10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-09553

CBS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	04-2949533 (I.R.S. Employer Identification No.)
51 W. 52nd Street, New York, New York (Address of principal executive offices)	10019 (Zip Code)

(212) 975-4321

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o    No x

Number of shares of common stock outstanding at October 31, 2018:

Class A Common Stock, par value $.001 per share— 37,507,526

Class B Common Stock, par value $.001 per share— 336,787,717

CBS CORPORATION

INDEX TO FORM 10-Q

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Consolidated Statements of Operations (Unaudited) for the  Three and Nine Months Ended September 30, 2018 and September 30, 2017	3
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the  Three and Nine Months Ended September 30, 2018 and September 30, 2017	4
	Consolidated Balance Sheets (Unaudited) at September 30, 2018  and December 31, 2017	5
	Consolidated Statements of Cash Flows (Unaudited) for the  Nine Months Ended September 30, 2018 and September 30, 2017	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition.	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	68
Item 4.	Controls and Procedures.	68
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	69
Item 1A.	Risk Factors.	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	71
Item 6.	Exhibits.	72

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues	$	3,263		$	3,171		$	10,490		$	9,771
Costs and expenses:
Operating	1,922			1,862			6,506			5,940
Selling, general and administrative	549			525			1,605			1,520
Depreciation and amortization	56			55			168			166
Restructuring and other corporate matters (Note 3)	46			—			90			—
Total costs and expenses	2,573			2,442			8,369			7,626
Operating income	690			729			2,121			2,145
Interest expense	(115		)	(116		)	(349		)	(336		)
Interest income	12			17			43			45
Loss on early extinguishment of debt	—			(5		)	—			(5		)
Other items, net	(17		)	(19		)	(52		)	(56		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	570			606			1,763			1,793
Provision for income taxes	(64		)	(172		)	(312		)	(479		)
Equity in loss of investee companies, net of tax	(18		)	(16		)	(52		)	(45		)
Net earnings from continuing operations	488			418			1,399			1,269
Net earnings (loss) from discontinued operations, net of tax (Note 13)	—			174			—			(871		)
Net earnings	$	488		$	592		$	1,399		$	398
Basic net earnings (loss) per common share:
Net earnings from continuing operations	$	1.30		$	1.04		$	3.70		$	3.13
Net earnings (loss) from discontinued operations	$	—		$	.43		$	—		$	(2.15	)
Net earnings	$	1.30		$	1.48		$	3.70		$	.98
Diluted net earnings (loss) per common share:
Net earnings from continuing operations	$	1.29		$	1.03		$	3.66		$	3.10
Net earnings (loss) from discontinued operations	$	—		$	.43		$	—		$	(2.12	)
Net earnings	$	1.29		$	1.46		$	3.66		$	.97
Weighted average number of common shares outstanding:
Basic	375			401			378			405
Diluted	379			406			382			410
Dividends per common share	$	.18		$	.18		$	.54		$	.54

See notes to consolidated financial statements.

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CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; in millions)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Net earnings	$	488		$	592	$	1,399		$	398
Other comprehensive income, net of tax:
Cumulative translation adjustments	(3		)	2		(17		)	4
Amortization of net actuarial loss	15			13		45			37
Total other comprehensive income, net of tax	12			15		28			41
Total comprehensive income	$	500		$	607	$	1,427		$	439

See notes to consolidated financial statements.

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CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except per share amounts)

	At				At
	September 30, 2018				December 31, 2017
ASSETS
Current Assets:
Cash and cash equivalents		$	182			$	285
Receivables, less allowances of $48 (2018) and $49 (2017)		3,697				3,697
Programming and other inventory (Note 4)		1,828				1,828
Prepaid income taxes		—				78
Prepaid expenses		137				194
Other current assets		196				191
Total current assets		6,040				6,273
Property and equipment		3,004				3,051
Less accumulated depreciation and amortization		1,782				1,771
Net property and equipment		1,222				1,280
Programming and other inventory (Note 4)		3,868				2,881
Goodwill		4,921				4,891
Intangible assets		2,650				2,666
Other assets		2,367				2,852
Total Assets		$	21,068			$	20,843
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	229			$	231
Accrued compensation		256				343
Participants’ share and royalties payable		1,110				986
Program rights		406				373
Income taxes payable		68				—
Commercial paper (Note 6)		374				679
Current portion of long-term debt (Note 6)		14				19
Accrued expenses and other current liabilities		1,536				1,341
Total current liabilities		3,993				3,972
Long-term debt (Note 6)		9,465				9,464
Pension and postretirement benefit obligations		1,226				1,328
Deferred income tax liabilities, net		563				480
Other liabilities		3,307				3,621
Commitments and contingencies (Note 14)
Stockholders’ Equity:
Class A Common Stock, par value $.001 per share; 375 shares authorized;  38 (2018 and 2017) shares issued		—				—
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;  835 (2018) and 834 (2017) shares issued		1				1
Additional paid-in capital		43,668				43,797
Accumulated deficit		(17,762		)		(18,900		)
Accumulated other comprehensive loss (Note 8)		(634		)		(662		)
		25,273				24,236
Less treasury stock, at cost; 498 (2018) and 489 (2017) Class B shares		22,759				22,258
Total Stockholders’ Equity		2,514				1,978
Total Liabilities and Stockholders’ Equity		$	21,068			$	20,843

See notes to consolidated financial statements.

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CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

	Nine Months Ended
	September 30,
	2018			2017
Operating Activities:
Net earnings	$	1,399		$	398
Less: Net loss from discontinued operations, net of tax	—			(871		)
Net earnings from continuing operations	1,399			1,269
Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:
Depreciation and amortization	168			166
Stock-based compensation	105			129
Equity in loss of investee companies, net of tax and distributions	52			45
Change in assets and liabilities, net of investing and financing activities	(545		)	(674		)
Net cash flow provided by operating activities from continuing operations	1,179			935
Net cash flow provided by operating activities from discontinued operations	1			52
Net cash flow provided by operating activities	1,180			987
Investing Activities:
Investments in and advances to investee companies	(76		)	(67		)
Capital expenditures	(99		)	(112		)
Acquisitions (including acquired television library)	(29		)	(258		)
Proceeds from sale of investments	—			10
Proceeds from dispositions	—			11
Other investing activities	8			17
Net cash flow used for investing activities from continuing operations	(196		)	(399		)
Net cash flow used for investing activities from discontinued operations	(23		)	(18		)
Net cash flow used for investing activities	(219		)	(417		)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net	(305		)	140
Proceeds from issuance of senior notes	—			889
Repayment of senior notes	—			(701		)
Proceeds from debt borrowings of CBS Radio	—			40
Repayment of debt borrowings of CBS Radio	—			(23		)
Payment of capital lease obligations	(12		)	(13		)
Payment of contingent consideration	(5		)	(7		)
Dividends	(208		)	(224		)
Purchase of Company common stock	(497		)	(1,111		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(59		)	(89		)
Proceeds from exercise of stock options	23			81
Other financing activities	(1		)	—
Net cash flow used for financing activities	(1,064		)	(1,018		)
Net decrease in cash and cash equivalents	(103		)	(448		)
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)	285			622
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	$	182		$	174
Supplemental disclosure of cash flow information
Cash paid for interest:
Continuing operations	$	406		$	393
Discontinued operations	$	—		$	52
Cash (refunded) paid for income taxes:
Continuing operations	$	(19	)	$	321
Discontinued operations	$	(3	)	$	58

See notes to consolidated financial statements.

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CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in millions, except per share amounts)

1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business-CBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the “Company” or “CBS Corp.”) is comprised of the following segments: Entertainment (CBS Television, comprised of the CBS Television Network, CBS Television Studios, CBS Studios International, and CBS Television Distribution; Network 10; CBS Interactive; and CBS Films), Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks), Publishing (Simon & Schuster) and Local Media (CBS Television Stations and CBS Local Digital Media).

Discontinued Operations-On November 16, 2017, the Company completed the disposition of CBS Radio Inc. (“CBS Radio”) through a split-off. CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements (See Note 13).

Basis of Presentation-The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the more detailed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the periods presented. Certain previously reported amounts have been reclassified to conform to the current presentation.

Use of Estimates-The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenues

Advertising Revenues-Advertising revenues are recognized when the advertising spots are aired on television or displayed on digital platforms. If there is a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. Audience ratings and impressions are determined based on data provided by independent third-party companies. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.

Advertising revenues are primarily generated by the Entertainment and Local Media segments.

Content Licensing and Distribution Revenues-Content licensing and distribution revenues are generated from the licensing of internally-produced television programming, fees from the distribution of third-party programming, and the publishing and distribution of consumer books.

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CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Program Licensing and Distribution

For licenses of internally-produced television programming, each individual episode delivered represents a separate performance obligation and revenues are recognized when the episode is made available to the licensee for exhibition and the license period has begun. For license agreements containing multiple deliverables, revenues are allocated based on the relative standalone selling price of each episode of a television series, which is based on licenses for comparable series within the marketplace. Agreements to license programming are often long term, with collection terms ranging from one to five years.

The Company also distributes programs on behalf of third parties. In such arrangements, the Company generally obtains control of the program before selling it to the customer. Therefore, revenues from such distribution arrangements, which include both content licensing and advertising revenues, are recognized based on the gross amount of consideration received from the customer, with a participation expense recognized for the fees paid to the third-party producer.

Substantially all of the Company’s program licensing and distribution revenues are generated by the Entertainment segment, with the remainder generated by the Cable Networks segment.

Publishing

Publishing revenues are recognized when merchandise is shipped or electronically delivered to the consumer. Consumer print books are generally sold with a right of return. The Company records a returns reserve and corresponding decrease in revenue at the time of sale based upon historical trends. For publishing revenues, payments are due shortly after shipment or electronic delivery.

Affiliate and Subscription Fees-A majority of the Company’s affiliate and subscription fees are generated by the Cable Networks segment and consist of fees received from multichannel video programming distributors (“MVPDs”) for carriage of the Company’s cable networks and subscription fees for the Showtime digital streaming subscription offering. The Entertainment segment generates affiliate and subscription fees primarily from television stations affiliated with the CBS Television Network and subscribers to CBS All Access, its owned streaming subscription service. In addition, the Local Media segment generates retransmission fees from MVPDs for carriage of the Company’s television stations.

The performance obligation for the Company’s affiliate agreements is a license to the Company’s programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs, also includes a license to programming for video on demand viewing. Affiliate and subscription fees are recognized over the term of the agreement as the Company continuously provides its customer with the right to use its programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers tothe customer’s service. For agreements that provide for a fixed fee, which primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”), revenues are recognized based on the relative fair value of the content provided over the term of the agreement, which is determined based on the fair value of the network affiliate’s service and the value of the Company’s programming. For affiliate and subscription fee revenues, payments are generally due monthly.

Noncurrent Receivables-Noncurrent receivables of $1.60 billion and $1.59 billion at September 30, 2018 and January 1, 2018, respectively, are included in “Other assets” on the Company’s Consolidated Balance Sheets and primarily relate to revenues recognized under long-term television licensing arrangements.

-8-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Deferred Revenues-Deferred revenues primarily consist of cash received related to advertising arrangements and the licensing of television programming for which the revenues have not yet been earned. Advertising revenues that have been deferred are recognized when the required audience rating or impressions are delivered and revenues deferred under licensing arrangements are recognized when the content is made available to the customer.

Deferred revenues are primarily short term and included within “Accrued expenses and other current liabilities” on the Company’s Consolidated Balance Sheets. Total deferred revenues were $259 million and $284 million at September 30, 2018 and January 1, 2018, respectively. The change in deferred revenue for the nine months endedSeptember 30, 2018 primarily reflects $178 million of revenues recognized that were included in deferred revenues at January 1, 2018, offset by cash payments received during the period for which the performance obligation was not satisfied prior to the end of the period.

Unrecognized Revenues Under Contract-As of September 30, 2018, unrecognized revenue attributable to unsatisfied performance obligations under the Company’s long-term contracts was $3.41 billion, of which $522 million is expected to be recognized for the remainder of 2018, $1.58 billion for 2019, $771 million for 2020, and $534 million thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts. Such amounts change on a regular basis as the Company renews existing agreements or enters into new agreements. Unrecognized revenues under contract disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of the Company’s advertising contracts (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly consisting of affiliate and subscription fee agreements and (iii) long-term licensing agreements for multiple programs for which the Company’s right to invoice corresponds with the value of the programs provided to the customer.

Net Earnings (Loss) per Common Share-Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss) divided by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) only in the periods in which such effect would have been dilutive. Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, were 7 million stock options for each of the three and nine months endedSeptember 30, 2018 and 4 million stock options for each of the three and nine months endedSeptember 30, 2017.

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2018	2017	2018	2017
Weighted average shares for basic EPS	375	401	378	405
Dilutive effect of shares issuable under stock-based compensation plans	4	5	4	5
Weighted average shares for diluted EPS	379	406	382	410

Other Liabilities-Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, participants’ share and royalties payable, program rights obligations, deferred compensation and other employee benefit accruals.

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CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Additional Paid-In Capital-For the nine months endedSeptember 30, 2018 and 2017, the Company recorded dividends of $206 million and $221 million, respectively, as a reduction to additional paid-in capital as the Company had an accumulated deficit balance.

Recently Adopted Accounting Pronouncements

Revenue from Contracts with Customers

During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (“FASB”) guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company applied the modified retrospective method of adoption with the cumulative effect of the initial adoption of $261 million reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. Prior periods continue to be presented under previous accounting guidance (See Note 12).

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

During the first quarter of 2018, the Company adopted FASB amended guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). This guidance requires the Company to present the service cost component of net benefit cost in the same line items on the statement of operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented in the statement of operations separately from the service cost component and below the subtotal of operating income. As a result of the adoption of this guidance, the Company presented $16 million and $47 million of net benefit costs in “Other items, net” on the Consolidated Statement of Operations for the three and nine months endedSeptember 30, 2018, respectively, representing the components of net benefit cost other than service cost. This guidance is required to be applied retrospectively and therefore, $22 million and $65 million of expenses, previously presented within operating income, have been reclassified to “Other items, net” for the three and nine months endedSeptember 30, 2017, respectively.

Stock Compensation: Scope of Modification Accounting

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for stock-based compensation which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award as equity or liability changes as a result of the change in the terms or conditions of a share-based payment award. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Clarifying the Definition of a Business

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for business combinations which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more

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CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

closely aligning it with how outputs are described in FASB guidance for revenue recognition. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Intra-Entity Transfers of Assets Other than Inventory

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for income taxes, which eliminates the exception in existing guidance that defers the recognition of the tax effects of intra-entity asset transfers other than inventory until the transferred asset is sold to a third party. Under this guidance, an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

In August 2018, the FASB issued guidance on the accounting for implementation costs of a cloud computing arrangement that is considered to be a service contract. This guidance requires companies to follow the guidance for capitalizing costs associated with internal-use software to determine which costs to capitalize in a cloud computing arrangement that is a service contract. The guidance also specifies the financial statement presentation for capitalized implementation costs and the related amortization, as well as required financial statement disclosures. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued amended guidance that eliminates, adds and clarifies certain disclosure requirements for defined benefit pension or other postretirement plans. The Company is currently evaluating the impact of this guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

Changes to the Disclosure Requirements for Fair Value Measurements

In August 2018, the FASB issued amended guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued amended guidance that permits an entity to reclassify the income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive income to retained earnings. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.

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CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued amended guidance for hedge accounting, which expands the eligibility of hedging strategies that qualify for hedge accounting, modifies the recognition and presentation of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition, this guidance amends and expands disclosure requirements. This guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, is not expected to have a material impact on the Company’s consolidated financial statements.

Leases

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This guidance is effective for the Company in the first quarter of 2019. The Company is currently reviewing its lease portfolio, evaluating the impact of this guidance on its consolidated balance sheet and is in the process of implementing new lease accounting software for administering its leases under the new guidance. The Company will apply the modified retrospective method of adoption as of January 1, 2019 and comparative periods will continue to be presented under existing lease guidance.

2) STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense for the three and nine months endedSeptember 30, 2018 and 2017.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
RSUs and PSUs	$	7		$	38		$	86		$	109
Stock options	7			6			19			20
Stock-based compensation expense, before income taxes	14			44			105			129
Related tax benefit	(3		)	(17		)	(26		)	(50		)
Stock-based compensation expense, net of tax benefit	$	11		$	27		$	79		$	79

Stock-based compensation expense for the three and nine months endedSeptember 30, 2018 includes forfeitures of $28 million and accelerations of $6 million relating to changes in senior management, which are included in “Restructuring and other corporate matters” on the Consolidated Statements of Operations. During the nine months endedSeptember 30, 2018, the Company granted 3 million RSUs for CBS Corp. Class B Common Stock with a weighted average per unit grant-date fair value of $53.96. RSUs granted during the first nine months of 2018 generally vest over a one- to four-year service period. Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant. For certain RSU awards the number of shares an employee earns ranges from 0% to 120% of the target award, based on the outcome of established performance conditions. Compensation expense is recorded based on the probable outcome of the performance conditions.

During the nine months endedSeptember 30, 2018, the Company also granted 2 million stock options with a weighted average exercise price of $54.32. Stock options granted during the first nine months of 2018 vest over a

-12-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

four-year service period and expire eight years from the date of grant. Compensation expense for stock options is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model.

Total unrecognized compensation cost related to unvested RSUs at September 30, 2018 was $201 million, which is expected to be recognized over a weighted average period of 2.5 years. Total unrecognized compensation cost related to unvested stock option awards at September 30, 2018 was $40 million, which is expected to be recognized over a weighted average period of 2.6 years.

3) RESTRUCTURING AND OTHER CORPORATE MATTERS

During the second quarter of 2018, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $25 million, reflecting $17 million of severance costs and $8 million of costs associated with exiting contractual obligations and other related costs.

During the year ended December 31, 2017, the Company recorded restructuring charges of $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs.

As of September 30, 2018, the cumulative settlements for the 2018, 2017 and 2016 restructuring charges were $67 million, of which $56 million was for severance costs and $11 million was for costs associated with contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reserves by the end of 2019.

	Balance at			2018			2018				Balance at
	December 31, 2017			Charges			Settlements				September 30, 2018
Entertainment		$	45		$	6		$	(26	)		$	25
Cable Networks		1			—			(1		)		—
Publishing		3			1			(2		)		2
Local Media		14			11			(7		)		18
Corporate		3			7			(4		)		6
Total		$	66		$	25		$	(40	)		$	51

	Balance at			2017			2017				Balance at
	December 31, 2016			Charges			Settlements				December 31, 2017
Entertainment		$	17		$	44		$	(16	)		$	45
Cable Networks		4			—			(3		)		1
Publishing		1			5			(3		)		3
Local Media		6			12			(4		)		14
Corporate		2			2			(1		)		3
Total		$	30		$	63		$	(27	)		$	66

During the three and nine months endedSeptember 30, 2018, the Company recorded expenses of $46 million and $65 million, respectively, primarily for professional fees related to legal proceedings and the ongoing investigations at the Company. (See Note 14). The nine-month period also included professional fees related to the evaluation of a potential combination with Viacom Inc.

-13-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

4) PROGRAMMING AND OTHER INVENTORY

	At			At
	September 30, 2018			December 31, 2017
Acquired program rights		$	2,373		$	2,234
Acquired television library		99			99
Internally produced programming:
Released		2,481			1,780
In process and other		680			543
Publishing, primarily finished goods		63			53
Total programming and other inventory		5,696			4,709
Less current portion		1,828			1,828
Total noncurrent programming and other inventory		$	3,868		$	2,881

5) RELATED PARTIES

National Amusements, Inc. National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp. and Viacom Inc. Mr. Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Chairman Emeritus of CBS Corp. and the Chairman Emeritus of Viacom Inc. In addition, Ms. Shari Redstone, Mr. Sumner M. Redstone’s daughter, is the president and a director of NAI and the vice chair of the Board of Directors of each of CBS Corp. and Viacom Inc. Mr. David R. Andelman was a director of CBS Corp. until his resignation on September 9, 2018. Mr. Andelman serves as a director of NAI. At September 30, 2018, NAI directly or indirectly owned approximately 79.7% of CBS Corp.’s voting Class A Common Stock, and owned approximately 10.4% of CBS Corp.’s Class A Common Stock and non-voting Class B Common Stock on a combined basis. NAI is controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which owns 80% of the voting interest of NAI, and such voting interest of NAI held by the SMR Trust is voted solely by Mr. Redstone until his incapacity or death. The SMR Trust provides that in the event of Mr. Redstone’s death or incapacity, voting control of the NAI voting interest held by the SMR Trust will pass to seven trustees, who will include CBS Corp. director Ms. Shari Redstone. Mr. Andelman also currently serves as a trustee. No member of the Company’s management is a trustee of the SMR Trust. See “Legal Matters” in Note 14 for information regarding recently settled litigation involving the foregoing parties.

Viacom Inc. As part of its normal course of business, the Company licenses its television content, leases production facilities and sells advertising spots to various subsidiaries of Viacom Inc. Viacom Inc. also distributes certain of the Company’s television programs in the home entertainment market. The Company’s total revenues from these transactions were $76 million and $38 million for the three months ended September 30, 2018 and 2017, respectively, and $105 million and $111 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

The Company leases production facilities, licenses feature films and purchases advertising spots from various subsidiaries of Viacom Inc. The total amounts for these transactions were $9 million and $4 million for the three months ended September 30, 2018 and 2017, respectively, and $21 million and $13 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

-14-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table presents the amounts due from Viacom Inc. in the normal course of business as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September 30, 2018 and December 31, 2017.

	At			At
	September 30, 2018			December 31, 2017
Receivables		$	40		$	93
Other assets (Receivables, noncurrent)		25			11
Total amounts due from Viacom		$	65		$	104

Other Related Parties. The Company has equity interests in two domestic television networks and several international joint ventures for television channels from which the Company earns revenues primarily by selling its television programming. Total revenues earned from sales to these joint ventures were $14 million and $5 million for the three months ended September 30, 2018 and 2017, respectively and $67 million and $54 million for the nine months endedSeptember 30, 2018 and 2017, respectively. At September 30, 2018 and December 31, 2017, total amounts due from these joint ventures were $23 million and $27 million, respectively.

The Company, through the normal course of business, is involved in transactions with other related parties that have not been material in any of the periods presented.

6) BANK FINANCING AND DEBT

The following table sets forth the Company’s debt.

	At			At
	September 30, 2018			December 31, 2017
Commercial paper		$	374		$	679
Senior debt (2.30% - 7.875% due 2019 - 2045) (a)		9,433			9,426
Obligations under capital leases		46			57
Total debt		9,853			10,162
Less commercial paper		374			679
Less current portion of long-term debt		14			19
Total long-term debt, net of current portion		$	9,465		$	9,464

(a) At September 30, 2018 and December 31, 2017, the senior debt balances included (i) a net unamortized discount of $60 million and $65 million, respectively, (ii) unamortized deferred financing costs of $44 million and $47 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $4 million and $3 million, respectively. The face value of the Company’s senior debt was $9.54 billion at both September 30, 2018 and December 31, 2017.

-15-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

At September 30, 2018, the Company classified $600 million of debt maturing in August 2019 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $374 million and $679 million at September 30, 2018 and December 31, 2017, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 2.41% at September 30, 2018 and 1.88% at December 31, 2017.

Credit Facility

At September 30, 2018, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At September 30, 2018, the Company’s Consolidated Leverage Ratio was approximately 3.0x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. At September 30, 2018, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.

7) PENSION AND OTHER POSTRETIREMENT BENEFITS

The components of net periodic cost for the Company’s pension and postretirement benefit plans were as follows:

	Pension Benefits						Postretirement Benefits
Three Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	7		$	7		$	—		$	—
Interest cost	38			48			3			4
Expected return on plan assets	(45		)	(50		)	—			—
Amortization of actuarial loss (gain) (a)	24			26			(4		)	(5		)
Net periodic cost	$	24		$	31		$	(1	)	$	(1	)

	Pension Benefits						Postretirement Benefits
Nine Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	23		$	22		$	—		$	—
Interest cost	112			143			11			13
Expected return on plan assets	(135		)	(151		)	—			—
Amortization of actuarial loss (gain) (a)	72			77			(13		)	(16		)
Net periodic cost	$	72		$	91		$	(2	)	$	(3	)

(a) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.

-16-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income and all other components of net periodic cost are presented within “Other items, net.”

8) STOCKHOLDERS’ EQUITY

During the third quarter of 2018, the Company repurchased 1.8 million shares of its Class B Common Stock under its share repurchase program for $100 million, at an average cost of $55.13 per share. During the nine months endedSeptember 30, 2018, the Company repurchased 9.4 million shares of its Class B Common Stock for $500 million, at an average cost of $52.94 per share, leaving $2.56 billion of authorization at September 30, 2018.

During the third quarter of 2018, the Company declared a quarterly cash dividend of $.18 per share on its Class A and Class B Common Stock, resulting in total dividends of $68 million, which were paid on October 1, 2018. During the nine months endedSeptember 30, 2018, the Company declared total per share cash dividends of $.54 on its Class A and Class B Common Stock, resulting in total dividends of $206 million.

On May 17, 2018, the Company’s Board of Directors voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company’s Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”). In connection with the settlement agreement involving legal proceedings in the Delaware Court of Chancery, on September 9, 2018, the Board rescinded the May 2018 Stock Dividend. See “Legal Matters” in Note 14 for related information.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the components of accumulated other comprehensive loss.

	Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2017	$	159		$	(821	)			$	(662	)
Other comprehensive loss before reclassifications	(17		)	—					(17		)
Reclassifications to net earnings	—			45			(a)		45
Net other comprehensive income (loss)	(17		)	45					28
At September 30, 2018	$	142		$	(776	)			$	(634	)

	Cumulative Translation Adjustments		Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2016	$	151	$	(918	)			$	(767	)
Other comprehensive income before reclassifications	4		—					4
Reclassifications to net earnings	—		37			(a)		37
Net other comprehensive income	4		37					41
At September 30, 2017	$	155	$	(881	)			$	(726	)

(a) Reflects amortization of net actuarial losses. See Note 7.

The net actuarial losses related to pension and other postretirement benefit plans included in other comprehensive income are net of tax provisions of $14 million and $24 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

-17-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

9) INCOME TAXES

The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Provision for income taxes, including interest and before other discrete items (a)	$	120		$	187		$	370		$	548
Impact of tax law changes (b)	(54		)	—			(54		)	—
Excess tax benefits from stock-based compensation (c)	—			(10		)	—			(41		)
Other discrete items (d)	(2		)	(5		)	(4		)	(28		)
Provision for income taxes	$	64		$	172		$	312		$	479
Effective income tax rate	11.2		%	28.4		%	17.7		%	26.7		%

(a) The lower tax provision for the three and nine months endedSeptember 30, 2018 primarily reflects a reduction in the federal corporate income tax rate from 35% to 21% as a result of the enactment of new federal tax legislation in December 2017 (the “Tax Reform Act”).

(b) During the third quarter of 2018, in connection with the preparation of its 2017 federal tax return, the Company elected to utilize a federal tax law provision that was retroactively renewed in 2018. This tax law provision allowed the Company to immediately expense certain qualified production costs on its 2017 tax return. As a result, during the third quarter of 2018, the Company established a deferred tax liability associated with this deduction at the 2017 federal tax rate of 35%, and concurrently recorded a net tax benefit of $69 million, primarily reflecting the re-measurement of this deferred tax liability at the reduced federal corporate tax rate of 21% under the Tax Reform Act. This benefit was partially offset by a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits that resulted from the enactment of the Tax Reform Act in 2017. See discussion below.

(c) Reflects the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return associated with the exercise of stock options and vesting of RSUs. This difference occurs because stock-based compensation expense is recorded based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests.

(d) For the nine months endedSeptember 30, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters.

In December 2017, the U.S. government enacted the Tax Reform Act containing significant changes to U.S. federal tax law, including a reduction in the federal corporate tax rate from 35% to 21% and a one-time transition tax on cumulative foreign earnings and profits. For the year ended December 31, 2017, the Company recorded a net provisional charge of $129 million, reflecting the estimated transition tax of $407 million on cumulative foreign earnings and profits, offset by an estimated benefit of $278 million to adjust the Company’s deferred income tax balances as a result of the reduced corporate income tax rate. The Tax Reform Act also includes a deduction for foreign derived intangible income and a tax on global intangible low-taxed income (“GILTI”), which imposes a U.S. tax on certain income earned by the Company’s foreign subsidiaries. The Company included the tax on GILTI in its tax provision for the three and nine months endedSeptember 30, 2018. During the third quarter of 2018, the Company recorded a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits. The Company will complete its analysis of the Tax Reform Act within one year from its enactment. Such analysis will include finalizing and recording any additional adjustments to provisional estimates, as well as determining whether to treat the tax on GILTI as a period cost when incurred or as a component of deferred taxes.

-18-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

10) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company’s carrying value of financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value. At September 30, 2018 and December 31, 2017, the carrying value of the Company’s senior debt was $9.43 billion and the fair value, which is estimated based on quoted market prices for similar liabilities (Level 2) and includes accrued interest, was $9.57 billion and $10.16 billion, respectively.

The Company uses derivative financial instruments primarily to modify its exposure to market risks from fluctuations in foreign currency exchange rates. The Company does not use derivative instruments unless there is an underlying exposure and, therefore, the Company does not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign Exchange Contracts

Foreign exchange forward contracts have principally been used to hedge projected cash flows, in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, generally for periods up to 24 months. The Company designates forward contracts used to hedge committed and forecasted foreign currency transactions as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enters into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At September 30, 2018 and December 31, 2017, the notional amount of all foreign exchange contracts was $391 million and $410 million, respectively.

Gains (losses) recognized on derivative financial instruments were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018		2017			Financial Statement Account
Non-designated foreign exchange contracts	$	—	$	(9	)	$	13	$	(29	)	Other items, net

The fair value of the Company’s derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.

-19-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

At September 30, 2018	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	9	$	—	$	9
Total Assets	$	—	$	9	$	—	$	9
Liabilities:
Deferred compensation	$	—	$	375	$	—	$	375
Foreign currency hedges	—		1		—		1
Total Liabilities	$	—	$	376	$	—	$	376

At December 31, 2017	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	5	$	—	$	5
Total Assets	$	—	$	5	$	—	$	5
Liabilities:
Deferred compensation	$	—	$	363	$	—	$	363
Foreign currency hedges	—		10		—		10
Total Liabilities	$	—	$	373	$	—	$	373

The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.

11) SEGMENT AND REVENUE INFORMATION

The following tables set forth the Company’s financial information by reportable segment. The Company’s operating segments, which are the same as its reportable segments, have been determined in accordance with the Company’s internal management structure, which is organized based upon products and services.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Entertainment	$	2,151		$	1,815		$	7,232		$	6,346
Cable Networks	569			840			1,769			1,954
Publishing	240			228			607			595
Local Media	434			397			1,269			1,218
Corporate/Eliminations	(131		)	(109		)	(387		)	(342		)
Total Revenues	$	3,263		$	3,171		$	10,490		$	9,771

-20-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Revenues generated between segments primarily reflect advertising sales, content licensing and station affiliation fees. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Intercompany Revenues:
Entertainment	$	135	$	111	$	394	$	348
Cable Networks	2		—		2		—
Local Media	3		4		13		10
Total Intercompany Revenues	$	140	$	115	$	409	$	358

The Company presents operating income (loss) excluding costs for restructuring and other corporate matters, where applicable, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments in accordance with FASB guidance for segment reporting. The Company believes the presentation of Segment Operating Income 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.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Segment Operating Income (Loss):
Entertainment	$	377		$	350		$	1,225		$	1,104
Cable Networks	248			296			734			801
Publishing	51			47			98			91
Local Media	124			106			370			358
Corporate	(64		)	(70		)	(216		)	(209		)
Restructuring and other corporate matters	(46		)	—			(90		)	—
Operating income	690			729			2,121			2,145
Interest expense	(115		)	(116		)	(349		)	(336		)
Interest income	12			17			43			45
Loss on early extinguishment of debt	—			(5		)	—			(5		)
Other items, net	(17		)	(19		)	(52		)	(56		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	570			606			1,763			1,793
Provision for income taxes	(64		)	(172		)	(312		)	(479		)
Equity in loss of investee companies, net of tax	(18		)	(16		)	(52		)	(45		)
Net earnings from continuing operations	488			418			1,399			1,269
Net earnings (loss) from discontinued operations, net of tax	—			174			—			(871		)
Net earnings	$	488		$	592		$	1,399		$	398

-21-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Depreciation and Amortization:
Entertainment	$	31	$	29	$	92	$	85
Cable Networks	5		5		16		17
Publishing	1		2		4		5
Local Media	11		11		33		34
Corporate	8		8		23		25
Total Depreciation and Amortization	$	56	$	55	$	168	$	166

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018		2017
Stock-based Compensation:
Entertainment	$	17		$	16	$	48	$	48
Cable Networks	4			3		10		9
Publishing	1			1		3		3
Local Media	3			3		9		9
Corporate (a)	(11		)	21		35		60
Total Stock-based Compensation	$	14		$	44	$	105	$	129

(a) Included in the three and nine months endedSeptember 30, 2018 are forfeitures of $28 million and accelerations of $6 million relating to changes in senior management.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures:
Entertainment	$	19	$	25	$	56	$	63
Cable Networks	5		5		12		12
Publishing	2		1		4		2
Local Media	6		8		15		20
Corporate	5		5		12		15
Total Capital Expenditures	$	37	$	44	$	99	$	112

	At			At
	September 30, 2018			December 31, 2017
Assets:
Entertainment		$	12,763		$	12,626
Cable Networks		3,008			2,878
Publishing		1,047			906
Local Media		3,996			4,042
Corporate/Eliminations		242			378
Discontinued operations		12			13
Total Assets		$	21,068		$	20,843

-22-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Revenues by Type	2018		2017		2018		2017
Advertising	$	1,263	$	1,106	$	4,323	$	4,008
Content licensing and distribution:
Programming	693		632		2,417		2,166
Publishing	240		228		607		595
Affiliate and subscription fees	1,008		1,145		2,976		2,835
Other	59		60		167		167
Total Revenues	$	3,263	$	3,171	$	10,490	$	9,771

12) ADOPTION OF “REVENUE FROM CONTRACTS WITH CUSTOMERS”

On January 1, 2018, the Company adopted FASB Accounting Standards Codification 606 (“ASC 606”) on the recognition of revenues using the modified retrospective method applied to all contracts. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior periods have not been adjusted. The Company recorded an increase to accumulated deficit of $261 million as of January 1, 2018 reflecting the cumulative impact of the adoption of ASC 606.

The adoption of ASC 606 primarily resulted in two changes to the Company’s revenue recognition policies.

• Revenues from Distribution Arrangements

Revenues from the Company’s distribution of third-party content are now recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues, which include content licensing and distribution revenues and advertising revenues, were recognized at the net amount retained by the Company after the payment of fees to the third party. For the three and nine months endedSeptember 30, 2018, respectively, revenues and operating expenses relating to such distribution arrangements were each $93 million and $217 million higher under ASC 606 than the amounts that would have been reported under previous accounting guidance, with no impact to operating income.

• Revenues from the Renewal of Licensing Agreements

Revenues associated with the renewal of an existing license agreement are now recognized at the beginning of the renewal period. Under previous accounting guidance, these revenues were recognized upon the execution of such renewal. Content licensing and distribution revenue comparisons will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Therefore, this change is not expected to have a material impact on the trend of the Company’s financial results. Additionally, historically, on an annual basis, revenues from renewals executed each year have approximated revenues associated with renewal periods that began in the same year.

-23-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table presents the amount by which each applicable financial statement line item on the Consolidated Statement of Operations would have decreased for the three and nine months endedSeptember 30, 2018 if license renewals were recognized under previous accounting guidance.

