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Previous: WELLS GARDNER ELECTRONICS CORP, 8-K/A, 1998-08-05 |
Next: JOHNSON & JOHNSON, SC 14D1/A, 1998-08-05 |
<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): August 5, 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 August 5 1998, the Registrant issued a press release concerning earnings for
the quarter and year-to-date ended June 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 June 30, 1998 and 1997 is attached hereto as Exhibit 99.2 and is
incorporated herein in its entirety. The segments formerly known as Network,
Television Stations, and Cable will be combined into one segment titled
Television. This segment reflects the changes in the management of the
Television business. This action had no impact on the Registrant's results of
operations or financial position for any current or prior periods. A copy of the
restated segments for 1998, 1997, and 1996 by quarter and total year, 1995,
1994, and 1993, 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 June 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 June 30, 1998, is
filed as Exhibit 99.2 to this Report.
99.3 Segment Results for 1998, 1997, and 1996, by quarter
and total year 1995, 1994, and 1993 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: August 5, 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 June 30, 1998 and
1997.
99.3 Segment Results for 1998, 1997, and
1996 by quarter and total year 1995,
1994, and 1993.
<PAGE> 1
Exhibit 99.1
CBS CORPORATION REPORTS SECOND QUARTER RESULTS
RECORD EBITDA PERFORMANCE, UP 22% OVER LAST YEAR'S QUARTER
RADIO SEGMENT REVENUE UP 21%
TELEVISION SEGMENT REPORTS CONTINUED GROWTH
COMPANY ANNOUNCES $2 BILLION INCREASE IN STOCK REPURCHASE PLAN
NEW YORK, August 5, 1998 -- CBS Corporation (NYSE:CBS) reported a
strong increase in revenue and earnings for the second quarter of 1998 compared
to the second quarter of 1997. Revenues for the Company increased 16%, while
earnings before interest, taxes, depreciation and amortization (EBITDA) grew 22%
to $275 million in the second quarter 1998 compared to $225 million in the
second quarter of 1997. The Company reported strong free cash flow growth of
approximately 60% over last year's quarter.
Driven by industry-leading performance in Radio and excellent growth in
Television, the Company reported net income of $4 million or $0.01 per share,
compared to a loss from Continuing Operations of $11 million or $0.04 per share
for the 1997 quarter.
Radio reported its sixth consecutive quarter of double-digit revenue
and EBITDA growth since the acquisition of Infinity in December 1996, posting
21% and 26% gains respectively. This growth was led by strong same-station
performance, and included the operations of the American Radio Systems
Corporation (American Radio) stations since their acquisition on June 5, 1998.
The Television segment, which now combines the operations of the
television stations, the network and cable, reported strong revenue and EBITDA
performance with 14% revenue growth and 33% EBITDA growth versus the second
quarter of 1997. Strong cable performance quarter-to-quarter was driven by cable
networks TNN and CMT, which were acquired late last year. On a proforma basis,
cable revenues and EBITDA were up 13% and 28%, respectively.
For the first half of 1998, the Company produced net income from
Continuing Operations of $23 million, compared with a loss of $102 million in
the first half of 1997. Over the same period, EBITDA grew from $317 million in
1997 to $546 million in 1998, an increase of 72%.
In the quarter, net income reflects a high effective tax rate of 89%
which relates to non-deductible goodwill, including that associated with the
American Radio transaction. However, the tax provision is substantially all
deferred taxes, as the Company has significant tax credits available to reduce
cash taxes payable.
<PAGE> 2
(More)
"We are pleased with the ongoing growth of radio and outdoor, the
television stations and the network," said Mel Karmazin, CBS President and Chief
Operating Officer. "We look forward to the return of the NFL and the debut of
our new fall programming schedule to drive our television operations."
Mr. Karmazin added: "We are also delighted with the continued strong
revenue growth in cable television, where most recently we announced our intent
to establish a new partnership with Discovery Communications for our new cable
channel, Eye On People, that will build the long and short term value of that
enterprise."
The Company's Board of Directors has authorized an increase of $2
billion to its stock repurchase plan, which was initiated in February 1998,
bringing the total plan to $3 billion.
Fredric G. Reynolds, Executive Vice President and Chief Financial
Officer of CBS, stated: "We believe our stock repurchase plan balances the use
of our growing free cash flow to optimize value to our shareholders, while
adhering to financial policies that are consistent with attaining and then
maintaining an investment grade rating."
