CBS Corporation Reports Third Quarter 2015 Results

Revenues of $3.3 Billion

Operating Income of $753 Million, Up 1%

EPS of $.88, Up 19%

Nov 03, 2015, 16:05 ET from CBS Corporation

NEW YORK, Nov. 3, 2015 /PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today reported results for the third quarter of 2015, including growth in operating income and record diluted earnings per share ("EPS").

"Thanks to the strength of our great content, CBS continues to have a winning hand," said Sumner Redstone, Executive Chairman, CBS Corporation. "Les and his team are capitalizing on all of the opportunities before us, and I'm confident they are setting the Company up for continued, long-term growth."

"During the third quarter, we once again grew our profit and EPS while continuing to increase our investment in content and new distribution services," said Leslie Moonves, President and Chief Executive Officer, CBS Corporation. "I'm particularly pleased with the gains we're seeing in network advertising, including underlying ad growth in the third quarter and even better pricing here in the fourth. Plus, having sold less inventory in the Upfront, we stand to benefit throughout this television season as we sell our #1 network in a very robust scatter marketplace. Add to that CBS's broadcast of Super Bowl 50 in February and the upcoming presidential election, you can see why we feel very good about advertising in 2016. At the same time, our nonadvertising revenue continues to grow even faster, led by retransmission consent and reverse compensation, which were up 50% in the third quarter and are well on their way to exceeding $1 billion next year. Looking ahead, as viewers increasingly want to access and pay for content in new ways, we see continued increases in subscription revenue from our in-house over-the-top services at CBS and Showtime, as well as those from outside distribution partners. The good news is, no matter how quickly the industry changes — from big bundles to 'skinny' ones to a la carte — CBS is positioned to succeed."

Third Quarter 2015 Results

Revenues were $3.26 billion for the third quarter of 2015 compared with $3.37 billion for the same prior-year period, primarily reflecting the timing of television licensing sales and decreases in lower-margin revenues, including the nonrenewal of a sports contract and lower pay-per-view revenues. Meanwhile, revenues for this year's third quarter benefited from growth in underlying network advertising, as well as 9% higher affiliate and subscription fees, including a 50% increase in revenues from retransmission consent and CBS Television Network-affiliated television stations.

Operating income of $753 million for the third quarter of 2015 grew from adjusted operating income of $746 million for the same prior-year period. This increase reflects growth in high-margin affiliate and subscription fee revenues, which were offset by lower profits from television licensing.

Net earnings from continuing operations of $426 million for the third quarter of 2015 rose from adjusted net earnings from continuing operations of $400 million for the same prior-year period. The increase was driven by higher operating income and lower losses from foreign exchange rate changes.

Net earnings from continuing operations per diluted share for the third quarter of 2015 rose to $.88 compared with adjusted net earnings from continuing operations per diluted share of $.74 for the same quarter in 2014. Weighted average shares outstanding were 484 million in this year's third quarter, down from 541 million in the prior-year period, mainly as a result of the Company's ongoing share repurchase program.

For the third quarter of 2014, adjusted results exclude restructuring charges of $26 million ($16 million, net of tax), an impairment charge of $52 million ($74 million, including tax provision), a pre-tax loss on early extinguishment of debt of $352 million ($219 million, net of tax), and a discrete tax item of $19 million. Also for the third quarter of 2014, reported operating income was $668 million, and reported net earnings from continuing operations was $72 million, or $.13 per diluted share. For the third quarter of 2015, no adjustments were made to reported results.

Net earnings per diluted share of $3.03 for the third quarter of 2014 includes a gain of $1.56 billion, or $2.88 per diluted share, recognized in connection with the split-off of CBS Outdoor Americas Inc.

Free Cash Flow, Balance Sheet and Liquidity

For the third quarter of 2015, free cash flow was an outflow of $289 million compared with an outflow of $400 million in the same prior-year period. For the first nine months of 2015, free cash flow grew to $546 million compared with $124 million for the same prior-year period, and operating cash flow from continuing operations was $650 million compared with $236 million in 2014. These increases reflect premiums paid in 2014 in connection with the Company's debt refinancing and higher collections from television licensing arrangements.

During the third quarter of 2015, the Company issued $800 million of 4.00% senior notes due 2026 and used the net proceeds from this offering for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and the repayment of short-term borrowings, including commercial paper.