	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Revenues		$	41		$	182
Operating expenses		19			82
Operating income		22			100
Less: Provision for income taxes		5			21
Net earnings from continuing operations		$	17		$	79
Diluted EPS from continuing operations		$	.04		$	.21

In addition, the adoption of ASC 606 resulted in certain classification changes on the Consolidated Balance Sheet. The primary change is the reclassification of the sales returns reserve relating to the publishing business to “Other current liabilities.” Such amount, which was $116 million at September 30, 2018, was previously presented as a reduction to receivables.

The following table presents the amount by which each applicable financial statement line item on the Consolidated Balance Sheet at September 30, 2018 would increase (decrease) if all of the above changes resulting from the adoption of ASC 606 were presented under previous accounting guidance.

Assets
Receivables, net	$	(89	)
Programming and other inventory (noncurrent)	$	(45	)
Other assets (noncurrent receivables)	$	386
Liabilities
Other current liabilities	$	(141	)
Deferred income tax liabilities, net	$	46
Participants’ share and royalties payable	$	165
Accumulated deficit	$	182

ASC 606 also requires enhanced disclosures relating to the Company’s revenues from contracts with customers (See Note 1), including the disaggregation of revenues into categories (See Note 11).

13) DISCONTINUED OPERATIONS

On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Communications Corp. (“Entercom”) Class A common stock upon completion of the merger.

-24-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table sets forth details of net earnings (loss) from discontinued operations for the three and nine months endedSeptember 30, 2017.

	Three Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2017
Revenues		$	300			$	856
Costs and expenses:
Operating		113				307
Selling, general and administrative		120				370
Market value adjustment (a)		(100		)		980
Restructuring charges (b)		—				7
Total costs and expenses		133				1,664
Operating income (loss)		167				(808		)
Interest expense		(21		)		(60		)
Other items, net		—				(1		)
Earnings (loss) from discontinued operations		146				(869		)
Income tax (provision) benefit (c)		28				(2		)
Net earnings (loss) from discontinued operations, net of tax		$	174			$	(871	)

(a) During 2017, prior to its split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.

(b) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.

(c) Included in the three and nine months endedSeptember 30, 2017 is a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.

14) COMMITMENTS AND CONTINGENCIES

Guarantees

The Company has indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At September 30, 2018, the outstanding letters of credit and surety bonds approximated $107 million and were not recorded on the Consolidated Balance Sheet.

In the course of its business, the Company both provides and receives indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Company may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. The Company records a liability for its indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters

General. On an ongoing basis, the Company vigorously defends itself in numerous lawsuits and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Company without merit, is inherently uncertain and always difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal matters and other litigation to which it is a party are not likely, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under

-25-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

the separation agreement between the Company and Viacom Inc., the Company and Viacom Inc. have agreed to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.

Litigation Settled in September 2018 Involving the Company and Its Controlling Stockholder, National Amusements, Inc., Among Others, in the Delaware Court of Chancery. On May 14, 2018, the Company and certain of the independent directors of the Company’s Board of Directors (the “Board”) filed a lawsuit in the Delaware Court of Chancery against NAI, Ms. Shari Redstone, Mr. Sumner M. Redstone, NAI Entertainment Holdings LLC (“NAIEH”) and the Sumner M. Redstone National Amusements Trust (the “SMR Trust”) (collectively, the “NAI Parties”). The verified complaint, as amended on May 23, 2018, alleged, among other things, that NAI, Mr. Sumner M. Redstone and Ms. Shari Redstone had breached their fiduciary duties to the Company’s stockholders by abusing their control to threaten the independent corporate governance of the Company. The amended verified complaint sought a declaration that the May 2018 Stock Dividend (as defined below) was valid and permissible, a declaration that the Bylaw Amendments (as defined below) were invalid or were ineffective as of May 17, 2018 and an injunction against any action by any of the NAI Parties to interfere with the composition of the Board or to modify the Company’s governance documents before the issuance of any shares pursuant to the May 2018 Stock Dividend.

On May 16, 2018, each of NAI and NAIEH delivered to the Company a written consent to amend (the “Bylaw Amendments”) the Company’s amended and restated bylaws (the “Bylaws”). On May 17, 2018, the Board voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company's Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”).

On May 29, 2018, NAI, NAIEH and Ms. Shari Redstone filed a lawsuit in the Delaware Court of Chancery against the Company and certain of the Company’s directors. NAI’s verified complaint, as amended on June 25, 2018 and July 27, 2018, alleged, among other things, that the May 2018 Stock Dividend violated the Company’s bylaws and certificate of incorporation, and that the directors named as defendants had breached their fiduciary duties in approving the May 2018 Stock Dividend. The amended verified complaint sought a declaration that the Bylaw Amendments were valid, a declaration that the May 2018 Stock Dividend was invalid, an injunction against issuance and payment of the May 2018 Stock Dividend and any action by the defendants to carry out the May 2018 Stock Dividend, and other relief.

On June 7, 2018, the Court consolidated the aforementioned lawsuits under the consolidated action captioned In re CBS Corporation Litigation, Consol. C.A. No. 2018-0342-AGB (Del. Ch.) (the “consolidated action”).

On May 31, 2018, Westmoreland County Employees’ Retirement System (“Westmoreland”), a purported beneficial owner of the Company’s Class B Common Stock, filed a class action complaint in the Delaware Court of Chancery against NAI, NAIEH, Mr. David R. Andelman, Mr. Robert N. Klieger and Ms. Shari Redstone (the “Westmoreland lawsuit”), which alleged breaches of contractual obligations, implied obligations and fiduciary duties to the Company’s Class B Common Stock holders in connection with the Bylaw Amendments and interference with the issuance by the Board of the May 2018 Stock Dividend. Westmoreland’s complaint sought a declaratory judgment that the Company’s certificate of incorporation authorized the May 2018 Stock Dividend, that Westmoreland and the class were entitled to the May 2018 Stock Dividend, and that the Bylaw Amendments were invalid, as well as other relief. On September 14, 2018, the Delaware Court of Chancery entered a stipulation agreed to by the parties whereby the Westmoreland lawsuit was dismissed without prejudice as moot and the Court retained jurisdiction to consider any application for attorneys’ fees and expenses submitted by Westmoreland or its counsel.

-26-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

On September 9, 2018, the Company entered into a settlement and release agreement (the “Settlement Agreement”) with NAI, NAIEH, the SMR Trust, Mr. Sumner M. Redstone, Ms. Shari Redstone and the other then members of the Board, among other parties. Pursuant to the Settlement Agreement, among other matters, the parties dismissed with prejudice all claims in the consolidated action. The Settlement Agreement includes mutual releases and covenants not to sue among the parties with respect to NAI’s and NAIEH’s investment in the Company, including the claims asserted in such action, subject to certain exceptions, and the Company has agreed to indemnify, and reimburse expenses of, certain parties, on the terms set forth in the Settlement Agreement, including with respect to the consolidated action and the defendants in the Westmoreland lawsuit. In connection with the Settlement Agreement, the Board rescinded the May 2018 Stock Dividend. In addition, NAI and NAIEH took action by written consent to amend the Company’s amended and restated bylaws.

Investigations and Related Matters. As announced on August 1, 2018, the Board has retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. This investigation is ongoing. The Company has received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Company may receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company is cooperating with the ongoing investigation and related inquiries.

On August 27, 2018, Gene Samit, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, its former Chairman of the Board, President and Chief Executive Officer and its then Chief Operating Officer, who has been appointed as the Company’s President and Acting Chief Executive Officer. This action is stated to be on behalf of a class of persons who acquired the Company’s securities between February 14, 2014 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On October 1, 2018, John Lantz, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, certain current and former senior executives and the members of the Board immediately prior to September 9, 2018. This action is stated to be on behalf of purchasers of the Company’s Class A Common Stock and Class B Common Stock between November 3, 2017 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.

Separation Agreement. On September 9, 2018, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company. Pursuant to the Separation Agreement, the Company will contribute the aggregate amount of $20 million to one or more charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations are mutually agreed by the Company and Mr. Moonves. The Company has recorded the contribution of $20 million in “Restructuring and other corporate matters” on the Consolidated Statements of Operations for the three and nine months endedSeptember 30, 2018. In October 2018, the Company also contributed $120 million to a grantor trust. In the event the Board determines that the Company is entitled to terminate Mr. Moonves’s employment for cause

-27-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

under his employment agreement and Mr. Moonves does not demand arbitration with respect to such determination, the assets of the grantor trust will be distributed to the Company and the Company will have no further obligations to Mr. Moonves. Any dispute related to the Board’s determination is subject to binding arbitration as set forth in the Separation Agreement. In the event of arbitration, the assets of the grantor trust will also be distributed to the Company upon a final determination in the arbitration that the Company was entitled to terminate Mr. Moonves’s employment for cause. The Board will make a determination whether the Company has grounds to terminate the employment of Mr. Moonves for cause under his employment agreement within thirty days following completion of the final report of the independent investigators in the ongoing internal investigation described above, but in no event later than January 31, 2019. In the event that the Board determines that the Company is not entitled to terminate Mr. Moonves’s employment for cause, or in the event of a final determination in arbitration that the Company is not entitled to terminate Mr. Moonves’s employment for cause, the assets of the grantor trust will be distributed to Mr. Moonves. The Company is currently unable to determine the amount of any such contingent distribution to Mr. Moonves and, accordingly, no accrual has been made in the Company’s consolidated financial statements.

Claims Related to Former Businesses: Asbestos. The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company is typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’s products is the basis of a claim. Claims against the Company in which a product has been identified principally relate to exposures allegedly caused by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company does not report as pending those claims on inactive, stayed, deferred or similar dockets which some jurisdictions have established for claimants who allege minimal or no impairment. As of September 30, 2018, the Company had pending approximately 31,500 asbestos claims, as compared with approximately 31,660 as of December 31, 2017 and 32,760 as of September 30, 2017. During the third quarter of 2018, the Company received approximately 770 new claims and closed or moved to an inactive docket approximately 1,020 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’s total costs for the years 2017 and 2016 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57 million and $48 million, respectively. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has remained generally flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

Other. The Company from time to time receives claims from federal and state environmental regulatory agencies and other entities asserting that it is or may be liable for environmental cleanup costs and related damages principally relating to historical and predecessor operations of the Company. In addition, the Company from time

-28-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

to time receives personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations of the Company and its predecessors.

15) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CBS Operations Inc. is a wholly owned subsidiary of the Company. CBS Operations Inc. has fully and unconditionally guaranteed CBS Corp.’s senior debt securities. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of CBS Corp., CBS Operations Inc., the direct and indirect Non-Guarantor Affiliates of CBS Corp. and CBS Operations Inc., and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

	Statement of Operations
	For the Three Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	47		$	2		$	3,214		$	—		$	3,263
Costs and expenses:
Operating	25			1			1,896			—			1,922
Selling, general and administrative	11			58			480			—			549
Depreciation and amortization	1			5			50			—			56
Restructuring and other corporate matters	—			46			—			—			46
Total costs and expenses	37			110			2,426			—			2,573
Operating income (loss)	10			(108		)	788			—			690
Interest (expense) income, net	(133		)	(130		)	160			—			(103		)
Other items, net	(7		)	(4		)	(6		)	—			(17		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(130		)	(242		)	942			—			570
Benefit (provision) for income taxes	27			50			(141		)	—			(64		)
Equity in earnings (loss) of investee companies, net of tax	591			410			(18		)	(1,001		)	(18		)
Net earnings	$	488		$	218		$	783		$	(1,001	)	$	488
Total comprehensive income	$	500		$	219		$	781		$	(1,000	)	$	500

-29-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Statement of Operations
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	134		$	7		$	10,349		$	—		$	10,490
Costs and expenses:
Operating	73			3			6,430			—			6,506
Selling, general and administrative	36			190			1,379			—			1,605
Depreciation and amortization	3			16			149			—			168
Restructuring and other corporate matters	—			71			19			—			90
Total costs and expenses	112			280			7,977			—			8,369
Operating income (loss)	22			(273		)	2,372			—			2,121
Interest (expense) income, net	(396		)	(378		)	468			—			(306		)
Other items, net	(23		)	8			(37		)	—			(52		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(397		)	(643		)	2,803			—			1,763
Benefit (provision) for income taxes	82			133			(527		)	—			(312		)
Equity in earnings (loss) of investee companies, net of tax	1,714			1,166			(52		)	(2,880		)	(52		)
Net earnings	$	1,399		$	656		$	2,224		$	(2,880	)	$	1,399
Total comprehensive income	$	1,427		$	659		$	2,205		$	(2,864	)	$	1,427

-30-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Statement of Operations
	For the Three Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	40		$	3		$	3,128		$	—		$	3,171
Costs and expenses:
Operating	23			1			1,838			—			1,862
Selling, general and administrative	13			59			453			—			525
Depreciation and amortization	1			6			48			—			55
Total costs and expenses	37			66			2,339			—			2,442
Operating income (loss)	3			(63		)	789			—			729
Interest (expense) income, net	(129		)	(123		)	153			—			(99		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(9		)	(11		)	1			—			(19		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(140		)	(197		)	943			—			606
Benefit (provision) for income taxes	43			62			(277		)	—			(172		)
Equity in earnings (loss) of investee companies, net of tax	689			369			(16		)	(1,058		)	(16		)
Net earnings from continuing operations	592			234			650			(1,058		)	418
Net earnings from discontinued operations, net of tax	—			—			174			—			174
Net earnings	$	592		$	234		$	824		$	(1,058	)	$	592
Total comprehensive income	$	607		$	229		$	830		$	(1,059	)	$	607

-31-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Statement of Operations
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	124		$	8		$	9,639		$	—		$	9,771
Costs and expenses:
Operating	69			4			5,867			—			5,940
Selling, general and administrative	37			185			1,298			—			1,520
Depreciation and amortization	3			18			145			—			166
Total costs and expenses	109			207			7,310			—			7,626
Operating income (loss)	15			(199		)	2,329			—			2,145
Interest (expense) income, net	(378		)	(360		)	447			—			(291		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(27		)	(42		)	13			—			(56		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(395		)	(601		)	2,789			—			1,793
Benefit (provision) for income taxes	120			184			(783		)	—			(479		)
Equity in earnings (loss) of investee companies, net of tax	673			1,062			(45		)	(1,735		)	(45		)
Net earnings from continuing operations	398			645			1,961			(1,735		)	1,269
Net loss from discontinued operations, net of tax	—			—			(871		)	—			(871		)
Net earnings	$	398		$	645		$	1,090		$	(1,735	)	$	398
Total comprehensive income	$	439		$	633		$	1,111		$	(1,744	)	$	439

-32-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Balance Sheet
	At September 30, 2018
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	62		$	—	$	120		$	—		$	182
Receivables, net	21			1		3,675			—			3,697
Programming and other inventory	2			2		1,824			—			1,828
Prepaid expenses and other current assets	16			31		323			(37		)	333
Total current assets	101			34		5,942			(37		)	6,040
Property and equipment	34			220		2,750			—			3,004
Less accumulated depreciation and amortization	17			179		1,586			—			1,782
Net property and equipment	17			41		1,164			—			1,222
Programming and other inventory	6			5		3,857			—			3,868
Goodwill	98			62		4,761			—			4,921
Intangible assets	—			—		2,650			—			2,650
Investments in consolidated subsidiaries	47,000			16,332		—			(63,332		)	—
Other assets	160			5		2,202			—			2,367
Intercompany	—			758		31,330			(32,088		)	—
Total Assets	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068
Liabilities and Stockholders’ Equity
Accounts payable	$	5		$	2	$	222		$	—		$	229
Participants’ share and royalties payable	—			—		1,110			—			1,110
Program rights	3			2		401			—			406
Commercial paper	374			—		—			—			374
Current portion of long-term debt	2			—		12			—			14
Accrued expenses and other current liabilities	356			282		1,259			(37		)	1,860
Total current liabilities	740			286		3,004			(37		)	3,993
Long-term debt	9,385			—		80			—			9,465
Other liabilities	2,655			225		2,216			—			5,096
Intercompany	32,088			—		—			(32,088		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,668			—		60,894			(60,894		)	43,668
Retained earnings (accumulated deficit)	(17,762		)	16,914		(10,262		)	(6,652		)	(17,762		)
Accumulated other comprehensive income (loss)	(634		)	20		58			(78		)	(634		)
	25,273			17,057		51,406			(68,463		)	25,273
Less treasury stock, at cost	22,759			331		4,800			(5,131		)	22,759
Total Stockholders’ Equity	2,514			16,726		46,606			(63,332		)	2,514
Total Liabilities and Stockholders’ Equity	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068

-33-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Balance Sheet
	At December 31, 2017
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	173		$	—	$	112		$	—		$	285
Receivables, net	29			2		3,666			—			3,697
Programming and other inventory	3			3		1,822			—			1,828
Prepaid expenses and other current assets	130			28		341			(36		)	463
Total current assets	335			33		5,941			(36		)	6,273
Property and equipment	49			217		2,785			—			3,051
Less accumulated depreciation and amortization	27			163		1,581			—			1,771
Net property and equipment	22			54		1,204			—			1,280
Programming and other inventory	3			4		2,874			—			2,881
Goodwill	98			62		4,731			—			4,891
Intangible assets	—			—		2,666			—			2,666
Investments in consolidated subsidiaries	45,504			15,225		—			(60,729		)	—
Other assets	162			5		2,685			—			2,852
Intercompany	—			1,221		29,562			(30,783		)	—
Total Assets	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843
Liabilities and Stockholders’ Equity
Accounts payable	$	1		$	30	$	200		$	—		$	231
Participants’ share and royalties payable	—			—		986			—			986
Program rights	4			4		365			—			373
Commercial paper	679			—		—			—			679
Current portion of long-term debt	2			—		17			—			19
Accrued expenses and other current liabilities	352			269		1,099			(36		)	1,684
Total current liabilities	1,038			303		2,667			(36		)	3,972
Long-term debt	9,378			—		86			—			9,464
Other liabilities	2,947			234		2,248			—			5,429
Intercompany	30,783			—		—			(30,783		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,797			—		60,894			(60,894		)	43,797
Retained earnings (accumulated deficit)	(18,900		)	16,257		(12,224		)	(4,033		)	(18,900		)
Accumulated other comprehensive income (loss)	(662		)	18		76			(94		)	(662		)
	24,236			16,398		49,462			(65,860		)	24,236
Less treasury stock, at cost	22,258			331		4,800			(5,131		)	22,258
Total Stockholders’ Equity	1,978			16,067		44,662			(60,729		)	1,978
Total Liabilities and Stockholders’ Equity	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843

-34-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(357	)	$	(183	)	$	1,720		$	—	$	1,180
Investing Activities:
Investments in and advances to investee companies	—			—			(76		)	—		(76		)
Capital expenditures	—			(12		)	(87		)	—		(99		)
Acquisitions	—			—			(29		)	—		(29		)
Other investing activities	8			—			—			—		8
Net cash flow provided by (used for) investing activities from continuing operations	8			(12		)	(192		)	—		(196		)
Net cash flow used for investing activities from discontinued operations	(23		)	—			—			—		(23		)
Net cash flow used for investing activities	(15		)	(12		)	(192		)	—		(219		)
Financing Activities:
Repayments of short-term debt borrowings, net	(305		)	—			—			—		(305		)
Payment of capital lease obligations	—			—			(12		)	—		(12		)
Payment of contingent consideration	—			—			(5		)	—		(5		)
Dividends	(208		)	—			—			—		(208		)
Purchase of Company common stock	(497		)	—			—			—		(497		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(59		)	—			—			—		(59		)
Proceeds from exercise of stock options	23			—			—			—		23
Other financing activities	(1		)	—			—			—		(1		)
Increase (decrease) in intercompany payables	1,308			195			(1,503		)	—		—
Net cash flow provided by (used for) financing activities	261			195			(1,520		)	—		(1,064		)
Net (decrease) increase in cash and cash equivalents	(111		)	—			8			—		(103		)
Cash and cash equivalents at beginning of period	173			—			112			—		285
Cash and cash equivalents at end of period	$	62		$	—		$	120		$	—	$	182

-35-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(851	)	$	(180	)	$	2,018		$	—	$	987
Investing Activities:
Investments in and advances to investee companies	—			—			(67		)	—		(67		)
Capital expenditures	—			(15		)	(97		)	—		(112		)
Acquisitions (including acquired television library)	—			—			(258		)	—		(258		)
Proceeds from sale of investments	—			—			10			—		10
Proceeds from dispositions	—			—			11			—		11
Other investing activities	17			—			—			—		17
Net cash flow provided by (used for) investing activities from continuing operations	17			(15		)	(401		)	—		(399		)
Net cash flow provided by (used for) investing activities from discontinued operations	1			(4		)	(15		)	—		(18		)
Net cash flow provided by (used for) investing activities	18			(19		)	(416		)	—		(417		)
Financing Activities:
Proceeds from short-term debt borrowings, net	140			—			—			—		140
Proceeds from issuance of senior notes	889			—			—			—		889
Repayment of senior notes	(701		)	—			—			—		(701		)
Proceeds from debt borrowings of CBS Radio	—			—			40			—		40
Repayment of debt borrowings of CBS Radio	—			—			(23		)	—		(23		)
Payment of capital lease obligations	—			—			(13		)	—		(13		)
Payment of contingent consideration	—			—			(7		)	—		(7		)
Dividends	(224		)	—			—			—		(224		)
Purchase of Company common stock	(1,111		)	—			—			—		(1,111		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(89		)	—			—			—		(89		)
Proceeds from exercise of stock options	81			—			—			—		81
Increase (decrease) in intercompany payables	1,545			199			(1,744		)	—		—
Net cash flow (used for) provided by financing activities	530			199			(1,747		)	—		(1,018		)
Net decrease in cash and cash equivalents	(303		)	—			(145		)	—		(448		)
Cash and cash equivalents at beginning of period (includes $24 million of discontinued operations cash)	321			—			301			—		622
Cash and cash equivalents at end of period (includes $30 million of discontinued operations cash)	$	18		$	—		$	156		$	—	$	174

-36-

Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition.
	(Tabular dollars in millions, except per share amounts)

Management’s discussion and analysis of the results of operations and financial condition of CBS Corporation (the “Company” or “CBS Corp.”) should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2017.

Overview

Business overview and strategy

The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television stations, internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences and generate both advertising and non-advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company continues to increase its investment in premium content to enhance its opportunities for revenue growth, which include exhibiting the Company’s content on multiple digital platforms, including the Company’s owned digital streaming services as well as third-party live television streaming offerings (“virtual MVPDs”); expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”) and television stations affiliated with the CBS Television Network. The Company also seeks to grow its advertising revenues by monetizing all content viewership as industry measurements evolve to reflect viewers’ changing habits. The Company’s continued ability to capitalize on these and other emerging opportunities will provide it with incremental advertising and non-advertising revenues.

Operational Highlights - Three Months Ended September 30, 2018 versusThree Months Ended September 30, 2017

Consolidated results of operations					Increase/(Decrease)
Three Months Ended September 30,	2018		2017		$			%
GAAP:
Revenues	$	3,263	$	3,171	$	92		3	%
Operating income	$	690	$	729	$	(39	)	(5	)%
Net earnings from continuing operations	$	488	$	418	$	70		17	%
Net earnings	$	488	$	592	$	(104	)	(18	)%
Diluted EPS from continuing operations	$	1.29	$	1.03	$	.26		25	%
Diluted EPS	$	1.29	$	1.46	$	(.17	)	(12	)%
Non-GAAP: (a)
Adjusted operating income	$	736	$	729	$	7		1	%
Adjusted net earnings from continuing operations	$	469	$	421	$	48		11	%
Adjusted net earnings	$	469	$	450	$	19		4	%
Adjusted diluted EPS from continuing operations	$	1.24	$	1.04	$	.20		19	%
Adjusted diluted EPS	$	1.24	$	1.11	$	.13		12	%

(a) See page 42 for reconciliations of adjusted results to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).

Revenues increased 3% for the three months ended September 30, 2018 and were impacted by several noncomparable items including Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017 and the Company’s acquisition of Network 10 in the fourth quarter of 2017. Together these noncomparable items reduced the revenue growth by five percentage points. Underlying revenue growth was led by 79% growth from digital initiatives, which include the Company’s owned streaming subscription services and virtual MVPDs, 15% higher station affiliation fees and retransmission revenues, and higher political advertising sales as a result of the 2018 midterm elections. Also contributing to the revenue growth were content licensing and distribution revenues, which grew 8%.

-37-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Operating income for the three months ended September 30, 2018 decreased 5% and included costs relating to corporate matters that affected the comparability of results. Adjusted operating income increased 1% from the three months ended September 30, 2017 reflecting the revenue growth partially offset by an increased investment in content, including a higher number of series produced for distribution on multiple platforms, including third-party services, and the expansion of the Company’s digital initiatives.

Net earnings from continuing operations for the three months ended September 30, 2018 increased 17% from the same prior-year period and included a net tax benefit resulting from tax law changes. Adjusted net earnings from continuing operations increased 11%, driven by a lower effective income tax rate in 2018 resulting from the enactment of new federal tax legislation in December 2017. Net earnings for the three months ended September 30, 2018 was $488 million, or $1.29 per diluted share, compared with $592 million, or $1.46 per diluted share, for the three months ended September 30, 2017, which included, in discontinued operations, a noncash gain to adjust the carrying value of CBS Radio Inc. (“CBS Radio”). Adjusted diluted earnings per share (“EPS”) increased 12% as a result of higher adjusted earnings and lower weighted average shares outstanding. Adjusted operating income, adjusted net earnings from continuing operations and adjusted diluted EPS are non-GAAP financial measures. See page 42 for details of the discrete items excluded from financial results, and reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

Operational Highlights - Nine Months Ended September 30, 2018versus Nine Months Ended September 30, 2017

Consolidated results of operations					Increase/(Decrease)
Nine Months Ended September 30,	2018		2017		$			%
GAAP:
Revenues	$	10,490	$	9,771	$	719		7	%
Operating income	$	2,121	$	2,145	$	(24	)	(1	)%
Net earnings from continuing operations	$	1,399	$	1,269	$	130		10	%
Net earnings	$	1,399	$	398	$	1,001		n/m
Diluted EPS from continuing operations	$	3.66	$	3.10	$	.56		18	%
Diluted EPS	$	3.66	$	.97	$	2.69		n/m
Non-GAAP: (a)
Adjusted operating income	$	2,211	$	2,145	$	66		3	%
Adjusted net earnings from continuing operations	$	1,414	$	1,250	$	164		13	%
Adjusted net earnings	$	1,414	$	1,318	$	96		7	%
Adjusted diluted EPS from continuing operations	$	3.70	$	3.05	$	.65		21	%
Adjusted diluted EPS	$	3.70	$	3.21	$	.49		15	%

n/m - not meaningful

(a) See page 43 for reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

For the nine months endedSeptember 30, 2018, revenues increased 7% reflecting growth across each of the Company’s main revenue streams. Advertising revenues increased 8%, primarily driven by the Company’s acquisition of Network 10 in the fourth quarter of 2017 and higher political advertising sales, partially offset by the absence of the National Semifinals and National Championship games of the NCAA Division I Men’s Basketball Championship (“NCAA Tournament”), which the CBS Television Network broadcast in the second quarter of 2017 and Turner Broadcasting System, Inc. (“Turner”) broadcast in 2018. Content licensing and distribution revenues grew 10%, mainly as a result of growth from domestic and international licensing, including the start of the license periods for previously signed renewals of contracts for library programming. Content licensing and distribution revenues and advertising revenues also included higher revenues as a result of the adoption of a new revenue recognition standard in 2018, which resulted in revenues from the distribution of third-party content now being

-38-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

recognized based on the gross amount of consideration received from the customer, with an offsetting increase to participation expenses (see “Adoption of New Revenue Standard”).Affiliate and subscription fees increased 5%, led by 22% higher station affiliation fees and retransmission revenues, as well as 77% growth from digital initiatives, including the Company’s owned streaming subscription services and virtual MVPDs. These increases were partially offset by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017.

Operating income for the nine months endedSeptember 30, 2018 decreased 1% from the same prior-year period and included costs for restructuring and other corporate matters that affected the comparability of results. Adjusted operating income increased 3%, reflecting the revenue growth, which was partially offset by an increased investment in content and digital initiatives.

Net earnings from continuing operations for the nine months endedSeptember 30, 2018 increased 10%. Adjusted net earnings from continuing operations increased 13%, driven by the higher adjusted operating income and a lower effective income tax rate in 2018. Net earnings for the nine months endedSeptember 30, 2018 was $1.40 billion, or $3.66 per diluted share, compared with $398 million, or $.97 per diluted share, for the nine months endedSeptember 30, 2017 which included, in discontinued operations, a noncash charge to adjust the carrying value of CBS Radio. Adjusted diluted EPS increased 15% as a result of higher earnings and lower weighted average shares outstanding. Adjusted operating income, adjusted net earnings from continuing operations and adjusted diluted EPS are non-GAAP financial measures. See page 43 for details of the discrete items excluded from financial results, and reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

The Company generated operating cash flow from continuing operations of $1.18 billion for the nine months endedSeptember 30, 2018 compared with $935 million for the nine months endedSeptember 30, 2017. Free cash flow for the nine months endedSeptember 30, 2018 was $1.08 billion compared with $823 million for the same prior-year period. These increases primarily reflect lower cash payments for income taxes and growth in affiliate and subscription fees, which were partially offset by an increased investment in content, including a higher number of series produced for distribution on multiple platforms. Free cash flow is a non-GAAP financial measure. See “Free Cash Flow and Adjusted Free Cash Flow” on pages 60 - 61 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, to free cash flow.

Corporate Transitions

As announced on August 1, 2018, the Company’s Board of Directors (the “Board”) has retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. This investigation is ongoing. On September 9, 2018, the Company entered into a separation and settlement agreement and releases with Mr. Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company. On September 9, 2018, effective upon Mr. Moonves’s separation from the Company, the Company appointed its then Chief Operating Officer, Mr. Joseph R. Ianniello, as President and Acting Chief Executive Officer of the Company. In October 2018, the Company announced the appointments of David Nevins as Chief Creative Officer, and Christina Spade as Executive Vice President, Chief Financial Officer. Further, pursuant to a settlement and release agreement regarding the dismissal of all claims in the legal proceedings involving the Company and its controlling stockholder, National Amusements, Inc. (“NAI”), among others (the “Settlement Agreement”), on September 9, 2018, seven members of the Board resigned and the Board appointed six new members to the Board. Subsequently, on September 23, 2018, two directors who had served as members of the Board prior to September 9, 2018

-39-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

resigned to pursue other interests, and, on October 21, 2018, another director resigned for health related reasons. The outcomes of investigations and any related legal proceedings, which are inherently unpredictable, and any associated costs, and the uncertainties arising from the transitions involving the Company’s senior executives and members of its Board, may have an adverse effect on the Company’s business. See “Legal Matters” for a description of the agreements and investigations and related legal proceedings referred to above.

Share Repurchases, Cash Dividends and Contingent Stock Dividend

During the third quarter of 2018, the Company repurchased 1.8 million shares of its Class B Common Stock under its share repurchase program for $100 million, at an average cost of $55.13 per share. During the nine months endedSeptember 30, 2018, the Company repurchased 9.4 million shares of its Class B Common Stock for $500 million, at an average cost of $52.94 per share, leaving $2.56 billion of authorization at September 30, 2018.

During the third quarter of 2018, the Company declared a quarterly cash dividend of $.18 per share on its Class A and Class B Common Stock, resulting in total dividends of $68 million, which were paid on October 1, 2018. During the nine months endedSeptember 30, 2018, the Company declared total per share cash dividends of $.54 on its Class A and Class B Common Stock, resulting in total dividends of $206 million.

On May 17, 2018, the Board voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company’s Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”). In connection with the Settlement Agreement, on September 9, 2018, the Board rescinded the May 2018 Stock Dividend. See “Legal Matters” for related information.

Adoption of New Revenue Standard

During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 606 (“ASC 606”) on the recognition of revenues which primarily resulted in two changes to the Company’s revenue recognition policies.

• Revenues from Distribution Arrangements

Revenues from the Company’s distribution of third-party content are now recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues, which include content licensing and distribution revenues and advertising revenues, were recognized at the net amount retained by the Company after the payment of fees to the third party. For the three and nine months endedSeptember 30, 2018, respectively, revenues and operating expenses relating to such distribution arrangements were each $93 million and $217 million higher under ASC 606 than the amounts that would have been reported under previous accounting guidance, with no impact to operating income.

• Revenues from the Renewal of Licensing Agreements

Revenues associated with the renewal of an existing license agreement are now recognized at the beginning of the renewal period. Under previous accounting guidance, these revenues were recognized upon the execution of such renewal. Content licensing and distribution revenue comparisons will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Therefore, this change is not expected to have a

-40-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

material impact on the trend of the Company’s financial results. Additionally, historically, on an annual basis, revenues from renewals executed each year have approximated revenues associated with renewal periods that began in the same year.

The Company applied the modified retrospective method of adoption and therefore, prior periods continue to be presented under previous accounting guidance. The following tables present the Company’s revenues, operating income, net earnings from continuing operations, and diluted EPS from continuing operations, as well as the corresponding year-over-year comparisons, as if results for the three and nine months endedSeptember 30, 2017 were recognized under ASC 606. These amounts are non-GAAP financial measures and are reconciled below to the most directly comparable financial measures in accordance with GAAP. The Company believes that presenting its financial results for 2017 under ASC 606 is relevant and useful for investors because it allows investors to view results for 2017 on a basis consistent with the 2018 presentation, and makes it easier to compare the Company’s year-over-year results.

	Three Months Ended September 30,
			2017									2018 Reported vs.
	2018 Reported		Reported		ASC 606 Adjustments				Under ASC 606			2017 Reported			2017 Under ASC 606
Revenues	$	3,263	$	3,171		$	40		$	3,211			3	%	2	%
Operating income	$	690	$	729		$	(14	)	$	715			(5	)%	(3	)%
Net earnings from continuing operations	$	488	$	418		$	(10	)	$	408			17	%	20	%
Diluted EPS from continuing operations	$	1.29	$	1.03		$	(.02	)	$	1.00	(a)		25	%	29	%

(a) Amount does not sum as a result of rounding.

	Nine Months Ended September 30,
			2017								2018 Reported vs.
	2018 Reported		Reported		ASC 606 Adjustments				Under ASC 606		2017 Reported			2017 Under ASC 606
Revenues	$	10,490	$	9,771		$	173		$	9,944		7	%	5	%
Operating income	$	2,121	$	2,145		$	(4	)	$	2,141		(1	)%	(1	)%
Net earnings from continuing operations	$	1,399	$	1,269		$	(3	)	$	1,266		10	%	11	%
Diluted EPS from continuing operations	$	3.66	$	3.10		$	(.01	)	$	3.09		18	%	18	%

-41-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Reconciliation of Non-GAAP Measures

Results for the three and nine months endedSeptember 30, 2018 and 2017 included discrete items that were not part of the normal course of operations. The following tables present non-GAAP financial measures, which exclude the impact of these discrete items, reconciled to the most directly comparable financial measures in accordance with GAAP. The Company believes that presenting its financial results adjusted for the impact of discrete items is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company’s management and provides a clearer perspective on the underlying performance of the Company.

	Three Months Ended September 30, 2018
	Reported			Corporate Matters (a)				Tax Item (b)			Adjusted
Operating income	$	690			$	46		—			$	736
Interest expense	(115		)		—			—			(115		)
Interest income	12				—			—			12
Other items, net	(17		)		—			—			(17		)
Earnings before income taxes	570				46			—			616
Provision for income taxes	(64		)		(11		)	(54		)	(129		)
Equity in loss of investee companies, net of tax	(18		)		—			—			(18		)
Net earnings	$	488			$	35		$	(54	)	$	469
Diluted EPS	$	1.29			$	.09		$	(.14	)	$	1.24

(a) Primarily reflects professional fees of $45 million ($34 million, net of tax) related to legal proceedings and the ongoing investigations at the Company. This amount also includes a contribution of $20 million ($15 million, net of tax) to organizations dedicated to fostering safe and equitable work environments, offset by a reversal of incentive compensation relating to prior periods of $19 million ($14 million, net of tax) as a result of changes in senior management (See “Legal Matters”).

