UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
 x☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2019
For the fiscal year ended December 31, 2016
 OR
 ¨☐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 CORPORATIONViacomCBSInc.
(Exact name of registrant as specified in its charter)
DELAWARE
Delaware		04-2949533
(State or other jurisdiction of
incorporation or organization)
 
04-2949533
(I.R.S. Employer
Identification Number)
No.)
51 W. 52nd Street
1515 Broadway
New York, NY 10019New York10036
(212) 258-6000
(Address, including zip code, and telephone numbers, including
(212) 975-4321
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbols 
Name of Each Exchange on
Which Registered
 
Class A Common Stock, $0.001 par valueVIACA New YorkThe Nasdaq Stock ExchangeMarket LLC 
Class B Common Stock, $0.001 par valueVIAC New YorkThe Nasdaq Stock ExchangeMarket LLC 
Securities Registered Pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act of 1933). Yes x☒    No o☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes o☐    No  x☒
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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files). Yes x☒    No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, ora smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filerx
☒ 
Accelerated filero
☐ 
Non-accelerated filero
(Do not check if a smaller
reporting company)
☐ 
Smaller reporting companyo
☐Emerging growth company☐
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o☐    No x☒
As of June 30, 2016,28, 2019, which was the last business day of the registrant’s most recently completed second fiscal quarter, the market value of the shares of CBS Corporationthe registrant’s Class A Common Stock, $0.001 par value (“Class A Common Stock”), held by non-affiliates was approximately $448,914,844$243,415,727 (based upon the closing price of $58.18$50.04 per share as reported by the New York Stock Exchange on that date) and the market value of the shares of CBS Corporationthe registrant’s Class B Common Stock, $0.001 par value (“Class B Common Stock”), held by non-affiliates was approximately $21,535,553,110$16,424,348,923 (based upon the closing price of $54.44$49.90 per share as reported by the New York Stock Exchange on that date); and the aggregate market value of the shares of both Class A Common Stock and Class B Common Stock held by non-affiliates was $21,984,467,954.$16,667,764,650.
As of February 14, 2017, 37,598,6042020, 52,268,438 shares of Class A Common Stock and 371,936,529561,471,552 shares of Class B Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of CBS Corporation’sViacomCBS Inc.’s Notice of 20172020 Annual Meeting of Stockholders and Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934 as amended (the “Proxy Statement”) (Portion of Item 5; Part(Part III).

     






VIACOMCBS INC.
TABLE OF CONTENTS

Page
PART I
Item 1.
Business.
I-2
Item 1A.
Risk Factors.
I-25
Item 1B.
Unresolved Staff Comments.
I-39
Item 2.
Properties.
I-39
Item 3.
Legal Proceedings.
I-40
Item 4.
Mine Safety Disclosures.
I-40
Our Board of Directors
I-40
Information About Our Executive Officers
I-41
PART II
Item 5.
Market for ViacomCBS Inc.’s Common Equity, Related Stockholder Matters and Purchases of Equity Securities.
II-1
Item 6.
Selected Financial Data.
II-3
Item 7.
Management’s Discussion and Analysis of Results of Operations and Financial Condition.
II-4
Item 8.
Financial Statements and Supplementary Data.
II-47
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
II-113
Item 9A.
Controls and Procedures.
II-113
Item 9B.
Other Information.
II-113
PART III
Item 10.
Directors, Executive Officers and Corporate Governance.
III-1
Item 11.
Executive Compensation.
III-1
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
III-1
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
III-1
Item 14.
Principal Accounting Fees and Services.
III-1
PART IV
Item 15.
Exhibits, Financial Statement Schedules.
IV-1
Item 16.
Form 10-K Summary.
IV-1
Signatures.




PART I
Item 1.Business.
CBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the “Company” or “CBS Corp.”OVERVIEW

ViacomCBS Inc. (“ViacomCBS”) is a massleading global media and entertainment company with operations inthat creates content and experiences for audiences worldwide. We operate through the following four segments:


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ENTERTAINMENT: TheTV Entertainment.  Our TV Entertainment segment is composedcreates and acquires programming for distribution and viewing on multiple media platforms, including our broadcast network, through multichannel video programming distributors (“MVPDs”) and virtual MVPDs, and our streaming services, as well as for licensing to third parties both domestically and internationally. TV Entertainment consists of the CBS® Television Network;Network™, CBS Television Studios®; CBS Studios International™ and, CBS Television Distribution™;®, CBS Interactive™;®, CBS FilmsSports Network®;, CBS Television Stations™ and the Company’s digitalCBS-branded streaming services CBS All Access® and CBSN®. and CBSN®, among others.


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CABLE NETWORKS: The Cable Networks.  Our Cable Networks segment is composedcreates and acquires programming for distribution and viewing on multiple media platforms, including our cable networks, through MVPDs and virtual MVPDs, and our streaming services, as well as for licensing to third parties both domestically and internationally. Cable Networks consists of Showtime Networks, which operates the Company’sour premium subscription program services,cable networks Showtime®, The Movie Channel® and Flix®, and Flixa subscription streaming offering of Showtime; our basic cable networks Nickelodeon®, including a digital streaming subscription offering; CBS Sports NetworkMTV®, the Company’s cable network focused on college athletics and other sports;BET®, Comedy Central®, Paramount Network®, Nick Jr. ®, VH1®, TV Land®, CMT®, Pop TV™ and Smithsonian Networks™Channel™, among others, as well as the international extensions of these brands operated by ViacomCBS Networks International™ (“VCNI”); international broadcast networks, Network 10®, Channel 5® and Telefe®; and Pluto TV™, a venture between Showtime Networks and Smithsonian Institution, which operates Smithsonian Channel™, a basic cable program service, and a digitalleading free streaming subscription service.TV platform in the United States (“U.S.”).


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PUBLISHING: The PublishingFilmed Entertainment.  Our Filmed Entertainment segment is composed ofdevelops, produces, finances, acquires and distributes films, television programming and other entertainment content in various markets and media worldwide primarily through Paramount Pictures®, Paramount Players™, Paramount Animation® and Paramount Television Studios™.

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Publishing.  Our Publishing segment publishes and distributes Simon & Schuster which publishes and distributes consumer books underdomestically and internationally and includes imprints such as Simon & Schuster®, PocketScribner™, Atria Books®, Scribner and Gallery Books®, Gallery Books®, Touchstone® and Atria Books®.


LOCAL MEDIA: The Local Media segment is composed of CBS Television Stations, the Company’s 30 owned broadcast television stations; and CBS Local Digital Media™, which operates local Websites including content from the Company’s television stations and news and sports radio stations.

For the year ended December 31, 2016,2019, contributions to the Company’sour consolidated revenues from itsour segments were as follows: TV Entertainment 67% 43%, Cable Networks 16% 45%, Publishing 6%Filmed Entertainment 10% and Local Media 14%Publishing 3%. The Company generated approximately 14%

Owners of its total revenues from international regions in 2016. For the year ended December 31, 2016, approximately 54% and 14% of total international revenues of approximately $1.85 billion were generated in Europe and Canada, respectively.

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 isour Class A Common Stock are entitled to create and acquire premium content that is widely accepted by audiences, and to 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 both Company-owned and acquired premium content to enhance its opportunities for revenue growth, which include exhibiting its content on multiple digital platforms, including the Company’s owned digital streaming services, as well as third-party live television streaming offerings; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”), including cable, direct broadcast satellite (“DBS”), telephone company, and other distributors, for authorizing the MVPDs’ carriage of the Company’s owned television stations (also known as “retransmission fees”) and cable networks, and securing compensation from television stations affiliated with the CBS Television Network (“station affiliation fees” also known as “reverse compensation”). The Company also seeks to grow its advertising revenues by monetizing all content viewership as industry measurements evolve to reflect viewers’ changing habits.

On February 2, 2017, the Company entered into an agreement with Entercom Communications Corp. to combine the Company’s radio business, CBS Radio, with Entercom in a merger to be effected through a Reverse Morris Trust transaction, which is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction, the Company intends to split-off CBS Radio through an exchange offer, in which the Company’s stockholders may elect to exchange shares of the Company’sone vote per share. Our Class B Common Stock for shares of CBS Radio, which will then bedoes not have voting rights. ViacomCBS Class A and Class B Common Stock are listed on The Nasdaq Stock Market LLC.


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immediatelyconverted into shares of Entercom common stock at the time of the merger. The merger and related transactions are collectively referred to as the “Radio Transaction”. The Radio Transaction is subject to customary approvals and closing conditions.  The Company expects to complete the Radio Transaction during the second half of 2017. CBS Radio, which was previously presented in the Company’s former Radio business segment, has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented.

On July 16, 2014, the Company completed the disposition of CBS Outdoor Americas Inc. (“Outdoor Americas”), which was previously a subsidiary of the Company and has been renamed OUTFRONT Media Inc. Outdoor Americas has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented.

The Company competes with many different entities and media in various markets worldwide. In addition to competition in each of its businesses, the Company competes for opportunities in the entertainment business with other diversified entertainment companies such as The Walt Disney Company, NBCUniversal Media, LLC, Twenty-First Century Fox, Inc. and Time Warner Inc., and with respect to CBS Radio, Cumulus Media Inc. and iHeartMedia, Inc.


As of December 31, 2016,2019, National Amusements, Inc. (“NAI”), a closely held corporation that owns and operates approximately 925 movie screens in the U.S., the United Kingdom (“U.K.”UK”) and South America and manages 3additional movie screens in South America, directly or indirectly owned approximately 79.5%79.4% of the Company’sour voting Class A Common Stock, and approximately 9.5%10.2% of the Company’sour Class A Common Stock and Class B Common Stock on a combined basis. Owners of the Company’s Class A Common Stock are entitled to one vote per share. The Company’s Class B Common Stock does not have voting rights. NAI is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended.


The Company wasWe were organized inas a Delaware corporation in 1986. The Company’sOur principal offices are located at 51 W. 52nd Street,1515 Broadway, New York, New York 10019. Its10036. Our telephone number is (212) 975-4321258-6000 and our website is www.viacbs.com. Information included on or accessible through our website is not intended to be incorporated into this Annual Report on Form 10‑K. On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the surviving company (the “Merger”), pursuant to an Agreement and Plan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). At the effective time of the Merger, we changed our


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name to “ViacomCBS Inc.” Unless the context requires otherwise, references in this document to “ViacomCBS,” “Company,” “we,” “us” and “our” mean ViacomCBS Inc. and our consolidated subsidiaries, to “CBS” mean CBS Corporation and its Website address is www.cbscorporation.com.consolidated subsidiaries prior to the Merger and to “Viacom” mean Viacom Inc. and its consolidated subsidiaries prior to the Merger.


CBS CORP. BUSINESS SEGMENTSTV ENTERTAINMENT


Entertainment (67%, 67% and 66% of the Company’s consolidated revenues in 2016, 2015 and 2014, respectively, and 53%, 51% and 50% of the Company’s total segment operating income in 2016, 2015 and 2014, respectively)Overview


TheOur TV Entertainment segment consists of the CBS Television Network;Network, our domestic broadcast network; CBS Television Studios CBS Studios International and CBS Television Distribution, the Company’sour television production and syndication operations; CBS Interactive, the Company’sour online content networksservices for information and entertainment; CBS Films, the Company’s producer and distributor of theatrical motion pictures; and the Company’s digitalour CBS-branded streaming services CBS All Access, CBSN, CBS Sports HQ®and CBSN.ET Live®; CBS Sports Network, our cable network focused on college athletics and other sports; and CBS Television Stations, our 29 owned broadcast television stations.


Television Network.Our TV Entertainment segment’s revenues are generated primarily from advertising sales, the licensing and distribution of its content and affiliate revenues comprised of station affiliation fees, retransmission fees and subscription fees, as further described below. In 2019, our TV Entertainment segment advertising revenues, content licensing revenues and affiliate revenues were approximately 50%, 26% and 21%, respectively, of total revenues for this segment. Our TV Entertainment segment generated 43%, 41% and 39% of our consolidated revenues in 2019, 2018 and 2017, respectively.

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The CBS Television Network, through CBS Entertainment™Entertainment™, CBS News® and CBS Sports®, distributes a comprehensive schedule of news and public affairs broadcasts, sports and entertainment programming to more than 200 domestic television station affiliates reaching throughout the U.S., including 1615 of the Company’sour owned and operated television stations, and to affiliated stations in certain U.S. territories.

The CBS Television Network primarily derives revenuesrevenue from the sale of advertising time for its network broadcasts. A significant portion of the sale of advertising spots for the network’s non-sports programming occurs annually generally during May through July in the industry’s upfront advertising market for the upcomingbroadcasts and affiliation fees from television broadcast season, which runs for one year generally commencing in mid-September. Advertisers purchase the remaining advertising spots closer to the broadcast of the related programming in the scatter advertising market. Overall advertising revenue for the network is also impacted by audience ratings for its programming. The Company offers dynamic advertising insertions forstations affiliated with the CBS Television Network’s on-demand programming which allow theNetwork.



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Company to change advertisements at any time within such programming and offer advertisers greater audience reach. In addition, the CBS Television Network’s revenues include station affiliation fees.

CBS Entertainment is responsible for acquiring or developing and scheduling the entertainment programming presented on the CBS Television Network, which includes primetime comedy and drama series, reality‑based programming, specials, children’s programs, daytime dramas, game shows and late-night programs such as The Late Show with Stephen Colbert. During 2019, the CBS Television Network broadcast the Tony Awards®, the Kennedy Center Honors and the GrammyAwards®. CBS won 21 awards at the 46th Annual Daytime Emmy® Awards in May 2019.

CBS News operates a worldwide news organization, providing the CBS Television Network and CBS News Radio News™® with regularly scheduled news and public affairs broadcasts, including 60 Minutes, 48 Hours Mystery,, CBS Evening News with Scott Pelley, CBS This Morning, CBS Sunday Morning and Face the Nation as well as special reports. CBS News also provides CBS Newspath®, a television news syndication service that offers daily news coverage, sports highlights and news features to the CBS Television Network affiliates and other subscribers worldwide.

CBS Sports broadcasts on the television network include The NFL Today; certain PGA Tour Golf Tournaments,golf tournaments, the Masters and the PGA Championship; certain games from the NCAA Division I Men’s Basketball Tournament the rights to which have been extended through 2032 under a March 2016 agreement with the NCAA and Turner Broadcasting System, Inc.;certain regular-season men’s college basketball games;games, including games from the Big Ten Conference; regular-season college football games, including games from the Southeastern ConferenceConference; and the NFL’s American Football Conference (AFC)(“AFC”) regular-season, post-season wild card playoff, divisional playoff and championship games. In 2016,2019, the CBS Television Network broadcast Super Bowl 50, for which CBS Sports won three Sports Emmy®Awards, and certain AFC games in the 2016 season under its February 2014our agreement with the NFL to broadcast the AFC package from the 2014 through the 2022 seasons,season, which also includes certain National Football Conference regular season games and the Super BowlsBowl, which is broadcast on the CBS Television Network on a rotating basis with other networks. Our most recent Super Bowl broadcast was in 2016,February 2019 and 2022. The Company produced andour next Super Bowl broadcast certain NFL Thursday Night Football games for the 2016 season and will also do so for the 2017 season under its January 2016 agreement with the NFL.be in February 2021.



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CBS Television Network content also is exhibited via the internet,Internet, including through CBS.com™, CBSSports.com® and related software applications (“apps”); CBSN,the Company’slive digital streaming advertiser-supported news network available 24 hours a day, seven days a week; and CBS All Access, the Company’s digital streaming subscription service which includes a commercial-free option for on-demand content announced in August 2016. CBS All Accessoffersbothcurrent and library programming as well as original series, such as the upcoming The Good Wife spin-off The Good Fight and Star Trek: Discovery.In December 2016, the Company commenced a multi-year deal with the NFL for the live, local NFL games broadcast by the CBS Television Network to be streamed on certain CBS All Access platforms. Digitalour streaming services, such as CBSN and CBS All Access, which are further described below; and CBSN are also knownvirtual MVPDs, such as “over-the-top” or “OTT” services which provide video content via the internet to users without payment to a traditional MVPD. CBS All AccessAT&T TV Now, Hulu with Live TV and CBSN are available at CBS.com and CBSNews.com™, respectively, and through CBS software applications (“apps”) on multiple digital platforms, including Android, iOS, Amazon Fire and Windows 8 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Chromecast, PlayStation, Roku and Xbox connected device platforms, among others. In January 2017, the Company entered into an agreement for the digital streaming of the CBS Television Network’s programming on Hulu’s upcoming live television streaming service. During 2016, the CBS Television Network broadcast the 70th Annual Tony Awards®, the Kennedy Center Honors and the GrammyAwards®. In June 2016, the Company extended an agreement with The Recording Academy® to broadcast the Grammy Awards on the CBS Television Network through 2026. Furthering the Company’s analytic tools regarding television advertising and ratings, in 2016, the Company announced the “NYU Stern / CBS Media Analytics Initiative” to focus on the interactions between television and other media platforms and their influence on consumer exposure and behavior and “Purchase-Driven Planning” with Nielsen Catalina Solutions used to maximize return on investment across television and digital advertising campaigns, all of which supplement the Company’s “Campaign Performance Audit™,” a data-driven approach for analyzing and buying advertising time on broadcast television which helps advertising customers enhance consumer targeting and measure the effectiveness of their advertising.YouTube TV.


The CW, a broadcast network and the Company’sour 50/50 joint venture with Warner Bros. Entertainment, airs programming, including Jane the Virgin, Crazy Ex-Girlfriend, Supergirl Charmedand The Flash.Flash. Eight of the Company’sour owned television stations are affiliates of The CW. Certain of The CW’s series are streamed on Netflix, a subscription video-on-demand service including pursuant to output license agreements entered into with Netflix, Inc. in July 2016.(“SVOD”), and are also available via The CW app on multiple digital platforms.



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Television Production and Syndication.CBS Television Studios CBS Studios International and CBS Television Distribution produce, acquire and/or distribute programming, worldwide, including series, specials, news and public affairs, and generate revenue principally from the licensing and distribution of such programming. The programming is produced primarily for broadcast on network television, exhibition on basic cable and premium subscription services, streaming services or distribution via first‑runfirst-run syndication. First-run syndication is programming exhibited on television stations without prior exhibition on a network or cable service. The CompanyWe subsequently distributesdistribute programming after its initial exhibition on a network, basic cable network or premium subscription service for domestic exhibition on television stations, cable networks or video-on-demandstreaming services (known as “off-network syndicated programming”). Off-network syndicated programming and first‑run syndicated programming distributed domestically, as well as programming distributed internationally, can sometimes be sold in successive cycles of sales known as “first cycle,”cycle” sales, “second cycle” sales, and so on, which may occur on exclusive or non-exclusive bases. Generally, license fees may decrease with successive sales cycles due to increased program exhibitions.


Programming that wasour production group produced or co-produced by the Company’s production group and is broadcast on network television includes, among others, NCISFBI (CBS), Bull (CBS), Kevin Can Wait (CBS), Madam Secretary (CBS), Scorpion (CBS), Criminal Minds Evil (CBS) and Jane the VirginNancy Drew (The CW). Generally, a network will license a specified number of episodes for broadcast on the network in the U.S. during a license period. Remaining distribution rights, including international and/or off‑network syndication rights, are typically retained by the Company or, in the case of co-productions, distribution rights are shared with the co-producer for U.S. or international markets. The network license fee for a series episode is normally lower than the costs of producing the episode; however, the Company’s objective is to recoup its costs and earn a profit through various forms of distribution, including international licensing, domestic syndication and digital streaming of episodes. Generally, international sales of network series are made within one year of the U.S. network run and series must have a network run of at least three or four years to be successfully sold in domestic off-network syndication; however, increasingly, these time frames are being shortened, particularly for sales to digital streaming services. In off-network syndication, the Company distributeswe distribute series, such as Hawaii Five-O, Criminal Minds, Blue Bloods The Good Wife, Elementary, NCIS and NCIS: Los Angeles,New Orleans as well as a library of older television programs. The CompanyWe also producesproduce and/or distributesdistribute first-run syndicated series such asWheel of Fortune, Jeopardy!, Entertainment Tonight, Inside Edition The Insider,, Dr. Phil, The Doctors, Rachael Ray, Hot Bench and Judge Judy and produces the upcomingproduce several series The Good Wife spin-off for streaming on CBS All Access, includingThe Good Fight, and Star Trek: Discovery,for streaming on CBS All Access Why Women Kill and Star Trek: Picard. The CompanyWe also distributesdistribute syndicated and other programming internationally.


The Company continues to monetize its content through digital media. It enters into and renews numerous multi-year licensing agreements for distribution of certain of its programming to various services, including the digital streaming on subscription video-on-demand services owned by Netflix (in the U.S, Canada and countries in Africa, Asia, Europe and Latin America), Amazon (in the U.S., India, Germany and U.K.), Hulu, Hulu Plus (each, in the U.S.), Bell Media (in Canada), Canal Play (in France), DLA (in countries in Latin America and the Caribbean), Foxtel, Stan Entertainment (each, in Australia), iFlix (in Malaysia, Thailand and Philippines), Nippon TV (in Japan), PlayCo (in the Middle East), MultiChoice Africa (in sub-Saharan Africa), Sky TV NZ, Telecom NZ (each, in New Zealand), Telefonica (in Spain), Watchever (in Germany), among others; digital streaming on advertising supported video-on-demand services, such as PPTV (in China); Sony’s broadband pay television service, PlayStation Vue (in the U.S.); and the digital downloading on various electronic-sell-through services owned by Amazon (in the U.S., Germany and the U.K.), Apple (in the U.S., Canada, Australia and countries in Europe), Google (in the U.S. and U.K.) and Microsoft (in the U.S.), among others. In July 2016, the Company announced that its upcoming Star Trek: Discovery series as well as the existing Star Trek series library were licensed to Netflix in 188 countries (excluding the U.S. and Canada) and to Bell Media in Canada.cbsinteractive.jpg


Fees for television programming licensed for syndication and digital streaming are recorded as revenues at the beginning of the license period in which the programs are made available for exhibition, which, among other reasons, may cause substantial fluctuations in the Entertainment segment’s operating results. Unrecognized revenues attributable to such license agreements were $749 million and $847 million at December 31, 2016 and December 31, 2015, respectively.



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The Company has a global channel presence through domestic and international joint ventures. The Company owns a 50% interest in a joint venture with Lionsgate, which owns and operates the entertainment cable network, Pop™. The Company owns a 49% interest in a joint venture with a subsidiary of AMC Networks Inc., which owns and operates six channels in the U.K. and Ireland, including CBS Action™, CBS Drama™, CBS Reality™ and Horror Channel™. The Company also owns a 30% interest in a joint venture with another subsidiary of AMC Networks, which owns and operates six cable and satellite channels in Europe, the Middle East and Africa broadcasting CBS programming and branded as CBS Action, CBS Drama, CBS Reality and CBS Europa™. In Australia, the Company owns an approximately 33% interest in a joint venture with a subsidiary of Ten Network Holdings Limited to provide content to ELEVEN™, a digital television channel service. The Company owns a 30% interest in a joint venture with RTL Group, which owns and operates two cable channels in Southeast Asia in English and local languages, RTL CBS Entertainment™ and RTL CBS Extreme™.

CBS Interactive.CBS Interactive is one of the leading global publishers of premium content on the internet,Internet, delivering this content via Webweb properties, mobile properties and CBS apps on mobile, as well as internet-connectedInternet-connected television and other device platform apps. CBS Interactive is ranked among the top internetInternet properties in the world according to comScore Media Metrix. CBS Interactive’s leading brands including CNET®, CBS.com™, CBS All Access, CBSSports.com™, 247 Sports®, GameSpot®, MaxPreps®,TVGuide.com™, CBSNews.com™, CBSN, ZDNet®, Last.fm®, and MetroLyrics.com®, among others, serve targeted audiences with text, video, audio, and mobile content spanning technology, entertainment, sports, news, business, gaming and music categories. In addition to its U.S.‑based business, which reached approximately 163 million multi-platform unique monthly visitors during December 2016 according to comScore Media Metrix, January 2017, CBS Interactive operates in Asia, Australia and Europe.

CBS Interactive generates revenue principally from the sale of advertising and sponsorships, in addition to subscription fees, derivedlicense fees and e-commerce activities.

CBS Interactive operates CBS.com, the online destination for CBS Television Network programming. Further extending the CBS.com experience, we offer a CBS app for on-demand streaming of various programs from searchour current network and commerce partners, licensing fees, subscriptions,library programming to users on multiple digital platforms. CBS Interactive operates CBSNews.com, the online destination for CBS News content, and offers an app for on-demand screening of current and library news programming and the content published on the website. CBS Interactive also operates CBSSportsDigital™, the online destination for CBS Sports content, including CBSSports.com, which provides sports content, fantasy sports, and community and e-commerce activities,features, and a related app for on-demand viewing of certain sports events broadcast on CBS and other paid services. Advertising spending on the internet, as in traditional media, fluctuates significantly with economic conditions. In addition, online marketing spending follows seasonal consumer behavior throughout the calendar year to reflect trends during the calendar year.sports information; Max Preps; and 247Sports.



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CBS Interactive also owns and operates other digital properties, including: CNET,, one of the preeminent digital properties for technology and consumer electronics information and featuring news, reviews, downloads and instructional and entertaining video and audio shows about technology; information;CNET en Espanol™, which delivers CNET.com’s information in the U.S. to Spanish speakers; Espanol®; TVGuide Digital™,which provides comprehensive information about television programming; Digital™; GameSpot, a leading gaming information digital property providing video game reviews®; Last.fm®; and previews, news, eSports, Webcasts, videos, and game downloads; CBSSports Digital™, which provides sports content, fantasy sports, community and e‑commerce features, and also owns and operates MaxPreps; Last.fm, which is a music recommendation, discovery and social networking property; MetroLyrics.com, which is one of the most popular databases for song lyrics online; and TV.com, which is a destination for entertainment and community around television where visitors can watch videos and discuss and obtain information about television shows across all networks.®.


Under CBS Interactive, also operates CBS.comViacom Digital Studios (“VDS”) and its international extension, Viacom Digital Studios International, produces original content for consumption across leading social platforms to build engagement with certain of our Cable Networks brands. VidCon®, an innovative conference and festival celebrating online video, drives additional growth at VDS and our live events business.

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Our CBS-branded streaming subscription services and advertiser-supported services feature general entertainment, news, sports and/or children’s programming and generate revenue from subscription fees and the online destination for CBS Television Network programming. Further extending the CBS.com experience, the Company offers a CBS app for on-demand streamingsale of various programs from the Company’s current networkadvertising on such services, respectively. The services are offered to customers through mobile and library programming to users on multiple digital platforms, including Android, iOS, Amazon Fireconnected devices and Windows 8 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Chromecast, PlayStation, Roku and Xbox connected device platforms, among others.third-party platforms. The below-described services are operated under CBS Interactive operates in collaboration with our other businesses.

CBS All Access, the Company’s digital is a streaming subscription service, which includes a commercial-free option for on-demand content announced in August 2016. content. CBS All Access offers an extensive on-demand selection of both current and library programming and original series, such as the upcoming The Good Wife spin-offThe Good Fight and , Star Trek: Discovery, Star Trek: Picard, Why Women Kill and The Twilight Zone series; and CBSN’s live and original news reporting and our other streaming services, as described further below, as well as the ability to stream live programming from local CBS Television Stations and certain CBS television station affiliates. In December 2016, the Company commenced a multi-year deal with the NFL for the live, localAll NFL games broadcast by the CBS Television Network to beas well as other CBS Television Network programming are streamed on certain CBS All Access platforms. CBS All Access platforms. CBS All Access also offers children’s programming, including original series and select Nickelodeon programming. CBS All Access is available at CBS.com and on the multiple digital platforms described aboveand through CBS apps in the U.S. and Canada. A version of CBS app. CBS Interactive also operates All Access has launched internationally in Canada and 10 All Access in Australia includes programming from our Network 10 channels and certain of our other programming.

CBSN is a streaming live, digital streaming advertiser-supported news network available 24 hours a day, seven days a week. week (“24/7”). Local versions of CBSN complement CBSN and stream local news from our owned television stations in major markets, including New York, Los Angeles, Philadelphia, San Francisco, Boston and Minneapolis. CBSN is available at CBSNews.com and on the multiple digital platforms described above through


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the CBS News app. app and through CBS Television Stations’ websites and mobile apps.

CBS Sports HQ is a streaming live, advertiser-supported sports news and highlights service available 24/7; and ET Live is a streaming advertiser-supported service based on the Entertainment Tonight brand covering entertainment stories and trends available 24/7.

Through the CBS Audience Network™Network™, the Company deliverswe deliver video content from itsour digital properties and television stations and affiliated television stations under an advertiser-supported distribution model to third-party digital properties. The growing slate of the Company’sour content available online includes full episodes, clips and highlights based on CBS, CBS Sports Network and Showtime Networksour programming as well as original made-for-the-Webmade-for-the-web content.


CBS Films. CBS Films produces, acquires and distributes theatrical motion pictures across all genres. The budget for each picture is intended to be up to $50 million (or, in certain cases, higher where a co-financing partner is involved) plus advertising and marketing costs at a level consistent with industry custom. The majority of motion pictures produced or acquired by CBS Films is intended for a wide, commercial theatrical release, similar to motion pictures typically produced and released by major studios. CBS Films’ theatrical releases in 2016 were Middle School: The Worst Years of My Life, Hell or High Water and Patriots Day. In 2017, CBS Films’ expected theatrical releases are Dean, The Sense of An Ending and American Assassin.cbssportsnetwork.jpg


In general, motion pictures produced or acquired by CBS Films are exhibited theatrically in the U.S. and internationally, followed by exploitation via home entertainment (including DVDs and Blu-ray Discs and electronic rental and sell-through), video-on-demand, pay-per-view, pay television, free television and basic cable, digital media outlets, including subscription video-on-demand, and, in some cases, other channels such as airlines and hotels. CBS Films exploits its motion pictures (including certain ancillary rights such as licensing and merchandising) and generates revenues in all media in the relevant release windows either directly, through affiliated CBS entities, or via third-party distribution arrangements, including CBS Films’ multi-year agreement with Lions Gate Films, which was entered into in November 2014, for Lions Gate Films to distribute CBS Films’ new wide-release motion pictures in all media, except U.S. pay television.

Entertainment Competition.

Television Network. The television broadcast environment is highly competitive. The principal methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming and promotion, in order to sell advertising at profitable rates. Broadcast networks like CBS compete for audience, advertising revenues and programming with other broadcast networks, such as ABC, FOX, NBC, The CW and MyNetworkTV, independent television stations, cable program services, as well as other media, including DVDs and Blu‑ray Discs, digital program services, print and the internet. In addition, the CBS Television Network competes with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country which are necessary to ensure the effective distribution of network programming to a nationwide audience.

Television Production and Syndication. As a producer and distributor of programming, the Company competes with studios, television production groups, and independent producers and syndicators, such as Disney, Fox, NBCUniversal, Sony and Warner Bros., to produce and sell programming both domestically and internationally. The Company also competes to obtain creative talent and story properties which are essential to the success of all of the Company’s entertainment businesses.

CBS Interactive. CBS Interactive competes with a variety of online properties for users, advertisers, and partners, including the following: general purpose portals, such as AOL, MSN and Yahoo!; search engines such as Google, Yahoo! and Bing; online comparison shopping and retail properties, including Amazon.com; vertical content sites in the categories that CBS Interactive’s brands serve such as technology, gaming, music, news, business, food, entertainment and lifestyle focused digital properties; other content sites and apps, such as ESPN.com, HBO GO, Hulu and Netflix, as well as major television broadcast company digital properties, including digital streaming services and apps; and platforms such as blogs, podcasts and video properties. CBS Interactive also competes for users and advertisers with diversified media companies that provide both online and offline content, including magazines, cable television, network television, radio and newspapers.



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CBS Films. Motion picture production and distribution is a highly competitive business. During the life cycle of the development and production of a motion picture project, CBS Films must compete for the rights to compelling underlying source material and talent such as writers, producers, directors, on-screen performers and other creative personnel. CBS Films must also compete with other buyers for the acquisition of third-party produced motion pictures. Once a motion picture is completed or acquired, CBS Films must compete with numerous other motion pictures produced and/or distributed by various studios and independent producers, including Paramount Pictures Corporation, Walt Disney Studios Motion Pictures, Warner Bros. Entertainment Inc., Lions Gate Entertainment, STX Entertainment, The Weinstein Company, Metro-Goldwyn-Mayer Studios Inc. and Lakeshore Entertainment Group, among others, for audience acceptance as well as limited exhibition outlets across all of the relevant release windows. In addition, the ultimate consumer has many options for entertainment other than motion pictures including video games, sports, travel, outdoor recreation, the internet, and other cultural and computer-related activities.

Cable Networks (16%, 18% and 17% of the Company’s consolidated revenues in 2016, 2015 and 2014, respectively, and 33%, 37% and 37% of the Company’s total segment operating income in 2016, 2015 and 2014, respectively)

The Cable Networks segment is composed of Showtime Networks, which operates the Company’s premium subscription program services, including a digital streaming subscription offering; CBS Sports Network, the Company’s cable network focused on college athletics and other sports; and Smithsonian Networks, a venture with Smithsonian Institution, which operates Smithsonian Channel and a digital streaming subscription service.

Showtime Networks. Showtime Networks owns and operates three commercial-free, premium subscription program services in the U.S.: Showtime, offering original series, recently released theatrical feature films, documentaries, boxing and other sports-related programming, and special events; The Movie Channel, offering recently released theatrical feature films and related programming; and Flix, offering theatrical feature films primarily from the last several decades; and a digital streaming subscription offering of the Showtime service which launched in July 2015. At December 31, 2016, Showtime, The Movie Channel and Flix, in the aggregate, had approximately 76 million subscriptions in the U.S., certain U.S. territories and Bermuda.

Showtime Networks makes versions of Showtime, The Movie Channel and Flix available on-demand, enabling television subscribers to watch individual programs at their convenience. Showtime Networks also makes available Showtime Anytime®, an authenticated version of Showtime, which can be accessed on computers via showtimeanytime.com™ or via certain internet-connected devices through a Showtime Anytime app free of charge to Showtime subscribers as part of their Showtime subscription through participating Showtime Networks’ distributors. Through Showtime Anytime, Showtime subscribers can view on-demand programming as well as the live telecast of the east and west coast feeds of Showtime. Showtime Networks additionally operates the Website SHO.com™ which promotes Showtime, The Movie Channel and Flix programming, and provides information and entertainment and other services. Showtime Networks also makes available a digital streaming subscription offering of the Showtime service for purchase by consumers without a traditional MVPD video subscription. This offering allows subscribers to view on-demand programming as well as the live east and west coast linear feeds of Showtime, and is available at showtime.com™, through the Showtime app on multiple digital platforms, and as an add-on subscription to Amazon Prime, Hulu or Sony’s PlayStation Vue.

Showtime Networks derives revenue principally from the license of its program services to numerous MVPDs, with a substantial portion of such revenue coming from three of the largest such distributors. The costs of acquiring exhibition rights to programming and producing original series are the principal expenses of Showtime Networks. Showtime Networks enters into commitments to acquire rights, with an emphasis on acquiring exclusive rights for Showtime and The Movie Channel, from motion picture studios and other distributors typically covering the U.S. and Bermuda for varying durations, including exclusive motion picture output agreements with CBS Films, Open Road Films, STX Entertainment, Amblin Partners and, for certain DreamWorks motion pictures, Buena Vista Pay Television, a subsidiary of The Walt Disney Company. Showtime Networks’ original series telecast in 2016 included Ray Donovan, Billions, Masters of Sex, The Affair, The Circus, Penny Dreadful, Shameless and House of Lies, among others. In 2016, Showtime Networks also telecast various sports-related programs, including Inside the NFL, 60 Minutes Sports


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and A Season With Florida State Football, and documentaries such as Weiner, Michael Jackson’s Journey from Motown to Off the Wall and Madonna: Rebel Heart Tour.

Showtime Networks has entered into and may from time to time enter into co-financing, co-production and/or distribution arrangements with other parties to reduce the net cost to Showtime Networks for its original programming. In addition, Showtime Networks derives revenue by licensing rights it retains in certain of its original programming. The Company enters into licensing arrangements with television networks, internet content distributors, such as Amazon and Netflix, and/or other media companies for the exhibition of certain Showtime original programming domestically and in various international territories. For example, the Company has output agreements with Bell Media Inc. for Canada, and with Sky-affiliated entities for Austria, Germany, Ireland, Italy and the U.K. The Company entered into an output agreement in January 2016 with Stan Entertainment PTY Limited for Australia, and an output agreement in September 2016 with Moviestar+ for Spain.

