0000813828-14-000005.txt : 20140722 0000813828-14-000005.hdr.sgml : 20140722 20140722160309 ACCESSION NUMBER: 0000813828-14-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20140716 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140722 DATE AS OF CHANGE: 20140722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CBS CORP CENTRAL INDEX KEY: 0000813828 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 042949533 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09553 FILM NUMBER: 14986655 BUSINESS ADDRESS: STREET 1: 51 WEST 52ND STREET STREET 2: 35TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2129754321 MAIL ADDRESS: STREET 1: 51 WEST 52ND STREET STREET 2: 35TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: VIACOM INC DATE OF NAME CHANGE: 19920703 8-K 1 cbs_8k-071614.htm 8-K Cover



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): July 16, 2014
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

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))
 



Item 2.01 Completion of Acquisition or Disposition of Assets.

On July 16, 2014, CBS Corporation (the “Company” or “CBS Corp.”) completed the previously announced split-off of CBS Outdoor Americas Inc. (“Outdoor Americas”) through which the Company accepted 44,723,131 shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97,000,000 shares of Outdoor Americas common stock that it owned (the "Split-Off").

The unaudited pro forma financial information giving effect to the Split-Off is filed herewith as Exhibit 99.1.

Item 2.02 Results of Operations and Financial Condition.

As a result of the completion of the Split-Off, Outdoor Americas will be accounted for as a discontinued operation of the Company beginning with the filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 ("Second Quarter 2014 10-Q").

The Company is providing in this Current Report on Form 8-K supplemental unaudited historical financial information of the Company, which presents Outdoor Americas as a discontinued operation for the first quarter of 2014 and each of the four quarters and full year of 2013. This information is being furnished to provide investors with prior period performance on a comparable basis in advance of the Company's filing of its Second Quarter 2014 10-Q.

The information furnished pursuant to this Item 2.02, including Exhibit 99.2, 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, except as expressly set forth in such filing.

A copy of such financial information is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The following unaudited pro forma financial information of the Company is filed as Exhibit 99.1 of this Report on Form 8-K and is incorporated herein by reference:

•
Unaudited pro forma condensed consolidated balance sheet at March 31, 2014.

•
Unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2014 and 2013 and each of the years ended December 31, 2013, 2012 and 2011.

•
Notes to the unaudited pro forma condensed consolidated financial statements.


(d) Exhibits. Exhibit 99.1 is filed and Exhibit 99.2 is furnished, each as part of this Current Report on Form 8-K.
 
Exhibit Number
 
Description of Exhibit
99.1
 
CBS Corporation Unaudited Pro Forma Condensed Consolidated Financial Statements.
99.2
 
Supplemental unaudited historical financial information of CBS Corporation, which presents Outdoor Americas as a discontinued operation for the first quarter of 2014 and for each of the four quarters and the full year of 2013.

-2-


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
CBS CORPORATION
 
 
By:
/s/ Joseph R. Ianniello
 
Name: Joseph R. Ianniello
 
Title: Chief Operating Officer
     
 
 
 
Date: July 22, 2014

-3-


EXHIBIT INDEX

Exhibit Number
 
Description of Exhibit
99.1
 
CBS Corporation Unaudited Pro Forma Condensed Consolidated Financial Statements.
99.2
 
Supplemental unaudited historical financial information of CBS Corporation, which presents Outdoor Americas as a discontinued operation for the first quarter of 2014 and for each of the four quarters and the full year of 2013.


-4-
 EX-99.1 2 cbs_ex991-071614.htm EXHIBIT 99.1 99.1 Pro Forma
    

Exhibit 99.1

CBS CORPORATION UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On July 16, 2014, CBS Corporation (the “Company” or “CBS Corp.”) completed the previously announced split-off of CBS Outdoor Americas Inc. (“Outdoor Americas”) through which the Company accepted 44,723,131 shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97,000,000 shares of Outdoor Americas common stock that it owned. As a result, Outdoor Americas will be accounted for as a discontinued operation of the Company. The accompanying pro forma condensed consolidated financial statements are presented to show the effects of the split-off on the Company’s consolidated financial statements.