(b) Reflects a net tax benefit associated with changes in tax law (See “Provision for Income Taxes”).

	Three Months Ended September 30, 2017
	Reported			Extinguishment of Debt				Discontinued Operations Items (a)				Adjusted
Operating income	$	729			$	—			$	—		$	729
Interest expense	(116		)		—				—			(116		)
Interest income	17				—				—			17
Loss on early extinguishment of debt	(5		)		5				—			—
Other items, net	(19		)		—				—			(19		)
Earnings from continuing operations before income taxes	606				5				—			611
Provision for income taxes	(172		)		(2		)		—			(174		)
Equity in loss of investee companies, net of tax	(16		)		—				—			(16		)
Net earnings from continuing operations	418				3				—			421
Net earnings from discontinued operations, net of tax	174				—				(145		)	29
Net earnings	$	592			$	3			$	(145	)	$	450
Diluted EPS from continuing operations	$	1.03			$	.01			$	—		$	1.04
Diluted EPS	$	1.46			$	.01			$	(.36	)	$	1.11

(a) Reflects a noncash gain of $100 million to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”) and a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.

-42-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

	Nine Months Ended September 30, 2018
	Reported			Restructuring and Other Corporate Matters (a)				Tax Item (b)			Adjusted
Operating income	$	2,121			$	90		—			$	2,211
Interest expense	(349		)		—			—			(349		)
Interest income	43				—			—			43
Other items, net	(52		)		—			—			(52		)
Earnings before income taxes	1,763				90			—			1,853
Provision for income taxes	(312		)		(21		)	(54		)	(387		)
Equity in loss of investee companies, net of tax	(52		)		—			—			(52		)
Net earnings	$	1,399			$	69		$	(54	)	$	1,414
Diluted EPS	$	3.66			$	.18		$	(.14	)	$	3.70

(a) Primarily reflects restructuring charges of $25 million ($19 million, net of tax) and professional fees of $64 million ($49 million, net of tax) related to legal proceedings, the ongoing investigations at the Company and the evaluation of a potential combination with Viacom Inc. This amount also includes a contribution of $20 million ($15 million, net of tax) to organizations dedicated to fostering safe and equitable work environments, offset by a reversal of incentive compensation relating to prior periods of $19 million ($14 million, net of tax) as a result of changes in senior management (See “Legal Matters”).

(b) Reflects a net tax benefit associated with changes in tax law (See “Provision for Income Taxes”).

	Nine Months Ended September 30, 2017
	Reported			Extinguishment of Debt				Tax Items (a)				Discontinued Operations Items (b)			Adjusted
Operating income	$	2,145			$	—			$	—			$	—	$	2,145
Interest expense	(336		)		—				—				—		(336		)
Interest income	45				—				—				—		45
Loss on early extinguishment of debt	(5		)		5				—				—		—
Other items, net	(56		)		—				—				—		(56		)
Earnings from continuing operations before income taxes	1,793				5				—				—		1,798
Provision for income taxes	(479		)		(2		)		(22		)		—		(503		)
Equity in loss of investee companies, net of tax	(45		)		—				—				—		(45		)
Net earnings from continuing operations	1,269				3				(22		)		—		1,250
Net earnings (loss) from discontinued operations, net of tax	(871		)		—				—				939		68
Net earnings	$	398			$	3			$	(22	)		$	939	$	1,318
Diluted EPS from continuing operations	$	3.10			$	.01			$	(.05	)		$	—	$	3.05
Diluted EPS	$	.97			$	.01			$	(.05	)		$	2.29	$	3.21

(a) Reflects a tax benefit in the first quarter of 2017 from the resolution of certain state income tax matters.

(b) Reflects a noncash charge of $980 million to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom; a restructuring charge of $7 million ($4 million, net of tax) at CBS Radio; and a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.

-43-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Consolidated Results of Operations

Three and Nine Months EndedSeptember 30, 2018versusThree and Nine Months EndedSeptember 30, 2017

Revenues

	Three Months Ended September 30,
			% of Total Revenues				% of Total Revenues		Increase/(Decrease)
Revenues by Type	2018				2017				$			%
Advertising	$	1,263	39	%	$	1,106	35	%	$	157		14	%
Content licensing and distribution	933		28		860		27		73			8
Affiliate and subscription fees	1,008		31		1,145		36		(137		)	(12	)
Other	59		2		60		2		(1		)	(2	)
Total Revenues	$	3,263	100	%	$	3,171	100	%	$	92		3	%

	Nine Months Ended September 30,
			% of Total Revenues				% of Total Revenues		Increase/(Decrease)
Revenues by Type	2018				2017				$		%
Advertising	$	4,323	41	%	$	4,008	41	%	$	315	8	%
Content licensing and distribution	3,024		29		2,761		28		263		10
Affiliate and subscription fees	2,976		28		2,835		29		141		5
Other	167		2		167		2		—		—
Total Revenues	$	10,490	100	%	$	9,771	100	%	$	719	7	%

Advertising

For the three and nine months endedSeptember 30, 2018, advertising revenues increased 14% and 8%, respectively, driven by the Company’s acquisition of Network 10 in the fourth quarter of 2017 and higher political advertising sales associated with the U.S. midterm elections. Advertising revenues for 2018 also benefited from higher revenues from the distribution of third-party content, resulting from such revenues now being recognized at the gross amount of consideration received from the customer, with an offsetting increase to operating expenses, as a result of the adoption of a new revenue recognition standard (see “Adoption of New Revenue Standard”). Under previous guidance such distribution revenues were recognized at the net amount retained by the Company after the payment of fees to the third party. For the nine-month period, these increases were partially offset by the absence of the National Semifinals and National Championship games of the NCAA Tournament, which the CBS Television Network broadcast in the second quarter of 2017 and Turner broadcast in 2018. The National Semifinals and National Championship games of the NCAA Tournament are broadcast by the CBS Television Network every other year through 2032 under the current agreements with the NCAA and Turner. For the three and nine months endedSeptember 30, 2018 underlying CBS Television Network advertising was comparable with the same prior-year periods.

During the fourth quarter of 2018, advertising revenues are expected to continue to benefit from the acquisition of Network 10 and political advertising spending associated with the U.S. midterm elections. Additionally, the CBS Television Network’s upfront advertising sales for the 2018/2019 television broadcast season, which runs from the middle of September 2018 through the middle of September 2019, resulted in pricing and volume increases compared with the prior broadcast season, which are expected to benefit the Company’s advertising revenues during the 2018/2019 broadcast season. However, overall advertising revenues for the Company will be dependent on ratings for its programming and market conditions, including demand in the scatter advertising market, which is when advertisers purchase the remaining advertising spots closer to the broadcast of the related programming.

-44-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

During the first nine months of 2018, compared to the same period in 2017, the Company has experienced lower ratings, which was offset by higher pricing. Additionally, the comparison in the fourth quarter of 2018 will be impacted by the absence of CBS’s broadcast of four Thursday Night Football games in 2017. However, this will result in an improvement in the Company’s operating income margin.

Content Licensing and Distribution

For the three and nine months endedSeptember 30, 2018, content licensing and distribution revenues increased 8% and 10%, respectively, benefiting from higher revenues from the distribution of third-party content, resulting from such revenues now being recognized at the gross amount of consideration received from the customer, with an offsetting increase to participation expense, as a result of the adoption of a new revenue recognition standard (see “Adoption of New Revenue Standard”). Under previous guidance such distribution revenues were recognized at the net amount retained by the Company after the payment of fees to the third party. The increase for the three-month period also reflects higher domestic licensing and for the nine-month period reflects higher domestic and international licensing.

For the remainder of 2018, the content licensing and distribution revenues comparison will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements, and the new revenue recognition standard.

Affiliate and Subscription Fees

For the three months ended September 30, 2018, affiliate and subscription fees decreased 12%, reflecting Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017, which impacted the third quarter comparison by 27 percentage points. Underlying results reflect 79% growth from digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime digital streaming subscription offering, and virtual MVPDs, as well as 15% higher station affiliation fees and retransmission revenues.

For the nine months endedSeptember 30, 2018, affiliate and subscription fees increased 5%, reflecting 22% higher station affiliation fees and retransmission revenues and 77% growth from digital initiatives, including CBS All Access, the Showtime digital streaming subscription offering, and virtual MVPDs. These increases were partially offset by the above-mentioned pay-per-view boxing event, which impacted the nine-month comparison by 11 percentage points.

Over the next few years, the Company expects to benefit from the renewal of several of its agreements with station affiliates and MVPDs, including virtual MVPDs. In addition, the Company’s existing agreements with station affiliates and MVPDs include annual contractual increases. Together, these factors are expected to result in continued growth in affiliate and subscription fees over the next several years.

International Revenues

The Company generated approximately 16% and 12% of its total revenues from international regions for the three months ended September 30, 2018 and 2017, respectively, and generated 18% and 14% of its total revenues from international regions for the nine months endedSeptember 30, 2018 and 2017, respectively. The increases in international revenues were primarily driven by the Company’s acquisition of Network 10 in the fourth quarter of 2017.

-45-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Operating Expenses

	Three Months Ended September 30,
			% of Operating Expenses				% of Operating Expenses		Increase/(Decrease)
Operating Expenses by Type	2018				2017				$			%
Programming	$	523	27	%	$	749	40	%	$	(226	)	(30	)%
Production	700		37		572		31		128			22
Participation, distribution and royalty	331		17		199		11		132			66
Other	368		19		342		18		26			8
Total Operating Expenses	$	1,922	100	%	$	1,862	100	%	$	60		3	%

	Nine Months Ended September 30,
			% of Operating Expenses				% of Operating Expenses		Increase/(Decrease)
Operating Expenses by Type	2018				2017				$			%
Programming	$	2,070	32	%	$	2,258	38	%	$	(188	)	(8	)%
Production	2,361		36		1,955		33		406			21
Participation, distribution and royalty	984		15		725		12		259			36
Other	1,091		17		1,002		17		89			9
Total Operating Expenses	$	6,506	100	%	$	5,940	100	%	$	566		10	%

Programming

For the three and nine months endedSeptember 30, 2018, the decreases in programming expenses of 30% and 8%, respectively, were primarily driven by costs associated with Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017, partially offset by costs for programming on Network 10, which was acquired in the fourth quarter of 2017.

Production

For the three and nine months endedSeptember 30, 2018, the increases in production expenses of 22% and 21%, respectively, were primarily driven by an increased investment in content, including a higher number of series produced for distribution on multiple platforms, and the acquisition of Network 10 in the fourth quarter of 2017. The increase for the nine-month period also included costs associated with the increase in television licensing revenues.

Participation, Distribution and Royalty

For the three and nine months endedSeptember 30, 2018, the increases in participation, distribution and royalty costs of 66% and 36%, respectively, were primarily driven by the adoption of new revenue recognition guidance, which resulted in revenues from the Company’s distribution of third-party content now being recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues were recognized at the net amount retained by the Company after the payment of fees to the third party. This change resulted in an increase to both revenues and participation expenses of $93 million and $217 million for the three and nine months endedSeptember 30, 2018, respectively, with no impact on the Company’s operating income. The increases for the three and nine months endedSeptember 30, 2018 also reflected higher participations and residuals associated with the increase in television licensing revenues.

-46-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other

Other operating expenses primarily include compensation and costs associated with book sales, including printing and warehousing. For the three and nine months endedSeptember 30, 2018, the increases in other expenses of 8% and 9%, respectively, primarily reflected expenses of Network 10, which was acquired in the fourth quarter of 2017, and higher costs associated with the Company’s digital initiatives.

Selling, General and Administrative Expenses

	Three Months Ended September 30,
	2018		% of Revenues			2017		% of Revenues			Increase/(Decrease)
Selling, general and administrative expenses	$	549		17	%	$	525		17	%		5	%

	Nine Months Ended September 30,
	2018		% of Revenues			2017		% of Revenues			Increase/(Decrease)
Selling, general and administrative expenses	$	1,605		15	%	$	1,520		16	%		6	%

Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy and back office support. For the three and nine months endedSeptember 30, 2018, the increases in SG&A expenses of 5% and 6%, respectively, were primarily driven by the Company’s acquisition of Network 10 in the fourth quarter of 2017 and higher advertising and marketing costs for series premieres.

Depreciation and Amortization

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018		2017		Increase/(Decrease)			2018		2017		Increase/(Decrease)
Depreciation and amortization	$	56	$	55		2	%	$	168	$	166		1	%

Restructuring and Other Corporate Matters

During the second quarter of 2018, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $25 million, reflecting $17 million of severance costs and $8 million of costs associated with exiting contractual obligations and other related costs. These restructuring activities are expected to reduce the Company’s annual cost structure by approximately $25 million.

During the year ended December 31, 2017, the Company recorded restructuring charges of $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs.

As of September 30, 2018, the cumulative settlements for the 2018, 2017 and 2016 restructuring charges were $67 million, of which $56 million was for severance costs and $11 million was for costs associated with contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reserves by the end of 2019.

-47-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

	Balance at			2018			2018				Balance at
	December 31, 2017			Charges			Settlements				September 30, 2018
Entertainment		$	45		$	6		$	(26	)		$	25
Cable Networks		1			—			(1		)		—
Publishing		3			1			(2		)		2
Local Media		14			11			(7		)		18
Corporate		3			7			(4		)		6
Total		$	66		$	25		$	(40	)		$	51

	Balance at			2017			2017				Balance at
	December 31, 2016			Charges			Settlements				December 31, 2017
Entertainment		$	17		$	44		$	(16	)		$	45
Cable Networks		4			—			(3		)		1
Publishing		1			5			(3		)		3
Local Media		6			12			(4		)		14
Corporate		2			2			(1		)		3
Total		$	30		$	63		$	(27	)		$	66

During the three and nine months endedSeptember 30, 2018, the Company recorded expenses of $46 million and $65 million, respectively, primarily for professional fees related to legal proceedings and the ongoing investigations at the Company. (See “Legal Matters”). The nine-month period also included professional fees related to the evaluation of a potential combination with Viacom Inc.

Interest Expense/Income

	Three Months Ended September 30,									Nine Months Ended September 30,
	2018			2017			Increase/(Decrease)			2018			2017			Increase/(Decrease)
Interest expense	$	(115	)	$	(116	)		(1	)%	$	(349	)	$	(336	)		4	%
Interest income	$	12		$	17			(29	)%	$	43		$	45			(4	)%

The following table presents the Company’s outstanding debt balances, excluding capital leases, and the weighted average interest rate as of September 30, 2018 and 2017:

	At September 30,
			Weighted Average					Weighted Average
	2018		Interest Rate			2017		Interest Rate
Senior debt	$	9,433		4.26	%	$	9,039		4.43	%
Commercial paper	$	374		2.41	%	$	590		1.44	%

Loss on Early Extinguishment of Debt

For the three and nine months endedSeptember 30, 2017, the loss on early extinguishment of debt of $5 million

reflected a pre-tax loss associated with the redemption of the Company’s $300 million outstanding 4.625% senior notes due May 2018.

-48-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other Items, Net

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Pension and postretirement benefit costs	$	(16	)	$	(22	)	$	(47	)	$	(65	)
Foreign exchange gains (losses)	(1		)	(1		)	(2		)	5
Gain (loss) from investments	—			4			(3		)	4
Other items, net	$	(17	)	$	(19	)	$	(52	)	$	(56	)

Beginning in the first quarter of 2018, as a result of the adoption of new accounting guidance, the Company presents pension and postretirement benefit costs, other than service cost, within “Other items, net” on the Consolidated Statements of Operations. All prior periods have been reclassified to conform to this presentation. (See Note 1 to the consolidated financial statements.)

Provision for Income Taxes

The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2018			2017			Increase/(Decrease)		2018			2017			Increase/(Decrease)
Provision for income taxes, including interest and before other discrete items (a)	$	120		$	187		(36	)%	$	370		$	548		(32	)%
Impact of tax law changes (b)	(54		)	—					(54		)	—
Excess tax benefits from stock-based compensation (c)	—			(10		)			—			(41		)
Other discrete items (d)	(2		)	(5		)			(4		)	(28		)
Provision for income taxes	$	64		$	172		(63	)%	$	312		$	479		(35	)%
Effective income tax rate	11.2		%	28.4		%			17.7		%	26.7		%

(a) The lower tax provision for the three and nine months endedSeptember 30, 2018 primarily reflects a reduction in the federal corporate income tax rate from 35% to 21% as a result of the enactment of new federal tax legislation in December 2017 (the “Tax Reform Act”).

(b) During the third quarter of 2018, in connection with the preparation of its 2017 federal tax return, the Company elected to utilize a federal tax law provision that was retroactively renewed in 2018. This tax law provision allowed the Company to immediately expense certain qualified production costs on its 2017 tax return. As a result, during the third quarter of 2018, the Company established a deferred tax liability associated with this deduction at the 2017 federal tax rate of 35%, and concurrently recorded a net tax benefit of $69 million, primarily reflecting the re-measurement of this deferred tax liability at the reduced federal corporate tax rate of 21% under the Tax Reform Act. This benefit was partially offset by a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits that resulted from the enactment of the Tax Reform Act. (See Note 9 to the consolidated financial statements.)

(c) Reflects the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return associated with the exercise of stock options and vesting of RSUs. This difference occurs because stock-based compensation expense is recorded based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests.

(d) For the nine months endedSeptember 30, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters.

-49-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Equity in Loss of Investee Companies, Net of Tax

	Three Months Ended September 30,									Nine Months Ended September 30,
	2018			2017			Increase/(Decrease)			2018			2017			Increase/(Decrease)
Equity in loss of investee companies, net of tax	$	(18	)	$	(16	)		13	%	$	(52	)	$	(45	)		16	%

Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018		2017		Increase/(Decrease)			2018		2017		Increase/(Decrease)
Net earnings from continuing operations	$	488	$	418		17	%	$	1,399	$	1,269		10	%
Diluted EPS from continuing operations	$	1.29	$	1.03		25	%	$	3.66	$	3.10		18	%

For the three and nine months endedSeptember 30, 2018, net earnings from continuing operations increased 17% and 10%, respectively, driven by the lower effective income tax rate in 2018. Diluted EPS from continuing operations for the three and nine months endedSeptember 30, 2018 increased 25% and 18%, respectively, reflecting higher earnings and lower weighted average shares outstanding.

Net Earnings (Loss) from Discontinued Operations, Net of Tax

The Company reported net earnings from discontinued operations, net of tax, of $174 million for the three months ended September 30, 2017, and a net loss from discontinued operations, net of tax, of $871 million for the nine months endedSeptember 30, 2017. The Company recorded a noncash gain of $100 million for the three months ended September 30, 2017 and a noncash charge of $980 million for the nine months ended September 30, 2017, to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom. (See Note 13 to the consolidated financial statements.)

Net Earnings and Diluted EPS

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018		2017		Increase/(Decrease)			2018		2017		Increase/(Decrease)
Net earnings	$	488	$	592		(18	)%	$	1,399	$	398		n/m
Diluted EPS	$	1.29	$	1.46		(12	)%	$	3.66	$	.97		n/m

n/m - not meaningful

-50-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Segment Results of Operations

The Company presents operating income (loss) excluding costs for restructuring and other corporate matters, where applicable, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments in accordance with FASB guidance for segment reporting. The Company believes the presentation of Segment Operating Income 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. The reconciliation of Segment Operating Income to the Company’s consolidated Net earnings (loss) is presented in Note 11 to the consolidated financial statements.

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
				% of Total Revenues						% of Total Revenues			Increase/(Decrease)
	2018						2017						$			%
Revenues:
Entertainment	$	2,151			66	%	$	1,815			57	%	$	336		19	%
Cable Networks	569				18		840				26		(271		)	(32	)
Publishing	240				7		228				7		12			5
Local Media	434				13		397				13		37			9
Corporate/Eliminations	(131		)		(4	)	(109		)		(3	)	(22		)	(20	)
Total Revenues	$	3,263			100	%	$	3,171			100	%	$	92		3	%

	Three Months Ended September 30,
				% of Total Segment Operating Income						% of Total Segment Operating Income
													Increase/(Decrease)
	2018						2017						$			%
Segment Operating Income (Loss):
Entertainment	$	377			51	%	$	350			48	%	$	27		8	%
Cable Networks	248				34		296				41		(48		)	(16	)
Publishing	51				7		47				6		4			9
Local Media	124				17		106				15		18			17
Corporate	(64		)		(9	)	(70		)		(10	)	6			9
Total Segment Operating Income	736				100	%	729				100	%	7			1
Corporate matters	(46		)				—						(46		)	n/m
Total Operating Income	$	690					$	729					$	(39	)	(5	)%

n/m - not meaningful

	Three Months Ended September 30,
					Increase/(Decrease)
	2018		2017		$			%
Depreciation and Amortization:
Entertainment	$	31	$	29	$	2		7	%
Cable Networks	5		5		—			—
Publishing	1		2		(1		)	(50	)
Local Media	11		11		—			—
Corporate	8		8		—			—
Total Depreciation and Amortization	$	56	$	55	$	1		2	%

-51-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2018 and 2017

	Nine Months Ended September 30,
				% of Total Revenues						% of Total Revenues			Increase/(Decrease)
	2018						2017						$			%
Revenues:
Entertainment	$	7,232			69	%	$	6,346			65	%	$	886		14	%
Cable Networks	1,769				17		1,954				20		(185		)	(9	)
Publishing	607				6		595				6		12			2
Local Media	1,269				12		1,218				13		51			4
Corporate/Eliminations	(387		)		(4	)	(342		)		(4	)	(45		)	(13	)
Total Revenues	$	10,490			100	%	$	9,771			100	%	$	719		7	%

	Nine Months Ended September 30,
				% of Total Segment Operating Income						% of Total Segment Operating Income
													Increase/(Decrease)
	2018						2017						$			%
Segment Operating Income (Loss):
Entertainment	$	1,225			55	%	$	1,104			52	%	$	121		11	%
Cable Networks	734				33		801				37		(67		)	(8	)
Publishing	98				5		91				4		7			8
Local Media	370				17		358				17		12			3
Corporate	(216		)		(10	)	(209		)		(10	)	(7		)	(3	)
Total Segment Operating Income	2,211				100	%	2,145				100	%	66			3
Restructuring and other corporate matters	(90		)				—						(90		)	n/m
Total Operating Income	$	2,121					$	2,145					$	(24	)	(1	)%

n/m - not meaningful

	Nine Months Ended September 30,
					Increase/(Decrease)
	2018		2017		$			%
Depreciation and Amortization:
Entertainment	$	92	$	85	$	7		8	%
Cable Networks	16		17		(1		)	(6	)
Publishing	4		5		(1		)	(20	)
Local Media	33		34		(1		)	(3	)
Corporate	23		25		(2		)	(8	)
Total Depreciation and Amortization	$	168	$	166	$	2		1	%

-52-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Entertainment (CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, Network 10, CBS Interactive and CBS Films)

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
							Increase/(Decrease)
Entertainment	2018			2017			$			%
Revenues	$	2,151		$	1,815		$	336		19	%
Segment Operating Income	$	377		$	350		$	27		8	%
Segment Operating Income as a % of revenues	18		%	19		%
Depreciation and amortization	$	31		$	29		$	2		7	%
Capital expenditures	$	19		$	25		$	(6	)	(24	)%

For the three months ended September 30, 2018, the 19%increase in revenues reflects growth across each of the main revenue streams. Advertising revenues grew 16%, reflecting the acquisition of Network 10 in the fourth quarter of 2017. Network advertising for the three months ended September 30, 2018 was comparable with the same prior-year period. Affiliate and subscription fee revenues grew 32%, driven by higher station affiliation fees and revenues from digital initiatives, including CBS All Access and virtual MVPDs. Content licensing and distribution revenues increased 16%, benefiting from higher revenues from international licensing, as well as additional series produced for third-parties. Entertainment revenues also included higher revenues from distribution arrangements, with an offsetting increase to operating expenses, as a result of the adoption of a new revenue recognition standard in the first quarter of 2018. (See Note 12 to the consolidated financial statements.)

For the three months ended September 30, 2018, operating income increased 8%, driven by the higher revenues, partially offset by an increased investment in content and digital initiatives.

Nine Months EndedSeptember 30, 2018 and 2017

	Nine Months Ended September 30,
							Increase/(Decrease)
Entertainment	2018			2017			$			%
Revenues	$	7,232		$	6,346		$	886		14	%
Segment Operating Income	$	1,225		$	1,104		$	121		11	%
Segment Operating Income as a % of revenues	17		%	17		%
Restructuring charges	$	6		$	—		$	6		n/m
Depreciation and amortization	$	92		$	85		$	7		8	%
Capital expenditures	$	56		$	63		$	(7	)	(11	)%

n/m - not meaningful

For the nine months endedSeptember 30, 2018, the 14%increase in revenues mainly reflected 36% growth in affiliate and subscription fee revenues, primarily as a result of higher station affiliation fees and growth from digital initiatives including CBS All Access and virtual MVPDs. Also contributing to the revenue increase was 10% growth in advertising revenues, driven by the acquisition of Network 10 in the fourth quarter of 2017, partially offset by the absence of the National Semifinals and National Championship games of the NCAA Tournament, which the CBS Television Network broadcast in the second quarter of 2017 and Turner broadcast in 2018. Underlying Network advertising was comparable with the same prior-year period. Content licensing and distribution revenues increased 11%, driven by growth from international licensing, as well as additional series produced for third parties, partially offset by lower domestic licensing. Entertainment revenues also included higher revenues from distribution arrangements, with an offsetting increase to operating expenses, as a result of the

-53-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

adoption of a new revenue recognition standard in the first quarter of 2018. (See Note 12 to the consolidated financial statements.)

For the nine months endedSeptember 30, 2018, operating income increased 11% as a result of higher revenues, partially offset by an increased investment in content and digital initiatives. Restructuring charges for the nine months endedSeptember 30, 2018 primarily reflected severance costs and costs associated with exiting contractual obligations.

Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks)

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
							Increase/(Decrease)
Cable Networks	2018			2017			$			%
Revenues	$	569		$	840		$	(271	)	(32	)%
Segment Operating Income	$	248		$	296		$	(48	)	(16	)%
Segment Operating Income as a % of revenues	44		%	35		%
Depreciation and amortization	$	5		$	5		$	—		—	%
Capital expenditures	$	5		$	5		$	—		—	%

For the three months ended September 30, 2018, the 32% decrease in revenues was driven by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017 and the timing of international licensing of Showtime original series, partially offset by growth from the Showtime digital streaming subscription offering. As of September 30, 2018, subscriptions totaled approximately 26 million for Showtime, the Company’s premium television network, and the Showtime digital streaming subscription offering combined, 50 million for CBS Sports Network and 31 million for Smithsonian Networks.

For the three months ended September 30, 2018, operating income decreased 16%as a result of an increased investment in programming and higher advertising costs, including from the original series premieres of Who Is America? and Kidding on Showtime during the third quarter of 2018.

Nine Months EndedSeptember 30, 2018 and 2017

	Nine Months Ended September 30,
							Increase/(Decrease)
Cable Networks	2018			2017			$			%
Revenues	$	1,769		$	1,954		$	(185	)	(9	)%
Segment Operating Income	$	734		$	801		$	(67	)	(8	)%
Segment Operating Income as a % of revenues	41		%	41		%
Depreciation and amortization	$	16		$	17		$	(1	)	(6	)%
Capital expenditures	$	12		$	12		$	—		—	%

For the nine months endedSeptember 30, 2018, the 9% decrease in revenues was driven by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in the third quarter of 2017, partially offset by higher licensing sales of Showtime original series and growth from the Showtime digital streaming subscription offering.

For the nine months endedSeptember 30, 2018, the 8% decrease in operating income was driven by an increased investment in programming, partially offset by growth from the Showtime digital streaming subscription offering.

-54-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Publishing (Simon & Schuster)

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
							Increase/(Decrease)
Publishing	2018			2017			$			%
Revenues	$	240		$	228		$	12		5	%
Segment Operating Income	$	51		$	47		$	4		9	%
Segment Operating Income as a % of revenues	21		%	21		%
Depreciation and amortization	$	1		$	2		$	(1	)	(50	)%
Capital expenditures	$	2		$	1		$	1		100	%

For the three months ended September 30, 2018, the 5% increase in revenues reflects higher print book sales and digital audio sales. Bestselling titles in the third quarter of 2018 included Fear: Trump in the White House by Bob Woodward and Whiskey in a Teacup by Reese Witherspoon.

For the three months ended September 30, 2018, the 9%increase in operating income primarily reflects the higher revenues.

Nine Months EndedSeptember 30, 2018 and 2017

	Nine Months Ended September 30,
							Increase/(Decrease)
Publishing	2018			2017			$			%
Revenues	$	607		$	595		$	12		2	%
Segment Operating Income	$	98		$	91		$	7		8	%
Segment Operating Income as a % of revenues	16		%	15		%
Restructuring charges	$	1		$	—		$	1		n/m
Depreciation and amortization	$	4		$	5		$	(1	)	(20	)%
Capital expenditures	$	4		$	2		$	2		100	%

n/m - not meaningful

For the nine months endedSeptember 30, 2018, the 2% increase in revenues primarily reflected higher digital audio sales.

For the nine months endedSeptember 30, 2018, the 8%increase in operating income reflects the higher revenues.

-55-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Local Media (CBSTelevision Stations and CBS Local Digital Media)

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
							Increase/(Decrease)
Local Media	2018			2017			$			%
Revenues	$	434		$	397		$	37		9	%
Segment Operating Income	$	124		$	106		$	18		17	%
Segment Operating Income as a % of revenues	29		%	27		%
Depreciation and amortization	$	11		$	11		$	—		—	%
Capital expenditures	$	6		$	8		$	(2	)	(25	)%

For the three months ended September 30, 2018, the 9%increase in revenues reflects 13% growth in retransmission revenues and higher advertising revenues, driven by political advertising sales associated with the U.S. midterm elections.

For the three months ended September 30, 2018, the 17% increase in operating income reflects the higher revenues.

In the fourth quarter of 2018, advertising revenues are expected to continue to benefit from increased political advertising sales associated with the U.S. midterm elections.

Nine Months EndedSeptember 30, 2018 and 2017

	Nine Months Ended September 30,
							Increase/(Decrease)
Local Media	2018			2017			$			%
Revenues	$	1,269		$	1,218		$	51		4	%
Segment Operating Income	$	370		$	358		$	12		3	%
Segment Operating Income as a % of revenues	29		%	29		%
Restructuring charges	$	11		$	—		$	11		n/m
Depreciation and amortization	$	33		$	34		$	(1	)	(3	)%
Capital expenditures	$	15		$	20		$	(5	)	(25	)%

n/m - not meaningful

For the nine months endedSeptember 30, 2018, the 4%increase in revenues reflected 14% growth in retransmission revenues, partially offset by lower advertising sales primarily driven by the absence of the National Semifinals and National Championship games of the NCAA Tournament.

For the nine months endedSeptember 30, 2018, the 3%increase in operating income primarily reflects the higher revenues. Restructuring charges for the nine months endedSeptember 30, 2018 primarily reflected severance costs and costs associated with exiting contractual obligations.

-56-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Corporate

Three Months Ended September 30, 2018 and 2017

	Three Months Ended September 30,
							Increase/(Decrease)
Corporate	2018			2017			$		%
Segment Operating Loss	$	(64	)	$	(70	)	$	6	9	%
Depreciation and amortization	$	8		$	8		$	—	—	%
Capital expenditures	$	5		$	5		$	—	—	%

Corporate expenses include general corporate overhead, unallocated shared company expenses, and intercompany eliminations. For the three months ended September 30, 2018, corporate expenses decreased 9%, primarily reflecting lower compensation costs resulting from changes in senior management.

Nine Months EndedSeptember 30, 2018 and 2017

	Nine Months Ended September 30,
							Increase/(Decrease)
Corporate	2018			2017			$			%
Segment Operating Loss	$	(216	)	$	(209	)	$	(7	)	(3	)%
Restructuring charges	$	7		$	—		$	7		n/m
Depreciation and amortization	$	23		$	25		$	(2	)	(8	)%
Capital expenditures	$	12		$	15		$	(3	)	(20	)%

n/m - not meaningful

For the nine months ended September 30, 2018, corporate expenses increased 3%. Restructuring charges for the nine months ended September 30, 2018 primarily reflected severance and other related costs.

Financial Position

The balance sheet at September 30, 2018 is presented under ASC 606 while December 31, 2017 is presented under previous accounting guidance. See Note 12 to the consolidated financial statements for the amount by which each balance sheet line item at September 30, 2018 was impacted by the adoption of ASC 606.

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$			%
Current Assets:
Cash and cash equivalents		$	182		$	285	$	(103	)	(36	)%
Receivables, net		3,697			3,697		—			—
Programming and other inventory		1,828			1,828		—			—
Prepaid income taxes (a)		—			78		(78		)	(100	)
All other current assets (b)		333			385		(52		)	(14	)
Total current assets		$	6,040		$	6,273	$	(233	)	(4	)%

(a) The decrease reflects the timing of income tax payments.

(b) The decrease is primarily due to the timing of deposits for acquired programming.

-57-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$		%
Programming and other inventory (a)		$	3,868		$	2,881	$	987	34	%

(a) The increase primarily reflects higher investment in programming, as well as the seasonality of the Company’s programming.

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$			%
Other assets (a)		$	2,367		$	2,852	$	(485	)	(17	)%

(a) The decrease primarily reflects lower noncurrent receivables as a result of the adoption of ASC 606.

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$			%
Current Liabilities:
Accounts payable		$	229		$	231	$	(2	)	(1	)%
Accrued compensation (a)		256			343		(87		)	(25	)
Participants’ share and royalties payable (a)		1,110			986		124			13
Program rights		406			373		33			9
Income taxes payable (b)		68			—		68			n/m
Commercial paper		374			679		(305		)	(45	)
All other current liabilities (c)		1,550			1,360		190			14
Total current liabilities		$	3,993		$	3,972	$	21		1	%

n/m - not meaningful

(a) The increase (decrease) primarily reflects the timing of payments.

(b) The increase reflects the timing of income tax payments.

(c) The increase primarily reflects the reclassification of the sales returns reserve to “Other current liabilities” as a result of the adoption of ASC 606.

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$			%
Pension and postretirement benefit obligations (a)		$	1,226		$	1,328	$	(102	)	(8	)%

(a) The decrease primarily reflects contributions to the Company’s non-qualified pension and other postretirement benefit plans to satisfy benefit payments due under these plans.

	At			At			Increase/(Decrease)
	September 30, 2018			December 31, 2017			$			%
Other liabilities (a)		$	3,307		$	3,621	$	(314	)	(9	)%

(a) The decrease primarily reflects lower participation and residual liabilities as a result of the adoption of ASC 606, and the timing of payments.

-58-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Cash Flows

The changes in cash and cash equivalents were as follows:

	Nine Months Ended September 30,
	2018			2017			Increase/(Decrease)
Net cash flow provided by operating activities from:
Continuing operations	$	1,179		$	935			$	244
Discontinued operations	1			52				(51		)
Net cash flow provided by operating activities	1,180			987				193
Net cash flow used for investing activities from:
Continuing operations	(196		)	(399		)		203
Discontinued operations	(23		)	(18		)		(5		)
Net cash flow used for investing activities	(219		)	(417		)		198
Net cash flow used for financing activities	(1,064		)	(1,018		)		(46		)
Net decrease in cash and cash equivalents	$	(103	)	$	(448	)		$	345

Operating Activities. For the nine months endedSeptember 30, 2018, the increase in cash provided by operating activities from continuing operations was primarily driven by lower cash payments for income taxes and growth in affiliate and subscription fees, which were partially offset by an increased investment in content, including a higher number of series produced for distribution on multiple platforms. During the nine months endedSeptember 30, 2018, the Company received net income tax refunds of $19 million compared to net income tax payments of $321 million for the same prior-year period. The 2018 net refund was primarily due to a federal tax overpayment carryforward from 2017 and the receipt of refundable state film production tax credits.

