<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): February 5, 1999
Commission file number 1-977
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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 February 5, 1999, the Registrant issued a press release concerning earnings
for the quarter and year ended December 31, 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 fourth quarter and total year
of 1998 and 1997 is attached hereto as Exhibit 99.2 and is incorporated herein
in its entirety. Certain modifications have been made to the segment information
which primarily includes the presentation of a performance measure titled "Core
EBITDA." Core EBITDA represents earnings before interest, taxes, depreciation
and amortization excluding charges primarily related to restructuring and
severance activities as well as the results of operations of certain divested
cable businesses for all periods presented. A copy of the restated segment
information for 1998 and 1997 by quarter and total year for 1996, 1995 and 1994
is attached hereto as Exhibit 99.3 and is 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 and year ended December 31, 1998 is filed as Exhibit
99.1 to this Report.
99.2 Condensed Consolidated Statement of Income for the fourth
quarter and total year of 1998 and 1997, is filed as Exhibit
99.2 to this Report.
99.3 Segment Results for 1998 and 1997 by quarter and total year
1996, 1995 and 1994, 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: February 5, 1999
<PAGE> 1
Exhibit 99.1
CBS CORPORATION REPORTS RECORD OPERATING RESULTS
FOR THE YEAR AND QUARTER
NEW YORK, Feb. 5, 1999--CBS Corporation (NYSE:CBS) reported record revenues
and earnings before interest, taxes, depreciation and amortization (EBITDA) for
the fourth quarter of 1998 and for the full year.
During the quarter, the Company took several significant actions:
The completion of the $3.1 billion initial public offering of
approximately 18% of the stock of Infinity Broadcasting.
Significant reduction in debt, which resulted in the Company's achieving
investment grade ratings from the major rating agencies.
Gained audience share in key demographic categories with the launch of
the CBS Television Network's 1998-99 Prime Time programming schedule.
Achieved record revenue and EBITDA at the CBS Owned television stations.
The successful divestiture of CBS Eye on People and a majority stake in
CBS TeleNoticias.
Senior management reorganization was accomplished during the quarter and
went into effect Jan. 1, 1999.
The Company's revenues for the fourth quarter of 1998 were $1.8 billion,
an increase of 22% over the fourth 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 Network, the CBS Owned television stations and CBS Cable--increased
by 15% over the fourth quarter of 1997 to $1.2 billion. The growth was led by
increased revenue at the CBS television stations, by improved performance at
the CBS Television Network, driven by the broadcast of the NFL, which benefited
both the Network and the CBS Owned television stations.
(More)
<PAGE> 2
CBS Corporation....2
The Radio and Outdoor segment, now also reporting its results as Infinity
Broadcasting Corporation (NYSE:INF), a subsidiary of CBS Corporation, had
revenues of $573 million for the fourth quarter of 1998, an increase of 39%
over the fourth quarter of 1997. The increase was due to strong growth at
Infinity's existing stations and at TDI, the Company's outdoor advertising
business. Results also include the addition of operations of American Radio
Systems (ARS) stations, which were acquired in June 1998. On a pro forma,
same-station basis, assuming the ARS acquisition had occurred at the beginning
of the periods presented, revenues for the Radio and Outdoor segment increased
by 13%.
"I am very pleased with the across-the-board improvement in all the
businesses of our television segment, and particularly encouraged by the
strong, double-digit revenue and profit growth at our television stations, by
increased profits at CBS Cable, and by our primetime schedule, where our
momentum continues to build," said Mel Karmazin, President and Chief Executive
Officer, CBS Corporation "Revenue and profit growth from our radio and
outdoor business was also very strong and continues to drive the value and
performance of the entire CBS Corporation."
For the fourth quarter of 1998, the Company's consolidated EBITDA,
excluding certain charges described below, was $305 million, an increase of $38
million, or 14%, as compared to the fourth quarter of 1997.
The Company's EBITDA for its Radio and Outdoor segment for the fourth
quarter of 1998 was $257 million, an increase of $80 million, or 45%.