Showtime Networks also owns a majority of and manages Smithsonian Networks, a venture with Smithsonian Institution, which operates Smithsonian Channel, a basic cable service in the U.S., featuring programs of a cultural, historical, scientific and educational nature. Smithsonian Networks offers a companion on-demand version, makes Smithsonian Channel content available on an authenticated basis to certain distributors in the U.S. and licenses Smithsonian Channel content outside of the U.S., including to Blue Ant Television Ltd. in connection with Smithsonian Channel in Canada. In September 2016, Smithsonian Networks launched Smithsonian Channel in Singapore. Smithsonian Networks also operates the Website SmithsonianChannel.com™ and various apps, which promote Smithsonian Channel programming and provide information and entertainment services. Smithsonian Networks also operates Smithsonian Earth™, its digital streaming subscription service featuring original nature and wildlife content in ultra-high definition resolution (4K), which is available to consumers without a traditional MVPD video subscription. Consumers can subscribe to Smithsonian Earth on multiple digital platforms, including Apple TV, Roku and Amazon Fire TV and Prime.

CBS Sports Network. CBS Sports Network is a 24 hours a day, seven days a week24/7 cable program service that provides a diverse slate of sports and related content, with a strong focus on college sports. CBS Sports Network derives revenue from carriage fees from MVPDs and virtual MVPDs and advertising sales. The network televises over 600700 live professional, amateur semi-professional and collegiate events


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annually, highlighted by Division I college football and basketball hockeygames, including games from the Big East Conference and lacrosse, as well asMountain West Conference. WNBA games and professional bull riding (PBR), professional lacrosse (MLL), arena football (AFL), World’s Toughest Mudder, and various styles of motor sports events (including asphalt, dirt, and off road racing).events. In addition, the network showcases a variety of original programming, including documentaries, features and studio shows, highlighted by NFL Monday QB,That Other Pre-Game Show (TOPS), NFL Monday QB, Inside College Basketball, Inside College Football, Time to Schein and a first of its kind all-female panel sports talk show, We Need to Talk. Talk. CBS Sports Network also provides ancillary coverage for CBS Sports relating to major events, such as the NCAA Division I Men’s Basketball Tournament, Masters Tournament and PGA Championship, and for Showtime Networks relating to Showtime Championship Boxing.Boxing. CBS Sports Network produces weekday simulcasts of the radio shows Boomer and CartonGio, Tiki and Tierney and The Doug GottliebJim Rome Show. Further, CBS Sports Network televises a diverse slate of additional programming under the CBS Sports Spectacular™ brand, including mixed martial arts, skiing, bowling, surfing, boxing, horse racing, volleyball, cheerleading and skate boarding, among other events. CBS Sports Network had approximately 55 million subscribers as of December 31, 2016. The network derives its revenues from subscription fees and the sale of advertising. CBS Sports Network has secured carriage arrangements with the top MVPDs. The Company also has agreements for the digital streaming of CBS Sports Network programming on several digital streaming services, including Hulu’s upcoming live television streaming service.


Cable Networks Competition.cbstelevisionstations.jpg

Showtime Networks. Showtime Networks primarily competes with other providers of premium subscription program services in the U.S., including Home Box Office, Inc. and Starz, LLC. Competition among these premium subscription program services in the U.S. is dependent on: (i) the production, acquisition and packaging of original series and other original programming and the acquisition and packaging of an adequate number of recently released theatrical motion pictures; and (ii) the offering of prices, marketing and advertising support and other incentives to distributors for carriage so as to favorably position and package Showtime Networks’ premium subscription program


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services to subscribers. In addition, Showtime Networks competes with non-traditional subscription programming services delivered via the internet, such as Amazon, Hulu and Netflix, for original programming, theatrical motion pictures and viewership. Showtime Networks also competes for programming, distribution and/or audiences with basic cable program services, broadcast television and other media, including video games and other internet apps.

Smithsonian Networks competes for programming, distribution and/or audiences with non‑fiction and other basic cable program services, including Discovery Channel, National Geographic Channel and History, as well as with broadcast television and other media.

CBS Sports Network. CBS Sports Network principally competes with cable programming services, including other sports‑oriented cable programming services, for distribution and license fee revenue among MVPDs, as well as for viewership and advertising revenue. The effects of consolidation among MVPDs and consumer pricing sensitivity have made it more difficult for niche channels to secure broad distribution in mainstream programming packages. In addition, the largest cable providers have created sports tiers for sports programming services which have not, in many cases, achieved significant subscriber penetration or acceptance. CBS Sports Network continues its repositioning to be included in programming packages with more subscribers. Re-alignment of college athletic conferences and their member institutions may adversely impact CBS Sports Network’s programming arrangements. CBS Sports Network also competes with cable programming services generally, including other sports programming services, such as ESPN, FOX Sports Networks and NBC Sports Network, in acquiring the television and multimedia rights to sporting events, resulting in increased rights fees and increased production expenses.


The terms and favorable renewal of agreements with distributors for the distribution of the Company’s subscription program services are important to the Company. The effects of consolidation among MVPDs and other marketplace factors make it more difficult to reach and maintain favorable terms and positioning and could have an adverse effect on revenues.

Publishing (6% of the Company’s consolidated revenues in each of 2016, 2015 and 2014, and 4% of the Company’s total segment operating income in each of 2016, 2015 and 2014)

The Publishing segment consists of Simon & Schuster, which publishes and distributes consumer books in the U.S. and internationally.

Simon & Schuster publishes and distributes adult and children’s consumer books in printed, digital and audio formats in the U.S. and internationally. Its digital formats include electronic books and audio books. Simon & Schuster’s major adult imprints include Simon & Schuster, Pocket Books, Scribner, Atria Books, Gallery Books, Touchstone and Howard Books®. Simon & Schuster’s major children’s imprints include Simon Pulse®, Aladdin®, Atheneum Books for Young Readers®, Margaret K. McElderry Books™, Saga Press™ and Simon & Schuster Books For Young Readers™. Simon & Schuster also develops special imprints and publishes titles based on the products of certain CBS businesses as well as that of third parties and distributes products for other publishers. Simon & Schuster distributes its products directly and through third parties. Simon & Schuster also delivers content and promotes its products on its own Websites, social media, general internet sites as well as those dedicated to individual titles. Its created assets include online videos showcasing Simon & Schuster authors and new releases on AOL, YouTube, Amazon, Bio.com, MSN.com, Google Newsstand, iTunes, SimonandSchuster.com and other sites. International publishing includes the international distribution of English-language titles through Simon & Schuster UK, Simon & Schuster Canada, Simon & Schuster Australia, Simon & Schuster India and other distributors, as well as the publication of locally originated titles by its international companies.

In 2016, Simon & Schuster had 277 New York Times bestsellers in hardcover, paperback and electronic formats, collectively, including 33 New York Times #1 bestsellers. Best-selling titles in 2016 include Born to Run by Bruce Springsteen, A Man Called Ove by Fredrik Backman and End of Watch by Stephen King. Best-selling children’s titles include Lady Midnight by Cassandra Clare, Dork Diaries 11: Tales from a Not-So-Friendly Frenemy by Rachel Renée Russell and Rush Revere and The Presidency by Rush Limbaugh and Kathryn Adams Limbaugh. Simon &


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Schuster Digital™, through SimonandSchuster.com, publishes original content, builds reader communities and promotes and sells Simon & Schuster’s books over the internet.

The consumer publishing marketplace is subject to increased periods of demand in the summer months and during the end‑of‑year holiday season. Major new title releases represent a significant portion of Simon & Schuster’s sales throughout the year. Simon & Schuster’s top two accounts drive a significant portion of its annual revenue. Consumer print books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Company is subject to global trends and local economic conditions. In 2016, the sale of digital content represented approximately 23% of Simon & Schuster’s revenues. The Company expects that electronic books will continue to represent a significant portion of Simon & Schuster revenues in the coming years.

Publishing Competition. The consumer publishing business is highly competitive and has been affected over the years by consolidation trends and electronic distribution methods and models. Mass merchandisers and on‑line retailers are significant factors in the industry contributing to the general trend toward consolidation in the retail channel. The growth of the electronic book market has impacted print book retailers and wholesalers and could result in a reduction of these channels for the sales and marketing of the Company’s books. In addition, unfavorable economic conditions and competition may adversely affect book retailers’ operations, including distribution of the Company’s books. The Company must compete with other larger publishers, such as Penguin Random House, Hachette and HarperCollins, for the rights to works by authors and sales to retailers and customers. Competition is particularly strong for well‑known authors and public personalities. In addition, technological changes have made it increasingly possible for authors to self‑publish and have led to the development of new digital distribution models in which the Company’s books must compete with the availability of both a larger volume of books as well as non‑book content.

Local Media (14%, 12% and 13% of the Company’s consolidated revenues in 2016, 2015 and 2014, respectively, and 22%, 19% and 20% of the Company’s total segment operating income in 2016, 2015 and 2014, respectively)

The Local Media segment is composed of CBS Television Stations the Company’s 30group consists of our 29 owned broadcast television stations, all of which operate under licenses granted by the Federal Communications Commission (“FCC”) pursuant to the Communications Act of 1934, as amended (the “Communications Act”). The licenses are renewable every eight years. The Company’sCBS Television Stations Group principally derives revenue from the sale of advertising on our television stations and fees for authorizing the MVPDs’ and vMVPDs’ carriage of our television stations, which are also known as retransmission fees.

Our television stations are located in the 6 largest, and 15 of the top 20, television markets in the U.S. The Company ownsWe own multiple television stations within the same designated market area (“DMA”) in 10 major markets. These multiple station markets are: New York (market #1), Los Angeles (market #2), Philadelphia (market #4), Dallas-Fort Worth (market #5), San Francisco-Oakland-San Jose (market #6), Boston (market #9), Detroit (market #13)#14), Miami-Ft. Lauderdale (market #16), Sacramento-Stockton-Modesto (market #20), and Pittsburgh (market #23)#24). This group ofOur television stations enables the Companyenable us to reach a wide audience within and across geographically diverse markets in the U.S. The stations produce news and broadcast public affairs, sports and other programming to serve their local markets and offer CBS, The CW or MyNetworkTV programming and syndicated programming. The CBS Television Stations group principally derives its revenues from the sale of advertising time on its television stations. In addition, the CBS Television Stations group receives retransmission fees from MVPDs for authorizing the MVPDs’ carriage of the Company’s owned television stations. The Company also has agreements for the digital streaming of the Company’s owned television stations on several digital streaming services, including Hulu’s upcoming live television streaming service. The Company’s digital streaming subscription service,

CBS All Access, offers an extensive on-demand selection of both current programming and library, original series as well as the ability to streamstreamed live programming from local CBS Television Stations and certainmost CBS television station affiliates. CBS All Access is available at CBS.com and through the CBS app on multiple digital platforms. The Company’sLocal versions of CBSN offer streamed local news from our owned television stations in certain local markets. Our television stations have a digital presence on CBS Local Websiteslocal websites which are operated by CBS Local Digital Media.  The CBS Local Websites and related apps promote the Company’s stations’ programming as well as provide live and on-demand news, traffic, weather, entertainment and sports information, among other services for their local communities. CBS Radio’s local sports and news radio stationsprogramming. We also have aagreements for the streaming of our owned television stations on virtual MVPDs. Our owned stations broadcast free, advertiser-supported digital presence onchannels using available broadcast spectrum, including local CBS Local Websites which is expected to continue for specified periods after the closing of the Radio Transaction pursuant to a digital services agreement with the Company. The CBS Local Websites principally derive revenues from the sale of advertising.  The “Television Stations and CBS Local Digital Media Websites” table below includes information with respect to these properties within U.S. television markets. CBS Television Stations and Weigel Broadcasting own and operate through an


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approximately 50/50 joint venture DECADESsyndicated programming, Start TV™, a national entertainment program service featuring classic television content moviesfocused on female audiences, which is an approximately 50/50 joint venture with Weigel Broadcasting, and original programming for local television stations’ digital sub-channels, which utilize a local television station's available broadcast spectrum to provide a companion to that station's primary channel.Dabl featuring lifestyle programming.


Local Media Competition. Television stations compete for programming, on‑air talent, audiences and advertising revenues with other stations and cable networks in their respective coverage areas and, in some cases, with respect to programming, with other station groups, and, in the case of advertising revenues, with other local and national media. The owned and operated television stations’ competitive position is largely influenced by the quality of the syndicated programs and local news programs in time periods not programmed by the network; the strength of the CBS Television Network programming and, in particular, the viewership of the CBS Television Network in the time period immediately prior to the late evening news; and in some cases, by the quality of the broadcast signal. The Company’s television stations face increasing competition from technologies such as audio and visual content delivered via the internet, which create new ways for audiences to consume content of their choosing while avoiding traditional commercial advertising. The Company’s television stations’ Websites face competition for advertisers and visitors from other digital sources of local content.


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Television Stations, Local Websites and CBS Local Digital Media WebsitesCBSN Streaming Services

The following table sets forth information with regard to the Company’sregarding our owned television stations and related CBS Local Digital Media Websites,local websites and CBSN streaming services, as of February 10, 2017,18, 2020, within U.S. television markets:
Television
CBS Local Digital Media(1)
Market and Market Rank(2)(1)
 StationsTypeNetwork Affiliation
Local Websites and
CBSN Streaming Services(2)
New York, NY (#1) WCBS‑TVUHFCBSnewyork.cbslocal.com
  WLNY‑TVUHFIndependentCBSN New York
      
Los Angeles, CA  (#2)
 KCAL‑TVVHFIndependentlosangeles.cbslocal.com
  KCBS‑TVUHFCBSCBSN Los Angeles
      
Chicago, IL (#3) WBBM‑TVVHFCBSchicago.cbslocal.com
      
Philadelphia, PA (#4) KYW‑TVUHFCBSphiladelphia.cbslocal.com
  WPSG‑TVUHFThe CWCBSN Philly
      
Dallas‑Fort Worth, TX (#5) KTVT‑TVUHFCBSdfw.cbslocal.com
  KTXA‑TVUHFIndependent 
      
San Francisco, CA (#6) KPIX‑TVUHFCBSsanfrancisco.cbslocal.com
  KBCW‑TVUHFThe CWCBSN Bay Area
      
Boston, MA (#9) WBZ‑TVWBZ-TVUHFCBSboston.cbslocal.com
  WSBK‑TVWSBK-TVUHFMyNetworkTVCBSN Boston
      
Atlanta, GA (#10) WUPA‑TVWUPA-TVUHFThe CWatlanta.cbslocal.com
      
Tampa‑St.Tampa-St. Petersburg, FL (#11)(#12) WTOG‑TVWTOG-TVUHFThe CWtampa.cbslocal.com
      
Seattle-Tacoma, WA (#13)KSTW-TVVHFThe CWseattle.cbslocal.com
Detroit, MI (#13)(#14) WKBD‑TVUHFThe CWdetroit.cbslocal.com
  WWJ‑TVUHFCBS 
      
Seattle‑Tacoma, WA (#14)KSTW‑TVVHFThe CWseattle.cbslocal.com
Minneapolis, MN (#15) WCCO‑TVUHFCBSminnesota.cbslocal.com
  
KCCO‑KCCW‑TV(3)
VHFCBS
KCCW‑TV(4)
VHFCBSCBSN Minnesota
      
Miami-Ft. Lauderdale, FL (#16) WFOR‑TVUHFCBSmiami.cbslocal.com

 WBFS‑TVUHFMyNetworkTV 
      
Denver, CO (#17) KCNC‑TVUHFCBSdenver.cbslocal.com
      
Sacramento, CA (#20) KOVR-TVUHFCBSsacramento.cbslocal.com


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Television
CBS Local Digital Media(1)
Market and Market Rank(2)
StationsTypeNetwork AffiliationWebsites
  KMAX-TVUHFThe CW 
      
Pittsburgh, PA (#23)(#24) KDKA-TVUHFCBSpittsburgh.cbslocal.com
  WPCW-TVVHFThe CW
Indianapolis, IN (#25)
WBXI-CA(4)
UHFIndependent 
      
Baltimore, MD (#26) WJZ‑TVVHFCBSbaltimore.cbslocal.com
      
Indianapolis, IN (#27)
WBXI-CA(5)
UHFIndependent
(1)The Company’sTelevision market (DMA) rankings based on Nielsen Media Research Local Market Universe Estimates, September 2019.
(2)
Our television stations’ Websites, which are operated bywebsites and the CBS Local Digital Media group,local versions of CBSN feature and promote the stations’ programming and provide news, traffic, weather, entertainment and sports information, among other services for their local communities.
(2)Television market (DMA) rankings based on Nielsen Media Research Local Market Universe Estimates, September 2016.
(3)KCCO-TV is operated as a satellite station of WCCO-TV.
(4)KCCW-TV is operated as a satellite station of WCCO-TV.
(5)(4)WBXI-CA is a Class A low power television station. Class A low power television stations do not implicate the FCC’s ownership rules.


REGULATION


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CABLE NETWORKS

Overview

Our Cable Networks segment provides entertainment content, services and related branded products for consumers in targeted demographics attractive to advertisers, content distributors and retailers. The Cable Networks segment also delivers advertising and marketing services, including those under our advanced marketing solutions portfolio, which both utilizes advanced addressable video inventory to allow dynamic ad insertion and advanced targeting, and provides our marketing partners with a variety of consulting and creative services and associated activations. The Cable Networks segment also licenses its brands and properties for consumer products and recreation experiences, produces live events and creates original programming for third-party distributors.

Our Cable Networks segment includes our premium subscription cable networks, Showtime, The Movie Channel and Flix; our basic cable networks, including Nickelodeon, MTV, BET, Comedy Central,Paramount Network, Nick Jr., VH1, TV Land, CMT, Pop TVandSmithsonian Channel; and the international extensions of our multimedia brands, and our program services created specifically for international audiences such as public service broadcaster (“PSB”) Channel 5® and Milkshake!® in the UK, Televisión Federal S.A., or Telefe®, in Argentina, COLORS® in India, Paramount Channel™ in various countries and international broadcast network Network 10® in Australia.

Our Cable Networks segment also develops and operates an extensive portfolio of digital and mobile experiences, including our streaming subscription offering of Showtime (“Showtime OTT”), Noggin, Nickelodeon’s preschool streaming subscription service, BET+, a subscription streaming service focused on Black audiences and consumers of Black culture, and Smithsonian Channel Plus.

Our studio production business is a global network of production studios producing premium episodic and film content across both our owned and operated platforms and for third parties. This business is primarily driven by Paramount Television Studios, Awesomeness, Nickelodeon, MTV and Comedy Central and utilizes our considerable intellectual property library to create long-form episodic content for third-party platforms.

Our Cable Networks segment’s revenues are generated primarily from affiliate revenues comprised of fees from MVPDs and virtual MVPDs for carriage of our cable networks and subscription fees from our streaming services; advertising sales; and the licensing of its content and brands. In 2019, our Cable Networks segment affiliate revenues, advertising revenues and content licensing revenues were approximately 49%, 41% and 10%, respectively, of total revenues for this segment. Our Cable Networks segment generated 45%, 46% and 47% of our consolidated revenues in 2019, 2018 and 2017, respectively.

Our most significant Cable Networks brands are discussed below.

showtimenetworks.jpg

Our three commercial-free, premium subscription program services in the U.S. are Showtime (including Showtime OTT), which offers original scripted and unscripted series, recently released and other theatrical feature films, documentaries, sports-related programming, comedy and other specials, and special events; The Movie Channel, which offers recently released and other theatrical feature films and related programming; and Flix, which offers theatrical feature films primarily from the last several decades.

Programming highlights in 2019 included Showtime original series Billions, Ray Donovan, The L Word: Generation Q and Shameless, limited series The Loudest Voice, documentary features including Hitsville: The Story


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of Motown, documentary series including The Circus: Inside the Wildest Political Show on Earth, and various sports-related programs and documentary series including Inside the NFL. As of December 31, 2019, subscriptions to Showtime (including Showtime OTT) totaled approximately 27 million in the U.S., certain U.S. territories and Bermuda.

Showtime OTT allows subscribers to view on-demand programming as well as the live telecast of the east and west coast feeds of Showtime, and is available for purchase (without an MVPD video subscription) at showtime.com™, through the Showtime app and from multiple digital platforms. Showtime Anytime®, an authenticated version of Showtime, is available onlineand, via certain Internet-connected devices, through the Showtime Anytime app, free of charge to Showtime subscribers as part of their Showtime subscription through participating distributors.

Showtime Networks also produces and/or provides special events on a pay-per-view basis available for purchase by both Showtime subscribers and non-subscribers through the Showtimeapp and third-party distributors, including the Manny Pacquiao vs. Adrien Broner boxing match in January 2019.

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Nickelodeon, now in its 40th year, is one of the most globally recognized and widely distributed multimedia entertainment brands for kids and family. Nickelodeon has been the number-one-rated ad-supported basic cable network for 24 consecutive years among kids 2 to 11. Nickelodeon features leading original and licensed series for kids across animation, live-action and preschool genres, and during the evening and overnight hours, the linear cable channel airs as Nick at Nite and features licensed family comedies. Nick Jr. entertains and educates preschoolers, engaging them with characters they love, building their imaginations and gaining key cognitive and social-emotional skills. Other Nickelodeon brands include TeenNick, Nicktoons and Nick Music.

Programming highlights in 2019 included Ryan’s Mystery Playdate, SpongeBob SquarePants, PAW Patrol, The Loud House, The Casagrandes, Henry Danger, Bubble Guppies, Blue’s Clues & You and Are You Smarter Than a 5th Grader? with John Cena and tentpole events such as Kids’ Choice Awards.

Nickelodeon is a key part of our global consumer products licensing business, licenses its brands for recreation experiences such as hotels and theme parks, and has numerous live and location-based experiences, such as JoJo Siwa’s D.R.E.A.M. The Tour, a multi-city live concert tour, its SlimeFest music festival in Chicago, multiple PAW Patrol live tours around the world, and Kids’ Choice Awards events in various international markets. In 2019, we acquired the entity holding global intellectual property rights to the Garfield franchise, including related to content, consumer products and location-based experiences. Noggin, Nickelodeon’s preschool subscription streaming service featuring over 1,000 full-length library episodes, interactive videos and short-form educational content, has an Amazon Prime Video Channel. In partnership with Paramount, Nickelodeon Movies™ produces branded films based on some of Nick’s most iconic franchises and characters.

Awesomeness creates programming for various social and SVOD platforms and produces premium original series and films through its Emmy®-winning dedicated television and film studios. Awesomeness’ portfolio is strengthened by a branded content sales team, a creator network, a creative agency and a roster of talent relationships. Programming highlights in 2019 included PEN15, which was nominated for a 2019 Emmy® for outstanding writing for a comedy series,season two of Light as a Feather on Hulu, and The Perfect Date and Trinkets on Netflix.

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MTV is the leading global youth media brand, with operations spanning cable and mobile networks, live events, theatrical films and MTV Studios.


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Programming highlights in 2019 included new series launches The Hills: New Beginnings and Double Shot at Love with DJ Pauly D and Vinny, returning favorites Teen Mom, MTV Floribama Shore, Ridiculousness, Wild ‘N Out, Are You The One?, Siesta Key, The Challenge franchise and Jersey Shore: Family Vacation. The signature MTV hit Jersey Shore format has been adapted for our international audiences, with multiple versions around the world, including as Geordie Shore in the UK (now in its 20th season) and Acapulco Shore in Mexico, and some of our international programming formats have been imported to the U.S., such as Ex on the Beach,which originated in the UK and has become a global franchise with 14 local adaptations airing worldwide.

MTV’s signature programming event, the MTV Video Music Awards, in 2019 drew 5.5 million viewers across its live linear simulcast and 269 million video views from the launch of the VMA website through the day of the show. MTV’s annual tentpole programming events also include the MTV European Music Awards, MTV Movie and TV Awards, MTV MIAWs (celebrating the best in Latin music and the digital world of the millennial generation) and MTV Fandom Awards. In July 2019, MTV hosted its 13th annual Isle of MTVMalta concert and Malta Music Week events.

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BET is a leading consumer brand in the urban marketplace, and the nation’s leading provider of entertainment, music, news and public affairs programming to African American audiences. Other BET brands include BET Her, the first network designed for black women, delivering a wide variety of culturally relevant programming, BET Gospel, featuring gospel music and spiritual programming, and BET Hip Hop, spotlighting hip hop music programming and performances.

Programming highlights in 2019 included new series launches American Soul and Boomerang, and returning favorites such as Martin, House of Payne and Meet the Browns. BET’s tentpoles and live events in 2019 included the seventh annual BET Experience, BET’s weekend-long celebration of music, entertainment and Black culture featuring the 2019 BET Awards, which aired as the number one cable awards show for the fifth consecutive year among adults 18 to 49; Black Girls Rock; and BET Hip Hop Awards. BET’s programming received seven NAACP Image Awards nominations and two wins in 2019.

BET has a multi-year content partnership with award-winning writer, director, producer, actor and playwright Tyler Perry, that extends through 2024 and spans television, film and short-form video. In October 2019, The Oval and Sistas premiered, the first two series in the multi-year partnership. In 2019, BET and Tyler Perry launched BET+, an online SVOD service focused on Black audiences and consumers of Black culture and featuring more than 1,000 hours of advertising-free premium content, including original programming from Tyler Perry and exclusive series and other content from leading Black content creators.

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Comedy Central is a leading destination for comedic talent and all things comedy, providing viewers access to a world of funny, provocative and relevant comedy, ranging from award-winning late-night, scripted and animated series, to stand-up specials, short-form and sketch.

Programming highlights in 2019 included the launch of South Side, the network’s highest-rated series premiere since 2012 among African Americans 18 to 49; returning hits The Daily Show with Trevor Noah, Drunk History and digital original Hack Into Broad City, each of which received several Emmy® nominations for outstanding series in their respective categories in 2019, South Park, which was renewed in September 2019 for three additional seasons, and the premieres of the critically-acclaimed scripted series The Other Two and sketch comedy Alternatino with Arturo Castro.


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Comedy Central also produces nationwide stand-up events and festivals, operates a Grammy Award-winning record label, produces a global podcast network and operates Comedy Central Radio on SiriusXM. In May 2019, Comedy Central launched Comedy Central Productions, a new studio-production arm partnering with comedy’s best writers, producers and on-screen talent to develop and distribute compelling, premium comedy content on all platforms. In June 2019, Comedy Central hosted its third annual Clusterfest, a three-day festival in San Francisco featuring world-class standup comedy, live music and experiential activities. Internationally, Comedy Central hosted the experiential events FriendsFest and Comedy Central Fest in a number of international markets.

Comedy Central’s strategic partnership with Trevor Noah’s production company, Day Zero Productions, gives us exclusive “first-look” rights on all projects developed by Day Zero Productions across television, feature films, digital and short-form video content.

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Paramount Network is a premium entertainment destination targeting adults 18 to 49 with original scripted and non-scripted series inspired by over a century of cinema, with stories that are immersive, inclusive and deeply personal. Programming highlights in 2019 included Yellowstone, starring Kevin Costner and written and directed by critically-acclaimed screenwriter Taylor Sheridan, which in its second season was cable’s most-watched scripted cable series of the summer. The network also featured the premiere of competition series The Last Cowboy, I Am Patrick Swayze, the most-watched episode of the network’s I Am documentary series, and new episodes of Ink Master, Bar Rescue and Bellator MMA.

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VH1 is a leading pop culture brand for adults 18 to 49 with an array of digital channels and services, including the VH1 app, VH1.com and @VH1. Programming highlights in 2019 included the critically-acclaimed original series RuPaul’s Drag Race, which received 14 Emmy® nominations and won four, including outstanding competition program and outstanding host; new series Girls’ Cruise with Lil’ Kim; and returning hits Love & Hip Hop, Black Ink Crew and Basketball Wives.

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TV Land features a mix of original programming, classic and contemporary television shows and specials that appeal to adults aged 25 to 54. Programming highlights in 2019 included the sixth season of Darren Star’s hit original series Younger, which was the number one rated ad-supported cable original sitcom among female viewers 18 to 49 and 25 to 54 for the third consecutive year.

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CMT is a leading country music and lifestyle destination, offering a mix of original series, music events and specials. Programming highlights in 2019 included the launch of Racing Wives; returning favorite Dallas Cowboys


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Cheerleaders; and tentpole events and music programming such as the CMT Music Awards, CMT Artists of the Year, CMTHot 20 Countdown and CMT Crossroads.

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Smithsonian Channel features series and documentaries of a cultural, historical, and scientific nature. Smithsonian Channel content is available via MVPDs and virtual MVPDs in the U.S. and versions of Smithsonian Channel are distributed in Canada, Singapore, Brazil, Latin America, Africa, Asia and the UK. The website SmithsonianChannel.com™ and various apps promote Smithsonian Channelprogramming and provide information and entertainment services. Smithsonian Channel Plus is a streaming subscription service that allows subscribers to view on-demand programming, including 4K Ultra HD series and documentaries.

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Pop TV is a general entertainment basic cable service focused on producing and licensing popular culture programming, such as the Emmy®-nominated original series Schitt’s Creek and Critics Choice Award®-nominated original series One Day at a Time, and licensed CBS programming, including NCIS: New Orleans and Scorpion. Pop TV is also available via the Pop Now app.

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Network 10 is one of the three major free-to-air commercial broadcast networks in Australia. Network 10 includes the channels 10™, 10 Bold™ and 10 Peach™, which broadcast a mix of entertainment, drama, news and sports programming, such as Australian Survivor, Have You Been Paying Attention? and The Australian Formula 1 Grand Prix. Network 10 also includes the digital platforms 10 Play™, 10 Daily™ as well as 10 All Access, our streaming subscription service in Australia featuring Network 10 programming as well as our other programming.

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Channel 5, a free-to-air PSB in the UK, and its affiliated channels air a broad mix of popular content, including factual programming, entertainment, reality, sports, acquired and original drama, and preschool programming through its award-winning Milkshake! brand. Programming highlights in 2019 included new dramas 15 Days, Blood and Agatha and the Truth of Murder, documentaries including RTS Programme Award winner The Abused and Suicidal: In Our Own Words, and critically acclaimed factual shows such as Critical Condition and Warship: Life at Sea.



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Telefe is a leading free-to-air channel and one of the biggest content producers in Argentina, with 11 studios and more than 3,500 hours of content produced each year. Telefe studios co-produced four films in 2019. Programming highlights in 2019 included La Voz Argentina (a local version of The Voice), Por el Mundo, 100 Días Para Enamorarse, PH: Podemos Hablar, Pequeña Victoria and Quien Quiere Ser Millonario (local version of Who Wants to be a Millionaire).

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Paramount+ is an advertising-free, premium video-on-demand service, featuring films from Paramount Pictures and hundreds of television episodes from ViacomCBS’ library. Available as an authenticated service or to customers of select subscription service providers, as of December 2019, Paramount+ was available in Sweden, Denmark, Norway, Finland, Hungary, Poland and across Latin America.

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COLORS is a highly-rated Hindi-language general entertainment pay television channel operated by our Viacom18joint venture in India. COLORS is available in India and over 120 additional countries, including in the U.S. as Aapka Colors. COLORSalso extends to the English language through COLORS Infinity, an English general entertainment channel, six Indian regional languages and two Hindi channels, COLORS Rishtey and COLORS Cineplex in the entertainment and movie space, respectively. Programming highlights in 2019 included the first season of Dance Deewane, a dance reality show; returning seasons of Bigg Boss, Fear Factor: Khatron Ke Khiladi, Naagin, Rising Star (India’s first-ever live singing reality show) and India’s Got Talent; and the 19th edition of the International Indian Film Academy (IIFA) Awards, Bollywood’s biggest awards extravaganza.

Viacom18 Studios, Viacom18’s filmed entertainment business, includes Viacom18 Motion Pictures, a fully-integrated motion pictures studio, and Tipping Point, a digital content unit. Viacom18 Motion Pictures also partners with Paramount to market and distribute Paramount films for theatrical exhibition in the Indian sub-continent.

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Pluto TV is a leading free streaming TV platform in the U.S. Pluto TV is available across mobile devices, desktops, streaming players and game consoles and is integrated across a growing number of Smart TVs and other video and broadband platforms.

With more than 22 million monthly active users in the U.S., the majority of whom are on connected TVs, and over 175 content partners, Pluto TV offers over 250 live linear channels and thousands of hours of on-demand content, including movies, news, sports, general entertainment, African Americans, kids and digital series. In July 2019, Pluto


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TV launched Pluto TV Latino, a suite of 22 channels streaming over 4,000 hours of programming in Spanish and Portuguese, including hit TV series and movies, sports, reality, lifestyle and more. In addition, Pluto TV is available in the UK, Germany, Austria and Switzerland, and plans to expand to Latin America and additional territories.

FILMED ENTERTAINMENT

Overview

Our Filmed Entertainment segment develops, produces, finances, acquires and distributes films, television programming and other entertainment content in various markets and media worldwide through its Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios divisions. It partners on various projects with key ViacomCBS brands, including Nickelodeon Movies, MTV Films® and BET Films™.

Films produced, acquired and/or distributed by the Filmed Entertainment segment are generally first exhibited theatrically in domestic and/or international markets and then released in various markets through airlines and hotels, electronic sell-through, DVDs and Blu-ray discs, transactional video-on-demand (“TVOD”), pay television, SVOD, basic cable television, free television and free video-on-demand (“FVOD”).

Our Filmed Entertainment segment’s revenues are generated primarily from the release and/or distribution of films theatrically, the release and/or distribution of film and television product through home entertainment, the licensing of film and television product to television and digital platforms and other ancillary activities. In 2019, our Filmed Entertainment segment licensing revenues, home entertainment revenues and theatrical revenues were approximately 57%, 21% and 18%, respectively, of total revenues for this segment. Our Filmed Entertainment segment generated 10%, 11% and 12% of our consolidated revenues in 2019, 2018 and 2017, respectively.

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Paramount Pictures is a major global producer and distributor of filmed entertainment and has an extensive library consisting of approximately 1,300 film titles produced by Paramount, acquired rights to approximately 2,100 additional films and a number of television programs. Paramount’s library includes many Academy Award winners, including Titanic, Braveheart, Forrest Gump, The Godfather, The Godfather Part II and Wings, which won the first Academy Award ever awarded for Best Picture in 1929. The Paramount library also includes other Academy Award Best Picture nominees such as Arrival, Fences, The Big Short, Selma and The Wolf of Wall Street, classics such as The Ten Commandments, Breakfast at Tiffany’s and Sunset Boulevard, and a number of successful franchises such as Mission: Impossible, Transformers, Star Trek and Paranormal Activity. In 2019, Paramount’s theatrical releases included Terminator: Dark Fate, Rocketman, Gemini Man, Pet Sematary, Crawl and Playing with Fire.

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Paramount Players aims to expand Paramount’s slate of films by partnering with our Cable Networks brands to develop, produce and release distinctive feature films that showcase the network brands to movie audiences worldwide. Paramount Players also focuses on modest budget films of specific genres for target audiences. In 2019, Paramount


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Players produced Dora and the Lost City of Gold, a live-action adaptation of the classic Nickelodeon series Dora the Explorer,co-produced with Nickelodeon Movies.

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Paramount Animation creates high-quality animated films and aims to release one to two titles per year. In 2019, Paramount Animation released Wonder Park, a film about the adventures of a young girl in a magical amusement park.

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Paramount Television Studios develops and finances a wide range of original, premium television content across all types of media platforms for distribution worldwide. Paramount Television Studios’ productions include Tom Clancy’s Jack Ryan for Amazon; 13 Reasons Why for Netflix; The Alienist and The Angel of Darkness for TNT; Catch-22 for Hulu; Defending Jacob forApple; Boomerang and First Wives Club for BET and BET+, respectively; and Berlin Station forEPIX. In 2019, Paramount Television Studios’ programming received seven Emmy® nominations.

Film Production, Distribution and Financing

Paramount produces many of the films it releases and also acquires films for distribution from third parties. In some cases, Paramount co-finances and/or co-distributes films with third parties, including other studios. Paramount also enters into film-specific financing and slate financing arrangements from time to time under which third parties participate in the financing of the costs of a film or group of films in exchange for an economic participation and a partial copyright interest. Paramountdistributes films worldwide or in select territories or media, and may engage third-party distributors for certain pictures in certain territories.

Paramount has several multi-picture production, distribution and financing relationships, including its agreement with Skydance Productions (“Skydance”), under which Paramountand Skydance produce and finance certain films, and Paramount has a first look on Skydance-initiated projects. Paramount also has an agreement with Hasbro Inc. (“Hasbro”) involving the production, financing and distribution of live action and animated films based on Hasbro’s expansive list of properties. In December 2019, in connection with ViacomCBS’ entry into an agreement to acquire a 49% interest in Miramax, Paramount and Miramax entered into first-look, co-financing and distribution agreements under which they will collaborate on production and financing of new film and television projects, and Paramountwill distribute such new projects, as well as Miramax library content.

