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Q1 2011 Earnings Call

May 03, 2011 4:30 pm ET


Sumner Redstone - Founder and Executive Chairman

Leslie Moonves - Chief Executive Officer, President and Director

Adam Townsend - Executive Vice President of Investor Relations

Joseph Ianniello - Chief Financial Officer and Executive Vice President


Michael Morris - Davenport & Company, LLC

Jessica Cohen - BofA Merrill Lynch

Laura Martin - Needham & Company, LLC

Anthony DiClemente - Barclays Capital

Benjamin Swinburne - Morgan Stanley

Michael Nathanson - Nomura Securities Co. Ltd.

Marci Ryvicker - Wells Fargo Securities, LLC

David Miller - Caris & Company

David Joyce - Miller Tabak + Co., LLC

Douglas Mitchelson - Deutsche Bank AG

John Janedis - UBS Investment Bank



Good day, everyone, and welcome to the CBS Corporation First Quarter 2011 Earnings Release Teleconference. Today's call is being recorded. At this time, I'd like to turn the call over to the Executive Vice President of Investor Relations, Mr. Adam Townsend. Please go ahead.

Adam Townsend

Good afternoon, everyone, and welcome to our first quarter 2011 earnings call. Joining me for today's discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, President and CEO; and Joe Ianniello, Executive Vice President and CFO. Sumner will have opening remarks, and we'll turn the call over to Les and Joe, who will discuss the strategic and financial results. We will then open the call up to questions.

Please note that during today's conference call, financial results and comparisons, with the exception of revenue, will be discussed on an adjusted basis unless otherwise specified. Reconciliations for non-GAAP financial information related to this call can be found in our earnings release or on our website. In addition, statements in this conference call relating to matters which are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause results to differ. Risks and uncertainties are disclosed in CBS Corporation's news releases and securities filings.

A webcast of this call and the earnings release related to today's presentation can be found on the Investors section of our website at

With that, it's now my pleasure to turn the call over to Sumner.

Sumner Redstone

Thank you, Adam. Good afternoon, everyone. And I thank you for being with us today. CBS is on a roll in 2011. Our industry-leading content, our multi-platform distribution have once again led to an exceptional performance for the company, and momentum is continuing throughout our businesses. What a terrific way to start off the year. Not only are we operating in a strong marketplace, we have the right strategy to turn our growing revenue into increasing profits. And remember this, we remain committed to enhancing shareholder value. This is an unbeatable approach that I'm confident will propel our company to even greater heights throughout the rest of this year and for many years beyond. This is in no small part, of course, thanks to Les and his team. They are doing a phenomenal job creating the best content, optimizing the business and managing our balance sheet. Needless to say, I'm really pleased, extremely pleased with CBS and all that we're doing to capitalize on our position of strength.

And now for more on CBS's exceptional performance, let's hear from my good friend, a man I rightfully and faithfully call a genius, CBS's President and CEO, Les Moonves.

Leslie Moonves

Thank you very much, Sumner, for that wonderful introduction. Good afternoon, everybody. Thank you for joining us once again. By now, you've read our release and have seen that we had a wonderful quarter. OIBDA was up 64%, 96% on a reported basis. EPS was $0.29, up nearly 6x from the first quarter last year. Every single segment of CBS is performing at extremely high levels. In a minute, I'm going to walk you through our divisions in more detail. But I can tell you up top that in every one of our businesses, we are very pleased with what we are seeing. And heading into the rest of the year, we are looking as strong as we ever have. This quarter is also a great one because you can truly see the kind of strong fundamental performance that we are confident we will achieve going forward. We did not benefit from any one-time items or adjustments. We just generated healthy underlying growth that speaks to the strength of our businesses.

As the numbers show, we're clearly benefiting from the strategic actions we've taken to enhance and derisk our business model, including diversifying our revenue streams and managing our cost structure. Our valuable content and our ability to sell it with increasing profitability is a powerful combination that positions CBS for success, not just for the rest of this year but for many years to come. We are very encouraged by the ongoing strength of the advertising marketplace. We posted solid underlying revenue growth during the quarter. And as we look to the rest of '11 and into '12, our business continues to be very healthy, particularly given the highly favorable climate heading into this year's upfront. Scatter is still extremely hot, and pacing in our local businesses is looking very solid as well. In just the first 4 months of the year, we are already making meaningful progress towards many of the core initiatives that we emphasized at our upfront for investors in February. A major theme we discussed that day was the opportunity we have to monetize the value of our content through strategic business deals. There were some notable examples of our progress during the quarter, including our new NCAA deal with Turner Broadcasting. Our first year in this 14-year agreement was a ratings success, and it places us in a much stronger and now profitable position.

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