CBS Corporation     Print Page  |  Close Window

News Release

CBS Corporation Reports Record Results in the Second Quarter of 2012
OIBDA of $901 Million, Up 3%
Operating Income of $769 Million, Up 5%
Diluted EPS of $.65, Up 12%

NEW YORK, Aug. 2, 2012 /PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today reported results for the second quarter ended June 30, 2012, including operating income before depreciation and amortization ("OIBDA"), operating income, and diluted earnings per share that were all-time records for CBS Corporation since it became a stand-alone Company in 2006.

"CBS's content continues to fuel the success of this great company," said Sumner Redstone, Executive Chairman, CBS Corporation. "In a world where great programming commands premium pricing, we continue to hit on all cylinders. I am extremely pleased with our terrific second-quarter results, and I am confident that Leslie and his management team will build on our momentum in the quarters and years to come."

"Our record second quarter results reflect CBS's underlying strength and the ongoing evolution of our business to encompass multiple sources of growing and recurring high-margin revenue," said Leslie Moonves, President and Chief Executive Officer, CBS Corporation. "The good news is, there's so much more to come, and there are several important events just ahead. The U.S. presidential election will be a major factor in our second half results, and the London Olympics will give a considerable lift to our Outdoor business. And as we head into 2013, we will benefit from the Super Bowl, CBS's success in the upfront marketplace, as well as from a number of hit shows that will be sold into syndication. Plus, we are containing our costs and reducing our interest expense, and as a sign of the confidence we have in our future, we recently announced a significant increase in the amount of capital we are returning to our shareholders both through our ongoing dividend and accelerated share buyback program. For all of these reasons, we're confident 2012 will be a record year, and we will produce exceptional results in 2013 and beyond as well."


Second Quarter 2012 Results

In the second quarter of 2012, the Company set new quarterly records in the following key metrics:

  • OIBDA of $901 million
  • Operating income of $769 million
  • Diluted earnings per share of $.65

Two significant factors in the second quarter of 2011 – the Company's initial multiyear digital streaming agreement (under which dozens of the Company's library titles were first made available for streaming) and the semifinals of the NCAA Division I Men's Basketball Championship (which aired during the first quarter in 2012) – had an impact on the revenue comparison. Second quarter 2012 revenues came in at $3.48 billion compared with $3.59 billion for the same quarter a year ago. Some of the impact was offset by growth in high-margin affiliate and subscription fee revenues, while underlying advertising revenues for the second quarter of 2012 reflected a steady marketplace.

In addition, the OIBDA margin improved two percentage points, to a record 26%, and the operating income margin expanded two percentage points, to 22%, in the second quarter of 2012. Those increases, as well as the Company's record performance in the three key metrics mentioned above, reflect a higher profit margin on 2012 television licensing revenues as well as the growth in high-margin affiliate and subscription fees.

Net earnings were $427 million for the second quarter of 2012, up 8%. The Company's earnings per share rose 12%, which was driven by the operating income growth and lower weighted average shares outstanding as a result of the Company's share repurchase program.

Reconciliations of non-GAAP measures to reported results are included at the end of this earnings release.

Free Cash Flow, Balance Sheet and Liquidity
Free cash flow was $558 million for the second quarter of 2012, compared with $646 million for the second quarter a year ago. For the first half of 2012, free cash flow was $1.17 billion compared with $1.50 billion for the first half of 2011, reflecting higher investment in content (primarily television programming) and higher income tax payments. The Company generated cash flow from operating activities of $1.26 billion for the six months ended June 30, 2012, versus $1.59 billion for the comparable prior-year period.

During the second quarter of 2012, the Company issued $400 million of 1.95% senior notes due 2017 and $500 million of 4.85% senior notes due 2042. The Company used the net proceeds to repay its $152 million of 8.625% debentures at maturity on August 1, 2012. Also, the net proceeds were used in July to redeem the Company's $338 million of 5.625% senior notes due August 2012 and its $400 million of 8.20% senior notes due 2014. In connection with these redemptions, the Company will record a pretax loss on early extinguishment of debt of approximately $57 million during the third quarter. These actions, along with the debt activity during the first quarter of 2012, are expected to result in annualized interest expense savings of approximately $53 million.  