Domestically, Paramount generally performs marketing and distribution services for theatrical releases and sales and marketing services for its home entertainment releases. Paramount has an agreement with Universal Studios for certain back-office and distribution services for all physical DVD and Blu-ray discs released by Paramount in the U.S. and Canada. Paramount also distributes CBS’ television and other library content and Nickelodeon television shows on DVD and Blu-ray disc on a worldwide basis. Internationally, Paramount generally distributes its theatrical releases through its own international affiliates or, in territories where it does not have an operating presence, through United International Pictures, a joint venture with Universal Studios. For home entertainment releases, Paramount’s physical DVD and Blu-ray discs are distributed in certain international territories by Universal Pictures Home


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Entertainment and in certain other territories by Paramount licensees. Paramount also distributes films and television shows domestically and internationally on electronic sell-through, TVOD, SVOD, FVOD and television platforms. In the first domestic pay television distribution window, Paramount’s feature films initially theatrically released in the U.S. are generally exhibited on EPIX.

Producing, marketing and distributing films and television programming can involve significant costs, and the timing of a film’s release can cause our financial results to vary. For example, marketing costs are generally incurred before and throughout the theatrical release of a film and, to a lesser extent, other distribution windows, and are expensed as incurred. As a result, we typically incur losses with respect to a particular film prior to and during the film’s theatrical exhibition, and recoupment of investment as well as profitability for the film may not be realized until well after its theatrical release. Therefore, the results of the Filmed Entertainment segment can be volatile as films work their way through the various distribution windows.

PUBLISHING

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Our Publishing segment consists of Simon & Schuster, which publishes and distributes adult and children’s consumer books in printed, digital and audio formats in the U.S. and internationally. Its digital formats include electronic books and audio books.

Simon & Schuster’s major adult imprints include Simon & Schuster, Scribner, Atria Books and Gallery Books. Simon & Schuster’s major children’s imprints include Simon & Schuster Books For Young Readers™, Aladdin® and Little Simon®. Simon & Schuster also develops special imprints and publishes titles based on the products of certain of our businesses as well as those of third parties and distributes products for other publishers. Simon & Schuster distributes its products directly and through third parties. Simon & Schusteralso delivers content and promotes its products on its own websites, social media, and general Internet sites as well as those dedicated to individual titles. International publishing includes the international distribution of English-language titles through Simon & Schuster in the UK, Canada, Australia and India and other distributors, as well as the publication of locally originated titles by its international companies.

In 2019, Simon & Schuster had 200 New York Times bestsellers in hardcover, paperback, audio and combined print and ebook formats, collectively, including 21 New York Times #1 bestsellers. Best-selling titles in 2019 included Howard Stern Comes Again by Howard Stern, The Institute by Stephen King and The Pioneers by David McCullough. Best-selling children’s titles included Dork Diaries 14: Tales from a Not-So-Best Friend Forever by Rachel Renée Russell and Red Scrolls of Magic by Cassandra Clare. Simon & Schuster Digital™, through SimonandSchuster.com, publishes original content, builds reader communities and promotes and sells Simon & Schuster’s books over the Internet.

Our Publishing segment’s revenues are generated from the publishing and distribution of consumer books in print, digital and audio formats. In 2019, the sale of digital content represented approximately 25% of Publishing’s revenues. Our Publishing segment generated 3% of our consolidated revenues in each of 2019, 2018 and 2017.

REVENUES

Our TV Entertainment, Cable Networks, Filmed Entertainment and Publishing segments generate advertising revenues, affiliate revenues, content licensing revenues, theatrical revenues and publishing revenues. For additional information regarding our sources of revenues, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition – Consolidated Results of Operations – 2019 vs. 2018 – Revenues” and “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements.” For information regarding seasonal factors affecting our revenues, see “Item 1A. Risk Factors – Our revenues, expenses and operating


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results may vary based on the timing, mix, number and availability of our films and other programming and on seasonal factors.”

Advertising

Advertising revenues are generated primarily from the sale of advertising spots on the CBS Television Network, our basic cable networks and our television stations, as well as on our ad-supported streaming services, including CBS All Access and Pluto TV, and on our websites. Our advertising revenues include integrated marketing services, which provide unique branded content and custom sponsorship opportunities to our advertisers, as well as advanced marketing solutions, including addressable video and brand solutions.

Affiliate

Affiliate revenues are principally comprised of fees received from MVPDs and virtual MVPDs for carriage of our cable networks, fees received from television stations affiliated with the CBS Television Network, fees for authorizing the MVPDs’ and virtual MVPDs’ carriage of our owned television stations, and subscription fees for our streaming services.

Content Licensing

Content licensing revenues are principally comprised of fees from the licensing of exhibition rights for our internally-produced television and film programming to television stations, cable networks and SVOD and FVOD services; home entertainment revenues, which are derived from the sale and distribution of our content through DVDs and Blu-ray discs to wholesale and retail partners, as well as from the viewing of our content on a transactional basis through TVOD and electronic sell-through services; fees from the use of our trademarks and brands for consumer products, recreation and live events, and fees from the distribution of third-party programming.

Theatrical

Theatrical revenues are principally comprised of the worldwide theatrical distribution of films through audience ticket sales.

Publishing

Publishing revenues are principally comprised of the domestic and international publishing and distribution of consumer books in printed, digital and audio formats.

COMPETITION

All of our businesses operate in highly competitive environments, and compete for creative talent and intellectual property, as well as audience and distribution of our content.

Our TV Entertainment, Cable Networks and Filmed Entertainment segments compete with a variety of media companies that have substantial resources to produce and acquire content worldwide, including broadcast networks, basic and premium cable networks, streaming services, film and television studios, production groups, independent producers and syndicators, television stations and television station groups. These segments compete with other content creators for creative talent including producers, directors, actors and writers, as well as for new program ideas and intellectual property and for the acquisition of popular programming. Similarly, our Publishing segment competes with large publishers for the rights to works by authors, and competition is particularly strong for well-known authors and public personalities.

Our businesses also face significant competition for audience share from various sources. Our Filmed Entertainment segment competes for audiences for its theatrical films with releases by other major film studios, television producers and streaming services as well as with other forms of entertainment and consumer spending


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outlets. Our TV Entertainment and Cable Networks segments compete for audiences and advertising revenues primarily with other cable and broadcast television networks; social media platforms; websites, apps and other online experiences; radio programming; and print media. In addition, our television and basic cable networks businesses face increasing competition from technologies providing digital audio and visual content in ways that allow audiences to consume content of their choosing while avoiding traditional commercial advertising.   Moreover, our businesses face competition from the many other entertainment options available to consumers including video games, sports, travel and outdoor recreation.

We also face competition for distribution of our content. Our TV Entertainment and Cable Networks segments compete for distribution of our program services (and receipt of related fees) with other broadcast networks, cable networks and programmers. The CBS Television Network also competes with other broadcast networks to secure affiliations with independently owned television stations to ensure the effective distribution of network programming nationwide. Our TV Entertainment, Cable Networks and Filmed Entertainment segments compete with studios and other producers of entertainment content for distribution on third party platforms. Our Publishing segment competes with large publishers for sales to retailers, and mass merchandisers and on-line retailers have contributed to a general trend toward consolidation in the retail channel. In addition, the growth of the electronic book market has impacted print book retailers and wholesalers, and could result in a reduction of these channels for the sales and marketing of our books.

For additional information regarding competition, see “Item 1A. Risk Factors – Our businesses operate in industries that are highly competitive and swiftly consolidating.”

ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGY

ViacomCBS is committed to responsible and sustainable business practices, which strengthen our ability to innovate and better serve our partners, audiences and stockholders. We are proactively identifying, measuring and mapping the environmental, social and governance (“ESG”) impacts of our global operations and are working to manage and report on various non-financial ESG impacts in an effort to transparently address them with stakeholders.

As content creators, we are passionate about entertaining and informing the world and are committed to our legacy of creating lasting impact through our work. From groundbreaking HIV awareness initiatives to campaigns supporting education, the empowerment of women and youth, health issues and the military, veterans and their families, we have always strived to be at the forefront of championing the causes that matter to our audiences. Today, we continue to leverage our brands and our global reach to amplify the efforts of those who are working to make positive changes in their communities. Striving to be a good corporate citizen and to make a positive impact in communities around the world is fundamental to what we do every day. Below are just a few examples of our efforts:

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We continue to use the immense power of our media platforms to heighten social awareness on important issues through our award-winning CBS Cares public service announcement (“PSA”) campaigns. In 2019, the CBS Television Network scheduled CBS Cares PSAs with an estimated value of $276 million and featuring a wide array of CBS talent on a variety of important topics such as heritage and history months, child advocacy, empowerment of women and girls, support for the military, veterans and their families, and health awareness. Examples include:

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We and Girls Inc. created a PSA that aired in-game during the CBS Television Network’s Super Bowl LIII coverage, and post-game on the CBS Sports Network. Featuring the voiceover of CBS This Morning’s Gayle King and players from the NY Giants, the PSA encourages girls to believe they can succeed at the highest levels.



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We produce and air annual PSAs as part of our commitment to honor the victims of the Holocaust on International Holocaust Remembrance Day.

We and the Association of National Advertisers again teamed up for a multi-pronged partnership in support of the #SeeHer initiative to accurately portray girls and women in media. Supporting PSAs ran in primetime as part of Women’s History Month and featured Norah O’Donnell, Gayle King, Tea Leoni, Carrie Ann Inaba and others.

CBS Cares tackled the issue of sexual harassment, by continuing to air PSAs featuring Bridget Moynahan, Daniela Ruah and Aisha Tyler.

PSAs featuring Shemar Moore, Aisha Tyler, Sara Gilbert and Sheryl Underwood continued to air, teaching children about the importance of other cultures, races and religions, and emphasizing that we are all enriched by our differences.

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Get Schooled inspires and empowers students nationwide to thrive in high school, college and their first jobs through a unique blend of powerful digital content, gamification and personalized support. In its 10-year history, Get Schooled has partnered with over 15,000 educators and their students, and has been recognized by Fast Company as a “Most Innovative Company.”

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The Company’sSave The Music Foundation helps kids, schools, and communities realize their full potential through the power of making music. Founded in 1997, Save The Music partners with school districts and raises funds to restore music programs in public schools. Since inception, we have donated over $58 million worth of new musical instruments and technology to 2,159 schools in 276 school districts around the country, impacting the lives of countless students.

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Beyond the Backpack is a celebration of Nickelodeon’s curriculum-based preschool properties. The initiative champions kindergarten and pre-k readiness by providing fun, simple and unique tools to address the five areas identified as critical to educational success: Family Engagement, Health & Wellness, Literacy Skills, Social & Emotional Skills, and STEAM (Science, Technology, Engineering, Arts and Math) Skills. Beyond the Backpack reinforces the academic community’s view that parents and caregivers are their child's first teachers and that it is never too early to start getting ready. In 2019, Nickelodeon donated 75,000 printed toolkits and 2,500 backpacks full of school supplies.



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Paramount has a long and proud tradition of giving back with a corporate social responsibility program focused on four key initiatives: supporting public education; protecting the environment; combating HIV/AIDS; and promoting volunteerism. By offering employee engagement opportunities, coupled with financial and in-kind contributions, Paramount supports numerous local, national, and global non-profit organizations. Kindergarten to Cap & Gown - Paramount’s signature education program - mentors students through their educational experience, targeting four partner schools in Paramount’s Los Angeles neighborhood.

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In 2019, Paramount Network debuted the first installments of Take Action - a short-form digital documentary series addressing important social issues related to our content themes. We believe that stories of individual volunteers and activists have the power to connect us, inspire action and, ultimately, create real change. Each film includes a call-to-action, partnering with a nonprofit organization to give the audience the opportunity to learn more and take action themselves.

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The MTV Staying Alive Foundation produces multi-award-winning, impactful behavior change campaigns to further its purpose of storytelling to save lives and enable young people to make empowered, informed choices about their health and wellbeing.

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Our robust Veterans Network (“VetNet”) engages in multiple programs and supports numerous veteran-related causes. Among its activities in 2019, VetNet worked with our legal teams to provide more than 4,000 hours of critical, pro-bono legal assistance to more than 200 veterans and their families, representing approximately $1.5 million of legal fees donated; hosted a virtual career advice event for veterans in partnership with American Corporate Partners; worked with partners to provide mentorship and internships for 850 veterans; and collected more than 100,000 donations, including toys for veteran families and toiletries for the homeless.

REGULATION AND PROTECTION OF OUR INTELLECTUAL PROPERTY

We are, fundamentally, a content company, so the trademark, copyright, patent and other intellectual property laws that protect our brands and content are of paramount importance to us. Our businesses and the intellectual property they create or acquire are either subject to orand affected by laws and regulations of U.S. federal, state and local governmental authorities, inas well as laws and regulations of countries other than the U.S. and of national, regionalpan-national bodies such as the European Union (“EU”). The laws and local authorities in foreign countries. The rules, regulations policies and procedures affecting theseour businesses are constantly subject to change. The descriptions which followchange, as are summaries and should be read in conjunction with the texts of the statutes, rulesprotections that those laws and regulations described herein.afford us. The descriptions dodiscussion below describes certain, but not purport to describe all, present and proposed statutes, ruleslaws and regulations affecting the Company’sour businesses.


Intellectual Property and Privacy

Laws affecting intellectual property are of significant importance to the Company. (See “Intellectual Property” on page I-16 for more information on the Company’s brands).

Unauthorized Distribution of Copyrighted Content and Piracy. Unauthorized distribution, reproduction or display of copyrighted material in digital formats without regard to content owners’ copyright rights in television programming, motion pictures, clips and books, such as through pirated DVDs and Blu-ray Discs, unauthorized stored copies and livestreaming, internet downloads, file “sharing” and peer-to-peer services, is a threat to copyright owners’ ability to protect and exploit their property. The Company’s digital delivery services and commercial arrangements with digital content providers help reduce the risks associated with unauthorized access to its content. The Company is also engaged in enforcement and other activities to protect its intellectual property and participates in various litigation, public relations programs and legislative activity. These business strategies and enforcement efforts are dependent upon laws and practices that protect the rights of creators and authorized distributors of content.

Laws and Content. The Company derives revenues from the creation and exploitation of creative content, for which the copyright law grants certain exclusive rights, including to reproduce, publicly perform and distribute. The duration of the protection afforded to the Company’s intellectual property depends on the type of property and the laws and regulations of the relevant jurisdiction.Any changes to copyright laws or related regulations that enable the Company to control the distribution of its content, including through court decisions, which diminish the scope of a copyright owner’s exclusive rights, could impact the Company. Proposed legal amendments, such as to the law governing territorial exclusivity of the distribution of content in Europe, could adversely impact the Company’s ability to control and distribute its content.

Privacy. The laws and regulations governing the collection, use and transfer of consumer information are complex and rapidly evolving, particularly as they relate to the Company’s interactive businesses. The Company monitors and considers these laws and regulations in the design and operation of its Websites, digital content services and legal and regulatory compliance programs.




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FCC and Similar Regulation
Broadcasting

General. Television Broadcast television and radio broadcastingcertain aspects of cable programming are subject to the jurisdiction of the FCC pursuant to the Communications Act. The Communications Act empowers the FCC, among other actions, to issue, renew, revoke and modify broadcasting licenses; penalize broadcasters for airing indecent or profane content; regulate the airing of emergency alerting and the use of emergency alerting tones by broadcasters or cable channels; require video programming to be accessible to persons with disabilities; determine stations’ frequencies, locations and operating power; regulate some of the equipment used by stations; adopt other regulations to carry out the provisions of the Communications Act and other laws, including requirements affecting the content of broadcasts; and to impose penalties for violation of its regulations, including monetary forfeitures, short-term renewal of licenses and, in egregious cases, license revocation or denial of license renewals.


Under the Communications Act, the FCC also regulates certain aspects of the operation of MVPDs and certain other electronic media that compete with broadcast stations.stations and cable programming.


IndecencyWe provide below a brief summary of certain laws and Profanity Regulation. The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent or profane material because the vagueness of the FCC’s indecency/profanity definition makes it difficult to apply, particularly with respect to spontaneous, live programming. The FCC’s maximum forfeiture penalty per station for broadcasting indecent or profane programming is approximately $383,000 per indecent or profane utterance with a maximum forfeiture exposure of approximately $3.5 million for any continuing violation arising from a single act or failure to act. The Company has been involved in litigation and, from time to time, has received and may receive in the future letters of inquiry from the FCC prompted by complaints alleging that certain programming on its broadcast stations included indecent or profane material.regulations under which we operate.


License Renewals. Television and radio broadcast licenses are typically granted for standard terms of eight years. The Communications Act requires the FCC to renew a broadcast license if the FCC finds that the station has served the public interest, convenience and necessity and, with respect to the station, there have been no serious violations by the licensee of either the Communications Act or the FCC’s rules and regulations and there have been no other violations by the licensee of the Communications Act or the FCC’s rules and regulations that, taken together, constitute a pattern of abuse. The Company hasWe have no pending renewal applications.applications, but we will be filing renewal applications with respect to all of our stations on a staggered basis between 2020 and 2023. A station remains authorized to operate while its license renewal application is pending.


License Assignments.Assignments and Transfers of Licensee Control. The Communications Act requires prior FCC approval for the assignment of a license or transfer of control of an FCC licensee. Third parties may oppose the Company’sour applications to assign, acquire, or transfer or acquirecontrol of broadcast licenses.


Ownership Regulation. The Communications Act and FCC rules and regulations limit the ability of individuals and entities to have certain official positions or ownership interests, known as “attributable” interests, above specific levels in broadcast stations as well as in other specified mass media entities.stations. In seeking FCC approval for the acquisition of a broadcast television or radio station license, the acquiring person or entity must demonstrate that the acquisition complies with the FCC’s ownership rules or that a waiver of the rules is in the public interest.


In August 2016, theBelow are descriptions of broadcast ownership rules. The FCC issued an Order as part ofis reviewing its local television ownership and dual network rules through its most recent quadrennial review ofthat commenced in November 2018 and is separately reviewing its broadcast ownership rules (the “2016television national audience reach rule. The FCC Order”) that largely retained the existing rules, which are briefly summarized below. However, several parties have petitioned the FCC to reconsider this decision and the FCC may relaxhad relaxed certain of these rules in 2017, including those relatedbut in November 2019, a federal appellate court vacated that 2017 action and ordered the FCC to local television ownership.conduct further proceedings.


Local Television Ownership. Under the The FCC’s local television ownership rule one partylimits the number of full-power television stations that may own up to two television stationsbe commonly owned in the same DMA, so long asDMA. For example, common ownership of two full-power stations in a market generally is allowed only if at least eight independently owned and operating full-power stations will remain in the market following the acquisition of the second station, and if at least one of the two stations is not amongoutside of the top-four ranked stations in the market based on audience share as of the date an application for approval of an acquisition is filed with the FCC, and at least eight independently owned and operating full-power television stations would remain in the market following the acquisition of the second television station. The 2016 FCC Order modified the local television station ownership rule to prohibit transactions involving the sale or swap ofshare.



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network affiliations between same-market television station owners that would result in an entity holding an attributable interest in two top-four ranked television stations. Further, without regard to the number of remaining independently owned television stations, the rule permits the ownership of more than one television station within the same DMA so long as certain signal contours of the stations involved do not overlap. “Satellite” television stations that simply rebroadcast the programming of a “parent” television station are exempt from the local television ownership rule if located in the same DMA as the “parent” station.

Television National Audience Reach Limitation. Under the national television ownership rule, one party may not own television stations which reach more than 39% of all U.S. television households. In a separate September 2016 decision, the FCC eliminated the UHF discount, pursuant to which a UHF television station was attributed with reaching only 50% of the television households in its market. This action is under reconsideration by the FCC, which may lead to the reinstatement of the UHF discount in 2017. The Company currently owns and operates television stations that reach approximately 38% of all U.S. television households not taking into account the UHF discount.

Radio-Television Cross-Ownership Rule. The radio-television cross-ownership rule limits the common ownership of radio and television stations in the same market. The cross-ownership rule may in certain circumstances be more restrictive than the rules that separately limit the ownership of local television stations or local radio stations. The numeric limit under the cross-ownership rule varies according to the number of independent media voices in the market. The Company is in compliance with the cross-ownership rule.

Newspaper-Broadcast Cross-Ownership. The newspaper-broadcast cross-ownership rule, which was largely left unchanged by the 2016 FCC Order, prohibits the common ownership of a television or radio station and daily newspaper in the same market absent a waiver by the FCC.

Local Radio Ownership. The FCC’s local radio ownership rule applies in all markets where the Company owns radio stations. Under that rule, one party may own up to eight radio stations in the largest markets, no more than five of whichmay be either AM or FM. With a few exceptions, the rule permits the common ownership of 8 radio stations in the top 50 markets, where CBS Radio has significant holdings.

Dual Network Rule. The dual network rule prohibits any of the four major networks, ABC, CBS, FOX and NBC, from combining.combining or being under common control.


Attribution of Ownership.Television National Audience Reach Limitation. Under the FCC’s attributionnational television ownership rule, one party may not own television stations that reach more than 39% of all U.S. television households, although under current FCC rules a direct or indirect purchaser of various types of securities of an entity which holds FCC licenses, such as the Company, could violate the foregoing FCC ownership regulations or policies if that purchaser owned or acquired an “attributable” interest in other media properties. Under the FCC’s rules, an “attributable” interest for purposesUHF station is attributed with reaching only 50% of the FCC’s broadcast ownershiptelevision households in its market. In December 2017, the FCC issued a Notice of Proposed Rulemaking pursuant to which it will consider modifying, retaining or eliminating the 39% national television audience reach limitation and/or the UHF


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discount. We currently own and operate television stations that reach approximately 38% or 25% of all U.S. television households on an undiscounted or discounted basis, respectively.

Cross-ownership restrictions. FCC “cross-ownership” rules generally includes: equity and debt interests which combined exceed 33%reinstated as a result of a licensee’s total assets, ifdecision by a federal appellate court (a) prohibit common ownership of one or more broadcast stations (whether radio or television) and a daily newspaper in the interest holder supplies more than 15%same DMA, and (b) limit the number of the licensee’s total weekly programming, or has an attributable same-market media interest, whetherradio and television radio, cable or newspaper; a 5% or greater direct or indirect voting stock interest, including certain interests held in trust, unless the holder is a qualified passive investor in which case the threshold is a 20% or greater voting stock interest; any equity interestbroadcast stations that may be commonly owned in a limited liability companygiven DMA. We do not currently own cognizable interests in any daily newspapers or a partnership, including a limited partnership, unless the interest holder is properly “insulated” from management activities; and any position as an officer or director of a licensee or of its direct or indirect parent. The FCC is reviewing its single majority voting stockholder attribution exemption, which renders as non‑attributable voting interests up to 49% in a licensee controlled by a single majority voting stockholder. Because NAI holds an attributable interest in both the Company and Viacom Inc., the business of each company is attributable to the other for certain FCC purposes, which may have the effect of limiting and affecting the activities, strategic business alternatives and business terms available to the Company. (See Item 1A. “Risk Factors—The Businesses of the Company and Viacom Inc. Will Be Attributable to the Other Company for Certain Regulatory Purposes, Which May Limit Business Opportunities”).radio broadcast stations.


Alien Ownership. In general, the Communications Act prohibitsrestricts foreign individuals or entities from collectively owning more than 25% of theour voting power or equity of the Company. In September 2016, theequity. FCC clarified


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and expanded certain rules and procedures and adopted and standardized filing and review procedures for broadcasters seeking to obtain FCC consentapproval is required to exceed the 25% threshold. The FCC has recently approved foreign ownership levels of up to 100% in certain instances, subsequent to its review and approval of specific, named foreign individuals.


Cable and Satellite Carriage of Television Broadcast Stations. The 1992 CableCommunications Act and implementing FCC regulations govern the retransmission of commercial television stations by cable television operators. Every three years, a television station must elect, with respect to cable systems within its DMA, either “must carry” status, pursuant to which the cable system’s carriage of the station is mandatory, or “retransmission consent,” pursuant to which the station gives up its right to mandatory carriage and secures instead the right to negotiate consideration in return for consenting to carriage. The Company’s owned television stations have elected the retransmission consent option in substantially all cases, and, since 2006, the Company has implemented a systematic process of seeking monetary consideration for its retransmission consent.

Similarly, federal legislation and FCC rules govern the retransmission of broadcast television stations by DBS operators. DBScable system operators, are requireddirect broadcast satellite operators, and other MVPDs. Pursuant to these regulations, we have elected to negotiate with MVPDs for the right to carry the signals of all localour broadcast television broadcast stations requesting carriage in local markets in which the DBS operator carries at least one signal pursuant to the statutory local-to-local compulsory copyright license. Every three years, each television station in such markets must elect “must carry” or “retransmission consent” status, in a manner similar to that described above with respect to cable systems. The Company’s owned and operated television stations are being transmitted into their local markets by the two major DBS operators pursuant to retransmission consent agreements. Federal law requires that broadcasters and MVPDs negotiate in good faith for retransmission consent. Some MVPDs have sought changes to federal law that would eliminate or otherwise limit the ability of broadcasters to obtain fair compensation for the grant of retransmission consent.


National Broadband Plan/Post-Auction Repack. In 2017, the FCC concluded a series of voluntary auctions to repurpose certain spectrum then utilized by broadcast television stations for use by wireless broadband services. The FCC has mandated that certain television stations that are continuing to operate subsequent to these auctions must change their channels as the FCC “repacks” the remaining spectrum dedicated to broadcast television use. Congress provided that the FCC will assist television stations in retaining their current coverage areas and established a fund to at least partially reimburse broadcasters for reasonable relocation expenses relating to the spectrum-repacking. Certain broadcast television stations, including some of those owned by us, are in the process of undertaking this repacking process and seeking reimbursement of associated costs.

Program Regulation. The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material between the hours of 6 a.m. and 10 p.m. The FCC’s maximum forfeiture penalty per station for broadcasting indecent or profane programming is approximately $415,000 per indecent or profane utterance, with a maximum forfeiture exposure of approximately $3.83 million for any continuing violation arising from a single act or failure to act. FCC regulations also prohibit broadcast television stations and cable networks from transmitting or causing the transmission of Emergency Alert System (“EAS”) tones in the absence of an actual emergency, authorized test of the EAS, or a qualified public service announcement. In September 2019, the FCC issued a Notice of Apparent Liability for Forfeiture finding that a CBS Television Network program broadcast in April 2018 violated the EAS rule and imposed a forfeiture of $272,000, which we timely paid.

Broadcast Transmission Standard. In November 2017, the FCC adopted rules to permit television broadcasters to voluntarily broadcast using the “Next Generation” broadcast television transmission standard developed by the Advanced Television Systems Committee, Inc., also called “ATSC 3.0.” Those full-service television stations using the new standard are subject to certain requirements, including the obligation to continue broadcasting a generally identical program stream in the current ATSC 1.0 broadcast standard. The ATSC 3.0 standard can be used to offer better picture quality and improved mobile broadcast viewing. A television station converting to ATSC 3.0 operation will incur significant costs in equipment purchases and upgrades. In addition, consumers may be required to obtain new television sets or other equipment that are capable of receiving ATSC 3.0 broadcasts. We are participating in various ATSC 3.0 testing with other broadcasters, but it is too early to predict any impact of this technical standard on our operations.

Children’s Television Programming. FederalOur business is subject to various regulations, both in the U.S. and abroad, applicable to children’s programming. Since 1990, federal legislation and rules of the FCC rules limithave limited the amount and content


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of commercial matter that may be shown on broadcast television stations and cable channels during programming designed for children 12 years of age and younger, and requiresince 2006 the FCC has limited the display of certain commercial website addresses during children’s programming. Moreover, each of our broadcast television stations is required to broadcast on their main program streamair, in general, three hours per week of educational and informational programming (“E/I programming”) designed for children 16 years of age and younger.younger, with at least two of those three hours appearing on the station’s primary program stream. The FCC rules also imposemade certain modifications to its E/I programming requirementsrules in 2019, which provided additional flexibility to broadcasters with respect to certain aspects of these rules.

In addition, some policymakers have sought limitations on eachfood and beverage marketing in media popular with children and teens. For example, restrictions on the television advertising of foods high in fat, salt and sugar (“HFSS”) to children aged 15 and under have been in place in the UK since 2007. The UK government is currently considering tighter controls, including a ban on all HFSS advertising before 9:00 p.m. Various laws with similar objectives have also been enacted in Ireland, Turkey, Mexico, Chile, Peru, Taiwan and South Korea, and significant pressure for similar restrictions continues to be felt globally, most acutely in Australia, Brazil, Canada, Colombia, India, Hungary, Singapore, South Africa and France. The implementation of these or similar limitations and restrictions could have a negative impact on our Cable Networks advertising revenues, particularly for our networks with programming for children and teens.

Certain Other Regulations Affecting Our Business

Global Data Protection Laws and Children’s Privacy Laws. A number of data protection laws impact, or may impact, the manner in which ViacomCBS collects, processes and transfers personal data. In the EU, the General Data Protection Regulation (“GDPR”) mandates data protection compliance obligations and authorizes significant fines for noncompliance, requiring significant compliance resources and efforts on our part. Further, a number of other regions where we do business, including the U.S., Asia and Latin America, have enacted or are considering new data protection regulations that may impact our business activities that involve the processing of personal data. For example, in the U.S., the California Consumer Privacy Act, which went into effect on January 1, 2020, creates a host of new obligations for businesses regarding how they handle the personal information of California residents, including creating new data access, data deletion and opt out rights. In addition, some of the mechanisms ViacomCBS relies upon for the transfer of personal data from the EU to the U.S., such as utilizing standard contractual clauses approved by the European Commission (“EC”), have been subject to legal challenges, and the EU-U.S. Privacy Shield framework, which permits the transfer of personal data from the EU to the U.S., is subject to review by the relevant EU and U.S. authorities. The outcomes of these proceedings are uncertain and may require changes to our international data transfer mechanisms.

In addition, we are subject to other laws and regulations intended specifically to protect the interests of children, including the privacy of minors online. The U.S. Children’s Online Privacy Protection Act (“COPPA”) limits the collection by operators of websites or online services of personal information online from children under the age of 13. In July 2019, the Federal Trade Commission initiated a review of its regulations implementing COPPA, which we anticipate will be updated to address changes in technology. In the EU, GDPR also limits our ability to process data from children under the age of 16. Such regulations also restrict the types of advertising we are able to sell on these sites and apps and impose strict liability on us for certain actions of ViacomCBS, advertisers and other third parties, which could affect advertising demand and pricing. State and federal policymakers are also considering regulatory and legislative methods to protect consumer privacy on the Internet, and these efforts have focused particular attention on children and teens.

Compliance with enhanced data protection laws, which may be inconsistent with one another, requires additional resources and efforts on our part, and noncompliance with personal data protection regulations could result in increased regulatory enforcement and significant monetary fines.

EU Commission’s Digital Single Market Strategy. The EU continues to pursue its Digital Single Market (“DSM”) Strategy, which contains a broad range of proposals designed to create a more complete EU-wide market for digital multicast program stream transmittedgoods and services, several of which are likely to impact ViacomCBS’ businesses.



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In November 2018, the EU adopted a number of reforms to the Audiovisual Media Services Directive (the “AVMSD”), which sets content and advertising rules for European broadcasters. The AVMSD applies the country-of-origin principle to linear and non-linear TV services, enabling cross-border broadcasts from a single regulatory jurisdiction, and sets compulsory minimum pan-EU content and advertising rules that Member States may choose to exceed. These reforms include a mandatory quota for European works on on-demand audiovisual services platforms, the option for EU states to introduce levies on the revenues of audiovisual media-service providers, and liberalized rules governing the scheduling of advertising on linear broadcasters. Member States have until September 2020 to transpose the reforms into national law. These changes could impact revenues for the VCNI television channels business in Europe and affiliate deals with platforms for both film and TV distribution.

In June 2019, two new EU directives became effective and may impact the way we acquire and distribute content online. The Copyright Directive introduced a requirement to agree to terms for the carriage of copyrighted content on online platforms (or to remove content in the absence of such agreement), and also granted rights to authors and performers to “fair and proportionate” remuneration, greater transparency and a right to revoke agreements if their work is not adequately exploited. The Online Broadcasting Directive extends the system of mandatory collective exercise of cable retransmission rights to other forms of retransmission including Internet protocol television and mobile, thereby potentially reducing the control that rights owners have over online distribution. EU states have until June 2021 to transpose these Directives into national law, if similar provisions do not already exist.

In 2020, the EU will evaluate the impact of the 2018 EC Geo-blocking Regulation that prohibits unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment. As part of its evaluation, it will consider whether the scope of the regulation should be extended to services that offer audio-visual and other copyrighted content, which may impact content owners’ ability to distribute on an exclusive, territorial basis within the EU.

Restrictions on Content Distribution. In addition to the EU, numerous countries around the world impose restrictions on the amount and nature of content that may be distributed in that country. Such regulations in China have the greatest impact, as only 34 foreign films, as selected by relevant authorities in China, may be distributed annually on a revenue share basis based on box office performance. In addition, in September 2018, China’s film and television stations,regulator, the National Administration of TV and Radio, published proposed regulations that would severely limit the streaming and broadcasting of foreign film and television content in China, further reducing foreign access to the Chinese market.

UK Regulations Affecting Channel 5 Business. As a PSB in the UK, Channel 5 is subject to certain UK Office of Communications (“OFCOM”) broadcasting regulations that impose detailed obligations, including mandating the proportion of total programming and programming during peak hours that must be original productions, the hours devoted to news and current affairs and the proportion of commissioned programming that must be made by independent producers. Channel 5 has also undertaken to air a certain amount of UK-originated children’s programming. Like all UK broadcasters, Channel 5 must abide by the OFCOM Broadcasting Code, which contains content and scheduling regulations relating to harm and offense, protection of individuals under the age of 18, privacy, fairness and product placement, and by OFCOM’s Code on the Scheduling of Television Advertising, which contains regulations on the amount and scheduling of advertising.

Protecting our Content from Copyright Theft

The unauthorized reproduction, distribution, exhibition or other exploitation of copyrighted material interferes with the requirement increasingmarket for copyrighted works and disrupts our ability to distribute and monetize our content. The theft of films, television, books and other entertainment content presents a significant challenge to our industry, and we take a number of steps to address this concern. Where possible, we use technological protection tools, such as encryption, to protect our content. We are actively engaged in proportionenforcement and other activities to protect our intellectual property, including: monitoring online destinations that distribute or otherwise infringe our content and sending takedown or cease and desist notices in appropriate circumstances; using filtering technologies employed by some user-generated content sites; and pursuing litigation and referrals to law enforcement with respect to websites and other online platforms that distribute or facilitate the distribution and exploitation of our content without authorization. Through


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partnerships with various organizations, we also are actively involved in educational outreach to the additional hourscreative community, state and federal government officials and other stakeholders in an effort to marshal greater resources to combat copyright theft. Additionally, we participate in various industry-wide enforcement initiatives, public relations programs and legislative activities on a worldwide basis. We have had notable success with site-blocking efforts in parts of free programming offered on multicast channels. These rules also limitEurope and Asia, which can be effective in diverting consumers from piracy platforms to legitimate platforms.

Notwithstanding these efforts and the display during children’s programmingmany legal protections that exist to combat piracy, the proliferation of internet addresses of Websites that contain or linkcontent theft and technological tools with which to commercial material or that use program characters to sell products.

Program Access. Under the Communications Act, vertically integrated cable programmers (more fully described below) are generally prohibited from offering different prices, terms or conditions for programming to competing MVPDs unless the differential is justified by certain permissible factors set forth in the FCC’s regulations. Until 2012, the FCC’s “program access” rules also generally prohibited vertically integrated cable programmers from entering into exclusive distribution arrangements with cable operators. The FCC continues to assess the competitive impact of such individual exclusive contracts. A cable programmer is consideredcarry it out continue to be vertically integrated undera challenge. The failure to maintain enhanced legal protections and enforcement tools and to update those tools as threats evolve could make it more difficult for us to adequately protect our intellectual property, which could negatively impact its value and further increase the FCC’s program access attribution rules if it owns or is owned in whole or in part by either a cable operator or a telephone company that provides video programming directlycosts of enforcing our rights as we continue to subscribers.expend substantial resources to protect our content.


The Company’s wholly owned program services are not currently subject to the program access rules. The Company’s flexibility to negotiate the most favorable terms available for carriage of these services and its ability to offer cable operators exclusive programming could be adversely affected if it were to become subject to the program access rules. Because the Company and Viacom Inc. are under common control by NAI, Viacom Inc.’s businesses could be attributable to the Company for purposes of the FCC’s program access rules. (See Item 1A. “Risk Factors—The Businesses of the Company and Viacom Inc. Will Be Attributable to the Other Company for Certain Regulatory Purposes, Which May Limit Business Opportunities”).