During the quarter, the Company also achieved certain goals in its
drive to transform CBS into the premier pure-play media company. Key actions in
this regard included:
The signing of definitive agreements to divest the
remaining Westinghouse industrial businesses (WELCO);
The completion of the acquisition of the radio
broadcasting operations of American Radio, increasing
the CBS radio station portfolio to approximately 170
stations;
The unprecedented announcement that CBS's affiliated
television stations will help share the cost of
obtaining the NFL broadcast rights for the next eight
years.
"We are pleased to have found qualified, dedicated buyers and to have
achieved a strong value for the WELCO businesses," said Michael H. Jordan,
Chairman and Chief Executive Officer of CBS Corporation. "With these sales we
will have accomplished our goal of transforming ourselves into a high growth
media company."
Mr. Jordan concluded: "We are extremely pleased by the rapid
development of the new CBS Corporation. We are making very positive strides in
our businesses and look for that momentum to continue in the months and years
ahead."
<PAGE> 3
(More)
The Company has changed its segment reporting effective with the second
quarter. CBS will report two major business segments -- Radio and Television.
Included in the first segment will be all radio stations, and results from TDI,
the Company's outdoor display business. Included in the Television segment will
be the segments formerly known as Network, Television Stations and Cable. This
new segment reflects the changes in the management of the television businesses
which were announced early in the second quarter of this year, and the important
inter-relationships between the operating businesses.
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
SECOND QUARTER
(unaudited)
<TABLE>
<CAPTION>
(in millions except per share data) Three Months Ended Six Months Ended
June 30 June 30
----------------- -------------------
1998 1997 1998 1997
----------------- -------------------
<S> <C> <C> <C> <C>
Revenues $1,484 $1,283 $3,433 $2,609
Operating expenses (1,183) (1,038) (2,828) (2,278)
Depreciation and amortization (136) (105) (266) (210)
Residual costs of discontinued businesses (38) (36) (76) (71)
------ ------ ------ ------
Operating costs and expenses (1,357) (1,179) (3,170) (2,559)
------ ------ ------ ------
Operating profit 127 104 263 50
Other income and expenses, net 12 16 17 57
Interest expense (85) (102) (160) (203)
------ ------ ------ ------
Income (loss) from Continuing Operations before
income taxes and minority interest 54 18 120 (96)
Income tax (expense) benefit (48) (29) (95) (7)
Minority interest (2) - (2) 1
------ ------ ------ ------
Income (loss) from Continuing Operations 4 (11) 23 (102)
------ ------ ------ ------
Income (loss) from Discontinued Operations, net of income taxes - 12 - (48)
------ ------ ------ ------
Net Income (loss) $4 $1 $23 ($150)
====== ====== ====== ======
Dividend requirements for Series C preferred stock - 11 - 23
Net income (loss) applicable to common stock $4 ($10) $23 ($173)
====== ====== ====== ======
Average shares outstanding - basic 701 604 700 596
Average shares outstanding - diluted 721 604 719 596
Basic earnings (loss) per common share:
Continuing Operations $0.01 ($0.04) $0.03 ($0.21)
Discontinued Operations $0.00 $0.02 $0.00 ($0.08)
------ ------ ------ ------
Basic earnings (loss) per common share $0.01 ($0.02) $0.03 ($0.29)
====== ====== ====== ======
Diluted earnings (loss) per common share:
Continuing Operations $0.01 ($0.04) $0.03 ($0.21)
Discontinued Operations $0.00 $0.02 $0.00 ($0.08)
------ ------ ------ ------
Diluted earnings (loss) per common share $0.01 ($0.02) $0.03 ($0.29)
====== ====== ====== ======
</TABLE>
<PAGE> 1
Exhibit 99.3
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997 % Change
---- ---- --------
<S> <C> <C> <C>
TELEVISION*
Sales $1,620 $1,015 59.6%
Operating Profit (Loss) 152 (9) 1788.9%
Depreciation & Amortization 55 31 77.4%
Capital Expenditures 12 17 -29.4%
EBITDA 212 49 332.7%
RADIO
Sales 330 313 5.4%
Operating Profit (Loss) 69 47 46.8%
Depreciation & Amortization 44 44 -
Capital Expenditures 4 3 33.3%
EBITDA 113 91 24.2%
CORPORATE & OTHER
Sales (1) (2) 50.0%
Operating Profit (Loss) (47) (57) 17.5%
OP (Loss) without Special Items (47) (57) 17.5%
Depreciation & Amortization 31 30 3.3%
Capital Expenditures 2 1 100.0%
EBITDA (16) (13) -23.1%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - N/A
Operating Profit (Loss) (38) (35) -8.6%
OP (Loss) without Special Items (38) (35) -8.6%
Depreciation & Amortization - - N/A
Capital Expenditures - - N/A
EBITDA (38) (35) -8.6%
TOTAL CONTINUING OPERATIONS
Sales 1,949 1,326 47.0%
Operating Profit (Loss) 136 (54) 351.9%
OP (Loss) without Special Items 136 (54) 351.9%
Depreciation & Amortization 130 105 23.8%
Capital Expenditures 18 21 -14.3%
EBITDA 271 92 194.6%
</TABLE>
* Formerly Network, Television Stations, and Cable.
