Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Consolidated Statements of Operations | ||||
Revenues | 3006.3 | 3393.7 | 6166.2 | 7047.8 |
Expenses: | ||||
Operating | 1984.4 | 1962.3 | 4297.5 | 4348.6 |
Selling, general and administrative | 625.7 | 668.4 | 1221.9 | 1249.3 |
Restructuring charges | 8.8 | 2.6 | 9.6 | 47.5 |
Depreciation and amortization | 145.2 | 123.4 | 287.5 | 241.2 |
Total expenses | 2764.1 | 2756.7 | 5816.5 | 5886.6 |
Operating income | 242.2 | 637 | 349.7 | 1161.2 |
Interest expense | -133.9 | -134.3 | -267.1 | (273) |
Interest income | 1.1 | 15.2 | 2.7 | 32.8 |
Loss on early extinguishment of debt | -30.5 | -29.8 | ||
Other items, net | -3.5 | 124.9 | -15.4 | 124.7 |
Earnings before income taxes and equity in loss of investee companies | 75.4 | 642.8 | 40.1 | 1045.7 |
Provision for income taxes | -56.9 | -232.9 | -65.7 | -384.2 |
Equity in loss of investee companies, net of tax | -3.1 | -1.5 | -14.3 | -8.8 |
Net earnings (loss) | 15.4 | 408.4 | -39.9 | 652.7 |
Basic net earnings (loss) per common share (in dollars per share) | 0.02 | 0.61 | -0.06 | 0.98 |
Diluted net earnings (loss) per common share (in dollars per share) | 0.02 | 0.61 | -0.06 | 0.97 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 673.4 | 669.4 | 672.5 | 668.7 |
Diluted (in shares) | 680.2 | 674.3 | 672.5 | 674 |
Dividends per common share (in dollars per share) | 0.05 | 0.27 | 0.1 | 0.52 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | 341.5 | 419.5 |
Receivables, less allowances of $158.5 (2009) and $143.9 (2008) | 2677.2 | 2749.9 |
Programming and other inventory (Note 5) | 648.5 | 1027.3 |
Deferred income tax assets, net | 320.8 | 318.7 |
Prepaid expenses and other current assets | 710.4 | 669.3 |
Current assets of discontinued operations | 12.7 | 8.1 |
Total current assets | 4711.1 | 5192.8 |
Property and equipment: | ||
Land | 336.4 | 337.1 |
Buildings | 709.4 | 702.3 |
Capital leases | 196.8 | 196.8 |
Advertising structures | 1980.4 | 1885.5 |
Equipment and other | 1809.4 | 1777.8 |
Property and equipment, gross | 5032.4 | 4899.5 |
Less accumulated depreciation and amortization | 2,074 | 1891.2 |
Net property and equipment | 2958.4 | 3008.3 |
Programming and other inventory, noncurrent (Note 5) | 1459.5 | 1578.1 |
Goodwill (Note 4) | 8659.4 | 8647.8 |
Intangible assets (Note 4) | 7037.9 | 7104.2 |
Other assets | 1107.6 | 1260.9 |
Assets of discontinued operations | 92 | 97.2 |
Total Assets | 26025.9 | 26889.3 |
Current Liabilities: | ||
Accounts payable | 384 | 462.8 |
Accrued compensation | 225 | 370.7 |
Participants' share and royalties payable | 1012.1 | 962.3 |
Program rights | 691.5 | 840.1 |
Deferred revenue | 335.2 | 392 |
Income taxes payable | 15.8 | 42.9 |
Current portion of long-term debt (Note 7) | 22.5 | 21.3 |
Accrued expenses and other current liabilities | 1429.7 | 1691.5 |
Current liabilities of discontinued operations | 21.1 | 17.3 |
Total current liabilities | 4136.9 | 4800.9 |
Long-term debt (Note 7) | 6964.3 | 6974.8 |
Pension and postretirement benefit obligations | 2297.7 | 2273.7 |
Deferred income tax liabilities, net | 376.7 | 345.1 |
Other liabilities | 3367.5 | 3617.3 |
Liabilities of discontinued operations | 272.7 | 280.2 |
Stockholders' Equity: | ||
Additional paid-in capital | 43480.6 | 43,495 |
Accumulated deficit | -30638.1 | -30598.2 |
Accumulated other comprehensive loss (Note 1) | -539.8 | -606.9 |
Stockholders' equity including treasury stock | 12303.5 | 12290.7 |
Less treasury stock, at cost; 120.4 (2009 and 2008) Class B Shares | 3693.4 | 3693.4 |
Total Stockholders' Equity | 8610.1 | 8597.3 |
Total Liabilities and Stockholders' Equity | 26025.9 | 26889.3 |
Common Stock Class A | ||
Stockholders' Equity: | ||
Common stock | 0.1 | 0.1 |
Common Stock Class B | ||
Stockholders' Equity: | ||
Common stock | 0.7 | 0.7 |
1_Consolidated Balance Sheets (
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Consolidated Balance Sheets | ||
Receivables, allowances | 158.5 | 143.9 |
Treasury stock, Class B shares (in shares) | 120.4 | 120.4 |
Common Stock Class A | ||
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | 0.001 | 0.001 |
Common stock, shares authorized (in shares) | 375 | 375 |
Common stock, shares issued (in shares) | 57.7 | 57.7 |
Common Stock Class B | ||
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | 0.001 | 0.001 |
Common stock, shares authorized (in shares) | 5,000 | 5,000 |
Common stock, shares issued (in shares) | 737.4 | 733.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating Activities: | ||
Net earnings (loss) | -39.9 | 652.7 |
Adjustments to reconcile net earnings (loss) to net cash flow provided by operating activities: | ||
Depreciation and amortization | 287.5 | 241.2 |
Stock-based compensation | 66.8 | 72.2 |
Loss on early extinguishment of debt | 29.8 | |
Equity in loss of investee companies, net of tax and distributions | 15.8 | 14.6 |
