<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 1998
Commission file number 1-977
-----
CBS CORPORATION
---------------
(Exact name of registrant as
specified in its charter)
PENNSYLVANIA 25-0877540
------------ ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
51 West 52nd Street, New York, NY 10019
---------------------------------------
(Address of principal executive offices; zip code)
(212) 975-4321
--------------
(Registrant's Telephone No., including area code)
<PAGE> 2
Item 5. Other Events
On October 29, 1998, the Registrant issued a press release concerning earnings
for the quarter and year-to-date ended September 30, 1998. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated herein. A copy of
the Condensed Consolidated Statement of Income for the quarter and year-to-date
ended September 30, 1998 and 1997 is attached hereto as Exhibit 99.2 and is
incorporated herein in its entirety. Certain segment information has been
restated to reflect the allocation of the goodwill acquired in connection with
the 1995 acquisition of CBS Inc. between the Radio and Outdoor Advertising, and
Television segments. Such goodwill and related amortization was previously
recorded in Corporate and Other. A copy of the restated segments for 1998, 1997,
and 1996 by quarter and total year for 1995 is attached hereto as Exhibit 99.3
and incorporated herein in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No.
99.1 Press release concerning earnings of the
Registrant for the quarter ended September 30,
1998 is filed as Exhibit 99.1 to this Report.
99.2 Condensed Consolidated Statement of Income for the
quarter and year-to-date ended September 30, 1998
and 1997, is filed as Exhibit 99.2 to this Report.
99.3 Segment Results for 1998, 1997, and 1996, by
quarter and total year for 1995 is filed as
Exhibit 99.3 to this Report.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CBS CORPORATION
(Registrant)
By: /s/ CAROL V. SAVAGE
-------------------------------
Carol V. Savage
Vice President, Finance
Date: October 29, 1998
<PAGE> 3
EXHIBIT INDEX
Exhibit No. Description Sequential Page No.
- ----------- ----------- -------------------
99.1 Press Release
99.2 Condensed Consolidated Statement of
Income for the quarter and
year-to-date ended September 30,
1998 and 1997.
99.3 Segment Results for 1998, 1997, and
1996 by quarter and total year for
1995.
<PAGE> 1
Exhibit 99.1
CBS CORPORATION REPORTS RECORD THIRD QUARTER
OPERATING RESULTS
REVENUES UP 23%
EBITDA UP 57%
AFTER-TAX CASH FLOW UP 115%
NEW YORK, Oct. 29, 1998 -- CBS Corporation (NYSE:CBS) reported record
revenues and earnings before interest, taxes, depreciation and amortization
(EBITDA) for the third quarter of 1998.
The Company's revenues for the third quarter of 1998 were $1,581,000,000,
an increase of 23% over the third quarter of 1997. All of the Company's
businesses contributed to record revenues for the quarter.
Revenues for the Company's Television segment -- which includes the
CBS Television Stations, the CBS Television Network and CBS Cable -- were
$1,049,000,000 in the third quarter of 1998, an increase of 15% over the
corresponding 1997 quarter. This strong growth was led by the Company's Cable
programming operations -- The Nashville Network (TNN) and Country Music
Television (CMT).
The Radio and Outdoor segment had revenues of $534,000,000 for the third
quarter of 1998, an increase of 42% over the corresponding 1997 quarter. The
increase was due to strong growth at the Company's existing stations and TDI,
the Company's outdoor business, as well as the inclusion of the results of
operations of American Radio's stations which were acquired in June 1998. On
a pro forma, same station basis, assuming the American Radio acquisition had
occurred at the beginning of the periods presented, revenues for the Radio and
Outdoor segment increased by 12%.
As previously announced, the Company recorded a pre-tax charge of
$68,000,000, primarily to streamline operations and reduce cost structures
of its Television segment.
The Company's EBITDA from Continuing Operations, before the charge, was
$336,000,000 for the third quarter of 1998, an increase of $122,000,000, or
57% as compared to the third quarter of 1997.
(More)
<PAGE> 2
CBS Corporation...2
The increase in EBITDA, excluding the charge, was principally due to
record results at the Company's Radio and Outdoor segment, as well as increases
in the Television segment. For the third quarter of 1998, EBITDA for the Radio
and Outdoor segment was $230,000,000, an increase of $80,000,000 or 53% over
the 1997 quarter. On a pro forma basis, assuming the acquisition of American
Radio has occurred at the beginning of the periods presented, EBITDA for the
Radio and Outdoor segment for the third quarter of 1998 increased 24% over the
third quarter of 1997.
