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Exhibit 99.1
CBS CORPORATION REPORTS
RECORD RESULTS FOR SECOND QUARTER 1999
PROFIT GROWTH UP DRAMATICALLY FOR ALL OPERATING SEGMENTS
NET REVENUES UP 13%
OPERATING CASH FLOW UP 55%
AFTER TAX CASH FLOW UP 55%
EARNINGS PER SHARE OF $0.13 UP FROM $0.01 LAST YEAR
NEW YORK, August 2, 1999 -- CBS Corporation (NYSE: CBS) today reported
record operating results for the second quarter of 1999.
RESULTS FOR THE SECOND QUARTER OF 1999
Net revenues for the second quarter were $1,678 million, as compared to
$1,484 million for the second quarter of 1998, an increase of approximately 13%.
The increase was due to revenue growth at the Company's television segment, at
its out-of-home media subsidiary, Infinity Broadcasting Corporation (NYSE: INF),
and at its cable segment, which had strong sales growth at its country lifestyle
cable channels.
Operating cash flow (defined as earnings before interest, taxes,
depreciation and amortization, excluding special items, or EBITDA) for the
second quarter of 1999 was $427 million, as compared to $275 million for the
second quarter of 1998, an increase of approximately 55%. The increase in
operating cash flow was driven by a record increase of 81% at the television
segment. The Company's cable and Infinity segments also had record operating
cash flow growth of 40% and 34% respectively during the second quarter. The
increase in operating cash flow was due to revenue growth at the Company's
television and cable segments, coupled with lower programming and operating
costs, along with record revenue increases at Infinity.
"I am very pleased with the Company's record operating performance,"
said Mel Karmazin, President and Chief Executive Officer, CBS Corporation. "The
gains made in our television segment were dramatic, with EBITDA growth of 81%
during the quarter, and the first Network prime time win in five years. Our
country lifestyle cable networks also had double digit operating cash flow
growth. And once again Infinity paced the Company with record performance across
the board. During the quarter, we announced acquisitions in virtually all
operating areas of the Company -- in television stations, the Internet, outdoor
advertising and syndication. We believe these new investments will create
significant value at both CBS and Infinity in the years ahead."
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CBS Corporation...2
Net interest expense for the second quarter of 1999 was $46 million, as
compared to $85 million in 1998's second quarter, a decrease of approximately
46%. This decrease was principally due to the lower debt levels as a result of
proceeds received from Infinity's initial public offering in late 1998, proceeds
from business dispositions, and strong cash flow from operations.
Income taxes for the second quarter of 1999 were $130 million, as
compared to $48 million for the second quarter of 1998, an increase of $82
million or approximately 171%. The increase is principally due to higher
operating results.
The Company's income from continuing operations for the second quarter
of 1999, which includes certain special items discussed below, was $78 million,
or $.11 per diluted share, as compared to $4 million for the second quarter of
1998, or $0.01 per diluted share, an increase of $74 million.
The Company's reported net income for the quarter was $95 million, or
$0.13 per diluted share, as compared to net income for the year-ago quarter of
$4 million, or $0.01 per diluted share. The second quarter of 1999 includes a
net gain of $18 million after tax on the disposal of certain discontinued
operations discussed below.
After tax cash flow (defined as income from continuing operations plus
depreciation and amortization, as adjusted for minority interests) for the
second quarter of 1999 was $217 million, as compared to $140 million for the
second quarter of 1998, an increase of $77 million, or approximately 55%.
However, as a result of the Company's substantial deferred tax position, after
tax cash flow adjusted for cash taxes only was $331 million, an increase of $149
million or 82% from the second quarter of 1998.
Acquisitions announced in the second quarter include:
o Infinity Broadcasting Corporation entered into a definitive
agreement by which Infinity will acquire Outdoor Systems, Inc. for
approximately $8.7 billion, which includes the assumption of
approximately $1.9 billion of debt;
o The Company announced an agreement to acquire King World
Productions, Inc. for $2.5 billion in common stock, adding the leading
supplier of first-run syndicated programming to the Company's array of
media assets;
o CBS entered into definitive agreements to purchase KTVT-TV, the
Network's affiliated station in Dallas-Ft. Worth, the nation's #7
market, and KEYE-TV, the Network's affiliate in Austin, Texas, in
exchange for $485 million of CBS common stock and $160 million in cash,
respectively. Both transactions are expected to close by the end of the
year. Combined, the acquisitions will raise CBS's ownership position to
television stations serving 34% of the United States;
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CBS Corporation...3
o The Company continued its Internet expansion, with numerous
announced promotion- for-equity swaps, including: a 50% stake in
e-commerce site storeRunner.com; 33.3% of office.com, an online
business service; 35% of Switchboard.com, an online directory for
personal and business use; and 30% of ThirdAge.com, a site for the
45-64 demographic. The Company also signed a letter of intent for a
similar promotion/equity arrangement with hollywood.com, an
entertainment Internet destination.
o More recently, CBS Corporation announced that it had signed
definitive agreements to exchange promotion and advertising for a 35%
interest in Medscape, Inc., which will produce a new consumer health
site, CBS.Medscape.com, and a 20% interest in Rx.com, an online
pharmacy.