Investing Activities

	Nine Months Ended September 30,
	2018				2017
Investments in and advances to investee companies (a)		$	(76	)		$	(67	)
Capital expenditures		(99		)		(112		)
Acquisitions (including acquired television library) (b)		(29		)		(258		)
Other investing activities		8				38
Net cash flow used for investing activities from continuing operations		(196		)		(399		)
Net cash flow used for investing activities from discontinued operations		(23		)		(18		)
Net cash flow used for investing activities		$	(219	)		$	(417	)

(a) Mainly includes the Company’s investment in The CW as well as its other domestic and international television joint ventures.

(b) 2017 includes a payment of $138 million for the acquisition of Network 10, which closed in the fourth quarter of 2017, as well as the acquisition of a television programming library.

-59-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Financing Activities

	Nine Months Ended September 30,
	2018				2017
(Repayments of) proceeds from short-term debt borrowings, net		$	(305	)		$	140
Proceeds from issuance of senior notes		—				889
Repayment of senior notes		—				(701		)
Repurchase of CBS Corp. Class B Common Stock		(497		)		(1,111		)
Dividends		(208		)		(224		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation		(59		)		(89		)
Proceeds from exercise of stock options		23				81
All other financing activities, net		(18		)		(3		)
Net cash flow used for financing activities		$	(1,064	)		$	(1,018	)

Free Cash Flow and Adjusted Free Cash Flow

Free cash flow and adjusted free cash flow are non-GAAP financial measures. Free cash flow reflects the Company’s net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations, and less capital expenditures; and adjusted free cash flow reflects the Company’s net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations and discretionary contributions to prefund the Company’s pension plans, and less capital expenditures. The Company’s calculations of free cash flow and adjusted free cash flow include capital expenditures because investment in capital expenditures is a use of cash that is directly related to the Company’s operations. Adjusted free cash flow excludes discretionary contributions to prefund the Company’s pension plans because management assesses the Company’s ability to generate operating cash flows without considering the impact from discretionary pension contributions, and decisions regarding the timing of pension plan funding are not dependent on the level of operating cash flows generated during the period. 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 and adjusted free cash flow provide 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 and adjusted free cash flow are significant measures 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 and adjusted 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 and adjusted free cash flow are among several components of incentive compensation targets for certain management personnel. In addition, free cash flow and adjusted free cash flow are primary measures 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 and adjusted free cash flow are not measures calculated in accordance with GAAP, free cash flow and adjusted 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 and adjusted free cash flow, as the Company calculates them, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow and adjusted free cash flow as measures of liquidity have certain limitations, do not necessarily represent funds available for discretionary use and are not necessarily measures of the Company’s ability to fund its cash needs. When comparing free cash flow

-60-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

and adjusted 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 that are not reflected in free cash flow or adjusted free cash flow.

The following table presents a reconciliation of the Company’s net cash flow provided by operating activities to free cash flow and adjusted free cash flow.

	Nine Months Ended
	September 30,
	2018			2017
Net cash flow provided by operating activities	$	1,180		$	987
Capital expenditures	(99		)	(112		)
Less: Operating cash flow from discontinued operations	1			52
Free cash flow	1,080			823
Less: Discretionary pension plan contributions, net of tax	—			(64		)
Adjusted free cash flow	$	1,080		$	887

Repurchase of Company Stock, Cash Dividends and Contingent Stock Dividend

During the third quarter of 2018, the Company repurchased 1.8 million shares of its Class B Common Stock under its share repurchase program for $100 million, at an average cost of $55.13 per share. During the nine months endedSeptember 30, 2018, the Company repurchased 9.4 million shares of its Class B Common Stock for $500 million, at an average cost of $52.94 per share, leaving $2.56 billion of authorization at September 30, 2018.

During the third quarter of 2018, the Company declared a quarterly cash dividend of $.18 per share on its Class A and Class B Common Stock, resulting in total dividends of $68 million, which were paid on October 1, 2018. During the nine months endedSeptember 30, 2018, the Company declared total per share cash dividends of $.54 on its Class A and Class B Common Stock, resulting in total dividends of $206 million.

On May 17, 2018, the Board voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company’s Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”). In connection with the Settlement Agreement, on September 9, 2018, the Board rescinded the May 2018 Stock Dividend. See “Legal Matters” for related information.

-61-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Capital Structure

The following table sets forth the Company’s debt.

	At			At
	September 30, 2018			December 31, 2017
Commercial paper		$	374		$	679
Senior debt (2.30% – 7.875% due 2019 – 2045) (a)		9,433			9,426
Obligations under capital leases		46			57
Total debt		9,853			10,162
Less commercial paper		374			679
Less current portion of long-term debt		14			19
Total long-term debt, net of current portion		$	9,465		$	9,464

(a) At September 30, 2018 and December 31, 2017, the senior debt balances included (i) a net unamortized discount of $60 million and $65 million, respectively, (ii) unamortized deferred financing costs of $44 million and $47 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $4 million and $3 million, respectively. The face value of the Company’s senior debt was $9.54 billion at both September 30, 2018 and December 31, 2017.

At September 30, 2018, the Company classified $600 million of debt maturing in August 2019 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $374 million and $679 million at September 30, 2018 and December 31, 2017, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 2.41% at September 30, 2018 and 1.88% at December 31, 2017.

Credit Facility

At September 30, 2018, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At September 30, 2018, the Company’s Consolidated Leverage Ratio was approximately 3.0x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. At September 30, 2018, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.

Liquidity and Capital Resources

The Company continually projects anticipated cash requirements for its operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. The Company’s operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, operating leases, interest payments, and pension funding obligations. The Company’s investing

-62-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

and financing spending includes capital expenditures, share repurchases, dividends and principal payments on its outstanding indebtedness. The Company believes that its operating cash flows; cash and cash equivalents; borrowing capacity under the Credit Facility, which had $2.49 billion of remaining availability at September 30, 2018; and access to capital markets are sufficient to fund its operating, investing and financing requirements for the next twelve months.

The Company’s funding for short-term and long-term obligations will come primarily from cash flows from operating activities. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to the Company, the existing Credit Facility provides sufficient capacity to satisfy short-term borrowing needs.The Company routinely assesses its capital structure and opportunistically enters into transactions to lower its interest expense, which could result in a charge from the early extinguishment of debt.

The Company’s long-term debt obligations due over the next five years of $2.59 billion are expected to be funded by cash generated from operating activities and the Company’s ability to refinance its debt.

Legal Matters

General.    On an ongoing basis, the Company vigorously defends itself in numerous lawsuits and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Company without merit, is inherently uncertain and always difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal matters and other litigation to which it is a party are not likely, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under the separation agreement between the Company and Viacom Inc., the Company and Viacom Inc. have agreed to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.

Litigation Settled in September 2018 Involving the Company and Its Controlling Stockholder, National Amusements, Inc., Among Others, in the Delaware Court of Chancery.    On May 14, 2018, the Company and certain of the independent directors of the Company’s Board of Directors (the “Board”) filed a lawsuit in the Delaware Court of Chancery against NAI, Ms. Shari Redstone, Mr. Sumner M. Redstone, NAI Entertainment Holdings LLC (“NAIEH”) and the Sumner M. Redstone National Amusements Trust (the “SMR Trust”) (collectively, the “NAI Parties”). The verified complaint, as amended on May 23, 2018, alleged, among other things, that NAI, Mr. Sumner M. Redstone and Ms. Shari Redstone had breached their fiduciary duties to the Company’s stockholders by abusing their control to threaten the independent corporate governance of the Company. The amended verified complaint sought a declaration that the May 2018 Stock Dividend (as defined below) was valid and permissible, a declaration that the Bylaw Amendments (as defined below) were invalid or were ineffective as of May 17, 2018 and an injunction against any action by any of the NAI Parties to interfere with the composition of the Board or to modify the Company’s governance documents before the issuance of any shares pursuant to the May 2018 Stock Dividend.

On May 16, 2018, each of NAI and NAIEH delivered to the Company a written consent to amend (the “Bylaw Amendments”) the Company’s amended and restated bylaws (the “Bylaws”). On May 17, 2018, the Board voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company's Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”).

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

On May 29, 2018, NAI, NAIEH and Ms. Shari Redstone filed a lawsuit in the Delaware Court of Chancery against the Company and certain of the Company’s directors. NAI’s verified complaint, as amended on June 25, 2018 and July 27, 2018, alleged, among other things, that the May 2018 Stock Dividend violated the Company’s bylaws and certificate of incorporation, and that the directors named as defendants had breached their fiduciary duties in approving the May 2018 Stock Dividend. The amended verified complaint sought a declaration that the Bylaw Amendments were valid, a declaration that the May 2018 Stock Dividend was invalid, an injunction against issuance and payment of the May 2018 Stock Dividend and any action by the defendants to carry out the May 2018 Stock Dividend, and other relief.

On June 7, 2018, the Court consolidated the aforementioned lawsuits under the consolidated action captioned In re CBS Corporation Litigation, Consol. C.A. No. 2018-0342-AGB (Del. Ch.) (the “consolidated action”).

On May 31, 2018, Westmoreland County Employees’ Retirement System (“Westmoreland”), a purported beneficial owner of the Company’s Class B Common Stock, filed a class action complaint in the Delaware Court of Chancery against NAI, NAIEH, Mr. David R. Andelman, Mr. Robert N. Klieger and Ms. Shari Redstone (the “Westmoreland lawsuit”), which alleged breaches of contractual obligations, implied obligations and fiduciary duties to the Company’s Class B Common Stock holders in connection with the Bylaw Amendments and interference with the issuance by the Board of the May 2018 Stock Dividend. Westmoreland’s complaint sought a declaratory judgment that the Company’s certificate of incorporation authorized the May 2018 Stock Dividend, that Westmoreland and the class were entitled to the May 2018 Stock Dividend, and that the Bylaw Amendments were invalid, as well as other relief. On September 14, 2018, the Delaware Court of Chancery entered a stipulation agreed to by the parties whereby the Westmoreland lawsuit was dismissed without prejudice as moot and the Court retained jurisdiction to consider any application for attorneys’ fees and expenses submitted by Westmoreland or its counsel.

On September 9, 2018, the Company entered into a settlement and release agreement (the “Settlement Agreement”) with NAI, NAIEH, the SMR Trust, Mr. Sumner M. Redstone, Ms. Shari Redstone and the other then members of the Board, among other parties. Pursuant to the Settlement Agreement, among other matters, the parties dismissed with prejudice all claims in the consolidated action. The Settlement Agreement includes mutual releases and covenants not to sue among the parties with respect to NAI’s and NAIEH’s investment in the Company, including the claims asserted in such action, subject to certain exceptions, and the Company has agreed to indemnify, and reimburse expenses of, certain parties, on the terms set forth in the Settlement Agreement, including with respect to the consolidated action and the defendants in the Westmoreland lawsuit. In connection with the Settlement Agreement, the Board rescinded the May 2018 Stock Dividend. In addition, NAI and NAIEH took action by written consent to amend the Company’s amended and restated bylaws.

Investigations and Related Matters. As announced on August 1, 2018, the Board has retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. This investigation is ongoing. The Company has received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Company may receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company is cooperating with the ongoing investigation and related inquiries.

On August 27, 2018, Gene Samit, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, its former Chairman of the Board, President and Chief Executive Officer and its then Chief Operating Officer, who

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

has been appointed as the Company’s President and Acting Chief Executive Officer. This action is stated to be on behalf of a class of persons who acquired the Company’s securities between February 14, 2014 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On October 1, 2018, John Lantz, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, certain current and former senior executives and the members of the Board immediately prior to September 9, 2018. This action is stated to be on behalf of purchasers of the Company’s Class A Common Stock and Class B Common Stock between November 3, 2017 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.

Separation Agreement. On September 9, 2018, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company. Pursuant to the Separation Agreement, the Company will contribute the aggregate amount of $20 million to one or more charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations are mutually agreed by the Company and Mr. Moonves. The Company has recorded the contribution of $20 million in “Restructuring and other corporate matters” on the Consolidated Statements of Operations for the three and nine months endedSeptember 30, 2018. In October 2018, the Company also contributed $120 million to a grantor trust. In the event the Board determines that the Company is entitled to terminate Mr. Moonves’s employment for cause under his employment agreement and Mr. Moonves does not demand arbitration with respect to such determination, the assets of the grantor trust will be distributed to the Company and the Company will have no further obligations to Mr. Moonves. Any dispute related to the Board’s determination is subject to binding arbitration as set forth in the Separation Agreement. In the event of arbitration, the assets of the grantor trust will also be distributed to the Company upon a final determination in the arbitration that the Company was entitled to terminate Mr. Moonves’s employment for cause. The Board will make a determination whether the Company has grounds to terminate the employment of Mr. Moonves for cause under his employment agreement within thirty days following completion of the final report of the independent investigators in the ongoing internal investigation described above, but in no event later than January 31, 2019. In the event that the Board determines that the Company is not entitled to terminate Mr. Moonves’s employment for cause, or in the event of a final determination in arbitration that the Company is not entitled to terminate Mr. Moonves’s employment for cause, the assets of the grantor trust will be distributed to Mr. Moonves. The Company is currently unable to determine the amount of any such contingent distribution to Mr. Moonves and, accordingly, no accrual has been made in the Company’s consolidated financial statements.

Claims Related to Former Businesses: Asbestos.    The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company is typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’s products is the basis of a claim. Claims against the Company in which a product has been identified principally relate to exposures allegedly caused by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company does not report as pending those claims on inactive, stayed, deferred or similar dockets which some jurisdictions have established for claimants who allege minimal or no impairment. As of September 30, 2018, the Company had pending approximately 31,500 asbestos claims, as compared with approximately 31,660 as of December 31, 2017 and 32,760 as of September 30, 2017. During the third quarter of 2018, the Company received approximately 770 new claims and closed or moved to an inactive docket approximately 1,020 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’s total costs for the years 2017 and 2016 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57 million and $48 million, respectively. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against the Company are non-cancer claims. The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has remained generally flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

Other.    The Company from time to time receives claims from federal and state environmental regulatory agencies and other entities asserting that it is or may be liable for environmental cleanup costs and related damages principally relating to historical and predecessor operations of the Company. In addition, the Company from time to time receives personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations of the Company and its predecessors.

Related Parties

See Note 5 to the consolidated financial statements.

Recent Pronouncements and Adoption of New Accounting Standards

See Note 1 to the consolidated financial statements.

Critical Accounting Policies

See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for a discussion of the Company’s critical accounting policies.

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Cautionary Statement Concerning Forward-Looking Statements

This quarterly report on Form 10-Q, including “Item 2 - Management’s Discussion and Analysis of Results of Operations and Financial Condition,” 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. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases. Similarly, statements that describe the Company’s 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: 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; the impact of piracy on the Company’s products; the impact of 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 investigations and related legal actions, which are inherently unpredictable, and any associated costs; the uncertainties arising from transitions involving senior executives and directors of 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 and/or other regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s filings made under the securities laws, including, among others, those set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and in our Quarterly Reports on Form 10-Q, and in the Company’s recent Current Reports on Form 8-K. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not necessarily known. The forward‑looking statements included in this document are made only as of the date of this document and the Company does not undertake any obligation to publicly update any forward‑looking statements to reflect subsequent events or circumstances.

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes to market risk since reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Item 4. Controls and Procedures.

The Company’s chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.

No change in the Company’s internal control over financial reporting occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

The information set forth in Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this report under the captions “Litigation Settled in September 2018 Involving the Company and Its Controlling Stockholder, National Amusements, Inc., Among Others, in the Delaware Court of Chancery” and “Investigations and Related Matters” is incorporated by reference herein.

Item 1A. Risk Factors.

The following updates the corresponding risk factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

NAI, Through Its Voting Control of the Company, Is in a Position to Control Actions that Require Stockholder Approval

NAI, through its direct and indirect ownership of the Company’s Class A Common Stock, has voting control of the Company. At September 30, 2018, NAI directly or indirectly owned approximately 79.7% of the Company’s voting Class A Common Stock, and approximately 10.4% of the Company’s Class A Common Stock and non-voting Class B Common Stock on a combined basis. Mr. Sumner M. Redstone is the beneficial owner of the controlling interest in NAI and, accordingly, beneficially owns all such shares. Mr. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company's Board of Directors, and Ms. Shari Redstone, the president and a director of NAI, serves as Vice Chair of the Company’s Board of Directors. Mr. David R. Andelman is a director of NAI and was a director of the Company until his resignation on September 9, 2018. NAI is controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which owns 80% of the voting interest of NAI, and such voting interest of NAI held by the SMR Trust is voted solely by Mr. Redstone until his incapacity or death. The SMR Trust provides that in the event of Mr. Redstone’s death or incapacity, voting control of the NAI voting interest held by the SMR Trust will pass to seven trustees, who will include CBS Corporation director Ms. Shari Redstone; Mr. David R. Andelman also currently serves as a trustee. No member of the Company’s management is a trustee of the SMR Trust.

Subject to the terms of the settlement and release agreement entered into by the Company and NAI, among others, on September 9, 2018, NAI is in a position to control the outcome of corporate actions that require, or may be accomplished by, stockholder approval, including amending the Company’s bylaws, the election or removal of directors and transactions involving a change of control. For example, the Company’s Amended and Restated Bylaws provide:

• that the affirmative vote of not less than a majority of the aggregate voting power of all outstanding shares of capital stock of the Company then entitled to vote generally in an election of directors, voting together as a single class, is required for the stockholders of the Company to amend, alter, change, repeal or adopt any bylaws of the Company;

• that any or all of the directors of the Company may be removed from office at any time prior to the expiration of his or her term of office, with or without cause, only by the affirmative vote of the holders of record of outstanding shares representing at least a majority of all the aggregate voting power of outstanding shares of stock of the Company then entitled to vote generally in the election of directors, voting together as a single class at a special meeting of stockholders called expressly for that purpose; and

• that, in accordance with the General Corporation Law of the State of Delaware, stockholders of the Company may act by written consent without a meeting if such stockholders hold the number of shares

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representing not less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted.

Accordingly, other stockholders who may have different interests are unable to affect the outcome of any such corporate actions for so long as NAI retains voting control.

NAI and Any Common Director May Face Actual or Potential Conflicts of Interest

NAI has voting control of each of the Company and Viacom Inc. Mr. Redstone, the controlling stockholder through the SMR Trust, chairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company and Chairman Emeritus of Viacom Inc. Ms. Redstone, the president and a director of NAI, serves as Vice Chair of the Board of Directors of each of the Company and Viacom Inc. This ownership overlap and this common director could create, or appear to create, potential conflicts of interest when the Company’s and Viacom Inc.’s directors and controlling stockholder face decisions that could have different implications for the Company and Viacom Inc. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between the Company and Viacom Inc. regarding the terms of the agreements governing the Separation and the relationship between the Company and Viacom Inc. thereafter. These agreements include the Separation Agreement, the Tax Matters Agreementand any commercial agreements between the parties or their affiliates. On occasion, the Company and Viacom Inc. may compete with each other in various commercial enterprises. Potential conflicts of interest could also arise if the Company and Viacom Inc. enter into any commercial arrangements with each other in the future. CBS Corp.’s certificate of incorporation contains provisions related to corporate opportunities that may be of interest to both the Company and Viacom Inc. CBS Corp.’s certificate of incorporation provides that in the event that a director, officer or controlling stockholder of the Company who is also a director, officer or controlling stockholder of Viacom Inc. acquires knowledge of a potential corporate opportunity for both the Company and Viacom Inc., such director, officer or controlling stockholder may present such opportunity to the Company or Viacom Inc. or both, as such director, officer or controlling stockholder deems appropriate in his or her sole discretion, and that by doing so such person will have satisfied his or her fiduciary duties to the Company and its stockholders. In addition, CBS Corp.’s certificate of incorporation provides that the Company renounces any interest in any such opportunity presented to Viacom Inc. Furthermore, CBS Corp.’s certificate of incorporation provides that neither the Company nor Viacom Inc. has any duty to refrain from engaging in the same or similar activities or lines of business as the other corporation, doing business with any potential or actual customer or supplier of the other corporation, or employing or soliciting for employment any officer or employee of the other corporation, and that no officer or director of either corporation shall be liable to the other corporation or the other corporation’s stockholders for breach of any fiduciary duty by reason of any such activities of the Company or Viacom Inc., as the case may be. These provisions create the possibility that a corporate opportunity of one of such companies may be used for the benefit of the other company. If any such opportunity is directed to Viacom Inc., rather than the Company, the Company may be materially adversely affected.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Company Purchases of Equity Securities

In November 2010, the Company announced that its Board of Directors approved a program to repurchase $1.5 billion of the Company’s common stock in open market purchases or other types of transactions (including accelerated stock repurchases or privately negotiated transactions). Since then, various increases totaling $16.4 billion have been approved and announced, including most recently, an increase to the share repurchase program to a total availability of $6.0 billion on July 28, 2016. Below is a summary of CBS Corp.’s purchases of its Class B Common Stock during the three months ended September 30, 2018 under this publicly announced share repurchase program.

(in millions, except per share amounts)	Total Number of Shares Purchased		Average Price Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Remaining Authorization
July 1, 2018 - July 31, 2018		.6	$	57.00		.6		$	2,624
August 1, 2018 - August 31, 2018		.7	$	53.13		.7		$	2,587
September 1, 2018 - September 30, 2018		.5	$	55.66		.5		$	2,557
Total		1.8	$	55.13		1.8		$	2,557

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Item 6. Exhibits.

Exhibit No.			Description of Document
(3	)		Articles of Incorporation and Bylaws
		(b)	Amended and Restated Bylaws of CBS Corporation (filed herewith).
(4	)		Instruments defining the rights of security holders, including indentures
		(a)	Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) between CBS Corporation, CBS Operations Inc., and The Bank of New York Mellon, as senior trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 of CBS Corporation filed November 3, 2008 (Registration No. 333-154962) (File No. 001-09553)).
		(b)	First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 between CBS Corporation, CBS Operations Inc., and Deutsche Bank Trust Company Americas, as senior trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of CBS Corporation filed April 5, 2010 (File No. 001-09553)).
			The other instruments defining the rights of holders of the long-term debt securities of CBS Corporation and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. CBS Corporation hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
(10	)		Material Contracts
		(a)	Settlement and Release Agreement effective as of September 9, 2018 (incorporated by reference to Exhibit 10(a) to the Current Report on Form 8-K of CBS Corporation filed September 10, 2018) (File No. 001-09553).
		(b)	Separation and Settlement Agreement and Releases effective as of September 9, 2018 between CBS Corporation and Leslie Moonves (incorporated by reference to Exhibit 10(b) to the Current Report on Form 8-K of CBS Corporation filed September 10, 2018) (File No. 001-09553).
		(c)	Letter Agreement dated as of September 9, 2018 between CBS Corporation and Joseph R. Ianniello (incorporated by reference to Exhibit 10(a) to the Current Report on Form 8-K of CBS Corporation filed September 27, 2018) (File No. 001-09553).
		(d)	Separation Agreement dated October 11, 2018 between CBS Corporation and Anthony G. Ambrosio (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed October 12, 2018) (File No. 001-09553).
		(e)	Separation Agreement dated September 21, 2018 between CBS Corporation and Gil D. Schwartz (incorporated by reference to Exhibit 10(b) to the Current Report on Form 8-K of CBS Corporation filed September 27, 2018) (File No. 001-09553).
		(f)	Employment Agreement dated October 18, 2018 between CBS Corporation and Christina Spade (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed October 19, 2018) (File No. 001-09553).
(12	)		Statement Regarding Computation of Ratios (filed herewith).
(31	)		Rule 13a-14(a)/15d-14(a) Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
		(b)	Certification of the Chief Financial Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).

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(32	)		Section 1350 Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
		(b)	Certification of the Chief Financial Officer of CBS Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
(101	)		Interactive Data File
			101. INS XBRL Instance Document.
			101. SCH XBRL Taxonomy Extension Schema.
			101. CAL XBRL Taxonomy Extension Calculation Linkbase.
			101. DEF XBRL Taxonomy Extension Definition Linkbase.
			101. LAB XBRL Taxonomy Extension Label Linkbase.
			101. PRE XBRL Taxonomy Extension Presentation Linkbase.

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SIGNATURES

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 thereunto duly authorized.

	CBS CORPORATION (Registrant)
Date: November 1, 2018	/s/ Joseph R. Ianniello
	Joseph R. Ianniello President and Acting Chief Executive Officer
Date: November 1, 2018	/s/ Lawrence Liding
	Lawrence Liding Executive Vice President, Controller and Chief Accounting Officer

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EX-3.B

Exhibit 3(b)

AMENDED AND RESTATED

BYLAWS

OF

CBS CORPORATION

ARTICLE I

OFFICES

Section 1.    The registered offices of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.    The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1.    Meetings of stockholders may be held at such time and place, within and without the State of Delaware, as shall be stated in the notice of the meeting or in a valid waiver of notice thereof. The annual meeting of stockholders may be held at such place, within or without the State of Delaware, as shall be designated by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    The annual meeting of stockholders for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting shall be held at such date and hour as shall be determined by the board of directors.

Section 3.    Whenever stockholders are required or permitted to take any action at a meeting, notice of the meeting shall be given which notice shall state the place, date and hour of the meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for determining stockholders entitled to notice of the meeting), and in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law) or the Amended and Restated Certificate of Incorporation, the notice of any meeting shall be given, not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.The board of directors may postpone or reschedule any previously scheduled meeting.

Section 4.    Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Amended and Restated Certificate of Incorporation, may be called by the affirmative vote of a majority of the board of directors, the Chairman of the Board, the Chief Executive Officer or the Vice Chair of the Board and shall be called by the Chairman of the Board, the Chief Executive Officer, the Vice Chair of the Board or Secretary at the request in writing of the holders of record of at least 50.1% of the aggregate voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, acting together as a single class. Such request shall state the purpose or purposes of the proposed meeting.

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Section 5.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 6.    The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, at the principal place of business of the Corporation. The list shall also be produced and kept open at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 7.    The holders of a majority of the aggregate voting power of the shares of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by applicable law or by the Amended and Restated Certificate of Incorporation. Whether or not a quorum is present, the chairman of the meeting or the holders of a majority of the aggregate voting power of the shares of capital stock entitled to vote who are present in person or represented by proxy at the meeting shall have the power to adjourn the meeting from time to time.

Section 8.    When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty days after the date for which the meeting was originally noticed, notice of the time and place of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the board of directors shall fix a new record date for notice of such adjourned meeting in accordance with Article VI, Section 2(a) of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the aggregate voting power of the shares of the capital stock entitled to vote who are present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which, by provision of applicable law or of the Amended and Restated Certificate of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

Section 10.    At every meeting of the stockholders, each stockholder shall be entitled to vote, in person or by a valid proxy given by the stockholder or his duly authorized attorney-in-fact, each share of the capital stock having voting power held by such stockholder in accordance with the provisions of the Amended and Restated Certificate of Incorporation and, if applicable, the certificate of designations relating thereto, but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

Section 11.    Any action required to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing (or deemed to be in writing under applicable law), setting forth the action so taken, shall be signed by stockholders (or deemed to be signed by stockholders under applicable law) representing not less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered and dated as required by law. Prompt notice of the taking of such action without a meeting by

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less than unanimous written consent shall be given to those stockholders who have not consented in writing. The Secretary shall file such consents with the minutes of the meetings of the stockholders.

Section 12.    At all meetings of stockholders, the chairman of the meeting shall have absolute authority over matters of procedure, and there shall be no appeal from the ruling of the chairman.

Section 13.    Attendance of a stockholder, in person or by proxy, at any meeting shall constitute a waiver of notice of such meeting, except where the stockholder, in person or by proxy, attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 14.    Notice of Director Nominations and Stockholder Business.

(a)    Nominations of persons for election to the board of directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of the stockholders only (i) pursuant to the Corporation’s notice of the meeting (or any supplement thereto), (ii) by or at the direction of the board of directors, (iii) by any stockholder or stockholders that, pursuant to Section 11 hereof, represent a sufficient number of votes to take such action by written consent without a meeting or (iv) by any stockholder of the Corporation who is a stockholder of record at the time of the giving of the notice provided for in this Section 14, who is entitled to vote at the meeting and who complies fully with the notice requirements and other procedures set forth in this Section 14.

(b)    For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to Section 14(a)(iv) above, the stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation and any such proposed business, other than the nomination of persons for election to the board of directors, must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice must be sent and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90^th) day, nor earlier than the close of business on the one hundred twentieth (120^th) day, prior to the first anniversary of the date of the immediately preceding annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty (30) days earlier or more than sixty (60) days later than such anniversary date, notice by the stockholder to be timely must be so sent and received not earlier than the close of business on the one hundred twentieth (120^th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder notice as described herein. To be in proper written form, a stockholder’s notice to the Secretary shall set forth in writing (i) as to each person whom the stockholder proposes to nominate for election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the stockholder proposes to bring before the annual meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the complete text of any resolutions proposed for consideration or any amendment to any Corporation document intended to be presented at the meeting), the reasons for conducting such business at the annual meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (B) the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (C) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination and (D) a representation whether the stockholder or the beneficial owner, if any, intends to solicit proxies in support of such

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nomination or proposal, including whether such stockholder orbeneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation’s voting shares required under applicable law to adopt and/or carry out the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require in order to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

(c)    Notwithstanding anything in this Section 14 to the contrary, in the event that the number of directors to be elected to the board of directors of the Corporation at an annual meeting is increased and there is no public announcement naming all of the nominees for directors or specifying the size of the increased board of directors made by the Corporation at least one hundred (100) days prior to the first anniversary of the date of the immediately preceding annual meeting, a stockholder’s notice required by this Section 14 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be sent and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the Corporation.

(d)    Only such business shall be conducted at a special meeting of stockholders as shall have been stated in the Corporation’s notice of meeting. Nominations of persons for election to the board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the board of directors, (ii) by any stockholder or stockholders that, pursuant to Section 11 hereof, represent a sufficient number of votes to take such action by written consent without a meeting or (iii) by any stockholder of the Corporation who is a stockholder of record at the time of the giving of the notice provided for in this Section 14, who is entitled to vote at the meeting and who complies fully with the notice requirements and other procedures set forth in this Section 14. In the event that the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the board of directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (b) of this Section 14 shall be sent and received by the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120^th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such special meeting or the tenth (10^th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder notice as described herein.

(e)    Only such persons who are nominated in accordance with the requirements and procedures set forth in this Section 14 shall be eligible and qualified to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 14. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the requirements and procedures set forth in this Section 14 (including whether the stockholder or beneficial owner, if any, on whose behalf the nominee or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (b)(iii)(D) of this Section 14) and, in the event any proposed nomination or business was not so made or proposed in compliance with this Section 14, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 14, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.  For purposes of this Section 14, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be

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authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(f)    For purposes of this Section 14, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or any comparable or successor national news service or in a document publicly filed by the Corporation with the Securities Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(g)    Notwithstanding the foregoing provisions of this Section 14, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 14. Nothing in this Section 14 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 of Regulation 14A under the Exchange Act (or any successor provision thereto).

ARTICLE III

DIRECTORS

Section 1.    The number of directors which shall constitute the entire board of directors shall be fixed as set forth in Article V of the Amended and Restated Certificate of Incorporation.

Section 2.    Subject to the rights of the holders of any series of Preferred Stock or any other class of capital stock of the Corporation then outstanding (other than Common Stock), vacancies in the board of directors for any reason, including by reason of an increase in the authorized number of directors, shall, if occurring prior to the expiration of the term of office in which the vacancy occurs, be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual meeting of stockholders of the Corporation or until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

Section 3.    The property and business of the Corporation shall be controlled and managed in accordance with the terms of the Amended and Restated Certificate of Incorporation by its board of directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Amended and Restated Certificate of Incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4.    The board of directors of the Corporation, or any committees thereof, may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5.    A regular annual meeting of the board of directors, including newly elected directors, shall be held in connection with each annual meeting of stockholders at the place of such stockholders’ meeting, and no notice of such meeting to the directors shall be necessary in order legally to constitute the meeting, provided that a quorum shall be present. If such meeting is held at any other time or place, notice thereof must be given or waived as hereinafter provided for special meetings of the board of directors.

Section 6.    Additional regular meetings of the board of directors shall be held on such dates and at such times and at such places as shall from time to time be determined by the board of directors.

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Section 7.    The Chairman of the Board, the Chief Executive Officer or the Vice Chair of the Board may call a special meeting of the board of directors at any time by giving notice as provided in these bylaws to each member of the board at least twenty-four (24) hours before the time appointed. Every such notice shall state the time and place but need not state the purpose of the meeting. Notwithstanding anything to the contrary herein, the board of directors may not consider any issuance of shares of Class A common stock or other voting securities of the Corporation or any of its subsidiaries at any annual, regular or special meeting unless notice of such proposed issuance shall have been provided personally, orally by telephone or by electronic transmission to each member of the board at least ten (10) business days prior to such meeting.

Section 8.    At all meetings of the board a majority of the entire board of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute, the Amended and Restated Certificate of Incorporation or these bylaws. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9.    Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, setting forth the action so taken, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee.

Section 10.    Unless otherwise restricted by the Amended and Restated Certificate of Incorporation or these bylaws, members of the board of directors, or any committee thereof, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 11.    Designation of Committees. The board of directors may, by resolution passed by a majority of the board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

Section 12.    Vacancies. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Section 13.    Powers. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors to the extent provided by Section 141(c) of the Delaware General Corporation Law as it exists now or may hereafter be amended.

Section 14.    Minutes. Each committee of the board of directors shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.    Unless otherwise restricted by the Amended and Restated Certificate of Incorporation or these bylaws, the board of directors shall have the authority to fix the compensation of directors. All directors may be paid their expenses, if any, of attendance at each meeting of the board of directors, and directors who are not full-time employees of the Corporation may be paid a fixed sum for attendance at each meeting of the board of directors,

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and/or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation and expenses for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.    Subject to the rights of the holders of any series of Preferred Stock or any other class of capital stock of the Corporation (other than the Common Stock) then outstanding, any or all directors may be removed from office at any time prior to the expiration of his or their term of office, with or without cause, only by the affirmative vote of the holders of record of outstanding shares representing at least a majority of all the aggregate voting power of outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors, voting together as a single class at a special meeting of stockholders called expressly for that purpose; provided that, any director may be removed from office by the affirmative vote of a majority of the board of directors, at any time prior to the expiration of his term of office, as provided by law, in the event a director is in breach of any agreement between such director and the Corporation relating to such director’s service as a director or employee of the Corporation.

ARTICLE IV

NOTICES

Section 1.    Whenever, under the provisions of applicable law, the Amended and Restated Certificate of Incorporation or these bylaws, notice is required to be given to (a) any director, it shall be construed to mean oral notice given telephonically or written or printed notice given either personally or by mail, wire or electronic transmission, or (b) any stockholder, it shall be construed to mean written or printed notice given either personally or by mail, wire or electronic transmission in the manner and to the extent provided by Section 232 of the Delaware General Corporation Law, in each case, addressed to such director or stockholder, at his address as it appears on the records of the Corporation, with postage or other charges thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail or at the appropriate office for transmission by wire or, in the case of electronic transmission, at the time specified by Section 232 of the Delaware General Corporation Law.

Section 2.    Whenever any notice is required to be given under the provisions of applicable law or of the Amended and Restated Certificate of Incorporation or of these bylaws, a waiver thereof in writing or by electronic transmission, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

Section 3.    Attendance at a meeting shall constitute a waiver of notice except where a director or stockholder attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 4.    Neither the business to be transacted at, nor the purpose of, any meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

ARTICLE V

OFFICERS

Section 1.    The officers of the Corporation shall be elected by the board of directors at its first meeting in connection with each annual meeting of the stockholders and shall be a Chief Executive Officer, a Chief Financial Officer and/or a Treasurer and a Secretary. The board of directors may also elect a Chairman of the Board, one or more Vice Chairmen or Vice Chairs of the Board, one or more Presidents and Vice Presidents and one or

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more Assistant Treasurers and Assistant Secretaries, and such other officers as the board of directors deems appropriate. Any number of offices may be held by the same person. Vice Presidents may be given distinctive designations such as Executive Vice President or Senior Vice President. At the time of election, the board of directors may determine that the Chairman of the Board shall be a Non-Executive Chairman of the Board or that the Vice Chair of the Board shall be a Non-Executive Vice Chair of the Board.