The following unaudited pro forma condensed consolidated balance sheet of CBS Corp. as of March 31, 2014 is presented as if the split-off and related events, as described in the notes to these unaudited pro forma condensed consolidated financial statements, had occurred at March 31, 2014. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2014 and 2013 and the year ended December 31, 2013 are presented as if the split-off had occurred on January 1, 2013. The Company also presents the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012 and 2011 reflecting Outdoor Americas as a discontinued operation. The unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of CBS Corp. for each period presented and in the opinion of the Company’s management, all adjustments and disclosures necessary for a fair presentation of the pro forma data have been made.

These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had the split-off been completed as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the notes thereto should be read together with the following:
•
CBS Corp.’s consolidated financial statements and the notes thereto as of and for the year ended December 31, 2013, and Management’s Discussion and Analysis included in CBS Corp.’s Annual Report on Form 10-K for the year ended December 31, 2013.
•
CBS Corp.’s consolidated financial statements and the notes thereto as of and for the three months ended March 31, 2014, and Management’s Discussion and Analysis included in CBS Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014.



-1-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT MARCH 31, 2014
(in millions)

 
 
 
 
Deconsolidation (2)
 
 
 
 
CBS
Historical
 
Outdoor
Americas
IPO (1)
 
Outdoor
Americas
Post IPO
 
Adjustments
 
Effects
of the
Exchange (3)
 
CBS
Pro Forma
ASSETS
 
 
 
 
 
 
 
 
 
 

Cash and cash equivalents
$
311

 
$
615

 
$
(214
)
 
$
—

 
$
—

 
$
712

Receivables, net
3,301

 
—

 
(155
)
 
—

 
—

 
3,146

Programming and other inventory
541

 
—

 
—

 
—

 
—

 
541

Other current assets
924

 
—

 
(155
)
 
—

 
—

 
769

Total current assets
5,077


615


(524
)

—


—


5,168

Property and equipment, net
2,179

 
—

 
(733
)
 
—

 
—

 
1,446

Programming and other inventory
1,635

 
—

 
—

 
—

 
—

 
1,635

Goodwill
8,559

 
—

 
(1,863
)
 
—

 
—

 
6,696

Intangible assets
6,407

 
—

 
(349
)
 
—

 
—

 
6,058

Investment in Outdoor Americas
—

 
—

 
—

 
1,162

 
(1,162
)
 
—

Other assets
2,258

 
—

 
(68
)
 
—

 
—

 
2,190

Total assets
$
26,115


$
615


$
(3,537
)

$
1,162


$
(1,162
)

$
23,193

LIABILITIES AND
STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 

Current liabilities:
 
 
 
 
 
 
 
 
 
 

Current portion of long-term debt
$
106

 
$
—

 
$
—

 
$
—

 
$
—

 
$
106

Commercial paper
440

 
—

 
—

 
—

 
—

 
440

Accounts payable and accrued expenses
1,012

 
15

 
(132
)
 
—

 
27

 
922

Other current liabilities
2,514

 
—

 
(52
)
 
—

 
—

 
2,462

Total current liabilities
4,072


15


(184
)

—


27

 
3,930

Long-term debt
7,448

 
—

 
(1,598
)
 
—

 
—

 
5,850

Other liabilities
6,128

 
—

 
(317
)
 
—

 
—

 
5,811

 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
 
 
 
 
 

Common stock
1

 
—

 
(363
)
 
363

 
—

 
1

Additional paid-in capital
43,225

 
313

 
(10,429
)
 
10,429

 
—

 
43,538

Accumulated deficit
(24,422
)
 
—

 
9,306

 
(9,306
)
 
1,559

 
(22,863
)
Accumulated other comprehensive loss
(543
)
 
11

 
48

 
(48
)
 
(27
)
 
