UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2021
For the fiscal year ended December 31, 2018OR
OR
☐¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                        to                                        
Commission File Number 001-09553
CBS CORPORATIONViacomCBSInc.
(Exact name of registrant as specified in its charter)
DELAWARE
Delaware
04-2949533
(State or other jurisdiction of

incorporation or organization)
04-2949533
(I.R.S. Employer
Identification Number)
No.)
51 W. 521515 Broadway
nd Street
New York, NY 10019
New York10036
(212) 258-6000
(Address, including zip code, and telephone numbers, including
(212) 975-4321
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbols
Name of Each Exchange on

Which Registered
Class A Common Stock, $0.001 par valueVIACANew YorkThe Nasdaq Stock ExchangeMarket LLC
Class B Common Stock, $0.001 par valueVIACNew YorkThe Nasdaq Stock ExchangeMarket LLC
5.75% Series A Mandatory Convertible Preferred Stock, $0.001 par valueVIACPThe Nasdaq Stock Market LLC
Securities Registered Pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act of 1933). Yes x☒    No o☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes o☐    No  x☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒    No o☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit such files). Yes x☒    No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filerx
☒
Accelerated filero☐
Non-accelerated filero☐
Smaller reporting companyo☐
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o☐    No x☒
As of June 29, 2018,30, 2021, which was the last business day of the registrant’s most recently completed second fiscal quarter, the market value of the shares of CBS Corporationthe registrant’s Class A Common Stock,$0.001 $0.001 par value (“Class A Common Stock”), held by non-affiliates was approximately $430,735,007$446,099,935 (based upon the closing price of $56.49$48.45 per share as reported by the New YorkThe Nasdaq Stock ExchangeMarket LLC on that date) and the market value of the shares of CBS Corporationthe registrant’s Class B Common Stock, $0.001 par value (“Class B Common Stock”), held by non-affiliates was approximately $18,367,556,649$25,906,496,345 (based upon the closing price of $56.22$45.20 per share as reported by the New YorkThe Nasdaq Stock ExchangeMarket LLC on that date); and the aggregate market value of the shares of both Class A Common Stock and Class B Common Stock held by non-affiliates was $18,798,291,656.$26,352,596,280.
As of February 13, 2019, 25,293,97210, 2022, 40,707,486 shares of Class A Common Stock and 347,676,011607,877,188 shares of Class B Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of CBS Corporation’sViacomCBS Inc.’s Notice of 20192022 Annual Meeting of Stockholders and Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934 (Part III).


VIACOMCBS INC.
TABLE OF CONTENTS
Page
PART I
Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II



CBS CORPORATION
TABLE OF CONTENTS

Item 5.Page
PART I
Item 1.
Business.
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Item 1A.
Risk Factors.
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Item 1B.
Unresolved Staff Comments.
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Item 2.
Properties.
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Item 3.
Legal Proceedings.
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Item 4.
Mine Safety Disclosures.
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Executive Officers of the Company.
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PART II
Item 5.
Market for CBS Corporation’sViacomCBS Inc.’s Common Equity, Related Stockholder Matters and Purchases of Equity Securities.
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Item 6.7.
Selected Financial Data.
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Item 7.
Management’s Discussion and Analysis of Results of Operations and Financial Condition.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 9C.PART III
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PART III
Item 10.
III-1
Item 11.
III-1
Item 12.
III-1
Item 13.
III-1
Item 14.
III-1
PART IV
Item 15.
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Item 16.
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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains both historical and forward-looking statements, including statements related to our future results and performance. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors are discussed in “Item 1A. Risk Factors” below and elsewhere in this Annual Report on Form 10-K. Other risks, uncertainties or other factors, or updates to those discussed herein may be described in our other filings with the SEC, including our reports on Form 10-Q and Form 8-K, press releases, public conference calls, webcasts, our social media and blog posts and on our investor relations website at ir.ViacomCBS.com. There may be additional risks, uncertainties and other factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this Annual Report on Form 10‑K are made only as of the date of this document, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

PART I

Item 1.Business.

Overview

We are a leading global media and entertainment company that creates premium content and experiences for audiences worldwide. We offer broadcast and cable television programming, innovative streaming services and digital video products, provide powerful capabilities in production, distribution and advertising solutions, and have one of the industry’s most extensive libraries of television and film titles. Our portfolio of iconic consumer brands includes Paramount+, Pluto TV, CBS, Corporation (togetherShowtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central and BET. Effective February 16, 2022, we are changing our name to Paramount Global, a name that represents our rich and storied history in entertainment and embraces our transition into the future.

Our global ecosystem of pay, free and premium streaming services grew significantly in 2021. Global streaming subscribers grew to 56.1 million as of December 31, 2021, an 88% increase year-over-year. We rebranded CBS All Access as Paramount+, our subscription streaming service that combines live sports, news and entertainment content, reaching 32.8 million global subscribers as of December 31, 2021. Pluto TV, our free advertising-supported streaming television (“FAST”) service, surpassed $1 billion in revenue for the year and reached 64.4 million global monthly active users (“MAUs”) for December 2021, a 49% increase year-over-year. We are investing in and scaling our streaming ecosystem through compelling content, broad distribution and international expansion.

In 2021, we demonstrated the continued breadth and depth of our content capabilities across broadcast and cable television, streaming and film. We attracted viewers domestically with its consolidated subsidiaries unlesssports, news and live events, including the context otherwise requires,National Football League (the “NFL”) and Union of European Football Associations (“UEFA”) games, 60 Minutes and Adele One Night Only. Hit movies included A Quiet Place Part II, which launched in theaters and on Paramount+ following a 45-day theatrical window, and PAW Patrol: The Movie and Clifford the “Company” or “CBS Corp.Big Red Dog,which in the United States (“U.S.”) were released “day and date” in theaters and on Paramount+.CBS remained the most-watched network in Daytime and Late Night, and we had more top 25 original cable series among key demographics than any other cable family. We are working to leverage our successful linear content to drive growth in streaming. 1883, Taylor Sheridan’s prequel to Yellowstone, debuted in 2021 as both the most watched

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original scripted drama on Paramount+ and, as part of a special airing on Paramount Network, the highest rated cable series premiere since 2015.

From our studios to streaming, we focused on expanding our global footprint and building key partnerships in 2021. We launched Pluto TV in Italy and announced plans to launch in the Nordics in 2022. We announced a strategic partnership to launch Paramount+ on Sky platforms in certain western European countries, as well as a joint venture with Comcast to launch SkyShowtime, a new streaming service expected to be available in more than 20 European territories. We acquired a majority stake in Fox TeleColombia & Estudios TeleMexico, which, when combined with production capabilities of ViacomCBS International Studios (“VIS”) and our broadcasters Televisión Federal S.A. (“Telefe”) and Chilevisión, solidified our status as a leading global Spanish-language content creator.

Our traditionalbusiness remained strong in 2021, where affiliate revenues continued to benefit from expanded distribution and advertising revenues benefited from an improved marketplace and EyeQ, our digital advertising platform that reaches millions of full-episode monthly unique viewers in the U.S. We entered into comprehensive agreements with key distributors that included our portfolio of streaming services, in addition to continued carriage of our cable and broadcast television networks.

In 2021, we continued to execute on our commitment to divest noncore assets, including CBS’ former headquarters, commonly known as Black Rock, as well as CBS Studio Center in Los Angeles, California. And in March 2021, we completed public equity offerings in which we raised approximately $2.7 billion in net proceeds. These transactions increased our ability to invest in our strategic growth priorities, including streaming.

We continued our commitment to diversity, equity and inclusion (“DE&I”) in 2021. We hosted our third annual Global Inclusion Week, a weeklong initiative featuring conversations, panels and workshops designed to ensure our workforce and culture reflect, celebrate and elevate the diversity of our audiences and communities. We also launched Content for Change, a companywide initiative designed to use the power of our content, creative supply chain and culture to counteract the narratives that enable racism, bias, stereotypes and hate. Building on our 2020 companywide Materiality Assessment and first Environmental, Social and Governance (“ESG”) Report, in 2021 we released our second ESG Report, which included our first set of overarching goals across our three environmental, social and governance pillars. We also hosted our 25th annual Community Day, the second consecutive fully virtual event, which is a mass media companyglobal day of community service focused on causes and issues that resonate with operations inour employees and audiences.

In 2021, we operated through the following segments:

•
ENTERTAINMENT: The Entertainment segment is composed of the CBS® Television Network; CBS Television Studios®; CBS Global Distribution Group™(composed of CBS Studios International™ and CBS Television Distribution™); Network 10™; CBS Interactive®; CBS Sports Network®, the Company’s cable network focused on college athletics and other sports; CBS Films®; and the Company’s direct-to-consumer digital streaming services CBS All Access®, CBSN®,CBS Sports HQ®, ET Live™ and 10 All Access™.

•
CABLE NETWORKS: The Cable Networks segment is composed of Showtime Networks, which operates the Company’s premium subscription program services Showtime®, The Movie Channel® and Flix®, and a direct-to-consumer digital streaming subscription offering; and Smithsonian Networks™, a venture between Showtime Networks and Smithsonian Institution, which operates Smithsonian Channel™, a basic cable program service, and Smithsonian Channel Plus™, a direct-to-consumer digital streaming subscription service.

•
PUBLISHING: The Publishing segment is composed of Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster®, Pocket Books®, Scribner®, Gallery Books® and Atria Books®.

LOCAL MEDIA: The Local Media•TV Entertainment. Our TV Entertainment segment is composedconsisted of CBS Television Stations, the Company’s 29 owned broadcast television stations; and CBS Local Digital Media™, which operates local Websites including content from the Company’s television stations.

For the year ended December 31, 2018, contributions to the Company’s consolidated revenues from its segments were as follows: Entertainment 70%, Cable Networks 15%, Publishing 6% and Local Media 13%. The Company generated approximately 17% of its total revenues from international regions in 2018. For the year ended December 31, 2018, approximately 44% and 11% of total international revenues of approximately $2.54 billion were generated in Europe and Canada, respectively.

The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, the segment’s television production and syndication operations; CBS Sports Network, CBS Sports’ 24-hour cable channel; CBS Stations, our owned broadcast television stations in the U.S.; and a number of streaming services, including our direct-to-consumer subscription streaming service, Paramount+ (in the U.S.), and several CBS-branded streaming services, including CBS News Streaming and CBS Sports HQ. TV Entertainment accounted for approximately 44% of our consolidated revenues in 2021 (after the elimination of intercompany revenues).

•Cable Networks. Our Cable Networks segment consisted of a portfolio of premium and basic cable networks, content productionincluding SHOWTIME, BET, Nickelodeon, MTV, Comedy Central, Paramount Network and distribution, television stations,Smithsonian Channel; a number of direct-to-consumer digital streaming services, including Showtime Networks’ premium subscription streaming service (“SHOWTIME OTT”) and other internet-based businesses,Pluto TV, our FAST service; and consumer publishing.  The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences and generate affiliate and subscription fee, licensing and advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company plans to increase its investment in premium content to enhance its opportunities for revenue growth, which include exhibiting the Company’s content on its direct-to-consumer digital streaming services; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors ViacomCBS Networks International(“MVPDs”VCNI”), including cable, direct broadcast satellite (“DBS”)which operates international extensions of Paramount+, telephone company,Pluto TV and other distributors,our Cable Networks brands and services, our international free-to-air networks and VIS, which produces content for our brands and streaming services, as well as third-party live television digital streaming offerings (“virtual MVPDs”), for authorizingthird parties. Cable Networks accounted for approximately 47% of our consolidated revenues in 2021 (after the MVPDs’ and virtual MVPDs’ carriageelimination of the Company’s owned television stations (also known as “retransmission fees”) and cable networks, and securing compensation from television stations affiliated with the CBS Television Network (“station affiliation fees,” also known as “reverse compensation”)intercompany revenues). The Company also seeks to grow its advertising revenues by monetizing all content viewership as industry measurements evolve to reflect viewers’ changing habits.



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•Filmed Entertainment. Our Filmed Entertainment segment consisted of Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television Studios and Miramax. Filmed Entertainment accounted for approximately 9% of our consolidated revenues in 2021 (after the elimination of intercompany revenues).
The Company competes with many different entities and media in various markets worldwide. In addition to competition in each of its businesses, the Company competes for opportunities in the entertainment business with other diversified entertainment companies such as The Walt Disney Company, NBCUniversal Media, LLC, Twenty-First Century Fox, Inc. and the WarnerMedia segment of AT&T Inc., formerly Time Warner Inc.

During the fourth quarter of 2018, the Company began presenting CBS Sports Network in the Entertainment segment2020, we entered into an agreement to reflect changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. CBS Sports Networksell Simon & Schuster, which was previously includedreported as our Publishing segment. Simon & Schuster is presented as a discontinued operation in the Cable Networks segment. Resultsour consolidated financial statements for all periods presented have been reclassified in this Annual Report on Form 10-K. See Notes 1 and 20 to conformthe consolidated financial statements.

Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to this presentation. Also duringhow we manage our businesses and allocate resources that resulted in a change to our operating segments. Accordingly, beginning in the fourthfirst quarter of 2018,2022, we expect to report results based on the following segments:

•TV Media. Our TV Media segment consists of our historical TV Entertainment and Cable Networks segments, except that it no longer includes their corresponding direct-to-consumer streaming services (now part of our Direct-to-Consumer segment) as well as Nickelodeon Studio (now part of our Filmed Entertainment segment), and now includes Paramount Television Studios (formerly part of our historical Filmed Entertainment segment).

•Direct-to-Consumer. Our Direct-to-Consumer segment consists of our portfolio of pay, free and premium streaming services, including Paramount+, Pluto TV, SHOWTIME OTT, BET+ and Noggin.

•Filmed Entertainment. Our Filmed Entertainment segment consists of our historical Filmed Entertainment segment, except that it no longer includes Paramount Television Studios (now part of our TV Media segment) and now includes Nickelodeon Studio (formerly part of our historical Cable Networks segment).

We were organized as a Delaware corporation in 1986. In December 2019, we changed our name to ViacomCBS Inc. in connection with recent management changes, the Company implemented changesmerger of Viacom Inc. (“Viacom”) and CBS Corporation (“CBS”) (the “Merger”). Unless the context requires otherwise, references in this document to “ViacomCBS,” “Company,” “we,” “us” and “our” mean ViacomCBS Inc. and our consolidated subsidiaries, to “CBS” mean CBS and its programming strategy, primarilyconsolidated subsidiaries prior to the Merger and to “Viacom” mean Viacom and its consolidated subsidiaries prior to the Merger. Effective February 16, 2022, we are changing our name to Paramount Global.

Our principal offices are located at CBS Films,1515 Broadway, New York, New York 10036. Our telephone number is (212) 258-6000 and our website is www.ViacomCBS.com. Information included on or accessible through our website is not intended to be incorporated into this Annual Report on Form 10‑K.

We have two classes of common stock, Class A Common Stock and Class B Common Stock, both of which will shift its focus from theatrical filmsare listed on The Nasdaq Stock Market LLC. Owners of our Class A Common Stock are entitled to developing content for the Company’s direct-to-consumer digital streaming services.

one vote per share. Our Class B Common Stock does not have voting rights. As of February 13, 2019,December 31, 2021, National Amusements, Inc. (“NAI”), a closely held corporation that owns and operates approximately 950 movie screens in the U.S., the United Kingdom (“U.K.”) and South America and manages 4additional movie screens in South America, directly or indirectly owned approximately 79.8%77.4% of the Company’sour voting Class A Common Stock, and approximately 10.5%9.7% of the Company’sour Class A Common Stock and Class B Common Stock on a combined basis. Owners of the Class A Common Stock are entitled to one vote per share. The Class B Common Stock does not have voting rights. NAI is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended.

The Company was organized in Delaware in 1986. The Company’s principal offices are located at 51 W. 52nd Street, New York, New York 10019. Its telephone number is (212) 975-4321 and its Website address is www.cbscorporation.com.

CBS CORP. BUSINESS SEGMENTS




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Our Segments in 2021

TV Entertainment

viac-20211231_g1.jpg
TV Entertainment consisted of the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, the segment’s television production and syndication operations; CBS Sports Network, CBS Sports’ 24-hour cable channel; CBS Stations, our owned broadcast television stations in the U.S.; and a number of streaming services, including our direct-to-consumer subscription streaming service, Paramount+ (in the U.S.), and several CBS-branded streaming services, including CBS News Streaming and CBS Sports HQ.
TV Entertainment’s revenues were generated primarily from advertising; affiliate revenues comprised of fees received from television stations affiliated with the CBS Television Network (“reverse compensation”), fees for authorizing multichannel video programming distributors’ (“MVPDs”) and third-party live television streaming services’ (“virtual MVPDs” or “vMVPDs”) carriage of our owned television stations; streaming revenues, principally comprised of advertising and subscription revenues generated by the segment’s streaming services and from digital video advertisements on our websites and in our video content on third-party platforms; and the licensing and distribution of our content and other rights. In 2021, TV Entertainment (70%advertising, licensing and other, affiliate and streaming generated approximately 41%, 25%, 22% and 12%, respectively, of the Company’ssegment’s total revenues. TV Entertainment generated approximately 44%, 41% and 43% of our consolidated revenues in 2018,2021, 2020 and 68%2019, respectively (after the elimination of the Company’s consolidated revenues in each of 2017 and 2016, and 55%, 54% and 53% of the Company’s total segment operating income in 2018, 2017 and 2016, respectively)intercompany revenues).

Paramount+
The Entertainment segment consists
Paramount+, our digital subscription video on-demand and live streaming service, combines live sports, news and entertainment content. Paramount+ features an expansive catalogue of original series, hit shows and popular movies across every genre from our brands and production studios, including CBS, BET, Comedy Central, MTV, Nickelodeon, Paramount Network, the CBS Television Network; CBS Television StudiosSmithsonian Channel and CBS Global Distribution Group (composed of CBS Studios InternationalParamount Pictures, and CBS Television Distribution), the Company’s television production and syndication operations; Network 10, the Company’s commercial broadcast network in Australia; CBS Interactive, the Company’s online content networks for information and entertainment; from third parties.

Domestically, Paramount+ is home to livestreamed CBS Sports Networkprogramming, including golf, football, auto racing and basketball. A destination for soccer fans, Paramount+ features more than 2,000 live and on-demand matches each year, including select matches from UEFA, Italy’s Serie A, and the National Women’s Soccer League (“NWSL”). Paramount+ also enables subscribers to stream local CBS Stations live across the U.S. in addition to other live channels, including CBS News Streaming for 24-hour news, CBS Sports HQ for sports news and analysis, and ET Live for entertainment coverage. Domestic highlights in 2021 include A Quiet Place Part II, Clifford the Company’s cable network focused on college athletics and other sports; CBS Films; and the Company’s direct-to-consumer digital streaming services Big Red DogCBS All Access, Mayor of Kingstown, Yellowstone prequel 1883, PAW Patrol, CBSNa variety of content from the Star Trek universe, a pair of original South Park movies and the NFL.

Paramount+ is available in two formats in the U.S.: Premium, an advertising-free (with the exception of livestreamed content) offering that includes all the benefits of Paramount+ for a monthly fee; and Essential, an advertising-supported offering available for a lower monthly fee that includes the NFL but does not include livestreamed local CBS Stations content.

Internationally, Paramount+ is home to hit movies, including titles from Paramount Pictures, as well as scripted dramas from SHOWTIME, Paramount Television Studios, CBS Studios and a robust offering of premium local content from VIS and third parties. International highlights in 2021 include Parot, CBS Sports HQBefore I Forget, ET LiveTo Catch a Thief and10 All Access. 100 Days to Fall in Love.

Television Network.
 The
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CBS Television Network through CBS Entertainment™, CBS News® and CBS Sports® distributes a comprehensive schedule of news and public affairs broadcasts, sports and entertainment programming to more than 200 domestic affiliates reaching throughout the U.S., including 15 of the Company’s owned and operated television stations, and to affiliated stations in certain U.S. territories.

The CBS Television Network primarily derives revenues from(the “CBS Network”), through CBS Entertainment, CBS News and CBS Sports, distributes entertainment programming, news, public affairs broadcasts and sports. Network content also is available on the sale of advertising time for its network broadcasts. A significant portion of the sale of advertising spots for the network’s non-sports programming occurs annually generally during May through July in the industry’s upfront advertising market for the upcoming television broadcast season, which runs for one year generally commencing in mid-September. Overall advertising revenue for the network is also impacted by audience ratings for its programminginternet, including through: CBS.com, CBSSports.com and market conditions, including demand in the scatter advertising market, in which advertisers purchase the remaining advertising spots closer to the broadcast of the related programming. The Company offers dynamic advertising insertions for thesoftware applications (“apps”); our streaming services, such as Paramount+, CBS Television Network’s on-demand programming, which allows the Company to change advertisements at any time within such programmingNews Streaming and offer advertisers greater audience reach. The Company is focused on developing advanced advertising productsPluto TV; and MVPDs and vMVPDs.


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that enable advertisers to target specific audience segments. In addition, the CBS Television Network’s revenues include station affiliation fees.

CBS Entertainment is responsible for acquiringacquires or developingdevelops and schedulingschedules the entertainment programming presented on the CBS Television Network, which includes primetime comedycomedies and drama series, reality‑based programming,dramas, reality, specials, children’skids’ programs, daytime dramas, game shows and late-night programs such aslate night. The CBS Network’s top-rated series include NCIS, The Late Show with Stephen Colbert. During 2018, the CBS Television Network broadcast the Tony Awards and ®, the Kennedy Center Honors and the GrammyAwards®The Price is Right. The Company won 20 awards at the 45
th
Annual Daytime Emmy® Awards in April 2018. CBS News operates a worldwide news organization, providing the CBS Television Network and CBS News Radio™Radio with regularly scheduled news and public affairs broadcasts, including 60 Minutes, 48 Hours, CBS Evening News, CBS This MorningMornings, CBS Sunday Morning and Face the Nation as well as special reports. CBS News also provides CBS Newspath.
®
, a television news syndication service that offers daily news coverage, sports highlights and news features to the CBS Television Network affiliates and other subscribers worldwide.
CBS Sports broadcasts on the television networkCBS Network include The NFL Today; certain PGA Tour Golf Tournaments, the Masters and the PGA Championship, for which the Company extended its broadcast rights in October 2018 through 2030; certainregular season games from the NCAANFL’s American Football Conference (“AFC”) and National Football Conference, as well as postseason AFC wild card playoff, AFC divisional playoff and championship games, and, on a rotating basis with other networks, the Super Bowl; the National Collegiate Athletic Association’s (the “NCAA”) Division I Men’s Basketball Tournament, through 2032;which we also broadcast on a rotating basis with other networks, and marquee regular-season college basketball games;games, including conference championship games from the Big Ten, Mountain West, Atlantic 10 and Missouri Valley; regular-season college football games, including games from the Southeastern ConferenceConference; PGA Tour golf tournaments; the Masters; the PGA Championship; and certain games from the NFL’s American Football Conference (AFC) regular-season, post-season wild card playoff, divisional playoffUEFA Champions League, including the semifinals and championship games. In 2018, CBS broadcast certain AFC games under its agreement with the NFL to broadcast the AFC package through the 2022 season, which also includes certain National Football Conference regular season games and the Super Bowl, which is broadcast on the CBS Television Network on a rotating basis with other networks. The Company’s most recent Super Bowl broadcast was in February 2019.finals.


CBS Television Network content also is exhibited via the internet, including through CBS.com™, CBSSports.com® and related software applications (“apps”); the Company’s direct-to-consumer services, such as CBSN,the Company’slive digital streaming advertiser-supported news network available 24 hours a day, seven days a week, CBSN New York and CBS All Access, the Company’s digital streaming subscription service which includes a commercial-free option for on-demand content; and virtual MVPDs, such as DIRECTV NOW, Hulu with Live TV and YouTube TV. CBS All Accessoffersbothcurrent and library programming as well as original series, such as The Good Fight, Star Trek: Discovery, No Activity, Strange Angel and Tell Me a Story and the new upcoming The Twilight Zone series and CBSN’s live and original reporting. All NFL games broadcast by the CBS Television Network are streamed on CBS All Access platforms under the Company’s multi-year deal with the NFL. Digital streaming services that provide video content, including from broadcast and/or cable channels, streamed via the internet to users who are not required to have a subscription to an MVPD (such as virtual MVPDs and direct-to-consumer services) are known as over-the-top or “OTT” services. Digital streaming services that do not require payment to a third party are known as “direct-to-consumer” services, such as CBS All Access. CBS All Access and CBSN are available at CBS.com and CBSNews.com™, respectively, and/or through CBS apps on multiple digital platforms, including Android, iOS, Amazon Fire and Windows 10 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Amazon Channels, Chromecast, PlayStation, Roku, Samsung Smart TVs and Xbox connected device platforms, among others.

The CW, a broadcast network and the Company’s 50/50our joint venture with Warner Bros. Entertainment, airs programming including Charmed, Dynasty, Supergirl and The Flash.targeting younger viewers. Eight of the Company’sour owned television stations are affiliates of The CW. Certain

CBS Studios

CBS Studios is a leading content supplier that produces series across broadcast television, cable and streaming. CBS Studios maintains an extensive library of intellectual property, including the genre-defining and ever-growing Star Trek universe. CBS Studios’ broadcast television productions include Blue Bloods, CSI: Vegas and the FBI and NCIS franchises for the CBS Network. In cable, CBS Studios productions include Your Honor and The CW’s series are streamed on Netflix, a subscription video-on-demand service.Man Who Fell to Earth for SHOWTIME. Streaming productions include the Star Trek franchise, The CW programming isGood Fight, Evil, Seal Team and Why Women Kill for Paramount+; Dead to Me for Netflix; and Carpool Karaoke: The Series and Swagger for Apple TV+. CBS Studios also available via produces award-winning late night and daytime talk shows, such as The CW app on multiple digital platforms, including Amazon Fire TV, Apple TV, Chromecast, Roku, XboxLate Show with Stephen Colbert, TheLate Late Show with James Corden and mobile devices.

Television Production and Syndication.The Talk. CBS Television Studios also develops, produces and distributes local language and international content originating outside of the U.S., with series in the U.K., Europe, the Middle East, Australia and Asia.

CBS Global Distribution Group produce, acquire and/Media Ventures

CBS Media Ventures (“CMV”) produces or distributedistributes first-run syndicated daily and weekly programming, worldwide,across various dayparts and genres, including series, specials, newstalk shows, court shows, game shows and public affairs, and generate revenue principally from the licensing and distribution of such programming. The programming is produced primarily for broadcast on network television, exhibition on basic cable and premium subscription services, streaming services or distribution via first-run syndication.newsmagazines. First-run syndication is original series programming exhibitedlicensed on a market-by-market basis to television stations for exhibition on local broadcast television and streaming. Examples of CMV’s first-run programming include The Dr. Phil Show, Entertainment Tonight, Jeopardy!, Wheel of Fortune, Rachael Ray and The Drew Barrymore Show. CMV also handles the domestic distribution for exhibition on television stations without prior exhibition on a network or cable service. The Company subsequently distributes programmingand streaming services of content produced by CBS Studios, after its initial exhibition on a network, basic cable network or premium subscription service for domestic exhibition onbroadcast television


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stations, cable networks or streaming services (known as “off-network (“off-network syndicated programming”). Off-network syndicated programming and first‑runfirst-run syndicated programming distributed domestically as well as programming distributed internationally, can sometimes be sold in successive cycles of sales known as “first cycle” sales, “second cycle” sales, and so on,windows, which may occur on an exclusive or non-exclusive bases. Generally, license fees may decrease with successivenonexclusive basis.

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CMV engages in national advertising and integrated marketing sales cycles due to increased program exhibitions.

Programming that was produced or co-produced byfor the Company’s production groupfirst-run and is broadcast on network television includes, among others, FBI (CBS), Seal Team (CBS), NCIS (CBS), Bull (CBS), Magnum P.I. (CBS), Madam Secretary (CBS), Criminal Minds (CBS), Charmed (The CW) and Jane the Virgin (The CW). Generally, a network will license a specified number of episodes for broadcast on the network in the U.S. during a license period. Remaining distribution rights, including international and/or off‑network syndication rights, are typically retained by the Company or, in the case of co-productions, distribution rights are shared with the co-producer for U.S. or international markets. The network license fee for a series episode is normally lower than the costs of producing the episode; however, the Company’s objective is to recoup its costs and earn a profit through various forms of distribution, including international licensing, domestic syndication and digital streaming of episodes. Generally, international sales of network series are made within one year of the U.S. network run and series must have a network run of at least three or four years to be successfully sold in domestic off-network syndication; however, increasingly, these time frames are being shortened, particularly for sales to digital streaming services. In off-network syndication, the Companyprogramming it distributes, series, such as Hawaii Five-O, Criminal Minds, Blue Bloods, Elementary, NCIS, NCIS: Los Angeles and NCIS: New Orleans as well as serving as the national advertising sales agent for other major syndicators. CMV also operates and distributes Dabl, a library of older television programs. The Company also produces and/or distributes first-run syndicated series such as multiplatform, advertiser-supported lifestyle network.
Wheel of Fortune, Jeopardy!, Entertainment Tonight, Inside Edition, Dr. Phil, The Doctors, Rachael Ray, Hot Bench and Judge Judy and produces The Good Fight, Star Trek: Discovery, No Activity, Strange Angel and Tell Me a Story for streaming on CBS All Access. The Company also distributes syndicated and other programming internationally.

The Company continues to monetize its content through digital media.  It enters into and renews numerous multi-year licensing agreements for distribution of certain of its programming to various services reaching countries throughout the world, particularly the U.S., Canada and in Europe.  These services include digital streaming on subscription or advertiser-supported video-on-demand services, including services by Amazon, Bell Media, Hotstar, Netflix, Stan Entertainment and Telefonica; virtual MVPDs, including DIRECTV NOW, Hulu with Live TV and YouTube TV; and digital downloading on various electronic sell-through services owned by Amazon, Apple, Google and Microsoft, among others.

Fees for television programming licensed for syndication and digital streaming are recorded as revenues at the beginning of the license period in which the programs are made available for exhibition, which, among other reasons, may cause substantial fluctuations in the Entertainment segment’s operating results. Unrecognized revenues attributable to such license agreements were $1.08 billion and $670 million at December 31, 2018 and December 31, 2017, respectively.

CBS Sports Network
In November 2017, the Company acquired Ten Network Holdings Limited, one of three major commercial broadcast networks in Australia. Network 10 includes the channels
 10™, 10 Bold™and 10 Peach™which broadcast a mix of entertainment, drama, news and sports programming, such as Australian Survivor, Have You Been Paying Attention? and The Australian Formula 1 Grand Prix. Network 10 also includes the digital platforms 10 Play™, 10 Daily™ as well as 10 All Access, a direct-to-consumer digital streaming subscription service in Australia, which the Company launched in December 2018, featuring programming from the Company and Network 10. Network 10 principally derives revenue from the sale of advertising for its network broadcasts and related digital services.

The Company also has interests in domestic and international joint ventures. The Company owns a 50% interest in a joint venture with Lionsgate, which owns and operates the entertainment cable network Pop®. The Company owns a 49% interest in a joint venture with a subsidiary of AMC Networks Inc., which owns and operates channels in the U.K. and Ireland, including CBS Justice™, CBS Drama™, CBS Reality™ and Horror Channel™. The Company also owns a 30% interest in a joint venture with another subsidiary of AMC Networks, which owns and operates cable and satellite channels in Europe, the Middle East and Africa broadcasting CBS programming and branded as CBS Justice, CBS Reality and CBS Europa™.


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CBS Interactive. CBS Interactive is one of the leading global publishers of premium content on the internet, delivering this content via Web properties, mobile properties and CBS apps on mobile, as well as internet-connected television and other device platform apps. CBS Interactive is ranked among the top internet properties in the world according to comScore Media Metrix. CBS Interactive’s leading brands, including CNET®, CBS.com™, CBS All Access, CBSSports.com, CBS Sports HQ, 247Sports®, GameSpot®, MaxPreps®, ET Live, TVGuide.com™, CBSNews.com™, CBSN, ZDNet®, Last.fm®, and MetroLyrics.com®, among others, serve targeted audiences with text, video, audio, and mobile content spanning technology, entertainment, sports, news, business, gaming and music categories. In addition to its U.S.-based business, which reached approximately 165 million U.S. unique monthly visitors during December 2018 according to comScore Media Metrix, January 2019, CBS Interactive operates in Asia, Australia and Europe.

CBS Interactive generates revenue principally from the sale of advertising and sponsorships, in addition to fees derived from subscriptions, license fees, search and commerce partners, e-commerce activities, and other paid services. Advertising spending on the internet, as in traditional media, fluctuates significantly with economic conditions. In addition, online marketing spending follows seasonal consumer behavior throughout the calendar year to reflect trends during the calendar year.

CBS Interactive owns and operates digital properties, including: CNET, one of the preeminent digital properties for technology and consumer electronics information and featuring news, reviews, downloads and instructional and entertaining video and audio shows about technology; CNET en Espanol®, which delivers CNET.com’s information in the U.S. to Spanish speakers; TVGuide Digital™,which provides comprehensive information about television programming; GameSpot, a leading gaming information digital property providing video game reviews and previews, news, eSports, Webcasts, videos, and game downloads; Last.fm, which is a music recommendation, discovery and social networking property; MetroLyrics.com, which is one of the most popular databases for song lyrics online; and TV.com, which is a destination for entertainment and community around television where visitors can watch videos and discuss and obtain information about television shows across all networks.

CBS Interactive also operates CBS.com, the online destination for CBS Television Network programming. Further extending the CBS.com experience, the Company offers a CBS app for on-demand streaming of various programs from the Company’s current network and library programming to users on multiple digital platforms, including Android, iOS, Amazon Fire and Windows 10 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Amazon Channels, Chromecast, PlayStation, Roku, Samsung Smart TVs and Xbox connected device platforms, among others. CBS Interactive operates CBSNews.com, the online destination for CBS News content, and offers an app for on-demand screening of current and library news programming and the content published on the website. CBS Interactive also operates CBSSportsDigital™, the online destination for CBS Sports content, including CBSSports.com, which provides sports content, fantasy sports, and community and e-commerce features; Max Preps; 247Sports; Scout; and BoxingScene®. Further extending the CBSSports.com experience, the Company offers an app for on-demand viewing of certain sports events broadcast on CBS as well as scores, news, standings and other sports information.

CBS Interactive operates CBS All Access, the Company’s direct-to-consumer digital streaming subscription service, which includes a commercial-free option for on-demand content. CBS All Access offers an on-demand selection of both current and library programming and original series, such as The Good Fight, Star Trek: Discovery, No Activity, Strange Angel and Tell Me a Story and the new upcoming The Twilight Zone series; and CBSN’s live and original reporting as well as the ability to stream live programming from local CBS Television Stations and certain CBS television station affiliates. All NFL games broadcast by the CBS Television Network are streamed on CBS All Access platforms. CBS All Access is available at CBS.com and on the multiple digital platforms described above through the CBS app in the U.S. and Canada. In April 2018, the Company launched CBS All Access in Canada. CBS Interactive also operates CBSN, a direct-to-consumer digital streaming live, advertiser-supported news network available 24 hours a day, seven days a week. In December 2018, the Company launched CBSN New York, a direct-to-consumer digital streaming live, advertiser-supported local news network available 24 hours a day, seven days a week that complements CBSN and streams news events from the Company’s owned television stations in New York. CBSN is available at CBSNews.com and on the multiple digital platforms described above through the CBS News app. and through CBS Television Stations’ websites and mobile apps.


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CBS Interactive also operates CBS Sports HQ, a direct-to-consumer digital streaming live, advertiser-supported sports news and highlights service available 24 hours a day, seven days a week, which launched in February 2018; ET Live, a direct-to-consumer digital streaming advertiser-supported service based on the Entertainment Tonight brand covering entertainment stories and trends available 24 hours a day, seven days a week, which launched in October 2018; and 10 All Access, a direct-to-consumer digital streaming subscription service in Australia, which launched in December 2018, featuring programming from the Company and Network 10. Through the CBS Audience Network™, the Company delivers video content from its digital properties and television stations and affiliated television stations under an advertiser-supported distribution model to third-party digital properties. The growing slate of the Company’s content available online includes full episodes, clips and highlights based on CBS, CBS Sports Network and Showtime Networks programming as well as original made-for-the-Web content.

CBS Sports Network. CBS Sports Network is a 24 hours a day, seven days a weekCBS Sports’ 24-hour cable program servicechannel that provides a diverse slate of sports and related content, with a strong focus on college sports.content. The network televises over 700 live professional, amateur and collegiatecollege events, annually, highlighted byincluding Division I college football, basketball, hockey and lacrosse, as well as professional bull riding (PBR)certain games from the NWSL, certain men’s and various styles of motor sports events (including asphalt, dirt,women’s international soccer games, including certain FIFA 2022 World Cup Concacaf qualifiers, FIFA 2023 Women’s World Cup qualifiers, UEFA Champions League games and off road racing).Scottish Professional Football League games. In addition, the network showcases a variety of original programming, including documentaries, features and studio shows, highlighted by NFL Monday QB, That Other Pre-Game Show (TOPS), Inside College Basketball, Inside College Football,Time to Schein and a first of its kind all-female panel sports talk show, We Need to Talk. CBS Sports Network also provides ancillary coverage for CBS Sports relating to major events, such as the NCAA Division I Men’s Basketball Tournament, the Masters Tournament and the PGA Championship, and for Showtime NetworksSHOWTIME relating to ShowtimeSHOWTIME Championship Boxing. CBS Sports Network produces weekday simulcasts of the radio shows The Morning Show with Boomer and Gio, Tiki and Tierney and The Jim Rome Show. Further, CBS Sports Network televises a diverse slate of additional programming under the CBS Sports Spectacular™ brand, including mixed martial arts, skiing, bowling, surfing, boxing, horse racing, volleyball and cheerleading, among other events. The network derives its revenues from subscription fees and the sale of advertising. CBS Sports Network has secured carriage arrangements with MVPDs and virtual MVPDs, including Hulu with Live TV, DIRECTV NOW and YouTube TV.Boxing.

CBS Stations
CBS Films. During the fourth quarter of 2018, in connection with recent management changes, the Company implemented changes to its programming strategy, primarily at CBS Films, which will shift its focus from theatrical films to developing content for the Company’s direct-to-consumer digital streaming services. During 2019, CBS Films plans to complete production of its remaining theatrical films. CBS Films’ theatrical releases in 2018 were At Eternity’s Gate, Hell Fest and Winchester.

Entertainment Competition.

Television Network. The broadcast television environment is highly competitive. The principal methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming and promotion, in order to sell advertising at profitable rates. Broadcast networks like CBS compete for audience, advertising revenues and programming with other broadcast networks, such as ABC, FOX, NBC, The CW and MyNetworkTV, independent television stations, cable program services, as well as other media, including OTT services, such as Netflix and Hulu, DVDs and Blu-ray Discs, print and the internet. In addition, the CBS Television Network competes with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country which are necessary to ensure the effective distribution of network programming to a nationwide audience.

Television Production and Syndication. As a producer and distributor of programming, the Company competes with studios, television production groups, and independent producers and syndicators, such as Disney, Fox, NBCUniversal, Sony and Warner Bros., as well as additional entrants with substantial resources, such as Amazon, Apple and Netflix, to produce and sell programming both domestically and internationally. The Company also competes to obtain creative talent and story properties which are essential to the success of all of the Company’s entertainment businesses. In addition, the consumer has many options for entertainment other than television


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programming, including video games, sports, travel, outdoor recreation, the internet, and other cultural and computer-related activities.

CBS Interactive. CBS Interactive competes with a variety of online properties for users, advertisers, and partners, including the following: general purpose portals, such as AOL, MSN and Yahoo!; search engines such as Google, Yahoo! and Bing; online comparison shopping and retail properties, including Amazon.com; vertical content sites in the categories that CBS Interactive’s brands serve, such as technology, gaming, music, news, business, food, entertainment and lifestyle-focused digital properties; other content sites and apps, such as ESPN.com, HBO GO, Hulu and Netflix, as well as major television broadcast company digital properties, including digital streaming services and apps; and platforms such as blogs, podcasts and video properties. CBS Interactive also competes for users and advertisers with diversified media companies that provide both online and offline content, including magazines, cable television, network television, radio and newspapers.

CBS Sports Network. CBS Sports Network principally competes with cable programming services, including other sports-oriented cable programming services, for distribution and license fee revenue among MVPDs and virtual MVPDs, as well as for viewership and advertising revenue. The effects of consolidation among MVPDs and consumer pricing sensitivity have made it more difficult for niche channels to secure broad distribution in mainstream programming packages. In addition, the largest cable providers have created sports tiers for sports programming services which have not, in many cases, achieved significant subscriber penetration or acceptance. CBS Sports Network continues its repositioning to be included in programming packages with more subscribers. Re-alignment of college athletic conferences and their member institutions may adversely impact CBS Sports Network’s programming arrangements. CBS Sports Network also competes with cable programming services generally, including other sports programming services, such as ESPN, FOX Sports Networks and NBC Sports Network, in acquiring the television and multimedia rights to sporting events, resulting in increased rights fees and increased production expenses.

CBS Films. CBS Films competes for audience acceptance with programming produced and/or distributed by digital program services, including Amazon, Apple and Netflix, and numerous films produced and/or distributed by various studios and independent producers, including Paramount Pictures Corporation, Walt Disney Studios Motion Pictures, Warner Bros. Entertainment Inc., Lions Gate Entertainment, STX Entertainment, Metro-Goldwyn-Mayer Studios Inc. and Lakeshore Entertainment Group.

Cable Networks (15%, 17% and 15% of the Company’s consolidated revenues in 2018, 2017 and 2016, respectively, and 30%, 35% and 33% of the Company’s total segment operating income in 2018, 2017 and 2016, respectively)

The Cable Networks segment is composed of Showtime Networks, which operates the Company’s premium subscription program services and a direct-to-consumer digital streaming subscription offering; and Smithsonian Networks, a venture with Smithsonian Institution, which operates Smithsonian Channel and a direct-to-consumer digital streaming subscription service.

Showtime Networks. Showtime Networks owns and operates three commercial-free, premium subscription program services in the U.S.: Showtime, offering original series, recently released theatrical feature films, documentaries, boxing and other sports-related programming, and special events; The Movie Channel, offering recently released theatrical feature films and related programming; and Flix, offering theatrical feature films primarily from the last several decades; and a direct-to-consumer digital streaming subscription offering of the Showtime service. At December 31, 2018, subscriptions to Showtime (including its direct-to-consumer digital streaming subscription offering) totaled approximately 27 million in the U.S., certain U.S. territories and Bermuda.

The Showtime direct-to-consumer digital streaming subscription offering allows subscribers to view on-demand programming as well as the live telecast of the east and west coast feeds of Showtime, and is available for purchase (without an MVPD video subscription) at showtime.com™, through the Showtime app on multiple digital platforms, including Apple, Android and Roku devices, as part of a Spotify package available to college students, and as an add-on subscription to Amazon Prime, DIRECTV NOW, Hulu, Sling TV and YouTube TV. Showtime Networks also makes Showtime Anytime®, an authenticated version of Showtime, available at showtimeanytime.com™and, via certain


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internet-connected devices, through a Showtime Anytime app, free of charge to Showtime subscribers as part of their Showtime subscription through participating distributors. Showtime Anytime enables Showtime subscribers to view on-demand programming as well as the live telecast of the east and west coast feeds of Showtime.Versions of Showtime, The Movie Channel and Flix are also available on-demand, enabling traditional television subscribers to watch individual programs at their convenience. Showtime Networks additionally operates the Website SHO.com™,which promotes Showtime, The Movie Channel and Flix programming, and provides information and entertainment and other services.

Showtime Networks derives revenue principally from the license of its program services to numerous MVPDs, with a substantial portion of such revenue coming from three of the largest such distributors. The costs of acquiring exhibition rights to programming and producing original series are the principal expenses of Showtime Networks. Showtime Networks enters into commitments to acquire rights, with an emphasis on acquiring exclusive rights for Showtime and The Movie Channel, from motion picture studios and other distributors typically covering the U.S. and Bermuda for varying durations. Showtime Networks’ original series telecast in 2018 included Homeland, Ray Donovan, Billions, The Affair, The Chi, Kidding, Who is America?, Our Cartoon President and Shameless, among others. In 2018, Showtime Networks also telecast limited series Escape at Dannemora and Patrick Melrose, documentary series, including The Circus: Inside the Wildest Political Show on Earth, The Fourth Estate, The Trade and Enemies: The President, Justice & The FBI, and various sports-related programs and documentary series, including Inside the NFL and Shut Up and Dribble. Showtime Networks also produces and/or provides special events on a pay-per-view basis, including the Tyson Fury vs. Deontay Wilder pay-per-view boxing match in December 2018, which was available for purchase by both Showtime subscribers and non-subscribers through the Showtime app and third-party distributors.

Showtime Networks has entered into and may from time to time enter into co-financing, co-production and/or distribution arrangements with other parties to reduce the net cost to Showtime Networks for its original programming. In addition, Showtime Networks derives revenue by licensing rights it retains in certain of its original programming. The Company enters into licensing arrangements with television networks, digital platforms, including Amazon and Netflix, and/or other media companies for the exhibition of certain Showtime original programming domestically and in various international territories. For example, the Company has output agreements, including with Bell Media Inc. for Canada, with Sky-affiliated entities for Austria, Germany, Ireland, Italy and the U.K., with Moviestar + for Spain, with Canal + Group for France, with Fox Networks Group Asia for Southeast Asia, and with Hotstar’s streaming service for India.

Showtime Networks also owns a majority of and manages Smithsonian Networks, a venture with Smithsonian Institution, which operates Smithsonian Channel, a basic cable service in the U.S., featuring programs of a cultural, historical, scientific and educational nature. Smithsonian Networks makes Smithsonian Channel content available via MVPDs and virtual MVPDs in the U.S. and licenses Smithsonian Channel content outside of the U.S., including in connection with Smithsonian Channel in Canada, in which Smithsonian Networks owns a minority interest. Smithsonian Networks also operates the Website SmithsonianChannel.com™ and various apps, which promote Smithsonian Channel programming and provide information and entertainment services. Smithsonian Networks also operates Smithsonian Channel Plus, a direct-to-consumer digital streaming subscription service, which launched in December 2018, that allows subscribers to view on-demand programming, including 4K Ultra HD series and documentaries.

Cable Networks Competition.

Showtime Networks. Showtime Networks primarily competes with other providers of premium subscription program services in the U.S., including Home Box Office, Inc. and Starz, LLC. Competition among these premium subscription program services in the U.S. is dependent on: (i) the production, acquisition and packaging of original series and other original programming and the acquisition and packaging of an adequate number of recently released theatrical motion pictures; and (ii) the offering of prices, marketing and advertising support and other incentives to distributors for carriage so as to favorably position and package Showtime Networks’ premium subscription program services to subscribers. In addition, Showtime Networks competes with digital subscription programming services, such as Amazon, Hulu and Netflix, for original programming, theatrical motion pictures and viewership. Showtime


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Networks also competes for programming, distribution and/or audiences with basic cable program services, broadcast television and other media, including video games and other internet apps.

Smithsonian Networks competes for programming, distribution and/or audiences with non‑fiction and other basic cable program services, including Discovery Channel, National Geographic Channel and History, as well as with broadcast television and other media.

The terms and favorable renewal of agreements with distributors for the distribution of the Company’s subscription program services are important to the Company. The effects of industry consolidation and other marketplace factors make it more difficult to reach and maintain favorable terms and positioning, which could increase costs and have an adverse effect on revenues.

Publishing (6% of the Company’s consolidated revenues in each of 2018, 2017 and 2016, and 5%, 5% and 4% of the Company’s total segment operating income in 2018, 2017 and 2016, respectively)

The Publishing segmentStations consists of Simon & Schuster, which publishes and distributes consumer books in the U.S. and internationally.

Simon & Schuster publishes and distributes adult and children’s consumer books in printed, digital and audio formats in the U.S. and internationally. Its digital formats include electronic books and audio books. Simon & Schuster’s major adult imprints include Simon & Schuster, Pocket Books, Scribner, Atria Books, Gallery Books, and Adams Media®. Simon & Schuster’s major children’s imprints include Simon Pulse®, Aladdin®, Atheneum Books for Young Readers®, Margaret K. McElderry Books™, Saga Press™,Salaam Reads® and Simon & Schuster Books For Young Readers™. Simon & Schuster also develops special imprints and publishes titles based on the products of certain CBS businesses as well as those of third parties and distributes products for other publishers. Simon & Schuster distributes its products directly and through third parties. Simon & Schuster also delivers content and promotes its products on its own Websites, social media, and general internet sites as well as those dedicated to individual titles. Its created assets include online videos showcasing Simon & Schuster authors and new releases on AOL, YouTube, Amazon, Bio.com, MSN.com, Google Newsstand, iTunes, SimonandSchuster.com and other sites. International publishing includes the international distribution of English-language titles through Simon & Schuster UK, Simon & Schuster Canada, Simon & Schuster Australia, Simon & Schuster India and other distributors, as well as the publication of locally originated titles by its international companies.

In 2018, Simon & Schuster had 206 New York Times bestsellers in hardcover, paperback, audio and electronic formats, collectively, including 28 New York Times #1 bestsellers. Best-selling titles in 2018 included Fear: Trump in the White House by Bob Woodward, The Outsider by Stephen King and Whiskey in a Teacup by Reese Witherspoon. Best-selling children’s titles include Queen of Air and Darkness by Cassandra Clare, Dork Diaries #13 by Rachel Renée Russell and To All the Boys I’ve Loved Before by Jenny Han. Simon & Schuster Digital™, through SimonandSchuster.com, publishes original content, builds reader communities and promotes and sells Simon & Schuster’s books over the internet.

The consumer publishing marketplace is subject to increased periods of demand in the summer months and during the end-of-year holiday season. Major new title releases represent a significant portion of Simon & Schuster’s sales throughout the year. Simon & Schuster’s top two accounts drive a significant portion of its annual revenue. Consumer print books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Company is subject to global trends and local economic conditions. In 2018, the sale of digital content represented approximately 23% of Simon & Schuster’s revenues. The Company expects that digital content will continue to represent a significant portion of Simon & Schuster revenues in the coming years.

Publishing Competition. The consumer publishing business is highly competitive and has been affected over the years by consolidation trends and electronic distribution methods and models. Mass merchandisers and on‑line retailers are significant factors in the industry contributing to the general trend toward consolidation in the retail channel. The growth of the electronic book market has impacted print book retailers and wholesalers and could result


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in a reduction of these channels for the sales and marketing of the Company’s books. In addition, unfavorable economic conditions and competition may adversely affect book retailers’ operations, including distribution of the Company’s books. The Company must compete with other larger publishers, such as Penguin Random House, Hachette and HarperCollins, for the rights to works by authors and sales to retailers and customers. Competition is particularly strong for well‑known authors and public personalities. In addition, technological changes have made it increasingly possible for authors to self‑publish and have led to the development of new digital distribution models in which the Company’s books must compete with the availability of both a larger volume of books as well as non-book content.

Local Media (13%, 12% and 14% of the Company’s consolidated revenues in 2018, 2017 and 2016, respectively, and 20%, 17% and 21% of the Company’s total segment operating income in 2018, 2017 and 2016, respectively)

The Local Media segment is composed of CBS Television Stations, the Company’sour 29 owned broadcast television stations, all of which operate under licenses granted by the Federal Communications Commission (“FCC”) pursuant to the Communications Act of 1934, as amended (the “Communications Act”). The licenses are renewableLicensees must seek to renew each license every eight years. The Company’s televisionOur stations are located in the 5six largest, and 15 of the top 20, television markets in the U.S. The Company ownsWe own multiple television stations within the same designated market area (“DMA”) in 10 major markets. These multiple station markets, are:including New York, (market #1), Los Angeles (market #2), Philadelphia (market #4), Dallas-Fort Worth (market #5), San Francisco-Oakland-San Jose (market #8), Boston (market #9), Detroit (market #14), Miami-Ft. Lauderdale (market #16), Sacramento-Stockton-Modesto (market #20), and Pittsburgh (market #24). This group of televisionPhiladelphia. Our stations enables the Companyenable us to reach a wide audience within and across geographically diverse markets in the U.S. The stations producebroadcast news and broadcast(including station-produced news), public affairs, sports and other programming to serve their local markets and most offer CBS, The CW or MyNetworkTV (a national broadcast service that provides syndicated programming, including series from our library, during primetime to stations across the country) programming and syndicated programming.

 The stations also broadcast free, advertiser-supported, digital channels using available broadcast spectrum, such as Dabl, Fave TV and Start TV (a national entertainment program service featuring classic television content focused on female audiences, which is our joint venture with Weigel Broadcasting). Local versions of CBS News Streaming offer local news from certain of our owned stations. Our stations have local websites that promote the stations’ programming.
The CBS
Television Stations group principally derives its revenues from the saleand Local Websites and Versions of advertising time on its television stations. In addition, the CBS Television Stations group receives retransmission fees from MVPDs for authorizing the MVPDs’ carriage of the Company’s owned television stations. News Streaming

The Company also has agreements for the digital streaming of the Company’sfollowing table sets forth information regarding our owned television stations and related local websites and versions of CBS News Streaming, as of February 14, 2022, within U.S. television markets:

Television Market
DMA Rank(1)
StationsTypeNetwork Affiliation
Local Websites and Versions of CBS News Streaming(2)
New York, NY1WCBS‑TVUHFCBSnewyork.cbslocal.com
WLNY‑TVUHFIndependentCBS News New York Streaming
Los Angeles, CA2KCAL‑TVVHFIndependentlosangeles.cbslocal.com
KCBS‑TVUHFCBSCBS News Los Angeles Streaming
Chicago, IL3WBBM‑TVVHFCBSchicago.cbslocal.com
CBS News Chicago Streaming
Philadelphia, PA4KYW‑TVUHFCBSphiladelphia.cbslocal.com
WPSG‑TVUHFThe CWCBS News Philly Streaming
Dallas‑Fort Worth, TX5KTVT‑TVUHFCBSdfw.cbslocal.com
KTXA‑TVUHFIndependentCBS News Dallas-Fort Worth Streaming
Atlanta, GA6WUPA-TVUHFThe CWatlanta.cbslocal.com

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Television Market
DMA Rank(1)
StationsTypeNetwork Affiliation
Local Websites and Versions of CBS News Streaming(2)
San Francisco, CA8KPIX‑TVUHFCBSsanfrancisco.cbslocal.com
KBCW‑TVUHFThe CWCBS News Bay Area Streaming
Boston, MA10WBZ-TVUHFCBSboston.cbslocal.com
WSBK-TVUHFMyNetworkTVCBS News Boston Streaming
Seattle-Tacoma, WA11KSTW-TVVHFThe CWseattle.cbslocal.com
Tampa-St. Petersburg, FL13WTOG-TVUHFThe CWtampa.cbslocal.com
Minneapolis, MN14WCCO‑TVUHFCBSminnesota.cbslocal.com
KCCW‑TV(3)VHFCBSCBS News Minnesota Streaming
Detroit, MI15WWJ‑TVUHFCBSdetroit.cbslocal.com
WKBD‑TVUHFThe CW
Denver, CO16KCNC‑TVUHFCBSdenver.cbslocal.com
CBS News Denver Streaming
Miami-Ft. Lauderdale, FL18WFOR‑TVUHFCBSmiami.cbslocal.com
WBFS‑TVUHFMyNetworkTVCBS News Miami Streaming
Sacramento, CA20KOVR-TVUHFCBSsacramento.cbslocal.com
KMAX-TVUHFThe CWCBS News Sacramento Streaming
Indianapolis, IN25WBXI-CA(4)UHFIndependent
Pittsburgh, PA26KDKA-TVUHFCBSpittsburgh.cbslocal.com
WPCW-TVVHFThe CWCBS News Pittsburgh Streaming
Baltimore, MD27WJZ‑TVVHFCBSbaltimore.cbslocal.com
CBS News Baltimore Streaming

(1)    Television market (DMA) rankings based on virtual MVPDs, including DIRECTV NOW, Hulu with Live TVNielsen Media Research Local Market Universe Estimates (September 2021).
(2)    Our television stations’ websites and YouTube TV. The Company’s direct-to-consumer digital streaming subscription service,the local versions of CBS All Access, offers an extensive on-demand selection of both currentNew Streaming feature and promote the stations’ programming and library, original series as well as the ability to stream linear programming from local CBS Television Stations and most CBS television station affiliates. CBS All Access is available at CBS.com and through the CBS app on multiple digital platforms. In December 2018, the Company launched CBSN New York, a direct-to-consumer digital streaming live, advertiser-supported local news network available 24 hours a day, seven days a week that complements CBSN and streams news events from the Company’s owned television stations in New York. The Company’s television stations also have a digital presence on CBS local Websites which are operated by CBS Local Digital Media.  The local Websites and related apps promote the Company’s stations’ programming as well as provide live and on-demand news, traffic, weather, entertainment and sports information, among other services for their local communities.
(3)    KCCW-TV is operated as a satellite station of WCCO-TV.
(4)    WBXI-CA is a Class A low power television station. Class A low power television stations do not implicate the FCC’s ownership rules.

Cable Networks

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Cable Networks consisted of a portfolio of premium and basic cable networks comprised of SHOWTIME, The Movie Channel, Flix, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, Smithsonian Channel, VH1, CMT, Pop TV, Logo and TV Land; a number of direct-to-consumer subscription streaming services — SHOWTIME OTT, Showtime Networks’ premium streaming service, Noggin, Nickelodeon’s preschool streaming service, and BET+, a streaming service focused on the Black audience; and Pluto TV, our FAST service.

Cable Networks also included VCNI, which operates international extensions of Paramount+, Pluto TV and our Cable Networks brands and services, our international free-to-air networks, which include Channel 5 in the U.K., Telefe in Argentina, Network 10 in Australia and Chilevisión in Chile, and VIS, which produces content for our brands and streaming services, as well as for third parties.

Cable Networks’ revenues were generated primarily from affiliate revenues comprised of fees from MVPDs and vMVPDs for carriage of our cable networks; advertising; streaming revenues, principally comprised of advertising and subscription revenues generated by the segment’s streaming services and from digital video advertisements on our websites and in our video content on third-party platforms; and the licensing of our content and other rights. In 2021, Cable Networks affiliate, advertising, streaming and licensing and other revenues

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generated approximately 39%, 28%, 19% and 14%, respectively, of the segment’s total revenues. Cable Networks generated approximately 47%, 50% and 46% of our consolidated revenues in 2021, 2020 and 2019, respectively (after the elimination of intercompany revenues).

Pluto TV

Pluto TV is a leading FAST service in the U.S., delivering hundreds of live linear channels and thousands of titles on-demand to 64.4 million global MAUs for December 2021. Pluto TV curates a diverse lineup of channels, in partnership with nearly 400 global media companies. Categories cover a wide array of genres, including movies, television series, including classic television, sports, news and opinion, reality, crime, comedy, home and DIY, explore, gaming, anime, music, kids and local programming. Pluto TV en español delivers over 50 Spanish-language channels reflecting the rich tapestry of the U.S. Hispanic community. Pluto TV was awarded the 2021 Corporate Leadership in Hispanic Programming award by Broadcasting & Cable, Multichannel News and Next Media. Pluto TV can be accessed and streamed across connected television devices, mobile and the internet. Pluto TV’s growing global footprint extends across three continents and 26 countries.

SHOWTIME

Our three premium subscription cable networks in the U.S. are SHOWTIME, which offers original scripted and unscripted series, movies, documentaries and docuseries, sports, comedy and special events; The local Websites principally derive revenuesMovie Channel, which offers a variety of movies and related programming; and Flix, which primarily offers movies from the salelast several decades. SHOWTIME OTT is Showtime Networks’ premium subscription streaming service. Showtime Networks also includes SHOWTIME Sports, a premium destination for live combat sports, including championship boxing, Bellator, a leading global mixed martial arts organization, and culturally relevant sports documentaries and original series. Highlights in 2021 include new seasons of advertising.  The “Television StationsChi and CBS Local Websites” table below includes informationBillions, the final season of Shameless, the return of Dexter in the limited series Dexter: New Blood, new dramas American Rust and Yellowjackets, as well as new late-night variety series Ziwe. SHOWTIME is also home to City on a Hill, The L Word: Generation Q, Your Honor and unscripted series Desus & Mero, Couples Therapy, The Circus and the news series Vice.

BET

BET is a leading provider of premium entertainment, music, news, digital and public affairs content for Black audiences. BET linear can be seen in the U.S., Canada, Brazil, the Caribbean, the U.K., sub-Saharan Africa and France. BET is one of the most well-known Black consumer brands in the world, with respectmultiplatform extensions, including BET Studios, a studio venture that provides equity ownership to these properties within U.S. television markets. CBS Television StationsBlack creators; BET Digital, BET’s interactive arm; BET Her, a network targeting the African-American woman; BET Music Networks; BET Home Entertainment; BET Live, BET’s events and Weigel Broadcasting ownexperience business; and operate through an approximately 50/50BET International, which operates BET around the globe. In 2021, BET aired a diverse roster of social justice content, including Disrupt & Dismantle with Soledad O’ Brien, COVID-19 Vaccine and The Black Community: A Tyler Perry Special, and, as part of our Content for Change initiative, Bars and Ballads for George Floyd, Justice Now: Race & Reckoning and Justice Now: The Way Forward. Other highlights include Twenties, Twenties After Show With B. Scott, Games People Play and new seasons of Tyler Perry’s original series The Oval, Sistas, House of Payne and Assisted Living. BET’s tentpole events are the BET Awards, the BET Hip Hop Awards and the NAACP Image Awards.

BET+, our joint venture with Tyler Perry Studios, is a leading subscription streaming service for the Black community, with thousands of hours of movies, television, stand-up specials, stage plays and more. BET+ is home to exclusive originals from leading Black creators such as Tracy Oliver’s Start TVFirst Wives Club™; Tyler Perry’s Ruthless and Bruh; Carl Weber’s The Family Business; and Will Packer’s Bigger; American Gangster: Trap Queens; All The Queen’s Men; The Ms. Pat Show; and Sacrifice.


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Kids & Family Entertainment Group

The Kids & Family Entertainment Group oversees our global strategy and business operations for our kids and family brands and content across linear and in streaming, through television programming, consumer products, location-based experiences, publishing and feature films. The group’s 2021 highlights on Paramount+ include The SpongeBob Movie: Sponge on the Run; the SpongeBob spinoff, Kamp Koral; the new iCarly series; and PAW Patrol: The Movie.
Nickelodeon

Nickelodeon, now in its 42nd year, is one of the most globally recognized and widely distributed multimedia entertainment brands for kids and family. Nickelodeon has been the number-one-rated advertising-supported basic cable network for 26 consecutive years among kids 2 to 11. Nickelodeon features leading original and licensed kids’ series across animation, live-action and preschool genres. Nickelodeon brands include Nick Jr., Nick at Nite, TeenNick, Nicktoons and Nick Music. Domestic highlights in 2021 include SpongeBob SquarePants, PAW Patrol, The Loud House, The Casagrandes, Tyler Perry’s Young Dylan, Danger Force and Blue’s Clues & You!. International highlights include Goldie’s Oldies, a nationalU.K. originated live action comedy series; Sharkdog, the Nickelodeon produced Netflix original animated series; and Spyders, Nickelodeon’s first original coproduction with Ananey Studios, our Israeli content producer and subscription television provider.

Noggin, Nickelodeon’s preschool subscription streaming service, features over 1,000 library episodes, interactive videos and short-form educational content. In partnership with Paramount, Nickelodeon Movies produces branded films based on some of Nickelodeon’s most iconic franchises and characters. Nickelodeon is a key part of our global consumer products business. In 2021, we launched a licensing partnership with global toy brand Melissa & Doug to deliver PAW Patrol and Blue’s Clues and You! cobranded toys. Nickelodeon also licenses its brands for recreation and other location-based experiences such as hotels and theme parks, and in 2021 opened Nickelodeon Hotels & Resorts Riviera Maya, in partnership with Karisma Hotels & Resorts and Grupo Lomas.

Awesomeness

Awesomeness creates content focused on the global Gen Z audience through its digital publishing, film and television studio divisions. Awesomeness’ original, award-winning content includes To All the Boys I’ve Loved Before, Trinkets and Pen15.

MTV Entertainment Group

MTV Entertainment Group connects with audiences through nine iconic brands — MTV, Comedy Central, VH1, CMT, Pop, Logo, Smithsonian, Paramount Network and TV Land — and MTV Entertainment Studios, which produces award-winning series, movies and documentary films for Paramount+ and third-party streaming services.

MTV

MTV is an iconic youth entertainment programbrand that is home to notable franchises such as The Challenge, the Shores (Jersey Shore Family Vacation, Floribama Shore, Geordie Shore, Acapulco Shore, Rio Shore and Warsaw Shore), Teen Mom (Teen Mom OG, Teen Mom Youngand Pregnant and Teen Mom 2) and Ridiculousness (Messyness and Deliciousness). MTV Documentary Films’ 2021 slate included the Academy Award-shortlisted, Emmy and Peabody-Award winning 76 Days. MTV’s signature live event — the MTV Video Music Awards — returned in 2021 along with the MTV Europe Music Awards and the MTV Movie and TV Awards.

Comedy Central

Comedy Central is a leading destination for all things comedy — from adult animation to stand-up to topical shows — providing viewers access to a world of funny, provocative and relevant content. Highlights for 2021

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include the South Park Pandemic and South ParQ Vaccination specials, The Daily Show with Trevor Noah, Tha God’s Honest Truth with Charlamagne Tha God, Awkwafina is Nora From Queens, Roy Wood Jr., Imperfect Messenger and the original holiday movies A Clüsterfünke Christmas and Hot Mess Holiday.

Paramount Network

Paramount Network is a premium entertainment destination and home to Yellowstone, cable’s hit co-created by Taylor Sheridan. Yellowstone serves as the launchpad for new original series from Taylor Sheridan on Paramount+, including Mayor of Kingstown and 1883, the Yellowstone prequel that premiered at the end of 2021.

Smithsonian Channel

Smithsonian Channel is the home of popular genres such as air and space, travel, history, science, nature and pop culture. Highlights for 2021 include the series Aerial America, America in Color, America’s Hidden Stories, Apollo’s Moon Shot, The Pacific War in Color and Air Disasters, as well as critically-acclaimed specials Black in Space: Breaking the Color Barrier and Cher & The Loneliest Elephant.

ViacomCBS Networks International

VCNI operates international extensions of Paramount+, Pluto TV and our Cable Networks brands and services, our international free-to-air broadcast networks, and VIS, which produces content for our brands and streaming services, as well as for third parties. VCNI provides distribution and advertising solutions for partners on five continents and across more than 180 countries. Viacom18 is our joint venture in India, whose operations include COLORS, a Hindi-language general entertainment pay television channel, and Viacom18 Studios, a filmed entertainment business.

ViacomCBS International Studios

One of the leading global producers of international content, VIS produces content for our brands and platforms, including Paramount+, Nickelodeon, MTV, Comedy Central, Channel 5, Network 10, Telefe, Ananey, Porta Dos Fundos and Chilevisión, as well as for third parties. A leading global Spanish-language content creator, VIS’ genres include kids, young adult, live action and animation, soap operas, dramas, short- and long-form comedy, feature films, unscripted reality and social impact documentaries. In 2021, we launched VIS Social Impact as part of our Content for Change social impact initiative.

Free-to-Air Networks

VCNI operates a number of free-to-air networks around the world.Network 10 is a major free-to-air broadcast network in Australia. Network 10’s brands include 10, 10 Bold, 10 Peach, 10 Shake and 10 Play, and its programming includes MasterChef Australia, Australian Survivor and I’m A Celebrity…Get Me Out of Here!.Channel 5 is a free-to-air public service featuring classicbroadcaster (PSB) in the U.K. Channel 5’s brands include 5Star, 5USA and 5Select, My5 and Milkshake, and its programming includes All Creatures Great and Small and Our Yorkshire Farm. Telefe is a leading free-to-air broadcast network in Argentina. Telefe’s brands include Telefe, Telefe Noticias, Mi Telefe, Telefe Internacional and Telefe Channels on Pluto TV, and its programming includes Telefe Noticias, its flagship newscast, MasterChef Celebrity, Bake Off, The Voice and top scripted and non-scripted content. Chilevisión is a leading free-to-air television network in Chile.Chilevisión’s programming includes ¿Quién es la Máscara?, Pasapalabra, Podemos Hablar, La Divina Comida and El Discípulo del Chef.



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Filmed Entertainment

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Filmed Entertainment consisted of Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television Studios and Miramax. Paramount produces franchise live-action and animated films and genre films for specific audiences and releases its films in various markets around the world theatrically, on streaming services, including Paramount+, through transactional home entertainment offerings, on television, and through various other media.

Filmed Entertainment’s revenues were generated primarily from the release or distribution of films theatrically, transactional home entertainment, the licensing of film and television product to streaming services, including Paramount+, broadcast and cable television networks and other digital services, and other ancillary activities. Our theatrical revenues in 2020 and 2021 were negatively impacted by the continued closure or reduction in capacity of movie theaters as a result of COVID‑19. We delayed certain planned 2020 and 2021 theatrical releases, licensed others to Paramount+ or third-party streaming services, and released several films theatrically, including A Quiet Place Part II, Snake Eyes: G.I. Joe Origins, PAW Patrol: The Movie and Clifford the Big Red Dog. In 2021, Filmed Entertainment licensing and other and theatrical revenues generated approximately 92% and 8%, respectively, of the segment’s total revenues. Filmed Entertainment generated approximately 9%, 9% and 11% of our consolidated revenues in 2021, 2020 and 2019, respectively (after the elimination of intercompany revenues).

Paramount Pictures

Paramount Pictures is a major global producer and distributor of filmed entertainment and has an extensive library consisting of over 1,200 film titles produced by Paramount and has acquired rights to nearly 2,900 additional films and a number of television programs. Paramount is home to a number of successful franchises such as Mission: Impossible, Transformers, Star Trek, A Quiet Place and Paranormal Activity. Paramount’s library includes Academy Award winners, including Titanic, Braveheart, Forrest Gump, The Godfather, The Godfather Part II and Wings, which won the first ever Academy Award for Best Picture in 1929. The Paramount library also includes Academy Award nominees such as Arrival, Fences, The Big Short, Selma and The Wolf of Wall Street, and classics such as The Ten Commandments, Breakfast at Tiffany’s and Sunset Boulevard. Paramount’s 2021 theatrical releases included A Quiet Place Part II, Snake Eyes: G.I. Joe Origins, PAW Patrol: The Movie and Clifford the Big Red Dog.

Paramount Players

Paramount Players is committed to creating genre films from unique, contemporary voices and properties, as well as drawing from Paramount’s rich library of content. Paramount Players also produces films for initial release on Paramount+, including Paranormal Activity: Next of Kin, which was released in 2021.

Paramount Animation

Paramount Animation develops and produces top-quality animated films. Paramount Animation coproduced The SpongeBob Movie: Sponge on the Run, which was digitally released domestically simultaneously on premium video on demand and Paramount+ in March 2021. Paramount Animation also produced Rumble, which was released on Paramount+ in the U.S. in December 2021.

Paramount Television Studios

Paramount Television Studios develops and finances a wide range of television content moviesacross all platforms for distribution worldwide. Paramount Television Studios’ productions include American Gigolo for Showtime

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Networks; Made For Love and original programming focused on femaleStation Eleven for HBO Max; Shantaram, Defending Jacob and HomeBefore Dark for Apple TV+; Tom Clancy’s Jack Ryan for Amazon; The Haunting of Bly Manor for Netflix; and Catch-22 for Hulu.

Miramax

Miramax, a consolidated joint venture with beIN Media Group, is a global film and television studio with an extensive library of content. We have exclusive, long-term rights to distribute Miramax’s library of more than 650 titles, which includes Pulp Fiction, Shakespeare in Love, Good Will Hunting, No Country for Old Men and Scary Movie. We also have certain rights to coproduce, co-finance and/or distribute new film and television projects with Miramax.

Film Production, Distribution and Financing

Weproduce many of the films we release and also acquire films for distribution from third parties. In some cases, we co-finance and/or co-distribute films with third parties, including other studios. Wealso enter into film-specific financing and multipicture financing arrangements from time to time under which third parties participate in the financing of the costs of a film or group of films in exchange for an economic participation and a partial copyright interest. Wedistribute films worldwide or in select territories in various media and may engage third-party distributors for certain films in certain territories.

Domestically, wegenerally market and distribute our own theatrical and home entertainment releases. Internationally, we distribute theatrical releases through our international affiliates or, in territories where we have no operating presence, through United International Pictures, our joint venture with Universal Studios, or other third-party distributors. For home entertainment releases, DVD and Blu-ray discs are distributed internationally by local licensees. We also license films and television shows domestically and/or internationally to a variety of platforms.

Competition

All of our businesses operate in highly competitive environments, and compete for creative talent and intellectual property, as well as for audiences and distribution of our content.

We compete with a variety of media, technology and entertainment companies that have substantial resources to produce, acquire and distribute content around the world, including broadcast networks, basic and premium cable networks, streaming services, film and television studios, production groups, independent producers and syndicators, television stations and television station groups. We compete with other content creators for creative talent including producers, directors, actors and writers, as well as for new program ideas and intellectual property and for the acquisition of popular programming.

Our businesses also face significant competition for audiences from various sources. We compete for audiences for localour films and television stations’ digital sub-channels, which utilize a localcontent with releases from other film studios, television station's available broadcast spectrum to provide a companion to that station's primary channel.

Local Media Competition. Television stationsproducers and streaming services, as well as with other forms of entertainment and consumer spending outlets. We also compete for programming, on‑air talent, audiences and advertising revenues primarily with other stationsbroadcast and cable networks in their respective coverage areastelevision networks; streaming services; social media platforms; websites, apps and in some cases, with respect to programming, with other station groups,online experiences; radio programming; and in the case of advertising revenues, with other local and nationalprint media. The owned and operatedIn addition, our television stations’ competitive position is largely influenced by the quality of the syndicated programs and local news programs in time periods not programmed by the network; the strength of the CBS Television Network programming and, in particular, the viewership of the CBS Television Network in the time period immediately prior to the late evening news; and in some cases, by the quality of the broadcast signal. The Company’s television stationsbusinesses face increasing competition from technologies such asproviding digital audio and visual content which create newin ways forthat allow audiences to consume content of their choosing while avoiding traditional commercial advertising. Moreover, our businesses face competition from the many other entertainment options available to consumers including video games, sports, travel and outdoor recreation.



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advertising. The Company’s television stations’ WebsitesWe also face competition for advertisersdistribution of our content. Our television businesses compete for distribution of our program services (and receipt of related fees) with other broadcast networks, cable networks and visitors fromprogrammers. The CBS Network competes with other digital sources of local content.