National Broadband Plan. In response to the FCC’s March 2010 National Broadband Plan, which seeks to provide affordable broadband access throughout the U.S., Congress passed legislation in February 2012 authorizing the FCC to conduct voluntary auctions to reclaim spectrum utilized by broadcast television stations to provide additional spectrum for wireless broadband services. The television stations that continue their operations may have to change channels once the FCC “repacks” the remaining spectrum dedicated to broadcast television use after the auctions. The legislation provides that the FCC will assist television stations in retaining their current coverage areas, no UHF band stations will be forced into the VHF band and a fund will be established to reimburse broadcasters for reasonable


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relocation expenses relating to the spectrum‑repacking. These spectrum auctions commenced in May 2016 and are expected to conclude in 2017.

INTELLECTUAL PROPERTY


The Company creates, owns, distributesWe create, own and exploits under licensesdistribute intellectual property worldwide. It is the Company’sour practice to protect its products, including its television, radio and motion picture products,our films, programs, content, brands, formats, characters, games, publications and other original and acquired works, and audiovisual works made for digital exploitation.ancillary goods and services. The following brands, logos, trade names, trademarks and related trademark families are amongthe most significant of those strongly identified with the product lines they represent and are significant assets of the Company: ViacomCBS™, CBS®, CBS Entertainment™, CBS NewsViacom®, CBS SportsAwesomenessTV®, CBSSports.comBET®, CBS All Access®, CBSNCBS Entertainment™, CBS Interactive®, CNETCBS News®, CBS Sports®, CBSN®, Channel 5® (UK), CMT®, COLORS®, Comedy Central®, Flix®, MTV®, MTV Films®, Network 10®, Nickelodeon®, Nick at Nite®, Nickelodeon Movies™, Nick Jr.®, Paramount Animation®, Paramount Network®, Paramount Pictures®, Paramount Players™, Paramount Television Studios™, Pluto TV™, Pop TV™, Showtime®, Showtime AnytimeSimon & Schuster®, Smithsonian Channel™, Telefe® (Argentina), The Movie Channel®, FlixTV Land®, CBS FilmsVH1®, CBS Audience NetworkVidCon®, TV.com™, Last.fmWhoSay®, MetroLyrics®, CSI:®, NCIS®, Entertainment Tonight®, Star Trek®, Simon & Schuster®, CBS Sports Network®, CBS Interactive™, CBS Local Digital Media™, CBS Radio® and other domestic and international program services and digital properties and all the call letters for the Company’sour stations. As a result, domestic and foreign laws protecting intellectual property rights are important to the Company and the Company actively enforces its intellectual property rights against infringements.


EMPLOYEES


AtAs of December 31, 2016, the Company2019, we employed approximately 15,55023,990 full-time and part-time salaried employees worldwide, and had approximately 5,7204,580 additional project-based staff includingon our payroll. We also use many other temporary employees and project-based staff of CBS Radio, which has been presented as a discontinued operation in the Company’s consolidated financial statements.ordinary course of our business.


FINANCIALAVAILABLE INFORMATION ABOUT SEGMENTS AND FOREIGN AND DOMESTIC OPERATIONS


FinancialWe file annual, quarterly and current reports, proxy and information statements and other information by segment and relating to foreign and domestic operations for each ofwith the last three years ending December 31 is set forth in Note 17 to the Consolidated Financial Statements.

AVAILABLE INFORMATION

CBS Corp. makes available free of charge on its Website, www.cbscorporation.com (Investors section), its Annual ReportSEC. Our annual reports on Form 10-K, Quarterly Reportsquarterly reports on Form 10-Q, Current Reportscurrent reports on Form 8-K and any amendments to thosesuch reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. Such material is made1934, as amended, will be available through the Company’s Websitefree of charge on our website at www.viacbs.com (under “Investors”) as soon as reasonably practicable after such material is electronicallythe reports are filed with or furnished to the Securities and Exchange Commission.SEC. These documents are also available on the SEC’s Websitewebsite at www.sec.gov.www.sec.gov.

Item 1A. Risk Factors.


CAUTIONARY STATEMENT CONCERNING FORWARD‑LOOKINGFORWARD-LOOKING STATEMENTS


This document,Annual Report on Form 10-K, including “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition,” and the documents incorporated by reference into this Annual Report on Form 10-K, containcontains both historical and forward-looking statements. All statements other thanthat are not statements of historical fact are, or may be deemed to be, forward-looking statements. 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’sour 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” or other similar words or phrases. Similarly, statements that describe the Company’s objectives, plans orand goals, are or may be forward-looking statements. These forward-looking statementsand involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause the actualfuture results, performance or achievements of the Company to be different from any future results, performance and achievements expressed or implied by these statements. More information about these risks, uncertainties and


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other factors is set forth below. Additionaldiffer. These risks, uncertainties and other factors are discussed in “Item 1A. Risk Factors” below. Other risks, or updates to the risks discussed below, may be described in our news releases and filings with the Company’s filings made under the securities laws. There may be additional risks, uncertaintiesSEC, including but not limited to our reports on Form 10-Q and factors that the Company does not currently view as material or that are not necessarily known.Form 8-K. The forward-looking statements included in this document are made only made as of the date of this document, and the Company doeswe do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.


RISK FACTORS


For an enterprise as large and complex as the Company, aI-24


Item 1A. Risk Factors.

A wide range of factors couldrisks may affect our business, financial condition or results of operations, now and financial results. The factorsin the future. We consider the risks described below are considered to be the most significant. There may be other currently unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our business, financial condition or results of operations.

Risks Relating to ViacomCBS’ Business and Industry

Changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging, may negatively affect our business, financial condition or results of operations

The ways in which consumers view content, and technology and business models in our industry continue to evolve rapidly, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the Company’s future results. Past financial performance may not be a reliable indicatorcomplexity of future performancemaintaining predictable revenue streams.

Technological advancements have driven changes in consumer behavior and historical trends should not be usedempowered consumers to anticipate results or trends in future periods.seek more control over when, where and how they consume content and have affected the options available to advertisers for reaching their target audiences. The following discussionevolution of risk factors should be read in conjunction with “Item 7. Management’s Discussionconsumer preferences towards digital services and Analysis of Results of Operations and Financial Condition”other subscription services, and the consolidatedsubstantial increase in availability of programming without advertising or adequate methodologies for audience measurement, may continue to have an adverse effect on our business, financial statementscondition or results of operations. Examples of the foregoing include the convergence of television telecasts and related notesdigital delivery of programming to televisions and other devices, video-on-demand platforms, tablets, new video and electronic book formats, user-generated content sites, unauthorized digital distribution of video content including via streaming and downloading, simultaneous live streaming of telecast content which allows users to consume content on demand and in “Item 8. Financial Statementsremote locations while avoiding traditional commercial advertisements or subscription payments and Supplementary Data”“cloud-based” DVR storage.

In addition, consumers are increasingly using time-shifting and advertising-blocking technologies that enable users to fast-forward or circumvent advertisements, such as DVRs, or increase the sharing of this Form 10-K.subscription content and reduce the demand for electronic sell-through, DVD and Blu-ray disc products. Substantial use of these technologies could impact the attractiveness of our programming to advertisers, adversely affecting our advertising revenue. Our business also may be adversely affected by the use of antennas (and their integration with set-top boxes or other consumer devices) to access broadcast signals to avoid subscriptions and live and stored video streaming boxes and services, which deliver unauthorized copies of copyrighted content, including those emanating from other countries in various languages.


A DeclineIn response to perceived consumer demand, distributors of programming and program services are continuing to develop alternative offerings for consumers, including “skinny bundles,” smaller, often customizable programming packages delivered at lower costs than traditional offerings; SVOD and other subscription services; ad-supported FVOD services developed by television manufacturers, cable providers and others; and original programming hosted on mobile and social media platforms. Also, the impact of technological changes on MVPDs may adversely affect our cable networks’ ability to grow revenue. If these alternative offerings continue to gain traction and our networks and brands are not included in Advertising Expenditures Could Causethose packages and services, or if consumers increasingly favor alternative offerings over traditional broadcast television and cable subscriptions, we may continue to experience a decline in viewership and ultimately demand for our programming, which could lead to lower revenues. These changing distribution models may also impact our ability to negotiate carriage deals on terms favorable to us, thereby having an adverse effect on our business, financial condition or results of operations.

In order to respond to these developments, we regularly consider and from time to time implement changes to our business models and strategies to remain competitive, and there can be no assurance that we will successfully anticipate or respond to these developments, that we will not experience disruption as we respond to such developments, or that the Company’s Revenuesbusiness models we develop will be as profitable as our current business models.



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Our advertising revenues have been and Operating Resultsmay continue to Decline Significantlybe adversely impacted by changes in Any Given Period orconsumers’ content viewership, deficiencies in Specific Marketsaudience measurement and advertising market conditions


The Company derivesWe derive substantial revenues from the sale of advertising on its broadcasta variety of platforms, and basic cable networks, television stations, radio stations, syndicated programming, and digital properties. A decline in the economic prospects of advertisers, the economy in general or the economy of any individual geographic market, particularly a major market, such as Los Angeles, New York or Chicago, in which the Company owns and operates sizeable businesses, could alter current or prospective advertisers’ spending priorities. Natural and other disasters, acts of terrorism, political uncertainty or hostilities could lead to a reduction in advertising expenditures as a result of disrupted programming and services, uninterrupted news coverage and economic uncertainty. Advertising expenditures may also be affected by increasing competition for the leisure time of audiences. In addition, advertising expenditures by companies in certain sectors of the economy, including the automotive, financial and pharmaceutical segments, represent a significant portion of the Company’s advertising revenues. Any political, economic, social or technological change resulting in a reduction in these sectors’ advertising expenditures may adversely affect the Company’s revenue. Advertisers’ willingness to purchase advertising from the Company may also be affected by a decline in audience ratingsadvertising revenues could have a significant adverse effect on our business, financial condition or results of operations in any given period.

Consumers are increasingly turning to online sources for viewing and purchasing content, and an increasing number of companies offer SVOD services, including some that offer exclusive high-quality original video programming delivered directly to consumers over the Company’s programming, the inability of the Company to retain the rights to popular programming, increasing audience fragmentation caused by new program channels and the proliferation of media formats, including the internet and video‑on‑demand and the deployment of portable digital video devices andInternet. Consumers are also using new technologies whichthat allow consumerscustomers to live stream and time shift programming, make and store digital copies and skip or fast‑forwardfast-forward through advertisements. The increasing number of entertainment choices available to consumers has intensified audience fragmentation and reduced the viewing of content through traditional MVPDs and virtual MVPDs, which has caused, and likely will continue to cause, audience ratings declines for our cable networks and may adversely affect the pricing and volume of advertising. In addition, the pricing and volume of advertising may be affected by shifts in spending toward digital and mobile offerings, which can deliver targeted advertising promptly, from more traditional media, or toward newnewer ways of purchasing advertising, such as through automated purchasing, dynamic advertising insertion, third parties selling local advertising spots and advertising exchanges, some or all of which may not be as beneficial to the Companyus as traditional advertising methods. Any reduction in

In addition, advertising expenditures could have an adverse effectsales are largely dependent on audience measurement, and the Company’s revenues and results of operations.

The Company’s Successaudience measurement techniques can vary for a variety of reasons, including the platforms on which viewing is measured and Profitability Are Dependent Upon Audience Acceptance of Its Content, Including Its Television Programs and Motion Pictures, Which Is Difficult to Predict

Television, radio, motion picture and other content production and distribution are inherently risky businesses becausevariations in the revenues derived from the production and distribution of such content, and the licensing of rights to the associated intellectual property, depend primarily upon their acceptance by the public, which is difficult to predict. The commercial success of a program or motion picture also depends upon the quality and acceptance of other competing programs and motion pictures released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, all of which are difficult to predict. Rating points are also factors that are weighed when determining


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the advertising rates that the Company receives.statistical sampling methods used. The use of evolving ratings technologies and measurements, and viewership on platforms or devices, such as tablets, smart phones and other mobile devices, that isare not being fully measured, could have an impact on the Company’sour program ratings and advertising revenues. For example, while C-3, a current television industry ratings system, measures live commercial viewing plus three daysAlso, consumer viewership of DVRstreaming services continues to grow and video-on-demand playback, the growing viewership occurring on subsequent days of DVR and video‑on‑demand playback is excluded from C-3 and other subsequent ratings. Poorunder measured. Low ratings can lead to a reduction inlower pricing and advertising spending. For example, thereWhile Nielsen’s statistical sampling method is the primary measurement technique used in our television advertising sales, we measure and monetize our campaign reach and frequency on and across digital platforms based on other third-party data as well as first-party data using a variety of methods, including the number of impressions served and demographics. In addition, multi-platform campaign verification remains in its infancy, and viewership on tablets, smartphones and other mobile devices, which continues to grow rapidly, still is not measured by any one consistently applied method. These variations and changes could have a significant effect on our advertising revenues. There can be no assurance that any replacement programming on the Company’sour television or radio stations will generate the same level of revenues or profitability ofas previous programming.

The strength of the advertising market can fluctuate in response to the economic prospects of specific advertisers or industries, advertisers’ current spending priorities and the economy in general or the economy of any individual geographic market, particularly a major market, such as Los Angeles or New York, in which we own and operate sizeable businesses, and this may adversely affect our advertising revenues. Natural and other disasters, acts of terrorism, political uncertainty or hostilities could lead to a reduction in domestic and international advertising expenditures as a result of disrupted programming and services, uninterrupted news coverage and economic uncertainty. In addition, advertising expenditures by companies in certain sectors of the economy, including the financial, pharmaceutical and automotive segments, represent a significant portion of our advertising revenues. Any political, economic, social or technological change resulting in a reduction in these sectors’ advertising expenditures may adversely affect our revenue. Our ability to generate advertising revenue is also dependent on demand for our content, the consumers in our targeted demographics, advertising rates and results observed by advertisers. These factors could have an adverse effect on our business, financial condition or results of operations.

Our success depends on our ability to maintain attractive brands andour reputation, and to offer popular programming and other content

Our ability to maintain attractive brands and our reputation, and to create popular programming and other content, tentpole and other live events and consumer products are key to the success of our business and our ability to generate revenues. The production and distribution of television and other programming, films and other entertainment content


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and the licensing of rights to the associated intellectual property is inherently risky because the revenues we derive from various sources primarily depend on our ability to satisfy consumer tastes and expectations in a consistent manner. The popularity of our content is affected by our ability to maintain or develop our strong brand awareness and reputation and to target key audiences, and by the quality and attractiveness of competing entertainment content and the availability of alternative forms of entertainment and leisure time activities, including online, mobile and other offerings. Audience tastes change frequently and it is a challenge to anticipate what offerings will be successful at any point in time. We invest substantial capital in creating and promoting our content, including in the production of original content on our networks, in our films, in our television production business and in our publications, before learning the extent to which it will garner critical success and popularity with consumers.

In our Cable Networks and TV Entertainment businesses, the popularity of our brands and programming has a significant impact on the revenues we are able to generate from advertising, affiliate fees, content licensing, consumer products and other licensing activities, and our ability to expand our presence internationally depends, in part, on our ability to successfully predict and adapt to changing consumer tastes and preferences outside the U.S. In addition, the success of the Company’s cable networks and Simon & Schusterour Publishing business is similarly dependent on audience acceptance of its programming and publications, respectively. Thepublications.  In our Filmed Entertainment business, the theatrical successperformance of a motion picture, based in large part upon audience acceptance, is a significant factor in determiningfilm affects not only the theatrical revenues it is likely to generate inwe receive but also revenues from other distribution outlets, such as TVOD and SVOD, television, home entertainment sales, licensing fees and other exploitation during the various other distribution windows. Consequently, low public acceptance of the Company’s content, including its television and radio programs, motion pictures and publications, will have an adverse effect on the Company’s results of operations. In addition, any decreased popularity of programming for which the Company has incurred significant commitments could have an adverse effect on its profitability. Programming and talent commitments of the Company, estimated to aggregate approximately $11.08 billion as of December 31, 2016, primarily included $8.06 billion for sports programming rights, $2.26 billion relating to the production and licensing of television and film programming, and $758 million for talent contracts with $2.30 billion of these amounts payable in and after 2022. Alicensed consumer products. Additionally, a shortfall, now or in the future, in the expected popularity of our programming that we expect to distribute or the sports events for which the Company haswe have acquired rights, or in the television and radio programming the Company expects to distribute, could lead to decreased profitability or losses for a significant period of time.

Failure by Significant negative claims or publicity regarding the Company or its operations, products, management, employees, practices, business partners and culture may damage our brands or reputation, even if such claims are untrue.  A lack of popularity of our offerings or damage to Obtain, Createour reputation could have an adverse effect on our business, financial condition or results of operations in a particular period or over a longer term.

Increased costs for programming, films and Retain the Rights Related to Popular Programming Could Adversely Affect the Company’s Revenues
The Company’s revenue from its television, cable networks, radioother rights, and motion picture business is partially dependentjudgments we make on the Company’s continued ability to anticipatepotential performance of our content, may adversely affect our business, financial condition or results of operations

In our TV Entertainment and adapt to changesCable Networks segments, we produce a significant amount of original programming and other content and we invest significant resources in consumer tastesour brands, in part with the aim of developing higher quality and behavior on a timely basis. Moreover, the Company derivesquantity of original content, and we also derive a portion of its revenuesour revenue from the exploitation of itsour extensive library of television programming. Generally, aIn our Filmed Entertainment segment, we invest significant amounts in the production, marketing and distribution of films and television series. We also acquire programming, films and television series, must haveas well as a network runvariety of at least three digital content and other ancillary rights such as consumer and home entertainment product offerings, and we pay license fees, royalties and/or four years to be successfully soldcontingent compensation in domestic syndication, however, increasingly,connection with these time frames are being shortened. If the content of its television programming library ceases to be widely accepted by audiences or is not continuously replenished with popular content, the Company’s revenues could be adversely affected. The Company obtains a significant portion of its popular programming from third parties.acquired rights. For example, some of CBS Television Network’s most widely viewed broadcasts, including golf’s Masters Tournament, the PGA Championship, NFL games, NCAA Division I Men’s Basketball Tournament games and series such as The Big Bang TheoryYoung Sheldon, are made available based upon programming rights of varying duration that the Company haswe have negotiated with third parties. In addition, Showtime Networks enters into commitments to acquireWe also license various music rights to certainfrom the major record companies, music publishers and performing rights organizations.

Our investments in original and acquired programming for Showtime, The Movie Channelare significant and Flix from motion picture producersinvolve complex negotiations with numerous third parties, and other suppliers for varying durations, and CBS Radio acquiresrapid changes in consumer behavior have increased the broadcast rights to syndicated shows and to various programs such as sports events from third parties. CBS Films competes for compelling source material for andrisk associated with the talent necessary to produce motion pictures, as well as with other buyers for the acquisitionsuccess of third‑party produced motion pictures.all kinds of programming. Competition for popular programming that is licensed from third partiescontent is intense, and we may have to increase the Companyprice we are willing to pay for talent and intellectual property rights, which may result in significantly increased costs. Further, increased competition in the market for development and production of original programming, such as from Amazon, Apple, Facebook, Hulu, Netflix and YouTube, and streaming services by large entertainment companies, increases our content costs as they introduce different ways of compensating talent and approaching production. We may be outbid by itsour competitors for the rights to new, popular programming or in connection with the renewalrenewals of popular programming that we currently licensedlicense. Finally, certain of our counterparties and vendors may encounter financial and operational pressures, which could result in increased costs to us or delays in production. As such, there can be no assurance that we will recoup our investments in programming, films and other content when the content is broadcast or distributed. If our content offerings cease to be widely accepted by the Company. The Company’s failure to obtainaudiences or retain rights toare not continuously replenished with popular content, our revenues could be adversely affect the Company’s revenues.affected.

The Company Must Respond to Rapid Changes in Technology, Content Creation, Services and Standards in Order to Remain Competitive

Video, telecommunications, radio and data services technologies used in the entertainment industry are changing rapidly as are the digital publishing and distribution models for books. Advances in technologies or alternative methods of product delivery or storage, including “cloud-based” DVR storage, or certain changes in consumer behavior driven by these or other technologies and methods of delivery and storage, could have a negative effect on the Company’s businesses. Examples of the foregoing include the convergence of television broadcasts and online delivery of programming to televisions and other devices, video-on-demand platforms, tablets, satellite radio, new video and




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electronic book formats, user-generated content sites, internet
The accounting for the expenses we incur in connection with our programming and mobile distributionfilms requires that we make judgments about their potential success and useful life. We initially estimate the ultimate revenues of video content via streaminga television program or film and downloading, simultaneous live streamingthen update our estimate of ultimate revenues based on expected future and actual results, including following a television program’s initial broadcast content, and place-shifting of content from the homeor a film’s initial theatrical release. If our estimates prove to portable devices on which content is viewable outside the home. For example, devices that allow users to viewbe incorrect or listen to television or radio programs onare reduced, it may result in decreased profitability as a time-delayed basis; technologies, such as DVRs, that enable users to fast-forward or skip advertisements or increase the sharing of subscription content; systems that allow users to access copyrighted productresult of the Company over the internet or other media; and portable digital devices and systems that enable users to view programming or store or make portable copies of programming, may cause changes in consumer behavior that could affect the attractivenessaccelerated recognition of the Company’s offerings to advertisers and adversely affect its revenues. Also, the growing uses of antennas to access broadcast signals to avoid subscriptions, user-generated content sites and live and stored video streaming sites, which deliver unauthorized copies of copyrighted content, including those emanating from other countries in various languages, may adversely impact the Company’s businesses. In addition, further increases in the use of internet-connected television expense and/or other digital devices, which allow users to consume content on-demand and in remote locations while avoiding traditional commercial advertisements or subscription payments, could adversely affect the Company’s television and radio broadcasting advertising and subscription revenues. Users who reduce, cancel or never had cable television subscription services are also known as “cord-shavers,” “cord-cutters” or “cord-nevers,” respectively. Cable providers and DBS operators are developing new techniques that allow them to transmit more channels on their existing equipment to highly targeted audiences, reducing the cost of creating channels and potentially leading to the divisionwrite-down of the television marketplace into more specialized niche audiences. More television and video programming options increase competition for viewers and competitors targeting programming to narrowly defined audiences may gain an advantage over the Company for television advertising and subscription revenues. Television manufacturers, cable providers and others are developing and offering technology to enable viewers to locate digital copies of programming from the internet to view on television monitors or other devices, which could diminish viewershipvalue of the Company’s programming. Generally, changing consumer behavior may impact the Company’s traditional distribution methods,asset. Similarly, if we determine it is no longer advantageous for example, by reducing viewership of its programming (including motion pictures), the demand for DVD and Blu-ray Disc product and/us to air a program on our broadcast or the desire to see motion pictures in theaters, which could have an adverse impact on the Company’s revenues and profitability. Also, the impact of technological changes on traditional distributors of video programming may adversely affect the Company’s cable networks’ ability to grow revenue. Anticipating and adapting to changes in technology on a timely basis and exploiting new sources of revenue from these changes will affect the Company’s ability to continue to increase its revenue.

Piracynetworks, we would accelerate our amortization of the Company’s Programming and Other Content, Including Digital Piracy, May Decrease Revenue Received from the Exploitation of the Company’s Programming and Other Content and Adversely Affect Its Businesses and Profitabilityprogram costs.


Piracy of programming (including motion pictures), books and other copyrighted material is prevalent in many parts of the world and is made easier by the availability of digital copies of content, which facilitates the creation, transmission and sharing of high quality unauthorized copies of the Company’s content. Technological advances, which facilitate the streaming of programming via the internet to television screens and other devices, may increase piracy. The proliferation of unauthorized access to content, including through unauthorized live streaming, streaming boxes programmed to seek pirated copies of content, the unauthorized premature release of content and unauthorized account sharing of subscription program services, has an adverse effect on the Company’s businesses and profitability because these unauthorized actions reduce the revenue that the Company potentiallyThese factors could receive from the legitimate sale and distribution of its products and services. In addition, if piracy were to increase, it would have an adverse effect on the Company’s businesses and profitability. Also, while legal protections exist, piracy and technological tools with which to carry it out continue to escalate, evolve and present challenges for enforcement. The Company vigorously defends itself against entities that illegally secure and exhibit its content, including streaming the Company’s content without obtaining the consentour business, financial condition or results of or paying compensation to the Company. Failure of legal protections to evolve and enable enhanced enforcement efforts to combat piracy could make it more difficult for the Company to adequately protect its intellectual property, which could negatively impact its value and further increase the Company’s enforcement costs.operations.



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The Company’s Businesses Operateloss of key talent could adversely affect our business, financial condition or results of operations

Our business depends upon the continued efforts, abilities and expertise of not only our corporate and divisional executive teams, but also the various creative talent and entertainment personalities with whom we work. For example, we employ or contract with several entertainment personalities with loyal audiences and we produce films with highly regarded directors, producers, writers, actors and other talent. These individuals are important to achieving the success of our programs, films and other content. There can be no assurance that these individuals will remain with us or will retain their current appeal, or that the costs associated with retaining them or new talent will be reasonable. If we fail to retain these individuals on current terms or if our entertainment personalities lose their current appeal or we fail to attract new talent, our business, financial condition or results of operations could be adversely affected.

Our businesses operate in Highly Competitiveindustries that are highly competitive and Consolidating Industriesswiftly consolidating


The Company competesWe depend on the popularity of our content and other offerings, our appeal to advertisers and widespread distribution of our content. We compete with other media companies forto attract creative talent and produce high quality content, to achieve large audiences and to generate advertising revenue. The Company also competes for distribution on various MVPD and othera variety of third-party digital platforms. The Company’s abilityplatforms to attractdraw large audiences. Competition for talent, content, audiences, and advertisers and obtain favorable distribution depends in part on its ability to provide popular television programming and radio programming, motion pictures and books and adapt to new technologiesservice providers, production infrastructure, advertising and distribution platforms. The consolidation of advertising agencies, distributorsis intense and television service providers also has increased their negotiating leverage and made competition for audiences, advertising revenue, and distribution more intense. In addition, consolidation among book retailers and the growth of online sales and electronic books sales have resulted in increased competition for limited physical shelf space for the Company’s publications and for the attention of consumers online. Competition for audiences and advertising comes from:from broadcast television stations and networks;networks, cable television systems and networks; motion picture studios;networks (including our own), streaming service distributors, the internet;Internet and social media platforms, film studios and independent film producers and distributors, consumer products companies and other entertainment outlets and platforms, as well as from search engines, program guides and “second screen” applications and non-traditional programming services; technological innovations in content distribution; terrestrial and satellite radio and portable devices; local, regional and national newspapers; direct mail; andservices, such as streaming offerings. Additionally, other communications and advertising media that operate in these markets. Other television and radio stations or cable networks may change their formats or programming, a new station or new network may adopt a format to compete directly with the Company’sour stations or networks, or stations or networks might engage in aggressive promotional campaigns. Further, competition from additional entrants into the market for development and production of original programming and streaming services, such as Amazon, Apple, Facebook, Hulu, Netflix and YouTube, and major entertainment companies, continues to increase. In book publishing, competition among electronic and print book retailers could decrease the prices for new releases and the outlets available for book sales. Moreover, the growing use of self-publishing technologies by authors increases competition and could result in decreased use of traditional publishing services.

Our ability to obtain widespread distribution on favorable terms, which contributes to our ability to attract audiences and, in turn, advertisers, is adversely affected by the consolidation of advertising agencies, programmers, content providers, distributors (including telecom companies) and television service providers. This consolidation reduces the number of distributors with whom we negotiate and increases the negotiating leverage and market power of the combined companies. In addition, consolidation in the film business may adversely affect the distribution of our films on various platforms. Consolidation among book retailers and the growth of online sales and electronic books sales have resulted in increased competition for limited physical shelf space for our publications and for the attention of consumers online.

In addition, our competitors generally include market participants with interests in multiple media businesses that are often vertically integrated, whereas our Cable Networks business generally relies on distribution relationships with third parties. As more cable and satellite operators, Internet service providers, telecom companies and other content distributors, aggregators and search providers create or acquire their own content, they may have significant


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competitive advantages, which could adversely affect our ability to negotiate favorable terms for distribution or otherwise compete effectively in the delivery marketplace. Our competitors could also have preferential access to important technologies, customer data or other competitive information, as well as significant financial resources.

This competition and consolidation could result in lower ratings and advertising, and subscriptionlower affiliate and other revenues, orand increased content costs and promotional and other expenses, negatively affecting our ability to generate revenues and consequently, lower earnings and cash flow for the Company. The Company cannotprofitability. There can be assuredno assurance that itwe will be able to compete successfully in the future against existing new or potentialnew competitors, or that competition andor consolidation in the marketplace will not have a materialan adverse effect on itsour business, financial condition or results of operations.


Because we derive a significant portion of our revenues from a limited number of distributors, the loss of affiliation and distribution agreements, renewal on less favorable terms or adverse interpretations could have a significant adverse effect on our business, financial condition or results of operations

A significant portion of our revenues, particularly from Cable Networks and TV Entertainment, are attributable to agreements with MVPDs and virtual MVPDs, and other distributors of our programming and program services. These agreements generally have fixed terms that vary by market and distributor, and there can be no assurance that these agreements will be renewed in the future, or renewed on favorable terms, including but not limited to those related to pricing and programming tiers. We may also be unable to modify existing agreements with terms that have over time become less favorable. The Lossloss of Affiliation Agreementsexisting packaging, positioning, pricing or Retransmission Agreementsother marketing opportunities and the loss of carriage on cable and satellite programming tiers or Renewalsthe failure to renew our agreements with any distributor, or renew or modify them on Less Favorable Terms Could Materially Adversely Affectfavorable terms, could reduce the Company’s Resultsdistribution of Operationsour programming and program services and decrease the potential audience for our programs, thereby negatively affecting our growth prospects and revenues from both affiliate fees and advertising.


The CBS Television Network provides its affiliates with up to approximately 98 hours of regularly scheduled programming per week. In return, the CBS Television Network’s affiliated stations broadcast network-inserted commercials during that programming and pay the Companyus station affiliation fees. Loss of station affiliation agreements of the CBS Television Network could adversely affect the Company’sour results of operations by reducing the reach of the Company’sour programming and therefore itsour attractiveness to advertisers, and renewal of these affiliation agreements on less favorable terms may also adversely affect the Company’sour results of operations. The non-renewal or termination of retransmission agreements with MVPDs or continued distribution on less favorable terms, could also adversely affect the Company’s revenues and its ability to distribute its network programming to a nationwide audience and affect the Company’s ability to sell advertising, which could have a material adverse effect on the Company’s results of operations. Showtime Networks, CBS Sports Network and Smithsonian Networks are also dependent upon the maintenance of distribution agreements with MVPDs and other third-party digital platforms and there can be no assurance that these agreements will be renewed in the future on terms acceptable to such programmers. The loss of one or more of these arrangements could reduce the distribution of Showtime Networks’, CBS Sports Network’s and Smithsonian Networks’ program services and reduce revenues from subscriber fees and advertising, as applicable. Further, the loss of favorable packaging, positioning, pricing or other marketing opportunities with any distributor could reduce revenues from subscriber fees. Also, consolidation

Consolidation among MVPDs and increased vertical integration of such distributors into the cable or broadcast network business have provided more leverage to these distributors and could adversely affect the Company’sour ability to maintain or obtain distribution for itsour network programming or distribution and/or marketing of itsour subscription program services on favorable or commercially reasonable terms, or at all. Also, consolidation among television station group owners could increase their negotiating leverage. Moreover, competitive pressures faced by MVPDs, particularly in light of the lower retail prices of streaming services, could adversely affect the terms of our renewals with MVPDs. In addition, MVPDs and streaming services continue to develop alternative offerings for consumers, which are generally smaller than the traditional program package or may allow the consumer to customize its package of program services.including “skinny bundles.” To the extent these packages do not include the Company’sour programming and become widely accepted in lieu of traditional program packages, the Companywe could experience a decline in affiliate and subscription revenues.




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The Company’s Operating Results Are Subject to Seasonal Variations and Other Factors

The Company’s business has experienced and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences, on people’s viewing, reading, attendance and listening habits. Typically, the Company’s revenue from advertising increases in the fourth quarter, Simon & Schuster generates a substantial portion of itsSimilarly, our revenues in the fourth quarter, and license fees for television programming and CBS Films’ revenue from motion pictures are dependent on the timing, mix,compliance of major distributors with the terms of our affiliation or distribution agreements. As these agreements have grown in complexity, the number of disputes regarding the interpretation, and even validity, of the agreements has grown, resulting in greater uncertainty and, from time to time, litigation with respect to our rights and obligations. For example, some of our distribution agreements contain “most favored nation” (“MFN”) clauses, which provide that if we enter into an agreement with a distributor and such agreement includes specified terms that are more favorable than those held by a distributor holding an MFN right, we must offer some of those terms to the distributor holding the MFN right. These clauses are generally complex and may lead to disagreement over their interpretation and application. Disagreements with a distributor on the interpretation or validity of an agreement could adversely impact our revenues from both affiliate fees and advertising, as well as our relationship with that distributor.

These factors could have an adverse effect on our business, financial condition or results of operations.


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The integration of the CBS and Viacom businesses may not be successful or may be more difficult, time consuming or costly than expected. Synergies and other benefits may not be realized within the expected time frames, or at all.Operating costs, customer loss and business disruption may be greater than expected and revenues may be lower than expected following the Merger.  Our ongoing investment in new businesses, products, services and technologies present many risks, and we may not realize the financial and strategic goals we had contemplated. 

Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to integrate the businesses of the combined companies in a manner that facilitates growth opportunities and achieves the projected standalone cost savings and revenue growth trends that have been identified without adversely affecting current revenues and investments in future growth. The failure to meet the challenges involved in combining CBS’ and Viacom’s businesses following the Merger and to realize the anticipated benefits of the Merger, including expected synergies, could cause an interruption of, or a loss of momentum in, the activities of ViacomCBS and could adversely affect the results of operations of ViacomCBS. The overall combination of our businesses may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships. The difficulties of combining the operations of the companies include, among others:

the diversion of management attention to integration matters;

difficulties in integrating operations and systems, including administrative and information technology infrastructure and financial reporting and internal control systems;

challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies;

difficulties in integrating employees and attracting and retaining key personnel, including talent;

challenges in retaining existing, and obtaining new customers, viewers, suppliers, distributors, licensors, employees and others, including material content providers, studios, producers, directors, actors, authors and other talent, and advertisers;

difficulties in achieving anticipated cost savings, synergies, business opportunities, financing plans and growth prospects from the combination;

difficulties in managing the expanded operations of a significantly larger and more complex company;

challenges in continuing to develop valuable and widely accepted content and technologies;

contingent liabilities that are larger than expected; and

potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Merger.

In addition, even if our operations are integrated successfully, the full benefits of the Merger may not be realized, including, among others, the synergies, cost savings or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of our businesses. Many of these factors are outside of our control, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact our business, financial condition and results of operations. 

In the past, we have acquired and invested, and expect to continue to acquire and invest, in new businesses, products, services and technologies as part of our ongoing strategic initiatives. Such acquisitions and strategic initiatives may involve significant risks and uncertainties, including the types described above as well as insufficient revenues from such investments to offset any new liabilities assumed and expenses associated with the new


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investments, unidentified issues not discovered in our due diligence that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities and a failure to successfully further develop an acquired business or technology. Because new investments are inherently risky, and the anticipated benefits or value of these investments may not materialize, no assurance can be given that such investments and other strategic initiatives will not adversely affect our business, financial condition or results of operations.

Service disruptions or failures of, or cybersecurity attacks upon, our or our service providers’ networks, information systems and other technologies could result in the disclosure of confidential or valuable business or personal information, disruption of our businesses, damage to our brands and reputation, legal exposure and financial losses

Networks, cloud services, information systems and other technologies, including technology systems used in connection with the production and distribution of our programming, films and other content by us or our third-party providers (“Systems”), are critical to our business activities, and shutdowns or service disruptions of, and cybersecurity attacks on, these Systems pose increasing risks. Such shutdowns, disruptions and attacks may be caused by third-party hacking of computers and Systems; dissemination of computer viruses, worms, malware, ransomware and other destructive or disruptive software; denial of service attacks and other bad acts; human error; and power outages, natural disasters, extreme weather, terrorist attacks or other similar events. Shutdowns, disruptions and attacks could have an adverse impact on us, our business partners, employees, advertisers, viewers and users of our content offerings, including degradation or disruption of service, loss of data and damage to equipment and data. Steps we take to add software and hardware, upgrade our Systems and network infrastructure, and improve the stability and efficiency of our Systems may not be sufficient to avoid shutdowns, disruptions and attacks. Significant events could result in a disruption of our operations and reduction of our revenues, the loss of or damage to the integrity of data used by management to make decisions and operate our businesses, viewer or advertiser dissatisfaction or a loss of viewers or advertisers, and damage to our reputation or brands.