The EBITDA, excluding the charge, for the Television segment for the third
quarter of 1998 increased by 22% over the 1997 third quarter with both the
Television stations and Cable operations contributing to the growth.
Mel Karmazin, President and Chief Operating Officer, CBS Corporation,
commented: "All of the Company's operating units have contributed to the third
quarter record operating results. We are particularly pleased with the core
growth at our Radio and Outdoor businesses, the Company's largest contributor
to its EBITDA, as well as at our Cable programming operations and Television
stations." Mr. Karmazin added: "The Company expects to benefit from the
ratings improvement at the CBS Television Network which, combined with the
reduction in its cost structure, will enable the Network to become a positive
contributor to the Company's future cash flows."
For the third quarter of 1998, after-tax cash flow (EBITDA, less interest
and cash taxes paid) before the special charge was $209,000,000, an increase of
115% from the third quarter of 1997. This increase was due to substantial
improvements in the Company's operating results.
During the third quarter, income from Continuing Operations, excluding the
aforementioned charge, was $3,000,000, or zero cents per share, compared to a
loss of $19,000,000, or $0.03 per share for the 1997 quarter. Including the
charge, the Company's net loss for the quarter was $43,000,000, or $0.06 per
share, compared to a loss of $162,000,000, or $0.26 per share, in the prior
year's quarter.
For the first nine months of 1998, the Company reported a loss, including
the charge, of $15,000,000 from Continuing Operations, compared to a loss of
$121,000,000 in the first nine months of 1997. Over the same period, EBITDA,
excluding the charge, grew from $531,000,000 in 1997 to $882,000,000 in 1998,
an increase of 66%. Including the charge, EBITDA year-to-date grew 53%.
(More)
<PAGE> 3
CBS Corporation...3
During 1998, the Company has purchased more than 25,000,000 common shares
at a cost of approximately $780,000,000, pursuant to a $3 billion stock buyback
authorization. Fredric G. Reynolds, Chief Financial Officer, CBS Corporation,
commented: "Our stock repurchase program balances our need to continue to grow
our businesses, and to reward our shareholders."
# # #
Contact: Gil Schwartz (N.Y.) 212-975-2121
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 the Company 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 1997 year filed with the Securities and Exchange
Commission for additional information concerning such risks and uncertainties.
<PAGE> 1
Exhibit 99.2
CBS CORPORATION
EARNINGS INFORMATION
THIRD QUARTER
(unaudited)
<TABLE>
<CAPTION>
(in millions except per share data) Three Months Ended Nine Months Ended
Sept 30 Sept 30
------------------------------ ------------------------------
1998 1997 * 1998 1997 *
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Revenues $1,581 $1,285 $5,014 $3,894
Operating expenses (1,284) (1,038) (4,112) (3,316)
Depreciation and amortization (154) (107) (420) (317)
Residual costs of discontinued businesses (41) (35) (117) (106)
------------ ------------ ------------ -----------
Operating costs and expenses (1,479) (1,180) (4,649) (3,739)
------------ ------------ ------------ -----------
Operating profit 102 105 365 155
Other income and expenses, net 12 2 29 59
Interest expense (112) (102) (272) (305)
------------ ------------ ------------ -----------
Income (loss) from Continuing Operations before
income taxes and minority interest 2 5 122 (91)
Income tax (expense) benefit (39) (25) (134) (32)
Minority interest (1) 1 (3) 2
------------ ------------ ------------ -----------
Income (loss) from Continuing Operations (38) (19) (15) (121)
------------ ------------ ------------ -----------
Income (loss) from Discontinued Operations, net of income taxes - (143) - (191)
------------ ------------ ------------ -----------
Extraordinary item:
Loss on early extinguishment of debt (5) - (5) -
------------ ------------ ------------ -----------
Net Income (loss) ($43) ($162) ($20) ($312)
============ ============ ============ ===========
Dividend requirements for Series C preferred stock - - - 23
Net income (loss) applicable to common stock ($43) ($162) ($20) ($335)
============ ============ ============ ===========
Average shares outstanding - basic 697 630 698 608
Average shares outstanding - diluted 697 630 698 608
Basic and diluted earnings (loss) per common share:
Continuing Operations ($0.05) ($0.03) ($0.02) ($0.24)
Discontinued Operations $0.00 ($0.23) $0.00 ($0.31)
Extraordinary item ($0.01) $0.00 ($0.01) $0.00
------------ ------------ ------------ -----------
Basic and diluted earnings (loss) per common share ($0.06) ($0.26) ($0.03) ($0.55)
============ ============ ============ ===========
</TABLE>
* Certain previously reported amounts have been reclassified to conform to the
1998 presentation.