Also during the quarter, the Company repurchased 9.4 million shares of CBS Corp. Class B Common Stock for $301 million, at an average cost of approximately $32 per share. Since the inception of the program, through June 30, 2012, the Company has repurchased 60.6 million shares for $1.59 billion, at an average cost of approximately $26 per share.

Consolidated and Segment Results (dollars in millions)
The tables below present the Company's revenues by segment and type as well as its OIBDA before impairment charges and operating income (loss) by segment for the three and six months ended June 30, 2012, and 2011. Reconciliations of all non-GAAP measures to reported results are included at the end of this earnings release.

 






Three Months Ended

Six Months Ended






June 30,

June 30,


Revenues by Segment


2012 



2011



2012



2011




Entertainment

$

1,707


$

1,836


$

4,025


$

3,830




Cable Networks


446



413



898



806




Publishing


189



183



365



338






Content Group


2,342



2,432



5,288



4,974




Local Broadcasting


704



691



1,326



1,312




Outdoor


481



490



897



903






Local Group


1,185



1,181



2,223



2,215




Eliminations


(51)



(27)



(111)



(93)





Total Revenues

$

3,476


$

3,586


$

7,400


$

7,096
























Three Months Ended

Six Months Ended






June 30,

June 30,


Revenues by Type


2012 



2011



2012



2011




Advertising

$

2,142


$

2,215


$

4,540


$

4,507




Content licensing and distribution


816



886



1,833



1,620




Affiliate and subscription fees


465



429



920



855




Other


53



56



107



114





Total Revenues

$

3,476


$

3,586


$

7,400


$

7,096
























Three Months Ended

Six Months Ended






June 30,

June 30,


OIBDA before Impairment Charges


2012 



2011



2012



2011




Entertainment

$

426


$

440


$

837


$

708




Cable Networks


190



176



399



329




Publishing


9



19



19



26






Content Group


625



635



1,255



1,063




Local Broadcasting


248



230



419



399




Outdoor


93



86



146



135






Local Group


341



316



565



534




Corporate


(52)



(57)



(110)



(109)




Residual costs


(12)



(18)



(24)



(37)




Eliminations


(1)



(3)



(1)



(2)





OIBDA before Impairment Charges


901



873



1,685



1,449




Impairment charges


— 





(11)







Total OIBDA

$

901


$

873


$

1,674


$

1,449
























Three Months Ended

Six Months Ended






June 30,

June 30,


Operating Income (Loss)


2012 



2011



2012



2011




Entertainment

$

385


$

400


$

755


$

630




Cable Networks


184



171



388



318




Publishing


7



17



15



22






Content Group


576



588



1,158



970




Local Broadcasting


225



204



363



347




Outdoor


39



26



37



14






Local Group


264



230



400



361




Corporate


(58)



(63)



(122)



(121)




Residual costs


(12)



(18)



(24)



(37)




Eliminations


(1)



(3)



(1)



(2)





Total Operating Income

$

769


$

734


$

1,411


$

1,171




















Entertainment (CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Films, and CBS Interactive)
Entertainment revenues of $1.71 billion for the second quarter of 2012 decreased 7% from $1.84 billion in the same prior-year period. Last year's second quarter benefited from the initial licensing of the Company's programming for digital streaming, the third-cycle domestic syndication sale of Frasier, and the semifinals of the NCAA Division I Men's Basketball Championship, which aired during the first quarter of 2012 versus the second quarter of 2011. Some of the impact was offset by growth in high-margin retransmission revenues and higher international syndication revenues in the second quarter of 2012.

Entertainment OIBDA for the second quarter of 2012 decreased 3% to $426 million from $440 million as the impact of the initial licensing of the Company's programming for digital streaming in 2011 was partially offset by higher profits from syndication.

Cable Networks (Showtime Networks, CBS Sports Network, and Smithsonian Networks)
Cable Networks revenues for the second quarter of 2012 increased 8% to $446 million from $413 million for the same prior-year period. The results were driven by higher affiliate revenues, which reflect increases in rates and subscriptions at Showtime Networks (which includes Showtime, The Movie Channel, and Flix), CBS Sports Network, and Smithsonian Networks, as well as higher licensing revenues from the digital streaming of Showtime original series.