Repurchase of Company Stock

During the third quarter of 2015, the Company repurchased 10.6 million shares of its Class B Common Stock for $500 million. Year-to-date through September 30, 2015, the Company repurchased 41.0 million shares of its Class B Common Stock for $2.30 billion.

Reconciliations of non-GAAP measures to reported results are included at the end of this earnings release.

Consolidated and Segment Results (dollars in millions)

The tables below present the Company's revenues by segment and type, operating income (loss) excluding restructuring charges and impairment charges by segment ("Segment Operating Income"), and depreciation and amortization by segment for the three and nine months ended September 30, 2015, and 2014.


Three Months Ended


Nine Months Ended


September 30,


September 30,

Revenues by Segment

2015


2014


2015


2014

Entertainment

$

1,932



$

1,911



$

5,978



$

6,049


Cable Networks

526



624



1,680



1,677


Publishing

203



199



547



563


Local Broadcasting

638



680



1,888



1,971


Eliminations

(42)



(47)



(117)



(135)


Total Revenues

$

3,257



$

3,367



$

9,976



$

10,125




Three Months Ended


Nine Months Ended


September 30,


September 30,

Revenues by Type

2015


2014


2015


2014

Advertising

$

1,481



$

1,548



$

4,859



$

5,057


Content licensing and distribution

1,046



1,141



2,889



3,117


Affiliate and subscription fees

664



608



2,044



1,761


Other

66



70



184



190


Total Revenues

$

3,257



$

3,367



$

9,976



$

10,125




Three Months Ended


Nine Months Ended


September 30,


September 30,

Segment Operating Income (Loss)

2015


2014


2015


2014

Entertainment

$

339



$

302



$

947



$

1,063


Cable Networks

246



266



717



733


Publishing

43



42



80



76


Local Broadcasting

174



192



533



586


Corporate

(49)



(56)



(181)



(191)


Adjusted Operating Income

753



746



2,096



2,267


Restructuring charges



(26)



(55)



(26)


Impairment charge



(52)





(52)


Total Operating Income

$

753



$

668



$

2,041



$

2,189




Three Months Ended


Nine Months Ended


September 30,


September 30,

Depreciation and Amortization

2015


2014


2015


2014

Entertainment

$

31



$

33



$

95



$

105


Cable Networks

5



6



17



17


Publishing

1



1



4



4


Local Broadcasting

20



22



60



66


Corporate

8



6



23



18


Total Depreciation and Amortization

$

65



$

68



$

199



$

210


Entertainment (CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive, and CBS Films)

Entertainment revenues rose 1% to $1.93 billion for the third quarter of 2015 compared with $1.91 billion for the same prior-year period, primarily reflecting a 55% increase in affiliate and subscription fees. Network advertising revenues were up 1% despite the broadcast of fewer sporting events on the CBS Television Network. Content licensing and distribution revenues decreased 3%, primarily reflecting the timing of television licensing sales.

Entertainment operating income for the third quarter of 2015 was $339 million, up 12% from $302 million for the same prior-year period, driven by growth in higher margin revenues, which were partially offset by an increased investment in programming and digital distribution initiatives.

Cable Networks (Showtime Networks, CBS Sports Network, and Smithsonian Networks)

Cable Networks revenues for the third quarter of 2015 were $526 million compared with $624 million for the same prior-year period, which included significant domestic streaming sales of Dexter and Californication and higher revenues from pay-per-view boxing events. An increase in affiliate and subscription fees, reflecting growth in rates and revenues from new digital distribution platforms, partially offset the decline.

Cable Networks operating income for the third quarter of 2015 was $246 million compared with $266 million for the same prior-year period, primarily reflecting the lower revenues. The decline was partially offset by lower programming costs that were mainly associated with pay-per-view boxing events.

Publishing (Simon & Schuster)

Publishing revenues for the third quarter of 2015 grew 2% to $203 million from $199 million for the same prior-year period. Digital revenues represented 25% of Publishing's total revenues for the third quarter of 2015. Best-selling titles included The Survivor by Vince Flynn and Kyle Mills and Plunder and Deceit by Mark R. Levin, as well as the continued success of the Pulitzer Prize-winning 2014 release, All the Light We Cannot See by Anthony Doerr.

Publishing operating income of $43 million for the third quarter of 2015 increased 2% from $42 million in the third quarter of 2014, primarily reflecting the revenue increase.