Decrease to accounts receivable securitization program | (300) | |
Change in assets and liabilities, net of effects of acquisitions | 335.3 | 641.7 |
Net cash flow provided by operating activities | 395.3 | 1622.4 |
Investing Activities: | ||
Acquisitions, net of cash acquired | -9.3 | -1886.2 |
Capital expenditures | -139.3 | -220.2 |
Investments in and advances to investee companies | -23.7 | -18.2 |
Purchases of marketable securities | -35.6 | -20.8 |
Proceeds from dispositions | 22.5 | 360.4 |
Proceeds from sales of marketable securities | 10 | |
Other, net | -0.4 | -13.7 |
Net cash flow used for investing activities | -185.8 | -1788.7 |
Financing Activities: | ||
Repayments to banks, including commercial paper, net | -2.3 | (4) |
Proceeds from issuance of senior notes | 974.4 | |
Repayment of senior notes | -1007.5 | |
Payment of capital lease obligations | -7.7 | -9.4 |
Dividends | -228.6 | -343.2 |
Purchase of Company common stock | -16.5 | -44.7 |
Proceeds from exercise of stock options | 31.2 | |
Excess tax benefit from stock-based compensation | 0.7 | 3.4 |
Net cash flow used for financing activities | -287.5 | -366.7 |
Net decrease in cash and cash equivalents | (78) | (533) |
Cash and cash equivalents at beginning of period | 419.5 | 1346.9 |
Cash and cash equivalents at end of period | 341.5 | 813.9 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 265.2 | 243.4 |
Cash paid for income taxes | 72.4 | 195.8 |
Non-cash investing and financing activities: | ||
Equipment acquired under capitalized leases | 9.7 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Summary of Significant Accounting Policies | 1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of BusinessCBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the "Company" or "CBS Corp.") is comprised of the following segments: Television (CBS Television, comprised of the CBS Television Network, television stations, its television production and syndication operations and CBS College Sports Network; and Showtime Networks), Radio (CBS Radio), Outdoor (CBS Outdoor), Interactive (CBS Interactive, comprised of Internet brands including CNET, CBS.com, CBSSports.com, TV.com, BNET and Last.fm) and Publishing (Simon Schuster). During the second quarter of 2008, the Company completed the acquisition of CNET Networks,Inc. ("CNET"). CNET has been included in the Company's results since its acquisition. In connection with the acquisition, the Company combined its existing interactive businesses, which were previously reported in the Television segment, with those of CNET and realigned its management structure to create a separate Interactive segment. Prior period results have been reclassified to conform to this presentation. Basis of PresentationThe accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules of the Securities and Exchange Commission ("SEC"). These financial statements should be read in conjunction with the more detailed financial statements and notes thereto, included in the Company's Annual Report on Form10-K for the fiscal year ended December31, 2008. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the periods presented. Certain previously reported amounts have been reclassified to conform to the current presentation. The Company performed an evaluation of subsequent events through August6, 2009, which is the date the financial statements have been filed with the SEC. Use of EstimatesThe preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States 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 expenses during the reporting period. The Company bases its 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 differ from these estimates. Net Earnings (Loss) per Common ShareBasic earnings (loss) per share ("EPS") is based upon net earnings (loss) divided by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted |
Stock Based Compensation
Stock Based Compensation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Stock-Based Compensation | 2) STOCK-BASED COMPENSATION The following table summarizes the Company's stock-based compensation expense for the three and six months ended June30, 2009 and 2008. ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 RSUs, PSUs and restricted shares $ 27.2 $ 34.7 $ 54.9 $ 64.9 Stock options and equivalents 6.7 4.4 11.9 7.3 Stock-based compensation expense, before income taxes 33.9 39.1 66.8 72.2 Related tax benefit (13.5 ) (15.5 ) (26.7 ) (28.6 ) Stock-based compensation expense, net of tax $ 20.4 $ 23.6 $ 40.1 $ 43.6 During the six months ended June30, 2009, the Company granted 11.7million RSUs with a weighted average per unit grant date fair value of $5.07. RSU grants during 2009 generally vest over a three- to four-year service period. Certain RSU awards are also subject to satisfying performance conditions. During the six months ended June30, 2009, the Company also granted .4million PSUs with an aggregate grant date fair value of $4.3million. The number of shares that will be issued upon vesting of PSUs can range from 0% to 300% of the target award, based on the ranking of the total shareholder return for CBS Corp. ClassB Common Stock within the SP500 Index over a designated three-year measurement period, or in certain circumstances, based on the achievement of established operating performance goals. During the six months ended June30, 2009, the Company also granted 14.2million stock options with a weighted average exercise price of $5.20. Stock option grants during 2009 generally vest over a three- to four-year service period. Total unrecognized compensation cost related to non-vested RSUs and PSUs at June30, 2009 was $174.0million, which is expected to be expensed over a weighted average period of 2.2years. Total unrecognized compensation cost related to unvested stock option awards and stock option equivalents at June30, 2009 was $58.7million, which is expected to be expensed over a weighted average period of 2.9years. |
Acquisitions and Dispositions
Acquisitions and Dispositions | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Acquisitions and Dispositions | 3) ACQUISITIONS AND DISPOSITIONS Acquisitions During June 2008, the Company completed the acquisition of all of the outstanding shares of CNET common stock for $11.50 per share, for a total of $1.8billion. The results of CNET have been included in the Interactive segment since its acquisition. On April23, 2008, the Company acquired International Outdoor Advertising Group ("IOA"), the leading out-of-home advertising company in South America, for $110.8million. IOA has been included as part of the Outdoor segment since the date of acquisition. Dispositions On March6, 2009, the Company completed the sale of three of its owned radio stations in Denver to Wilks Broadcasting for $19.5million. During June 2008, the Company sold its 37% investment in Sundance Channel for $168.4million resulting in a pre-tax gain of $127.2million included in "Other Items, net" in the Consolidated Statements of Operations for the three and six months ended June30, 2008. On January10, 2008, the Company completed the sale of seven of its owned television stations in Austin, Salt Lake City, Providence and West Palm Beach to Cerberus Capital Management,L.P. for $185.0million. Non-cash transaction On April1, 2009, the Company completed a transaction with Clear Channel Communications,Inc. for the swap of five of its mid-size market radio stations in Baltimore, Portland, Sacramento and Seattle, for two radio stations in Houston. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Goodwill and Intangible Assets | 4) GOODWILL AND INTANGIBLE ASSETS The changes in the book value of goodwill, by segment, for the six months ended June30, 2009 were as follows: At December31,2008 Activity(a) At June30,2009 Television $ 3,000.9 $ $ 3,000.9 Radio 1,929.2 (.8 ) 1,928.4 Outdoor 1,933.7 12.0 1,945.7 Interactive 1,368.1 .2 1,368.3 Publishing 415.9 .2 416.1 Total $ 8,647.8 $ 11.6 $ 8,659.4 (a)Primarily reflects foreign currency translation adjustments and purchase price adjustments for Outdoor acquisitions. The Company's intangible assets were as follows: At June30, 2009 Gross Accumulated Amortization Net Intangible assets subject to amortization: Leasehold agreements $ 877.4 $ (478.2 ) $ 399.2 Franchise agreements 508.1 (247.6 ) 260.5 Other intangible assets 462.4 (220.4 ) 242.0 Total intangible assets subject to amortization 1,847.9 (946.2 ) 901.7 FCC licenses 5,967.4 5,967.4 Trade names 168.8 168.8 Total intangible assets $ 7,984.1 $ (946.2 ) $ 7,037.9 At December31, 2008 Gross Accumulated Amortization Net Intangible assets subject to amortization: Leasehold agreements $ 866.5 $ (448.3 ) $ 418.2 Franchise agreements 504.3 (233.9 ) 270.4 Other intangible assets 461.8 (192.3 ) 269.5 Total intangible assets subject to amortization 1,832.6 (874.5 ) 958.1 FCC licenses 5,977.3 5,977.3 Trade names 168.8 168.8 Total intangible assets $ 7,978.7 $ (874.5 ) $ 7,104.2 Amortization expense was $33.4million and $25.8million for the three months ended June30, 2009 and 2008, respectively, and $66.3million and $51.4million for the six months ended June30, 2009 and 2008, respectively. The Company expects its aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2009 through 2013, to be as follows: 2009 2010 2011 2012 2013 Amortization expense $ 133.1 $ 128.4 $ 115.4 $ 93.6 $ 82.9 |
Programming and Other Inventory
