<PAGE>
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 15, 2000
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>
Item 5. OTHER EVENTS
On February 15, 2000, the Registrant issued a press release concerning earnings
for the quarter and year-to-date ended December 31, 1999. 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 December 31, 1999 and 1998 is attached hereto as Exhibit 99.2 and is
incorporated herein in its entirety. Certain segment information has been
restated to reflect the separation of the Registrants Internet operations from
its Television segment into a new segment (New Media). A copy of the Segment
information for the quarter and year-to-date ended December 31, 1999 and 1998,
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 and year-to-date ended December 31,
1999 is filed as Exhibit 99.1 to this Report.
99.2 Condensed Consolidated Statement of Income for the
quarter and year-to-date ended December 31, 1999
and 1998 is filed as Exhibit 99.2 to this report.
99.3 Segment Results for the quarter and year-to-date
ended December 31, 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: March 8, 2000
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page No.
<S> <C> <C>
99.1 Press Release
99.2 Condensed Consolidated Statement of
Income for the quarter and
year-to-date ended December 31, 1999
and 1998.
99.3 Segment Results for the quarter and
year-to-date ended December 31, 1999
and 1998.
</TABLE>
<PAGE>
Exhibit 99.1
CBS CORPORATION REPORTS RECORD RESULTS
FOR FOURTH QUARTER 1999
REVENUES UP 24%
EBITDA UP 85%
AFTER TAX CASH FLOW UP 81%
TELEVISION SEGMENT EBITDA UP 209%
NEW YORK, February 15, 2000 -- CBS Corporation (NYSE: CBS) today
reported record revenues, EBITDA and after tax cash flow for the fourth quarter
of 1999.
The Company's revenues for the fourth quarter climbed to a record $2,219
million, as compared to $1,791 million for the fourth quarter of 1998, an
increase of approximately 24%. EBITDA (earnings before interest, taxes,
depreciation and amortization, minority interests and equity losses) for the
fourth quarter of 1999 was $523 million, as compared to $282 million for the
fourth quarter a year ago, an increase of approximately 85%. After tax cash flow
(defined as income from continuing operations before New Media and equity
losses, and depreciation and amortization, as adjusted for the minority
interests) for the quarter grew to $279 million, as compared to $154 million for
the fourth quarter last year, an increase of 81%. As a result of the Company's
deferred tax position, after tax cash flow adjusted for cash taxes only was $332
million, an increase of $157 million or 90% from the fourth quarter of 1998.
All of the Company's operating segments, except for the newly created
New Media segment, reported record fourth quarter results, led by CBS Television
and Infinity, which posted quarter-to-quarter revenue growth of 23% and 32%,
respectively. EBITDA for the Television segment was up a record 209%.
"This was a great quarter, capping off a year where we produced record
growth in revenues, EBITDA and after tax cash flow," said Mel Karmazin,
President and Chief Executive Officer, CBS Corporation. "This growth was fueled
by our Television segment, which enjoyed substantial increases in the value of
its advertising time, and by our Infinity subsidiary, which posted double-digit
growth in every category. During the quarter, we completed the acquisition of
King World -- one of the premier names in television syndication. Also in the
quarter, Infinity completed its acquisition of Outdoor Systems, which
significantly expands our out-of-home position in the largest revenue markets.
Looking forward, we continue to be superbly positioned in all segments to profit
from a very robust advertising market."
-More-
<PAGE>
-2-
Television segment revenues during the quarter climbed to $1,331
million, an increase of approximately $248 million or 23%, reflecting pricing
increases and the inclusion of the results of King World. Excluding the impact
of King World, Television segment revenues increased by approximately $145
million, or 13%. EBITDA at the Television segment for the quarter increased by
approximately $136 million to $201 million, an increase of 209%, reflecting the
strong increases in 1999 revenue and the inclusion of the results of King World.
Excluding King World, Television segment EBITDA increased by approximately $108
million or 166%, versus last year's fourth quarter.
Infinity's revenues also grew to record levels reaching $759 million for
the quarter -- an increase of $186 million, or 32% over the prior year period.
