Document


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): May 2, 2019
CBS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
001-09553
04-2949533
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification
Number)
51 West 52nd Street
New York, New York
10019
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 975-4321
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbols
 
Name of each exchange on which registered
Class A Common Stock, $0.001 par value
 
 
CBS.A
 
 
 
New York Stock Exchange
 
Class B Common Stock, $0.001 par value
 
 
CBS
 
 
 
New York Stock Exchange
 
 
 
 
 
 





Item 2.02 Results of Operations and Financial Condition.

On May 2, 2019, CBS Corporation issued a press release announcing earnings for the first quarter ended March 31, 2019. A copy of the press release is furnished herewith as Exhibit 99 and is incorporated by reference herein in its entirety.

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following Exhibit is furnished as part of this Report on Form 8-K.
 
Exhibit Number

Description of Exhibit
 
 
 
99






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/ Christina Spade
 
Name:
Christina Spade
 
Title:
Executive Vice President,
 
          
Chief Financial Officer
 
 
 
Date: May 2, 2019




Exhibit

Exhibit 99

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12876196&doc=3

CBS CORPORATION REPORTS FIRST QUARTER 2019 RESULTS
Revenues of $4.2 Billion, Up 11%
Diluted EPS of $4.21; Adjusted Diluted EPS of $1.37, Up 2%


NEW YORK, May 2, 2019 - CBS Corporation (NYSE: CBS.A and CBS) today reported results for the first quarter of 2019, including the Company’s best-ever quarterly revenue and first quarter records in adjusted operating income and adjusted diluted earnings per share (“EPS”).

“CBS has once again grown across all of our key financial metrics, while continuing to invest in our future as a global multiplatform premium content company,” said Joe Ianniello, President and Acting Chief Executive Officer, CBS Corporation. “We delivered higher profits and achieved double-digit revenue growth, helped in part by Super Bowl LIII and strong increases in affiliate and subscription fee revenues. At a time when others are losing subscribers, our total number of subs across traditional MVPDs, virtual MVPDs and our direct-to-consumer services once again grew strongly during the quarter. In fact, our direct-to-consumer subs grew 71% from last year, and we are seeing strong growth here in the second quarter thanks to premium original series such as The Twilight Zone on CBS All Access and Billions on Showtime. At the same time, we also continue to produce more and more content for a variety of buyers, including Amazon, Apple and Netflix, which will debut the critically acclaimed Dead to Me from CBS Television Studios tomorrow. Plus, in two weeks we’ll be unveiling a whole new lineup of hit shows on the #1 broadcast network -- and most-powerful platform in the business -- the CBS Television Network. Given our Company’s strong programming pipeline and our early-mover advantage in direct-to-consumer, we feel very confident about CBS’ leadership position in a media landscape that values must-have content above all else.”




First Quarter 2019 Results
Revenues for the first quarter of 2019 increased 11% to $4.17 billion from $3.76 billion for the same prior-year period. Advertising revenues grew 18%, driven by the broadcast of Super Bowl LIII on the CBS Television Network. Affiliate and subscription fee revenues rose 13%, led by growth in the Company’s direct-to-consumer streaming services, fees from CBS Television Network affiliated stations and retransmission revenues, including from virtual MVPDs. Content licensing and distribution revenues decreased 3% as a result of the benefit to 2018 from the renewal of a domestic licensing sale of Dexter.
Operating income for the first quarter of 2019 increased to $1.23 billion from $772 million for the same prior-year period. The comparison was affected by discrete items in the first quarter of 2019, including a gain of $549 million on the sale of CBS Television City and charges relating to a restructuring plan initiated during the quarter. Adjusted operating income increased 2% to $793 million from $781 million for the same prior-year period. The increase was primarily driven by the revenue growth, which was offset by a higher investment in premium content, including an increase in the number of owned series, and higher costs associated with the growth and expansion of the Company’s direct-to-consumer streaming services.
Net earnings for the first quarter of 2019 were $1.58 billion compared with $511 million for the first quarter of 2018. Comparability was affected by a discrete tax benefit of $768 million, or $2.04 per diluted share, resulting from a reorganization of the Company’s international operations. Adjusted net earnings decreased 1% to $515 million from $518 million for the first quarter of 2018.
Diluted EPS for the first quarter of 2019 was $4.21 compared with $1.32 for the same quarter in 2018. Adjusted diluted EPS increased 2% to $1.37 from $1.34.
Details of the discrete items excluded from financial results and reconciliations of adjusted results to their most directly comparable GAAP financial measures are included at the end of this earnings release.
Free Cash Flow, Balance Sheet and Liquidity
For the first quarter of 2019, operating cash flow was $438 million compared with $717 million for the first quarter of 2018. Free cash flow was $411 million for the first quarter of 2019 compared with $687 million for the same prior-year period. The decreases were mainly driven by an increased investment in content.
In March 2019, the Company issued $500 million of 4.20% senior notes due 2029. The Company used the net proceeds from this issuance in the redemption of its $600 million outstanding 2.30% senior notes due August 2019.