Programming and Other Inventory | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Programming and Other Inventory | 5) PROGRAMMING AND OTHER INVENTORY At June30,2009 At December31,2008 Program rights $ 1,264.8 $ 1,915.7 Television programming: Released (including acquired libraries) 640.4 551.4 In process and other 70.8 53.6 Theatrical programming, in process and other 50.6 Publishing, primarily finished goods 80.4 83.7 Other 1.0 1.0 Total programming and other inventory 2,108.0 2,605.4 Less current portion 648.5 1,027.3 Total noncurrent programming and other inventory $ 1,459.5 $ 1,578.1 |
Related Parties
Related Parties | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Related Parties | 6) RELATED PARTIES National Amusements,Inc.National Amusements,Inc. ("NAI") is the controlling stockholder of CBS Corp. Mr.Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Executive Chairman of the Board of Directors and founder of both CBS Corp. and ViacomInc. At June30, 2009, NAI beneficially owned CBS Corp. ClassA Common Stock representing approximately 81% of the voting power of all classes of CBS Corp.'s Common Stock, and owned approximately 10% of CBS Corp.'s ClassA Common Stock and ClassB Common Stock on a combined basis. ViacomInc.CBS Corp., as part of its normal course of business, enters into transactions with ViacomInc. and its subsidiaries. CBS Corp., through its Television segment, licenses its television products to ViacomInc., primarily MTV Networks and BET. In addition, CBS Corp. recognizes advertising revenues for media spending placed by various subsidiaries of ViacomInc., primarily Paramount Pictures. Paramount Pictures also distributes certain of the Company's television products in the home entertainment market. CBS Corp.'s total revenues from these transactions were $40.9million and $99.3million for the three months ended June30, 2009 and 2008, respectively, and $112.3million and $145.4million for the six months ended June30, 2009 and 2008, respectively. Showtime Networks pays license fees to Paramount Pictures for motion picture programming under an exclusive output agreement which covers feature films initially theatrically released in the United States through 2007. Showtime Networks has exhibition rights to each film licensed under this agreement during three pay television exhibition windows over the course of several years after each such film's initial theatrical release. This agreement has not been renewed for new feature films initially theatrically released in the United States after 2007. These license fees are initially recorded as programming inventory and amortized over the shorter of the life of the license agreement or projected useful life of the programming. In addition, CBS Corp. places advertisements with and leases production facilities from various subsidiaries of ViacomInc. The total spending for all of these transactions was $4.8million and $8.3million for the three months ended June30, 2009 and 2008, respectively, and $8.8million and $12.1million for the six months ended June30, 2009 and 2008, respectively. The following table presents the amounts due from or due to ViacomInc. in the normal course of business as reflected on CBS Corp.'s Consolidated Balance Sheets. At June30,2009 At December31,2008 Amounts due from ViacomInc. Receivables $ 165.2 $ 182.5 Other assets (Receivables, noncurrent) 180.3 249.8 Total amounts due from Viacom Inc. $ 345.5 $ 432.3 Amounts due to ViacomInc. Accounts payable $ 3.8 $ 6.5 Program rights 33.6 48.2 Other liabilities (Program rights, noncurrent) 8.7 26.5 Total amounts due to Viacom Inc. $ 46.1 $ 81.2 Other Related Parties.The Company owns 50% of T |
Bank Financing and Debt
Bank Financing and Debt | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Bank Financing and Debt | 7) BANK FINANCING AND DEBT The following table sets forth the Company's debt. At June30,2009 At December31,2008 Notes payable to banks $ 1.9 $ 4.3 Senior debt (4.625%-8.875% due 2010-2056)(a) 6,905.2 6,904.3 Other notes .2 Obligations under capital leases 113.2 120.8 Total debt 7,020.3 7,029.6 Less discontinued operations debt(b) 33.5 33.5 Total debt from continuing operations 6,986.8 6,996.1 Less current portion 22.5 21.3 Total long-term debt from continuing operations, net of current portion $ 6,964.3 $ 6,974.8 (a) At June30, 2009 and December31, 2008, the senior debt balances included (i)a net unamortized premium of $2.2million and $23.3million, respectively, and (ii)an increase in the carrying value of the debt relating to previously settled fair value hedges of $85.4million and $88.0million, respectively. The June30, 2009 balance also includes an increase in the carrying value of the debt relating to outstanding fair value hedges of $2.8million. The face value of the Company's senior debt was $6.81billion at June30, 2009 and $6.79billion at December31, 2008. (b) Included in "Liabilities of discontinued operations" on the Consolidated Balance Sheets. The senior debt of CBS Corp. is fully and unconditionally guaranteed by its wholly owned subsidiary, CBS OperationsInc. Senior debt in the amount of $52.2million of the Company's