CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | 3530.9 | 3159.9 |
Expenses: | ||
Operating | 2563.5 | 2313.1 |
Selling, general and administrative | 616.1 | 596.2 |
Restructuring charges | 57.1 | 0.8 |
Depreciation and amortization | 140.8 | 142.3 |
Total expenses | 3377.5 | 3052.4 |
Operating income | 153.4 | 107.5 |
Interest expense | (138) | -133.2 |
Interest income | 1.1 | 1.6 |
Gain on early extinguishment of debt | 2.4 | 0.7 |
Other items, net | -13.1 | -11.9 |
Earnings (loss) before income taxes and equity in loss of investee companies | 5.8 | -35.3 |
Provision for income taxes | (21) | -8.8 |
Equity in loss of investee companies, net of tax | (11) | -11.2 |
Net loss | -26.2 | -55.3 |
Basic net loss per common share (in dollars per share) | -0.04 | -0.08 |
Diluted net loss per common share (in dollars per share) | -0.04 | -0.08 |
Basic weighted average number of common shares outstanding (in shares) | 676.3 | 671.5 |
Diluted weighted average number of common shares outstanding (in shares) | 676.3 | 671.5 |
Dividends per common share (in dollars per share) | 0.05 | 0.05 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current Assets: | ||
Cash and cash equivalents | 872.7 | 716.7 |
Receivables, less allowances of $136.7 (2010) and $142.6 (2009) | 3198.7 | 2900.2 |
Programming and other inventory (Note 4) | 604.8 | 1,085 |
Deferred income tax assets, net | 307.2 | 303.4 |
Prepaid income taxes | 14.8 | |
Prepaid expenses and other current assets | 702.1 | 630.4 |
Current assets of discontinued operations | 4.9 | 1.2 |
Total current assets | 5705.2 | 5636.9 |
Property and equipment: | ||
Land | 329.3 | 329.3 |
Buildings | 709.1 | 706.6 |
Capital leases | 196.3 | 196.3 |
Advertising structures | 2,037 | 2039.8 |
Equipment and other | 1714.7 | 1,726 |
Property and equipment, gross | 4986.4 | 4,998 |
Less accumulated depreciation and amortization | 2200.8 | 2139.3 |
Net property and equipment | 2785.6 | 2858.7 |
Programming and other inventory (Note 4) | 1402.2 | 1464.2 |
Goodwill | 8663.3 | 8667.5 |
Intangible assets (Note 3) | 6713.7 | 6753.7 |
Other assets | 1397.9 | 1489.9 |
Assets of discontinued operations | 88.2 | 91.1 |
Total Assets | 26756.1 | 26,962 |
Current Liabilities: | ||
Accounts payable | 335.6 | 436.4 |
Accrued compensation | 216.8 | 320.7 |
Participants' share and royalties payable | 1026.9 | 955 |
Program rights | 885.8 | 729.2 |
Deferred revenue | 387.3 | 461.5 |
Income taxes payable | 4 | |
Current portion of long-term debt (Note 6) | 442.5 | 443.6 |
Accrued expenses and other current liabilities | 1397.6 | 1376.9 |
Current liabilities of discontinued operations | 19.8 | 19.2 |
Total current liabilities | 4712.3 | 4746.5 |
Long-term debt (Note 6) | 6528.3 | 6553.3 |
Pension and postretirement benefit obligations | 2115.4 | 2117.4 |
Deferred income tax liabilities, net | 610.7 | 631.9 |
Other liabilities | 3486.6 | 3636.6 |
Liabilities of discontinued operations | 256.7 | 256.9 |
Commitments and contingencies (Note 10) | ||
Stockholders' Equity: | ||
Additional paid-in capital | 43456.2 | 43479.2 |
Accumulated deficit | -30397.9 | -30371.7 |
Accumulated other comprehensive loss (Note 1) | -323.8 | -395.5 |
Stockholders' equity including treasury stock | 12735.3 | 12712.8 |
Less treasury stock, at cost; 120.2 (2010) and 120.4 (2009) Class B Shares | 3689.2 | 3693.4 |
Total Stockholders' Equity | 9046.1 | 9019.4 |
Total Liabilities and Stockholders' Equity | 26756.1 | 26,962 |
Class A Common Stock | ||
Stockholders' Equity: | ||
Common Stock | 0.1 | 0.1 |
Class B Common Stock | ||
Stockholders' Equity: | ||
Common Stock | 0.7 | 0.7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
In Millions | Mar. 31, 2010
| Dec. 31, 2009
|
Receivables, allowances (in dollars) | 136.7 | 142.6 |
Treasury Stock, at cost, Class B shares | 120.2 | 120.4 |
Class A Common Stock | ||
Common Stock, par value (in dollars per share) | 0.001 | 0.001 |
Common Stock, shares authorized | 375 | 375 |
Common Stock, shares issued | 51.4 | 51.8 |
Class B Common Stock | ||
Common Stock, par value (in dollars per share) | 0.001 | 0.001 |
Common Stock, shares authorized | 5,000 | 5,000 |
Common Stock, shares issued | 747.1 | 743.4 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Operating Activities: | ||
Net loss | -26.2 | -55.3 |
