CBS Corporation Reports Second Quarter 2017 Results

NEW YORK, Aug. 7, 2017

"CBS delivered outstanding second quarter results while continuing to take a number of steps to achieve our long-term financial goals," said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation. "First, we had a terrific upfront with gains in pricing and volume, including more and more deals that better reflect how people are watching our programming on a delayed basis. In addition, we took significant steps during the quarter to grow our affiliate fees from both traditional and 'skinny' bundles. Retransmission consent and reverse compensation increased 25% in the second quarter. And we are now seeing the benefit of our recent skinny bundle deals with Google's YouTube TV, Hulu, fuboTV, and just today we announced that we will be a part of DIRECTV NOW as well. At the same time, our in-house over-the-top subscription services, CBS All Access and Showtime OTT, continue to grow beyond our expectations and are on track to surpass a combined four million subscribers by the end of 2017. We are now gearing up to take the next strategic step with All Access by expanding it into the international marketplace, starting with Canada in the first half of 2018. Showtime also had a terrific quarter, led by the successful return of Twin Peaks, which boosted OTT subscriptions dramatically, and we continue to expand the Showtime brand overseas with new deals to license our entire portfolio in France, India, Taiwan, Hong Kong, and others. So, 2017 is turning out to be a great year for the CBS Corporation even without the Super Bowl and political spending that we had in the prior year. And as we look ahead, we are positioned to have an even better year in 2018."

Second Quarter 2017 Results

Revenues for the second quarter of 2017 increased 9% to $3.26 billion from $2.98 billion for the same prior-year period, with growth across all of the Company's significant revenue streams. Affiliate and subscription fee revenues were up 16%, driven by a 25% increase in retransmission revenues and fees from CBS Television Network affiliated stations, as well as growth from new initiatives, including the Company's digital subscription services. Advertising revenues were up 4%, led by the broadcast of the semifinals and finals of the NCAA Division I Men's Basketball Championship ("NCAA Tournament") on the CBS Television Network. Content licensing and distribution revenues benefited from a higher volume of television licensing sales and grew 12%, despite a difficult comparison to the second quarter of 2016, which included the international sales of five Star Trek series.

Operating income for the second quarter of 2017 increased 3% to $669 million from $651 million for the same prior-year period, despite higher-margin licensing sales in the second quarter of 2016. Net earnings from continuing operations increased 6% to $397 million for the second quarter of 2017 from $373 million for the same quarter last year, mainly a result of the higher operating income. Adjusted net earnings for the second quarter of 2017 were $427 million compared with net earnings of $423 million for the same prior-year period.

Net earnings for the second quarter of 2017 were $58 million, which included a noncash charge of $365 million in discontinued operations to reduce 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 carrying value 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 second quarter of 2017 increased 18% to $.97 from $.82 for the same quarter in 2016, driven by higher earnings and lower shares outstanding in the second quarter of 2017 from the Company's ongoing share repurchase program. Diluted EPS for the second quarter of 2017 was $.14 as a result of the above-mentioned noncash charge at CBS Radio, compared with $.93 for the prior-year period. Adjusted diluted EPS increased 12% to $1.04. During the quarter, the Company repurchased 4.7 million of its shares for $300 million.