wholly owned subsidiary, CBS BroadcastingInc., is not guaranteed. On May13, 2009, CBS Corp. issued $350.0million of 8.875% senior notes due 2019 and $400.0million of 8.200% senior notes due 2014. On June2, 2009, CBS Corp. issued $250.0million of 8.875% senior notes due 2019. Interest on these senior notes will be paid semi-annually. The senior notes are fully and unconditionally guaranteed by CBS OperationsInc., a wholly owned subsidiary of CBS Corp. During the six months ended June30, 2009, the Company repurchased $978.3million of its 7.70% senior notes due 2010 resulting in a loss on early extinguishment of debt of $29.8million. Credit Facility At June30, 2009, the Company had a $3.0billion revolving credit facility which expires in December 2010 (the "Credit Facility"). The Credit Facility requires the Company to maintain a minimum Consolidated Coverage Ratio, as defined in the Credit Facility, of 3x for the trailing four quarters. At June30, 2009, the Company's Consolidated Coverage Ratio was approximately 4x. The primary purpose of the Credit Facility is to support commercial paper borrowings. At June30, 2009, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.80billion. Accounts Receivable Securitization Program The Company's revolving accounts receivable securitization program provides for the sale of receivables on a non-recourse basis to unrelated third parties on a one-year renewable basis, thereby reducing accounts receivable on the Company's Consolidated Balance Sheets. The Company entered into this arrangement because it provide |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Pension and Other Postretirement Benefits | 8) PENSION AND OTHER POSTRETIREMENT BENEFITS The components of net periodic cost for the Company's pension and postretirement benefits plans were as follows: Pension Benefits Postretirement Benefits Three Months Ended June30, 2009 2008 2009 2008 Components of net periodic cost: Service cost $ 7.8 $ 8.4 $ .2 $ .3 Interest cost 72.4 74.9 12.3 13.6 Expected return on plan assets (54.8 ) (69.5 ) Amortization of actuarial loss (gain) 21.2 8.2 (2.8 ) (1.1 ) Amortization of prior service cost (credit) .2 .1 (.1 ) (.1 ) Net periodic cost $ 46.8 $ 22.1 $ 9.6 $ 12.7 Pension Benefits Postretirement Benefits Six months Ended June30, 2009 2008 2009 2008 Components of net periodic cost: Service cost $ 15.2 $ 16.8 $ .4 $ .6 Interest cost 145.3 149.8 24.7 27.2 Expected return on plan assets (109.3 ) (139.0 ) Amortization of actuarial loss (gain) 42.5 16.4 (5.6 ) (2.2 ) Amortization of prior service cost (credit) .4 .2 (.2 ) (.2 ) Net periodic cost $ 94.1 $ 44.2 $ 19.3 $ 25.4 |
Stockholders Equity
Stockholders Equity | |
1/1/2009 - 6/30/2009
USD / shares | |
Notes to Consolidated Financial Statements | |
Stockholders Equity | 9) STOCKHOLDERS' EQUITY On April7, 2009, the Company announced a quarterly cash dividend of $.05 per share on its ClassA and ClassB Common Stock payable on July1, 2009. The total dividend was $34.6million of which $33.7million was paid on July1, 2009 and $.9million was accrued to be paid upon vesting of RSUs. During the second quarter of 2009, the Company paid $44.2million for the dividend declared on February18, 2009 and for dividend payments on RSUs and restricted shares that vested during the second quarter of 2009. |
Income Taxes
Income Taxes | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Income Taxes | 10) INCOME TAXES The provision for income taxes represents federal, state and local, and foreign income taxes on earnings before income taxes and equity in loss of investee companies. The provision for income taxes was $56.9million and $232.9million for the three months ended June30, 2009 and 2008, respectively, and $65.7million and $384.2million for the six months ended June30, 2009 and 2008, respectively. The provision for income taxes for the three and six months ended June30, 2009, was impacted by a reduction of deferred tax assets associated with stock-based compensation of $23.3million and $42.1million, respectively. This reduction reflects the difference between the estimated tax benefit recognized based on the grant date fair value of the stock-based compensation award versus the actual tax benefit realized based on the market value on the date of vest. The provision for income taxes for the six months ended June30, 2009 was also impacted by the reversal of certain international net operating loss carryforwards of $13.4million. The Company expects to settle its Internal Revenue Service audit for the year 2005 by the end of 2009 and is currently under examination for the years 2006 and 2007. In addition, various tax years are currently under examination by state and local and foreign tax authorities. With respect to open tax years in all jurisdictions, the Company believes it is reasonably possible that the total reserve for uncertain tax positions may decrease within the next twelve months by an amount of up to $40million, plus accrued interest, a portion of which may impact the Company's effective income tax rate. |