Television Stations and CBS Local Websites
The following table sets forth information regarding the Company’sbroadcast networks to secure affiliations with independently owned television stations and related local Websites, as of February 13, 2019, within U.S. television markets:

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Market and Market Rank(1)

Stations

Type

Network Affiliation

CBS Local Websites(2)
New York, NY (#1)WCBS‑TVUHFCBSnewyork.cbslocal.com
WLNY‑TVUHFIndependent
Los Angeles, CA(#2)
KCAL‑TVVHFIndependentlosangeles.cbslocal.com
KCBS‑TVUHFCBS
Chicago, IL (#3)WBBM‑TVVHFCBSchicago.cbslocal.com
Philadelphia, PA (#4)KYW‑TVUHFCBSphiladelphia.cbslocal.com
WPSG‑TVUHFThe CW
Dallas‑Fort Worth, TX (#5)KTVT‑TVUHFCBSdfw.cbslocal.com
KTXA‑TVUHFIndependent
San Francisco, CA (#8)KPIX‑TVUHFCBSsanfrancisco.cbslocal.com
KBCW‑TVUHFThe CW
Boston, MA (#9)WBZ-TVUHFCBSboston.cbslocal.com
WSBK-TVUHFMyNetworkTV
Atlanta, GA (#10)WUPA-TVUHFThe CWatlanta.cbslocal.com
Tampa-St. Petersburg, FL (#11)WTOG-TVUHFThe CWtampa.cbslocal.com
Seattle-Tacoma, WA (#13)KSTW-TVVHFThe CWseattle.cbslocal.com
Detroit, MI (#14)WKBD‑TVUHFThe CWdetroit.cbslocal.com
WWJ‑TVUHFCBS
Minneapolis, MN (#15)WCCO‑TVUHFCBSminnesota.cbslocal.com
KCCW‑TV(3)
VHFCBS
Miami-Ft. Lauderdale, FL (#16)WFOR‑TVUHFCBSmiami.cbslocal.com

WBFS‑TVUHFMyNetworkTV
Denver, CO (#17)KCNC‑TVUHFCBSdenver.cbslocal.com
Sacramento, CA (#20)KOVR-TVUHFCBSsacramento.cbslocal.com
KMAX-TVUHFThe CW
Pittsburgh, PA (#24)KDKA-TVUHFCBSpittsburgh.cbslocal.com
WPCW-TVVHFThe CW
Baltimore, MD (#26)WJZ‑TVVHFCBSbaltimore.cbslocal.com
Indianapolis, IN (#28)
WBXI-CA(4)
UHFIndependent
(1)Television market (DMA) rankings based on Nielsen Media Research Local Market Universe Estimates, September 2018.
(2)The Company’s television stations’ Websites, which are operated by the CBS Local Digital Media Group, promote the stations’ programming and provide news, traffic, weather, entertainment and sports information, among other services for their local communities.
(3)KCCW-TV is operated as a satellite station of WCCO-TV.
(4)WBXI-CA is a Class A low power television station. Class A low power television stations do not implicate the FCC’s ownership rules.


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television stations to ensure the effective distribution of network programming in the U.S. We also compete with studios and other producers of entertainment content for distribution on third-party platforms.
REGULATION
For additional information regarding competition, see “Item 1A. Risk Factors — Our businesses operate in industries that are highly competitive.”

Environmental, Social and Governance Strategy

We believe the media and entertainment industry plays an important role in shaping culture and conversations. We take this role seriously and are committed to advancing and strengthening our approach to issues, opportunities and risks related to ESG matters to help serve our stockholders, employees, partners, audiences and the communities in which we operate, as well as to enhance our business. Our ESG strategy is centered on an understanding of our biggest opportunities and risks.

We organize our ESG work into three pillars: (1) On-Screen Content & Social Impact, (2) Workforce & Culture and (3) Sustainable Production & Operations. On-Screen Content & Social Impact addresses the opportunities and responsibilities we have to represent, inform and influence through our content and brands. Workforce & Culture focuses on our efforts to recruit and retain the best employees, treat contractors and partners well, and foster an environment where people feel welcome and safe. Sustainable Production & Operations addresses the environmental and social impacts of our operations and facilities, film and television productions and other activities.

Building on our 2020 companywide Materiality Assessment and first ESG Report, in 2021 we released our second ESG Report, which is available on our website, and included our first set of overarching goals for each of these pillars to help focus our efforts and assess our progress. We are committed to continuing to identify, measure, map and report on the ESG impact of our global operations.

ESG Governance

Our ESG efforts are a companywide commitment led by a dedicated ESG team that oversees day-to-day strategy and implementation. Our ESG team works closely with our ESG Council, a cross-functional team of senior leadership and subject matter experts spanning our brands, legal, investor relations, global inclusion, human resources, finance, real estate and environmental health and safety, to guide our strategy and reporting and help spread and instill our ESG values across the Company. The ESG team works in close collaboration with our Chief Executive Officer, Chief Financial Officer, General Counsel and other senior executives who together make up our ESG Steering Committee. These leaders are actively involved in reviewing and refining our ESG strategies, programs and policies. The ESG team regularly updates the Nominating and Governance Committee of our Board of Directors, which, pursuant to its charter, oversees and monitors significant issues impacting our culture and reputation, as well as our handling of ESG issues.

Human Capital Management

We aim to build a culture that attracts and retains the best employees and a workplace where people feel welcome, safe and inspired to bring their whole self to work.

As of December 31, 2021, we employed approximately 22,965 full- and part-time employees in 37 countries worldwide and had approximately 4,300 project-based staff on our payroll. We also use temporary employees in the ordinary course of our business.

Our human capital management strategy is intended to address the areas described below, and additional information can be found in our ESG Report.


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A Culture of Diversity, Equity and Inclusion

We seek to mold a companywide culture built on our core values and anchored in a dynamic and proactive approach to DE&I through a range of partnerships, collaborations, programs and initiatives, some of which are described below.

•Many of our brands maintain inclusivity councils to address their DE&I activities and the DE&I challenges in their businesses.

•We partner with hundreds of diversity-focused institutions globally that are committed to supporting women, BIPOC and LGBTQ+ individuals, veterans and/or persons with disabilities. We have placed a particular focus on organizations advancing the causes of racial justice, anti-hate and social equity.

•We sponsor internal and external professional development programs and campus-to-career initiatives aimed at underrepresented groups.

•Our job postings reach an expansive network that includes more than 60 diversity-focused job boards. We use third-party technology to identify and remove biasing language from our job descriptions.

•We sponsor eight active employee-led Employee Resource Groups (“ERGs”) with 53 chapters in 19 locations worldwide. More than half of our employees are members of these employee-led groups. Our ERGs provide support for certain business and corporate initiatives.

•Our CEO has signed onto the CEO Action for Diversity and Inclusion pledge and the Company was a founding signatory for Management Leadership for Tomorrow’s (“MLT”) Black Equity at Work Certification Program (“BEW”). The MLT BEW is a third-party validation program that aims to drive measurable progress in improving representation and racial equity in the workplace.

•Of our U.S. employees, as of December 31, 2021, approximately 49% were female and approximately 39% self-identified as part of a racial or ethnic minority group. Of our U.S. employees with Vice President titles and above, as of December 31, 2021, approximately 49% were female and approximately 28% self-identified as part of a racial or ethnic minority group.

•In 2021, we set new goals to help accelerate our performance on key DE&I objectives, including a target global hire and promotion rate for female Senior Vice Presidents and above and a target U.S. hire and promotion rate for ethnically diverse Vice Presidents and above.

Preventing Harassment and Discrimination

We remain committed to building a work environment free of harassment and discrimination so that our employees can focus on doing their best work. We have enacted policies addressing harassment, discrimination and other behaviors that could create a hostile workplace, some of which are described below.

•Our Business Conduct Statement provides employees with clear examples of harassment and discrimination and guidance on how to create a safe and inclusive environment for all. We make annual trainings on sexual harassment, discrimination and retaliation prevention available to all employees.

•We monitor employee diversity data trends — including the promotion rates of women and ethnically diverse employees compared to their male or white peers, respectively — and watch for any patterns that might suggest discrimination or unconscious bias so that we can seek to address them.


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•We require that employees report any incidents of harassment and discrimination that they witness. Among other ways, employees can report incidents of harassment or discrimination using our anonymous third-party managed complaint and reporting hotline, called OPENLINE.

Employee Attraction, Retention and Training

Our training, mentoring and career mobility programs embody our culture of DE&I as we recruit, retain and engage our employees. We strive to create an inclusive culture in which our employees and talent feel supported, heard and understood and in which employees of all backgrounds feel like they belong and have the opportunity to thrive. Some of these programs are described below.

•We offer a broad spectrum of learning opportunities for our employees, including leadership-specific training for employees who are new to their positions, taking on an expanded scope of responsibilities, or otherwise seeking to expand their impact. We also offer regular manager and employee classes focused on specific skills, leader learning journeys to help people leaders implement new capabilities over several months, and team-based workshops for groups who want to learn together.

•We offer a range of financial and nonfinancial compensation and benefits, including health, life and disability insurance; matching retirement and profit-sharing contributions; flexible paid time off; paid volunteer time; financial planning assistance; multiple wellness programs; and parental, caregiving, bereavement and military leave benefits. We also offer tuition support for certain employees. In 2021, we began offering our employees access to a behavior-change app designed to help our employees manage stress, improve focus and enhance overall well-being.

•We offer flexible work hours for many of our full-time and part-time employees.

•In 2021, we launched our first global employee engagement survey, administered by an independent third party, to assess our efforts around employee engagement, inclusion and well-being. Our executive officers (and managers, on a team level) reviewed the survey results and instituted action plans to address feedback and opportunity areas. We continue to track our progress on these efforts through shorter, periodic “pulse” engagement surveys.

•As a result of our focus on employee satisfaction and inclusiveness, we have been recognized for our workplace culture, including being named a 2021 Most Loved Workplace by Newsweek, one of America’s Best Employers for Diversity by Forbes and one of the Top 100 workplaces with the Best D&I Initiatives in 2021 by Mogul.

Health, Safety and Security

The Company’shealth and safety of our workers, particularly across our productions worldwide, remains a top priority. We strive to take a proactive approach to identifying and mitigating health, safety and security risks. Some of the steps we take are described below.

•In 2021, we began to centralize our nonproduction environmental health and safety (“EHS”) functions. We appointed a new Senior Vice President of EHS in an effort to ensure that these critical functions are managed consistently and reported on externally in an appropriate way.

•We have on-site health care at some office and production sites, as well as medics and medical support at many production sites.

•We perform risk assessments of daily work processes across our productions, offices and other work sites and develop hazard reduction, avoidance and mitigation plans. We also track and report safety, health and security incident data across the company.

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•Our Global Security Operations Center oversees security and emergency response efforts and undertakes risk scans in an effort to identify potential security risks.

•After COVID-19 caused an initial period in which our offices closed and production ceased, we restarted productions in mid-2020 and began to manage a slow and safe return-to-office process. We have established a number of COVID-19-related safety protocols in our offices, on our productions and with respect to nonproduction activities. While the majority of our employees had the opportunity to work at a reduced capacity from certain offices, most of our office employees worked remotely in 2021.

Social Impact and Corporate Social Responsibility

We leverage our platforms and diverse capabilities to create positive social impacts, including by exploring and raising awareness of issues that align with our values and impact our viewers such as climate change, mental health, civic engagement and social justice. Our commitment to social impact is not only exemplified by the content we produce, but also our community service projects, philanthropy and employee engagement efforts, including our 25th annual Community Day, which was held virtually in 2021 and involved employees from 23 regions around the world across more than 100 volunteer projects.

Content for Change

Content for Change is a social justice initiative launched by BET in 2020 that is anchored in the belief that storytelling has the power to transform how we see ourselves and one another. In 2021, we expanded the program across the Company with three interrelated objectives: (1) leveraging content to counteract racism, bias, stereotypes and hate; (2) striving for equity across our entire creative supply chain; and (3) creating a culture of diversity, inclusion and belonging that continuously informs and enhances the stories we tell through our content. This initiative builds upon our commitment to our community, as well as to DE&I and fostering an inclusive company culture.

Regulation

Our businesses and the intellectual property they create or acquire are subject to and/orand affected by laws and regulations of U.S. federal, state and local governmental authorities, inas well as laws and regulations of countries other than the U.S. and of national, regionalpan-national bodies such as the European Union (“E.U.”). The laws and local authorities in foreign countries. The rules, regulations policies and procedures affecting theseour businesses are constantly subject to change. The summaries below should be read in conjunction withchange, as are the texts of the statutes, rulesprotections that those laws and regulations described herein.afford us. The descriptions dodiscussion below describes certain, but not describe all, present and proposed statutes, ruleslaws and regulations affecting the Company’sour businesses.

Intellectual PropertyFCC and Privacy

Laws affecting intellectual property are of significant importance to the Company. (See “Intellectual Property” on page I-15 for more information on the Company’s brands).

Similar Regulation
Unauthorized Distribution
The FCC regulates broadcast television, some aspects of Copyrighted Contentcable network programming, and Piracy. Unauthorized distribution, reproduction, exhibition or other exploitation of copyrighted material in televisioncertain programming motion pictures, video clips and books, such as through unauthorized stored copies and livestreaming,delivered by internet downloads, file “sharing” and peer-to-peer services, is a threat to copyright owners’ ability to protect and exploit their property. The Company’s digital delivery services and commercial arrangements with digital content providers help reduce the risks associated with unauthorized access to its content. The Company is also engaged in enforcement and other activities to protect its intellectual property and participates in various litigation, public relations programs and legislative activity. These business strategies and enforcement efforts are dependent upon laws and practices that protect the rights of creators and authorized distributors of content.

Laws and Content. The Company derives revenues from the creation and exploitation of creative content, for which the copyright law, includingprotocol in the U.S. and other laws in other jurisdictions, grants certain exclusive rights, including to reproduce, publicly perform and distribute such content. The scope and duration of the protection afforded to the Company’s intellectual property depends on the type of property and the laws and regulations of the relevant jurisdiction.Any changes to copyright laws or related regulations that enable the Company to control the distribution of its content, including through court decisions, which diminish the scope of a copyright owner’s exclusive rights could impact the Company. Proposed legal amendments, such as to the law governing territorial exclusivity of the distribution of content in Europe, could adversely impact the Company’s ability to control and distribute its content.

Privacy. The U.S. and international laws and regulations governing the collection, use and transfer of consumer information are complex and rapidly evolving, particularly as they relate to the Company’s interactive businesses. The Company monitors and considers these laws and regulations in the design and operation of its Websites, digital content services and legal and regulatory compliance programs. Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, changes to business practices, financial penalties for noncompliance, or otherwise harm the Company's business. For example, the European Union’s (“EU”) General Data Protection Regulation (“GDPR”) went into effect in May 2018 and applies to activities conducted from the Company's establishments in the EU or related to products and services that the Company offers to EU users. The GDPR creates new data protection compliance obligations and significantly increases financial penalties for noncompliance. Compliance with evolving U.S. and international consumer privacy and data protection laws requires additional resources and efforts by the Company.

Broadcasting

General. Television broadcasting is subject to the jurisdiction of the FCC, pursuant to U.S. federal law, including the Communications Act. The Communications Act empowersViolation of FCC regulations can result in substantial monetary fines, the FCC, among other actions, to issue, renew, revoke and modify broadcasting licenses; determine stations’ frequencies, locations and operating power; regulate someimposition of the equipment used by stations; adopt other regulations to carry out the provisions of the Communications Act and other laws, including requirements affecting the content of broadcasts; and impose penalties for violation of its regulations, including monetary forfeitures, short-term renewalreporting obligations, limited renewals of licenses and, in egregious cases, license revocation or denial of license renewals.renewal or revocation of a license.




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Under the Communications Act, the FCC also regulates certain aspects of the operation of MVPDsLicense Renewals and certain other electronic media that compete with broadcast stations.

Transfers
Indecency and Profanity Regulation.
 The FCC’s rules prohibit the broadcast
Each of obscene material at any time and indecent or profane material between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent or profane material because the vagueness of the FCC’s indecency/profanity definition makes it difficult to apply, particularly with respect to spontaneous, live programming. The FCC’s maximum forfeiture penalty per station for broadcasting indecent or profane programming is approximately $407,000 per indecent or profane utterance, with a maximum forfeiture exposure of approximately $3.76 million for any continuing violation arising from a single act or failure to act. The Company has been involved in litigation and, from time to time, has received and may receiveour owned television stations in the future letters of inquiry fromU.S. must be licensed by the FCC prompted by complaints alleging that certain programming on its broadcast stations included indecent or profane material.

License Renewals.FCC. Television broadcast licenses are typically granted for standardeight-year terms, of eight years.and we must obtain renewals as they expire to continue operating our stations. The Communications Act requires the FCC to renew a broadcast license if the FCC finds that (1) the station has served the public interest, convenience and necessity and,necessity; (2) with respect to the station, there have been no serious violations by the licensee of either the Communications Act or the FCC’s rulesFCC regulations; and regulations and(3) there have been no other violations by the licensee of the Communications Act or the FCC’s rules andFCC regulations that, taken together,

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constitute a pattern of abuse. The Company has noAs of February 14, 2022, we had three pending renewal applications.applications, and we will be filing applications with respect to most of our remaining stations on a staggered basis in 2022 and 2023. A station remains authorized to operate while its license renewal application is pending.

License Assignments and Transfers of Licensee Control. The In addition, the Communications Act requires prior FCC approval for the assignment of a license or transfer of control of an FCC licensee. Third parties may oppose the Company’s applications to assign, acquire, or transfer control of broadcast licenses.


Broadcast Ownership Regulation
Ownership Regulation.
The Communications Act and FCC rules impose limits on local and regulations limit the ability of individuals and entities to have certain official positions ornational broadcast television station ownership interests, known as “attributable” interests, above specific levels in broadcast stations. In seeking FCC approval for the acquisition of a broadcast station license, the acquiring person or entity must demonstrate that the acquisition complies with the FCC’s ownership rules or that a waiver of the rules is in the public interest.

Below are descriptions ofU.S. The broadcast ownership rules discussed below are the most relevant to our operations in the U.S. In 2019, a federal appellate court vacated a 2017 FCC decision that are subject to current FCC review. The FCC is reviewing itshad (1) repealed rules restricting common ownership of a TV station with either a daily newspaper or one or more radio stations in the same local televisionmarket, and (2) loosened a rule restricting common ownership and dual network rules through its most recent quadrennial review that commenced in November 2018 and is separately reviewing its television national audience reach rule.of TV stations within the same market.

Local Television Ownership.Ownership

 Under the
The FCC’s local television ownership rule one party may own up togenerally limits common ownership of two televisionfull-power stations in the same DMA, so long asa market unless at least one of the twoowned stations is not among thea top-four ranked stationsstation in the market based on audience share, as of the date an application for approval of an acquisition is filed with the FCC. A party may also own two television stations in the same DMA if the broadcast service contours of the stations do not overlap. In addition,provided that the FCC will consider whether tomay permit acquisitions of a second top-four ranked television station in the same market on a case-by-case basissuch common ownership if doing soit finds such ownership would serve the public interest, convenience and necessity. “Satellite” television stations that simply rebroadcast the programming of a “parent” television station are exempt from the local television ownership rule if located in the same DMA as the “parent” station. Low power television stations, which are authorized by the FCC to operate at significantly lower power levels than full-service stations, are exempt from FCC ownership rules.


Dual Network Rule.Rule

The dual network rule effectively prohibits any of the four major U.S. broadcast networks — ABC, CBS, FOX and NBC — from combining.combining or being under common control.


Television National Audience Reach Limitation.Limitation

Under the national television ownership rule, one party may not own television stations that reach more than 39% of all U.S. television households. In April 2017, the FCC reinstated the UHF discount, which was subsequently upheld by a federal courtHowever, for purposes of appeals, pursuant to whichthis rule, a UHF television station is afforded a “discount” and is therefore attributed with reaching only 50% of the television households in its


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market. In December 2017, the FCC issued a Notice of Proposed Rulemaking pursuant to which it will consider modifying, retaining or eliminating the 39% national television audience reach limitation and/or the UHF discount. The CompanyWe currently ownsown and operatesoperate television stations that reach approximately 38% of all U.S. television households, not taking into account the UHF discount.

Attributionbut we are attributed with reaching approximately 24% of Ownership. Under the FCC’s attribution rules, a direct or indirect purchaser of various types of securities of an entity which holds FCC licenses,all such as the Company, could violate the foregoing FCC ownership regulations or policies if that purchaser owned or acquired an “attributable” interest in other media properties. Under the FCC’s rules, an “attributable” interesthouseholds for purposes of the FCC’s broadcastnational ownership rules generally includes: equity and debt interests which combined exceed 33% of a licensee’s total assets, if the interest holder supplies more than 15%rule because of the licensee’s total weekly programming, or has an attributable same-market media interest, whether television, radio, cable or newspaper; a 5% or greater direct or indirect voting stock interest, including certain interests held in trust, unless the holder is a qualified passive investor, in which case the threshold is a 20% or greater voting stock interest; any equity interest in a limited liability company or a partnership, including a limited partnership, unless the interest holder is properly “insulated” from management activities; and any position as an officer or director of a licensee or of its direct or indirect parent. The FCC is reviewing its single majority voting stockholder attribution exemption, which renders as non‑attributable voting interests up to 49% in a licensee controlled by a single majority voting stockholder. Because NAI holds an attributable interest in both the Company and Viacom Inc., the business of each company is attributable to the other for certain FCC purposes, which may have the effect of limiting and affecting the activities, strategic business alternatives and business terms available to the Company. (See Item 1A. “Risk Factors-The businesses of the Company and Viacom Inc. will be attributable to the other company for certain regulatory purposes, which may limit business opportunities”).discount.


Foreign Ownership
Alien Ownership.
In general, the Communications Act prohibitsrestricts foreign individuals or entities from collectively owning more than 25% of theour voting power or equity of the Company.equity. FCC approval is required to exceed the 25% threshold. The FCC has recently approved foreign ownership levels of up to 100% in certain instances, subsequent to its review and approval of specific, named foreign individuals.


Cable and Satellite Carriage of Television Broadcast Stations.Stations
The 1992 Cable Act and implementing FCC regulations govern the retransmission of commercial television stations by cable television operators. Every three years, a television station must elect, with respect to cable systems within its DMA, either “must carry” status, pursuant to which the cable system’s carriage of the station is mandatory, or “retransmission consent,” pursuant to which the station gives up its right to mandatory carriage and secures instead the right to negotiate consideration in return for consenting to carriage. Since 2006, the Company has implemented a systematic process of seeking monetary consideration for its retransmission consent.

Similarly, federal legislationThe Communications Act and FCC rules govern the retransmission of broadcast television stations by DBS operators. DBScable system operators, are requireddirect broadcast satellite operators, and other MVPDs in the U.S. Pursuant to these regulations, we have elected to negotiate with MVPDs for the right to carry the signals of all local televisionour broadcast stations requesting carriage in local markets in which the DBS operator carries at least one signal pursuant to the statutory local-to-local compulsory copyright license. Every three years, each television station in such markets must elect “must carry” or “retransmission consent” status, in a manner similar to that described above with respect to cable systems. The Company’s owned and operated television stations are being transmitted into their local markets by the two major DBS operators pursuant tovia retransmission consent agreements.

 The Communications Act and FCC regulations require that broadcasters and some categories of MVPDs negotiate in good faith for retransmission consent. Some MVPDs have sought changes to federal law that would eliminate or otherwise limit the ability of broadcasters to obtain fair compensation for the grant of retransmission consent.
Children’s Television Programming.

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Program Regulation

The FCC rulesalso regulates the content of broadcast, cable network, and other video programming. The FCC prohibits broadcasters from airing obscene material at any time and indecent or profane material between 6 a.m. and 10 p.m. The FCC’s maximum forfeiture penalty per station for broadcasting indecent or profane programming is approximately $445,445 per indecent or profane utterance or image, with a maximum forfeiture exposure of approximately $4.1 million for any continuing violation arising from a single act or failure to act. The FCC also actively monitors compliance with requirements that apply to broadcasters and cable networks relating to political advertising, identification of program sponsors, and the use and integrity of the Emergency Alert System. In addition, FCC regulations require the closed captioning of almost all broadcast and cable programming, as well as certain programming in the U.S. delivered by internet protocol. Broadcast television stations in certain markets that are affiliated with one of the four major U.S. broadcast networks must also provide a certain amount of programming every quarter that includes audio description (audio-narrated description of a television program’s key visual elements that make the programming accessible to broadcast on their main program stream three hours per week of educationalblind and informational programming (“E/I programming”) designed for children 16 years of agelow-vision viewers).

Children’s Programming

Our business is subject to various regulations in the U.S. and younger.abroad applicable to children’s programming. U.S. federal law and FCC rules also impose E/I programming requirements on each additional digital multicast program stream transmitted by television stations, with the requirement increasing in proportion to the additional hours of free programming offered on multicast channels. These rules also limit the display during children’s programming of internet addresses of Websites that contain or link to commercial material or that use program characters to sell products. Regulations also limit the amount and content of commercial matter that may be shown on broadcast television stations and cable networks during programming designed for children 12 years of age and younger. The FCC is considering relaxing certain ofyounger, and the E/I programming rules.



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Program Access. Under the Communications Act, vertically integrated cable programmers (more fully described below) are generally prohibited from offering different prices, terms or conditions for programming to competing MVPDs unless the differential is justified by certain permissible factors set forth in the FCC’s regulations. The FCC also assesseslimits the competitive impactdisplay of exclusive distribution arrangements between vertically integrated cable programmers and cable operators on a complaint-based process, using a case-by-case review. A cable programmer is considered to be vertically integrated under the FCC’s program access attribution rules if it owns or is owned in whole or in part by either a cable operator or a telephone company that provides video programming directly to subscribers.

The Company’s wholly owned program services are not currently subject to the program access rules. The Company’s flexibility to negotiate the most favorable terms available for carriagecertain commercial website addresses during children’s programming. Moreover, each of these services and its ability to offer cable operators exclusive programming could be adversely affected if it were to become subject to the program access rules. Because the Company and Viacom Inc. are under common control by NAI, Viacom Inc.’s businesses could be attributable to the Company for purposes of the FCC’s program access rules. (See Item 1A. “Risk Factors-The businesses of the Company and Viacom Inc. will be attributable to the other company for certain regulatory purposes, which may limit business opportunities”).

National Broadband Plan/Post-Auction Repack. In 2017, the FCC concluded a series of voluntary auctions to repurpose certain spectrum then utilized byour broadcast television stations for use by wireless broadband services. The FCC has mandated that certain television stations that are continuing to operate subsequent to these auctions must change their channels as the FCC “repacks” the remaining spectrum dedicated to broadcast television use. Congress provided that the FCC will assist television stations in retaining their current coverage areas and established a fund to at least partially reimburse broadcasters for reasonable relocation expenses relating to the spectrum-repacking. Certain broadcast television stations, including some of those owned by the Company, are in the processU.S. is required to air, in general, three hours per week of undertaking this repacking processprogramming specifically designed to meet the educational and seeking reimbursementinformational programming needs of associated costs.children 16 years of age and younger.


In addition, some policymakers have sought limitations on food and beverage marketing in media popular with children and teens. For example, restrictions on the television advertising of foods high in fat, salt and sugar (“HFSS”) to children aged 15 and under have been in place in the U.K. since 2007. The U.K. government has announced its intention to impose a ban, effective in 2023, on all HFSS advertising before 9:00 p.m. on television and a total ban online. Various laws with similar objectives have also been enacted in Ireland, Turkey, Mexico, Chile, Argentina, Peru, Taiwan and South Korea, and significant pressure for similar restrictions continues to be felt globally, most acutely in Australia, Brazil, Canada, Colombia, India, Hungary, Singapore, South Africa and France. The implementation of these or similar limitations and restrictions could have a negative impact on our television advertising revenues, particularly for our networks with programming for children and teens.

Broadcast Transmission Standard

.
In November 2017, the FCC adopted rules to permit television broadcasters to voluntarily broadcast using the “Next Generation” broadcast television transmission standard developed by the Advanced Television Systems Committee, Inc., also called “ATSC 3.0.” Those full-service television stations using the new standard are subject to certain requirements, including the obligation to continue broadcasting a generally identical program stream in the current ATSC 1.0 broadcast standard. The ATSC 3.0 standard can be used to offer better picture quality and improved mobile broadcast viewing. A television station converting to ATSC 3.0 operation will incur significant costs in equipment purchases and upgrade.upgrades. In addition, consumers may be required to obtain new television sets or other equipment that are capable of receiving ATSC 3.0 broadcasts. The Company isWe are participating in various ATSC 3.0 testingpartnerships with other broadcasters but it is tooand may enter into additional partnerships in the future.

Global Data Protection Laws and Children’s Privacy Laws

A number of data protection and privacy laws impact, or may impact, the manner in which we collect, process and transfer personal data. In the E.U., the General Data Protection Regulation (“GDPR”) mandates data protection compliance obligations and authorizes significant fines for noncompliance. In the U.S., the California Consumer Privacy Act (“CCPA”) went into effect in January 2020 and created a host of new obligations for businesses

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regarding how they handle the personal information of California residents, including creating new data access, data deletion and opt out rights. The new California Privacy Right Act will replace the CCPA in early 2023 and creates even more onerous obligations, including the need to predict anyimplement mechanisms for consumers to opt out of personal data sharing with third parties in the context of digital advertising. A number of other regions where we do business, including the U.S., Asia and Latin America, have enacted or are considering new data protection legislation and regulations that may impact our business activities that involve the processing of this technicalpersonal data.

In addition, some of the mechanisms we previously relied upon for the international transfer of personal data from the E.U. to other countries including the U.S., are no longer available. New legal requirements such as utilizing the new standard contractual clauses recently approved by the European Commission require significant resources going forward to perform international data transfer assessments.

We are also subject to laws and regulations intended specifically to protect the interests of children, including the privacy of minors online. The U.S. Children’s Online Privacy Protection Act (“COPPA”) limits the collection by operators of websites or online services of personal information online from children under the age of 13. The U.S. Federal Trade Commission has yet to issue a proposed new COPPA rule as part of its review of its regulations implementing COPPA begun in 2019; however, the agency as well as some state Attorneys General have continued to bring enforcement cases under the existing COPPA rule. Since the enactment of GDPR in 2018, several countries in the E.U. and U.K. have issued guidance documents or codes of conduct with respect to the online privacy of children under 18, which impact countries outside of the U.K. and E.U., including the U.S. and in Australia. Such regulations may also restrict the types of advertising we are able to sell on these online services, sites and apps and may impose strict liability on us for certain of our actions, as well as certain actions of our advertisers and other third parties, which could affect advertising demand and pricing. In the U.S., state and federal policymakers are also considering regulatory and legislative methods to protect consumer privacy on the Company’s operations.internet, and these efforts have focused particular attention on children and teens. Congress has held several hearings on protecting children and teens online and has signaled that an update to COPPA with stronger protections for children and teens is likely.


INTELLECTUAL PROPERTY

See “Item 1A. Risk Factors — Risks Relating to Business Continuity, Cybersecurity and Privacy and Data Protection — We are subject to complex, often inconsistent and potentially costly laws, rules, regulations, industry standards and contractual obligations relating to privacy and personal data protection.”
The Company creates, owns, distributes
Intellectual Property

We are fundamentally a content company, and exploits under licenses itsthe trademark, copyright, patent and other intellectual property worldwide.laws that protect our brands and content are extremely important to us. It is the Company’sour practice to protect its products, including its television and motion picture products, characters, publications and other original and acquired works and audiovisual works made for digital exploitation. The following logos, trade names, trademarksour brands, content and related trademark families are among those strongly identifiedintellectual property. Unauthorized exploitation of copyrighted works interferes with the product lines they representlegitimate market and are significant assetsdisrupts our ability to distribute and monetize our content. The infringement of the Company: CBS®, CBS Entertainment™, CBS News®, CBS Sports®, CBSSports.com®, CBS All Access®, CBSN®, CBSN Local™, CBS Sports HQ®, CNET®, Showtime®, Showtime Anytime®, The Movie Channel®, Flix®, CBS Films®, Network 10™, 10™, 10 Bold™, 10 Peach™, 10 Play™, 10 Daily™, 10 All Access™, CBS Audience Network™, TV.com™, Last.fm®, MetroLyrics®, CSI:®, NCIS®, Entertainment Tonight®, ET Live™, Star Trek®, Simon & Schuster®, CBS Sports Network®, CBS Interactive®, CBS Local Digital Media™and all the call letters for the Company’s stations. As a result, domestic and foreign laws protectingour intellectual property rights presents a significant challenge to our industry, and we take a number of steps to address this concern. For example, where possible, we use technologies, such as encryption, watermarking, and digital rights management tools, to protect our content from piracy. We are importantalso actively engaged in enforcement and other activities to protect our intellectual property, including: monitoring services that unlawfully distribute or otherwise infringe our content and sending takedown or cease-and-desist notices in appropriate circumstances; using filtering technologies employed by some social media companies and other platforms hosting our content; working with intermediaries and other third parties to address current infringements and prevent more in the future; and pursuing litigation and referrals to law enforcement. Through partnerships with various organizations, we also are actively involved in educational outreach to the Companycreative community, state and the Company actively enforces itsfederal government officials and other stakeholders in an effort to marshal greater resources to combat intellectual property rights against infringements.infringement. Additionally, we participate in various industrywide enforcement initiatives, public relations programs and legislative activities on a worldwide basis. For example, we have had notable success with site-blocking efforts in parts of Europe, Asia, Latin America and Australia, which can be effective in steering consumers away from piracy platforms and toward legitimate platforms.



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Notwithstanding these efforts and the many legal protections that exist to combat piracy, the proliferation of infringing services and the sophistication of and continued technological advancement in the tools used in infringing activities continues to be a challenge. The failure to maintain enhanced legal protections and enforcement tools and to update those tools as threats evolve could make it more difficult for us to adequately protect our intellectual property, which could negatively impact its value and further increase the costs of enforcing our rights as we continue to expend substantial resources to protect our content.
EMPLOYEES

Our Executive Officers
At
Our executive officers as of February 14, 2022, are as follows:

NameAgePosition
Robert M. Bakish58President and Chief Executive Officer, Director
Naveen Chopra48Executive Vice President, Chief Financial Officer
Christa A. D’Alimonte53Executive Vice President, General Counsel and Secretary
Katherine Gill-Charest57Executive Vice President, Controller and Chief Accounting Officer
Richard M. Jones56Executive Vice President, General Tax Counsel and Chief Veteran Officer
Doretha (DeDe) Lea57Executive Vice President, Global Public Policy and Government Relations
Julia Phelps44Executive Vice President, Chief Communications and Corporate Marketing Officer
Nancy Phillips54Executive Vice President, Chief People Officer

Robert M. Bakish has been our President and Chief Executive Officer and a member of our Board since December 31, 2018,2019. Mr. Bakish served as President and Chief Executive Officer and a member of the board of Viacom from December 2016 to December 2019, having served as Acting President and Chief Executive Officer beginning earlier in 2016. Mr. Bakish joined Viacom’s predecessor (“Former Viacom”) in 1997 and held positions throughout the organization, including as President and Chief Executive Officer of Viacom International Media Networks and its predecessor company, MTV Networks International, from 2007 to 2016; Executive Vice President, Operations and Viacom Enterprises; Executive Vice President and Chief Operating Officer, MTV Networks Advertising Sales; and Senior Vice President, Planning, Development and Technology. Before joining Former Viacom, Mr. Bakish was a partner with Booz Allen Hamilton in its Media and Entertainment practice. Mr. Bakish has served as a director of Avid Technology, Inc. since 2009.

Naveen Chopra has been our Executive Vice President, Chief Financial Officer since August 2020. Prior to that, he served as Vice President and Chief Financial Officer of Amazon Devices & Services, beginning in 2019. Prior to joining Amazon Devices & Services, Mr. Chopra served as Chief Financial Officer of Pandora Media from 2017 to 2019 and as its Interim Chief Executive Officer during part of this time, having previously served as Interim Chief Executive Officer of TiVo Inc. in 2016 and as its Chief Financial Officer from 2012 to 2016.

Christa A. D’Alimonte has been our Executive Vice President, General Counsel and Secretary since December 2019. Prior to that,she served as Executive Vice President, General Counsel and Secretary of Viacom beginning in 2017, having previously served asSenior Vice President, Deputy General Counsel and Assistant Secretary beginning in 2012. Prior to joining Viacom, Ms. D’Alimonte was a partner of Shearman & Sterling LLP, where she was Deputy Practice Group Leader of the Firm’s Global Mergers & Acquisitions group. She first joined Shearman & Sterling in 1993 and became a partner in 2001.

Katherine Gill-Charesthas been our Executive Vice President, Controller and Chief Accounting Officer since December 2019. Prior to that, she served as Senior Vice President, Controller and Chief Accounting Officer of Viacom beginning in 2010, having previously served as Senior Vice President, Deputy Controller of Viacom during 2010 and Vice President, Deputy Controller beginning in 2007. Prior to that, Ms. Gill-Charest was the Chief Accounting Officer of WPP Group from 2001 to 2007 and was the Vice President and Worldwide Controller of Young & Rubicam Inc. from 1998 to 2000. Ms. Gill-Charest also held roles in financial reporting

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and accounting policy at Time Warner Inc. from 1991 to 1998 and at NYNEX Corporation from 1988 to 1991 and served in the audit practice of Price Waterhouse for two years.

Richard M. Jones has been our Executive Vice President, General Tax Counsel and Chief Veteran Officer since August 2014. Prior to that, he served as Senior Vice President and General Tax Counsel of CBS Corporation beginning in 2006 and of FormerViacom beginning in 2005. Prior to that, he served as Vice President of Tax, Assistant Treasurer and Tax Counsel for NBC Universal, Inc. beginning in 2003 and he served 13 years with Ernst & Young in its media & entertainment and transaction advisory services practices. Mr. Jones served honorably as a noncommissioned officer in the U.S. Army’s 75th Ranger Regiment and 10th Mountain Division.

Doretha (DeDe) Lea has been our Executive Vice President, Global Public Policy and Government Relations since December 2019. Prior to that, she served as Executive Vice President, Global Government Affairs of Viacom beginning in 2013, having previously served as Executive Vice President, Government Relations beginning in 2005. Prior to that, Ms. Lea served in various government relations positions at Former Viacom beginning in 1997, with the exception of 2004 to 2005, when she served as Vice President of Government Affairs at Belo Corp. Prior to joining Former Viacom, she was Senior Vice President of Government Relations at the National Association of Broadcasters.

Julia Phelps has been our Executive Vice President, Chief Communications and Corporate Marketing Officer since December 2019. Prior to that, she served as Executive Vice President, Communications, Culture and Marketing of Viacom beginning in 2017, having previously served as Senior Vice President, Communications and Culture of Viacom beginning earlier in 2017. Prior to that, she served as Executive Vice President of Communications for Viacom International Media Networks beginning in 2012, after having served as Vice President of Corporate Communications for Viacom. Ms. Phelps joined Former Viacom in 2005 from DeVries Public Relations, a New York-based communications agency.

Nancy Phillips has been our Executive Vice President, Chief People Officer since December 2019. Prior to that, she served as Executive Vice President and Chief Human Resources Officer of Nielsen Holdings PLC beginning in 2017, having served as Executive Vice President and Chief Human Resources Officer of Broadcom Corporation from 2014 to 2016. From 2010 to 2014, Ms. Phillips was Senior Vice President, Human Resources for the Imaging and Printing Group at Hewlett-Packard Company, employed approximately 12,770 full-time and part-time salaried employeespreviously served as Senior Vice President, Human Resources, Enterprise Services. From 2008 to 2010, Ms. Phillips served as Executive Vice President and had approximately 3,960 additional project-based staff.Chief Human Resources Officer at Fifth Third Bancorp. Prior to that, Ms. Phillips spent 11 years at General Electric Company, holding various human resources positions. Ms. Phillips practiced law from 1993 to 1997.

FINANCIAL INFORMATION ABOUT SEGMENTS AND FOREIGN AND DOMESTIC OPERATIONSAvailable Information

FinancialWe file annual, quarterly and current reports, proxy and information statements and other information by segment and relating to foreign and domestic operations for each ofwith the last three years ended December 31 is set forth in Note 15 to the Consolidated Financial Statements.

AVAILABLE INFORMATION

CBS Corp. makes available free of charge on its Website, www.cbscorporation.com (Investors section), its Annual ReportSEC. Our annual reports on Form 10-K, Quarterly Reportsquarterly reports on Form 10-Q, Current Reportscurrent reports on Form 8-K and any amendments to thosesuch reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. Such material is made1934, as amended, will be available through the Company’s Websitefree of charge on our website at www.ViacomCBS.com (under “Investors”) as soon as reasonably practicable after such material is electronicallythe reports are filed with or furnished to the Securities and Exchange Commission.SEC. These documents are also available on the SEC’s Websitewebsite at www.sec.gov.

Item 1A.
We announce material financial information through SEC filings, press releases, public conference calls and webcasts and our investor relations website at Risk Factors.

CAUTIONARY STATEMENT CONCERNING FORWARDir.ViacomCBS.com‑LOOKING STATEMENTS

This document, including “Item 7. Management’s Discussion. We may use any of these channels as well as social media and Analysis of Results of Operationsblogs to communicate with investors about our Company. It is possible that the information we post on social media and Financial Condition,” and the documents incorporated by reference into this Annual Report on Form 10-K, contain both historical and forward-looking statements. All statements other than statements of historical fact are, or mayblogs could be deemed to be forward-looking statements withinmaterial information. Therefore, we encourage investors, the meaning of section 27A of the Securities Act of 1933media, 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. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases. Similarly, statements that describe the Company’s 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 theothers interested in our Company to be different from any future results, performance or achievements expressed or implied by these statements. Morereview the information about these risks, uncertaintieswe post on the social media channels and other factors is set forth below. Additional risks, uncertainties and other factors may be described in the Company’s filings made under the securities laws. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not necessarily known. The forward-looking statements included in this document are made only as of the date of this document and the Company does not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.blogs listed on our investor relations website.

RISK FACTORS


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For an enterprise as large and complex as the Company, a
Item 1A.Risk Factors.

A wide range of factors couldrisks may affect itsour business, financial condition or results of operations, now and financial results. The factorsin the future. We consider the risks described below are considered to be the most significant. There may be other currently unknown or unpredictable economic, business, competitive, technological, regulatory or other factors that could have material adverse effects on the Company’s future results. Pastour business, financial performance may notcondition or results of operations.

Risks Relating to Our Business and Industry

If our streaming initiatives are unsuccessful, our business, financial condition or results of operations could be a reliable indicator of future performanceadversely affected

Streaming is intensely competitive and historical trends should not be used to anticipate results or trends in future periods. The following discussion of risk factors should be read in conjunction with “Item 7. Management’s Discussioncash intensive and Analysis of Results of Operations and Financial Condition” and the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.



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The Company’s success and profitability are dependent upon audience acceptance of its content, which is difficult to predict.

Television and other content production and distribution are inherently risky businesses because the revenues derived from the production and distribution of such content, and the licensing of rights to the associated intellectual property, depend primarily upon their acceptance by the public, which is difficult to predict. The commercial success of a program also depends upon the quality and acceptance of other competing programs released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, all of which are difficult to predict. Rating points are also factors that are weighed when determining the advertising rates that the Company receives. The use of evolving ratings technologies and measurements, and viewership on platforms or devices, such as tablets, smart phones and other mobile devices, that is not being fully measured, could have an impact on the Company’s program ratings and advertising revenues. For example, while C-7, a current television industry sales metric, measures live, in-home, commercial viewing plus seven days of digital video recorder (“DVR”) and video-on-demand playback, the viewership occurring on subsequent days of DVR and video-on-demand playback, as well as out-of-home viewing and online and mobile viewership, are excluded from current audience viewership measures. Also, consumer viewership of OTT services continues to grow and is under measured. Low ratings can lead to lower pricing and advertising spending. For example, there can be no assurance that any replacement programmingour streaming initiatives will be profitable or otherwise successful. Our ability to attract, engage and retain subscribers to our subscription streaming services, including Paramount+, SHOWTIME OTT and BET+, and MAUs (together with subscribers, “users”) on our FAST service, Pluto TV, as well as the Company’s television stationscorresponding subscription and advertising revenues they generate, will generatedepend on our ability to consistently provide appealing and differentiated content globally, effectively market our content and services and provide a quality experience for selecting and viewing that content. Our success will require significant investments to produce original content and acquire the same level of revenues or profitability as previous programming. In addition, the success of the Company’s cable networks and Simon & Schuster is similarly dependent on audience acceptance of its programming and publications, respectively. Low public acceptance of the Company’srights to third-party content, including its programmingwith respect to live sports, as well as the establishment and publications, willmaintenance of key content and distribution partnerships.

We must continually add new users, convert promotional subscribers and meaningfully engage with existing subscribers to manage turnover, or “churn,” to grow our business. If we are unable to successfully compete with competitors in attracting, engaging with and retaining users as well as creative talent, our business, financial condition or results of operations could be adversely affected. The relative service levels, content offerings, promotions and pricing and related features of our competitors’ services may adversely impact our ability to attract, engage and retain users. If consumers do not consider our streaming services to be of value compared to our competitors’ services, including because we fail to introduce attractive new content and features, do not maintain competitive pricing, terminate or modify promotional or trial period offerings, experience technical issues, or change the mix of content in a manner that is unfavorably received, we may not be able to attract, engage and retain users. If we are not able to attract new users, or our existing users decide to not continue subscriptions on our services for any reason, including a perception that they do not use our streaming services sufficiently, the need to cut household expenses, unsatisfactory content, promotions or trial-period offers expire or are modified, competitive services or promotions provide a better value or experience or customer service or technical issues are not satisfactorily resolved, our business, financial condition or results of operations could be adversely affected.

Changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging, may negatively affect our business, financial condition or results of operations

Our success depends on our ability to anticipate and adapt to shifting content consumption patterns. The ways in which viewers consume content, and technology and business models in our industry, continue to evolve rapidly, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining predictable revenue streams.

Technological advancements have empowered consumers to seek more control over when, where and how they consume content and have affected the options available to advertisers for reaching target audiences. The evolution of consumer preferences toward “over-the-top” content consumption, such as streaming and other digital offerings, and the substantial increase in the availability of content without advertising or adequate methodologies for audience measurement, have had, and may continue to have, an adverse effect on the Company’sour business, financial condition and results of operations. In addition, any decreased popularityconsumers are increasingly using time-shifting and advertising-blocking technologies, such as DVRs, that enable users to bypass advertisements. Substantial use of

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these technologies could impact the attractiveness of our programming to advertisers, adversely affecting our advertising revenue.

In response to perceived consumer demand, distributors are continuing to develop alternative offerings, including streaming and other subscription services; advertising-supported services, including FAST; original content for which the Company has incurred significant commitments could have an adverse effect on its profitability. Programmingmobile and talent commitments of the Company, estimated to aggregate approximately $8.98 billion as of December 31, 2018, primarilysocial media platforms; and smaller, often customizable, packages delivered by MVPDs at lower costs than traditional offerings. If our networks and brands are not included $6.62 billion for sports programming rights, $1.71 billion relating to the productionin these offerings and licensing ofservices, or if consumers increasingly favor alternative offerings over traditional broadcast television and filmcable subscriptions, we may continue to experience viewership declines and ultimately demand for our programming, and $660 million for talent contracts, with $889 million of these amounts payable in and after 2024. A shortfall, now or in the future, in the expected popularity of the programming the Company expects to distribute or the sports events for which the Company has acquired rights, could lead to decreased profitabilitylower revenues from traditional sources. These changing distribution models may also impact our ability to negotiate carriage deals on terms favorable to us.

To respond to these developments, we regularly adopt or losses for a significant period of time.develop new technologies and consider, and from time to time implement, changes to our business models and strategies to remain competitive, such as our increased investment in streaming. There can be no assurance that we will successfully anticipate or respond to these developments, that we will not experience disruption, even as we respond to such developments, or that the new technologies or business models we develop will be as successful as historic or existing ones.

A declineOur advertising revenues have been and may continue to be adversely impacted by changes in consumer viewership, advertising expenditures could cause the Company’s revenuesmarket conditions and operating results to decline significantlydeficiencies in any given period or in specific markets.audience measurement

The Company derivesWe derive substantial revenues from the sale of advertising, and a decline in advertising revenues could have a significant adverse effect on its broadcastour business, financial condition or results of operations.

The evolution of consumer preferences toward over-the-top streaming and basic cable networks,other digital services and the increasing number of entertainment choices has intensified audience fragmentation and reduced content viewership through traditional linear distribution models, which has caused and may continue to cause ratings declines for our television stations, syndicated programming,networks. This evolution has also given rise to new ways of purchasing advertising, as well as a general shift in total advertising expenditures toward streaming and digital, properties. A declinesome of which may not be as beneficial to us as traditional advertising methods. Although we have increasingly focused on generating advertising revenue from our own streaming services, including Pluto TV and Paramount+ Essential, and other digital services, there can be no assurance that we can successfully navigate this shift or that the advertising revenues we generate will replace the declines in advertising revenues generated from our traditional linear business.

The strength of the advertising market can fluctuate in response to the economic prospects of specific advertisers or industries, advertisers’ current spending priorities and the economy in general or the economy of any individual geographic market, particularly a major market, such as Los Angeles, New York or Chicago, in whichincluding the Company ownsimpact of the current inflationary environment and operates sizeable businesses, could alter current or prospective advertisers’ spending priorities.the global supply chain delays. These factors may adversely affect our advertising revenues. Natural and other disasters, pandemics, acts of terrorism, political uncertainty or hostilities could also lead to a reduction in domestic and international advertising expenditures as a result of disrupted programming and services, uninterrupted news coverage and economic uncertainty. Our ability to generate advertising revenue is also dependent on demand for our content, the consumers in our targeted demographics, advertising rates and results observed by advertisers.

Major sports events, such as the Super Bowl and the NCAA Division I Men’s Basketball Tournament and state, congressional and presidential elections cycles may cause our advertising revenues to vary substantially from year to year. Political advertising expenditures are impacted by the ability and willingness of candidates and political action campaigns to raise and spend funds on advertising and the competitive nature of the elections affecting viewers in markets featuring our content.

Advertising expenditures maysales are also largely dependent on audience measurement and could be negatively affected if measurement methodologies do not accurately reflect actual viewership levels. Nielsen’s statistical sampling method is the primary measurement technique used in our television advertising sales; however, it does not fully

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measure viewership across streaming and digital. We measure and monetize across over-the-top platforms based on census-based advertising-server data establishing the number of impressions served, combined with third-party data providing demographic composition estimates. Multiplatform campaign verification remains in its infancy and is still not measured by any one consistently applied method. While we expect innovation and standards around multiplatform measurement to benefit us as the advertising market continues to evolve, we are nevertheless partially dependent on third parties to deliver those solutions. Our ability to target and measure audiences is also limited by an increasing number of global laws and regulations relating to privacy and the collection, use and security of personal data.

Our success depends on our ability to maintain attractive brands andour reputation, and to offer popular programming and other content

Our ability to maintain attractive brands, and to create, distribute and/or license popular content are key to our success and ability to generate revenues. The revenues we generate primarily depend on our ability to consistently anticipate and satisfy consumer tastes and expectations, both in the U.S. and internationally. The popularity of our content is affected by increasing competition forour ability to develop and maintain strong brand awareness and a strong reputation; our ability to target key audiences; the quality and attractiveness of competing entertainment content; and the availability of alternative forms of entertainment and leisure time of audiences. In addition, advertising expenditures by companiesactivities. Consumer tastes and behavior change frequently, and it is a challenge to anticipate what will be successful at any point in certain sectors of the economy,time. We invest substantial capital in our content, including the automotive, financialproduction of original content, before learning the extent to which it will garner critical success and pharmaceutical segments, representpopularity with consumers. A shortfall in the expected popularity of content we distribute or of sports events for which we have acquired rights, could lead to decreased profitability or losses for a significant portionperiod of time. Significant negative claims or publicity regarding the Company’s advertising revenues. Any political, economic, socialCompany or technological change resulting in a reduction in these sectors’ advertising expendituresits operations, content, products, management, employees, practices, business partners and culture, including individuals associated with the content we create and/or license, as well as our inability to adequately prepare for or respond to such negative claims or publicity, may damage our brands or reputation, even if such claims are untrue.

Increased costs for content and other rights may adversely affect our business, financial condition or results of operations

We invest significant resources to produce, market and distribute original content. We also acquire content and ancillary rights and pay related rights fees, license fees, royalties and/or contingent compensation. For example, some of the Company’s revenue. Advertisers’ willingness to purchase advertisingsports programming most viewed on CBS Sports or streamed on Paramount+, including NFL games, are made available based on rights of varying duration that we have negotiated with third parties. We also license various music rights from the Company may also be affected by a declinemajor record companies, music publishers and performing rights organizations. Our investments in audience ratings for the Company’s programming, the inability of the Company to retain the rights to popular programming, increasing audience fragmentation caused by new program channelsinternally produced and the proliferation of media formats, including the internetacquired content are significant and video-on-demand and the deployment of portable digital video devices and new technologies, which allow consumers to live stream and time shift programming, make and store digital copies and skip or fast-forward through advertisements. In addition, the pricing and volume of advertising may be affected by shifts in spending toward digital and mobile offerings, which can deliver targeted advertising promptly, from more traditional media, or toward newer ways of purchasing advertising, such as through automated purchasing, dynamic advertising insertion,involve complex negotiations with numerous third parties, selling local advertising spots and advertising exchanges, some or all of which may not be as beneficial to the Company


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as traditional advertising methods. Any reduction in advertising expenditures could have an adverse effect on the Company’s revenues and results of operations.

The Company must respond to rapid changes in technology, content creation, services, standards and changes in consumer behavior in order to remain competitive.

Video, telecommunications and data services technologies used inhave increased the entertainment industry are changing rapidly as are the digital publishing and distribution models for books. Advances in technologies or alternative methods of product delivery or storage could reduce subscription or advertiser-supported viewership of the Company’s programming and have a negative effect on the Company’s revenues and profitability. Examples of the foregoing include the convergence of television telecasts and digital delivery of programming to televisions and other devices, video-on-demand platforms, tablets, new video and electronic book formats, user-generated content sites, unauthorized digital distribution of video content including via streaming and downloading, simultaneous live streaming of telecast content which allows users to consume content on demand and in remote locations while avoiding traditional commercial advertisements or subscription payments and “cloud-based” DVR storage. Further, these and other technologies drive changes in consumer behavior that could affect the attractiveness of the Company’s offerings to advertisers and adversely affect its revenues, including devices that allow users to view television programs on a time-delayed basis and technologies, such as DVRs, that enable users to fast-forward or skip advertisements or increase the sharing of subscription content and reduce the demand for electronic sell-through, DVD and Blu-ray Disc products. The Company’s business also may be adversely affected by the use of antennas (and their integration with set-top boxes or other consumer devices) to access broadcast signals to avoid subscriptions and live and stored video streaming boxes and services, which deliver unauthorized copies of copyrighted content, including those emanating from other countries in various languages.

More television and video programming options, including via digital streaming services and platforms, increase competition for viewers. In addition, competitors targeting programming to narrowly defined audiences may gain an advantage over the Company for advertising and subscription revenues. Television manufacturers, cable providers and others are developing and offering technology to enable viewers to locate digital copies of programming from the internet to view on television monitors or other devices, which could diminish viewership of the Company’s programming. Also, the impact of technological changes on MVPDs may adversely affect the Company’s cable networks’ ability to grow revenue. In order to respond to these developments, the Company implements changes to its business models and strategies from time to time. There can be no assurance that the Company’s direct-to-consumer digital streaming business models will continue to successfully respond to changes in technologies and consumer preferences. Anticipating and timely adapting to changes in technology and content consumption and exploiting new sources of revenue from these changes could affect the Company’s ability to continue to increase its revenues.

Increased programming and content costs may adversely affect the Company’s profits.

The Company produces and acquires programming and other content and incurs costs with respect to its content, including for all types of creative talent, such as actors, authors, writers and producers, composers and publishers of music, as well as for marketing and distribution. The Company plans to increase its investment in content and related marketing and distribution, including for its direct-to-consumer digital streaming services. An increase in any of these costs and increased competition from large entertainment companies and additional entrants with substantial resources for the production, acquisition and distribution of new content, including Amazon, Apple, Hulu and Netflix, may lead to decreased profitability. As competition for popular content is intense, the Company may have to increase expenditures for talent and intellectual property rights. In addition, changes in content consumption as well as the increasing number of available digital and other program, entertainment and news services increase the risksrisk associated with the success of all typeskinds of content. There can be no assurance that the Company will recoup its investments in programming and related costs. These factors could have an adverse effect on the Company’s business, financial condition or results of operations.


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Piracy of the Company’s programming and other content, including digital piracy, may decrease revenue received from the exploitation of the Company’s programming and other content and adversely affect its businesses and profitability.

Piracy of programming, books and other copyrighted material is prevalent in many parts of the world and is made easier by the availability of digital copies of content, which facilitates the creation, transmission and sharing of high quality unauthorized copies of the Company’s content. Technological advances, which facilitate the streaming of programming via the internet to television screens and other devices, may increase piracy. The proliferation of unauthorized access to content, including through unauthorized live streaming, streaming boxes and apps programmed to seek pirated copies of content, the unauthorized premature release of content and unauthorized account sharing of subscription program services, has an adverse effect on the Company’s businesses and profitability because these unauthorized actions reduce the revenue that the Company potentially could receive from the legitimate sale and distribution of its products and services. Increases in piracy would have an adverse effect on the Company’s businesses and profitability. Also, while legal protections exist, piracy and technological tools with which to carry it out continue to escalate, evolve and present challengesCompetition for enforcement. The Company enforces its rights against entities that illegally secure and exhibit its content, including streaming the Company’s content without obtaining the consent of or paying compensation to the Company. Failure of legal and technological protections to evolve and enable enhanced enforcement efforts to combat piracy could make it more difficult for the Company to adequately protect its intellectual property, which could negatively impact its value and further increase the Company’s enforcement costs.

Failure by the Company to obtain, create and retain the rights related to popular programming could adversely affect the Company’s revenues.

The Company’s revenues from its television, cable networks and digital services businesses are partially dependent on the Company’s continued ability to anticipate and adapt to changes in consumer tastes and behavior on a timely basis. Moreover, the Company derives a portion of its revenues from the exploitation of its extensive library of television programming. Generally, a television series must have a network run of at least three or four years to be successfully sold in domestic syndication, however, increasingly, these time frames are being shortened. If the content of its television programming library ceases to be widely accepted by audiences or is not continuously replenished with popular content the Company’s revenues could be adversely affected. The Company obtains a significant portion of its popular programming from third parties. For example, some of CBS Television Network’s most widely viewed broadcasts, including golf’s Masters Tournament, the PGA Championship, NFL games, NCAA Division I Men’s Basketball Tournament games and series such as Young Sheldon, are made available based upon programming rights of varying duration that the Company has negotiated with third parties. In addition, Showtime Networks enters into commitments and competes with other buyers to acquire rights to certain programming for Showtime, The Movie Channel and Flix from motion picture producers and other suppliers for varying durations. The Company competes for compelling source material for and the talent necessary to produce programming. In addition, competition for popular programming that is licensed from third parties is intense, and we may have to increase the Companyprice we are willing to pay for talent and intellectual property rights, which may result in significantly increased costs. Further, increased competition in the market for development and production of original content, particularly from streaming services, increases our content costs. We may be outbid by itsour competitors for the rights to new, popular programmingcontent or in connection with the renewalrenewals of popular programmingrights we currently licensed byhold. As such, there can be no assurance that we will recoup our investments when the Company. The Company’s failure to obtaincontent is broadcast or retain rights to popular content could adversely affect the Company’s revenues.distributed.


The Company’sOur businesses operate in industries that are highly competitive and consolidating industries.

The Company competesWe compete with other media companies for high qualityto attract creative talent and produce high-quality content, to achieve large audiences and to generate advertising and subscription revenue. The Company also competes for distribution on various MVPDs anda variety of third-party digital platforms. The Company’s ability to attractCompetition for talent, content, audiences, and advertisers and obtain favorable distribution depends in part on its ability to provide popular programming and books and adapt to new technologiessubscribers, service providers, production infrastructure, advertising and distribution platforms. The consolidation of advertising agencies, distributors, content providers, printersis intense and television service providers also has increased their negotiating leverage and intensified competition for audiences, advertising revenue, print production and distribution. In addition, consolidation among book retailers and the growth of online sales and electronic books sales have resulted in increased competition for limited physical shelf space for the Company’s publications and for the attention of consumers online. Competition for audiences and advertising


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comes from:from other broadcast television networks and stations, cable networks, streaming services, the internet and networks; cable television systemssocial media, film studios and networks; motion picture studios; the internet; non-traditional programming services, including increases in the number of direct-to-consumer services; technological innovations in content distribution; terrestrialindependent film producers and satellite radio and portable devices; local, regional and national newspapers; direct mail;distributors, consumer products companies and other communicationsentertainment outlets and advertising media that operate in these markets.platforms, as well as from “second screen” applications. Other broadcast television networks or stations or cable networks may change their formats or programming, a new stationnetwork or new networkstation may adopt a format to

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compete directly with the Company’sour networks or stations, or networks or stations or networks might engage in aggressive promotional campaigns. In book publishing, competition among electronicWe also compete with additional entrants into the market for the production of original content and print book retailersstreaming services.

Our ability to obtain widespread distribution on favorable terms, which contributes to our ability to reach audiences and, in turn, attract advertisers, is adversely affected by continued industry consolidation, including distributors and television service providers. Our competitors generally include companies with interests in multiple media businesses that are often vertically integrated, whereas our cablebusiness generally relies on distribution relationships with third parties. As more companies in sectors adjacent to our own create or acquire their own content, they may have significant competitive advantages, which could decrease the pricesadversely affect our ability to negotiate favorable terms for new releases and the outlets available for book sales. Moreover, the growing use of self-publishingdistribution or otherwise compete effectively. Our competitors could also have preferential access to important technologies, by authors increasescustomer data or other competitive information, as well as significant financial resources.

This competition and could result in decreased use of traditional publishing services. This competitionconsolidation could result in lower ratings and advertising, and subscriptionlower affiliate and other revenues, orand increased content costs and promotional and other expenses, negatively affecting our ability to generate revenues and consequently, lower the Company’s earnings and cash flow. The Company cannotprofitability. There can be assuredno assurance that itwe will be able to compete successfully in the future against existing new or potentialnew competitors, or that competition andor consolidation in the marketplace will not have a materialan adverse effect on itsour business, financial condition or results of operations.

The loss of affiliation and distribution agreements, or retransmissionrenewal of these agreements or renewals on less favorable terms or adverse interpretations thereof could materially adversely affect the Company’shave a significant adverse effect on our business, financial condition or results of operations.operations

A significant portion of our revenues are attributable to agreements with a limited number of distributors. These agreements generally have fixed terms that vary by market and distributor, and there can be no assurance that they will be renewed in the future, or renewed on favorable terms, including those related to pricing and programming tiers. We may also be unable to modify existing agreements with terms that have become less favorable over time. The loss of existing packaging, positioning, pricing or other marketing opportunities and the loss of carriage or the failure to renew our agreements with any distributor, or renew or modify them on favorable terms, could reduce the distribution of our programming and program services and decrease the potential audience for our programs, thereby negatively affecting our growth prospects and revenues from both affiliate fees and advertising. The CBS Television Network provides its affiliates with up to approximately 98 hours ofaffiliated television stations regularly scheduled programming per week. Inin return for the CBS Television Network’s affiliated stations broadcast network-insertedinsertion of network commercials during that programming and pay the Company station affiliation fees. Losspayment of reverse compensation. The loss of such station affiliation agreements of the CBS Television Network could adversely affect the Company’sour results of operations by reducing the reach of the Company’sour programming and therefore itsour attractiveness to advertisers, and renewal of these affiliation agreements on less favorable terms may also adversely affect the Company’sour results of operations.

Consolidation among and vertical integration of distributors in the cable or broadcast network business has provided more leverage to these distributors and could adversely affect our ability to maintain or obtain distribution for our network programming or distribution and/or marketing of our subscription services on favorable or commercially reasonable terms, or at all. Also, consolidation among television station group owners could increase their negotiating leverage. The non-renewal or termination of retransmission agreements with MVPDs and virtual MVPDs or continued distribution on less favorable terms could also adversely affect the Company’s revenues and its ability to distribute its network programming to a nationwide audience and affect the Company’s ability to sell advertising, which could have a material adverse effect on the Company’s results of operations. Showtime Networks, CBS Sports Network and Smithsonian Networks are also dependent upon the maintenance of distribution agreements with MVPDs and third-party digital platforms and there can be no assurance that these agreements will be renewed in the future on terms acceptable to such programmers. The loss of one or more of these arrangements could reduce the distribution of Showtime Networks’, CBS Sports Network’s and Smithsonian Networks’ program services and reduce revenues from subscriber fees and advertising, as applicable. Further, the loss of favorable packaging, positioning, pricing or other marketing opportunities with any distributor could reduce revenues from subscriber fees. Also, consolidation among MVPDs and increased vertical integration of such distributors into the cable or broadcast network business have provided more leverage to these distributors and could adversely affect the Company’s ability to maintain or obtain distribution for its network programming or distribution and/or marketing of its subscription program services on favorable or commercially reasonable terms, or at all. Moreover, competitiveCompetitive pressures faced by MVPDs, particularly in light of the lower retail prices of digital streaming services, could adversely affect the terms of the Company’sour renewals with MVPDs. In addition, MVPDs and digital streaming services continue to develop alternative offerings for consumers, including “skinny bundles,” which are generally smaller than the traditional program package or may allow the consumer to customize its package of program services.consumers. To the extent these packagesofferings do not include the Company’s programmingour content and become widely accepted in lieu of traditional program packages, the Companyofferings, we could experience a decline in affiliate and subscription revenues.

Cyber attacksOur revenues are dependent on the compliance of major distributors with the terms of our affiliation or distribution agreements. As these agreements have grown in complexity, the number of disputes regarding their interpretation and even their validity has grown, resulting in greater uncertainty and, from time to time, litigation with respect to our rights and obligations. Some of our distribution agreements contain “most favored nation” (“MFN”) clauses, which provide that if we enter into an agreement with a distributor and such agreement

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includes terms that are more favorable than those held by a distributor holding an MFN right, we must offer some of those terms to the distributor holding the MFN right. Disagreements with a distributor on the interpretation or validity of an agreement could adversely impact our affiliate and advertising revenues, as well as our relationship with that distributor.

We could suffer losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming

We test goodwill and indefinite-lived intangible assets, including FCC licenses, for impairment on an annual basis and between annual tests if events or circumstances require an interim impairment assessment. Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in advertising markets, a decrease in audience acceptance of our programming or films, a shift by advertisers to competing advertising platforms and/or changes in consumer behavior could result in a downward revision in the estimated fair value of a reporting unit or intangible assets, including FCC licenses, which could result in a noncash impairment charge. Any such impairment charge for goodwill, intangible assets and/or programming could have a material adverse effect on our reported net earnings.

Our ongoing investments in new businesses, products, services and technologies, through acquisitions and other eventsstrategic initiatives, present many risks, and we may not realize intended financial and strategic goals

We have invested in and may continue to invest, including through acquisitions, in new businesses, products, services and technologies as part of our ongoing strategic initiatives. These initiatives, such as the integration of the CBS and Viacom businesses following the Merger, may involve significant risks and uncertainties, including: difficulty integrating acquired businesses; failure to realize anticipated benefits; unanticipated problems, expenses and liabilities; potential disruption to our business and operations; diversion of management’s attention; difficulty managing expanded operations; the loss or inability to retain key employees, including talent; unanticipated challenges to or loss of our relationship with new or existing customers, viewers, advertisers, suppliers, distributors, licensors; insufficient revenues from such investments to offset any new liabilities assumed and expenses associated with new investments; and failure to successfully develop an acquired business or technology. Many of these factors are outside of our control, and because new investments are inherently risky, and the anticipated benefits or value of these investments may not materialize, no assurance can be given that such investments and other strategic initiatives will not adversely affect the Company’s information systemsour business, financial condition or result in the breachresults of proprietaryoperations.

Risks Relating to Business Continuity, Cybersecurity and Privacy and Data Protection

Disruptions or confidential information could disrupt the Company’s business, harm its reputation and expose the Company to regulatory enforcement and litigation.

Network andfailures of, or cybersecurity attacks on, our or our service providers’ networks, information systems and other technologies could result in the disclosure of confidential or valuable business or personal information, disruption of our businesses, damage to our brands and reputation, legal exposure and financial losses, and our business continuity plans may prove inadequate to address any such disruption, failure or attack

Cloud services, networks, software, information systems and other technologies we use or that are used by our third-party service providers and our product suppliers (“Providers”), including technology systems used by us and our Providers in connection with the production and distribution of the Company’sour content by the Company or third parties,and that otherwise perform important functions (“Systems”), are importantcritical to the Company’sour business activities. DespiteShutdowns or disruptions of, and cybersecurity attacks on, our Systems pose increasing risks on our business. We also use content delivery networks to help us stream programming, films and other content in high volume to viewers and users of our online, mobile and app offerings over the Company’s security measuresinternet. Shutdowns, disruptions and disaster recovery planning, network


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attacks on our or our Providers’ networks or Systems may be caused by third-party hacking; dissemination of computer viruses, worms, malware, ransomware and information systems-related events, such as process breakdowns, employeeother destructive or partner error, cyberdisruptive software; denial-of-service attacks and other bad acts; human error; and power outages, natural disasters, extreme weather, terrorist attacks or other activities,similar events. Shutdowns, disruptions and power outages, terrorism, naturalattacks could have an adverse impact on us, our business partners, advertisers and other Providers,

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employees, viewers and users of our content, including degradation or other disasters,disruption of service, loss of data and damage to equipment and data. Steps we or our Providers take to enhance, improve or upgrade networks or Systems may not be sufficient to avoid shutdowns, disruptions and attacks. Significant events could result in a disruption or degradation of our operations and reduction of our revenues, the Company’s services and operations,loss of or damage to equipmentthe integrity of data used by management to make decisions and data,operate our businesses, viewer or advertiser dissatisfaction or a loss of viewers or advertisers, and dissatisfactiondamage to our reputation or brands. In addition, our recovery and business continuity plans may prove inadequate to address any such disruption, failure or cybersecurity attack.

We are subject to risks caused by the misappropriation, misuse, falsification or intentional or accidental release or loss of viewers, customersbusiness or advertisers.  The Company manages, stores,personal data or programming content maintained in our or our Providers’ Systems, including proprietary and otherwise processes proprietarypersonal information (of third parties, employees and sensitive or confidential data relating to its operations. The Company may experience breaches or other compromiseusers of the information technology systems it uses for these purposes, as criminal or other actors may be able to penetrate the Company’s network securityour online, mobile and misappropriate or compromise the Company’sapp offerings), business information including intellectual property, financial, personal or other confidential information, or that of third parties, create system disruptions or cause shutdowns. Further, hardware and operating system software and applications that the Company produces or procures from thirdinformation. Outside parties may contain defects in designattempt to penetrate our or manufacture, including “bugs”our Providers’ Systems or fraudulently induce employees, business partners or users of our online, mobile and other problems that could unexpectedly interfere with the operation of such systems.  The costsapp offerings to address the foregoing security problems and security vulnerabilities before or after a cyber incident could be significant. Remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential customers that may impede the Company’s operations. Breaches of the Company’s security measures and the unapproved dissemination of proprietary information ordisclose sensitive or confidential information in order to gain access to our proprietary data aboutor our subscribers’ or users’ data, our programming or our intellectual property. The number and sophistication of attempted and successful phishing, information security breaches or disruptive ransomware or denial-of-service attacks in the Company U.S. and elsewhere have increased significantly in recent years, and because of our prominence, we and/or its customersProviders we use may be a particularly attractive target for such attacks. Because the techniques used to obtain unauthorized access to, or disable, degrade or sabotage, networks and Systems change frequently, we may be unable to anticipate these techniques, implement adequate security measures or remediate flaws or detect intrusion on a timely or effective basis. Despite our efforts, the possibility of these adverse events occurring cannot be eliminated.

If a material breach of our networks or Systems or those of our Providers occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose subscribers, viewers, revenues in the case of leaked content, advertisers and other third parties could expose such affected parties to a riskbusiness partners, and users of loss or misuse of this information, result in regulatory enforcement, litigationour online, mobile and potential liability for the Company, damage the Company’sapp offerings; our reputation, brands and reputation, or otherwise harm the Company’s business. Further, the Company relies in certain limited capacities on third-party data management providerscredibility could be damaged; and we could be required to expend significant amounts of money and other vendors whose possible security problemsresources to repair, replace or recover such networks and security vulnerabilitiesSystems. We could also be subject to actions by regulatory authorities and claims asserted in private litigation. The costs relating to any data breach could be material, and we may not have similar effects on the Company. adequate insurance coverage to compensate us for any losses associated with such events.

The Company isWe are subject to complex, often inconsistent and potentially costly laws, rules, regulations, industry standards and contractual obligations relating to privacy and personal data protection

We are subject to laws, rules, regulations, industry standards and regulationscontractual obligations in the U.S. and in other countries relating to privacy and the collection, use and security of userpersonal data. In the E.U., for example, the GDPR mandates data protection compliance obligations and authorizes significant fines for noncompliance, requiring extensive compliance resources and efforts on our part. Further, a number of other regions where we do business have enacted or are considering new data protection regulations that may impact our business activities. In the U.S., the CCPA mandates a host of new obligations for businesses regarding how they handle the personal information of California residents. We are also subject to laws and regulations intended specifically to protect the interests of children and the privacy of minors online, including COPPA in the U.S., and more generally, the GDPR in the E.U., and we have been required to limit some functionality on digital properties as a result of these regulations. Such regulations also restrict the types of advertising we are able to sell on these digital properties and impose strict liability on us for certain of our actions, as well as certain actions of our advertisers and other personal data. The Company’sthird parties, which could affect advertising demand and pricing. Recently, laws in Brazil and China that govern the processing of children’s data also went into effect. These laws will likely have similar impacts to COPPA and GDPR, especially with respect to data collected in connection with advertising. Compliance with privacy and data protection rules, regulations, industry standards and contractual obligations, which may be inconsistent with one another, and noncompliance could result in regulatory investigations and enforcement, significant monetary fines, breaches of contractual obligations and private litigation. Any actual or perceived noncompliance could also lead

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to harm to our reputation and market position. See “Business — Regulation — Global Data Protection Laws and Children’s Privacy Laws.”

Risks Relating to Intellectual Property

Infringement of our content, including digital copyright piracy and other unauthorized uses of our content, reduces revenue received from legitimate distribution of our programming, films, books and other entertainment content and adversely affects our business, financial condition and results of operations

Our success depends in part on our ability to execute transactionsmaintain and monetize our intellectual property rights. We are fundamentally a content company and infringement of our content — specifically, the infringement of our films, television programming, digital content, books and other intellectual property rights — affects the value of our content. Copyright infringement is particularly prevalent in many parts of the world that either lack effective laws and technical protection measures similar to possessthose existing in the U.S. and use personal informationEurope or lack effective enforcement of such measures, or both. Such foreign copyright infringement often creates a supply of pirated content for major markets as well. The interpretation of copyright, trademark and dataother intellectual property laws as applied to our content, and our infringement-detection and enforcement efforts, remain in conductingflux, and some methods of enforcement have encountered political opposition. The failure to appropriately enforce and/or the weakening of existing intellectual property laws could make it more difficult for us to adequately protect and monetize our intellectual property and thus negatively affect its business may requirevalue.

Copyright piracy is made easier by the Companywide availability of higher bandwidth and reduced storage costs, as well as tools that undermine encryption and other security features and enable infringers to notify regulatorsdisguise their identities online. We and customers, employees,our numerous production and distribution partners operate various technology systems in connection with the production and distribution of our programming and films, and intentional or unintentional acts could result in unauthorized access to our content. The continuing proliferation of digital formats and technologies heightens this risk. Internet-connected televisions, set-top boxes and mobile devices are ubiquitous, and many can support illegal retransmission platforms, illicit video-on-demand or streaming services and pre-loaded hardware, providing more accessible, versatile and legitimate-looking environments for consuming unlicensed film and television content. Unauthorized access to our content could result in the premature release of films, television programs or other individualscontent as well as a reduction in demand for authorized content, which would likely have significant adverse effects on the value of a data security breach, includingthe affected content and our ability to monetize our content.