Adjustments to reconcile net loss to net cash flow provided by (used for) operating activities: | ||
Depreciation and amortization | 140.8 | 142.3 |
Stock-based compensation | 32.6 | 32.9 |
Equity in loss of investee companies, net of tax and distributions | 11 | 12.7 |
Decrease to accounts receivable securitization program (Note 6) | (300) | |
Change in assets and liabilities, net of effects of acquisitions | 542.5 | 145.9 |
Net cash flow provided by (used for) operating activities | 700.7 | -21.5 |
Investing Activities: | ||
Acquisitions, net of cash acquired | -1.6 | -6.7 |
Capital expenditures | -40.9 | -74.2 |
Investments in and advances to investee companies | -31.2 | -12.5 |
Purchases of marketable securities | -35.6 | |
Proceeds from dispositions | 0.2 | 21.6 |
Other investing activities | -0.1 | -0.3 |
Net cash flow used for investing activities | -73.6 | -107.7 |
Financing Activities: | ||
Borrowings from banks, including commercial paper, net | 293.1 | |
Repayment of notes | -17.2 | -151.9 |
Payment of capital lease obligations | (4) | -3.9 |
Dividends | -36.6 | -184.4 |
Purchase of Company common stock | -24.7 | (4) |
Proceeds from exercise of stock options | 2.2 | |
Excess tax benefit from stock-based compensation | 9.6 | 0.4 |
Decrease to accounts receivable securitization program (Note 6) | (400) | |
Other financing activities | -0.4 | |
Net cash flow used for financing activities | -471.1 | -50.7 |
Net increase (decrease) in cash and cash equivalents | 156 | -179.9 |
Cash and cash equivalents at beginning of period | 716.7 | 419.5 |
Cash and cash equivalents at end of period | 872.7 | 239.6 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 131.5 | 169 |
Cash paid for income taxes | 17.9 | 47.4 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
3 Months Ended
Mar. 31, 2010 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1) BASIS OF PRESENTATION AND 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: Entertainment (CBS Television, comprised of the CBS Television Network, CBS Television Studios, CBS Studios International and CBS Television Distribution; CBS Films and CBS Interactive), Cable Networks (Showtime Networks, Smithsonian Networks and CBS College Sports Network), Publishing (Simon Schuster), Local Broadcasting (CBS Television Stations and CBS Radio) and Outdoor (CBS Outdoor). 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, 2009. 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. Use of EstimatesThe preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States ("U.S.") 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. 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 under different assumptions or conditions. 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 units ("RSUs"), market-based performance share units ("PSUs") and restricted shares only in the periods in which such effect would have been dilutive. For the three months ended March31, 2010, stock options to purchase 49.8million shares of ClassB Common Stock and 21.8million RSUs and PSUs were outstanding but excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive since the Company reported a net loss. For the three months ended March31, 2009, stock options to purchase 45.2million shares of ClassB Common Stock and 22.8million |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | |
3 Months Ended
Mar. 31, 2010 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 2) STOCK-BASED COMPENSATION The following table summarizes the Company's stock-based compensation expense for the three months ended March31, 2010 and 2009. Three Months Ended March31, 2010 2009 RSUs, PSUs and restricted shares $ 26.8 $ 27.7 Stock options and equivalents 5.8 5.2 Stock-based compensation expense, before income taxes 32.6 32.9 Related tax benefit (12.8 ) (13.2 ) Stock-based compensation expense, net of tax $ 19.8 $ 19.7 During the three months ended March31, 2010, the Company granted 6.5million RSUs with a weighted average per unit grant date fair value of $13.03. RSU grants during the first quarter of 2010 generally vest over a four-year service period. Certain RSU awards are also subject to satisfying performance conditions. The number of shares that will be issued upon vesting of RSU awards with performance conditions can range from 0% to 120% of the target award, based on the achievement of established operating performance goals. During the three months ended March31, 2010, the Company also granted .2million PSUs with an aggregate grant date fair value of $5.5million. 