-2-


Consolidated and Segment Results (dollars in millions)
The tables below present the Company’s revenues by segment and type; segment operating income (loss); and depreciation and amortization by segment for the three months ended March 31, 2019, and 2018.

Three Months Ended

March 31,
Revenues by Segment
2019

2018
Entertainment
$
3,176

 
$
2,753

Cable Networks
552

 
571

Publishing
164

 
160

Local Media
457

 
415

Corporate/Eliminations
(182
)
 
(138
)
Total Revenues
$
4,167


$
3,761

 
Three Months Ended
 
March 31,
Revenues by Type
2019
 
2018
Advertising
$
2,044

 
$
1,733

Content licensing and distribution
963

 
995

Affiliate and subscription fees
1,111

 
979

Other
49

 
54

Total Revenues
$
4,167

 
$
3,761

 
Three Months Ended
 
March 31,
Segment Operating Income (Loss)
2019

2018
Entertainment
$
530

 
$
486

Cable Networks
175

 
236

Publishing
17

 
16

Local Media
138

 
118

Corporate
(67
)
 
(75
)
Adjusted Operating Income
793

 
781

Restructuring and other corporate matters
(114
)

(9
)
Gain on sale of assets
549

 

Total Operating Income
$
1,228

 
$
772

 
Three Months Ended
 
March 31,
Depreciation and Amortization
2019
 
2018
Entertainment
$
30

 
$
31

Cable Networks
4

 
5

Publishing
1

 
1

Local Media
11

 
11

Corporate
7

 
8

Total Depreciation and Amortization
$
53

 
$
56



-3-


Entertainment (CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network and CBS Films)
Entertainment revenues of $3.18 billion for the first quarter of 2019 increased 15% from $2.75 billion for the first quarter of 2018. Advertising revenues increased 19% from the same prior-year period, driven by the CBS Television Network’s broadcast of Super Bowl LIII. Underlying CBS Network advertising revenues increased 1% from the same prior-year period. Affiliate and subscription fees grew 26%, driven by subscriber growth at CBS All Access and increases in station affiliation fees and revenues from virtual MVPDs. Content licensing and distribution revenues were up 3%, mainly from higher sales of series produced for third-party services.
Entertainment operating income of $530 million for the first quarter of 2019 increased 9% from $486 million for the same prior-year period. This increase was driven by the revenue growth, which was partially offset by an increased investment in premium content and higher costs associated with the growth and expansion of the Company’s direct-to-consumer streaming services.
Cable Networks (Showtime Networks, Pop and Smithsonian Networks)
Cable Networks revenues of $552 million for the first quarter of 2019 decreased 3% from $571 million for the same prior-year period. The decrease primarily reflects the benefit to 2018 from the renewal of a significant domestic licensing sale of Dexter, which was partially offset by growth from the Showtime digital streaming subscription offering and revenues from a pay-per-view boxing event.
Cable Networks operating income of $175 million for the first quarter of 2019 decreased 26% from $236 million for the same prior-year period. The decrease reflects the lower revenues, an increased investment in programming, costs associated with the pay-per-view event and higher advertising and marketing costs for series premieres and to drive subscriber growth for the Showtime digital streaming subscription offering.
Publishing (Simon & Schuster)
Publishing revenues of $164 million for the first quarter of 2019 increased 3% from $160 million for the same prior-year period, driven by higher print book sales. Bestselling titles for the first quarter of 2019 included Five Feet Apart by Rachael Lippincott and Supermarket by Bobby Hall.
Publishing operating income of $17 million for the first quarter of 2019 increased 6% from $16 million for the same prior-year period, mainly as a result of the higher revenues.

-4-


Local Media (CBS Television Stations and CBS Local Digital Media)
Local Media revenues of $457 million for the first quarter of 2019 increased 10% from $415 million for the same prior-year period, reflecting higher advertising revenues as a result of the broadcast of Super Bowl LIII on CBS and growth in retransmission fees.
Local Media operating income of $138 million for the first quarter of 2019 increased 17% from $118 million for the same prior-year period, as a result of the higher revenues.
Corporate
Corporate expenses of $67 million for the first quarter of 2019 decreased 11% from $75 million for the same prior-year period, primarily reflecting lower executive compensation costs.