Section 2.    The board of directors may elect such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board of directors.

Section 3.    The officers of the Corporation shall hold office until their successors are elected or appointed and qualify or until their earlier resignation or removal. Any officer elected or appointed by the board of directors may be removed at any time with or without cause by the affirmative vote of majority of the board of directors. Any vacancy occurring in any office of the Corporation shall be filled by the board of directors.

CHAIRMAN OF THE BOARD

Section 4.    The Chairman of the Board, if any shall be elected, shall preside at all meetings of the board of directors and the stockholders and shall have such other powers and perform such other duties as may from time to time be assigned to him by the board of directors.

VICE CHAIR OF THE BOARD

Section 5.    The Vice Chair of the Board, if any shall be elected, or if there be more than one, the Vice Chairs of the Board in order of their election, shall, in the absence of the Chairman of the Board, or in case the Chairman of the Board shall resign, retire, become deceased or otherwise cease or be unable to act, perform the duties and exercise the powers of the Chairman of the Board. In addition, the Vice Chair of the Board shall have such other powers and perform such other duties as may from time to time be assigned to him by the board of directors.

THE CHIEF EXECUTIVE OFFICER

Section 6.    The Chief Executive Officer shall be the chief executive officer of the Corporation and shall have the general powers and duties of supervision, management and control of the business and affairs of the Corporation, subject to the control of the board of directors. The Chief Executive Officer shall perform the duties and exercise the powers incident to the office of Chief Executive Officer and shall have such other powers and perform such other duties as may from time to time be assigned to him by the board of directors or these bylaws.

THE PRESIDENT

Section 7.    The President, if any shall be elected, shall, under the direction of the Chief Executive Officer, be responsible for the operations of the Corporation and shall have all the powers, rights, functions and responsibilities normally exercised by a president. The President shall have such other powers and perform such other duties as may from time to time be assigned to the President by the Chief Executive Officer, the board of directors or these bylaws.

THE VICE PRESIDENTS

Section 8.    The Vice Presidents, if any shall be elected, shall have such powers and perform such duties as may from time to time be assigned to them by the board of directors or the Chief Executive Officer.

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THE SECRETARY AND ASSISTANT SECRETARY

Section 9.    The Secretary, if any shall be elected, shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees of the board of directors when required. He shall give, or cause to be given, notice of all meetings of the stockholders and the special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or the Chief Executive Officer, under whose supervision he shall be. He shall have custody of the corporate seal of the Corporation and he, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The board of directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

Section 10.    The Assistant Secretary, if any shall be elected, or if there be more than one, the Assistant Secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall have such other powers and perform such other duties as may from time to time be assigned to them by the board of directors, the Chief Executive Officer or the Secretary.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.    The Treasurer, under the supervision of the Chief Executive Officer, shall have charge of the corporate funds and securities and shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by or at the direction of the board of directors.

Section 12.    The Treasurer shall disburse or cause to be disbursed the funds of the Corporation as may be ordered by or at the direction of the Chief Executive Officer or the board of directors, taking proper vouchers for such disbursements, and subject to the supervision of the Chief Executive Officer, shall render to the board of directors, when they or either of them so require, an account of his transactions as Treasurer and of the financial condition of the Corporation.

Section 13.    If required by the board of directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 14.    The Assistant Treasurer, if any shall be elected, or if there shall be more than one, the Assistant Treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall have such other powers and perform such other duties as may from time to time be assigned to them by the board of directors, the Chief Financial Officer or the Treasurer.

Section 15.    In addition to the corporate officers elected by the board of directors pursuant to this Article V, the Chief Executive Officer may, from time to time, appoint one or more other persons as appointed officers who shall not be deemed to be corporate officers, but may, respectively, be designated with such titles as the Chief Executive Officer may deem appropriate. The Chief Executive Officer may prescribe the powers to be exercised and the duties to be performed by each such appointed officer, may designate the term for which each such appointment is made, and may, from time to time, terminate any or all of such appointments. Such appointments and termination of appointments shall be reported to the board of directors.

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ARTICLE VI

TRANSFERS OF STOCK

Section 1.    Unless otherwise provided by resolution of the board of directors, each class or series of the shares of capital stock in the Corporation shall be issued in uncertificated form pursuant to the customary arrangements for issuing shares in such form. Shares shall be transferable only on the books of the Corporation by the holder thereof in person or by attorney upon presentment of proper evidence of succession, assignation or authority to transfer in accordance with the customary procedures for transferring shares in uncertificated form.

FIXING RECORD DATE

Section 2.    (a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall, except as otherwise required by applicable law, not be more than sixty nor less than ten days before the date of such meeting. If the board of directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the board of directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 2(a) at the adjourned meeting.

(b)    In order that the Corporation may determine the stockholders entitled to consent to corporate action without a meeting, (including by telegram, cablegram or other electronic transmission as permitted by law), the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall be not more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors and no prior action by the board of directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action without a meeting shall be the first date on which a consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Article II, Section 11 hereof. If no record date has been fixed by the board of directors and prior action by the board of directors is required by applicable law with respect to the proposed action by consent of the stockholders without a meeting, the record date for determining stockholders entitled to consent to corporate action without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

(c)    In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

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REGISTERED STOCKHOLDERS

Section 3.    The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

INDEMNIFICATION OF EMPLOYEES

Section 1.    Right to Indemnification. The Corporation shall indemnify any present or former employee of the Corporation who was or is involved in or is threatened to be involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an employee of the Corporation, or is or was serving at the request of the Corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise (such person, an “indemnitee”), to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment and unless applicable law otherwise requires, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against judgments, fines, amounts paid in settlement and expenses (including, without limitation, attorneys’ fees), actually and reasonably incurred by him in connection with such action, suit or proceeding. Notwithstanding the foregoing, except as provided in Section 7 of this Article VII with respect to proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify an indemnitee in connection with a proceeding (or part thereof) initiated by the indemnitee, if and only if the board of directors authorized the bringing of the action, suit or proceeding (or part thereof) in advance of the commencement of the proceeding.

Section 2.    Successful Defense. To the extent that an indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 of this Article VII, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred by him in connection therewith.

Section 3.    Advance Payment of Expenses. Expenses (including attorneys’ fees) incurred by an indemnitee in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon such terms and conditions, if any, as the Corporation deems appropriate, by resolution of the board of directors.

Section 4.    Not Exclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article VII shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. Without limiting the foregoing, the Corporation is authorized to enter into an agreement with any employee of the Corporation providing indemnification for such person against expenses, including, without limitation, attorneys’ fees, judgments, fines and amounts paid in settlement that result from any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, including, without limitation, any action, suit or proceeding by or in the right of the Corporation, that arises by reason of the fact that such person is or was an employee of the Corporation, or is or was serving at the request of the Corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, to the fullest extent allowed by law, except that no such agreement shall provide for indemnification for any actions that constitute fraud, actual dishonesty or willful misconduct.

11

Section 5.    Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was an employee of the Corporation, or is or was serving at the request of the Corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VII.

Section 6.    Certain Definitions. For the purposes of this Article VII, (a) any employee of the Corporation who shall serve or has served as an employee of any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which the Corporation, directly or indirectly, is or was a stockholder or creditor, or in which the Corporation is or was in any way interested, or (b) any current or former employee of any subsidiary corporation, limited liability company, partnership, joint venture, trust or other enterprise wholly owned by the Corporation, shall be deemed to be serving as such employee at the request of the Corporation, unless the board of directors of the Corporation shall determine otherwise. In all other instances where any person shall serve or has served as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise of which the Corporation is or was a stockholder or creditor, or in which it is or was otherwise interested, if it is not otherwise established that such person is or was serving as such employee at the request of the Corporation, the board of directors of the Corporation may determine whether such service is or was at the request of the Corporation, and it shall not be necessary to show any actual or prior request for such service. For purposes of this Article VII, references to a corporation include all constituent corporations absorbed in a consolidation or merger (including any constituent of a constituent) as well as the resulting or surviving corporation so that any person who is or was an employee of such a constituent corporation, or is or was serving at the request of such constituent corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity. For purposes of this Article VII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as an employee of the Corporation which imposes duties on, or involves services by, such employee with respect to an employee benefit plan, its participants, or beneficiaries, and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII.

Section 7.    Proceedings to Enforce Rights to Indemnification. (a) If a claim under Section 1 of this Article VII is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, or a claim under Section 3 of this Article VII is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. Any such written claim under Section 1 of this Article VII shall include such documentation and information as is reasonably available to the indemnitee and reasonably necessary to determine whether and to what extent the indemnitee is entitled to indemnification. Any written claim under Sections 1, 2 and 3 of this Article VII shall include reasonable documentation of the expenses incurred by the indemnitee.

(b)    If successful in whole or in part in any suit brought pursuant to Section 7(a) of this Article VII, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking to the extent an undertaking would be required of a present director or officer of the Corporation pursuant to Article VI of the Amended and Restated Certificate of Incorporation of the Corporation (an “undertaking”), the indemnitee shall also be entitled to be paid and indemnified for the expense of prosecuting or defending such suit.

(c)    In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense

12

that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise shall be on the Corporation.

Section 8.    Preservation of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be an employee of the Corporation, or has ceased to serve at the request of the Corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, and shall inure to the benefit of the heirs, executors and administrators of such a person. Any repeal or modification of this Article VII by the stockholders of the Corporation entitled to vote thereon shall not adversely affect any right or protection of an employee of the Corporation, or any person serving at the request of the Corporation as an employee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, existing at the time of such repeal or modification.

ARTICLE VIII

FORUM FOR ADJUDICATION OF DISPUTES

The Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state or federal court located within the State of Delaware) shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Corporation to the Corporation or the Corporation's stockholders, (iii) any action or proceeding asserting a claim against the Corporation or any director or officer of the Corporation arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the Delaware General Corporation Law, the Corporation's Amended and Restated Certificate of Incorporation, or these bylaws (as each may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce, or determine the validity of any provision or provisions of the Corporation's Amended and Restated Certificate of Incorporation or these bylaws (as each may be amended from time to time), or any amendment thereto or modification thereof, (v) any action or proceeding asserting a claim against the Corporation or any director or officer of the Corporation governed by the internal affairs doctrine, or (vi) any action or proceeding to determine the result of any vote or action by written consent of stockholders. The board of directors may consent in writing to the selection of an alternative forum; provided, however, that any such consent shall require the affirmative vote of all the directors then in office.

ARTICLE IX

GENERAL PROVISIONS

DIVIDENDS

Section 1.    Dividends upon the capital stock of the Corporation, subject to the provisions of the Amended and Restated Certificate of Incorporation, if any, may be declared by the board of directors at any regular

13

or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of any statute, the Amended and Restated Certificate of Incorporation and these bylaws.

Section 2.    Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

CHECKS

Section 3.    All checks or demands for money of the Corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

FISCAL YEAR

Section 4.    The fiscal year of the Corporation shall be as specified by the board of directors.

SEAL

Section 5.    The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE X

AMENDMENTS

In furtherance of and not in limitation of the powers conferred by statute, the board of directors of the Corporation from time to time may adopt, amend, alter, change or repeal the bylaws of the Corporation; provided, that any bylaws adopted, amended, altered, changed or repealed by the board of directors or the stockholders of the Corporation may be amended, altered, changed or repealed by the stockholders of the Corporation. Notwithstanding any other provisions of the Amended and Restated Certificate of Incorporation of the Corporation or these bylaws (and notwithstanding the fact that a lesser percentage may be specified by law, the Amended and Restated Certificate of Incorporation or these bylaws), the affirmative vote of not less than a majority of the aggregate voting power of all outstanding shares of capital stock of the Corporation then entitled to vote generally in an election of directors, voting together as a single class, shall be required for the stockholders of the Corporation to amend, alter, change, repeal or adopt any bylaws of the Corporation.

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EX-12

Exhibit 12

CBS CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Tabular dollars in millions, except ratios)

	Nine Months Ended						Twelve Months Ended
	September 30,						December 31,
	2018			2017			2017			2016			2015			2014			2013
Earnings from continuing operations before income taxes and equity in loss of investee companies	$	1,763		$	1,793		$	1,979		$	2,230		$	2,264		$	1,858		$	2,303
Add:
Distributions from investee companies	—			—			1			3			3			9			8
Interest expense, net of capitalized interest	349			336			457			411			392			363			375
1/3 of rental expense	53			44			60			56			58			57			55
Total earnings from continuing operations	$	2,165		$	2,173		$	2,497		$	2,700		$	2,717		$	2,287		$	2,741
Fixed charges:
Interest expense, net of capitalized interest	$	349		$	336		$	457		$	411		$	392		$	363		$	375
1/3 of rental expense	53			44			60			56			58			57			55
Total fixed charges	$	402		$	380		$	517		$	467		$	450		$	420		$	430
Ratio of earnings to fixed charges	5.4		x	5.7		x	4.8		x	5.8		x	6.0		x	5.4		x	6.4		x

EX-31.A

Exhibit 31(a)

CERTIFICATION

I, Joseph R. Ianniello, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CBS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2018

/s/ Joseph R. Ianniello

Joseph R. Ianniello

President and Acting Chief Executive Officer

EX-31.B

Exhibit 31(b)

CERTIFICATION

I, Christina Spade, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CBS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2018

/s/ Christina Spade

Christina Spade

Executive Vice President, Chief Financial Officer

EX-32.A

Exhibit 32(a)

Certification Pursuant to 18 U.S.C.  Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of CBS Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Joseph R. Ianniello, President and Acting Chief Executive Officer of the Company, certify that to my knowledge:

1.    the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joseph R. Ianniello

Joseph R. Ianniello

November 1, 2018

EX-32.B

Exhibit 32(b)

Certification Pursuant to 18 U.S.C.  Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of CBS Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2018 as filed with the Securities and Exchange Commission (the ”Report”), I, Christina Spade, Executive Vice President, Chief Financial Officer of the Company, certify that to my knowledge:

1.    the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Christina Spade

Christina Spade

November 1, 2018

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document Information [Line Items]
Entity Registrant Name	CBS Corporation
Entity Central Index Key	0000813828
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Small Business	false
Entity Emerging Growth Company	false
Common Class A [Member]
Document Information [Line Items]
Shares of common stock outstanding		37,507,526
Common Class B [Member]
Document Information [Line Items]
Shares of common stock outstanding		336,787,717

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenues	$ 3,263	$ 3,171	$ 10,490	$ 9,771
Costs and expenses:
Operating	1,922	1,862	6,506	5,940
Selling, general and administrative	549	525	1,605	1,520
Depreciation and amortization	56	55	168	166
Restructuring and other corporate matters	46	0	90	0
Total costs and expenses	2,573	2,442	8,369	7,626
Operating income (loss)	690	729	2,121	2,145
Interest expense	(115)	(116)	(349)	(336)
Interest income	12	17	43	45
Loss on early extinguishment of debt	0	(5)	0	(5)
Other items, net	(17)	(19)	(52)	(56)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	570	606	1,763	1,793
Provision for income taxes	(64)	(172)	(312)	(479)
Equity in loss of investee companies, net of tax	(18)	(16)	(52)	(45)
Net earnings from continuing operations	488	418	1,399	1,269
Net earnings (loss) from discontinued operations, net of tax	0	174	0	(871)
Net earnings	$ 488	$ 592	$ 1,399	$ 398
Basic net earnings (loss) per common share:
Basic net earnings from continuing operations (in dollars per share)	$ 1.30	$ 1.04	$ 3.70	$ 3.13
Basic net earnings (loss) from discontinued operations (in dollars per share)	0.00	0.43	0.00	(2.15)
Basic net earnings (in dollars per share)	1.30	1.48	3.70	0.98
Diluted net earnings (loss) per common share:
Diluted net earnings from continuing operations (in dollars per share)	1.29	1.03	3.66	3.10
Diluted net earnings (loss) from discontinued operations (in dollars per share)	0.00	0.43	0.00	(2.12)
Diluted net earnings (in dollars per share)	$ 1.29	$ 1.46	$ 3.66	$ 0.97
Weighted average number of common shares outstanding:
Basic (in shares)	375	401	378	405
Diluted (in shares)	379	406	382	410
Dividends per common share (in dollars per share)	$ 0.18	$ 0.18	$ 0.54	$ 0.54

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net earnings	$ 488	$ 592	$ 1,399	$ 398
Other comprehensive income, net of tax:
Cumulative translation adjustments	(3)	2	(17)	4
Amortization of net actuarial loss	15	13	45	37
Total other comprehensive income, net of tax	12	15	28	41
Total comprehensive income	$ 500	$ 607	$ 1,427	$ 439

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 182	$ 285
Receivables, less allowances of $48 (2018) and $49 (2017)	3,697	3,697
Programming and other inventory	1,828	1,828
Prepaid income taxes	0	78
Prepaid expenses	137	194
Other current assets	196	191
Total current assets	6,040	6,273
Property and equipment	3,004	3,051
Less accumulated depreciation and amortization	1,782	1,771
Net property and equipment	1,222	1,280
Programming and other inventory	3,868	2,881
Goodwill	4,921	4,891
Intangible assets	2,650	2,666
Other assets	2,367	2,852
Total Assets	21,068	20,843
Current Liabilities:
Accounts payable	229	231
Accrued compensation	256	343
Participants’ share and royalties payable	1,110	986
Program rights	406	373
Income taxes payable	68	0
Commercial paper	374	679
Current portion of long-term debt	14	19
Accrued expenses and other current liabilities	1,536	1,341
Total current liabilities	3,993	3,972
Long-term debt	9,465	9,464
Pension and postretirement benefit obligations	1,226	1,328
Deferred income tax liabilities, net	563	480
Other liabilities	3,307	3,621
Commitments and contingencies
Stockholders’ Equity:
Common stock	1	1
Additional paid-in capital	43,668	43,797
Accumulated deficit	(17,762)	(18,900)
Accumulated other comprehensive income (loss)	(634)	(662)
Stockholders' equity including treasury stock	25,273	24,236
Less treasury stock, at cost; 498 (2018) and 489 (2017) Class B shares	22,759	22,258
Total Stockholders’ Equity	2,514	1,978
Total Liabilities and Stockholders’ Equity	21,068	20,843
Common Class A [Member]
Stockholders’ Equity:
Common stock	0	0
Common Class B [Member]
Stockholders’ Equity:
Common stock	$ 1	$ 1

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for receivables	$ 48	$ 49
Common Class A [Member]
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	375,000,000	375,000,000
Common stock, shares issued (in shares)	38,000,000	38,000,000
Common Class B [Member]
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	5,000,000,000	5,000,000,000
Common stock, shares issued (in shares)	835,000,000	834,000,000
Treasury stock, at cost, Class B shares (in shares)	498,000,000	489,000,000

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating Activities:
Net earnings	$ 1,399	$ 398
Less: Net loss from discontinued operations, net of tax	0	(871)
Net earnings from continuing operations	1,399	1,269
Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:
Depreciation and amortization	168	166
Stock-based compensation	105	129
Equity in loss of investee companies, net of tax and distributions	52	45
Change in assets and liabilities, net of investing and financing activities	(545)	(674)
Net cash flow provided by operating activities from continuing operations	1,179	935
Net cash flow provided by operating activities from discontinued operations	1	52
Net cash flow provided by operating activities	1,180	987
Investing Activities:
Investments in and advances to investee companies	(76)	(67)
Capital expenditures	(99)	(112)
Acquisitions (including acquired television library)	(29)	(258)
Proceeds from sale of investments	0	10
Proceeds from dispositions	0	11
Other investing activities	8	17
Net cash flow used for investing activities from continuing operations	(196)	(399)
Net cash flow used for investing activities from discontinued operations	(23)	(18)
Net cash flow used for investing activities	(219)	(417)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net	(305)	140
Proceeds from issuance of senior notes	0	889
Repayment of senior notes	0	(701)
Proceeds from debt borrowings of CBS Radio	0	40
Repayment of debt borrowings of CBS Radio	0	(23)
Payment of capital lease obligations	(12)	(13)
Payment of contingent consideration	(5)	(7)
Dividends	(208)	(224)
Purchase of Company common stock	(497)	(1,111)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(59)	(89)
Proceeds from exercise of stock options	23	81
Other financing activities	(1)	0
Net cash flow (used for) provided by financing activities	(1,064)	(1,018)
Net decrease in cash and cash equivalents	(103)	(448)
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)	285	622
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	182	174
Continuing Operations [Member]
Supplemental disclosure of cash flow information
Cash paid for interest	406	393
Cash (refunded) paid for income taxes	(19)	321
Discontinued Operations [Member]
Supplemental disclosure of cash flow information
Cash paid for interest	0	52
Cash (refunded) paid for income taxes	$ (3)	$ 58

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Statement of Cash Flows [Abstract]
Cash and cash equivalents of discontinued operations	$ 30	$ 24

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Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business-CBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the “Company” or “CBS Corp.”) is comprised of the following segments: Entertainment (CBS Television, comprised of the CBS Television Network, CBS Television Studios, CBS Studios International, and CBS Television Distribution; Network 10; CBS Interactive; and CBS Films), Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks), Publishing (Simon & Schuster) and Local Media (CBS Television Stations and CBS Local Digital Media).

Discontinued Operations-On November 16, 2017, the Company completed the disposition of CBS Radio Inc. (“CBS Radio”) through a split-off. CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements (See Note 13).

Basis of Presentation-The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the more detailed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the periods presented. Certain previously reported amounts have been reclassified to conform to the current presentation.

Use of Estimates-The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenues

Advertising Revenues-Advertising revenues are recognized when the advertising spots are aired on television or displayed on digital platforms. If there is a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. Audience ratings and impressions are determined based on data provided by independent third-party companies. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.

Advertising revenues are primarily generated by the Entertainment and Local Media segments.

Content Licensing and Distribution Revenues-Content licensing and distribution revenues are generated from the licensing of internally-produced television programming, fees from the distribution of third-party programming, and the publishing and distribution of consumer books.

Program Licensing and Distribution

For licenses of internally-produced television programming, each individual episode delivered represents a separate performance obligation and revenues are recognized when the episode is made available to the licensee for exhibition and the license period has begun. For license agreements containing multiple deliverables, revenues are allocated based on the relative standalone selling price of each episode of a television series, which is based on licenses for comparable series within the marketplace. Agreements to license programming are often long term, with collection terms ranging from one to five years.

The Company also distributes programs on behalf of third parties. In such arrangements, the Company generally obtains control of the program before selling it to the customer. Therefore, revenues from such distribution arrangements, which include both content licensing and advertising revenues, are recognized based on the gross amount of consideration received from the customer, with a participation expense recognized for the fees paid to the third-party producer.

Substantially all of the Company’s program licensing and distribution revenues are generated by the Entertainment segment, with the remainder generated by the Cable Networks segment.

Publishing

Publishing revenues are recognized when merchandise is shipped or electronically delivered to the consumer. Consumer print books are generally sold with a right of return. The Company records a returns reserve and corresponding decrease in revenue at the time of sale based upon historical trends. For publishing revenues, payments are due shortly after shipment or electronic delivery.

Affiliate and Subscription Fees-A majority of the Company’s affiliate and subscription fees are generated by the Cable Networks segment and consist of fees received from multichannel video programming distributors (“MVPDs”) for carriage of the Company’s cable networks and subscription fees for the Showtime digital streaming subscription offering. The Entertainment segment generates affiliate and subscription fees primarily from television stations affiliated with the CBS Television Network and subscribers to CBS All Access, its owned streaming subscription service. In addition, the Local Media segment generates retransmission fees from MVPDs for carriage of the Company’s television stations.

The performance obligation for the Company’s affiliate agreements is a license to the Company’s programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs, also includes a license to programming for video on demand viewing. Affiliate and subscription fees are recognized over the term of the agreement as the Company continuously provides its customer with the right to use its programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers tothe customer’s service. For agreements that provide for a fixed fee, which primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”), revenues are recognized based on the relative fair value of the content provided over the term of the agreement, which is determined based on the fair value of the network affiliate’s service and the value of the Company’s programming. For affiliate and subscription fee revenues, payments are generally due monthly.

Noncurrent Receivables-Noncurrent receivables of $1.60 billion and $1.59 billion at September 30, 2018 and January 1, 2018, respectively, are included in “Other assets” on the Company’s Consolidated Balance Sheets and primarily relate to revenues recognized under long-term television licensing arrangements.

Deferred Revenues-Deferred revenues primarily consist of cash received related to advertising arrangements and the licensing of television programming for which the revenues have not yet been earned. Advertising revenues that have been deferred are recognized when the required audience rating or impressions are delivered and revenues deferred under licensing arrangements are recognized when the content is made available to the customer.

Deferred revenues are primarily short term and included within “Accrued expenses and other current liabilities” on the Company’s Consolidated Balance Sheets. Total deferred revenues were $259 million and $284 million at September 30, 2018 and January 1, 2018, respectively. The change in deferred revenue for the nine months endedSeptember 30, 2018 primarily reflects $178 million of revenues recognized that were included in deferred revenues at January 1, 2018, offset by cash payments received during the period for which the performance obligation was not satisfied prior to the end of the period.

Unrecognized Revenues Under Contract-As of September 30, 2018, unrecognized revenue attributable to unsatisfied performance obligations under the Company’s long-term contracts was $3.41 billion, of which $522 million is expected to be recognized for the remainder of 2018, $1.58 billion for 2019, $771 million for 2020, and $534 million thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts. Such amounts change on a regular basis as the Company renews existing agreements or enters into new agreements. Unrecognized revenues under contract disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of the Company’s advertising contracts (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly consisting of affiliate and subscription fee agreements and (iii) long-term licensing agreements for multiple programs for which the Company’s right to invoice corresponds with the value of the programs provided to the customer.

Net Earnings (Loss) per Common Share-Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss) divided by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) only in the periods in which such effect would have been dilutive. Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, were 7 million stock options for each of the three and nine months endedSeptember 30, 2018 and 4 million stock options for each of the three and nine months endedSeptember 30, 2017.

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2018	2017	2018	2017
Weighted average shares for basic EPS	375	401	378	405
Dilutive effect of shares issuable under stock-based compensation plans	4	5	4	5
Weighted average shares for diluted EPS	379	406	382	410

Other Liabilities-Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, participants’ share and royalties payable, program rights obligations, deferred compensation and other employee benefit accruals.

Additional Paid-In Capital-For the nine months endedSeptember 30, 2018 and 2017, the Company recorded dividends of $206 million and $221 million, respectively, as a reduction to additional paid-in capital as the Company had an accumulated deficit balance.

Recently Adopted Accounting Pronouncements

Revenue from Contracts with Customers

During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (“FASB”) guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company applied the modified retrospective method of adoption with the cumulative effect of the initial adoption of $261 million reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. Prior periods continue to be presented under previous accounting guidance (See Note 12).

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

During the first quarter of 2018, the Company adopted FASB amended guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). This guidance requires the Company to present the service cost component of net benefit cost in the same line items on the statement of operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented in the statement of operations separately from the service cost component and below the subtotal of operating income. As a result of the adoption of this guidance, the Company presented $16 million and $47 million of net benefit costs in “Other items, net” on the Consolidated Statement of Operations for the three and nine months endedSeptember 30, 2018, respectively, representing the components of net benefit cost other than service cost. This guidance is required to be applied retrospectively and therefore, $22 million and $65 million of expenses, previously presented within operating income, have been reclassified to “Other items, net” for the three and nine months endedSeptember 30, 2017, respectively.

Stock Compensation: Scope of Modification Accounting

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for stock-based compensation which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award as equity or liability changes as a result of the change in the terms or conditions of a share-based payment award. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Clarifying the Definition of a Business

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for business combinations which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Intra-Entity Transfers of Assets Other than Inventory

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for income taxes, which eliminates the exception in existing guidance that defers the recognition of the tax effects of intra-entity asset transfers other than inventory until the transferred asset is sold to a third party. Under this guidance, an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

In August 2018, the FASB issued guidance on the accounting for implementation costs of a cloud computing arrangement that is considered to be a service contract. This guidance requires companies to follow the guidance for capitalizing costs associated with internal-use software to determine which costs to capitalize in a cloud computing arrangement that is a service contract. The guidance also specifies the financial statement presentation for capitalized implementation costs and the related amortization, as well as required financial statement disclosures. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued amended guidance that eliminates, adds and clarifies certain disclosure requirements for defined benefit pension or other postretirement plans. The Company is currently evaluating the impact of this guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

Changes to the Disclosure Requirements for Fair Value Measurements

In August 2018, the FASB issued amended guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued amended guidance that permits an entity to reclassify the income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive income to retained earnings. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.

Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued amended guidance for hedge accounting, which expands the eligibility of hedging strategies that qualify for hedge accounting, modifies the recognition and presentation of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition, this guidance amends and expands disclosure requirements. This guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, is not expected to have a material impact on the Company’s consolidated financial statements.

Leases

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This guidance is effective for the Company in the first quarter of 2019. The Company is currently reviewing its lease portfolio, evaluating the impact of this guidance on its consolidated balance sheet and is in the process of implementing new lease accounting software for administering its leases under the new guidance. The Company will apply the modified retrospective method of adoption as of January 1, 2019 and comparative periods will continue to be presented under existing lease guidance.

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Stock-based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

2) STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense for the three and nine months endedSeptember 30, 2018 and 2017.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
RSUs and PSUs	$	7		$	38		$	86		$	109
Stock options	7			6			19			20
Stock-based compensation expense, before income taxes	14			44			105			129
Related tax benefit	(3		)	(17		)	(26		)	(50		)
Stock-based compensation expense, net of tax benefit	$	11		$	27		$	79		$	79

Stock-based compensation expense for the three and nine months endedSeptember 30, 2018 includes forfeitures of $28 million and accelerations of $6 million relating to changes in senior management, which are included in “Restructuring and other corporate matters” on the Consolidated Statements of Operations. During the nine months endedSeptember 30, 2018, the Company granted 3 million RSUs for CBS Corp. Class B Common Stock with a weighted average per unit grant-date fair value of $53.96. RSUs granted during the first nine months of 2018 generally vest over a one- to four-year service period. Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant. For certain RSU awards the number of shares an employee earns ranges from 0% to 120% of the target award, based on the outcome of established performance conditions. Compensation expense is recorded based on the probable outcome of the performance conditions.

During the nine months endedSeptember 30, 2018, the Company also granted 2 million stock options with a weighted average exercise price of $54.32. Stock options granted during the first nine months of 2018 vest over a four-year service period and expire eight years from the date of grant. Compensation expense for stock options is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model.

Total unrecognized compensation cost related to unvested RSUs at September 30, 2018 was $201 million, which is expected to be recognized over a weighted average period of 2.5 years. Total unrecognized compensation cost related to unvested stock option awards at September 30, 2018 was $40 million, which is expected to be recognized over a weighted average period of 2.6 years.

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Restructuring and Other Corporate Matters

9 Months Ended

Sep. 30, 2018

Restructuring Charges [Abstract]

Restructuring and Other Corporate Matters

3) RESTRUCTURING AND OTHER CORPORATE MATTERS

During the second quarter of 2018, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $25 million, reflecting $17 million of severance costs and $8 million of costs associated with exiting contractual obligations and other related costs.

During the year ended December 31, 2017, the Company recorded restructuring charges of $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2016, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs.

As of September 30, 2018, the cumulative settlements for the 2018, 2017 and 2016 restructuring charges were $67 million, of which $56 million was for severance costs and $11 million was for costs associated with contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reserves by the end of 2019.

	Balance at			2018			2018				Balance at
	December 31, 2017			Charges			Settlements				September 30, 2018
Entertainment		$	45		$	6		$	(26	)		$	25
Cable Networks		1			—			(1		)		—
Publishing		3			1			(2		)		2
Local Media		14			11			(7		)		18
Corporate		3			7			(4		)		6
Total		$	66		$	25		$	(40	)		$	51

	Balance at			2017			2017				Balance at
	December 31, 2016			Charges			Settlements				December 31, 2017
Entertainment		$	17		$	44		$	(16	)		$	45
Cable Networks		4			—			(3		)		1
Publishing		1			5			(3		)		3
Local Media		6			12			(4		)		14
Corporate		2			2			(1		)		3
Total		$	30		$	63		$	(27	)		$	66

During the three and nine months endedSeptember 30, 2018, the Company recorded expenses of $46 million and $65 million, respectively, primarily for professional fees related to legal proceedings and the ongoing investigations at the Company. (See Note 14). The nine-month period also included professional fees related to the evaluation of a potential combination with Viacom Inc.

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Programming and Other Inventory

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Programming and Other Inventory

4) PROGRAMMING AND OTHER INVENTORY

	At			At
	September 30, 2018			December 31, 2017
Acquired program rights		$	2,373		$	2,234
Acquired television library		99			99
Internally produced programming:
Released		2,481			1,780
In process and other		680			543
Publishing, primarily finished goods		63			53
Total programming and other inventory		5,696			4,709
Less current portion		1,828			1,828
Total noncurrent programming and other inventory		$	3,868		$	2,881

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Related Parties

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Parties

5) RELATED PARTIES

National Amusements, Inc. National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp. and Viacom Inc. Mr. Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Chairman Emeritus of CBS Corp. and the Chairman Emeritus of Viacom Inc. In addition, Ms. Shari Redstone, Mr. Sumner M. Redstone’s daughter, is the president and a director of NAI and the vice chair of the Board of Directors of each of CBS Corp. and Viacom Inc. Mr. David R. Andelman was a director of CBS Corp. until his resignation on September 9, 2018. Mr. Andelman serves as a director of NAI. At September 30, 2018, NAI directly or indirectly owned approximately 79.7% of CBS Corp.’s voting Class A Common Stock, and owned approximately 10.4% of CBS Corp.’s Class A Common Stock and non-voting Class B Common Stock on a combined basis. NAI is controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which owns 80% of the voting interest of NAI, and such voting interest of NAI held by the SMR Trust is voted solely by Mr. Redstone until his incapacity or death. The SMR Trust provides that in the event of Mr. Redstone’s death or incapacity, voting control of the NAI voting interest held by the SMR Trust will pass to seven trustees, who will include CBS Corp. director Ms. Shari Redstone. Mr. Andelman also currently serves as a trustee. No member of the Company’s management is a trustee of the SMR Trust. See “Legal Matters” in Note 14 for information regarding recently settled litigation involving the foregoing parties.

Viacom Inc. As part of its normal course of business, the Company licenses its television content, leases production facilities and sells advertising spots to various subsidiaries of Viacom Inc. Viacom Inc. also distributes certain of the Company’s television programs in the home entertainment market. The Company’s total revenues from these transactions were $76 million and $38 million for the three months ended September 30, 2018 and 2017, respectively, and $105 million and $111 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

The Company leases production facilities, licenses feature films and purchases advertising spots from various subsidiaries of Viacom Inc. The total amounts for these transactions were $9 million and $4 million for the three months ended September 30, 2018 and 2017, respectively, and $21 million and $13 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

The following table presents the amounts due from Viacom Inc. in the normal course of business as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September 30, 2018 and December 31, 2017.

	At			At
	September 30, 2018			December 31, 2017
Receivables		$	40		$	93
Other assets (Receivables, noncurrent)		25			11
Total amounts due from Viacom		$	65		$	104

Other Related Parties. The Company has equity interests in two domestic television networks and several international joint ventures for television channels from which the Company earns revenues primarily by selling its television programming. Total revenues earned from sales to these joint ventures were $14 million and $5 million for the three months ended September 30, 2018 and 2017, respectively and $67 million and $54 million for the nine months endedSeptember 30, 2018 and 2017, respectively. At September 30, 2018 and December 31, 2017, total amounts due from these joint ventures were $23 million and $27 million, respectively.