Infinity's dramatic growth reflects a 17% increase in radio revenues and a 90%
increase in outdoor advertising revenues. Excluding the newly acquired Outdoor
Systems, Infinity's revenue would have increased by approximately $113 million,
or 20%. EBITDA at Infinity also grew dramatically as a result of increased
revenues during 1999, climbing by $93 million to $350 million, an increase of
36%, for the quarter over the prior year period. Infinity's EBITDA growth
reflects increases of 22% at Infinity's radio operations and 180% at its outdoor
advertising operations. Excluding the impact of Outdoor Systems, same-station
EBITDA at Infinity grew by 23%.
EBITDA at the Cable segment also increased during the quarter, up
approximately $34 million, or 121%. The Cable segment increase primarily
reflects operating gains at TNN, its country lifestyles cable network, and the
elimination of certain 1998 fourth quarter losses related to two cable networks
that were divested late in 1998. Excluding the impact of the two cable networks
divested last year and recovery of a previously written off receivable, the
Cable segment EBITDA increased by approximately $12 million, or 28%.
The Company's newly created New Media segment incurred a loss of $30
million primarily as a result of a majority investment in iWon.com, which in the
fourth quarter launched an aggressive advertising and marketing plan. The
majority of these advertising and marketing costs were spent on the CBS and
Infinity media properties.
The Company's net interest expense for the fourth quarter of 1999 was
$61 million, as compared to $98 million in 1998's fourth quarter, a decrease of
approximately 38%. This decrease was principally due to: lower debt levels as a
result of proceeds received from Infinity's initial public offering in late
1998; proceeds from business dispositions; cash received upon the closing of the
King World acquisition; and cash flow from operations offset in part by $1.8
billion in debt assumed upon the consummation of the Outdoor Systems
acquisition.
Income taxes for the fourth quarter of 1999 were $159 million, as
compared to $27 million for the fourth quarter of 1998, an increase of $132
million. The increase is principally due to higher operating results.
-More-
<PAGE>
-3-
During the fourth quarter of 1999, the Company recognized its
proportionate share of losses for its Internet based equity investments, as well
as the related amortization expense. Together, these non-cash expenses totaled
$45 million after tax. The Company's non-cash losses reflect a continuing
investment in Internet based companies, which have aggressive start-up
advertising and marketing campaigns. These non-cash losses are expected to
increase as the Company adds to its strategic investments in Internet companies.
The Company's income from continuing operations for the fourth quarter
of 1999 was $19 million, or $0.03 per diluted share, as compared to $3 million
for the fourth quarter of 1998, or $0.00 per diluted share, an increase of $16
million.
The Company's reported net income for the quarter was $251 million, or
$0.34 per diluted share, as compared to a net loss for the year-ago quarter of
$1 million, or $0.00 per diluted share. The fourth quarter of 1999 includes a
$232 million after tax net gain on the disposal of certain discontinued
operations, or $0.31 per diluted share. This gain was due to the favorable
resolution of a number of contingencies related to the Company's disposal of its
former industrial businesses.
Mr. Karmazin concluded: "We enter the year 2000 with excellent momentum
in all of our businesses, and eagerly anticipate the closing of our merger with
Viacom Inc., which was recently overwhelmingly approved by the shareholders of
both companies."
RESULTS FOR THE YEAR ENDED DECEMBER 31, 1999
The Company's revenues from continuing operations for 1999 were $7,373
million, an increase of 8% over the prior year. Excluding the 1999 impact of
King World and Outdoor Systems, the 1998 Winter Olympics and including the
pro-forma effect of the American Radio Systems acquisition in the prior year,
revenues for the year ended December 31, 1999 increased by approximately 10%.
The Company's EBITDA for 1999 increased by $540 million to $1,636
million, or 49% over the prior year. The Company's after tax cash flow for 1999
increased by $304 million to $863 million, or 54% over the prior year. As a
result of the Company's deferred tax position, after tax cash flow adjusted for
cash taxes only was $1,190 million, an increase of $503 million, or 73% from
1998. For the full year 1999, the Company reported income from continuing
operations of $157 million or $0.22 per diluted share, compared to a loss of $12
million, or $0.02 per diluted share, for the year 1998. Net income for the full
year 1999 totaled $780 million, or $1.08 per diluted share, compared to a loss
of $21 million, or $0.03 per diluted share for the year 1998. Net income during
1999 includes an after tax gain on disposal of discontinued operations of $628
million, or $0.87 per diluted share.