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 three months ended March31, 2010, the Company also granted 6.6million stock options with a weighted average exercise price of $13.43. Stock option grants during the first quarter of 2010 generally vest over a four-year service period. Total unrecognized compensation cost related to non-vested RSUs and PSUs at March31, 2010 was $189.9million, which is expected to be expensed over a weighted average period of 2.6years. Total unrecognized compensation cost related to unvested stock option awards and stock option equivalents at March31, 2010 was $81.4million, which is expected to be expensed over a weighted average period of 3.0years. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | |
3 Months Ended
Mar. 31, 2010 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 3) INTANGIBLE ASSETS The Company's intangible assets were as follows: At March31, 2010 Gross Accumulated Amortization Net Intangible assets subject to amortization: Leasehold agreements $ 892.2 $ (524.2 ) $ 368.0 Franchise agreements 494.4 (258.2 ) 236.2 Other intangible assets 414.9 (212.4 ) 202.5 Total intangible assets subject to amortization 1,801.5 (994.8 ) 806.7 FCC licenses 5,738.2 5,738.2 Trade names 168.8 168.8 Total intangible assets $ 7,708.5 $ (994.8 ) $ 6,713.7 At December31, 2009 Gross Accumulated Amortization Net Intangible assets subject to amortization: Leasehold agreements $ 883.6 $ (504.1 ) $ 379.5 Franchise agreements 512.5 (261.7 ) 250.8 Other intangible assets 415.6 (199.2 ) 216.4 Total intangible assets subject to amortization 1,811.7 (965.0 ) 846.7 FCC licenses 5,738.2 5,738.2 Trade names 168.8 168.8 Total intangible assets $ 7,718.7 $ (965.0 ) $ 6,753.7 Amortization expense was $33.2million and $32.9million for the three months ended March31, 2010 and 2009, respectively. The Company expects its aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2010 through 2014, to be as follows: 2010 2011 2012 2013 2014 Amortization expense $ 129.7 $ 116.2 $ 94.0 $ 82.8 $ 75.2 |
PROGRAMMING AND OTHER INVENTORY
PROGRAMMING AND OTHER INVENTORY | |
3 Months Ended
Mar. 31, 2010 | |
PROGRAMMING AND OTHER INVENTORY | |
PROGRAMMING AND OTHER INVENTORY | 4) PROGRAMMING AND OTHER INVENTORY At March31, 2010 At December31, 2009 Program rights $ 1,223.8 $ 1,737.5 Television programming: Released (including acquired libraries) 514.8 547.9 In process and other 117.5 134.8 Theatrical programming: Released 5.3 In process and other 76.6 58.5 Publishing, primarily finished goods 68.1 69.6 Other .9 .9 Total programming and other inventory 2,007.0 2,549.2 Less current portion 604.8 1,085.0 Total noncurrent programming and other inventory $ 1,402.2 $ 1,464.2 |
RELATED PARTIES
RELATED PARTIES | |
3 Months Ended
Mar. 31, 2010 | |
RELATED PARTIES | |
RELATED PARTIES | 5) 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. 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 both CBS Corp. and ViacomInc. Mr.David R. Andelman is a director of CBS Corp. and serves as a director of NAI. Mr.Frederic V. Salerno is a director of CBS Corp. and serves as a director of ViacomInc. At March31, 2010, NAI beneficially owned CBS Corp. ClassA Common Stock representing approximately 80% of the voting power of all classes of CBS Corp.'s Common Stock, and owned approximately 6% 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 Entertainment segment, licenses its television products to ViacomInc., primarily MTV Networks and BET Networks. 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 $39.0million and $71.4million for the three months ended March31, 2010 and 2009, 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 U.S. 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 U.S. 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 $5.3million and $4.0million for the three months ended March31, 2010 and 2009, 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 March31, 2010 At December31, 2009 Amounts due from ViacomInc. Receivables $ 142.3 $ 164.4 Other assets (Receivables, noncurrent) 243.9 268.3 Total amounts due from Viacom Inc. $ 386.2 $ 432.7 Amounts due to ViacomInc. Accounts payable $ 3.3 $ 2.8 Program rights 7.1 18.4 Other liabilitie |
