CBS Corporation Reports Record Results in the Second Quarter of 2012

CBS Corporation Reports Record Results in the Second Quarter of 2012

OIBDA of $901 Million, Up 3%

Operating Income of $769 Million, Up 5%

Diluted EPS of $.65, Up 12%

NEW YORK, Aug. 2, 2012 /PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today reported results for the second quarter ended June 30, 2012, including operating income before depreciation and amortization ("OIBDA"), operating income, and diluted earnings per share that were all-time records for CBS Corporation since it became a stand-alone Company in 2006.

"CBS's content continues to fuel the success of this great company," said Sumner Redstone, Executive Chairman, CBS Corporation. "In a world where great programming commands premium pricing, we continue to hit on all cylinders. I am extremely pleased with our terrific second-quarter results, and I am confident that Leslie and his management team will build on our momentum in the quarters and years to come."

"Our record second quarter results reflect CBS's underlying strength and the ongoing evolution of our business to encompass multiple sources of growing and recurring high-margin revenue," said Leslie Moonves, President and Chief Executive Officer, CBS Corporation. "The good news is, there's so much more to come, and there are several important events just ahead. The U.S. presidential election will be a major factor in our second half results, and the London Olympics will give a considerable lift to our Outdoor business. And as we head into 2013, we will benefit from the Super Bowl, CBS's success in the upfront marketplace, as well as from a number of hit shows that will be sold into syndication. Plus, we are containing our costs and reducing our interest expense, and as a sign of the confidence we have in our future, we recently announced a significant increase in the amount of capital we are returning to our shareholders both through our ongoing dividend and accelerated share buyback program. For all of these reasons, we're confident 2012 will be a record year, and we will produce exceptional results in 2013 and beyond as well."



Second Quarter 2012 Results

In the second quarter of 2012, the Company set new quarterly records in the following key metrics:


-- OIBDA of $901 million
-- Operating income of $769 million
-- Diluted earnings per share of $.65
Two significant factors in the second quarter of 2011 - the Company's initial multiyear digital streaming agreement (under which dozens of the Company's library titles were first made available for streaming) and the semifinals of the NCAA Division I Men's Basketball Championship (which aired during the first quarter in 2012) - had an impact on the revenue comparison. Second quarter 2012 revenues came in at $3.48 billion compared with $3.59 billion for the same quarter a year ago. Some of the impact was offset by growth in high-margin affiliate and subscription fee revenues, while underlying advertising revenues for the second quarter of 2012 reflected a steady marketplace.

In addition, the OIBDA margin improved two percentage points, to a record 26%, and the operating income margin expanded two percentage points, to 22%, in the second quarter of 2012. Those increases, as well as the Company's record performance in the three key metrics mentioned above, reflect a higher profit margin on 2012 television licensing revenues as well as the growth in high-margin affiliate and subscription fees.

Net earnings were $427 million for the second quarter of 2012, up 8%. The Company's earnings per share rose 12%, which was driven by the operating income growth and lower weighted average shares outstanding as a result of the Company's share repurchase program.

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


Free Cash Flow, Balance Sheet and Liquidity
Free cash flow was $558 million for the second quarter of 2012, compared with $646 million for the second quarter a year ago. For the first half of 2012, free cash flow was $1.17 billion compared with $1.50 billion for the first half of 2011, reflecting higher investment in content (primarily television programming) and higher income tax payments. The Company generated cash flow from operating activities of $1.26 billion for the six months ended June 30, 2012, versus $1.59 billion for the comparable prior-year period.

During the second quarter of 2012, the Company issued $400 million of 1.95% senior notes due 2017 and $500 million of 4.85% senior notes due 2042. The Company used the net proceeds to repay its $152 million of 8.625% debentures at maturity on August 1, 2012. Also, the net proceeds were used in July to redeem the Company's $338 million of 5.625% senior notes due August 2012 and its $400 million of 8.20% senior notes due 2014. In connection with these redemptions, the Company will record a pretax loss on early extinguishment of debt of approximately $57 million during the third quarter. These actions, along with the debt activity during the first quarter of 2012, are expected to result in annualized interest expense savings of approximately $53 million.