Cable Networks OIBDA for the second quarter of 2012 grew 8% to $190 million from $176 million for the same prior-year period, primarily reflecting the revenue growth, partially offset by expense increases associated with the timing of theatrical programming costs and advertising expenses for series premieres.

Publishing (Simon & Schuster)
Publishing revenues for the second quarter of 2012 increased 3% to $189 million from $183 million for the same prior-year period reflecting continued growth in digital book sales, partially offset by lower print book sales. Digital sales increased 44% from the same prior-year period and represented approximately 21% of total Publishing revenues. Best-selling titles in the second quarter included The Wind Through the Keyhole by Stephen King and Cowards by Glenn Beck.

Publishing OIBDA for the second quarter of 2012 decreased $10 million to $9 million from the same prior-year period, as a charge related to a legal matter more than offset the revenue increase.

Local Broadcasting (CBS Television Stations and CBS Radio)
Local Broadcasting revenues for the second quarter of 2012 increased 2% to $704 million from $691 million for the same prior-year period. CBS Television Stations revenues rose 6%, reflecting increased spending by automotive manufacturers, higher political advertising, and higher retransmission revenues, which were partially offset by lower advertising spending by the retail and financial services industries. CBS Radio revenues decreased 2% as growth in automotive advertising was offset by a decline in spending by retail and financial services advertisers.

Local Broadcasting OIBDA for the second quarter of 2012 increased 8% to $248 million from $230 million, primarily driven by the revenue growth and lower programming and production costs.

Outdoor (CBS Outdoor)
Outdoor revenues for the second quarter of 2012 decreased 2% to $481 million from $490 million for the same prior-year period, driven by the unfavorable impact of foreign exchange rate changes. In constant dollars, revenues increased 1% from the second quarter of 2011. Revenues for the Americas (which includes North America and South America) increased 2% in constant dollars for the second quarter of 2012, principally driven by growth in the U.S. billboards and displays businesses, partially offset by the impact from the nonrenewal of the Toronto transit contract. Revenues for Europe increased 1% in constant dollars, primarily reflecting higher advertising sales associated with the 2012 Summer Olympics in London. Some of this increase was offset by weakness in the European economy and the nonrenewal of certain contracts.

Outdoor OIBDA for the second quarter of 2012 increased 8% to $93 million from $86 million for the same prior-year period, driven by the revenue growth in constant dollars.

Corporate
Corporate expenses before depreciation for the second quarter of 2012 decreased $5 million to $52 million from the same prior-year period, principally reflecting lower stock-based compensation expense.

Residual Costs
Residual costs include pension and postretirement benefits costs for plans retained by the Company for previously divested businesses. Residual costs for the second quarter of 2012 decreased $6 million to $12 million from the same quarter last year, primarily because of the benefit from the prefunding of pension plans during 2011.

About CBS Corporation
CBS Corporation (NYSE: CBS.A and CBS) is a mass media company that creates and distributes industry-leading content across a variety of platforms to audiences around the world. The Company has businesses with origins that date back to the dawn of the broadcasting age as well as new ventures that operate on the leading edge of media. CBS owns the most-watched television network in the U.S. and one of the world's largest libraries of entertainment content, making its brand – "the Eye" – one of the most recognized in business. The Company's operations span virtually every field of media and entertainment, including cable, publishing, radio, local TV, film, outdoor advertising, and interactive and socially responsible media. CBS's businesses include CBS Television Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), Showtime Networks, CBS Sports Network, Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio, CBS Outdoor, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive, CBS Consumer Products, CBS Home Entertainment, CBS Films and CBS EcoMedia. For more information, go to www.cbscorporation.com.