Local Broadcasting (CBS Television Stations and CBS Radio)

Local Broadcasting revenues of $638 million for the third quarter of 2015 decreased 6% from $680 million in the same prior-year period. CBS Television Stations revenues declined 7% from a year ago, as a result of the benefit to 2014 from the midterm elections and the broadcast of fewer sporting events on CBS in 2015. Growth in affiliate fees partially offset the decline. CBS Radio revenues decreased 6%, reflecting several noncomparable items, including fewer stations and lower political revenues, as well as continued softness in the radio advertising marketplace.

Local Broadcasting operating income for the third quarter of 2015 was down 9% to $174 million from $192 million for the same prior-year period, primarily because of the revenue decline, which was partially offset by the recent cost-cutting measures the Company put in place. 

Corporate

Corporate expenses for the third quarter of 2015 decreased $7 million to $49 million from $56 million for the same prior-year period, mainly because of lower employee-related costs.

About CBS Corporation

CBS Corporation (NYSE: CBS.A and CBS) is a mass media company that creates and distributes industry-leading content across a variety of platforms to audiences around the world. The Company has businesses with origins that date back to the dawn of the broadcasting age as well as new ventures that operate on the leading edge of media. CBS owns the most-watched television network in the U.S. and one of the world's largest libraries of entertainment content, making its brand -"the Eye" - one of the most recognized in business. The Company's operations span virtually every field of media and entertainment, including cable, publishing, radio, local TV, film, and interactive and socially responsible media. CBS's businesses include CBS Television Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), CBS Television Studios, CBS Global Distribution Group (CBS Studios International and CBS Television Distribution), CBS Consumer Products, CBS Home Entertainment, CBS Interactive, CBS Films, Showtime Networks, CBS Sports Network, Pop (a joint venture between CBS Corporation and Lionsgate), Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio and CBS EcoMedia. For more information, go to www.cbscorporation.com.

Cautionary Statement Concerning Forward-Looking Statements

This news release contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking statements are not based on historical facts, but rather reflect the Company's current expectations concerning future results and events. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause the actual results, performance or achievements of the Company to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: advertising market conditions generally; changes in the public acceptance of the Company's programming; changes in technology and its effect on competition in the Company's markets; changes in the Federal Communications laws and regulations; the impact of piracy on the Company's products; the impact of the consolidation in the market for the Company's programming; the impact of negotiations or the loss of affiliation agreements or retransmission agreements; other domestic and global economic, business, competitive and/or other regulatory factors affecting the Company's businesses generally; the impact of union activity, including possible strikes or work stoppages or the Company's inability to negotiate favorable terms for contract renewals; and other factors described in the Company's filings with the Securities and Exchange Commission including but not limited to the Company's most recent Form 10-K, Form 10-Qs and Form 8-Ks. The forward-looking statements included in this document are made only as of the date of this document, and under section 27A of the Securities Act and section 21E of the Exchange Act, we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

 

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014









Revenues

$

3,257



$

3,367



$

9,976



$

10,125


Operating income

753



668



2,041



2,189


Interest expense

(102)



(89)



(289)



(276)


Interest income

6



4



18



10


Loss on early extinguishment of debt



(352)





(352)


Other items, net

(4)



(21)



(4)



(10)


Earnings from continuing operations before income taxes

653



210



1,766



1,561


Provision for income taxes

(211)



(110)



(579)



(561)


Equity in loss of investee companies, net of tax

(16)



(28)



(35)



(48)


Net earnings from continuing operations

426



72



1,152



952


Net earnings from discontinued operations, net of tax



1,567





1,594


Net earnings

$

426



$

1,639



$

1,152



$

2,546










Basic net earnings per common share:








Net earnings from continuing operations

$

.89



$

.14



$

2.36



$

1.69


Net earnings from discontinued operations

$



$

2.95



$



$

2.84


Net earnings

$

.89



$

3.08



$

2.36



$

4.53










Diluted net earnings per common share:








Net earnings from continuing operations

$

.88



$

.13



$

2.33



$

1.66


Net earnings from discontinued operations

$



$

2.90



$



$

2.78


Net earnings

$

.88



$

3.03



$

2.33



$

4.44










Weighted average number of common shares outstanding:








Basic

480



532



489



562


Diluted

484



541



495



574










Dividends per common share

$

.15



$

.15



$

.45



$

.39


 

 

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)