Copyright infringement reduces the revenue that we are able to generate from the legitimate sale and distribution of our content, undermines lawful distribution channels, reduces the public’s and some affiliate partners’ perceived value of our content and inhibits our ability to recoup or profit from the costs incurred to create such content. We are actively engaged in the EU under the GDPR, which took effect in May 2018. The Companyenforcement and other activities to protect our intellectual property, and it is likely that we will continue to incur expensesexpend substantial resources in connection with these initiatives. Efforts to comply with mandatory privacyprevent the unauthorized reproduction, distribution and security standardsexhibition of our content may affect our profitability and protocols imposed by law, regulation, industry standards or contractual obligations, but despite such efforts may face regulatorynot be successful in preventing harm to our business.

Risks Relating to Macroeconomic and Political Conditions

COVID-19 and other legal actions in the eventpandemics could have a material adverse effect on our business, financial condition and results of a data breach or perceived or actual non-compliance with such requirements.operations.

The Company’s operating results are subject to seasonal variations and other factors.

The Company’s businessCOVID-19 pandemic has experiencednegatively impacted, and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences, on people’s viewing, reading, attendance and listening habits. Typically,impact, the Company’s revenue from advertising increasesmacroeconomic environment in the firstU.S. and fourth quarters, Simon & Schuster generatesglobally. In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, some of which have been subsequently rescinded, modified or reinstated, including travel bans, orders to close or limit access to businesses not deemed “essential,” vaccination and masking requirements, requirements to isolate residents to their homes or places of residence, and social distancing. The difficult macroeconomic environment has included increased portionand prolonged unemployment, a decline in consumer confidence, global supply chain issues and inflation, and prolonged declines in economic

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growth, as well as changes in consumer behavior in response to the pandemic, which have had, and may continue to have, a negative impact on our business, financial condition and results of itsoperations. Other pandemics or widespread health emergencies may have similar effects.

As a result of COVID-19, in 2020 we experienced a material negative impact on our advertising revenues as a result of weakness in the second halfadvertising market, the cancellation or postponement of sporting events, and the delay of the year and license fees forbroadcast television programmingseason as a result of production shutdowns. While the advertising market improved in 2021, we are dependent on the commencement of a license period, mix, number and availability of the Company’s television programming, which may cause operating results to increase or decrease during a period and create non-comparable results relative to the corresponding period in the prior year. In addition, the Company’s advertising revenues benefit when the Company broadcasts the Super Bowl and NCAA Division I Men’s Basketball Tournament National Semifinals and Championship and, in even-numbered years, benefit from advertising placed by candidates for political offices. The effects of such seasonality make it difficult to estimate future operating results based on the previous results of any specific quarter and may adversely affect the Company’s operating results.

Economic conditions may adversely affect the Company’s businesses and customers.

The U.S. and other countries where the Company operates experience slowdowns and volatilities in their economies from time to time. A downturn could lead to lower consumer and business spending for the Company’s products and services, particularly if customers, including advertisers, subscribers, licensees, retailers and other consumers of the Company’s content offerings and services, reduce demands for the Company’s products and services. In addition, in unfavorable economic environments, the Company’s customers may have difficulties obtaining capital at adequate or historical levels to finance their ongoing business and operations and may face insolvency, all of which could impair their ability to make timely payments and continue operations, including distribution of the Company’s


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content. The Company is unablenot able to predict the effect that COVID-19 may have on the advertising market in the future and any prolonged decline in our advertising revenues would have a negative impact on our business, financial condition and results of operations. COVID-19 had a negative effect on our licensing revenues due to production shutdowns, delays in our delivery of content to third parties, and fewer original programs and live events airing on our networks. We also experienced lower demand for the licensing of our content from advertising-supported licensees. While production has resumed, we are not able to predict whether we will encounter future production delays or shutdowns or if and to what extent content licensing revenues will continue to be negatively impacted. Our theatrical revenues have been negatively impacted by the closure or reduced capacity of movie theaters as a result of COVID-19. We are not able to predict the effect that COVID-19 may have on theatergoing in the future, including whether consumers will return at the same levels they previously did because of concerns related to COVID-19 or because of changes to viewing habits, or whether revenues from theatrical releases will be comparable to historical levels.

The magnitude of the continuing impact of COVID-19 and its variants, which could be material to our business, financial condition and results of operations, will depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and severityextent of weakenedthe pandemic, the impact of governmental actions, consumer behavior in response to the pandemic and such governmental actions, and economic and operating conditions in the aftermath of COVID-19. Due to the evolving and uncertain nature of the pandemic, we are not able to estimate the full extent of the impact that COVID-19 will have on our business, financial condition and results of operations, and that impact could also exacerbate the other risks described herein. Even after COVID-19 has moderated and governmental restrictions have eased, we may continue to experience the same adverse effects on our business resulting from recessionary economic conditions that persist and suchlong-term changes in the advertising and distribution markets and consumer engagement and viewing habits.

Economic and political conditions in a variety of markets around the world could have an adverse effect on our business, financial condition or results of operations

Our businesses operate and resultant effects could adverselyhave audiences, customers and partners worldwide, and we are focused on expanding our international operations in key markets, some of which are emerging markets. For that reason, economic conditions in many different markets around the world affect a number of aspects of our businesses. Economic conditions in each market can also impact our audience’s discretionary spending (such as current inflation or global supply chain issues) and therefore their willingness to access our content, as well as the Company’s businesses operating results,of our partners who purchase advertising on our networks, causing them to reduce their spending on advertising. We may also be subject to longer payment cycles. In addition, as we have expanded our international operations, our exposure to foreign currency fluctuations against the U.S. dollar has increased, and financial condition.

Volatility and weakness in capital markets may adversely affect credit availability and related financing costs for the Company.

Bank and capital markets can experience periods of volatility and disruption. If the disruption in these markets is prolonged, the Company’s ability to refinance, and the related cost of refinancing, some or all of its debt could be adversely affected. Although the Company can currently access the bank and capital markets, there is no assurance that suchdownward trending currencies will rebound or that stable currencies will remain stable in any period. Such fluctuations could have an adverse effect on our business, financial condition or results of operations. Also, volatility and weakness in the capital markets, will continue to be a reliable source of financing for the Company. In addition, the Company’s access to and cost of borrowing can be affected by the Company’s short- and long-term debt ratings assigned by credit ratings agencies. These factors, including the tightening of credit markets or a decrease in the Company’sour debt ratings could adversely affect the Company’sour ability to obtain cost-effective financing. Broader supply chain delays, such as those currently impacting global distribution, may impact our business.

ChangesOur businesses are also exposed to certain political risks inherent in communicationsconducting a global business, including retaliatory actions by governments reacting to changes in the U.S. and other countries, including in connection with trade negotiations; issues related to the presence of corruption in certain markets and enforcement of anticorruption laws and regulations; increased risk of political instability in some markets as well as conflict and

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sanctions preventing us from accessing those markets; escalating trade, immigration and nuclear disputes; wars, acts of terrorism or other hostilities; and other political, economic or other uncertainties.

These political and economic risks could create instability in any of the markets where our businesses derive revenues, which could result in a reduction of revenue or loss of investment that adversely affects our businesses, financial condition or results of operations.

Risks Relating to Regulatory and Legal Matters

Failures to comply with or changes in U.S. or foreign laws or other regulations may have an adverse effect on the Company’s business.

our business, financial condition or results of operations

We are subject to a variety of laws and regulations, both in the U.S. and/or in the foreign jurisdictions in which we or our partners operate, including laws and regulations relating to intellectual property, content regulation, user privacy, data protection, anticorruption, repatriation of profits, tax regimes, quotas, tariffs or other trade barriers, currency exchange controls, operating license and permit requirements, restrictions on foreign ownership or investment, anticompetitive conduct, export and market access restrictions, and exceptions to and limitations on copyright and censorship, among others.

The television broadcasting and distributioncable programming industries in the U.S. are highly regulated by U.S. federal laws and regulations issued and administered by various federal agencies, including the FCC. The television broadcasting industry is subject to extensive regulation by the FCC under the Communications Act. For example, the Company iswe are required to obtain licenses from the FCC to operate itsour television stations. The Companystations and periodically renew them. It cannot be assured that the FCC will approve itsour future renewal applications or that the renewals will be for full terms or will not include conditions or qualifications. The non-renewal,nonrenewal, or renewal with substantial conditions or modifications, of one or more of the Company’sour licenses could have a material adverse effect on the Company’sour revenues. The CompanyWe must also comply with extensive FCC regulations and policies inlimits on the ownership and operation of itsour television stations and itsour television networks. FCC regulations prohibit the common ownership of more than one of the top four networks, ABC, CBS, FOX and NBC, and limit the number of television stations that a licensee can own in a market and the number of television stations that can be owned nationwide, which could restrict the Company’sour ability to consummate future transactions and in certain circumstances could require itus to divest some television stations. The U.S. Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations, and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation and ownership of the Company’s television properties. For example, from time to time, proposals have been advanced in the U.S. Congress and at the FCC to require television stations to provide advertising time to political candidates for free or at a reduced charge. Any restrictions on political or other advertising may adversely affect the Company’s advertising revenues. Changes to the media ownership and other FCC rules may affect the competitive landscape in ways that could increase the competition faced by the Company. Proposals have also been advanced from time to time before the U.S. Congress and the FCC to extend the program access rules (currently applicable only to those cable program services which also own or are owned in whole or in part by cable distribution or telephone company systems) to all cable program services. The Company’s ability to obtain the most favorable terms available for its content

Our businesses could be adversely affected should such an extension be enacted into law. It is difficult to predict the outcome of the FCC’s actions or their effect, if any, on the Company’s broadcasting properties. In addition, changes in orby new interpretations of international laws and regulations, governing the broadcastchanges in existing laws, changes in interpretations of existing laws by courts and distribution of content, competitionregulators and the internet, including those affecting data privacy, threat that additional laws or regulations may be forthcoming, as well as the new EU law requiring 30% local content on subscription video on demand services and proposed amendmentsour ability to the law governing territorial exclusivityenforce our legal rights. We could be required to change or limit certain of the distribution of content in Europe, may have an adverseour business practices, which could impact on the Company’s international businesses and internet properties. The Company is unableour ability to predict the effect that any such laws, regulations or policies may have on its operations.

Vigorous enforcement or modification of FCC indecency and other program content rules against the broadcast and cable industriesgenerate revenues. We could have an adverse effect on the Company’s businesses and results of operations.

The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material on television stations between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent material because of the vagueness of the FCC’s indecency/profanity definition, coupled with


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the spontaneity of live programming. The FCC enforces its indecency rules against the broadcasting industry. The FCC has found on a number of occasions that the content of television broadcasts has contained indecent material. In such instances, the FCC issued fines or advisory warnings to the offending licensees. Moreover, the FCC has in some instances imposed separate fines for each allegedly indecent “utterance,” in contrast with its previous policy, which generally considered all indecent words or phrases within a given program as constituting a single violation. Broadcasting indecent material could result in fines per station of a maximum of approximately $407,000 per utterance and/or the loss of a station’s FCC license.  If the FCC denied a license renewal or revoked the license for one of the Company’s television stations, the Company would lose its authority to operate the station. The determination of whether content is indecent is inherently subjective and, as such, it can be difficult to predict whether particular content could violate indecency standards. The difficulty in predicting whether individual programs, words or phrases may violate the FCC’s indecency rules adds significant uncertainty to the Company’s abilityalso incur substantial costs to comply with the rules. Violation of indecency rules could lead to sanctions which may adversely affect the Company’s businessesnew and results of operations. Some policymakers support the extension of the indecency rules that are applicable to over-the-air broadcasters to cover cable and satellite programming and/or attempts to increase enforcement of or otherwise expand existing laws and rules. If such an extension, attempt to increase enforcementregulations, or substantial fines and penalties or other expansion took placeliabilities if we fail to comply with such laws and were found to be constitutional, some of the Company’s cable content could be subject to additional regulation and might not be able to attract the same subscription and viewership levels.regulations.

The failure or destruction of satellites and transmitter facilities on which the Company depends to distribute its programming could materially adversely affect the Company’s businesses and results of operations.

The Company uses satellite systems to transmit its broadcast and cable networks to affiliates. The distribution facilities include uplinks, communications satellites and downlinks. Transmissions may be disrupted as a result of local disasters including extreme weather that impair on-ground uplinks or downlinks, or as a result of an impairment of a satellite. Currently, there are a limited number of communications satellites available for the transmission of programming. If a disruption occurs, failure to secure alternate distribution facilities in a timely manner could have a material adverse effect on the Company’s businesses and results of operations. Each of the Company’s television stations and cable networks uses studio and transmitter facilities that are subject to damage or destruction. Failure to restore such facilities in a timely manner could have a material adverse effect on the Company’s businesses and results of operations.

The Company could suffer losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming.

The Company tests goodwill and indefinite-lived intangible assets, including FCC licenses, for impairment during the fourth quarter of each year and between annual tests if events or circumstances require an interim impairment assessment. A downward revision in the estimated fair value of a reporting unit or intangible assets, including FCC licenses, could result in a non-cash impairment charge. Also, any significant shortfall, now or in the future, in the expected popularity of the Company’s programming could lead to a downward revision in the fair value of such assets. Any such impairment charge for goodwill, intangible assets and/or programming could have a material adverse effect on the Company’s reported net earnings.

Dividends and dividend rates cannot be guaranteed.

The Company’s Board of Directors assesses relevant factors when considering the declaration of a dividend on the Company’s common stock. The Company cannot guarantee that it will continue to declare dividends, including at the same or similar rates.

The loss of key personnel, including talent, could adversely affect the Company’s business and revenues.

The Company’s business depends upon the continued efforts, abilities and expertise of the Company’s corporate and divisional executive officers and various creative talent and entertainment personalities. The Company believes that the loss of its executive officers could have a material adverse effect on the Company, including the impairment of the Company’s ability to execute its business strategy. The Company employs or contracts with highly regarded


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directors, actors, producers, authors and other talent who are important to attracting and retaining audiences and achieving the success of the Company’s programming, television stations, books and other content. There can be no assurance that these individuals will remain with or be drawn to the Company or will retain their current appeal. If the Company fails to retain or attract entertainment personalities, authors and talent or they lose their current appeal, the Company’s revenues could be adversely affected.

The Company’sOur liabilities related to discontinued operations and former businesses could adversely impact itsour financial condition.conditions

The Company hasWe have both recognized and potential liabilities and costs related to discontinued operations and former businesses, certain of which are unrelated to the mediaour existing business, including leases, guarantees, environmental liabilities, liabilities related to the pensions and medical expenses of retirees, asbestos liabilities, contractual disputes and other pending and threatened litigation. The CompanyWe cannot be assured that its reservesour accruals for these matters are sufficient to cover these liabilities in their entirety or any one of these liabilities when it becomes due or at what point any of these liabilities may come due. Therefore, there can be no assurances that these liabilities will not have a material adverse effect on the Company’sour financial position,condition, operating performance or cash flow.flows.


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Risks Relating to Human Capital

The Companyloss of existing or inability to hire new key employees or secure creative talent could adversely affect our business, financial condition or results of operations

Our business depends upon the continued efforts, abilities and expertise of our executives and other employees and the creative talent with whom we work. We compete for executives in highly specialized and evolving industries (including streaming) and our ability to attract, retain and engage such individuals may be impacted by our reputation, workplace culture, efforts with respect to DE&I and ESG matters, the compensation and benefits we provide, and our commitment to effectively managing executive succession. We also employ or contract with entertainment personalities with loyal audiences and produce films with highly regarded directors, producers, writers, actors and other creative talent in highly competitive markets. Our ability to attract and retain these individuals will similarly be impacted by our reputation, culture and efforts with respect to DE&I and ESG matters. These individuals are important to attracting viewers and the success of our programs, films and other content. There can be no assurance that these individuals will remain with us or will retain their current appeal, or that the costs associated with retaining them or new talent will be reasonable. If we fail to retain or attract new key employees or creative talent, our business, financial condition or results of operations could be adversely affected by strikesaffected.

We and other union activity.

The Company, its suppliers andour business partners also engage the services of writers, directors, actors, musicians and other creative talent, production crew members, trade employees, players in sports leaguesprofessional athletes and others who are subject to collective bargaining agreements. If the Company, its suppliers or business partners are unable to renew expiring collective bargaining agreements, it is possible that the affected unions or others could take action in the form ofAny labor disputes, including lockouts, strikes or work stoppages. Such actions, higher costs in connection with these agreements or a significant labor dispute could adversely affect the Company’s television, cable networksstoppages, may disrupt our operations and interactive businesses by disrupting the Company’s ability to provide scheduled services and programming or by causingcause delays in the production of the Company’s programming. Depending on its duration, any lockout, strike or work stoppageour programming, which could increase our costs and have an adverse effect on the Company’sour revenues, cash flows and/or operating income and/or their timing.income.

Fluctuations in foreign exchange rates and political and economic risks associated with the Company’s international businesses could harm the Company’s financial condition or results of operations.Risks Relating to our Ownership Structure

The Company’s businesses operate and have customers worldwide. Certain of the Company’s revenues are earned and expenses are incurred in foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. As a result, the Company is exposed to exchange rate fluctuations, which could have an adverse effect on its results of operations. Other inherent risks of doing business in international markets include changes in the economic environment, potentially adverse tax developments, export restrictions, exchange controls, tariffs and other trade and sanctions barriers, longer payment cycles, and changes in privacy and data protection laws. The Company may incur substantial expense as a result of the imposition of new restrictions or changes in the existing economic environment in the regions where it does business. For example, the ongoing “Brexit” processes to withdraw the U.K. from the EU, which is expected to occur in 2019, may adversely affect economic and market conditions in the U.K. and other regions where the Company conducts business and could contribute to volatility in foreign exchange markets. In addition, acts of terrorism or other hostilities, or other future financial, political, economic or other uncertainties, could lead to a reduction in advertising expenditures, which could materially adversely affect the Company’s business, financial condition or results of operations.

Changes in tax laws, regulations and administrative practices, interpretations and policies may result in material tax liabilities.

The Company is subject to income taxes in both the U.S. and numerous foreign jurisdictions.  Changes in tax laws, regulations and administrative practices, interpretations and policies in the territories where the Company’s businesses operate may result in material tax liabilities.  The Company’s tax returns are routinely audited by tax authorities and tax-related litigation or settlements may occur resulting in the assessment of additional taxes.  The enactment of the federal tax legislation in December 2017 (the “Tax Reform Act”) may expose the Company to tax


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risks as a result of the ongoing issuance of interpretive guidance by the U.S. government as to how provisions of the Tax Reform Act are to be applied, which may differ from the Company’s current interpretations.  The aforementioned risks may adversely affect the Company’s effective income tax rate or cash tax payments, which may adversely affect the Company’s business, financial condition or results of operations.

NAI, through its voting control of the Company, is in a position to control actions that require stockholder approval.approval

NAI, through its direct and indirect ownership of the Company’s votingour Class A Common Stock, has voting control of the Company. At February 13, 2019,As of December 31, 2021, NAI directly or indirectly owned approximately 79.8%77.4% of the Company’sour voting Class A Common Stock and approximately 10.5%9.7% of the Company’sour Class A Common Stock and non-voting Class B Common Stock on a combined basis. Mr. Sumner M. Redstone is the beneficial owner of the controlling interest in NAI and, accordingly, beneficially owns all such shares. Mr. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company's Board of Directors, and Ms. Shari Redstone, the president and a director of NAI, serves as Vice Chair of the Company’s Board of Directors. NAI is controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Part B General Trust (the “SMR“General Trust”), which owns 80% of the voting interest of NAI and suchacts by majority vote of seven voting interest oftrustees (subject to certain exceptions), including with respect to the NAI shares held by the SMR TrustGeneral Trust. Shari E. Redstone, Chairperson, CEO and President of NAI and non-executive Chair of our Board of Directors, is voted solely by Mr. Redstone until his incapacity or death. The SMR Trust provides that in the event of Mr. Redstone’s death or incapacity, voting controlone of the NAIseven voting interest held bytrustees for the SMRGeneral Trust will pass to sevenand is one of two voting trustees who will include CBS Corporation director Ms. Shari Redstone.are beneficiaries of the General Trust. No member of the Company’sour management or other member of our Board of Directors is a trustee of the SMRGeneral Trust.

Subject to the terms of the settlement and release agreement entered into by the Company and NAI, among others, on September 9, 2018, NAI is in a position to control the outcome of corporate actions that require, or may be accomplished by, stockholder approval, including amending the Company’sour bylaws, the election or removal of directors and transactions involving a change of control. For example, the Company’s Amended and Restated Bylawsour bylaws provide that:

•the affirmative vote of not less than a majority of the aggregate voting power of all outstanding shares of our capital stock of the Company then entitled to vote generally in an election of directors, voting together as a single class, is required for theour stockholders of the Company to amend, alter, change, repeal or adopt any bylaws of the Company;our bylaws;

•any or all of theour directors of the Company may be removed from office at any time prior to the expiration of the director’shis or her term of office, with or without cause, only by the affirmative vote of the holders of record of outstanding shares representing at least a majority of all the aggregate voting power of outstanding shares of stock of the Companyour Common Stock then entitled to vote generally in the election of directors, voting together as a single class at a special meeting of our stockholders called expressly for that purpose; and

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•in accordance with the General Corporation Law of the State of Delaware, our stockholders of the Company may act by written consent without a meeting if such stockholders hold the number of shares representing not less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted.

Accordingly, otherour stockholders who may have different interests are unable to affect the outcome of any such corporate actions for so long as NAI retains voting control.

Sales of NAI’s shares of the Company’s common stockour Common Stock, some of which are pledged to lenders, could adversely affect the stock price.price

At February 13, 2019, NAI directly or indirectly owned approximately 79.8% of the Company’s voting Class A Common Stock, and approximately 10.5% of the Company’s Class A Common Stock and non-voting Class B Common Stock on a combined basis.  Based on information received from NAI, NAI has pledged to its lenders a portion of shares of the Company’s non-votingour Class A Common Stock and our Class B Common Stock owned directly or indirectly by NAI. TheAs of December 31, 2021, the aggregate number of shares


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of non-voting Class Bour Common Stock pledged by NAI to its lenders representsrepresented approximately 4.8%3.9% of the Company’s total outstanding shares of our Class A Common Stock and our Class B Common Stock outstanding.on a combined basis. If there is a default on NAI’s debt obligations and the lenders foreclose on the collateral,pledged shares, the lenders may not effect a transfer, sale or disposition of any pledged shares of our Class A Common Stock unless NAI and its affiliates beneficially own 50% or less of our Class A Common Stock then outstanding or such shares have first been converted into our Class B Common Stock could be sold, whichStock. A sale of the pledged shares could adversely affect the Company’sour Common Stock share price. ThereIn addition, there can be no assurance that NAI or its subsidiaries at some future time NAI will not sell or pledge additional shares of the Company’s stock,our Common Stock, which could adversely affect the Company’sour Common Stock share price.

Many factors may cause the stock price of the Company’s Class A Common Stock and Class B Common Stock to fluctuate.

Item 1B.Unresolved Staff Comments.
The stock price of Class A Common Stock and Class B Common Stock may fluctuate significantly as a result of many factors. These factors, some or all of which
Not applicable.

Item 2.Properties.

Our significant physical properties are beyond the Company’s control, include: actual or anticipated fluctuations in the Company’s operating results; changes in expectations as to the Company’s future financial performance or changes in financial estimates of securities analysts; success of the Company’s operating and growth strategies; investor anticipation of strategic, technological or regulatory threats, whether or not warranted by actual events; operating and stock price performance of other comparable companies; and realization of any of the risks described in these risk factors.below. In addition, the stock market has experienced volatility that often has been unrelated or disproportionate to the operating performance of particular companies. These broad marketwe own and industry fluctuations may adversely affectlease office, studio, production and warehouse space and broadcast, antenna and satellite transmission facilities throughout the trading prices of the Company’s common stock, regardless of the Company’s actual operating performance.

The businesses of the Company and Viacom Inc. will be attributable to the other company for certain regulatory purposes, which may limit business opportunities.

So long as the Company and Viacom Inc. are under common control, each company’s businesses, as well as the businesses of any other commonly controlled company, will be attributable to the other company for purposes of certain rules and regulations of the FCC, U.S. and non-U.S. antitrust rules and regulations and certain rules regarding political campaign contributions inaround the U.S., among others potentially. The businesses of one company will continue to be attributable to the other companyworld for certain FCC and other purposes even after the two companies cease to be commonly controlled, if the two companies share common officers, directors, or attributable stockholders. As a result, the businesses and conduct of Viacom Inc. may have the effect of limiting and affecting the activities, strategic business alternativesour businesses. We consider our properties adequate for our present needs.

•Our global headquarters is located at 1515 Broadway, New York, New York, where we lease approximately 1.6 million square feet for executive, administrative and business terms available to the Company, including limitations to which the Company contractually agreed in connection with the Company’s separation of former Viacom Inc. (“Former Viacom”) into two publicly traded entities, CBS Corporationoffices, and new Viacom Inc., which was completed on December 31, 2005 (the “Separation”).

In connection with the Separation, each company will rely on the other company’s performance under various agreements between the companies.

In connection with the Separation, the Company and Viacom Inc. entered into various agreements, including a Separation Agreement dated December 19, 2005, a Tax Matters Agreement dated December 30, 2005, which are filed as exhibits to this report, and certain related party arrangements pursuant to which the Company and Viacom Inc. will provide services and products to each other from and after the Separation. The Separation Agreement sets forth the allocation of assets, liabilities, rights and obligations of the Company and Viacom Inc. following the Separation, and includes indemnification obligations for such liabilities and obligations. In addition, pursuant to the Tax Matters Agreement, certain income tax liabilities and related responsibilities are allocated between, and indemnification obligations are assumed by, each of the Company and Viacom Inc. Each company will rely on the other to satisfy its performance and payment obligations under these agreements. Certain of the liabilities to be assumed or indemnified by the Company or Viacom Inc. under these agreements are legal or contractual liabilities of the other company. If Viacom Inc. were to breach or be unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification obligations, the Company could suffer operational difficulties or significant losses.



I-26

NAI and any common director may face actual or potential conflicts of interest.

NAI has voting control of each of the Company and Viacom Inc. Mr. Sumner M. Redstone, the controlling stockholder through the SMR Trust, chairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company and Chairman Emeritus of Viacom Inc. Ms. Shari Redstone, the president and a director of NAI, serves as Vice Chair of the Board of Directors of each of the Company and Viacom Inc. This ownership overlap and this common director could create, or appear to create, potential conflicts of interest when the Company’s and Viacom Inc.’s directors and controlling stockholder face decisions that could have different implicationsproduction space for the Company and Viacom Inc. For example, potential conflictscertain of interest could arise in connectionour operating divisions. The lease runs through 2031, with two renewal options based on market rates at the resolutiontime of any dispute between the Company and Viacom Inc. regarding the terms of the agreements governing the Separation and the relationship between the Company and Viacom Inc. thereafter. These agreements include the Separation Agreement, the Tax Matters Agreementand any commercial agreements between the parties or their affiliates. On occasion, the Company and Viacom Inc. may compete with each other in various commercial enterprises. Potential conflicts of interest could also arise if the Company and Viacom Inc. enter into any commercial arrangements with each other in the future. CBS Corp.’s certificate of incorporation contains provisions related to corporate opportunities that may be of interest to both the Company and Viacom Inc. CBS Corp.’s certificate of incorporation provides that in the event that a director, officer or controlling stockholder of the Company who is also a director, officer or controlling stockholder of Viacom Inc. acquires knowledge of a potential corporate opportunityrenewal for both the Company and Viacom Inc., such director, officer or controlling stockholder may present such opportunity to the Company or Viacom Inc. or both, as such director, officer or controlling stockholder deems appropriate in his or her sole discretion, and that by doing so such person will have satisfied his or her fiduciary duties to the Company and its stockholders. In addition, CBS Corp.’s certificate of incorporation provides that the Company renounces any interest in any such opportunity presented to Viacom Inc. Furthermore, CBS Corp.’s certificate of incorporation provides that neither the Company nor Viacom Inc. has any duty to refrain from engaging in the same or similar activities or lines of business as the other corporation, doing business with any potential or actual customer or supplier of the other corporation, or employing or soliciting for employment any officer or employee of the other corporation, and that no officer or director of either corporation shall be liable to the other corporation or the other corporation’s stockholders for breach of any fiduciary duty by reason of any such activities of the Company or Viacom Inc., as the case may be. These provisions create the possibility that a corporate opportunity of one of such companies may be used for the benefit of the other company. If any such opportunity is directed to Viacom Inc., rather than the Company, the Company may be materially adversely affected.ten years each.

Item 1B. •Unresolved Staff Comments.

None.

Item 2. Properties.

The Company maintains its world headquartersWe occupy approximately 284,000 square feet of office and administrative space at 51 West 52nd Street, New York, New York where it ownsunder a building containing approximately 900,000 square feet of space, 831,000 square feet of which is office space. The Company occupies approximately 275,000 square feetlease expiring in 2023 for the majority of the office space and leasesin 2024 for the balance to third parties. The Company ownsremainder of the space.

TV Entertainment

•We own the CBS Broadcast Center complex located on approximately 3.7 acres at 524 West 57th Street, New York, New York, which consists of approximately 860,000 square feet of office, studio and studioproduction space. The Company also owns studio facilities at

•At the Radford Studio Lot in Studio City, California (formerly known as the CBS Studio CenterCenter), we occupy (i) approximately 125,000 square feet of office, studio and production space for the operations of KCAL-TV, KCBS-TV and the CBS News Bureau under a lease expiring in 2031 and (ii) approximately 150,000 square feet of office and administrative space under a lease expiring in December 2022.


I-32
•We occupy approximately 330,000 square feet of office and production space at 4024 Radford Avenue, Studio City, California, located on555 West 57th Street, New York, New York, under a lease expiring in 2023.

Cable Networks

•We occupy approximately 40 acres. On January 31, 2019, the Company sold the studio facilities known as CBS Television City, located281,000 square feet of office and production space at 7800 Beverly Boulevard,345 Hudson Street, New York, New York, under a lease expiring in October 2022.

•We occupy approximately 210,000 square feet of office and production space at 1575 North Gower Street, Los Angeles, California, under a lease expiring in 2028.

•We own and occupy our Cloud Control Center and Network Operations Center, both located in Hauppauge, New York, containing, in the aggregate, approximately 170,000 square feet of floor space on approximately 25 acres. 22 acres of land.

•The Nickelodeon Animation Studio at 203-231 West Olive Avenue, Burbank, California contains approximately 180,000 square feet of studio and office space, leased under two leases expiring in 2036.

•Nickelodeon’s Live Action Studio contains approximately 108,000 square feet of stage and office space at Burbank Studios, 3000 West Alameda Avenue, Burbank, California, under a lease expiring in 2024.

•Showtime Networks leases approximately 230,000253,000 square feet of office and production space at 1633 Broadway, New York, New York, under a lease which expiresexpiring in 2026. Simon & Schuster2026 and leases approximately 300,00056,000 square feet of office space at 1230The Lot, 1041 N. Formosa Avenue, of the Americas, New York, New York, which lease runs to 2034. CBS Interactive leases approximately 283,000 square feet of space at 235 Second Street, San Francisco,West Hollywood, California, under a lease which expiresexpiring in 2022. CBS Interactive subleases2028.

•Telefe occupies approximately 90,000375,000 square feet at its owned and leased facilities in Buenos Aires, Argentina, for the purposes of office, studio and production spaces, transmission facilities and other ancillary uses.

•Chilevisión occupies approximately 187,098 square feet of thisleased space to third parties. in Santiago, Chile, for the purposes of offices, technical areas, warehouses and other ancillary uses.

•VCNI occupies approximately 140,000 square feet of office, studio and production space at its owned and leased Hawley Crescent facilities in London.

•Network 10 leases approximately 100,000118,000 square feet of office, studio, production and storage space in the suburbs of Sydney, Australia at 1 Saunders Street, Pyrmont, New South Wales, Australia, under a lease which expiresexpiring in December 2023. The Company2033.

Filmed Entertainment

•Paramount owns the Paramount Pictures Studio lot situated at 5555 Melrose Avenue, Los Angeles, California, located on approximately 62 acres of land, and its subsidiaries also owncontaining approximately 1.85 million square feet of floor space used for executive, administrative and lease office, studiobusiness offices, sound stages, production facilities, theatres, equipment facilities and warehouse space andother ancillary uses.



I-27I-33

broadcast, antenna and satellite transmission facilities throughout the U.S., Canada and several other foreign countries for its businesses. The Company considers its properties adequate for its present needs.

Item 3. Legal Proceedings.

General. On an ongoing basis, the Company vigorously defends itself in numerous lawsuits and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Company without merit, is inherently uncertain and always difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal matters and other litigation to which it is a party are not likely, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under the separation agreement between the Company and Viacom Inc., the Company and Viacom Inc. have agreed to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.

Investigation-Related Matters. As announced on August 1, 2018, the Company’s Board of Directors (“Board”) retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. On December 17, 2018, the Board announced the completion of the investigation, certain findings of the investigation and the Board’s determination, discussed below, with respect to the termination of Mr. Moonves’s employment. The Company has received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Company may receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company is cooperating with these inquiries.

On August 27, 2018 and on October 1, 2018, each of Gene Samit and John Lantz, respectively, filed putative class action suits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below.  On November 6, 2018, the Court entered an order consolidating the two actions.  On November 30, 2018, the Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action.  On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against the Company, certain current and former senior executives and members of the Board.  The consolidated action is stated to be on behalf of purchasers of the Company’s Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018.  This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. 

Separation Agreement. On September 9, 2018, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company. Pursuant to the Separation Agreement, the Company is contributing the aggregate amount of $20 million toward various charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations were mutually agreed by the Company and Mr. Moonves. The Company has recorded the contribution of $20 million in “Restructuring and other corporate matters” on the Consolidated Statements of Operations for the year ended December 31, 2018. In October 2018, the Company contributed $120 million to a grantor trust. On December 17, 2018, the Board announced that, following its consideration of the findings of the investigation referred to above, it had determined that there were grounds to terminate Mr. Moonves’s employment for cause under his employment agreement with the Company. Any dispute related to the Board’s determination is subject to binding arbitration as set forth in the Separation Agreement. On January 16, 2019, Mr. Moonves notified the Company of his election to demand binding arbitration with respect to this matter and the related Board investigation. The assets of the grantor trust will remain in the trust until a final determination in the arbitration. The Company is currently unable to determine the


I-28

outcome of the arbitration and the amount, if any, that may be awarded thereunder and, accordingly, no accrual for this matter has been made in the Company’s consolidated financial statements.

Claims Related to Former Businesses: Asbestos. The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company is typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’s products is the basis of a claim. Claims against the Company in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company does not report as pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2018, the Company had pending approximately 31,570 asbestos claims, as compared with approximately 31,660 as of December 31, 2017 and 33,610 as of December 31, 2016. During 2018, the Company received approximately 3,290 new claims and closed or moved to an inactive docket approximately 3,380 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’s total costs for the years 2018 and 2017 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $45 million and $57 million, respectively. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against the Company are non-cancer claims. The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has remained generally flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur, including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

Other. The Company from time to time receives claims from federal and state environmental regulatory agencies and other entities asserting that it is or may be liable for environmental cleanup costs and related damages principally relating to historical and predecessor operations of the Company. In addition, the Company from time to time receives personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations of the Company and its predecessors.

Item 4.    Mine Safety Disclosures.

Not applicable.



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EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is certain information concerning the executive officers of the Company as of February 13, 2019.
NameItem 3.AgeTitle
Joseph R. Ianniello51President and Acting Chief Executive Officer
Jonathan H. Anschell50Executive Vice President, Deputy General Counsel and Secretary
Richard M. Jones53Executive Vice President and General Tax Counsel
Lawrence Liding50Executive Vice President, Controller and Chief Accounting Officer
Christina Spade49Executive Vice President, Chief Financial Officer
Lawrence P. Tu64Senior Executive Vice President and Chief Legal Officer
Proceedings.
None of
The information set forth under the executive officers ofcaption “Legal Matters” in Note 20 to the Companyconsolidated financial statements in “Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements” is related to any other executive officer or directorincorporated herein by blood, marriage or adoption.reference.

Mr. Ianniello has been President and Acting Chief Executive Officer of the Company since September 2018. Prior to that, Mr. Ianniello served as Chief Operating Officer of the Company since June 2013 and as Executive Vice President and Chief Financial Officer of the Company since August 2009. Previously, he served as Deputy Chief Financial Officer of the Company since November 2008, as Senior Vice President, Chief Development Officer and Treasurer of the Company since September 2007, as Senior Vice President, Finance and Treasurer of the Company since January 1, 2006, as Senior Vice President and Treasurer of Former Viacom since July 2005 and as Vice President, Corporate Development of Former Viacom from 2000 to 2005.

Item 4.Mine Safety Disclosures.
Mr. Anschell has been Executive Vice President, Deputy General Counsel and Secretary of the Company since January 1, 2016.  Mr. Anschell also serves as Executive Vice President and General Counsel of CBS Broadcasting Inc., a position he has held since joining the Company in 2004.  Mr. Anschell previously was a partner with the law firm, White O’Connor Curry in Los Angeles, California.

Mr. Jones has been Executive Vice President and General Tax Counsel since August 2014. Previously, he served as Senior Vice President and General Tax Counsel of the Company since January 1, 2006 and for Former Viacom since December 2005. Prior to that, he served as Vice President of Tax, Assistant Treasurer and Tax Counsel for NBC Universal, Inc. since 2003 and he served 13 years with Ernst & Young in its media & entertainment and transaction advisory services practices. Mr. Jones also serves as the Company’s Chief Veteran Officer and served honorably as a non-commissioned officer in the U.S. Army’s 75th Ranger Regiment and 10th Mountain Division.

Mr. Liding has been Executive Vice President, Controller and Chief Accounting Officer of the Company since August 2014. Previously, he served as Senior Vice President, Controller and Chief Accounting Officer of the Company since October 2011, as Vice President, Deputy Controller of the Company since March 2010 and as Vice President, Assistant Controller since January 1, 2006. Prior to that, Mr. Liding joined Former Viacom in 1995 and served as Vice President of Financial Reporting from 2002 through 2005. Effective February 20, 2019, Mr. Liding has been appointed to a newly created role as head of the Company’s operations in China.

Effective February 20, 2019, Mr. David Byrnes has been appointed to succeed Mr. Liding to serve as the Company’s Senior Vice President, Controller and Chief Accounting Officer. Prior to such appointment, Mr. Byrnes, age 48, served as the Company’s Senior Vice President, Internal Audit since 2015 and as Senior Vice President, Finance, CBS Information Solutions & Technology since 2014. Previously, Mr. Byrnes served as Vice President, Finance at Simon & Schuster since 2009 and as Vice President, Corporate Development of the Company since 2008. Prior to that, Mr. Byrnes served five years at Automatic Data Processing, Inc. in various financial positions, including divisional Chief Financial Officer and Vice President of Financial Reporting and Policy, and served 11 years with KPMG LLP in its audit practice.


Not applicable.

I-30I-34

Ms. Spade has been Executive Vice President, Chief Financial Officer of the Company since October 2018. Previously, she served as Executive Vice President, Chief Financial Officer and Strategy for Showtime Networks Inc. (“Showtime”) since 2013. Prior to that, Ms. Spade served as Senior Vice President, Affiliate Finance and Business Operations for Showtime since 2003. Prior to joining Showtime in 1997, Ms. Spade was an Audit Manager with PricewaterhouseCoopers LLP in its Entertainment, Media and Communications practice.

Mr. Tu has been Senior Executive Vice President and Chief Legal Officer of the Company since January 1, 2014. Previously, Mr. Tu served as Senior Vice President, General Counsel and Secretary of Dell Inc. since July 2004. Prior to that, Mr. Tu served as Executive Vice President and General Counsel of NBC Universal since 2001. He previously was a partner with the law firm, O’Melveny & Myers LLP, and also served five years as managing partner of the firm’s Hong Kong office. Mr. Tu’s prior experience also includes serving as General Counsel Asia-Pacific for Goldman Sachs, attorney for the U.S. State Department, and law clerk for U.S. Supreme Court Justice Thurgood Marshall.


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Part II
Item 5.Market for CBS Corporation’sViacomCBS Inc.’s Common Equity, Related Stockholder Matters and Purchases of Equity Securities.
CBS Corporation (the “Company” or “CBS Corp.”)Our voting Class A Common Stock and CBS Corporation non-voting Class B Common Stock are listed and traded on the New YorkThe Nasdaq Stock ExchangeMarket LLC under the symbols “CBS.A”“VIACA” and “CBS”,“VIAC,” respectively.

We declared a quarterly cash dividend on our Class A and Class B Common Stock during each of the quarters of 2021 and 2020. During each of the years ended December 31, 2021 and 2020, we declared total per share dividends of $.96, resulting in total annual dividends of $625 million and $601 million, respectively. On January 31,December 19, 2019, the Company announcedwe declared a quarterly cash dividend of $.18$.24 per share on itsour Class A and Class B Common Stock, resulting in total dividends of $150 million. Prior to Viacom Inc. (“Viacom”) merging with and into CBS Corporation (“CBS”) (the “Merger”), Viacom and CBS each declared a quarterly cash dividend during each of the first three quarters of 2019. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million.

During each of the third and fourth quarters of 2021, we declared quarterly cash dividends of $1.4375 per share on our 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”). During the second quarter of 2021, we declared a cash dividend of $1.5493 per share on our Mandatory Convertible Preferred Stock, representing a dividend period from March 26, 2021 through July 1, 2021. Accordingly, we recorded dividends on the Mandatory Convertible Preferred Stock of $44.2 million during the year ended December 31, 2021.

On February 10, 2022, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, payable on April 1, 2019. The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2018 and 2017, resulting in total annual dividends of $274 million, or $.72 per share, for 2018 and $289 million, or $.72 per share, for 2017. CBS Corp.2022.  We currently expectsexpect to continue to pay a regular cash dividend to itsour common stockholders. At the same time, we also declared a quarterly cash dividend of $1.4375 per share on our Mandatory Convertible Preferred Stock, payable on April 1, 2022.

In November 2010, the Companywe announced that itsour Board of Directors approved a program to repurchase $1.5 billion of the Company’sour common stock in open market purchases or other types of transactions (including accelerated stock repurchases or privately negotiated transactions). Since then, various increases totaling $16.4 billion have been approved and announced, including most recently, an increase to the share repurchase program to a total availability of $6.0 billion on July 28, 2016. Below is a summaryDuring the fourth quarter of CBS Corp.’s purchases2021, we did not purchase any shares of its Class B Common Stock during the three months endedour common stock. Our publicly announced share repurchase program had remaining authorization of $2.36 billion at December 31, 2018.2021.
(in millions, except per share amounts)
Total
Number of
Shares
Purchased
 
Average
Price Per
Share
 
Total Number of
Shares Purchased
as Part of Publicly
Announced Programs
 
Remaining
Authorization
October 1, 2018 - October 31, 2018 .7
  $55.62
  .7
   $2,521
 
November 1, 2018 - November 30, 2018 .1
  $57.48
  .1
   $2,515
 
December 1, 2018 - December 31, 2018 1.3
  $43.59
  1.3
   $2,457
 
Total 2.1
     2.1
   $2,457
 

As of February 13, 2019,10, 2022, there were approximately 1,3682,007 record holders of CBS Corp.our Class A Common Stock and approximately 18,51628,121 record holders of CBS Corp.our Class B Common Stock.
II-1

Performance Graph
The following graph compares the cumulative total stockholder return on CBS Corp.of our Class A and Class B Common Stock with the cumulative total return on the companies listed in the Standard & Poor’s 500 Stock Index (“S&P 500”) and a Peerthe Standard & Poor’s 500 Media and Entertainment Industry Group of companies identified below.Index (“S&P 500 Media and Entertainment Index”).

The performance graph assumes $100 invested on December 31, 20132016 in each of theour Class A and Class B Common Stock, of CBS Corp., the S&P 500, and the Peer Group identified belowS&P 500 Media and Entertainment Index, including reinvestment of dividends, through the calendar year ended December 31, 2018.2021.


Total Cumulative Stockholder Return
For Five-Year Period Ended December 31, 20182021
chart-1ea25fca89b533619f1.jpgviac-20211231_g4.jpg

December 31,201620172018201920202021
Class A Common Stock$100$93$69$72$63$57
Class B Common Stock$100$94$70$69$64$53
S&P 500$100$122$116$153$181$233
S&P 500 Media & Entertainment Index$100$107$95$127$167$211

II-2
December 31,201320142015201620172018
CBS Corp. Class A Common Stock$100$89$84$105$98$73
CBS Corp. Class B Common Stock$100$88$75$103$97$73
S&P 500$100$114$115$129$157$150
Peer Group (a)
$100$120$113$126$134$148
(a) The Peer Group consists of the following companies: The Walt Disney Company, Twenty-First Century Fox, Inc. and Time Warner Inc. (“Time Warner”). In June 2018, Time Warner was acquired by AT&T Inc. and as a result, the peer group performance reflects the conversion of Time Warner common stock to AT&T Inc. common stock as of the date of the merger.

Item 6.Selected Financial Data.
CBS CORPORATION AND SUBSIDIARIES
(In millions, except per share amounts)
 
Year Ended December 31, (a) (b)
 
2018 (c) (d)
 
2017 (e) (f) (g)
 
2016 (e) (f)
 
2015 (e) (h)
 
2014 (e) (i)
Revenues$14,514
 $13,692
 $13,166
 $12,671
 $12,519
Operating income$2,768
 $2,861
 $2,902
 $2,684
 $2,631
Net earnings from continuing operations$1,960
 $1,309
 $1,552
 $1,554
 $1,151
Net earnings (loss) from discontinued operations,
net of tax
$—
 $(952) $(291) $(141) $1,808
Net earnings$1,960
 $357
 $1,261
 $1,413
 $2,959
          
Basic net earnings (loss) per common share:         
Net earnings from continuing operations$5.20
 $3.26
 $3.50
 $3.21
 $2.09
Net earnings (loss) from discontinued
operations
$—
 $(2.37) $(.66) $(.29) $3.29
Net earnings$5.20
 $.89
 $2.84
 $2.92
 $5.38
          
Diluted net earnings (loss) per common share:         
Net earnings from continuing operations$5.14
 $3.22
 $3.46
 $3.18
 $2.05
Net earnings (loss) from discontinued
operations
$—
 $(2.34) $(.65) $(.29) $3.22
Net earnings$5.14
 $.88
 $2.81
 $2.89
 $5.27
          
Dividends per common share$.72
 $.72
 $.66
 $.60
 $.54
          
At Year End:         
Total assets:         
Continuing operations$21,847
 $20,830
 $19,642
 $18,695
 $18,372
Discontinued operations12
 13
 4,596
 5,070
 5,563
Total assets$21,859
 $20,843
 $24,238
 $23,765
 $23,935
Total debt:         
Continuing operations$10,152
 $10,162
 $9,375
 $8,448
 $7,112
Discontinued operations—
 —
 1,345
 —
 —
Total debt$10,152
 $10,162
 $10,720
 $8,448
 $7,112
Total Stockholders’ Equity$2,804
 $1,978
 $3,689
 $5,563
 $6,970
(a) During the first quarter of 2018, CBS Corporation (the “Company” or “CBS Corp.”) adopted amended Financial Accounting Standards Board guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). As a result, the components of net benefit cost other than the service cost component are presented in the statement of operations below the subtotal of operating income. All prior periods have been recast to conform to this presentation.
(b) On November 16, 2017, the Company completed the disposition of CBS Radio Inc. (“CBS Radio”) through a tax-free split-off. CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented.Also included in discontinued operations is CBS Outdoor Americas Inc., which was disposed of in 2014, and Outdoor Europe, which was sold in 2013.
(c) During 2018, the Company recorded expenses of $128 million primarily for professional fees related to legal proceedings, recent investigations at the Company and the evaluation of a potential combination with Viacom Inc.
(d) During 2018, the Company reversed a valuation allowance of $140 million relating to capital loss carryforwards that will be utilized in connection with the sale of CBS Television City, which is classified as held for sale on the Consolidated Balance Sheets.
(e) For 2017, net loss from discontinued operations, net of tax, includes a loss on the split-off of CBS Radio of $105 million, or $.26 per diluted share, and a market value adjustment of $980 million, or $2.41 per diluted share, recorded prior to the split-off to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”). Included in net loss from discontinued operations, net of tax, are noncash impairment charges of $444 million ($427 million, net of tax), or $.95 per diluted share, in 2016, and $484 million ($297 million, net of tax), or $.61 per diluted share, in 2015, in each case to reduce the carrying value of CBS Radio’s intangible assets. For 2014, net earnings from discontinued operations, net of tax, included a gain on the disposal of Outdoor Americas Inc. of $1.56 billion, or $2.78 per diluted share.
(f) In 2017, the Company recorded a pension settlement charge of $352 million ($237 million, net of tax), or $.58 per diluted share, and in 2016, the Company recorded a pension settlement charge of $211 million ($130 million, net of tax), or $.29 per diluted share.
(g) In 2017, the Company recorded a provisional charge of $129 million, or $.32 per diluted share, resulting from the enactment of federal tax legislation in December 2017.
(h) In 2015, the Company recorded gains from the sales of internet businesses in China of $139 million ($131 million, net of tax), or $.27 per diluted share.
(i) In 2014, in connection with the early redemption of $1.07 billion of its debt, the Company recorded a pretax loss on early extinguishment of debt of $352 million ($219 million, net of tax), or $.39 per diluted share.

Item 7.
Management’s Discussion and Analysis of Results of Operations and Financial Condition.

(Tabular dollars in millions, except per share amounts)
Management’s discussion and analysis of the results of operations and financial condition of CBS Corporation (together with its consolidated subsidiaries, unless the context otherwise requires, the “Company” or “CBS Corp.”)ViacomCBS Inc. should be read in conjunction with the consolidated financial statements and related notes.

Overview
Business Overview and Strategy
The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television stations, direct-to-consumer digital streaming services and other internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences and generate affiliate and subscription fee, licensing and advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company plans to increase its investment in premium content to enhance its opportunities for revenue growth, which include exhibiting the Company’s content on its direct-to-consumer digital streaming services; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”), third-party live television digital streaming offerings (“virtual MVPDs”), and television stations affiliated with the CBS Television Network. The Company also seeks to grow its advertising revenues by monetizing all content viewership as industry measurements evolve to reflect viewers’ changing habits. The Company’s continued ability to capitalize on these and other emerging opportunities will provide incremental revenues across all of the Company’s main revenue streams.

Corporate Matters
In August 2018, the Company’s Board of Directors (the “Board”) retained two law firms to conduct a full investigation of allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. In September 2018, Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company, pursuant to a separation and settlement agreement and releases, and the Company appointed its then Chief Operating Officer, Mr. Joseph R. Ianniello, as President and Acting Chief Executive Officer of the Company. The Board is conducting a search for a permanent Chief Executive Officer and Mr. Ianniello is a candidate References in this search. Ondocument to “ViacomCBS,” the “Company,” “we,” “us” and “our” refer to ViacomCBS Inc. and its consolidated subsidiaries, unless the context otherwise requires. Effective February 16, 2022, we are changing our name to Paramount Global.

Significant components of management’s discussion and analysis of results of operations and financial condition include:
•Overview—Summary of our business and operational highlights.
•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the years ended December 17, 2018,31, 2021 and 2020, including a comparison of 2021 to 2020. Analysis of our results on a consolidated basis for the Board announcedyear ended December 31, 2019, including a comparison of 2020 to 2019, is included in our Annual Report on Form 10-K for the completionyear ended December 31, 2020.
•Segment Results of Operations—Analysis of our results on a reportable segment basis for the investigationyears ended December 31, 2021 and certain findings2020, including a comparison of 2021 to 2020. Analysis of our results on a reportable segment basis for the investigation. Also during 2018,year ended December 31, 2019, including a comparison of 2020 to 2019, is included in our Annual Report on Form 10-K for the Company was involvedyear ended December 31, 2020.
•Liquidity and Capital Resources—Discussions of our cash flows, including sources and uses of cash, for the years ended December 31, 2021 and 2020, and our outstanding debt. Discussion of our cash flows for the year ended December 31, 2019 is included in our Annual Report on Form 10-K for the year ended December 31, 2020.
•Critical Accounting Policies—Detail with respect to accounting policies that are considered by management to require significant judgment and use of estimates and that could have a significant impact on our financial statements.
•Legal Matters—Discussion of legal proceedings with its controlling shareholder, National Amusements, Inc., among others,matters to which concluded with the dismissalwe are involved.
•Market Risk—Discussion of all claims pursuanthow we manage exposure to a settlementmarket and release agreement. Pursuant to this agreement, on September 9, 2018, seven members of the Board resigned and the Board appointed six new members to the Board. On September 23, 2018, two directors who had served as members of the Board prior to September 9, 2018 resigned to pursue other interests, and, on October 21, 2018, another director resigned for health-related reasons. In addition, in early 2018, a potential combination with Viacom Inc. was evaluated by a special committee established by the Board. The uncertainties arising from leadership changes at the Company may have an adverse effect on the Company’s business. In connection with the aforementioned matters, the Company incurred expenses of $128 million in 2018. See “Legal Matters” for certain related information.interest rate risks.




II-3



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Overview
Operational Highlights 20182021 vs. 20172020
Consolidated results of operationsIncrease/(Decrease)
Year Ended December 31,20212020$%
GAAP:
Revenues$28,586 $25,285 $3,301 13 %
Operating income$6,297 $4,139 $2,158 52 %
Net earnings from continuing operations
attributable to ViacomCBS
$4,381 $2,305 $2,076 90 %
Diluted EPS from continuing operations
attributable to ViacomCBS
$6.69 $3.73 $2.96 79 %
Non-GAAP: (a)
Adjusted OIBDA$4,444 $5,132 $(688)(13)%
Adjusted net earnings from continuing operations
attributable to ViacomCBS
$2,292 $2,595 $(303)(12)%
Adjusted diluted EPS from continuing operations
attributable to ViacomCBS
$3.48 $4.20 $(.72)(17)%
(a) Certain items identified as affecting comparability are excluded in non-GAAP results. See “Reconciliation of Non-GAAP Measures
Consolidated results of operations    Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
GAAP:        
Revenues$14,514
 $13,692
 $822
 6 % 
Operating income$2,768
 $2,861
 $(93) (3)% 
Net earnings from continuing operations$1,960
 $1,309
 $651
 50 % 
Net earnings$1,960
 $357
 $1,603

n/m
 
Diluted EPS from continuing operations$5.14
 $3.22
 $1.92
 60 % 
Diluted EPS$5.14
 $.88
 $4.26
 n/m
 
Net cash flow provided by operating activities$1,426
 $887
 $539
 61 % 
         
Non-GAAP: (a)
        
Adjusted operating income$3,048
 $2,905
 $143
 5 % 
Adjusted net earnings from continuing operations$1,979
 $1,705
 $274
 16 % 
Adjusted net earnings$1,979
 $1,791
 $188
 10 % 
Adjusted diluted EPS from continuing operations$5.19
 $4.19
 $1.00
 24 % 
Adjusted diluted EPS$5.19
 $4.40
 $.79
 18 % 
Adjusted free cash flow$1,260
 $989
 $271
 27 % 
n/m - not meaningful
(a) See pages II-8, II-9, II-35” for details of these items and II-36 for reconciliations of adjustednon-GAAP results to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).

For 2018,2021, revenues reached an all-time high of $14.51increased 13% to $28.59 billion anfrom $25.29 billion in 2020, reflecting growth in all revenue streams. The increase of 6% from 2017, drivenwas led by 64% higher streaming revenues, with growth across eachour streaming services, and an 11% increase in advertising revenues. The advertising revenue growth is principally the result of the Company’s main revenue streams. Advertising revenues grew 8%, driven by record political advertising sales from the 2018 midterm elections and the Company’s acquisitionCBS’ broadcasts of Network 10 in the fourth quarter of 2017. These increases were partially offset by the absence of the National Semifinals Super Bowl LV and National Championship games of the NCAA Division I Men’s Basketball Championship (“NCAA(the “NCAA Tournament”) and five Thursday Night Footballgames, which contributed 9-percentage points of the increase and for which there were no comparable broadcasts on CBS in 2020. We have the rights to broadcast the Super Bowl on a rotational basis with other networks, and the 2020 NCAA Tournament was cancelled as a result of the coronavirus pandemic (“COVID-19”). Affiliate revenues grew 5%, driven by expanded distribution for our domestic cable networks and growth in fees received from television stations affiliated with the CBS Television Network in 2017. During 2018, the Company experienced strong demand for CBS Television Network advertising. Underlying CBS Television Network advertising(“reverse compensation”). Licensing and other revenues in 2018 were comparable with 2017, asalso increased 5%, primarily reflecting a higher pricing and higher ratings for Sunday National Football League (“NFL”) games were offset by lower ratings for the Company’s primetime programming. Affiliate and subscription fees increased 7%, driven by 62% growthvolume of licensing, including from the Company’s direct-to-consumer digital streaming services, CBS All Access and Showtime, and higher station affiliation fees and retransmission revenues, including from virtual MVPDs. These increases weretiming of program availabilities, partially offset by Showtime Networks’ distributionthe benefit to the prior year from the licensing of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in 2017, which reduced the affiliate and subscription fee comparison by eight percentage points. Content licensing and distributiondomestic streaming rights to South Park. Theatrical revenues were up 3%34%, mainlyas a result of a higher number of theatrical releases in 2021, reflecting the impact on 2020 from the closure or reduced capacity of movie theaters in response to COVID-19.

Operating income for 2021 increased 52% to $6.30 billion from $4.14 billion in 2020. This comparison was impacted by items identified as affecting comparability, including gains on sales in 2021 of $2.34 billion, principally reflecting gains on real estate sales of $2.23 billion; a gain on sale of $214 million in 2020; restructuring charges in each period; and in 2020, costs for other corporate matters, programming charges and impairment charges. Adjusted OIBDA decreased 13%, as revenue growth was more than offset by higher international licensingcosts, principally from an increased investment in our streaming services, the timing of production as the prior year was impacted by shutdowns as a result of COVID-19, and the adoptionbroadcast of a new revenue recognition standardnoncomparable sporting events in 2018. This new standard resulted in revenues from the distribution of third-party content now being recognized based on the gross amount of consideration received from the customer, with an offsetting increase to participation expenses (see “Adoption of New Revenue Standard”). These increases were partially offset by lower domestic licensing compared with 2017.2021.


For 2021, net earnings from continuing operations attributable to ViacomCBS and diluted EPS from continuing operations increased 90% and 79%, respectively, from 2020. These comparisons were impacted by items identified as affecting comparability, including the aforementioned items impacting operating income, and in each period, a loss on extinguishment of debt, gains from investments, and discrete tax items. Adjusted net earnings
II-4



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Operating income decreased 3% from 2017. This comparison was impacted by several discrete items, including restructuring charges, costs relatingcontinuing operations attributable to corporate matters and programming charges resulting from changes in the Company’s programming strategy, primarily at CBS Films. Adjusted operating income increased 5%, primarily reflecting the revenue growth, which was partially offset by an increased investment in content, including a higher number of premium series produced for the Company’s direct-to-consumer digital streaming services, as well as for distribution on other platforms. Net earnings for 2018 were $1.96 billion, or $5.14 per diluted share, compared with $357 million, or $.88 per diluted share, for 2017. The net earnings comparison was impacted by the following discrete items: the reversal of a valuation allowance in 2018, charges in 2017 resulting from a pension settlement and the enactment of federal tax legislation in December 2017 (the “Tax Reform Act”); and, in discontinued operations for 2017, a net loss from the split-off of CBS Radio Inc. (“CBS Radio”) and a noncash charge to adjust the carrying value of CBS Radio. (See Note 17 to the consolidated financial statements.) Adjusted diluted earnings per share (“EPS”) increased 18% to $5.19 for 2018, driven by the higher adjusted operating income and a lower effective income tax rate in 2018, which resulted from the Tax Reform Act, as well as lower weighted average shares outstanding. Adjusted operating incomeViacomCBS and adjusted diluted EPS are non-GAAP financial measures. See pages II-8decreased 12% and II-917%, respectively, reflecting lower Adjusted OIBDA partially offset by the impact in the prior year from the noncontrolling interest’s share of profit from the licensing of South Park. Additionally, diluted EPS and adjusted diluted EPS for details2021 were each impacted by the 2021 stock issuances discussed below, which negatively impacted reported diluted EPS by $.26 and adjusted diluted EPS by $.16.

Stock Offerings
On March 26, 2021, we completed offerings of the discrete items excluded from financial results, and reconciliations20 million shares of adjusted resultsour Class B Common Stock at a price to the most directly comparable financialpublic of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”) at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the net proceeds for general corporate purposes, including investments in streaming.

Reconciliation of Non-GAAP Measures
Results for the years ended December 31, 2021 and 2020 included certain items identified as affecting comparability. Adjusted OIBDA, adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to ViacomCBS, and adjusted diluted EPS from continuing operations (together, the “adjusted measures”) exclude the impact of these items and are measures of performance not calculated in accordance with GAAP. We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

The Company generated operating cash flow from continuing operationsBecause the adjusted measures are measures of $1.43 billion in 2018 compared with $793 million in 2017, which included discretionary pension contributions of $600 million to prefund the Company’s qualified pension plans. Adjusted free cash flow was $1.26 billion for 2018 compared with $989 million for 2017. These increases primarily reflected lower cash payments for income taxes and growth in affiliate and subscription fees, which were partially offset by the aforementioned increased investment in content. Adjusted free cash flow is a non-GAAP financial measure. See “Free Cash Flow and Adjusted Free Cash Flow” on pages II-35 and II-36 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable financial measureperformance not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income, earnings from continuing operations before income taxes, provision for income taxes, net earnings from continuing operations attributable to adjusted free cash flow.

Share RepurchasesViacomCBS or diluted EPS from continuing operations, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.
The following is a summary of the Company’s purchases of its Class B Common Stock during the year ended December 31, 2018:
II-5
 
Total Number
of Shares
(in millions)
 
Average Price
Per Share
 
Dollar Value
of Shares Repurchased
 Remaining Authorization
Share repurchase program 11.5
   $52.06
   $600
   $2,457
 


Dividends
      Increase/(Decrease) 
Year Ended December 31, 2018 2017 $ % 
Dividends per share $.72
 $.72
 $—
 — % 
Total dividends $274
 $289
 $(15) (5)% 




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Adoption of New Revenue Standard
During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 606 (“ASC 606”) on the recognition of revenues which primarily resulted in two changes to the Company’s revenue recognition policies.
Revenues from Distribution Arrangements
Revenues from the Company’s distribution of third-party content are now recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues, which include content licensing and distribution revenues and advertising revenues, were recognized at the net amount retained by the Company after the payment of fees to the third party. For the year ended December 31, 2018, revenues and operating expenses relating to such distribution arrangements were each $279 million higher under ASC 606 than the amounts that would have been reported under previous accounting guidance, with no impact to operating income.
Revenues from the Renewal of Licensing Agreements
Revenues associated with the renewal of an existing license agreement are now recognized at the beginning of the renewal period. Under previous accounting guidance, these revenues were recognized upon the execution of such renewal. Content licensing and distribution revenue comparisons will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Therefore, this change is not expected to have a material impact on the trend of the Company’s financial results. Additionally, historically, on an annual basis, revenues from renewals executed each year have approximated revenues associated with renewal periods that began in the same year.
The Company appliedfollowing tables reconcile the modified retrospective method of adoption and therefore, prior periods continueadjusted measures to be presented under previous accounting guidance. The following table presents the Company’s revenues, operating income, net earnings from continuing operations, and diluted EPS from continuing operations, as well as the corresponding year-over-year comparisons, as if results for the year ended December 31, 2017 were recognized under ASC 606. These amounts are non-GAAP financial measures and are reconciled below to thetheir most directly comparable financial measures in accordance with GAAP. The Company believes
Year Ended December 31,20212020
Operating income (GAAP)$6,297 $4,139 
Depreciation and amortization (a)
390 430 
Restructuring and other corporate matters (b)
100 618 
Programming charges (b)
— 159 
Net gain on sales (b)
(2,343)(214)
Adjusted OIBDA (Non-GAAP)$4,444 $5,132 
(a) 2020 includes an impairment charge for FCC licenses of $25 million and accelerated depreciation of $12 million for technology that presenting its financial resultswas abandoned in connection with synergy plans related to the merger of Viacom Inc. with and into CBS Corporation (the “Merger”).
(b) See notes on the following tables for 2017 under ASC 606 is relevantadditional information on items affecting comparability.
Year Ended December 31, 2021
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ViacomCBSDiluted EPS from Continuing Operations
Reported (GAAP)$5,206 $(646)$4,381 $6.69 
Items affecting comparability:
Restructuring and other corporate matters (a)
100 (25)75 .11 
Net gain on sales (b)
(2,343)592 (1,751)(2.67)
Gains from investments (c)
(47)11 (36)(.05)
Loss on extinguishment of debt128 (30)98 .15 
Pension settlement charge (d)
10 (2)8 .01 
Discrete tax items (e)
— (517)(517)(.79)
Impairment of equity-method investment,
    net of tax		— — 34 .05 
Impact of antidilution of Mandatory
   Convertible Preferred Stock (f)
— — — (.02)
Adjusted (Non-GAAP)$3,054 $(617)$2,292 $3.48 
(a) Reflects severance costs associated with changes in management at certain of our businesses and useful for investors because it allows investorsthe impairment of lease assets in connection with cost transformation initiatives related to view results for 2017the Merger.
(b) Primarily reflects gains on the sales of CBS Studio Center, 51 West 52nd Street, an office tower that was formerly the headquarters of CBS (“51 West 52nd Street”), and a basis consistentnoncore trademark licensing operation.
(c) Primarily reflects a gain of $37 million on the sale of an investment and a gain of $9 million from an increase in the fair value of an investment that was sold during the third quarter of 2021.
(d) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.
(e) Primarily reflects a benefit of $260 million to remeasure our United Kingdom (“U.K.”) net deferred income tax asset as a result of the enactment of an increase in the U.K. corporate income tax rate from 19% to 25% beginning April 1, 2023, a benefit of $229 million from the recognition of a capital loss associated with a change in the tax entity classification of a foreign subsidiary, as well as a net tax benefit in connection with the 2018 presentation, and makes it easier to comparesettlement of income tax audits.
(f) The weighted average number of common shares outstanding used in the Company’s year-over-year results. If revenues were recognized under ASC 606 for 2017, the year-over-year comparisons to 2018 for operating income, net earnings from continuing operations andcalculation of reported diluted EPS from continuing operations were 655 million and in the calculation of adjusted diluted EPS from continuing operations were 646 million. These amounts differ because adjusted diluted EPS excludes the effect of the assumed conversion of our Mandatory Convertible Preferred Stock into shares of common stock since the impact would have been similar toantidilutive. As a result, in the comparisons on a reported basis.calculation of adjusted diluted EPS, the weighted average number of diluted shares outstanding does not include the assumed issuance of shares upon conversion of preferred stock, and preferred stock dividends recorded during the year ended December 31, 2021 of $44 million are deducted from net earnings from continuing operations.
II-6
  For the Year Ended December 31, 
    2017 2018 Reported vs.
  2018 Reported Reported ASC 606 Adjustments Under ASC 606 
2017
Reported
 
2017
Under ASC 606
 
Revenues $14,514
 $13,692
  $239
  $13,931
  6 %  4 % 
                  
Operating income $2,768
 $2,861
  $(5)  $2,856
  (3)%  (3)% 
                  
Net earnings from
continuing operations
 $1,960
 $1,309
  $(4)  $1,305
  50 %  50 % 
                  
Diluted EPS from
continuing operations
 $5.14
 $3.22
  $(.01)  $3.21
  60 %  60 % 





Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Reconciliation of Non-GAAP Measures
Year Ended December 31, 2020
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ViacomCBSDiluted EPS from Continuing Operations
Reported (GAAP)$3,147 $(535)$2,305 $3.73 
Items affecting comparability:
Restructuring and other corporate matters (a)
618 (133)485 .79 
Impairment charge (b)
25 (6)19 .03 
Depreciation of abandoned technology (c)
12 (3)9 .01 
Programming charges (d)
159 (39)120 .20 
Gain on sales (e)
(214)31 (183)(.30)
Net gains from investments (f)
(206)50 (156)(.25)
Loss on extinguishment of debt126 (29)97 .16 
Discrete tax items (g)
— (110)(110)(.18)
Impairment of equity-method investment,
    net of tax		— — 9 .01 
Adjusted (Non-GAAP)$3,667 $(774)$2,595 $4.20 
Results for the years ended December 31, 2018(a) Reflects severance, exit costs and 2017 included discrete items that were not part of the normal course of operations. The following tables present non-GAAP financial measures, which exclude the impact of these discrete items, reconciledother costs related to the most directly comparable financial measuresMerger and a charge to write down property and equipment that was classified as held for sale.
(b) Reflects a charge to reduce the carrying values of FCC licenses in accordancetwo markets to their fair values.
(c) Reflects accelerated depreciation for technology that was abandoned in connection with GAAP. The Company believes that presenting its financial results adjusted for the impact of discrete items is relevant and useful for investors because it allows investors to view performance in a manner similarsynergy plans related to the method used byMerger.
(d) Primarily related to the Company’s management and providesabandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.
(e) Reflects a clearer perspectivegain on the underlying performancesale of CNET Media Group (“CMG”).
(f) Primarily reflects an increase in the Company.value of our investment in fuboTV, Inc. (“fuboTV”), which was sold in the fourth quarter of 2020.
(g) Primarily reflects a benefit from the remeasurement of our U.K. net deferred income tax asset as a result of an increase in the U.K. corporate income tax rate from 17% to 19% enacted during the third quarter of 2020.
Consolidated Results of Operations - 2021 vs. 2020
Revenues
Beginning in the first quarter of 2021, we changed the categories we use to disaggregate revenues to include streaming revenues in order to align with management’s increased focus on this revenue stream. Streaming revenues are comprised of streaming advertising and streaming subscription revenues. Streaming advertising revenues are earned from advertisements on our pay and free streaming services, including Paramount+ and Pluto TV, and from digital video advertisements on our websites and in our video content on third-party platforms (“other digital video platforms”). Streaming subscription revenues include fees for our pay streaming services, including Paramount+, Showtime Networks’ premium subscription streaming service (“Showtime OTT”), BET+ and Noggin, as well as premium subscriptions to access certain video content on our websites. Accordingly, our advertising and affiliate revenue categories exclude revenues earned by our streaming services and on other digital video platforms. The prior year has been reclassified to conform to this presentation.
Year Ended December 31,2018
2017
Operating income$2,768
 $2,861
Discrete items:   
Restructuring charges67
 63
Corporate matters128
 —
Programming charges85
 —
Other operating items, net (a)
—
 (19)
Adjusted operating income$3,048
 $2,905
II-7

 Net Earnings from Continuing Operations 
Diluted EPS from Continuing Operations (f)
 
Year Ended December 31,2018 2017 2018 2017 
Reported (GAAP)$1,960
 $1,309
 $5.14
 $3.22
 
Discrete items:        
Restructuring charges
(net of a tax benefit of $17 million in 2018 and
$24 million in 2017)
50

39
 .13
 .10
 
Corporate matters
(net of a tax benefit of $29 million)
99
 —
 .26
 —
 
Programming charges
(net of a tax benefit of $21 million)
64
 —
 .17
 —
 
Other operating items, net
(net of a tax benefit of $4 million) (a)
—

(23) —
 (.06) 
Loss on early extinguishment of debt
(net of a tax benefit of $18 million)
—

31
 —
 .08
 
Pension settlement charge
(net of a tax benefit of $115 million)
—

237
 —
 .58
 
Write-down of investment
(net of a tax benefit of $3 million) (b)
—

5
 —
 .01
 
Tax law changes (c)
(54)
129
 (.14) .32
 
Other tax items (d)
(140)
(22) (.37) (.05) 
Adjusted (Non-GAAP)$1,979
 $1,705
 $5.19
 $4.19
 




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


 Net Earnings 
Diluted EPS (f)
 
Year Ended December 31,2018 2017 2018 2017 
Reported (GAAP)$1,960
 $357
 $5.14
 $.88
 
Discrete items:        
Restructuring charges
(net of a tax benefit of $17 million in 2018 and
$24 million in 2017)
50
 39
 .13
 .10
 
Corporate matters
(net of a tax benefit of $29 million)
99
 —
 .26
 —
 
Programming charges
(net of a tax benefit of $21 million)
64
 —
 .17
 —
 
Other operating items, net
(net of a tax benefit of $4 million) (a)
—
 (23) —
 (.06) 
Loss on early extinguishment of debt
(net of a tax benefit of $18 million)
—
 31
 —
 .08
 
Pension settlement charge
(net of a tax benefit of $115 million)
—
 237
 —
 .58
 
Write-down of investment
(net of a tax benefit of $3 million) (b)
—
 5
 —
 .01
 
Tax law changes (c)
(54) 129
 (.14) .32
 
Other tax items (d)
(140) (22) (.37) (.05) 
Discontinued operations items (e)
—
 1,038
 —
 2.55
 
Adjusted (Non-GAAP)$1,979
 $1,791
 $5.19
 $4.40
 
Revenues by Type% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2021Revenues2020Revenues$%
Advertising (a)
$9,267 32 %$8,333 33 %$934 11 %
Affiliate (b)
8,394 29 8,023 32 371 5 
Streaming4,193 15 2,561 10 1,632 64 
Theatrical241 1 180 1 61 34 
Licensing and other6,491 23 6,188 24 303 5 
Total Revenues$28,586 100 %$25,285 100 %$3,301 13 %
(a) Includes a net gain relating to the disposition of property and equipment.Excludes streaming advertising revenues.
(b) Reflects the write-down of an investment to its fair value.Excludes streaming subscription revenues.
(c) For 2018, reflects a net tax benefit associated with changes in tax law and for 2017, reflects a provisional charge resultingAdvertising
Advertising revenues are generated primarily from the enactment of the Tax Reform Act in December 2017.
(d) For 2018, reflects the reversal of a valuation allowance relating to capital loss carryforwards that will be utilized in connection with the sale of advertising spots on our global broadcast and cable networks and television stations. For 2021, the 11% increase in advertising revenues was driven by the benefit in 2021 from CBS’ broadcasts of Super Bowl LV and NCAA Tournament games for which there were no comparable broadcasts on CBS Television Cityin 2020, and an improved advertising market, driven by higher pricing and demand, compared with 2020, which was negatively impacted by COVID-19. We have the rights to broadcast the Super Bowl and the national semi-finals and championship games of the NCAA Tournament on a rotational basis with other networks, including in 2021. Additionally, while we share the games in the first quarterpreceding rounds of 2019. For 2017, primarily reflects a taxthe NCAA Tournament with Turner Broadcasting System, Inc. (“Turner”) each year, COVID-19 caused the cancellation of the NCAA Tournament in 2020. These noncomparable sporting events contributed 9-percentage points of the advertising revenue increase for 2021. The above-mentioned increases were partially offset by lower linear impressions for our domestic networks; lower political advertising sales, reflecting the benefit to 2020 from the resolutionU.S. Presidential election; and the absence of certain state income tax matters.
(e) Reflects a loss on the split-off of CBS Radio of $105 million, or $.26 per diluted share; a market value adjustment of $980 million, or $2.41 per diluted share, recorded prior to the split-off to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”); adjustments to the loss on disposal of the Company’s Outdoor advertising business; restructuring charges at CBS Radio of $7 million ($4 million, net of tax); and a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.
(f) Amounts may not sumCMG as a result of rounding.
its sale in the fourth quarter of 2020, which negatively impacted the comparison by 1-percentage point.
Consolidated Results
In March 2021, we reached an agreement with the National Football League (“NFL”) to extend our rights to broadcast American Football Conference (AFC) regular season and post-season games, which include wildcard, divisional playoff and championship games, on the CBS Television Network and to stream these games live on Paramount+. The contract begins with the 2023 season and extends through the 2033 season, and includes the rights to the Super Bowl in 2024, 2028 and 2032, as well as certain expanded rights across our networks and platforms. The NFL has a one-time right to terminate the agreement after the 2029 season.