Cautionary Statement Concerning Forward-looking Statements
This news release contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking statements are not based on historical facts, but rather reflect the Company's current expectations concerning future results and events. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause the actual results, performance or achievements of the Company to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: advertising market conditions generally; changes in the public acceptance of the Company's programming; changes in technology and its effect on competition in the Company's markets; changes in the Federal Communications laws and regulations; the impact of piracy on the Company's products; the impact of the consolidation in the market for the Company's programming; other domestic and global economic, business, competitive and/or other regulatory factors affecting the Company's businesses generally; the impact of union activity, including possible strikes or work stoppages or the Company's inability to negotiate favorable terms for contract renewals; and other factors described in the Company's news releases and filings with the Securities and Exchange Commission including but not limited to the Company's most recent Form 10-K, Form 10-Qs and Form 8-Ks. The forward-looking statements included in this document are made only as of the date of this document, and under section 27A of the Securities Act and section 21E of the Exchange Act, we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

CBS CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited; in millions, except per share amounts)






















Three Months Ended


Six Months Ended




June 30,


June 30,





2012




2011




2012




2011





















Revenues

$

3,476



$

3,586



$

7,400



$

7,096





















Operating income


769




734




1,411




1,171






















Interest expense


(104)




(110)




(214)




(220)




Interest income


1




1




3




3




Gain on early extinguishment of debt








25







Other items, net


(3)




5




9




14



Earnings before income taxes


663




630




1,234




968






















Provision for income taxes


(225)




(230)




(428)




(352)




Equity in loss of investee companies, net of tax


(11)




(5)




(16)




(19)



Net earnings

$

427



$

395



$

790



$

597





















Basic net earnings per common share

$

.66



$

.59



$

1.22



$

.89





















Diluted net earnings per common share

$

.65



$

.58



$

1.19



$

.87





















Weighted average number of common shares outstanding:


















Basic


646




669




648




671




Diluted


661




686




664




689





















Dividends per common share

$

.10



$

.10



$

.20



$

.15




 

CBS CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(Unaudited; in millions)





























At


At





June 30, 2012


December 31, 2011














Assets




















Cash and cash equivalents

$

1,888



$

660




Receivables, net


2,973




3,254




Programming and other inventory


521




735




Prepaid expenses and other current assets


1,000




894






Total current assets


6,382




5,543




Property and equipment


5,362




5,334





Less accumulated depreciation and amortization


2,968




2,824






Net property and equipment


2,394




2,510




Programming and other inventory


1,332




1,496




Goodwill


8,599




8,620




Intangible assets


6,508




6,526




Other assets


1,566




1,502




Total Assets

$

26,781



$

26,197
















Liabilities and Stockholders' Equity




















Accounts payable

$

309



$

410




Participants' share and royalties payable


875




938




Program rights


488




577




Current portion of long-term debt


901




24




Accrued expenses and other current liabilities


1,801




1,984






Total current liabilities


4,374




3,933




Long-term debt


5,900




5,958




Other liabilities


6,389




6,398




Total Stockholders' Equity


10,118




9,908




Total Liabilities and Stockholders' Equity

$

26,781



$

26,197





 

CBS CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited; in millions)
























Six Months Ended




June 30,





2012




2011













Operating Activities:









Net earnings

$

790



$

597



Adjustments to reconcile net earnings to net cash flow










provided by operating activities:










Depreciation and amortization


263




278




Stock-based compensation


81




75




Impairment charges


11







Gain on early extinguishment of debt


(25)







Equity in loss of investee companies, net of tax and distributions


19




21




Change in assets and liabilities, net of effects of acquisitions


119




623



Net cash flow provided by operating activities


1,258




1,594



Investing Activities:










Acquisitions, net of cash acquired


(69)




(55)




Capital expenditures


(93)




(95)




Investments in and advances to investee companies


(39)




(42)




Proceeds from dispositions


1




13




Other investing activities


6




8



Net cash flow used for investing activities


(194)




(171)



Financing Activities:










Proceeds from issuance of notes


1,567




4




Repayment of notes


(700)




(2)




Payment of capital lease obligations


(10)




(9)




Payment of contingent consideration


(33)







Dividends


(135)




(73)




Purchase of Company common stock


(564)




(500)




Payment of payroll taxes in lieu of issuing shares for stock-based compensation


(105)




(78)




Proceeds from exercise of stock options


71




45




Excess tax benefit from stock-based compensation


73




61




Other financing activities





(5)



Net cash flow provided by (used for) financing activities


164




(557)