(559
)
 
18,261


324


(1,438
)

1,438


1,532

 
20,117

Less treasury stock, at cost
9,794

 
—

 
—

 
—

 
2,721

 
12,515

Total CBS Corp. stockholders' equity
8,467


324


(1,438
)

1,438


(1,189
)
 
7,602

Equity attributable to noncontrolling interest
—

 
276

 
—

 
(276
)
 
—

 
—

Total stockholders' equity
8,467


600


(1,438
)

1,162


(1,189
)
 
7,602

Total liabilities and stockholders' equity
$
26,115


$
615


$
(3,537
)

$
1,162


$
(1,162
)
 
$
23,193


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.


-2-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2014
(in millions, except per share amounts)

 
 
Deconsolidation (2)
 
 
CBS
Historical
 
Outdoor
Americas
 
Adjustments
 
CBS
Pro Forma
Revenues
$
3,856

 
$
(288
)
 
$
2

 
$
3,570

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Operating
2,284

 
(163
)
 
—

 
2,121

Selling, general and administrative
642

 
(57
)
 
2

 
587

Depreciation and amortization
112

 
(41
)
 
—

 
71

Total expenses
3,038

 
(261
)
 
2

 
2,779

Operating income
818

 
(27
)
 
—

 
791

Interest expense
(106
)
 
13

 
—

 
(93
)
Interest income
3

 
—

 
—

 
3

Other items, net
5

 
—

 
—

 
5

Earnings from continuing operations before income taxes
and equity in loss of investee companies
720

 
(14
)
 
—

 
706

Provision for income taxes
(242
)
 
8

 
—

 
(234
)
Equity in loss of investee companies, net of tax
(10
)
 
—

 
—

 
(10
)
Net earnings from continuing operations
$
468

 
$
(6
)
 
$
—

 
$
462

 
 
 
 
 
 
 
 
Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
$
.80

 
 
 
 
 
$
.79

Diluted
$
.78

 
 
 
 
 
$
.77

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
585

 
 
 
 
 
585

Diluted
600

 
 
 
 
 
600

 
 
 
 
 
 
 
 
Pro Forma - Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
$
.86

Diluted
 
 
 
 
 
 
$
.83

 
 
 
 
 
 
 
 
Pro Forma - Weighted average number of common shares outstanding: (3)
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
540

Diluted
 
 
 
 
 
 
555


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.



-3-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2013
(in millions, except per share amounts)
 
 
Deconsolidation (2)
 
 
CBS
Historical
 
Outdoor
Americas
 
Adjustments
 
CBS
Pro Forma
Revenues
$
4,040

 
$
(281
)
 
$
4

 
$
3,763

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Operating
2,474

 
(167
)
 
2

 
2,309

Selling, general and administrative
650

 
(43
)
 
2

 
609

Depreciation and amortization
116

 
(42
)
 
—

 
74

Total expenses
3,240

 
(252
)
 
4

 
2,992

Operating income
800

 
(29
)
 
—

 
771

Interest expense
(95
)
 
1

 
—

 
(94
)
Interest income
2

 
—

 
—

 
2

Other items, net
(2
)
 
—

 
—

 
(2
)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
705

 
(28
)
 
—

 
677

Provision for income taxes
(234
)
 
16

 
—

 
(218
)
Equity in loss of investee companies, net of tax
(8
)
 
(1
)
 
—

 
(9
)
Net earnings from continuing operations
$
463

 
$
(13
)
 
$
—

 
$
450

 
 
 
 
 
 
 
 
Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
$
.75

 
 
 
 
 
$
.72

Diluted
$
.73

 
 
 
 
 
$
.71

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
621

 
 
 
 
 
621

Diluted
638

 
 
 
 
 
638

 
 
 
 
 
 
 
 
Pro Forma - Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
$
.78

Diluted
 
 
 
 
 
 
$
.76

 
 
 
 
 
 
 
 
Pro Forma - Weighted average number of common shares outstanding: (3)
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
576

Diluted
 
 
 
 
 
 
593


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.