<PAGE> 1
Exhibit 99.3
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------------------
1998 1997 % Change
---- ---- --------
<S> <C> <C> <C>
TELEVISION *
Sales $ 1,620 $ 1,015 59.6%
Operating Profit (Loss) 127 (33) 484.8%
OP (Loss) without Special Items 127 (33) 484.8%
Depreciation & Amortization 80 55 45.5%
Capital Expenditures 12 17 -29.4%
EBITDA 212 49 332.7%
EBITDA without Special Items 212 49 332.7%
RADIO & OUTDOOR
Sales 330 313 5.4%
Operating Profit (Loss) 64 42 52.4%
OP (Loss) without Special Items 64 42 52.4%
Depreciation & Amortization 49 49 -
Capital Expenditures 4 3 33.3%
EBITDA 113 91 24.2%
EBITDA without Special Items 113 91 24.2%
CORPORATE & OTHER
Sales (1) (2) 50.0%
Operating Profit (Loss) (17) (28) 39.3%
OP (Loss) without Special Items (17) (28) 39.3%
Depreciation & Amortization 1 1 -
Capital Expenditures 2 1 100.0%
EBITDA (16) (13) -23.1%
EBITDA without Special Items (16) (13) -23.1%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - N/A
Operating Profit (Loss) (38) (35) -8.6%
OP (Loss) without Special Items (38) (35) -8.6%
Depreciation & Amortization - - N/A
Capital Expenditures - - N/A
EBITDA (38) (35) -8.6%
EBITDA without Special Items (38) (35) -8.6%
TOTAL CONTINUING OPERATIONS
Sales 1,949 1,326 47.0%
Operating Profit (Loss) 136 (54) 351.9%
OP (Loss) without Special Items 136 (54) 351.9%
Depreciation & Amortization 130 105 23.8%
Capital Expenditures 18 21 -14.3%
EBITDA 271 92 194.6%
EBITDA without Special Items 271 92 194.6%
</TABLE>
* Formerly Network, Television Stations,
and Cable
<PAGE> 2
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
--------------------------------------- ---------------------------------------
1998 1997 % Change 1998 1997 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TELEVISION *
Sales $ 1,030 $ 905 13.8% $ 2,650 $ 1,920 38.0%
Operating Profit (Loss) 45 42 7.1% 172 9 1811.1%
OP (Loss) without Special Items 45 42 7.1% 172 9 1811.1%
Depreciation & Amortization 78 54 44.4% 158 109 45.0%
Capital Expenditures 19 14 35.7% 31 31 -
EBITDA 133 100 33.0% 345 149 131.5%
EBITDA without Special Items 133 100 33.0% 345 149 131.5%
RADIO & OUTDOOR
Sales 456 378 20.6% 786 691 13.7%
Operating Profit (Loss) 141 107 31.8% 205 149 37.6%
OP (Loss) without Special Items 141 107 31.8% 205 149 37.6%
Depreciation & Amortization 57 49 16.3% 106 98 8.2%
Capital Expenditures 7 3 133.3% 11 6 83.3%
EBITDA 198 157 26.1% 311 248 25.4%
EBITDA without Special Items 198 157 26.1% 311 248 25.4%
CORPORATE & OTHER
Sales (2) - N/A (3) (2) -50.0%
Operating Profit (Loss) (21) (9) -133.3% (38) (37) -2.7%
OP (Loss) without Special Items (21) (9) -133.3% (38) (37) -2.7%
Depreciation & Amortization 1 2 -50.0% 2 3 -33.3%
Capital Expenditures 1 1 - 3 2 50.0%
EBITDA (18) 4 -550.0% (34) (9) -277.8%
EBITDA without Special Items (18) 4 -550.0% (34) (9) -277.8%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - N/A - - N/A
Operating Profit (Loss) (38) (36) -5.6% (76) (71) -7.0%
OP (Loss) without Special Items (38) (36) -5.6% (76) (71) -7.0%
Depreciation & Amortization - - N/A - - N/A
Capital Expenditures - - N/A - - N/A
EBITDA (38) (36) -5.6% (76) (71) -7.0%
EBITDA without Special Items (38) (36) -5.6% (76) (71) -7.0%
TOTAL CONTINUING OPERATIONS
Sales 1,484 1,283 15.7% 3,433 2,609 31.6%
Operating Profit (Loss) 127 104 22.1% 263 50 426.0%