We operate communications and computer hardware Systems located both in our facilities and that of third-party providers. In addition, we use third-party “cloud” computing services in connection with our business operations. We also use content delivery networks to help us stream programming, films and other content in high volume to viewers and users of our online, mobile and app offerings over the internet. Problems faced by us, our hosting providers, our third-party “cloud” computing or other network providers, including technological or business-related disruptions, as well as cybersecurity attacks and regulatory interference, could result in a disruption of our operations and reduction of our revenues, adversely impact the experience of our viewers and users, and could damage our reputation and brands.

We are subject to risks caused by the misappropriation, misuse, falsification or intentional or accidental release or loss of business or personal data or programming content maintained in our or our third-party providers’ Systems, including proprietary and personal information (of third parties, employees and users of our online, mobile and app offerings), business information including intellectual property, or other confidential information. Outside parties may attempt to penetrate our Systems or those of our third-party providers or fraudulently induce employees, business partners or users of our online, mobile and app offerings to disclose sensitive or confidential information in order to gain access to our data or our subscribers’ or users’ data, or our programming. The number and availabilitysophistication of attempted and successful information security breaches in the U.S. and elsewhere have increased in recent years, and because of our prominence, we and/or third-party providers we use may be a particularly attractive target for such attacks. Because the techniques used to obtain unauthorized access to, or disable, degrade or sabotage, these Systems change frequently and often are not recognized until launched, we may be unable to anticipate these techniques, implement adequate security measures or remediate any intrusion on a timely or effective basis. Moreover, the development and maintenance of security measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite our efforts, the possibility of these events occurring cannot be eliminated.

If a material breach of our Systems or those of our third-party providers occurs, the market perception of the Company’s television programmingeffectiveness of our security measures could be harmed, we could lose subscribers, viewers, advertisers and motion pictures,other


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business partners, and users of our online, mobile and app offerings; and our reputation, brands and credibility could be damaged; and we could be required to expend significant amounts of money and other resources to repair or replace such Systems or to comply with regulatory requirements. We could also be subject to actions by regulatory authorities and claims asserted in private litigation. The costs relating to any data breach could be material, and we may not have adequate insurance coverage to compensate us for any losses associated with such events.

Each of these factors could have an adverse effect on our reputation, business, financial condition or results of operations.

We are subject to complex, often inconsistent and potentially costly laws, rules, regulations, industry standards and contractual obligations relating to privacy and personal data protection

We are subject to laws, rules and regulations in the U.S. and in other countries relating to privacy and the collection, use and security of personal data. In the EU, for example, the GDPR mandates data protection compliance obligations and authorizes significant fines for noncompliance, requiring significant compliance resources and efforts on our part. Further, a number of other regions where we do business have enacted or are considering new data protection regulations that may impact our business activities. In the U.S., the California Consumer Privacy Act, which went into effect on January 1, 2020, creates a host of new obligations for businesses regarding how they handle the personal information of California residents. We are also subject to laws and regulations intended specifically to protect the interests of children and the privacy of minors online, including COPPA in the U.S. and the GDPR in the EU, and we have been required to limit some functionality on our websites and apps as applicable,a result of these regulations. Such regulations also restrict the types of advertising we are able to sell on these sites and apps and impose strict liability on us for certain actions of ViacomCBS, advertisers and other third parties, which could affect advertising demand and pricing. We will continue to expend resources to comply with data protection and privacy standards imposed by law, industry standards or contractual obligations, which may cause operating results to increasebe inconsistent with one another, and despite such efforts we may face regulatory and other legal actions. See “Regulation and Protection of our Intellectual Property—Certain Other Regulations Affecting Our Business—Global Data Protection Laws and Children’s Privacy Laws.”

Each of these factors could have an adverse effect on our reputation, business, financial condition or decrease during a period and create non-comparable results relative to the corresponding period in the prior year. In addition, advertising revenues in even-numbered years benefit from advertising placed by candidates for political offices. The effects of such seasonality make it difficult to estimate future operating results based on the previous results of any specific quarteroperations.

The failure, destruction and/or breach of satellites and mayfacilities that we depend upon to distribute our programming could adversely affect operating results.our business, financial condition or results of operations


Economic Conditions May Adversely Affect the Company’s Businesses and Customers

The U.S.We use satellite systems, fiber and other countries where the Company operates have experienced slowdownsmethods to transmit our programs and volatilities in their economies. A downturn could leadprogram services to lower consumerbroadcast television and business spending for the Company’s products and services, particularly if customers, including advertisers, subscribers, licensees, retailers, theatercable television operators and other consumersdistributors worldwide. The distribution facilities include uplinks, communications satellites and downlinks. Notwithstanding certain back-up and redundant systems, transmissions may be disrupted as a result of power outages, natural disasters, extreme weather, terrorist attacks, cyber attacks, failures or impairments of communications satellites or on-ground uplinks or downlinks used to transmit programming or other similar events. Currently, there are a limited number of communications satellites available for the transmission of programming, and if a disruption occurs, we may not be able to secure alternate distribution facilities in a timely manner. There can be no assurance that such failure or disruption would not have an adverse effect on our business, financial condition or results of operations.

Theft of our content, including digital copyright theft and other unauthorized uses of our content, reduces revenue received from legitimate distribution of our programming, films, books and other entertainment content and adversely affects our business, financial condition or results of operations

The success of our businesses depends in part on our ability to maintain and monetize our intellectual property rights. We are fundamentally a content company and theft of our content - specifically, the infringement of our films and home entertainment products, television programming, digital content, books and other intellectual property rights - affects us and the value of our content. Intellectual property theft is particularly prevalent in many parts of the Company’sworld that either lack effective laws and technical protection measures similar to those existing in the U.S. and Europe or


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lack effective enforcement of such measures, or both. Such foreign copyright theft often creates a supply of pirated content offeringsfor major markets as well. The interpretation of copyright, trademark and other intellectual property laws as applied to our content, and our infringement-detection and enforcement efforts, remain in flux, and some methods of enforcement have encountered political opposition. The failure to appropriately enforce and/or the weakening of existing intellectual property laws could make it more difficult for us to adequately protect our intellectual property and thus negatively affect its value.

Content theft is made easier by the wide availability of higher bandwidth and reduced storage costs, as well as tools that undermine encryption and other security features and enable infringers to cloak their identities online. We and our numerous production and distribution partners operate various technology systems in connection with the production and distribution of our programming and films, and intentional or unintentional acts could result in unauthorized access to our content. The continuing proliferation of digital formats and technologies heightens this risk. The unauthorized distribution and consumption of our content through a wide array of platforms and devices remain problematic and an ever-present challenge, as Internet-connected televisions, set-top boxes and mobile devices are ubiquitous and many can support illegal re-transmission platforms, illicit video-on-demand/streaming services and pre-loaded hardware, providing more accessible, versatile and legitimate-looking environments for consuming pirated film and television content. Unauthorized access to our content could result in the premature release of films, television programs or other content as well as a reduction in legitimate audiences, which would likely have significant adverse effects on the value of the affected content and our ability to monetize our content.

Copyright theft has an adverse effect on our business because it reduces the revenue that we are able to receive from the legitimate sale and distribution of our content, undermines lawful distribution channels, reduces the public’s and some affiliate partners’ perceived value of our content and inhibits our ability to recoup or profit from the costs incurred to create such content. While legal protections exist, piracy and technological tools with which to engage in copyright theft continue to escalate, evolve and present challenges for enforcement. We are actively engaged in enforcement and other activities to protect our intellectual property, and it is likely that we will continue to expend substantial resources in connection with these efforts. Efforts to prevent the unauthorized reproduction, distribution and exhibition of our content may affect our profitability and may not be successful in preventing harm to our business and may have an adverse effect on our business, financial condition or results of operations.

Political and economic conditions in a variety of markets around the world could have an adverse effect on our business, financial condition or results of operations

Our businesses operate and have audiences, customers and partners worldwide, and we are focused on expanding our international operations in key markets, some of which are emerging markets. For that reason, economic conditions in many different markets around the world affect a number of aspects of our businesses, in particular revenues in both domestic and international markets derived from advertising sales, theatrical releases, home entertainment distribution, television licensing and sales of consumer products. Economic conditions in each market can also impact our audience’s discretionary spending and therefore their willingness to access our content, as well as the businesses of our partners who purchase advertising on our networks, causing them to reduce demands for the Company’s products and services.their spending on advertising. We may also be subject to longer payment cycles. In addition, in unfavorable economic environments,as we have expanded our international operations, our exposure to foreign currency fluctuations against the Company’s customers may have difficulties obtaining capital at adequate or historical levelsU.S. dollar (compared to, finance their ongoing business and operations and may face insolvency, all of which could impair their ability to make timely payments and continue operations, including distribution offor example, the Company’s content. The Company is unable to predictArgentinian peso, the duration and severity of weakened economic conditions and such conditions and resultant effects could adversely impact the Company’s businesses, operating results, and financial condition.

Volatility and Weakness in Capital Markets May Adversely Affect Credit Availability and Related Financing Costs for the Company

Bank and capital markets can experience periods of volatility and disruption. If the disruption in these markets is prolonged, the Company’s ability to refinance,British pound and the related costEuro, among others) has increased. Such fluctuations could have an adverse effect on our business, financial condition or results of refinancing, some or all of its debt could be adversely affected. Although the Company can currently access the bankoperations, and capital markets, there is no assurance that such marketsdownward trending currencies will continuerebound or that stable currencies will remain stable in any period.

Our businesses are also exposed to becertain political risks inherent in conducting a reliable source of financing for the Company. In addition, the Company’s accessglobal business, including retaliatory actions by governments reacting to and cost of borrowing can be affected by the Company’s short- and long-term debt ratings assigned by ratings agencies. These factors, including the tightening of credit markets, or a decreasechanges in the Company’s debt ratings, could adversely affect the Company’s ability to obtain cost‑effective financing.

Increased Programming and Content Costs May Adversely Affect the Company’s Profits

The Company produces and acquires programming (including motion pictures)U.S. and other contentcountries, including in connection with trade negotiations; issues related to the presence of corruption in certain markets and incurs costs with respect to its content, including for all typesenforcement of creative talent, including actors, authors, writersanti-corruption laws and producers, composers and publishersregulations; increased risk of music,political instability in some markets as well as conflict and sanctions preventing us from accessing those markets; escalating trade, immigration and nuclear disputes; wars, acts of terrorism or other hostilities; and other political, economic or other uncertainties.



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The UK left the EU on January 31, 2020. It is now in a ‘transition period’ scheduled to end on December 31, 2020 that allows the negotiation of a future UK-EU trade relationship while remaining part of the EU Single Market. Depending on the ultimate terms of a trade deal, the UK could lose access to the single EU market and to the global trade deals negotiated by the EU on behalf of its members. It is possible that the UK could revert to World Trade Organization terms if no deal is reached. The effects of Brexit and the on-going trade negotiations may continue to adversely affect business activity, political stability and economic and market conditions in the UK, the Eurozone, the EU and elsewhere and contribute to instability in global financial and foreign exchange markets, including volatility in the value of the Euro and the British Pound. A new trade deal, or no deal at all, could lead to additional political, legal and economic instability and uncertainty in the EU, including changes in the regulatory environment, which could impact our ability to use UK law under “country of origin” rules for marketingprogramming in the EU, potential trade barriers between the UK and distribution. An increasethe EU and between the UK and other countries, and potential content production quota regulations. Given that a portion of our business is conducted in the EU, including the UK, any of these effects of Brexit and a trade deal, and others we cannot anticipate, could have an adverse effect on our business, financial condition or results of operations.

These political and economic risks could create instability in any of these costs and increased competition from consolidated entities and new entrants into the market for the production and acquisitionmarkets where our businesses derive revenues, which could result in a reduction of new content may lead to decreased profitability.revenue or loss of investment that adversely affects our businesses, financial condition or results of operations.


Changes in Communications LawsU.S. or Other Regulations May Haveforeign laws or regulations may have an Adverse Effectadverse effect on our business, financial condition or results of operations

Our program services, filmed entertainment and online, mobile and app properties are subject to a variety of laws and regulations, both in the Company’s BusinessU.S. and/or in the foreign jurisdictions in which we or our partners operate, including relating to intellectual property, content regulation, user privacy, data protection, anti-corruption, repatriation of profits, tax regimes, quotas, tariffs or other trade barriers, currency exchange controls, operating license and permit requirements, restrictions on foreign ownership or investment, export and market access restrictions, and exceptions and limitations on copyright and censorship, among others.


The television and radio broadcasting and distribution industries in the U.S. are highly regulated by U.S. federal laws and regulations issued and administered by various federal agencies, including the FCC. The television and radio broadcasting industry is subject to extensive regulation by the FCC under the Communications Act. For example, the Company iswe are required to obtain licenses from the FCC to operate itsour television and radio stations. The CompanyIt cannot be assured that the FCC will approve itsour future renewal applications or that the renewals will be for full terms or will not include conditions or qualifications. The non-renewal, or renewal with substantial conditions or modifications,


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of one or more of the Company’sour licenses could have a material adverse effect on the Company’sour revenues. The CompanyWe must also comply with extensive FCC regulations and policies in the ownership and operation of itsour television and radio stations and itsour television networks. FCC regulationsnetworks, which prohibit the common ownership of two or more than one of the top four television networks ABC, CBS, FOX and NBC, and limit the number of television and radio stations that a licensee can own in a market and the number of television stations that can be owned nationwide,in the U.S., which could restrict the Company’sour ability to consummate future transactions and in certain circumstances could require itus to divest some television stations. Our programming directed towards children is subject to a number of additional regulations. For example, privacy regulations make it difficult to measure online viewership by children. The threat of regulatory action or radio stations. increased scrutiny that deters certain advertisers from advertising or reaching their intended audiences could adversely affect advertising revenue.

The U.S. Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations, and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation and ownership of the Company’sour television and radio properties. For example, from time to time, proposals have been advanced in the U.S. Congress and at the FCC to require television and radio broadcast stations to provide advertising time to political candidates for free or at a reduced charge. Any restrictions on political or other advertising may adversely affect the Company’sour advertising revenues. Changes to the media ownership and other FCC rules may affect the competitive landscape in ways that could increase the competition faced by the Company.us. Proposals have also been advanced from time to time before the U.S. Congress and the FCC to extend the program access rules (currently applicable only to those cable program services which also own or are owned in whole or in part by cable distribution or telephone company systems) to all cable program services. The Company’sOur ability to


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obtain the most favorable terms available for itsour content could be adversely affected should such an extension be enacted into law. In response to the FCC’s March 2010 National Broadband Plan, which seeks to provide affordable broadband access throughout the U.S., Congress passed legislation in February 2012 authorizing the FCC to conduct voluntary auctions to reclaim spectrum utilized by broadcast television stations to provide additional spectrum for wireless broadband services. The television stations that continue their operations may have to change channels once the FCC “repacks” the remaining spectrum dedicated to broadcast television use after the auctions. These spectrum auctions commenced in May 2016 and are expected to conclude in 2017 followed by repacking, which could adversely impact the Company’s broadcast coverage and related revenues. It is difficult to predict the timinglikelihood or outcomeimpact of any proposed actions by the FCC’s actionsU.S. Congress or their effect, if any,the FCC on our television properties.

Laws in some non-U.S. jurisdictions differ in significant respects from those in the Company’s broadcasting properties. Legislation couldU.S., and the enforcement of such laws can be enactedinconsistent and unpredictable, which could remove over-the-air broadcasters’ existing exemption from payment of a performance royaltyimpact our ability to record companiesexpand our operations and performers of music which is broadcast on radio stations and could have an adverse impact on the cost of music programming for the Company.undertake activities that we believe are beneficial to our business. In addition, changes in or new interpretations of international laws and regulations governing the broadcast and distribution of content, competition and the internet,Internet, including those affecting data privacy,, as well as the new EU law requiring 30% local content on SVOD services and proposed amendments to the law governing territorial exclusivity of the distribution of content in Europe, may have an adverse impact on the Company’sour international businesses and internetdigital properties. The Company

Our businesses are also subject to laws and regulations in the U.S. and internationally governing the collection, use, sharing, protection and retention of personal data, which has implications for how such data is unablemanaged. For example, GDPR expands the regulation of personal data processing throughout the EU and significantly increases penalties for non-compliance. Complying with these laws and regulations could be costly, require us to predictchange our business practices, or limit or restrict aspects of our business in a manner adverse to our business operations. Many of these laws and regulations continue to evolve, and substantial uncertainty surrounds their scope and application. Our failure to comply could result in exposure to enforcement by U.S. or foreign governments, as well as significant negative publicity and reputational damage.

Our businesses could be adversely affected by new laws and regulations, changes in existing laws, changes in interpretations of existing laws by courts and regulators and the effectthreat that anyadditional laws or regulations may be forthcoming, as well as our ability to enforce our legal rights. We could be required to change or limit certain of our business practices, which could impact our ability to generate revenues. We could also incur substantial costs to comply with new and existing laws and regulations, or substantial fines and penalties or other liabilities if we fail to comply with such laws regulations or policies may have on its operations.and regulations.


Vigorous Enforcementenforcement or Enhancementmodification of FCC Indecencyindecency and Other Program Content Rules Againstother program content rules against the Broadcastbroadcast and Cable Industries Could Havecable industries could have an Adverse Effectadverse effect on the Company’s Businessesour businesses and Resultsresults of Operationsoperations


The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material on television or radio broadcast stations between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent material because of the vagueness of the FCC’s indecency/profanity definition, coupled with the spontaneity of live programming. The FCC enforces its indecency rules against the broadcasting industry. The FCC has found on a number of occasions that the content of television and radio broadcasts has contained indecent material. In such instances, the FCC issued fines or advisory warnings to the offending licensees. Moreover, the FCC has in some instances imposed separate fines for each allegedly indecent “utterance,” in contrast with its previous policy, which generally considered all indecent words or phrases within a given program as constituting a single violation. The fines for broadcastingBroadcasting indecent material could result in fines per station areof a maximum of approximately $383,000$415,000 per utterance.utterance and/or the loss of a station’s FCC license. If the FCC denied a license renewal or revoked the license for one of the Company’s broadcastour television or radio stations, the Companywe would lose itsour authority to operate the station. The determination of whether content is indecent is inherently subjective and, as such, it can be difficult to predict whether particular content could violate indecency standards. The difficulty in predicting whether individual programs, words or phrases may violate the FCC’s indecency rules adds significant uncertainty to the Company’sour ability to comply with the rules. Violation of the indecency rules could lead to sanctions which may adversely affect the Company’sour businesses and results of operations. Some policymakers support the extension of the indecency rules that are applicable to over-the-air


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broadcasters to cover cable and satellite programming and/or attempts to increase enforcement of or otherwise expand existing laws and rules. If such an extension, attempt to increase enforcement or other expansion took place and were found to be constitutional, some of the Company’sour cable content could be subject to additional regulation and might not be able to attract the same subscription and viewership levels.


The Failure or Destruction of Satellites and Transmitter Facilities that the Company Depends Upon

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We could be subject to Distribute Its Programming Could Materially Adversely Affect the Company’s Businesses and Results of Operations

The Company uses satellite systems to transmit its broadcast and cable networks to affiliates. The distribution facilities include uplinks, communications satellites and downlinks. Transmissions may be disruptedmaterial liabilities as a result of adoption of or changes in tax laws, regulations and administrative practices, interpretations and policies

We are subject to taxation in the U.S. and numerous international jurisdictions. Our tax rates are impacted by the tax laws, regulations and administrative practices, interpretations and policies in the federal, state and local disastersand international territories where our businesses operate, and these rates may be subject to significant change. Our tax returns are routinely audited and litigation, adverse outcomes, or settlements may occur because tax authorities may disagree with certain positions we have taken, including extreme weatherour methodologies for intercompany arrangements. Additionally, shifting economic and political conditions may result in significant changes to tax policies, laws or tax rates in various jurisdictions. Such changes, litigation, adverse outcomes, or audit settlements may result in the recognition of additional charges to our income tax provision in any given period and may adversely affect our effective income tax rate or cash payments and may therefore adversely affect our business, financial condition or results of operations.

Volatility and weakness in capital markets may adversely affect our credit availability and related financing costs

Bank and capital markets can experience periods of volatility and disruption. If the disruption in these markets is prolonged, our ability to refinance, and the related cost of refinancing, some or all of our debt could be adversely affected. Although we can currently access the bank and capital markets, there is no assurance that impair on-ground uplinks such markets will continue to be a reliable source of financing for us. In addition, our access to and cost of borrowing can be affected by our short- and long-term debt ratings assigned by ratings agencies. In addition, the interest rates included in certain agreements that govern certain of our debt securities and/or downlinks,credit facilities may be based on the London Interbank Offered Rate (“LIBOR”). In the future, use of LIBOR may be discontinued and we cannot be certain how long LIBOR will continue to be a viable benchmark interest rate. Use of alternative interest rates could result in increased borrowing costs or asvolatility in the markets and interest rates. These factors, including the tightening of credit markets, or a resultdecrease in our debt ratings, could adversely affect our ability to obtain cost-effective financing.

We could be adversely affected by strikes and other union activity

We and our business partners engage the services of an impairmentwriters, directors, actors, musicians and other talent, production crew members, trade employees, players in sports leagues and others who are subject to industry-wide or specially-negotiated collective bargaining agreements, and occasionally individual agreements. The Alliance of Motion Picture and Television Producers (AMPTP) is a satellite. Currently, there aremulti-employer trade association that, along with and on behalf of hundreds of member companies including Paramount Pictures and CBS Studios, negotiates the industry-wide collective bargaining agreements with these parties, and we may lack practical control over the negotiations and terms of the agreements. The Writers Guild of America contract expires on May 1, 2020, and the Directors Guild of America and Screen Actors Guild-American Federation of Television and Radio Artists contracts expire on June 30, 2020.  The AMPTP expects to negotiate successor deals with these guilds and unions in the coming months. Any labor disputes that arise may disrupt our operations and cause delays in the production of our programming, and we may not be able to negotiate favorable terms for a limited number of communications satellites available for the transmission of programming. If a disruption occurs, failure to secure alternate distribution facilities in a timely mannerrenewal, which could increase our costs. Depending on its duration, any lockout, labor dispute, strike or work stoppage could have a materialan adverse effect on our revenues, cash flows and/or operating income and/or their timing.

Our revenues, expenses and operating results may vary based on the Company’s businessestiming, mix, number and availability of our films and other programming and on seasonal factors

Our revenues, expenses and operating results fluctuate due to the timing, mix, number and/or availability of our theatrical films, home entertainment releases and programs for licensing. For example, our operating results may increase or decrease during a particular period relative to the corresponding period in the prior year due to differences in the number and/or mix of films released, the commencement of a license period or the timing of delivery of programming to licensees for exhibition. Our operating results also fluctuate due to the timing of the recognition of marketing expenses, which are generally incurred before and throughout the theatrical release of a film, with the recognition of related revenues through the film’s theatrical exhibition and subsequent distribution windows.



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Our business also has experienced and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences on audiences’ viewing, reading and attendance habits. Typically, our revenue from advertising is highest in the first and fourth quarters. In the Cable Networks segment, advertising is typically highest in the fourth quarter due to the holiday season, among other factors. In the TV Entertainment segment, advertising revenues benefit principally in the first quarter of the years in which we telecast the Super Bowl and NCAA Division I Men’s Basketball Tournament National Semifinals and Championship and in the fourth quarter due to the holiday season and, in even-numbered years, advertising placed by candidates for political offices. Revenues from the Filmed Entertainment segment’s theatrical film releases tend to be cyclical with increases during the summer. The Publishing segment is subject to increased periods of demand during the summer and year-end holiday season. The effects of these variances make it difficult to estimate future operating results based on the previous results of operations. Each of the Company’s televisionany specific quarter.

We could suffer losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and radio stations and cable networks uses studio and transmitter facilities that are subject to damage or destruction. Failure to restore such facilities in a timely manner could have a material adverse effect on the Company’s businesses and results of operations.programming


Breach of Security Measures Regarding Information Systems Could Disrupt Operations and Damage the Company’s Reputation and Could Materially Adversely Affect the Company’s Businesses and Results of Operations

Network and information systems and other technologies are important to the Company’s business activities. Despite the Company’s security measures and disaster recovery planning, network and information systems‑related events, such as computer compromises, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns, employee or partner error or malicious or other activities, and power outages, terrorism, natural or other disasters could result in a disruption of the Company’s services and operations. These events could also result in the improper disclosure of personal data or confidential or proprietary information, including through third parties which receive any of such information on a confidential basis for business purposes and could be subject to any of these events, and damage the Company’s reputation and require the Company to expend resources to remedy any such breaches. The occurrence of any of these events could have a material adverse effect on the Company’s business and results of operations.

The Company Could Suffer Losses Due to Asset Impairment Charges for Goodwill, Intangible Assets, FCC Licenses and Programming

The Company willWe test goodwill and indefinite-lived intangible assets, including FCC licenses, for impairment during the fourth quarter of each yearon an annual basis and between annual tests if events or circumstances require an interim impairment assessment. ACertain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in advertising markets, a decrease in audience acceptance of our programming or films, a shift by advertisers to competing advertising platforms and/or changes in consumer behavior could result in a downward revision in the estimated fair value of a reporting unit or intangible assets, including FCC licenses, which could result in a non-cash impairment charge. Also, any significant shortfall, now or in the future, in the expected popularity of the programming for which the Company has acquired rights could lead to a downward revision in the fair value of such assets. Any such impairment charge for goodwill, intangible assets and/or programming could have a material adverse effect on the Company’sour reported net earnings.


Dividends and Dividend Rates Cannot Be Guaranteed

The Company’s Board of Directors assesses relevant factors when considering the declaration of a dividend on the Company’s common stock. The Company cannot guarantee that it will continue to declare dividends, including at the same or similar rates.



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The Loss of Key Personnel, Including Talent, Could Disrupt the Management or Operations of the Company’s Business and Adversely Affect Its Revenues

The Company’s business depends upon the continued efforts, abilities and expertise of its chief executive officer and other key employees and entertainment personalities. The Company believes that the unique combination of skills and experience possessed by its executive officers would be difficult to replace, and that the loss of its executive officers could have a material adverse effect on the Company, including the impairment of the Company’s ability to execute its business strategy. While the Company does not maintain a written succession plan with respect to Chairman of the Board, in accordance with the Company’s Corporate Governance Guidelines, designated independent committees of the CBS Board together periodically review succession planning for the position of Chairman and report to the non-management directors of the CBS Board. Because approximately 79.5% of the voting shares are controlled by Sumner Redstone there can be no assurance now or in the future that he or the successors to the voting control may not seek to effect succession of the Chairman; however, and in all cases, the Board will elect the next Chairman by a majority vote of the Board. Additionally, the Company employs or independently contracts with several entertainment personalities and authors with significant loyal audiences or readership. Entertainment personalities are sometimes significantly responsible for the ranking of a television or radio station and, therefore, the ability of the station to sell advertising, and an author’s popularity can be significantly responsible for the success of a particular book. The Company’s cable networks, CBS Television Studios and CBS Television Distribution produce programming and CBS Films produces motion pictures with highly regarded directors, actors and other talent who are important to attracting and retaining audiences fortheir content. There can be no assurance that these entertainment personalities, authors and talent will remain with or be drawn to the Company or will retain their current audiences or readership. If the Company fails to retain or attract these entertainment personalities, authors and talent or they lose their current audiences or readership, the Company’s revenues could be adversely affected.

The Company's Proposed Separation of its Radio Business Is Subject to Approvals and Closing Conditions

During 2016, the Company announced its intention to explore strategic options to separate its radio business. On February 2, 2017, the Company entered into an agreement with Entercom Communications Corp. to combine the Company’s radio business with Entercom in a merger following a split-off of the Company’s radio business, which is expected to occur through an exchange offer. These transactions are subject to customary approvals and closing conditions and other risks and uncertainties, including the ability to complete the transactions on the anticipated terms and schedule; the ability to obtain regulatory and stockholder approvals; changes in U.S. federal tax laws and interpretations and the ability to obtain the anticipated tax treatment of the transactions; the ability to obtain financingOur liabilities related to the transactions upon acceptable terms or at all;discontinued operations and changes in economic, political and market conditions. These risksformer businesses could adversely impact the Company’s timing and the ability to consummate or achieve the benefits of the transactions.our financial conditions


The Company’s Liabilities Related to Discontinued Operations and Former Businesses Could Adversely Impact Its Financial Condition

The Company hasWe have both recognized and potential liabilities and costs related to discontinued operations and former businesses, certain of which are unrelated to the media business, including leases, guarantees, environmental liabilities, liabilities related to the pensions and medical expenses of retirees, asbestos liabilities, contractual disputes and other pending and threatened litigation. The CompanyWe cannot be assured that its reservesour accruals for these matters are sufficient to cover these liabilities in their entirety or any one of these liabilities when it becomes due or at what point any of these liabilities may come due. Therefore, there can be no assurances that these liabilities will not have a material adverse effect on the Company’sour financial position, operating performance or cash flow.


The Company Could Be Adversely Affected by Strikes and Other Union Activity

The Company and its suppliers engage the services of writers, directors, actors and other talent, trade employees and others who are subjectRisks Relating to collective bargaining agreements. If the Company or its suppliers are unable to renew expiring collective bargaining agreements, it is possible that the affected unions or others could take action in the


I-24


form of strikes or work stoppages. Such actions, higher costs in connection with these agreements or a significant labor dispute could adversely affect the Company’s television, radio, cable networks, interactive and motion picture businesses by disrupting the Company’s ability to provide scheduled services and programming or by causing delays in the production of the Company’s television or radio programming or motion pictures. Depending on its duration, any lockout, strike or work stoppage could have an adverse effect on the Company’s revenues, cash flows and/or operating income and/or the timing thereof.

Fluctuations in Foreign Exchange Rates and Political and Economic Risks Associated with the Company’s International Businesses Could Harm the Company’s Financial Condition or Results of Operations

The Company’s businesses operate and have customers worldwide. Certain of the Company’s revenues are earned and expenses are incurred in foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. As a result, the Company is exposed to exchange rate fluctuations, which could have an adverse effect on its results of operations. Other inherent risks of doing business in international markets include changes in the economic environment, potentially adverse tax developments, export restrictions, exchange controls, tariffs and other trade and sanctions barriers and longer payment cycles. The Company may incur substantial expense as a result of the imposition of new restrictions or changes in the existing economic environment in the regions where it does business. For example, the June 2016 non-binding “Brexit” referendum to withdraw the U.K. from the European Union may adversely affect economic and market conditions in the U.K. and other regions where the Company conducts business and could contribute to instability in global financial and foreign exchange markets, including volatility in the value of the Euro and British Pound. In addition, acts of terrorism or other hostilities, or other future financial, political, economic or other uncertainties, could lead to a reduction in advertising expenditures, which could materially adversely affect the Company’s business, financial condition or results of operations.

NAI, Through ItsNAI’s Voting Control of the Company, IsViacomCBS and Pledged Shares

NAI, through its voting control of ViacomCBS, will be in a Positionposition to Control Actionscontrol actions that Require Stockholder Approvalrequire stockholder approval


NAI, through its direct and indirect ownership of the Company’sour Class A Common Stock, has voting control of the Company.ViacomCBS. At December 31, 2016,2019, NAI directly or indirectly owned approximately 79.5%79.4% of the Company’s votingshares of our Class A Common Stock outstanding, and approximately 10.2% of the shares of our Class A Common Stock and approximately 9.5% of the Company’s Class A Common Stock and non-votingour Class B Common Stock outstanding 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 is the controlling stockholder, chairmanChairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company's Board of Directors and Ms.Chief Executive Officer of NAI. Shari E. Redstone, the presidentPresident and a director of NAI, serves as Vicenon-executive Chair of the Company’sViacomCBS Board of Directors. In addition, Mr. David R. Andelman is a director of NAI and serves as a director of the Company.Directors (the “ViacomCBS Board”). 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 directors Ms. Shari Redstone and Mr. David R. Andelman.Redstone. No member of the Company’sour management is a trustee of the SMR Trust.



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Subject to the terms of the Governance Agreement dated as of August 13, 2019, which is incorporated by reference as an exhibit in this Annual Report on Form 10-K, NAI is in a position to control the outcome of corporate actions that require, or may be accomplished by, stockholder approval, including amending ViacomCBS’ bylaws, the election or removal of directors and transactions involving a change of control. OtherFor example, the ViacomCBS bylaws provide that:

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

any or all of our directors 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 our Common Stock then entitled to vote generally in the election of directors, voting together as a single class at a special meeting of our stockholders called expressly for that purpose; provided that during the two-year period following the closing date of the ViacomCBS Merger, the removal of our Chief Executive Officer requires the approval of the ViacomCBS Board by the “Requisite Approval” (as defined in the ViacomCBS certificate of incorporation incorporated by reference as an exhibit in this Annual Report on Form 10-K); provided further, that during the two-year period following the closing date, NAI and NAI Entertainment Holdings LLC are not permitted to remove any other persons who were members of the ViacomCBS Board at the effective time of the Merger in accordance with the Merger Agreement or who otherwise become members the ViacomCBS Board (other than any of the NAI Affiliated Directors (as defined in the bylaws)) without the Requisite Approval; and

in accordance with the General Corporation Law of the State of Delaware, our stockholders may act by written consent without a meeting if such stockholders hold the number of shares 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, ViacomCBS stockholders who may have different interests are unable to affect the outcome of theany such corporate actions of the Company for so long as NAI retains voting control. For more information, see the Governance Agreement incorporated by reference as an exhibit in this Annual Report on Form 10-K.


Sales of SharesNAI’s shares of ViacomCBS Common Stock, bysome of which are pledged to lenders, could adversely affect the stock price

At December 31, 2019, NAI Could Adversely Affect the Stock Price

NAI, through its direct and indirect ownershipdirectly or indirectly owned approximately 79.4% of the Company’sshares of our Class A Common Stock has voting controloutstanding, and approximately 10.2% of the Company.shares of our Class A Common Stock and our Class B Common Stock outstanding on a combined basis. Based on information received from NAI, NAI has pledged to its lenders a portion of shares of the Company’s votingour Class A Common Stock and non-votingour Class B Common Stock owned directly or indirectly by certain wholly‑owned subsidiariesNAI.

At December 31, 2019, the aggregate number of shares of our Common Stock pledged by NAI are pledged to such subsidiaries’ lenders.  NAI holds more than 50%its lenders represented approximately 4.1% of the Company’s votingtotal outstanding shares of our Class A Common Stock and our Class B Common Stock, on a combined basis. At December 31, 2019, the amount of our Class A Common Stock that NAI directly or indirectly owned and that was not pledged by NAI to its lenders represented approximately 64.0% of the total outstanding shares directly and these shares are not pledged. of our Class A Common Stock.

If any of such subsidiaries defaultsthere is a default on itsNAI’s debt obligations and the lenders foreclose on the collateral,pledged shares, the lenders may not effect a transfer, sale or anyone to whom the lenders transfer the Company’sdisposition of any pledged shares could sell such shares or convert those shares


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of votingour Class A Common Stock, into sharesunless NAI and its affiliates beneficially own 50% or less of non-voting Class B Common Stock and sell such shares, which could adversely affect the Company’s share price. Additionally, if the lenders foreclose on the pledged shares of votingour Class A Common Stock NAI will no longer directlythen outstanding or indirectly own thosesuch shares and such lenders or other transferees would have voting rights infirst been converted into our Class B Common Stock. A sale of the Company.pledged shares could adversely affect our Common Stock share price.  In addition, there can be no assurance that NAI or its subsidiaries at some future time NAI will not sell or pledge additional shares of the Company’s stock,our Common Stock, which could adversely affect the Company’sour Common Stock share price.


Many Factors May Cause the Stock Price of the Company’s Class A Common Stock and Class B Common Stock to Fluctuate


The stock price of Class A Common Stock and Class B Common Stock may fluctuate significantly as a result of many factors. These factors, some or all of whichI-38

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

Our principal physical properties are beyond the Company’s control, include: actual or anticipated fluctuations in the Company’s operating results; changes in expectations as to the Company’s future financial performance or changes in financial estimates of securities analysts; success of the Company’s operating and growth strategies; investor anticipation of strategic, technological or regulatory threats, whether or not warranted by actual events; operating and stock price performance of other comparable companies; and realization of any of the risks described in these risk factors.below. In addition, the stock market has experienced volatility that often has been unrelated or disproportionate to the operating performance of particular companies. These broad marketwe own and industry fluctuations may adversely affectlease office, studio, production and warehouse space and broadcast, antenna and satellite transmission facilities throughout the trading prices of the Company’s common stock, regardless of the Company’s actual operating performance.