-4-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2013
(in millions, except per share amounts)

 
 
Deconsolidation (2)
 
 
CBS
Historical
 
Outdoor
Americas
 
Adjustments
 
CBS
Pro Forma
Revenues
$
15,284

 
$
(1,304
)
 
$
25

 
$
14,005

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Operating
8,813

 
(698
)
 
9

 
8,124

Selling, general and administrative
2,735

 
(205
)
 
16

 
2,546

Restructuring charges
20

 
—

 
—

 
20

Depreciation and amortization
457

 
(167
)
 
—

 
290

Total expenses
12,025

 
(1,070
)
 
25

 
10,980

Operating income
3,259

 
(234
)
 
—

 
3,025

Interest expense
(376
)
 
1

 
—

 
(375
)
Interest income
8

 
—

 
—

 
8

Other items, net
6

 
1

 
—

 
7

Earnings from continuing operations before income taxes
and equity in loss of investee companies
2,897

 
(232
)
 
—

 
2,665

Provision for income taxes
(978
)
 
100

 
—

 
(878
)
Equity in loss of investee companies, net of tax
(46
)
 
(3
)
 
—

 
(49
)
Net earnings from continuing operations
$
1,873

 
$
(135
)
 
$
—

 
$
1,738

 
 
 
 
 
 
 
 
Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
$
3.08

 
 
 
 
 
$
2.86

Diluted
$
3.00

 
 
 
 
 
$
2.79

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
608

 
 
 
 
 
608

Diluted
624

 
 
 
 
 
624

 
 
 
 
 
 
 
 
Pro Forma - Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
$
3.09

Diluted
 
 
 
 
 
 
$
3.00

 
 
 
 
 
 
 
 
Pro Forma - Weighted average number of common shares outstanding: (3)
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
563

Diluted
 
 
 
 
 
 
579


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.



-5-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2012
(in millions, except per share amounts)



Deconsolidation (2)


CBS
Historical

Outdoor
Americas

Adjustments

CBS
Pro Forma
Revenues
$
14,089


$
(1,296
)

$
27


$
12,820









Expenses:
 
 
 
 
 
 
 
Operating
7,967


(710
)

7


7,264

Selling, general and administrative
2,634


(212
)

20


2,442

Restructuring charges
19


—


—


19

Impairment charges
11


—




11

Depreciation and amortization
475


(169
)

—


306

Total expenses
11,106

 
(1,091
)
 
27

 
10,042

Operating income
2,983


(205
)

—


2,778

Interest expense
(402
)

1


—


(401
)
Interest income
6


(1
)

—


5

Net loss on early extinguishment of debt
(32
)

—


—


(32
)
Other items, net
6


1


—


7

Earnings from continuing operations before income taxes
and equity in loss of investee companies
2,561


(204
)

—


2,357

Provision for income taxes
(892
)

80


—


(812
)
Equity in loss of investee companies, net of tax
(35
)

(2
)

—


(37
)
Net earnings from continuing operations
$
1,634


$
(126
)

$
—


$
1,508









Net earnings from continuing operations per common share:







Basic
$
2.55






$
2.35

Diluted
$
2.48






$
2.29









Weighted average number of common shares outstanding:







Basic
642






642

Diluted
659






659


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.


-6-

CBS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2011
(in millions, except per share amounts)

 
 
Deconsolidation (2)
 
 
CBS
Historical
 
Outdoor
Americas
 
Adjustments
 
CBS
Pro Forma
Revenues
$
13,637

 
$
(1,286
)
 
$
30

 
$
12,381

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Operating
7,882

 
(697
)
 
6

 
7,191

Selling, general and administrative
2,598

 
(210
)
 
24

 
2,412

Restructuring charges
43

 
(1
)
 
—

 
42

Depreciation and amortization
495

 
(182
)
 
—

 
313

Total expenses
11,018

 
(1,090
)
 