Net increase in cash and cash equivalents


1,228




866



Cash and cash equivalents at beginning of period


660




480



Cash and cash equivalents at end of period

$

1,888



$

1,346




 

CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited; in millions)

 

Operating Income (Loss) Before Depreciation and Amortization ("OIBDA") and OIBDA Before Impairment Charges

 

The following tables set forth the Company's OIBDA for the three and six months ended June 30, 2012 and 2011. The Company defines OIBDA as net earnings (loss) adjusted to exclude the following line items presented in its Consolidated Statements of Operations: Equity in earnings (loss) of investee companies, net of tax; Provision for income taxes; Other items, net; Gain on early extinguishment of debt; Interest income; Interest expense; and Depreciation and amortization. The following tables also set forth the Company's OIBDA before impairment charges for the six months ended June 30, 2012. The Company defines "OIBDA before impairment charges" as OIBDA excluding impairment charges.

 

The Company uses OIBDA and OIBDA before impairment charges, as well as OIBDA margin and OIBDA before impairment charges margin, among other things, to evaluate the Company's operating performance, to value prospective acquisitions and as one of several components of incentive compensation targets for certain management personnel, and these measures are among the primary measures used by management for planning and forecasting of future periods. These measures are important indicators of the Company's operational strength and performance of its business because they provide a link between profitability and operating cash flow. The Company believes the presentation of these measures is relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by the Company's management, help improve their ability to understand the Company's operating performance and make it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these measures are among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry.

 

Since OIBDA and OIBDA before impairment charges are not measures of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), they should not be considered in isolation of, or as a substitute for, net earnings (loss) as an indicator of operating performance. OIBDA, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. As OIBDA and OIBDA before impairment charges exclude certain financial information compared with net earnings (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions which are excluded. The Company provides the following reconciliations of OIBDA and OIBDA before impairment charges to net earnings (loss), and OIBDA or OIBDA before impairment charges for each segment to such segment's operating income (loss), the most directly comparable amounts reported under GAAP.


CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions)













Three Months Ended June 30, 2012






Depreciation

Operating





OIBDA

and Amortization

Income/(Loss)

Entertainment

$

426


$

(41)


$

385


Cable Networks


190



(6)



184


Publishing


9



(2)



7




Content Group


625



(49)



576


Local Broadcasting


248



(23)



225


Outdoor


93



(54)



39




Local Group


341



(77)



264


Corporate


(52)



(6)



(58)


Residual Costs


(12)





(12)


Eliminations


(1)





(1)



Total

$

901


$

(132)


$

769



Margin(a)


26%






22%






































Three Months Ended June 30, 2011






Depreciation

Operating





OIBDA

and Amortization

Income/(Loss)

Entertainment

$

440


$

(40)


$

400


Cable Networks


176



(5)



171


Publishing


19



(2)



17




Content Group


635



(47)



588


Local Broadcasting


230



(26)



204


Outdoor


86



(60)



26




Local Group


316



(86)



230


Corporate


(57)



(6)



(63)


Residual Costs


(18)





(18)


Eliminations


(3)





(3)



Total

$

873


$

(139)


$

734



Margin(a)


24%






20%


 














Three Months Ended June 30,






2012



2011


Total OIBDA

$

901


$

873




Depreciation and amortization


(132)



(139)


Operating income


769



734




Interest expense


(104)



(110)




Interest income


1



1




Other items, net


(3)



5


Earnings before income taxes


663



630




Provision for income taxes


(225)



(230)




Equity in loss of investee companies, net of tax


(11)



(5)


Net earnings

$

427


$

395


 

(a)      Margin is defined as OIBDA or operating income, as applicable, divided by revenues.

