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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): April 30, 1999
Commission file number 1-977
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CBS Corporation
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(Exact name of registrant as
specified in its charter)
PENNSYLVANIA 25-0877540
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
51 West 52nd Street, New York, NY 10019
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(Address of principal executive offices; zip code)
(212) 975-4321
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(Registrant's Telephone No., including area code)
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Item 5. Other Events
On April 29, 1999, the Registrant issued a press release concerning earnings for
the quarter ended March 31, 1999. A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated herein. A copy of the consolidated statement
of income for the first quarter of 1999 and 1998 is attached hereto as Exhibit
99.2 and is incorporated herein in its entirety. A copy of the Segment
information for the first quarter of 1999 and 1998 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 ended March 31,
1999 is filed as Exhibit 99.1 to this Report.
99.2 Condensed Consolidated Statement of Income
for the first quarter of 1999 and 1998 is
filed as Exhibit 99.2 to this Report.
99.3 Segment Results for the first quarter of 1999
and 1998 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/ROBERT G. FREEDLINE
-----------------------------
Robert G. Freedline
Vice President and Controller
Date: April 30, 1999
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<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page No.
- ----------- ----------- -------------------
<S> <C> <C>
99.1 Press Release
99.2 Condensed Consolidated Statement of
Income for the first quarter of 1999
and 1998.
99.3 Segment Results for the first
quarter of 1999 and 1998.
</TABLE>
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Exhibit 99.1
CBS CORPORATION REPORTS
RECORD RESULTS FOR FIRST QUARTER 1999
NEW YORK, April 29, 1999 -- CBS Corporation (NYSE:CBS) today reported
record operating results for the first quarter of 1999. Net revenues for the
first quarter were $1,768 million, operating cash flow (EBITDA) was $280 million
and income from Continuing Operations was $25 million.
The increase in operating cash flow and income from Continuing
Operations in the 1999 quarter was achieved without the benefit of revenues and
profits associated with the 1998 Winter Olympics, which was broadcast during the
first quarter of 1998. Excluding the effect of the Winter Olympics from the 1998
results, net revenues from Continuing Operations in the first quarter of 1999
were up 18% and operating cash flow (EBITDA) was up 55%.
"I am very pleased with the results of all of our operating segments,"
said Mel Karmazin, President and Chief Executive Officer, CBS Corporation. "Our
radio and outdoor business continues to achieve double-digit growth in revenues
and operating cash flow on a same station basis. We are especially pleased with
the growth of our Television segment, particularly at the Network, where our
turnaround is in full swing."
CBS's net revenues for the first quarter were $1,768 million as
compared to $1,949 million for the first quarter of 1998. Excluding the revenues
associated with the 1998 Winter Olympics, net revenues for the first quarter of
1999 increased by approximately 18%. All of the Company's operating segments
contributed to this revenue growth. Infinity Broadcasting Corporation
(NYSE:INF), the Company's out-of-home media subsidiary, increased revenues
approximately 44%.
Operating cash flow (defined as earnings before interest, taxes,
depreciation and amortization, or EBITDA) for the first quarter of 1999 was $280
million, as compared to $271 million for the first quarter of 1998. Last year's
first quarter EBITDA reflected a benefit associated with the 1998 Winter
Olympics. Excluding the effect of the Winter Olympics, EBITDA for the first
quarter of 1999 was up by $99 million or 55%. This increase was due to the
record performances by both Infinity, which was up 51%, as well as the
Television segment, which was up 25%. The Television segment also benefitted by
the elimination of start-up losses associated with certain cable operations
divested late in 1998.
Interest expense for the first quarter of 1999 was $51 million, as
compared to $75 million in 1998's first quarter, a decrease of approximately
32%. This decrease was principally due to the lower debt levels as a result of
proceeds received from Infinity's Initial Public Offering in late 1998.
Income from Continuing Operations was $25 million or $0.04 per share,
an increase of 33% per share from 1998's first quarter net income of $19 million
or $0.03 per share.
The Company's reported net income for the quarter was $387 million, or
$0.55 per diluted share, which includes a $366 million net gain on the disposal
of Discontinued Operations. Net income for the year-ago quarter was $19 million,
or $0.03 per share.
(More)
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CBS Corporation...2
The Company benefitted from the strong performance of its Television
segment, which increased revenues through ratings share growth and strong
pricing, as well as lower operating costs due to cost reductions. In primetime
ratings, the CBS Television Network continued to win more weeks than any other
broadcast television network, positioning the Company in a race for its first
victory in households and total viewers since the 1993-94 season. At CBS Cable,
TNN, the Company's country lifestyle network, scored record-breaking ratings for
its cablecast of the NASCAR Winston Cup.
Other highlights since the start of the year include:
o The Company entered into an agreement to acquire King World
Productions, Inc. for approximately $2.5 billion in common
stock, which is expected to close later this year and add a
leading supplier of first-run syndicated programming to the
Company's array of media assets;
o CBS entered into an agreement to acquire KTVT-TV, the
Network's affiliated VHF television station in Dallas-Ft.