Also during the quarter, the Company repurchased 9.4 million shares of CBS Corp. Class B Common Stock for $301 million, at an average cost of approximately $32 per share. Since the inception of the program, through June 30, 2012, the Company has repurchased 60.6 million shares for $1.59 billion, at an average cost of approximately $26 per share.

Consolidated and Segment Results (dollars in millions)
The tables below present the Company's revenues by segment and type as well as its OIBDA before impairment charges and operating income (loss) by segment for the three and six months ended June 30, 2012, and 2011. Reconciliations of all non-GAAP measures to reported results are included at the end of this earnings release.




Three Months Ended Six Months Ended
June 30, June 30,
Revenues by Segment 2012 2011 2012 2011
------------------- ---- ---- ---- ----
Entertainment $1,707 $1,836 $4,025 $3,830
Cable Networks 446 413 898 806
Publishing 189 183 365 338
---------- --- --- --- ---
Content Group 2,342 2,432 5,288 4,974
Local
Broadcasting 704 691 1,326 1,312
Outdoor 481 490 897 903
------- --- --- --- ---
Local Group 1,185 1,181 2,223 2,215
Eliminations (51) (27) (111) (93)
------------ --- --- ---- ---
Total
Revenues $3,476 $3,586 $7,400 $7,096
--------- ------ ------ ------ ------

Three Months Ended Six Months Ended
June 30, June 30,
Revenues by Type 2012 2011 2012 2011
---------------- ---- ---- ---- ----
Advertising $2,142 $2,215 $4,540 $4,507
Content
licensing and
distribution 816 886 1,833 1,620
Affiliate and
subscription
fees 465 429 920 855
Other 53 56 107 114
----- --- --- --- ---
Total
Revenues $3,476 $3,586 $7,400 $7,096
--------- ------ ------ ------ ------

Three Months Ended Six Months Ended
June 30, June 30,
OIBDA before
Impairment Charges 2012 2011 2012 2011
------------------- ---- ---- ---- ----
Entertainment $426 $440 $837 $708
Cable Networks 190 176 399 329
Publishing 9 19 19 26
---------- --- --- --- ---
Content Group 625 635 1,255 1,063
Local
Broadcasting 248 230 419 399
Outdoor 93 86 146 135
------- --- --- --- ---
Local Group 341 316 565 534
Corporate (52) (57) (110) (109)
Residual costs (12) (18) (24) (37)
Eliminations (1) (3) (1) (2)
------------ --- --- --- ---
OIBDA before
Impairment
Charges 901 873 1,685 1,449
Impairment
charges - - (11) -
----------- --- --- --- ---
Total OIBDA $901 $873 $1,674 $1,449
----------- ---- ---- ------ ------

Three Months Ended Six Months Ended
June 30, June 30,
Operating Income
(Loss) 2012 2011 2012 2011
----------------- ---- ---- ---- ----
Entertainment $385 $400 $755 $630
Cable Networks 184 171 388 318
Publishing 7 17 15 22
---------- --- --- --- ---
Content Group 576 588 1,158 970
Local
Broadcasting 225 204 363 347
Outdoor 39 26 37 14
------- --- --- --- ---
Local Group 264 230 400 361
Corporate (58) (63) (122) (121)
Residual costs (12) (18) (24) (37)
Eliminations (1) (3) (1) (2)
------------ --- --- --- ---
Total
Operating
Income $769 $734 $1,411 $1,171
---------- ---- ---- ------ ------


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

Entertainment revenues of $1.71 billion for the second quarter of 2012 decreased 7% from $1.84 billion in the same prior-year period. Last year's second quarter benefited from the initial licensing of the Company's programming for digital streaming, the third-cycle domestic syndication sale of Frasier,and the semifinals of the NCAA Division I Men's Basketball Championship, which aired during the first quarter of 2012 versus the second quarter of 2011. Some of the impact was offset by growth in high-margin retransmission revenues and higher international syndication revenues in the second quarter of 2012.