-More-
<PAGE>
-4-
CBS Corporation is composed of CBS Television, Cable, New Media and a
majority stake of Infinity Broadcasting Corporation, its out-of-home media
subsidiary. CBS Television is comprised of the CBS Television Network, 16 CBS
owned television stations, eight of which are in the Top 10 markets, and King
World -- CBS's newly acquired television syndication business. CBS Cable
consists of two country networks and regional sports operations. CBS New Media
is comprised of the Company's Internet operations. Infinity Broadcasting
Corporation operates 163 radio stations, and TDI and Outdoor Systems, Inc., its
outdoor advertising businesses.
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 CBS 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, AS
AMENDED BY FORM 10-K/A, FOR THE 1998 YEAR AND SUBSEQUENT REPORTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR ADDITIONAL INFORMATION CONCERNING SUCH
RISKS AND UNCERTAINTIES.
* * *
<TABLE>
<S> <C> <C> <C>
Contacts: Gil Schwartz CBS Corporation 212/975-2121 [email protected]
Dana McClintock CBS Corporation 212/975-1077 [email protected]
</TABLE>
<PAGE>
Exhibit 99.2
CBS CORPORATION
EARNINGS INFORMATION
FOURTH QUARTER
<TABLE>
<CAPTION>
(in millions except per share data) Three Months Ended Twelve Months Ended
December 31 December 31
------------------ -------------------
1999 1998 1999 1998
------------------ -------------------
<S> <C> <C> <C> <C>
Revenues $ 2,219 $ 1,791 $ 7,373 $ 6,805
Operating expenses (1,658) (1,477) (5,573) (5,589)
Depreciation and amortization (218) (151) (669) (571)
Residual costs of discontinued businesses (45) (46) (175) (163)
------- -------- ------- -------
Operating costs and expenses (1,921) (1,674) (6,417) (6,323)
------- -------- ------- -------
Operating profit 298 117 956 482
Other income and expenses, net 7 14 11 43
Interest expense, net (61) (98) (204) (370)
------- -------- ------- -------
Income from Continuing Operations before income tax,
minority interest in income of consolidated subsidiaries and
equity in loss of unconsolidated affiliated companies 244 33 763 155
Income tax expense (159) (27) (461) (161)
Minority interest in income of consolidated subsidiaries (21) (3) (72) (6)
Equity in loss of unconsolidated affiliated companies, net of income taxes (45) -- (73) --
------- -------- ------- -------
Income (loss) from Continuing Operations 19 3 157 (12)
Gain on disposal of Discontinued Operations, net of income taxes 232 -- 628 --
Extraordinary loss on early extinguishment of debt, net of income taxes -- (4) (5) (9)
------- -------- ------- -------
Net income (loss) $ 251 ($ 1) $ 780 ($ 21)
======= ======= ======= =======
Average shares outstanding:
Basic 721 691 702 696
Diluted 750 703 721 696
Basic earnings (loss) per common share:
Continuing Operations $ 0.03 $ 0.00 $ 0.22 ($ 0.02)
Discontinued Operations $ 0.32 $ 0.00 $ 0.89 $ 0.00
Extraordinary item $ 0.00 $ 0.00 ($ 0.01) ($ 0.01)
------- -------- ------- -------
Basic earnings (loss) per common share $ 0.35 $ 0.00 $ 1.10 ($ 0.03)
======= ======= ======= =======
Diluted earnings (loss) per common share:
Continuing Operations $ 0.03 $ 0.00 $ 0.22 ($ 0.02)
Discontinued Operations $ 0.31 $ 0.00 $ 0.87 $ 0.00
Extraordinary item $ 0.00 $ 0.00 ($ 0.01) ($ 0.01)