BANK FINANCING AND DEBT
BANK FINANCING AND DEBT | |
3 Months Ended
Mar. 31, 2010 | |
BANK FINANCING AND DEBT | |
BANK FINANCING AND DEBT | 6) BANK FINANCING AND DEBT The following table sets forth the Company's debt. At March31, 2010 At December31, 2009 Senior debt (4.625%8.875% due 20102056)(a) $ 6,888.0 $ 6,909.5 Other notes 2.1 2.7 Obligations under capital leases 101.2 105.2 Total debt 6,991.3 7,017.4 Less discontinued operations debt(b) 20.5 20.5 Total debt from continuing operations 6,970.8 6,996.9 Less current portion 442.5 443.6 Total long-term debt from continuing operations, net of current portion $ 6,528.3 $ 6,553.3 (a) At March31, 2010 and December31, 2009, the senior debt balances included (i)a net unamortized premium of $2.3million and $2.2million, respectively, and (ii)an increase in the carrying value of the debt relating to previously settled fair value hedges of $90.4million and $92.4million, respectively. The face value of the Company's senior debt was $6.80billion at March31, 2010 and $6.81billion at December31, 2009. (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. During the first quarter of 2010, the Company repurchased $19.5million of its 5.50% senior debentures due 2033 resulting in a pre-tax gain on early extinguishment of debt of $2.4million. In March 2010, the Company called for the redemption of $414.6million of its 7.70% senior notes due July30, 2010, which settled on April30, 2010. In April 2010, the Company issued $500.0million of 5.75% senior notes due 2020 and used the net proceeds from this offering and cash on hand to repurchase, through a tender offer in April 2010, $400.0million of its 6.625% senior notes due 2011, $42.6million of its 8.625% debentures due 2012 and $57.4million of its 5.625% senior notes due 2012. These transactions will result in a pre-tax loss on early extinguishment of debt of $38.6million in the second quarter of 2010. During the first quarter of 2009, the Company repurchased $152.8million of its 7.70% senior notes due 2010 resulting in a pre-tax gain on early extinguishment of debt of $.7million. Credit Facility At March31, 2010, the Company had a $2.0billion revolving credit facility which expires in December 2012 (the "Credit Facility"). The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of the fiscal quarter, subject to reductions, and a minimum Consolidated Coverage Ratio, of 3.0x for the trailing four quarters, each as further described in the Credit Facility. At March31, 2010, the Company's Consolidated Leverage Ratio was approximately 3.4x and Consolidated Coverage Ratio was approximately 4.1x. The primary purpose of the Credit Facility is to support commercial paper borrowings. At March31, 2010, the Company had no commercial paper borrowings under its $2.0billion commercial paper program. At March31, 2010, the remaining availabil |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
3 Months Ended
Mar. 31, 2010 | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | 7) PENSION AND OTHER POSTRETIREMENT BENEFITS The components of net periodic cost for the Company's pension and postretirement benefit plans were as follows: PensionBenefits PostretirementBenefits Three Months Ended March31, 2010 2009 2010 2009 Components of net periodic cost: Service cost $ 7.8 $ 7.4 $ .2 $ .2 Interest cost 66.8 72.9 10.8 12.4 Expected return on plan assets (56.7 ) (54.5 ) Amortization of actuarial loss (gain) 17.9 21.3 (2.6 ) (2.8 ) Amortization of prior service cost (credit) .1 .2 (.2 ) (.1 ) Net periodic cost $ 35.9 $ 47.3 $ 8.2 $ 9.7 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | |
3 Months Ended
Mar. 31, 2010 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8) STOCKHOLDERS' EQUITY On February23, 2010, the Company announced a quarterly cash dividend of $.05 per share on its ClassA and ClassB Common Stock payable on April1, 2010. The total dividend was $34.6million of which $33.9million was paid on April1, 2010 and $.7million was accrued to be paid upon vesting of RSUs. During the first quarter of 2010, the Company paid $36.6million for the dividend declared on November16, 2009 and for dividend payments on RSUs that vested during the first quarter of 2010. |