 

CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions)
















Six Months Ended June 30, 2012





OIBDA Before














 Impairment

Depreciation

Impairment

Operating





Charges

and Amortization

Charges

Income/(Loss)

Entertainment

$

837


$

(82)


$


$

755


Cable Networks


399



(11)





388


Publishing


19



(4)





15




Content Group


1,255



(97)





1,158


Local Broadcasting


419



(45)



(11)



363


Outdoor


146



(109)





37




Local Group


565



(154)



(11)



400


Corporate


(110)



(12)





(122)


Residual Costs


(24)







(24)


Eliminations


(1)







(1)



Total

$

1,685


$

(263)


$

(11)


$

1,411



Margin(a)


23%









19%















































Six Months Ended June 30, 2011






Depreciation

Impairment

Operating





OIBDA

and Amortization

Charges

Income/(Loss)

Entertainment

$

708


$

(78)


$


$

630


Cable Networks


329



(11)





318


Publishing


26



(4)





22




Content Group


1,063



(93)





970


Local Broadcasting


399



(52)





347


Outdoor


135



(121)





14




Local Group


534



(173)





361


Corporate


(109)



(12)





(121)


Residual Costs


(37)







(37)


Eliminations


(2)







(2)



Total

$

1,449


$

(278)


$


$

1,171



Margin(a)


20%









17%


 














Six Months Ended June 30,






2012



2011


OIBDA before impairment charges

$

1,685


$

1,449




Impairment charges


(11)




Total OIBDA


1,674



1,449




Depreciation and amortization


(263)



(278)


Operating income


1,411



1,171




Interest expense


(214)



(220)




Interest income


3



3




Gain on early extinguishment of debt


25






Other items, net


9



14


Earnings before income taxes


1,234



968




Provision for income taxes


(428)



(352)




Equity in loss of investee companies, net of tax


(16)



(19)


Net earnings

$

790


$

597









(a) Margin is defined as OIBDA, OIBDA before impairment charges or operating income, as applicable, divided by revenues.

CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions)

Free Cash Flow

 

The Company defines free cash flow as its net cash flow provided by (used for) operating activities less capital expenditures.  The Company's calculation of free cash flow includes capital expenditures since investment in capital expenditures is a use of cash that is directly related to the Company's operations. The Company's net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.

 

Management believes free cash flow provides investors with an important perspective on the cash available to the Company to service debt, make strategic acquisitions and investments, maintain its capital assets, satisfy its tax obligations and fund ongoing operations and working capital needs.  As a result, free cash flow is a significant measure of the Company's ability to generate long-term value.  It is useful for investors to know whether this ability is being enhanced or degraded as a result of the Company's operating performance.  The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from the Company's underlying operations in a manner similar to the method used by management.  Free cash flow is one of several components of incentive compensation targets for certain management personnel.  In addition, free cash flow is a primary measure used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry.

 

As free cash flow is not a measure calculated in accordance with GAAP, free cash flow should not be considered in isolation of, or as a substitute for, either net cash flow provided by (used for) operating activities as a measure of liquidity or net earnings (loss) as a measure of operating performance.  Free cash flow, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies.  In addition, free cash flow as a measure of liquidity has certain limitations, and does not necessarily represent funds available for discretionary use and is not necessarily a measure of the Company's ability to fund its cash needs.  When comparing free cash flow to net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions which are not reflected in free cash flow.

The following table presents a reconciliation of the Company's net cash flow provided by operating activities to free cash flow:

 




Three Months Ended


Six Months Ended




June 30,


June 30,





2012




2011




2012




2011


Net cash flow provided by operating activities

$

612



$

700



$

1,258



$

1,594


Capital expenditures


(54)




(54)




(93)




(95)


Free cash flow

$

558



$

646



$

1,165



$

1,499




















The following table presents a summary of the Company's cash flows:






















Three Months Ended


Six Months Ended




June 30,


June 30,





2012




2011




2012




2011


Net cash flow provided by operating activities

$

612



$

700



$

1,258



$

1,594


Net cash flow used for investing activities

$

(54)



$

(68)



$

(194)



$

(171)


Net cash flow provided by (used for) financing activities

$

536



$

(258)



$

164



$

(557)




















 

SOURCE CBS Corporation

Press: Gil Schwartz, Executive Vice President, Corporate Communications, +1-212-975-2121, gdschwartz@cbs.com or Dana McClintock, Senior Vice President, Corporate Communications, +1-212-975-1077, dlmcclintock@cbs.com; Investors: Adam Townsend, Executive Vice President, Investor Relations, +1-212-975-5292, adam.townsend@cbs.com or Jessica Kourakos, Vice President, Investor Relations, +1-212-975-6106, jessica.kourakos@cbs.com