The Businesses of the Company and Viacom Inc. Will Be Attributable to the Other Company for Certain Regulatory Purposes, Which May Limit Business Opportunities

So long as the Company and Viacom Inc. are under common control, each company’s businesses, as well as the businesses of any other commonly controlled company, will be attributable to the other company for purposes of certain rules and regulations of the FCC, U.S. and non-U.S. antitrust rules and regulations and certain rules regarding political campaign contributions inaround the U.S., among others potentially. The businesses of one company will continue to be attributable to the other companyworld for certain FCC and other purposes even after the two companies cease to be commonly controlled, if the two companies share common officers, directors, or attributable stockholders. As a result, the businesses and conduct of Viacom Inc. may have the effect of limiting and affecting the activities, strategic business alternativesour businesses. We consider our properties adequate for our present needs.

ViacomCBS

Our world headquarters is located at 1515 Broadway, New York, New York, where we lease approximately 1.4 million square feet for executive, administrative and business terms available to the Company, including limitations to which the Company contractually agreed in connection with the Company’s separation of former Viacom Inc. (“Former Viacom”) into two publicly traded entities, CBS Corporation and new Viacom Inc., which was completed on December 31, 2005 (the “Separation”).

In Connection with the Separation, Each Company Will Rely on the Other Company’s Performance Under Various Agreements Between the Companies

In connection with the Separation, the Company and Viacom Inc. entered into various agreements, including a Separation Agreement dated December 19, 2005, a Tax Matters Agreement dated December 30, 2005, which are filed as exhibits to this report, and certain related party arrangements pursuant to which the Company and Viacom Inc. will provide services and products to each other from and after the Separation. The Separation Agreement sets forth the allocation of assets, liabilities, rights and obligations of the Company and Viacom Inc. following the Separation, and includes indemnification obligations for such liabilities and obligations. In addition, pursuant to the Tax Matters Agreement, certain income tax liabilities and related responsibilities are allocated between, and indemnification obligations are assumed by, each of the Company and Viacom Inc. Each company will rely on the other to satisfy its performance and payment obligations under these agreements. Certain of the liabilities to be assumed or indemnified by the Company or Viacom Inc. under these agreements are legal or contractual liabilities of the other company. If Viacom Inc. were to breach or be unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification obligations, the Company could suffer operational difficulties or significant losses.



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NAI, Certain Directors and Members of Management 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. Mr. David R. Andelman is a director of NAI and serves as a director of the Company. This ownership overlap and these common directors 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 implicationsoffices for the Company and Viacom Inc. For example, potential conflictscertain of interest could arise in connectionour operating divisions. The lease runs through 2031, with two renewal options based on market rates at the resolutiontime 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 couldrenewal for ten years each.

We 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 thatown 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. These provisions create the possibility that a corporate opportunity of one of such companies may be used for the benefit of the other company.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

The Company maintains its world headquartersbuilding at 51 West 52nd Street, New York, New York where it owns a building containing approximately 900,000892,000 square feet of space, 831,000space. Of the 855,000 square feet of which is office space. The Company occupiesspace in the building, we occupy approximately 275,000270,000 square feet of the office space and leaseslease the balance to third parties. The Company ownsWe have retained a real estate brokerage firm to explore a possible sale of this property.

We maintain facilities for our Global Business Services Center at our offices in Budapest, Hungary, where we lease approximately 44,000 square feet of space through 2023, and at our offices in Warsaw, Poland, where we lease approximately 50,000 square feet of space through 2025.

TV Entertainment

We own the CBS Broadcast Center complex located on approximately 3.7 acres at 524 West 57th Street, New York, New York, which consists of approximately 860,000 square feet of office and studio space. The Company also owns two

We own studio facilities in California: (a)at the CBS Studio Center at 4024 Radford Avenue, Studio City, California, located on approximately 40 acres,acres.

CBS Interactive occupies approximately 193,000 square feet of space at 235 Second Street, San Francisco, California, under a lease expiring in 2022.

We occupy approximately 106,000 square feet of office, production and (b) CBStechnical space at Television City, at 7800 Beverly Boulevard, Los Angeles, California locatedunder a lease expiring in 2024.

Cable Networks

In addition to occupying space at 1515 Broadway in New York, we occupy the following major office facilities:

Our Cable Networks business occupies approximately 277,000 square feet of office and production space at 345 Hudson Street, New York, New York, under a lease expiring in 2022.

Our Cable Networks business occupies approximately 210,000 square feet of office and production space at 1575 North Gower Street, Los Angeles, California, under a lease expiring in 2028.



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Our Cable Networks’ Network Operations Center in Hauppauge, New York contains approximately 65,000 square feet of floor space on approximately 25 acres. nine acres of owned land.

The Nickelodeon Animation Studio at 203-231 West Olive Avenue, Burbank, California contains approximately 180,000 square feet of studio and office space, leased under two leases expiring in 2036.

Nickelodeon’s Live Action Studio contains approximately 108,000 square feet of stage and office space at Burbank Studios, 3000 West Alameda Avenue, Burbank, California, under a lease expiring in 2024.

Showtime Networks leases approximately 230,000253,000 square feet at 1633 Broadway, New York, New York, under a lease which expiresexpiring in 2026. 2026 and leases approximately 56,000 square feet at The Lot, 1041 N. Formosa Avenue, West Hollywood, California, under a lease expiring in 2028.

Telefe occupies approximately 496,000 square feet of office, studio and production space, transmission facilities and for other ancillary uses at its owned and leased facilities in Buenos Aires, Argentina.

ViacomCBS Networks International occupies approximately 140,000 square feet of space at its owned and leased Hawley Crescent facilities in London.

Network 10 leases approximately 100,000 square feet of space at 1 Saunders Street, Pyrmont, New South Wales, Australia, under a lease expiring in 2023.

Filmed Entertainment

Paramount owns the Paramount Pictures Studio situated at 5555 Melrose Avenue, Los Angeles, California, located on approximately 62 acres of land, and containing approximately 1.85 million square feet of floor space used for executive, administrative and business offices, sound stages, production facilities, theatres, equipment facilities and other ancillary uses. Paramount has embarked on a planned 25-year expansion and revitalization project for the studio.

Publishing

Simon & Schuster leases approximately 292,000300,000 square feet of office space at 1230 Avenue of the Americas, New York, New York, which lease runs to 2019. CBS Interactive leases approximately 283,000 square feet of space at 235 Second Street, San Francisco, California under a lease which expiresexpiring in 2022. CBS Interactive subleases approximately 77,000 square feet of this space to third parties. The Company and its subsidiaries also own and lease office, studio and warehouse space and broadcast, antenna and satellite transmission facilities throughout the U.S., Canada and several other foreign countries for its businesses. The Company considers its properties adequate for its present needs.2034.


Item 3. Legal Proceedings.


General. On an ongoing basis,The information set forth under the Company vigorously defends itselfcaption “Legal Matters” 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


I-27


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.

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 principally as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally priorNote 19 to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Companyconsolidated financial statements in “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements” 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 causedincorporated herein by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.reference.

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 December 31, 2016, the Company had pending approximately 33,610 asbestos claims, as compared with approximately 36,030 as of December 31, 2015 and 41,100 as of December 31, 2014. During 2016, the Company received approximately 4,160 new claims and closed or moved to an inactive docket approximately 6,580 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. In 2016, the Company’s costs for settlement and defense of asbestos claims after insurance and taxes were approximately $48 million. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement and defense of asbestos claims by approximately $5 million. 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 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.


Item 4.    Mine Safety Disclosures.


Not applicable.






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EXECUTIVE OFFICERSOUR BOARD OF THE COMPANYDIRECTORS


Set forth below is certain information concerning the executive officers of the CompanyViacomCBS’ directors as of February 10, 2017.18, 2020 are as follows:
NameAgePosition
Shari E. Redstone65Non-Executive Chair, Director
Robert M. Bakish56President and Chief Executive Officer, Director
Candace K. Beinecke73Director
Barbara M. Byrne65Director
Brian Goldner56Director
Linda M. Griego72Director
Robert N. Klieger47Director
Judith A. McHale73Director
Ronald L. Nelson67Director
Charles E. Phillips, Jr.60Director
Susan Schuman60Director
Nicole Seligman63Director
Frederick O. Terrell65Director

Shari E. Redstone has been a member of the ViacomCBS Board of Directors (the “Board”) since January 1994. She has served as the Non-Executive Chair of our Board since December 2019 and, prior to that, served as Non-Executive Vice Chair of the Board beginning in 2005 and as Non-Executive Vice Chair of the board of Viacom beginning in 2006. Ms. Redstone is Co-founder and Managing Partner of Advancit Capital, an investment firm launched in 2011 that focuses on early stage companies at the intersection of media, entertainment and technology, with investments in over 75 companies. Ms. Redstone has been President of NAI since 2000, and also serves as a director of NAI. Ms. Redstone brings to the Board her extensive experience in and a deep understanding of the entertainment industry, broad experience and talent managing a large business, extensive legal experience and her experience as President of NAI, including as one of its significant stockholders. Ms. Redstone is actively involved in a variety of charitable, civic, and educational organizations, including serving as a member of the board of trustees of The Paley Center for Media. She sits on the Board of Trustees of the Dana-Farber Cancer Institute. Ms. Redstone earned a BS from Tufts University and a JD and a Masters in Tax Law from Boston University. She practiced corporate law, estate planning and criminal law in the Boston area before joining NAI. Ms. Redstone is the daughter of Sumner M. Redstone.

Robert M. Bakish has been our President and Chief Executive Officer and a member of our Board since December 2019. Mr. Bakish served as President and Chief Executive Officer and a member of the board of Viacom from December 2016 to December 2019, having served as Acting President and Chief Executive Officer beginning earlier in 2016. Mr. Bakish joined Viacom’s predecessor (“Former Viacom”) in 1997 and held positions throughout the organization, including as President and Chief Executive Officer of Viacom International Media Networks and its predecessor company, MTV Networks International (“MTVNI”), from 2007 to 2016; President of MTVNI; Executive Vice President, Operations and Viacom Enterprises; Executive Vice President and Chief Operating Officer, MTV Networks Advertising Sales; and Senior Vice President, Planning, Development and Technology. Before joining Former Viacom, Mr. Bakish was a partner with Booz Allen Hamilton in its Media and Entertainment practice. Mr. Bakish has extensive knowledge and deep understanding of the Viacom business and the entertainment industry through various leadership positions at Viacom spanning approximately 20 years and culminating with President and Chief Executive Officer, and broad expertise overseeing global operations. Mr. Bakish has served as a director of Avid Technology, Inc. since 2009.

Candace K. Beinecke has been a member of our Board since September 2018. Ms. Beinecke is the Senior Partner of Hughes Hubbard & Reed LLP, a New York law firm, and is a practicing partner in Hughes Hubbard’s corporate department. In 1999, Ms. Beinecke became the first woman to Chair a major New York law firm. Ms. Beinecke also serves as the Lead Trustee of Vornado Realty Trust, the Chairperson of the Board of First Eagle Funds (a mutual fund


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family), and as a board member of ALSTOM (a public French transport company). As the long-time head of a top-ranked international law firm, Ms. Beinecke is well-recognized in the legal profession for her corporate governance and mergers and acquisitions expertise and brings to the Board extensive legal, governance, business and risk management experience. Ms. Beinecke’s breadth of director experience, which includes service as a lead trustee and chairperson, as well as service on other nominating and governance committees, a remuneration committee and an executive committee, gives her a deep understanding of public company governance.

Barbara M. Byrne has been a member of our Board since September 2018. Ms. Byrne is the former Vice Chairman, Investment Banking at Barclays PLC. During her more than 35 years of financial services experience, Ms. Byrne served as team leader for some of Barclay’s most important multinational corporate clients and was the primary architect of several of Barclays’ marquee transactions. Widely recognized as a leading investment banker and strategic advisor, she is a member of various industry councils and participates as a forum leader on strategic issues and trends facing the financial services sector and global markets. With this experience, Ms. Byrne brings to the Board important business and financial expertise in its deliberations on complex transactions, risk management, strategy and other financial matters.

Brian Goldner has been a member of our Board since September 2018. Mr. Goldner has served as the Chief Executive Officer of Hasbro, Inc. since 2008, and additionally has served as its Chairman of the Board since May 2015. In addition to being Chief Executive Officer, from 2008 to 2016, Mr. Goldner was also the President of Hasbro. Besides being a member of Hasbro’s board, he also served on the boards of The Gap, Inc. from 2016 to 2019 and Molson Coors Brewing Company from 2010 to 2016. Mr. Goldner brings to the Board significant leadership, operational and brand management experience from his executive positions at one of the leading public companies in his industry, where he was instrumental in transforming a traditional toy and game company into a global play and entertainment leader. With his direct experience in executing on strategies to differentiate Hasbro in a competitive global marketplace in response to industry evolution, he is well-positioned to advise on the strategic direction of the Company’s businesses. Further, Mr. Goldner’s service on other boards and board committees gives him a deep understanding of public company governance.

Linda M. Griego has been a member of our Board since March 2007. Ms. Griego has served, since 1986, as President and Chief Executive Officer of Griego Enterprises, Inc., a business management company. For more than 20 years, she oversaw the operations of Engine Co. No. 28, a prominent restaurant in downtown Los Angeles that she founded in 1988. From 1990 to 2000, Ms. Griego held a number of government-related appointments, including Deputy Mayor of the city of Los Angeles, President and Chief Executive Officer of the Los Angeles Community Development Bank, and President and Chief Executive Officer of Rebuild LA, the agency created to jump-start inner-city economic development following the 1992 Los Angeles riots. Over the past two decades, she has also served on a number of government commissions and boards of directors of nonprofit organizations, including current service on the boards of The Ralph M. Parsons Foundation, the MLK Health and Wellness, CDC, and the Charles R. Drew University of Medicine and Science. Ms. Griego has served as a director of publicly traded and private corporations, including serving as director of AECOM and the American Funds (7 funds). With the breadth of her leadership experience as a businesswoman, in the public sector through her multiple government appointments and extensive community-based participation in Los Angeles, an area where the Company has a significant presence, and on multiple not-for-profit boards, Ms. Griego provides the Board with financial and business acumen, as well as public policy expertise as it relates to business practices. Ms. Griego is also an experienced director, including through service on other audit, compensation and organization, and nominating and governance committees, with demonstrated expertise in the application of sound corporate governance principles.

Robert N. Klieger has been a member of our Board since July 2017. Mr. Klieger is a partner in the Los Angeles law firm Hueston Hennigan LLP. Mr. Klieger’s practice focuses on complex civil litigation and counseling in the areas of entertainment and intellectual property. Mr. Klieger represents motion picture studios, broadcast and cable television networks, production companies, video game publishers and high net worth individuals in the media and entertainment space, as well as clients in other industries including apparel, aviation and venture capital. Prior to joining Hueston Hennigan, Mr. Klieger was a partner at Irell & Manella LLP and a founding partner at Kendall Brill & Klieger LLP. Before beginning his career in private practice, Mr. Klieger served as a law clerk to the Honorable


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Cynthia Holcomb Hall of the United States Court of Appeals for the Ninth Circuit, and the Honorable William Matthew Byrne, Jr. of the United States District Court for the Central District of California. Mr. Klieger is recognized as one of the most prominent attorneys in the entertainment industry, with a practice focused on complex civil litigation and counseling in the areas of media, entertainment and intellectual property and clients that include leading enterprises in television, film and digital media. With his exceptional legal acumen and distinguished reputation for his trial practice and counsel, Mr. Klieger brings to the Board legal and strategic expertise in matters germane to the Company’s businesses and complex business transactions.

Judith A. McHale has been a member of our Board since December 2019 and, prior to that, served on the board of Viacom from August 2016 to December 2019. Ms. McHale is President and Chief Executive Officer of Cane Investments, LLC, a private investment company. Prior to joining Cane Investments in 2011, Ms. McHale served as the Under Secretary of State for Public Diplomacy and Public Affairs for the U.S. Department of State from 2009 to 2011. From 2004 to 2006, Ms. McHale served as the President and Chief Executive Officer of Discovery Communications, Inc., the parent company of Discovery Channel, and served as its President and Chief Operating Officer from 1995 to 2004. In 2006, Ms. McHale worked with private equity firm Global Environment Fund to launch the GEF/Africa Growth Fund, an investment vehicle focused on supplying expansion capital to small and medium-sized enterprises that provide consumer goods and services in emerging African markets. Ms. McHale has extensive experience leading a major media conglomerate with a background in operations and financial management, expertise in global affairs, experience in government affairs and extensive public company and corporate governance experience. She has served on the board of Ralph Lauren Corporation since 2011 and the board of Hilton Worldwide Holdings Inc. since 2013. She previously served on the boards of SeaWorld Entertainment, Inc., Host Hotel & Resorts, Inc., DigitalGlobe Inc., John Hancock Financial Services, Inc. and Potomac Electric Power Company.

Ronald L. Nelson has been a member of our Board since December 2019 and served on the board of Viacom from August 2016 to December 2019. Mr. Nelson served as a consultant to Avis Budget Group, Inc. until May 2019. Prior to that, he served as Executive Chairman of the Board of Avis Budget Group from 2016 to 2018 and as its Chairman and Chief Executive Officer from 2006 to 2015, and also served as Chief Operating Officer from 2010 to 2015. Prior to that, Mr. Nelson held several executive finance and operating roles, beginning in 2003 with Cendant Corporation, including as its Chief Financial Officer and President and a member of its board from 2003 to 2006. From 1994 to 2003, Mr. Nelson served as Co-Chief Operating Officer of DreamWorks SKG. Prior to that, he was Executive Vice President, Chief Financial Officer and a director at Paramount Communications, Inc., formerly Gulf + Western Industries, Inc. Mr. Nelson has extensive experience as a chief executive officer, chief financial officer and chief operating officer of major global companies, significant financial expertise, international business experience, public company and corporate governance experience and a long-standing background in the media industry. Mr. Nelson has served on the board of Hanesbrands Inc. since 2008 and as its Non-Executive Chairman since 2019, and on the board of Wyndham Hotels & Resorts, Inc. since 2019. He previously served on the board of Convergys.

Charles E. Phillips, Jr. has been a member of our Board since December 2019 and served on the board of Viacom from January 2006 to December 2019 and, prior to that, on the board of Former Viacom beginning in 2004. Mr. Phillips is Chairman of Infor, Inc., a multi-billion dollar enterprise software company and served as its Chief Executive Officer from 2010 to 2019. He was a President of Oracle Corporation from 2003 to 2010 and served as a member of its Board of Directors and Executive Management Committee from 2004 to 2010. Prior to Oracle, Mr. Phillips was a managing director at Morgan Stanley in the Technology Group and served on its Board of Directors. Mr. Phillips has extensive experience as a senior executive in a large, multinational corporation, financial industry background and financial and analytical expertise, significant public company and corporate governance experience, expertise in technology issues and familiarity with issues facing media, new media and intellectual property-driven companies and a deep knowledge of the Viacom business. He is a member of the Board of Directors of the Federal Reserve Bank of New York, the Apollo Theater, Business Executives for National Security and the New York Police Foundation. He served on President Obama’s Economic Recovery Board, led by Paul Volcker, and is a member of the Council on Foreign Relations.

Susan Schumanhas been a member of our Board since September 2018. Ms. Schuman is the Chief Executive Officer and Co-Founder of SYPartners LLC, a consultancy firm that partners with chief executive officers and their


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leadership teams undergoing business and cultural transformation. Over the past 20 years, Ms. Schuman has built and led SYPartners, working with executives at many high-profile companies and organizations. This experience in advising on business, organization and cultural transformation, including new value creation strategies, positions Ms. Schuman as a skilled advisor to the Board on the strategic and transformational direction of the Company.

Nicole Seligman has been a member of our Board since December 2019 and, prior to that, served on the board of Viacom from August 2016 to December 2019. Until March 2016, Ms. Seligman served as the President of Sony Entertainment, Inc. (beginning in 2014) and of Sony Corporation of America (beginning in 2012), and as Senior Legal Counsel of Sony Group (beginning in 2014). Ms. Seligman previously served as Executive Vice President and General Counsel of Sony Corporation from 2005 to 2014. She joined Sony in 2001 and served in a variety of other capacities during her tenure, including as a Corporate Executive Officer and Group Deputy General Counsel of Sony Corporation, and as General Counsel and an Executive Vice President at Sony Corporation of America, a subsidiary of Sony Corporation. Prior to joining Sony Corporation of America, Ms. Seligman was a partner in the litigation practice at Williams & Connolly LLP in Washington, D.C., where she worked on a broad range of complex civil and criminal matters and counseled a wide range of clients, including President William Jefferson Clinton and Lt. Col. Oliver North. Ms. Seligman joined Williams & Connolly in 1985. Ms. Seligman served as law clerk to Justice Thurgood Marshall on the Supreme Court of the United States from 1984 to 1985 and as law clerk to Judge Harry T. Edwards at the U.S. Court of Appeals for the District of Columbia Circuit from 1983 to 1984. Ms. Seligman has extensive media industry experience with various leadership roles at a major media conglomerate, public company and corporate governance experience, and exceptional achievements in the legal profession. Ms. Seligman has served on the board of Far Point Acquisition Corporation since 2018 and the board of MeiraGTx Holdings plc since 2019, and has been a Non-Executive Director of WPP plc since 2014 and its Senior Independent Director since 2016.

Frederick O. Terrell has been a member of our Board since December 2018. Mr. Terrell served as Executive Vice Chairman of Investment Banking and Capital Markets at Credit Suisse and later Senior Advisor from January 2018 to November 2018. From 2010 to 2017 he was Vice Chairman of Investment Banking and Capital Markets at Credit Suisse. His investment banking career began in 1983 as an Associate with The First Boston Corporation. During his accomplished career in the financial services sector spanning more than 25 years, Mr. Terrell was responsible for Credit Suisse’s global banking relationships with some of its most high-profile clients. From 2000 to 2008 he was the Managing Partner of Provender Capital Group, LLC a private equity firm focusing on investments in emerging companies. He has served as a member of the Board of Directors of the New York Life Insurance Company, Wellchoice Inc. (formerly Empire Blue Cross Blue Shield) and Carver Bancorp, Inc. His experience also includes past and present service on multiple not-for-profit boards, including the Yale School of Management, The Partnership for New York City, The Partnership Fund for New York City, Coro New York Leadership Center, Big Brothers Big Sisters of New York City and the Center for a New American Security. He is a member of the Council on Foreign Relations, The Economic Club of New York and the Investment Committee of the Rockefeller Foundation. Based on his extensive banking and corporate advisory experience, Mr. Terrell brings significant business and financial expertise to the Board in its deliberations on corporate strategy, complex transactions and other financial matters.



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OUR EXECUTIVE OFFICERS

ViacomCBS’ executive officers as of February 18, 2020 are as follows:

NameAgeTitlePosition
Leslie MoonvesRobert M. Bakish5667Chairman of the Board, President and Chief Executive Officer, Director
Anthony G. AmbrosioChrista A. D’Alimonte56
Senior Executive Vice President, Chief Administrative Officer and
Chief Human Resources Officer
Jonathan H. Anschell4851Executive Vice President, Deputy General Counsel and Secretary
Joseph R. IannielloKatherine Gill-Charest49Chief Operating Officer
Richard M. Jones51Executive Vice President and General Tax Counsel
Lawrence Liding4855Executive Vice President, Controller and Chief Accounting Officer
Gil SchwartzRichard M. Jones5465Senior Executive Vice President, General Tax Counsel and Chief CommunicationsVeteran Officer
Lawrence P. TuDoretha (DeDe) Lea5562Senior Executive Vice President, Global Public Policy and Government Relations
Julia Phelps42Executive Vice President, Chief LegalCommunications and Corporate Marketing Officer
Nancy Phillips52Executive Vice President, Chief People Officer
Christina Spade50Executive Vice President, Chief Financial Officer
None
See “Our Board of the executive officers of the Company is related to any other executive officer or director by blood, marriage or adoption.Directors” for Mr. Bakish’s biography.


Mr. MoonvesChrista A. D’Alimonte has been Chairman of the Board, President and Chief Executive Officer of the Company since February 3, 2016. Prior to that, Mr. Moonves served as President and Chief Executive Officer and a Director of the Company since January 1, 2006. Previously, Mr. Moonves served as Co-President and Co-Chief Operating Officer of Former Viacom since June 2004, Chairman and Chief Executive Officer of CBS since 2003 and as its President and Chief Executive Officer since 1998. Mr. Moonves joined former CBS Corporation in 1995 as President, CBS Entertainment. Prior to that, Mr. Moonves was President of Warner Bros. Television since July 1993.

Mr. Ambrosio has been Seniorour Executive Vice President, Chief Administrative OfficerGeneral Counsel and Chief Human Resources Officer of the CompanySecretary since June 2013.December 2019. Prior to that, Mr. Ambrosioshe served as Executive Vice President, Human ResourcesGeneral Counsel and AdministrationSecretary of the Company since January 1, 2006. Previously, heViacom beginning in 2017, having previously served as Co‑Executive Vice President, Human Resources of Former Viacom since September 2005 and as Senior Vice President, Human Resources and Administration of the CBS, Infinity and Viacom Outdoor businesses since 2000. Prior to that, Mr. Ambrosio served as Vice President, Corporate Human Resources of the former CBS Corporation from 1999 to 2000, as Vice President, Benefits of the former CBS Corporation from 1995 to November 1999 and as Director, Personnel of the former CBS Corporation in 1995. He joined the former CBS Corporation in 1985 and held various positions in the human resources area since that time.

Mr. Anschell has been Executive Vice President, Deputy General Counsel and Assistant Secretary of Viacom beginning in 2012. Prior to joining Viacom, Ms. D’Alimonte was a partner of Shearman & Sterling LLP, where she was Deputy Practice Group Leader of the Company since January 1, 2016.  Mr. Anschell also serves asFirm’s Global Mergers & Acquisitions group. She first joined Shearman & Sterling in 1993 and became a partner in 2001.

Katherine Gill-Charesthas been our Executive Vice President, Controller and General Counsel of CBS Broadcasting Inc., a position he has heldChief Accounting Officer since joining the Company in 2004.  Mr. Anschell previously was a partner with the law firm, White O’Connor Curry in Los Angeles, California.

Mr. Ianniello has been Chief Operating Officer of the Company since June 2013.December 2019. Prior to that, Mr. Iannielloshe served as Executive Vice President and Chief Financial Officer of the Company since August 2009. Previously, he served as Deputy Chief Financial Officer of the Company since November 2008, as Senior Vice President, Controller and Chief DevelopmentAccounting Officer and Treasurer of the Company since September 2007,Viacom beginning in 2010, having previously served as Senior Vice President, FinanceDeputy Controller of Viacom during 2010 and TreasurerVice President, Controller beginning in 2007. Prior to that, Ms. Gill-Charest was the Chief Accounting Officer of WPP Group from 2001 to 2007 and was the Company since January 1, 2006, as Senior Vice President and TreasurerWorldwide Controller of Former Viacom since July 2005Young & Rubicam Inc. from 1998 to 2000. Ms. Gill-Charest also held roles in financial reporting and as Vice President, Corporate Developmentaccounting policy at Time Warner Inc. from 1991 to 1998 and at NYNEX Corporation from 1988 to 1991 and served in the audit practice of Former Viacom from 2000 to 2005.Price Waterhouse for two years. 


Mr.Richard M. Jones has been our Executive Vice President, and General Tax Counsel and Chief Veteran Officer since August 2014. Previously,Prior to that, he served as Senior Vice President and General Tax Counsel of the Company since January 1,CBS Corporation beginning in 2006 and for FormerViacom beginning in December 2005. Prior to that, he served as Vice President of Tax, Assistant Treasurer and Tax Counsel for NBC Universal, Inc. sincebeginning in 2003 and he spentserved 13 years with Ernst & Young in theirits media & entertainment and transaction advisory services practices. Mr. Jones also serves as the Company’s Chief Veteran Officer and served honorably as a non-commissioned officer in the U.S. Army’s 75th Ranger Regiment and 10th Mountain Division.



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Mr. LidingDoretha (DeDe) Lea has been our Executive Vice President, ControllerGlobal Public Policy and Government Relations since December 2019. Prior to that, she served as Executive Vice President, Global Government Affairs of Viacom beginning in 2013, having previously served as Executive Vice President, Government Relations of Former Viacom beginning in 2005. Prior to that, she was Senior Vice President, Government Relations of Former Viacom beginning earlier in 2005. Prior to that, she served as Vice President of Government Affairs at Belo Corp. from 2004 to 2005 and as Vice President, Government Affairs of Former Viacom from 1997 to 2004.

Julia Phelps has been our Executive Vice President, Chief AccountingCommunications and Corporate Marketing Officer since December 2019. Prior to that, she served as Executive Vice President, Communications, Culture and Marketing of the Company since August 2014. Previously, heViacom beginning in 2017, having previously served as Senior Vice President, ControllerCommunications and Chief Accounting OfficerCulture of the Company since October 2011,Viacom beginning earlier in 2017. Prior to that, she served as Executive Vice President Deputy Controller of the Company since March 2010 and Vice President, Assistant Controller since January 1, 2006. Prior to that, Mr. Liding joined FormerCommunications for Viacom


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International Media Networks beginning in 1995 and2012, after having served as Vice President of Financial ReportingCorporate Communications for Viacom. Ms. Phelps joined Viacom in 2005 from 2002 through 2005.DeVries Public Relations, a New York-based communications agency.


Mr. SchwartzNancy Phillips has been Seniorour Executive Vice President, and Chief CommunicationsPeople Officer of the Company since June 2013.December 2019. Prior to that, heshe served as Executive Vice President and Chief CommunicationsHuman Resources Officer of the Company since January 1, 2006. Previously, he served as Executive Vice President of CBS Communications Group from 2004 until January 1, 2006, as Senior Vice President, Communications of CBS from 2000 to 2004 and as Senior Vice President, Communications of the former CBS Corporation from 1996 to 2000. Prior to that, Mr. Schwartz served as Vice President, Corporate Communications of Westinghouse Broadcasting from 1995 to 1996 and as Vice President, Communications for Westinghouse Broadcasting’s Group W Television Stations from 1989 to 1995. Mr. Schwartz joined Westinghouse BroadcastingNielsen Holdings PLC beginning in 1981.

Mr. Tu has been Senior Executive Vice President and Chief Legal Officer of the Company since January 1, 2014. Previously, Mr. Tu served as Senior Vice President, General Counsel and Secretary of Dell Inc. since July 2004. Prior to that, Mr. Tu2017, having served as Executive Vice President and General CounselChief Human Resources Officer of NBC Universal since 2001. He previouslyBroadcom Corporation from 2014 to 2016. From 2010 to 2014, Ms. Phillips was a partner with the law firm, O’Melveny & Myers LLP, and also served five years as managing partner of the firm’s Hong Kong office. Mr. Tu’s prior experience also includes serving as General Counsel Asia-Pacific for Goldman Sachs, attorneySenior Vice President, Human Resources for the U.S. State Department,Imaging and Printing Group at Hewlett-Packard Company, and previously served as Senior Vice President, Human Resources, Enterprise Services. From 2008 to 2010, Ms. Phillips served as Executive Vice President and Chief Human Resources Officer at Fifth Third Bancorp. Prior to that, Ms. Phillips spent 11 years at General Electric Company, holding various human resources positions.  Ms. Phillips practiced law clerkfrom 1993 to 1997.

Christina Spade has been our Executive Vice President, Chief Financial Officer since October 2018. Prior to that, she served as Executive Vice President, Chief Financial Officer and Strategy for U.S. Supreme Court Justice Thurgood Marshall.Showtime Networks Inc. (“Showtime”) beginning in 2013. Previously, Ms. Spade served as Senior Vice President, Affiliate Finance and Business Operations for Showtime beginning in 2003. Prior to joining Showtime in 1997, Ms. Spade was an Audit Manager with PricewaterhouseCoopers LLP in its Entertainment, Media and Communications practice.





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Part II
Item 5.Market for CBS Corporation’sViacomCBS Inc.’s Common Equity, Related Stockholder Matters and Purchases of Equity Securities.
CBS Corporation (the “Company” or “CBS Corp.”)Our voting Class A Common Stock and CBS Corporation non-voting Class B Common Stock are listed and traded on the New YorkNasdaq Stock Exchange (“NYSE”)Market LLC under the symbols “CBS.A”“VIACA” and “CBS”“VIAC”, respectively.
The following table sets forth, for the calendar periods indicated, the
On December 19, 2019, we declared a quarterly cash dividend of $.24 per share range of high and low sales prices for CBS Corporation’son our Class A and Class B Common Stock, as reportedresulting in total dividends of $150 million, which were paid on January 10, 2020. Prior to the NYSE.Merger, Viacom and CBS each declared a quarterly cash dividend during each of the first three quarters of 2019 and during each of the four quarters of 2018 and 2017. During 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For each of the years ended December 31, 2018 and 2017, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million and $289 million, respectively. During 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For each of the years ended December 31, 2018 and 2017, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million and $323 million, respectively.
 Voting Class A Non-Voting Class B
 Common Stock Common Stock
 High Low High Low
        
2016       
1st quarter$59.99
 $46.86
 $55.38
 $41.36
2nd quarter$61.77
 $53.13
 $57.89
 $50.53
3rd quarter$61.51
 $49.92
 $58.22
 $48.88
4th quarter$66.99
 $55.27
 $65.09
 $54.35
2015       
1st quarter$64.63
 $53.93
 $63.71
 $52.94
2nd quarter$72.50
 $57.02
 $63.95
 $55.21
3rd quarter$58.44
 $42.54
 $56.39
 $38.51
4th quarter$57.90
 $43.28
 $52.18
 $38.76

On January 26, 2017, the CompanyFebruary 12, 2020, we announced a quarterly cash dividend of $.18$.24 per share on itsour Class A and Class B Common Stock, payable on April 1, 2017. The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2016 and 2015, resulting in total annual dividends of $294 million, or $.66 per share for 2016 and $293 million, or $.60 per share for 2015. CBS Corp.2020. We currently expectsexpect to continue to pay a regular cash dividend to itsour stockholders.

In November 2010, the Companywe announced that itsour Board of Directors approved a program to repurchase $1.5 billion of the Company’sour 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.’sour purchases of itsour Class B Common Stock during the three months ended December 31, 2016 under this publicly announced share repurchase program.2019.
(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
October 1, 2016 - October 31, 2016 7.3
  $56.18
  7.3
   $5,193
 
November 1, 2016 - November 30, 2016 11.4
  $58.68
  11.4
   $4,527
 
December 1, 2016 - December 31, 2016 6.7
  $62.72
  6.7
   $4,107
 
Total 25.4
     25.4
   $4,107
 
(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
October 1, 2019 - October 31, 2019 —
  $—
  —
   $2,457
 
November 1, 2019 - November 30, 2019 —
  $—
  —
   $2,457
 
December 1, 2019 - December 31, 2019 1.2
  $40.78
  1.2
   $2,408
 
Total 1.2
     1.2
   $2,408
 
As of February 14, 2017,2020, there were approximately 1,5252,227 record holders of CBS Corp.our Class A Common Stock and approximately 21,25531,784 record holders of CBS Corp.our Class B Common Stock.
Additional information required by this item is contained in the CBS Corp. Proxy Statement for the Company’s 2017 Annual Meeting of Stockholders under the heading “Equity Compensation Plan Information,” which information is incorporated herein by reference.



Performance Graph
The following graph compares the cumulative total stockholder return on CBS Corp.of our Class A and Class B Common Stock with the cumulative total return on the companies listed in the Standard & Poor’s 500 Stock Index (“S&P 500”) and a Peer Group of companies identified below.
On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the surviving company (the “Merger”). At the effective time of the Merger, the combined company changed its name to ViacomCBS Inc. Accordingly, the performance graph also includes Viacom Class B Common Stock.
The performance graph assumes $100 invested on December 31, 20112014 in each of theour Class A and Class B Common Stock, of CBS Corp.,Viacom’s Class B Common Stock, the S&P 500 and the Peer Group identified below, including reinvestment of dividends, through the calendar year ended December 31, 2016.2019.

Total Cumulative Stockholder Return
For Five-Year Period EndingEnded December 31, 20162019
chart-c378fcdfc52750e5db4.jpg
December 31,201120122013201420152016
CBS Corp. Class A Common Stock$100$139$235$210$196$247
CBS Corp. Class B Common Stock$100$142$240$210$181$248
S&P 500$100$116$154$175$177$198
Peer Group (a)
$100$138$210$251$237$263
December 31,201420152016201720182019
Class A Common Stock$100$94$118$110$82$85
Class B Common Stock$100$86$118$110$83$81
Viacom Class B Common Stock (a)
$100$56$50$45$38$38
S&P 500$100$101$114$138$132$174
Peer Group (b)
$100$98$99$108$123$154
(a) At the effective time of the Merger, each share of Viacom Class B Common Stock was converted into 0.59625 shares of ViacomCBS Class B Common Stock. Accordingly, the performance graph reflects the performance of Viacom Class B Common Stock through December 4, 2019, the date of the Merger, and the performance of ViacomCBS Class B Common Stock from December 4, 2019 through December 31, 2019.
(b) The Peer Group consists of the following companies: The Walt Disney Company (“Disney”), Fox Corporation and Discovery Inc. In March 2019, Disney acquired Twenty-First Century Fox Inc. and Time Warner Inc. CBS Radio is presented as a discontinued operation as(“21st Century Fox”) following the spin-off of December 31, 2016 and as a result, Cumulus Media Inc., which was previously included inFox Corporation from 21st Century Fox. The performance graph reflects the peer group, has been excluded.performance of 21st Century Fox stock through the date of such transactions.



