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2012 Earnings Call

February 14, 2013 4:30 pm ET


Adam Townsend - Executive Vice President of Investor Relations

Sumner M. Redstone - Founder and Executive Chairman

Leslie Moonves - Chief Executive Officer, President and Director

Joseph R. Ianniello - Chief Financial Officer and Executive Vice President


Benjamin Swinburne - Morgan Stanley, Research Division

Jessica Reif Cohen - BofA Merrill Lynch, Research Division

David Bank - RBC Capital Markets, LLC, Research Division

Michael C. Morris - Davenport & Company, LLC, Research Division

Douglas D. Mitchelson - Deutsche Bank AG, Research Division

John Janedis - UBS Investment Bank, Research Division

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

Laura A. Martin - Needham & Company, LLC, Research Division

David W. Miller - B. Riley & Co., LLC, Research Division

Alan S. Gould - Evercore Partners Inc., Research Division

Tim Nollen - Macquarie Research

Marci Ryvicker - Wells Fargo Securities, LLC, Research Division



Good day, ladies and gentlemen, and welcome to the CBS Corporation Fourth Quarter 2012 Earnings Release Teleconference. Today's call is being recorded. At this time, I'd like to turn the conference over to the Executive Vice President of Investor Relations, Mr. Adam Townsend. Please go ahead, sir.

Adam Townsend

Thank you, and good afternoon, everyone, and welcome to our fourth quarter and full year 2012 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 will 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, the fourth quarter and full year 2012 profit measures 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 involves risks and uncertainties that could cause actual results to differ. Risks and uncertainties are disclosed in CBS Corporation's news releases and securities filings. The 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 is my pleasure to turn the call over to Sumner.

Sumner M. Redstone

Thank you, Adam. Good afternoon, everyone. Once again, I'm more than proud of the results that CBS is reporting today. We are truly on a roll. The company is in a position of great strength. I am confident our strategy will keep us at the top of our game for many, many years to come.

The reason, of course, I'm so certain is because of Leslie and his superb management team. They continue to lead CBS into a bright future. And now to tell you more, I'm going to turn it over to my very good friend, a man I frequently and properly call a super genius, Les Moonves.

Leslie Moonves

Thank you very much, Sumner, and good afternoon, everybody. Welcome and happy Valentine's Day to you all. Throughout last year, we told you that we would post record results in 2012, and I'm pleased to report that we did. Not only for the year, but for the fourth quarter as well. In fact, we had our best fourth quarter ever in all profit measures, including OIBDA, operating income and EPS. Our sources of high-margin growth are hitting on all cylinders, and as a result, we are driving earnings like never before.

As our company evolves, we will continue to build momentum, propelling us to even greater heights. 2013 is going to be an even better year, with significant growth in retrans, significant growth in reverse compensation, significant growth in digital streaming, significant growth in domestic and international syndication, and our base businesses will grow even stronger, led by the CBS Television Network, which is #1 in viewers in every single key demographic. And we expect to remain that way for the rest of the season. All of these areas of growth are built upon the enduring strength of our premium content.

In addition, as you are aware, we have announced a pair of very important initiatives regarding our Outdoor segment that will speed the transformation of our company into one that is even more built on steady, recurring revenue streams.

First, we're selling our Outdoor operations in Europe and Asia, which is attracting significant interest. And at the same time, our Outdoor Americas business is in the process of being converted into a REIT, which will greatly unlock the value of this business for our shareholders. Because of all these factors, and the great confidence we have in our businesses, we announced plans today to immediately repurchase an additional $1 billion of our stock. This accelerated share repurchase will nearly double our previous commitment for the year.

In addition, when we conclude our Outdoor initiatives, we also intend to use that currency to return additional capital to our shareholders. It should be clear that returning value to investors remains a top priority for us. And today's news is further proof of that.

As I mentioned, we have great confidence in the future because all the key pillars of our growth strategy are performing just as we said they would. Last month, we announced another retrans agreement on very attractive terms with Charter Communication. This deal includes our own station, as well as carriage for Showtime, Smithsonian and our fast-growing CBS Sports cable network. Just like our previous agreements, each new deal we make is better than the last. And as a result, we are looking at significantly higher retrans revenue in 2013. Plus, we remain ahead of our target of hitting $1 billion in revenue from retrans and reverse comp by 2017, if not sooner.

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