The Company, through the normal course of business, is involved in transactions with other related parties that have not been material in any of the periods presented.

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Bank Financing and Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Bank Financing and Debt

6) BANK FINANCING AND DEBT

The following table sets forth the Company’s debt.

	At			At
	September 30, 2018			December 31, 2017
Commercial paper		$	374		$	679
Senior debt (2.30% - 7.875% due 2019 - 2045) (a)		9,433			9,426
Obligations under capital leases		46			57
Total debt		9,853			10,162
Less commercial paper		374			679
Less current portion of long-term debt		14			19
Total long-term debt, net of current portion		$	9,465		$	9,464

(a) At September 30, 2018 and December 31, 2017, the senior debt balances included (i) a net unamortized discount of $60 million and $65 million, respectively, (ii) unamortized deferred financing costs of $44 million and $47 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $4 million and $3 million, respectively. The face value of the Company’s senior debt was $9.54 billion at both September 30, 2018 and December 31, 2017.

At September 30, 2018, the Company classified $600 million of debt maturing in August 2019 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $374 million and $679 million at September 30, 2018 and December 31, 2017, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 2.41% at September 30, 2018 and 1.88% at December 31, 2017.

Credit Facility

At September 30, 2018, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At September 30, 2018, the Company’s Consolidated Leverage Ratio was approximately 3.0x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. At September 30, 2018, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.

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Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

7) PENSION AND OTHER POSTRETIREMENT BENEFITS

The components of net periodic cost for the Company’s pension and postretirement benefit plans were as follows:

	Pension Benefits						Postretirement Benefits
Three Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	7		$	7		$	—		$	—
Interest cost	38			48			3			4
Expected return on plan assets	(45		)	(50		)	—			—
Amortization of actuarial loss (gain) (a)	24			26			(4		)	(5		)
Net periodic cost	$	24		$	31		$	(1	)	$	(1	)

	Pension Benefits						Postretirement Benefits
Nine Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	23		$	22		$	—		$	—
Interest cost	112			143			11			13
Expected return on plan assets	(135		)	(151		)	—			—
Amortization of actuarial loss (gain) (a)	72			77			(13		)	(16		)
Net periodic cost	$	72		$	91		$	(2	)	$	(3	)

(a) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.

The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income and all other components of net periodic cost are presented within “Other items, net.”

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity

8) STOCKHOLDERS’ EQUITY

During the third quarter of 2018, the Company repurchased 1.8 million shares of its Class B Common Stock under its share repurchase program for $100 million, at an average cost of $55.13 per share. During the nine months endedSeptember 30, 2018, the Company repurchased 9.4 million shares of its Class B Common Stock for $500 million, at an average cost of $52.94 per share, leaving $2.56 billion of authorization at September 30, 2018.

During the third quarter of 2018, the Company declared a quarterly cash dividend of $.18 per share on its Class A and Class B Common Stock, resulting in total dividends of $68 million, which were paid on October 1, 2018. During the nine months endedSeptember 30, 2018, the Company declared total per share cash dividends of $.54 on its Class A and Class B Common Stock, resulting in total dividends of $206 million.

On May 17, 2018, the Company’s Board of Directors voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company’s Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”). In connection with the settlement agreement involving legal proceedings in the Delaware Court of Chancery, on September 9, 2018, the Board rescinded the May 2018 Stock Dividend. See “Legal Matters” in Note 14 for related information.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the components of accumulated other comprehensive loss.

	Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2017	$	159		$	(821	)			$	(662	)
Other comprehensive loss before reclassifications	(17		)	—					(17		)
Reclassifications to net earnings	—			45			(a)		45
Net other comprehensive income (loss)	(17		)	45					28
At September 30, 2018	$	142		$	(776	)			$	(634	)

	Cumulative Translation Adjustments		Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2016	$	151	$	(918	)			$	(767	)
Other comprehensive income before reclassifications	4		—					4
Reclassifications to net earnings	—		37			(a)		37
Net other comprehensive income	4		37					41
At September 30, 2017	$	155	$	(881	)			$	(726	)

(a) Reflects amortization of net actuarial losses. See Note 7.

The net actuarial losses related to pension and other postretirement benefit plans included in other comprehensive income are net of tax provisions of $14 million and $24 million for the nine months endedSeptember 30, 2018 and 2017, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

9) INCOME TAXES

The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Provision for income taxes, including interest and before other discrete items (a)	$	120		$	187		$	370		$	548
Impact of tax law changes (b)	(54		)	—			(54		)	—
Excess tax benefits from stock-based compensation (c)	—			(10		)	—			(41		)
Other discrete items (d)	(2		)	(5		)	(4		)	(28		)
Provision for income taxes	$	64		$	172		$	312		$	479
Effective income tax rate	11.2		%	28.4		%	17.7		%	26.7		%

(a) The lower tax provision for the three and nine months endedSeptember 30, 2018 primarily reflects a reduction in the federal corporate income tax rate from 35% to 21% as a result of the enactment of new federal tax legislation in December 2017 (the “Tax Reform Act”).

(b) During the third quarter of 2018, in connection with the preparation of its 2017 federal tax return, the Company elected to utilize a federal tax law provision that was retroactively renewed in 2018. This tax law provision allowed the Company to immediately expense certain qualified production costs on its 2017 tax return. As a result, during the third quarter of 2018, the Company established a deferred tax liability associated with this deduction at the 2017 federal tax rate of 35%, and concurrently recorded a net tax benefit of $69 million, primarily reflecting the re-measurement of this deferred tax liability at the reduced federal corporate tax rate of 21% under the Tax Reform Act. This benefit was partially offset by a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits that resulted from the enactment of the Tax Reform Act in 2017. See discussion below.

(c) Reflects the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return associated with the exercise of stock options and vesting of RSUs. This difference occurs because stock-based compensation expense is recorded based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests.

(d) For the nine months endedSeptember 30, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters.

In December 2017, the U.S. government enacted the Tax Reform Act containing significant changes to U.S. federal tax law, including a reduction in the federal corporate tax rate from 35% to 21% and a one-time transition tax on cumulative foreign earnings and profits. For the year ended December 31, 2017, the Company recorded a net provisional charge of $129 million, reflecting the estimated transition tax of $407 million on cumulative foreign earnings and profits, offset by an estimated benefit of $278 million to adjust the Company’s deferred income tax balances as a result of the reduced corporate income tax rate. The Tax Reform Act also includes a deduction for foreign derived intangible income and a tax on global intangible low-taxed income (“GILTI”), which imposes a U.S. tax on certain income earned by the Company’s foreign subsidiaries. The Company included the tax on GILTI in its tax provision for the three and nine months endedSeptember 30, 2018. During the third quarter of 2018, the Company recorded a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits. The Company will complete its analysis of the Tax Reform Act within one year from its enactment. Such analysis will include finalizing and recording any additional adjustments to provisional estimates, as well as determining whether to treat the tax on GILTI as a period cost when incurred or as a component of deferred taxes.

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Financial Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

10) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company’s carrying value of financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value. At September 30, 2018 and December 31, 2017, the carrying value of the Company’s senior debt was $9.43 billion and the fair value, which is estimated based on quoted market prices for similar liabilities (Level 2) and includes accrued interest, was $9.57 billion and $10.16 billion, respectively.

The Company uses derivative financial instruments primarily to modify its exposure to market risks from fluctuations in foreign currency exchange rates. The Company does not use derivative instruments unless there is an underlying exposure and, therefore, the Company does not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign Exchange Contracts

Foreign exchange forward contracts have principally been used to hedge projected cash flows, in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, generally for periods up to 24 months. The Company designates forward contracts used to hedge committed and forecasted foreign currency transactions as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enters into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At September 30, 2018 and December 31, 2017, the notional amount of all foreign exchange contracts was $391 million and $410 million, respectively.

Gains (losses) recognized on derivative financial instruments were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018		2017			Financial Statement Account
Non-designated foreign exchange contracts	$	—	$	(9	)	$	13	$	(29	)	Other items, net

The fair value of the Company’s derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.

The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

At September 30, 2018	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	9	$	—	$	9
Total Assets	$	—	$	9	$	—	$	9
Liabilities:
Deferred compensation	$	—	$	375	$	—	$	375
Foreign currency hedges	—		1		—		1
Total Liabilities	$	—	$	376	$	—	$	376

At December 31, 2017	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	5	$	—	$	5
Total Assets	$	—	$	5	$	—	$	5
Liabilities:
Deferred compensation	$	—	$	363	$	—	$	363
Foreign currency hedges	—		10		—		10
Total Liabilities	$	—	$	373	$	—	$	373

The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.

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Segment and Revenue Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment and Revenue Information

11) SEGMENT AND REVENUE INFORMATION

The following tables set forth the Company’s financial information by reportable segment. The Company’s operating segments, which are the same as its reportable segments, have been determined in accordance with the Company’s internal management structure, which is organized based upon products and services.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Entertainment	$	2,151		$	1,815		$	7,232		$	6,346
Cable Networks	569			840			1,769			1,954
Publishing	240			228			607			595
Local Media	434			397			1,269			1,218
Corporate/Eliminations	(131		)	(109		)	(387		)	(342		)
Total Revenues	$	3,263		$	3,171		$	10,490		$	9,771

Revenues generated between segments primarily reflect advertising sales, content licensing and station affiliation fees. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Intercompany Revenues:
Entertainment	$	135	$	111	$	394	$	348
Cable Networks	2		—		2		—
Local Media	3		4		13		10
Total Intercompany Revenues	$	140	$	115	$	409	$	358

The Company presents operating income (loss) excluding costs for restructuring and other corporate matters, where applicable, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments in accordance with FASB guidance for segment reporting. The Company believes the presentation of Segment Operating Income 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.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Segment Operating Income (Loss):
Entertainment	$	377		$	350		$	1,225		$	1,104
Cable Networks	248			296			734			801
Publishing	51			47			98			91
Local Media	124			106			370			358
Corporate	(64		)	(70		)	(216		)	(209		)
Restructuring and other corporate matters	(46		)	—			(90		)	—
Operating income	690			729			2,121			2,145
Interest expense	(115		)	(116		)	(349		)	(336		)
Interest income	12			17			43			45
Loss on early extinguishment of debt	—			(5		)	—			(5		)
Other items, net	(17		)	(19		)	(52		)	(56		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	570			606			1,763			1,793
Provision for income taxes	(64		)	(172		)	(312		)	(479		)
Equity in loss of investee companies, net of tax	(18		)	(16		)	(52		)	(45		)
Net earnings from continuing operations	488			418			1,399			1,269
Net earnings (loss) from discontinued operations, net of tax	—			174			—			(871		)
Net earnings	$	488		$	592		$	1,399		$	398

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Depreciation and Amortization:
Entertainment	$	31	$	29	$	92	$	85
Cable Networks	5		5		16		17
Publishing	1		2		4		5
Local Media	11		11		33		34
Corporate	8		8		23		25
Total Depreciation and Amortization	$	56	$	55	$	168	$	166

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018		2017
Stock-based Compensation:
Entertainment	$	17		$	16	$	48	$	48
Cable Networks	4			3		10		9
Publishing	1			1		3		3
Local Media	3			3		9		9
Corporate (a)	(11		)	21		35		60
Total Stock-based Compensation	$	14		$	44	$	105	$	129

(a) Included in the three and nine months endedSeptember 30, 2018 are forfeitures of $28 million and accelerations of $6 million relating to changes in senior management.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures:
Entertainment	$	19	$	25	$	56	$	63
Cable Networks	5		5		12		12
Publishing	2		1		4		2
Local Media	6		8		15		20
Corporate	5		5		12		15
Total Capital Expenditures	$	37	$	44	$	99	$	112

	At			At
	September 30, 2018			December 31, 2017
Assets:
Entertainment		$	12,763		$	12,626
Cable Networks		3,008			2,878
Publishing		1,047			906
Local Media		3,996			4,042
Corporate/Eliminations		242			378
Discontinued operations		12			13
Total Assets		$	21,068		$	20,843

The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Revenues by Type	2018		2017		2018		2017
Advertising	$	1,263	$	1,106	$	4,323	$	4,008
Content licensing and distribution:
Programming	693		632		2,417		2,166
Publishing	240		228		607		595
Affiliate and subscription fees	1,008		1,145		2,976		2,835
Other	59		60		167		167
Total Revenues	$	3,263	$	3,171	$	10,490	$	9,771

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Adoption of "Revenue From Contracts With Customers"

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Adoption of Revenue From Contracts With Customers

12) ADOPTION OF “REVENUE FROM CONTRACTS WITH CUSTOMERS”

On January 1, 2018, the Company adopted FASB Accounting Standards Codification 606 (“ASC 606”) on the recognition of revenues using the modified retrospective method applied to all contracts. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior periods have not been adjusted. The Company recorded an increase to accumulated deficit of $261 million as of January 1, 2018 reflecting the cumulative impact of the adoption of ASC 606.

The adoption of ASC 606 primarily resulted in two changes to the Company’s revenue recognition policies.

• Revenues from Distribution Arrangements

Revenues from the Company’s distribution of third-party content are now recognized based on the gross amount of consideration received from the customer, with an offsetting participation expense recognized for the fees paid to the third party. Under previous accounting guidance, such revenues, which include content licensing and distribution revenues and advertising revenues, were recognized at the net amount retained by the Company after the payment of fees to the third party. For the three and nine months endedSeptember 30, 2018, respectively, revenues and operating expenses relating to such distribution arrangements were each $93 million and $217 million higher under ASC 606 than the amounts that would have been reported under previous accounting guidance, with no impact to operating income.

• Revenues from the Renewal of Licensing Agreements

Revenues associated with the renewal of an existing license agreement are now recognized at the beginning of the renewal period. Under previous accounting guidance, these revenues were recognized upon the execution of such renewal. Content licensing and distribution revenue comparisons will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Therefore, this change is not expected to have a material impact on the trend of the Company’s financial results. Additionally, historically, on an annual basis, revenues from renewals executed each year have approximated revenues associated with renewal periods that began in the same year.

The following table presents the amount by which each applicable financial statement line item on the Consolidated Statement of Operations would have decreased for the three and nine months endedSeptember 30, 2018 if license renewals were recognized under previous accounting guidance.

	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Revenues		$	41		$	182
Operating expenses		19			82
Operating income		22			100
Less: Provision for income taxes		5			21
Net earnings from continuing operations		$	17		$	79
Diluted EPS from continuing operations		$	.04		$	.21

In addition, the adoption of ASC 606 resulted in certain classification changes on the Consolidated Balance Sheet. The primary change is the reclassification of the sales returns reserve relating to the publishing business to “Other current liabilities.” Such amount, which was $116 million at September 30, 2018, was previously presented as a reduction to receivables.

The following table presents the amount by which each applicable financial statement line item on the Consolidated Balance Sheet at September 30, 2018 would increase (decrease) if all of the above changes resulting from the adoption of ASC 606 were presented under previous accounting guidance.

Assets
Receivables, net	$	(89	)
Programming and other inventory (noncurrent)	$	(45	)
Other assets (noncurrent receivables)	$	386
Liabilities
Other current liabilities	$	(141	)
Deferred income tax liabilities, net	$	46
Participants’ share and royalties payable	$	165
Accumulated deficit	$	182

ASC 606 also requires enhanced disclosures relating to the Company’s revenues from contracts with customers (See Note 1), including the disaggregation of revenues into categories (See Note 11).

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Discontinued Operations

9 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

13) DISCONTINUED OPERATIONS

On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Communications Corp. (“Entercom”) Class A common stock upon completion of the merger.

The following table sets forth details of net earnings (loss) from discontinued operations for the three and nine months endedSeptember 30, 2017.

	Three Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2017
Revenues		$	300			$	856
Costs and expenses:
Operating		113				307
Selling, general and administrative		120				370
Market value adjustment (a)		(100		)		980
Restructuring charges (b)		—				7
Total costs and expenses		133				1,664
Operating income (loss)		167				(808		)
Interest expense		(21		)		(60		)
Other items, net		—				(1		)
Earnings (loss) from discontinued operations		146				(869		)
Income tax (provision) benefit (c)		28				(2		)
Net earnings (loss) from discontinued operations, net of tax		$	174			$	(871	)

(a) During 2017, prior to its split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.

(b) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.

(c) Included in the three and nine months endedSeptember 30, 2017 is a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14) COMMITMENTS AND CONTINGENCIES

Guarantees

The Company has indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At September 30, 2018, the outstanding letters of credit and surety bonds approximated $107 million and were not recorded on the Consolidated Balance Sheet.

In the course of its business, the Company both provides and receives indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Company may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. The Company records a liability for its indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters

General. On an ongoing basis, the Company vigorously defends itself in numerous lawsuits and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against the Company without merit, is inherently uncertain and always difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal matters and other litigation to which it is a party are not likely, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under the separation agreement between the Company and Viacom Inc., the Company and Viacom Inc. have agreed to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.

Litigation Settled in September 2018 Involving the Company and Its Controlling Stockholder, National Amusements, Inc., Among Others, in the Delaware Court of Chancery. On May 14, 2018, the Company and certain of the independent directors of the Company’s Board of Directors (the “Board”) filed a lawsuit in the Delaware Court of Chancery against NAI, Ms. Shari Redstone, Mr. Sumner M. Redstone, NAI Entertainment Holdings LLC (“NAIEH”) and the Sumner M. Redstone National Amusements Trust (the “SMR Trust”) (collectively, the “NAI Parties”). The verified complaint, as amended on May 23, 2018, alleged, among other things, that NAI, Mr. Sumner M. Redstone and Ms. Shari Redstone had breached their fiduciary duties to the Company’s stockholders by abusing their control to threaten the independent corporate governance of the Company. The amended verified complaint sought a declaration that the May 2018 Stock Dividend (as defined below) was valid and permissible, a declaration that the Bylaw Amendments (as defined below) were invalid or were ineffective as of May 17, 2018 and an injunction against any action by any of the NAI Parties to interfere with the composition of the Board or to modify the Company’s governance documents before the issuance of any shares pursuant to the May 2018 Stock Dividend.

On May 16, 2018, each of NAI and NAIEH delivered to the Company a written consent to amend (the “Bylaw Amendments”) the Company’s amended and restated bylaws (the “Bylaws”). On May 17, 2018, the Board voted 11 to 3 in favor of a pro rata dividend of 0.5687 of a share of the Company’s voting Class A Common Stock for each share of the Company's Class A Common Stock and non-voting Class B Common Stock to stockholders of record as of the close of business on the record date and conditioned the issuance of such dividend on Delaware court approval (the “May 2018 Stock Dividend”).

On May 29, 2018, NAI, NAIEH and Ms. Shari Redstone filed a lawsuit in the Delaware Court of Chancery against the Company and certain of the Company’s directors. NAI’s verified complaint, as amended on June 25, 2018 and July 27, 2018, alleged, among other things, that the May 2018 Stock Dividend violated the Company’s bylaws and certificate of incorporation, and that the directors named as defendants had breached their fiduciary duties in approving the May 2018 Stock Dividend. The amended verified complaint sought a declaration that the Bylaw Amendments were valid, a declaration that the May 2018 Stock Dividend was invalid, an injunction against issuance and payment of the May 2018 Stock Dividend and any action by the defendants to carry out the May 2018 Stock Dividend, and other relief.

On June 7, 2018, the Court consolidated the aforementioned lawsuits under the consolidated action captioned In re CBS Corporation Litigation, Consol. C.A. No. 2018-0342-AGB (Del. Ch.) (the “consolidated action”).

On May 31, 2018, Westmoreland County Employees’ Retirement System (“Westmoreland”), a purported beneficial owner of the Company’s Class B Common Stock, filed a class action complaint in the Delaware Court of Chancery against NAI, NAIEH, Mr. David R. Andelman, Mr. Robert N. Klieger and Ms. Shari Redstone (the “Westmoreland lawsuit”), which alleged breaches of contractual obligations, implied obligations and fiduciary duties to the Company’s Class B Common Stock holders in connection with the Bylaw Amendments and interference with the issuance by the Board of the May 2018 Stock Dividend. Westmoreland’s complaint sought a declaratory judgment that the Company’s certificate of incorporation authorized the May 2018 Stock Dividend, that Westmoreland and the class were entitled to the May 2018 Stock Dividend, and that the Bylaw Amendments were invalid, as well as other relief. On September 14, 2018, the Delaware Court of Chancery entered a stipulation agreed to by the parties whereby the Westmoreland lawsuit was dismissed without prejudice as moot and the Court retained jurisdiction to consider any application for attorneys’ fees and expenses submitted by Westmoreland or its counsel.

On September 9, 2018, the Company entered into a settlement and release agreement (the “Settlement Agreement”) with NAI, NAIEH, the SMR Trust, Mr. Sumner M. Redstone, Ms. Shari Redstone and the other then members of the Board, among other parties. Pursuant to the Settlement Agreement, among other matters, the parties dismissed with prejudice all claims in the consolidated action. The Settlement Agreement includes mutual releases and covenants not to sue among the parties with respect to NAI’s and NAIEH’s investment in the Company, including the claims asserted in such action, subject to certain exceptions, and the Company has agreed to indemnify, and reimburse expenses of, certain parties, on the terms set forth in the Settlement Agreement, including with respect to the consolidated action and the defendants in the Westmoreland lawsuit. In connection with the Settlement Agreement, the Board rescinded the May 2018 Stock Dividend. In addition, NAI and NAIEH took action by written consent to amend the Company’s amended and restated bylaws.

Investigations and Related Matters. As announced on August 1, 2018, the Board has retained two law firms to conduct a full investigation of the allegations in recent press reports about the Company’s former Chairman of the Board, President and Chief Executive Officer, Mr. Leslie Moonves, CBS News and cultural issues at all levels of the Company. This investigation is ongoing. The Company has received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Company may receive additional related regulatory and investigative inquiries from these and other entities in the future. The Company is cooperating with the ongoing investigation and related inquiries.

On August 27, 2018, Gene Samit, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, its former Chairman of the Board, President and Chief Executive Officer and its then Chief Operating Officer, who has been appointed as the Company’s President and Acting Chief Executive Officer. This action is stated to be on behalf of a class of persons who acquired the Company’s securities between February 14, 2014 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On October 1, 2018, John Lantz, individually and on behalf of others similarly situated, filed a putative class action suit in the United States District Court for the Southern District of New York against the Company, certain current and former senior executives and the members of the Board immediately prior to September 9, 2018. This action is stated to be on behalf of purchasers of the Company’s Class A Common Stock and Class B Common Stock between November 3, 2017 and July 27, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws by allegedly making materially false and misleading statements or failing to disclose material information, as well as costs and expenses, and seeks remedies under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.

Separation Agreement. On September 9, 2018, the Company entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Leslie Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of the Company. Pursuant to the Separation Agreement, the Company will contribute the aggregate amount of $20 million to one or more charitable organizations that support the #MeToo movement and equality for women in the workplace, which organizations are mutually agreed by the Company and Mr. Moonves. The Company has recorded the contribution of $20 million in “Restructuring and other corporate matters” on the Consolidated Statements of Operations for the three and nine months endedSeptember 30, 2018. In October 2018, the Company also contributed $120 million to a grantor trust. In the event the Board determines that the Company is entitled to terminate Mr. Moonves’s employment for cause under his employment agreement and Mr. Moonves does not demand arbitration with respect to such determination, the assets of the grantor trust will be distributed to the Company and the Company will have no further obligations to Mr. Moonves. Any dispute related to the Board’s determination is subject to binding arbitration as set forth in the Separation Agreement. In the event of arbitration, the assets of the grantor trust will also be distributed to the Company upon a final determination in the arbitration that the Company was entitled to terminate Mr. Moonves’s employment for cause. The Board will make a determination whether the Company has grounds to terminate the employment of Mr. Moonves for cause under his employment agreement within thirty days following completion of the final report of the independent investigators in the ongoing internal investigation described above, but in no event later than January 31, 2019. In the event that the Board determines that the Company is not entitled to terminate Mr. Moonves’s employment for cause, or in the event of a final determination in arbitration that the Company is not entitled to terminate Mr. Moonves’s employment for cause, the assets of the grantor trust will be distributed to Mr. Moonves. The Company is currently unable to determine the amount of any such contingent distribution to Mr. Moonves and, accordingly, no accrual has been made in the Company’s consolidated financial statements.

Claims Related to Former Businesses: Asbestos. The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company is typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’s products is the basis of a claim. Claims against the Company in which a product has been identified principally relate to exposures allegedly caused by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company does not report as pending those claims on inactive, stayed, deferred or similar dockets which some jurisdictions have established for claimants who allege minimal or no impairment. As of September 30, 2018, the Company had pending approximately 31,500 asbestos claims, as compared with approximately 31,660 as of December 31, 2017 and 32,760 as of September 30, 2017. During the third quarter of 2018, the Company received approximately 770 new claims and closed or moved to an inactive docket approximately 1,020 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. The Company’s total costs for the years 2017 and 2016 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57 million and $48 million, respectively. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has remained generally flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

Other. The Company from time to time receives claims from federal and state environmental regulatory agencies and other entities asserting that it is or may be liable for environmental cleanup costs and related damages principally relating to historical and predecessor operations of the Company. In addition, the Company from time to time receives personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations of the Company and its predecessors.

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Condensed Consolidating Financial Statements

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements

15) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CBS Operations Inc. is a wholly owned subsidiary of the Company. CBS Operations Inc. has fully and unconditionally guaranteed CBS Corp.’s senior debt securities. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of CBS Corp., CBS Operations Inc., the direct and indirect Non-Guarantor Affiliates of CBS Corp. and CBS Operations Inc., and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

	Statement of Operations
	For the Three Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	47		$	2		$	3,214		$	—		$	3,263
Costs and expenses:
Operating	25			1			1,896			—			1,922
Selling, general and administrative	11			58			480			—			549
Depreciation and amortization	1			5			50			—			56
Restructuring and other corporate matters	—			46			—			—			46
Total costs and expenses	37			110			2,426			—			2,573
Operating income (loss)	10			(108		)	788			—			690
Interest (expense) income, net	(133		)	(130		)	160			—			(103		)
Other items, net	(7		)	(4		)	(6		)	—			(17		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(130		)	(242		)	942			—			570
Benefit (provision) for income taxes	27			50			(141		)	—			(64		)
Equity in earnings (loss) of investee companies, net of tax	591			410			(18		)	(1,001		)	(18		)
Net earnings	$	488		$	218		$	783		$	(1,001	)	$	488
Total comprehensive income	$	500		$	219		$	781		$	(1,000	)	$	500

	Statement of Operations
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	134		$	7		$	10,349		$	—		$	10,490
Costs and expenses:
Operating	73			3			6,430			—			6,506
Selling, general and administrative	36			190			1,379			—			1,605
Depreciation and amortization	3			16			149			—			168
Restructuring and other corporate matters	—			71			19			—			90
Total costs and expenses	112			280			7,977			—			8,369
Operating income (loss)	22			(273		)	2,372			—			2,121
Interest (expense) income, net	(396		)	(378		)	468			—			(306		)
Other items, net	(23		)	8			(37		)	—			(52		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(397		)	(643		)	2,803			—			1,763
Benefit (provision) for income taxes	82			133			(527		)	—			(312		)
Equity in earnings (loss) of investee companies, net of tax	1,714			1,166			(52		)	(2,880		)	(52		)
Net earnings	$	1,399		$	656		$	2,224		$	(2,880	)	$	1,399
Total comprehensive income	$	1,427		$	659		$	2,205		$	(2,864	)	$	1,427

	Statement of Operations
	For the Three Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	40		$	3		$	3,128		$	—		$	3,171
Costs and expenses:
Operating	23			1			1,838			—			1,862
Selling, general and administrative	13			59			453			—			525
Depreciation and amortization	1			6			48			—			55
Total costs and expenses	37			66			2,339			—			2,442
Operating income (loss)	3			(63		)	789			—			729
Interest (expense) income, net	(129		)	(123		)	153			—			(99		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(9		)	(11		)	1			—			(19		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(140		)	(197		)	943			—			606
Benefit (provision) for income taxes	43			62			(277		)	—			(172		)
Equity in earnings (loss) of investee companies, net of tax	689			369			(16		)	(1,058		)	(16		)
Net earnings from continuing operations	592			234			650			(1,058		)	418
Net earnings from discontinued operations, net of tax	—			—			174			—			174
Net earnings	$	592		$	234		$	824		$	(1,058	)	$	592
Total comprehensive income	$	607		$	229		$	830		$	(1,059	)	$	607

	Statement of Operations
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	124		$	8		$	9,639		$	—		$	9,771
Costs and expenses:
Operating	69			4			5,867			—			5,940
Selling, general and administrative	37			185			1,298			—			1,520
Depreciation and amortization	3			18			145			—			166
Total costs and expenses	109			207			7,310			—			7,626
Operating income (loss)	15			(199		)	2,329			—			2,145
Interest (expense) income, net	(378		)	(360		)	447			—			(291		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(27		)	(42		)	13			—			(56		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(395		)	(601		)	2,789			—			1,793
Benefit (provision) for income taxes	120			184			(783		)	—			(479		)
Equity in earnings (loss) of investee companies, net of tax	673			1,062			(45		)	(1,735		)	(45		)
Net earnings from continuing operations	398			645			1,961			(1,735		)	1,269
Net loss from discontinued operations, net of tax	—			—			(871		)	—			(871		)
Net earnings	$	398		$	645		$	1,090		$	(1,735	)	$	398
Total comprehensive income	$	439		$	633		$	1,111		$	(1,744	)	$	439

	Balance Sheet
	At September 30, 2018
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	62		$	—	$	120		$	—		$	182
Receivables, net	21			1		3,675			—			3,697
Programming and other inventory	2			2		1,824			—			1,828
Prepaid expenses and other current assets	16			31		323			(37		)	333
Total current assets	101			34		5,942			(37		)	6,040
Property and equipment	34			220		2,750			—			3,004
Less accumulated depreciation and amortization	17			179		1,586			—			1,782
Net property and equipment	17			41		1,164			—			1,222
Programming and other inventory	6			5		3,857			—			3,868
Goodwill	98			62		4,761			—			4,921
Intangible assets	—			—		2,650			—			2,650
Investments in consolidated subsidiaries	47,000			16,332		—			(63,332		)	—
Other assets	160			5		2,202			—			2,367
Intercompany	—			758		31,330			(32,088		)	—
Total Assets	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068
Liabilities and Stockholders’ Equity
Accounts payable	$	5		$	2	$	222		$	—		$	229
Participants’ share and royalties payable	—			—		1,110			—			1,110
Program rights	3			2		401			—			406
Commercial paper	374			—		—			—			374
Current portion of long-term debt	2			—		12			—			14
Accrued expenses and other current liabilities	356			282		1,259			(37		)	1,860
Total current liabilities	740			286		3,004			(37		)	3,993
Long-term debt	9,385			—		80			—			9,465
Other liabilities	2,655			225		2,216			—			5,096
Intercompany	32,088			—		—			(32,088		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,668			—		60,894			(60,894		)	43,668
Retained earnings (accumulated deficit)	(17,762		)	16,914		(10,262		)	(6,652		)	(17,762		)
Accumulated other comprehensive income (loss)	(634		)	20		58			(78		)	(634		)
	25,273			17,057		51,406			(68,463		)	25,273
Less treasury stock, at cost	22,759			331		4,800			(5,131		)	22,759
Total Stockholders’ Equity	2,514			16,726		46,606			(63,332		)	2,514
Total Liabilities and Stockholders’ Equity	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068

	Balance Sheet
	At December 31, 2017
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	173		$	—	$	112		$	—		$	285
Receivables, net	29			2		3,666			—			3,697
Programming and other inventory	3			3		1,822			—			1,828
Prepaid expenses and other current assets	130			28		341			(36		)	463
Total current assets	335			33		5,941			(36		)	6,273
Property and equipment	49			217		2,785			—			3,051
Less accumulated depreciation and amortization	27			163		1,581			—			1,771
Net property and equipment	22			54		1,204			—			1,280
Programming and other inventory	3			4		2,874			—			2,881
Goodwill	98			62		4,731			—			4,891
Intangible assets	—			—		2,666			—			2,666
Investments in consolidated subsidiaries	45,504			15,225		—			(60,729		)	—
Other assets	162			5		2,685			—			2,852
Intercompany	—			1,221		29,562			(30,783		)	—
Total Assets	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843
Liabilities and Stockholders’ Equity
Accounts payable	$	1		$	30	$	200		$	—		$	231
Participants’ share and royalties payable	—			—		986			—			986
Program rights	4			4		365			—			373
Commercial paper	679			—		—			—			679
Current portion of long-term debt	2			—		17			—			19
Accrued expenses and other current liabilities	352			269		1,099			(36		)	1,684
Total current liabilities	1,038			303		2,667			(36		)	3,972
Long-term debt	9,378			—		86			—			9,464
Other liabilities	2,947			234		2,248			—			5,429
Intercompany	30,783			—		—			(30,783		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,797			—		60,894			(60,894		)	43,797
Retained earnings (accumulated deficit)	(18,900		)	16,257		(12,224		)	(4,033		)	(18,900		)
Accumulated other comprehensive income (loss)	(662		)	18		76			(94		)	(662		)
	24,236			16,398		49,462			(65,860		)	24,236
Less treasury stock, at cost	22,258			331		4,800			(5,131		)	22,258
Total Stockholders’ Equity	1,978			16,067		44,662			(60,729		)	1,978
Total Liabilities and Stockholders’ Equity	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(357	)	$	(183	)	$	1,720		$	—	$	1,180
Investing Activities:
Investments in and advances to investee companies	—			—			(76		)	—		(76		)
Capital expenditures	—			(12		)	(87		)	—		(99		)
Acquisitions	—			—			(29		)	—		(29		)
Other investing activities	8			—			—			—		8
Net cash flow provided by (used for) investing activities from continuing operations	8			(12		)	(192		)	—		(196		)
Net cash flow used for investing activities from discontinued operations	(23		)	—			—			—		(23		)
Net cash flow used for investing activities	(15		)	(12		)	(192		)	—		(219		)
Financing Activities:
Repayments of short-term debt borrowings, net	(305		)	—			—			—		(305		)
Payment of capital lease obligations	—			—			(12		)	—		(12		)
Payment of contingent consideration	—			—			(5		)	—		(5		)
Dividends	(208		)	—			—			—		(208		)
Purchase of Company common stock	(497		)	—			—			—		(497		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(59		)	—			—			—		(59		)
Proceeds from exercise of stock options	23			—			—			—		23
Other financing activities	(1		)	—			—			—		(1		)
Increase (decrease) in intercompany payables	1,308			195			(1,503		)	—		—
Net cash flow provided by (used for) financing activities	261			195			(1,520		)	—		(1,064		)
Net (decrease) increase in cash and cash equivalents	(111		)	—			8			—		(103		)
Cash and cash equivalents at beginning of period	173			—			112			—		285
Cash and cash equivalents at end of period	$	62		$	—		$	120		$	—	$	182

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(851	)	$	(180	)	$	2,018		$	—	$	987
Investing Activities:
Investments in and advances to investee companies	—			—			(67		)	—		(67		)
Capital expenditures	—			(15		)	(97		)	—		(112		)
Acquisitions (including acquired television library)	—			—			(258		)	—		(258		)
Proceeds from sale of investments	—			—			10			—		10
Proceeds from dispositions	—			—			11			—		11
Other investing activities	17			—			—			—		17
Net cash flow provided by (used for) investing activities from continuing operations	17			(15		)	(401		)	—		(399		)
Net cash flow provided by (used for) investing activities from discontinued operations	1			(4		)	(15		)	—		(18		)
Net cash flow provided by (used for) investing activities	18			(19		)	(416		)	—		(417		)
Financing Activities:
Proceeds from short-term debt borrowings, net	140			—			—			—		140
Proceeds from issuance of senior notes	889			—			—			—		889
Repayment of senior notes	(701		)	—			—			—		(701		)
Proceeds from debt borrowings of CBS Radio	—			—			40			—		40
Repayment of debt borrowings of CBS Radio	—			—			(23		)	—		(23		)
Payment of capital lease obligations	—			—			(13		)	—		(13		)
Payment of contingent consideration	—			—			(7		)	—		(7		)
Dividends	(224		)	—			—			—		(224		)
Purchase of Company common stock	(1,111		)	—			—			—		(1,111		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(89		)	—			—			—		(89		)
Proceeds from exercise of stock options	81			—			—			—		81
Increase (decrease) in intercompany payables	1,545			199			(1,744		)	—		—
Net cash flow (used for) provided by financing activities	530			199			(1,747		)	—		(1,018		)
Net decrease in cash and cash equivalents	(303		)	—			(145		)	—		(448		)
Cash and cash equivalents at beginning of period (includes $24 million of discontinued operations cash)	321			—			301			—		622
Cash and cash equivalents at end of period (includes $30 million of discontinued operations cash)	$	18		$	—		$	156		$	—	$	174

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Use of Estimates

Use of Estimates-The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenues

Revenues

Advertising Revenues-Advertising revenues are recognized when the advertising spots are aired on television or displayed on digital platforms. If there is a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. Audience ratings and impressions are determined based on data provided by independent third-party companies. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.