Item 6.Selected Financial Data.
CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
(In millions, except per share amounts)
 
Year Ended December 31, (a)
 
2016 (b) (c)
 
2015 (b) (d)
 
2014 (b) (e)
 2013 2012
Revenues$13,166
 $12,671
 $12,519
 $12,713
 $11,514
Operating income$2,621
 $2,658
 $2,590
 $2,663
 $2,415
Net earnings from continuing operations$1,552
 $1,554
 $1,151
 $1,520
 $1,288
Net earnings (loss) from discontinued operations,
net of tax
$(291) $(141) $1,808
 $359
 $286
Net earnings$1,261
 $1,413
 $2,959
 $1,879
 $1,574
          
Basic net earnings (loss) per common share:         
Net earnings from continuing operations$3.50
 $3.21
 $2.09
 $2.50
 $2.01
Net earnings (loss) from discontinued operations,
net of tax
$(.66) $(.29) $3.29
 $.59
 $.45
Net earnings$2.84
 $2.92
 $5.38
 $3.09
 $2.45
          
Diluted net earnings (loss) per common share:         
Net earnings from continuing operations$3.46
 $3.18
 $2.05
 $2.44
 $1.95
Net earnings (loss) from discontinued operations,
net of tax
$(.65) $(.29) $3.22
 $.58
 $.43
Net earnings$2.81
 $2.89
 $5.27
 $3.01
 $2.39
          
Dividends per common share$.66
 $.60
 $.54
 $.48
 $.44
          
At Year End:         
Total assets:         
Continuing operations$19,642
 $18,695
 $18,372
 $17,191
 $17,072
Discontinued operations4,596
 5,070
 5,563
 9,014
 9,121
Total assets$24,238
 $23,765
 $23,935
 $26,205
 $26,193
Total debt:         
Continuing operations$9,375
 $8,448
 $7,112
 $6,403
 $5,886
Discontinued operations1,345
 —
 —
 14
 14
Total debt$10,720
 $8,448
 $7,112
 $6,417
 $5,900
Total Stockholders’ Equity$3,689
 $5,563
 $6,970
 $9,966
 $10,213
 
Year Ended December 31, (a)
 
2019 (c)
 
2018 (d)
 
2017 (e) (h)
 
2016 (f) (h)
 
2015 (g) (h)
Revenues$27,812
 $27,250
 $26,535
 $25,685
 $25,559
Operating income$4,273
 $5,204
 $5,341
 $5,297
 $5,708
Net earnings from continuing operations
(ViacomCBS and noncontrolling interests)
$3,301
 $3,460
 $3,320
 $2,970
 $3,506
Net earnings from continuing operations
attributable to ViacomCBS
$3,270
 $3,423
 $3,268
 $2,935
 $3,427
          
Net earnings from continuing operations per
common share attributable to ViacomCBS
         
Basic$5.32
 $5.55
 $5.11
 $4.32
 $4.75
Diluted$5.30
 $5.51
 $5.05
 $4.28
 $4.71
          
Dividends per common share:         
ViacomCBS Inc. (formerly CBS Corporation)$.78
 $.72
 $.72
 $.66
 $.60
Viacom Inc. (b)
$.60
 $.80
 $.80
 $1.20
 $1.53
          
At Year End:         
Total assets$49,519
 $44,497
 $43,503
 $47,383
 $45,922
Total debt$18,719
 $19,113
 $20,351
 $21,675
 $21,015
Total ViacomCBS stockholders’ equity$13,207
 $10,449
 $8,519
 $8,235
 $9,311
Total equity$13,289
 $10,503
 $8,600
 $8,286
 $9,369
(a) During the fourth quarter of 2016,On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the surviving company (the “Company” or “CBS Corp.”“Merger”) classified. At the effective time of the Merger, the combined company changed its name to ViacomCBS Inc. The Merger has been accounted for as a transaction between entities under common control and therefore, the net assets of Viacom were combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented.
(b) Amounts reflect the historical dividends of Viacom Inc. and have not been adjusted for the conversion to ViacomCBS shares in connection with the Merger.
(c) For 2019, the following items affected the comparability of results: costs for restructuring and other corporate matters, including costs related to the Merger, of $775 million ($641 million, net of tax); programming charges of $589 million ($447 million, net of tax); a gain on sale of assets of $549 million($386 million, net of tax); and discrete tax benefits of $827 million.
(d) For 2018, the following items affected the comparability of results: costs for restructuring and other corporate matters of $490 million ($374 million, net of tax); programming charges of $162 million ($123 million, net of tax); and discrete tax benefits of $297 million.
(e) For 2017, the following items affected the comparability of results: restructuring charges of $258 million ($163 million, net of tax); programming charges of $144 million ($94 million, net of tax); a gain on sale of assets of $146 million ($130 million, net of tax); a gain on the sale of EPIX of $285 million ($189 million, net of tax); a pension settlement charge of $352 million ($237 million, net of tax); and discrete tax benefits of $321 million.
(f) Results for 2016 included costs for restructuring and other corporate matters of $286 million ($182 million, net of tax) and a pension settlement charge of $211 million ($130 million, net of tax).
(g) Results for 2015 included programming charges of $578 million ($383 million, net of tax); costs for restructuring and other corporate matters of $287 million ($186 million, net of tax); and a gain on sale of assets of $139 million ($131 million, net of tax).
(h) On November 16, 2017, we completed the disposition of CBS Radio as held for sale and asInc. (“CBS Radio”) through a result,tax-free split-off. CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented. Also included in discontinued operations is CBS Outdoor Americas Inc., which was disposed of in 2014, and Outdoor Europe, which was sold in 2013.
(b) Included in net earnings (loss) from discontinued operations, net of tax, are noncash impairment charges of $444 million ($427 million, net of tax), or $.95 per diluted share, in 2016, and $484 million ($297 million, net of tax), or $.61 per diluted share, in 2015, in each case to reduce the carrying value of CBS Radio’s intangible assets. For 2014, net earnings from discontinued operations, net of tax, included a gain on the disposal of Outdoor Americas of $1.56 billion, or $2.78 per diluted share.
(c) In 2016, the Company recorded a one-time pension settlement charge of $211 million in operating income ($130 million, net of tax), or $.29 per diluted share, for the settlement of pension obligations resulting from the completion of the Company’s offer to eligible former employees to receive lump-sum distributions of their pension benefits.
(d) In 2015, the Company recorded gains from the sales of internet businesses in China of $139 million in operating income ($131 million, net of tax), or $.27 per diluted share.
(e) In 2014, in connection with the early redemption of $1.07 billion of its debt, the Company recorded a pretax loss on early extinguishment of debt of $352 million ($219 million, net of tax), or $.39 per diluted share.




Item 7.
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 (together with its consolidated subsidiaries, unless the context otherwise requires, the “Company” or “CBS Corp.”)ViacomCBS Inc. should be read in conjunction with the consolidated financial statements and related notes. References in this document to “ViacomCBS,” the “Company,” “we,” “us” and “our” refer to ViacomCBS Inc. and its consolidated subsidiaries, unless the context otherwise requires.


Significant components of management’s discussion and analysis of results of operations and financial condition include:
•
Overview—The overview section provides a summary of ViacomCBS and our business and operational highlights.
•
Consolidated Results of Operations—The consolidated results of operations section provides an analysis of our results on a consolidated basis for the three years ended December 31, 2019.
•
Segment Results of Operations—The segment results of operations section provides an analysis of our results on a reportable segment basis for the three years ended December 31, 2019.
•
Liquidity and Capital Resources—The liquidity and capital resources section provides a discussion of our cash flows for the three years ended December 31, 2019, and of our outstanding debt, commitments and contingencies existing as of December 31, 2019.
•
Critical Accounting Policies—The critical accounting policies section provides detail with respect to accounting policies that are considered by management to require significant judgment and use of estimates and that could have a significant impact on our financial statements.
•
Legal Matters—The legal matters section discusses our legal matters and other litigation to which we are a party.
•
Market Risk—The market risk section discusses how we manage exposure to market and interest rate risks.
Overview
Business overview and strategy
The Company operates businesses which span theViacomCBS is a leading global media and entertainment industries, including the CBS Television Network, cable networks,company that creates 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 byexperiences for 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 both Company-owned and acquired 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; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”) and television stations affiliatedworldwide.
Merger 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.

CBS Radio SeparationViacom Inc.
On February 2, 2017,December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the Company enteredsurviving company (the “Merger”). At the effective time of the Merger (the “Effective Time”), the combined company changed its name to ViacomCBS Inc. (“ViacomCBS”).

At the Effective Time, (1) each share of Viacom Class A Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into an agreement with Entercom Communications Corp. to combine the Company’s radio business, CBS Radio, with Entercom in a merger to be effected through a Reverse Morris Trust transaction, which is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction, the Company intends to split-off CBS Radio through an exchange offer, in which the Company’s stockholders may elect to exchange0.59625 shares of the Company’sViacomCBS Class A Common Stock, and (2) each share of Viacom Class B Common Stock forissued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of ViacomCBS Class B Common Stock (together with ViacomCBS Class A Common Stock, the “ViacomCBS Common Stock”). At the Effective Time, each share of CBS Radio, which will then beClass A Common Stock and each share of CBS Class B Common Stock (together with CBS Class A Common Stock, the “CBS Common Stock”) issued and outstanding immediately converted into sharesprior to the Effective Time, remained an issued and outstanding share of Entercom common stock atViacomCBS Class A Common Stock and ViacomCBS Class B Common Stock, respectively, and was not affected by the time ofMerger.

Following the merger. This transaction is subject to customary approvalsMerger, the CBS Common Stock was delisted from the New York Stock Exchange and closing conditions.  The Company expects to complete the transaction duringViacom Common Stock ceased trading on the second half of 2017. CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.Nasdaq Stock Market LLC (“Nasdaq”). On December 5, 2019, ViacomCBS






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




Class A Common Stock and ViacomCBS Class B Common Stock were listed on Nasdaq and began trading under the ticker symbols VIACA and VIAC, respectively.

The Merger is being accounted for as a transaction between entities under common control as National Amusements, Inc. (“NAI”) was the controlling stockholder of each of CBS and Viacom (and remains the controlling stockholder of ViacomCBS). The net assets of Viacom have been combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented.

Operational highlights 2016Highlights 2019 vs. 20152018
Consolidated results of operations    Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
GAAP:        
Revenues$13,166
 $12,671
 $495
 4 % 
Operating income$2,621
 $2,658
 $(37) (1)% 
Net earnings from continuing operations$1,552
 $1,554
 $(2) — % 
Net earnings$1,261
 $1,413
 $(152)
(11)% 
Diluted EPS from continuing operations$3.46
 $3.18
 $.28
 9 % 
Diluted EPS$2.81
 $2.89
 $(.08) (3)% 
         
Non-GAAP: (a)
        
Adjusted operating income$2,861
 $2,564
 $297
 12 % 
Adjusted net earnings$1,840
 $1,618
 $222
 14 % 
Adjusted diluted EPS$4.11
 $3.31
 $.80
 24 % 
Consolidated results of operations    Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
GAAP:        
Revenues$27,812
 $27,250
 $562
 2 % 
Operating income$4,273
 $5,204
 $(931) (18)% 
Net earnings from continuing operations
attributable to ViacomCBS
$3,270
 $3,423
 $(153)
(4)% 
Diluted EPS from continuing operations
attributable to ViacomCBS
$5.30
 $5.51
 $(.21) (4)% 
Net cash flow provided by operating activities$1,230
 $3,464
 $(2,234) (64)% 
         
Non-GAAP: (a)
        
Adjusted OIBDA$5,531
 $6,289
 $(758) (12)% 
Adjusted net earnings from continuing operations
attributable to ViacomCBS
$3,090
 $3,646
 $(556) (15)% 
Adjusted diluted EPS from continuing operations
attributable to ViacomCBS
$5.01
 $5.87
 $(.86) (15)% 
Free cash flow$877
 $3,111
 $(2,234) (72)% 
(a) See pages II-6 - II-8 and II-7II-33 for reconciliations of adjusted results to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).


For 2016,2019, revenues increased 4%2% to $13.17$27.81 billion ledfrom $27.25 billion in 2018, driven by CBS’ broadcast of Super Bowl LIII in 2019, growth from our streaming services, which include CBS All Access, Pluto TVand the Showtime streaming subscription offering (“Showtime OTT”), and higher content licensing revenues driven by the broadcastproduction of Super Bowl 50 on CBS, growth in affiliate and subscription fees and higher political advertising sales.programming for third parties. These increases were partially offset by lower theatrical revenues, primarily due to the benefit to 2015 from Showtime Networks’ distributiondifficult comparison against Mission: Impossible - Fallout in 2018, and lower political advertising sales as a result of the Floyd Mayweather/Manny Pacquiao boxing event, and lower content licensing and distribution revenues compared with 2015, which included significant licensing sales of NCIS and Elementary.midterm elections in 2018. Foreign exchange rate changes had a 1-percentage point unfavorable impact on the revenue comparison.


Operating income decreased 1%18% to $4.27 billion from 2015. Comparability of operating income$5.20 billion in 2018. This comparison was impacted by discrete items which for 2016 includedidentified as affecting comparability, including restructuring charges, for a pension settlementcosts related to the Merger and restructuring activities,other corporate matters, programming charges and for 2015 included gains fromon the salessale of internet businesses in China and restructuring charges. On an adjusted basis,assets. Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) decreased 12%, primarily reflecting an increased investment in content, including a higher number of series produced for exhibition on our properties as well as for third parties. Net earnings from continuing operations attributable to ViacomCBS for 2019 were $3.27 billion, or $5.30 per diluted share, compared with $3.42 billion, or $5.51 per diluted share, for 2018. This comparison was up 12% drivenimpacted by the increaseaforementioned items as well as other items identified as affecting comparability set forth in revenues. Dilutedthe section “Reconciliation of Non-GAAP Measures” below. Adjusted net earnings from continuing operations attributable to ViacomCBS decreased 15% and adjusted diluted earnings per share (“EPS”), which included the previously mentioned discrete items as well as impairment charges at CBS Radio, which have been presented in discontinued from continuing operations was $2.81decreased 15%to $5.01 for 2016 compared with $2.89 for 2015. On an adjusted basis, EPS was $4.11, up 24% from $3.31 for 2015,2019, driven by the higherlower Adjusted OIBDA. Adjusted OIBDA, adjusted operating incomenet earnings from continuing operations attributable to ViacomCBS and lower weighted average shares outstanding as a result of the Company’s $3.0 billion of share repurchases during 2016. 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. These adjusted resultsdiluted EPS from continuing operations are non-GAAP financial measures. See pages II-6



Management’s Discussion and II-7Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


- II-8 for details of the discrete items excluded from adjustedfinancial results, along withand reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.


The CompanyWe generated operating cash flow from continuing operations of $1.45$1.23 billion in 2016 and $1.192019 compared with $3.46 billion in 2015.2018. Free cash flow was $877 million for 2016 was $1.26 billion2019 compared with $1.02$3.11 billion for 2015.2018. These increases were driven by growth in affiliate and subscription fees and higher advertising revenues, including fromdecreases primarily reflected the broadcast of Super Bowl 50 on CBS, partially offset byaforementioned increased investment in content. The Company generatedcontent, higher payments for income taxes and payments of $132 million in 2019 for costs related to the Merger. In addition, operating cash flow from discontinued operationsand free cash flow included payments for restructuring activities of $231$234 million in 20162019 and $205$219 million in 2015.2018. Free cash flow is a non-GAAP financial measure. See “Free“Free Cash Flow”Flow” on pages II-30 and II-31II-33 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable financial measure in accordance with GAAP, to free cash flow.


Reconciliation of Non-GAAP Measures
Results for the years ended December 31, 2019, 2018 and 2017 included certain items identified as affecting comparability. Adjusted OIBDA, adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to ViacomCBS and adjusted diluted EPS from continuing operations (together, the “adjusted measures”) exclude the impact of these items and are measures of performance not calculated in accordance with GAAP. We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

Because the adjusted measures are measures of performance not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income, earnings from continuing operations before income taxes, benefit (provision) for income taxes, net earnings from continuing operations attributable to ViacomCBS or diluted EPS from continuing operations, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.

The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with GAAP.


Year Ended December 31,2019 2018 2017
Operating Income (GAAP)$4,273
 $5,204
 $5,341
Depreciation and amortization (a)
443
 433
 443
Restructuring and other corporate matters (b)
775
 490
 258
Programming charges (b)
589
 162
 144
Gain on sale of assets (b)
(549) —
 (146)
Adjusted OIBDA (Non-GAAP)$5,531
 $6,289
 $6,040

(a) 2019 includes an impairment charge of $20 million to reduce the carrying value of intangible assets.
(b) See notes on the following tables for additional information on items affecting comparability.



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



Pension Settlement
In September 2016, the Company offered eligible former employees who had not yet initiated pension benefit payments the option to make a one-time election to receive the present value of their pension benefits as a lump-sum distribution or to commence an immediate monthly annuity benefit. As a result, the Company recorded a one-time pension settlement charge of $211 million in 2016.

Share repurchases
Following is a summary of the Company’s purchases of its Class B Common Stock during the year ended December 31, 2016:
Total Number of Shares Purchased
(in millions)
 
Average Price
Per Share
 
Dollar Value
of Shares Repurchased
 Remaining Authorization
 54.3
   $55.15
   $3,000
   $4,107
 
 Year Ended December 31, 2019
 Earnings from Continuing Operations Before Income Taxes Benefit (Provision) for Income Taxes Net Earnings from Continuing Operations Attributable to ViacomCBS Diluted EPS from Continuing Operations
Reported (GAAP) $3,345
   $9
   $3,270
   $5.30
 
Items affecting comparability:               
Restructuring and other corporate matters (a)
 775
   (134)   641
   1.04
 
Impairment charge (b)
 20
   (6)   14
   .02
 
Programming charges (c)
 589
   (142)   447
   .73
 
Gain on sale of assets (d)
 (549)   163
   (386)   (.63) 
Net gain from investments (e)
 (85)   16
   (69)   (.11) 
Discrete tax items (f)
 —
   (827)   (827)   (1.34) 
Adjusted (Non-GAAP) $4,095
   $(921)   $3,090
   $5.01
 

Dividends
      Increase/(Decrease) 
Year Ended December 31, 2016 2015 $ % 
Dividends per share $.66
 $.60
 $.06
 10% 
Total dividends $294
 $293
 $1
 —% 
On July 28, 2016,(a) Reflects severance and exit costs relating to restructuring activities and costs incurred in connection with the Merger, legal proceedings involving the Company announced thatand other corporate matters.
(b) Reflects a charge to reduce the carrying value of our international broadcast licenses in Australia to their fair value.
(c) Programming charges principally reflect accelerated amortization associated with changes in the expected monetization of certain programs, and decisions to cease airing, alter future airing patterns or not renew certain programs, in connection with management changes implemented as a result of the Merger.
(d) Reflects a gain on the sale of the CBS Television City property and sound stage operation (“CBS Television City”).
(e) Reflects a gain on marketable securities of $113 million; gains of $22 million on the sale and acquisition of joint ventures; and an impairment charge of $50 million to write-down an investment to its Boardfair value.
(f) Primarily reflects a deferred tax benefit of Directors approved$768 million resulting from the transfer of intangible assets between our subsidiaries in connection with a 20% increasereorganization of our international operations; tax benefits of $44 million realized in connection with the preparation of the 2018 federal tax return, based on further clarity provided by the United States government on tax positions relating to federal tax legislation enacted in December 2017 (the “Tax Reform Act”); and a tax benefit of $39 million triggered by the quarterly cash dividend on its Class A Common Stock and Class B Common Stock to $.18 from $.15 per share.bankruptcy of an investee.

Reconciliation of Non-GAAP Measures
The following tables present adjusted operating income, adjusted net earnings, and adjusted diluted EPS, which exclude the impact of discrete items. These adjusted results are non-GAAP financial measures, which are reconciled below to the most directly comparable financial measures in accordance with GAAP.

     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Operating income$2,621
 $2,658
 $(37) (1)% 
Discrete items:        
Pension settlement charge211
 —
     
Restructuring and merger and acquisition-related costs38
 45
     
Other operating items, net (a)
(9) (139)     
Adjusted operating income$2,861

$2,564

$297

12 % 





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




     Increase/(Decrease) 
Year Ended December 31,2016
2015 $ % 
Net earnings$1,261
 $1,413
 $(152) (11)% 
Discrete items:        
Pension settlement charge
(net of tax benefit of $81 million)
130
 —
     
Restructuring and merger and acquisition-related costs
(net of tax benefit of $18 million in 2016 and $32 million in 2015) (b)
28
 49
     
Other operating items, net (net of tax benefit of $4 million in 2016 and $8 million in 2015) (a)
(5) (131)     
Write-down of equity investment10
 —
     
Discrete tax items (c)
(11) —
     
CBS Radio impairment charges (net of tax benefit of $17 million in 2016 and $187 million in 2015)427
 297
     
Other adjustments for discontinued operations (d)
—
 (10)     
Adjusted net earnings$1,840

$1,618

$222

14 % 
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Diluted EPS$2.81
 $2.89
 $(.08) (3)% 
Discrete items:        
Pension settlement charge.29
 —
     
Restructuring and merger and acquisition-related costs (b)
.06
 .10
     
Other operating items, net (a)
(.01) (.27)     
Write-down of equity investment.02
 —
     
Discrete tax items (c)
(.02) —
     
CBS Radio impairment charges.95
 .61
     
Other adjustments for discontinued operations (d)
—
 (.02)     
Adjusted diluted EPS (e)
$4.11

$3.31

$.80

24 % 
 Year Ended December 31, 2018
 Earnings from Continuing Operations Before Income Taxes Provision for Income Taxes Net Earnings from Continuing Operations Attributable to ViacomCBS Diluted EPS from Continuing Operations
Reported (GAAP) $4,124
   $(617)   $3,423
   $5.51
 
Items affecting comparability:               
Restructuring and other corporate matters (a)
 490
   (116)   374
   .60
 
Programming charges (b)
 162
   (39)   123
   .20
 
Gain on early extinguishment of debt (18)   4
   (14)   (.02) 
Net loss from investments (c)
 53
   (16)   37
   .06
 
Discrete tax items (d)
 —
   (297)   (297)   (.48) 
Adjusted (Non-GAAP) $4,811
   $(1,081)   $3,646
   $5.87
 
(a) Other operating items, net for 2016Primarily reflects severance and 2015 includes gainsexit costs relating to restructuring activities as well as professional fees related to legal proceedings, cost transformation initiatives, investigations at our Company and the evaluation of potential merger activity.
(b) Reflects programming charges resulting from the sales of internet businesseschanges to our programming strategy, including at CBS Films and our Cable Networks segment, in China, and for 2016, also includes a multiyear, retroactive impact of a new operating tax.
(b) Adjustments to net earnings and diluted EPS include CBS Radio restructuring charges of $8 million ($5 million, net of tax) in 2016 and $36 million ($21 million, net of tax) in 2015, which are included in net loss from discontinued operations.connection with management changes.
(c) Reflects a one-time tax benefitloss on marketable securities of $47$23 million; an impairment charge of $46 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016,write-down an investment to its fair value; and a chargegain of $36$16 million fromon the resolutionsale of a tax matter1% equity interest in a foreign jurisdiction relatingViacom18 to a previously disposed business, which is included in net loss from discontinued operations.our joint venture partner.
(d) Primarily reflects a decreasenet discrete tax benefit of $80 million related to the guarantee liabilityTax Reform Act and other tax law changes; a net tax benefit of $71 million relating to a tax accounting method change granted by the Internal Revenue Service (“IRS”); and the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that were utilized in connection with the sale of CBS Television City in 2019.
 Year Ended December 31, 2017
 Earnings from Continuing Operations Before Income Taxes Provision for Income Taxes Net Earnings from Continuing Operations Attributable to ViacomCBS Diluted EPS from Continuing Operations
Reported (GAAP) $4,120
   $(804)   $3,268
   $5.05
 
Items affecting comparability:               
Restructuring charges 258
   (95)   163
   .25
 
Programming charges (a)
 144
   (50)   94
   .14
 
Gain on sale of assets (b)
 (146)   16
   (130)   (.20) 
Loss on early extinguishment of debt 38
   (17)   21
   .03
 
Gain on sale of EPIX (285)   96
   (189)   (.29) 
Pension settlement charge 352
   (115)   237
   .37
 
Impairment of investments (c)
 18
   (7)   11
   .02
 
Discrete tax items (d)
 —
   (321)   (321)   (.50) 
Adjusted (Non-GAAP) $4,499
   $(1,297)   $3,154
   $4.87
 
(a) Reflects programming charges associated with the 2013execution of a strategy for certain of our flagship brands, as well as strategic initiatives at Paramount.
(b) Reflects a gain of $127 million, with $11 million attributable to the noncontrolling interest, on the sale of broadcast spectrum in connection with the FCC’s broadcast spectrum auction and a net gain of $19 million relating to the disposition of Outdoor Europe.property and equipment.
(e) Amounts may not sum as(c) Reflects the write-down of certain investments to their fair value.
(d) Primarily reflects a resulttax benefit of rounding.$279 million reflecting the recognition of foreign tax credits on the distribution of securities to the United States (“U.S”).






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




SegmentsConsolidated Results of Operations—2019 vs. 2018

Revenues
CBS Corp. operates in the following four segments:
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2019 Revenues 2018 Revenues $ % 
Advertising$11,074
  40%  $10,841
  40%  $233
 2 % 
Affiliate8,602
  31
  8,376
  31
  226
 3
 
Content licensing6,483
  23
  6,163
  22
  320
 5
 
Theatrical547
  2
  744
  3
  (197) (26) 
Publishing814
  3
  825
  3
  (11) (1) 
Other292
  1
  301
  1
  (9) (3) 
Total Revenues$27,812
  100%  $27,250
  100%  $562
 2 % 
ENTERTAINMENT:  The Entertainment segment consists of the CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive and CBS Films as well as the Company’s digital streaming services, CBS All Access and CBSN.  Entertainment’sAdvertising
Advertising revenues are generated primarily from the sale of advertising sales,spots on the licensingCBS Television Network, our basic cable networks and distribution of itsour television stations, as well as on our ad-supported streaming services, including CBS All Access and Pluto TV, and on our websites. Our advertising revenues include integrated marketing services, which provide unique branded content and affiliatecustom sponsorship opportunities to our advertisers, as well as advanced marketing solutions (“AMS”), including addressable video and subscription fees.  The Entertainment segment contributed 67% to consolidated revenues in each ofbrand solutions. For 2019, the years 2016 and 2015, and 66% in 2014, and 53%, 51% and 50% to total segment operating income in 2016, 2015 and 2014, respectively.
CABLE NETWORKS:  The Cable Networks segment consists of Showtime Networks, CBS Sports Network and Smithsonian Networks. Cable Networks’ revenues are generated primarily from affiliate and subscription fees and the licensing and distribution of its content.  The Cable Networks segment contributed 16%, 18% and 17% to consolidated revenues in 2016, 2015, and 2014, respectively, and 33% to total segment operating income in 2016 and 37% in each of the years 2015 and 2014.
PUBLISHING:  The Publishing segment consists of Simon & Schuster’s consumer book publishing business with imprints such as Simon & Schuster, Pocket Books, Scribner and Atria Books.  Publishing generates revenues from the distribution of consumer books in print, digital and audio formats. The Publishing segment contributed 6% to consolidated revenues in each of the years 2016, 2015, and 2014, and 4% to total segment operating income in each of the years 2016, 2015, and 2014.
LOCAL MEDIA:  The Local Media segment consists of CBS Television Stations and CBS Local Digital Media, with revenues generated primarily from advertising sales and retransmission fees. The Local Media segment contributed 14%, 12% and 13% to consolidated revenues in 2016, 2015, and 2014, respectively, and 22%, 19%, and 20% to total segment operating income in 2016, 2015, and 2014, respectively.

Consolidated Results of Operations—2016 vs. 2015
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2016 Revenues 2015 Revenues $ % 
Advertising$6,288
  48%  $5,824
  46%  $464
 8 % 
Content licensing and distribution3,673
  28
  3,903
  31
  (230) (6) 
Affiliate and subscription fees2,978
  22
  2,724
  21
  254
 9
 
Other227
  2
  220
  2
  7
 3
 
Total Revenues$13,166
  100%  $12,671
  100%  $495
 4 % 
Advertising
For 2016, the 8%2% increase in advertising revenues was driven by CBS’s5% growth in domestic advertising revenues, reflecting CBS’ broadcast of the tent-pole sporting events in 2019, mainly Super Bowl LIII and the national semifinals and championship game of the NCAA Division I Men’s Basketball Tournament (“NCAA Tournament”), as well as higher revenues from AMS, which includes Pluto TV. These increases were partially offset by lower political advertising sales at our owned television stations, as a result of the benefit to last year from the 2018 midterm elections. International advertising revenues decreased 14%, reflecting the unfavorable impact of foreign exchange rate changes, as well as softness in the Australian and UK markets, partially offset by increases in pricing and political advertising in Argentina. Foreign exchange rate changes had an unfavorable impact of 1-percentage point on the total advertising revenues comparison and 9-percentage points on the international advertising revenues comparison.

The Super Bowl is broadcast on the CBS Television Network once every three yearson a rotating basis with other networks through the 2022 season under the current contract; higher political advertising sales;contract with the National Football League (“NFL”), and 3% growth in underlying network advertising. The increase in network advertising reflects higher pricing, including from increased demand, partially offset by lower ratings, including from the national semifinals and championship games of the NCAA Tournament are broadcast of NFL games.
on the CBS Television Network every other year through 2032 under the current agreement with the NCAA and Turner Broadcasting System, Inc. (“Turner”). In 2017,2020, the advertising revenue comparison will be negatively affected by the benefit in 20162019 from the broadcastCBS’ broadcasts of the Super Bowl onand the national semifinals and championship game of the NCAA Tournament. These events will not be broadcast by CBS and strong political advertising spending. However, advertisingin 2020. Advertising revenues in 20172020 will benefit from higher political advertising sales, mainly in the second half of the year, associated with the U.S. Presidential election.

Affiliate
Affiliate revenues are principally comprised of fees received from multichannel video programming distributors (“MVPDs”) and virtual MVPDs for carriage of our cable networks (“cable affiliate fees”), fees received from television stations affiliated with the CBS Television Network’s broadcastNetwork (“station affiliation fees”); fees for authorizing the MVPDs’ and virtual MVPDs’ carriage of our owned television stations (“retransmission fees”); and subscription fees for our streaming services. For 2019, the National Semifinals3% increase in affiliate revenues reflects 20% growth in station affiliation fees and National Championship gamesretransmission fees, driven by annual contractual increases and contract renewals with MVPDs and virtual MVPDs, as well as 45% growth from our streaming services, including CBS All Accessand Showtime OTT, driven by subscriber growth. These increases were partially offset by 5% lower cable affiliate fees, mainly resulting from subscriber declines. Domestic affiliate revenues increased 4%, while international affiliate revenues decreased 6% from the prior






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




year driven by the unfavorable impact of the NCAA Division I Men’s Basketball Championship (“NCAA Tournament”), which are broadcastforeign exchange rate changes. Foreign exchange rate changes had an unfavorable impact of 1-percentage point on the CBS Television Network every other year through 2032 undertotal affiliate revenues comparison and 6-percentage points on the current agreements with the NCAA and Turner Broadcasting System, Inc. (“Turner”). The CBS Television Network’s upfront advertising sales (“Upfront”) for the 2016/2017 television broadcast season, which runs from the middle of September 2016 through the middle of September 2017, resulted in pricing increases compared with the prior broadcast season, which is expected to benefit advertisinginternational affiliate revenues during the 2016/2017 broadcast season (See page I-2 for a description of the Upfront market). 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.comparison.

Content Licensing
Content licensing and distribution
Content licensing and distribution revenues are principally comprised of fees from the licensing of internally producedexhibition rights for our internally-produced television programming;and film programming to television stations, cable networks, and subscription video-on-demand (“SVOD”) and free video-on-demand services; home entertainment revenues, which are derived from the sale and distribution of our content through DVDs and Blu-ray discs to wholesale and retail partners, as well as from the viewing of our content on a transactional basis through transactional video-on-demand (“TVOD”) and electronic sell-through services; fees from the use of our trademarks and brands for consumer products, recreation and live events; and fees from the distribution of third party programming; andthird-party programming. For 2019, content licensing revenues increased 5%, primarily reflecting higher revenues from the publishingdomestic licensing of our content, driven by the production of programming for third parties and distributionthe licensing of consumer books. For 2016, the 6% decreaseprogramming to SVOD providers. These increases were partially offset by a decline in content licensing and distribution revenues primarily reflected lower domestic television licensing revenues compared with 2015, which included the sales of NCIS,Elementary and CSI. A significant contributor to television licensing revenues in 2016 was the international licensing of five Star Trek series.revenues.


Content licensing and distribution revenue comparisons are impacted by fluctuations resultingRevenues from the timinglicensing of the availability of Company-owned television series for multiyear licensing agreements. Television license fee revenuesexhibition rights are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition. Unrecognized revenues attributable to license agreements for produced programming that is not yet available for exhibition, were $749 million and $847 million at December 31, 2016 and 2015, respectively. Astherefore, content licensing revenue comparisons are impacted by fluctuations resulting from the timing of the endavailability of 2016, the Company had approximately 500 episodes of scripted originalour programming that had not yet been made available in the secondary domestic marketplace (See page II-51 for a descriptionmultiyear licensing agreements.

Theatrical
Theatrical revenues are principally comprised of the secondary marketplace).

Total outstanding receivables attributable toworldwide theatrical distribution of films through audience ticket sales. For 2019, theatrical revenues recognized under licensing agreements at December 31, 2016decreased 26%, principally reflecting a difficult comparison against the prior year, as a result of the 2018 releases of Mission: Impossible - Fallout and 2015 were $3.82 billion and $3.83 billion, respectively. At December 31, 2016, the total amount due from these receivables was $1.63 billion in 2017, $1.03 billion in 2018, $595 millionA Quiet Place. Theatrical revenues in 2019 $349 millionbenefited from the releases of Rocketman, Gemini Man and Dora and the Lost City of Gold, as well as the continued success of the 2018 release, Bumblebee. Domestic theatrical revenues decreased 31% and international theatrical revenues decreased 23%.

Theatrical revenues may be affected by many factors, including domestic and international audience response, the number, timing and mix of releases and competitive offerings in 2020,any given period, consumer tastes and $216 millionconsumption habits and overall economic conditions, including discretionary spending. Revenues from theatrical film releases tend to be cyclical with increases during the summer.

Publishing
Publishing revenues are principally comprised of the domestic and international publishing and distribution of consumer books in 2021printed, digital and thereafter.audio formats. For 2019, publishing revenues decreased 1%, driven by lower print book sales, which were partially offset by higher sales from digital audio books.


Affiliate and subscription feesOther
Affiliate and subscription feesOther revenues are principally comprised of revenues received from MVPDs for carriagethe rental of the Company’s cable networks (“cable affiliate fees”)production facilities and digital revenues from search and e-commerce partners. For 2019, other revenues decreased 3%, as well as for authorizing the MVPDs’ carriage of the Company’s owned television stations (“retransmission fees”); fees received from television stations affiliated with the CBS Television Network (“station affiliation fees”); subscription fees for digital streaming services; and revenues received for the distribution of pay-per-view boxing events. For 2016, the 9% increase in affiliate and subscription fees reflects 35% growth in station affiliation fees and retransmission fees, andmainly reflecting lower revenues from the Company’s streaming subscription services, including CBS All Access and the Showtime digital streaming subscription offering. These increases were partially offset by the benefit to 2015 from Showtime Networks’ distributionrental of our production facilities as a result of the Floyd Mayweather/Manny Pacquiao boxing event, which was the highest grossing pay-per-view eventsale of all time.CBS Television City in January 2019.

Over the next few years, the Company expects to benefit from the renewal of several of its agreements with station affiliates and MVPDs as well as from agreements with new distributors of live television streaming offerings. 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.