For the fourth quarter, the Company's Television segment EBITDA was $108
million, excluding losses of approximately $16 million pertaining to the
operations of the divested cable businesses. This represents a decrease of 25%,
as compared to the same quarter of 1997. The decrease in the quarter was due to
lower syndication revenues from the sale of CBS off-network programming
compared to 1997, as well as lower profits on non-NFL sports programming.
Corporate and other expenses, including residual costs of discontinued
businesses for the fourth quarter, were $67 million, which includes separation
costs of approximately $7 million in connection with the management
reorganization.
Income from Continuing Operations for the fourth quarter was $3 million,
or $0.00 per share, compared to a loss of $10 million, or $0.01 per share for
the fourth quarter of 1997. Excluding the abovementioned special items of $14
million after tax, or $0.02 per share, recorded during the fourth quarter of
1998, income from Continuing Operations was $17 million, or $0.02 per share.
The Company's reported net loss for the fourth quarter 1998, including
Continuing Operations, Discontinued Operations and extraordinary items, was $1
million, or $0.00 per share, which includes a $4 million loss on the early
extinguishment of debt. This compares to net income of $861 million, or $1.24
per share, for the year-ago quarter. The 1997 quarter benefited from the $871
million net gain from the disposal of Discontinued Operations, primarily from
the sale of Thermo King in October 1997.
(More)
<PAGE> 3
CBS Corporation....3
The Company's net revenues from Continuing Operations for 1998 were $6.8
billion, an increase of 27% over the prior year. The Company's EBITDA for 1998
increased by $324 million to $1.1 billion, or 42% over the prior year. For the
full year 1998, the Company reported a loss from Continuing Operations of $12
million, or $0.02 per share, compared to a loss of $131 million, or $0.24 per
share, for the year 1997.
* * *
Contact: Gil Schwartz Dana McClintock
CBS Corporation CBS Corporation
212-975-2121 212-975-1077
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
FOURTH QUARTER
(unaudited)
<TABLE>
<CAPTION>
(in millions except per share data) Three Months Ended Twelve Months Ended
December 31 December 31
-------------------- --------------------
1998 1997 * 1998 1997 *
-------------------- --------------------
<S> <C> <C> <C> <C>
Revenues $ 1,791 $ 1,473 $ 6,805 $ 5,367
Operating expenses (1,477) (1,210) (5,589) (4,526)
Depreciation and amortization (151) (128) (571) (445)
Residual costs of discontinued businesses (46) (37) (163) (143)
------- ------- ------- -------
Operating costs and expenses (1,674) (1,375) (6,323) (5,114)
------- ------- ------- -------
Operating profit 117 98 482 253
Other income and expenses, net 14 15 43 74
Interest expense (98) (81) (370) (386)
------- ------- ------- -------
Income (loss) from Continuing Operations before
income taxes and minority interest 33 32 155 (59)
Income tax (expense) benefit (27) (41) (161) (73)
Minority interest (3) (1) (6) 1
------- ------- ------- -------
Income (loss) from Continuing Operations 3 (10) (12) (131)
------- ------- ------- -------
Income (loss) from Discontinued Operations, net of
income taxes -- 871 -- 680
------- ------- ------- -------
Extraordinary item:
Loss on early extinguishment of debt (4) -- (9) --
------- ------- ------- -------
Net Income (loss) $(1) $861 $(21) $549
=== ==== ==== ====
Dividend requirements for Series C preferred stock -- -- -- 23
Net income (loss) applicable to common stock $(1) $861 $(21) $526
=== ==== ==== ====
Average shares outstanding - basic 691 693 696 629
Average shares outstanding - diluted 703 693 696 629
Basic and diluted earnings (loss) per common share:
Continuing Operations $0.00 $(0.01) $(0.02) $(0.24)
Discontinued Operations $0.00 $ 1.25 $ 0.00 $ 1.08
Extraordinary item $0.00 $ 0.00 $(0.01) $ 0.00