30

 
9,958

Operating income
2,619


(196
)

—


2,423

Interest expense
(435
)
 
2

 
—

 
(433
)
Interest income
6

 
(1
)
 
—

 
5

Other items, net
(11
)
 
(1
)
 
—

 
(12
)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
2,179


(196
)

—


1,983

Provision for income taxes
(751
)
 
70

 
—

 
(681
)
Equity in loss of investee companies, net of tax
(37
)
 
(2
)
 
—

 
(39
)
Net earnings from continuing operations
$
1,391


$
(128
)

$
—


$
1,263

 
 
 
 
 
 
 
 
Net earnings from continuing operations per common share:
 
 
 
 
 
 
 
Basic
$
2.09






$
1.90

Diluted
$
2.04






$
1.85

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
664

 
 
 
 
 
664

Diluted
681

 
 
 
 
 
681


The accompanying notes are an integral part of these
unaudited pro forma condensed consolidated financial statements.

-7-


NOTES TO CBS CORPORATION UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular dollars in millions, except per share amounts)

1)    INITIAL PUBLIC OFFERING OF OUTDOOR AMERICAS
On April 2, 2014, Outdoor Americas completed the initial public offering of its common stock, through which it sold 23,000,000 shares of its outstanding common stock, representing approximately 19% of its outstanding common stock, for $28.00 per share. Total proceeds from the initial public offering aggregated $615 million, net of $29 million of underwriting discounts and commissions and before $15 million of other offering expenses. As a result of the initial public offering, the Company established a noncontrolling interest on its consolidated balance sheet of $276 million for the carrying value of the approximately 19% public ownership in Outdoor Americas. The initial public offering has been accounted for as an equity transaction, as the Company retained a controlling financial interest and continued to consolidate Outdoor Americas. The adjustment of $313 million to “additional paid-in-capital” reflects the excess of the net proceeds received from the initial public offering over the carrying value of the noncontrolling interest and the effect of the adjustment of $11 million to “accumulated other comprehensive loss” due to the approximately 19% public ownership of Outdoor Americas.
2)    DECONSOLIDATION OF OUTDOOR AMERICAS
Prior to the completion of its initial public offering, Outdoor Americas was an indirect wholly owned subsidiary of the Company. Following the initial public offering of Outdoor Americas, the Company indirectly owned 97,000,000 shares of Outdoor Americas common stock in the aggregate, representing approximately 81% of the outstanding shares of Outdoor Americas common stock. On July 16, 2014, the Company disposed of all of the shares of Outdoor Americas common stock that it indirectly owned by means of a tax-free split-off. As a result, Outdoor Americas will be accounted for as a discontinued operation of the Company. The deconsolidation adjustments include the reversal of (i) the historical assets and liabilities and results of operations of Outdoor Americas, including the related tax impact (ii) consolidation entries and (iii) previously eliminated transactions between Outdoor Americas and subsidiaries of the Company, as a result of the completion of the split-off.
3)    EXCHANGE OFFER AND SPLIT-OFF OF OUTDOOR AMERICAS

On July 16, 2014, the Company completed the split-off of Outdoor Americas through an exchange offer. Under the terms of the exchange offer, CBS Corp. shareholders received 2.1689 shares of Outdoor Americas common stock for each share of CBS Corp. Class B Common Stock accepted in the exchange offer. This exchange ratio was calculated based on the average price of CBS Corp. Class B Common Stock of $63.6544 per share divided by 93.0% of the average price of Outdoor Americas common stock of $31.5577 per share, reflecting a discount of 7.0%. The average prices reflect the simple arithmetic average of the daily volume-weighted average prices of shares of CBS Corp. Class B Common Stock and Outdoor Americas common stock on the NYSE during the three consecutive trading days ending on and including July 9, 2014. The exchange offer was oversubscribed and, after proration, the Company accepted 44,723,131 shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97,000,000 shares of Outdoor Americas common stock that it owned.