Commitments and Contingencies
Commitments and Contingencies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Commitments and Contingencies | 11) COMMITMENTS AND CONTINGENCIES Off-Balance Sheet Arrangements 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 June30, 2009, the outstanding letters of credit and surety bonds approximated $379.8million and were not recorded on the Consolidated Balance Sheets. 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 under generally accepted accounting principles. Legal Matters Securities Action.On December12, 2008, the City of Pontiac General Employees' Retirement System filed a self-styled class action complaint in the United States District Court for the Southern District of New York against the Company and its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and Treasurer, alleging violations of federal securities law. The complaint, which was filed on behalf of a putative class of purchasers of the Company's common stock between February26, 2008 and October10, 2008 (the "Class Period"), alleges that, among other things, the Company's failure to timely write down the value of certain assets caused the Company's reported operating results during the Class Period to be materially inflated. The plaintiffs seek unspecified compensatory damages. On February11, 2009, a motion was filed in the case on behalf of The City of Omaha, Nebraska Civilian Employees' Retirement System, and The City of Omaha Police and Fire Retirement System (collectively, the "Omaha Funds") seeking to appoint the Omaha Funds as the lead plaintiffs in this case; on March5, 2009, the court granted that motion. On May4, 2009, the plaintiffs filed an Amended Complaint, which removes the Treasurer as a defendant and adds the Executive Chairman. On July13, 2009, the defendants filed a motion to dismiss this action. The Company believes that the plaintiffs' claims are without merit and intends to vigorously defend itself in the litigation. Indecency Regulation.In March 2006, the FCC released certain decisions relating to indecency complaints against certain of the Company's owned television stations and affiliated stations. The FCC ordered the Company to pay a forfeiture of $550,000 in the proceeding relating to the broadcast of a Super Bowl half-time show by the Company's television stations (the "Superbowl Proceeding"). In May 2006, the FCC denied the Company's petition for reconsideration. In July 2006, the Company filed a Petition for Review of the forfeiture with the U.S. Court of Appeals for the Third Circuit and paid the $550,000 forfeiture in order to facilitate the Company's ability to bring the appeal. Oral argument was heard in September 2007. In Ju |
Restructuring Charges
Restructuring Charges | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Restructuring Charges | 12) RESTRUCTURING CHARGES During the year ended December31, 2008, the Company recorded restructuring charges of $136.7million, of which $47.5million was recorded during the six months ended June30, 2008. The full year 2008 charges reflected $127.5million of severance costs and $9.2million of contract termination and other associated costs. During the six months ended June30, 2009, the Company recorded restructuring charges of $9.6million, reflecting $4.9million of severance costs associated with headcount reductions and $4.7million of contract termination costs related to exiting a broadcasting equipment lease upon completion of the digital conversion. As of June30, 2009, the Company paid $86.0million of severance costs and $2.9million of contract termination and other associated costs, of which $12.7million and $.6million, respectively, was paid during the second quarter of 2009. The following table sets forth the activity for the restructuring charges by segment. Balance at December31, 2008 2009 Charges 2009 Payments Balance at June30, 2009 Television $ 35.9 $ 4.1 $ (17.6 ) $ 22.4 Radio 38.9 (14.3 ) 24.6 Outdoor 7.8 3.3 (5.0 ) 6.1 Interactive 2.7 (2.6 ) .1 Publishing 3.9 2.2 (2.9 ) 3.2 Corporate 1.5 (.5 ) 1.0 Total $ 90.7 $ 9.6 $ (42.9 ) $ 57.4 |
Fair Value Measurements