----- ------ ------ ------
Basic and diluted earnings (loss) per common share $0.00 $1.24 $(0.03) $ 0.84
===== ===== ====== ======
</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>
TOTAL CONTINUING OPERATIONS
Sales $ 1,949 $ 1,326 47.0%
Operating Profit (Loss) 136 (54) 351.9%
Core EBITDA 281 102 175.5%
EBITDA as reported 271 92 194.6%
RADIO & OUTDOOR
Sales 330 313 5.4%
Operating Profit (Loss) 64 42 52.4%
Core EBITDA 113 91 24.2%
EBITDA as reported 113 91 24.2%
TELEVISION *
Sales 1,620 1,015 59.6%
Operating Profit (Loss) 127 (33) 484.8%
Core EBITDA 222 59 276.3%
EBITDA as reported 212 49 332.7%
CORPORATE & OTHER
Sales (1) (2) 50.0%
Operating Profit (Loss) (17) (28) 39.3%
Core EBITDA (16) (13) -23.1%
EBITDA as reported (16) (13) -23.1%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- N/A
Operating Profit (Loss) (38) (35) -8.6%
Core EBITDA (38) (35) -8.6%
EBITDA as reported (38) (35) -8.6%
</TABLE>
* Formerly Network, Television Stations, and Cable
Core EBITDA excludes certain charges primarily related to restructuring and
severance activities as well as the results of operations of the TeleNoticias
and Eye on People businesses for all periods presented.
<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>
TOTAL CONTINUING OPERATIONS
Sales $1,484 $1,283 15.7% $3,433 $2,609 31.6%
Operating Profit (Loss) 127 104 22.1% 263 50 426.0%
Core EBITDA 284 236 20.3% 565 338 67.2%
EBITDA as reported 275 225 22.2% 546 317 72.2%
RADIO & OUTDOOR
Sales 456 378 20.6% 786 691 13.7%
Operating Profit (Loss) 141 107 31.8% 205 149 37.6%
Core EBITDA 198 157 26.1% 311 248 25.4%
EBITDA as reported 198 157 26.1% 311 248 25.4%
TELEVISION *
Sales 1,030 905 13.8% 2,650 1,920 38.0%
Operating Profit (Loss) 45 42 7.1% 172 9 1811.1%
Core EBITDA 142 111 27.9% 364 170 114.1%
EBITDA as reported 133 100 33.0% 345 149 131.5%
CORPORATE & OTHER
Sales (2) -- N/A (3) (2) -50.0%
Operating Profit (Loss) (21) (9) -133.3% (38) (37) -2.7%
Core EBITDA (18) 4 -550.0% (34) (9) -277.8%
EBITDA as reported (18) 4 -550.0% (34) (9) -277.8%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- N/A -- -- N/A
Operating Profit (Loss) (38) (36) -5.6% (76) (71) -7.0%
Core EBITDA (38) (36) -5.6% (76) (71) -7.0%
EBITDA as reported (38) (36) -5.6% (76) (71) -7.0%
</TABLE>
* Formerly Network, Television Stations, and Cable
Core EBITDA excludes certain charges primarily related to restructuring and
severance activities as well as the results of operations of the TeleNoticias
and Eye on People businesses for all periods presented.
<PAGE> 3
CBS CORPORATION
SEGMENT INFORMATION
($ 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>
TOTAL CONTINUING OPERATIONS
Sales $1,581 $1,285 23.0% $5,014 $3,894 28.8%
Operating Profit (Loss) 102 105 -2.9% 365 155 135.5%
Core EBITDA 345 226 52.7% 910 564 61.3%
EBITDA as reported 268 214 25.2% 814 531 53.3%
RADIO & OUTDOOR
Sales 534 377 41.6% 1,320 1,068 23.6%
Operating Profit (Loss) 157 99 58.6% 362 248 46.0%
Core EBITDA 230 150 53.3% 541 398 35.9%
EBITDA as reported 230 150 53.3% 541 398 35.9%
TELEVISION *
Sales 1,049 909 15.4% 3,699 2,829 30.8%
Operating Profit (Loss) 7 72 -90.3% 179 81 121.0%
Core EBITDA 167 142 17.6% 531 312 70.2%
EBITDA as reported 92 130 -29.2% 437 279 56.6%
CORPORATE & OTHER
Sales (2) (1) -100.0% (5) (3) -66.7%
Operating Profit (Loss) (21) (31) 32.3% (59) (68) 13.2%
Core EBITDA (11) (31) 64.5% (45) (40) -12.5%
EBITDA as reported (13) (31) 58.1% (47) (40) -17.5%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- N/A -- -- N/A
Operating Profit (Loss) (41) (35) -17.1% (117) (106) -10.4%
Core EBITDA (41) (35) -17.1% (117) (106) -10.4%
EBITDA as reported (41) (35) -17.1% (117) (106) -10.4%
</TABLE>
* Formerly Network, Television Stations, and Cable
Core EBITDA excludes certain charges primarily related to restructuring and
severance activities as well as the results of operations of the TeleNoticias
and Eye on People businesses for all periods presented.