Entertainment OIBDA for the second quarter of 2012 decreased 3% to $426 million from $440 million as the impact of the initial licensing of the Company's programming for digital streaming in 2011 was partially offset by higher profits from syndication.

Cable Networks (Showtime Networks, CBS Sports Network, and Smithsonian Networks)
Cable Networks revenues for the second quarter of 2012 increased 8% to $446 million from $413 million for the same prior-year period. The results were driven by higher affiliate revenues, which reflect increases in rates and subscriptions at Showtime Networks (which includes Showtime, The Movie Channel, and Flix), CBS Sports Network, and Smithsonian Networks, as well as higher licensing revenues from the digital streaming of Showtime original series.

Cable Networks OIBDA for the second quarter of 2012 grew 8% to $190 million from $176 million for the same prior-year period, primarily reflecting the revenue growth, partially offset by expense increases associated with the timing of theatrical programming costs and advertising expenses for series premieres.

Publishing (Simon & Schuster)
Publishing revenues for the second quarter of 2012 increased 3% to $189 million from $183 million for the same prior-year period reflecting continued growth in digital book sales, partially offset by lower print book sales. Digital sales increased 44% from the same prior-year period and represented approximately 21% of total Publishing revenues. Best-selling titles in the second quarter included The Wind Through the Keyhole by Stephen King and Cowards by Glenn Beck.



Publishing OIBDA for the second quarter of 2012 decreased $10 million to $9 million from the same prior-year period, as a charge related to a legal matter more than offset the revenue increase.

Local Broadcasting (CBS Television Stations and CBS Radio)
Local Broadcasting revenues for the second quarter of 2012 increased 2% to $704 million from $691 million for the same prior-year period. CBS Television Stations revenues rose 6%, reflecting increased spending by automotive manufacturers, higher political advertising, and higher retransmission revenues, which were partially offset by lower advertising spending by the retail and financial services industries. CBS Radio revenues decreased 2% as growth in automotive advertising was offset by a decline in spending by retail and financial services advertisers.

Local Broadcasting OIBDA for the second quarter of 2012 increased 8% to $248 million from $230 million, primarily driven by the revenue growth and lower programming and production costs.

Outdoor (CBS Outdoor)
Outdoor revenues for the second quarter of 2012 decreased 2% to $481 million from $490 million for the same prior-year period, driven by the unfavorable impact of foreign exchange rate changes. In constant dollars, revenues increased 1% from the second quarter of 2011. Revenues for the Americas (which includes North America and South America) increased 2% in constant dollars for the second quarter of 2012, principally driven by growth in the U.S. billboards and displays businesses, partially offset by the impact from the nonrenewal of the Toronto transit contract. Revenues for Europe increased 1% in constant dollars, primarily reflecting higher advertising sales associated with the 2012 Summer Olympics in London. Some of this increase was offset by weakness in the European economy and the nonrenewal of certain contracts.

Outdoor OIBDA for the second quarter of 2012 increased 8% to $93 million from $86 million for the same prior-year period, driven by the revenue growth in constant dollars.

Corporate
Corporate expenses before depreciation for the second quarter of 2012 decreased $5 million to $52 million from the same prior-year period, principally reflecting lower stock-based compensation expense.



Residual Costs
Residual costs include pension and postretirement benefits costs for plans retained by the Company for previously divested businesses. Residual costs for the second quarter of 2012 decreased $6 million to $12 million from the same quarter last year, primarily because of the benefit from the prefunding of pension plans during 2011.