OP (Loss) without Special Items 127 104 22.1% 263 50 426.0%
Depreciation & Amortization 136 105 29.5% 266 210 26.7%
Capital Expenditures 27 18 50.0% 45 39 15.4%
EBITDA 275 225 22.2% 546 317 72.2%
EBITDA without Special Items 275 225 22.2% 546 317 72.2%
</TABLE>
* Formerly Network, Television Stations,
and Cable
<PAGE> 3
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------------------- ---------------------------------------
1998 1997 % Change 1998 1997 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TELEVISION *
Sales $ 1,049 $ 909 15.4% $ 3,699 $ 2,829 30.8%
Operating Profit (Loss) 7 72 -90.3% 179 81 121.0%
OP (Loss) without Special Items 71 72 -1.4% 243 81 200.0%
Depreciation & Amortization 81 56 44.6% 239 165 44.8%
Capital Expenditures 34 27 25.9% 65 58 12.1%
EBITDA 92 130 -29.2% 437 279 56.6%
EBITDA without Special Items 158 130 21.5% 503 279 80.3%
RADIO & OUTDOOR
Sales 534 377 41.6% 1,320 1,068 23.6%
Operating Profit (Loss) 157 99 58.6% 362 248 46.0%
OP (Loss) without Special Items 157 99 58.6% 362 248 46.0%
Depreciation & Amortization 71 51 39.2% 177 149 18.8%
Capital Expenditures 9 4 125.0% 20 10 100.0%
EBITDA 230 150 53.3% 541 398 35.9%
EBITDA without Special Items 230 150 53.3% 541 398 35.9%
CORPORATE & OTHER
Sales (2) (1) -100.0% (5) (3) -66.7%
Operating Profit (Loss) (21) (31) 32.3% (59) (68) 13.2%
OP (Loss) without Special Items (19) (31) 38.7% (57) (68) 16.2%
Depreciation & Amortization 2 - N/A 4 3 33.3%
Capital Expenditures 1 2 -50.0% 4 4 -
EBITDA (13) (31) 58.1% (47) (40) -17.5%
EBITDA without Special Items (11) (31) 64.5% (45) (40) -12.5%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - N/A - - N/A
Operating Profit (Loss) (41) (35) -17.1% (117) (106) -10.4%
OP (Loss) without Special Items (41) (35) -17.1% (117) (106) -10.4%
Depreciation & Amortization - - N/A - - N/A
Capital Expenditures - - N/A - - N/A
EBITDA (41) (35) -17.1% (117) (106) -10.4%
EBITDA without Special Items (41) (35) -17.1% (117) (106) -10.4%
TOTAL CONTINUING OPERATIONS
Sales 1,581 1,285 23.0% 5,014 3,894 28.8%
Operating Profit (Loss) 102 105 -2.9% 365 155 135.5%
OP (Loss) without Special Items 168 105 60.0% 431 155 178.1%
Depreciation & Amortization 154 107 43.9% 420 317 32.5%
Capital Expenditures 44 33 33.3% 89 72 23.6%
EBITDA 268 214 25.2% 814 531 53.3%
EBITDA without Special Items 336 214 57.0% 882 531 66.1%
</TABLE>
* Formerly Network, Television Stations,
and Cable
<PAGE> 4
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Total Year
December 31 December 31
------------------- -------------
1997 1997
---- ----
<S> <C> <C>
TELEVISION *
Sales $ 1,062 $ 3,891
Operating Profit (Loss) 48 129
OP (Loss) without Special Items 48 129
Depreciation & Amortization 79 244
Capital Expenditures 44 102
EBITDA 133 412
EBITDA without Special Items 133 412
RADIO & OUTDOOR
Sales 412 1,480
Operating Profit (Loss) 124 372
OP (Loss) without Special Items 124 372
Depreciation & Amortization 48 197
Capital Expenditures 5 15
EBITDA 177 575
EBITDA without Special Items 177 575
CORPORATE & OTHER
Sales (1) (4)
Operating Profit (Loss) (37) (105)
OP (Loss) without Special Items (22) (90)
Depreciation & Amortization 1 4
Capital Expenditures - 4
EBITDA (32) (72)
EBITDA without Special Items (17) (57)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - -
Operating Profit (Loss) (37) (143)
OP (Loss) without Special Items (37) (143)