In 2022, the advertising revenue comparison will be negatively impacted by the absence of Operations—2018 vs. 2017the Super Bowl and semi-finals and championship games of the NCAA Tournament, which will be carried by other networks, reflecting the above-mentioned rotational nature of the rights to broadcast these tentpole sporting events. However, comparability in 2022 will benefit from higher political advertising revenues, mainly in the second half of the year, driven by mid-term elections.

RevenuesAffiliate
Affiliate revenues are principally comprised of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television streaming services (“virtual MVPDs” or “vMVPDs”) for carriage of our cable networks (“cable affiliate fees”), reverse compensation, and fees for authorizing the MVPDs’ and vMVPDs’ carriage of our owned television stations (“retransmission fees”). For 2021, affiliate revenues increased 5% as a result of growth in reverse compensation and retransmission fee revenues; and higher cable affiliate fees, reflecting the benefit from the launch of our basic cable networks in June 2020 and April 2021 on two vMVPDs,
II-8
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2018 Revenues 2017 Revenues $ % 
Advertising$6,195
  43%  $5,753
  42%  $442
 8% 
Content licensing and distribution4,081
  28
  3,952
  29
  129
 3
 
Affiliate and subscription fees4,003
  27
  3,758
  27
  245
 7
 
Other235
  2
  229
  2
  6
 3
 
Total Revenues$14,514
  100%  $13,692
  100%  $822
 6% 




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Advertising
For 2018, the 8% increase in advertising revenues was driven by the Company’s acquisition of Network 10 in the fourth quarter of 2017rate increases, and record political advertising sales in 2018 associated with the U.S. midterm elections. Underlying CBS Television Network advertising revenues for 2018 were comparable with 2017, as higher pricing and higher ratings for Sunday NFL games were offset by lower ratings for the Company’s primetime programming.
Advertising revenues for 2018 also benefited from higher revenues from the distribution of third-party content, resulting from such revenues now being recognized at the gross amount of consideration received from the customer, with an offsetting increase to operating expenses, as a result of the adoption of a new revenue recognition standard (see “Adoption of New Revenue Standard”). Under previous guidance such distribution revenues were recognized at the net amount retained by the Company after the payment of fees to the third party. These increases werepay-per-view boxing events, partially offset by the absenceimpact of subscriber declines.

Streaming
Streaming Revenues by TypeIncrease/(Decrease)
Year Ended December 31,20212020$%
Advertising$2,145 $1,418 $727 51 %
Subscription2,048 1,143 905 79 
Total Streaming Revenues$4,193 $2,561 $1,632 64 %
For 2021, streaming advertising revenues grew 51% driven by higher advertising on our streaming services, Pluto TV and Paramount+, as well as growth on our other digital video platforms. Global monthly active users (“MAUs”), which reflect the number of unique devices interacting with the Pluto TV service in a calendar month, increased 21.3 million to 64.4 million for December 2021 from 43.1 million for December 2020.

Streaming subscription revenues increased 79% reflecting subscriber growth, which was led by Paramount+, which benefited from film releases, including A Quiet Place Part II and PAW Patrol: The Movie; new original scripted dramas, including 1883 and Mayor of Kingstown; NFL games; and launches in international markets. Revenue growth also benefited from subscriber increases for Showtime OTT and BET+. Global streaming subscribers increased 26.2 million to 56.1 million at December 31, 2021 from 29.9 million at December 31, 2020. Global streaming subscribers include customers with access to our domestic or international streaming services, either directly through our owned and operated apps and websites, or through third-party distributors. Our subscribers include paid subscriptions and those customers registered in a free trial, and subscribers are considered unique to each of our services, whether offered individually or as part of a bundle.

Theatrical
Theatrical revenues are principally earned from the worldwide theatrical distribution of films through audience ticket sales. For 2021, the 34% increase in theatrical revenues reflects the benefit from current year releases including A Quiet Place Part II and PAW Patrol: The Movie, while the prior year was impacted by the closure or reduced capacity of movie theaters in response to COVID-19, following the release of Sonic the Hedgehog in the first quarter of 2020, and throughout the remainder of the broadcast of five Thursday Night Football games and the National Semifinals and National Championship games of the NCAA Tournament, which were broadcast on the CBS Television Network in 2017. The National Semifinals and National Championship games of the NCAA Tournament are broadcast by the CBS Television Network every other year through 2032 under the current agreements with the NCAA and Turner Broadcasting System, Inc. (“Turner”).year.

In 2019, advertising revenues will benefit from the CBS Television Network’s broadcast of the Super Bowl, which airs on the CBS Television Network on a rotating basis with other networks through 2022 under the current contract with the NFL, and the National Semifinals and National Championship games of the NCAA Tournament. However, the advertising revenue comparison in 2019 will be negatively affected by the benefit in 2018 from record political advertising sales. The CBS Television Network’s upfront advertising sales (“Upfront”) for the 2018/2019 television broadcast season, which runs from the middle of September 2018 through the middle of September 2019, resulted in pricing and volume increases compared with the prior broadcast season, which are expected to benefit the Company’s advertising revenues during the 2018/2019 broadcast season. (See page I-2 for a description of the Upfront market.) However, overall advertising revenues for the Company will be dependent on ratings for its programming and market conditions, including demand in the scatter advertising market, in which advertisers purchase the remaining advertising spots closer to the broadcast of the related programming.
Content Licensing and DistributionOther
Content licensingLicensing and distributionother revenues are principally comprised of fees from the licensing of the rights to exhibit our internally-produced television programming;and film programming on various platforms in the secondary market after its initial exhibition on our owned or third-party platforms; license fees from content produced for third parties; home entertainment revenues, which include revenues from the viewing of our content on a transactional basis through transactional video-on-demand (TVOD) and electronic sell-through services, and the sale and distribution of our content through DVDs and Blu-ray discs to wholesale and retail partners; fees from the use of our trademarks and brands for consumer products, recreation and live events; fees from the distribution of third-party programming; and revenues from the publishing and distributionrental of consumer books.production facilities. For 2018, content2021, licensing and distributionother revenues increased 3%5%, benefiting fromreflecting a higher revenuesvolume of licensing, including from the distributiontiming of third-party content, resulting from such revenues now being recognized at the gross amount of consideration received from the customer, with an offsetting increase to participation expense,program availabilities as a result of the adoptionproduction shutdowns in 2020 because of a new revenue recognition standard (see “Adoption of New Revenue Standard”). Under previous guidance such distribution revenuesCOVID-19, and increased licensing for consumer products. These increases were recognized at the net amount retainedpartially offset by the Company after the payment of feesbenefit to the third party. Content licensing and distribution revenues also reflected growth in international licensing, offset by lower domestic licensing, mainly resulting from several large sales in 2017, including NCIS: New Orleans, Madam Secretary and titlesprior year from the CSI franchise.

Content licensing and distribution revenue comparisons are impacted by fluctuations resulting from the timing of the availability of Company-owned television series for multiyear licensing agreements. Television license fee revenues are recognized at the beginning of the license period in which programs are made availabledomestic streaming rights to the licensee for exhibition. Unrecognized revenues attributable to signed license agreements for produced programming that is not yet available for exhibition were $1.08 billion at December 31, 2018 and $670 million at December 31, 2017,South Park.

II-9



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Operating Expenses
which
% of% of
Operating Expenses by TypeOperatingOperatingIncrease/(Decrease)
Year Ended December 31,2021Expenses2020Expenses$%
Production and programming$12,672 71 %$10,204 68 %$2,468 24 %
Participations and residuals2,031 12 1,729 12 302 17 
Programming charges— — 159 1 (159)n/m
Distribution and other3,041 17 2,900 19 141 5 
Total Operating Expenses$17,744 100 %$14,992 100 %$2,752 18 %
n/m - not meaningful
Production and Programming
Production and programming expenses reflect the amortization of costs of internally-produced television and theatrical film content; amortization of acquired program rights; and other television production costs, including on-air talent. For 2021, the increase of 24% was primarily a result of an increased investment in content for our streaming services; the timing of production, as the prior year was impacted by shutdowns as a result of COVID-19; and higher sports programming costs, principally associated with noncomparable sporting events.

Participations and Residuals
Participation and residual costs primarily include expenses relating to $1.33 billion on January 1, 2018 upon the adoption of ASC 606. At December 31, 2018, the Company had approximately 800 episodes of scripted original programming that had not yet been made availableamounts owed to talent and other participants in the secondary domestic marketplace (See page II-59 forour content pursuant to contractual and collective bargaining arrangements. For 2021, participation and residual costs increased 17% primarily as a descriptionresult of the secondary marketplace).

Total outstanding receivables attributable toincrease in licensing revenues recognized under licensing agreements were $3.57 billion at December 31, 2018, $4.06 billion at December 31, 2017 and $3.45 billion at January 1, 2018. At December 31, 2018, the total amount due from these receivables was $1.96 billion in 2019, $771 million in 2020, $430 million in 2021 $236 million in 2022, and $181 million in 2023 and thereafter.

Affiliate and Subscription Fees
Affiliate and subscription fees are principally comprised of revenues received from MVPDs and virtual MVPDs for carriage of the Company’s cable networks (“cable affiliate fees”), as well as fees receivedthe mix of titles licensed in each year.

Programming Charges
During 2020, we recorded programming charges of $159 million primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.

Distribution and Other
Distribution and other operating expenses primarily include costs relating to the distribution of our content, including print and advertising for theatrical releases and costs paid to third-party distributors; compensation; revenue-sharing costs to television stations affiliated with the CBS Television NetworkNetwork; and other ancillary and overhead costs associated with our operations. For 2021, the 5% increase was a result of cost increases associated with the growth of our streaming services.

Selling, General and Administrative Expenses
Increase/(Decrease)
Year Ended December 31,20212020$%
Selling, general and administrative expenses$6,398 $5,320 $1,078 20 %
Selling, general and administrative (“station affiliation fees”SG&A”); expenses include expenses incurred for selling and marketing costs, occupancy, professional service fees for authorizing the MVPDs’ and virtual MVPDs’ carriage of the Company’s owned television stations (“retransmission fees”); subscription fees for the Company’s direct-to-consumer digital streaming services; and revenues received for the distribution of pay-per-view boxing events. For 2018, the 7%back office support, including employee compensation. The 20% increase in affiliate and subscription fees reflects 22% growth in station affiliation and retransmission fees and 62% growth from the Company’s direct-to-consumer digital streaming services, CBS All Access and Showtime. These increases were partially offset by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in 2017, which reduced the comparison by eight percentage points.

Over the next two years, agreements with MVPDs and virtual MVPDs, representing approximately 85% of the Company’s total subscribers to these services, and agreements with station affiliates representing approximately 60% of the Company’s total subscribers under its station affiliation agreements, will come up for renewal. Historically, renewals of these agreements have resulted in increases in the rates received by the Company and therefore, the Company expects to benefit from these renewals over the next few years. In addition, the Company’s existing agreements with station affiliates, MVPDs and virtual MVPDs include annual contractual increases. Together, these factors are expected to result in continued growth in affiliate and subscription fees over the next several years.

Other
Other revenues are principally comprised of revenues from the rental of production facilities and ancillary digital revenues.
International Revenues
For 2018, international revenues increased 26% primarilySG&A expenses was driven by advertising, marketing and other cost increases to support the Company’s acquisition of Network 10 in the fourth quarter of 2017. The Company generated approximately 17%growth
II-10
and 15% of its total revenues from international regions in 2018 and 2017, respectively.

    % of   % of 
Year Ended December 31, 2018 International 2017 International 
United Kingdom $328
  13%  $300
  15%  
Other Europe 794
  31
  735
  37
  
Canada 268
  11
  279
  14
  
Asia 179
  7
  210
  10
  
Australia 574
  23
  166
  8
  
Other 392
  15
  327
  16
  
Total International Revenues $2,535
  100%  $2,017
  100%  



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Operating Expenses
   % of   % of   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2018 Expenses 2017 Expenses $ % 
Programming$2,858
  32%  $3,156
  37%  $(298) (9)% 
Production3,402
  37
  2,873
  34
  529
 18
 
Participation, distribution and
royalty
1,368
  15
  1,050
  13
  318
 30
 
Other1,483
  16
  1,359
  16
  124
 9
 
Total Operating Expenses$9,111
  100%  $8,438
  100%  $673
 8 % 
Programmingand expansion of our streaming services, including the launch of Paramount+. The increase also reflects higher advertising and marketing costs to promote the increased level of original programming in 2021.
Programming expenses reflect the
Depreciation and Amortization
Increase/(Decrease)
Year Ended December 31,20212020$%
Depreciation and amortization$390 $430 $(40)(9)%
Depreciation and amortization expense reflects depreciation of fixed assets, including transponders and equipment under finance leases, amortization of acquired programs exhibitedfinite-lived intangible assets, and impairment of fixed and intangible assets, when applicable. For 2020, amortization expenseincluded an impairment charge of $25 million in the TV Entertainment segment to write down the carrying values of FCC licenses in two markets to their fair values and accelerated depreciation of $12 million resulting from the abandonment of technology in connection with synergy plans related to the Merger.

Restructuring and Other Corporate Matters
During the years ended December 31, 2021 and 2020, we recorded the following costs associated with restructuring and other corporate matters.
Year Ended December 31,20212020
Severance$65 $472 
Exit costs and other35 70 
Restructuring charges100 542 
Merger-related costs— 56 
Other corporate matters— 20 
Restructuring and other corporate matters$100 $618 
During the year ended December 31, 2021, we recorded restructuring charges of $100 million. These charges include $65 million of severance costs, including the accelerated vesting of stock-based compensation, primarily associated with changes in management at certain of our businesses. The charges also include $35 million for the impairment of lease assets that we determined we will not use and began actively marketing for sublease. This determination was made in connection with cost-transformation initiatives related to the Merger. The impairment is the result of a decline in market conditions since inception of these leases and reflects the difference between the estimated fair values, which were determined based on television broadcastthe expected discounted future cash flows of the lease assets, and cable networks, and television stations. For 2018, the 9% decreasecarrying values.

During the year ended December 31, 2020, we recorded restructuring charges of $542 million, associated with cost-transformation initiatives in programming expenses was primarily driven by lower sports programmingconnection with the Merger in an effort to reduce redundancies across our businesses. These charges consisted of severance costs, including the accelerated vesting of stock-based compensation, as well as costs resulting from Showtime Networks’ distributionthe termination of contractual obligations and charges associated with the Floyd Mayweather/Conor McGregor pay-per-view boxing eventexit of leases. In addition, in 2017 and the absence of Thursday Night Football and the National Semifinals and National Championship games of the NCAA Tournament, which were broadcast on the CBS Television Network in 2017. These decreases were partially offset by costs for programming on Network 10, which was acquired in the fourth quarter of 2017.
Production
Production expenses reflect the amortization of direct2020 we incurred costs of internally-developed television and theatrical film content$56 million in connection with the Merger, consisting of professional fees mainly associated with integration activities, as well as transaction-related bonuses. We also incurred costs of $5 million for professional fees associated with dispositions and other television production costs, including on-air talent. For 2018, the 18% increasecorporate matters, and we recorded a charge of $15 million to write down property and equipment, which was classified as held for sale in production expenses reflected an increased investment in content, including a 17% increase in the number of series produced for distribution on multiple platforms, and the acquisition of Network 10 in the fourth quarter of 2017.

During the fourth quarter of 2018, in connection with recent management changes, the Company implemented changes2020, to its programming strategy, primarily at CBS Films, which will shift its focus from theatrical filmsfair value less costs to developing content for the Company’s direct-to-consumer digital streaming services. As a result, the Company recorded programming charges of $85 million in 2018.
Participation, Distribution and Royaltysell.
Participation, distribution and royalty costs primarily include participation and residual expenses for television programming, royalty costs for Publishing content and other distribution expenses incurred with respect to television content, such as print and advertising. For 2018, the 30%increase in participation, distribution and royalty costs was primarily driven by the adoption of new revenue recognition guidance, which resulted in revenues from the Company’s distribution of third-party content now being recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues were recognized at the net amount retained by the Company after the payment of fees to the third party. This change resulted in an increase to both revenues and participation expenses of $279 million for 2018, with no impact to the Company’s operating income.
II-11

Other
Other operating expenses primarily include compensation and costs associated with book sales, including printing and warehousing. For 2018, the 9% increase in other operating expenses mainly reflected higher costs associated with growth in the Company’s direct-to-consumer digital streaming services and expenses of Network 10, which was acquired in the fourth quarter of 2017.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Net Gain on Sales
Selling, GeneralDuring 2021, we completed the sale of 51 West 52nd Street to Harbor Group International, LLC, for $760 million. This transaction resulted in a pre-tax gain during the fourth quarter of 2021 of $523 million.

Also in 2021, we completed the sale of CBS Studio Center to Hackman Capital Partners, LLC and Administrative ExpensesSquare Mile Capital Management, LLC for $1.85 billion. This transaction resulted in a pre-tax gain during the fourth quarter of 2021 of $1.70 billion.

   % of   % of Increase/(Decrease) 
Year Ended December 31,2018 Revenues 2017 Revenues $ % 
Selling, general and administrative
expenses
$2,217
  15%  $2,126
  16%  $91
 4% 
In addition, during 2021 we recognized a pre-tax net gain of $117 million, principally relating to the sale of a noncore trademark licensing operation.
Selling, general
In 2020, we completed the sale of CMG to Red Ventures for $484 million. This transaction resulted in a pre-tax gain of $214 million.

Interest Expense and administrative (“SG&A”) expensesInterest Income
Increase/(Decrease)
Year Ended December 31,20212020$%
Interest expense$(986)$(1,031)$(45)(4)%
Interest income$53 $60 $(7)(12)%
The following table presents our outstanding debt balances, excluding finance leases, and the weighted average interest rate as of December 31, 2021 and 2020:
Weighted AverageWeighted Average
At December 31,2021Interest Rate2020Interest Rate
Total long-term debt$17,658 4.93 %$19,612 4.80 %
Other bank borrowings$35 3.50 %$95 3.50 %
Net Gains from Investments
Increase/(Decrease)
Year Ended December 31,20212020$%
Net gains from investments$47 $206 $(159)(77)%
For 2021, net gains from investments primarily include expenses incurred for sellinga gain of $37 million on the sale of an investment and marketing costs, occupancy and back office support. The 4%a gain of $9 million from an increase in SG&A expensesthe fair value of a marketable security that was sold during the third quarter of 2021. For 2020, net gains from investments primarily reflectedreflect an increase of $213 million in the Company’s acquisitionfair value of Network 10our investment in fuboTV, which was sold in the fourth quarter of 20172020.

Loss on Extinguishment of Debt
For 2021 and higher advertising2020, we recorded losses on extinguishment of debt of $128 million and marketing costs$126 million, respectively, associated with an increased numberthe early redemption of original programs, includinglong-term debt of $1.99 billion for the Company’s direct-to-consumer digital streaming services.

Depreciation2021 and Amortization$2.77 billion for 2020.
II-12
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Depreciation and amortization$223
 $223
 $—
 —% 


Restructuring and Other Corporate Matters
During the year ended December 31, 2018, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization and closure of certain business operations. As a result, the Company recorded restructuring charges of $67 million, reflecting $57 million of severance costs and $10 million of costs associated with exiting contractual obligations and other related costs. These restructuring activities are expected to reduce the Company’s annual cost structure by approximately $70 million.

During the year ended December 31, 2017, the Company recorded restructuring charges of $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs.

As of December 31, 2018, the cumulative settlements for the 2018, 2017, and 2016 restructuring charges were $88 million, of which $74 million was for severance costs and $14 million related to costs associated with exiting contractual obligations and other related costs.
 Balance at 2018 2018 Balance at
 December 31, 2017 Charges Settlements December 31, 2018
Entertainment $45
  $27
  $(38)   $34
 
Cable Networks 1
  —
  (1)   —
 
Publishing 3
  1
  (2)   2
 
Local Media 14
  18
  (9)   23
 
Corporate 3
  21
  (11)   13
 
Total $66
  $67
  $(61)   $72
 



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


 Balance at 2017 2017 Balance at
 December 31, 2016 Charges Settlements December 31, 2017
Entertainment $17
  $44
  $(16)   $45
 
Cable Networks 4
  —
  (3)   1
 
Publishing 1
  5
  (3)   3
 
Local Media 6
  12
  (4)   14
 
Corporate 2
  2
  (1)   3
 
Total $30
  $63
  $(27)   $66
 
In 2018, the Company recorded expenses of $128 million primarily for professional fees related to legal proceedings, recent investigations at the Company (see “Legal Matters”) and the evaluation of a potential combination with Viacom Inc.

In February 2019, the Company initiated a restructuring plan under which severance payments will be provided to certain eligible employees who voluntarily elect to participate. As a result, the Company expects to record a restructuring charge in the first quarter of 2019. The amount of this charge and the associated future savings will be based on the number of eligible employees who elect to participate in the restructuring plan and therefore cannot currently be determined.

Other Operating Items, Net
For 2017, other operating items, net reflected a net gain relating to the disposition of property and equipment.

Interest Expense and Interest Income
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Interest expense$(467) $(457) $10
 2 % 
Interest income$57
 $64
 $(7) (11)% 
The following table presents the Company’s outstanding debt balances, excluding capital leases, and the weighted average interest rate as of December 31, 2018 and 2017:
   Weighted Average   Weighted Average 
At December 31,2018 Interest Rate 2017 Interest Rate 
Total long-term debt$9,435
  4.26%  $9,426
  4.26%  
Commercial paper$674
  3.02%  $679
  1.88%  
Loss on Early Extinguishment of Debt
For 2017, the loss on early extinguishment of debt of $49 million reflected a pretax loss associated with the Company’s redemption of $800 million of its long-term debt.

Pension Settlement Charges
During 2017, the Company purchased a group annuity contract under which an insurance company permanently assumed the Company’s obligation to pay and administer pension benefits to certain of the Company’s pension plan participants, or their designated beneficiaries, who had been receiving pension benefits. The purchase of this group annuity contract was funded with pension plan assets. As a result, the Company’s outstanding pension benefit obligation



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


was reduced by approximately $800 million, which represented approximately 20% of the total obligations of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a settlement charge of $352 million in 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.

Other Items, Net
The following table presents the components of Other items, net.
Year Ended December 31,20212020
Pension and postretirement benefit costs$(43)$(69)
Foreign exchange losses(26)(35)
Pension settlement charge (a)
(10)— 
Other2 3 
Other items, net$(77)$(101)
Year Ended December 31,2018 2017
Pension and postretirement benefit costs$(63)
$(86)
Foreign exchange (losses) gains(3)
2
Net loss from investments(3)
(4)
Other items, net$(69) $(88)
(a) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.
Provision for Income Taxes
The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.
Year Ended December 31,2018
2017 Increase/(Decrease)
Provision for income taxes before discrete items (a)
$469
 $560
  (16)% 
Impact of tax law changes (b)
(54) 129
    
Reversal of valuation allowance (c)
(140) —
    
Excess tax benefits from stock-based compensation (d)
(1) (44)    
Other discrete items(1) (12)    
Provision for income taxes$273
 $633
  (57)% 
Effective income tax rate11.9% 32.0%    
(a) The lower tax For 2021, we recorded a provision for the year ended December 31, 2018 primarily reflects a reductionincome taxes of $646 million, reflecting an effective income tax rate of 12.4%. Included in the federalprovision for income taxes was a discrete tax benefit of $517 million, which includes a benefit of $260 million to remeasure our U.K. net deferred income tax asset as a result of the enactment during the second quarter of an increase in the U.K. corporate income tax rate from 35%19% to 21%25% beginning April 1, 2023, a benefit of $229 million from the recognition of a capital loss associated with a change in the tax entity classification of a foreign subsidiary, as well as a net tax benefit in connection with the settlement of income tax audits. The discrete tax benefit of $517 million, together with a net tax provision of $546 million on the items identified as affecting comparability in Reconciliation of Non-GAAP Measures, which principally include net gains on sales, reduced our effective income tax rate by 7.8 percentage points.

For 2020, we recorded a provision for income taxes of $535 million, reflecting an effective income tax rate of 17.0%. Included in the provision for income taxes was a discrete tax benefit of $110 million, primarily consisting of a benefit of $100 million to remeasure our U.K. net deferred income tax asset as a result of an increase in the Tax Reform Act.
(b) DuringU.K. corporate income tax rate from 17% to 19% enacted during the third quarter of 2018,2020, as well as a tax benefit of $13 million realized in connection with the preparation of its 2017 federalthe 2019 tax return, the Company elected to utilize a federal tax law provision that was retroactively renewed in 2018. This tax law provision allowed the Company to immediately expense certain qualified production costs on its 2017 tax return. As a result, during the third quarter of 2018, the Company established a deferred tax liability associatedreturns. These items, together with this deduction at the 2017 federal tax rate of 35%, and concurrently recorded a net tax benefit of $69 million, primarily reflecting the re-measurement of this deferred tax liability at the reduced federal corporate tax rate of 21% under the Tax Reform Act. This benefit was partially offset by a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits that resulted from the enactment of the Tax Reform Act. (See Note 13 to the consolidated financial statements.) 2017 reflects the impact of the enactment of the Tax Reform Act in December 2017. As a result of this tax law, the Company recorded a net provisional charge of $129 million for the year ended December 31, 2017, reflecting an estimated tax impact of $407 million on the Company’s historical accumulated foreign earningsitems identified as affecting comparability in Reconciliation of Non-GAAP Measures, including restructuring and profits, partially offset by an estimated benefitother corporate matters, programming charges, loss on extinguishment of $278 million to adjust the Company’s deferred income tax balances as a result of the reduction in the federal corporatedebt and net gains from investments, reduced our effective income tax rate from 35% to 21%.by 4.1 percentage points.
(c) Reflects the reversal
Equity in Loss of a valuation allowanceInvestee Companies, Net of Tax
The following table presents equity in loss of investee companies for our equity-method investments.
Increase/(Decrease)
Year Ended December 31,20212020$%
Equity in loss of investee companies$(140)$(47)$(93)(198)%
Tax benefit49 19 30 158 
Equity in loss of investee companies, net of tax$(91)$(28)$(63)(225)%
For 2021 and 2020, equity in loss of investee companies, net of tax includes impairment charges of $34 million and $9 million, respectively, relating to capital loss carryforwards that will be utilized in connection with the sale of CBS Television City in the first quarter of 2019.television joint ventures.
(d) Reflects the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return associated with the exercise of stock options and vesting of RSUs. This difference occurs because stock-based compensation expense is recorded based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests.

II-13



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Net Earnings Attributable to Noncontrolling Interests
Year Ended December 31,20212020
Net earnings attributable to noncontrolling interests$(88)$(279)
For 2019,2020,net earnings attributable to noncontrolling interests primarily reflects our joint venture partners’ share of profit from the Company’s annual effective income tax rate is expectedlicensing of the domestic streaming rights to be approximately 21% before any potential discrete items, including the tax impacts from stock-based compensation.South Park to a streaming service.

Equity in Loss of Investee Companies, Net of Tax
The following table presents equity in earnings (loss) of investee companies for the Company’s domestic and international equity investments.
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Domestic$(77) $(61) $(16) (26)% 
International2
 2
 —
 —
 
Tax benefit19
 22
 (3) (14) 
Equity in loss of investee companies, net of tax$(56) $(37) $(19) (51)% 
Net Earnings from Continuing Operations Attributable to ViacomCBS and Diluted EPS from Continuing Operations Attributable to ViacomCBS
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Net earnings from continuing operations$1,960
 $1,309
 $651
 50% 
Diluted EPS from continuing operations$5.14
 $3.22
 $1.92
 60% 
Increase/(Decrease)
Year Ended December 31,20212020$%
Net earnings from continuing operations attributable to
    ViacomCBS		$4,381 $2,305 $2,076 90 %
Diluted EPS from continuing operations attributable to
    ViacomCBS		$6.69 $3.73 $2.96 79 %
For 2018, the increase in2021, net earnings from continuing operations of 50% wasattributable to ViacomCBS and diluted EPS from continuing operations increased 90% and 79%, respectively, primarily driven by the lower effective income tax rate in 2018 and a pension settlement chargeabove-mentioned gains on sales of $352 million ($237 million,$1.75 billion, net of tax)tax, and higher discrete tax benefits in 2017. Diluted2021. The diluted EPS from continuing operations grew 60% reflectingcomparison also includes the effect of higher earnings and lower weighted average shares outstanding.outstanding as a result of stock issuances in the first quarter of 2021, which negatively impacted EPS for 2021 by $.26.

Net LossEarnings from Discontinued Operations, Net of Tax
On November 16, 2017,During the Company completed the split-offfourth quarter of CBS Radio through2020, we entered into an exchange offer, in which the Company accepted 17.9 million sharesagreement to sell our publishing business, Simon & Schuster, to Penguin Random House LLC (“Penguin Random House”), a wholly owned subsidiary of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Class A common stock upon completion of the merger of CBS Radio and Entercom. CBS Radio has beenBertelsmann SE & Co. KGaA (see Legal Matters). Simon & Schuster is presented as a discontinued operation in theour consolidated financial statements for all periods presented.

The following tables set forth details of net earnings from discontinued operations for the years ended December 31, 2021 and 2020.
Year Ended December 31, 2021Simon & Schuster
Other (a)
Total
Revenues$993 $— $993 
Costs and expenses:
Operating618 (16)602 
Selling, general and administrative158 — 158 
Depreciation and amortization3 — 3 
Restructuring charges1 — 1 
Total costs and expenses780 (16)764 
Operating income213 16 229 
Other items, net(10)— (10)
Earnings from discontinued operations203 16 219 
Income tax provision(46)(11)(57)
Net earnings from discontinued operations, net of tax$157 $5 $162 
II-14



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


The following table sets forth details of net earnings (loss) from discontinued operations for the year ended December 31, 2017.
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
  $—
  $1,018
Costs and expenses:       
Operating364
  —
  364
Selling, general and administrative444
  (1)  443
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
  —
  7
Total costs and expenses1,795
  (1)  1,794
Operating income (loss)(777)  1
  (776)
Interest expense(70)  —
  (70)
Other items, net(2)  —
  (2)
Earnings (loss) from discontinued operations(849)  1
  (848)
Income tax benefit (provision)(55)  45
(b) 
 (10)
Earnings (loss) from discontinued operations, net of tax(904)  46
  (858)
Net gain (loss) on disposal(109)  13
  (96)
Income tax benefit (provision)4
  (2)  2
Net gain (loss) on disposal, net of tax(105)  11
(c) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $57
  $(952)
Year Ended December 31, 2020Simon & Schuster
Other (a)
Total
Revenues$901 $— $901 
Costs and expenses:
Operating573 (19)554 
Selling, general and administrative172 — 172 
Depreciation and amortization5 — 5 
Restructuring charges10 — 10 
Total costs and expenses760 (19)741 
Operating income141 19 160 
Other items, net(5)— (5)
Earnings from discontinued operations136 19 155 
Income tax provision(34)(4)(38)
Net earnings from discontinued operations, net of tax$102 $15 $117 
(a) During 2017, priorPrimarily relates to the split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment of $980 million in 2017 to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.
(b) Reflects a tax benefit from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accountedindemnification obligations for as a discontinued operation.
(c) Reflects adjustments to the loss on disposal of the Company’s outdoor advertising businesses, primarily from a decrease to the guarantee liabilityleases associated with the 2013 disposalpreviously discontinued operations of Famous Players Inc.

Segments
In 2021, we operated through the following three segments:
TV ENTERTAINMENT: TV Entertainment consisted of the Company’s outdoorCBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, the segment’s television production and syndication operations; CBS Sports Network, CBS Sports’ 24-hour cable channel; CBS Stations, our owned broadcast television stations; and a number of streaming services, including our direct-to-consumer streaming service, Paramount+ (in the United States) and several CBS-branded streaming services, including CBS News Streaming and CBS Sports HQ. TV Entertainment’s revenues were generated primarily from advertising; affiliate revenues, comprised of reverse compensation and retransmission fees; streaming revenues, principally comprised of advertising businessand subscription revenues generated by the segment’s streaming services and from digital video advertisements on our websites and in Europe.our video content on third-party platforms; and the licensing and distribution of content.

Net EarningsCABLE NETWORKS: Cable Networks consisted of a portfolio of premium and Diluted EPSbasic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, and Smithsonian Channel; a number of direct-to-consumer streaming services, including Pluto TV, our free advertising-supported streaming television service, Showtime OTT, Noggin, and BET+; and ViacomCBS Networks International, which operates international extensions of Paramount+, Pluto TV and our Cable Networks brands and services, our international free-to-air networks (including Network 10, Channel 5 and Telefe) and ViacomCBS International Studios. Cable Networks’ revenues were generated primarily from affiliate revenues, comprised of fees from MVPDs and vMVPDs for carriage of our cable networks; advertising; streaming revenues, principally comprised of advertising and subscription revenues generated by the segment’s streaming services and from digital video advertisements on our websites and in our video content on third-party platforms; and the licensing of our content and other rights.
FILMED ENTERTAINMENT: Filmed Entertainment consisted of Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television Studios, and Miramax. Filmed Entertainment’s revenues were generated primarily from the release or distribution of films theatrically; transactional home entertainment; the licensing of film and television product to streaming services, including Paramount+, broadcast and cable networks, and other digital services; and other ancillary activities.

II-15
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Net earnings$1,960
 $357
 $1,603
 n/m 
Diluted EPS$5.14
 $.88
 $4.26
 n/m 
n/m - not meaningful

Consolidated Results of Operations— 2017 vs. 2016
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Advertising$5,753
  42%  $6,288
  48%  $(535) (9)% 
Content licensing and distribution3,952
  29
  3,673
  28
  279
 8
 
Affiliate and subscription fees3,758
  27
  2,978
  22
  780
 26
 
Other229
  2
  227
  2
  2
 1
 
Total Revenues$13,692
  100%  $13,166
  100%  $526
 4 % 



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Advertising
For 2017,During the 9% decrease in advertising revenues primarily reflectsfourth quarter of 2020, we entered into an agreement to sell Simon & Schuster, which was previously reported as the benefit to 2016 from CBS’s broadcast of the Super Bowl, whichPublishing segment. Simon & Schuster is broadcast on the CBS Television Network on a rotating basis with other networks. The decline also reflects the benefit in 2016 from political advertising sales during the 2016 Presidential election cycle. Underlying CBS Television Network advertising revenues declined 2% in 2017, mainlypresented as a result of lower ratingsdiscontinued operation in our consolidated financial statements for the Company’s programming, which was partially offset by higher pricing.

Content Licensing and Distributionall periods presented.
For 2017, the 8%
increase
Beginning in content licensing and distribution revenues reflected growth in both international and domestic licensing sales. The increase in domestic licensing sales was primarily driven by sales of NCIS: New Orleans, Madam Secretary and several titles from the CSI franchise. Internationally, the Company benefited from strong demand for its content during 2017, reflecting additional titles available for sale as a result of the Company’s increased investment in internally-produced series.

Affiliate and Subscription Fees
For 2017, the 26% increase in affiliate and subscription fees reflects revenues from Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, which contributed nine points of the growth. Underlying affiliate and subscription fee revenues increased 17%, led by 27% growth in station affiliation fees and retransmission fees, and 98% growth from digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime direct-to-consumer digital streaming subscription offering, and virtual MVPDs.

International Revenues
For 2017, international revenues increased 9%2022, primarily as a result of higher television licensing sales. The Company generated approximately 15%our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and 14% of its total revenues from international regionsallocate resources that resulted in 2017 and 2016, respectively.
    % of   % of 
Year Ended December 31, 2017 International 2016 International 
United Kingdom $300
  15%  $279
  15%  
Other Europe 735
  37
  717
  39
  
Canada 279
  14
  256
  14
  
Asia 210
  10
  190
  10
  
Australia 166
  8
  167
  9
  
Other 327
  16
  240
  13
  
Total International Revenues $2,017
  100%  $1,849
  100%  



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollarsa change to our operating segments. Accordingly, beginning in millions, except per share amounts)


Operating Expenses
   % of Total   % of Total   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2017 Expense 2016 Expense $ % 
Programming$3,156
  37%  $2,941
  37%  $215
 7 % 
Production2,873
  34
  2,658
  34
  215
 8
 
Participation, distribution and
royalty
1,050
  13
  1,058
  13
  (8) (1) 
Other1,359
  16
  1,299
  16
  60
 5
 
Total Operating Expenses$8,438
  100%  $7,956
  100%  $482
 6 % 
Programming
For 2017, the 7% increase in programming expenses was driven by costs associated with Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event; CBS’s broadcast of the National Semifinals and National Championship games of the NCAA Tournament, and an increased investment in cable programming. Costs in 2016 associated with CBS’s broadcast of Super Bowl 50 partially offset these increases.

Production
For 2017, the 8% increase in production expenses reflected an increased investment in internally-developed television series and higher costs associated with the increase in television licensing revenues.

Participation, Distribution and Royalty
For 2017, the 1% decrease in participation, distribution and royalty costs was primarily driven by the mix of titles sold under television licensing arrangements.
Other
For 2017, the 5% increase in other operating expenses mainly reflected higher compensation costs associated with the Company’s growth initiatives and increased costs resulting from a higher volume of book sales.

Selling, General and Administrative Expenses
   % of   % of Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Selling, general and administrative
expenses
$2,126
  16%  $2,054
  16%  $72
 4% 
For 2017, the 4% increase in SG&A expenses primarily reflected higher advertising and marketing costs, mainly to support the Company’s growth initiatives.
Depreciation and Amortization
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Depreciation and amortization$223
 $225
 $(2) (1)% 



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Restructuring and Other Corporate Matters
During the year ended December 31, 2017, the Company recorded restructuring charges of $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs.

During the year ended December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs.

In 2016, the Company incurred professional fees of $8 million associated with merger and acquisition-related activities.

Other Operating Items, Net
For 2017, other operating items, net reflected a net gain relating to the disposition of property and equipment. For 2016, other operating items, net included a gain from the disposition of an internet business in China and a multiyear, retroactive impact of a new operating tax.

Interest Expense and Interest Income
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Interest expense$(457) $(411) $46
 11% 
Interest income$64
 $32
 $32
 100% 
The following table presents the Company’s outstanding debt balances, excluding capital leases and discontinued operations debt, and the weighted average interest rate as of December 31, 2017 and 2016:
   Weighted Average   Weighted Average 
At December 31,2017 Interest Rate 2016 Interest Rate 
Total long-term debt$9,426
  4.26%  $8,850
  4.47%  
Commercial paper$679
  1.88%  $450
  0.98%  
Loss on Early Extinguishment of Debt
For 2017, the loss on early extinguishment of debt of $49 million reflected a pretax loss associated with the Company’s redemption of $800 million of its long-term debt.

Pension Settlement Charges
During 2017, the Company purchased a group annuity contract under which an insurance company permanently assumed the Company’s obligation to pay and administer pension benefits to certain of the Company’s pension plan participants, or their designated beneficiaries, who had been receiving pension benefits. The purchase of this group annuity contract was funded with pension plan assets. As a result, the Company’s outstanding pension benefit obligation was reduced by approximately $800 million, which represented approximately 20% of the total obligations of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a settlement charge of $352 million in 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


During 2016, the Company offered eligible former employees who had not yet initiated pension benefit payments the option to make a one-time election to receive the present value of their pension benefits as a lump-sum distribution or to commence an immediate monthly annuity benefit. As a result, the Company paid a total of $518 million of lump-sum distributions in 2016 using its pension plan assets, which represented 12% of the total obligations of its qualified pension plans. Accordingly, the Company recorded a settlement charge of $211 million reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.

Other Items, Net
The following table presents the components of Other items, net.
Year Ended December 31,2017 2016
Pension and postretirement benefit costs$(86) $(70)
Foreign exchange gains (losses)2
 (12)
Net loss from investments(4) —
Other items, net$(88) $(82)
Provision for Income Taxes
The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.
Year Ended December 31,2017 2016 Increase/(Decrease)
Provision for income taxes before discrete items$560
 $681
  (18)% 
Impact of tax law changes (a)
129
 —
    
Excess tax benefits from stock-based compensation (b)
(44) —
    
Other discrete items (c)
(12) (53)    
Provision for income taxes$633
 $628
  1 % 
Effective income tax rate32.0% 28.2%    
(a) Reflects the impact of the enactment of the Tax Reform Act in December 2017. As a result of this tax law, the Company recorded a net provisional charge of $129 million for the year ended December 31, 2017, reflecting an estimated tax impact of $407 million on the Company’s historical accumulated foreign earnings and profits, partially offset by an estimated benefit of $278 million to adjust the Company’s deferred income tax balances as a result of the reduction in the federal corporate income tax rate from 35% to 21%.
(b) Reflects excess tax benefits associated with the exercise of stock options and vesting of RSUs. During the first quarter of 2017, the Company adopted FASB guidance which requires that the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return be recognized within the income tax provision on the statement of operations. Previously, such difference was recognized in stockholders’ equity on the balance sheet. This difference occurs because stock-based compensation expense is determined2022, we will report results based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests. This guidance requires the income statement classification to be applied prospectively, and therefore, excess tax benefits for prior periods remain classified in stockholders’ equity.
(c) For the year ended December 31, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters. For the year ended December 31, 2016, primarily reflects a one-time tax benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Equity in Loss of Investee Companies, Net of Tax
The following table presents equity in earnings (loss) of investee companies for the Company’s domestic and international equity investments.
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Domestic$(61) $(67) $6
 9 % 
International2
 (8) 10
 125
 
Tax benefit22
 25
 (3) (12) 
Equity in loss of investee companies, net of tax$(37) $(50) $13
 26 % 
For 2016, equity in loss of investee companies, net of tax included $10 million for the write-down of an international television joint venture to its fair value.

Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Net earnings from continuing operations$1,309
 $1,552
 $(243) (16)% 
Diluted EPS from continuing operations$3.22
 $3.46
 $(.24) (7)% 
For 2017, the decreases in net earnings from continuing operations and diluted EPS from continuing operations of 16% and 7%, respectively, were driven by pension settlement charges of $352 million ($237 million, net of tax) in 2017 compared with $211 million ($130 million, net of tax) in 2016; a provisional charge of $129 million from the enactment of the Tax Reform Act in December 2017; and a charge of $49 million ($31 million, net of tax) from the early extinguishment of debt. Diluted EPS from continuing operations benefited from lower weighted average shares outstanding as a result of the Company’s share repurchases and the shares retired as a result of the split-off of CBS Radio during the fourth quarter of 2017.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Net Loss from Discontinued Operations, Net of Tax
The following tables set forth details of net earnings (loss) from discontinued operations for the years ended December 31, 2017 and 2016.
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
  $—
  $1,018
Costs and expenses:       
Operating364
  —
  364
Selling, general and administrative444
  (1)  443
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
  —
  7
Total costs and expenses1,795
  (1)  1,794
Operating income (loss)(777)  1
  (776)
Interest expense(70)  —
  (70)
Other items, net(2)  —
  (2)
Earnings (loss) from discontinued operations(849)  1
  (848)
Income tax benefit (provision)(55)  45
(b) 
 (10)
Earnings (loss) from discontinued operations, net of tax(904)  46
  (858)
Net gain (loss) on disposal(109)  13
  (96)
Income tax benefit (provision)4
  (2)  2
Net gain (loss) on disposal, net of tax(105)  11
(c) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $57
  $(952)
(a) During 2017, prior to the split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment of $980 million in 2017 to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.
(b) Reflects a tax benefit from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.
(c) Reflects adjustments to the loss on disposal of the Company’s outdoor advertising businesses, primarily from a decrease to the guarantee liability associated with the 2013 disposal of the Company’s outdoor advertising business in Europe.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Year Ended December 31, 2016CBS Radio 
Other (b)
 Total
Revenues$1,220
  $—
  $1,220
Costs and expenses:       
Operating397
  —
  397
Selling, general and administrative496
  —
  496
Depreciation and amortization26
  —
  26
Restructuring charges8
  —
  8
Impairment charge444
(a) 
 —
  444
Total costs and expenses1,371
  —
  1,371
Operating loss(151)  —
  (151)
Interest expense(17)  —
  (17)
Other items, net1
  —
  1
Loss from discontinued operations(167)  —
  (167)
Income tax provision(88)  (36)  (124)
Net loss from discontinued operations, net of tax$(255)  $(36)  $(291)
(a) Reflects a pretax noncash impairment charge of $444 million ($427 million, net of tax) to reduce the carrying value of CBS Radio’s goodwill and FCC licenses in 11 radio markets to their fair value.
(b) Reflects a charge from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.
Net Earnings and Diluted EPS
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Net earnings$357
 $1,261
 $(904) (72)% 
Diluted EPS$.88
 $2.81
 $(1.93) (69)% 
Segments

CBS Corp. operates in the following four segments:

ENTERTAINMENT:  The Entertainment segment TV MEDIA: TV Media consists of theour historical CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network, and CBS Films as well as the Company’s digital streaming services CBS All AccessTV Entertainment and CBSNCable Networks .  Entertainment’s revenues are generated primarily from advertising sales, the licensingsegments, except that it no longer includes their corresponding direct-to-consumer streaming services (now part of our Direct-to-Consumer segment) and distributionNickelodeon Studio (now part of its content, and affiliate and subscription fees. Theour Filmed Entertainment segment contributed 70% to consolidated revenues in 2018 and 68% to consolidated revenues in each of the years 2017 and 2016, and 55%, 54% segment), and 53% to total now includes Paramount Television Studios (formerly part of our historical Filmed Entertainment segment).

DIRECT-TO-CONSUMER: Direct-to-Consumer consists of our portfolio of free, premium and pay streaming services, including Paramount+, Pluto TV, Showtime OTT, BET+ and Noggin.

FILMED ENTERTAINMENT: Filmed Entertainment consists of our historical Filmed Entertainment segment, except that it no longer includes Paramount Television Studios (now part of our TV Media segment), and now includes Nickelodeon Studio (formerly part of our historical Cable Networks segment).

We present operating income in 2018, 2017,excluding depreciation and 2016, respectively.
CABLE NETWORKS:  The Cable Networks segment consists of Showtime Networks and its digital subscription streaming offering,and Smithsonian Networks. Cable Networks’ revenues are generated primarily from affiliate and subscription fees and the licensing and distribution of its content. The Cable Networks segment contributed 15%, 17%, and 15% to consolidated revenues in 2018, 2017, and 2016, respectively, and 30%, 35%, and 33% to total segment operating income in 2018, 2017, and 2016, respectively.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


PUBLISHING:  The Publishing segment consists of Simon & Schuster’s consumer book publishing business with imprints such as Simon & Schuster, Pocket Books, Scribner and Atria Books. Publishing generates revenues from the distribution of consumer books in print, digital and audio formats. The Publishing segment contributed 6% to consolidated revenues in each of the years 2018, 2017, and 2016, and 5% to total segment operating income in each of the years 2018 and 2017 and 4% to total segment operating income in 2016.
LOCAL MEDIA:  The Local Media segment consists of CBS Television Stations and CBS Local Digital Media, with revenues generated primarily from advertising sales and retransmission fees. The Local Media segment contributed 13%, 12%, and 14% to consolidated revenues in 2018, 2017, and 2016, respectively, and 20%, 17%, and 21% to total segment operating income in 2018, 2017, and 2016, respectively.

During the fourth quarter of 2018, the Company began presenting CBS Sports Network in the Entertainment segment, to reflect changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. CBS Sports Network was previously included in the Cable Networks segment. Results for all periods presented have been reclassified to conform to this presentation.

The Company presents operating income (loss) excludingamortization, stock-based compensation, costs for restructuring and other corporate matters, programming charges and other operating items, net gain on sales, each where applicable (“Segment Operating Income”Adjusted OIBDA”), as the primary measure of profit and loss for itsour operating segments in accordance with FASBFinancial Accounting Standards Board guidance for segment reporting. The Company believesWe believe the presentation of Segment Operating IncomeAdjusted OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company’sour management and enhances their ability to understand the Company’sour operating performance. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management. Stock-based compensation is included as a component of our consolidated Adjusted OIBDA. The reconciliation of Segment Operating IncomeAdjusted OIBDA to the Company’sour consolidated net earnings is presented in Note 1519 to the consolidated financial statements.

Segment Results of Operations - 20182021 vs. 20172020
% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2021Revenues2020Revenues$%
Revenues:
TV Entertainment$12,931 45 %$10,700 42 %$2,231 21 %
Cable Networks14,200 50 12,589 50 1,611 13 
Filmed Entertainment3,070 11 2,562 10 508 20 
Eliminations(1,615)(6)(566)(2)(1,049)(185)
Total Revenues$28,586 100 %$25,285 100 %$3,301 13 %
II-16


   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2018 Revenues 2017 Revenues $ % 
Entertainment$10,178
  70 %  $9,306
  68 %  $872
 9 % 
Cable Networks2,204
  15
  2,355
  17
  (151) (6) 
Publishing825
  6
  830
  6
  (5) (1) 
Local Media1,830
  13
  1,668
  12
  162
 10
 
Corporate/Eliminations(523)  (4)  (467)  (3)  (56) (12) 
Total Revenues$14,514
  100 %  $13,692
  100 %  $822
 6 % 



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


   % of Total   % of Total   
   Segment   Segment   
   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2018 Income 2017 Income $ % 
Segment Operating Income (Loss):                
Entertainment$1,675
  55 %  $1,578
  54 %  $97
 6 % 
Cable Networks915
  30
  999
  35
  (84) (8) 
Publishing144
  5
  136
  5
  8
 6
 
Local Media609
  20
  497
  17
  112
 23
 
Corporate(295)  (10)  (305)  (11)  10
 3
 
Total Segment Operating Income3,048
  100 %  2,905
  100 %  143
 5
 
Restructuring charges(67)     (63)     (4) n/m
 
Corporate matters(128)     —
     (128) n/m
 
Programming charges(85)     —
     (85) n/m
 
Other operating items, net—
     19
     (19) n/m
 
Total Operating Income$2,768
     $2,861
     $(93) (3)% 
Increase/(Decrease)
Year Ended December 31,20212020$%
Adjusted OIBDA:
TV Entertainment$1,083 $1,857 $(774)(42)%
Cable Networks3,747 3,746 1 — 
Filmed Entertainment368 215 153 71 
Corporate/Eliminations(582)(500)(82)(16)
Stock-based compensation(172)(186)14 8 
Total Adjusted OIBDA4,444 5,132 (688)(13)
Depreciation and amortization(390)(430)40 9 
Restructuring and other corporate matters(100)(618)518 84 
Programming charges— (159)159 n/m
Net gain on sales2,343 214 2,129 n/m
Total Operating Income$6,297 $4,139 $2,158 52 %
n/m - not meaningful
Increase/(Decrease)
Year Ended December 31,20212020$%
Depreciation and Amortization:
TV Entertainment$126 $162 $(36)(22)%
Cable Networks191 205 (14)(7)
Filmed Entertainment38 36 2 6 
Corporate35 27 8 30 
Total Depreciation and Amortization$390 $430 $(40)(9)%
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Depreciation and Amortization:        
Entertainment$125
 $118
 $7
 6 % 
Cable Networks18
 20
 (2) (10) 
Publishing6
 6
 —
 —
 
Local Media43
 45
 (2) (4) 
Corporate31
 34
 (3) (9) 
Total Depreciation and Amortization$223
 $223
 $—
 — % 
TV Entertainment
Increase/(Decrease)
Year Ended December 31,20212020$%
Advertising (a)
$5,377 $4,639 $738 16 %
Affiliate (b)
2,803 2,614 189 7 
Streaming1,551 911 640 70 
Licensing and other3,200 2,536 664 26 
Revenues$12,931 $10,700 $2,231 21 %
Adjusted OIBDA$1,083 $1,857 $(774)(42)%
(a) Excludes streaming advertising revenues.
(b) Excludes streaming subscription revenues.
Revenues
For 2021, revenues increased (CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network,21%, reflecting growth across all revenue streams, led by increased advertising revenues, including from CBS’ broadcasts of tentpole sporting events for which there were no comparable broadcasts in 2020, higher licensing revenues and CBS Films)growth at Paramount+.
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Revenues$10,178
 $9,306
 $872
 9 % 
Segment Operating Income$1,675
 $1,578
 $97
 6 % 
Segment Operating Income as a % of revenues16% 17% 

   
Restructuring charges$27
 $44
 $(17) n/m
 
Depreciation and amortization$125
 $118
 $7
 6 % 
Capital expenditures$93
 $102
 $(9) (9)% 
n/m - not meaningfulAdvertising
For 2018, the 9%The 16% increase in revenues mainly reflected 29% growth in affiliate and subscription fee revenues, primarily as a result of higher station affiliation fees and growth from the Company’s direct-to-consumer streaming service, CBS All Access. Also contributing to the increase was 7% growth in advertising revenues was driven by the acquisitionCBS’ broadcasts in 2021 of Network 10sporting events for which there were no comparable broadcasts in the fourth quarter of 2017, partially offset by the absence ofprior year, including Thursday Night FootballSuper Bowl LV and the National Semifinals and National Championship games of the NCAA Tournament which were broadcast on the CBS Television Network in 2017. Underlying CBS Television Network advertising revenues for 2018 were comparable with the prior year. Entertainment revenues also benefited from the adoption of a new revenue recognition standard in 2018, which resulted in higher revenues from distribution arrangements, with an offsetting increase to operating expenses. (See Note 16 to the consolidated financial statements.) Content licensing and distribution revenues increased 3%, primarily reflecting this new standard and higher international licensing, partially offset by lowergames.
II-17



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


domestic licensing, mainly asWe have the rights to broadcast the Super Bowl and the national semi-finals and championship games of the NCAA Tournament on a resultrotational basis with other networks, including in 2021. Additionally, while we share the games in the preceding rounds of several large salesthe NCAA Tournament with Turner each year, COVID-19 caused the cancellation of the NCAA Tournament in 2017 including NCIS: New Orleans, Madam Secretary2020. The increase also reflects an improved advertising market, driven by higher pricing and titlesdemand, compared with 2020, which was negatively impacted by COVID-19, and a higher level of original programming broadcast in 2021. These increases were partially offset by lower ratings for the CBS Television Network, lower political advertising and a 2-percentage point unfavorable impact from the CSI franchise.

Operating income increased 6% as a result of higher revenues and lower programming costs associated with the absence of CBS’s broadcastadvertising revenues from CMG, which was sold during the fourth quarter of 2020.

Thursday Night Football, partially offset
In 2022, the advertising revenue comparison will be negatively impacted by an increased investment in content and digital initiatives. For 2018 and 2017, restructuring charges primarily reflected severance costs and costs associated with exiting contractual obligations and other related costs.

Results in 2019 will benefit from the CBS Television Network’s broadcastabsence of the Super Bowl which airs on the CBS Television Network on a rotating basis with other networks through 2022 under the current contract, and the broadcast of the National Semifinalssemi-finals and National Championshipchampionship games of the NCAA Tournament, which arewill be carried by other networks, reflecting the above-mentioned rotational nature of the rights to broadcast on the CBS Television Network every other year through 2032 under the current agreement with the NCAA and Turner. Results are also expected totentpole sporting events. However, comparability in 2022 will benefit from continuedhigher political advertising revenues, mainly in the second half of the year, driven by mid-term elections.

Affiliate
Affiliate revenues increased 7%, as a result of growth in affiliatereverse compensation and subscriptionretransmission fee revenues.

Streaming
Streaming revenues increased 70%, primarily reflecting subscriber growth at Paramount+, as well as advertising growth from Paramount+ and other digital video platforms.

Licensing and Other
Licensing and other revenues increased 26%, driven by the renewaltiming of several of the Company’s agreements with MVPDs and its television station affiliates, as well as annual contractual increases on multiyear agreements. Revenue comparisons will also be affected by fluctuations resultingprogram availabilities, primarily from the timingimpact of multiyearproduction shutdowns in 2020 due to COVID-19, and a higher volume of domestic licensing, agreementsincluding the benefit from current year licensing arrangements for television series. Television license fee revenues are recognized at the beginning of the license period in which programs are made availableNCIS, Bull and several library titles. The increase also reflects higher licensing to the licensee for exhibition. In addition, the Company plans to increase its investment in content in 2019, including increasing the number of series on CBS All Access in order to drive long-term subscriber growth. This will increase costs for the Entertainment segment in 2019 compared with 2018.
Cable Networks(Showtime Networks and Smithsonian Networks)
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Revenues$2,204
 $2,355
 $(151) (6)% 
Segment Operating Income$915
 $999
 $(84) (8)% 
Segment Operating Income as a % of revenues42% 42%     
Depreciation and amortization$18
 $20
 $(2) (10)% 
Capital expenditures$20
 $16
 $4
 25 % 
For 2018, the 6% decrease in revenues was, driven by Showtime Networks’ distributionlicensing to Pluto TV and to Paramount+ internationally. The increase was partially offset by the absence of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in 2017, which impacted the comparison by 12 percentage points. Underlying results reflected growthancillary revenues from the Showtime direct-to-consumer digital streaming subscription offering and higher licensing sales of Showtime original series. As of December 31, 2018, subscriptions totaled approximately 27 million for Showtime, including its direct-to-consumer digital streaming subscription offering, and 32 million for Smithsonian Networks.CMG.

Operating incomeAdjusted OIBDA
Adjusted OIBDA decreased 8% driven by an42% primarily reflecting our increased investment in programming, partially offset by growth from the Paramount+, including higher content and marketing costs.
II-18
Showtime direct-to-consumer digital streaming subscription offering.

Revenue comparisons in 2019 will be affected by fluctuations resulting from the timing of availability of television series for multiyear licensing agreements. In addition, the Company plans to increase its investment in content in 2019 in order to drive long-term subscriber growth on its direct-to-consumer digital streaming services. This will increase costs for the Cable Networks segment in 2019 compared to 2018.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Cable Networks
Increase/(Decrease)
Year Ended December 31,20212020$%
Advertising (a)
$3,907 $3,721 $186 5 %
Affiliate (b)
5,591 5,409 182 3 
Streaming2,642 1,650 992 60 
Licensing and other2,060 1,809 251 14 
Revenues$14,200 $12,589 $1,611 13 %
Adjusted OIBDA$3,747 $3,746 $1 — %
(a) Excludes streaming advertising revenues.
(b) Excludes streaming subscription revenues.
Revenues
For 2021, revenues increased 13%, reflecting growth across all revenue streams, led by higher streaming revenues.
Publishing (Simon & Schuster)
Advertising
     Increase/(Decrease) 
Year Ended December 31,2018
2017
$ % 
Revenues$825
 $830
 $(5) (1)% 
Segment Operating Income$144
 $136
 $8
 6 % 
Segment Operating Income as a % of revenues17% 16%     
Restructuring charges$1
 $5
 $(4) n/m
 
Depreciation and amortization$6
 $6
 $—
 — % 
Capital expenditures$7
 $5
 $2
 40 % 
n/m - not meaningfulThe 5% increase in advertising revenues was driven by higher international advertising, reflecting an improved advertising market, which benefited from the comparison against the impact in 2020 from COVID-19, the acquisition in 2021 of Chilevisión, and the impact of foreign exchange rate changes. Taken together, the acquisition and foreign exchange rate changes contributed 2-percentage points of the growth in total advertising revenue. Domestic advertising also benefited from an improved advertising market, reflecting higher pricing and demand, but declined compared with the prior year as a result of lower linear impressions for our cable networks.
For 2018,
Affiliate
The 3% growth in affiliate revenues was primarily driven by the 1% decreasebenefit from the launch of our basic cable networks in June 2020 and April 2021 on two vMVPDs, increases in rates, and revenues primarily reflects lower sales of print and electronic books,from pay-per-view boxing events, partially offset by 20%the impact from subscriber declines.

Streaming
The 60% increase in streaming revenues was driven by advertising revenue growth from our free streaming service, Pluto TV, and other digital video platforms, as well as growth in digital audio sales. Bestselling titlessubscribers for 2018 includedour subscription streaming services. Subscriber growth was driven by Showtime OTT, BET+ and our international streaming services, including the benefit from the launch of Paramount+ in several international markets.

Licensing and Other
The 14% increase in licensing and other revenues was driven by higher revenues from the licensing of programming to streaming services, primarily Paramount+, and for consumer products, partially offset by the domestic licensing of Fear: TrumpSouth Park in the White House by Bob Woodward, The Outsider by Stephen King and Whiskey in a Teacup by Reese Witherspoon.prior year.
The 6%increase in operating income mainly reflects lower production costs. For 2018 and 2017, restructuring charges primarily reflected severance costs.
Local Media(CBS Television Stations and CBS Local Digital Media)
II-19
     Increase/(Decrease) 
Year Ended December 31,2018
2017
$ % 
Revenues$1,830
 $1,668
 $162
 10 % 
Segment Operating Income$609
 $497
 $112
 23 % 
Segment Operating Income as a % of revenues33% 30%     
Restructuring charges$18
 $12
 $6
 n/m
 
Depreciation and amortization$43
 $45
 $(2) (4)% 
Capital expenditures$27
 $32
 $(5) (16)% 
n/m - not meaningful
For 2018, the 10% increase in revenues reflected higher advertising revenues, driven by record political advertising sales associated with the 2018 midterm elections, and 13% growth in retransmission and subscription fees.

The increase in operating income of 23% primarily reflected the higher revenues. For 2018, restructuring charges reflected severance costs, primarily associated with centralizing certain functions across markets, and costs associated with exiting contractual obligations and other related costs. For 2017, restructuring charges reflected severance costs and costs associated with exiting contractual obligations and other related costs.

In 2019, revenues will benefit from CBS’s broadcast of Super Bowl LIII and continued growth in retransmission revenues, driven by the renewal of several of the Company’s agreements with MVPDs and annual contractual increases on multiyear agreements with MVPDs. However, the revenue comparison will be negatively affected by the benefit in 2018 from record political advertising sales associated with the 2018 midterm elections.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Adjusted OIBDA
CorporateAdjusted OIBDA remained substantially flat as growth from advertising, affiliate, and streaming revenues was offset by higher content and marketing costs and lower profits from content licensing, reflecting the mix of titles licensed in each year.
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Segment Operating Loss$(295) $(305) $10
 3 % 
Restructuring charges$21
 $2
 $19
 n/m
 
Depreciation and amortization$31
 $34
 $(3) (9)% 
Capital expenditures$18
 $30
 $(12) (40)% 
Filmed Entertainment
n/m - not meaningful
Increase/(Decrease)
Year Ended December 31,20212020$%
Theatrical$241 $180 $61 34 %
Licensing and other2,829 2,382 447 19 
Revenues$3,070 $2,562 $508 20 %
Adjusted OIBDA$368 $215 $153 71 %
Revenues
For 2021, revenues increased 20% reflecting growth in licensing revenues and theatrical revenues.
Corporate expenses include general corporate overhead, unallocated shared company expenses,
Theatrical
The 34% increase in theatrical revenues reflects the benefit from current year releases including A Quiet Place Part II and PAW Patrol: The Movie while the prior year was impacted by the closure or reduced capacity of movie theaters in response to COVID-19, following the release of Sonic the Hedgehog in the first quarter of 2020, and intercompany eliminations. For 2018, corporate expenses decreased 3%throughout the remainder of the year.

Licensing and Other
The 19% increase in licensing and other revenues was driven by the licensing of current year releases, including Coming 2 America, primarily reflecting lower compensation costs resulting from changes in senior management. Restructuring charges in 2018Tom Clancy’s Without Remorseand 2017 primarily reflected severanceHalloween Kills to third parties, and other related costs.Infinite, The SpongeBob Movie: Sponge on the Run and Rumble to Paramount+, while licensing in the prior year was impacted by the above-mentioned impact from COVID-19.

Adjusted OIBDA
Segment ResultsAdjusted OIBDA increased 71%, primarily the result of Operations - 2017 vs. 2016higher profits associated with the licensing of films.
Fluctuations in results for the Filmed Entertainment segment may occur as a result of the timing of the recognition of distribution costs, including print and advertising, which are generally incurred before and throughout the theatrical release of a film, while the revenues for the respective film are recognized as earned through the film’s theatrical exhibition and distribution to other platforms.
Liquidity and Capital Resources
Sources and Uses of Cash
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows expected to be generated and available to meet these needs. Our operating needs include, among other items, expenditures for content for our broadcast and cable networks and streaming services, including television and film programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content and platforms; payments for leases, interest, and income taxes, and pension funding obligations. Our
II-20
   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Entertainment$9,306
  68 %  $9,020
  68 %  $286
 3 % 
Cable Networks2,355
  17
  2,015
  15
  340
 17
 
Publishing830
  6
  767
  6
  63
 8
 
Local Media1,668
  12
  1,779
  14
  (111) (6) 
Corporate/Eliminations(467)  (3)  (415)  (3)  (52) (13) 
Total Revenues$13,692
  100 %  $13,166
  100 %  $526
 4 % 


   % of Total   % of Total   
   Segment   Segment   
   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2017 Income 2016 Income $ % 
Segment Operating Income (Loss):                
Entertainment$1,578
  54 %  $1,539
  53 %  $39
 3 % 
Cable Networks999
  35
  959
  33
  40
 4
 
Publishing136
  5
  122
  4
  14
 11
 
Local Media497
  17
  622
  21
  (125) (20) 
Corporate(305)  (11)  (311)  (11)  6
 2
 
Total Segment Operating Income2,905
  100 %  2,931
  100 %  (26) (1) 
Restructuring charges(63)     (30)     (33) n/m
 
Corporate matters—
     (8)     8
 n/m
 
Other operating items, net19
     9
     10
 n/m
 
Total Operating Income$2,861
     $2,902
     $(41) (1)% 
n/m - not meaningful
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Depreciation and Amortization:        
Entertainment$118
 $120
 $(2) (2)% 
Cable Networks20
 20
 —
 —
 
Publishing6
 6
 —
 —
 
Local Media45
 44
 1
 2
 
Corporate34
 35
 (1) (3) 
Total Depreciation and Amortization$223
 $225
 $(2) (1)% 



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Entertainment(CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network,investing and CBS Films)
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Revenues$9,306
 $9,020
 $286
 3 % 
Segment Operating Income$1,578
 $1,539
 $39
 3 % 
Segment Operating Income as a % of revenues17% 17%     
Restructuring charges$44
 $16
 $28
 n/m
 
Depreciation and amortization$118
 $120
 $(2) (2)% 
Capital expenditures$102
 $102
 $—
 — % 
n/m - not meaningful
For 2017, the 3% increase in revenues was led by growth in affiliatefinancing spending includes capital expenditures, investments and subscription feesacquisitions, share repurchases, dividends and content licensingprincipal payments on our outstanding indebtedness. We believe that our operating cash flows, cash and distribution revenues. Affiliate and subscription fees grew 32% as a result of higher station affiliation fees and growth from CBS All Access. Content licensing and distribution revenues increased 10%, driven by the domestic licensing sales of NCIS: New Orleans, Madam Secretary and titles from the CSI franchise, and higher international licensing sales resulting from strong demand for the Company’s content internationally, due in part to increased investment in internally-produced series. These increases were partially offset by lower advertising revenues, mainly as a result of the benefit to 2016 from CBS’s broadcast of Super Bowl 50.

The increase in operating income of 3% was driven by the higher revenues, partially offset by an increased investment in programming,cash equivalents, borrowing capacity under our $3.50 billion Credit Facility described below, as well as other costs associatedaccess to capital markets are sufficient to fund our operating, investing and financing requirements for the next twelve months.

Our funding for short-term and long-term obligations, including our long-term debt obligations (see Note 10), as well as our long term operating commitments, including for programming and talent (see Note 20) and lease obligations (see Note 11), will come primarily from cash flows from operating activities, proceeds from non-core asset sales, including the planned sale of Simon & Schuster described below, as well as our ability to refinance our debt. We also increased our liquidity position with the Company’sproceeds from our first quarter 2021 stock offerings described below, and the fourth quarter sales of 51 West 52nd Street for $760 million, and CBS Studio Center for $1.85 billion. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to us, the Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. We routinely assess our capital structure and opportunistically enter into transactions to lower our interest expense, which could result in a charge from the early extinguishment of debt.

During 2020, we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, and expect to use proceeds from the sale to invest in our strategic growth initiatives. For 2017priorities, including in streaming, as well as to fund dividends and 2016, restructuring charges primarily reflected severance costspay down debt. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and costs associatedto defend any litigation that would delay or prevent consummation, and also provides for a termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory reasons (see Legal Matters).

On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the net proceeds for general corporate purposes, including investments in streaming.

If declared, dividends on the Mandatory Convertible Preferred Stock are payable quarterly through April 1, 2024. Dividends on the Mandatory Convertible Preferred Stock accumulate from the most recent dividend payment date, and will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee thereof, at an annual rate of 5.75% of the liquidation preference of $100 per share, payable in cash or, subject to certain limitations, by delivery of shares of Class B Common Stock or through any combination of cash and shares of Class B Common Stock, at our election.

Our access to capital markets can be impacted by factors outside our control, including economic conditions; however, we believe that our strong cash flows and balance sheet, our credit facility and our credit rating will provide us with exiting contractual obligationsadequate access to funding for our expected cash needs. The cost of any new borrowings are affected by market conditions and other related costs.
short and long-term debt ratings assigned by independent rating agencies, and there can be no assurance that we will be able to access capital markets on terms and conditions that will be favorable to us.
Cable Networks(Showtime Networks and Smithsonian Networks)
II-21
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Revenues$2,355
 $2,015
 $340
 17% 
Segment Operating Income$999
 $959
 $40
 4% 
Segment Operating Income as a % of revenues42% 48%     
Restructuring charges$—
 $4
 $(4) n/m
 
Depreciation and amortization$20
 $20
 $—
 —% 
Capital expenditures$16
 $15
 $1
 7% 
n/m - not meaningful
For 2017, the 17% increase in revenues was driven by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, which contributed 13 percentage points to the revenue growth. The increase also reflected growth from the Showtime direct-to-consumer digital streaming subscription offering and higher international licensing sales of Showtime content. These increases were partially offset by lower domestic licensing sales, primarily as a result of sales of several titles, including Penny Dreadful, in 2016. As of December 31, 2017, subscriptions totaled approximately 25 million for Showtime, including the direct-to-consumer digital streaming subscription offering, and 30 million for Smithsonian Networks.

Operating income increased 4% driven by the revenue growth, which was significantly offset by higher costs associated with the pay-per-view boxing event and an increased investment in programming. Restructuring charges in 2016 primarily reflected severance costs.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Publishing (Simon & Schuster)
     Increase/(Decrease) 
Year Ended December 31,2017
2016
$ % 
Revenues$830
 $767
 $63
 8 % 
Segment Operating Income$136
 $122
 $14
 11 % 
Segment Operating Income as a % of revenues16% 16%     
Restructuring charges$5
 $1
 $4
 n/m
 
Depreciation and amortization$6
 $6
 $—
 — % 
Capital expenditures$5
 $9
 $(4) (44)% 
n/m - not meaningful
For 2017, the 8% increase in revenues reflects higher print book sales and 39% growth in digital audio sales. Bestselling titles for 2018 included What Happened by Hillary Rodham Clinton, Leonardo da Vinci by Walter Isaacson and Sleeping Beauties by Stephen King and Owen King.

The 11%increase in operating income reflects the revenue growth. For 2017and 2016, restructuring charges primarily reflected severance costs.
Local Media(CBS Television Stations and CBS Local Digital Media)
     Increase/(Decrease) 
Year Ended December 31,2017
2016
$ % 
Revenues$1,668
 $1,779
 $(111) (6)% 
Segment Operating Income$497
 $622
 $(125) (20)% 
Segment Operating Income as a % of revenues30% 35%     
Restructuring charges$12
 $6
 $6
 n/m
 
Depreciation and amortization$45
 $44
 $1
 2 % 
Capital expenditures$32
 $37
 $(5) (14)% 
n/m - not meaningful
For 2017, the 6% decrease in revenues was driven by lower advertising revenues, primarily reflecting the benefit to 2016 from political advertising sales during the 2016 Presidential election cycle and CBS’s broadcast of Super Bowl 50. This decrease was partially offset by growth in retransmission fees.

The decreasein operating income of 20% primarily reflected a decline in high-margin political advertising sales. For 2017 and 2016, restructuring charges reflected severance costs and costs associated with exiting contractual obligations and other related costs.
Corporate
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Segment Operating Loss$(305) $(311) $6
 2 % 
Restructuring charges$2
 $3
 $(1) n/m
 
Depreciation and amortization$34
 $35
 $(1) (3)% 
Capital expenditures$30
 $33
 $(3) (9)% 
n/m - not meaningful
Corporate expenses include general corporate overhead, unallocated shared company expenses, and intercompany eliminations. Restructuring charges in 2017 and 2016 primarily reflected severance costs.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Financial Position
The balance sheet at December 31, 2018 is presented under ASC 606, the new revenue recognition standard adopted on January 1, 2018, while December 31, 2017 is presented under previous accounting guidance. See Note 16 to the consolidated financial statements for the amount by which each balance sheet line item at December 31, 2018 was impacted by the adoption of ASC 606.
     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Current assets:        
Cash and cash equivalents$322
 $285
 $37
 13 % 
Receivables, net (a)
4,041
 3,697
 344
 9
 
Programming and other inventory (b)
1,988
 1,828
 160
 9
 
Prepaid income taxes27
 78
 (51) (65) 
All other current assets, net374
 385
 (11) (3) 
Total current assets$6,752
 $6,273
 $479
 8 % 
(a) The increase primarily relates to the reclassification of the sales returns reserve to “Other current liabilities” as a result of the adoption of ASC 606 and higher receivables from television licensing arrangements.
(b) The increase primarily reflects the payment of sports program rights in advance of the broadcast of the related sporting events.
     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Programming and other inventory (a)
$3,883
 $2,881
 $1,002
 35% 
(a) The increase primarily reflects higher investment in programming.
     Increase/(Decrease) 
At December 31,2018
2017 $ % 
Other assets (a)
$2,424
 $2,852
 $(428) (15)% 
(a) The decrease reflects lower noncurrent receivables from television licensing arrangements primarily as a result of the adoption of ASC 606 partially offset by restricted cash of $120 million held in a grantor trust related to the separation and settlement agreement between the Company and the former Chairman of the Board, President and Chief Executive Officer of the Company. (See Note 18 to the consolidated financial statements.) As of December 31, 2018, total outstanding receivables from television licensing arrangements, including both current and noncurrent, were $3.57 billion versus $4.06 billion at December 31, 2017 and $3.45 billion at January 1, 2018 upon the adoption of ASC 606. At December 31, 2018,2021, we had $2.36 billion of remaining availability under our share repurchase program. Any share repurchases under the total amount dueprogram are expected to be funded by cash flows from these receivables was $1.96 billion in 2019, $771 million in 2020, $430 million in 2021, $236 million in 2022,operations and, $181 million in 2023 and thereafter.as appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt.
     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Assets held for sale (a)
$33
 $34
 $(1) (3)% 
(a) Assets held for sale at December 31, 2018 and 2017 include the CBS Television City property and sound stage operation which was sold in January 2019. (See Note 2 to the consolidated financial statements.)