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, outdoor advertising, 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), Showtime Networks, CBS Sports Network, Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio, CBS Outdoor, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive, CBS Consumer Products, CBS Home Entertainment, CBS Films 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; 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 news releases and 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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
---- ---- ---- ----

Revenues $3,476 $3,586 $7,400 $7,096
-------- ------ ------ ------ ------

Operating income 769 734 1,411 1,171

Interest expense (104) (110) (214) (220)
Interest income 1 1 3 3
Gain on early extinguishment of debt - - 25 -
Other items, net (3) 5 9 14
---------------- --- --- --- ---
Earnings before income taxes 663 630 1,234 968

Provision for income taxes (225) (230) (428) (352)
Equity in loss of investee companies, net of tax (11) (5) (16) (19)
------------------------------------------------ --- --- --- ---
Net earnings $427 $395 $790 $597
------------ ---- ---- ---- ----

Basic net earnings per common share $.66 $.59 $1.22 $.89

Diluted net earnings per common share $.65 $.58 $1.19 $.87

Weighted average number of common shares outstanding:
Basic 646 669 648 671
Diluted 661 686 664 689

Dividends per common share $.10 $.10 $.20 $.15
-------------------------- ---- ---- ---- ----





CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
(Unaudited; in millions)


At At
June 30, 2012 December 31, 2011
------------- -----------------

Assets

Cash and cash equivalents $1,888 $660
Receivables, net 2,973 3,254
Programming and other inventory 521 735
Prepaid expenses and other current assets 1,000 894
----------------------------------------- ----- ---
Total current assets 6,382 5,543
-------------------- ----- -----
Property and equipment 5,362 5,334
Less
accumulated
depreciation
and
amortization 2,968 2,824
------------ ----- -----
Net property and equipment 2,394 2,510
-------------------------- ----- -----
Programming and other inventory 1,332 1,496
Goodwill 8,599 8,620
Intangible assets 6,508 6,526
Other assets 1,566 1,502
----- -----
Total Assets $26,781 $26,197
------------ ------- -------

Liabilities and Stockholders' Equity

Accounts payable $309 $410
Participants' share and royalties payable 875 938
Program rights 488 577
Current portion of long-term debt 901 24
Accrued expenses and other current
liabilities 1,801 1,984
---------------------------------- ----- -----
Total current liabilities 4,374 3,933
------------------------- ----- -----
Long-term debt 5,900 5,958
Other liabilities 6,389 6,398
Total Stockholders' Equity 10,118 9,908
-------------------------- ------ -----
Total Liabilities and Stockholders' Equity $26,781 $26,197
------------------------------------------ ------- -------





CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited; in millions)


Six Months Ended
June 30,
2012 2011
---- ----

Operating Activities:
Net earnings $790 $597
Adjustments to reconcile net
earnings to net cash flow
provided by operating activities:
Depreciation and amortization 263 278
Stock-based compensation 81 75
Impairment charges 11 -
Gain on early extinguishment of
debt (25) -
Equity in loss of investee
companies, net of tax and
distributions 19 21
Change in assets and liabilities,
net of effects of acquisitions 119 623
---------------------------------- --- ---
Net cash flow provided by operating
activities 1,258 1,594
----------------------------------- ----- -----
Investing Activities:
Acquisitions, net of cash acquired (69) (55)
Capital expenditures (93) (95)
Investments in and advances to
investee companies (39) (42)
Proceeds from dispositions 1 13
Other investing activities 6 8
-------------------------- --- ---
Net cash flow used for investing
activities (194) (171)
-------------------------------- ---- ----
Financing Activities:
Proceeds from issuance of notes 1,567 4
Repayment of notes (700) (2)
Payment of capital lease
obligations (10) (9)
Payment of contingent consideration (33) -
Dividends (135) (73)
Purchase of Company common stock (564) (500)
Payment of payroll taxes in lieu of
issuing shares for stock-based
compensation (105) (78)
Proceeds from exercise of stock
options 71 45
Excess tax benefit from stock-
based compensation 73 61
Other financing activities - (5)
-------------------------- --- ---
Net cash flow provided by (used for)
financing activities 164 (557)
--- ----
Net increase in cash and cash
equivalents 1,228 866
Cash and cash equivalents at
beginning of period 660 480
---------------------------- --- ---
Cash and cash equivalents at end of
period $1,888 $1,346
----------------------------------- ------ ------





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

---
Operating Income (Loss) Before
Depreciation and Amortization ("OIBDA")
and OIBDA Before Impairment Charges