<PAGE> 2
CBS CORPORATION
SEGMENT INFORMATION
($ 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 $1,920 38.0%
Operating Profit (Loss) 69 66 4.5% 221 57 287.7%
Depreciation & Amortization 53 30 76.7% 108 61 77.0%
Capital Expenditures 19 14 35.7% 31 31 -
EBITDA 133 100 33.0% 345 149 131.5%
RADIO
Sales 456 378 20.6% 786 691 13.7%
Operating Profit (Loss) 146 113 29.2% 215 160 34.4%
Depreciation & Amortization 52 44 18.2% 96 88 9.1%
Capital Expenditures 7 3 133.3% 11 6 83.3%
EBITDA 198 157 26.1% 311 248 25.4%
CORPORATE & OTHER
Sales (2) - N/A (3) (2) -50.0%
Operating Profit (Loss) (50) (39) -28.2% (97) (96) -1.0%
OP (Loss) without Special Items (50) (39) -28.2% (97) (96) -1.0%
Depreciation & Amortization 31 31 - 62 61 1.6%
Capital Expenditures 1 1 - 3 2 50.0%
EBITDA (18) 4 -550.0% (34) (9) -277.8%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - N/A - - N/A
Operating Profit (Loss) (38) (36) -5.6% (76) (71) -7.0%
OP (Loss) without Special Items (38) (36) -5.6% (76) (71) -7.0%
Depreciation & Amortization - - N/A - - N/A
Capital Expenditures - - N/A - - N/A
EBITDA (38) (36) -5.6% (76) (71) -7.0%
TOTAL CONTINUING OPERATIONS
Sales 1,484 1,283 15.7% 3,433 2,609 31.6%
Operating Profit (Loss) 127 104 22.1% 263 50 426.0%
OP (Loss) without Special Items 127 104 22.1% 263 50 426.0%
Depreciation & Amortization 136 105 29.5% 266 210 26.7%
Capital Expenditures 27 18 50.0% 45 39 15.4%
EBITDA 275 225 22.2% 546 317 72.2%
</TABLE>
* Formerly Network, Television Stations, and Cable.
<PAGE> 3
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1997 1997
---- ----
<S> <C> <C>
TELEVISION*
Sales $ 909 $2,829
Operating Profit (Loss) 97 154
Depreciation & Amortization 31 92
Capital Expenditures 27 58
EBITDA 130 279
RADIO
Sales 374 1,065
Operating Profit (Loss) 102 262
Depreciation & Amortization 45 133
Capital Expenditures 4 10
EBITDA 150 398
CORPORATE & OTHER
Sales - (2)
Operating Profit (Loss) (61) (157)
OP (Loss) without Special Items (61) (157)
Depreciation & Amortization 31 92
Capital Expenditures 2 4
EBITDA (31) (40)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - -
Operating Profit (Loss) (35) (106)
OP (Loss) without Special Items (35) (106)
Depreciation & Amortization - -
Capital Expenditures - -
EBITDA (35) (106)
TOTAL CONTINUING OPERATIONS
Sales 1,283 3,892
Operating Profit (Loss) 103 153
OP (Loss) without Special Items 103 153
Depreciation & Amortization 107 317
Capital Expenditures 33 72
EBITDA 214 531
</TABLE>
* Formerly Network, Television Stations, and Cable.