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Current liabilities:        
Accounts payable$201
 $231
 $(30) (13)% 
Accrued expenses (a)
522
 454
 68
 15
 
Participants’ share and royalties payable (b)
1,177
 986
 191
 19
 
Accrued programming and production costs (c)
704
 497
 207
 42
 
Commercial paper674
 679
 (5) (1) 
All other current liabilities, net (d)
1,295
 1,125
 170
 15
 
Current liabilities$4,573
 $3,972
 $601
 15 % 
(a) The increase primarily reflects accruals for charitable contributions and professional fees associated with corporate matters.
(b) The increase primarily reflects the timing of payments.
(c) The increase primarily reflects increased production of television programming.
(d) The increase primarily reflects the reclassification of the sales returns reserve to “Other current liabilities” as a result of the adoption of ASC 606.
     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Participants’ share and royalties payable (a)
$1,159
 $1,424
 $(265) (19)% 
(a) The decrease primarily reflects lower participation and residual liabilities as a result of the adoption of ASC 606, and the timing of payments.
     Increase/(Decrease) 
At December 31,2018
2017 $ % 
Pension and postretirement benefit obligations (a)
$1,388
 $1,328
 $60
 5% 
(a) The increase primarily reflects the recognition of interest and service cost, partially offset by contributions to the Company’s non-qualified pension and other postretirement benefits plans to satisfy benefit payments due under these plans.
     Increase/(Decrease) 
At December 31,2018 2017 $ % 
Other liabilities (a)
$2,071
 $2,197
 $(126) (6)% 
(a) The decrease primarily relates to the reduction to a tax liability established during 2017 resulting from the enactment of the Tax Reform Act. This liability reflects the estimated tax on the Company’s historical accumulated foreign earnings and profits, which is payable to the IRS over eight years. The reduction relates to the application of a 2017 federal tax overpayment toward the liability.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Cash Flows
The changes in cash, cash equivalents and restricted cash were as follows:
     Increase/ (Decrease)   Increase/ (Decrease)
Year Ended December 31,2018
2017
2018 vs. 2017 2016 2017 vs. 2016
Cash provided by operating activities from:             
Continuing operations$1,425
 $793
  $632
  $1,454
  $(661) 
Discontinued operations1
 94
  (93)  231
  (137) 
Cash provided by operating activities1,426
 887
  539
  1,685
  (798) 
Cash used for investing activities from:             
Continuing operations(325) (523)  198
  (334)  (189) 
Discontinued operations(23) (24)  1
  (6)  (18) 
Cash used for investing activities(348) (547)  199
  (340)  (207) 
Cash used for financing activities(921) (677)  (244)  (1,046)  369
 
Net increase (decrease) in cash, cash equivalents and
restricted cash
$157
 $(337)  $494
  $299
  $(636) 
Increase/ (Decrease)
Year Ended December 31,202120202021 vs. 2020
Net cash flow provided by operating activities from:
Continuing operations$835 $2,215 $(1,380)
Discontinued operations118 79 39 
Net cash flow provided by operating activities953 2,294 (1,341)
Net cash flow provided by (used for) investing activities from:
Continuing operations2,402 63 2,339 
Discontinued operations(7)(7)— 
Net cash flow provided by investing activities2,395 56 2,339 
Net cash flow used for financing activities(152)(90)(62)
Effect of exchange rate changes on cash and cash equivalents(48)25 (73)
Net increase in cash, cash equivalents and restricted cash$3,148 $2,285 $863 
Operating Activities.  The increasedecrease in cash flow provided by operating activities from continuing operations for 2018 compared with 2017 was primarilymainly driven by increased investment in our streaming services, including spending for content, advertising and marketing, and a higher level of production in 2021 as a result of production shutdowns in 2020 due to COVID-19. The decrease was partially offset by higher collections and lower cashpayments for restructuring, merger-related costs and costs to achieve synergies, as well as lower payments for income taxestaxes. Payments for restructuring, merger-related costs and growthcosts to achieve synergies included in affiliate and subscription fees, which were partially offset by an increased investment in internally-produced programming, including a higher number of series produced for distribution on multiple platforms. Operating cash flow for 2017 also included discretionary pension contributions of $600 million to prefund the Company’s qualified plans.

The decrease in cash provided by operating activities from continuing operationswere $294 million and $584 million for 2017 compared with 2016 was driven by the aforementioned discretionary pension contributions; a decline in advertising revenues including from the benefit in 2016 from CBS’s broadcast of Super Bowl 50; 2021 and an increased investment in programming. These decreases were partially offset by higher affiliate and subscription fee revenues.2020, respectively.
Cash provided by operating activities from discontinued operations primarily reflected the operating activities of CBS Radio. Operating activities from discontinued operations also included payments and refunds for tax matters in foreign jurisdictions related to previously disposed businesses that are accounted for as discontinued operations.

Cash paid for income taxes for the years ended December 31, 2018, 2017 and 2016 was as follows:
Year Ended December 31,2018
2017
2016
Cash taxes included in operating activities from continuing operations$16
 $365
 $390
Less: Excess tax benefits from the exercise of stock options and
vesting of restricted stock units, included in financing activities
—
 —
 17
Cash paid for income taxes from continuing operations$16
 $365
 $373
Cash paid for income taxes in 2018 benefited from a federal income tax overpayment of $484 million in 2017, which included the impact from the retroactive renewal of a federal tax law. Cash paid for income taxes from continuing operations decreased to $291 million for 20172021 from $411 million for 2020 primarily due to a higher volume of production incentives received, lower adjusted earnings from continuing operations before income taxes and 2016 benefiteda higher deduction associated with the exercise and vesting of stock-based compensation, partially offset by higher tax payments associated with gains from dispositions, primarily from the applicationsale of prior year federal income tax overpaymentsCBS Studio Center in 2021.

Cash flow provided by operating activities from discontinued operations reflects the operating activities of $32 million and $90 million, respectively.Simon & Schuster.

II-22



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Investing Activities
Year Ended December 31,2018
2017
2016
Investments in and advances to investee companies (a)
$(124) $(110) $(81)
Capital expenditures (b)
(165) (185) (196)
Acquisitions (including acquired television library), net of cash acquired (c)
(31) (270) (92)
Proceeds from dispositions—
 11
 20
All other investing activities from continuing operations, net(5) 31
 15
Cash flow used for investing activities from continuing operations(325) (523) (334)
Cash flow used for investing activities from discontinued operations(23) (24) (6)
Cash flow used for investing activities$(348) $(547) $(340)
Year Ended December 31,20212020
Investments (a)
$(193)$(59)
Capital expenditures (b)
(354)(324)
Acquisitions, net of cash acquired (c)
(54)(147)
Proceeds from dispositions (d)
3,028 593 
Other investing activities(25)— 
Net cash flow provided by investing activities from continuing operations2,402 63 
Net cash flow used for investing activities from discontinued operations(7)(7)
Net cash flow provided by investing activities$2,395 $56 
(a) MainlyPrimarily includes the Company’sour investment in The CW as well as its other domestic and international television joint ventures.CW.
(b) Capital expendituresIncludes payments for 2019 are anticipatedcosts to be approximately $200 million.achieve synergies of $68 million and $40 million for 2021 and 2020, respectively.
(c) 20182021 reflects the acquisitions of Chilevisión, a free-to-air television channel, and a controlling interest in Fox TeleColombia & Estudios TeleMexico, a Spanish language content producer. 2020 primarily reflects the acquisition of Miramax, a digital entertainment media company. 2017global film and television studio.
(d) 2021 primarily reflects proceeds received from the acquisitionsales of Network 10, oneCBS Studio Center and51 West 52nd Street. 2021 also includes proceeds received from the sale of three major commercial broadcast networksour investment in Australia, for approximately $124 million, netfuboTV during the fourth quarter of cash acquired,2020, and proceeds received from the acquisitionsales of a television library. 2016 primarilynoncore trademark licensing operation and other investments. 2020 reflects the acquisitionssales of a sports-focused digital media businessCMG and a publishing business.marketable securities.

Financing Activities
Year Ended December 31,20212020
Repayments of short-term debt borrowings, net$— $(706)
Proceeds from issuance of senior notes— 4,375 
Repayment of long-term debt(2,230)(2,901)
Dividends paid on preferred stock(30)— 
Dividends paid on common stock(617)(600)
Proceeds from issuance of preferred stock983 — 
Proceeds from issuance of common stock1,672 — 
Purchase of Company common stock— (58)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation(110)(93)
Proceeds from exercise of stock options408 5 
Payments to noncontrolling interests(235)(59)
Other financing activities7 (53)
Net cash flow used for financing activities$(152)$(90)

Dividends
Year Ended December 31,2018 2017 2016
(Repayments of) proceeds from short-term debt borrowings, net$(5) $229
 $450
Proceeds from issuance of senior notes—
 1,773
 684
Repayment of senior notes and debentures—
 (1,244) (199)
Repurchase of CBS Corp. Class B Common Stock(586) (1,111) (2,997)
Proceeds from debt borrowings of CBS Radio—
 40
 1,452
Repayment of debt borrowings of CBS Radio—
 (43) (110)
Dividends(276) (296) (288)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(59) (89) (58)
Proceeds from exercise of stock options27
 91
 21
All other financing activities, net(22) (27) (1)
Cash flow used for financing activities$(921) $(677) $(1,046)

Free Cash FlowWe declared a quarterly cash dividend on our Class A and Adjusted Free Cash Flow
FreeClass B Common Stock during each of the quarters of 2021 and 2020. During each of the years ended December 31, 2021 and 2020, we declared total per share dividends of $.96, resulting in total annual dividends of $625 million and $601 million, respectively. On December 19, 2019, we declared a quarterly cash flowdividend of $.24 per share on our Class A and adjusted free cash flow are non-GAAP financial measures. Free cash flow reflects the Company’s net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations, and less capital expenditures; and adjusted free cash flow reflects the Company’s net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations and discretionary contributions to prefund the Company’s pension plans, and less capital expenditures. The Company’s calculationsClass B Common Stock, resulting in total dividends of free cash flow and adjusted free cash flow include capital expenditures because investment in capital expenditures is a use of cash that is directly related$150 million. Prior to the Company’s operations. Adjusted freeMerger, Viacom and CBS each declared a quarterly cash flow excludes discretionary contributions to prefunddividend during each of the Company’s pension plans because management assessesfirst three quarters of 2019. During the Company’s ability to generate operating cash flows without consideringfirst three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. During the impact from discretionary pension contributions, and decisions regarding the timingfirst three quarters of pension plan funding are not dependent on the level2019, Viacom declared total per share dividends of operating cash flows generated during the period. The Company’s net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.$.60, resulting in total dividends of $245 million.

II-23



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Management believes freeDuring each of the third and fourth quarters of 2021, we declared quarterly cash flow and adjusted freedividends of $1.4375 per share on our Mandatory Convertible Preferred Stock. During the second quarter of 2021, we declared a cash flow provide investors with an important perspectivedividend of $1.5493 per share on our Mandatory Convertible Preferred Stock, representing a dividend period from March 26, 2021 through July 1, 2021. Accordingly, we recorded dividends on the cash available toMandatory Convertible Preferred Stock of $44.2 million during the Company to service debt, make strategic acquisitions and investments, maintain its capital assets, satisfy its tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow and adjusted free cash flow are significant measures of the Company’s ability to generate long-term value. It is useful for investors to know whether this ability is being enhanced or degraded as a result of the Company’s operating performance. The Company believes the presentation of free cash flow and adjusted free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from the Company’s underlying operations in a manner similar to the method used by management. Free cash flow and adjusted free cash flow are among several components of incentive compensation targets for certain management personnel. In addition, free cash flow and adjusted free cash flow are primary measures used externally by the Company’s investors, analysts and industry peers for purposes of valuation and comparison of the Company’s operating performance to other companies in its industry.

As free cash flow and adjusted free cash flow are not measures calculated in accordance with GAAP, free cash flow and adjusted free cash flow should not be considered in isolation of, or as a substitute for, either net cash flow provided by (used for) operating activities as a measure of liquidity or net earnings (loss) as a measure of operating performance. Free cash flow and adjusted free cash flow, as the Company calculates them, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow and adjusted free cash flow as measures of liquidity have certain limitations, do not necessarily represent funds available for discretionary use and are not necessarily measures of the Company’s ability to fund its cash needs. When comparing free cash flow and adjusted free cash flow to net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions that are not reflected in free cash flow or adjusted free cash flow.

The following table presents a reconciliation of the Company’s net cash flow provided by operating activities to free cash flow and adjusted free cash flow.
Year Ended December 31,2018 2017 2016
Net cash flow provided by operating activities$1,426
 $887
 $1,685
Capital expenditures(165) (185) (196)
Less: Operating cash flow from discontinued operations1
 94
 231
Free cash flow1,260
 608
 1,258
Less: Discretionary pension plan contributions, net of tax of $219 million—
 (381) —
Adjusted free cash flow$1,260
 $989
 $1,258

Dividends
For the yearsyear ended December 31, 2018, 2017 and 2016, the Company declared total per share dividends of $.72, $.72, and $.66, respectively, which resulted in total annual dividends of $274 million, $289 million and $294 million, respectively.2021.

On January 31, 2019, the Company announcedFebruary 10, 2022, we declared a quarterly cash dividend of $.18$.24 per share on itsour Class A and Class B Common Stock, payable on April 1, 2019. 




Management’s Discussion and Analysis2022. At the same time, we also declared a quarterly cash dividend of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except $1.4375 per share amounts)on our Mandatory Convertible Preferred Stock, payable on April 1, 2022.


Share Repurchase Program
During 2018, the Company repurchased 11.5 million shares of CBS Corp. Class B Common Stock under its share repurchase program for $600 million, at an average cost of $52.06 per share. At December 31, 2018, $2.46 billion of authorization remained under the share repurchase program.
Capital Structure
The following table sets forth the Company’sour debt.
At December 31,20212020
Senior debt (2.250%-7.875% due 2022-2050)$16,501 $18,455 
Junior debt (5.875% and 6.250% due 2057)1,157 1,157 
Other bank borrowings35 95 
Obligations under finance leases16 26 
Total debt (a)
17,709 19,733 
Less current portion of long-term debt11 16 
Total long-term debt, net of current portion$17,698 $19,717 
At December 31,2018 2017
Commercial paper$674
 $679
Senior debt (2.30%-7.875% due 2019-2045)9,435
 9,426
Obligations under capital leases43
 57
Total debt (a)
10,152
 10,162
Less commercial paper674
 679
Less current portion of long-term debt13
 19
Total long-term debt, net of current portion$9,465
 $9,464
(a)    At December 31, 2021 and 2020, the senior and junior subordinated debt balances included (i) a net unamortized discount of $466 million and $491 million, respectively, and (ii) unamortized deferred financing costs of $95 million and $107 million, respectively. The face value of our total debt was $18.27 billion at December 31, 2021 and $20.33 billion at December 31, 2020.
(a)At December 31, 2018 and 2017, the senior debt balances included (i) a net unamortized discount of $58 million and $65 million, respectively, (ii) unamortized deferred financing costs of $43 million and $47 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $5 million and $3 million, respectively. The face value of the Company’s total debt was $10.26 billion at December 31, 2018 and $10.28 billion at December 31, 2017.

During the year ended December 31, 2017,2021, we redeemed senior notes totaling $1.99 billion, prior to maturity, for an aggregate redemption price of $2.11 billion resulting in a pre-tax loss on extinguishment of debt of $128 million.

During the Companyyear ended December 31, 2020, we issued $1.80$4.50 billion of senior notes and used the net proceeds from these issuances for the redemption and repayment of $1.20long-term debt totaling $2.77 billion, of senior notes, of which $800 million was redeemed prior to maturity, resultingfor an aggregate redemption price of $2.88 billion, as well as for general corporate purposes. The early redemption resulted in a pre-tax loss on early extinguishment of debt of $49 million ($31 million, net of tax). The remaining proceeds were used for general corporate purposes, including discretionary contributions to the Company’s qualified pension plans and the repayment of short-term borrowings, including commercial paper.

Atyear ended December 31, 2018,2020 of $126 million.

Our 5.875% junior subordinated debentures due February 2057 and 6.25% junior subordinated debentures due February 2057 accrue interest at the Company classified $600 millionstated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the expiration of debt maturingthe fixed-rate period. In January 2022, we delivered notice that we will be calling our 5.875% junior subordinated debentures due February 2057 in August 2019 as long-term debtfull on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.February 28, 2022.

At December 31, 2018, the Company’s scheduled maturities of long-term debt at face value, excluding capital leases, were as follows:
                2024 and
 20192020202120222023Thereafter
Long-term debt $600
  $—
  $300
  $700
  $1,033
 $6,907
Commercial Paper
The Company had outstanding commercial paper borrowings under its $2.50 billion commercial paper programsubordination, interest deferral option and extended term of $674 millionthe junior subordinated debentures provide significant credit protection measures for senior creditors and, $679 million at December 31, 2018as a result of these features, the debentures received a 50% equity credit by Standard & Poor’s Rating Services and 2017, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 3.02%Fitch Ratings Inc., and 1.88% at December 31, 2018 and 2017, respectively.
a 25% equity credit by Moody’s Investors Service, Inc.
II-24



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

The interest rate payable on our 3.45% senior notes due October 2026, will be subject to adjustment from time to time if Moody’s Investor Services, Inc. or S&P Global Ratings downgrades (or downgrades and subsequently upgrades) the credit rating assigned to these senior notes. The interest rate on these senior notes would increase by 0.25% upon each credit agency downgrade up to a maximum of 2.00%, and would similarly be decreased for subsequent upgrades. At December 31, 2021, the outstanding principal amount of these senior notes was $124 million.

Some of our outstanding notes and debentures provide for certain covenant packages typical for an investment grade company. There is an acceleration trigger for the majority of the notes and debentures in the event of a change in control under specified circumstances coupled with ratings downgrades due to the change in control, as well as certain optional redemption provisions for our junior debentures.

Commercial Paper
At both December 31, 2021 and 2020, we had no outstanding commercial paper borrowings.

Credit Facility
At December 31, 2018, the Company2021, we had a $2.5$3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”) which expires in June 2021.. The Company,Credit Facility is used for general corporate purposes and to support commercial paper borrowings, if any. We may, at itsour option, may also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the Company’s option at the time of each borrowing and are generally based generally on either the prime rate in the U.S. or LIBORan applicable benchmark rate plus a margin based(based on the Company’sour senior unsecured debt rating. The Company pays a facility fee basedrating), depending on the total amounttype and tenor of the commitments.
loans entered. During the fourth quarter of 2021, the Credit Facility was amended to replace LIBOR as the benchmark rate for loans denominated in euros, sterling and yen with EURIBOR, SONIA and TIBOR-based rates, respectively, as publication of all non-USD LIBOR tenors has been discontinued after December 31, 2021. The Credit Facility has one principal financial covenant that requires the Company to maintain a maximumour Consolidated Total Leverage Ratio ofto be less than 4.5x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualified acquisition) at the end of each quarter as further described in the Credit Facility. At December 31, 2018, the Company’squarter. The Consolidated Leverage Ratio was approximately 3.1x.

The ConsolidatedTotal Leverage Ratio reflects the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations,our Consolidated Indebtedness at the end of a quarter, to the Company’sour Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing four consecutive quarters.twelve-month period. We met the covenant as of December 31, 2021. On February 14, 2022, we further amended our Credit Facility to modify the definition of the Consolidated EBITDA is definedTotal Leverage Ratio in the Credit Facility as operating income plus interest incomeamended credit agreement to allow unrestricted cash and before depreciation, amortization and certain other noncash items.cash equivalents to be netted against Consolidated Indebtedness through June 2024.

The Credit Facility is used for general corporate purposes. At December 31, 2018, the Company2021, we had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49$3.50 billion.

Liquidity and Capital Resources
The Company continually projects anticipated cash requirements for its operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. The Company’s operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, operating leases, interest payments, and pension funding obligations. The Company’s investing and financing spending includes capital expenditures, share repurchases, dividends and principal payments on its outstanding indebtedness. The Company believes that its operating cash flows, cash and cash equivalents, borrowing capacity under its Credit Facility, which had $2.49 billion of remaining availability at December 31, 2018, and access to capital markets are sufficient to fund its operating, investing and financing requirements for the next twelve months.
The Company’s funding for short-term and long-term obligations will come primarily from cash flows from operating activities. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to the Company, the existing Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. The Company routinely assesses its capital structure and opportunistically enters into transactions to lower its interest expense, which could result in a charge from the early extinguishment of debt.

Funding for the Company’s long-term debt obligations due over the next five years of $2.63 billion is expected to come from the Company’s ability to refinance its debt and cash generated from operating activities.

Other Bank Borrowings
At December 31, 2018, the Company2021 and 2020, we had $2.46 billionbank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of remaining availability under its share repurchase program. Share repurchases under the program are expected to be funded by cash flows from operations and, as appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Contractual Obligations
As of December 31, 2018, payments due by period under the Company’s significant contractual obligations with remaining terms in excess of one year were as follows:
 Payments Due by Period
         2024 and
 Total 2019 2020-2021 2022-2023 Thereafter
Programming and talent commitments (a)
$8,982
 $2,270
 $3,819
 $2,004
 $889
Purchase obligations (b)
795
 285
 418
 34
 58
Operating leases (c)
1,101
 174
 251
 211
 465
Long-term debt obligations (d)
9,540
 600
 300
 1,733
 6,907
Interest commitments on long-term debt (e)
4,716
 401
 773
 695
 2,847
Capital lease obligations (including interest) (f)
47
 13
 23
 9
 2
Other long-term contractual obligations (g)
1,469
 —
 929
 311
 229
Total$26,650
 $3,743
 $6,513
 $4,997
 $11,397
(a) Programming and talent commitments of the Company primarily include $6.62 billion for sports programming rights, $1.71 billion relating to the production and licensing of television and film programming, and $660 million for talent contracts.
(b) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including open purchase orders.
(c) Consists of long-term noncancellable operating lease commitments for office space, equipment, transponders and studio facilities.
(d) Long-term debt obligations are presented at face value, excluding capital leases.
(e) Future interest based on scheduled debt maturities, excluding capital leases.
(f) Includes capital leases for satellite transponders.
(g) Reflects long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet, including program liabilities; participations due to producers; residuals; and a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the estimated tax on the Company’s historical accumulated foreign earnings and profits, which is payable to the IRS over eight years.
The table above excludes $266 million of reserves for uncertain tax positions and the related accrued interest and penalties, as the Company cannot reasonably predict the amount of and timing of cash payments relating to this obligation.

In 2019, the Company expects to make contributions of approximately $60 million to its non-qualified pension plans to satisfy the benefit payments due under these plans. Also in 2019, the Company expects to contribute approximately $48 million to its other postretirement benefit plans to satisfy the Company’s portion of benefit payments due under these plans.

Guarantees
The Company has indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At December 31, 2018, the outstanding letters of credit and surety bonds approximated $100$35 million and were not recorded on the Consolidated Balance Sheet.$95 million, respectively, with a weighted average interest rate of 3.50%.

In the course of its business, the Company both provides and receives indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Company may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. The Company records a liability for its indemnification obligations and other contingent liabilities when probable and reasonably estimable.



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Critical Accounting Policies
The preparation of the Company’sour financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates itswe evaluate these estimates,
II-25



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions.

The Company considersWe consider the following accounting policies to be the most critical as they are important to the Company’sour financial condition and results of operations, and require significant judgment and estimates on the part of management in itstheir application. The risks and uncertainties involved in applying our critical accounting policies are provided below. Unless otherwise noted, we applied our critical accounting policies and estimation methods consistently in all material respects and for all periods presented, and have discussed such policies with our Audit Committee. For a summary of the Company’sour significant accounting policies, see the accompanying notes to the consolidated financial statements.

ProgrammingRevenue Recognition
Revenue is recognized when control of a good or service is transferred to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Significant judgments used in the determination of the amount and timing of revenue recognition include the identification of distinct performance obligations in contracts containing bundled advertising sales and content licenses, and the allocation of consideration among individual performance obligations within these arrangements based on their relative standalone selling prices.

Advertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or streamed or displayed on digital platforms. If a contract includes a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation to be satisfied over time and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. To the extent the amounts billed exceed the amount of revenue recognized, such excess is deferred until the guaranteed audience ratings or impressions are delivered. For contracts that do not include impressions guarantees, the individual advertising spots are the performance obligation and consideration is allocated among the individual advertising spots based on relative standalone selling price.

Affiliate Revenues—The performance obligation for our affiliate agreements is a license to our programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs and vMVPDs, also includes a license to programming for video on demand viewing. Affiliate revenues are recognized over the term of the agreement as we satisfy our performance obligation by continuously providing our customer with the right to use our programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers toour customer’s service. For agreements that provide for a fixed fee, revenues are recognized based on the relative fair value of the content provided over the term of the agreement. These agreements primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”) for which fair value is determined based on the fair value of the network affiliate’s service and the value of our programming.

II-26



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

Content Licensing Revenues—For licenses of exhibition rights for internally-produced programming, each individual episode or film delivered represents a separate performance obligation and revenues are recognized when the episode or film is made available to the licensee for exhibition and the license period has begun. For license agreements that include delivery of content on one or more dates for a fixed fee, consideration is allocated based on the relative standalone selling price of each episode or film, which is based on licenses for comparable content within the marketplace. Estimation of standalone selling prices requires judgment, which can impact the timing of recognizing revenues.

Film and Television Production and Programming Costs
Accounting forCosts incurred to produce television programs and feature films are capitalized when incurred and amortized over the Company’s television production costs requires management’s judgment as it relates to total estimated revenues to be earned (“Ultimate Revenues”) and costs to be incurred throughout theprojected life of each television program. These estimates are used to determine the amortization of capitalized production costs, expensing of participation costs, and any necessary net realizable value adjustments to capitalized production costs. For each television program management bases these estimates on the performance in the initial markets, the existence of future firm commitments to sell and the past performance of similar television programs.

or feature film. The costs incurred in acquiringto acquire television series and feature film programming rights, including advances, are capitalized when the license period has begun and the program is accepted and available for airing and theairing. The costs of programming rights licensed under multi-year sports programming agreements are capitalized if the rights payments are made before the related economic benefit has been received. These costsAcquired programming rights, including rights for sports programming, are expensed over the shorter of the license period or the period in which an economic benefit is expected to be derived. The economic benefit

For internally-produced television programs and feature films that are predominantly monetized on an individual basis, we use an individual-film-forecast computation method to amortize capitalized production costs and to accrue estimated liabilities for participations and residuals over the applicable title’s life cycle based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. Management’s judgment is determinedrequired in estimating Ultimate Revenues and the costs to be incurred throughout the life of each television program or feature film. These estimates are used to determine the timing of amortization of capitalized production costs and expensing of participation and residual costs.

For television programming, our estimate of Ultimate Revenues includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, five years from the delivery of the most recent episode, if later. These estimates are based on management’sthe past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license programs.

For feature films, our estimate of Ultimate Revenues includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial release. Prior to the release of feature films, we estimate Ultimate Revenues based on the historical performance of similar content and pre-release market research (including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. For films intended for theatrical release, we believe the performance during the theatrical exhibition is the most sensitive factor affecting our estimate of Ultimate Revenues as subsequent markets have historically exhibited a high correlation to theatrical performance. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future performance. Our estimates of revenues from succeeding windows and markets are revised based on historical relationships to theatrical performance and an analysis of current market trends. We also review and revise estimates of Ultimate Revenue and participation costs as of each reporting date to reflect the most current available information.

For acquired film libraries, our estimate of Ultimate Revenues is for a period within 20 years from the date of acquisition.

II-27



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

For programming that is predominantly monetized as part of a film group, which includes our acquired programming rights and certain internally-produced television programs, capitalized costs are amortized based on an estimate of the timing of our usage of and benefit from such programming. Such estimates require management’s judgement and include consideration of factors such as expected revenues to be derived from the programming. Management’s judgment is required in determiningprogramming, the valueexpected number of the future economic benefitairings, and, timing of the expensing of these costs.

Ultimate revenue estimates for internally produced television programming, and the estimated economic benefit for acquired programming, which includes television series, feature filmsthe length of the license period. If initial airings are expected to generate higher revenues, an accelerated method of amortization is used. These estimates are periodically reviewed and sports, are updated regularly based on information available asthroughout the contractual term or life of each program.

For content that is predominantly monetized on an individual basis, a television program or feature film progresses throughis tested for impairment when events or circumstances indicate that its life cycle or contractual term. Overestimating Ultimate Revenues for internally produced programming or a failure to adjust for a downward revision infair value may be less than its unamortized cost. If the result of the impairment test indicates that the carrying value exceeds the estimated economic benefit tofair value, an impairment charge will then be generated fromrecorded for the amount of the difference. Content that is predominantly monetized within a film group is assessed for impairment at the film group level and would similarly be tested for impairment if circumstances indicate that the fair value of the content within the film group is less than its amortized costs. In addition, unamortized costs for internally-produced or acquired programming could result in the understatement of the amortization of capitalized production or programming costs, future net realizable value adjustments and/or estimated accruals for participation expense.that have been substantively abandoned are written off.

Goodwill and Intangible Assets Impairment Test
The Company performs aWe perform fair value-based impairment testtests of goodwill and intangible assets with indefinite lives, comprised primarily of television FCC licenses, and international broadcast licenses, annually during the fourth quarteron an annual basis and also between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value.




Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


FCC Licenses—FCC licenses are tested for impairment at the geographic market level. The Company considersWe consider each geographic market, which is comprised of all of the Company’sour television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use. At December 31, 2018 the Company2021, we had 14 television markets with FCC license book values. For international broadcast licenses, the Company considers all of its broadcast licenses within a country to be a single unit of accounting because the international broadcast licenses at this level represent their highest and best use. At December 31, 2018, the Company had international broadcast licenses in Australia.

Goodwill is tested for impairment at the reporting unit level. During the fourth quarter of 2018, the Company began including CBS Sports Network within the Television reporting unit, which is a component of the Entertainment operating segment, reflecting changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. Prior to this change, CBS Sports Network was a standalone reporting unit and a component of the Cable Networks operating segment. At December 31, 2018, the Company had seven reporting units with goodwill balances, each one level below their respective operating segments, except for the Cable Networks reporting unit and the Publishing reporting unit, which are each the same as their respective operating segments because these operating segments each have only one component.

Television FCC Licenses and International Broadcast Licenses-
For itsour annual impairment test, the Company performswe perform qualitative assessments for each television market or country that management estimates the FCC licenses or international broadcast licenses havewe estimate has an aggregate fair value of FCC licenses that significantly exceed their respective carrying values. In selecting markets or international broadcast licenses for a qualitative assessment, the Company also considersAdditionally, we consider the duration of time since a quantitative test was performed. For the 20182021 annual impairment test, the Companywe performed qualitative assessments for all 1411 of its U.S.our television markets. For each of these markets, the Companymarket, we weighed the relative impact of market-specific and macroeconomic factors. The market-specific factors considered include recent projections by geographic market from both independent and internal sources for revenue and operating costs, as well as average market share and capital expenditures. The Companyshare. We also considered the macroeconomic impact on discount rates and growth rates, as well as the impact from recent tax law changes.rates. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that it is not more likely than not that the fair values of the FCC licenses in each of these television markets are less than their respective carrying values. Therefore, performing thea quantitative impairment test on these markets was unnecessary.


For 2018, the CompanyWe performed a quantitative impairment test for international broadcast licenses. A quantitativethe FCC licenses in the remaining three markets. The impairment test comparestests indicated that the estimated fair values of FCC licenses in two of the markets exceeded their respective carrying values by more than 20% and the fair value of the FCC license in one of the markets exceeded its carrying value of $157 million by 9%.

The quantitative impairment test of FCC licenses with their carrying value. Thecalculates an estimated fair value is computed using the Greenfield Discounted Cash Flow Method, (‘‘Greenfield Method’’), which attempts to isolate the income that is attributable to the license alone. The Greenfield Method is based upon modelingvalues a hypothetical start-up station and building it up to a normalized operation that, by design, lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method adds the present value of the estimated annual cash flows of the start-up station over a projection period to the residual value at the end of the projection period. The annual cash flows over the projection period include assumptions for overall revenues in the relevant market the start-up station’s operating costs and capital expenditures, and a five-year build-up period for the start-up station to reach a normalized state of operations, which reflects the point at which it achieves an average market share. The overall revenues in the subject market are estimated based on recent industry projections. Operating costs and capital expenditures are estimated based on both industry and internal data. The residual value is calculated using a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections. The discount rate is determined based on the risk of achieving the projected cash flows, including the risk applicable to the industry and the market as a whole. The discount rate and perpetual nominal growth rate used for international broadcast licenses for 2018 were 11% and 0.5%, respectively. The Company concluded that the estimated fair value of international broadcast licenses, which were recorded at fair value in the fourth quarter ofby adding
II-28



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


discounted cash flows over a five-year build-up period to a residual value. The assumptions for the build-up period include industry projections of overall market revenues; the start-up station’s operating costs and capital expenditures, which are based on both industry and internal data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a long-term growth rate, which is based on projected long-range inflation and industry projections.
2017 when the Company acquired Network 10, continues to approximate the carrying value and therefore no impairment charge was required.

The estimated fair values of the FCC licenses and international broadcast licenses are highly dependent on the assumptions of future economic conditions in the individual geographic markets in which the Company ownswe own and operatesoperate television stations. Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, or a decline in the local television advertising marketplace in the U.S. or the advertising marketplace in Australia could result in a downward revision to the Company’sour current assumptions and judgments. Various factors may contribute to a future decline in an advertising marketplace including declines in economic conditions; an other-than-temporary decrease in spending by advertisers in certain industries that have historically represented a significant portion of television advertising revenues in that market; a shift by advertisers to competing advertising platforms; changes in consumer behavior; and/or a change in population size. A downward revision to the present value of future cash flows could result in impairment and a noncash charge would be required.  Such a charge could have a material effect on the Company’s Consolidated Statement of Operations and Consolidated Balance Sheet.

Goodwill-Goodwill—Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below. At December 31, 2021, we had four reporting units. For itsthe 2021 annual impairment test, we tested two reporting units as of August 31 and two reporting units as of October 31. During the Company performsfourth quarter of 2021, to better align the timing of our annual impairment date with our budgeting cycle, we changed the date for the annual impairment test to October 31 for all reporting units. As a result, those two reporting units previously tested as of August 31 were also tested as of October 31 based on a qualitative assessment resulting in no changes to the conclusion below.

For our annual impairment test, we perform qualitative assessments for each reporting unit that management estimates havewe estimate has an aggregate fair valuesvalue that significantly exceed theirits respective carrying values. Additionally, we consider the duration of time since a quantitative test was performed. For the 20182021 annual impairment test, the Companywe performed qualitative assessments for seventwo of our reporting units. For each of these two reporting units, the Companywe weighed the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. The reporting unit specific factors that were considered included actual and expected financial performance and changes to the reporting units’ carrying amounts since the most recent impairment tests. For each industry in which the reporting units operate, the Companywe considered growth projections from independent sources and significant developments or transactions within the industry. The CompanyWe also determined that the impact of macroeconomic factors on the discount rates and growth rates used for the most recent impairment tests would not significantly affect the fair value of the reporting units and that the lower tax rate from recenta tax law changeschange enacted since the most recent quantitative tests would positively impact the fair value of the reporting units. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that for these seven reporting units, it is not more likely than not that the fair value of each of these two reporting unitunits is lesshigher than itstheir respective carrying amountamounts and therefore performing the quantitative impairment testtests was unnecessary.

For 2018, the Company performed a quantitative goodwill2021 annual impairment test, we elected to perform quantitative impairment tests for the CBS Sports Networktwo reporting unit prior to the inclusion of this business in theunits: CBS Television reporting unit.and CBS Interactive, because of the amount of time that has elapsed since the previous quantitative tests. The quantitative goodwill impairment test examinesevaluates whether the carrying value of a reporting unit exceeds its estimated fair value. For CBS Television, we estimated the fair value which is computedof the reporting unit based uponon the present value of future cash flows (“Discounted Cash Flow Method”) and the traded or transaction values of comparable businesses (“Market Comparable Method”). If the carrying value exceeds the estimated fair value, an impairment charge is recognized as the amount by which the carrying value exceeds the fair value. For 2018, the Discounted Cash Flow Method and Market Comparable Method for CBS Sports Network resulted in similar estimated fair values. The Discounted Cash Flow Method adds the present value of the estimated annual cash flows over a discrete projection period to the residual value of the business at the end of the projection period. This technique requires the use of significant estimates and assumptions such as growth rates, operating margins, capital expenditures and discount rates. The estimated growth rates, operating margins and capital expenditures for the projection period are based on the Company’s internal forecasts of future performance as well as historical trends.  The residual value is estimated based on a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections and for 2018 was 2.0%. The discount rate, which for 2018 was 8.5%, is determined based on the risk of achieving the projected cash flows, including the risk applicable to the industry and the market as a whole.

II-29



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


of comparable businesses (“Guideline Public Company Method”). The Discounted Cash Flow Method requires us to make various assumptions regarding the timing and amount of future cash flows, including growth rates, operating margins and capital expenditures for a projection period, plus the terminal value of the business at the end of the projection period. The assumptions about future cash flows are based on our internal forecasts of the reporting unit, which incorporates our long-term business plans and historical trends. The terminal value is estimated based on a perpetual nominal growth rate, which is based on historical and projected inflation and economic indicators, as well as industry growth projections. A discount rate is determined for the reporting unit based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of comparable entities. For 2021, we utilized a discount rate of 10% and a terminal growth rate of 1.5%. The Guideline Public Company Method incorporates revenue and earnings multiples from publicly traded companies with operations and other characteristics similar to each reporting unit. The selected multiples consider each reporting unit’s relative growth, profitability, size, and risk relative to the 2018 annualselected publicly traded companies. For CBS Interactive, we estimated the fair value of the reporting unit based on the Guideline Public Company Method. Based on the results of the 2021 quantitative impairment test the Companytests, we concluded that the estimated fair value of each of the CBS Sports Networktwo reporting unit, which at December 31, 2018 had a goodwill balance of $261 million,units significantly exceeded itstheir respective carrying value by 16%values and therefore no impairment charge was required. An increase to the discount rate of 83 basis points, or a decrease to the perpetual nominal growth rate of 135 basis points, assuming no changes to other factors, would cause the fair value of the CBS Sports Network reporting unit to fall below its carrying value.

Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in the advertising market, a decrease in audience acceptance of programming, a shift by advertisers to competing advertising platforms; and/orplatforms, changes in consumer behavior and/or a decrease in audience acceptance of our content could result in changes to the Company’sour assumptions and judgments used in itsthe goodwill impairment tests. A downward revision of these assumptions could cause the fair values of the reporting units to fall below their respective carrying values and a noncash impairment charge would be required. Such a charge could have a material effect on the Company’s Consolidated Statement of Operations and Consolidated Balance Sheet.
 
Reserves and Legal Matters
Estimates of reserves and liabilities related to legal issues and discontinued businesses, including asbestos and environmental matters, require significant judgments by management. The CompanyWe record an accrual for a loss contingency when it is both probable that a liability has been incurred and when the amount of the loss can be reasonably estimated. We continually evaluatesevaluate these estimates based on changes in the relevant facts and circumstances and events that may impact estimates. While management believeswe believe that the current reservesour accrual for matters related to our predecessor operations, of the Company, including environmental and asbestos, are adequate, there can be no assurance that circumstances will not change in future periods. This beliefIt is difficult to predict future asbestos liabilities as events and circumstances may impact the estimate of our liabilities. Our liability estimate is based upon many factors, and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims.claims, as well as consultation with a third party firm on trends that may impact our future asbestos liability.
 
Pensions
Pension benefit obligations and net periodic pension costs are calculated using many actuarial assumptions. Two key assumptions used in accounting for pension liabilities and expenses are the discount rate and expected rate of return on plan assets. The discount rate is determined based on the yield on a portfolio of high quality bonds, constructed to provide cash flows necessary to meet the Company’sour pension plans’ expected future benefit payments, as determined for the projectedaccumulated benefit obligation. The expected return on plan assets assumption is derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets. As of December 31, 2018, the unrecognized2021, changes in actuarial losses includedassumptions resulted in a slight decrease to accumulated other comprehensive income increased fromloss compared with the prior year-end due primarily to an increase in
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

the discount rate, which was mostly offset by the unfavorable performance of pension plan assets, partially offset by the impact from an increase in the discount rate and the amortization of actuarial losses.assets. A 25 basis point change in the discount rate would result in an estimated change to the projectedaccumulated benefit obligation of approximately $92$136 million and would not have a materialan insignificant impact on 20192022 pension expense. A decrease in the expected rate of return on plan assets would increase pension expense. The estimated impact of a 25 basis point change in the expected rate of return on plan assets is a change of approximately $6$8 million to 20192022 pension expense.
 
Income Taxes
The Company isWe are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes.taxes and evaluating our income tax positions.  When recording an interim worldwide provision for income taxes, an estimated effective tax rate for the year is applied to interim operating results.  In the event there is a significant or unusual item recognized in the quarterly operating results, the tax attributable to that item is separately calculated and recorded in the same quarter. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. We evaluate the realizability of deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

A number of years may elapse before a tax return containing tax matters



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


for which a reserve has been established is audited and finally resolved. For positions taken in a previously filed tax return or expected to be taken in a future tax return, the Company evaluateswe evaluate each position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize in the Consolidated Statement of Operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold a tax reserve is established and no benefit is recognized. The Company is continuallyWe evaluate our uncertain tax positions quarterly based on many factors, including, changes in tax laws and interpretations, information received from tax authorities, and other changes in facts and circumstances. Our income tax returns are routinely audited by U.S. federal and state as well as foreign tax authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believeswe believe that itsthe reserve for uncertain tax positions of $266$301 million at December 31, 20182021 is properly recorded pursuant to the recognition and measurement provisions of FASB guidance for uncertainty in income taxes.recorded.

During 2017, as a result of the enactment of the Tax Reform Act on December 22, 2017, the Company recorded a provisional charge of $407 million for the estimated tax impact on the Company’s historical accumulated foreign earnings and profits. This amount was based on the Company’s initial estimate. During 2018, the Company completed its analysis of the provisional amounts and recorded a charge of $15 million to adjust the estimated transition tax on cumulative foreign earnings and profits. In January 2019, the U.S. government issued guidance relating to the transition tax. The Company is currently evaluating the impact of this guidance, which will be recorded in the Company’s consolidated financial statements in the first quarter of 2019. In addition, future guidance issued by federal and state authorities regarding the Tax Reform Act could have an impact on the Company’s consolidated financial statements.
Legal Matters
General.General
On an ongoing basis, the Companywe vigorously defends itselfdefend ourselves in numerous lawsuits and proceedings and respondsrespond to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Companyus without merit, is inherently uncertain and always difficult to predict. However, based on itsour understanding and evaluation of the relevant facts and circumstances, the Company believeswe believe that the below-described legalfollowing matters and other litigation to which it is a party are not likely, in the aggregate, to haveresult in a material adverse effect on itsour business, financial condition and results of operations, financial position operations.

Litigation Relating to the Merger
Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or cash flows. Underputative class action lawsuits in the separation agreement betweenCourt of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the three lawsuits and appointed Bucks County Employees’ Retirement Fund and International Union of Operating
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

Engineers of Eastern Pennsylvania and Delaware as co-lead plaintiffs for the consolidated action. On April 14, 2020, the lead plaintiffs filed a Verified Consolidated Class Action and Derivative Complaint (as used in this paragraph, the “Complaint”) against Shari E. Redstone, NAI, Sumner M. Redstone National Amusements Trust, members of the CBS Board of Directors (comprised of Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Robert N. Klieger, Martha L. Minow, Susan Schuman, Frederick O. Terrell and Strauss Zelnick), former CBS President and Acting Chief Executive Officer Joseph Ianniello and the Company as nominal defendant. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and Viacom Inc.,approval of the CompanyAgreement and Viacom Inc. have agreedPlan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.against them vigorously.


Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the four lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) against NAI, NAI Entertainment Holdings LLC, Shari E. Redstone, the members of the special transaction committee of the Viacom Board of Directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters.
As announced on August 1, 2018, the Company’sCBS Board of Directors (“Board”) retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’sCBS’ former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company.CBS. On December 17, 2018, the CBS Board of Directors announced the completion of theits investigation, certain findings of the investigation and the Board’sCBS Board of Directors’ determination, discussed below, with respect to the termination of Mr. Moonves’sMoonves’ employment. The Company hasWe have received subpoenas or requests for information from the New York County District Attorney’s Office, and the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Companymatters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company isWe are cooperating with these inquiries.

On August 27, 2018 and on October 1, 2018, each of Gene Samit and John Lantz, respectively, filed putative class action suitslawsuits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below. On November 6, 2018, the Court entered an order consolidating the two actions. On November 30, 2018, the
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action. On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against the



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Company,CBS, certain current and former senior executives and members of the Board.CBS Board of Directors. The consolidated action is stated to be on behalf of purchasers of the Company’sCBS Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

 On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of liability or wrongdoing by the Company, will be subject to court approval. All amounts payable by the Company under the settlement will be paid by the Company’s insurers.
Separation Agreement
.
Litigation Related to Television Station Owners
On September 9, 2018,2019, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resignedwas added as a director and as Chairmandefendant in a multi-district putative class action lawsuit filed in the United States District Court for the Northern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on or about January 1, 2014 on television stations owned by one or more of the Board, Presidentdefendant television station owners and Chief Executive Officeralleges the sharing of allegedly competitively sensitive information among such television stations in alleged violation of the Company. Pursuant to the Separation Agreement,Sherman Antitrust Act. The action, which names the Company is contributingamong fourteen total defendants, seeks monetary damages, attorneys’ fees, costs and interest as well as injunctions against the aggregate amountallegedly unlawful conduct. On October 8, 2019, the Company and other defendants filed a motion to dismiss the matter, which was denied by the court on November 6, 2020. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of $20 million toward various charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations were mutually agreedliability or wrongdoing by the Company, will be subject to court approval.

Litigation Related to Stock Offerings
On August 13, 2021, Camelot Event Driven Fund filed a putative securities class action lawsuit in New York Supreme Court, County of New York, and Mr. Moonves.on November 5, 2021, an amended complaint was filed that, among other changes, added an additional named plaintiff (the “Complaint”). The Complaint is purportedly on behalf of investors who purchased shares of the Company’s Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock pursuant to public securities offerings completed in March 2021, and was filed against the Company, has recordedcertain senior executives, members of our Board of Directors, and the contributionunderwriters involved in the offerings. The Complaint asserts violations of $20 millionfederal securities law and alleges that the offering documents contained material misstatements and omissions, including through an alleged failure to adequately disclose certain total return swap transactions involving Archegos Capital Management referenced to our securities and related alleged risks to the Company’s stock price. On December 22, 2021, the plaintiffs filed a stipulation seeking the voluntary dismissal without prejudice of the outside director defendants from the lawsuit, which the Court subsequently ordered. On the same date, the defendants filed motions to dismiss the lawsuit, which are pending. The Complaint seeks unspecified compensatory damages, as well as other relief. We believe that the claims are without merit and intend to defend against them vigorously.

Litigation Related to the Proposed Sale of Simon & Schuster
On November 2, 2021, the U.S. Department of Justice (the “DOJ”) filed suit in “Restructuringthe United States District Court for the District of Columbia to block our sale of the Simon & Schuster business to Penguin Random House (the
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Management’s Discussion and other corporate matters”Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

“Transaction”) pursuant to a Share Purchase Agreement (“Purchase Agreement”), dated November 24, 2020, between the Company, certain of its subsidiaries, Penguin Random House and Bertelsmann SE & Co. KGaA. The DOJ asserts that the sale of Simon & Schuster would reduce competition for the acquisition of titles. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the Consolidated Statementspart of OperationsPenguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for the year ended December 31, 2018. In October 2018,a termination fee payable to the Company contributed $120 million to a grantor trust. On December 17, 2018, the Board announced that, following its consideration of the findings of the investigation referred to above, it had determined that there were grounds to terminate Mr. Moonves’s employment for cause under his employment agreement with the Company. Any dispute related to the Board’s determination is subject to binding arbitration as set forthin certain circumstances in the Separation Agreement. On January 16, 2019, Mr. Moonves notifiedevent the Company of his election to demand binding arbitration with respect to this matterTransaction does not close for regulatory reasons. We and the related Board investigation. The assets ofother defendants believe the grantor trust will remain in the trust until a final determination in the arbitration. The Company is currently unableDOJ’s claims are without merit, and we intend to determine the outcome of the arbitration and the amount, if any, that may be awarded thereunder and, accordingly, no accrual has been made for this matter in the Company’s consolidated financial statements.defend against them vigorously.


Claims Related to Former Businesses: Asbestos. The Company isAsbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company isWe are typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’sour products is the basis of a claim. Claims against the Companyus in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines.turbines and electrical equipment.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company doesWe do not report as pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2018, the Company2021, we had pending approximately 31,57027,770 asbestos claims, as compared with approximately 31,66030,710 as of December 31, 20172020 and 33,61030,950 as of December 31, 2016.2019. During 2018, the Company2021, we received approximately 3,2903,050 new claims and closed or moved to an inactive docket approximately 3,3805,990 claims. The Company reportsWe report claims as closed when it becomeswe become aware that



Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


a dismissal order has been entered by a court or when the Company haswe have reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’sOur total costs for the years 20182021 and 20172020 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $45$63 million and $57$35 million, respectively. The Company’sOur costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against the Companyus are non-cancer claims. The Company believesIt is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that its reservesa liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are adequatesufficient to cover itsour asbestos liabilities. This beliefOur liability estimate is based upon many factors, and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims, filed against the Company has remained generally flat in recent years, it is difficult to predictas well as consultation with a third party firm on trends that may impact our future asbestos liabilities, as eventsliability.

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Management’s Discussion and circumstances may occur, including, among others, the numberAnalysis of
Results of Operations and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)
Other.
 The Company from
Other
From time to time receiveswe receive claims from federal and state environmental regulatory agencies and other entities asserting that it iswe are or may be liable for environmental cleanup costs and related damages principally relating to our historical and predecessor operations of the Company.operations. In addition, the Company from time to time receiveswe receive personal injury claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations of the Company and its predecessors.

Market Risk
The Company isWe are exposed to fluctuations in foreign currency exchange rates and interest rates and usesuse derivative financial instruments to manage this exposure. In accordance with itsour policy, the Company doeswe do not use derivative instruments unless there is an underlying exposure and, therefore, the Company doeswe do not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign Exchange Risk
The Company conductsWe conduct business in various countries outside the U.S., resulting in exposure to movements in foreign exchange rates when translating from the foreign local currency to the U.S. dollar. In order to hedge anticipated cash flows in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, foreign currency forward contracts, for periods generally up to 24 months, are used. Additionally, the Company designateswe designate forward contracts used to hedge committed and forecasted foreign currency transactions, including future production costs and programming obligations, as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income (loss) and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enterswe enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows. The change in fair value of the non-designated contracts is included in “Other items, net” inon the Consolidated Statements of Operations. The Company managesWe manage the use of foreign exchange derivatives centrally.

At December 31, 20182021 and 2017,2020, the notional amount of all foreign currency contracts was $325$1.94 billion and $1.27 billion, respectively. For 2021, $1.38 billion related to future production costs and $564 million related to our foreign currency balances and $410 million, respectively, which represents hedges ofother expected foreign currency cash flows. For 2020, $740 million related to future production costs and $529 millionrelated to our foreign currency balances and other expected foreign currency cash flows.

Interest Risk
Interest rates on future long-term debt issuances are exposed to risk related to movements in long-term interest rates. Interest rate hedges may be used to modify this exposure at our discretion. There were no interest rate hedges outstanding at December 31, 2021 or 2020 but in the future we may use derivatives to manage our exposure to interest rates.

At December 31, 2021, the carrying value of our outstanding notes and debentures was $17.66 billion and the estimated fair value was $21.5 billion. A 1% increase or decrease in interest rates would decrease or increase the fair value of our notes and debentures by approximately $1.62 billion and $2.64 billion, respectively.

Credit Risk
We continually monitor our positions with, and credit quality of, the financial institutions that are counterparties to our financial instruments. We are exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, we do not anticipate nonperformance by the counterparties.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


Interest Risk
The Company did not have any interest rate swaps outstanding at December 31, 2018 or December 31, 2017 but in the future may use derivatives to manage its exposure to interest rates.

Credit Risk
The Company continually monitors its positions with, and credit quality of, the financial institutions that are counterparties to its financial instruments. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company does not anticipate nonperformance by the counterparties.

The Company’sOur receivables do not represent significant concentrations of credit risk at December 31, 20182021 or 2017,2020, due to the wide variety of customers, markets and geographic areas to which the Company’sour products and services are sold.

Related Parties
For a discussion of related parties, seeSee Note 68 to the consolidated financial statements.

Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted
See Note 1 to the consolidated financial statements.
Item 7A.Quantitative and Qualitative Disclosures About Market Risk.

Information required by this item is presented in “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Market Risk.”
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Item 8.Financial Statements and Supplementary Data.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
The following Consolidated Financial Statements and schedule of the registrant and its subsidiaries are submitted herewith as part of this report:
Page
Page
Item 15(a)(1) Financial Statements:
1.
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2.
II-3950
3.
II-4252
4.
II-4353
5.
II-4454
6.
II-4555
7.
II-4656
8.
II-4757
Item 15(a)(2) Financial Statement Schedule:
F-1
All other Schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule.
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MANAGEMENT’ S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the effectiveness of internal control over financial reporting, as such term is defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act. OurViacomCBS Inc. and its subsidiaries’ (the “Company”) internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 20182021 based on the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2018.2021.

The effectiveness of our internal control over financial reporting as of December 31, 20182021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
VIACOMCBS INC.
CBS CORPORATIONBy:/s/ Robert M. Bakish
By:/s/ Joseph R. Ianniello
Joseph R. IannielloRobert M. Bakish
President and Acting Chief
Chief Executive Officer
By:/s/ Christina SpadeNaveen Chopra
Christina SpadeNaveen Chopra
Executive Vice President,
Chief Financial Officer
By:/s/ Lawrence LidingKatherine Gill-Charest
Lawrence LidingKatherine Gill-Charest
Executive Vice President, Controller and
Chief Accounting Officer
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of CBS Corporation:ViacomCBS Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of CBS CorporationViacomCBS Inc. and its subsidiaries (the “Company”) as of December 31, 20182021 and 2017,2020 and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity, and of cash flows for each of the three years in the period ended December 31, 2018,2021, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’sCompany's internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20182021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principles
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers and the manner in which it accounts for net periodic pension and postretirement benefit cost in 2018.

Basis for Opinions
The Company’sCompany's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’sCompany's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.


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Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Amortization of Internally-Produced Television Programming Inventory that is Predominantly Monetized on an Individual Basis
As described in Notes 1 and 5 to the consolidated financial statements, the Company’s internally-produced television programming inventory that is predominantly monetized on an individual basis was $2.4 billion as of December 31, 2021. For internally-produced television programs that are predominantly monetized on an individual basis, management uses an individual-film-forecast computation method to amortize capitalized production costs over the applicable title’s life cycle based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. The estimate of Ultimate Revenues includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, 5 years from the delivery of the most recent episode, if later. These estimates are based on the past performance of similar television programs in a market, the performance in the initial markets, and future firm commitments to license programs.
The principal considerations for our determination that performing procedures relating to amortization of internally-produced television programming inventory that is predominantly monetized on an individual basis is a critical audit matter are the significant judgment by management when estimating Ultimate Revenues; this led to a high degree of auditor judgment, effort and subjectivity in performing procedures and evaluating management’s estimate of Ultimate Revenues and the significant assumptions that are based on the past performance of similar television programs in a market, the performance in the initial markets, and future firm commitments to license programs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to amortization of internally-produced television programming inventory that is predominantly
II-40

monetized on an individual basis, including the controls over the estimation of Ultimate Revenues. These procedures also included, among others, (i) testing management’s process for estimating Ultimate Revenues, and (ii) evaluating whether the significant assumptions were reasonable considering information related to the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license programs. Procedures were also performed to test the completeness and accuracy of management's data used in these estimates.


/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
New York, New York
February 15, 20192022

We have served as the Company’s or its predecessor’s auditor since 1970.
II-41


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Year Ended December 31,Year Ended December 31,
2018 2017 2016202120202019
Revenues$14,514
 $13,692
 $13,166
Revenues$28,586 $25,285 $26,998 
Costs and expenses:     Costs and expenses:
Operating9,111
 8,438
 7,956
Operating17,744 14,992 16,713 
Selling, general and administrative2,217
 2,126
 2,054
Selling, general and administrative6,398 5,320 5,481 
Depreciation and amortization223
 223
 225
Depreciation and amortization390 430 438 
Restructuring and other corporate matters (Note 4)195
 63
 38
Other operating items, net—
 (19) (9)
Restructuring and other corporate mattersRestructuring and other corporate matters100 618 769 
Total costs and expenses11,746
 10,831
 10,264
Total costs and expenses24,632 21,360 23,401 
Net gain on salesNet gain on sales2,343 214 549 
Operating income2,768
 2,861
 2,902
Operating income6,297 4,139 4,146 
Interest expense(467) (457) (411)Interest expense(986)(1,031)(962)
Interest income57
 64
 32
Interest income53 60 66 
Loss on early extinguishment of debt—
 (49) —
Pension settlement charges (Note 14)—
 (352) (211)
Net gains from investmentsNet gains from investments47 206 85 
Loss on extinguishment of debtLoss on extinguishment of debt(128)(126)— 
Other items, net(69) (88) (82)Other items, net(77)(101)(112)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
2,289
 1,979
 2,230
Earnings from continuing operations before income taxes
and equity in loss of investee companies
5,206 3,147 3,223 
Provision for income taxes(273) (633) (628)
(Provision) benefit for income taxes(Provision) benefit for income taxes(646)(535)29 
Equity in loss of investee companies, net of tax(56) (37) (50)Equity in loss of investee companies, net of tax(91)(28)(53)
Net earnings from continuing operations1,960
 1,309
 1,552
Net earnings from continuing operations4,469 2,584 3,199 
Net loss from discontinued operations, net of tax (Note 17)—
 (952) (291)
Net earnings$1,960
 $357
 $1,261
Basic net earnings (loss) per common share:     
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax162 117 140 
Net earnings (ViacomCBS and noncontrolling interests)Net earnings (ViacomCBS and noncontrolling interests)4,631 2,701 3,339 
Net earnings attributable to noncontrolling interestsNet earnings attributable to noncontrolling interests(88)(279)(31)
Net earnings attributable to ViacomCBSNet earnings attributable to ViacomCBS$4,543 $2,422 $3,308 
Amounts attributable to ViacomCBS:Amounts attributable to ViacomCBS:
Net earnings from continuing operations$5.20
 $3.26
 $3.50
Net earnings from continuing operations$4,381 $2,305 $3,168 
Net loss from discontinued operations$—
 $(2.37) $(.66)
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax162 117 140 
Net earnings attributable to ViacomCBSNet earnings attributable to ViacomCBS$4,543 $2,422 $3,308 
Basic net earnings per common share attributable to ViacomCBS:Basic net earnings per common share attributable to ViacomCBS:
Net earnings from continuing operationsNet earnings from continuing operations$6.77 $3.74 $5.15 
Net earnings from discontinued operationsNet earnings from discontinued operations$.25 $.19 $.23 
Net earnings$5.20
 $.89
 $2.84
Net earnings$7.02 $3.93 $5.38 
     
Diluted net earnings (loss) per common share:     
Diluted net earnings per common share attributable to ViacomCBS:Diluted net earnings per common share attributable to ViacomCBS:
Net earnings from continuing operations$5.14
 $3.22
 $3.46
Net earnings from continuing operations$6.69 $3.73 $5.13 
Net loss from discontinued operations$—
 $(2.34) $(.65)
Net earnings from discontinued operationsNet earnings from discontinued operations$.25 $.19 $.23 
Net earnings$5.14
 $.88
 $2.81
Net earnings$6.94 $3.92 $5.36 
     
Weighted average number of common shares outstanding:     Weighted average number of common shares outstanding:
Basic377
 401
 444
Basic641 616 615 
Diluted381
 407
 448
Diluted655 618 617 
See notes to consolidated financial statements.

II-42


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
 Year Ended December 31,
 2018 2017 2016
Net earnings$1,960
 $357
 $1,261
Other comprehensive income (loss), net of tax:     
Cumulative translation adjustments(26) 8
 (1)
Net actuarial gain (loss) and prior service costs (Note 14)(87) 97
 4
Total other comprehensive income (loss), net of tax(113) 105
 3
Total comprehensive income$1,847
 $462
 $1,264
Year Ended December 31,
202120202019
Net earnings (ViacomCBS and noncontrolling interests)$4,631 $2,701 $3,339 
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments(143)134 9 
Net actuarial gain (loss) and prior service costs75 (2)(145)
Other comprehensive income (loss) from continuing operations, net of tax
(ViacomCBS and noncontrolling interests)
(68)132 (136)
Other comprehensive income (loss) from discontinued operations(3)5 6 
Comprehensive income4,560 2,838 3,209 
Less: Comprehensive income attributable to noncontrolling interests87 278 33 
Comprehensive income attributable to ViacomCBS$4,473 $2,560 $3,176 
See notes to consolidated financial statements.
II-43

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
  At December 31, 
  2018 2017 
ASSETS     
Current Assets:     
Cash and cash equivalents $322
 $285
 
Receivables, less allowances of $41 (2018) and $49 (2017) 4,041
 3,697
 
Programming and other inventory (Note 5) 1,988
 1,828
 
Prepaid income taxes 27
 78
 
Prepaid expenses 149
 194
 
Other current assets 225
 191
 
Total current assets 6,752
 6,273
 
Property and equipment 2,926
 2,947
 
Less accumulated depreciation and amortization 1,717
 1,701
 
Net property and equipment (Note 2) 1,209
 1,246
 
Programming and other inventory (Note 5) 3,883
 2,881
 
Goodwill (Note 3) 4,920
 4,891
 
Intangible assets (Note 3) 2,638
 2,666
 
Other assets 2,424
 2,852
 
Assets held for sale (Note 2) 33
 34
 
Total Assets $21,859
 $20,843
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
     
Current Liabilities:     
Accounts payable $201
 $231
 
Accrued expenses 522
 454
 
Accrued compensation 346
 343
 
Participants’ share and royalties payable 1,177
 986
 
Accrued programming and production costs 704
 497
 
Deferred revenues 222
 219
 
Commercial paper (Note 8) 674
 679
 
Current portion of long-term debt (Note 8) 13
 19
 
Other current liabilities 714
 544
 
Total current liabilities 4,573
 3,972
 
Long-term debt (Note 8) 9,465
 9,464
 
Participants’ share and royalties payable 1,159
 1,424
 
Pension and postretirement benefit obligations (Note 14) 1,388
 1,328
 
Deferred income tax liabilities, net (Note 13) 399
 480
 
Other liabilities 2,071
 2,197
 
      
Commitments and contingencies (Note 18) 


 


 
      
Stockholders’ Equity:     
Class A Common Stock, par value $.001 per share; 375 shares authorized;
35 (2018) and 38 (2017) shares issued
 —
 —
 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
838 (2018) and 834 (2017) shares issued
 1
 1
 
Additional paid-in capital 43,637
 43,797
 
Accumulated deficit (17,201) (18,900) 
Accumulated other comprehensive loss (Note 11) (775) (662) 
  25,662
 24,236
 
Less treasury stock, at cost; 500 (2018) and 489 (2017) Class B Shares 22,858
 22,258
 
Total Stockholders’ Equity 2,804
 1,978
 
Total Liabilities and Stockholders’ Equity
 $21,859
 $20,843
 
At December 31,
20212020
ASSETS
Current Assets:
Cash and cash equivalents$6,267 $2,984 
Receivables, net6,984 7,017 
Programming and other inventory1,504 1,757 
Prepaid expenses and other current assets1,176 1,391 
Current assets of discontinued operations745 630 
Total current assets16,676 13,779 
Property and equipment, net1,736 1,994 
Programming and other inventory13,358 10,363 
Goodwill16,584 16,612 
Intangible assets, net2,772 2,826 
Operating lease assets1,630 1,602 
Deferred income tax assets, net1,206 993 
Other assets3,824 3,657 
Assets held for sale19 28 
Assets of discontinued operations815 809 
Total Assets$58,620 $52,663 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$800 $571 
Accrued expenses2,323 1,714 
Participants’ share and royalties payable2,159 2,005 
Accrued programming and production costs1,342 1,141 
Deferred revenues1,091 978 
Debt11 16 
Other current liabilities1,182 1,391 
Current liabilities of discontinued operations571 480 
Total current liabilities9,479 8,296 
Long-term debt17,698 19,717 
Participants’ share and royalties payable1,244 1,317 
Pension and postretirement benefit obligations1,946 2,098 
Deferred income tax liabilities, net1,063 778 
Operating lease liabilities1,598 1,583 
Program rights obligations404 243 
Other liabilities1,898 2,158 
Liabilities of discontinued operations213 220 
Redeemable noncontrolling interest107 197 
Commitments and contingencies (Note 20)00
ViacomCBS stockholders’ equity:
5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share;
    25 shares authorized and 10 shares issued (2021)
— — 
Class A Common Stock, par value $.001 per share; 55 shares authorized;
41 (2021) and 52 (2020) shares issued
— — 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
1,110 (2021) and 1,068 (2020) shares issued
1 1 
Additional paid-in capital32,918 29,785 
Treasury stock, at cost; 503 (2021 and 2020) Class B Shares(22,958)(22,958)
Retained earnings14,343 10,375 
Accumulated other comprehensive loss(1,902)(1,832)
Total ViacomCBS stockholders’ equity22,402 15,371 
Noncontrolling interests568 685 
Total Equity22,970 16,056 
Total Liabilities and Equity$58,620 $52,663 
See notes to consolidated financial statements.
II-44

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31,Year Ended December 31,
 2018 2017 2016202120202019
Operating Activities:      Operating Activities:
Net earnings $1,960
 $357
 $1,261
Less: Net loss from discontinued operations, net of tax —
 (952) (291)
Net earnings (ViacomCBS and noncontrolling interests)Net earnings (ViacomCBS and noncontrolling interests)$4,631 $2,701 $3,339 
Less: Net earnings from discontinued operations, net of taxLess: Net earnings from discontinued operations, net of tax162 117 140 
Net earnings from continuing operations 1,960
 1,309
 1,552
Net earnings from continuing operations4,469 2,584 3,199 
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:
      
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:
Depreciation and amortization 223
 223
 225
Depreciation and amortization390 430 438 
Television programming and feature film cost amortizationTelevision programming and feature film cost amortization13,352 11,045 12,554 
Deferred tax provision (benefit) 44
 (188) 144
Deferred tax provision (benefit)90 122 (765)
Stock-based compensation 146
 179
 165
Stock-based compensation192 274 286 
Redemption of debt —
 42
 —
Net loss (gain) on disposition and write-down of assets 1
 (9) (18)
Net gain on salesNet gain on sales(2,343)(214)(549)
Net gains from investmentsNet gains from investments(47)(206)(85)
Loss on extinguishment of debtLoss on extinguishment of debt128 126 — 
Equity in loss of investee companies, net of tax and distributions 58
 38
 53
Equity in loss of investee companies, net of tax and distributions96 34 58 
Change in assets and liabilities, net of investing and financing activities      
(Increase) decrease in receivables (254) (268) 36
Change in assets and liabilitiesChange in assets and liabilities
Decrease (increase) in receivablesDecrease (increase) in receivables179 (68)(247)
Increase in inventory and related program and participation liabilities, net (830) (728) (765)Increase in inventory and related program and participation liabilities, net(16,584)(12,170)(14,215)
Decrease (increase) in other assets 15
 (52) (85)
Decrease in accounts payable and accrued expenses (94) (30) (16)
Increase in accounts payable and other liabilitiesIncrease in accounts payable and other liabilities760 188 302 
(Decrease) increase in pension and postretirement benefit obligations (47) (238) 205
(Decrease) increase in pension and postretirement benefit obligations(61)(20)16 
Increase in income taxes 213
 456
 94
Increase in income taxes265 2 176 
(Decrease) increase in deferred revenue (20) 54
 (137)
Other, net 10
 5
 1
Other, net(51)88 3 
Net cash flow provided by operating activities from continuing operations 1,425
 793
 1,454
Net cash flow provided by operating activities from continuing operations835 2,215 1,171 
Net cash flow provided by operating activities from discontinued operations 1
 94
 231
Net cash flow provided by operating activities from discontinued operations118 79 59 
Net cash flow provided by operating activities 1,426
 887
 1,685
Net cash flow provided by operating activities953 2,294 1,230 
Investing Activities:      Investing Activities:
Investments in and advances to investee companies (124) (110) (81)
InvestmentsInvestments(193)(59)(171)
Capital expenditures (165) (185) (196)Capital expenditures(354)(324)(345)
Acquisitions (including acquired television library), net of cash acquired (31) (270) (92)
Proceeds from sale of investments —
 10
 —
Acquisitions, net of cash acquiredAcquisitions, net of cash acquired(54)(147)(399)
Proceeds from dispositions —
 11
 20
Proceeds from dispositions3,028 593 756 
Other investing activities (5) 21
 15
Other investing activities(25)— 14 
Net cash flow used for investing activities from continuing operations (325) (523) (334)
Net cash flow provided by (used for) investing activities from continuing operationsNet cash flow provided by (used for) investing activities from continuing operations2,402 63 (145)
Net cash flow used for investing activities from discontinued operations (23) (24) (6)Net cash flow used for investing activities from discontinued operations(7)(7)(10)
Net cash flow used for investing activities (348) (547) (340)
Net cash flow provided by (used for) investing activitiesNet cash flow provided by (used for) investing activities2,395 56 (155)
Financing Activities:      Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net (5) 229
 450
(Repayments of) proceeds from short-term debt borrowings, net— (706)25 
Proceeds from issuance of senior notes —
 1,773
 684
Proceeds from issuance of senior notes— 4,375 492 
Repayment of senior notes and debentures —
 (1,244) (199)
Proceeds from debt borrowings of CBS Radio —
 40
 1,452
Repayment of debt borrowings of CBS Radio —
 (43) (110)
Payment of capital lease obligations (16) (18) (18)
Dividends (276) (296) (288)
Repayment of long-term debtRepayment of long-term debt(2,230)(2,901)(910)
Dividends paid on preferred stockDividends paid on preferred stock(30)— — 
Dividends paid on common stockDividends paid on common stock(617)(600)(595)
Proceeds from issuance of preferred stockProceeds from issuance of preferred stock983 — — 
Proceeds from issuance of common stockProceeds from issuance of common stock1,672 — — 
Purchase of Company common stock (586) (1,111) (2,997)Purchase of Company common stock— (58)(57)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation (59) (89) (58)Payment of payroll taxes in lieu of issuing shares for stock-based compensation(110)(93)(56)
Proceeds from exercise of stock options 27
 91
 21
Proceeds from exercise of stock options408 5 15 
Excess tax benefit from stock-based compensation —
 —
 17
Payments to noncontrolling interestsPayments to noncontrolling interests(235)(59)(91)
Other financing activities (6) (9) —
Other financing activities7 (53)(39)
Net cash flow used for financing activities (921) (677) (1,046)Net cash flow used for financing activities(152)(90)(1,216)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(48)25 (1)
Net increase (decrease) in cash, cash equivalents and restricted cash 157
 (337) 299
Net increase (decrease) in cash, cash equivalents and restricted cash3,148 2,285 (142)
Cash and cash equivalents at beginning of year
(includes $24 (2017) and $6 (2016) of discontinued operations cash)
 285
 622
 323
Cash, cash equivalents and restricted cash at end of year
(includes $120 (2018) of restricted cash and $24 (2016) of discontinued
operations cash)
 $442
 $285
 $622
Cash, cash equivalents and restricted cash at beginning of year
(includes $135 (2021) $202 (2020) and $120 (2019) of restricted cash)
Cash, cash equivalents and restricted cash at beginning of year
(includes $135 (2021) $202 (2020) and $120 (2019) of restricted cash)
3,119 834 976 
Cash, cash equivalents and restricted cash at end of year
(includes $135 (2020) and $202 (2019) of restricted cash)
Cash, cash equivalents and restricted cash at end of year
(includes $135 (2020) and $202 (2019) of restricted cash)
$6,267 $3,119 $834 
See notes to consolidated financial statements.
II-45

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
Preferred StockClass A and B Common StockTreasury
Stock		Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal ViacomCBS Stockholders’ EquityNon-Controlling InterestsTotal Equity
(Shares)(Shares)
December 31, 2018— $— 613 $1 $(43,420)$49,907 $5,569 $(1,608)$10,449 $54 $10,503 
Stock-based
compensation
activity and other		— — 3 — 29 226 (4)— 251 — 251 
Cancellation of
treasury stock in
the Merger		— — — — 20,533 (20,533)— — — — — 
Class B Common
Stock purchased		— — (1)— (50)— — — (50)— (50)
Common stock
dividends		— — — — — — (600)— (600)— (600)
Noncontrolling
interests		— — — — — (10)(9)— (19)(5)(24)
Net earnings— — — — — — 3,308 — 3,308 31 3,339 
Reclassification of
   income tax effect
   of the Tax
   Reform Act
— — — — — — 230 (230)— — — 
Other
comprehensive
income (loss)		— — — — — — — (132)(132)2 (130)
December 31, 2019— — 615 1 (22,908)29,590 8,494 (1,970)13,207 82 13,289 
Stock-based
compensation
activity		— — 3 — — 195 — — 195 — 195 
Class B Common
Stock purchased		— — (1)— (50)— — — (50)— (50)
Common stock
dividends		— — — — — — (601)— (601)— (601)
Noncontrolling
interests		— — — — — — 60 — 60 325 (a)385 
Net earnings— — — — — — 2,422 — 2,422 279 2,701 
Other
comprehensive
income (loss)		— — — — — — — 138 138 (1)137 
December 31, 2020— — 617 1 (22,958)29,785 10,375 (1,832)15,371 685 16,056 
Stock-based
compensation
activity		— — 11 — — 493 — — 493 — 493 
Stock issuances10 — 20 — — 2,655 — — 2,655 2,655 
Preferred stock
dividends		— — — — — — (44)— (44)— (44)
Common stock
dividends		— — — — — — (625)— (625)— (625)
Noncontrolling
interests		— — — — — (15)94 — 79 (204)(125)
Net earnings— — — — — — 4,543 — 4,543 88 4,631 
Other
comprehensive
loss		— — — — — — — (70)(70)(1)(71)
December 31, 202110 $— 648 $1 $(22,958)$32,918 $14,343 $(1,902)$22,402 $568 $22,970 
 Year Ended December 31,
 2018 2017 2016
 Shares Amount Shares Amount Shares Amount
Class A Common Stock:           
Balance, beginning of year38
 $—
 38
 $—
 38
 $—
Conversion of A shares into B shares(3) —
 —
 —
 —
 —
Balance, end of year35
 —
 38
 —
 38
 —
Class B Common Stock:           
Balance, beginning of year834
 1
 829
 1
 826
 1
Conversion of A shares into B shares3
 —
 —
 —
 —
 —
Restricted stock unit vests1
 —
 3
 —
 3
 —
Exercise of stock options1
 —
 3
 —
 1
 —
Retirement of treasury stock(1) —
 (1) —
 (1) —
Balance, end of year838
 1
 834
 1
 829
 1
Additional Paid-In Capital:           
Balance, beginning of year
 43,797
 
 43,913
   44,055
Stock-based compensation  146
   181
   177
Tax benefit related to employee
stock-based transactions
  —
   —
   12
Exercise of stock options  27
   92
   21
Retirement of treasury stock  (59)   (89)   (58)
Dividends  (274)   (289)   (294)
Decrease in noncontrolling interest  —
   (11)   —
Balance, end of year
 43,637
 
 43,797
 
 43,913
Accumulated Deficit:           
Balance, beginning of year
 (18,900) 
 (19,257) 
 (20,518)
Net earnings  1,960
   357
   1,261
Adoption of new accounting standard (Note 16)  (261)   —
   —
Balance, end of year
 (17,201) 
 (18,900) 
 (19,257)
Accumulated Other Comprehensive Loss:           
Balance, beginning of year  (662)   (767)   (770)
Other comprehensive income (loss)  (113)   105
   3
Balance, end of year  (775)   (662)   (767)
Treasury Stock, at cost:           
Balance beginning of year489
 (22,258) 455
 (20,201) 401
 (17,205)
Class B Common Stock purchased11
 (600) 16
 (1,050) 54
 (2,997)
CBS Radio Split-Off—
 —
 18
 (1,007) —
 —
Shares paid for tax withholding for
stock-based compensation
1
 (59) 1
 (89) 1
 (58)
Issuance of stock for deferred compensation—
 —
 —
 —
 —
 1
Retirement of treasury stock(1) 59
 (1) 89
 (1) 58
Balance, end of year500
 (22,858) 489
 (22,258) 455
 (20,201)
Total Stockholders’ Equity
 $2,804
 
 $1,978
 
 $3,689
(a) Primarily reflects the acquisition of Miramax (see Note 2).
See notes to consolidated financial statements.