<PAGE> 4
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Total Year
December 31 December 31
------------------------------ --------------------------------
1998 1997 % Change 1998 1997 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TOTAL CONTINUING OPERATIONS
Sales $1,791 $1,473 21.6% $6,805 $5,367 26.8%
Operating Profit (Loss) 117 98 19.4% 482 253 90.5%
Core EBITDA 305 267 14.2% 1,215 831 46.2%
EBITDA as reported 282 241 17.0% 1,096 772 42.0%
RADIO & OUTDOOR
Sales 573 412 39.1% 1,893 1,480 27.9%
Operating Profit (Loss) 180 124 45.2% 542 372 45.7%
Core EBITDA 257 177 45.2% 798 575 38.8%
EBITDA as reported 257 177 45.2% 798 575 38.8%
TELEVISION *
Sales 1,220 1,062 14.9% 4,919 3,891 26.4%
Operating Profit (Loss) 9 48 -81.3% 188 129 45.7%
Core EBITDA 108 144 -25.0% 639 456 40.1%
EBITDA as reported 92 133 -30.8% 529 412 28.4%
CORPORATE & OTHER
Sales (2) (1) -100.0% (7) (4) -75.0%
Operating Profit (Loss) (26) (37) 29.7% (85) (105) 19.0%
Core EBITDA (14) (17) 17.6% (59) (57) -3.5%
EBITDA as reported (21) (32) 34.4% (68) (72) 5.6%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- N/A -- -- N/A
Operating Profit (Loss) (46) (37) -24.3% (163) (143) -14.0%
Core EBITDA (46) (37) -24.3% (163) (143) -14.0%
EBITDA as reported (46) (37) -24.3% (163) (143) -14.0%
</TABLE>
* Formerly Network, Television Stations, and Cable
Core EBITDA excludes certain charges primarily related to restructuring and
severance activities as well as the results of operations of the TeleNoticias
and Eye on People businesses for all periods presented.
<PAGE> 5
CBS CORPORATION
SEGMENT INFORMATION
($ in millions) (unaudited)
<TABLE>
<CAPTION>
Total Year
December 31
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
TOTAL CONTINUING OPERATIONS
Sales $4,143 $1,074 $ 744
Operating Profit (Loss) 54 160 151
Core EBITDA 488 395 59
EBITDA as reported 388 370 61
RADIO & OUTDOOR
Sales 554 216 175
Operating Profit (Loss) 140 53 47
Core EBITDA 197 70 93
EBITDA as reported 197 70 93
TELEVISION *
Sales 3,563 797 475
Operating Profit (Loss) 229 164 152
Core EBITDA 482 222 167
EBITDA as reported 467 222 167
CORPORATE & OTHER
Sales 26 61 94
Operating Profit (Loss) (201) (20) 27
Core EBITDA (77) 140 (126)
EBITDA as reported (162) 115 (124)
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- --
Operating Profit (Loss) (114) (37) (75)
Core EBITDA (114) (37) (75)
EBITDA as reported (114) (37) (75)
</TABLE>
* Formerly Network, Television Stations, and Cable
Core EBITDA excludes certain charges primarily related to restructuring and
severance activities as well as the results of operations of the TeleNoticias
and Eye on People businesses for all periods presented.