---
The following tables set forth the
Company's OIBDA for the three and six
months ended June 30, 2012 and 2011. The
Company defines OIBDA as net earnings
(loss) adjusted to exclude the following
line items presented in its Consolidated
Statements of Operations: Equity in
earnings (loss) of investee companies,
net of tax; Provision for income taxes;
Other items, net; Gain on early
extinguishment of debt; Interest income;
Interest expense; and Depreciation and
amortization. The following tables also
set forth the Company's OIBDA before
impairment charges for the six months
ended June 30, 2012. The Company defines
"OIBDA before impairment charges" as
OIBDA excluding impairment charges.

The Company uses OIBDA and OIBDA before
impairment charges, as well as OIBDA
margin and OIBDA before impairment
charges margin, among other things, to
evaluate the Company's operating
performance, to value prospective
acquisitions and as one of several
components of incentive compensation
targets for certain management
personnel, and these measures are among
the primary measures used by management
for planning and forecasting of future
periods. These measures are important
indicators of the Company's operational
strength and performance of its business
because they provide a link between
profitability and operating cash flow.
The Company believes the presentation of
these measures is 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 their
ability to understand the Company's
operating performance and make it easier
to compare the Company's results with
other companies that have different
financing and capital structures or tax
rates. In addition, these measures are
among the primary measures used
externally by the Company's investors,
analysts and peers in its industry for
purposes of valuation and comparing the
operating performance of the Company to
other companies in its industry.

Since OIBDA and OIBDA before impairment
charges are not measures of performance
calculated in accordance with accounting
principles generally accepted in the
United States ("GAAP"), they should not
be considered in isolation of, or as a
substitute for, net earnings (loss) as
an indicator of operating performance.
OIBDA, 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 is not
necessarily a measure of the Company's
ability to fund its cash needs. As OIBDA
and OIBDA before impairment charges
exclude certain financial information
compared with net earnings (loss), the
most directly comparable GAAP financial
measure, users of this financial
information should consider the types of
events and transactions which are
excluded. The Company provides the
following reconciliations of OIBDA and
OIBDA before impairment charges to net
earnings (loss), and OIBDA or OIBDA
before impairment charges for each
segment to such segment's operating
income (loss), the most directly
comparable amounts reported under GAAP.



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

---

Three Months Ended June 30, 2012
--------------------------------
Depreciation Operating
OIBDA and Amortization Income/(Loss)
----- ---------------- -------------
Entertainment $426 $(41) $385
Cable Networks 190 (6) 184
Publishing 9 (2) 7
---------- --- --- ---
Content Group 625 (49) 576
Local Broadcasting 248 (23) 225
Outdoor 93 (54) 39
------- --- --- ---
Local Group 341 (77) 264
Corporate (52) (6) (58)
Residual Costs (12) - (12)
Eliminations (1) - (1)
--- --- ---
Total $901 $(132) $769
----- ---- ----- ----
Margin(a) 26% 22%
-------- --- ---



Three Months Ended June 30, 2011
--------------------------------
Depreciation Operating
OIBDA and Amortization Income/(Loss)
----- ---------------- -------------
Entertainment $440 $(40) $400
Cable Networks 176 (5) 171
Publishing 19 (2) 17
---------- --- --- ---
Content Group 635 (47) 588
Local Broadcasting 230 (26) 204
Outdoor 86 (60) 26
------- --- --- ---
Local Group 316 (86) 230
Corporate (57) (6) (63)
Residual Costs (18) - (18)
Eliminations (3) - (3)
--- --- ---
Total $873 $(139) $734
----- ---- ----- ----
Margin(a) 24% 20%
-------- --- ---




Three Months Ended
June 30,
2012 2011
---- ----
Total OIBDA $901 $873
Depreciation and amortization (132) (139)
----------------------------- ---- ----
Operating income 769 734
Interest expense (104) (110)
Interest income 1 1
Other items, net (3) 5
---------------- --- ---
Earnings before income taxes 663 630
Provision for income taxes (225) (230)
Equity in loss of investee
companies, net of tax (11) (5)
--------------------------- --- ---
Net earnings $427 $395
------------ ---- ----


(a) Margin is defined as OIBDA or operating income, as applicable, divided by revenues.