II-46


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in millions, except per share amounts)



1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business—In 2021, ViacomCBS Inc. operated through the following segments: TV Entertainment (CBS Television Network; CBS Corporation (together withStudios; CBS Media Ventures; CBS Sports Network; CBS Stations, our owned broadcast television stations; and a number of streaming services, including our direct-to-consumer streaming service, Paramount+ (in the United States), and several CBS-branded streaming services, including CBS News Streaming and CBS Sports HQ); Cable Networks (a portfolio of premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, and Smithsonian Channel; a number of direct-to-consumer streaming services, including Pluto TV, Showtime Networks’ premium subscription streaming service (“Showtime OTT”), Noggin and BET+; and ViacomCBS Networks International, which operates international extensions of Paramount+ and our Cable Networks brands and services, our international free-to-air networks and ViacomCBS International Studios); and Filmed Entertainment (Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television Studios and Miramax). References to “ViacomCBS,” the “Company,” “we,” “us” and “our” refer to ViacomCBS Inc. and its consolidated subsidiaries, unless the context otherwise requires,requires. Effective February 16, 2022, we are changing our name to Paramount Global.

Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in a change to our operating segments. Accordingly, beginning in the “Company” or “CBS Corp.”) is comprisedfirst quarter of 2022, we will report results based on the following segments: TV Media(consists of our historical TV Entertainment (CBSand Cable Networks segments, except that it no longer includes their corresponding direct-to-consumer streaming services, which are now part of our Direct-to-Consumer segment, and Nickelodeon Studio, which is now a part of our Filmed Entertainment segment, and now includes Paramount Television comprisedStudios, which was formerly part of our historical Filmed Entertainment segment); Direct-to-Consumer (consists of our portfolio of free, premium and pay streaming services, including Paramount+, Pluto TV, Showtime OTT, BET+ and Noggin); andFilmed Entertainment (consists of our historical Filmed Entertainment segment, except that it no longer includes Paramount Television Studios, which is now part of our TV Media segment, and now includes Nickelodeon Studio, which was formerly a part of our historical Cable Networks segment).

Merger with Viacom Inc.—On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the surviving company (the “Merger”). At the effective time of the CBS Television Network, CBS Television Studios, and CBS Global Distribution Group; Network 10; CBS Interactive; CBS Sports Network and CBS Films;Merger (the “Effective Time”), Cable Networks (Showtime Networksthe combined company changed its name to ViacomCBS Inc. (“ViacomCBS”). The Merger has been accounted for as a transaction between entities under common control as National Amusements, Inc. (“NAI”) was the controlling stockholder of each of CBS and Smithsonian Networks), Publishing (Simon & Schuster) and Local Media (CBS Television Stations andViacom (and remains the controlling stockholder of ViacomCBS). Upon the closing of the Merger, the net assets of Viacom were combined with those of CBS Local Digital Media).  During the fourth quarter of 2018, the Company began presenting CBS Sports Network in the Entertainment segment, to reflect changes in management structureat their historical carrying amounts and the integration of CBS Sports Network programming with the CBS Television Network. CBS Sports Network was previously included in the Cable Networks segment. Resultscompanies have been presented on a combined basis for all periods presented have been reclassified to conform to this presentation.in the consolidated financial statements.

Discontinued Operations—On November 16, 2017,25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, which was previously reported as the Company completed the dispositionPublishing segment, to Penguin Random House LLC (“Penguin Random House”), a wholly owned subsidiary of CBS Radio Inc. (“CBS Radio”) throughBertelsmann SE & Co. KGaA, for $2.175 billion in cash. As a split-off. CBS Radio has beenresult, Simon & Schuster is presented as a discontinued operation in the Company’sour consolidated financial statements (Seefor all periods presented (see Note 17)3). In addition, certain businesses that were previously disposed of by the Company prior to January 1, 2002, were accounted for as discontinued operations in accordance with accounting rules in effect prior to 2002.

Principles of Consolidation—The consolidated financial statements include the accounts of CBS Corp. and all ofViacomCBS, its subsidiaries in which a controlling interest is maintained.maintained and variable interest entities (“VIEs”) where we are considered the primary beneficiary, after the elimination of intercompany transactions. Controlling interest is
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

determined by majority ownership interest and the absence of substantive third party participating rights.  Investments over which the Company haswe have a significant influence, or ownership of more than 20% but less than or equal to 50%, without a controlling interest, are accounted for under the equity method. InvestmentsOur proportionate share of 20%net earnings or less, over whichloss of the Company has no significant influence, that do not have a readily determinable fair value, are measured at cost less impairment, if any, and adjusted for observable price changes. Ifentity is recorded in “Equity in loss of investee companies, net of tax” on the fair value is readily determinable, the investment is measured at fair value. Intercompany transactions have been eliminated. Amounts attributable to noncontrolling interests are immaterial for all periods presented.Consolidated Statements of Operations. 


Reclassifications-Reclassifications—Certain amounts reported for prior years have been reclassified to conform to the current year’s presentation.

Use of Estimates—The preparation of the Company’sour financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities atas of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period.  The Company bases itsperiods presented. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from these estimates under different assumptions or conditions.

Business Combinations—We generally account for business combinations using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, 100% of the assets, liabilities and certain contingent liabilities acquired, as well as amounts attributed to noncontrolling interests, are recorded at fair value. Any transaction costs are expensed as incurred. The Merger was accounted for as a transaction between entities under common control as NAI was the controlling stockholder of each of CBS and Viacom.

Cash and Cash Equivalents—Cash and cash equivalents consist of cash on hand and highly liquid investments with maturities of three months or less at the date of purchase, including money market funds, commercial paper and bank time deposits. IncludedAt December 31, 2020, we had restricted cash of $135 million, which consisted of amounts held in grantor trusts related to agreements with former executives. Restricted cash is included within “Other current assets” and “Other assets” on the Company’s Consolidated Balance Sheet at December 31, 2018 is restricted cash2020.

Programming Inventory—We produce and acquire rights to programming to exhibit on our broadcast and cable networks, direct to consumers through our streaming services, on our broadcast television stations, and in theaters. We also produce programming for third parties. Costs for internally-produced and acquired programming inventory, including prepayments for such costs, are recorded within the non-current portion of $120 million. Restricted cash consists“Programming and other inventory” on the Consolidated Balance Sheet. Prepayments for the rights to air sporting and other live events that are expected to be expensed over the next 12 months are classified within the current portion of amounts held in a grantor trust related“Programming and other inventory” on the Consolidated Balance Sheet.

Costs incurred to produce television programs and feature films (which include direct production costs, production overhead, acquisition costs and development costs) are capitalized when incurred and amortized over the separationprojected life of each television program or feature film. Costs incurred to acquire television series and settlement agreement betweenfeature film programming rights, including advances, are capitalized when the Companylicense period has begun and the former Chairmanprogram is accepted and available for airing and amortized over the shorter of the Board, Presidentlicense period or the period in which an economic benefit is expected to be derived.

For internally-produced television programs and Chief Executive Officerfeature films that are predominantly monetized on an individual basis, we use an individual-film-forecast computation method to amortize capitalized production costs and to accrue estimated liabilities for participations and residuals over the applicable title’s life cycle based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. The estimate of Ultimate Revenues impacts the Company (See Note 18). timing of amortization of capitalized production
II-48



CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Programming Inventory—The Company acquires rights tocosts and expensing of participations and residual costs. For television programming, and produces programming to exhibit on its broadcast and cable networks, broadcast television stations, direct to consumers through its digital streaming services and the internet, and in theaters. The costs incurred in acquiring and producing programs are capitalized and amortized over the license period or projected useful lifeour estimate of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable, and the program is accepted and available for airing.

Television production costs (which include direct production costs, production overhead and acquisition costs) are stated at the lower of unamortized cost or net realizable value. The Company then estimates totalUltimate Revenues includes revenues to be earned and costs to be incurred throughoutwithin 10 years from the life of each television program.  For television programming, estimates for remaining total lifetime revenues are initially limited to the amount of revenue contracted for each episode in the initial market. Accordingly, television programming costs and participation costs incurred in excessdelivery of the amountfirst episode, or, if still in production, five years from the delivery of revenue contracted for eachthe most recent episode, if later. These estimates are based on the past performance of similar television programs in the initiala market, are expensed as incurred on an episode by episode basis. Estimates for all secondary market revenues such as domestic and foreign syndication, basic cable, digital streaming, home entertainment and merchandising are included in the estimated lifetime revenues of such television programming once it can be demonstrated that a program can be successfully licensed in such secondary market. For each television program, management bases these estimates on the performance in the initial markets the existence ofand future firm commitments to selllicense programs.

For feature films, our estimate of Ultimate Revenues includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial release. Prior to the release of feature films, we estimate Ultimate Revenues based on the historical performance of similar content and pre-release market research (including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of similarthe lead actors and actresses. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future performance. Our estimates of revenues from succeeding windows and markets are revised based on historical relationships to theatrical performance and an analysis of current market trends. For acquired television programs. Television programming costs incurred subsequentand film libraries, our estimate of Ultimate Revenues is for a period within 20 years from the date of acquisition. Ultimate Revenue estimates are periodically reviewed and adjustments, if any, will result in changes to the establishment of the secondary market are initially capitalized and amortized,inventory amortization rates and estimated liabilitiesaccruals for participationsresiduals and participations.

Film development costs that have not been set for production are accrued, based onexpensed within three years unless they are abandoned earlier, in which case these projects are written down to their estimated fair value in the proportionperiod the decision to abandon the project is determined.

For programming that current period revenues bear to the estimated remaining total lifetime revenues.

The costs incurred in acquiringis predominantly monetized as part of a film group, which includes our acquired programming rights and certain internally-produced television series and feature film programming areprograms, capitalized when the program is accepted and available for airing.  These costs are amortized over the period in whichbased on an economic benefit is expected to be derived based onestimate of the timing of the Company’sour usage of and benefit from such programming. The costs of programming rights licensed under multi-year sports programming agreements are capitalized if the rights payments are made before the related economic benefit has been received.  These costs are expensedreceived and amortized over the period in which an economic benefit is expected to be derived based on the relative value of the events broadcast by the Companyus during a period.  The relative value for an event is determined based on the revenues generated for that eventperiod in relation to the estimated total revenuesvalue of the events over the remaining term of the sports programming agreement.

Lifetime revenue estimatesFor content that is predominantly monetized on an individual basis, a television program or feature film is tested for internally producedimpairment when events or circumstances indicate that its fair value may be less than its unamortized cost. If the carrying value of a film group or individual television program or feature film exceeds the estimated fair value, an impairment charge will then be recorded in the amount of the difference. Content that is predominantly monetized within a film group is assessed for impairment at the film group level and would similarly be tested for impairment if circumstances indicate that the fair value of the content within the film group is less than its amortized costs. In addition, unamortized costs for internally-produced or acquired programming that have been substantively abandoned are written off.

Television and feature film programming and the estimated economic benefit for acquired programming,production costs, including revenue projections for multi-year sports programming, are periodically reviewed. Adjustments,inventory amortization, development costs, residuals and participations and impairment charges, if any, will resultare included within “Operating expenses” on the Consolidated Statements of Operations.

II-49

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in changes to amortization rates, future net realizable value adjustments and/or estimated accruals for participation expense.millions, except per share amounts)

Property and Equipment—Property and equipment is stated at cost.  Depreciation is computed bycalculated using the straight-line method over estimated useful lives as follows:
Buildings and building improvements10 to 40 years
Leasehold improvementsShorter of lease term or useful life
Equipment and other (including capitalfinance leases)3 to 20 years
Costs associated with repairs and maintenance of property and equipment are expensed as incurred.

Impairment of Long-Lived Assets—The Company assesses long-lived assets and intangible assets, other than goodwill and intangible assets with indefinite lives, for impairment whenever there is an indication that the carrying amount of the asset group may not be recoverable.  Recoverability of these assetsasset groups is determined by comparing the forecasted undiscounted cash flows expected to be generated by these assetsasset groups to their net carrying value. If the carrying value is not recoverable, the amount of impairment loss,charge, if any, will beis measured by the difference between the net carrying value and the estimated fair value of the asset.assets.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Impairment of Investments—Investments over which we have a significant influence, without a controlling interest, are reviewedaccounted for impairment on a quarterly basis by comparing theirunder the equity method. Equity investments for which we have no significant influence are measured at fair value to their respective carrying amounts. The Company determineswhere a readily determinable fair value exists. Equity investments that do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for observable price changes. Gains and losses resulting from changes in the fair value of public companyequity investments by reference to their publicly traded stock price. With respect to private companyare recorded in “Net gains from investments” on the Consolidated Statements of Operations. We monitor our investments for impairment and reduce the Company makes its estimate of fair value by considering recent investee equity transactions, discounted cash flow analyses, recent operating results, estimates based on comparable public company operating cash flow multiples and, in certain situations, balance sheet liquidation values.  The amount of impairment loss, if any, will be measured by the difference between the net carrying amount and the market value or estimated fair value of the investment.investment if we determine that an impairment charge is required based on qualitative and quantitative information. Our investments are included in “Other assets” on the Consolidated Balance Sheets.

Goodwill and Intangible Assets—Goodwill is allocated to various reporting units, which are at or one level below the Company’sour operating segments. Intangible assets with finite lives, which primarily consist of trade names, licenses, and customer agreements are generally amortized using the straight-line method over their estimated useful lives, which range from 4 to 40 years. Goodwill and other intangible assets with indefinite lives, which consist primarily of FCC licenses and international broadcast licenses, are not amortized but are tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. If the carrying value of goodwill or the indefinite-lived intangible asset exceeds its fair value, an impairment losscharge is recognized (See(see Note 3)6).

Guarantees—At the inception of a guarantee, we recognize a liability for the fair value of an obligation assumed by issuing the guarantee. The related liability is subsequently reduced as utilized or extinguished and increased if there is a probable loss associated with the guarantee which exceeds the value of the recorded liability.

Treasury Stock—Treasury stock is accounted for using the cost method. Retirements of treasury stock are reflected as a reduction to additional paid-in capital.
Fair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The framework for measuring fair value provides a hierarchy that prioritizes the inputs to valuation techniques used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting our own assumptions about the assumptions that market participants would use in pricing the asset or
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

liability. Certain assets and liabilities, including foreign currency hedges and deferred compensation liabilities, are measured and recorded at fair value on a recurring basis. Other assets and liabilities, including television and film production costs, goodwill, intangible assets, and equity-method investments are recorded at fair value only if an impairment charge is recognized. Impairment charges, if applicable, are generally determined using discounted cash flows, which is a Level 3 valuation technique.

Derivative Financial Instruments—Derivative financial instruments are recorded on the Consolidated Balance Sheets as assets or liabilities and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair value of both the derivatives and the hedged items are recorded in “Other items, net”on the Consolidated Statements of Operations. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets and subsequently recognized in net earnings when the hedged items are recognized.

Pension and Postretirement Benefits—The service cost component of net benefit cost for our pension and postretirement benefits is recorded on the same line items on the Consolidated Statements of Operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented separately from the service cost component and below the subtotal of operating income in “Other items, net” on the Consolidated Statements of Operations.

Other Liabilities—Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, program rights obligations, long-term income tax liabilities, deferred compensation and other employee benefit accruals.

Revenues
Revenue is recognized when control of a good or service is transferred to a customer. Control is considered to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service.

Advertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or streamed or displayed on digital platforms. Advertising spots are typically sold as part of advertising campaigns consisting of multiple commercial units. If there isa contract includes a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation to be satisfied over time and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. Audience ratings and impressions are determined based on data provided by independent third-party companies. To the extent the amounts billed exceed the amount of revenue recognized, such excess is deferred until the guaranteed audience ratings or impressions are delivered. For contracts that do not include impressions guarantees, the individual advertising spots are the performance obligation and consideration is allocated among the individual advertising spots based on relative standalone selling price. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.

Advertising revenues are primarily generated by the Entertainment and Local Media segments.
Content Licensing and Distribution Revenues—Content licensing and distribution revenues are generated from the licensing of internally-produced television programming, fees from the distribution of third-party programming, and the publishing and distribution of consumer books.

II-51
Program Licensing and Distribution
For licenses of internally-produced television programming, each individual episode delivered represents a separate performance obligation and revenues are recognized when the episode is made available to the licensee for exhibition and the license period has begun. For license agreements containing multiple deliverables, revenues are allocated based on the relative standalone selling price of each episode of a television series, which is based on licenses for comparable series within the marketplace. Agreements to license programming are often long term, with collection terms ranging from one to five years.

The Company also distributes programs on behalf of third parties. In such arrangements, the Company generally obtains control of the program before selling it to the customer. Therefore, revenues from such distribution arrangements, which include both content licensing and advertising revenues, are recognized based on the gross

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


amount of consideration received from the customer, with a participation expense recognized for the fees paid to the third-party producer.

Substantially all of the Company’s program licensing and distribution revenues are generated by the Entertainment segment, with the remainder generated by the Cable Networks segment.

Publishing
Publishing revenues are recognized when merchandise is shipped or electronically delivered to the consumer. Consumer print books are generally sold with a right of return. The Company records a returns reserve and corresponding decrease in revenue at the time of sale based upon historical trends. For publishing revenues, payments are due shortly after shipment or electronic delivery.

Affiliate and Subscription FeesRevenues—A majority of the Company’s affiliate and subscription fees are generated by the Cable Networks segment andAffiliate revenues primarily consist of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television digital streaming offeringsservices (“virtual MVPDs”, or “vMVPDs”) for carriage of the Company’sour cable networks (“cable affiliate fees”) and subscriptiontelevision stations (“retransmission fees”); and fees for the Showtime direct-to-consumer digital streaming subscription offering. The Entertainment segment generates affiliate and subscription fees primarily from television stations affiliated with the CBS Television Network and subscribers to CBS All Access, its owned streaming subscription service. In addition, the Local Media segment generates retransmission fees from MVPDs and virtual MVPDs for carriage of the Company’s television stations.(“reverse compensation”). Costs incurred for advertising, marketing and marketingother services provided to the Companyus by cable, satellite and other distributors that are in exchange for a distinct service are recorded in selling, general and administrativeas expenses. If a distinct service is not received, such costs are recorded as a reduction to revenues.

The performance obligation for the Company’sour affiliate agreements is a license to the Company’sour programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs and vMVPDs, also includes a license to programming for video on demandvideo-on-demand viewing. Affiliate and subscription feesrevenues are recognized over the term of the agreement as the Companywe satisfy our performance obligation by continuously provides itsproviding our customer with the right to use itsour programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers to theour customer’s service. For agreements that provide for a fixed fee, which primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”), revenues are recognized based on the relative fair value of the content provided over the term of the agreement,agreement. These agreements primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”) for which fair value is determined based on the fair value of the network affiliate’s service and the value of the Company’sour programming. For affiliate and subscription fee revenues, payments are generally due monthly.

Noncurrent ReceivablesLicensing and Other Revenues—IncludedLicensing and other revenues are principally comprised of fees from the licensing of the rights to exhibit our internally-produced television and film programming on various platforms in “Other assets”the secondary market after its initial exhibition on our owned or third party platforms; license fees from content produced for third parties; home entertainment revenues, which include revenues from the Company’s Consolidated Balance Sheets are noncurrent receivablesviewing of $1.55 billion at December 31, 2018our content on a transactional basis through transactional video-on-demand (TVOD) and $2.12 billion at December 31, 2017, which decreasedelectronic sell-through services, and the sale and distribution of our content through DVDs and Blu-ray discs to $1.59 billion on January 1, 2018 uponwholesale and retail partners; fees from the adoptionuse of new revenue recognition guidance. Noncurrent receivables primarily relate toour trademarks and brands for consumer products, recreation and live events; fees from the distribution of third-party programming; and revenues recognized under long-term television licensing arrangements. Television license feefrom the rental of production facilities.

For licenses of exhibition rights for internally-produced programming, each individual episode or film delivered represents a separate performance obligation and revenues are recognized atwhen the beginning of the license period in which programs areepisode or film is made available to the licensee for exhibition while the related cash is collected over the term of the license period.

Deferred Revenues—Deferred revenues primarily consist of cash received related to advertising arrangements and the licensing of television programming for which the revenues have not yet been earned. Advertising revenues that have been deferred are recognized when the required audience rating or impressions are delivered and revenues deferred under licensing arrangements are recognized when the content is made available to the customer and the license period has begun. For license agreements that include delivery of content on one or more dates for a fixed fee, consideration is allocated based on the relative standalone selling price of each episode or film. Estimation of standalone selling prices requires judgment, which can impact the timing of recognizing revenues. Agreements to license programming are often long term, with collection terms ranging from one to five years.

When payment is due from a customer more than one year before or after revenue is recognized, we consider the contract to contain a significant financing component and the transaction price is adjusted for the effects of the time value of money. We do not adjust the transaction price for the time value of money if payment is expected within one year of recognizing revenues.

We also license our programming to distributors of transactional video-on-demand and similar services. Under these arrangements, our performance obligation is the delivery of our content to such distributors who then license our content to the end customer. Our revenues are determined each month based on a contractual rate applied to the number of licenses to the distributors’ end customers. Similarly, revenues earned from electronic sell-through services are recognized as each program is downloaded by the end customer.

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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Revenues associated with the licensing of our brands for consumer products, recreation and live events are generally determined based on contractual royalty rates applied to sales reported by the licensees. For consumer products and recreation arrangements that include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee, if the sales-based consideration is expected to exceed the minimum guarantee, or ratably if it is not expected to exceed the minimum guarantee. For live events, we recognize revenue when the event is held.
Total deferred
Revenues from the sales of DVDs and Blu-ray discs to wholesalers and retailers are recognized upon the later of the physical delivery to the customer or the date that any sales restrictions on the retailers are lifted.

We earn revenues from the distribution of content on behalf of third parties. We also have arrangements for the distribution or sale of our content by third parties. Under such arrangements, we determine whether revenues should be recognized based on the gross amount of consideration received from the customer or the net amount of revenue we retain after payment to the third party producer or distributor, based on an assessment of which party controls the good or service being transferred.

Theatrical Revenues—Theatrical revenue is earned from the theatrical distribution of our films during the exhibition period. Under these arrangements, revenues are recognized based on sales to the end customer.

Revenue Allowances—DVDs and Blu-ray discs are generally sold with a right of return. We record a provision for sales returns and allowances at the time of sale based upon an estimate of future returns, rebates and other incentives. In determining this provision, we consider sources of qualitative and quantitative evidence including bothforecast sales data, customers’ rights of return, sales levels for units already shipped, historical return rates for similar products, current economic trends, the competitive environment, promotions and noncurrent, were $274our sales strategies. Reserves for sales returns and allowances of $36 million and $284$64 million at December 31, 20182021 and January 1, 2018,2020, respectively, are recorded in “Other current liabilities” on the Consolidated Balance Sheets.

Reserves for accounts receivable reflect our expected credit losses, which are estimated based on historical experience, as well as current and expected economic conditions and industry trends. Our allowance for doubtful accounts was $80 million and $85 million at December 31, 2021 and 2020, respectively. The changeprovision for doubtful accounts charged to expense was $8 million in deferred revenue for the year ended December 31, 20182021, $32 million in 2020 and $25 million in 2019.

Contract Liabilities—A contract liability is recorded when consideration is received from a customer prior to fully satisfying a performance obligation in a contract. Our contract liabilities primarily reflects $201 millionconsist of revenues recognized that were included in deferred revenues at January 1, 2018, offset by cash payments received during the periodrelated to advertising arrangements for which the performance obligation wasrequired audience rating or impressions have not satisfied priorbeen delivered; consumer products arrangements with minimum guarantees; and content licensing arrangements under which the content has not yet been made available to the endcustomer. These contract liabilities will be recognized as revenues when control of the period.

Unrecognized Revenues Underrelated product or service is transferred to the customer. Contract—As of December 31, 2018, unrecognized revenue attributable to unsatisfied performance obligations under the Company’s long-term contracts was $3.45 billion, of which $2.02 billion is expected to be recognized for 2019, $806 million for 2020, $445 million for 2021, liabilities are included within “Deferred revenues” and $175 million thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts. Such amounts change on a regular basis as the Company renews existing agreements or enters into new agreements. Unrecognized revenues under contract disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of the Company’s advertising contracts (ii) contracts for which variable consideration is determined based“Other liabilities” on the customer’s subsequent sale or usage, mainly consisting of affiliate and subscription fee agreements and (iii) long-term licensing agreements for multiple programs for which the Company’s right to invoice corresponds with the value of the programs provided to the customer.Consolidated Balance Sheets.

Collaborative Arrangements—Collaborative arrangements primarily consist of joint efforts with third parties to produce and distribute programming such as television series and live sporting events, including the agreement between the Companyus and Turner Broadcasting System, Inc. to telecast the NCAA Division I Men’s Basketball Championship (“NCAA(the “NCAA Tournament”), which runs through 2032. In connection with this agreement for the NCAA Tournament, advertisements aired on the CBS Television Network are recorded as revenues and the Company’sour share of the program rights fees and other operating costs are recorded as operating expenses.

For episodic
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

We also enter into collaborative arrangements with other studios to jointly finance and distribute film and television programming, under which each partner is responsible for distribution of the program in specific territories or distribution windows. Under these arrangements, co-production costs are initially capitalized as programming inventory and amortized over the television series’ estimated economic life.life of the program. In such arrangements where the Company haswe have distribution rights, all proceeds generated from such distribution are recorded as revenues and any participation profits due to third party collaborators are recorded as operatingparticipation expenses. In co-production arrangements where third party collaborators have distribution rights, the Company’sour net participating profits are recorded as revenues.

Amounts attributable to transactions arising from collaborative arrangements between participants were not material to the Company’s consolidated financial statements for all periodsany period presented.

Leases—We have operating leases primarily for office space, equipment, satellite transponders and studio facilities and finance leases for satellite transponders and equipment. We determine that a contract contains a lease if we obtain substantially all of the economic benefits of, and the right to direct the use of, an asset identified in the contract. For leases with terms greater than 12 months, we record a right-of-use asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or our collateralized incremental borrowing rate. For those contracts that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), we generally include both the lease costs and non-lease costs in the measurement of the lease asset and liability. We also own buildings and production facilities where we lease space to lessees.

Our leases generally have remaining terms ranging from one to 15 years and often contain renewal options to extend the lease for periods of generally up to 10 years. For leases that contain renewal options, we include the renewal period in the lease term if it is reasonably certain that the option will be exercised. Lease expense and income for our operating leases are recognized on a straight-line basis over the lease term, with the exception of variable lease costs, which are expensed as incurred, and leases of assets used in the production of programming, which are capitalized in programming assets and amortized over the projected useful life of the related programming. For finance leases, amortization of the right-of-use asset is recognized in amortization expense on a straight-line basis over the lease term and interest expense is accreted on the lease liability using the effective interest method. This results in an accelerated recognition of cost over the lease term.

Advertising—Advertising costs are expensed as incurred. The CompanyWe incurred total advertising expenses of $448 million$2.14 billion in 2018, $426 million2021, $1.31 billion in 20172020 and $373 million$1.67 billion in 2016.2019.

Other Operating Items, Net—Other operating items, net for 2017 reflects a net gain relating to the disposal of property and equipment and for 2016 includes a gain from the sales of businesses and a multiyear, retroactive impact of a new operating tax.

Interest—Costs associated with the refinancing or issuance of debt, as well as debt discounts or premiums, are recorded as interest over the term of itsthe related debt.  The Company may enter into interest rate exchange agreements; the amount to be paid or received under such agreements is accrued and recognized over the life of the agreements as an adjustment to interest expense.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Income Taxes—The provision for income taxes includes federal, state, local, and foreign taxes. We recognize the tax on global intangible low-taxed income, a U.S. tax on certain income earned by our foreign subsidiaries, as a period cost when incurred within the provision for income taxes.Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. The Company evaluatesWe evaluate the realizability of deferred tax assets and establishesestablish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Deferred tax assets and deferred tax liabilities are classified as noncurrent on the Consolidated Balance Sheets.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


For tax positions taken in a previously filed tax return or expected to be taken in a future tax return, the Company evaluateswe evaluate each position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to be recognized in the Consolidated Statement of Operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, a tax reserve is established and no benefit is recognized.  A number of years may elapse before a tax return containing tax matters for which a reserve has been established is audited and finally resolved. We recognize interest and penalty charges related to the reserve for uncertain tax positions as income tax expense.

Foreign Currency Translation and Transactions—The Company’s assetsAssets and liabilities denominated in foreign currenciesof subsidiaries with a functional currency other than the United States (“U.S.”) Dollar are translated into U.S. Dollars at foreign exchange rates in effect at the balance sheet date, while results of operations are translated at average foreign exchange rates for the respective periods. The resulting translation gains orand losses are included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss).  Foreignloss on the Consolidated Balance Sheets. Argentina has been designated as a highly inflationary economy during all periods presented. Transactions denominated in currencies other than the functional currency transactionwill result in remeasurement gains and losses, have beenwhich are included in “Other items, net” inon the Consolidated Statements of Operations.

Other Items, net—“Other items, net” primarily consists of pension and postretirement benefit costs, other than service costs, and foreign exchange gains and losses.

Provision for Doubtful Accounts—The provision for doubtful accounts is estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, as well as recent payment history for specific customers.The provision for doubtful accounts charged to expense was $5 million, in each of the years 2018 and 2017, and $12 million in 2016.

Net Earnings (Loss) per Common Share—Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss)available to common stockholders divided by the weighted average number of common shares outstanding during the period.  DilutedNet earnings available to common stockholders is calculated as net earnings from continuing operations or net earnings, as applicable, adjusted to include preferred stock dividends recorded during the period. During the year ended December 31, 2021, we recorded dividends of $44.2 million on the 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”) that was issued during the first quarter of 2021 (see Note 14).

Weighted average shares for diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) or performance stock units (“PSUs”) only in the periods in which such effect would have been dilutive. Diluted EPS also reflects the effect of the assumed conversion of preferred stock, if dilutive, which includes the issuance of common shares in the weighted average number of shares and excludes the above-mentioned preferred stock dividend adjustment to net earnings available to common stockholders. Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive,antidilutive, were stock options and RSUs of 6 million, stock options22 million and 19 million for the year ended December 31, 2018 and 4 million stock options for each of the years ended December 31, 20172021, 2020 and 2016.2019, respectively.

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.
Year Ended December 31,202120202019
(in millions)
Weighted average shares for basic EPS641 616 615 
Dilutive effect of shares issuable under stock-based compensation plans5 2 2 
Conversion of Mandatory Convertible Preferred Stock9 — — 
Weighted average shares for diluted EPS655 618 617 
Year Ended December 31,2018 2017 2016
(in millions)     
Weighted average shares for basic EPS377
 401
 444
Dilutive effect of shares issuable under stock-based compensation plans4
 6
 4
Weighted average shares for diluted EPS381
 407
 448
II-55


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Stock-based Compensation-CompensationThe Company measures—We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The cost is recognized over the vesting period during which an employee is required to provide service in exchange for the award.

Recently Adopted Accounting Pronouncements
Revenue from Contracts with CustomersSimplifying the Accounting for Income Taxes
During the first quarter of 2018, the CompanyOn January 1, 2021, we adopted Financial Accounting Standards Board (“FASB”) guidance on the accounting for income taxes that, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of revenues which provides a single, comprehensive revenue recognition modeldeferred tax liabilities for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under thisoutside basis differences. This guidance is thatalso requires an entity should recognize revenue atto reflect the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company applied the modified retrospective method of adoption with the cumulative effect of the initial adoption of $261 million reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. Prior periods continue to be presented under previous accounting guidance (See Note 16).

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
During the first quarter of 2018, the Company adopted FASB amended guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). This guidance requires the Company to present the service cost component of net benefit costenacted change in tax laws or rates in its effective income tax rate in the same line items oninterim period that includes the statement of operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented in the statement of operations separately from the service cost component and below the subtotal of operating income. As a result of the adoption of this guidance, the Company presented $63 million of net benefit costs in “Other items, net” on the Consolidated Statement of Operations for 2018 representing the components of net benefit cost other than service cost. This guidance is required to be applied retrospectively and therefore, the Company reclassified net benefit costs of $438 million and $281 million, including pension settlement charges, below operating income for 2017 and 2016, respectively, on the Consolidated Statements of Operations (See Note 14). All related amounts presented herein have been recast to conform to this presentation.
Stock Compensation: Scope of Modification Accounting
During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for stock-based compensation which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award as equity or liability changes as a result of the change in the terms or conditions of a share-based payment award.enactment date. The adoption of this guidance did not have ana material impact on the Company’sour consolidated financial statements.

ClarifyingReference Rate Reform

In March 2020, the DefinitionFASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The one-week and two-month USD LIBOR tenors and all non-USD LIBOR tenors have been discontinued after December 31, 2021, with the remaining USD LIBOR tenors ceasing after June 30, 2023. The guidance is effective immediately upon issuance and an entity may elect to apply it to contract modifications or hedging relationships entered into on or before December 31, 2022, with a Business
few exceptions for certain hedging relationships existing as of December 31, 2022. This guidance, which primarily affects certain of our debt and hedging arrangements, is being applied as modifications of contracts that include LIBOR occur. During the firstfourth quarter of 2018,2021, we amended our $3.50 billion revolving credit facility (the “Credit Facility”) to replace LIBOR as the Company adopted FASB amended guidance on the accountingbenchmark rate for business combinations which clarifies the definition of a businessloans denominated in euros, sterling and assists entitiesyen with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an inputEURIBOR, SONIA and a substantive process that together significantly contribute to the ability to create an output.TIBOR-based rates, respectively. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. The adoptionapplication of this guidance did not have anand is not expected to have a material impact on the Company’sour consolidated financial statements.

CBS CORPORATIONAccounting Pronouncements Not Yet Adopted
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
On August 5, 2020, the FASB issued amended guidance to reduce complexity associated with the accounting for convertible instruments with characteristics of liabilities and equity. Under this guidance, embedded conversion features associated with convertible instruments no longer need to be separated from the host contracts unless they are required to be accounted for as derivatives or have been issued at a substantial premium. For contracts in an entity’s own equity, this guidance removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exceptions. This guidance also amends certain EPS guidance for convertible instruments and expands disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements.
2) ACQUISITIONS
During 2021, we made payments totaling $54 million, net of cash acquired, for the acquisition of Chilevisión, a free-to-air television channel, and a controlling interest in Fox TeleColombia & Estudios TeleMexico, a Spanish
II-56

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


language content producer. The results of these companies are included in the Cable Networks segment from the dates of acquisition.
Intra-Entity Transfers
During 2020, we acquired a 49% interest in Miramax, a global film and television studio, for $375 million, which included a cash payment at closing of Assets Other than Inventory
Duringapproximately $150 million along with a commitment to invest $45 million annually, beginning on the first quarteranniversary of 2018, the Company adopted FASB amended guidanceclosing and continuing through 2025, to be used for new film and television productions and working capital. In conjunction with this acquisition, we entered into commercial agreements with Miramax under which we have exclusive, long-term distribution rights to Miramax’s catalog, which added more than 700 titles to our existing library. We also have certain rights to co-produce, co-finance and/or distribute new film and television projects. The investment is accounted for as a consolidated VIE. We are the primary beneficiary of the VIE due to our power to direct the distribution of Miramax’s films and television series, which is considered the most significant activity of the VIE. The results of Miramax are included in the Filmed Entertainment segment from the date of acquisition.

During 2019, we acquired Pluto Inc., the provider of Pluto TV, a leading free streaming television service in the U.S., for $324 million, net of cash acquired, as well as the remaining 50% interest in Pop TV, a general entertainment cable network, for $39 million, net of cash acquired, which brought our ownership to 100%. The results of Pluto TV and Pop TV are included in the Cable Networks segment from the date of acquisition.

The operating results of these acquisitions were not material to our consolidated financial statements in the year of acquisition.
3) DISPOSITIONS
During October 2021, we completed the sale of 51 West 52nd Street, an office tower that was formerly the headquarters of CBS, to Harbor Group International, LLC, for $760 million. At closing, we executed an agreement to lease back the space we occupy for terms ranging from two to three years. This transaction resulted in a pre-tax gain of $523 million.
In December 2021, we completed the sale of CBS Studio Center to a partnership formed by Hackman Capital Partners, LLC and Square Mile Capital Management, LLC for $1.85 billion. At closing, we executed a 10-year lease-back of the portion of a building on the accounting for income taxes, which eliminatesproperty that is used by our Los Angeles television stations. The lease-back began at the exception in existing guidance that defers the recognitiontime of the tax effects of intra-entity asset transfers other than inventory until the transferred asset is soldsale and includes an option to a third party. Under this guidance, an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The adoption of this guidance did not have an impactterminate one floor without penalty beginning on the Company’s consolidated financial statements.fifth anniversary. The sale resulted in a pre-tax gain of $1.70 billion.

StatementIn addition, during 2021 we recognized a pre-tax net gain of Cash Flows: Restricted Cash
During 2018, the Company adopted FASB amended guidance on the presentation of restricted cash in the statement of cash flows. The guidance requires companies to include restricted cash and restricted cash equivalents in their cash and cash equivalents balance in the statements of cash flows. This guidance also requires a reconciliation of the total of cash, cash equivalents, restricted cash and restricted cash equivalents on the statement of cash flows$117 million, principally relating to the related balance sheet line items. This guidancesale of a noncore trademark licensing operation.

On November 25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House for $2.175 billion in cash. Simon & Schuster is required to be applied retrospectively; however, it did not have an impact on the Company’spresented as a discontinued operation in our consolidated financial statements for prior years.

Accounting Pronouncements Not Yet Adopted
Collaborative Arrangements: Clarifyingall periods presented. On November 2, 2021, the Interaction withU.S. Department of Justice filed suit to block the New Revenue Standard

In November 2018, the FASB issued guidance to clarify that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance when the counterparty is a customer. This guidance also prohibits the presentation of collaborative arrangements as revenues from contracts with customers if the counterparty is not a customer. This guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impactsale. The purchase agreement contains commitments on the Company’s consolidated financial statements.part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory reasons (see Note 20).

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract
In August 2018, the FASB issued guidance on the accounting for implementation costs of a cloud computing arrangement that is considered to be a service contract. This guidance requires companies to follow the guidance for capitalizing costs associated with internal-use software to determine which costs to capitalize in a cloud computing arrangement that is a service contract. The guidance also specifies the financial statement presentation for capitalized implementation costs and the related amortization, as well as required financial statement disclosures. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.

Changes to the Disclosure Requirements for Defined Benefit Plans
In August 2018, the FASB issued amended guidance that eliminates, adds and clarifies certain disclosure requirements for defined benefit pension or other postretirement plans. The Company is currently evaluating the impact of this guidance, which is required to be applied retrospectively and is effective for annual periods ending after December 15, 2020, with early adoption permitted.

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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following tables set forth details of net earnings from discontinued operations for the years ended December 31, 2021, 2020 and 2019.
Changes
Year Ended December 31, 2021Simon & Schuster
Other (a)
Total
Revenues$993 $— $993 
Costs and expenses:
Operating618 (16)602 
Selling, general and administrative158 — 158 
Depreciation and amortization3 — 3 
Restructuring charges1 — 1 
Total costs and expenses780 (16)764 
Operating income213 16 229 
Other items, net(10)— (10)
Earnings from discontinued operations203 16 219 
Income tax provision(46)(11)(57)
Net earnings from discontinued operations, net of tax$157 $5 $162 
Year Ended December 31, 2020Simon & Schuster
Other (a)
Total
Revenues$901 $— $901 
Costs and expenses:
Operating573 (19)554 
Selling, general and administrative172 — 172 
Depreciation and amortization5 — 5 
Restructuring charges10 — 10 
Total costs and expenses760 (19)741 
Operating income141 19 160 
Other items, net(5)— (5)
Earnings from discontinued operations136 19 155 
Income tax provision(34)(4)(38)
Net earnings from discontinued operations, net of tax$102 $15 $117 
Year Ended December 31, 2019Simon & Schuster
Other (a)
Total
Revenues$814 $— $814 
Costs and expenses:
Operating510 (50)460 
Selling, general and administrative166 — 166 
Depreciation and amortization5 — 5 
Restructuring charges6 — 6 
Total costs and expenses687 (50)637 
Operating income127 50 177 
Other items, net(5)— (5)
Earnings from discontinued operations122 50 172 
Income tax provision(20)(12)(32)
Net earnings from discontinued operations, net of tax$102 $38 $140 
(a) Primarily relates to the Disclosure Requirements for Fair Value Measurements
In August 2018, the FASB issued amended guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
In February 2018, the FASB issued amended guidance that permits an entity to reclassify the income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive income to retained earnings. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.

Targeted Improvements to Accounting for Hedging Activities
In August 2017, the FASB issued amended guidance for hedge accounting, which expands the eligibility of hedging strategies that qualify for hedge accounting, modifies the recognition and presentation of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition, this guidance amends and expands disclosure requirements. This guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, is not expected to have a material impact on the Company’s consolidated financial statements.

Leases
In February 2016, the FASB issued new guidance on the accountingindemnification obligations for leases which supersedes previous lease guidance. Under this guidance, for all leasesassociated with terms in excessthe previously discontinued operations of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This guidance is effective for the Company in the first quarter of 2019. The Company will apply the modified retrospective method of adoption as of January 1, 2019 and comparative periods will continue to be presented under existing lease guidance. The Company is still in the process of evaluating the impact of this guidance, including reviewing its lease portfolio as well as implementing new lease accounting software for administering its leases under the new guidance and therefore the estimated impact on the Company’s Consolidated Balance Sheet cannot currently be determined. This change is not expected to have a material impact on the Company’s Consolidated Statement of Operations.
2) PROPERTY AND EQUIPMENTFamous Players Inc. (“Famous Players”).
At December 31,2018 2017
Land$189
 $189
Buildings795
 729
Capital leases (a)
144
 162
Equipment and other1,798
 1,867
 2,926
 2,947
Less accumulated depreciation and amortization1,717
 1,701
Net property and equipment$1,209
 $1,246
II-58

(a) Accumulated amortization of capital leases was $106 million and $112 million at December 31, 2018 and 2017, respectively.

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following table presents the major classes of assets and liabilities of our discontinued operations.
At December 31,20212020
Receivables, net$536 $447 
Other current assets209 183 
Goodwill435 435 
Property and equipment, net46 42 
Operating lease assets203 191 
Other assets131 141 
Total Assets$1,560 $1,439 
Royalties payable$155 $131 
Other current liabilities416 349 
Operating lease liabilities194 194 
Other liabilities19 26 
Total Liabilities$784 $700 
On October 30, 2020, we completed the sale of CNET Media Group (“CMG”) to Red Ventures for $484 million.This transaction resulted in a pre-tax gain of $214 million.
During 2019, we completed the sale of CBS Television City for $750 million. This transaction resulted in a pre-tax gain of $549 million, which included a reduction for the present value of the estimated amount payable under a guarantee obligation (see Note 20).
4) PROPERTY AND EQUIPMENT
Year Ended December 31,2018 2017 2016
Depreciation expense, including capitalized lease amortization (a)
$205
 $203
 $205
At December 31,20212020
Land$372 $437 
Buildings842 1,253 
Finance leases (a)
160 159 
Equipment and other4,112 4,151 
5,486 6,000 
Less accumulated depreciation and amortization3,750 4,006 
Net property and equipment$1,736 $1,994 
(a) Accumulated amortization of finance leases was $143 million and $140 million at December 31, 2021 and 2020, respectively.
Year Ended December 31,202120202019
Depreciation expense, including amortization of finance leases (a) (b)
$344 $345 $362 
(a) Amortization expense related to capitalfinance leases was $19 million, $18 million $16and $23 million in 2021, 2020 and 2019, respectively.
(b) Included in depreciation expense for 2020 is $12 million of accelerated depreciation resulting from the abandonment of technology in connection with synergy plans related to the Merger.
5) PROGRAMMING AND OTHER INVENTORY
The following table presents our programming and other inventory at December 31, 2021 and 2020, grouped by type and predominant monetization strategy.
II-59

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

At December 31,20212020
Film Group Monetization:
Acquired program rights, including prepaid sports rights$3,432 $3,413 
Internally-produced television and film programming:
Released3,808 2,558 
In process and other2,609 1,682 
Individual Monetization:
Acquired libraries441 483 
Film inventory:
Released606 374 
Completed, not yet released253543 
In process and other1,303 816 
Internally-produced television programming:
Released1,604 1,206 
In process and other769 1,013 
Home entertainment37 32 
Total programming and other inventory14,862 12,120 
Less current portion1,504 1,757 
Total noncurrent programming and other inventory$13,358 $10,363 
The following table presents amortization of television and film programming and production costs.
Year Ended December 31,20212020
Programming costs, acquired programming$5,143 $3,779 
Production costs, internally-produced television and film programming:
Individual monetization$3,245 $2,669 
Film group monetization$3,248 $3,133 
Programming Charges
Included in the table above for the year ended December 31, 2020, are programming charges of $159 million primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to the coronavirus pandemic (“COVID-19”). Programming charges of $101 million, $53 million and $17$5 million are included within the TV Entertainment,Cable Networks and Filmed Entertainment segments, respectively.
During 2019, in 2018, 2017, and 2016, respectively.
connection with the Merger, we implemented management changes across the organization. In January 2019, the Company completed the saleconnection with these changes, we performed an evaluation of its CBS Television City property and sound stage operation for $750 million. The Company has guaranteed a specified levelour programming portfolio across all of cash flows to be generated by the business during the first five years following the completionour businesses, including an assessment of the sale. optimal use of our programming in the marketplace, which resulted in the identification of programs not aligned with management’s strategy. As a result, we recorded programming charges of $589 million principally reflecting accelerated amortization associated with changes in the expected monetization of certain programs, and decisions to cease airing, alter future airing patterns or not renew certain programs.
The Company expects to record a liabilityprogramming charges for 2020 and 2019 were included within “Operating expenses” on the Consolidated Statements of approximately $130 million reflectingOperations.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The following table presents the estimated amount payable underexpected amortization over each of the guarantee obligation. This transaction is expected to result in a pre-tax gainnext three years of approximately $540 million, which includes a reduction for the guarantee obligation. CBS Television City has been classified as held for salereleased programming inventory on the Consolidated Balance Sheets.Sheet at December 31, 2021.
202220232024
Programming costs, acquired programming$2,391 $592 $223 
Production costs, internally-produced television and film programming:
Individual monetization$1,514 $323 $241 
Film group monetization$1,526 $987 $631 
3)During the year ended December 31, 2022, we expect to amortize approximately $216 million of our completed, not yet released film inventory, which is monetized on an individual basis.
6) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and Intangible Assets Impairment Test
The Company performs aWe perform fair value-based impairment testtests of goodwill and intangible assets with indefinite lives, comprised primarily of television FCC licenses, and international broadcast licenses, annually during the fourth quarteron an annual basis, and also between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value.

Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below.
At December 31, 2021, we had 4 reporting units. FCC licenses are tested for impairment at the geographic market level. The Company considersWe consider each geographic market, which is comprised of all of the Company’sour television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use. At December 31, 2018, the Company2021, we had 14 television markets with FCC license book values.

For international broadcast licenses, the Company considers all of its broadcast licenses within a country to be a single unit of accounting because the international broadcast licenses at this level represent their highest and best use. At December 31, 2018, the Company had international broadcast licenses in Australia.

Goodwill is tested for impairment at the reporting unit level. During the fourth quarter of 2018, the Company began including CBS Sports Network within the Television reporting unit, which is a component of the Entertainment operating segment, reflecting changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. Prior to this change, CBS Sports Network was a standalone reporting unit and a component of the Cable Networks operating segment. At December 31, 2018, the Company had seven reporting units with goodwill balances, each one level below their respective operating segments, except for the Cable Networks reporting unit and the Publishing reporting unit, which are each the same as their respective operating segments because these operating segments each have only one component.

For itsour annual impairment test, the Company performswe perform qualitative assessments for the reporting units U.S.and television markets with FCC licenses and international broadcast licenses that management estimateswe estimate have fair values that significantly exceed their respective carrying values. In selecting reporting units, markets, and broadcast licenses for a qualitative assessment, the Companymaking this determination, we also considersconsider the duration of time since a quantitative test was performed. For the 20182021 annual impairment test, the Companywe performed qualitative assessments for seven 11 of our television markets and 2 of ourreporting units and all of its 14 U.S. television markets.units. For each reporting unit, the Companywe weighed the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. For each television market, the Companywe weighed the relative impact of market-specific and macroeconomic factors. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that it is not more likely than not that the fair values of these reporting units and the fair value of FCC licenses within each marketof these markets are less than their respective carrying values. Therefore, performing thea quantitative impairment test was unnecessary.

For the 2021 annual test for FCC licenses, we performed a quantitative impairment test for the remaining 3 markets. The quantitative impairment test of FCC licenses calculates an estimated fair value using the Greenfield Discounted Cash Flow Method, which values a hypothetical start-up station in the relevant market by adding discounted cash flows over a five-year build-up period to a residual value. The assumptions for the build-up period include industry projections of overall market revenues; the start-up station’s operating costs and capital expenditures, which are based on both industry and internal data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a long-term growth rate, which is based on projected long-range inflation and industry projections. The impairment tests indicated that the estimated fair values of FCC licenses in two of the markets exceeded their respective carrying values by more than 20% and the fair value of the FCC license in one of the markets exceeded its carrying value of $157 million by 9%.
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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


For 2018, the Company performed a2021 annual test for goodwill, we elected to perform quantitative impairment testtests for international broadcast licenses. A2 reporting units, CBS Television and CBS Interactive, because of the amount of time that has elapsed since the previous quantitative impairment test comparestests. For CBS Television, we estimated the estimated fair value of the licenses with their carrying value. The estimated fair value is computed using the Greenfield Discounted Cash Flow Method (‘‘Greenfield Method’’), which attempts to isolate the income that is attributable to the license alone. The Greenfield Method is based upon modeling a hypothetical start-up station and building it up to a normalized operation that, by design, lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method adds the present value of the estimated annual cash flows of the start-up station over a projection period to the residual value at the end of the projection period. The annual cash flows over the projection period include assumptions for overall revenues in the relevant market, the start-up station’s operating costs and capital expenditures, and a five-year build-up period for the start-up station to reach a normalized state of operations, which reflects the point at which it achieves an average market share. The overall revenues in the subject market are estimated based on recent industry projections. Operating costs and capital expenditures are estimated based on both industry and internal data. The residual value is calculated using a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections. The discount rate is determined based on the risk of achieving the projected cash flows, including the risk applicable to the industry and the market as a whole. The discount rate and perpetual nominal growth rate used for international broadcast licenses for 2018 were 11% and 0.5%, respectively. The Company concluded that the estimated fair value of international broadcast licenses, which were recorded at fair value in the fourth quarter of 2017 when the Company acquired Ten Network Holdings Limited (“Network 10”), continues to approximate the carrying value and therefore no impairment charge was required.

For 2018, the Company performed a quantitative goodwill impairment test for the CBS Sports Network reporting unit prior to the inclusion of this business in the CBS Television reporting unit. The quantitative goodwill impairment test examines whether the carrying value of a reporting unit exceeds its estimated fair value, which is computed based uponon the present value of future cash flows (“Discounted Cash Flow Method”) and the traded or transaction values of comparable businesses (“Market ComparableGuideline Public Company Method”). If the carrying value exceeds the estimated fair value, an impairment charge is recognized as the amount by which the carrying value exceeds the fair value. For 2018, the Discounted Cash Flow Method and Market Comparable Method for CBS Sports Network resulted in similar estimated fair values. The Discounted Cash Flow Method includesrequires us to make various assumptions regarding the Company’s assumptions fortiming and amount of future cash flows, including growth rates, operating margins and capital expenditures for thea projection period, plus the residualterminal value of the business at the end of the projection period. The estimated growth rates, operating margins and capital expenditures for the projection periodassumptions about future cash flows are based on the Company’sour internal forecasts of future performance as well asthe reporting unit, which incorporates our long-term business plans and historical trends. The residualterminal value is estimated based on a perpetual nominal growth rate, which is based on historical and projected long-range inflation and long-termeconomic indicators, as well as industry projections and for 2018 was 2.0%. Thegrowth projections. A discount rate whichis determined for 2018was8.5%, is determinedthe reporting unit based on the riskrisks of achieving the projectedfuture cash flows, including the riskrisks applicable to the industry and the market as a whole.

whole, as well as the capital structure of comparable entities. The Guideline Public Company Method incorporates revenue and earnings multiples from publicly traded companies with operations and other characteristics similar to each reporting unit. For CBS Interactive, we estimated the 2018 annualfair value of the reporting unit based on the Guideline Public Company Method. Based on the results of the 2021 quantitative impairment test, the Companytests, we concluded that the estimated fair value of each of the CBS Sports Networktwo reporting unitunits exceeded itstheir respective carrying valuevalues and therefore no impairment charge was required.

Transactions
For the 2021 annual goodwill impairment test, we tested two reporting units as of August 31 and two reporting units as of October 31. During the fourth quarter of 2017,2021, to better align the Company completedtiming of our annual impairment date with our budgeting cycle, we changed the acquisitiondate for the annual impairment test to October 31 for all reporting units. As a result, those two reporting units previously tested as of Network 10, oneAugust 31 were also tested as of three major commercial broadcast networksOctober 31 based on a qualitative assessment resulting in Australia, for approximately $124 million, which is net of cash acquired. The assets acquired primarily consist of broadcast licenses, net operating loss carryforwards and working capital.no changes to the conclusion above.

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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following tables present the changes in the book value of goodwill by segment for the years ended December 31, 20182021 and 2017. During the fourth quarter of 2018, the Company began presenting CBS Sports Network, which was previously included in the Cable Networks segment, in the Entertainment segment. As a result, goodwill of $261 million associated with CBS Sports Network has been reclassified from Cable Networks to Entertainment for all periods presented.2020.
Balance atAcquisitions /ForeignBalance at
December 31, 2020(Dispositions)CurrencyDecember 31, 2021
TV Entertainment:
Goodwill$17,502 $— $— $17,502 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment4,148 — — 4,148 
Cable Networks:
Goodwill10,772 16 

(44)10,744 
Accumulated impairment losses— — — — 
Goodwill, net of impairment10,772 16 (44)10,744 
Filmed Entertainment:
Goodwill1,692 — — 1,692 
Accumulated impairment losses— — — — 
Goodwill, net of impairment1,692 — — 1,692 
Total:
Goodwill29,966 16 (44)29,938 
Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment$16,612 $16 $(44)$16,584 
Balance atAcquisitions /ForeignBalance at
 Balance at     Balance atDecember 31, 2019(Dispositions)CurrencyDecember 31, 2020
 December 31, 2017 Acquisitions Dispositions December 31, 2018
Entertainment:         
TV Entertainment:TV Entertainment:
Goodwill $9,584
 $27
(a) 
 $—
 $9,611
 Goodwill$17,615 $(113)(a)$— $17,502 
Accumulated impairment losses (6,294) —
 —
 (6,294) Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment 3,290
 27
 —
 3,317
 Goodwill, net of impairment4,261 (113)— 4,148 
Cable Networks:         Cable Networks:
Goodwill 219
 2
 —
 221
 Goodwill10,691 28 53 10,772 
Accumulated impairment losses —
 —
 —
 —
 Accumulated impairment losses— — — — 
Goodwill, net of impairment 219
 2
 —
 221
 Goodwill, net of impairment10,691 28 53 10,772 
Publishing:         
Goodwill 435
 —
 —
 435
 
Accumulated impairment losses —
 —
 —
 —
 
Goodwill, net of impairment 435
 —
 —
 435
 
Local Media:         
Filmed Entertainment:Filmed Entertainment:
Goodwill 8,007
 —
 —
 8,007
 Goodwill1,593 99 (b)— 1,692 
Accumulated impairment losses (7,060) —
 —
 (7,060) Accumulated impairment losses— — — — 
Goodwill, net of impairment 947
 —
 —
 947
 Goodwill, net of impairment1,593 99 — 1,692 
Total:         Total:
Goodwill 18,245
 29
 —
 18,274
 Goodwill29,899 14 53 29,966 
Accumulated impairment losses (13,354) —
 —
 (13,354) Accumulated impairment losses(13,354)— — (13,354)
Goodwill, net of impairment $4,891
 $29
 $—
 $4,920
 Goodwill, net of impairment$16,545 $14 $53 $16,612 
(a) Amount reflects the disposition of CMG.
(b) Amount relates to the acquisition of a digital entertainment media company.Miramax.

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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


  Balance at      Balance at
  December 31, 2016 Acquisitions  Dispositions December 31, 2017
Entertainment:             
Goodwill  $9,561
  $23
(a) 
 $—
  $9,584
 
Accumulated impairment losses  (6,294)  —
  —
  (6,294) 
Goodwill, net of impairment  3,267
  23
  —
  3,290
 
Cable Networks:             
Goodwill  219
  —
  —
  219
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  219
  —
  —
  219
 
Publishing:             
Goodwill  431
  4
(b) 
 —
  435
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  431
  4
  —
  435
 
Local Media:             
Goodwill  8,007
  —
  —
  8,007
 
Accumulated impairment losses  (7,060)  —
  —
  (7,060) 
Goodwill, net of impairment  947
  —
  —
  947
 
Total:             
Goodwill  18,218
  27
  —
  18,245
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  $4,864
  $27
  $—
  $4,891
 
(a) Amount reflects the acquisitions of a television production business and a digital sports publishing business.
(b) Amount relates to the acquisition of a publishing business in the fourth quarter of 2016.
The Company’sOur intangible assets were as follows:
Accumulated
At December 31, 2021GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$257 $(140)$117 
Licenses140 (53)87 
Customer agreements124 (98)26 
Other intangible assets237 (170)67 
Total intangible assets subject to amortization758 (461)297 
FCC licenses2,416 — 2,416 
International broadcast licenses25 — 25 
Other intangible assets34 — 34 
Total intangible assets$3,233 $(461)$2,772 
   Accumulated  
At December 31, 2018Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$189
 $(58) $131
Other intangible assets49
 (28) 21
Total intangible assets subject to amortization238
 (86) 152
FCC licenses2,441
 —
 2,441
International broadcast licenses45
 —
 45
Total intangible assets$2,724
 $(86) $2,638
   Accumulated  
At December 31, 2017Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$190
 $(51) $139
Other intangible assets134
 (101) 33
Total intangible assets subject to amortization324
 (152) 172
FCC licenses2,441
 —
 2,441
International broadcast licenses53
 —
 53
Total intangible assets$2,818
 $(152) $2,666

Accumulated
At December 31, 2020GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$249 $(123)$126 
Licenses168 (50)118 
Customer agreements120 (97)23 
Other intangible assets251 (169)82 
Total intangible assets subject to amortization788 (439)349 
FCC licenses2,416 — 2,416 
International broadcast licenses27 — 27 
Other intangible assets34 — 34 
Total intangible assets$3,265 $(439)$2,826 
Amortization expense was as follows:
Year Ended December 31,202120202019
Amortization expense (a)
$46 $85 $76 
Year Ended December 31,2018 2017 2016
Amortization expense $18
   $20
   $20
 
(a) For 2020, amortization expense includes an impairment charge of $25 million to write down the carrying value of FCC licenses, which was recorded within the TV Entertainment segment. For 2019, amortization expense includes an impairment charge of $20 million, to reduce the carrying value of broadcast licenses in Australia to their fair value, which was recorded within the Cable Networks segment.


We expect our aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2022 through 2026, to be as follows:
CBS CORPORATION
20222023202420252026
Future amortization expense$41 $39 $31 $27 $26 
II-64

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The Company expects its aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2019 through 2023, to be as follows:
 2019 2020 2021 2022 2023
Future amortization expense $15
   $15
   $14
   $12
   $10
 

4) 7) RESTRUCTURING PROGRAMMING CHARGES AND OTHER CORPORATE MATTERS
During the years ended December 31, 2021, 2020 and 2019, we recorded the following costs associated with restructuring and other corporate matters.
Year Ended December 31,202120202019
Severance$65 $472 $395 
Exit costs and other35 70 23 
Restructuring charges100 542 418 
Merger-related costs— 56 294 
Other corporate matters— 20 57 
Restructuring and other corporate matters$100 $618 $769 

Restructuring Charges
During the year ended December 31, 2021, we recorded restructuring charges of $100 million. These charges include $65 million of severance costs, including the accelerated vesting of stock-based compensation, primarily associated with changes in management at certain of our businesses. The charges also include $35 million for the impairment of lease assets that we determined we will not use and began actively marketing for sublease. This determination was made in connection with cost-transformation initiatives related to the Merger. The impairment is the result of a decline in market conditions since inception of these leases and reflects the difference between the estimated fair values, which were determined based on the expected discounted future cash flows of the lease assets, and the carrying values.

During the year ended December 31, 2018, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization and closure of certain business operations. As a result, the Company2020, we recorded restructuring charges of $67$542 million, reflecting $57 millionassociated with cost-transformation initiatives in connection with the Merger in an effort to reduce redundancies across our businesses. These charges consisted of severance costs, and $10 millionincluding the accelerated vesting of stock-based compensation, as well as costs associated with exitingresulting from the termination of contractual obligations and other related costs. charges associated with the exit of leases.

During the year ended December 31, 2017, the Company2019, we recorded restructuring charges of $63$418 million, reflecting $54 million ofprimarily for severance costs, and $9 millionincluding the accelerated vesting of stock-based compensation, in connection with the Merger, as well as costs associated with exitingrelated to a restructuring plan initiated in the first quarter of 2019 under which severance payments were provided to certain eligible employees who voluntarily elected to participate. These charges also included costs related to the termination of contractual obligations and other related costs. Duringcharges associated with the year endedexit of leases.

The following is a rollforward of our restructuring liability, which is recorded in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets. The majority of the restructuring liability at December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of2021, which primarily relates to severance costs and $11 million of costs associated with exiting contractual obligations and other related costs. As of December 31, 2018, the cumulative settlements for the 2018, 2017, and 2016 restructuring charges were $88 million, of which $74 million was for severance costs and $14 million relatedpayments, is expected to costs associated with exiting contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reservesbe paid by the end of 2019.2022.
Balance at2021 ActivityBalance at
December 31, 2020
Charges (a)
PaymentsOtherDecember 31, 2021
TV Entertainment$112 $10 $(58)$(10)$54 
Cable Networks144 11 (82)(5)68 
Filmed Entertainment30 23 (14)(5)34 
Corporate86 1 (50)(3)34 
Total$372 $45 $(204)$(23)$190 
II-65
 Balance at 2018 2018 Balance at
 December 31, 2017 Charges Settlements December 31, 2018
Entertainment $45
  $27

 $(38)   $34
 
Cable Networks 1
  —
  (1)   —
 
Publishing 3
  1
  (2)   2
 
Local Media 14
  18

 (9)   23
 
Corporate 3
  21

 (11)   13
 
Total $66
  $67
  $(61)   $72
 
 Balance at 2017 2017 Balance at
 December 31, 2016 Charges Settlements December 31, 2017
Entertainment $17
  $44
  $(16)   $45
 
Cable Networks 4
  —
  (3)   1
 
Publishing 1
  5
  (3)   3
 
Local Media 6
  12
  (4)   14
 
Corporate 2
  2
  (1)   3
 
Total $30
  $63
 
$(27)   $66
 


In 2018, the Company recorded expenses of $128 million primarily for professional fees related to legal proceedings, recent investigations at the Company (see Note 18) and the evaluation of a potential combination with Viacom Inc.

In 2016, the Company incurred professional fees of $8 million associated with merger and acquisition-related activities.

During the fourth quarter of 2018, in connection with recent management changes, the Company implemented changes to its programming strategy, primarily at CBS Films, which will shift its focus from theatrical films to developing content for the Company’s direct-to-consumer digital streaming services. As a result, the Company

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


recorded programming charges of $85 million in 2018, which are included in “Operating expenses” on the Consolidated Statement of Operations.
In February 2019, the Company initiated a restructuring plan under which severance payments will be provided to certain eligible employees who voluntarily elect to participate. As a result, the Company expects to record a restructuring charge in the first quarter of 2019. The amount of this charge and the associated future savings will be based on the number of eligible employees who elect to participate in the restructuring plan and therefore cannot currently be determined.
5) PROGRAMMING AND OTHER INVENTORY
At December 31,2018 2017
Acquired program rights$2,400
 $2,234
Acquired television library99
 99
Internally produced programming:   
Released2,477
 1,780
In process and other839
 543
Publishing, primarily finished goods56
 53
Total programming and other inventory5,871
 4,709
Less current portion1,988
 1,828
Total noncurrent programming and other inventory$3,883
 $2,881

The Company expects to amortize approximately $1.1 billion of its released internally produced programming during
Balance at2020 ActivityBalance at
December 31, 2019
Charges (a)
PaymentsOtherDecember 31, 2020
TV Entertainment$99 $137 $(111)$(13)$112 
Cable Networks137 179 (158)(14)144 
Filmed Entertainment17 25 (12)— 30 
Corporate143 71 (117)(11)86 
Total$396 $412 $(398)$(38)$372 
(a) For the yearyears ended December 31, 2019. 2021 and 2020, excludes stock-based compensation expense of $20 million and $88 million, respectively, and lease asset impairments of $35 million (recorded within the TV Entertainment segment) and $42 million (recorded across our segments and Corporate), respectively.

Merger-related Costs and Other Corporate Matters
In 2020, in addition while it is difficult to determine the precise timingabove-mentioned restructuring charges, we incurred costs of $56 million in connection with the amortizationMerger, consisting of professional fees mainly associated with integration activities, as well as transaction-related bonuses. We also incurred costs of $5 million for professional fees associated with dispositions and other corporate matters, and we recorded a charge of $15 million to write down property and equipment, which was classified as held for sale in 2020, to its fair value less costs to sell.

In 2019, in addition to the remaining released internally produced programming,above-mentioned restructuring charges, we incurred costs of $294 million in connection with the Merger, consisting of financial advisory, legal and other professional fees, transaction-related bonuses, and contractual executive compensation, including the accelerated vesting of stock-based compensation, that was triggered by the Merger. We also incurred costs of $40 million in connection with the settlement of a commercial dispute and $17 million associated with legal proceedings involving the Company estimates that substantially all of the December 31, 2018 balance will be amortized over the next three years.(see Note 20) and other corporate matters.
6)8) RELATED PARTIES
National Amusements, Inc.
National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp. and Viacom Inc.  Mr. Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Chairman Emeritus of CBS Corp. and the Chairman Emeritus of Viacom Inc. In addition, Ms. Shari Redstone, Mr. Sumner M. Redstone’s daughter, is the president and a director of NAI and the vice chair of the Board of Directors of each of CBS Corp. and Viacom Inc.Company. At February 13, 2019,December 31, 2021, NAI directly or indirectly owned approximately 79.8%77.4% of CBS Corp.’sour voting Class A Common Stock and owned approximately 10.5%9.7% of CBS Corp.’sour Class A Common Stock and non-voting Class B Common Stock on a combined basis. NAI is controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Part B General Trust (the “SMR“General Trust”), which owns 80% of the voting interest of NAI and suchacts by majority vote of 7 voting interest oftrustees (subject to certain exceptions), including with respect to the NAI shares held by the SMR TrustGeneral Trust. Shari E. Redstone, Chairperson, CEO and President of NAI and non-executive Chair of our Board of Directors, is voted solely by Mr. Redstone until his incapacity or death. The SMR Trust provides that in the event of Mr. Redstone’s death or incapacity, voting controlone of the NAI7 voting interest held bytrustees for the SMRGeneral Trust will pass to sevenand is one of 2 voting trustees who will include CBS Corporation director Ms. Shari Redstone.are beneficiaries of the General Trust. No member of the Company’sour management or other member of our Board of Directors is a trustee of the SMRGeneral Trust. Pursuant to a settlement and release agreement entered into by the Company and NAI, among others, with respect to legal proceedings involving these parties, the Company paid $30 million for professional fees incurred by NAI during 2018 relating to these legal proceedings, which are included in “Restructuring and other corporate matters” on the Consolidated Statement of Operations for the year ended December 31, 2018.


Other Related Parties
Viacom Inc.  As part of its normalIn the ordinary course of business, we are involved in transactions with our equity-method investees, primarily for the Company licenses itslicensing of television content, leases production facilities and sells advertising spotsfilm programming. The following tables present the amounts recorded in our consolidated financial statements related to various subsidiaries of Viacom Inc. Viacom Inc. also distributes certain of the Company’s television programs in the home entertainment market. The Company’s total revenues fromthese transactions.
Year Ended December 31,202120202019
Revenues$237 $106 $179 
Operating expenses$21 $13 $14 
II-66


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31,20212020
Accounts receivable$50 $69 
these transactions were $88 million, $145 million and $120 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The Company leases production facilities, licenses feature films and purchases advertising spots from various subsidiaries of Viacom Inc. The total amounts for these transactions were $30 million, $21 million and $24 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The following table presents the amounts due from Viacom Inc. inThrough the normal course of business, as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at December 31, 2018 and 2017.
At December 31,2018 2017
Receivables$38
 $93
Other assets (Receivables, noncurrent)23
 11
Total amounts due from Viacom Inc.$61
 $104

Other Related Parties  The Company has equity interests in two domestic television networks and several international joint ventures for television channels, from which the Company earns revenues primarily by selling its television programming.  Total revenues earned from sales to these joint ventures were $110 million, $99 million and $112 million for the years ended December 31, 2018, 2017 and 2016, respectively. Total amounts due from these joint ventures were $34 million and $27 million at December 31, 2018 and 2017, respectively.

The Company, through the normal course of business, iswe are involved in transactions with other related parties that have not been material in any of the periods presented.
7) INVESTMENTS9) REVENUES
The Company’s investments consisttable below presents our revenues disaggregated into categories based on the nature of equity investments. Investments over which the Company has significant influence or ownership of more than 20% but less than or equal to 50%, without a controlling interest, are accounted for under the equity method. Such investments include the Company’s 50% interestssuch revenues. Beginning in the broadcast network, The CW,first quarter of 2021, and the entertainment cable network, Pop. In addition, the Company has interestsfor all comparable prior-year periods, these categories include streaming revenues, which aligns with management’s increased focus on this revenue stream. Streaming revenues are comprised of streaming advertising and streaming subscription revenues. Streaming advertising revenues are earned from advertisements on our pay and free streaming services, including Paramount+ and Pluto TV, and from digital video advertisements on our websites and in several international television joint venturesour video content on third-party platforms (“other digital video platforms”). Streaming subscription revenues include fees for our pay streaming services, including a 49% interest in a joint venture with a subsidiary of AMC Networks Inc.Paramount+, which ownsShowtime OTT, BET+ and operates channels in the United KingdomNoggin, as well as premium subscriptions to access certain video content on our websites. Accordingly, our advertising and Ireland, including CBS branded channels;affiliate revenue categories exclude revenues earned by our streaming services and a 30% interest in a joint venture with another subsidiary of AMC Networks Inc., which owns and operates cable and satellite channels in Europe, the Middle East and Africa.on other digital video platforms.

Year Ended December 31,202120202019
Revenues by Type:
Advertising (a)
$9,267 $8,333 $10,069 
Affiliate (b)
8,394 8,023 7,893 
Streaming4,193 2,561 1,714 
Theatrical241 180 547 
Licensing and other6,491 6,188 6,775 
Total Revenues$28,586 $25,285 $26,998 
At December 31, 2018 and 2017, respectively, the Company had $329 million and $283 million of equity-method investments, which are included(a) Excludes streaming advertising revenues.
(b) Excludes streaming subscription revenues.
Receivables
Included in “Other assets” on the Consolidated Balance Sheets.Sheets are noncurrent receivables of $1.84 billion and $2.02 billion atDecember 31, 2021 and 2020, respectively. Noncurrent receivables primarily relate to revenues recognized under long-term content licensing arrangements. Revenues from the licensing of content are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition, while the related cash is generally collected over the term of the license period.

Investments of 20% or less, over which the Company has no significant influence, thatOur receivables do not have a readily determinable fair value are measuredrepresent significant concentrations of credit risk at cost less impairment, if any, and adjusted for any observable price changes. At December 31, 20182021 or 2020, due to the wide variety of customers, markets and 2017, respectively, the Company had $23 milliongeographic areas to which our products and $24 million of such investments, whichservices are sold.

Contract Liabilities
Contract liabilities are included inwithin “Deferred revenues” and “Other assets”liabilities” on the Consolidated Balance Sheets.
The Company invested $124Sheets and were $1.20 billion, $1.12 billion and $908 million, $110 million at December 31, 2021, 2020 and $81 million into its equity investments during2019, respectively. For the years ended December 31, 2018, 20172021, 2020 and 2016, respectively.2019, we recognized revenues of $877 million, $591 million, and $498 million, respectively, that were included in the opening balance of deferred revenues for the respective year.
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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Unrecognized Revenues Under Contract
For 2018 and 2017, respectively, other items, net on the statement of operations included $3 million and$13 million for the write-down of investments without readily determinable fair values. For 2016, equity in loss of investee companies, net of tax on the statement of operations included $10 million for the write-down of an international television joint venture to its fair value.

8) BANK FINANCING AND DEBT
The Company’s debt consists of the following (a):
At December 31,2018 2017
Commercial paper$674
 $679
2.30% Senior Notes due 2019601
 604
4.30% Senior Notes due 2021300
 299
3.375% Senior Notes due 2022697
 696
2.50% Senior Notes due 2023397
 396
2.90% Senior Notes due 2023396
 395
7.875% Debentures due 2023187
 187
7.125% Senior Notes due 2023 (b)
46
 46
3.70% Senior Notes due 2024597
 597
3.50% Senior Notes due 2025590
 589
4.00% Senior Notes due 2026787
 785
2.90% Senior Notes due 2027686
 684
3.375% Senior Notes due 2028493
 493
3.70% Senior Notes due 2028490
 489
7.875% Senior Debentures due 2030832
 832
5.50% Senior Debentures due 2033426
 425
5.90% Senior Notes due 2040297
 297
4.85% Senior Notes due 2042486
 485
4.90% Senior Notes due 2044539
 539
4.60% Senior Notes due 2045588
 588
Obligations under capital leases43
 57
Total debt (c)
10,152
 10,162
Less commercial paper674
 679
Less current portion13
 19
Total long-term debt, net of current portion$9,465
 $9,464
(a) Unless otherwise noted, the long-term debt instruments are issuances of CBS Corp. and are guaranteed by CBS Operations Inc.
(b) Debt instrument is an issuance of CBS Broadcasting Inc., a wholly owned subsidiary of CBS Corp., and has no guarantor.
(c) At December 31, 20182021, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts were $6.3 billion, of which $3.8 billion is expected to be recognized in 2022, $1.4 billion in 2023, $0.7 billion in 2024, and 2017,$0.4 billion thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the senior debt balances includedguaranteed minimum under variable contracts, primarily consisting of television and film licensing contracts and affiliate agreements that are subject to a fixed or guaranteed minimum fee. Such amounts change on a regular basis as we renew existing agreements or enter into new agreements. Unrecognized revenues under contracts disclosed above do not include (i) a net unamortized discountcontracts with an original expected term of $58 million and $65 million, respectively,one year or less, mainly consisting of advertising contracts (ii) unamortized deferred financing costscontracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly consisting of $43 million and $47 million, respectively,affiliate agreements and (iii) a decrease inlong-term licensing agreements for multiple programs for which variable consideration is determined based on the carrying value of the debt relatingprograms delivered to previously settled fairthe customer and our right to invoice corresponds with the value hedgesdelivered.