-5-


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, local TV, film and interactive. CBS’ businesses include CBS Television Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), Network 10 Australia, CBS Television Studios, CBS Global Distribution Group, CBS Consumer Products, CBS Home Entertainment, CBS Interactive, CBS All Access, the Company’s direct-to-consumer digital streaming subscription service, CBS Sports Network, CBS Films, Showtime Networks, Pop, Smithsonian Networks, Simon & Schuster, CBS Television Stations and CBS Experiences. 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, including the Company’s expectations concerning its revenues and EPS. 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: changes in the public acceptance of the Company’s content; advertising market conditions generally; changes in technology and its effect on competition in the Company’s markets; changes in the federal communications laws and regulations; increased programming costs and investments; the impact of piracy on the Company’s products; the impact of the consolidation in the market for the Company’s content; the impact of negotiations or the loss of affiliation agreements or retransmission agreements; the outcomes of investigation-related legal actions, which are inherently unpredictable, and any associated costs; the uncertainties arising from leadership changes at the Company; the impact of union activity, including possible strikes or work stoppages or the Company’s inability to negotiate favorable terms for contract renewals; other domestic and global economic, business, competitive, technological and/or other regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s filings with the U.S. 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 we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

Contacts:
 
 
Press:
 
Investors:
Dana McClintock
 
David Bank
Executive Vice President, Chief Communications Officer
 
Executive Vice President, Investor Relations
(212) 975-1077
 
(212) 975-6106
dlmcclintock@cbs.com
 
david.bank@cbs.com
 
 
 
Kelli Raftery
 
 
Executive Vice President, Corporate Communications
 
 
(212) 975-3161
 
 
kelli.raftery@cbs.com
 
 

-6-



CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
 
Three Months Ended
 
March 31,
 
2019
 
2018
 
 
 
 
Revenues
$
4,167

 
$
3,761

Operating income
$
1,228

 
$
772

Interest expense
(117
)
 
(118
)
Interest income
14

 
17

Other items, net
(21
)
 
(11
)
Earnings before income taxes and equity in loss of investee companies
1,104

 
660

Benefit (provision) for income taxes
496

 
(135
)
Equity in loss of investee companies, net of tax
(17
)
 
(14
)
Net earnings
$
1,583

 
$
511

 
 
 
 
Basic net earnings per common share
$
4.24

 
$
1.34

 
 
 
 
Diluted net earnings per common share
$
4.21


$
1.32

 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
Basic
373

 
382

Diluted
376

 
386



-7-


CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions)
 
At
 
 
At
 
 
March 31, 2019
 
December 31, 2018
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
500

 
 
 
$
322

 
Receivables, net
 
4,147

 
 
 
4,041

 
Programming and other inventory
 
1,533

 
 
 
1,988

 
Prepaid expenses and other current assets
 
552

 
 
 
401

 
Total current assets
 
6,732

 
 
 
6,752

 
Property and equipment
 
2,963

 
 
 
2,926

 
Less accumulated depreciation and amortization
 
1,769

 
 
 
1,717

 
Net property and equipment
 
1,194

 
 
 
1,209

 
Programming and other inventory
 
4,313

 
 
 
3,883

 
Goodwill
 
5,062

 
 
 
4,920

 
Intangible assets
 
2,665

 
 
 
2,638

 
Operating lease assets
 
952

 
 
 

 
Deferred income tax assets, net
 
797

 
 
 
29

 
Other assets
 
2,360




2,395

 
Assets held for sale
 

 
 
 
33

 
Total Assets
 
$
24,075

 
 
 
$
21,859

 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
Accounts payable
 
$
273

 
 
 
$
201

 
Participants' share and royalties payable
 
1,157

 
 
 
1,177

 
Accrued programming and production costs
 
804

 
 
 
704

 
Commercial paper
 

 
 
 
674

 
Accrued expenses and other current liabilities
 
2,258

 
 
 
1,817

 
Total current liabilities
 
4,492

 
 
 
4,573

 
Long-term debt
 
9,358

 
 
 
9,465

 
Noncurrent operating lease liabilities
 
866

 
 
 

 
Other liabilities
 
5,010

 
 
 
5,017

 
Stockholders’ Equity
 
4,349

 
 