INCOME TAXES
INCOME TAXES | |
3 Months Ended
Mar. 31, 2010 | |
INCOME TAXES | |
INCOME TAXES | 9) INCOME TAXES The provision for income taxes represents federal, state and local, and foreign income taxes on earnings (loss) before income taxes and equity in loss of investee companies. The provision for income taxes was $21.0million and $8.8million for the three months ended March31, 2010 and 2009, respectively. The provision for income taxes for the three months ended March31, 2010 included three discrete items which impacted comparability totaling $25.9million, comprised of a $62.2million reduction of deferred tax assets associated with the recently enacted Patient Protection and Affordable Care Act, partially offset by a $26.4million reversal of previously established deferred tax liabilities and a $9.9million tax benefit from the settlements of state and local income tax audits. The provision for income taxes for the three months ended March31, 2009 included a charge of $18.8million for the reduction of deferred tax assets associated with stock-based compensation. 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 Company is currently under examination by the Internal Revenue Service ("IRS") for the years 2006 and 2007. The IRS has completed its field audit and the Company expects to settle the audit in 2010. 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 reserve for uncertain tax positions may change within the next twelve months; however, any related estimate of the impact to the reserves for uncertain tax positions can not currently be determined. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
3 Months Ended
Mar. 31, 2010 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 10) 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 March31, 2010, the outstanding letters of credit and surety bonds approximated $381.1million and were not recorded on the Consolidated Balance Sheet. 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 and Derivative Actions.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, all defendants filed a motion to dismiss this action. On March16, 2010, the court granted the Company's motion and dismissed this action as to the Company and all defendants. On April30, 2010, the plaintiffs filed a motion for leave to serve an amended complaint. The Company intends to oppose the plaintiffs' motion. The Company believes that the plaintiffs' claims are without merit and intends to vigorously defend itself in the litigation. On October2, 2009, a shareholder derivative complaint, Hatcher v. Moonves, et al., was filed in the United States District Court for the Southern District of New York naming the Company, as a nominal defendant, members of its board of directors and its Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer as defendants. The complaint alleges that the defendants breached fiduciary duties by failing to timely write down the value o |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | |
3 Months Ended
Mar. 31, 2010 | |
RESTRUCTURING CHARGES | |
RESTRUCTURING CHARGES | 11) RESTRUCTURING CHARGES During the three months ended March31, 2010, in a continued effort to reduce its cost structure, the Company recorded restructuring charges of $57.1million, reflecting $44.7million of severance costs associated with the elimination of positions and $12.4million of contract termination and other associated costs. During the year ended December31, 2009, the Company recorded restructuring charges of $22.8million, reflecting $20.8million of severance costs and $6.7million of contract termination and other associated costs, partially offset by the reversal of $4.7million as a result of changes in estimates of previously established restructuring accruals. During the year ended December31, 2008, the Company recorded restructuring charges of $136.7million, which reflected $127.5million of severance costs and $9.2million of contract termination and other associated costs. As of March31, 2010, the Company had paid $126.1million of the severance costs and $6.6million of the contract termination and other associated costs. The Company expects to substantially utilize the remaining reserves by the end of 2011. Balance at December31, 2009 First Quarter 2010 Charges First Quarter 2010 Payments Balance at March31, 2010 Entertainment $ 2.2 $ 10.3 $ (3.9 ) $ 8.6 Cable Networks .1 (.1 ) Publishing 2.4 1.5 (1.2 ) 2.7 Local Broadcasting 28.6 25.2 (5.3 ) 48.5 Outdoor 6.2 20.1 (2.3 ) 24.0 Corporate .3 (.2 ) .1 Total $ 39.8 $ 57.1 $ (13.0 ) $ 83.9 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