Performance Obligations Satisfied in Previous Periods
Under certain licensing arrangements, the amount and timing of $5 million and $3 million, respectively. The face valueour revenue recognition is determined based on our licensees’ subsequent sale to its end customers. As a result, under such arrangements, we often satisfy our performance obligation of delivery of our content in advance of revenue recognition. For the Company’s total debt was $10.26 billion at December 31, 2018 and $10.28 billion at December 31, 2017.

During the yearyears ended December 31, 2017, the Company issued $1.80 billion2021, 2020 and 2019, we recognized revenues of senior notes$424 million, $383 million, and used the net proceeds$294 million, respectively, for the redemptionlicensing to distributors of transactional video-on-demand and repaymentelectronic sell-through services and other arrangements for licensing of $1.20 billion of senior notes, ofour content for which $800 millionour performance obligation was redeemed prior to maturity, resultingsatisfied in a pre-tax loss on early extinguishment of debt of $49 million ($31 million, net of tax). The remaining proceeds were used for general corporate purposes, including discretionary contributions to the Company’s qualified pension plans and the repayment of short-term borrowings, including commercial paper.

prior period.
At December 31, 2018, the Company classified $600 million of debt maturing in August 2019 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

10) DEBT
Our debt consists of the following:
At December 31,20212020
2.250% Senior Notes due 2022$— $35 
3.375% Senior Notes due 2022— 415 
3.125% Senior Notes due 2022— 117 
2.50% Senior Notes due 2023— 196 
3.25% Senior Notes due 2023— 141 
2.90% Senior Notes due 2023— 242 
4.25% Senior Notes due 2023— 837 
7.875% Debentures due 2023139 139 
7.125% Senior Notes due 202335 35 
3.875% Senior Notes due 2024490 490 
3.70% Senior Notes due 2024599 598 
3.50% Senior Notes due 2025597 596 
4.75% Senior Notes due 20251,242 1,239 
4.0% Senior Notes due 2026793 791 
3.45% Senior Notes due 2026123 123 
2.90% Senior Notes due 2027692 691 
3.375% Senior Notes due 2028496 495 
3.70% Senior Notes due 2028493 492 
4.20% Senior Notes due 2029494 493 
7.875% Senior Debentures due 2030830 831 
4.95% Senior Notes due 20311,223 1,220 
4.20% Senior Notes due 2032972 969 
5.50% Senior Debentures due 2033427 427 
4.85% Senior Debentures due 203487 87 
6.875% Senior Debentures due 20361,070 1,069 
6.75% Senior Debentures due 203775 75 
5.90% Senior Notes due 2040298 298 
4.50% Senior Debentures due 204245 45 
4.85% Senior Notes due 2042488 487 
4.375% Senior Debentures due 20431,123 1,116 
4.875% Senior Debentures due 204318 18 
5.85% Senior Debentures due 20431,233 1,232 
5.25% Senior Debentures due 2044345 345 
4.90% Senior Notes due 2044540 540 
4.60% Senior Notes due 2045590 589 
4.95% Senior Notes due 2050944 942 
5.875% Junior Subordinated Debentures due 2057514 514 
6.25% Junior Subordinated Debentures due 2057643 643 
Other bank borrowings35 95 
Obligations under finance leases16 26 
Total debt (a)
17,709 19,733 
Less current portion of long-term debt11 16 
Total long-term debt, net of current portion$17,698 $19,717 
(a) At December 31, 2021 and 2020, the senior and junior subordinated debt balances included (i) a net unamortized discount of $466 million and $491 million, respectively, and (ii) unamortized deferred financing costs of $95 million and $107 million, respectively. The face value of our total debt was $18.27 billion at December 31, 2021 and $20.33 billion at December 31, 2020.

During the year ended December 31, 2021, we redeemed senior notes totaling $1.99 billion, prior to maturity, for an aggregate redemption price of $2.11 billion resulting in a pre-tax loss on extinguishment of debt of $128 million.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

During the year ended December 31, 2020, we issued $4.50 billion of senior notes and used the net proceeds from these issuances for the redemption of long-term debt totaling $2.77 billion, prior to maturity, for an aggregate redemption price of $2.88 billion, as well as for general corporate purposes. The early redemption resulted in a pre-tax loss on extinguishment of debt for the year ended December 31, 2020of $126 million.

During the year ended December 31, 2019, we issued $500 million of 4.20% senior notes due 2029. We used the net proceeds from this issuance in the redemption of our $600 million outstanding 2.30% senior notes due August 2019. During 2019, we also repaid the $220 million aggregate principal amount of our 5.625% senior notes due September 2019 and the $90 million aggregate principal amount of our 2.75% senior notes due December 2019.

Our 5.875% junior subordinated debentures due February 2057 and 6.25% junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the expiration of the fixed-rate period. In January 2022, we delivered notice that we will be calling our 5.875% junior subordinated debentures due February 2057 in full on February 28, 2022.

The interest rate payable on our 3.45% senior notes due October 2026, will be subject to adjustment from time to time if Moody’s Investor Services, Inc. or S&P Global Ratings downgrades (or downgrades and subsequently upgrades) the credit rating assigned to these senior notes. The interest rate on these senior notes would increase by 0.25% upon each credit agency downgrade up to a maximum of 2.00%, and would similarly be decreased for subsequent upgrades. At December 31, 2021, the outstanding principal amount of these senior notes was $124 million.

Some of our outstanding notes and debentures provide for certain covenant packages typical for an investment grade company. There is an acceleration trigger for the majority of the notes and debentures in the event of a change in control under specified circumstances coupled with ratings downgrades due to the change in control, as well as certain optional redemption provisions for our junior debentures.

At December 31, 2018, the Company’s2021, our scheduled maturities of long-term debt at face value, excluding capitalfinance leases, and the related interest payments were as follows:
                2024 and
 20192020202120222023Thereafter
Long-term debt $600
  $—
  $300
  $700
  $1,033
 $6,907

2027 and
20222023202420252026Thereafter
Long-term debt$— $209 $1,092 $1,850 $924 $14,179 
Commercial Paper
The CompanyAt both December 31, 2021 and 2020, we had no outstanding commercial paper borrowings under its $2.50 billion commercial paper program of $674 million and $679 million at December 31, 2018 and 2017, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 3.02% and 1.88% at December 31, 2018 and 2017, respectively.borrowings.

Credit Facility
At December 31, 2018, the Company2021, we had a $2.5$3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”) which expires in June 2021.. The Company,Credit Facility is used for general corporate purposes and to support commercial paper borrowings, if any. We may, at itsour option, may also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the Company’s option at the time of each borrowing and are generally based generally on either the prime rate in the U.S. or LIBORan applicable benchmark rate plus a margin based(based on the Company’sour senior unsecured debt rating. The Company pays a facility fee basedrating), depending on the total amounttype and tenor of the commitments.loans entered. During the fourth quarter of 2021, the Credit Facility was amended to replace LIBOR as the benchmark rate for loans denominated in euros, sterling and yen with EURIBOR, SONIA and TIBOR-based rates, respectively, as publication of all non-USD
II-70

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

LIBOR tenors has been discontinued after December 31, 2021. The Credit Facility has one principal financial covenant that requires the Company to maintain a maximumour Consolidated Total Leverage Ratio ofto be less than 4.5x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualified acquisition) at the end of each quarter as further described in the Credit Facility. At December 31, 2018, the Company’squarter. The Consolidated Leverage Ratio was approximately 3.1x.

The ConsolidatedTotal Leverage Ratio reflects the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations,our Consolidated Indebtedness at the end of a quarter, to the Company’sour Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing four consecutive quarters.twelve-month period. We met the covenant as of December 31, 2021. On February 14, 2022, we further amended our Credit Facility to modify the definition of the Consolidated EBITDA is definedTotal Leverage Ratio in the Credit Facility as operating income plus interest incomeamended credit agreement to allow unrestricted cash and before depreciation, amortization and certain other noncash items.cash equivalents to be netted against Consolidated Indebtedness through June 2024.

The Credit Facility is used for general corporate purposes. At December 31, 2018, the Company2021, we had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49$3.50 billion.
Other Bank Borrowings
9) FINANCIAL INSTRUMENTS
The carrying value of financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value.  At both December 31, 20182021 and 2017,2020, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of $35 million and $95 million, respectively, with a weighted average interest rate of 3.50%.
11) LEASES
At December 31, 2021 and 2020, the carrying value offollowing amounts were recorded on the Company’s senior debt was $9.43 billion and the fair value, which is estimated based on quoted market prices for similar liabilities (Level 2) and includes accrued interest, was $9.48 billion and $10.16 billion, respectively.Consolidated Balance Sheets relating to our leases.

OperatingFinance
2021202020212020
Right-of-Use Assets
Operating lease assets$1,630 $1,602 $— $— 
Property and equipment, net$— $— $17 $19 
Lease Liabilities
Other current liabilities$325 $306 $— $— 
Debt— — 11 16 
Operating lease liabilities1,598 1,583 — — 
Long-term debt— — 5 10 
Total lease liabilities$1,923 $1,889 $16 $26 
The Company uses derivative financial instruments primarily to manage its exposure to market risks from fluctuations in foreign currency exchange rates.  The Company does not use derivative instruments unless there is an underlying exposure and, therefore, the Company does not hold or enter into derivative financial instruments for speculative trading purposes.

OperatingFinance
2021202020212020
Weighted average remaining lease term8 years8 years2 years2 years
Weighted average discount rate3.4 %4.0 %1.5 %4.2 %
II-71

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Lessee Contracts
We have operating leases primarily for office space, equipment, satellite transponders and studio facilities. We also have finance leases for satellite transponders and equipment. Lease costs are generally fixed, with certain contracts containing variable payments for non-lease costs based on usage and escalations in the lessors’ annual costs.

The following table presents our lease cost.
Year Ended December 31,202120202019
Operating lease cost (a) (b)
$374 $379 $382 
Finance lease cost:
Amortization of right-of-use assets19 18 23 
Interest expense on lease liabilities1 2 3 
Short-term lease cost (b) (c)
283 162 242 
Variable lease cost (d)
62 58 80 
Sublease income(20)(24)(31)
Total lease cost$719 $595 $699 
(a) Includes fixed lease costs and non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) associated with long-term operating leases.
(b) Includes costs capitalized in programming assets during the period for leased assets used in the production of programming.
(c) Short-term leases, which are not recorded in right-of-use assets and lease liabilities on the Consolidated Balance Sheets, have a term of 12 months or less and exclude month-to-month leases.
(d) Primarily includes non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) and costs for equipment leases that vary based on usage.

The following table presents supplemental cash flow information related to our leases.
Year Ended December 31,202120202019
Cash paid for amounts included in lease liabilities
Operating lease payments, included in operating cash flows$399 $385 $324 
Finance lease payments, included in financing cash flows$25 $21 $27 
Noncash additions to operating lease assets$377 $221 $387 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The expected future payments relating to our operating and finance lease liabilities at December 31, 2021 are as follows:
Leases
OperatingFinance
2022$388 $11 
2023326 5 
2024260 — 
2025243 — 
2026208 — 
2027 and thereafter807 — 
Total minimum payments2,232 16 
Less amounts representing interest309 — 
Present value of minimum payments$1,923 $16 
As of December 31, 2021, we had no material leases that were executed but not yet commenced.

Lessor Contracts
For the years ended December 31, 2021, 2020 and 2019, we recorded total lease income of $145 million, $133 million and $148 million, respectively, which relates to operating leases of our owned production facilities and office buildings. Lease payments received under these agreements consisted of fixed payments for the rental of space and certain building operating costs, as well as variable payments based on usage of production facilities and services, and escalating costs of building operations. During the fourth quarter of 2021, we completed the sales of a production facility and an office building, and as a result our future expected fixed lease income is not material (see Note 3).
12) FINANCIAL INSTRUMENTS
The carrying value of our financial instruments approximates fair value, except for notes and debentures.  At December 31, 2021 and 2020, the carrying value of our outstanding notes and debentures was $17.66 billion and $19.61 billion, respectively, and the fair value, which is determined based on quoted prices in active markets (Level 1 in the fair value hierarchy) was $21.5 billion and $24.5 billion, respectively.

Investments
At December 31, 2021 and 2020, we had investments of $627 million and $601 million, respectively, consisting of equity-method investments and equity investments without a readily determinable fair value. These investments are included in “Other assets” on the Consolidated Balance Sheets. We contributed $193 million, $59 million and $171 million to our investments during the years ended December 31, 2021, 2020 and 2019, respectively.

Our equity-method investments include a 50% interest in the broadcast network, The CW, as well as interests in several international television joint ventures including a 49% interest in Viacom18, a joint venture in India which owns and operates COLORS pay television channel. At December 31, 2021 and 2020, respectively, we had $568 million and $536 million of equity-method investments. For the years ended December 31, 2021 and 2020, “Equity in loss of investee companies, net of tax” on the Consolidated Statements of Operations includes impairment charges of $34 million and $9 million, respectively, relating to television joint ventures.

The carrying value of our investments without a readily determinable fair value for which we have no significant
II-73

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

influence was $59 million and $65 million at December 31, 2021 and 2020, respectively.

For 2021, “Net gains from investments” of $47 million on the Consolidated Statement of Operations primarily includes a gain of $37 million on the sale of an investment without a readily determinable fair value and a gain of $9 million from an increase in the fair value of a marketable security, which was sold during the third quarter. For 2020, “Net gains from investments” of $206 million reflects a gain of $213 million related to an increase in the value of our investment in fuboTV, which was sold in the fourth quarter of 2020, partially offset by an impairment of investments without a readily determinable fair value of $7 million. For 2019, “Net gains from investments” of $85 million reflects an unrealized gain of $113 million resulting from increases in the fair value of marketable securities, which were sold in 2020, and gains of $22 million on the sale and acquisition of joint ventures, partially offset by an impairment charge of $50 million to write down an investment to its fair value.

In February 2022, we closed on an agreement with Comcast to form a joint venture to launch SkyShowtime, a new subscription streaming service that is expected to be available in more than 20 European territories and will include premium and original content from both parent companies. The partnership, which is owned and controlled equally by us and Comcast, is accounted for under the equity method.

Foreign Exchange Contracts
We use derivative financial instruments primarily to manage our exposure to market risks from fluctuations in foreign currency exchange rates. We do not use derivative instruments unless there is an underlying exposure and, therefore, we do not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign exchange forward contracts have principally been used to hedge projected cash flows in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, generally for periods up to 24 months. The Company designatesWe designate foreign exchange forward contracts used to hedge committed and forecasted foreign currency transactions as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enterswe enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows. 

At December 31, 20182021 and 2017,2020, the notional amount of all foreign currency contracts was $325$1.94 billion and $1.27 billion, respectively. For 2021, $1.38 billion related to future production costs and $564 millionrelated to our foreign currency balances and $410other expected foreign currency cash flows. For 2020, $740 million respectively.related to future production costs and $529 million related to our foreign currency balances and other expected foreign currency cash flows.

Gains (losses) recognized on derivative financial instruments were as follows:
Year Ended December 31,20212020Financial Statement Account
Non-designated foreign exchange contracts$14 $(20)Other items, net
Year Ended December 31,2018 2017 Financial Statement Account
Non-designated foreign exchange contracts $25
   $(27)  Other items, net

The fair value of the Company’sour derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.

The CompanyWe continually monitors itsmonitor our positions with, and credit quality of, the financial institutions that are counterparties to itsour financial instruments. The Company isWe are exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company doeswe do not anticipate nonperformance by the counterparties.
The Company’s receivables do not represent significant concentrations of credit risk at December 31, 2018 and 2017, due to the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold.
II-74

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
10)
13) FAIR VALUE MEASUREMENTS
Certain of our assets and liabilities are measured at fair value on a recurring basis. The following tables set forth the Company’stable below presents our assets and liabilities measured at fair value on a recurring basis at December 31, 20182021 and 2017.2020. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’sour own assumptions about the assumptions that market participants would use in pricing the asset or liability.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31, 2018Level 1 Level 2 Level 3 Total
Assets:       
Foreign currency hedges$—
 $15
 $—
 $15
Total Assets$—

$15

$—
 $15
Liabilities:      $—
Deferred compensation$—
 $336
 $—
 $336
Foreign currency hedges—
 1
 —
 1
Total Liabilities$—

$337

$—
 $337
At December 31, 2017Level 1 Level 2 Level 3 Total
Assets:       
Foreign currency hedges$—
 $5
 $—
 $5
Total Assets$—
 $5
 $—
 $5
Liabilities:      $—
Deferred compensation$—
 $363
 $—
 $363
Foreign currency hedges—
 10
 —
 10
Total Liabilities$—
 $373
 $—
 $373

All of our assets and liabilities that are measured at fair value on a recurring basis use level 2 inputs. The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.
At December 31,20212020
Assets:
Foreign currency hedges$23 $20 
Total Assets$23 $20 
Liabilities:
Deferred compensation$435 $529 
Foreign currency hedges29 39 
Total Liabilities$464 $568 
11)
14) STOCKHOLDERS’ EQUITY
In general, CBS Corp.the Company’s Class A Common Stock and CBS Corp. Class B Common Stock have the same economic rights; however, holders of CBS Corp.the Company’s Class B Common Stock do not have any voting rights, except as required by law. Holders of CBS Corp.the Company’s Class A Common Stock are entitled to one vote per share with respect to all matters on which the holders of CBS Corp.the Company’s Common Stock are entitled to vote.

Merger with Viacom
At the Effective Time of the Merger, (1) each share of Viacom Class A Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of our Class A Common Stock, and (2) each share of Viacom Class B Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of our Class B Common Stock, resulting in the issuance of 29 million shares of our Class A Common Stock and 211 million shares of our Class B Common Stock. At the Effective Time, each share of CBS Class A Common Stock and each share of CBS Class B Common Stock issued and outstanding immediately prior to the Effective Time, remained an issued and outstanding share of our Class A Common Stock and our Class B Common Stock, respectively, and was not affected by the Merger.
Dividends
II-75
—
VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Stock Offerings
On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share, resulting in an aggregate liquidation preference of $1 billion. The Companynet proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the net proceeds for general corporate purposes, including investments in streaming.

Mandatory Convertible Preferred Stock
Unless earlier converted, each share of Mandatory Convertible Preferred Stock will automatically and mandatorily convert on the mandatory conversion date, expected to be April 1, 2024, into between 1.0013 and 1.1765 shares of our Class B Common Stock, subject to customary anti-dilution adjustments. The number of shares of Class B Common Stock issuable upon conversion will be determined based on the average of the volume-weighted average price per share of our Class B Common Stock over the 20 consecutive trading day period commencing on, and including, the 21st scheduled trading day immediately preceding April 1, 2024. Holders of the Mandatory Convertible Preferred Stock (“Holders”) have the right to convert all or any portion of their shares of Mandatory Convertible Preferred Stock at any time prior to April 1, 2024 at the minimum conversion rate of 1.0013 shares of our Class B Common Stock. In addition, the conversion rate applicable to such an early conversion may, in certain circumstances, be increased to compensate Holders for certain unpaid accumulated dividends. However, if a fundamental change (as defined in the Certificate of Designations governing the Mandatory Convertible Preferred Stock) occurs on or prior to April 1, 2024, then Holders will, in certain circumstances, be entitled to convert all or a portion of their shares of Mandatory Convertible Preferred Stock at an increased conversion rate for a specified period of time and receive an amount to compensate them for unpaid accumulated dividends and any remaining future scheduled dividend payments.

The Mandatory Convertible Preferred Stock is not redeemable. However, at our option, we may purchase or otherwise acquire (including in an exchange transaction) the Mandatory Convertible Preferred Stock from time to time in the open market, by tender or exchange offer or otherwise, without the consent of, or notice to, Holders. Holders have no voting rights, with certain exceptions.

If declared, dividends on the Mandatory Convertible Preferred Stock are payable quarterly through April 1, 2024. Dividends on the Mandatory Convertible Preferred Stock accumulate from the most recent dividend payment date, and will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee thereof, at an annual rate of 5.75% of the liquidation preference of $100 per share, payable in cash or, subject to certain limitations, by delivery of shares of Class B Common Stock or through any combination of cash and shares of Class B Common Stock, at our election. If we have not declared any portion of the accumulated and unpaid dividends by April 1, 2024, the conversion rate will be adjusted so that Holders receive an additional number of shares of our Class B Common Stock, with certain limitations.


II-76

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Dividends
We declared a quarterly cash dividend on itsour Class A and Class B Common Stock during each of the four quarters of 2018, 2017,2021 and 2016. For2020. During each of the years ended December 31, 2018, 20172021 and 2016, the Company2020, we declared total per share dividends of $.72, $.72, and $.66, respectively,$.96, resulting in total annual dividends of $274 million, $289$625 million and $294$601 million, respectively. Dividends have beenOn December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. Prior to the Merger, Viacom and CBS each declared a quarterly cash dividend during each of the first three quarters of 2019. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million.

During each of the third and fourth quarters of 2021, we declared quarterly cash dividends of $1.4375 per share on our Mandatory Convertible Preferred Stock. During the second quarter of 2021, we declared a cash dividend of $1.5493 per share on our Mandatory Convertible Preferred Stock, representing a dividend period from March 26, 2021 through July 1, 2021. Accordingly, we recorded as a reduction to additional paid-in capital asdividends on the Company has an accumulated deficit balance.Mandatory Convertible Preferred Stock of $44.2 million during the year ended December 31, 2021.


Treasury Stock
PurchaseAt December 31, 2021, we had $2.36 billion of Company Stock—authorization remaining under our share repurchase program. During 2018, the Company2021, we did not repurchase any shares of our common stock. During 2020, we repurchased 11.51.3 million shares of CBS Corp.our Class B Common Stock under itsour share repurchase program for $600$50 million, at an average cost of $52.06$38.63 per share. At December 31, 2018, $2.46 billionDuring 2019, we repurchased 1.2 million shares of authorization remainedour Class B Common Stock under theour share repurchase program.program for $50 million, at an average cost of $40.78 per share.

In the Merger, all shares of Viacom Class B Common Stock held by Viacom as treasury stock were canceled and recorded to additional paid-in-capital.

Conversion Rights—
Holders of Class A Common Stock have the right to convert their shares to Class B Common Stock as long as there are at least 5,000 shares of Class A Common Stock outstanding. Conversions of CBS Corp. Class A Common Stock into Class B Common Stock were 2.511.6 million for 20182021 and 0.112.2 million for 2016. Conversions2019. For 2020, conversions of CBS Corp. Class A Common Stock into Class B Common Stock for 2017 were minimal.

II-77

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Accumulated Other Comprehensive Income—Income (Loss)
The following table presents the changes in the components of accumulated other comprehensive income (loss).
   Net Actuarial Accumulated
 Cumulative Loss and Other
 Translation Prior Comprehensive
 Adjustments Service Cost Loss
At December 31, 2015$152
 $(922) $(770)
Other comprehensive loss before reclassifications(1) (165) (166)
Reclassifications to net earnings—
 169
(a) 
169
Other comprehensive income (loss)(1) 4
 3
At December 31, 2016151
 (918) (767)
Other comprehensive income (loss) before reclassifications6
 (173) (167)
Reclassifications to net earnings2
 270
(a) 
272
Other comprehensive income8
 97
 105
At December 31, 2017159
 (821) (662)
Other comprehensive loss before reclassifications(26) (143) (169)
Reclassifications to net earnings—
 56
(a) 
56
Other comprehensive loss(26) (87) (113)
At December 31, 2018$133
 $(908) $(775)
Continuing OperationsDiscontinued Operations
Net ActuarialAccumulated
CumulativeLoss andOtherOther
TranslationPriorComprehensiveComprehensive
AdjustmentsService Cost
Income (Loss) (a)
Loss
At December 31, 2018$(445)$(1,132)$(31)$(1,608)
Other comprehensive income (loss) before reclassifications7 (205)6 (192)
Reclassifications to net earnings— 60 (b)— 60 
Other comprehensive income (loss)7 (145)6 (132)
Tax effects reclassified to retained earnings— (230)(c)— (230)
At December 31, 2019(438)(1,507)(25)(1,970)
Other comprehensive income (loss) before reclassifications135 (74)5 66 
Reclassifications to net earnings— 72 (b)— 72 
Other comprehensive income (loss)135 (2)5 138 
At December 31, 2020(303)(1,509)(20)(1,832)
Other comprehensive income (loss) before reclassifications(142)5 (3)(140)
Reclassifications to net earnings— 70 (b)— 70 
Other comprehensive income (loss)(142)75 (3)(70)
At December 31, 2021$(445)$(1,434)$(23)$(1,902)
(a) Reflects cumulative translation adjustments.
(b) Reflects amortization of net actuarial losses, which for 2021 includes the accelerated recognition of a portion of the unamortized actuarial losses as a resultdue to the volume of lump sum benefit payments in one of our pension settlements forplans (see Note 17), and amortization of prior service cost.
(c) Reflects the years endedreclassification of certain income tax effects of federal tax legislation enacted in December 31, 2018, 2017 and 2016 (See Note 14).(the “Tax Reform Act”) on items within accumulated other comprehensive loss to retained earnings upon the adoption of new FASB guidance.

The net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax benefit (provision) for the years ended December 31, 2018, 20172021, 2020 and 20162019 of $29$25 million, $(106)$1 million and $(3)$44 million, respectively.
12) 15) STOCK-BASED COMPENSATION
The Company hasWe have equity incentive plans (the “Plans”) under which stock options, RSUs and market-based performance share units (“PSUs”) wereare issued. The purpose of the Plans is to benefit and advance the interests of the Companyour company by attracting, retaining and motivating participants and to compensate participants for their contributions to the financial success of the Company.our company. The Plans provide for awards of stock options, stock appreciation rights, restricted and unrestricted shares, RSUs, dividend equivalents, performance awards and other equity-related awards. RSUs and PSUs accrue dividends each time we declare a quarterly cash dividend, which are paid upon vesting when the shares are delivered and are forfeited if the award does not vest. Upon exercise of stock options or vesting of RSUs the Company issuesand PSUs, we issue new shares from itsour existing authorization. At December 31, 2018,2021, there were 4138 million shares available for future grant under the Plans.
The following table summarizes the Company’s stock-based Stock-based compensation expense for the years endedawards were also granted under Viacom’s equity incentive plans until December 31, 2018, 20172020. Upon exercise of outstanding stock options or vesting of RSUs and 2016.PSUs previously granted under Viacom’s equity incentive plans, shares may be issued from Viacom’s previous authorization or from treasury stock.
Year Ended December 31,2018 2017 2016
RSUs and PSUs$120
 $152
 $137
Stock options26
 27
 28
Stock-based compensation expense, before income taxes146
 179
 165
Related tax benefit(36) (69) (63)
Stock-based compensation expense, net of tax benefit$110
 $110
 $102
II-78

Stock-based compensation expenses for 2018 included forfeitures of $28 million and accelerations of $6 million relating to changes in senior management, which are included in “Restructuring and other corporate matters” on the Consolidated Statement of Operations. Included in net loss from discontinued operations was stock-based compensation expense of $2 million and $12 million for 2017 and 2016, respectively.

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

At the Effective Time of the Merger, each RSU for Viacom Class B common stock was converted into 0.59625 RSUs for the Company’s Class B Common Stock and each outstanding stock option for Viacom Class B common stock was converted into 0.59625 options for the Company’s Class B common stock. The exercise price of stock options was adjusted by dividing the exercise price of the Viacom stock options by 0.59625. At the Effective Time of the Merger, all outstanding PSU awards for which the performance period had not been completed were converted into time-based RSUs based on the target number of shares included in the terms of the original PSU award. RSU and stock option information is presented herein as if Viacom and CBS had been combined for or all periods presented, unless otherwise noted.

The following table summarizes stock-based compensation expense for the years ended December 31, 2021, 2020 and 2019.
Year Ended December 31,202120202019
RSUs and PSUs$163 $167 $169 
Stock options9 19 27 
Compensation cost included in operating and SG&A expense172 186 196 
Compensation cost included in restructuring and other
corporate matters (a)
20 88 90 
Stock-based compensation expense, before income taxes192 274 286 
Related tax benefit(41)(54)(58)
Stock-based compensation expense, net of tax benefit$151 $220 $228 
(a) Reflects accelerations as a result of restructuring activities, as well as accelerations triggered by the Merger in 2019.

Included in net earnings from discontinued operations was stock-based compensation expense of $3 million, $10 million, and $5 million for the years 2021, 2020, and 2019, respectively.

RSUs and PSUs
Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is generally a one-one- to four-year service period. Certain RSU awards are also subject to satisfying internal performance conditions. Compensation expense is recorded based on the probable outcome of the internal performance conditions.conditions and subsequently adjusted to the actual outcome of the performance condition. Forfeitures for RSUs are estimated on the date of grant based on historical forfeiture rates. On an annual basis, the Company adjusts theWe adjust compensation expense based on actual forfeitures and reviseson an annual basis we revise the forfeiture rate as necessary.

The weighted average grant date fair value of RSUs was $53.96
, $66.59
During 2021 and $47.30 in 2018, 2017, and 2016, respectively. The total market value of RSUs that vested during 2018, 2017, and 2016 was $135 million, $193 million and $129 million, respectively. Total unrecognized compensation cost related to non-vested RSUs at December 31, 2018 was $164 million which is expected to be recognized over a weighted average period of 2.4 years.

During 2018, 2017, and 2016, the Company2020, we also granted PSU awards. The number of shares to be issued upon vesting of thethese PSUs is based on the total shareholder return of the Company’s stock price performanceClass B Common Stock measured against the companies comprising the S&P 500 Index over a designated measurement period, as well asand for certain 2021 awards is also based on the achievement of established operating goals. The fair value of PSU awards with a market condition is determined using a Monte Carlo simulation model. Compensation expense for PSUs is expensed over the required employee service period. The fair value of the PSU awards granted during the years ended December 31, 2018, 20172021 and 20162020 was $16$3 million and $34 million, respectively. There were no PSU awards granted in 2019.

The weighted average grant date fair value of RSUs and PSUs granted was $35.80, $2332.35 and $41.71 in 2021, 2020, and 2019, respectively. The total market value of RSUs and PSUs that vested during 2021, 2020, and 2019 was $260 million, $222 million and $4$159 million, respectively. All PSU awards were forfeited during 2018.Total unrecognized compensation cost related to non-vested RSUs and PSUs at December 31, 2021 was $199 million, which is expected to be recognized over a weighted average period of 2.3 years.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The following table summarizes the Company’sour RSU activity.and PSU share activity:
Weighted Average
SharesGrant Date Fair Value
Non-vested at December 31, 202014,000,630 $38.91 
Granted486,315 $35.80 
Vested(6,238,540)$40.94 
Forfeited(517,741)$37.91 
Non-vested at December 31, 20217,730,664 $37.14 
     Weighted Average
 RSUs Grant Date Fair Value
Non-vested at December 31, 2017 5,323,987
   $58.19
 
Granted 3,093,130
   $53.96
 
Vested (2,443,125)   $58.71
 
Forfeited (788,923)   $56.16
 
Non-vested at December 31, 2018 5,185,069
   $55.73
 

Stock Options
Compensation expense for stock options is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model. Stock options generally vest over a three-three- to four-year service period and expire eight years from the date of grant. Forfeitures are estimated on the date of grant based on historical forfeiture rates. On an annual basis, the Company adjustsWe adjust the compensation expense based on actual forfeituresforfeitures.
There were no stock option grants during 2021, 2020, and revises the forfeiture rate as necessary.2019.
TheTotal unrecognized compensation cost related to non-vested stock option awards at December 31, 2021 was $3 million, which is expected to be recognized over a weighted average fair valueperiod of stock options as of the grant date was $14.48, $17.50 and $12.30 in 2018, 2017, and 2016, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:0.8 years.
 2018 2017 2016
Expected dividend yield1.33% 1.09% 1.31%
Expected stock price volatility29.52% 29.89% 32.55%
Risk-free interest rate2.73% 2.00% 1.35%
Expected term of options (years)5.00
 5.00
 5.00


The following table summarizes our stock option activity under the Plans.
CBS CORPORATION
Weighted Average
Stock OptionsExercise Price
Outstanding at December 31, 202014,140,724 $60.72 
Exercised(7,532,834)$55.19 
Forfeited or expired(405,315)$115.51 
Outstanding at December 31, 20216,202,575 $63.85 
Exercisable at December 31, 20215,700,778 $64.78 
The following table summarizes other information relating to stock option exercises during the years ended December 31, 2021, 2020 and 2019.
Year Ended December 31, 202120202019
Cash received from stock option exercises$408 $5 $15 
Tax benefit of stock option exercises$29 $1 $4 
Intrinsic value of stock option exercises$128 $2 $15 
At December 31, 2021, stock options outstanding and exercisable have a weighted average remaining contractual life of 2.60 years and 2.40 years, respectively. There was no intrinsic value for options outstanding and exercisable, based on our closing stock price of $30.18 at December 31, 2021.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The expected stock price volatility is determined using a weighted average of historical volatility for CBS Corp. Class B Common Stock and implied volatility of publicly traded options to purchase CBS Corp. Class B Common Stock. Given the existence of an actively traded market for CBS Corp. options, the Company was able to derive implied volatility using publicly traded options to purchase CBS Corp. Class B Common Stock that were trading near the grant date of the employee stock options at a similar exercise price and a remaining term of greater than one year.

The risk-free interest rate is based on a U.S. Treasury rate in effect on the date of grant with a term equal to the expected term. The expected term is determined based on historical employee exercise and post-vesting termination behavior. The expected dividend yield represents the Company’s future expectation of the dividend yield based on current rates and historical patterns of dividend changes.

Total unrecognized compensation cost related to non-vested stock option awards at December 31, 2018 was $31 million, which is expected to be recognized over a weighted average period of 2.5 years.

The following table summarizes the Company’s stock option activity under the Plans.
     Weighted Average
 Stock Options Exercise Price
Outstanding at December 31, 2017 10,113,836
   $50.59
 
Granted 1,774,181
   $54.32
 
Exercised (760,503)   $35.80
 
Forfeited or expired (220,544)   $58.74
 
Outstanding at December 31, 2018 10,906,970
   $52.07
 
Exercisable at December 31, 2018 7,310,228
   $50.15
 

The following table summarizes other information relating to stock option exercises during the years ended December 31, 2018, 2017 and 2016.
Year Ended December 31, 2018 2017 2016
Cash received from stock option exercises$27
 $91
 $21
Tax benefit of stock option exercises$4
 $36
 $14
Intrinsic value of stock option exercises$16
 $96
 $37

The following table summarizes information concerning outstanding and exercisable stock options to purchase CBS Corp. Class B Common Stock under the Plans at December 31, 2018.
 Outstanding Exercisable
   Remaining Weighted   Weighted
Range ofNumber Contractual Average Number Average
Exercise Priceof Options Life (Years) Exercise Price of Options Exercise Price
$5 to 9.9910,186
 0.08  $5.72
  10,186
  $5.72
 
$10 to 19.9942,442
 1.61  $16.52
  42,442
  $16.52
 
$20 to 29.99932,407
 0.72  $26.71
  932,407
  $26.71
 
$30 to 39.99791,703
 1.82  $34.27
  791,703
  $34.27
 
$40 to 49.992,741,793
 3.72  $44.96
  1,994,388
  $44.64
 
$50 to 59.993,225,456
 5.73  $56.71
  1,287,783
  $59.27
 
$60 to 69.993,162,983
 4.33  $66.04
  2,251,319
  $65.96
 
 10,906,970
       7,310,228
    

At December 31, 2018 stock options outstanding have a weighted average remaining contractual life of 4.08 years and the total intrinsic value for “in-the-money” options, based on the Company’s closing stock price of $43.72, was

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


$25 million. At December 31, 2018 stock options exercisable have a weighted average remaining contractual life of 3.02 years and the total intrinsic value for “in-the-money” exercisable options was $25 million.

13)16) INCOME TAXES
The U.S. and foreign components of earnings from continuing operations before income taxes and equity in loss of investee companies were as follows:
Year Ended December 31,2018 2017 2016
United States$1,743
 $1,441
 $1,803
Foreign546
 538
 427
Total$2,289
 $1,979
 $2,230

Year Ended December 31,202120202019
United States$4,106 $2,353 $2,225 
Foreign1,100 794 998 
Total$5,206 $3,147 $3,223 
The components of the provision (benefit) for income taxes were as follows:
Year Ended December 31,2018 2017 2016
Current:     
Federal$107
 $720
 $359
State and local81
 38
 64
Foreign41
 63
 61
 229
 821
 484
Deferred44
 (188) 144
Provision for income taxes$273
 $633
 $628

Year Ended December 31,202120202019
Current:
Federal$179 $160 $370 
State and local138 73 164 
Foreign239 180 202 
Total current556 413 736 
Deferred:
Federal249 146 (67)
State and local49 42 (43)
Foreign(208)(66)(655)
Total deferred90 122 (765)
Provision (benefit) for income taxes$646 $535 $(29)
In addition, included in net lossearnings from discontinued operations was an income tax provision of $8$57 million, $38 million and $124$32 million in 2017for 2021, 2020, and 2016,2019, respectively.

The equity in loss of investee companies is shown net of tax on the Company’s Consolidated Statements of Operations. The tax benefitsbenefit relating to losses from equity investments was $49 million in 2018, 2017,2021 and 2016 were $19 million $22 million,in both 2020 and $25 million, respectively,2019, which represented an effective tax rate of 25.3%35.0%, 37.9%40.4% and 33.5%26.4% for 2018, 2017,2021, 2020, and 2016,2019, respectively.
In 2018 and 2017, the Company realized tax benefits from the exercise of stock options and vesting of RSUs of $37 million and $104 million, respectively.
II-81

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The difference between income taxes expected at the U.S. federal statutory income tax rate of 21% and the provision (benefit) for income taxes is summarized as follows:
Year Ended December 31,2018 2017 2016
Taxes on income at U.S. federal statutory rate$481
 $693
 $780
State and local taxes, net of federal tax benefit77
 47
 59
Effect of foreign operations(75) (162) (112)
Impact of federal tax legislation(54) 129
 —
Reversal of valuation allowance (a)
(154) —
 —
Excess tax benefits from stock-based compensation(1) (44) —
Domestic production deduction—
 (31) (42)
Other, net (b)
(1) 1
 (57)
Provision for income taxes$273
 $633
 $628
Year Ended December 31,202120202019
Taxes on income at U.S. federal statutory rate$1,093 $661 $676 
State and local taxes, net of federal tax benefit190 116 116 
Effect of foreign operations(141)(98)(49)
Noncontrolling interests(13)(52)(2)
U.K. statutory rate change(260)(100)— 
Reorganization of foreign operations (a)
(229)— (768)
Bankruptcy of an investee— — (39)
Tax benefits from positions relating to the Tax Reform Act (b)
— — (44)
Merger-related costs— — 41 
Excess tax (benefit) deficiency from stock-based
    compensation		(8)29 20 
Other, net
14 (21)20 
Provision (benefit) for income taxes$646 $535 $(29)
(a) IncludesFor 2021, reflects a tax benefit from the reversalrecognition of a valuation allowance of $140 million relating to capital loss carryforwards that willassociated with a change in the tax entity classification of a foreign subsidiary. For 2019, reflects a deferred tax benefit resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. The related deferred tax asset is primarily expected to be utilizedrealized over a 25-year period.
(b) Reflects tax benefits realized in connection with the salepreparation of CBS Television Citythe 2018 federal tax return, based on further clarity provided by the United States government on tax positions relating to the Tax Reform Act.
The following table summarizes the components of deferred income tax assets and liabilities.
At December 31,20212020
Deferred income tax assets:
Reserves and other accrued liabilities$369 $476 
Pension, postretirement and other employee benefits679 772 
Lease liability465 466 
Tax credit and loss carryforwards428 448 
Other23 56 
Total deferred income tax assets1,964 2,218 
Valuation allowance(581)(593)
Deferred income tax assets, net1,383 1,625 
Deferred income tax liabilities:
Intangible assets(523)(460)
Unbilled licensing receivables(76)(237)
Lease asset(391)(400)
Property, equipment and other assets(171)(198)
Financing obligations(65)(71)
Other(14)(44)
Total deferred income tax liabilities(1,240)(1,410)
Deferred income tax assets, net$143 $215 
In addition to the amounts reflected in the first quartertable above, included in “Assets of 2019.
(b) 2016 includes a one-timediscontinued operations” on the Consolidated Balance Sheets are net deferred income tax benefitassets of $47$80 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.and $93 million at December 31, 2021 and 2020, respectively.
II-82

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following table summarizes the components ofAt December 31, 2021, we had deferred income tax assets and liabilities.
At December 31,2018 2017
Deferred income tax assets:   
Reserves and other accrued liabilities$339
 $391
Pension, postretirement and other employee benefits492
 478
Tax credit and loss carryforwards723
 835
Other80
 70
Total deferred income tax assets1,634
 1,774
Valuation allowance(719) (974)
Deferred income tax assets, net915
 800
Deferred income tax liabilities:   
Intangible assets(844) (847)
Unbilled licensing receivables(401) (291)
Property, equipment and other assets(40) (86)
Total deferred income tax liabilities(1,285) (1,224)
Deferred income tax liabilities, net$(370) $(424)

In addition to the deferred income taxes reflected in the table above, included in other liabilities on the Consolidated Balance Sheets are net deferred incomefor federal foreign tax assetscredit carryforwards of $12$40 million at both December 31, 2018 and 2017 relating to discontinued operations.

At December 31, 2018, the Company had net operating loss carryforwards for federal, state and local, and foreign jurisdictions of approximately $1.73 billion,$282 million, the majority of which expire in various years from 20192022 through 2038.2039.

The 20182021 and 20172020 deferred income tax assets were reduced by a valuation allowance of $719$581 million and $974$593 million, respectively, principally relating to income tax benefits from capital losses and net operating losses in foreign jurisdictions which are not expected to be realized.

In December 2017, the U.S. government enacted the Tax Reform Act which contained significant changes to U.S. federal tax law, including a reduction in the federal corporate tax rate from 35% to 21% and a one-time transition tax on cumulative foreign earnings and profits. For the year ended December 31, 2017, the Company recorded a net provisional charge of $129 million, reflecting the estimated transition tax of $407 million on cumulative foreign earnings and profits, offset by an estimated benefit of $278 million to adjust the Company’s deferred income tax balances as a result of the reduced corporate income tax rate. During 2018, the Company completed its analysis of these provisional amounts and recorded a charge of $15 million to adjust the estimated transition tax on cumulative foreign earnings and profits. In January 2019, the U.S. government issued guidance relating to the transition tax. The Company is currently evaluating the impact of this guidance, which will be recorded in the Company’s consolidated financial statements in the first quarter of 2019.

The Tax Reform Act includes a deduction for foreign derived intangible income and a tax on global intangible low-taxed income (“GILTI”), which imposes a U.S. tax on certain income earned by the Company’s foreign subsidiaries. The Company elected to treat the tax on GILTI as a period cost when incurred and therefore, the tax on GILTI is included in its tax provision for the year ended December 31, 2018.

Generally, the future remittance of foreign undistributed earnings will not be subject to U.S. federal income taxes under the provisions of the Tax Reform Act and as a result, for substantially all of itsour foreign subsidiaries, the Company doeswe do not intend to assert indefinite reinvestment of both cash held outside of the U.S. and future cash earnings. However, a future repatriation of cash could be subject to state and local income taxes, foreign income taxes, and withholding taxes. Accordingly, the Companywe recorded deferred income tax liabilities associated with future

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


repatriations, which were not material to the Company’s consolidated financial statements. Additional income taxes have not been provided for outside basis differences inherent in these entities, which could be recognized upon sale or other transaction, as these amounts continue to be indefinitely invested in foreign operations. The determination of the U.S. federal deferred income tax liability for such outside basis difference is not practicable.

The following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.
At January 1, 2016$104
Additions for current year tax positions9
Additions for prior year tax positions4
Reductions for prior year tax positions(8)
Cash settlements(6)
Statute of limitations lapses(1)
At December 31, 2016102
Additions for current year tax positions50
Additions for prior year tax positions39
Reductions for prior year tax positions(41)
Cash settlements(5)
Statute of limitations lapses(7)
At December 31, 2017138
Additions for current year tax positions15
Additions for prior year tax positions165
Reductions for prior year tax positions(34)
Cash settlements(16)
Statute of limitations lapses(2)
At December 31, 2018$266

At January 1, 2019$446 
Additions for current year tax positions49 
Additions for prior year tax positions67 
Reductions for prior year tax positions(26)
Cash settlements(149)
Statute of limitations lapses(3)
At December 31, 2019384 
Additions for current year tax positions15 
Additions for prior year tax positions18 
Reductions for prior year tax positions(34)
Cash settlements(2)
Statute of limitations lapses(9)
Reclassification to deferred income tax liability(64)
At December 31, 2020308 
Additions for current year tax positions23 
Additions for prior year tax positions32 
Reductions for prior year tax positions(45)
Cash settlements(6)
Statute of limitations lapses(11)
At December 31, 2021$301 
The reserve for uncertain tax positions of $266$301 million at December 31, 20182021 includes $249$271 million which would affect the Company’sour effective income tax rate, including discontinued operations, if and when recognized in future years.

The Company recognizes interest and penalty charges related to the reserve for uncertain tax positions as income tax expense. The Company We recognized interest and penalties of $14 million, $16 million and $24 million for the yearyears ended December 31, 2018, $6 million for the year ended December 31, 20172021, 2020 and $7 million for the year ended December 31, 2016,2019, respectively, in the Consolidated Statements of Operations. As of December 31, 20182021 and 2017, the Company has2020, we have recorded liabilities for accrued interest and penalties of $24$56 million and $14$57 million, respectively, on the Consolidated Balance Sheets.
II-83

The statute of limitations for the 2014 tax year expired in September 2018. The IRS is expected to commence its examination of the 2016 and 2017 tax years during the first quarter of 2019. Various tax years are also currently under examination by state and local and foreign tax authorities. In addition, there are significant uncertainties with respect to the interpretation of tax law provisions contained in the Tax Reform Act. Guidance issued by the U.S. government in January 2019 may result in a decrease to the reserve for uncertain tax positions within the next twelve months; however, the Company is still evaluating the impact of this guidance and therefore, the amount of this decrease cannot currently be determined. In addition, future guidance issued by federal and state authorities could result in further changes to the reserve for uncertain tax positions.

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


14)The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and local and foreign jurisdictions. For periods prior to the Merger, Viacom and CBS filed separate tax returns. For CBS, we are currently under examination by the IRS for the 2017 and 2018 tax years. For Viacom, the Company and the IRS settled the income tax audit for the 2014 and 2015 tax years during the second quarter of 2021. The IRS commenced its examination of Viacom’s 2016 through 2019 tax years in November 2021. Various tax years are also currently under examination by state and local and foreign tax authorities. With respect to open tax years in all jurisdictions, we currently do not believe that it is reasonably possible that the reserve for uncertain tax positions will significantly change within the next 12 months; however, it is difficult to predict the final outcome or timing of resolution of any particular tax matter and events could cause our current expectation to change in the future.
17) PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company and certain of its subsidiaries sponsor qualified and non-qualified defined benefit pension plans, principally non-contributory, covering eligible employees. Our pension plans consist of both funded and unfunded plans. The majority of participants in these plans are retired employees or former employees of previously divested businesses. MostIn November 2020, our remaining defined benefit pension plans subject to benefit accruals, which were sponsored by CBS prior to the Merger, were amended to freeze future benefit accruals and benefits were enhanced under defined contribution plans that were previously sponsored by CBS, both of which are effective January 1, 2021. As a result of the Company’s pension plans are closed to new entrants. Theplan amendments, a curtailment gain of $79 million associated with the elimination of benefit accruals for future services of the impacted employees was reflected in unrecognized actuarial loss included within “Accumulated other comprehensive loss” on the Consolidated Balance Sheet for the year ended December 31, 2020. Plan benefits for some plans are based primarily on an employee’s years of service and average pay near retirement. Benefits under other plans are based primarily on an employee’s pay for each year that the employee participated in the plan. Participating employees are vested in the plans after five years of service. The Company funds itsWe fund our pension plans in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), the Pension Protection Act of 2006, the Internal Revenue Code of 1986 and other applicable law, rules and regulations. Plan assets consist principally of corporate bonds, equity securities, andcommon collective trust funds, U.S. government securities.securities and short-term investments. The Company’s common stock representsCommon Stock represented approximately 2.5%1.5% and 2.8%1.8% of the fair value of plan assets’ fair valuesassets at December 31, 20182021 and 2017,2020, respectively.

During the first quarter of 2018, the Company adopted FASB amended guidance on the presentation of net benefit cost. This guidance requires the Company to present the service cost component of net benefit cost in the same line items on the statement of operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented in the statement of operations separately from the service cost component and below the subtotal of operating income. As a result of the adoption of this guidance, the Company presented $63 million of net benefit costs in “Other items, net” on the Consolidated Statement of Operations for 2018 representing the components of net benefit cost other than service cost. This guidance is required to be applied retrospectively and therefore, the Company reclassified net benefit costs of $438 million and $281 million, including pension settlement charges, for 2017 and 2016, respectively, below operating income on the Consolidated Statements of Operations. All related amounts presented herein have been recast to conform to this presentation.

During 2017, the Company purchased a group annuity contract under which an insurance company permanently assumed the Company’s obligation to pay and administer pension benefits to certain of the Company’s pension plan participants, or their designated beneficiaries, who had been receiving pension benefits. The purchase of this group annuity contract was funded with pension plan assets. As a result, the Company’s outstanding pension benefit obligation was reduced by approximately $800 million, which represented approximately 20% of the total obligations of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a settlement charge of $352 million in 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.

During 2016, the Company offered eligible former employees who had not yet initiated pension benefit payments the option to make a one-time election to receive the present value of their pension benefits as a lump-sum distribution or to commence an immediate monthly annuity benefit. As a result, the Company paid a total of $518 million of lump-sum distributions in 2016 using its pension plan assets, which represented 12% of the total obligations of its qualified pension plans. Accordingly, the Company recorded a settlement charge of $211 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.
In addition, the Company sponsors health and welfare plans that provide postretirement health care and life insurance benefits to eligible retired employees and their covered dependents. Eligibility is based in part on certain age and service requirements at the time of their retirement. Most of the plans are contributory and contain cost-sharing features such as deductibles and coinsurance which are adjusted annually, as well as caps on the annual dollar amount the Companywe will contribute toward the cost of coverage. Claims and premiums for which we are responsible are paid primarily with the Company’sour own funds.

The pension plan disclosures herein include information related to our domestic pension and postretirement benefit plans only, unless otherwise noted. At December 31, 2021 and 2020, the Consolidated Balance Sheets also include a liability of $53 million and $77 million, respectively, in “Pension and postretirement benefit obligations” relating to our non-U.S. pension plans and certain other retirement severance plans.

We use a December 31 measurement date for all pension and other postretirement benefit plans.
II-84

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The Company uses a December 31 measurement date for all pension and other postretirement benefit plans.

The following table sets forth the change in benefit obligation for the Company’sour pension and postretirement benefit plans.
Pension BenefitsPostretirement Benefits
2021202020212020
Change in benefit obligation:
Benefit obligation, beginning of year$5,162 $4,963 $322 $360 
Service cost— 30 1 2 
Interest cost145 164 8 11 
Actuarial (gain) loss(45)408 (18)(8)
Curtailment gain— (79)— — 
Benefits paid(320)(324)(46)(58)
Settlements paid(33)— — — 
Participants’ contributions— — 5 12 
Retiree Medicare drug subsidy— — 4 3 
Benefit obligation, end of year$4,909 $5,162 $276 $322 
 Pension Benefits Postretirement Benefits
 2018 2017 2018 2017
Change in benefit obligation:       
Benefit obligation, beginning of year$4,040
 $4,660
 $424
 $447
Service cost31
 29
 —
 —
Interest cost149
 191
 16
 18
Actuarial (gain) loss(147) 337
 (8) 19
Benefits paid(305) (326) (104) (73)
Participants’ contributions—
 —
 11
 10
Retiree Medicare drug subsidy—
 —
 4
 3
Settlements(90) (862) —
 —
Cumulative translation adjustments(7) 11
 —
 —
Benefit obligation, end of year$3,671
 $4,040
 $343
 $424
The actuarial gain of $45 million, included in the change in benefit obligation for pension benefits in 2021, was driven by a 30 basis point increase in the discount rate from December 31, 2020 to December 31, 2021.

The following table sets forth the change in plan assets for the Company’sour pension and postretirement benefit plans.
 Pension Benefits Postretirement Benefits
 2018 2017 2018 2017
Change in plan assets:       
Fair value of plan assets, beginning of year$3,046
 $3,244
 $—
 $4
Actual return on plan assets(170) 328
 —
 —
Employer contributions51
 650
 90
 56
Benefits paid(305) (326) (104) (73)
Participants’ contributions—
 —
 11
 10
Retiree Medicare drug subsidy—
 —
 4
 3
Settlements(90) (862) —
 —
Cumulative translation adjustments(6) 12
 —
 —
Fair value of plan assets, end of year$2,526
 $3,046
 $1
 $—

Pension BenefitsPostretirement Benefits
2021202020212020
Change in plan assets:
Fair value of plan assets, beginning of year$3,347 $3,176 $— $— 
Actual return on plan assets116 429 — — 
Employer contributions81 66 37 43 
Benefits paid(320)(324)(46)(58)
Settlements paid(33)— — — 
Participants’ contributions— — 5 12 
Retiree Medicare drug subsidy— — 4 3 
Fair value of plan assets, end of year$3,191 $3,347 $— $— 
The funded status of pension and postretirement benefit obligations and the related amounts recognized on the Company’s Consolidated Balance Sheets were as follows:
 Pension Benefits Postretirement Benefits
At December 31,2018 2017 2018 2017
Funded status at end of year$(1,145) $(994) $(342) $(424)
Amounts recognized on the Consolidated Balance Sheets:       
Other assets$6
 $12
 $—
 $—
Current liabilities(59) (53) (46) (49)
Noncurrent liabilities(1,092) (953) (296) (375)
Net amounts recognized$(1,145) $(994) $(342) $(424)

Pension BenefitsPostretirement Benefits
At December 31,2021202020212020
Funded status at end of year$(1,718)$(1,815)$(276)$(322)
Amounts recognized on the Consolidated Balance Sheets:
Other assets$7 $7 $— $— 
Current liabilities(73)(85)(35)(38)
Noncurrent liabilities(1,652)(1,737)(241)(284)
Net amounts recognized$(1,718)$(1,815)$(276)$(322)
The Company’sOur qualified pension plans were underfunded by $478$655 million and $309$712 million at December 31, 20182021 and 2017,2020, respectively.

II-85

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following amounts were recognized in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.
 Pension Benefits Postretirement Benefits
At December 31,2018 2017 2018 2017
Net actuarial (loss) gain$(1,692) $(1,583) $179
 $189
Net prior service cost(4) (6) —
 —
Share of equity investee(1) (2) —
 —
 (1,697) (1,591) 179
 189
Deferred income taxes632
 606
 (22) (25)
Net amount recognized in accumulated other
comprehensive income (loss)
$(1,065) $(985) $157
 $164

Pension BenefitsPostretirement Benefits
At December 31,2021202020212020
Net actuarial (loss) gain$(2,068)$(2,144)$143 $140 
Net prior service cost(1)(1)— — 
Share of equity investee(1)(2)— — 
(2,070)(2,147)143 140 
Deferred income taxes541 560 (14)(13)
Net amount recognized in accumulated other
comprehensive income (loss)
$(1,529)$(1,587)$129 $127 
The accumulated benefit obligation for all defined benefit pension plans was $3.58$4.91 billion and $3.96$5.16 billion at December 31, 20182021 and 2017,2020, respectively.
 
Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below.
At December 31,2018 2017
Projected benefit obligation$3,662
 $3,933
Accumulated benefit obligation$3,576
 $3,852
Fair value of plan assets$2,511
 $2,928

At December 31,20212020
Projected benefit obligation$4,908 $5,161 
Accumulated benefit obligation$4,908 $5,161 
Fair value of plan assets$3,184 $3,340 
The following tables present the components of net periodic benefit cost and amounts recognized in other comprehensive income (loss).
Pension BenefitsPostretirement Benefits
Year Ended December 31,202120202019202120202019
Components of net periodic cost:
Service cost$— $30 $28 $1 $2 $1 
Interest cost145 164 191 8 11 16 
Expected return on plan assets(188)(194)(183)— — — 
Amortization of actuarial losses (gains)93 103 94 (15)(15)(18)
Amortization of prior service cost— 2 1 — 1 1 
Settlements (a)
10 — — — — — 
Net periodic cost (b)
$60 $105 $131 $(6)$(1)$— 
 Pension Benefits Postretirement Benefits
Year Ended December 31,2018
2017
2016
2018
2017
2016
Components of net periodic cost:           
Service cost$31
 $29
 $29
 $—
 $—
 $—
Interest cost149
 191
 215
 16
 18
 20
Expected return on plan assets(177) (201) (227) —
 —
 —
Amortization of actuarial losses (gains)81
 101
 84
 (18) (22) (21)
Amortization of prior service cost1
 2
 1
 —
 —
 —
Settlements11
 352
 211
 —
 —
 —
Net periodic cost$96
 $474
 $313
 $(2) $(4) $(1)
(a) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

(b) Includes amounts reflected in net earnings from discontinued operations of $3 million for 2021, $5 million for 2020 and $6 million for 2019.
The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income. All other components of net periodic cost are presented below operating income, in “Other items, net” and “Pension settlement charges.net.” Included in net loss from discontinued operations was net periodic cost of $3 million and $2 million in 2017 and 2016, respectively.
II-86

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Pension Benefits Postretirement Benefits
Year Ended December 31, 20182018 2017 2016 2018 2017 2016
Other comprehensive income (loss): -200   45     
Actuarial (loss) gain$(200) $(210) $(275) $8
 $(19) $5
Amortization of actuarial losses (gains) (a)
81
 101
 84
 (18) (22) (21)
Amortization of prior service cost (a)
1
 2
 1
 —
 —
 —
Settlements (a)
11
 352
 211
 —
 —
 —
Cumulative translation adjustments1
 (1) 2
 —
 —
 —
 (106) 244
 23
 (10) (41) (16)
Deferred income taxes26
 (119) (9) 3
 13
 6
Recognized in other comprehensive income
(loss), net of tax
$(80) $125
 $14
 $(7) $(28) $(10)
Pension BenefitsPostretirement Benefits
Year Ended December 31,202120202019202120202019
Other comprehensive income (loss):
Actuarial (loss) gain$(27)$(173)$(246)$18 $8 $(9)
Share of equity investee1 — — — — — 
Curtailment gain— 79 — — — — 
Settlements10 — — — — — 
Amortization of actuarial losses (gains)93 103 94 (15)(15)(18)
Amortization of prior service cost— 2 1 — 1 1 
77 11 (151)3 (6)(26)
Deferred income taxes(19)(3)37 (1)1 5 
Recognized in other comprehensive income
   (loss), net of tax		$58 $8 $(114)$2 $(5)$(21)
(a)Reflects amounts reclassified from accumulated other comprehensive income (loss) to net earnings.
Estimated net actuarial losses and prior service costs related to the defined benefit pension plans of approximately $90 million and $1 million, respectively, will be amortized from accumulated other comprehensive loss into net periodic benefit costs in 2019.

Estimated net actuarial gains related to the other postretirement benefit plans of approximately $18 million will be amortized from accumulated other comprehensive loss into net periodic benefit costs in 2019.
Pension Benefits Postretirement BenefitsPension BenefitsPostretirement Benefits
2018 2017 2016 2018 2017 2016202120202019202120202019
Weighted average assumptions used to determine benefit obligations at December 31:           Weighted average assumptions used to determine benefit obligations at December 31:
Discount rate4.5% 3.9% 4.3% 4.4% 3.9% 4.1%Discount rate3.2 %2.9 %3.5 %3.0 %2.6 %3.3 %
Rate of compensation increase3.0% 3.0% 3.0% N/A
 N/A
 N/A
Rate of compensation increase— %— %3.0 %N/AN/AN/A
Weighted average assumptions used to determine net periodic costs for the year ended December 31:           Weighted average assumptions used to determine net periodic costs for the year ended December 31:
Discount rate3.9% 4.3% 4.6% 3.9% 4.1% 4.2%Discount rate2.9 %3.4 %4.5 %2.6 %3.3 %4.4 %
Expected long-term return on plan assets6.3% 6.4% 6.4% N/A
 2.0% 2.0%Expected long-term return on plan assets5.9 %6.4 %6.6 %N/AN/AN/A
Cash balance interest crediting rateCash balance interest crediting rate5.0 %5.0 %5.0 %N/AN/AN/A
Rate of compensation increase3.0% 3.0% 3.0% N/A
 N/A
 N/A
Rate of compensation increase— %3.0 %3.0 %N/AN/AN/A
N/A - not applicable

The discount rates are determined primarily based on the yield onof a portfolio of high quality bonds, constructed to provideproviding cash flows necessary to meet the Company’s pension plans’ expected future benefit payments, as determined for the projected benefit obligations. The expected return on plan assets assumption is derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets.

The following additional assumptions were used in accounting for postretirement benefits.
20212020
Projected health care cost trend rate (pre-65)7.0 %6.6 %
Projected health care cost trend rate (post-65)7.0 %6.6 %
Ultimate trend rate5.0 %5.0 %
Year ultimate trend rate is achieved20302025
 2018 2017
Projected health care cost trend rate6.6% 7.0%
Ultimate trend rate5.0% 5.0%
Year ultimate trend rate is achieved2023
 2023
II-87


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


A one percentage point change in assumed health care cost trend rates would have the following effects:
 One Percentage One Percentage
 Point Increase Point Decrease
Effect on total service and interest cost components $—
   $—
 
Effect on the accumulated postretirement benefit obligation $4
   $(4) 

Plan Assets
The ViacomCBS Investments Committee (the “Committee”) determines the strategy for the investment of pension plan assets. The Committee establishes target asset allocations for the Company’s U.S. qualified defined benefitour pension plan trust and international pension plan trusts are based upon an analysis of the timing and amount of projected benefit payments, projected company contributions, the expected returns and risk of the asset classes and the correlation of those returns. The target asset allocation for the Company’s U.S.domestic pension plan trust, which accounted for 97% of total plan assets at December 31, 2018,plans is to invest between 70%60% - 80%68% in long duration fixed income investments, 16%liability hedging assets, 22% - 28%30% in equity securities, 3% - 10% in real estate and the remainder in cash and other investments. At December 31, 2018, this trust was invested approximately 75% in long duration fixed income securities, 22% in equity investments,real assets and the remainder in cash, cash equivalents and other investments. Long duration fixed income investmentsAt December 31, 2021, the trusts were invested approximately 60% in liability hedging assets, 29% in equity securities, 7% in real estate and real assets, and the remainder in cash, cash equivalents and other investments. Liability hedging assets consist of a diversified portfolio of fixed income instruments that are substantially all investment grade, with a duration that approximates the duration of the liabilities covered by the trust. All equity portfolios are diversified between U.S. and non-U.S. equities and include large and small capitalization equities. The asset allocations are reviewed regularly.

The following tables set forth the Company’sour pension plan assets measured at fair value on a recurring basis at December 31, 20182021 and 2017.2020. These assets have been categorized according to the three-level fair value hierarchy established by the FASB which prioritizes the inputs used in measuring fair value. See Note 13 for a description of the levels within this hierarchy. There are no investments categorized as Level 1 is based on quoted prices for the asset in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset in inactive markets or quoted prices for similar assets. Level 3 is based on unobservable inputs that market participants would use in pricing the asset.3.
At December 31, 2021Level 1Level 2Total
Cash and cash equivalents (a) (b)
$83 $5 $88 
Fixed income securities:
U.S. treasury securities164 — 164 
Government-related securities— 175 175 
Corporate bonds (c)
— 1,448 1,448 
Mortgage-backed and asset-backed securities— 76 76 
Equity securities:
U.S. large capitalization72 — 72 
U.S. small capitalization81 — 81 
Other— 14 14 
Total assets in fair value hierarchy$400 $1,718 $2,118 
Common collective funds measured at net asset value (d) (e)
1,013 
Limited partnerships measured at net asset value (d)
18 
Mutual funds measured at net asset value (d)
42 
Investments, at fair value$3,191 
II-88
At December 31, 2018Level 1 Level 2 Level 3 Total
Cash and cash equivalents (a)
$2
 $9
 $—
 $11
Fixed income securities:      

U.S. treasury securities85
 —
 —
 85
Government-related securities—
 171
 —
 171
Corporate bonds (b)
—
 1,483
 —
 1,483
Mortgage-backed and asset-backed securities—
 113
 —
 113
Equity securities:      

U.S. large capitalization143
 3
 —
 146
U.S. small capitalization35
 —
 —
 35
International equity—
 3
 —
 3
Other1
 23
 —
 24
Total assets in fair value hierarchy$266
 $1,805
 $—
 $2,071
Common collective funds measured at net asset value (c) (d)
      397
Limited partnerships measured at net asset value (c)
      26
Mutual funds measured at net asset value (c)
      32
Investments, at fair value      $2,526


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31, 2017Level 1 Level 2 Level 3 Total
At December 31, 2020At December 31, 2020Level 1Level 2Total
Cash and cash equivalents (a)
$8
 $22
 $—
 $30
Cash and cash equivalents (a)
$8 $— $8 
Fixed income securities:       Fixed income securities:
U.S. treasury securities135
 —
 —
 135
U.S. treasury securities78 — 78 
Government-related securities12
 238
 —
 250
Government-related securities— 167 167 
Corporate bonds (b)
—
 1,657
 —
 1,657
Corporate bonds (c)
Corporate bonds (c)
— 1,634 1,634 
Mortgage-backed and asset-backed securities—
 97
 1
 98
Mortgage-backed and asset-backed securities— 56 56 
Equity securities:      

Equity securities:
U.S. large capitalization175
 3
 —
 178
U.S. large capitalization82 — 82 
U.S. small capitalization43
 —
 —
 43
U.S. small capitalization79 — 79 
International equity—
 3
 —
 3
Other—
 43
 —
 43
Other— 30 30 
Total assets in fair value hierarchy$373
 $2,063
 $1
 $2,437
Total assets in fair value hierarchy$247 $1,887 $2,134 
Common collective funds measured at net asset value (c) (d)
      519
Limited partnerships measured at net asset value (c)
      32
Mutual funds measured at net asset value (c)
      58
Common collective funds measured at net asset value (d) (e)
Common collective funds measured at net asset value (d) (e)
1,149 
Limited partnerships measured at net asset value (d)
Limited partnerships measured at net asset value (d)
18 
Mutual funds measured at net asset value (d)
Mutual funds measured at net asset value (d)
46 
Investments, at fair value      $3,046
Investments, at fair value$3,347 
(a)  Assets categorized as Level 2 reflect investments in money market funds.
(b) On January 3, 2022, the trust that held the assets of the Viacom pension plan was merged into the trust that holds the assets of the remainder of ViacomCBS' domestic plans. As part of this merger, certain of the transferred assets were liquidated, which resulted in a higher level of cash and cash equivalents at December 31, 2021.
(c)  Securities of diverse sectors and industries, substantially all investment grade.
(c)(d)  In accordance with FASB guidance investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.
(d)(e)  Underlying investments consist mainly of U.S. large capitalization and international equity securities.
Money market investments are carried at amortized cost which approximates fair value due to the short-term maturity of these investments. Investments in equity securities are reported at fair value based on quoted market prices on national security exchanges. The fair value of investments in common collective funds and mutual funds areis determined using the net asset value (“NAV”) provided by the administrator of the fund as a practical expedient. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. The fair value of U.S. treasury securities is determined based on quoted market prices in active markets. The fair value of government related securities and corporate bonds is determined based on quoted market prices on national security exchanges, when available, or using valuation models which incorporate certain other observable inputs including recent trading activity for comparable securities and broker quoted prices. The fair value of mortgage-backed and asset-backed securities is based upon valuation models which incorporate available dealer quotes, projected cash flows and market information. The fair value of limited partnerships has been estimated using the NAV of the ownership interest. The NAV is determined using quarterly financial statements issued by the partnership which determine the value based on the fair value of the underlying investments.

The table below sets forth a summary of changes in the fair value of investments reflected as Level 3 at December 31, 2018.
  
Mortgage-backed
Securities
At January 1, 2017  $2
 
Contributions and distributions, net  (1) 
At December 31, 2017  1
 
Contributions and distributions, net  (1) 
At December 31, 2018  $—
 


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The Company’s other postretirement benefits plan assets of $1 million at December 31, 2018 were invested in U.S. money market funds, which are categorized as Level 2 assets.
Future Benefit Payments
Estimated future benefit payments are as follows: 
202220232024202520262027-2031
Pension$322 $317 $315 $314 $312 $1,455 
Postretirement$40 $37 $34 $31 $29 $108 
Retiree Medicare drug subsidy$5 $4 $4 $4 $4 $18 
 2019 2020 2021 2022 2023 2024-2028
Pension$329
 $266
 $262
 $260
 $256
 $1,218
Postretirement$53
 $50
 $47
 $44
 $41
 $162
Retiree Medicare drug subsidy$(5) $(5) $(5) $(5) $(5) $(20)
II-89

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

In 2019, the Company expects2022, we expect to make no contributions of approximately $60to our qualified pension plans for minimum funding requirements under ERISA and $74 million to itsour non-qualified pension plans to satisfy the benefit payments due under these plans. Also in 2019, the Company expects2022, we expect to contribute approximately $48$40 million to itsour other postretirement benefit plans to satisfy the Company’sour portion of benefit payments due under these plans.

Multiemployer Pension and Postretirement Benefit Plans
The Company contributesWe contribute to a number of multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover itsour union-represented employees including talent, writers, directors, producers and other employees, primarily in the entertainment industry. The other employers participating in these multiemployer plans are primarily in the entertainment and other related industries. The risks of participating in multiemployer plans are different from single-employer plans as assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers and if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if the Company chooseswe choose to stop participating in some of its multiemployer plans itwe may be required to pay those plans a withdrawal liability based on the underfunded status of the plan.
The financial health of a multiemployer plan is indicated by the zone status, as defined by the Pension Protection Act of 2006. Plans in the red zone are in critical status; those in the yellow zone are in endangered status; and those in the green zone are neither critical nor endangered.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The table below presents information concerning the Company’sour participation in multiemployer defined benefit pension plans.
 Employer Identification Number/Pension Plan Number 
Pension
Protection Act
 Company Contributions Expiration Date of Collective Bargaining AgreementEmployer Identification Number/Pension Plan NumberPension
Protection Act		Company ContributionsExpiration Date of Collective Bargaining Agreement
 
Zone Status (a)
 
Zone Status (a)
Pension Plan 20182017 2018 2017 2016 Pension Plan20212020202120202019
AFTRA Retirement Plan (b)
 13-6414972-001 Green $6
 $6
 $6
 (c)
AFTRA Retirement Plan (b)
13-6414972-001Green$17 $13 $12 6/30/2023
Directors Guild of America - Producer 95-2892780-001 Green 9
 8
 6
 6/30/2020Directors Guild of America - Producer95-2892780-001Green23 16 19 6/30/2023
Producer-Writers Guild of America 95-2216351-001 Green 17
 15
 12
 5/1/2020Producer-Writers Guild of America95-2216351-001Green26 22 26 5/1/2023
Screen Actors Guild - Producers 95-2110997-001 Green 28
 22
 11
 6/30/2020Screen Actors Guild - Producers95-2110997-001Green45 24 43 6/30/2023
Motion Picture Industry 95-1810805-001 Green 17
 14
 11
 (d)Motion Picture Industry95-1810805-001Green66 35 43 (c)
I.A.T.S.E. Local No. 33 Pension Trust Fund (e)
 95-6377503-001 Green 12
 10
 9
 12/31/2019
I.A.T.S.E. Local No. 33 Pension Trust FundI.A.T.S.E. Local No. 33 Pension Trust Fund95-6377503-001Green10 3 5 12/31/2022
Other Plans 7
 5
 5
 Other Plans16 7 16 
 Total contributions $96
 $80
 $60
 Total contributions$203 $120 $164 
(a) The Zonezone status for each individual plan listed was certified by each plan’s actuary as of the beginning of the plan years for 20182021 and 2017.2020. The plan year is the twelve months ending December 31 for each plan listed above except AFTRA Retirement Plan which has a plan year ending November 30.
(b) The Company was listed in AFTRA Retirement Plan’s Form 5500 as providing more than 5% of total contributions for the plan year ended November 30, 2017.2020.
(c) The expiration dates range from June 30, 2020May 15, 2021 through June 30, 2021.
(d) The expiration dates range from March 2, 2019 through July 31, 2021.2022.
(e) The Company was listed in I.A.T.S.E. Local No. 33 Pension Trust Fund’s Form 5500 as providing more than 5% of total contributions for the plan year ended December 31, 2017.

As a result of the above noted zone status there were no funding improvements or rehabilitation plans implemented, as defined by ERISA, nor any surcharges imposed for any of the individual plans listed.

The CompanyWe also contributescontribute to multiemployer plans that provide postretirement healthcare defined contribution and other benefits to certain employees under collective bargaining agreements. The contributions to these plans were $36$184 million, $30$95 million and $28$89 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. We recognize the
II-90

The Company recognizes the VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

net periodic cost for multiemployer pension and postretirement benefit plans based on the required contributions to the plans.