 
2,804

 
Total Liabilities and Stockholders’ Equity
 
$
24,075

 
 
 
$
21,859

 


-8-


CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
 
Three Months Ended
 
March 31,
 
2019
 
2018
Operating Activities:
 
 
 
Net earnings
$
1,583

 
$
511

Adjustments to reconcile net earnings to net cash flow provided by operating activities:
 
 
 
Depreciation and amortization
53

 
56

Deferred tax (benefit) provision
(629
)
 
79

Stock-based compensation
39

 
44

Equity in loss of investee companies, net of tax and distributions
17

 
14

Gain on sale of assets
(549
)
 

Change in assets and liabilities, net of investing and financing activities
(76
)
 
13

Net cash flow provided by operating activities
438

 
717

Investing Activities:
 
 
 
Investments in and advances to investee companies
(42
)
 
(40
)
Capital expenditures
(27
)
 
(30
)
Acquisitions, net of cash acquired
(39
)
 

Proceeds from dispositions
741

 

Other investing activities
2

 
3

Net cash flow provided by (used for) investing activities from continuing operations
635

 
(67
)
Net cash flow used for investing activities from discontinued operations

 
(23
)
Net cash flow provided by (used for) investing activities
635

 
(90
)
Financing Activities:
 
 
 
Repayments of short-term debt borrowings, net
(674
)
 
(462
)
Proceeds from issuance of senior notes
493

 

Repayment of senior notes
(600
)
 

Payment of capital lease obligations
(3
)
 
(4
)
Payment of contingent consideration

 
(5
)
Dividends
(70
)
 
(71
)
Purchase of Company common stock
(14
)
 
(186
)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation
(37
)
 
(52
)
Proceeds from exercise of stock options
11

 
16

Other financing activities

 
(1
)
Net cash flow used for financing activities
(894
)
 
(765
)
Net increase (decrease) in cash, cash equivalents and restricted cash
179


(138
)
Cash, cash equivalents and restricted cash at beginning of period
(includes $120 (2019) and $0 (2018) of restricted cash)
442

 
285

Cash, cash equivalents and restricted cash at end of period
(includes $121 (2019) and $0 (2018) of restricted cash)
$
621

 
$
147


-9-




CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited; in millions)
Adjusted Operating Income and Segment Operating Income

The following table sets forth the Company’s Adjusted Operating Income for the three months ended March 31, 2019 and 2018. The Company defines “Adjusted Operating Income” as operating income excluding costs for restructuring and other corporate matters and gain on sale of assets, each where applicable. For each individual reportable segment Adjusted Operating Income is also known as “Segment Operating Income.” The Company presents Segment Operating Income as the primary measure of profit and loss for its reportable segments in accordance with Financial Accounting Standards Board (“FASB”) guidance for segment reporting.
The Company uses Adjusted Operating Income (or Segment Operating Income for each segment), as well as Adjusted Operating Income Margin, to, among other things, evaluate the Company’s operating performance, to value prospective acquisitions and as one of several components of incentive compensation targets for certain management personnel. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of the Company’s operational strength and business performance. The Company believes these measures are 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; provide a clearer perspective on the underlying performance of the Company; and make it easier for investors, analysts and peers to compare the Company’s operating performance to other companies in its industry and to compare the Company’s year-over-year results.
Because Adjusted Operating Income is a measure of performance not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), it should not be considered in isolation of, or as a substitute for, operating income or net earnings as an indicator of operating performance. Adjusted Operating Income, 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 Adjusted Operating Income excludes certain financial information that is included in operating income and net earnings, the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded. The Company provides the following reconciliation of Adjusted Operating Income to operating income and net earnings.
 
Three Months Ended March 31,
 
2019
 
2018
Adjusted Operating Income
$
793

 
$
781

Restructuring and other corporate matters
(114
)
 
(9
)
Gain on sale of assets
549

 

Operating income
1,228

 
772

Interest expense
(117
)
 
(118
)
Interest income
14

 
17

Other items, net
(21
)
 
(11
)
Earnings before income taxes and equity in loss of investee companies
1,104

 
660

Benefit (provision) for income taxes
496

 
(135
)
Equity in loss of investee companies, net of tax
(17
)
 
(14
)
Net earnings
$
1,583

 
$
511


-10-


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 net cash flow provided by operating activities less capital expenditures. The Company’s calculation of free cash flow includes capital expenditures because 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 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 industry peers for purposes of valuation and comparison of the Company’s operating performance 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 operating activities as a measure of liquidity or net earnings 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, 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 operating activities, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions that 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