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

Six Months Ended June 30, 2012
------------------------------
OIBDA Before
Impairment Depreciation Impairment Operating
Charges and Amortization Charges Income/(Loss)
------- ---------------- ------- -------------
Entertainment $837 $(82) $ - $755
Cable Networks 399 (11) - 388
Publishing 19 (4) - 15
---------- --- --- --- ---
Content Group 1,255 (97) - 1,158
Local Broadcasting 419 (45) (11) 363
Outdoor 146 (109) - 37
------- --- ---- --- ---
Local Group 565 (154) (11) 400
Corporate (110) (12) - (122)
Residual Costs (24) - - (24)
Eliminations (1) - - (1)
--- --- --- ---
Total $1,685 $(263) $(11) $1,411
----- ------ ----- ---- ------
Margin(a) 23% 19%
-------- --- ---



Six Months Ended June 30, 2011
------------------------------
Depreciation Impairment Operating
OIBDA and Amortization Charges Income/(Loss)
----- ---------------- ------- -------------
Entertainment $708 $(78) $ - $630
Cable Networks 329 (11) - 318
Publishing 26 (4) - 22
---------- --- --- --- ---
Content Group 1,063 (93) - 970
Local Broadcasting 399 (52) - 347
Outdoor 135 (121) - 14
------- --- ---- --- ---
Local Group 534 (173) - 361
Corporate (109) (12) - (121)
Residual Costs (37) - - (37)
Eliminations (2) - - (2)
--- --- --- ---
Total $1,449 $(278) $ - $1,171
----- ------ ----- --- --- ------
Margin(a) 20% 17%
-------- --- ---




Six Months Ended June
30,
2012 2011
---- ----
OIBDA before impairment charges $1,685 $1,449
Impairment charges (11) -
------------------ --- ---
Total OIBDA 1,674 1,449
Depreciation and amortization (263) (278)
----------------------------- ---- ----
Operating income 1,411 1,171
Interest expense (214) (220)
Interest income 3 3
Gain on early extinguishment of
debt 25 -
Other items, net 9 14
---------------- --- ---
Earnings before income taxes 1,234 968
Provision for income taxes (428) (352)
Equity in loss of investee
companies, net of tax (16) (19)
--------------------------- --- ---
Net earnings $790 $597
------------ ---- ----

(a) Margin is defined as OIBDA, OIBDA before impairment charges 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 less capital
expenditures. The Company's calculation
of free cash flow includes capital
expenditures since 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 peers in its industry for
purposes of valuation and comparing the
operating performance of the Company 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 (loss) 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, and 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 which are not
reflected in free cash flow.

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

Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
---- ---- ---- ----
Net cash flow
provided by
operating
activities $612 $700 $1,258 $1,594
Capital expenditures (54) (54) (93) (95)
--- --- --- ---
Free cash flow $558 $646 $1,165 $1,499
-------------- ---- ---- ------ ------

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

Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
---- ---- ---- ----
Net cash flow
provided by
operating
activities $612 $700 $1,258 $1,594
Net cash flow
used for
investing
activities $(54) $(68) $(194) $(171)
Net cash flow
provided by
(used for)
financing
activities $536 $(258) $164 $(557)
------------- ---- ----- ---- -----


SOURCE CBS Corporation

CBS Corporation

CONTACT: Press: Gil Schwartz, Executive Vice President, Corporate Communications, +1-212-975-2121, gdschwartz@cbs.com or Dana McClintock, Senior Vice President, Corporate Communications, +1-212-975-1077, dlmcclintock@cbs.com; Investors: Adam Townsend, Executive Vice President, Investor Relations, +1-212-975-5292, adam.townsend@cbs.com or Jessica Kourakos, Vice President, Investor Relations, +1-212-975-6106, jessica.kourakos@cbs.com

Web Site: http://www.cbscorporation.com


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