3 Months Ended
Mar. 31, 2010 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 12) FAIR VALUE MEASUREMENTS The following tables set forth the Company's assets and liabilities measured at fair value on a recurring basis at March31, 2010 and December31, 2009. 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. At March31, 2010 Level1(a) Level2(b) Level3(c) Total Assets: Investments $ 59.6 $ $ $ 59.6 Foreign currency hedges .7 .7 Total Assets $ 59.6 $ .7 $ $ 60.3 Liabilities: Deferred compensation $ $ 137.8 $ $ 137.8 Foreign currency hedges 5.2 5.2 Total Liabilities $ $ 143.0 $ $ 143.0 At December31, 2009 Level1(a) Level2(b) Level3(c) Total Assets: Investments $ 57.2 $ $ $ 57.2 Total Assets $ 57.2 $ $ $ 57.2 Liabilities: Deferred compensation $ $ 138.6 $ $ 138.6 Foreign currency hedges 5.8 5.8 Total Liabilities $ $ 144.4 $ $ 144.4 (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. (c) Level3 valuation is based on unobservable inputs reflecting the Company's own assumptions about the assumptions that market participants would use in pricing the asset. The fair value of investments is determined based on publicly quoted market prices in active markets. 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 is determined based on the fair value of the investments elected by employees. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | |
3 Months Ended
Mar. 31, 2010 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | 13) FINANCIAL INSTRUMENTS The Company's carrying value of financial instruments approximates fair value, except for differences with respect to the notes and debentures. At March31, 2010 and December31, 2009, the carrying value of the senior debt was $6.89billion and $6.91billion, respectively, and the fair value, which is estimated based on quoted market prices and includes accrued interest, was $7.31billion and $7.25billion, respectively. The Company uses derivative financial instruments to modify its exposure to market risks from changes 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. Foreign exchange forward contracts have principally been used to hedge projected cash flows, generally within the next twelve months, in such currencies as the British Pound, the Euro, the Canadian Dollar 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 OCI and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enters 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" in the Consolidated Statements of Operations. At March31, 2010, the notional amount of all foreign currency contracts was $115.5million, of which $2.1million related to the hedging of future production costs and $113.4million represents hedges of expected foreign currency cash flows. At December31, 2009, the notional amount of all foreign currency contracts was $97.1million, of which $2.1million relates to the hedging of future production costs and $95.0million represents hedges of expected foreign currency cash flows. The fair value of foreign exchange contracts recorded on the Consolidated Balance Sheets were as follows: At March31, 2010 At December31, 2009 Balance Sheet Account Designated hedging instruments $ (.1 ) $ (.1 ) Accrued expenses and other current liabilities Non-designated hedging instruments: Assets $ .7 Prepaid expenses and other current assets Liabilities $ (5.1 ) $ (5.7 ) Accrued expenses and other current liabilities Gains (losses) recognized on foreign exchange contracts were as follows: Three Months Ended March31, 2010 2009 Financial Statement Account Designated hedging instruments: Recognized in OCI $ (.1 ) $ 1.4 Change in fair value of cash flow hedges Reclassified from accumulated OCI $ $ .1 Programming costs Non-designated hedging instruments $ (1.9 ) $ 2.6 Other items, net |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | |
3 Months Ended