March 31,

2019

2018
Net cash flow provided by operating activities
$
438


$
717

Capital expenditures
(27
)

(30
)
Free cash flow
$
411

 
$
687

The following table presents a summary of the Company’s cash flows:
 
Three Months Ended
 
March 31,
 
2019
 
2018
Net cash flow provided by operating activities
$
438

 
$
717

Net cash flow provided by (used for) investing activities
$
635

 
$
(90
)
Net cash flow used for financing activities
$
(894
)
 
$
(765
)

-11-


CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions, except per share amounts)
2019 and 2018 Adjusted Results
The Company’s results included discrete items that affected comparability. Adjusted results exclude these discrete items and are measures of performance not calculated in accordance with GAAP. The Company believes that these measures are 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; provide a clearer perspective on the underlying performance of the Company; and make it easier for investors, analysts, and peers to compare the Company’s operating performance to other companies in its industry and to compare the Company’s year-over-year results. The following tables reconcile adjusted financial results to their most directly comparable GAAP financial measures.
 
Three Months Ended March 31, 2019
 
Reported
Restructuring and Other Corporate
Matters (a)
 
Gain on Sale
of Assets (b)
 
Tax
Item (c)
 
Adjusted
 
Revenues
$
4,167

 
$

 
 
 
$

 
 
$

 
$
4,167

 
 

 
 
 
 
 
 
 
 
 
 

 
Operating income
$
1,228

 
$
114

 
 
 
$
(549
)
 
 
$

 
$
793

 
Operating income margin (d)
29%

 
 
 
 
 
 
 
 
 
 
19
%
 
Interest expense
(117
)
 

 
 
 

 
 

 
(117
)
 
Interest income
14

 

 
 
 

 
 

 
14

 
Other items, net
(21
)
 

 
 
 

 
 

 
(21
)
 
Earnings before income taxes and equity in
loss of investee companies
1,104

 
114

 
 
 
(549
)
 
 

 
669

 
Benefit (provision) for income taxes
496

 
(28
)
 
 
 
163

 
 
(768
)
 
(137
)
 
Effective income tax rate
(44.9
)%
 
 
 
 
 
 
 
 
 
 
20.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in loss of investee companies,
net of tax
(17
)
 

 
 
 

 
 

 
(17
)
 
Net earnings
$
1,583

 
$
86

 
 
 
$
(386
)
 
 
$
(768
)
 
$
515

 
Diluted EPS
$
4.21

 
$
.23

 
 
 
$
(1.03
)
 
 
$
(2.04
)
 
$
1.37

 
Diluted weighted average number of common shares outstanding
376

 
 
 
 
 
 
 
 
 
 
376

 
(a) Primarily reflects restructuring charges of $108 million ($81 million, net of tax) at Entertainment, Cable Networks, Publishing, Local Media and Corporate and costs associated with other corporate matters.
(b)
Reflects a gain on the sale of the CBS Television City property and sound stage operation.
(c) Reflects a deferred tax benefit resulting from the transfer of intangible assets between subsidiaries of the Company in connection with a reorganization of the Company’s international operations.
(d) Operating income margin is defined as operating income or Adjusted Operating Income divided by revenues.


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CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; in millions, except per share amounts)
 
Three Months Ended March 31, 2018
 
Reported
 
Corporate Matters
 
Adjusted
 
Revenues
$
3,761

 
 
$

 
 
$
3,761

 
 
 
 
 
 
 
 
 
 
Operating income
$
772

 
 
$
9

 
 
$
781

 
Operating income margin (a)
21
%
 
 
 
 
 
21
%
 
Interest expense
(118
)
 
 

 
 
(118
)
 
Interest income
17

 
 

 
 
17

 
Other items, net
(11
)
 
 

 
 
(11
)
 
Earnings before income taxes and equity in loss of investee companies
660

 
 
9

 
 
669

 
Provision for income taxes
(135
)
 
 
(2
)
 
 
(137
)
 
Effective income tax rate
20.5
%
 
 
 
 
 
20.5
%
 
 
 
 
 
 
 
 
 
 
Equity in loss of investee companies, net of tax
(14
)
 
 

 
 
(14
)
 
Net earnings
$
511

 
 
$
7

 
 
$
518

 
Diluted EPS
$
1.32

 
 
$
.02

 
 
$
1.34

 
Diluted weighted average number of common shares outstanding
386

 
 
 
 
 
386

 
(a) Operating income margin is defined as operating income or Adjusted Operating Income divided by revenues.



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