<PAGE> 4
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Total Year
December 31 December 31
1997 1997
---- ----
<S> <C> <C>
TELEVISION*
Sales $1,062 $3,891
Operating Profit (Loss) 73 227
Depreciation & Amortization 54 146
Capital Expenditures 44 102
EBITDA 133 412
RADIO
Sales 410 1,475
Operating Profit (Loss) 128 390
Depreciation & Amortization 43 176
Capital Expenditures 5 15
EBITDA 177 575
CORPORATE & OTHER
Sales (1) (3)
Operating Profit (Loss) (68) (225)
OP (Loss) without Special Items (53) (210)
Depreciation & Amortization 31 123
Capital Expenditures - 4
EBITDA (32) (72)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - -
Operating Profit (Loss) (37) (143)
OP (Loss) without Special Items (37) (143)
Depreciation & Amortization - -
Capital Expenditures - -
EBITDA (37) (143)
TOTAL CONTINUING OPERATIONS
Sales 1,471 5,363
Operating Profit (Loss) 96 249
OP (Loss) without Special Items 111 264
Depreciation & Amortization 128 445
Capital Expenditures 49 121
EBITDA 241 772
</TABLE>
* Formerly Network, Television Stations, and Cable.
<PAGE> 5
CBS CORPORATION
SEGMENT INFORMATION
($ 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 $3,563
Operating Profit (Loss) 58 186 74 9 327
Depreciation & Amortization 27 33 29 26 115
Capital Expenditures 18 5 16 30 69
EBITDA 85 222 119 41 467
RADIO
Sales 121 145 136 152 554
Operating Profit (Loss) 20 47 42 52 161
Depreciation & Amortization 10 8 8 10 36
Capital Expenditures 1 1 2 2 6
EBITDA 31 55 49 62 197
CORPORATE & OTHER
Sales 6 4 8 8 26
Operating Profit (Loss) (126) (66) (46) (82) (320)
OP (Loss) without Special Items (50) (66) (46) (73) (235)
Depreciation & Amortization 30 34 31 33 128
Capital Expenditures 2 10 2 4 18
EBITDA (91) (28) (8) (35) (162)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - - - -
Operating Profit (Loss) (24) (30) (30) (30) (114)
OP (Loss) without Special Items (24) (30) (30) (30) (114)
Depreciation & Amortization - - - - -
Capital Expenditures - - - - -
EBITDA (24) (30) (30) (30) (114)
TOTAL CONTINUING OPERATIONS
Sales 1,117 1,100 910 1,016 4,143
Operating Profit (Loss) (72) 137 40 (51) 54
OP (Loss) without Special Items 4 137 40 (42) 139
Depreciation & Amortization 67 75 68 69 279
Capital Expenditures 21 16 20 36 93
EBITDA 1 219 130 38 388
</TABLE>
* Formerly Network, Television Stations, and Cable.
<PAGE> 6
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Total Year
December 31
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
TELEVISION*
Sales $ 797 $ 475 $ 437
Operating Profit (Loss) 172 152 108
Depreciation & Amortization 30 15 16
Capital Expenditures 21 24 17
EBITDA 222 167 146
RADIO
Sales 216 175 181
Operating Profit (Loss) 55 47 44
Depreciation & Amortization 16 16 15
Capital Expenditures 9 8 3
EBITDA 70 93 62
CORPORATE & OTHER
Sales 61 94 66
Operating Profit (Loss) (30) 27 (105)
OP (Loss) without Special Items (5) 25 (65)
Depreciation & Amortization 11 10 3
Capital Expenditures 2 5 3
EBITDA 114 (124) (92)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales - - -
Operating Profit (Loss) (37) (75) (1)
OP (Loss) without Special Items (37) (75) (1)
Depreciation & Amortization - - -
Capital Expenditures - - -
EBITDA (37) (75) (1)
TOTAL CONTINUING OPERATIONS
Sales 1,074 744 684
Operating Profit (Loss) 160 151 46
OP (Loss) without Special Items 185 149 86
Depreciation & Amortization 57 41 34
Capital Expenditures 32 37 23
EBITDA 369 61 115
</TABLE>
* Formerly Network, Television Stations, and Cable.
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