At



At



September 30, 2015


December 31, 2014

Assets








Cash and cash equivalents


$

133





$

428



Receivables, net


3,397





3,459



Programming and other inventory


1,420





922



Prepaid expenses and other current assets


605





780



Total current assets


5,555





5,589



Property and equipment


3,226





3,164



Less accumulated depreciation and amortization


1,852





1,731



Net property and equipment


1,374





1,433



Programming and other inventory


1,909





1,817



Goodwill


6,663





6,698



Intangible assets


5,997





6,008



Other assets


2,741





2,527



Total Assets


$

24,239





$

24,072



Liabilities and Stockholders' Equity








Accounts payable


$

169





$

302



Participants' share and royalties payable


926





999



Program rights


377





404



Commercial paper


303





616



Current portion of long-term debt


20





20



Accrued expenses and other current liabilities


1,637





1,692



Total current liabilities


3,432





4,033



Long-term debt


8,476





6,510



Other liabilities


6,364





6,441



Liabilities of discontinued operations


88





118



Total Stockholders' Equity


5,879





6,970



Total Liabilities and Stockholders' Equity


$

24,239





$

24,072



 

 

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)



Nine Months Ended


September 30,


2015


2014

Operating Activities:




Net earnings

$

1,152



$

2,546


Less: Net earnings from discontinued operations



1,594


Net earnings from continuing operations

1,152



952


Adjustments to reconcile net earnings from continuing operations to net cash flow
     
provided by operating activities from continuing operations:




Depreciation and amortization

199



210


Impairment charge



52


Stock-based compensation

128



117


Equity in loss of investee companies, net of tax and distributions

37



56


Change in assets and liabilities, net of investing and financing activities

(866)



(1,151)


Net cash flow provided by operating activities from continuing operations

650



236


Net cash flow (used for) provided by operating activities from discontinued operations

(27)



52


Net cash flow provided by operating activities

623



288


Investing Activities:




Acquisitions, net of cash acquired

(7)



(27)


Capital expenditures

(104)



(112)


Investments in and advances to investee companies

(58)



(68)


Proceeds from dispositions

75



7


Other investing activities

(8)



3


Net cash flow used for investing activities from continuing operations

(102)



(197)


Net cash flow used for investing activities from discontinued operations

(4)



(271)


Net cash flow used for investing activities

(106)



(468)


Financing Activities:




Repayments of short-term debt borrowings, net

(313)



(44)


Proceeds from issuance of notes, net

1,959



1,729


Repayments of notes and debentures



(1,152)


Payment of capital lease obligations

(13)



(13)


Dividends

(228)



(214)


Purchase of Company common stock

(2,345)



(2,830)


Payment of payroll taxes in lieu of issuing shares for stock-based compensation

(96)



(146)


Proceeds from exercise of stock options

137



237


Excess tax benefit from stock-based compensation

87



227


Net cash flow used for financing activities from continuing operations

(812)



(2,206)


Net cash flow provided by financing activities from discontinued operations



2,167


Net cash flow used for financing activities

(812)



(39)


Net decrease in cash and cash equivalents

(295)



(219)


Cash and cash equivalents at beginning of period
     
(includes $29 (2014) of discontinued operations cash)

428



397


Cash and cash equivalents at end of period

$

133



$

178


 

CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited; in millions)

Adjusted Operating Income and Segment Operating Income

The following tables set forth the Company's Adjusted Operating Income for the nine months ended September 30, 2015 and 2014 and the three months ended September 30, 2014. The Company defines "Adjusted Operating Income" as operating income excluding restructuring charges and impairment charges, where applicable. For each individual reportable segment Adjusted Operating Income is also known as "Segment Operating Income". The Company presents Segment Operating Income as the primary measure of profit and loss for its reportable segments in accordance with FASB guidance for segment reporting.

The Company uses Adjusted Operating Income (or Segment Operating Income for each segment), as well as Adjusted Operating Income Margin, to, among other things, evaluate the Company's operating performance, to value prospective acquisitions and as one of several components of incentive compensation targets for certain management personnel. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of the Company's operational strength and business performance because they provide a link between profitability and operating cash flow. The Company believes these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by the Company's management, help improve investors' understanding of the Company's operating performance, and make it easier for investors to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these are among the primary measures used externally by the Company's investors, analysts and industry peers for purposes of valuation and for the comparison of the Company's operating performance to other companies in its industry.