During the quarter, the Company's operating profit benefitted by $24
million resulting from the reduction in the need for certain restructuring
charges previously recorded for the television segment, due to second-quarter
1999 changes in programming decisions and higher voluntary employee
terminations. In addition, other income and expenses includes a $24 million
provision for losses associated with the Company's indemnification of certain
obligations that were assumed by the buyer in the sale of a majority stake in a
previously divested cable unit.
In addition, the Company also realized an $18 million after-tax gain on
the disposal of discontinued operations, or $0.02 per diluted share, associated
with the divestiture of former Westinghouse Electric Corporation businesses
which were sold to Bechtel National, Inc.
RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1999
Net revenues for the six months ended June 30, 1999 were $3,446
million, as compared to $3,433 million for the six months ended June 30, 1998.
Excluding the revenues associated with the 1998 Winter Olympics, net revenues
for the six months ended June 30, 1999 increased by approximately 16%.
Revenue increases were driven by industry-leading performance at
Infinity, which experienced strong revenue growth of 36% during the first half.
The Company's 1999 results also reflect the inclusion of operations of American
Radio Systems (ARS) stations, which were acquired in June 1998. Excluding the
effect of the Olympics and certain cable divestitures which occurred late in
1998, revenue growth was strong at the television and cable segments as well.
EBITDA for the six months ended June 30, 1999 was $699 million, as
compared to $546 million for the six months ended June 30, 1998, an increase of
28%. The increase in EBITDA was due to strong revenue performance, and the
television and cable segments benefitted from cost containment efforts
implemented during the prior year. Last year's EBITDA reflected a benefit
associated with the 1998 Winter Olympics. Excluding the effect of the Olympics,
EBITDA for the six months ended June 30, 1999, would have increased by
approximately 53% over last year's first half.
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CBS Corporation...4
Net interest expense for the six months ended June 30, 1999, was $97
million, as compared to $160 million in 1998's first half, a decrease of
approximately 39%. This decrease was principally due to the lower debt levels as
a result of proceeds received from Infinity's initial public offering in late
1998, proceeds from business dispositions, and strong cash flow from operations.
Income taxes for the six months ended June 30, 1999 were $176 million,
as compared to $95 million for the six months ended June 30, 1998, an increase
of $81 million or 85%. The increase is principally due to higher operating
results.
Income from continuing operations for the six months ended June 30,
1999 was $103 million, or $0.15 per diluted share, as compared to $23 million,
for the six months ended June 30, 1998, or $0.03 per diluted share, an increase
of $80 million.
The Company's reported net income for the six months ended June 30,
1999 was $482 million, or $0.68 per diluted share, which includes a net gain on
the disposal of the discontinued operations discussed above, as well as the
disposal of the former Westinghouse Electric Corporation businesses reported in
the first quarter of 1999. Net income for the first half of 1998 was $23
million, or $0.03 per diluted share.
After tax cash flow for the six months ended June 30, 1999 was $377
million, as compared to $289 million for the first half of 1998, an increase of
$88 million, or approximately 30%. After tax cash flow adjusted for cash taxes
only was $526 million for the six months ended June 30, 1999, an increase of
$154 million or 41% from the first half of 1998.
Pursuant to a previously authorized $3 billion stock buyback program,
the Company to date has purchased almost 39 million shares of its common stock
at a cost of approximately $1.3 billion.
CBS Corporation, the world's largest pure-play media company, is
composed of CBS Television, Cable and a majority stake of Infinity Broadcasting
Corporation, its out-of-home media subsidiary. CBS Television is comprised of
the CBS Television Network and 14 CBS owned television stations, seven of which
are in the Top 10 markets. CBS Cable consists of two country networks and
regional sports operations. Infinity Broadcasting Corporation operates 163 radio
stations and TDI, the Company's outdoor business. Infinity recently entered into
an agreement to acquire Outdoor Systems, Inc.
Note: Certain statements in this press release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of CBS to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Reference is made to the Company's Annual Report on Form 10-K for
the 1998 year and subsequent reports filed with the Securities and Exchange
Commission for additional information concerning such risks and uncertainties.
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Contacts: Gil Schwartz CBS Corporation 212/975-2121
Michael G. Silver CBS Corporation 212/975-3161