CBS Corporation Reports First Quarter 2017 Results

NEW YORK, May 4, 2017

"Our first-quarter results once again demonstrate the strength of our strategy, which is to diversify our revenue mix as we achieve our long-term financial goals," said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation. "Retransmission consent and reverse compensation led the way in Q1, growing 28%. This contributed to a 17% increase in our Company's affiliate and subscription fee revenue, which also benefited from our over-the-top subscription services, CBS All Access and Showtime OTT. In addition, we a had very solid quarter for content licensing and distribution, which was up 16% and is poised for continued strength when several of our hit series enter the syndication cycle later this year. And we continue to add to our content pipeline all the time. In two weeks we will unveil our new primetime schedule on the CBS Television Network, which will include 19 returning series further strengthened by several new shows, the majority of which we will own. We look forward to the upfront marketplace where we're confident advertisers will once again place great value on the #1 television network in an increasingly fragmented media landscape. And longer term, that content becomes even more valuable when we license it across distribution services, both here in the U.S. and internationally as well. As we continue to sharpen our core content focus in the quarters to come, including the impending split-off of our radio business, we will be even better positioned to take advantage of all of the opportunities before us. So there is so much yet to come, and our road map for success is clear."

First Quarter 2017 Results

Revenues were $3.34 billion for the first quarter of 2017, down from $3.59 billion for the first quarter of 2016, when the CBS Television Network broadcast Super Bowl 50 and an additional National Football League ("NFL") playoff game. Excluding these two noncomparable games, first quarter revenues would have been up high-single digits. In addition, affiliate and subscription fee revenues increased 17%, driven by 28% growth in retransmission revenues and fees from CBS Television Network affiliated stations, as well as the Company's digital subscription services. Content licensing and distribution revenues grew 16%, led by higher domestic and international television licensing sales.

Operating income for the first quarter of 2017 was $704 million compared with $765 million for the same prior-year period, as a result of the above-mentioned noncomparable NFL games.

Net earnings from continuing operations were $454 million for the first quarter of 2017 compared with $442 million for the same quarter last year. Net earnings from continuing operations for the first quarter of 2017 included tax benefits from the resolution of certain state income tax matters as well as the exercise of stock options and vesting of RSUs. The Company reported a net loss of $252 million for the first quarter of 2017 compared with net earnings of $473 million for the same prior-year period. The net loss for the first quarter of 2017 included a noncash charge of $715 million in discontinued operations to establish a valuation allowance to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. CBS Radio is classified as held for sale and therefore, in accordance with accounting guidance, the valuation allowance will continue to be adjusted based on the trading price of Entercom's stock, which could result in future gains or losses.

Diluted EPS from continuing operations for the first quarter of 2017 was $1.09 compared with $.95 for the same quarter in 2016. Adjusted EPS from continuing operations increased 9% to $1.04, as a result of lower shares outstanding in the first quarter of 2017 because of the Company's ongoing share repurchase program. Adjusted EPS from continuing operations excludes the tax benefit of $22 million, or $.05 per diluted share, from the resolution of the aforementioned state income tax matters. EPS for the first quarter of 2017 was a loss of $.61 as a result of the above-mentioned noncash charge at CBS Radio, compared with EPS of $1.02 for the prior-year period. During the quarter, the Company repurchased 7.6 million of its shares for $500 million.