------- -------- ------- -------
Diluted earnings (loss) per common share $ 0.34 $ 0.00 $ 1.08 ($ 0.03)
======= ======= ======= =======
</TABLE>
<PAGE>
Exhibit 99.3
CBS CORPORATION
SEGMENT INFORMATION
($ in millions)
<TABLE>
<CAPTION>
Three Months Ended Total Year
December 31 December 31
-------------------------------------- -----------------------------------------
1999 1998 % CHANGE 1999 1998 % CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TOTAL CONTINUING OPERATIONS
Revenue $ 2,219 $ 1,791 23.9% $ 7,373 $ 6,805 8.3%
Operating Profit (Loss) 298 117 154.7% 956 482 98.3%
OP (Loss) without Special Items 291 124 134.7% 925 555 66.7%
EBITDA 523 282 85.5% 1,636 1,096 49.3%
EBITDA without Special Items 516 289 78.5% 1,621 1,171 38.4%
INFINITY *
Revenue 759 573 32.5% 2,449 1,893 29.4%
Operating Profit (Loss) 242 180 34.4% 739 542 36.3%
OP (Loss) without Special Items 242 180 34.4% 739 542 36.3%
EBITDA 350 257 36.2% 1,067 798 33.7%
EBITDA without Special Items 350 257 36.2% 1,067 798 33.7%
TELEVISION **
Revenue 1,331 1,083 22.9% 4,371 4,369 0.0%
Operating Profit (Loss) 118 1 N/A 351 146 140.4%
OP (Loss) without Special Items 118 1 N/A 327 209 56.5%
EBITDA 201 65 209.2% 606 385 57.4%
EBITDA without Special Items 201 65 209.2% 582 448 29.9%
CABLE
Revenue 142 134 6.0% 565 546 3.5%
Operating Profit (Loss) 34 9 277.8% 138 50 176.0%
OP (Loss) without Special Items 27 9 200.0% 131 51 156.9%
EBITDA 62 28 121.4% 219 148 48.0%
EBITDA without Special Items 55 28 96.4% 236 151 56.3%
NEW MEDIA
Revenue 6 3 100.0% 13 4 225.0%
Operating Profit (Loss) (33) (1) N/A (35) (8) -337.5%
OP (Loss) without Special Items (33) (1) N/A (35) (8) -337.5%
EBITDA (30) (1) N/A (37) (4) -825.0%
EBITDA without Special Items (30) (1) N/A (37) (4) -825.0%
CORPORATE & OTHER
Revenue (19) (2) -850.0% (25) (7) -257.1%
Operating Profit (Loss) (18) (26) 30.8% (62) (85) 27.1%
OP (Loss) without Special Items (18) (19) 5.3% (62) (76) 18.4%
EBITDA (15) (21) 28.6% (44) (68) 35.3%
EBITDA without Special Items (15) (14) -7.1% (52) (59) 11.9%
RESIDUAL COSTS OF DISCONTINUED
BUSINESSES
Revenue - - N/A - - N/A
Operating Profit (Loss) (45) (46) 2.2% (175) (163) -7.4%
OP (Loss) without Special Items (45) (46) 2.2% (175) (163) -7.4%
EBITDA (45) (46) 2.2% (175) (163) -7.4%
EBITDA without Special Items (45) (46) 2.2% (175) (163) -7.4%
</TABLE>
* Amounts recorded at Infinity related to the Outdoor Systems acquisition
which closed on December 7, 1999 are as follows: Revenue $73; Operating Profit
$8; and EBITDA $38.
** Amounts recorded in the Television segment related to the King World
acquisition which closed on November 15, 1999 are as follows: Revenue $103;
Operating Profit $6; and EBITDA $28.
Special Items for 1999:
Q1 - Corporate & Other includes an $8 gain on the sale of an airplane
Q2 - $24 benefit for the reduction of certain restructuring charges
previously recorded for the Television segment
$24 provision for losses associated with a Cable unit
Q4 - Cable includes a benefit for the recovery of a $7 receivable
previously reserved for
Special Items for 1998:
Q3 - $68 provision for restructuring charges ($63 Television, $3 Cable,
$2 Corporate & Other)
Q4 - $7 provision for special severance charges - Corporate & Other