Depreciation & Amortization - -
Capital Expenditures - -
EBITDA (37) (143)
EBITDA without Special Items (37) (143)
TOTAL CONTINUING OPERATIONS
Sales 1,473 5,367
Operating Profit (Loss) 98 253
OP (Loss) without Special Items 113 268
Depreciation & Amortization 128 445
Capital Expenditures 49 121
EBITDA 241 772
EBITDA without Special Items 256 787
</TABLE>
* Formerly Network, Television Stations,
and Cable
<PAGE> 5
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------- Total Year
Mar. 31 June 30 Sept. 30 Dec. 31 December 31
1996 1996 1996 1996 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
TELEVISION *
Sales $ 990 $ 951 $ 766 $ 856 $ 3,563
Operating Profit (Loss) 33 161 50 (15) 229
OP (Loss) without Special Items 33 161 50 (15) 229
Depreciation & Amortization 52 57 53 51 213
Capital Expenditures 18 5 16 30 69
EBITDA 85 222 119 41 467
EBITDA without Special Items 85 222 119 41 467
RADIO & OUTDOOR
Sales 121 145 136 152 554
Operating Profit (Loss) 15 42 37 46 140
OP (Loss) without Special Items 15 42 37 46 140
Depreciation & Amortization 16 13 13 15 57
Capital Expenditures 1 1 2 2 6
EBITDA 31 55 49 62 197
EBITDA without Special Items 31 55 49 62 197
CORPORATE & OTHER
Sales 6 4 8 8 26
Operating Profit (Loss) (96) (36) (17) (52) (201)
OP (Loss) without Special Items (20) (36) (17) (43) (116)
Depreciation & Amortization (1) 5 2 3 9
Capital Expenditures 2 10 2 4 18
EBITDA (91) (28) (8) (35) (162)
EBITDA without Special Items (15) (28) (8) (26) (77)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - - - -
Operating Profit (Loss) (24) (30) (30) (30) (114)
OP (Loss) without Special Items (24) (30) (30) (30) (114)
Depreciation & Amortization - - - - -
Capital Expenditures - - - - -
EBITDA (24) (30) (30) (30) (114)
EBITDA without Special Items (24) (30) (30) (30) (114)
TOTAL CONTINUING OPERATIONS
Sales 1,117 1,100 910 1,016 4,143
Operating Profit (Loss) (72) 137 40 (51) 54
OP (Loss) without Special Items 4 137 40 (42) 139
Depreciation & Amortization 67 75 68 69 279
Capital Expenditures 21 16 20 36 93
EBITDA 1 219 130 38 388
EBITDA without Special Items 77 219 130 47 473
</TABLE>
* Formerly Network, Television Stations,
and Cable
<PAGE> 6
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Total Year
December 31
--------------
1995
----
<S> <C>
TELEVISION *
Sales $ 797
Operating Profit (Loss) 164
OP (Loss) without Special Items 164
Depreciation & Amortization 38
Capital Expenditures 21
EBITDA 222
EBITDA without Special Items 222
RADIO & OUTDOOR
Sales 216
Operating Profit (Loss) 53
OP (Loss) without Special Items 53
Depreciation & Amortization 18
Capital Expenditures 9
EBITDA 70
EBITDA without Special Items 70
CORPORATE & OTHER
Sales 61
Operating Profit (Loss) (20)
OP (Loss) without Special Items 5
Depreciation & Amortization 2
Capital Expenditures 2
EBITDA 115
EBITDA without Special Items 140
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -
Operating Profit (Loss) (37)
OP (Loss) without Special Items (37)
Depreciation & Amortization -
Capital Expenditures -
EBITDA (37)
EBITDA without Special Items (37)
TOTAL CONTINUING OPERATIONS
Sales 1,074
Operating Profit (Loss) 160
OP (Loss) without Special Items 185
Depreciation & Amortization 58
Capital Expenditures 32
EBITDA 370
EBITDA without Special Items 395
</TABLE>
* Formerly Network, Television Stations,
and Cable