Because Adjusted Operating Income is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), it should not be considered in isolation of, or as a substitute for, operating income or net earnings as an indicator of operating performance. Adjusted Operating Income, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use and are not necessarily a measure of the Company's ability to fund its cash needs. As Adjusted Operating Income excludes certain financial information that is included in operating income and net earnings, the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded. The Company provides the following reconciliation of Adjusted Operating Income to operating income and net earnings. In addition, the following tables also provide reconciliations of Segment Operating Income for each segment to such segment's operating income (loss).

 

CBS CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)

(Unaudited; in millions)



Three Months Ended September 30, 2014


Adjusted Operating Income (Loss)


Restructuring Charges


Impairment Charge


Operating Income (Loss)

Entertainment

$

302



$

(8)



$



$

294


Cable Networks

266







266


Publishing

42



(1)





41


Local Broadcasting

192



(14)



(52)



126


Corporate

(56)



(3)





(59)


Total

$

746



$

(26)



$

(52)



$

668


Margin (a)

22

%






20

%




Three Months Ended September 30,


2015


2014

Adjusted Operating Income

$

753



$

746


Restructuring charges



(26)


Impairment charge



(52)


Operating income

753



668


Interest expense

(102)



(89)


Interest income

6



4


Loss on early extinguishment of debt



(352)


Other items, net

(4)



(21)


Earnings from continuing operations before income taxes

653



210


Provision for income taxes

(211)



(110)


Equity in loss of investee companies, net of tax

(16)



(28)


Net earnings from continuing operations

426



72


Net earnings from discontinued operations



1,567


Net earnings

$

426



$

1,639




(a)

Margin is defined as Adjusted Operating Income or operating income, as applicable, divided by revenues.

 

 

CBS CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)

(Unaudited; in millions)



Nine Months Ended September 30, 2015


Adjusted Operating Income (Loss)


Restructuring Charges


Operating Income (Loss)

Entertainment

$

947



$

(12)



$

935


Cable Networks

717





717


Publishing

80





80


Local Broadcasting

533



(43)



490


Corporate

(181)





(181)


Total

$

2,096



$

(55)



$

2,041


Margin (a)

21

%




20

%




Nine Months Ended September 30, 2014


Adjusted Operating Income (Loss)


Restructuring Charges


Impairment Charge


Operating Income (Loss)

Entertainment

$

1,063



$

(8)



$



$

1,055


Cable Networks

733







733


Publishing

76



(1)





75


Local Broadcasting

586



(14)



(52)



520


Corporate

(191)



(3)





(194)


Total

$

2,267



$

(26)



$

(52)



$

2,189


Margin (a)

22

%






22

%




Nine Months Ended September 30,


2015


2014

Adjusted Operating Income

$

2,096



$

2,267


Restructuring charges

(55)



(26)


Impairment charge



(52)


Operating income

2,041



2,189


Interest expense

(289)



(276)


Interest income

18



10


Loss on early extinguishment of debt



(352)


Other items, net

(4)



(10)


Earnings from continuing operations before income taxes

1,766



1,561


Provision for income taxes

(579)



(561)


Equity in loss of investee companies, net of tax

(35)



(48)


Net earnings from continuing operations

1,152



952


Net earnings from discontinued operations



1,594


Net earnings

$

1,152



$

2,546




(a)

Margin is defined as Adjusted Operating Income or operating income, as applicable, divided by revenues.

 

 

CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions)

Free Cash Flow

The Company defines free cash flow as its net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations and less capital expenditures. The Company's calculation of free cash flow includes capital expenditures because investment in capital expenditures is a use of cash that is directly related to the Company's operations. The Company's net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.

Management believes free cash flow provides investors with an important perspective on the cash available to the Company to service debt, make strategic acquisitions and investments, maintain its capital assets, satisfy its tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow is a significant measure of the Company's ability to generate long-term value. It is useful for investors to know whether this ability is being enhanced or degraded as a result of the Company's operating performance. The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from the Company's underlying operations in a manner similar to the method used by management. Free cash flow is one of several components of incentive compensation targets for certain management personnel. In addition, free cash flow is a primary measure used externally by the Company's investors, analysts and industry peers for purposes of valuation and comparison of the Company's operating performance to other companies in its industry.