Advertising revenues are primarily generated by the Entertainment and Local Media segments.

Content Licensing and Distribution Revenues-Content licensing and distribution revenues are generated from the licensing of internally-produced television programming, fees from the distribution of third-party programming, and the publishing and distribution of consumer books.

Program Licensing and Distribution

For licenses of internally-produced television programming, each individual episode delivered represents a separate performance obligation and revenues are recognized when the episode is made available to the licensee for exhibition and the license period has begun. For license agreements containing multiple deliverables, revenues are allocated based on the relative standalone selling price of each episode of a television series, which is based on licenses for comparable series within the marketplace. Agreements to license programming are often long term, with collection terms ranging from one to five years.

The Company also distributes programs on behalf of third parties. In such arrangements, the Company generally obtains control of the program before selling it to the customer. Therefore, revenues from such distribution arrangements, which include both content licensing and advertising revenues, are recognized based on the gross amount of consideration received from the customer, with a participation expense recognized for the fees paid to the third-party producer.

Substantially all of the Company’s program licensing and distribution revenues are generated by the Entertainment segment, with the remainder generated by the Cable Networks segment.

Publishing

Publishing revenues are recognized when merchandise is shipped or electronically delivered to the consumer. Consumer print books are generally sold with a right of return. The Company records a returns reserve and corresponding decrease in revenue at the time of sale based upon historical trends. For publishing revenues, payments are due shortly after shipment or electronic delivery.

Affiliate and Subscription Fees-A majority of the Company’s affiliate and subscription fees are generated by the Cable Networks segment and consist of fees received from multichannel video programming distributors (“MVPDs”) for carriage of the Company’s cable networks and subscription fees for the Showtime digital streaming subscription offering. The Entertainment segment generates affiliate and subscription fees primarily from television stations affiliated with the CBS Television Network and subscribers to CBS All Access, its owned streaming subscription service. In addition, the Local Media segment generates retransmission fees from MVPDs for carriage of the Company’s television stations.

The performance obligation for the Company’s affiliate agreements is a license to the Company’s programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs, also includes a license to programming for video on demand viewing. Affiliate and subscription fees are recognized over the term of the agreement as the Company continuously provides its customer with the right to use its programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers tothe customer’s service. For agreements that provide for a fixed fee, which primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”), revenues are recognized based on the relative fair value of the content provided over the term of the agreement, which is determined based on the fair value of the network affiliate’s service and the value of the Company’s programming. For affiliate and subscription fee revenues, payments are generally due monthly.

Net Earnings (Loss) per Common Share

Net Earnings (Loss) per Common Share-Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss) divided by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) only in the periods in which such effect would have been dilutive.

Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

Revenue from Contracts with Customers

During the first quarter of 2018, the Company adopted Financial Accounting Standards Board (“FASB”) guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company applied the modified retrospective method of adoption with the cumulative effect of the initial adoption of $261 million reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. Prior periods continue to be presented under previous accounting guidance (See Note 12).

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

During the first quarter of 2018, the Company adopted FASB amended guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). This guidance requires the Company to present the service cost component of net benefit cost in the same line items on the statement of operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented in the statement of operations separately from the service cost component and below the subtotal of operating income. As a result of the adoption of this guidance, the Company presented $16 million and $47 million of net benefit costs in “Other items, net” on the Consolidated Statement of Operations for the three and nine months endedSeptember 30, 2018, respectively, representing the components of net benefit cost other than service cost. This guidance is required to be applied retrospectively and therefore, $22 million and $65 million of expenses, previously presented within operating income, have been reclassified to “Other items, net” for the three and nine months endedSeptember 30, 2017, respectively.

Stock Compensation: Scope of Modification Accounting

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for stock-based compensation which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award as equity or liability changes as a result of the change in the terms or conditions of a share-based payment award. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Clarifying the Definition of a Business

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for business combinations which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Intra-Entity Transfers of Assets Other than Inventory

During the first quarter of 2018, the Company adopted FASB amended guidance on the accounting for income taxes, which eliminates the exception in existing guidance that defers the recognition of the tax effects of intra-entity asset transfers other than inventory until the transferred asset is sold to a third party. Under this guidance, an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

In August 2018, the FASB issued guidance on the accounting for implementation costs of a cloud computing arrangement that is considered to be a service contract. This guidance requires companies to follow the guidance for capitalizing costs associated with internal-use software to determine which costs to capitalize in a cloud computing arrangement that is a service contract. The guidance also specifies the financial statement presentation for capitalized implementation costs and the related amortization, as well as required financial statement disclosures. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued amended guidance that eliminates, adds and clarifies certain disclosure requirements for defined benefit pension or other postretirement plans. The Company is currently evaluating the impact of this guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

Changes to the Disclosure Requirements for Fair Value Measurements

In August 2018, the FASB issued amended guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance, which is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued amended guidance that permits an entity to reclassify the income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive income to retained earnings. The Company is currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.

Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued amended guidance for hedge accounting, which expands the eligibility of hedging strategies that qualify for hedge accounting, modifies the recognition and presentation of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition, this guidance amends and expands disclosure requirements. This guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, is not expected to have a material impact on the Company’s consolidated financial statements.

Leases

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This guidance is effective for the Company in the first quarter of 2019. The Company is currently reviewing its lease portfolio, evaluating the impact of this guidance on its consolidated balance sheet and is in the process of implementing new lease accounting software for administering its leases under the new guidance. The Company will apply the modified retrospective method of adoption as of January 1, 2019 and comparative periods will continue to be presented under existing lease guidance.

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Reconciliation from Basic to Diluted Shares

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2018	2017	2018	2017
Weighted average shares for basic EPS	375	401	378	405
Dilutive effect of shares issuable under stock-based compensation plans	4	5	4	5
Weighted average shares for diluted EPS	379	406	382	410

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Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

The following table summarizes the Company’s stock-based compensation expense for the three and nine months endedSeptember 30, 2018 and 2017.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
RSUs and PSUs	$	7		$	38		$	86		$	109
Stock options	7			6			19			20
Stock-based compensation expense, before income taxes	14			44			105			129
Related tax benefit	(3		)	(17		)	(26		)	(50		)
Stock-based compensation expense, net of tax benefit	$	11		$	27		$	79		$	79

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Restructuring and Other Corporate Matters (Tables)

9 Months Ended

Sep. 30, 2018

Restructuring Charges [Abstract]

Restructuring Reserve Rollforward

	Balance at			2018			2018				Balance at
	December 31, 2017			Charges			Settlements				September 30, 2018
Entertainment		$	45		$	6		$	(26	)		$	25
Cable Networks		1			—			(1		)		—
Publishing		3			1			(2		)		2
Local Media		14			11			(7		)		18
Corporate		3			7			(4		)		6
Total		$	66		$	25		$	(40	)		$	51

	Balance at			2017			2017				Balance at
	December 31, 2016			Charges			Settlements				December 31, 2017
Entertainment		$	17		$	44		$	(16	)		$	45
Cable Networks		4			—			(3		)		1
Publishing		1			5			(3		)		3
Local Media		6			12			(4		)		14
Corporate		2			2			(1		)		3
Total		$	30		$	63		$	(27	)		$	66

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Programming and Other Inventory (Tables)

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Current Programming and Other Inventory

	At			At
	September 30, 2018			December 31, 2017
Acquired program rights		$	2,373		$	2,234
Acquired television library		99			99
Internally produced programming:
Released		2,481			1,780
In process and other		680			543
Publishing, primarily finished goods		63			53
Total programming and other inventory		5,696			4,709
Less current portion		1,828			1,828
Total noncurrent programming and other inventory		$	3,868		$	2,881

Noncurrent Programming and Other Inventory

	At			At
	September 30, 2018			December 31, 2017
Acquired program rights		$	2,373		$	2,234
Acquired television library		99			99
Internally produced programming:
Released		2,481			1,780
In process and other		680			543
Publishing, primarily finished goods		63			53
Total programming and other inventory		5,696			4,709
Less current portion		1,828			1,828
Total noncurrent programming and other inventory		$	3,868		$	2,881

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Related Parties (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Amounts due from Viacom Inc.

The following table presents the amounts due from Viacom Inc. in the normal course of business as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September 30, 2018 and December 31, 2017.

	At			At
	September 30, 2018			December 31, 2017
Receivables		$	40		$	93
Other assets (Receivables, noncurrent)		25			11
Total amounts due from Viacom		$	65		$	104

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Bank Financing and Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

The following table sets forth the Company’s debt.

	At			At
	September 30, 2018			December 31, 2017
Commercial paper		$	374		$	679
Senior debt (2.30% - 7.875% due 2019 - 2045) (a)		9,433			9,426
Obligations under capital leases		46			57
Total debt		9,853			10,162
Less commercial paper		374			679
Less current portion of long-term debt		14			19
Total long-term debt, net of current portion		$	9,465		$	9,464

(a) At September 30, 2018 and December 31, 2017, the senior debt balances included (i) a net unamortized discount of $60 million and $65 million, respectively, (ii) unamortized deferred financing costs of $44 million and $47 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $4 million and $3 million, respectively. The face value of the Company’s senior debt was $9.54 billion at both September 30, 2018 and December 31, 2017.

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Pension and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

The components of net periodic cost for the Company’s pension and postretirement benefit plans were as follows:

	Pension Benefits						Postretirement Benefits
Three Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	7		$	7		$	—		$	—
Interest cost	38			48			3			4
Expected return on plan assets	(45		)	(50		)	—			—
Amortization of actuarial loss (gain) (a)	24			26			(4		)	(5		)
Net periodic cost	$	24		$	31		$	(1	)	$	(1	)

	Pension Benefits						Postretirement Benefits
Nine Months Ended September 30,	2018			2017			2018			2017
Components of net periodic cost:
Service cost	$	23		$	22		$	—		$	—
Interest cost	112			143			11			13
Expected return on plan assets	(135		)	(151		)	—			—
Amortization of actuarial loss (gain) (a)	72			77			(13		)	(16		)
Net periodic cost	$	72		$	91		$	(2	)	$	(3	)

(a) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Changes in Components of Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the components of accumulated other comprehensive loss.

	Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2017	$	159		$	(821	)			$	(662	)
Other comprehensive loss before reclassifications	(17		)	—					(17		)
Reclassifications to net earnings	—			45			(a)		45
Net other comprehensive income (loss)	(17		)	45					28
At September 30, 2018	$	142		$	(776	)			$	(634	)

	Cumulative Translation Adjustments		Net Actuarial Loss and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2016	$	151	$	(918	)			$	(767	)
Other comprehensive income before reclassifications	4		—					4
Reclassifications to net earnings	—		37			(a)		37
Net other comprehensive income	4		37					41
At September 30, 2017	$	155	$	(881	)			$	(726	)

(a) Reflects amortization of net actuarial losses. See Note 7.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Provision for income taxes, including interest and before other discrete items (a)	$	120		$	187		$	370		$	548
Impact of tax law changes (b)	(54		)	—			(54		)	—
Excess tax benefits from stock-based compensation (c)	—			(10		)	—			(41		)
Other discrete items (d)	(2		)	(5		)	(4		)	(28		)
Provision for income taxes	$	64		$	172		$	312		$	479
Effective income tax rate	11.2		%	28.4		%	17.7		%	26.7		%

(a) The lower tax provision for the three and nine months endedSeptember 30, 2018 primarily reflects a reduction in the federal corporate income tax rate from 35% to 21% as a result of the enactment of new federal tax legislation in December 2017 (the “Tax Reform Act”).

(b) During the third quarter of 2018, in connection with the preparation of its 2017 federal tax return, the Company elected to utilize a federal tax law provision that was retroactively renewed in 2018. This tax law provision allowed the Company to immediately expense certain qualified production costs on its 2017 tax return. As a result, during the third quarter of 2018, the Company established a deferred tax liability associated with this deduction at the 2017 federal tax rate of 35%, and concurrently recorded a net tax benefit of $69 million, primarily reflecting the re-measurement of this deferred tax liability at the reduced federal corporate tax rate of 21% under the Tax Reform Act. This benefit was partially offset by a charge of $15 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits that resulted from the enactment of the Tax Reform Act in 2017. See discussion below.

(c) Reflects the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return associated with the exercise of stock options and vesting of RSUs. This difference occurs because stock-based compensation expense is recorded based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests.

(d) For the nine months endedSeptember 30, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters.

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Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Financial Instruments

Gains (losses) recognized on derivative financial instruments were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018		2017			Financial Statement Account
Non-designated foreign exchange contracts	$	—	$	(9	)	$	13	$	(29	)	Other items, net

Fair Value Measurements

The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

At September 30, 2018	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	9	$	—	$	9
Total Assets	$	—	$	9	$	—	$	9
Liabilities:
Deferred compensation	$	—	$	375	$	—	$	375
Foreign currency hedges	—		1		—		1
Total Liabilities	$	—	$	376	$	—	$	376

At December 31, 2017	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	5	$	—	$	5
Total Assets	$	—	$	5	$	—	$	5
Liabilities:
Deferred compensation	$	—	$	363	$	—	$	363
Foreign currency hedges	—		10		—		10
Total Liabilities	$	—	$	373	$	—	$	373

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Segment and Revenue Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Revenues by Segment

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Entertainment	$	2,151		$	1,815		$	7,232		$	6,346
Cable Networks	569			840			1,769			1,954
Publishing	240			228			607			595
Local Media	434			397			1,269			1,218
Corporate/Eliminations	(131		)	(109		)	(387		)	(342		)
Total Revenues	$	3,263		$	3,171		$	10,490		$	9,771

Intercompany Revenues by Segment

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Intercompany Revenues:
Entertainment	$	135	$	111	$	394	$	348
Cable Networks	2		—		2		—
Local Media	3		4		13		10
Total Intercompany Revenues	$	140	$	115	$	409	$	358

Segment Operating Income (Loss) and Reconciliation to Net Earnings (Loss)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Segment Operating Income (Loss):
Entertainment	$	377		$	350		$	1,225		$	1,104
Cable Networks	248			296			734			801
Publishing	51			47			98			91
Local Media	124			106			370			358
Corporate	(64		)	(70		)	(216		)	(209		)
Restructuring and other corporate matters	(46		)	—			(90		)	—
Operating income	690			729			2,121			2,145
Interest expense	(115		)	(116		)	(349		)	(336		)
Interest income	12			17			43			45
Loss on early extinguishment of debt	—			(5		)	—			(5		)
Other items, net	(17		)	(19		)	(52		)	(56		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	570			606			1,763			1,793
Provision for income taxes	(64		)	(172		)	(312		)	(479		)
Equity in loss of investee companies, net of tax	(18		)	(16		)	(52		)	(45		)
Net earnings from continuing operations	488			418			1,399			1,269
Net earnings (loss) from discontinued operations, net of tax	—			174			—			(871		)
Net earnings	$	488		$	592		$	1,399		$	398

Depreciation and Amortization, Stock-based Compensation and Capital Expenditures

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Depreciation and Amortization:
Entertainment	$	31	$	29	$	92	$	85
Cable Networks	5		5		16		17
Publishing	1		2		4		5
Local Media	11		11		33		34
Corporate	8		8		23		25
Total Depreciation and Amortization	$	56	$	55	$	168	$	166

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018		2017
Stock-based Compensation:
Entertainment	$	17		$	16	$	48	$	48
Cable Networks	4			3		10		9
Publishing	1			1		3		3
Local Media	3			3		9		9
Corporate (a)	(11		)	21		35		60
Total Stock-based Compensation	$	14		$	44	$	105	$	129

(a) Included in the three and nine months endedSeptember 30, 2018 are forfeitures of $28 million and accelerations of $6 million relating to changes in senior management.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures:
Entertainment	$	19	$	25	$	56	$	63
Cable Networks	5		5		12		12
Publishing	2		1		4		2
Local Media	6		8		15		20
Corporate	5		5		12		15
Total Capital Expenditures	$	37	$	44	$	99	$	112

Assets by Segment

	At			At
	September 30, 2018			December 31, 2017
Assets:
Entertainment		$	12,763		$	12,626
Cable Networks		3,008			2,878
Publishing		1,047			906
Local Media		3,996			4,042
Corporate/Eliminations		242			378
Discontinued operations		12			13
Total Assets		$	21,068		$	20,843

Revenues by Type

The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Revenues by Type	2018		2017		2018		2017
Advertising	$	1,263	$	1,106	$	4,323	$	4,008
Content licensing and distribution:
Programming	693		632		2,417		2,166
Publishing	240		228		607		595
Affiliate and subscription fees	1,008		1,145		2,976		2,835
Other	59		60		167		167
Total Revenues	$	3,263	$	3,171	$	10,490	$	9,771

XML

Adoption of "Revenue From Contracts With Customers" (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Financial Statements Impacted by ASC 606

The following table presents the amount by which each applicable financial statement line item on the Consolidated Statement of Operations would have decreased for the three and nine months endedSeptember 30, 2018 if license renewals were recognized under previous accounting guidance.

	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Revenues		$	41		$	182
Operating expenses		19			82
Operating income		22			100
Less: Provision for income taxes		5			21
Net earnings from continuing operations		$	17		$	79
Diluted EPS from continuing operations		$	.04		$	.21

The following table presents the amount by which each applicable financial statement line item on the Consolidated Balance Sheet at September 30, 2018 would increase (decrease) if all of the above changes resulting from the adoption of ASC 606 were presented under previous accounting guidance.

Assets
Receivables, net	$	(89	)
Programming and other inventory (noncurrent)	$	(45	)
Other assets (noncurrent receivables)	$	386
Liabilities
Other current liabilities	$	(141	)
Deferred income tax liabilities, net	$	46
Participants’ share and royalties payable	$	165
Accumulated deficit	$	182

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

The following table sets forth details of net earnings (loss) from discontinued operations for the three and nine months endedSeptember 30, 2017.

	Three Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2017
Revenues		$	300			$	856
Costs and expenses:
Operating		113				307
Selling, general and administrative		120				370
Market value adjustment (a)		(100		)		980
Restructuring charges (b)		—				7
Total costs and expenses		133				1,664
Operating income (loss)		167				(808		)
Interest expense		(21		)		(60		)
Other items, net		—				(1		)
Earnings (loss) from discontinued operations		146				(869		)
Income tax (provision) benefit (c)		28				(2		)
Net earnings (loss) from discontinued operations, net of tax		$	174			$	(871	)

(a) During 2017, prior to its split-off, CBS Radio was measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The value of the transaction with Entercom was determined based on Entercom’s stock price at the closing of the transaction and therefore, the Company recorded a market value adjustment to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.

(b) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.

(c) Included in the three and nine months endedSeptember 30, 2017 is a tax benefit of $45 million from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statements of Operations

	Statement of Operations
	For the Three Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	47		$	2		$	3,214		$	—		$	3,263
Costs and expenses:
Operating	25			1			1,896			—			1,922
Selling, general and administrative	11			58			480			—			549
Depreciation and amortization	1			5			50			—			56
Restructuring and other corporate matters	—			46			—			—			46
Total costs and expenses	37			110			2,426			—			2,573
Operating income (loss)	10			(108		)	788			—			690
Interest (expense) income, net	(133		)	(130		)	160			—			(103		)
Other items, net	(7		)	(4		)	(6		)	—			(17		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(130		)	(242		)	942			—			570
Benefit (provision) for income taxes	27			50			(141		)	—			(64		)
Equity in earnings (loss) of investee companies, net of tax	591			410			(18		)	(1,001		)	(18		)
Net earnings	$	488		$	218		$	783		$	(1,001	)	$	488
Total comprehensive income	$	500		$	219		$	781		$	(1,000	)	$	500

	Statement of Operations
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	134		$	7		$	10,349		$	—		$	10,490
Costs and expenses:
Operating	73			3			6,430			—			6,506
Selling, general and administrative	36			190			1,379			—			1,605
Depreciation and amortization	3			16			149			—			168
Restructuring and other corporate matters	—			71			19			—			90
Total costs and expenses	112			280			7,977			—			8,369
Operating income (loss)	22			(273		)	2,372			—			2,121
Interest (expense) income, net	(396		)	(378		)	468			—			(306		)
Other items, net	(23		)	8			(37		)	—			(52		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(397		)	(643		)	2,803			—			1,763
Benefit (provision) for income taxes	82			133			(527		)	—			(312		)
Equity in earnings (loss) of investee companies, net of tax	1,714			1,166			(52		)	(2,880		)	(52		)
Net earnings	$	1,399		$	656		$	2,224		$	(2,880	)	$	1,399
Total comprehensive income	$	1,427		$	659		$	2,205		$	(2,864	)	$	1,427

	Statement of Operations
	For the Three Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	40		$	3		$	3,128		$	—		$	3,171
Costs and expenses:
Operating	23			1			1,838			—			1,862
Selling, general and administrative	13			59			453			—			525
Depreciation and amortization	1			6			48			—			55
Total costs and expenses	37			66			2,339			—			2,442
Operating income (loss)	3			(63		)	789			—			729
Interest (expense) income, net	(129		)	(123		)	153			—			(99		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(9		)	(11		)	1			—			(19		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(140		)	(197		)	943			—			606
Benefit (provision) for income taxes	43			62			(277		)	—			(172		)
Equity in earnings (loss) of investee companies, net of tax	689			369			(16		)	(1,058		)	(16		)
Net earnings from continuing operations	592			234			650			(1,058		)	418
Net earnings from discontinued operations, net of tax	—			—			174			—			174
Net earnings	$	592		$	234		$	824		$	(1,058	)	$	592
Total comprehensive income	$	607		$	229		$	830		$	(1,059	)	$	607

	Statement of Operations
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	124		$	8		$	9,639		$	—		$	9,771
Costs and expenses:
Operating	69			4			5,867			—			5,940
Selling, general and administrative	37			185			1,298			—			1,520
Depreciation and amortization	3			18			145			—			166
Total costs and expenses	109			207			7,310			—			7,626
Operating income (loss)	15			(199		)	2,329			—			2,145
Interest (expense) income, net	(378		)	(360		)	447			—			(291		)
Loss on early extinguishment of debt	(5		)	—			—			—			(5		)
Other items, net	(27		)	(42		)	13			—			(56		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(395		)	(601		)	2,789			—			1,793
Benefit (provision) for income taxes	120			184			(783		)	—			(479		)
Equity in earnings (loss) of investee companies, net of tax	673			1,062			(45		)	(1,735		)	(45		)
Net earnings from continuing operations	398			645			1,961			(1,735		)	1,269
Net loss from discontinued operations, net of tax	—			—			(871		)	—			(871		)
Net earnings	$	398		$	645		$	1,090		$	(1,735	)	$	398
Total comprehensive income	$	439		$	633		$	1,111		$	(1,744	)	$	439

Condensed Consolidating Balance Sheets

	Balance Sheet
	At September 30, 2018
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	62		$	—	$	120		$	—		$	182
Receivables, net	21			1		3,675			—			3,697
Programming and other inventory	2			2		1,824			—			1,828
Prepaid expenses and other current assets	16			31		323			(37		)	333
Total current assets	101			34		5,942			(37		)	6,040
Property and equipment	34			220		2,750			—			3,004
Less accumulated depreciation and amortization	17			179		1,586			—			1,782
Net property and equipment	17			41		1,164			—			1,222
Programming and other inventory	6			5		3,857			—			3,868
Goodwill	98			62		4,761			—			4,921
Intangible assets	—			—		2,650			—			2,650
Investments in consolidated subsidiaries	47,000			16,332		—			(63,332		)	—
Other assets	160			5		2,202			—			2,367
Intercompany	—			758		31,330			(32,088		)	—
Total Assets	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068
Liabilities and Stockholders’ Equity
Accounts payable	$	5		$	2	$	222		$	—		$	229
Participants’ share and royalties payable	—			—		1,110			—			1,110
Program rights	3			2		401			—			406
Commercial paper	374			—		—			—			374
Current portion of long-term debt	2			—		12			—			14
Accrued expenses and other current liabilities	356			282		1,259			(37		)	1,860
Total current liabilities	740			286		3,004			(37		)	3,993
Long-term debt	9,385			—		80			—			9,465
Other liabilities	2,655			225		2,216			—			5,096
Intercompany	32,088			—		—			(32,088		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,668			—		60,894			(60,894		)	43,668
Retained earnings (accumulated deficit)	(17,762		)	16,914		(10,262		)	(6,652		)	(17,762		)
Accumulated other comprehensive income (loss)	(634		)	20		58			(78		)	(634		)
	25,273			17,057		51,406			(68,463		)	25,273
Less treasury stock, at cost	22,759			331		4,800			(5,131		)	22,759
Total Stockholders’ Equity	2,514			16,726		46,606			(63,332		)	2,514
Total Liabilities and Stockholders’ Equity	$	47,382		$	17,237	$	51,906		$	(95,457	)	$	21,068

	Balance Sheet
	At December 31, 2017
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	173		$	—	$	112		$	—		$	285
Receivables, net	29			2		3,666			—			3,697
Programming and other inventory	3			3		1,822			—			1,828
Prepaid expenses and other current assets	130			28		341			(36		)	463
Total current assets	335			33		5,941			(36		)	6,273
Property and equipment	49			217		2,785			—			3,051
Less accumulated depreciation and amortization	27			163		1,581			—			1,771
Net property and equipment	22			54		1,204			—			1,280
Programming and other inventory	3			4		2,874			—			2,881
Goodwill	98			62		4,731			—			4,891
Intangible assets	—			—		2,666			—			2,666
Investments in consolidated subsidiaries	45,504			15,225		—			(60,729		)	—
Other assets	162			5		2,685			—			2,852
Intercompany	—			1,221		29,562			(30,783		)	—
Total Assets	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843
Liabilities and Stockholders’ Equity
Accounts payable	$	1		$	30	$	200		$	—		$	231
Participants’ share and royalties payable	—			—		986			—			986
Program rights	4			4		365			—			373
Commercial paper	679			—		—			—			679
Current portion of long-term debt	2			—		17			—			19
Accrued expenses and other current liabilities	352			269		1,099			(36		)	1,684
Total current liabilities	1,038			303		2,667			(36		)	3,972
Long-term debt	9,378			—		86			—			9,464
Other liabilities	2,947			234		2,248			—			5,429
Intercompany	30,783			—		—			(30,783		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,797			—		60,894			(60,894		)	43,797
Retained earnings (accumulated deficit)	(18,900		)	16,257		(12,224		)	(4,033		)	(18,900		)
Accumulated other comprehensive income (loss)	(662		)	18		76			(94		)	(662		)
	24,236			16,398		49,462			(65,860		)	24,236
Less treasury stock, at cost	22,258			331		4,800			(5,131		)	22,258
Total Stockholders’ Equity	1,978			16,067		44,662			(60,729		)	1,978
Total Liabilities and Stockholders’ Equity	$	46,124		$	16,604	$	49,663		$	(91,548	)	$	20,843

Condensed Consolidating Statements of Cash Flows

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2018
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(357	)	$	(183	)	$	1,720		$	—	$	1,180
Investing Activities:
Investments in and advances to investee companies	—			—			(76		)	—		(76		)
Capital expenditures	—			(12		)	(87		)	—		(99		)
Acquisitions	—			—			(29		)	—		(29		)
Other investing activities	8			—			—			—		8
Net cash flow provided by (used for) investing activities from continuing operations	8			(12		)	(192		)	—		(196		)
Net cash flow used for investing activities from discontinued operations	(23		)	—			—			—		(23		)
Net cash flow used for investing activities	(15		)	(12		)	(192		)	—		(219		)
Financing Activities:
Repayments of short-term debt borrowings, net	(305		)	—			—			—		(305		)
Payment of capital lease obligations	—			—			(12		)	—		(12		)
Payment of contingent consideration	—			—			(5		)	—		(5		)
Dividends	(208		)	—			—			—		(208		)
Purchase of Company common stock	(497		)	—			—			—		(497		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(59		)	—			—			—		(59		)
Proceeds from exercise of stock options	23			—			—			—		23
Other financing activities	(1		)	—			—			—		(1		)
Increase (decrease) in intercompany payables	1,308			195			(1,503		)	—		—
Net cash flow provided by (used for) financing activities	261			195			(1,520		)	—		(1,064		)
Net (decrease) increase in cash and cash equivalents	(111		)	—			8			—		(103		)
Cash and cash equivalents at beginning of period	173			—			112			—		285
Cash and cash equivalents at end of period	$	62		$	—		$	120		$	—	$	182

	Statement of Cash Flows
	For the Nine Months Ended September 30, 2017
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(851	)	$	(180	)	$	2,018		$	—	$	987
Investing Activities:
Investments in and advances to investee companies	—			—			(67		)	—		(67		)
Capital expenditures	—			(15		)	(97		)	—		(112		)
Acquisitions (including acquired television library)	—			—			(258		)	—		(258		)
Proceeds from sale of investments	—			—			10			—		10
Proceeds from dispositions	—			—			11			—		11
Other investing activities	17			—			—			—		17
Net cash flow provided by (used for) investing activities from continuing operations	17			(15		)	(401		)	—		(399		)
Net cash flow provided by (used for) investing activities from discontinued operations	1			(4		)	(15		)	—		(18		)
Net cash flow provided by (used for) investing activities	18			(19		)	(416		)	—		(417		)
Financing Activities:
Proceeds from short-term debt borrowings, net	140			—			—			—		140
Proceeds from issuance of senior notes	889			—			—			—		889
Repayment of senior notes	(701		)	—			—			—		(701		)
Proceeds from debt borrowings of CBS Radio	—			—			40			—		40
Repayment of debt borrowings of CBS Radio	—			—			(23		)	—		(23		)
Payment of capital lease obligations	—			—			(13		)	—		(13		)
Payment of contingent consideration	—			—			(7		)	—		(7		)
Dividends	(224		)	—			—			—		(224		)
Purchase of Company common stock	(1,111		)	—			—			—		(1,111		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(89		)	—			—			—		(89		)
Proceeds from exercise of stock options	81			—			—			—		81
Increase (decrease) in intercompany payables	1,545			199			(1,744		)	—		—
Net cash flow (used for) provided by financing activities	530			199			(1,747		)	—		(1,018		)
Net decrease in cash and cash equivalents	(303		)	—			(145		)	—		(448		)
Cash and cash equivalents at beginning of period (includes $24 million of discontinued operations cash)	321			—			301			—		622
Cash and cash equivalents at end of period (includes $30 million of discontinued operations cash)	$	18		$	—		$	156		$	—	$	174

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Basis of Presentation and Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 01, 2018
Revenues
Revenue recognized			$ 178
Additional Paid-In Capital
Dividends recorded on common stock	$ 68		$ 206	$ 221
Stock Options [Member]
Net Earnings (Loss) per Common Share
Antidilutive securities excluded from computation of earnings per share (in shares)	7	4	7	4
Other Assets [Member]
Revenues
Noncurrent receivables	$ 1,600		$ 1,600		$ 1,590
Accrued Expenses and Other Current Liabilities [Member]
Revenues
Deferred revenue	$ 259		$ 259		$ 284
Television Licensing [Member] | Minimum [Member]
Revenues
Collection term			1 year
Television Licensing [Member] | Maximum [Member]
Revenues
Collection term			5 years

XML

Basis of Presentation and Summary of Significant Accounting Policies (Unrecognized Revenues Under Contract) (Details) $ in Millions	Sep. 30, 2018 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Unrecognized revenue	$ 3,410
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Unrecognized revenue	$ 522
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Unrecognized revenue	$ 1,580
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Unrecognized revenue	$ 771
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Unrecognized revenue	$ 534
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction period

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Basis of Presentation and Summary of Significant Accounting Policies (Earnings per Share) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Weighted average shares for basic EPS (in shares)	375	401	378	405
Dilutive effect of shares issuable under stock-based compensation plans (in shares)	4	5	4	5
Weighted average shares for diluted EPS (in shares)	379	406	382	410

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Basis of Presentation and Summary of Significant Accounting Policies (Recently Adopted Accounting Pronouncements Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accumulated deficit	$ 17,762		$ 17,762			$ 18,900
Operating income	690	$ 729	2,121	$ 2,145
Other items, net	(17)	(19)	(52)	(56)
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating income		22		65
Other items, net		$ 22		$ 65
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | Other Items, Net [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net benefit cost	16		47
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ASC 606 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accumulated deficit	$ (182)		$ (182)		$ 261

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Stock-based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
RSUs and PSUs	$ 7	$ 38	$ 86	$ 109
Stock options	7	6	19	20
Stock-based compensation expense, before income taxes	14	44	105	129
Related tax benefit	(3)	(17)	(26)	(50)
Stock-based compensation expense, net of tax benefit	$ 11	$ 27	$ 79	$ 79

XML

Stock-based Compensation (Narrative) (Details) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of RSUs granted during the period (in shares) | shares		3
Weighted average grant date fair value - RSUs (in dollars per share) | $ / shares		$ 53.96
Number of stock options granted during the period (in shares) | shares		2
Unrecognized future expense of RSUs	$ 201	$ 201
Unrecognized future expense of stock options	40	$ 40
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period to expense unrecognized stock-based compensation expense		2 years 6 months
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period over which grants vest		1 year
Percent of payout on stock-based compensation award		0.00%
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period over which grants vest		4 years
Percent of payout on stock-based compensation award		120.00%
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period over which grants vest		4 years
Weighted average per unit exercise price - options (in dollars per share) | $ / shares		$ 54.32
Term until expiration from grant date - options		8 years
Weighted average period to expense unrecognized stock-based compensation expense		2 years 7 months 6 days
Restructuring and other corporate matters [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense, forfeitures	28	$ 28
Stock-based compensation expense, accelerations	$ 6	$ 6

XML

Restructuring and Other Corporate Matters (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended		33 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2018
Restructuring Reserve
Beginning balance			$ 66	$ 30
Charges		$ 25	25	63	$ 30
Settlements			(40)	(27)		$ (67)
Ending balance	$ 51		51	66	30	51
Other corporate matters, costs	46		65
Operating Segments [Member] | Entertainment [Member]
Restructuring Reserve
Beginning balance			45	17
Charges			6	44
Settlements			(26)	(16)
Ending balance	25		25	45	17	25
Operating Segments [Member] | Cable Networks [Member]
Restructuring Reserve
Beginning balance			1	4
Charges			0	0
Settlements			(1)	(3)
Ending balance	0		0	1	4	0
Operating Segments [Member] | Publishing [Member]
Restructuring Reserve
Beginning balance			3	1
Charges			1	5
Settlements			(2)	(3)
Ending balance	2		2	3	1	2
Operating Segments [Member] | Local Media [Member]
Restructuring Reserve
Beginning balance			14	6
Charges			11	12
Settlements			(7)	(4)
Ending balance	18		18	14	6	18
Corporate [Member]
Restructuring Reserve
Beginning balance			3	2
Charges			7	2
Settlements			(4)	(1)
Ending balance	$ 6		$ 6	3	2	6
Severance Costs [Member]
Restructuring Reserve
Charges		17		54	19
Settlements						(56)
Exiting Contractual Obligations [Member]
Restructuring Reserve
Charges		$ 8		$ 9	$ 11
Settlements						$ (11)

