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Q4 2010 Earnings Call

February 16, 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


James Goss - Barrington Research Associates, Inc.

Michael Meltz - JP Morgan Chase & Co

Michael Morris - Davenport & Company, LLC

Jessica Cohen - BofA Merrill Lynch

Laura Martin - Needham & Company, LLC

Anthony DiClemente - Barclays Capital

Alexander Paris - Barrington Research Associates, Inc.

Marci Ryvicker - Wells Fargo Securities, LLC

David Miller - Caris & Company

Douglas Mitchelson - Deutsche Bank AG



Good day, everyone. Welcome to the CBS Corporation Fourth Quarter and Fiscal Year End 2010 Earnings Release Conference. [Operator Instructions] At this time, I would like to turn the conference over to Executive Vice President and Investor Relations, Mr. Adam Townsend. Please go ahead, sir.

Adam Townsend

Thank you, Lisa. Good afternoon, everyone, and welcome to our fourth quarter and full year 2010 earnings call. Joining me for today's discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, President and CEO; Joe Ianniello, Executive Vice President and CFO. Sumner will have opening remarks and will 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 on this conference call relating to matters which are not historical facts are forward-looking statements which involve risks and uncertainties that could cause actual 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. I thank you for being with us today. Now I'm not given to all the stations, but the performance of CBS this year was nothing less than sensational. What an extraordinary finish to an extraordinary year. Every single division improved on its performance and Leslie's team, as usual, they did everything right. Our strength lies in our extraordinary content and CBS' content leads in every single area where CBS competes: On the network, which is yet again ranked one; on all the global markets where people watch our hit programming on our major market TV and Radio. Nationwide and on our top global websites, CBS has the content that by far leads its competitors, the content that audience want most, and that content and our performance get better and better and better. We saw it in the 2010 results. We're seeing it continue in 2011 today, and I am certain we'll keep seeing it for years to come and it will be never, never-ending. The winning streak for CBS is bound to continue under the great management team, and it is a great management team, led by Les Moonves.

So let's now hear from my very close friend, CBS' CEO, Les. And Les, I congratulate you.

Leslie Moonves

Thank you very much, Sumner, and good afternoon, everybody. Thank you for joining us. I'm very pleased to discuss our fourth quarter results with you today, results that capped a tremendous 2010 and speak to the momentum we saw throughout the year and are now seeing this year as well. Every one of our businesses grew during the quarter, with solid revenue increases and double-digit OIBDA growth across all of the company's operating segments. Our success continues to come primarily from the performance of our content and the increasing demand we're seeing for that content in an improving economic marketplace, locally, nationally and internationally.

Today's very strong fourth quarter results closed out a terrific year which we have consistently delivered on our promises. We've capitalized on the sharp increase in advertising, while at the same time continuing to diversify and de-risk our business model by building profitable secondary revenue streams that don't depend on advertising. We've prudently managed both our cost structure and our balance sheet and at the same time, delivered more value to our shareholders. And through a number of long-term strategic deals throughout the company, we've set up CBS for a very bright future, one in which we are ideally positioned for continued growth this year and beyond.

Not only was it a very good quarter and year, but given the growing value of our content, the trends we see in our businesses and the media landscape as a whole, we expect these results to continue for a long, long time.

Before I turn it over to Joe and we take your questions, I'm going to spend a few minutes to walk you through our financial and operational highlights, beginning with our full year and fourth quarter results. Our revenue for 2010 of $14.1 billion was up 8%, and quarterly revenues of $3.9 billion was up 11%, once again speaking to our building momentum throughout the year. 2010 OIBDA of $2.4 billion was up 32% and fourth quarter OIBDA of $770 million was up 32% as well, illustrating our ability to turn increasing revenue into even better profits. And most importantly, EPS for the year was $1.11, up 102% from 2009, and fourth quarter EPS of $0.46 was up 77% from last year's fourth quarter. CBS also drew up $1.45 billion in free cash flow in 2010, up 75% from our total in 2009.

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