CBS Corporation is a mass media company with constituent parts that reach back to the beginnings of the broadcast industry as well as newer businesses that operate on the leading edge of the media industry. The Company through its many and varied operations combines broad reach with well-positioned local businesses all of which provide it with an extensive distribution network by which it serves audiences and advertisers in states and key international markets. It has operations in virtually every field of media and entertainment including broadcast television (CBS and UPN) cable television (Showtime) local television (CBS Television Stations) television production and syndication (CBS Paramount Television and King World) radio (CBS Radio) advertising on out-of-home media (CBS Outdoor) publishing (Simon & Schuster) theme parks (Paramount Parks) digital media (CBS Digital Media Group and CSTV Networks) and consumer products (CBS Consumer Products). CBS Corp. has a market cap of $5.47 billion; its shares were traded at around $8.06 with a P/E ratio of 5.1 and P/S ratio of 0.4. The dividend yield of CBS Corp. stocks is 2.6%.
Highlight of Business Operations:for the three months ended March 31, 2009 primarily due to the impact of the acquisition of CNET and the absence of the first quarter 2008 settlement of an international receivable claim, partially offset by lower expenses resulting from restructuring and cost-savings initiatives implemented across the Company's segments, and the impact of foreign exchange rate changes. Pension and postretirement benefits costs increased $22.2 million to $57.0 million for the three months ended March 31, 2009 from $34.8 million for the same prior-year period due to pension plan asset performance in 2008. SG&A expenses as a percentage of revenues were 19% and 16% for the three months ended March 31, 2009 and 2008, respectively.
During 2008, as a result of weakened economic conditions, the Company reduced its cost structure across all of its segments. Accordingly, the Company recorded total restructuring charges of $136.7 million, of which $44.9 million was recorded during the first quarter of 2008. The charges reflect $127.5 million of severance costs and $9.2 million of contract termination and other associated costs. As of March 31, 2009, the Company paid $73.3 million of severance costs and $2.3 million of the contract termination and other associated costs, of which $28.8 million and $.8 million, respectively, was paid during the three months ended March 31, 2009. The following table sets forth the activity for these restructuring charges by segment.
For the three months ended March 31, 2009, interest expense decreased $5.5 million to $133.2 million from $138.7 million for the same prior-year period primarily reflecting the repurchases of a portion of the Company's 7.70% senior notes due 2010 during the fourth quarter of 2008 and the first quarter of 2009. The Company had $7.13 billion of principal amounts of debt outstanding (including current maturities) at both March 31, 2009 and 2008, at weighted average interest rates of 6.8% and 7.1%, respectively.
For the three months ended March 31, 2009, interest income decreased $15.3 million to $2.3 million from $17.6 million for the same prior-year period reflecting lower average cash balances and lower interest rates.
For the three months ended March 31, 2008, "Other items, net" reflected a net loss of $.2 million consisting of losses of $4.2 million associated with securitizing accounts receivables partially offset by foreign exchange translation gains of $4.0 million.
For the three months ended March 31, 2009, Television operating income decreased $220.1 million, or 54%, to $184.7 million and OIBDA decreased $219.7 million, or 49%, to $228.7 million primarily due to lower advertising revenues and lower profits from syndication sales partially offset by the absence of the first quarter 2008 restructuring charges of $34.9 million and lower expenses associated with restructuring and cost-savings initiatives.
Read the The complete ReportCBS is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, NWQ Managers of NWQ Investment Management Co, David Williams of Columbia Value and Restructuring Fund, David Williams of Columbia Value and Restructuring Fund, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Richard Aster Jr of Meridian Fund, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, David Dreman of Dreman Value Management, Richard Aster Jr of Meridian Fund, David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management.