XML

Programming and Other Inventory (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Acquired program rights	$ 2,373	$ 2,234
Acquired television library	99	99
Internally produced programming:
Released	2,481	1,780
In process and other	680	543
Publishing, primarily finished goods	63	53
Total programming and other inventory	5,696	4,709
Less current portion	1,828	1,828
Total noncurrent programming and other inventory	$ 3,868	$ 2,881

XML

Related Parties (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) interest trustee	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) interest trustee	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
SMR Trust ownership in NAI	80.00%		80.00%
National Amusements, Inc. [Member]
Related Party Transaction [Line Items]
NAI ownership of CBS Corp. Class A Common Stock (percentage)	79.70%		79.70%
NAI ownership of CBS Corp. Class A and Class B Common Stock on a combined basis (percentage)	10.40%		10.40%
Number of trustees | trustee	7		7
Viacom Inc. [Member]
Related Party Transaction [Line Items]
Revenues from transactions with related parties	$ 76	$ 38	$ 105	$ 111
Expenses from transactions with related parties	9	4	21	13
Amounts due from Related Party
Receivables	40		40		$ 93
Other assets (Receivables, noncurrent)	25		25		11
Amounts due from related parties	65		65		104
Domestic and International Television Joint Ventures [Member]
Related Party Transaction [Line Items]
Revenues from transactions with related parties	14	$ 5	67	$ 54
Amounts due from Related Party
Amounts due from related parties	$ 23		$ 23		$ 27
Number of equity interests | interest	2		2

XML

Bank Financing and Debt (Schedule of Debt) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Commercial paper	$ 374	$ 679
Senior debt (2.30% - 7.875% due 2019 - 2045)	9,433	9,426
Obligations under capital leases	46	57
Total debt	9,853	10,162
Less commercial paper	374	679
Less current portion of long-term debt	14	19
Total long-term debt, net of current portion	9,465	9,464
Senior Debt [Member]
Debt Instrument [Line Items]
Net unamortized discount on senior debt	60	65
Unamortized deferred financing costs	44	47
Decrease to carrying value of debt relating to previously settled fair value hedges	4	3
Face value of debt	$ 9,540	$ 9,540
Senior Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rate	2.30%
Senior Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rate	7.875%

XML

Bank Financing and Debt (Narrative) (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Commercial paper	$ 374,000,000	$ 679,000,000
Commercial Paper [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity under credit facility	$ 2,500,000,000.0
Debt maturity, less than	90 days	90 days
Weighted average interest rate	2.41%	1.88%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity under credit facility	$ 2,500,000,000.0
Maximum consolidated leverage ratio	4.5
Consolidated leverage ratio	3.0
Period for Consolidated EBITDA	12 months
Amount borrowed under credit facility	$ 0
Availability under credit facility	2,490,000,000
Debt Due August 2019 [Member]
Debt Instrument [Line Items]
Face value of debt	$ 600,000,000

XML

Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 7	$ 7	$ 23	$ 22
Interest cost	38	48	112	143
Expected return on plan assets	(45)	(50)	(135)	(151)
Amortization of actuarial loss (gain)	24	26	72	77
Net periodic cost	24	31	72	91
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0	0	0
Interest cost	3	4	11	13
Expected return on plan assets	0	0	0	0
Amortization of actuarial loss (gain)	(4)	(5)	(13)	(16)
Net periodic cost	$ (1)	$ (1)	$ (2)	$ (3)

XML

Stockholders' Equity (Narrative) (Details) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
	Oct. 01, 2018 $ / shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2017 $ / shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares	May 17, 2018
Stockholders' Equity Note [Abstract]
Class B common stock repurchased under repurchase program (shares) | shares		1.8		9.4
Value of shares repurchased		$ 100		$ 500
Average price per share repurchased (in dollars per share) | $ / shares		$ 55.13		$ 52.94
Remaining authorization under share repurchase program		$ 2,560		$ 2,560
Dividends per common share (in dollars per share) | $ / shares		$ 0.18	$ 0.18	$ 0.54	$ 0.54
Dividends recorded on common stock		$ 68		$ 206	$ 221
Tax provision on net actuarial gain (loss) and prior service costs related to pension and other postretirement benefit plans				$ 14	$ 24
Pro rata stock dividend declared						0.5687
Subsequent Event [Member]
Class of Stock [Line Items]
Dividends paid per common share (in dollars per share) | $ / shares	$ 0.18

XML

Stockholders' Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
AOCI Attributable to Parent, Net of Tax
Accumulated other comprehensive income (loss) beginning balance			$ (662)	$ (767)
Other comprehensive income (loss) before reclassifications			(17)	4
Reclassifications to net earnings (loss)			45	37
Total other comprehensive income, net of tax	$ 12	$ 15	28	41
Accumulated other comprehensive income (loss) ending balance	(634)	(726)	(634)	(726)
Cumulative Translation Adjustments [Member]
AOCI Attributable to Parent, Net of Tax
Accumulated other comprehensive income (loss) beginning balance			159	151
Other comprehensive income (loss) before reclassifications			(17)	4
Reclassifications to net earnings (loss)			0	0
Total other comprehensive income, net of tax			(17)	4
Accumulated other comprehensive income (loss) ending balance	142	155	142	155
Net Actuarial Loss and Prior Service Cost [Member]
AOCI Attributable to Parent, Net of Tax
Accumulated other comprehensive income (loss) beginning balance			(821)	(918)
Other comprehensive income (loss) before reclassifications			0	0
Reclassifications to net earnings (loss)			45	37
Total other comprehensive income, net of tax			45	37
Accumulated other comprehensive income (loss) ending balance	$ (776)	$ (881)	$ (776)	$ (881)

XML

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Provision for income taxes, including interest and before other discrete items	$ 120	$ 187	$ 370	$ 548
Impact of tax law changes	(54)	0	(54)	0
Excess tax benefits from stock-based compensation	0	(10)	0	(41)
Other discrete items	(2)	(5)	(4)	(28)
Provision for income taxes	$ 64	$ 172	$ 312	$ 479
Effective income tax rate	11.20%	28.40%	17.70%	26.70%
Benefit from retroactive renewal	$ 69
Adjustment to provisional amount of transition tax on cumulative foreign earnings and profits	$ 15
Provisional income tax charge					$ 129
Estimated tax on repatriation of foreign earnings					407
Estimated tax on remeasurement of deferred income tax					$ 278

XML

Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Carrying value of senior debt	$ 9,433	$ 9,426
Cash Flow Hedging [Member] | Foreign exchange contracts [Member]
Derivative [Line Items]
Maximum derivative contract term	24 months
Notional amount of derivative	$ 391	410
Senior Debt [Member]
Derivative [Line Items]
Fair value of senior debt	$ 9,570	$ 10,160

XML

Financial Instruments and Fair Value Measurements (Gain (Losses) Recognized on Derivative Financial Instruments) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Foreign exchange contracts [Member]
Derivatives [Line Items]
Non-designated foreign exchange contracts	$ 0	$ (9)	$ 13	$ (29)

XML

Financial Instruments and Fair Value Measurements (Fair Value of Assets and Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Assets:
Foreign currency hedges	$ 9	$ 5
Total Assets	9	5
Liabilities:
Deferred compensation	375	363
Foreign currency hedges	1	10
Total Liabilities	376	373
Level 1 [Member]
Assets:
Foreign currency hedges	0	0
Total Assets	0	0
Liabilities:
Deferred compensation	0	0
Foreign currency hedges	0	0
Total Liabilities	0	0
Level 2 [Member]
Assets:
Foreign currency hedges	9	5
Total Assets	9	5
Liabilities:
Deferred compensation	375	363
Foreign currency hedges	1	10
Total Liabilities	376	373
Level 3 [Member]
Assets:
Foreign currency hedges	0	0
Total Assets	0	0
Liabilities:
Deferred compensation	0	0
Foreign currency hedges	0	0
Total Liabilities	$ 0	$ 0

XML

Segment and Revenue Information (Revenues) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 3,263	$ 3,171	$ 10,490	$ 9,771
Operating Segments [Member] | Entertainment [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	2,151	1,815	7,232	6,346
Operating Segments [Member] | Cable Networks [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	569	840	1,769	1,954
Operating Segments [Member] | Publishing [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	240	228	607	595
Operating Segments [Member] | Local Media [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	434	397	1,269	1,218
Corporate and Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	(131)	(109)	(387)	(342)
Intersegment Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	(140)	(115)	(409)	(358)
Intersegment Eliminations [Member] | Entertainment [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	(135)	(111)	(394)	(348)
Intersegment Eliminations [Member] | Cable Networks [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	(2)	0	(2)	0
Intersegment Eliminations [Member] | Local Media [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ (3)	$ (4)	$ (13)	$ (10)

XML

Segment and Revenue Information (Operating Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Operating income (loss)	$ 690	$ 729	$ 2,121	$ 2,145
Restructuring and other corporate matters	(46)	0	(90)	0
Interest expense	(115)	(116)	(349)	(336)
Interest income	12	17	43	45
Loss on early extinguishment of debt	0	(5)	0	(5)
Other items, net	(17)	(19)	(52)	(56)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	570	606	1,763	1,793
Provision for income taxes	(64)	(172)	(312)	(479)
Equity in loss of investee companies, net of tax	(18)	(16)	(52)	(45)
Net earnings from continuing operations	488	418	1,399	1,269
Net earnings (loss) from discontinued operations, net of tax	0	174	0	(871)
Net earnings	488	592	1,399	398
Operating Segments [Member] | Entertainment [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	377	350	1,225	1,104
Operating Segments [Member] | Cable Networks [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	248	296	734	801
Operating Segments [Member] | Publishing [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	51	47	98	91
Operating Segments [Member] | Local Media [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	124	106	370	358
Corporate [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	(64)	(70)	(216)	(209)
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Restructuring and other corporate matters	$ (46)	$ 0	$ (90)	$ 0

XML

Segment and Revenue Information (Depreciation and Amortization) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 56	$ 55	$ 168	$ 166
Operating Segments [Member] | Entertainment [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	31	29	92	85
Operating Segments [Member] | Cable Networks [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	5	5	16	17
Operating Segments [Member] | Publishing [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	1	2	4	5
Operating Segments [Member] | Local Media [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	11	11	33	34
Corporate [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 8	$ 8	$ 23	$ 25

XML

Segment and Revenue Information (Stock-based Compensation) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Stock-based compensation	$ 14	$ 44	$ 105	$ 129
Operating Segments [Member] | Entertainment [Member]
Segment Reporting Information [Line Items]
Stock-based compensation	17	16	48	48
Operating Segments [Member] | Cable Networks [Member]
Segment Reporting Information [Line Items]
Stock-based compensation	4	3	10	9
Operating Segments [Member] | Publishing [Member]
Segment Reporting Information [Line Items]
Stock-based compensation	1	1	3	3
Operating Segments [Member] | Local Media [Member]
Segment Reporting Information [Line Items]
Stock-based compensation	3	3	9	9
Corporate [Member]
Segment Reporting Information [Line Items]
Stock-based compensation	(11)	$ 21	35	$ 60
Stock-based compensation expense, forfeitures	28		28
Stock-based compensation expense, accelerations	$ 6		$ 6

XML

Segment and Revenue Information (Capital Expenditures) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Capital expenditures	$ 37	$ 44	$ 99	$ 112
Operating Segments [Member] | Entertainment [Member]
Segment Reporting Information [Line Items]
Capital expenditures	19	25	56	63
Operating Segments [Member] | Cable Networks [Member]
Segment Reporting Information [Line Items]
Capital expenditures	5	5	12	12
Operating Segments [Member] | Publishing [Member]
Segment Reporting Information [Line Items]
Capital expenditures	2	1	4	2
Operating Segments [Member] | Local Media [Member]
Segment Reporting Information [Line Items]
Capital expenditures	6	8	15	20
Corporate [Member]
Segment Reporting Information [Line Items]
Capital expenditures	$ 5	$ 5	$ 12	$ 15

XML

Segment and Revenue Information (Assets) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Assets	$ 21,068	$ 20,843
Assets of discontinued operations	12	13
Operating Segments [Member] | Entertainment [Member]
Segment Reporting Information [Line Items]
Assets	12,763	12,626
Operating Segments [Member] | Cable Networks [Member]
Segment Reporting Information [Line Items]
Assets	3,008	2,878
Operating Segments [Member] | Publishing [Member]
Segment Reporting Information [Line Items]
Assets	1,047	906
Operating Segments [Member] | Local Media [Member]
Segment Reporting Information [Line Items]
Assets	3,996	4,042
Corporate and Eliminations [Member]
Segment Reporting Information [Line Items]
Assets	$ 242	$ 378

XML

Segment and Revenue Information (Revenues by Type) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 3,263	$ 3,171	$ 10,490	$ 9,771
Advertising [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,263	1,106	4,323	4,008
Programming [Member]
Disaggregation of Revenue [Line Items]
Revenue	693	632	2,417	2,166
Publishing [Member]
Disaggregation of Revenue [Line Items]
Revenue	240	228	607	595
Affiliate and Subscription Fees [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,008	1,145	2,976	2,835
Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 59	$ 60	$ 167	$ 167

XML

Adoption of "Revenue From Contracts With Customers" (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit	$ 17,762,000,000		$ 17,762,000,000			$ 18,900,000,000
Revenue	3,263,000,000	$ 3,171,000,000	10,490,000,000	$ 9,771,000,000
Operating expenses	1,922,000,000	1,862,000,000	6,506,000,000	5,940,000,000
Operating income	690,000,000	$ 729,000,000	2,121,000,000	$ 2,145,000,000
ASC 606 [Member] | Other Current Liabilities [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales return reserve	116,000,000		116,000,000
ASC 606 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit	(182,000,000)		(182,000,000)		$ 261,000,000
Distribution Arrangements [Member] | ASC 606 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	93,000,000		217,000,000
Operating expenses	$ 93,000,000		217,000,000
Operating income			$ 0

XML

Adoption of "Revenue From Contracts With Customers" (Statement of Operations) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenues	$ 3,263	$ 3,171	$ 10,490	$ 9,771
Operating expenses	1,922	1,862	6,506	5,940
Operating income	690	729	2,121	2,145
Less: Provision for income taxes	64	172	312	479
Net earnings from continuing operations	$ 488	$ 418	$ 1,399	$ 1,269
Diluted net earnings from continuing operations (in dollars per share)	$ 1.29	$ 1.03	$ 3.66	$ 3.10
Renewal of Licensing Agreements [Member] | ASC 606 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenues	$ 41		$ 182
Operating expenses	19		82
Operating income	22		100
Less: Provision for income taxes	5		21
Net earnings from continuing operations	$ 17		$ 79
Diluted net earnings from continuing operations (in dollars per share)	$ 0.04		$ 0.21

XML

Adoption of "Revenue From Contracts With Customers" (Balance Sheet) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
ASSETS
Receivables, net	$ 3,697		$ 3,697
Programming and other inventory	3,868		2,881
Other assets (noncurrent receivables)	2,367		2,852
Liabilities
Other current liabilities	1,536		1,341
Deferred income tax liabilities, net	563		480
Accumulated deficit	(17,762)		$ (18,900)
ASC 606 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
ASSETS
Receivables, net	(89)
Programming and other inventory	(45)
Other assets (noncurrent receivables)	386
Liabilities
Other current liabilities	(141)
Deferred income tax liabilities, net	46
Participants’ share and royalties payable	165
Accumulated deficit	$ 182	$ (261)

XML

Discontinued Operations (Narrative) (Details) - CBS Radio [Member] - Discontinued Operations [Member] shares in Millions	Nov. 16, 2017 shares
Common Class B [Member]
Discontinued Operations [Line Items]
Shares received in exchange offer	17.9
Common Stock [Member]
Discontinued Operations [Line Items]
Shares exchanged in exchange offer	101.4

XML

Discontinued Operations (Net Earnings (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Costs and expenses:
Net earnings (loss) from discontinued operations, net of tax	$ 0	$ 174	$ 0	$ (871)
CBS Radio [Member] | Discontinued Operations [Member]
Discontinued Operations [Line Items]
Revenues		300		856
Costs and expenses:
Operating		113		307
Selling, general and administrative		120		370
Market value adjustment		(100)		980
Restructuring charges		0		7
Total costs and expenses		133		1,664
Operating income (loss)		167		(808)
Interest expense		(21)		(60)
Other items, net		0		(1)
Earnings (loss) from discontinued operations		146		(869)
Income tax (provision) benefit		28		(2)
Net earnings (loss) from discontinued operations, net of tax		174		(871)
Other [Member] | Discontinued Operations [Member]
Costs and expenses:
Income tax (provision) benefit		$ 45		$ 45

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Commitments and Contingencies (Details) $ in Millions		1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 09, 2018 USD ($)	Oct. 31, 2018 USD ($)	Sep. 30, 2018 USD ($) claim	Sep. 30, 2018 USD ($) claim	Dec. 31, 2017 USD ($) claim	Dec. 31, 2016 USD ($)	May 17, 2018	Sep. 30, 2017 claim
Commitments and Contingencies Disclosure [Abstract]
Outstanding letters of credit and surety bonds			$ 107	$ 107
Pro rata stock dividend declared							0.5687
Loss Contingencies [Line Items]
Charitable contribution	$ 20
Costs for settlement and defense of asbestos claims, net of insurance recoveries and taxes					$ 57	$ 48
Asbestos Claims [Member]
Loss Contingencies [Line Items]
Number of pending asbestos claims | claim			31,500	31,500	31,660			32,760
Number of new asbestos claims | claim			770
Number of asbestos claims closed or moved to inactive docket | claim			1,020
Subsequent Event [Member]
Loss Contingencies [Line Items]
Contributions to grantor trust		$ 120
Restructuring and other corporate matters [Member]
Loss Contingencies [Line Items]
Charitable contribution			$ 20	$ 20

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Condensed Consolidating Financial Statements (Statement of Operations) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Income Statements, Captions [Line Items]
Revenues	$ 3,263	$ 3,171	$ 10,490	$ 9,771
Costs and expenses:
Operating	1,922	1,862	6,506	5,940
Selling, general and administrative	549	525	1,605	1,520
Depreciation and amortization	56	55	168	166
Restructuring and other corporate matters	46	0	90	0
Total costs and expenses	2,573	2,442	8,369	7,626
Operating income (loss)	690	729	2,121	2,145
Interest (expense) income, net	(103)	(99)	(306)	(291)
Loss on early extinguishment of debt	0	(5)	0	(5)
Other items, net	(17)	(19)	(52)	(56)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	570	606	1,763	1,793
Benefit (provision) for income taxes	(64)	(172)	(312)	(479)
Equity in earnings (loss) of investee companies, net of tax	(18)	(16)	(52)	(45)
Net earnings from continuing operations	488	418	1,399	1,269
Net earnings (loss) from discontinued operations, net of tax	0	174	0	(871)
Net earnings	488	592	1,399	398
Total comprehensive income	500	607	1,427	439
Eliminations [Member]
Condensed Income Statements, Captions [Line Items]
Revenues	0	0	0	0
Costs and expenses:
Operating	0	0	0	0
Selling, general and administrative	0	0	0	0
Depreciation and amortization	0	0	0	0
Restructuring and other corporate matters	0		0
Total costs and expenses	0	0	0	0
Operating income (loss)	0	0	0	0
Interest (expense) income, net	0	0	0	0
Loss on early extinguishment of debt		0		0
Other items, net	0	0	0	0
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	0	0	0	0
Benefit (provision) for income taxes	0	0	0	0
Equity in earnings (loss) of investee companies, net of tax	(1,001)	(1,058)	(2,880)	(1,735)
Net earnings from continuing operations		(1,058)		(1,735)
Net earnings (loss) from discontinued operations, net of tax		0		0
Net earnings	(1,001)	(1,058)	(2,880)	(1,735)
Total comprehensive income	(1,000)	(1,059)	(2,864)	(1,744)
CBS Corp. [Member]
Condensed Income Statements, Captions [Line Items]
Revenues	47	40	134	124
Costs and expenses:
Operating	25	23	73	69
Selling, general and administrative	11	13	36	37
Depreciation and amortization	1	1	3	3
Restructuring and other corporate matters	0		0
Total costs and expenses	37	37	112	109
Operating income (loss)	10	3	22	15
Interest (expense) income, net	(133)	(129)	(396)	(378)
Loss on early extinguishment of debt		(5)		(5)
Other items, net	(7)	(9)	(23)	(27)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(130)	(140)	(397)	(395)
Benefit (provision) for income taxes	27	43	82	120
Equity in earnings (loss) of investee companies, net of tax	591	689	1,714	673
Net earnings from continuing operations		592		398
Net earnings (loss) from discontinued operations, net of tax		0		0
Net earnings	488	592	1,399	398
Total comprehensive income	500	607	1,427	439
CBS Operations Inc. [Member]
Condensed Income Statements, Captions [Line Items]
Revenues	2	3	7	8
Costs and expenses:
Operating	1	1	3	4
Selling, general and administrative	58	59	190	185
Depreciation and amortization	5	6	16	18
Restructuring and other corporate matters	46		71
Total costs and expenses	110	66	280	207
Operating income (loss)	(108)	(63)	(273)	(199)
Interest (expense) income, net	(130)	(123)	(378)	(360)
Loss on early extinguishment of debt		0		0
Other items, net	(4)	(11)	8	(42)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(242)	(197)	(643)	(601)
Benefit (provision) for income taxes	50	62	133	184
Equity in earnings (loss) of investee companies, net of tax	410	369	1,166	1,062
Net earnings from continuing operations		234		645
Net earnings (loss) from discontinued operations, net of tax		0		0
Net earnings	218	234	656	645
Total comprehensive income	219	229	659	633
Non-Guarantor Affiliates [Member]
Condensed Income Statements, Captions [Line Items]
Revenues	3,214	3,128	10,349	9,639
Costs and expenses:
Operating	1,896	1,838	6,430	5,867
Selling, general and administrative	480	453	1,379	1,298
Depreciation and amortization	50	48	149	145
Restructuring and other corporate matters	0		19
Total costs and expenses	2,426	2,339	7,977	7,310
Operating income (loss)	788	789	2,372	2,329
Interest (expense) income, net	160	153	468	447
Loss on early extinguishment of debt		0		0
Other items, net	(6)	1	(37)	13
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	942	943	2,803	2,789
Benefit (provision) for income taxes	(141)	(277)	(527)	(783)
Equity in earnings (loss) of investee companies, net of tax	(18)	(16)	(52)	(45)
Net earnings from continuing operations		650		1,961
Net earnings (loss) from discontinued operations, net of tax		174		(871)
Net earnings	783	824	2,224	1,090
Total comprehensive income	$ 781	$ 830	$ 2,205	$ 1,111

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Condensed Consolidating Financial Statements (Balance Sheet) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 182	$ 285
Receivables, net	3,697	3,697
Programming and other inventory	1,828	1,828
Prepaid expenses and other current assets	333	463
Total current assets	6,040	6,273
Property and equipment	3,004	3,051
Less accumulated depreciation and amortization	1,782	1,771
Net property and equipment	1,222	1,280
Programming and other inventory	3,868	2,881
Goodwill	4,921	4,891
Intangible assets	2,650	2,666
Investments in consolidated subsidiaries	0	0
Other assets	2,367	2,852
Intercompany	0	0
Total Assets	21,068	20,843
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	229	231
Participants’ share and royalties payable	1,110	986
Program rights	406	373
Commercial paper	374	679
Current portion of long-term debt	14	19
Accrued expenses and other current liabilities	1,860	1,684
Total current liabilities	3,993	3,972
Long-term debt	9,465	9,464
Other liabilities	5,096	5,429
Intercompany	0	0
Stockholders’ Equity:
Preferred stock	0	0
Common stock	1	1
Additional paid-in capital	43,668	43,797
Retained earnings (accumulated deficit)	(17,762)	(18,900)
Accumulated other comprehensive income (loss)	(634)	(662)	$ (726)	$ (767)
Stockholders' equity including treasury stock	25,273	24,236
Less treasury stock, at cost	22,759	22,258
Total Stockholders’ Equity	2,514	1,978
Total Liabilities and Stockholders’ Equity	21,068	20,843
Eliminations [Member]
ASSETS
Cash and cash equivalents	0	0
Receivables, net	0	0
Programming and other inventory	0	0
Prepaid expenses and other current assets	(37)	(36)
Total current assets	(37)	(36)
Property and equipment	0	0
Less accumulated depreciation and amortization	0	0
Net property and equipment	0	0
Programming and other inventory	0	0
Goodwill	0	0
Intangible assets	0	0
Investments in consolidated subsidiaries	(63,332)	(60,729)
Other assets	0	0
Intercompany	(32,088)	(30,783)
Total Assets	(95,457)	(91,548)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	0	0
Participants’ share and royalties payable	0	0
Program rights	0	0
Commercial paper	0	0
Current portion of long-term debt	0	0
Accrued expenses and other current liabilities	(37)	(36)
Total current liabilities	(37)	(36)
Long-term debt	0	0
Other liabilities	0	0
Intercompany	(32,088)	(30,783)
Stockholders’ Equity:
Preferred stock	(126)	(126)
Common stock	(713)	(713)
Additional paid-in capital	(60,894)	(60,894)
Retained earnings (accumulated deficit)	(6,652)	(4,033)
Accumulated other comprehensive income (loss)	(78)	(94)
Stockholders' equity including treasury stock	(68,463)	(65,860)
Less treasury stock, at cost	(5,131)	(5,131)
Total Stockholders’ Equity	(63,332)	(60,729)
Total Liabilities and Stockholders’ Equity	(95,457)	(91,548)
CBS Corp. [Member]
ASSETS
Cash and cash equivalents	62	173
Receivables, net	21	29
Programming and other inventory	2	3
Prepaid expenses and other current assets	16	130
Total current assets	101	335
Property and equipment	34	49
Less accumulated depreciation and amortization	17	27
Net property and equipment	17	22
Programming and other inventory	6	3
Goodwill	98	98
Intangible assets	0	0
Investments in consolidated subsidiaries	47,000	45,504
Other assets	160	162
Intercompany	0	0
Total Assets	47,382	46,124
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	5	1
Participants’ share and royalties payable	0	0
Program rights	3	4
Commercial paper	374	679
Current portion of long-term debt	2	2
Accrued expenses and other current liabilities	356	352
Total current liabilities	740	1,038
Long-term debt	9,385	9,378
Other liabilities	2,655	2,947
Intercompany	32,088	30,783
Stockholders’ Equity:
Preferred stock	0	0
Common stock	1	1
Additional paid-in capital	43,668	43,797
Retained earnings (accumulated deficit)	(17,762)	(18,900)
Accumulated other comprehensive income (loss)	(634)	(662)
Stockholders' equity including treasury stock	25,273	24,236
Less treasury stock, at cost	22,759	22,258
Total Stockholders’ Equity	2,514	1,978
Total Liabilities and Stockholders’ Equity	47,382	46,124
CBS Operations Inc. [Member]
ASSETS
Cash and cash equivalents	0	0
Receivables, net	1	2
Programming and other inventory	2	3
Prepaid expenses and other current assets	31	28
Total current assets	34	33
Property and equipment	220	217
Less accumulated depreciation and amortization	179	163
Net property and equipment	41	54
Programming and other inventory	5	4
Goodwill	62	62
Intangible assets	0	0
Investments in consolidated subsidiaries	16,332	15,225
Other assets	5	5
Intercompany	758	1,221
Total Assets	17,237	16,604
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	2	30
Participants’ share and royalties payable	0	0
Program rights	2	4
Commercial paper	0	0
Current portion of long-term debt	0	0
Accrued expenses and other current liabilities	282	269
Total current liabilities	286	303
Long-term debt	0	0
Other liabilities	225	234
Intercompany	0	0
Stockholders’ Equity:
Preferred stock	0	0
Common stock	123	123
Additional paid-in capital	0	0
Retained earnings (accumulated deficit)	16,914	16,257
Accumulated other comprehensive income (loss)	20	18
Stockholders' equity including treasury stock	17,057	16,398
Less treasury stock, at cost	331	331
Total Stockholders’ Equity	16,726	16,067
Total Liabilities and Stockholders’ Equity	17,237	16,604
Non-Guarantor Affiliates [Member]
ASSETS
Cash and cash equivalents	120	112
Receivables, net	3,675	3,666
Programming and other inventory	1,824	1,822
Prepaid expenses and other current assets	323	341
Total current assets	5,942	5,941
Property and equipment	2,750	2,785
Less accumulated depreciation and amortization	1,586	1,581
Net property and equipment	1,164	1,204
Programming and other inventory	3,857	2,874
Goodwill	4,761	4,731
Intangible assets	2,650	2,666
Investments in consolidated subsidiaries	0	0
Other assets	2,202	2,685
Intercompany	31,330	29,562
Total Assets	51,906	49,663
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	222	200
Participants’ share and royalties payable	1,110	986
Program rights	401	365
Commercial paper	0	0
Current portion of long-term debt	12	17
Accrued expenses and other current liabilities	1,259	1,099
Total current liabilities	3,004	2,667
Long-term debt	80	86
Other liabilities	2,216	2,248
Intercompany	0	0
Stockholders’ Equity:
Preferred stock	126	126
Common stock	590	590
Additional paid-in capital	60,894	60,894
Retained earnings (accumulated deficit)	(10,262)	(12,224)
Accumulated other comprehensive income (loss)	58	76
Stockholders' equity including treasury stock	51,406	49,462
Less treasury stock, at cost	4,800	4,800
Total Stockholders’ Equity	46,606	44,662
Total Liabilities and Stockholders’ Equity	$ 51,906	$ 49,663

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Condensed Consolidating Financial Statements (Statement of Cash Flow) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2016
Condensed Financial Statements, Captions [Line Items]
Net cash flow (used for) provided by operating activities			$ 1,180	$ 987
Investing Activities:
Investments in and advances to investee companies			(76)	(67)
Capital expenditures	$ (37)	$ (44)	(99)	(112)
Acquisitions (including acquired television library)			(29)	(258)
Proceeds from sale of investments			0	10
Proceeds from dispositions			0	11
Other investing activities			8	17
Net cash flow used for investing activities from continuing operations			(196)	(399)
Net cash flow used for investing activities from discontinued operations			(23)	(18)
Net cash flow used for investing activities			(219)	(417)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net			(305)	140
Proceeds from issuance of senior notes			0	889
Repayment of senior notes			0	(701)
Proceeds from debt borrowings of CBS Radio			0	40
Repayment of debt borrowings of CBS Radio			0	(23)
Payment of capital lease obligations			(12)	(13)
Payment of contingent consideration			(5)	(7)
Dividends			(208)	(224)
Purchase of Company common stock			(497)	(1,111)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation			(59)	(89)
Proceeds from exercise of stock options			23	81
Other financing activities			(1)	0
Increase (decrease) in intercompany payables			0	0
Net cash flow (used for) provided by financing activities			(1,064)	(1,018)
Net decrease in cash and cash equivalents			(103)	(448)
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)			285	622
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	182	174	182	174
Cash and cash equivalents of discontinued operations		30		30	$ 24
Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash flow (used for) provided by operating activities			0	0
Investing Activities:
Investments in and advances to investee companies			0	0
Capital expenditures			0	0
Acquisitions (including acquired television library)			0	0
Proceeds from sale of investments				0
Proceeds from dispositions				0
Other investing activities			0	0
Net cash flow used for investing activities from continuing operations			0	0
Net cash flow used for investing activities from discontinued operations			0	0
Net cash flow used for investing activities			0	0
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net			0	0
Proceeds from issuance of senior notes				0
Repayment of senior notes				0
Proceeds from debt borrowings of CBS Radio				0
Repayment of debt borrowings of CBS Radio				0
Payment of capital lease obligations			0	0
Payment of contingent consideration			0	0
Dividends			0	0
Purchase of Company common stock			0	0
Payment of payroll taxes in lieu of issuing shares for stock-based compensation			0	0
Proceeds from exercise of stock options			0	0
Other financing activities			0
Increase (decrease) in intercompany payables			0	0
Net cash flow (used for) provided by financing activities			0	0
Net decrease in cash and cash equivalents			0	0
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)			0	0
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	0	0	0	0
CBS Corp. [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash flow (used for) provided by operating activities			(357)	(851)
Investing Activities:
Investments in and advances to investee companies			0	0
Capital expenditures			0	0
Acquisitions (including acquired television library)			0	0
Proceeds from sale of investments				0
Proceeds from dispositions				0
Other investing activities			8	17
Net cash flow used for investing activities from continuing operations			8	17
Net cash flow used for investing activities from discontinued operations			(23)	1
Net cash flow used for investing activities			(15)	18
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net			(305)	140
Proceeds from issuance of senior notes				889
Repayment of senior notes				(701)
Proceeds from debt borrowings of CBS Radio				0
Repayment of debt borrowings of CBS Radio				0
Payment of capital lease obligations			0	0
Payment of contingent consideration			0	0
Dividends			(208)	(224)
Purchase of Company common stock			(497)	(1,111)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation			(59)	(89)
Proceeds from exercise of stock options			23	81
Other financing activities			(1)
Increase (decrease) in intercompany payables			1,308	1,545
Net cash flow (used for) provided by financing activities			261	530
Net decrease in cash and cash equivalents			(111)	(303)
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)			173	321
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	62	18	62	18
CBS Operations Inc. [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash flow (used for) provided by operating activities			(183)	(180)
Investing Activities:
Investments in and advances to investee companies			0	0
Capital expenditures			(12)	(15)
Acquisitions (including acquired television library)			0	0
Proceeds from sale of investments				0
Proceeds from dispositions				0
Other investing activities			0	0
Net cash flow used for investing activities from continuing operations			(12)	(15)
Net cash flow used for investing activities from discontinued operations			0	(4)
Net cash flow used for investing activities			(12)	(19)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net			0	0
Proceeds from issuance of senior notes				0
Repayment of senior notes				0
Proceeds from debt borrowings of CBS Radio				0
Repayment of debt borrowings of CBS Radio				0
Payment of capital lease obligations			0	0
Payment of contingent consideration			0	0
Dividends			0	0
Purchase of Company common stock			0	0
Payment of payroll taxes in lieu of issuing shares for stock-based compensation			0	0
Proceeds from exercise of stock options			0	0
Other financing activities			0
Increase (decrease) in intercompany payables			195	199
Net cash flow (used for) provided by financing activities			195	199
Net decrease in cash and cash equivalents			0	0
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)			0	0
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	0	0	0	0
Non-Guarantor Affiliates [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash flow (used for) provided by operating activities			1,720	2,018
Investing Activities:
Investments in and advances to investee companies			(76)	(67)
Capital expenditures			(87)	(97)
Acquisitions (including acquired television library)			(29)	(258)
Proceeds from sale of investments				10
Proceeds from dispositions				11
Other investing activities			0	0
Net cash flow used for investing activities from continuing operations			(192)	(401)
Net cash flow used for investing activities from discontinued operations			0	(15)
Net cash flow used for investing activities			(192)	(416)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net			0	0
Proceeds from issuance of senior notes				0
Repayment of senior notes				0
Proceeds from debt borrowings of CBS Radio				40
Repayment of debt borrowings of CBS Radio				(23)
Payment of capital lease obligations			(12)	(13)
Payment of contingent consideration			(5)	(7)
Dividends			0	0
Purchase of Company common stock			0	0
Payment of payroll taxes in lieu of issuing shares for stock-based compensation			0	0
Proceeds from exercise of stock options			0	0
Other financing activities			0
Increase (decrease) in intercompany payables			(1,503)	(1,744)
Net cash flow (used for) provided by financing activities			(1,520)	(1,747)
Net decrease in cash and cash equivalents			8	(145)
Cash and cash equivalents at beginning of period (includes $24 (2017) of discontinued operations cash)			112	301
Cash and cash equivalents at end of period (includes $30 (2017) of discontinued operations cash)	$ 120	$ 156	$ 120	$ 156