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

The following table presents a reconciliation of the Company's net cash flow provided by (used for) operating activities to free cash flow:


Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014

Net cash flow (used for) provided by operating activities

$

(240)



$

(336)



$

623



$

288


Capital expenditures

(58)



(43)



(104)



(112)


Exclude operating cash flow from discontinued operations

(9)



21



(27)



52


Free cash flow

$

(289)



$

(400)



$

546



$

124


 

The following table presents a summary of the Company's cash flows:


Three Months Ended


Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014

Net cash flow (used for) provided by operating activities

$

(240)



$

(336)



$

623



$

288


Net cash flow used for investing activities

$

(64)



$

(319)



$

(106)



$

(468)


Net cash flow provided by (used for) financing activities

$

117



$

349



$

(812)



$

(39)


 

 

CBS CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)

(Unaudited; in millions, except per share amounts)


2015 and 2014 Adjusted Results


The following tables reconcile adjusted financial results to the reported results included in this earnings release. The Company believes that adjusting its financial results for the impact of these items is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company's management, provides a clearer perspective on the current underlying performance of the Company, and adjusting each period's results on the same basis makes it easier to compare the Company's year-over-year results.



Nine Months Ended September 30, 2015


2015 Reported


Restructuring Charges (a)


2015 Adjusted

Revenues

$

9,976



$



$

9,976








Operating income

2,041



55



2,096


Operating income margin (b)

20

%




21

%

Interest expense

(289)





(289)


Interest income

18





18


Other items, net

(4)





(4)


Earnings from continuing operations before income taxes

1,766



55



1,821


Provision for income taxes

(579)



(22)



(601)


Effective income tax rate

32.8

%




33.0

%







Equity in loss of investee companies, net of tax

(35)





(35)


Net earnings from continuing operations

$

1,152



$

33



$

1,185


Diluted EPS from continuing operations

$

2.33



$

.07



$

2.39


Diluted weighted average number of common shares outstanding

495





495




(a)

Restructuring charges at Entertainment and Local Broadcasting primarily for the reorganization of certain business operations and other exit costs.

(b)

Operating Income margin is defined as Operating Income or Adjusted Operating Income divided by revenues.

 

 

CBS CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)

(Unaudited; in millions, except per share amounts).



Three Months Ended September 30, 2014


2014 Reported


Restructuring Charges (a)


Impairment Charge (b)


Extinguishment of Debt


Tax Item (c)


2014 Adjusted

Revenues

$

3,367



$



$



$



$



$

3,367














Operating income

668



26



52







746


Operating income margin (d)

20

%










22

%

Interest expense

(89)











(89)


Interest income

4











4


Loss on early extinguishment of debt

(352)







352






Other items, net

(21)











(21)


Earnings from continuing operations before income taxes

210



26



52



352





640


Provision for income taxes

(110)



(10)



22



(133)



19



(212)


Effective income tax rate

52.4

%










33.1

%













Equity in loss of investee companies, net of tax

(28)











(28)


Net earnings from continuing operations

$

72



$

16



$

74



$

219



$

19



$

400


Diluted EPS from continuing operations

$

.13



$

.03



$

.14



$

.40



$

.04



$

.74


Diluted weighted average number of common shares outstanding

541











541





Nine Months Ended September 30, 2014


2014 Reported


Restructuring Charges (a)


Impairment Charge (b)


Extinguishment of Debt


Tax Item (c)


2014 Adjusted

Revenues

$

10,125



$



$



$



$



$

10,125














Operating income

2,189



26



52







2,267


Operating income margin (d)

22

%










22

%

Interest expense

(276)











(276)


Interest income

10











10


Loss on early extinguishment of debt

(352)







352






Other items, net

(10)











(10)


Earnings from continuing operations before income taxes

1,561



26



52



352





1,991


Provision for income taxes

(561)



(10)



22



(133)



19



(663)


Effective income tax rate

35.9

%










33.3

%













Equity in loss of investee companies, net of tax

(48)











(48)


Net earnings from continuing operations

$

952



$

16



$

74



$

219



$

19



$

1,280


Diluted EPS from continuing operations

$

1.66



$

.03



$

.13



$

.38



$

.03



$

2.23


Diluted weighted average number of common shares outstanding

574











574




(a)

Restructuring charges at Entertainment, Publishing, Local Broadcasting and Corporate primarily for the reorganization of certain business operations and other exit costs.

(b)

Reflects a noncash impairment charge to reduce goodwill at Local Broadcasting in connection with a radio station swap.

(c)

Reflects the establishment of a tax reserve for the retroactive impact of an uncertain tax position in a foreign jurisdiction.

(d)

Operating Income margin is defined as Operating Income or Adjusted Operating Income divided by revenues.

 

SOURCE CBS Corporation



RELATED LINKS

http://www.cbscorporation.com