Fair Value Measurements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Fair Value Measurements | 13) FAIR VALUE MEASUREMENTS The following table sets forth the Company's financial assets and liabilities measured at fair value on a recurring basis at June30, 2009. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by SFAS157, which prioritizes the inputs used in measuring fair value. Level1(a) Level2(b) Level3 Total Assets: Investments $ 46.0 $ 125.7 $ $ 171.7 Foreign currency hedges .5 .5 Interest rate swaps 2.8 2.8 Total Assets $ 46.0 $ 129.0 $ $ 175.0 Liabilities: Deferred compensation $ $ 109.4 $ $ 109.4 Foreign currency hedges 1.6 1.6 Total Liabilities $ $ 111.0 $ $ 111.0 (a) Level1 valuation is based on quoted prices for the asset in active markets. (b) Level2 valuation is based on inputs that are observable other than quoted market prices in Level1, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. The fair value of Level1 investments is determined based on publicly quoted market prices in active markets. The fair value of Level2 investments is determined by reference to market prices for similar securities. The fair value of interest rate swaps and foreign currency hedges is determined based on the present value of future cash flows using observable inputs, including interest rates, yield curves and foreign currency exchange rates. The fair value of deferred compensation is determined based on the fair value of the investments elected by employees. |
Financial Instruments
Financial Instruments | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Financial Instruments | 14) FINANCIAL INSTRUMENTS The Company's carrying value of financial instruments approximates fair value, except for differences with respect to the notes and debentures. At June30, 2009 and December31, 2008, the carrying value of the senior debt and senior subordinated debt was $6.91billion and $6.90billion, respectively, and the fair value, which is estimated based on quoted market prices and includes accrued interest, was $6.04billion and $5.47billion, respectively. The Company uses derivative financial instruments to modify its exposure to market risks from changes in foreign currency exchange rates and interest rates. In accordance with its policy, 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. Foreign Exchange Contracts Foreign exchange forward contracts have principally been used to hedge cash flows, generally within the next twelve months, in such currencies as the British Pound, the Euro, the Canadian Dollar, the Mexican Peso and the Australian Dollar. The Company designates forward contracts used to hedge projected future television and film production costs 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 programming costs upon settlement. Additionally, the Company enters into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows. At June30, 2009, the notional amount of all foreign exchange contracts was $87.1million, of which $3.3million relates to the hedging of future production costs and $83.8million represents hedges of expected foreign currency cash flows. Interest Rate Swaps All of the Company's long-term debt has been issued under fixed interest rate agreements. The Company has entered into fixed-to-floating rate swap agreements for a portion of this debt, which are designated as fair value hedges. Gains or losses on interest rate swaps are recorded as a change in the carrying value of the debt attributable to the risk being hedged. At June30, 2009, the Company was a party to $350million notional amount of interest rate swaps which are accounted for as fair value hedges. The fair value of derivative financial instruments recorded on the Consolidated Balance Sheet at June30, 2009 was as follows: Fair Value Balance Sheet Account Foreign exchange contracts: Designated hedging instruments $ (.1 ) Accrued expenses and other current liabilities Non-designated hedging instruments: Assets $ .5 Prepaid expenses and other current assets Liabilities $ (1.5 ) Accrued expenses and other current liabilities Designated interest rate swaps $ 2.8 Other assets Gains (losses) recognized on derivative financial instruments were as follows: ThreeMonths Ended June30, 2009 SixMonths Ended June30, 2009 Financial Statement Account Foreign exchange contracts: Designated hedging instrum |
Reportable Segments
Reportable Segments | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Reportable Segments | 15) REPORTABLE SEGMENTS The following tables set forth the Company's financial performance by operating segment. The Company's operating segments have been determined in accordance with the Company's internal management structure, which is organized based upon products and services. CNET has been included in the Company's results since its acquisition in the second quarter 2008. In connection with this acquisition, the Company combined its existing interactive businesses, which were previously reported in the Television segment, with those of CNET and realigned its management structure to create a separate Interactive segment. Prior period results have been reclassified to conform to this presentation. ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 Revenues: Television $ 1,947.5 $ 2,160.9 $ 4,178.1 $ 4,705.6 Radio 322.0 416.4 581.7 779.9 Outdoor 434.1 598.1 814.0 1,095.0 Interactive 126.4 40.2 260.0 93.1 Publishing 181.4 186.0 343.1 387.6 Eliminations (5.1 ) (7.9 ) (10.7 ) (13.4 ) Total Revenues $ 3,006.3 $ 3,393.7 $ 6,166.2 $ 7,047.8 The Company presents segment operating income (loss) before depreciation and amortization ("Segment OIBDA") as the primary measure of profit and loss for its operating segments in accordance with SFAS No.131 "Disclosures about Segments of an Enterprise and Related Information". The Company believes the presentation of Segment 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's management and enhances their ability to understand the Company's operating performance. ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 Segment OIBDA: Television $ 306.7 $ 512.4 $ 535.4 $ 960.8 Radio 95.3 158.6 147.5 280.9 Outdoor 42.2 153.6 67.3 255.1 Interactive 5.7 (16.8 ) 13.9 (15.7 ) Publishing 8.1 17.0 8.2 34.1 Corporate (34.7 ) (41.9 ) (63.2 ) (67.9 ) Residual costs (35.9 ) (22.5 ) (71.9 ) (44.9 ) Depreciation and amortization (145.2 ) (123.4 ) (287.5 ) (241.2 ) Total Operating Income 242.2 637.0 349.7 1,161.2 Interest expense (133.9 ) (134.3 ) (267.1 ) (273.0 ) Interest income 1.1 15.2 2.7 32.8 Loss on early extinguishment of debt (30.5 ) (29.8 ) Other items, net (3.5 ) 124.9 (15.4 ) 124.7 Earnings before income taxes and equity in loss of investee companies 75.4 642.8 40.1 1,045.7 Provision for income taxes (56.9 ) (232.9 ) (65.7 ) (384.2 ) Equity in loss of investee companies, net of tax (3.1 ) (1.5 ) (14.3 ) (8.8 ) Net Earnings (Loss) $ 15.4 $ 408.4 $ (39.9 ) $ 652.7 |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Condensed Consolidating Financial Statements | 16) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CBS OperationsInc. is a wholly owned subsidiary of the Company. CBS OperationsInc. has fully and unconditionally guaranteed CBS Corp.'s senior debt securities (See Note7). The following condensed consolidating financial statements present the results of operations, financial position and cash flows of CBS Corp., CBS OperationsInc., the direct and indirect Non-Guarantor Affiliates of CBS Corp. and CBS OperationsInc., and the eliminations necessary to arrive at the information for the Company on a consolidated basis. Statement of Operations For the Three Months Ended June30, 2009 CBS Corp. CBS Operations Inc. Non- Guarantor Affiliates Eliminations CBS Corp. Consolidated Revenues $ 25.8 $ 16.2 $ 2,964.3 $ $ 3,006.3 Expenses: Operating 17.3 12.9 1,954.2 1,984.4 Selling, general and administrative 44.0 40.3 541.4 625.7 Restructuring charges 8.8 8.8 Depreciation and amortization 1.0 2.7 141.5 145.2 Total expenses 62.3 55.9 2,645.9 2,764.1 Operating income (loss) (36.5 ) (39.7 ) 318.4 242.2 Interest (expense) income, net (143.4 ) (76.7 ) 87.3 (132.8 ) Loss on early extinguishment of debt (30.5 ) (30.5 ) Other items, net (8.7 ) (8.7 ) 13.9 (3.5 ) Earnings (loss) before income taxes and equity in earnings (loss) of investee companies (219.1 ) (125.1 ) 419.6 75.4 Benefit (provision) for income taxes 94.5 49.2 (200.6 ) (56.9 ) Equity in earnings (loss) of investee companies, net of tax 140.0 166.1 (3.1 ) (306.1 ) (3.1 ) Net earnings $ 15.4 $ 90.2 $ 215.9 $ (306.1 ) $ 15.4 Statement of Operations For the Six Months Ended June30,2009 CBS Corp. CBS Operations Inc. Non- Guarantor Affiliates Eliminations CBS Corp. Consolidated Revenues $ 50.6 $ 43.0 $ 6,072.6 $ $ 6,166.2 Expenses: Operating 34.1 34.3 4,229.1 4,297.5 Selling, general and administrative 87.4 77.0 1,057.5 1,221.9 Restructuring charges 9.6 9.6 Depreciation and amortization 2.1 5.2 280.2 287.5 Total expenses 123.6 116.5 5,576.4 5,816.5 Operating income (loss) (73.0 ) (73.5 ) 496.2 349.7 Interest (expense) income, net (286.6 ) (152.1 ) 174.3 (264.4 ) Loss on early extinguishment of debt (29.8 ) (29.8 ) Other items, net (2.9 ) (10.9 ) (1.6 ) (15.4 ) Earnings (loss) before income taxes and equity in earnings (loss) of investee companies (392.3 ) (236.5 ) 668.9 40.1 Benefit (provision) for income taxes 163.6 86.7 (316.0 ) (65.7 ) Equity in earnings (loss) of investee companies, net of tax |
Document and Entity Information
Document and Entity Information (USD $) | |||||
6 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
Common Stock Class A | Jun. 30, 2008
Common Stock Class A | Jul. 31, 2009
Common Stock Class B | Jun. 30, 2008
Common Stock Class B | |
Document and Entity Information | |||||
Entity Registrant Name | CBS CORP | ||||
Entity Central Index Key | 0000813828 | ||||
Document Type | 10-Q | ||||
Document Period End Date | 2009-06-30 | ||||
Amendment Flag | false | ||||
Current Fiscal Year End Date | --12-31 | ||||
Entity Well-known Seasoned Issuer | Yes | ||||
Entity Voluntary Filers | No | ||||
Entity Current Reporting Status | Yes | ||||
Entity Filer Category | Large Accelerated Filer | ||||
Entity Public Float | $223,995,903 | $11,183,405,560 | |||
Entity Common Stock, Shares Outstanding | 57,706,477 | 620,017,462 |