Mar. 31, 2010 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 14) REPORTABLE SEGMENTS 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. In the fourth quarter of 2009, the Company realigned its management structure to more effectively pursue its long-term strategy of investing in content businesses and capitalizing on its strong local presence. As a result, the Company realigned its operating segments. Prior period results have been reclassified to conform to this presentation. Three Months Ended March31, 2010 2009 Revenues: Entertainment $ 2,081.5 $ 1,817.6 Cable Networks 368.0 340.6 Publishing 151.7 161.7 Local Broadcasting 605.5 510.4 Outdoor 392.2 379.9 Eliminations (68.0 ) (50.3 ) Total Revenues $ 3,530.9 $ 3,159.9 Revenues generated between segments primarily reflect advertising sales and television license fees. These transactions are recorded at fair market value as if the sales were to third parties and are eliminated in consolidation. Three Months Ended March31, 2010 2009 Intercompany Revenues: Entertainment $ 57.1 $ 42.3 Cable Networks .1 .6 Local Broadcasting 5.4 4.2 Outdoor 5.4 3.2 Total Intercompany Revenues $ 68.0 $ 50.3 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 FASB guidance for segment reporting. 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. Three Months Ended March31, 2010 2009 Segment OIBDA: Entertainment $ 134.5 $ 151.1 Cable Networks 100.9 83.4 Publishing 2.1 .1 Local Broadcasting 108.8 54.1 Outdoor 12.1 25.1 Corporate (38.7 ) (28.5 ) Residual costs (26.3 ) (36.0 ) Eliminations .8 .5 OIBDA 294.2 249.8 Depreciation and amortization (140.8 ) (142.3 ) Total Operating Income 153.4 107.5 Interest expense (138.0 ) (133.2 ) Interest income 1.1 1.6 Gain on early extinguishment of debt 2.4 .7 Other items, net (13.1 ) (11.9 ) Earnings (loss) before income taxes and equity in loss of investee companies 5.8 (35.3 ) Provision for income taxes (21.0 ) (8.8 ) Equity in loss of investee companies, net of tax (11.0 ) (11.2 ) Net Loss $ (26.2 ) $ (55.3 ) Three Months Ended March31, 2010 2009 Operating Income (Loss): |
CONDENSED CONSOLIDATING FINANCI
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | |
3 Months Ended
Mar. 31, 2010 | |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 15) 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 Note6). 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 March31, 2010 CBSCorp. CBS Operations Inc. Non- Guarantor Affiliates Eliminations CBS Corp. Consolidated Revenues $ 33.1 $ 29.0 $ 3,468.8 $ $ 3,530.9 Expenses: Operating 16.0 24.9 2,522.6 2,563.5 Selling, general and administrative 34.7 43.9 537.5 616.1 Restructuring charges 57.1 57.1 Depreciation and amortization 1.2 2.8 136.8 140.8 Total expenses 51.9 71.6 3,254.0 3,377.5 Operating income (loss) (18.8 ) (42.6 ) 214.8 153.4 Interest (expense) income, net (147.7 ) (81.8 ) 92.6 (136.9 ) Gain on early extinguishment of debt 2.4 2.4 Other items, net (.2 ) 1.9 (14.8 ) (13.1 ) Earnings (loss) before income taxes and equity in earnings (loss) of investee companies (164.3 ) (122.5 ) 292.6 5.8 Benefit (provision) for income taxes 26.3 46.3 (93.6 ) (21.0 ) Equity in earnings (loss) of investee companies, net of tax 111.8 169.9 (11.0 ) (281.7 ) (11.0 ) Net earnings (loss) $ (26.2 ) $ 93.7 $ 188.0 $ (281.7 ) $ (26.2 ) Statement of Operations For the Three Months Ended March31, 2009 CBSCorp. CBS Operations Inc. Non- Guarantor Affiliates Eliminations CBS Corp. Consolidated Revenues $ 24.8 $ 26.8 $ 3,108.3 $ $ 3,159.9 Expenses: Operating 16.8 21.4 2,274.9 2,313.1 Selling, general and administrative 43.4 36.7 516.1 596.2 Restructuring charges .8 .8 Depreciation and amortization 1.1 2.5 138.7 142.3 Total expenses 61.3 60.6 2,930.5 3,052.4 Operating income (loss) (36.5 ) (33.8 ) 177.8 107.5 Interest (expense) income, net (143.2 ) (75.4 ) 87.0 (131.6 ) Gain on early extinguishment of debt .7 .7 Other items, net 5.8 (2.2 ) (15.5 ) (11.9 ) Earnings (loss) before income taxes and equity in earnings (loss) of investee companies (173.2 ) (111.4 ) 249.3 (35.3 ) Benefit (provision) for income taxes 69.1 37.5 (115.4 ) (8.8 ) Equity in earnings (loss) of investee companies, net of tax 48.8 98.7 |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | Apr. 30, 2010
| |
Entity Registrant Name | CBS CORP | |
Entity Central Index Key | 0000813828 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 51,359,803 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 628,603,214 |