Shares of Outdoor Americas common stock owned by the Company
97,000,000

Exchange ratio
2.1689

Total shares of CBS Corp. Class B Common Stock accepted
44,723,131


-8-


NOTES TO CBS CORPORATION UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular dollars in millions, except per share amounts)

The 44,723,131 shares of CBS Corp. Class B Common Stock accepted by the Company in the exchange offer have been reflected as treasury stock on the unaudited pro forma condensed consolidated balance sheet. Pro forma weighted average number of common shares outstanding on the unaudited pro forma condensed consolidated statements of operations reflects historical weighted average shares outstanding reduced by the 44,723,131 shares of CBS Corp. Class B Common Stock accepted in the exchange offer.
This transaction results in a one-time gain to the Company estimated to be approximately $1.56 billion calculated as follows:
 
Fair value of CBS Corp. Class B Common Stock accepted
(44,723,131 shares at $60.85 per share as of July 16, 2014)
$
2,721

CBS Corp.'s carrying value in Outdoor Americas at March 31, 2014
(1,162
)
Accumulated other comprehensive loss
27

Estimated transaction costs
(27
)
Net gain on split-off of Outdoor Americas from CBS Corp.
$
1,559


The split-off is accounted for as a tax-free transaction and therefore, there is no tax impact on the gain. This gain, which will be reflected in discontinued operations in the Company's consolidated statement of operations for the third quarter of 2014, has not been reflected in the pro forma condensed consolidated statements of operations. The amount of the actual gain will be calculated based on the Company's carrying value in Outdoor Americas as of the closing of the exchange offer and therefore could differ from the current estimate.



-9-
 EX-99.2 3 cbs_ex992-071614.htm EXHIBIT 99.2 99.2 Segments
Exhibit 99.2



SUPPLEMENTAL QUARTERLY FINANCIAL DATA
(Unaudited; Dollars in millions, except per share amounts)
 
2013
 
2014
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Full
Year
 
First
Quarter
Revenues:
 
 
 
 
 
 

 
 
 
 
Entertainment
$
2,539

 
$
2,008

 
$
1,884

 
$
2,214

 
$
8,645

 
$
2,303

Cable Networks
478

 
518

 
596

 
477

 
2,069

 
537

Publishing
171

 
189

 
224

 
225

 
809

 
153

Local Broadcasting
638

 
698

 
641

 
719

 
2,696

 
626

Eliminations
(63
)
 
(44
)
 
(43
)
 
(64
)
 
(214
)
 
(49
)
Total Revenues
$
3,763

 
$
3,369

 
$
3,302

 
$
3,571

 
$
14,005

 
$
3,570

Segment OIBDA: (a)
 
 
 
 
 
 

 

 
 
Entertainment
$
480

 
$
429

 
$
431

 
$
418

 
$
1,758

 
$
457

Cable Networks
231

 
207

 
261

 
199

 
898

 
259

Publishing
12

 
21

 
43

 
37

 
113

 
13

Local Broadcasting
199

 
255

 
181

 
263

 
898

 
200

Corporate
(77
)
 
(64
)
 
(82
)
 
(109
)
 
(332
)
 
(67
)
Total Segment OIBDA
845

 
848

 
834

 
808

 
3,335

 
862

Restructuring charges
—

 
—

 
—

 
(20
)
 
(20
)
 
—

Depreciation and amortization
(74
)
 
(73
)
 
(70
)
 
(73
)
 
(290
)
 
(71
)
Total Operating Income
$
771

 
$
775

 
$
764

 
$
715

 
$
3,025

 
$
791

Operating Income (Loss):
 
 
 
 
 
 

 

 
 
Entertainment
$
440

 
$
391

 
$
394

 
$
368

 
$
1,593

 
$
420

Cable Networks
227

 
202

 
255

 
193

 
877

 
254

Publishing
10

 
20

 
41

 
35

 
106

 
11

Local Broadcasting
176

 
234

 
161

 
236

 
807

 
179

Corporate
(82
)
 