Worth, the nation's #7 market, in exchange for $485 million of
CBS common stock. The acquisition, expected to close by
year-end, will give CBS ownership of television stations in
eight of the top 10 U.S. markets;
o CBS entered into a definitive agreement to purchase KEYE-TV,
Channel 42, the CBS Television Network affiliate in Austin,
Texas from Granite Broadcasting Corporation for $160 million
in cash in an asset transaction. The transaction is expected
to close by the end of the year. The acquisition, combined
with CBS's pending ownership of KTVT-TV Dallas-Ft. Worth, will
raise CBS's ownership position to television stations serving
34% of the United States;
o Infinity agreed to acquire three major-market FM radio
stations - two in Tampa and one in Cleveland - to bolster its
presence in the top 50 U.S. markets;
o The Company completed the sale of virtually all of
Westinghouse's remaining industrial businesses;
o Building its presence on the Internet, the Company announced a
multi-year, cross promotional alliance that made CBS News the
sole branded broadcast news partner on America Online and
Compuserve. CBS also extended its strategic alliance with
Sportsline USA, increasing its ownership in that successful
online sports service to approximately 20%, with an
opportunity to further increase its ownership over the next
few years;
(More)
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CBS Corporation...3
o CBS expanded its growing role in the Internet by entering into
a letter of intent with storeRunner.com in which CBS will
receive a 50% ownership interest in that comprehensive,
interactive online shopping mall in exchange for approximately
$100 million of promotion and branding support, over a period
of six years. In a separate arrangement, CBS also signed a
letter of intent to receive a 35% ownership interest, plus
warrants for an additional 5% ownership, in hollywood.com, a
premier Web site for movies and the motion picture industry,
in exchange for $100 million of promotion and content support
over a period of seven years;
o CBS entered into an agreement with Office.com, an online Web
site that serves small and medium-sized businesses. Office.com
will receive $42 million of promotion and advertising over a
term of six years across the full range of CBS media
properties. In exchange, CBS will receive a one-third equity
interest.
Mr. Karmazin added: "During the quarter, we continued to increase our
stake in Internet-based companies, leveraging the superb promotional platform
provided by our incomparable collection of assets, our capability as a provider
of content, marketing and advertising support. Our Internet growth will
continue, as we work to build our equity in Web destinations we believe provide
superb service to Internet users, and where we can add value with our assets and
our expertise."
CBS Corporation, the world's largest pure-play media company, is
comprised of the CBS Television Network, with programming operations in
Entertainment, News, Sports, Syndication and New Media - including CBS.com and
Country.com, as well as stakes in SportsLine USA, Inc. and MarketWatch.com,
Inc.; the CBS Television Stations, currently with 14 CBS Owned television
stations, seven of which are in the Top 10 markets; CBS Cable, with two country
networks and its regional sports operations; and more than 80% stake in Infinity
Broadcasting Corporation, which includes 160 radio stations and TDI, the
Company's outdoor advertising business.
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 1998 year filed with the Securities and Exchange Commission
for additional information concerning such risks and uncertainties.
* * *
Contact: Gil Schwartz CBS Corporation 212/975-2121
Michael G. Silver CBS Corporation 212/975-3161
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EXHIBIT 99.2
CBS CORPORATION
EARNINGS INFORMATION
FIRST QUARTER
(unaudited)
<TABLE>
<CAPTION>
(in millions except per share data) Three Months Ended
March 31
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1999 1998
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<S> <C> <C>
Revenues $ 1,768 $ 1,949
Operating expenses (1,461) (1,645)
Depreciation and amortization (149) (130)
Residual costs of discontinued businesses (40) (38)
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Operating costs and expenses (1,650) (1,813)
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Operating profit 118 136
Other income and expenses, net 13 5
Interest expense, net (51) (75)
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Income from Continuing Operations before income tax
and minority interest in income of consolidated subsidiaries 80 66
Income tax expense (46) (47)
Minority interest in income of consolidated subsidiaries (9) --
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Income from Continuing Operations 25 19
Discontinued Operations, net of income taxes:
Gain on disposal of Discontinued Operations 366 --
Extraordinary item:
Loss on early extinguishment of debt (4) --
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Net income applicable to common stock $387 $19
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Average shares outstanding - basic 693 698
Average shares outstanding - diluted 708 718
Basic earnings (loss) per common share:
Continuing Operations $ 0.04 $0.03
Discontinued Operations $ 0.53 $0.00
Extraordinary item $(0.01) $0.00
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Basic earnings per common share $0.56 $0.03
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Diluted earnings (loss) per common share:
Continuing Operations $ 0.04 $0.03
Discontinued Operations $ 0.52 $0.00
Extraordinary item $(0.01) $0.00
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Diluted earnings per common share $0.55 $0.03
======= =======
</TABLE>
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EXHIBIT 99.3
CBS CORPORATION
SEGMENT INFORMATION (unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
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1999 1998 % Change
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<S> <C> <C> <C>
TOTAL CONTINUING OPERATIONS
Sales $ 1,768 $ 1,949 -9.3%
Operating Profit (Loss) 118 136 -13.2%
EBITDA 280 271 3.3%
INFINITY BROADCASTING CORPORATION
Sales 474 330 43.6%
Operating Profit (Loss) 98 64 53.1%
EBITDA 170 113 50.4%
TELEVISION
Sales 1,295 1,620 -20.1%
Operating Profit (Loss) 73 127 -42.5%
EBITDA 153 212 -27.8%
CORPORATE & OTHER
Sales (1) (1) --
Operating Profit (Loss) (13) (17) 23.5%
EBITDA (3) (16) 81.3%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Sales -- -- N/A
Operating Profit (Loss) (40) (38) -5.3%
EBITDA (40) (38) -5.3%
</TABLE>