Defined Contribution Plans
The Company sponsorsWe sponsor defined contribution plans for the benefit of substantially all employees meeting eligibility requirements. Employer contributions to such plans were $40$106 million, $42$91 million and $35$95 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
18) REDEEMABLE NONCONTROLLING INTEREST
We are subject to a redeemable put option, payable in a foreign currency, with respect to an international subsidiary. The put option expires in December 2022 and is classified as “Redeemable noncontrolling interest” on the Consolidated Balance Sheets. The activity reflected within redeemable noncontrolling interest for the years ended December 31, 2021, 2020 and 2019 is presented below.
Year Ended December 31,202120202019
Beginning balance$197 $254 $239 
Net earnings14 11 14 
Distributions(5)(15)(16)
Translation adjustment(5)7 8 
Redemption value adjustment(94)(60)9 
Ending balance$107 $197 $254 
19) SEGMENT INFORMATION
The following tables set forth our financial performance by reportable segment. Our operating segments, which are the same as our reportable segments, have been determined in accordance with our internal management structure, which is organized based upon products and services. Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in a change to our operating segments (see Note 1).
In the first quarter of 2021, we began separately presenting streaming revenues in the categories we use to disaggregate our revenues (see Note 9).
Year Ended December 31,202120202019
Revenues:
Advertising$5,377 $4,639 $5,649 
Affiliate2,803 2,614 2,208 
Streaming1,551 911 701 
Licensing and other3,200 2,536 3,366 
TV Entertainment12,931 10,700 11,924 
Advertising3,907 3,721 4,483 
Affiliate5,591 5,409 5,685 
Streaming2,642 1,650 1,013 
Licensing and other2,060 1,809 1,268 
Cable Networks14,200 12,589 12,449 
Theatrical241 180 547 
Licensing and other2,829 2,382 2,443 
Filmed Entertainment3,070 2,562 2,990 
Eliminations/Corporate (a)
(1,615)(566)(365)
Total Revenues$28,586 $25,285 $26,998 
(a) In 2019, the elimination of intercompany revenues was partially offset by ancillary revenues recorded by our corporate operations.
II-91

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


15) SEGMENT AND REVENUE INFORMATION
The following tables set forth the Company’s financial performance by reportable segment. The Company’s operating segments, which are the same as its reportable segments, have been determined in accordance with the Company’s internal management structure, which is organized based upon products and services. During the fourth quarter of 2018, the Company began presenting CBS Sports Network in the Entertainment segment, to reflect changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. CBS Sports Network was previously included in the Cable Networks segment. Results for all periods presented have been reclassified to conform to this presentation.
Year Ended December 31,2018
2017
2016
Revenues:     
Entertainment$10,178
 $9,306
 $9,020
Cable Networks2,204
 2,355
 2,015
Publishing825
 830
 767
Local Media1,830
 1,668
 1,779
Corporate/Eliminations(523) (467) (415)
Total Revenues$14,514
 $13,692
 $13,166

Revenues generated between segments primarily reflect advertising sales,are principally from the licensing of Filmed Entertainment and Cable Networks content to Paramount+ and licensing of Filmed Entertainmentand station affiliation fees.TV Entertainment content to Cable Networks. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation. Revenues earned from the licensing of content within segments, including licensing to Paramount+ within the TV Entertainment segment, are eliminated within the segment. Intercompany revenues associated with the licensing of programming to Paramount+ after the initial exhibition on our broadcast or cable networks are recorded on a straight-line basis over the term of the agreement and eliminated in consolidation.
Year Ended December 31,202120202019
Intercompany Revenues:
TV Entertainment$348 $285 $226 
Cable Networks625 79 53 
Filmed Entertainment642 202 117 
Total Intercompany Revenues$1,615 $566 $396 
We present operating income excluding depreciation and amortization, stock-based compensation, costs for restructuring and other corporate matters, programming charges and net gain on sales, each where applicable (“Adjusted OIBDA”), as the primary measure of profit and loss for our operating segments in accordance with FASB guidance for segment reporting since it is the primary method used by our management. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management.
Year Ended December 31,202120202019
Adjusted OIBDA:
TV Entertainment$1,083 $1,857 $2,443 
Cable Networks3,747 3,746 3,515 
Filmed Entertainment368 215 80 
Corporate/Eliminations(582)(500)(449)
Stock-based compensation(172)(186)(196)
Depreciation and amortization(390)(430)(438)
Restructuring and other corporate matters(100)(618)(769)
Programming charges— (159)(589)
Net gain on sales2,343 214 549 
Operating income6,297 4,139 4,146 
Interest expense(986)(1,031)(962)
Interest income53 60 66 
Net gains from investments47 206 85 
Loss on extinguishment of debt(128)(126)— 
Other items, net(77)(101)(112)
Earnings from continuing operations before income taxes and
equity in loss of investee companies
5,206 3,147 3,223 
(Provision) benefit for income taxes(646)(535)29 
Equity in loss of investee companies, net of tax(91)(28)(53)
Net earnings from continuing operations4,469 2,584 3,199 
Net earnings from discontinued operations, net of tax162 117 140 
Net earnings (ViacomCBS and noncontrolling interests)4,631 2,701 3,339 
Net earnings attributable to noncontrolling interests(88)(279)(31)
Net earnings attributable to ViacomCBS$4,543 $2,422 $3,308 
Year Ended December 31,2018
2017
2016
Intercompany Revenues:     
Entertainment$534
 $477
 $431
Cable Networks1
 1
 1
Local Media18
 13
 8
Total Intercompany Revenues$553
 $491
 $440
II-92


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Year Ended December 31,202120202019
Depreciation and Amortization:
TV Entertainment$126 $162 $150 
Cable Networks191 205 219 
Filmed Entertainment38 36 37 
Corporate35 27 32 
Total Depreciation and Amortization$390 $430 $438 
The Company presents operating income (loss) excluding costs for restructuring
Year Ended December 31,202120202019
Capital Expenditures:
TV Entertainment$98 $112 $113 
Cable Networks138 110 166 
Filmed Entertainment34 37 43 
Corporate84 65 23 
Total Capital Expenditures$354 $324 $345 
At December 31,20212020
Assets:
TV Entertainment$20,719 $19,443 
Cable Networks24,515 23,139 
Filmed Entertainment6,942 6,440 
Corporate/Eliminations4,884 2,202 
Discontinued Operations1,560 1,439 
Total Assets$58,620 $52,663 
Year Ended December 31,202120202019
Revenues: (a)
United States$23,320 $20,690 $21,449 
International5,266 4,595 5,549 
Total Revenues$28,586 $25,285 $26,998 
(a) Revenue classifications are based on customers’ locations.
At December 31,20212020
Long-lived Assets: (a)
United States$16,075 $13,435 
International897 785 
Total Long-lived Assets$16,972 $14,220 
(a) Reflects total assets less current assets, investments, goodwill, intangible assets, noncurrent receivables and other corporate matters, programming charges and other operating items, net, each where applicable, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments (“segment profit measure”) in accordance with FASB guidance for segment reporting. The Company believes the presentation of Segment Operating Income is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company’s management and enhances their ability to understand the Company’s operating performance.noncurrent deferred tax assets.
Year Ended December 31, (a)
2018 2017 2016
Segment Operating Income (Loss):     
Entertainment$1,675
 $1,578
 $1,539
Cable Networks915
 999
 959
Publishing144
 136
 122
Local Media609
 497
 622
Corporate(295) (305) (311)
Restructuring charges(67) (63) (30)
Corporate matters(128) —
 (8)
Programming charges(85) —
 —
Other operating items, net—
 19
 9
Operating income2,768
 2,861
 2,902
Interest expense(467) (457) (411)
Interest income57
 64
 32
Loss on early extinguishment of debt—
 (49) —
Pension settlement charges—
 (352) (211)
Other items, net(69) (88) (82)
Earnings from continuing operations before income taxes and
equity in loss of investee companies
2,289
 1,979
 2,230
Provision for income taxes(273) (633) (628)
Equity in loss of investee companies, net of tax(56) (37) (50)
Net earnings from continuing operations1,960
 1,309
 1,552
Net loss from discontinued operations, net of tax—
 (952) (291)
Net earnings$1,960
 $357
 $1,261
II-93

(a) During the first quarter of 2018, the Company adopted amended FASB guidance on the presentation of net benefit cost. As a result, the components of net benefit cost other than the service cost component are presented in the statement of operations below the subtotal of operating income. All prior periods have been recast to conform to this presentation.
Year Ended December 31,2018 2017 2016
Depreciation and Amortization:

 

 

Entertainment$125
 $118
 $120
Cable Networks18
 20
 20
Publishing6
 6
 6
Local Media43
 45
 44
Corporate31
 34
 35
Total Depreciation and Amortization$223
 $223
 $225


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Year Ended December 31,2018 2017 2016
Stock-based Compensation:     
Entertainment$62
 $68
 $63
Cable Networks12
 10
 10
Publishing4
 5
 4
Local Media11
 12
 12
Corporate (a)
57
 84
 76
Total Stock-based Compensation$146
 $179
 $165

(a) Included in 2018 are forfeitures of $28 million and accelerations of $6 million relating to changes in senior management.
Year Ended December 31,2018 2017 2016
Capital Expenditures:     
Entertainment$93
 $102
 $102
Cable Networks20
 16
 15
Publishing7
 5
 9
Local Media27
 32
 37
Corporate18
 30
 33
Total Capital Expenditures$165
 $185
 $196

At December 31,2018 2017
Assets:   
Entertainment (a)
$13,579
 $12,927
Cable Networks2,693
 2,577
Publishing1,054
 906
Local Media4,037
 4,042
Corporate/Eliminations484
 378
Discontinued operations12
 13
Total Assets$21,859
 $20,843

(a) Includes assets held for sale of $33 million and $34 million at December 31, 2018 and 2017, respectively.
The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues.
Year Ended December 31,2018
2017
2016
Revenues by Type:     
Advertising$6,195
 $5,753
 $6,288
Content licensing and distribution     
Programming3,256
 3,122
 2,906
Publishing825
 830
 767
Affiliate and subscription fees4,003
 3,758
 2,978
Other235
 229
 227
Total Revenues$14,514
 $13,692
 $13,166

Year Ended December 31,2018 2017 2016
Revenues: (a)
     
United States$11,979
 $11,675
 $11,317
International2,535
 2,017
 1,849
Total Revenues$14,514
 $13,692
 $13,166

(a) Revenue classifications are based on customers’ locations.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31,2018
2017
Long-lived Assets: (a)
   
United States$14,286
 $13,699
International429
 495
Total Long-lived Assets$14,715
 $14,194

(a) Reflects total assets less current assets, investments and noncurrent deferred tax assets.

Transactions within the Company between the United States and international regions were not significant.
16) ADOPTION OF “REVENUE FROM CONTRACTS WITH CUSTOMERS”
On January 1, 2018, the Company adopted FASB Accounting Standards Codification 606 (“ASC 606”) on the recognition of revenues using the modified retrospective method applied to all contracts. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior periods have not been adjusted. The Company recorded an increase to accumulated deficit of $261 million as of January 1, 2018 reflecting the cumulative impact of the adoption of ASC 606.

The adoption of ASC 606 primarily resulted in two changes to the Company’s revenue recognition policies.

Revenues from Distribution Arrangements
Revenues from the Company’s distribution of third-party content are now recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues, which include content licensing and distribution revenues and advertising revenues, were recognized at the net amount retained by the Company after the payment of fees to the third party. For the year ended December 31, 2018, revenues and operating expenses relating to such distribution arrangements were $279 million higher under ASC 606 than the amounts that would have been reported under previous accounting guidance, with no impact to operating income.

Revenues from the Renewal of Licensing Agreements
Revenues associated with the renewal of an existing license agreement are now recognized at the beginning of the renewal period. Under previous accounting guidance, these revenues were recognized upon the execution of such renewal. Content licensing and distribution revenue comparisons will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Therefore, this change is not expected to have a material impact on the trend of the Company’s financial results. Additionally, historically, on an annual basis, revenues from renewals executed each year have approximated revenues associated with renewal periods that began in the same year.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following table presents the amount by which each applicable financial statement line item on the Consolidated Statement of Operations would have decreased for 2018 if license renewals were recognized under previous accounting guidance.
 Year Ended
 December 31, 2018
Revenues $263
 
Operating expenses 124
 
Operating income 139
 
Less: Provision for income taxes 30
 
Net earnings $109
 
Diluted EPS $.29
 

In addition, the adoption of ASC 606 resulted in certain classification changes on the Consolidated Balance Sheet. The primary change is the reclassification of the sales returns reserve relating to the publishing business to “Other current liabilities.” Such amount, which was $116 million at December 31, 2018, was previously presented as a reduction to receivables.

The following table presents the amount by which each applicable financial statement line item on the Consolidated Balance Sheet at December 31, 2018 would increase (decrease) if all of the above changes resulting from the adoption of ASC 606 were presented under previous accounting guidance.
Assets 
Receivables, net$(102)
Programming and other inventory (noncurrent)$(35)
Other assets (noncurrent receivables)$327
  
Liabilities 
Other current liabilities$(128)
Deferred income tax liabilities, net$38
Participants’ share and royalties payable$128
  
Accumulated deficit$152

ASC 606 also requires enhanced disclosures relating to the Company’s revenues from contracts with customers (See Note 1), including the disaggregation of revenues into categories (See Note 15).
17) DISCONTINUED OPERATIONS
On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Communications Corp. (“Entercom”) Class A common stock upon completion of the merger of CBS Radio and Entercom. CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following tables set forth details of net earnings (loss) from discontinued operations for the years ended December 31, 2017 and 2016.
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
 
$—
  $1,018
Costs and expenses:       
Operating364
 
—
  364
Selling, general and administrative444
 
(1)  443
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
 
—
  7
Total costs and expenses1,795
  (1)  1,794
Operating income (loss)(777)  1
  (776)
Interest expense(70) 
—
  (70)
Other items, net(2)  —
  (2)
Earnings (loss) from discontinued operations(849)  1
  (848)
Income tax benefit (provision)(55) 
45
(b) 
 (10)
Earnings (loss) from discontinued operations, net of tax(904)  46
  (858)
Net gain (loss) on disposal(109)  13
  (96)
Income tax benefit (provision)4
  (2)  2
Net gain (loss) on disposal, net of tax(105)  11
(c) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $57
  $(952)
(a) During 2017, prior to the split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment of $980 million in 2017 to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.
(b) Reflects a tax benefit from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.
(c) Reflects adjustments to the loss on disposal of the Company’s outdoor advertising businesses, primarily from a decrease to the guarantee liability associated with the 2013 disposal of the Company’s outdoor advertising business in Europe.
Year Ended December 31, 2016CBS Radio 
Other (b)
 Total
Revenues$1,220

 $—
  $1,220
Costs and expenses:       
Operating397

 —
  397
Selling, general and administrative496

 —
  496
Depreciation and amortization26

 —
  26
Restructuring charges8

 —
  8
Impairment charge444
(a) 
 —
  444
Total costs and expenses1,371
  —
  1,371
Operating loss(151)  —
  (151)
Interest expense(17)
 —
  (17)
Other items, net1

 —
  1
Loss from discontinued operations(167)  —
  (167)
Income tax provision(88)
 (36)  (124)
Net loss from discontinued operations, net of tax$(255)  $(36)  $(291)

(a) Reflects a pretax noncash impairment charge of $444 million ($427 million, net of tax) to reduce the carrying value of CBS Radio’s goodwill by $408 million ($405 million, net of tax) and FCC licenses in 11 radio markets by $36 million ($22 million, net of tax).
(b) Reflects a charge from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


18) 20) COMMITMENTS AND CONTINGENCIES
The Company’sCommitments
Our commitments not recorded on the balance sheet primarily consist of programming and talent commitments operating lease arrangements and purchase obligations for goods and services resulting from the Company’sour normal course of business.
 
ProgrammingOur programming and talent commitments, of the Company, estimated to aggregate $8.98$32.63 billion as of December 31, 2018, primarily2021, include $6.62$28.40 billion for sports programming rights $1.71and $4.23 billion relating to the production and licensing of television and film programming, and $660 million forincluding talent contracts. The CompanyWe also hashave committed purchase obligations which include agreements to purchase goods or services in the future that totaled $795 million$1.38 billion as of December 31, 2018.2021.

Other long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet include program liabilities;liabilities, participations, due to producers; residuals;residuals, and a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the estimatedremaining tax on the Company’s historical accumulated foreign earnings and profits, which is payable to the IRS over eight years.in 2024 and 2025.
 
At December 31, 2018,2021, commitments for programming and talent and purchase obligations not recorded on the balance sheet, and other long-term contractual obligations recorded on the balance sheet were payable as follows:
 Programming and Talent Purchase Obligations Other Long-Term Contractual Obligations
2019$2,270
 $285
  $—
 
20201,989
 247
  569
 
20211,830
 171
  360
 
20221,704
 26
  199
 
2023300
 8
  112
 
2024 and thereafter889
 58
  229
 
Total$8,982
 $795
  $1,469
 

Payments Due by Period
2027 and
Total20222023202420252026Thereafter
Off-Balance Sheet Arrangements
Programming and talent commitments$32,634 $3,032 $3,442 $3,094 $2,498 $2,429 $18,139 
Purchase obligations$1,384 $468 $453 $253 $129 $19 $62 
On-Balance Sheet Arrangements
Other long-term contractual obligations$1,823 $— $867 $478 $354 $117 $7 
The Company hasWe also have long-term noncancellable operating and finance lease commitments for office space, equipment, transponders and studio facilities. The Company also enters into capital leases for satellite transponders.
Atfacilities, which are recorded on the Consolidated Balance Sheet at December 31, 2018, future minimum rental payments under noncancellable2021. See Note 11 for details of our operating leases with terms in excess of one year and payments under capital leases are as follows:finance lease commitments.
 Leases
 Capital Operating
2019$13
 $174
202012
 129
202111
 122
20227
 110
20232
 101
2024 and thereafter2
 465
Total minimum payments$47
 $1,101
Less amounts representing interest4
  
Present value of minimum payments$43
  

Guarantees
Future minimum operating lease payments have been reduced by future minimum sublease incomeLetters of $30 million. Rent expense was $212 million in 2018, $181 million in 2017Credit and $167 millionSurety Bonds. in 2016. Included in net earnings (loss) from discontinued operations was rent expense of $32 million in 2017 and $36 million in 2016.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Guarantees
The Company hasWe have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At December 31, 2018,2021, the outstanding letters of credit and surety bonds approximated $100$176 million and were not recorded on the Consolidated Balance Sheet.
CBS Television City. In connection with the sale of CBS Television City in 2019, we guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheet at December 31, 2021 is a liability of $76 million, reflecting the present value of the remaining estimated amount payable under the guarantee obligation.
Lease Guarantees. We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players. These lease commitments amounted to $50 million as of December 31, 2021, and are presented within “Other liabilities” on the Consolidated Balance Sheet. The
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

amount of lease commitments varies over time depending on the expiration or termination of individual underlying leases, or the related indemnification obligation, and foreign exchange rates, among other things. We may also have exposure for certain other expenses related to the leases, such as property taxes and common area maintenance. We believe our accrual is sufficient to meet any future obligations based on our consideration of available financial information, the lessees’ historical performance in meeting their lease obligations and the underlying economic factors impacting the lessees’ business models.

In the course of itsour business, the Companywe both providesprovide and receivesreceive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Companywe may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. The Company recordsWe record a liability for itsour indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters
General.General
On an ongoing basis, the Companywe vigorously defends itselfdefend ourselves in numerous lawsuits and proceedings and respondsrespond to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Companyus without merit, is inherently uncertain and always difficult to predict. However, based on itsour understanding and evaluation of the relevant facts and circumstances, the Company believeswe believe that the below-described legalfollowing matters and other litigation to which it is a party are not likely, in the aggregate, to haveresult in a material adverse effect on itsour business, financial condition and results of operations, financial position operations.

Litigation Relating to the Merger
Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or cash flows. Underputative class action lawsuits in the separation agreement betweenCourt of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the 3 lawsuits and appointed Bucks County Employees’ Retirement Fund and International Union of Operating Engineers of Eastern Pennsylvania and Delaware as co-lead plaintiffs for the consolidated action. On April 14, 2020, the lead plaintiffs filed a Verified Consolidated Class Action and Derivative Complaint (as used in this paragraph, the “Complaint”) against Shari E. Redstone, NAI, Sumner M. Redstone National Amusements Trust, members of the CBS Board of Directors (comprised of Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Robert N. Klieger, Martha L. Minow, Susan Schuman, Frederick O. Terrell and Strauss Zelnick), former CBS President and Acting Chief Executive Officer Joseph Ianniello and the Company as nominal defendant. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and Viacom Inc.,approval of the CompanyAgreement and Viacom Inc. have agreedPlan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.against them vigorously.

Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the 4 lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) against NAI, NAI
II-95

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Entertainment Holdings LLC, Shari E. Redstone, the members of the special transaction committee of the Viacom Board of Directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters.
As announced on August 1, 2018, the Company’sCBS Board of Directors (“Board”) retained two2 law firms to conduct a full investigation of the allegations in recent press reports about the Company’sCBS’ former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company.CBS. On December 17, 2018, the CBS Board of Directors announced the completion of theits investigation, certain findings of the investigation and the Board’sCBS Board of Directors’ determination, discussed below, with respect to the termination of Mr. Moonves’sMoonves’ employment. The Company hasWe have received subpoenas or requests for information from the New York County District Attorney’s Office, and the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Companymatters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company isWe are cooperating with these inquiries.

On August 27, 2018 and on October 1, 2018, each of Gene Samit and John Lantz, respectively, filed putative class action suitslawsuits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below. On November 6, 2018, the Court entered an order consolidating the two actions. On November 30, 2018, the Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action. On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against the Company,CBS, certain current and former senior executives and members of the Board.CBS Board of Directors. The consolidated action is stated to be on behalf of purchasers of the Company’sCBS Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

 On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of liability or wrongdoing by the Company, will be subject to court approval. All amounts payable by the Company under the settlement will be paid by the Company’s insurers.
Separation Agreement
.
Litigation Related to Television Station Owners
On September 9, 2018,2019, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resignedwas added as a director and as Chairmandefendant in a multi-district putative class action lawsuit filed in the United States District Court for the Northern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on or about January 1, 2014 on television stations owned by one or more of the Board, Presidentdefendant television station owners and Chief Executive Officeralleges the sharing of the Company. Pursuant to theallegedly
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CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Separation Agreement,competitively sensitive information among such television stations in alleged violation of the Sherman Antitrust Act. The action, which names the Company is contributingamong 14 total defendants, seeks monetary damages, attorneys’ fees, costs and interest as well as injunctions against the aggregate amountallegedly unlawful conduct. On October 8, 2019, the Company and other defendants filed a motion to dismiss the matter, which was denied by the court on November 6, 2020. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of $20 million toward various charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations were mutually agreedliability or wrongdoing by the Company, will be subject to court approval.

Litigation Related to Stock Offerings
On August 13, 2021, Camelot Event Driven Fund filed a putative securities class action lawsuit in New York Supreme Court, County of New York, and Mr. Moonves.on November 5, 2021, an amended complaint was filed that, among other changes, added an additional named plaintiff (the “Complaint”). The Complaint is purportedly on behalf of investors who purchased shares of the Company’s Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock pursuant to public securities offerings completed in March 2021, and was filed against the Company, has recordedcertain senior executives, members of our Board of Directors, and the contributionunderwriters involved in the offerings. The Complaint asserts violations of $20 millionfederal securities law and alleges that the offering documents contained material misstatements and omissions, including through an alleged failure to adequately disclose certain total return swap transactions involving Archegos Capital Management referenced to our securities and related alleged risks to the Company’s stock price. On December 22, 2021, the plaintiffs filed a stipulation seeking the voluntary dismissal without prejudice of the outside director defendants from the lawsuit, which the Court subsequently ordered. On the same date, the defendants filed motions to dismiss the lawsuit, which are pending. The Complaint seeks unspecified compensatory damages, as well as other relief. We believe that the claims are without merit and intend to defend against them vigorously.

Litigation Related to the Proposed Sale of Simon & Schuster
On November 2, 2021, the U.S. Department of Justice (the “DOJ”) filed suit in “Restructuringthe United States District Court for the District of Columbia to block our sale of the Simon & Schuster business to Penguin Random House (the “Transaction”) pursuant to a Share Purchase Agreement (“Purchase Agreement”), dated November 24, 2020, between the Company, certain of its subsidiaries, Penguin Random House and other corporate matters”Bertelsmann SE & Co. KGaA. The DOJ asserts that the sale of Simon & Schuster would reduce competition for the acquisition of titles. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the Consolidated Statementspart of OperationsPenguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for the year ended December 31, 2018. In October 2018,a termination fee payable to the Company contributed $120 million to a grantor trust. On December 17, 2018, the Board announced that, following its consideration of the findings of the investigation referred to above, it had determined that there were grounds to terminate Mr. Moonves’s employment for cause under his employment agreement with the Company. Any dispute related to the Board’s determination is subject to binding arbitration as set forthin certain circumstances in the Separation Agreement. On January 16, 2019, Mr. Moonves notifiedevent the Company of his election to demand binding arbitration with respect to this matterTransaction does not close for regulatory reasons. We and the related Board investigation. The assets ofother defendants believe the grantor trust will remain in the trust until a final determination in the arbitration. The Company is currently unableDOJ’s claims are without merit, and we intend to determine the outcome of the arbitration and the amount, if any, that may be awarded thereunder and, accordingly, no accrual for this matter has been made in the Company’s consolidated financial statements.

defend against them vigorously.

Claims Related to Former Businesses: Asbestos. The Company isAsbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company isWe are typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’sour products is the basis of a claim. Claims against the Companyus in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines.turbines and electrical equipment.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company doesWe do not report as
II-97

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2018, the Company2021, we had pending approximately 31,57027,770 asbestos claims, as compared with approximately 31,66030,710 as of December 31, 20172020 and 33,61030,950 as of December 31, 2016.2019. During 2018, the Company2021, we received approximately 3,2903,050 new claims and closed or moved to an inactive docket approximately 3,3805,990 claims. The Company reportsWe report claims as closed when it becomeswe become aware that a dismissal order has been entered by a court or when the Company haswe have reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’sOur total costs for the years 20182021 and 20172020 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $45$63 million and $57$35 million, respectively. The Company’sOur costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The Company believespredominant number of pending claims against us are non-cancer claims. It is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that its reservesa liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are adequatesufficient to cover itsour asbestos liabilities. This beliefOur liability estimate is based upon many factors, and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims, filed against the Company has remained generally flat in recent years, it is difficult to predictas well as consultation with a third party firm on trends that may impact our future asbestos liabilities, as events and circumstances may occur, including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.liability.
Other.
 The Company from
Other
From time to time receiveswe receive claims from federal and state environmental regulatory agencies and other entities asserting that it iswe are or may be liable for environmental cleanup costs and related damages principally relating to our historical and predecessor operations of the Company.operations. In addition, the Company from time to time receiveswe receive personal injury claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations of the Company and its predecessors.
19) 21) SUPPLEMENTAL FINANCIAL INFORMATION
The following table presents the components of Other items, net on the Consolidated Statements of Operations.
Year Ended December 31,202120202019
Pension and postretirement benefit costs$(43)$(69)$(99)
Foreign exchange losses(26)(35)(18)
Pension settlement charge (a)
(10)— — 
Other2 3 5 
Other items, net$(77)$(101)$(112)
Year Ended December 31,2018 2017 2016
Pension and postretirement benefit costs$(63) $(86) $(70)
Foreign exchange (losses) gains(3) 2
 (12)
Net loss from investments(3) (4) —
Other items, net$(69) $(88) $(82)
(a) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

Supplemental Cash Flow Information
II-98
Year Ended December 31,2018
2017
2016
Cash paid for interest:     
Continuing operations$457
 $448
 $407
Discontinued operations—
 70
 8
Total$457
 $518
 $415
Year Ended December 31,2018
2017
2016
Cash paid (refunded) for income taxes:     
Continuing operations$16

$365

$373
Discontinued operations(4) 26
 119
Total$12
 $391
 $492
Year Ended December 31,2018 2017 2016
Noncash investing and financing activities:     
Shares received in split-off of CBS Radio (Note 17)$—
 $1,007
 $—
Noncash additions to property and equipment$—
 $31
 $—
Equipment acquired under capitalized leases$9
 $5
 $10



CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


20) QUARTERLY FINANCIAL DATA (unaudited):Supplemental Cash Flow Information
Year Ended December 31,202120202019
Cash paid for interest$970 $965 $922 
Cash paid for income taxes:
Continuing operations$291 $411 $560 
Discontinued operations43 55 38 
Total cash paid for income taxes$334 $466 $598 
 First Second Third Fourth  
2018 (a)
Quarter Quarter Quarter 
Quarter (b)
 Total Year
Revenues:         
Entertainment$2,753
 $2,402
 $2,190
 $2,833
 $10,178
Cable Networks571
 553
 529
 551
 2,204
Publishing160
 207
 240
 218
 825
Local Media415
 420
 434
 561
 1,830
Corporate/Eliminations(138) (116) (130) (139) (523)
Total Revenues$3,761
 $3,466
 $3,263
 $4,024
 $14,514
Segment Operating Income (Loss):

        
Entertainment$486
 $367
 $384
 $438
 $1,675
Cable Networks236
 245
 241
 193
 915
Publishing16
 31
 51
 46
 144
Local Media118
 128
 124
 239
 609
Corporate(75) (77) (64) (79) (295)
Total Segment Operating Income781
 694
 736
 837
 3,048
Restructuring charges—
 (25) —
 (42) (67)
Corporate matters(9) (10) (46) (63) (128)
Programming charges—
 —
 —
 (85) (85)
Total Operating Income$772
 $659
 $690
 $647
 $2,768
Net earnings$511
 $400
 $488
 $561
 $1,960
          
Basic net earnings per common share$1.34
 $1.06
 $1.30
 $1.50
 $5.20
          
Diluted net earnings per common share$1.32
 $1.05
 $1.29
 $1.49
 $5.14
          
Weighted average number of common shares         
outstanding:         
Basic382
 378
 375
 374
 377
Diluted386
 381
 379
 377
 381
Variable Interest Entities
(a) DuringIn the fourth quarternormal course of 2018,business, we enter into joint ventures or make investments with business partners that support our underlying business strategy and provide us the Company began presenting CBS Sports Networkability to enter new markets to expand the reach of our brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which we make an investment may qualify as a VIE. In determining whether we are the Entertainment segment,primary beneficiary of a VIE, we assess whether we have the power to reflect changes in management structuredirect matters that most significantly impact the activities of the VIE and have the integration of CBS Sports Network programming withobligation to absorb losses or the CBS Television Network. CBS Sports Network was previously included inright to receive benefits from the Cable Networks segment. Results for all periods presented have been reclassifiedVIE that could potentially be significant to conform to this presentation.the VIE. The following table providestables present the impact on the Company’s revenues and Segment Operating Income by segment for 2018 as a result of this change. There was no changeamounts recorded in our consolidated financial statements related to the Company’s total revenues or total operating income.our consolidated VIEs.
At December 31,20212020
Total assets$1,578 $1,385 
Total liabilities$184 $197 
 Revenues Segment Operating Income
 First Second Third First Second Third
 Quarter Quarter Quarter Quarter Quarter Quarter
Entertainment$37
 $37
 $39
 $(6) $11
 $7
Cable Networks$(38) $(38) $(40) $6
 $(11) $(7)
Corporate/Eliminations$1
 $1
 $1
 $—
 $—
 $—
(b) The fourth quarter of 2018 includes the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that will be utilized in connection with the sale of CBS Television City in the first quarter of 2019.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 First Second Third Fourth  
2017 (a) (e)
Quarter Quarter Quarter 
Quarter (c) (d)
 Total Year
Revenues:           
Entertainment$2,384
 $2,217
 $1,849
  $2,856
  $9,306
Cable Networks505
 537
 805
  508
  2,355
Publishing161
 206
 228
  235
  830
Local Media409
 412
 397
  450
  1,668
Corporate/Eliminations(116) (115) (108)  (128)  (467)
Total Revenues$3,343
 $3,257
 $3,171
  $3,921
  $13,692
Segment Operating Income (Loss):           
Entertainment$400
 $359
 $354
  $465
  $1,578
Cable Networks253
 247
 292
  207
  999
Publishing15
 29
 47
  45
  136
Local Media124
 128
 106
  139
  497
Corporate(66) (73) (70)  (96)  (305)
Total Segment Operating Income726
 690
 729
  760
  2,905
Restructuring charges—
 —
 —
  (63)  (63)
Other operating items, net—
 —
 —
  19
  19
Total Operating Income$726
 $690
 $729
  $716
  $2,861
Net earnings from continuing operations$454
 $397
 $418
  $40
  $1,309
Net earnings (loss) (b)
$(252) $58
 $592
  $(41)  $357
            
Basic net earnings per common share:           
Net earnings from continuing operations$1.11
 $.98
 $1.04
  $.10
  $3.26
Net earnings (loss)$(.61) $.14
 $1.48
  $(.10)  $.89
Diluted net earnings per common share:           
Net earnings from continuing operations$1.09
 $.97
 $1.03
  $.10
  $3.22
Net earnings (loss)$(.61) $.14
 $1.46
  $(.10)  $.88
            
Weighted average number of common shares           
outstanding:           
Basic410
 405
 401
  391
  401
Diluted416
 410
 406
  395
  407
(a) During the first quarter of 2018, the Company adopted amended FASB guidance on the presentation of net benefit cost. As a result, the components of net benefit cost other than the service cost component are presented in the statement of operations below the subtotal of operating income. All prior periods have been recast to conform to this presentation. This change resulted in an increase to total operating income of $22 million, $21 million, $22 million and $373 million for the first quarter, second quarter, third quarter and fourth quarter of 2017, respectively.
(b) CBS Radio has been presented as a discontinued operation for all periods presented. In the fourth quarter of 2017, the Company recorded a loss on the split-off of CBS Radio of $105 million. During 2017, prior to the split-off, the Company recorded a market value adjustment of $980 million, including a charge of $715 million, a charge of $365 million and a gain of $100 million in the first, second and third quarter, respectively, to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom (See Note 17).
(c) In the fourth quarter of 2017, the Company recorded a pension settlement charge of $352 million for the settlement of pension obligations resulting from the transfer of pension obligations to an insurance company through the purchase of a group annuity contract (See Note 14).
(d) In the fourth quarter of 2017, the Company recorded a provisional charge of $129 million resulting from the enactment of the Tax Reform Act.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


(e) During the fourth quarter of 2018, the Company began presenting CBS Sports Network in the Entertainment segment, to reflect changes in management structure and the integration of CBS Sports Network programming with the CBS Television Network. CBS Sports Network was previously included in the Cable Networks segment. Results for all periods presented have been reclassified to conform to this presentation. The following table provides the impact on the Company’s revenues and Segment Operating Income by segment for 2017 as a result of this change. There was no change to the Company’s total revenues or total operating income.
 Revenues Segment Operating Income
 First Second Third Fourth Total First Second Third Fourth Total
 Quarter Quarter Quarter Quarter Year Quarter Quarter Quarter Quarter Year
Entertainment$37
 $33
 $34
 $38
 $142
 $(3) $8
 $4
 $(4) $5
Cable Networks$(38) $(34) $(35) $(39) $(146) $3
 $(8) $(4) $4
 $(5)
Corporate/Eliminations$1
 $1
 $1
 $1
 $4
 $—
 $—
 $—
 $—
 $—

Year Ended December 31,2021
2020 (b)
Revenues (a)
$576 $705 
Operating income (a)
$43 $498 
(a) Revenues and operating income from our consolidated VIEs were not significant for 2019.
21) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
CBS Operations Inc. is a wholly owned subsidiary(b) The revenue and operating income include the licensing of the Company.  CBS Operations Inc. has fully and unconditionally guaranteed CBS Corp.’s senior debt securities (See Note 8).  The following condensed consolidating financial statements present the results of operations, financial position and cash flows of CBS Corp., CBS Operations Inc., the direct and indirect Non-Guarantor Affiliates of CBS Corp. and CBS Operations Inc., and the eliminations necessarystreaming rights to arrive at the information for the Company onSouth Park by a consolidated basis. Changes to the entities that comprise the guarantor group are reflected for all periods presented.
 Statement of Operations
 For the Year Ended December 31, 2018
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$187
 $10
 $14,317
 $—
 $14,514
Costs and expenses:         
Operating99
 4
 9,008
 —
 9,111
Selling, general and administrative54
 252
 1,911
 —
 2,217
Depreciation and amortization4
 22
 197
 —
 223
Restructuring and other corporate matters1
 141
 53
 —
 195
Total costs and expenses158
 419
 11,169
 —
 11,746
Operating income (loss)29
 (409) 3,148
 —
 2,768
Interest (expense) income, net(533) (509) 632
 —
 (410)
Other items, net(32) 15
 (52) —
 (69)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies(536) (903) 3,728
 —
 2,289
Benefit (provision) for income taxes110
 185
 (568) —
 (273)
Equity in earnings (loss) of investee companies,
net of tax
2,386
 1,515
 (56) (3,901) (56)
Net earnings$1,960
 $797
 $3,104
 $(3,901) $1,960
Total comprehensive income$1,847
 $801
 $3,072
 $(3,873) $1,847

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars51%-owned VIE in millions, except per share amounts)


 Statement of Operations
 For the Year Ended December 31, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$172
 $10
 $13,510
 $—
 $13,692
Costs and expenses:         
Operating95
 6
 8,337
 —
 8,438
Selling, general and administrative49
 274
 1,803
 —
 2,126
Depreciation and amortization5
 23
 195
 —
 223
Restructuring charges and other corporate matters—
 2
 61
 —
 63
Other operating items, net—
 —
 (19) —
 (19)
Total costs and expenses149
 305
 10,377
 —
 10,831
Operating income (loss)23
 (295) 3,133
 —
 2,861
Interest (expense) income, net(509) (486) 602
 —
 (393)
Loss on early extinguishment of debt(49) —
 —
 —
 (49)
Pension settlement charge(352) —
 —
 —
 (352)
Other items, net(37) (54) 3
 —
 (88)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(924) (835) 3,738
 —
 1,979
Benefit (provision) for income taxes266
 240
 (1,139) —
 (633)
Equity in earnings (loss) of investee companies,
net of tax
1,014
 1,450
 (37) (2,464) (37)
Net earnings from continuing operations356
 855
 2,562
 (2,464) 1,309
Net earnings (loss) from discontinued operations, net of tax1
 (5) (948) —
 (952)
Net earnings$357
 $850
 $1,614
 $(2,464) $357
Total comprehensive income$462
 $839
 $1,640
 $(2,479) $462

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Operations
 For the Year Ended December 31, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$181
 $12
 $12,973
 $—
 $13,166
Costs and expenses:         
Operating67
 6
 7,883
 —
 7,956
Selling, general and administrative46
 287
 1,721
 —
 2,054
Depreciation and amortization5
 23
 197
 —
 225
Restructuring and other corporate matters—
 2
 36
 —
 38
Other operating items, net—
 —
 (9) —
 (9)
Total costs and expenses118
 318
 9,828
 —
 10,264
Operating income (loss)63
 (306) 3,145
 —
 2,902
Interest (expense) income, net(502) (433) 556
 —
 (379)
Pension settlement charge(211) —
 —
 —
 (211)
Other items, net(37) 9
 (54) —
 (82)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(687) (730) 3,647
 —
 2,230
Benefit (provision) for income taxes212
 224
 (1,064) —
 (628)
Equity in earnings (loss) of investee companies,
net of tax
1,736
 1,161
 (50) (2,897) (50)
Net earnings from continuing operations1,261
 655
 2,533
 (2,897) 1,552
Net loss from discontinued operations, net of tax—
 (1) (290) —
 (291)
Net earnings$1,261
 $654
 $2,243
 $(2,897) $1,261
Total comprehensive income$1,264
 $679
 $2,212
 $(2,891) $1,264

2020.

II-99
CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Balance Sheet
 At December 31, 2018
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$148
 $—
 $174
 $—
 $322
Receivables, net27
 1
 4,013
 —
 4,041
Programming and other inventory2
 2
 1,984
 —
 1,988
Prepaid expenses and other current assets81
 46
 310
 (36) 401
Total current assets258
 49
 6,481
 (36) 6,752
Property and equipment31
 223
 2,672
 —
 2,926
Less accumulated depreciation and amortization14
 184
 1,519
 —
 1,717
Net property and equipment17
 39
 1,153
 —
 1,209
Programming and other inventory5
 4
 3,874
 —
 3,883
Goodwill98
 62
 4,760
 —
 4,920
Intangible assets—
 —
 2,638
 —
 2,638
Investments in consolidated subsidiaries47,600
 16,901
 —
 (64,501) —
Other assets281
 —
 2,143
 —
 2,424
Assets held for sale—
 —
 33
 —
 33
Intercompany—
 526
 31,686
 (32,212) —
Total Assets$48,259
 $17,581
 $52,768
 $(96,749) $21,859
Liabilities and Stockholders’ Equity
         
Accounts payable$5
 $31
 $165
 $—
 $201
Participants’ share and royalties payable
—
 —
 1,177
 —
 1,177
Accrued programming and production costs3
 2
 699
 —
 704
Commercial paper674
 —
 —
 —
 674
Current portion of long-term debt1
 —
 12
 —
 13
Accrued expenses and other current liabilities395
 308
 1,137
 (36) 1,804
Total current liabilities1,078
 341
 3,190
 (36) 4,573
Long-term debt9,388
 —
 77
 —
 9,465
Other liabilities2,777
 212
 2,028
 —
 5,017
Intercompany32,212
 —
 —
 (32,212) —
Stockholders’ Equity:         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital43,637
 —
 60,894
 (60,894) 43,637
Retained earnings (deficit)(17,201) 17,214
 (9,381) (7,833) (17,201)
Accumulated other comprehensive income (loss)(775) 22
 44
 (66) (775)
 25,662
 17,359
 52,273
 (69,632) 25,662
Less treasury stock, at cost22,858
 331
 4,800
 (5,131) 22,858
Total Stockholders’ Equity
2,804
 17,028
 47,473
 (64,501) 2,804
Total Liabilities and Stockholders’ Equity
$48,259
 $17,581
 $52,768
 $(96,749) $21,859

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Balance Sheet
 At December 31, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$173
 $—
 $112
 $—
 $285
Receivables, net29
 2
 3,666
 —
 3,697
Programming and other inventory3
 3
 1,822
 —
 1,828
Prepaid expenses and other current assets130
 28
 341
 (36) 463
Total current assets335
 33
 5,941
 (36) 6,273
Property and equipment49
 217
 2,681
 —
 2,947
Less accumulated depreciation and amortization27
 163
 1,511
 —
 1,701
Net property and equipment22
 54
 1,170
 —
 1,246
Programming and other inventory3
 4
 2,874
 —
 2,881
Goodwill98
 62
 4,731
 —
 4,891
Intangible assets—
 —
 2,666
 —
 2,666
Investments in consolidated subsidiaries45,504
 15,385
 —
 (60,889) —
Other assets162
 5
 2,685
 —
 2,852
Assets held for sale—
 —
 34
 —
 34
Intercompany—
 1,221
 29,562
 (30,783) —
Total Assets$46,124
 $16,764
 $49,663
 $(91,708) $20,843
Liabilities and Stockholders’ Equity
         
Accounts payable$1
 $30
 $200
 $—
 $231
Participants’ share and royalties payable—
 —
 986
 —
 986
Accrued programming and production costs4
 4
 489
 —
 497
Commercial paper679
 —
 —
 —
 679
Current portion of long-term debt2
 —
 17
 —
 19
Accrued expenses and other current liabilities352
 269
 975
 (36) 1,560
Total current liabilities1,038
 303
 2,667
 (36) 3,972
Long-term debt9,378
 —
 86
 —
 9,464
Other liabilities2,947
 234
 2,248
 —
 5,429
Intercompany30,783
 —
 —
 (30,783) —
Stockholders’ Equity:
         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital43,797
 —
 60,894
 (60,894) 43,797
Retained earnings (deficit)(18,900) 16,417
 (12,224) (4,193) (18,900)
Accumulated other comprehensive income (loss)(662) 18
 76
 (94) (662)
 24,236
 16,558
 49,462
 (66,020) 24,236
Less treasury stock, at cost22,258
 331
 4,800
 (5,131) 22,258
Total Stockholders’ Equity1,978
 16,227
 44,662
 (60,889) 1,978
Total Liabilities and Stockholders’ Equity
$46,124
 $16,764
 $49,663
 $(91,708) $20,843


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2018
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(440) $(286) $2,152
 $—
 $1,426
Investing Activities:         
Investments in and advances to investee companies—
 —
 (124) —
 (124)
Capital expenditures—
 (18) (147) —
 (165)
Acquisitions, net of cash acquired—
 —
 (31) —
 (31)
Other investing activities(5) —
 —
 —
 (5)
Net cash flow used for investing activities from continuing operations(5) (18) (302) —
 (325)
Net cash flow used for investing activities from discontinued operations(23) —
 —
 —
 (23)
Net cash flow used for investing activities(28) (18) (302) —
 (348)
Financing Activities:         
Repayments of short-term debt borrowings, net(5) —
 —
 —
 (5)
Payment of capital lease obligations—
 —
 (16) —
 (16)
Dividends(276) —
 —
 —
 (276)
Purchase of Company common stock(586) —
 —
 —
 (586)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(59) —
 —
 —
 (59)
Proceeds from exercise of stock options27
 —
 —
 —
 27
Other financing activities(1) —
 (5) —
 (6)
Increase (decrease) in intercompany payables1,463
 304
 (1,767) —
 —
Net cash flow provided by (used for) financing activities563
 304
 (1,788) —
 (921)
Net increase in cash, cash equivalents and restricted cash95
 —
 62
 —
 157
Cash and cash equivalents at beginning of year173
 —
 112
 —
 285
Cash, cash equivalents and restricted cash at
end of year (includes $120 of restricted cash)
$268
 $—
 $174
 $—
 $442

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(1,491) $(203) $2,581
 $—
 $887
Investing Activities:         
Investments in and advances to investee companies—
 —
 (110) —
 (110)
Capital expenditures—
 (30) (155) —
 (185)
Acquisitions (including acquired television library),
net of cash acquired
—
 —
 (270) —
 (270)
Proceeds from sale of investments—
 —
 10
 —
 10
Proceeds from dispositions—
 —
 11
 —
 11
Other investing activities22
 (1) —
 —
 21
Net cash flow provided by (used for) investing activities from continuing operations22
 (31) (514) —
 (523)
Net cash flow provided by (used for) investing activities from discontinued operations1
 (5) (20) —
 (24)
Net cash flow provided by (used for) investing activities23
 (36) (534) —
 (547)
Financing Activities:         
Proceeds from short-term debt borrowings, net229
 —
 —
 —
 229
Proceeds from issuance of senior notes1,773
 —
 —
 —
 1,773
Repayment of senior notes(1,244) —
 —
 —
 (1,244)
Proceeds from debt borrowings of CBS Radio—
 —
 40
 —
 40
Repayment of debt borrowings of CBS Radio—
 —
 (43) —
 (43)
Payment of capital lease obligations—
 —
 (18) —
 (18)
Dividends(296) —
 —
 —
 (296)
Purchase of Company common stock(1,111) —
 —
 —
 (1,111)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(89) —
 —
 —
 (89)
Proceeds from exercise of stock options91
 —
 —
 —
 91
Other financing activities(1) —
 (8) —
 (9)
Increase (decrease) in intercompany payables1,968
 239
 (2,207) —
 —
Net cash flow provided by (used for) financing activities1,320
 239
 (2,236) —
 (677)
Net decrease in cash and cash equivalents(148) —
 (189) —
 (337)
Cash and cash equivalents at beginning of year
(includes $24 of discontinued operations cash)		321
 —
 301
 —
 622
Cash and cash equivalents at end of year$173

$—

$112

$—
 $285

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(846) $(157) $2,688
 $—
 $1,685
Investing Activities:         
Investments in and advances to investee companies—
 —
 (81) —
 (81)
Capital expenditures—
 (33) (163) —
 (196)
Acquisitions—
 —
 (92) —
 (92)
Proceeds from dispositions(4) —
 24
 —
 20
Other investing activities15
 —
 —
 —
 15
Net cash flow provided by (used for) investing activities from continuing operations11
 (33) (312) —
 (334)
Net cash flow used for investing activities from discontinued operations—
 (1) (5) —
 (6)
Net cash flow provided by (used for) investing activities11
 (34) (317) —
 (340)
Financing Activities:         
Proceeds from short-term debt borrowings, net450
 —
 —
 —
 450
Proceeds from issuance of senior notes684
 —
 —
 —
 684
Repayment of senior debentures(199) —
 —
 —
 (199)
Proceeds from debt borrowings of CBS Radio—
 —
 1,452
 —
 1,452
Repayment of debt borrowings of CBS Radio—
 —
 (110) —
 (110)
Payment of capital lease obligations—
 —
 (18) —
 (18)
Dividends(288) —
 —
 —
 (288)
Purchase of Company common stock(2,997) —
 —
 —
 (2,997)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(58) —
 —
 —
 (58)
Proceeds from exercise of stock options21
 —
 —
 —
 21
Excess tax benefit from stock-based compensation17
 —
 —
 —
 17
Increase (decrease) in intercompany payables3,259
 190
 (3,449) —
 —
Net cash flow provided by (used for) financing activities889
 190
 (2,125) —
 (1,046)
Net increase (decrease) in cash and cash equivalents54
 (1) 246
 —
 299
Cash and cash equivalents at beginning of year
(includes $6 of discontinued operations cash)
267
 1
 55
 —
 323
Cash and cash equivalents at end of year
(includes $24 of discontinued operations cash)
$321

$—

$301

$—
 $622



Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A.Controls and Procedures.
The Company’sOur chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, the Company’sour disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. No change in the Company’sour internal control over financial reporting occurred during the Company’sour fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’sour internal control over financial reporting.
Management’s report on internal control over financial reporting and the report of the Company’sour independent registered public accounting firm thereon are set forth in Item 8, on pages II-49II-38 and II-50,II-39, of this report.
Item 9B.Other Information.
None.On February 14, 2022, we entered into an amendment to our amended credit agreement to modify the definition of consolidated total leverage ratio therein to allow unrestricted cash and cash equivalents to be netted against consolidated indebtedness through June 2024.

For more information on the amendment, see the full text of the amendment, a copy of which is attached as Exhibit 10(hh) to this Annual Report on Form 10-K and is incorporated herein by reference.

Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

II-100

PART III

Item 10.Directors, Executive Officers and Corporate Governance.

The information required by this item with respect to the Company’s directors iswill be contained in the CBS Corporation Proxy Statement for the Company’s 20192022 Annual Meeting of Stockholders (the “Proxy Statement”) under the headings “CBS Corporation’s“Our Board of Directors,”Directors” and “Item 1—1 — Election of Directors,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” which information is incorporated herein by reference.

The information required by this item with respect to the Company’s executive officers is (i) contained in the Proxy Statement under the headings “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” and (ii) included in Part I of this Form 10-K under the caption “Executive Officers of the Company,“Our Executive Officers.” which information is incorporated herein by reference.

Item 11.Executive Compensation.

The information required by this item iswill be contained in the Proxy Statement under the headings “CBS Corporation’s“Our Board of Directors,” “Director Compensation,” “Executive Compensation,” “Compensation Discussion and Analysis” and “Compensation Committee Report,” which information is incorporated herein by reference.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item iswill be contained in the Proxy Statement under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” which information is incorporated herein by reference.

Item 13.Certain Relationships and Related Transactions, and Director Independence.

The information required by this item iswill be contained in the Proxy Statement under the headings “Related Person Transactions” and “CBS Corporation’s“Our Board of Directors,” which information is incorporated herein by reference.

Item 14.Principal Accounting Fees and Services.

The information required by this item iswill be contained in the Proxy Statement under the heading “Fees for Services Provided by the Independent Registered Public Accounting Firm,” which information is incorporated herein by reference.

III-1

PART IV

Item 15.Exhibits, Financial Statement Schedules.

(a)

1. Financial Statements.

The financial statements of the CompanyViacomCBS filed as part of this report on Form 10-K are listed on the Index on page II-48.II-37.

2. Financial Statement Schedules.

The financial statement schedule required to be filed by Item 8 of this Form 10-K is listed on the Index on page II-48.II-37.

3. Exhibits.

The exhibits listed in Item 15(b) of this Part IV are filed or incorporated by reference as part of this Form 10-K. The Index to Exhibits begins on page E-1.
(b)Exhibits.

(b)Exhibits.

The exhibits listed in Item 15(b) of this Part IV are filed or incorporated by reference as part of this Form 10-K. The Index to Exhibits begins on page E-1.

Item 16.16Form 10-K Summary.

None.


IV-1

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
 SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(Tabular dollars in millions)
Col. ACol. BCol. CCol. DCol. E
DescriptionBalance at Beginning of PeriodCharged to Expenses and Other AccountsDeductionsBalance at End of Period
Allowance for doubtful accounts:
Year ended December 31, 2021$85 $8 $13 $80 
Year ended December 31, 2020$80 $32 $27 $85 
Year ended December 31, 2019$81 $25 $26 $80 
Valuation allowance on deferred tax assets:
Year ended December 31, 2021$593 $63 $75 $581 
Year ended December 31, 2020$547 $67 $21 $593 
Year ended December 31, 2019$838 $76 $367 $547 
Reserves for inventory obsolescence:
Year ended December 31, 2021$58 $— $11 $47 
Year ended December 31, 2020$57 $3 $2 $58 
Year ended December 31, 2019$54 $5 $2 $57 
Col. A Col. B Col. C  Col. D Col. E
Description Balance at Beginning of Period Balance Acquired through Acquisitions Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period
Allowance for doubtful accounts:                        
Year ended December 31, 2018  $49
   $1
   $5
   $—
   $14
   $41
 
Year ended December 31, 2017  $60
   $1
   $5
   $—
   $17
   $49
 
Year ended December 31, 2016  $59
   $1
   $12
   $—
   $12
   $60
 
                       

 
Valuation allowance on deferred tax assets:                      

 
Year ended December 31, 2018  $974
   $—
   $3
   $—
   $258
   $719
 
Year ended December 31, 2017  $928
   $218
   $143
   $—
   $315
   $974
 
Year ended December 31, 2016  $914
   $—
   $41
   $—
   $27
   $928
 
                       

 
Reserves for inventory obsolescence:                      

 
Year ended December 31, 2018  $19
   $—
   $7
   $—
   $6
   $20
 
Year ended December 31, 2017  $19
   $1
   $6
   $—
   $7
   $19
 
Year ended December 31, 2016  $23
   $1
   $2
   $—
   $7
   $19
 




F-1


INDEX TO EXHIBITS
ITEM 15(b)

Effective December 31, 2005, Former Viacom was renamed CBS Corporation.
Effective December 4, 2019, Viacom Inc. merged with and into CBS Corporation with CBS Corporation continuing as the surviving company and the combined company changed its name to “ViacomCBS Inc.”
Exhibit No.Description of Document
(2)Plan of acquisition, reorganization, arrangement, liquidation or succession
(a)
PurchaseAgreement and Sale AgreementPlan of Merger, dated as of December 10, 2018 amongAugust 13, 2019, by and between CBS BroadcastingCorporation and Viacom Inc., Television City Equity, LLC and First American Title Insurance Company (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of CBS Corporation filed December 11, 2018)August 19, 2019) (File No. 001‑09553)001-09553).
(3)(b)
Amendment No. 1 to the Agreement and Plan of Merger, dated as of October 16, 2019, by and between CBS Corporation and Viacom Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of CBS Corporation, filed October 17, 2019) (File No. 001-09553).
(3)Articles of Incorporation and Bylaws
(a)
Amended and Restated Certificate of Incorporation of CBS CorporationViacomCBS Inc., effective December 31, 20054, 2019 (incorporated by reference to Exhibit 3(a)3.1 to the Current Report on Form 8‑K of CBS Corporation filed December 4, 2019) (File No. 001‑09553).
(b)
Amended and Restated Bylaws of ViacomCBS Inc., effective as of February 22, 2021 (incorporated by reference to Exhibit 3(b) to the Annual Report on Form 10‑K10-K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2005)2020) (File No. 001‑09553)001-09553).
(b)(c)
Amended and Restated BylawsCertificate of CBS CorporationDesignations of the 5.75% Mandatory Convertible Preferred Stock, Series A (incorporated by reference to Exhibit 3(b)3.1 to the QuarterlyCurrent Report on Form 10-Q8-K of CBS Corporation for the quarter ended September 30, 2018)ViacomCBS Inc. filed March 26, 2021) (File No. 001‑09553)001-09553).
(4)Instruments defining the rights of security holders, including indentures
(a)Specimen Certificate of the Mandatory Convertible Preferred Stock (included in Exhibit 3(c) above).
(b)
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed herewith).
(c)
Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) among CBS Corporation, CBS Operations Inc., and The Bank of New York Mellon, as senior trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S‑3 of CBS Corporation filed November 3, 20082008) (Registration No. 333‑154962) (File No. 001‑09553).
(b)(d)
First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 among CBS Corporation, CBS Operations Inc., and Deutsche Bank Trust Company Americas, as senior trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8‑K of CBS Corporation filed April 5, 20102010) (File No. 001‑09553).
(e)
Indenture, dated as of April 12, 2006, between Viacom Inc. and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Viacom Inc. filed April 17, 2006) (File No. 001-32686).
(f)
Twenty-First Supplemental Indenture, dated as of December 4, 2019, by and among CBS Corporation, Viacom Inc. and The Bank of New York Mellon, a New York banking corporation, as trustee (in such capacity, the “Trustee”), to the Indenture, dated as of April 12, 2006, between Viacom Inc. and the Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of ViacomCBS Inc. filed December 4, 2019) (File No. 001-09553).
(g)
Indenture, dated as of March 27, 2020, between ViacomCBS Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-3 of ViacomCBS Inc. filed March 27, 2020) (File No. 001‑09553).
The other instruments defining the rights of holders of the long‑term debt securities of CBS CorporationViacomCBS Inc. and its subsidiaries are omitted pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S‑K. CBS CorporationViacomCBS Inc. hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
(10)Material Contracts
(a)
CBS Corporation 2009 Long‑Term Incentive Plan (as amended and restated December 11, 2018) (incorporated by reference to Exhibit 10(a)(filed herewith) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2018) (File No. 001-09553).*
(b)Forms of Certificate and Terms and Conditions for equity awards for:under CBS Corporation 2009 Long‑Term Incentive Plan:

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-1
Exhibit No.Description of Document
(i)
Stock Options (incorporated by reference to Exhibit 10(c)(ii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
(ii)
Performance‑Based Restricted Share Units with Time Vesting and Performance Vesting (incorporated by reference to Exhibit 10(c)(v) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
(iii)
Restricted Share Units with Time Vesting (incorporated by reference to Exhibit 10(c)(vii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
(c)(iv)
CBS Corporation Senior Executive Short‑Term Incentive Plan (as amended and restated as of December 31, 2005)Performance Share Units (incorporated by reference to Exhibit 10(f)10(b)(iv) to the Annual Report on Form 10‑K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2005)2020) (File No. 001‑09553) (as amended by the First Amendment to the CBS Corporation Senior Executive Short‑Term Incentive Plan effective January 1, 2009)001-09553).*
(v)
Restricted Share Units (incorporated by reference to Exhibit 10(d)10(b)(v) to the Annual Report on Form 10‑K10-K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2008)2020) (File No. 001‑09553)001-09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

Exhibit No.Description of Document
(d)(c)
CBS Retirement Excess Pension Plan (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(o) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2009) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010) (File No. 001‑09553) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (File No. 001‑09553) (as Part B was amended by Amendment No. 1, effective as of December 31, 2020) (incorporated by reference to
Exhibit 10(c) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2020) (File No. 001-09553).*
(e)(d)
CBSViacomCBS Excess 401(k) Plan for Designated Senior Executives - Part A (as amended and restated as of December 31, 2005)October 1, 2021) (incorporated by reference to Exhibit 10(p)10(b) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended September 30, 2021) (File No. 001‑09553).*
(e)
ViacomCBS Excess 401(k) Plan for Designated Senior Executives - Part B (as amended and restated as of October 1, 2021) (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended September 30, 2021) (File No. 001‑09553).*
(f)
ViacomCBS Bonus Deferral Plan for Designated Senior Executives - Part A (as amended and restated as of October 1, 2021) (incorporated by reference to Exhibit 10(e) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended September 30, 2021) (File No. 001‑09553).*
(g)
ViacomCBS Bonus Deferral Plan for Designated Senior Executives - Part B (as amended and restated as of October 1, 2021) (incorporated by reference to Exhibit 10(f) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended September 30, 2021) (File No. 001‑09553).*
(h)
Viacom Inc. 2016 Long-Term Management Incentive Plan (incorporated by reference to Exhibit A to the Definitive Proxy Statement of Viacom Inc. filed January 23, 2015) (File No. 001-32686).*
(i)Forms of Terms and Conditions to the Certificates for equity awards under the Viacom Inc. 2016 Long-Term Management Incentive Plan:
(i)
Stock Options (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(ii)
Restricted Share Units (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(iii)
Performance Share Units (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended December 31, 2018) (File No. 001-32686).*
(iv)
Performance Share Units (incorporated by reference to Exhibit 10(g)(iv) to the Annual Report on Form 10‑K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2005)2020) (File No. 001‑09553) (as amended by Part B as of January 1, 2009)001-09553).*
(v)
Restricted Share Units (incorporated by reference to Exhibit 10(f)10(g)(v) to the Annual Report on Form 10‑K10-K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2020) (File No. 001-09553).*
(j)
Viacom Excess Pension Plan, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Viacom Inc. for the fiscal year ended December 31, 2008) (File No. 001‑09553) (as Part B was001-32686), as amended by Amendment, No. 1effective as of January 1, 2009)March 31, 2009 (incorporated by reference to Exhibit 10(b)10.13 to the Transition Report on Form 10-K of Viacom Inc. for the nine-month transition period ended September 30, 2010) (File No. 001-32686).*
(k)
Viacom Excess 401(k) Plan for Designated Senior Executives, as amended and restated as of October 1, 2021
(incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10‑Q10-Q of CBS CorporationViacomCBS Inc. for the quarter ended March 31, 2010)September 30, 2021) (File No. 001‑09553) (as Part B was amended by Amendment No. 2 as of January 1, 2009) (incorporated by reference to Exhibit 10(h) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010 (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2014) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part B was amended by Amendment No. 3 as of January 1, 2014) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part A was amended by Amendment No. 2 as of February 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553), (as Part B was amended by Amendment No. 4 as of February 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553) (as Part A was amended by Amendment No. 3 as of January 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553) (as Part B was amended by Amendment No. 5 as of January 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553) (as Part A was amended by Amendment No. 4 as of October 2, 2017) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part B was amended by Amendment No. 6 as of October 2, 2017) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553).*
(f)
CBS Bonus Deferral Plan for Designated Senior Executives (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(q) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as amended by Part B as of January 1, 2009) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2008) (File No. 001‑09553) (as Part B was amended by Amendment No. 1 as of January 1, 2009) (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10‑Q of CBS Corporation for the quarter ended March 31, 2010) (File No. 001‑09553) (as Part B was amended by Amendment No. 2 as of January 1, 2009) (incorporated by reference to Exhibit 10(i) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010) (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2014) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part B was amended by Amendment No. 3 as of January 1, 2014) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part A was amended by Amendment No. 2 as of January 1, 2015) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553) (as Part B was amended by Amendment No. 4 as of January 1, 2015) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553) (as Part A was amended by Amendment No. 3 as of October 2, 2017) (incorporated by reference to Exhibit 10(f) of the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part B was amended by Amendment No. 5 as of October 2, 2017) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-2

Exhibit No.Description of Document
(g)(l)
Viacom Bonus Deferral Plan for Designated Senior Executives, as amended and restated as of October 1, 2021
(incorporated by reference to Exhibit 10(d) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended September 30, 2021) (File No. 001‑09553).*
(m)
Summary of CBS CorporationViacomCBS Inc. Compensation for Outside Directors (as of January 31, 2019) ((incorporated by reference to Exhibit 10(g)filed herewith) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2018) (File No. 001-09553).*
(h)(n)
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10 to the Current Report on Form 8‑K of CBS Corporation filed September 18, 2009) (File No. 001‑09553).*
(i)
Former Viacom Deferred Compensation Plan for Non‑Employee Directors (as amended and restated as of October 14, 2003) (incorporated by reference to (o)Exhibit 10(e) to the Annual Report on Form 10‑K of Former Viacom for the fiscal year ended December 31, 2003) (File No. 001‑09553).*
(j)
CBS Corporation Deferred Compensation Plan for Outside Directors (as amended and restated as of January 29, 2015) (incorporated by reference to Exhibit 10(k) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(k)
CBS Corporation 2000 Stock Option Plan for Outside Directors (as amended and restated through December 14, 2016) (incorporated by reference to (p)Exhibit 10(k) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2016) (File No. 001-09553).*
(l)
CBS Corporation 2005 RSU Plan for Outside Directors (as amended and restated through January 29, 2015) (incorporated by reference to Exhibit 10(m) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(m)(q)
CBS Corporation 2015 Equity Plan for Outside Directors (effective May 21, 2015) (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended June 30, 2015) (File No. 001-09553).*
(n)(r)
Viacom Inc. 2011 RSU Plan for Outside Directors, as amended and restated as of January 1, 2016 (incorporated by reference to Exhibit B to the Definitive Proxy Statement of Viacom Inc. filed January 23, 2015) (File No. 001-32686), as further amended and restated as of May 18, 2016 (incorporated by reference to Exhibit 10.2 to the Quarterly Report of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(s)
CBS Corporation Senior Executive Retention Plan, including the form of Letter to Participants (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4 of CBS Corporation filed October 17, 2019 (Registration No. 333-234238) (File No. 001-09553).*
(t)
Viacom Inc. Executive Retention Plan for Section 16 Officers (incorporated by reference to Exhibit 10.15 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(u)
Employment Agreement, dated as of July 1, 2017August 13, 2019, between CBS CorporationViacom Inc. and Joseph R. IannielloRobert M. Bakish (incorporated by reference to Exhibit 10.4 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(v)
Letter Agreement, dated as of August 13, 2019, between Viacom Inc. and Robert M. Bakish (incorporated by reference to Exhibit 10.5 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(w)
Employment Agreement, dated as of June 30, 2020, between Viacom Inc. and Naveen Chopra (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS CorporationViacomCBS Inc. for the quarter ended SeptemberJune 30, 2017)2020) (File No. 001-09553), as amended by 333-234238).*
(x)
Letter Agreement, dated as of September 9, 2018June 30, 2020, between ViacomCBS Inc. and Naveen Chopra (incorporated by reference to Exhibit 10(a) to the Current Report on Form 8-K of CBS Corporation filed September 27, 2018) (File No. 001-09553).*
(o)
Employment Agreement dated October 18, 2018 between CBS Corporation and Christina Spade (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed October 19, 2018) (File No. 001-09553).*
(p)
Employment Agreement dated as of June 1, 2017 between CBS Corporation and Lawrence P. Tu (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of CBS CorporationViacomCBS Inc. for the quarter ended SeptemberJune 30, 2017)2020) (File No. 001-09553), as amended by Letter Agreement dated April 25, 2018 (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2018) (File No. 001-09553)333-234238).*
(q)(y)
Employment Agreement, dated as of January 1,August 13, 2019, between Viacom Inc. and Christa A. D’Alimonte (incorporated by reference to Exhibit 10.9 to CBS Corporation and Jonathan H. Anschell (Corporation’s Registration Statement No. 333-234238 on Form S-4 filed herewith)October 17, 2019) (File No. 333-234238).*
(r)(z)
Letter Agreement, dated as of August 13, 2019, between Viacom Inc. and Christa A. D’Alimonte (incorporated by reference to Exhibit 10.10 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(aa)
Employment Agreement, dated as of January 1,October 2, 2019, between Viacom Inc. and DeDe Lea (incorporated by reference to Exhibit 10.13 to CBS Corporation and Richard M. Jones (Corporation’s Registration Statement No. 333-234238 on Form S-4 filed herewith)October 17, 2019) (File No. 333-234238).*
(s)(bb)
Employment Agreement, dated May 19, 2017as of December 2, 2019, between CBS CorporationViacom Inc. and Leslie MoonvesNancy Phillips (incorporated by reference to Exhibit 10(a)10(bb) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended June 30, 2017) (File No. 001-09553).*
(t)
Letter Agreement dated December 11, 2014 between CBS Corporation and Leslie Moonves amending and restating the Letter Agreement dated May 2, 2012 between CBS Corporation and Leslie Moonves (incorporated by reference to Exhibit 10(p) to the Annual Report on Form 10-K of CBS CorporationViacomCBS Inc. for the fiscal year ended December 31, 2014) (File No. 001-09553).*
Certain portions of this exhibit have been omitted pursuant to a confidential treatment order granted by the Securities and Exchange Commission.
(u)
Separation and Settlement Agreement and Releases effective as of September 9, 2018 between CBS Corporation and Leslie Moonves (incorporated by reference to Exhibit 10(b) to the Current Report on Form 8-K of CBS Corporation filed September 10, 2018)2019) (File No. 001-09553).*
(cc)
Letter Agreement, dated as of December 2, 2019, between Viacom Inc. and Nancy Phillips (incorporated by reference to Exhibit 10(cc) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2019) (File No. 001-09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).


E-3



Exhibit No.Description of Document
(v)(dd)
Employment Agreement dated as of September 29, 2016 between CBS Corporation and Anthony G. Ambrosio (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2016), as amended by Letter Agreement dated August 4, 2017 (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2017) (File No. 001-09553).*
(w)
Separation Agreement dated October 11, 2018 between CBS Corporation and Anthony G. Ambrosio (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed October 12, 2018) (File No. 001-09553).*
(x)
Employment Agreement dated as of July 1, 2016 between CBS Corporation and Gil Schwartz (incorporated by reference to Exhibit 10(u) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2015) (File No. 001-09553), as amended by Letter Agreement dated August 4, 2017 (incorporated by reference to Exhibit 10(d) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2017) (File No. 001-09553), as amended by Letter Agreement dated January 11, 2018 (incorporated by reference to Exhibit 10(s) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553).*
(y)
Separation Agreement dated as of September 21, 2018 between CBS Corporation and Gil D. Schwartz (incorporated by reference to Exhibit 10(b) to the Current Report on Form 8-K of CBS Corporation filed September 27, 2018) (File No. 001-09553).*
(z)CBS Corporation plansPlans assumed by Former Viacom after the merger with former CBS Corporation in May 2000, consisting of the following:
(i)
CBS Supplemental Executive Retirement Plan (as amended as of April 1, 1999) (incorporated by reference to Exhibit 10(h) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(t)(i) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (incorporated by reference to Exhibit 10(kk)(i) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2020) (File No. 001‑09553).*
(ii)
CBS Bonus Supplemental Executive Retirement Plan (as amended as of April 1, 1999) (incorporated by reference to Exhibit 10(i) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(t)(ii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (as Part B was amended, effective as of December 31, 2020) (incorporated by reference to Exhibit 10(kk)(ii) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2020) (File No. 001‑09553).*
(iii)
CBS Supplemental Employee Investment Fund (as amended as of January 1, 1998) (incorporated by reference to Exhibit 10(j) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977).*
(aa)(ee)
CBS Corporation Matching Gifts Program for Directors ((incorporated by reference to Exhibit 10(aa)filed herewith) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2018) (File No. 001-09553).*
(bb)(ff)
Amended and Restated $2.5$3.5 Billion Credit Agreement, dated as of June 9, 2016,January 23, 2020 (the “Credit Agreement”), among CBS Corporation; CBS OperationsViacomCBS Inc.; the Subsidiary Borrowers Partiesparty thereto; the Lenders named therein; JPMorgan Chase Bank, N.A., as Administrative Agent; Citibank, N.A., as Syndication Agent; and Bank of America, N.A., and Wells Fargo Bank, National Association, as Syndication Agents; and Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., and Morgan Stanley MUFG Loan Partners, LLC, and Wells Fargo Bank, N.A., as Co‑Documentation Agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of CBS CorporationViacomCBS Inc. filed June 10, 2016)January 23, 2020) (File No. 001-09553).
(cc)(gg)
Amendment No. 1 to the Credit Agreement, dated as of December 9, 2021, by and among the parties listed therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of ViacomCBS Inc. filed December 14, 2021) (File No. 001-09553).
(hh)
Amendment No. 2 to the Credit Agreement, dated as of February 14, 2022, by and among the parties listed therein (filed herewith).
(ii)
Settlement and Release Agreement effective as of September 9, 2018 (incorporated by reference to Exhibit 10(a) to the Current Report on Form 8-K of CBS Corporation filed September 10, 2018) (File No. 001-09553).
(dd)(jj)
SeparationAmendment No. 1 to the Settlement and Release Agreement, dated as of December 19, 2005August 13, 2019, by and between Former Viacom and New Viacom Corp.among the parties listed therein (incorporated by reference to Exhibit 10.110.3 to the Current Report on Form 8‑K8-K of Former ViacomCBS Corporation filed December 21, 2005)August 19, 2019) (File No. 001‑09553)001-09553).
(ee)(kk)
Tax MattersSupport Agreement, dated as of December 30, 2005August 13, 2019, by and between Former Viacom and New Viacom Corp.among the parties listed therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K8-K of CBS Corporation filed January 5, 2006)August 19, 2019) (File No. 001‑09553)001-09553).
(ll)
Governance Agreement, dated as of August 13, 2019, by and among the parties listed therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of CBS Corporation filed August 19, 2019) (File No. 001-09553).
(21)
Subsidiaries of ViacomCBS Inc. (filed herewith).
(23)Consents of Experts and Counsel
(a)
Consent of PricewaterhouseCoopers LLP (filed herewith).
(24)
Powers of Attorney (filed herewith).
(31)Rule 13a‑14(a)/15d‑14(a) Certifications
(a)
Certification of the Chief Executive Officer of ViacomCBS Inc. pursuant to Rule 13a‑14(a) or 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 (filed herewith).
(b)
Certification of the Chief Financial Officer of ViacomCBS Inc. pursuant to Rule 13a‑14(a) or 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 (filed herewith).

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-4

Exhibit No.Description of Document
(21)(32)
Subsidiaries of CBS CorporationSection 1350 Certifications (filed herewith).
(23)Consents of Experts and Counsel
(a)
Consent of PricewaterhouseCoopers LLP (filed herewith).
(24)
Powers of Attorney (filed herewith).
(31)Rule 13a‑14(a)/15d‑14(a) Certifications
(a)
Certification of the Chief Executive Officer of CBS Corporation pursuant to Rule 13a‑14(a) or 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 (filed herewith).
(b)
Certification of the Chief Financial Officer of CBS Corporation pursuant to Rule 13a‑14(a) or 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 (filed herewith).
(32)Section 1350 Certifications
(a)
Certification of the Chief Executive Officer of CBS CorporationViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 (furnished herewith).
(b)
Certification of the Chief Financial Officer of CBS CorporationViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 (furnished herewith).
(101)Interactive Data File
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101. SCH XBRL Taxonomy Extension Schema.

101. CAL XBRL Taxonomy Extension Calculation Linkbase.

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101. LAB XBRL Taxonomy Extension Label Linkbase.

101. PRE XBRL Taxonomy Extension Presentation Linkbase.
(104)Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-5

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, CBS CorporationViacomCBS Inc. has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
VIACOMCBS INC.
CBS CORPORATIONBy:/s/ Robert M. Bakish
By:/s/ Joseph R. Ianniello
Joseph R. IannielloRobert M. Bakish
President and Acting Chief
Chief Executive Officer
Date: February 15, 20192022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of CBS CorporationViacomCBS Inc. and in the capacities and on the dates indicated:
SignatureTitleDate
/s/ Robert M. BakishPresident and Chief
Executive Officer; Director
(Principal Executive Officer)		February 15, 2022
Robert M. Bakish
SignatureTitleDate
/s/ Joseph R. IannielloNaveen Chopra
President and Acting Chief
Executive Officer
(Principal Executive Officer)
February 15, 2019
Joseph R. Ianniello
/s/ Christina Spade
Executive Vice President,

Chief Financial Officer

(Principal Financial Officer)
February 15, 20192022
Christina SpadeNaveen Chopra
/s/ Lawrence Liding
Executive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)
February 15, 2019
Lawrence Liding
*DirectorFebruary 15, 2019
Candace K. Beinecke
*DirectorFebruary 15, 2019
Barbara M. Byrne
*DirectorFebruary 15, 2019
Gary L. Countryman
*DirectorFebruary 15, 2019
Brian Goldner



/s/ Katherine Gill-CharestExecutive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)		February 15, 2022
SignatureKatherine Gill-CharestTitleDate
*DirectorFebruary 15, 20192022
Candace K. Beinecke
*DirectorFebruary 15, 2022
Barbara M. Byrne
*DirectorFebruary 15, 2022
Linda M. Griego
*DirectorFebruary 15, 20192022
Robert N. Klieger

*Director
SignatureTitleDate
*DirectorFebruary 15, 20192022
Martha L. MinowJudith A. McHale
*DirectorFebruary 15, 20192022
Shari RedstoneRonald L. Nelson
*DirectorFebruary 15, 20192022
Susan SchumanCharles E. Phillips, Jr.
*
Director

Chair		February 15, 20192022
Shari Redstone
*DirectorFebruary 15, 2022
Susan Schuman
*DirectorFebruary 15, 2022
Nicole Seligman
*Director
February 15, 2022
Frederick O. Terrell
*
Director
(Interim Chairman of the
Board of Directors)

*By:/s/ Christa A. D’AlimonteFebruary 15, 20192022
Strauss Zelnick
*By:/s/ Lawrence P. TuFebruary 15, 2019
Lawrence P. TuChrista A. D’Alimonte
Attorney-in-Fact
for Directors