(72
)
 
(87
)
 
(117
)
 
(358
)
 
(73
)
Total Operating Income
771

 
775

 
764

 
715

 
3,025

 
791

Interest expense
(94
)
 
(94
)
 
(93
)
 
(94
)
 
(375
)
 
(93
)
Interest income
2

 
2

 
2

 
2

 
8

 
3

Other items, net
(2
)
 
(6
)
 
6

 
9

 
7

 
5

Earnings from continuing operations before
income taxes and equity in loss of investee companies
677

 
677

 
679

 
632

 
2,665

 
706

Provision for income taxes
(218
)
 
(234
)
 
(226
)
 
(200
)
 
(878
)
 
(234
)
Equity in loss of investee companies, net of tax
(9
)
 
(8
)
 
(22
)
 
(10
)
 
(49
)
 
(10
)
Net earnings from continuing operations
450

 
435

 
431

 
422

 
1,738

 
462

Net earnings (loss) from discontinued operations
(7
)
 
37

 
63

 
48

 
141

 
6

Net earnings
$
443

 
$
472

 
$
494

 
$
470

 
$
1,879

 
$
468

 
 
 
 
 
 
 

 
 
 
 
Basic net earnings (loss) per common share:
 
 
 
 
 
 

 
 
 
 
Net earnings from continuing operations
$
.72

 
$
.71

 
$
.71

 
$
.70

 
$
2.86


$
.79

Net earnings (loss) from discontinued operations
$
(.01
)
 
$
.06

 
$
.10

 
$
.08

 
$
.23


$
.01

Net earnings
$
.71

 
$
.78

 
$
.82

 
$
.78

 
$
3.09


$
.80

 

 
 
 
 
 

 
 
 
 
Diluted net earnings (loss) per common share:

 
 
 
 
 

 
 
 
 
Net earnings from continuing operations
$
.71

 
$
.70

 
$
.70

 
$
.69

 
$
2.79


$
.77

Net earnings (loss) from discontinued operations
$
(.01
)
 
$
.06

 
$
.10

 
$
.08

 
$
.23


$
.01

Net earnings
$
.69

 
$
.76

 
$
.80

 
$
.76

 
$
3.01


$
.78

 
 
 
 
 
 
 

 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 

 
 
 
 
Basic
621

 
609

 
603

 
599

 
608

 
585

Diluted
638

 
624

 
618

 
615

 
624

 
600

 
 
 
 
 
 
 

 
 
 
 
Pro Forma Per Share Data: (b)
 
 
 
 
 
 
 
 
 
 
 
Pro Forma - Basic net earnings from continuing operations
per common share
$
.78

 
$
.77

 
$
.77

 
$
.76

 
$
3.09

 
$
.86

Pro Forma - Diluted net earnings from continuing
operations per common share
$
.76

 
$
.75

 
$
.75

 
$
.74

 
$
3.00

 
$
.83

 
 
 
 
 
 
 
 
 
 
 
 
Pro Forma weighted average number of common
shares outstanding: (c)
 
 
 
 
 
 
 
 
 
 
 
Basic
576

 
564

 
558

 
554

 
563

 
540

Diluted
593

 
579

 
573

 
570

 
579

 
555




(a) The Company presents segment operating income (loss) before depreciation and amortization, restructuring charges and impairment charges, where applicable, ("Segment OIBDA") as the primary measure of profit and loss for its operating segments in accordance with Financial Accounting Standards Board guidance for segment reporting. The Company believes the presentation of Segment OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company's management and enhances their ability to understand the Company's operating performance.

(b) Pro forma per share data is calculated as net earnings from continuing operations divided by pro forma weighted average number of common shares outstanding.

(c) Pro forma weighted average number of common shares outstanding reflects historical weighted average shares outstanding reduced by 44,723,131 shares of CBS Corp. Class B Common Stock accepted by the Company in exchange for 97,000,000 shares of Outdoor Americas common stock that it owned.