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



International Revenues
International revenues primarily consist of television licensing revenues. The Company generated approximately 14% and 16% of its total revenues from international regions in 2016 and 2015, respectively.
    % of   % of 
Year Ended December 31, 2016 International 2015 International 
United Kingdom $279
  15%  $345
  17%  
Other Europe 717
  39
  691
  35
  
Canada 256
  14
  286
  14
  
Asia 190
  10
  236
  12
  
Other 407
  22
  446
  22
  
Total International Revenues $1,849
  100%  $2,004
  100%  

Operating Expenses
  % of   % of     % of   % of   
Operating Expenses by Type  Operating   Operating Increase/(Decrease)   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2016 Expenses 2015 Expenses $ % 2019 Expenses 2018 Expenses $ % 
Production$6,797
 39% $6,483
 41% $314
 5% 
Programming$2,941
  37%  $2,892
  37%  $49
 2 % 4,287
 25
 3,965
 25
 322
 8
 
Production2,658
 34
 2,604
 33
 54
 2
 
Participation, distribution and
royalty
1,058
 13
 1,109
 14
 (51) (5) 3,369
 20
 3,295
 21
 74
 2
 
Programming charges589
 3
 162
 1
 427
 n/m
 
Other1,299
 16
 1,306
 16
 (7) (1) 2,181
 13
 2,012
 12
 169
 8
 
Total Operating Expenses$7,956
  100%  $7,911
 100% $45
 1 % $17,223
  100%  $15,917
 100% $1,306
 8% 
Programming expenses reflect the amortization of acquired rights of programs exhibited on the television broadcast and cable networks, and television stations. For 2016, the 2% increase in programming expenses was primarily driven by increased sports programming costs associated with the broadcast of NFL games, including Super Bowl 50, which was broadcast by CBS in 2016, partially offset by three fewer Thursday Night Football games than 2015. This increase was partially offset by costs in 2015 associated with Showtime Networks’ distribution of the Floyd Mayweather/Manny Pacquiao pay-per-view boxing event and lower costs for acquired television series as a result of a shift to a higher mix of internally developed television series.n/m - not meaningful
Production
Production expenses reflect the amortization of direct costs of internally developedinternally-produced television and theatrical film content as well as other television production costs, including on-air talent. For 2016,2019, the 2%5% increase in production expenses reflected an increased investment in internally developedcontent, including a higher number of series produced for distribution on multiple platforms, including our streaming services and cable networks, as well as higher amortization of television series,production costs associated with the increase in content licensing revenues. These increases were partially offset by lower expensesamortization of feature film costs, driven by costs in 2018 associated with Mission: Impossible - Fallout.

Programming
Programming expenses reflect the decreaseamortization of acquired programs exhibited on our television broadcast networks, cable networks and television stations. For 2019, the 8% increase in television licensing revenues.programming expenses was driven by higher sports programming costs, mainly from CBS’ broadcasts of Super Bowl LIII and the national semifinals and championship game of the NCAA Tournament in 2019, which were not broadcast by CBS in 2018, and programming for Pluto TV, which we acquired in March 2019. These increases were partially offset by lower amortization of acquired programming for our cable networks.

Participation, Distribution and Royalty
Participation, distribution and royalty costs primarily include participation and residual expenses for television and film programming, royalty costs for Publishingpublishing content and other distribution expenses incurred with respect to film and television content, such as print and advertising. For 2016,2019, the 5%decrease2%increase in participation, distribution and royalty costs primarily reflected lower participations associated with lower licensing sales of the CSI franchise.
Other operating expenses primarily include compensation andwas driven by higher participation costs associated with book sales,the increase in content licensing revenues.

Programming Charges
During 2019, in connection with the Merger, we implemented management changes across the organization. In connection with these changes, we performed an evaluation of our programming portfolio across all of our businesses, including printingan assessment of the optimal use of our programming in the marketplace, which resulted in the identification of programs not aligned with management’s strategy. As a result, we recorded programming charges of $589 million principally reflecting accelerated amortization associated with changes in the expected monetization of certain programs, and warehousing. decisions to cease airing, alter future airing patterns or not renew certain programs.

In addition, during 2018, in connection with management changes, we recorded programming charges of $162 million relating to changes to our programming strategy, including at CBS Films, which shifted its focus from theatrical films to developing content for our streaming services, as well as at our Cable Networks segment where we ceased the use of certain programming.






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 2019, the 8% increase in other operating expenses mainly reflected higher costs associated with growth and expansion of our streaming services.

Selling, General and Administrative Expenses
  % of   % of Increase/(Decrease)     Increase/(Decrease) 
Year Ended December 31,2016 Revenues 2015 Revenues $ % 2019 2018 $ % 
Selling, general and administrative
expenses
$2,124
  16%  $1,961
  15%  $163
 8% $5,647
 $5,206
 $441
 8% 
Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy, professional service fees and back office support.support, including employee compensation. The 8% increase in SG&A primarily reflects incrementalexpenses was driven by higher advertising and marketing costs, reflecting an increase in the number of series premieres and employee-related costs to supportassociated with our streaming services, as well as the Company’s growth initiatives,inclusion of Pluto TV and higher pensionPop TV since their acquisitions in the first quarter of 2019. These increases were partially offset by cost savings associated with restructuring activities and incentive compensation costs.cost savings resulting from changes in senior management at CBS in 2018.


Depreciation and Amortization
    Increase/(Decrease)     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 2019 2018 $ % 
Depreciation and amortization$225
 $235
 $(10) (4)% $443
 $433
 $10
 2% 

Depreciation and amortization expense reflects depreciation of fixed assets, including amortization of transponders and equipment under finance leases, and amortization of finite-lived intangible assets. For 2016, the 4%decrease in2019, depreciation and amortization wasexpense also includes an impairment charge of $20 million to reduce the result of intangibles and property and equipment that became fully amortized, and the sales of internet businesses in China.

Pension Settlement Charge
In September 2016, the Company offered eligible former employees who had not yet initiated pension benefit payments the option to make a one-time election to receive the presentcarrying value of broadcast licenses in Australia to their pension benefits as a lump-sum distribution or to commence an immediate monthly annuity benefit. As a result, the Company paid a total of $518 million of lump-sum distributions in 2016 using its pension plan assets, representing 12% of the total obligations of its qualified pension plans. Accordingly, the Company recorded a one-time settlement charge of $211 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.fair value.


Restructuring and MergerOther Corporate Matters
During 2019 and Acquisition-Related Costs2018, we recorded costs for restructuring and other corporate matters as follows:
Year Ended December 31,2019 2018
Severance$401
 $235
Exit costs and other23
 75
Restructuring charges424
 310
Restructuring-related costs—
 52
Merger-related costs294
 —
Other corporate matters57
 128
Restructuring and other corporate matters$775
 $490
During the year ended December 31, 2016, 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 Company2019, we recorded restructuring charges of $30$424 million, reflecting $19primarily for severance and the acceleration of stock-based compensation in connection with the Merger, as well as costs related to a restructuring plan initiated in the first quarter of 2019 under which severance payments are being provided to certain eligible employees who voluntarily elected to participate. In addition, in 2019 we incurred costs of $294 million in connection with the Merger, consisting of severancefinancial advisory, legal and other professional fees, transaction-related bonuses, and contractual executive compensation, including the accelerated vesting of stock-based compensation, that was triggered by the Merger. We also incurred costs of $40 million in connection with the settlement of a commercial dispute and $11$17 million of costs associated with exiting contractual obligationslegal proceedings involving the Company (see Note 19) and other related costs. These restructuring activities are expected to reduce the Company’s annual cost structure by approximately $30 million.

During the year ended December 31, 2015, the Company recorded restructuring charges of $45 million, reflecting $24 million of severance costs and $21 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2014, the Company recorded restructuring charges of $19 million, reflecting $11 million of severance costs and $8 million of costs associated with exiting contractual obligations.

As of December 31, 2016, the cumulative settlements for the 2016, 2015, and 2014 restructuring charges were $55 million, of which $33 million was for severance costs and $22 million related to costs associated with exiting contractual obligations. The Company expects to substantially utilize its restructuring reserves by the end of 2018.corporate matters.






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



 Balance at 2016 2016 Balance at
 December 31, 2015 Charges Settlements December 31, 2016
Entertainment $19
  $16
  $(15)   $20
 
Cable Networks —
  4
  —
   4
 
Publishing —
  1
  —
   1
 
Local Media 11
  6
  (5)   12
 
Corporate 1
  3
  (2)   2
 
Total $31
  $30
  $(22)   $39
 
 Balance at 2015 2015 Balance at
 December 31, 2014 Charges Settlements December 31, 2015
Entertainment $6
  $26
  $(13)   $19
 
Local Media 5
  19
  (13)   11
 
Corporate 2
  —
  (1)   1
 
Total $13
  $45
  $(27)   $31
 

During the year ended December 31, 2018, we recorded restructuring charges of $310 million resulting from cost transformation initiatives to improve margins, as well as restructuring-related costs of $52 million, comprised of third-party professional services associated with such initiatives. In addition, in 2018 we recorded expenses of $128 million primarily for professional fees related to legal proceedings, investigations at our Company and the evaluation of potential merger activity.

Gain on Sale of Assets
In 2019, we completed the sale of CBS Television City for $750 million. We have guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included on the Consolidated Balance Sheet at December 31, 2019 is a liability of $124 million, reflecting the present value of the estimated amount payable under the guarantee obligation. This transaction resulted in a gain of $549 million for 2019, which includes a reduction for the guarantee obligation. We also recognized a tax benefit of $140 million in the fourth quarter of 2016,2018 for the Company incurred professional fees of $8 million associated with merger and acquisition-related activities.

Other Operating Items, Net
For 2016 and 2015, other operating items, net included gains from the disposition of businesses in China, and for 2016, also included a multiyear, retroactive impactreversal of a new operating tax.valuation allowance relating to capital loss carryforwards that were utilized in connection with this sale.


Interest Expense/Expense and Interest Income
    Increase/(Decrease)     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 2019 2018 $ % 
Interest expense$(411) $(392) $19
 5% $(962) $(1,030) $(68) (7)% 
Interest income$32
 $24
 $8
 33% $66
 $79
 $(13) (16)% 
The following table presents the Company’sour outstanding debt balances, excluding capitalfinance leases, and discontinued operations debt, and the weighted average interest rate as of December 31, 20162019 and 2015:2018:
  Weighted Average   Weighted Average   Weighted Average   Weighted Average 
At December 31,2016 Interest Rate 2015 Interest Rate 2019 Interest Rate 2018 Interest Rate 
Total long-term debt$8,850
 4.47%  $8,365
  4.68% $17,976
 4.70%  $18,370
  4.64% 
Commercial paper$450
 0.98% $—
 n/a
 $699
 2.07% $674
 3.02% 
n/Gain (Loss) on Marketable Securities
For 2019 and 2018, we recorded a - not applicablegain of $113 million and a loss of $23 million, respectively, reflecting changes in the fair value of marketable securities.

Gain (Loss) on Early Extinguishment of Debt
For 2018, we recorded a gain on early extinguishment of debt of $18 million associated with the redemption of senior notes and debentures prior to maturity totaling $1.13 billion.

Other Items, Net
The following table presents the components of Other items, net.
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Other items, net$(12) $(26) $14
 54% 
Other items, net for 2016 and 2015 primarily consisted of foreign exchange losses.
Year Ended December 31,2019 2018
Pension and postretirement benefit costs$(105)
$(68)
Foreign exchange losses(17)
(18)
Impairment of investments(50) (46)
Gains from investments22
 16
Other5

(8)
Other items, net$(145) $(124)






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




Provision
Benefit (Provision) for Income Taxes
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Tax provision$(628) $(676) $(48) (7)% 
Effective tax rate28.2% 29.9%     
The provisionbenefit (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. The Company’sFor 2019, we recorded a benefit for income taxes of $9 million, reflecting an effective income tax provision for 2016rate of (0.3)%, which included discrete items such as a one-timedeferred tax benefit of $47$768 million associatedresulting from the transfer of intangible assets between our subsidiaries in connection with a multiyear adjustment to areorganization of our international operations; tax deduction, which was approvedbenefits of $44 million realized in connection with the preparation of the 2018 federal tax return, based on further clarity provided by the IRS duringUnited States government on tax positions relating to the third quarter of 2016,Tax Reform Act; and a tax benefit of $81$39 million relatedtriggered by the bankruptcy of an investee. For 2018, the provision for income taxes was $617 million, reflecting an effective income tax rate of 15.0%. The provision for income taxes for 2018 included discrete items such as the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that were utilized in connection with the sale of CBS Television City in 2019; a tax benefit of $80 million relating to the pension settlement chargeTax Reform Act and other tax law changes; and a net tax benefit of $211 million. In 2015, the Company’s income tax provision included$71 million relating to a tax provision of $8 million related to gains fromaccounting method change granted by the sales of internet businesses in China of $139 million.

Internal Revenue Service.
Equity in LossEarnings (Loss) of Investee Companies, Net of Tax
The following table presents equity in earnings (loss)loss of investee companies for the Company’s domestic and international equity investments:our equity-method investments.
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Domestic$(67) $(60) $(7) (12)% 
International(8) 4
 (12) n/m
 
Tax benefit25
 22
 3
 14
 
Equity in loss of investee companies, net of tax$(50) $(34) $(16) (47)% 
n/m - not meaningful
For 2016, equity in loss of investee companies, net of tax included $10 million for the write-down of an international television joint venture to its fair value.
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Equity in loss of investee companies$(72) $(62) $(10) (16)% 
Tax benefit19
 15
 4
 27
 
Equity in loss of investee companies, net of tax$(53) $(47) $(6) (13)% 
Net Earnings from Continuing Operations Attributable to ViacomCBS and Diluted EPS from Continuing Operations Attributable to ViacomCBS
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Net earnings from continuing operations$1,552
 $1,554
 $(2) —% 
Diluted EPS from continuing operations$3.46
 $3.18
 $.28
 9% 
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Net earnings from continuing operations attributable to
ViacomCBS
$3,270
 $3,423
 $(153) (4)% 
Diluted EPS from continuing operations attributable to
ViacomCBS
$5.30
 $5.51
 $(.21) (4)% 
NetFor 2019, net earnings from continuing operations for 2016 was comparable with 2015, as the increase in revenues was offset by the 2016 pension settlement charge of $211 million ($130 million, net of tax),attributable to ViacomCBS and2015 gains on the sales of internet businesses in China of $139 million ($131 million, net of tax). The 9% increase in diluted EPS from continuing operations each decreased 4%, primarily driven by the lower operating income, mainly reflecting our increased investment in content. The lower operating income was partially offset by the aforementioned discrete tax benefits.

Net Earnings Attributable to ViacomCBS and Diluted EPS Attributable to ViacomCBS
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Net earnings attributable to ViacomCBS$3,308
 $3,455
 $(147) (4)% 
Diluted EPS attributable to ViacomCBS$5.36
 $5.56
 $(.20) (4)% 
Consolidated Results of Operations— 2018 vs. 2017
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2018 Revenues 2017 Revenues $ % 
Advertising$10,841
  40%  $10,582
  40%  $259
 2 % 
Affiliate8,376
  31
  8,153
  31
  223
 3
 
Content licensing6,163
  22
  5,947
  22
  216
 4
 
Theatrical744
  3
  716
  3
  28
 4
 
Publishing825
  3
  830
  3
  (5) (1) 
Other301
  1
  307
  1
  (6) (2) 
Total Revenues$27,250
  100%  $26,535
  100%  $715
 3 % 
Advertising
For 2018, the 2% increase in advertising revenues was driven by our acquisition of Network 10 in the fourth quarter of 2017; record political advertising sales in 2018 associated with the U.S. midterm elections; higher pricing at our broadcast and cable networks; and growth in revenues from AMS. Advertising revenues for 2018 also benefited from the adoption of a new revenue recognition standard in the first quarter of 2018, under which revenues for certain distribution arrangements are recognized based on the gross amount of consideration received from the customer, with an offsetting increase to operating expenses. Under previous accounting guidance, such revenues were recognized at the net amount retained by us after the payment of fees to the third party. This guidance was applied prospectively from the date of adoption, and therefore, amounts for 2017 are reported under previous accounting guidance. These increases were partially offset by lower weighted average shares outstandinglinear impressions at our cable networks and the absence of the broadcasts of five Thursday Night Football games and the national semifinals and championship game of the NCAA Tournament, which were broadcast on the CBS Television Network in 2017. The national semifinals and championship game 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. Foreign exchange rate changes had an unfavorable impact of 1-percentage point on the advertising revenues comparison.
Affiliate
For 2018, the 3% increase in affiliate revenues reflects 22% growth in station affiliation and retransmission fees and 65% growth from subscription fees for our streaming services, CBS All Accessand Showtime OTT. These increases were partially offset by the unfavorable comparison against Showtime Networks’ distribution in 2017 of the Floyd Mayweather/Conor McGregor pay-per-view boxing event. Cable affiliate fees were relatively flat for 2018 compared with 2017, as contractual rate increases under carriage agreements for our cable networks and the benefit of new channel launches and acquisitions were offset by subscriber declines.

Content Licensing
For 2018, the 4%increase in content licensing revenues reflects higher revenues from the distribution of third-party content, resulting from revenues under certain distribution arrangements 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 Company’s share repurchases during 2016, which totaled $3.0 billion.

adoption of a new revenue recognition standard in the first quarter of 2018. Under previous guidance, such






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




Discontinueddistribution revenues were recognized at the net amount retained by us after the payment of fees to the third party. The increase also reflected growth from domestic and international license fees, including the 2018 availability of Tom Clancy’s Jack Ryan, The Haunting of Hill House, Maniac, The Alienist and The Cloverfield Paradox, compared with 2017, which included the licensing of NCIS: New Orleans, Madam Secretary and titles from the CSI franchise. These increases were partially offset by lower home entertainment revenues, primarily reflecting the number and mix of titles in release.

Theatrical
For 2018, theatrical revenues increased 4%, principally reflecting the strong performance of the theatrical release of Mission: Impossible - Fallout in 2018.

Publishing
Publishing revenues for 2018 decreased 1%driven by lower sales of print and electronic books, which were partially offset by higher sales of digital audio books.

Operating Expenses
   % of Total   % of Total   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2018 Expense 2017 Expense $ % 
Production$6,483
  41%  $5,994
  39%  $489
 8 % 
Programming3,965
  25
  4,268
  28
  (303) (7) 
Participation, distribution and
royalty
3,295
  21
  3,182
  20
  113
 4
 
Programming charges162
  1
  144
  1
  18
 13
 
Other2,012
  12
  1,895
  12
  117
 6
 
Total Operating Expenses$15,917
  100%  $15,483
  100%  $434
 3 % 
Production
For 2018, the 8% increase in production expenses reflected an increased investment in content, including a higher number of series produced for distribution on multiple platforms, including our owned networks and streaming services, and the acquisition of Network 10 in the fourth quarter of 2017.

Programming
For 2018, the 7% decrease in programming expenses was driven by lower sports programming costs, resulting from Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in 2017 and the absence of Thursday Night Football and the national semifinals and championship game of the NCAA Tournament, which were broadcast on the CBS Television Network in 2017. These decreases were partially offset by costs for programming on Network 10, which we acquired in the fourth quarter of 2017, and an increased investment in programming for our cable networks.

Participation, Distribution and Royalty
For 2018, the 4% increase in participation, distribution and royalty costs was primarily driven by the adoption of new revenue recognition guidance in the first quarter of 2018, which resulted in revenues under certain distribution arrangements 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 us after the payment of fees to the third party. This



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


change resulted in an increase to both revenues and participation expenses of $279 million for 2018, with no impact to our operating income. The increase also reflects higher participation costs associated with the increase in content licensing revenues. These increases were partially offset by lower film distribution costs, driven by the number and mix of theatrical releases and a charge in 2017 resulting from the termination of a slate financing agreement.
Programming Charges
During 2018, in connection with management changes, we recorded programming charges of $162 million relating to changes to our programming strategy, including at CBS Films, which shifted its focus from theatrical films to developing content for our streaming services, as well as at our Cable Networks segment where we ceased the use of certain programming.
In addition, during 2017, we recorded programming charges of $144 million associated with management’s decision to cease use of certain original and acquired programming, in connection with the execution of a strategy for certain of our flagship brands and strategic initiatives at Paramount.
Other
For 2018, the 6% increase in other operating expenses mainly reflected higher costs associated with growth in our streaming services and expenses of Network 10, which we acquired in the fourth quarter of 2017.

Selling, General and Administrative Expenses
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Selling, general and administrative expenses$5,206
 $5,156
 $50
 1% 
For 2018, the 1% increase in SG&A expenses reflected higher advertising and marketing costs, mainly for the launch of the Paramount Network and to support our growth initiatives. These increases were partially offset by savings from cost transformation initiatives.
Depreciation and Amortization
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Depreciation and amortization$433
 $443
 $(10) (2)% 
Restructuring and Other Corporate Matters
During 2018 and 2017, we recorded costs for restructuring and other corporate matters as follows:
Year Ended December 31,2018 2017
Severance$235
 $224
Exit costs and other75
 12
Asset impairment—
 22
Restructuring charges310
 258
Restructuring-related costs52
 —
Other corporate matters128
 —
Restructuring and other corporate matters$490
 $258

During the year ended December 31, 2018, we recorded restructuring charges of $310 million resulting from cost transformation initiatives to improve margins, as well as restructuring-related costs of $52 million, comprised of third-



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


party professional services associated with such initiatives. In addition, in 2018 we recorded expenses of $128 million primarily for professional fees related to legal proceedings, investigations at our Company and the evaluation of potential merger activity.

During the year ended December 31, 2017, we recorded restructuring charges of $258 million, resulting from the execution of a strategy for certain of our flagship brands and strategic initiatives at Paramount, as well as costs relating to other restructuring plans across several of our businesses in a continued effort to reduce our cost structure. The restructuring charges for 2017 included a non-cash impairment charge resulting from the decision to abandon an international trade name in connection with the strategic initiatives.

Gain on Sale of Assets
In 2017, we completed the sale of broadcast spectrum in connection with the FCC’s broadcast spectrum auction. The sale resulted in a pre-tax gain of $127 million on the Consolidated Statement of Operations, with $11 million attributable to the noncontrolling interest. In addition, in 2017 we recorded a net gain of $19 million relating to the disposition of property and equipment.

Interest Expense and Interest Income
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Interest expense$(1,030) $(1,088) $(58) (5)% 
Interest income$79
 $87
 $(8) (9)% 
The following tables settable presents our outstanding debt balances, excluding finance leases, and the weighted average interest rate as of December 31, 2018 and 2017:
   Weighted Average   Weighted Average 
At December 31,2018 Interest Rate 2017 Interest Rate 
Total long-term debt$18,370
  4.64%  $19,466
  4.67%  
Commercial paper$674
  3.02%  $779
  1.91%  
Gain (Loss) on Marketable Securities
During 2018, we recorded a loss on marketable securities of $23 million. In connection with the adoption of FASB guidance on financial instruments, beginning in the first quarter of 2018, changes in the fair value of marketable securities are recognized in the Consolidated Statements of Operations.

Gain (Loss) on Early Extinguishment of Debt
For 2018, the gain on early extinguishment of debt of $18 million reflected the pre-tax gain associated with the redemption of senior notes and debentures prior to maturity totaling $1.13 billion. During 2017, we redeemed, prior to maturity, senior notes totaling $4.27 billion, resulting in the recognition of a pre-tax loss on the early extinguishment of debt of $38 million.

Gain on Sale of EPIX
During 2017, we completed the sale of our 49.76% interest in EPIX, resulting in a pre-tax gain of $285 million.




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


Pension Settlement Charge
During 2017, we purchased a group annuity contract under which an insurance company permanently assumed our obligation to pay and administer pension benefits to certain pension plan participants, or their designated beneficiaries, who had been receiving pension benefits. The purchase of this group annuity contract was funded with pension plan assets. As a result, our outstanding pension benefit obligation was reduced by approximately $800 million. In connection with this transaction, we recorded a settlement charge of $352 million in 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, we made discretionary contributions totaling $600 million to prefund our qualified pension plans.

Other Items, Net
The following table presents the components of Other items, net.
Year Ended December 31,2018 2017
Pension and postretirement benefit costs$(68) $(96)
Foreign exchange losses(18) (20)
Impairment of investments(46) (18)
Gain on sale of investment16
 —
Other(8) 19
Other items, net$(124) $(115)
Benefit (Provision) for Income Taxes
For 2018, the provision for income taxes was $617 million, reflecting an effective income tax rate of 15.0%. The provision for income taxes for 2018 included discrete items such as the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that were utilized in connection with the sale of CBS Television City in 2019; a tax benefit of $80 million relating to the Tax Reform Act and other tax law changes; and a tax benefit of $71 million relating to a tax accounting method change granted by the Internal Revenue Service. For 2017, the provision for income taxes was $804 million, reflecting an effective income tax rate of 19.5%. The provision for income taxes for 2017 included discrete items such as a tax benefit of $279 million reflecting the recognition of foreign tax credits on the distribution of securities to the U.S.

Equity in Earnings (Loss) of Investee Companies, Net of Tax
The following table presents equity in earnings (loss) of investee companies for our equity-method investments.
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Equity in earnings (loss) of investee companies$(62) $14
 $(76) n/m 
Tax benefit (provision)15
 (10) 25
 n/m 
Equity in earnings (loss) of investee companies, net of tax$(47) $4
 $(51) n/m 
n/m - not meaningful



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


Net Earnings from Continuing Operations Attributable to ViacomCBS and Diluted EPS from Continuing Operations Attributable to ViacomCBS
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Net earnings from continuing operations attributable to
ViacomCBS
$3,423
 $3,268
 $155
 5% 
Diluted EPS from continuing operations attributable to
ViacomCBS
$5.51
 $5.05
 $.46
 9% 
For 2018, the 5% increase in net earnings from continuing operations attributable to ViacomCBS was driven by the lower effective income tax rate in 2018, partially offset by lower operating income. Diluted EPS from continuing operations attributable to ViacomCBS grew 9%, reflecting the higher earnings and lower weighted average shares outstanding as a result of share repurchases and the shares retired as a result of the split-off of CBS Radio Inc. (“CBS Radio) during the fourth quarter of 2017.

Net Loss from Discontinued Operations, Net of Tax
On November 16, 2017, we completed the split-off of CBS Radio through an exchange offer, in which we accepted 17.9 million shares of CBS Class B Common Stock from our stockholders in exchange for the 101.4 million shares of CBS Radio common stock that we 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 of CBS Radio and Entercom. CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.



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


The following table sets forth details of net earnings (loss) from discontinued operations for the yearsyear ended December 31, 2016 and 2015.2017. Net earnings from discontinued operations for the year ended December 31, 2018 was not material to our consolidated financial statements.
Year Ended December 31, 2016CBS Radio Other Total
Revenues from discontinued operations$1,220
 $—
 $1,220
Costs and expenses:     
Operating397
 —
 397
Selling, general and administrative497
 —
 497
Depreciation and amortization26
 —
 26
Restructuring charges8
 —
 8
Impairment charge444
 —
 444
Total costs and expenses1,372
 —
 1,372
Operating loss(152) —
 (152)
Interest expense(17) —
 (17)
Other income2
 —
 2
Loss from discontinued operations(167) —
 (167)
Income tax provision(88) (36) (124)
Net loss from discontinued operations, net of tax$(255) $(36) $(291)
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
  $—
  $1,018
Costs and expenses:       
Operating364
  —
  364
Selling, general and administrative444
  (8)  436
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
  —
  7
Total costs and expenses1,795
  (8)  1,787
Operating income (loss)(777)  8
  (769)
Interest expense(70)  —
  (70)
Other items, net(2)  —
  (2)
Earnings (loss) from discontinued operations(849)  8
  (841)
Income tax benefit (provision)(55)  43
(b) 
 (12)
Earnings (loss) from discontinued operations, net of tax(904)  51
  (853)
Net gain (loss) on disposal(109)  13
  (96)
Income tax benefit (provision)4
  (2)  2
Net gain (loss) on disposal, net of tax(105)  11
(c) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $62
  $(947)
Year Ended December 31, 2015CBS Radio Other Total
Revenues from discontinued operations$1,223
 $—
 $1,223
Costs and expenses:     
Operating415
 —
 415
Selling, general and administrative500
 (17) 483
Depreciation and amortization29
 —
 29
Restructuring charges36
 —
 36
Impairment charge484
 —
 484
Total costs and expenses1,464
 (17) 1,447
Operating income (loss)(241) 17
 (224)
Other income1
 —
 1
Earnings (loss) from discontinued operations(240) 17
 (223)
Income tax benefit (provision)89
 (7) 82
Net earnings (loss) from discontinued operations, net of tax$(151) $10
 $(141)

The results of(a) During 2017, prior to the split-off, CBS Radio for 2016 includedwas 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, we recorded a pretax noncash impairment chargemarket value adjustment of $444$980 million ($427 million, net of tax)in 2017 to reduceadjust the carrying value of CBS Radio’s goodwill and FCC licenses in 11 marketsRadio to their fairthe value and for 2015, includedindicated by the stock valuation of Entercom.
(b) Primarily reflects a pretax noncash impairment charge of $484 million ($297 million, net of tax) to reduce the carrying value of radio FCC licenses in 18 markets to their fair value.

For 2016, net loss from discontinued operations also included a charge of $36 milliontax benefit from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation. For 2015, net
(c) Reflects adjustments to the loss on disposal of our outdoor advertising businesses, primarily from discontinued operations also included a decrease to the guarantee liability associated with the 2013 dispositiondisposal of the Company’sour outdoor advertising business in Europe (“Outdoor Europe”) as a result of a reductionEurope.

Net Earnings Attributable to the risk associated with the guarantee.

CBS Radio Indebtedness
In October 2016, in connection with the Company’s previously announced plansViacomCBS and Diluted EPS Attributable to separate its radio business, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 (“Term Loan”) and theViacomCBS


     Increase/(Decrease) 
Year Ended December 31,2018
2017 $ % 
Net earnings attributable to ViacomCBS$3,455
 $2,321
 $1,134
 49% 
Diluted EPS attributable to ViacomCBS$5.56
 $3.59
 $1.97
 55% 




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




issuanceSegments
We operate in the following four segments:
TV ENTERTAINMENT:  Our TV Entertainment segment creates and acquires programming for distribution and viewing on multiple media platforms, including our broadcast network, through multichannel video programming distributors (“MVPDs”) and virtual MVPDs, and our streaming services, as well as for licensing to third parties both domestically and internationally. TV Entertainment consists of $400 million of 7.25% senior unsecured notes due 2024 through a private placement. During the fourth quarter of 2016, CBS Radio prepaid $100 million of the Term Loan, leaving $960 million outstanding at December 31, 2016. The Term Loan is part of a credit agreement which also includes a $250 million senior secured revolving credit facility (the “Radio Revolving Credit Facility”) which expires in 2021. At December 31, 2016, the total outstanding borrowing under the Radio Revolving Credit Facility was $10 million. This debt is guaranteed by certain subsidiaries of CBS Radio. The Company does not guarantee, or otherwise provide credit support for, the senior notes, Term Loan, or Radio Revolving Credit Facility.

Net Earnings and Diluted EPS
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Net earnings$1,261
 $1,413
 $(152) (11)% 
Diluted EPS$2.81
 $2.89
 $(.08) (3)% 
Consolidated Results of Operations— 2015 vs. 2014
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2015 Revenues 2014 Revenues $ % 
Advertising$5,824
  46%  $5,934
  47%  $(110) (2)% 
Content licensing and distribution3,903
  31
  3,990
  32
  (87) (2) 
Affiliate and subscription fees2,724
  21
  2,362
  19
  362
 15
 
Other220
  2
  233
  2
  (13) (6) 
Total Revenues$12,671
  100%  $12,519
  100%  $152
 1 % 
Advertising
For 2015, the 2% decrease in advertising revenues was principally driven by lower local advertising revenues, mainly from the benefit to 2014 from midterm elections. These declines were partially offset by growth in network advertising revenues, which increased 1% despite the broadcast of fewer sporting events on the CBS Television Network, in 2015. The increase in networkCBS Television Studios, CBS Television Distribution, CBS Interactive, CBS Sports Network, CBS Television Stations and CBS-branded streaming services CBS All Access and CBSN, among others.  TV Entertainment’s revenues are generated primarily from advertising reflects higher scatter pricing insales, the second half of the year, primarily as a result of increased demand. The increase is also driven by more inventory available to be sold at higher prices in the scatter market as a result of fewer units sold in the Upfront for the 2015/2016 season compared with the 2014/2015 season.

Content licensing and distribution
For 2015, the 2%decrease in content licensing and distribution revenues reflects lower domestic television licensing revenues, partially offset by higher international television licensing revenues. Significant contributors to domestic licensing revenues in 2015 included Elementary and NCIS, while 2014 included Blue Bloods, Hawaii Five-0,and Dexter.

Affiliate and subscription fees
For 2015, the 15% increase in affiliate and subscription fees reflects 43% growth in station affiliation fees and retransmission fees; higher cable affiliate fees from growth in rates; higher revenues from pay-per-view boxing events as 2015 included the Floyd Mayweather/Manny Pacquiao boxing event, which was the highest grossing pay-per-view event of all time; and revenues from new streaming subscription services.




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


International Revenues
International revenues primarily consist of television licensing revenues. The Company generated approximately 16% and 14% of its total revenues from international regions in 2015content, and 2014, respectively.affiliate revenues.
    % of   % of 
Year Ended December 31, 2015 International 2014 International 
United Kingdom $345
  17%  $270
  15%  
Other Europe 691
  35
  657
  37
  
Canada 286
  14
  241
  13
  
Asia 236
  12
  262
  15
  
Other 446
  22
  363
  20
  
Total International Revenues $2,004
  100%  $1,793
  100%  
Operating Expenses
   % of Total   % of Total   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2015 Expense 2014 Expense $ % 
Programming$2,892
  37%  $2,918
  38%  $(26) (1)% 
Production2,604
  33
  2,287
  30
  317
 14
 
Participation, distribution and
royalty
1,109
  14
  1,185
  15
  (76) (6) 
Other1,306
  16
  1,299
  17
  7
 1
 
Total Operating Expenses$7,911
  100%  $7,689
  100%  $222
 3 % 
For 2015, the 1% decrease inCABLE NETWORKS:  Our Cable Networks segment creates and acquires programming expenses reflected lower costs for acquired television series as a result of a shift to a higher mix of internally developed television, partially offset by increased sports programming costs associated with higher revenues from NFL broadcastsdistribution and pay-per-view boxing events.

For 2015, the 14% increase in production expenses reflects an increased investment in internally developed television seriesviewing on multiple media platforms, including our cable networks, through MVPDs and virtual MVPDs, and our streaming services, as well as higher costs associated with the mixfor licensing to third parties both domestically and internationally. Cable Networks consists of titles sold under television licensing agreements in 2015 compared with 2014.our premium subscription cable networks Showtime, The Company produced approximately 20% more hoursMovie Channel and Flix, and a subscription streaming offering of original scripted programming in 2015 compared with 2014.

For 2015, the 6% decrease in participation, distributionShowtime; our basic cable networks Nickelodeon, MTV, BET, Comedy Central, Paramount Network, Nick Jr., VH1, TV Land, CMT, Pop TV and royalty costs primarily reflects lower participations and residuals associated with the decrease in licensing revenues.

Selling, General and Administrative Expenses
   % of   % of Increase/(Decrease) 
Year Ended December 31,2015 Revenues 2014 Revenues $ % 
Selling, general and administrative
expenses
$1,961
  15%  $1,971
  16%  $(10) (1)% 
Depreciation and Amortization
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Depreciation and amortization$235
 $250
 $(15) (6)% 
For 2015, the 6% decrease in depreciation and amortization was the result of intangibles and property and equipment that became fully amortized.



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


Restructuring Charges
During the year ended December 31, 2014, the Company recorded restructuring charges of $19 million, reflecting $11 million of severance costs and $8 million of costs associated with exiting contractual obligations. The 2014 restructuring reserve was substantially utilized by December 31, 2015.

Interest Expense/Income
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Interest expense$(392) $(363) $29
 8% 
Interest income$24
 $13
 $11
 85% 
The following table presents the Company’s outstanding debt balances, excluding capital leases, and the weighted average interest rate as of December 31, 2015 and 2014:
   Weighted Average   Weighted Average 
At December 31,2015 Interest Rate 2014 Interest Rate 
Total long-term debt$8,365
  4.68%  $6,399
  4.88%  
Commercial paper$—
  n/a
  $616
  0.46%  
n/a - not applicable
Net Loss on Early Extinguishment of Debt
For 2014, the loss on early extinguishment of debt of $352 million reflected a pretax loss associated with the Company’s redemption of $1.07 billion of its long-term debt.

Other Items, Net
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Gain on sale of investments$—
 $4
 $(4) (100)% 
Foreign exchange losses(26) (34) 8
 24
 
Other items, net$(26) $(30) $4
 13 % 
Provision for Income Taxes
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Tax provision$(676) $(659) $17
 3% 
Effective tax rate29.9% 35.5%     
The Company’s income tax provision for 2015 included a tax provision of $8 million related to gains from the sales of internet businesses in China of $139 million. In 2014, the Company’s income tax provision included a tax benefit of $133 million associated with the loss on early extinguishment of debt of $352 million.



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
The following table presents equity in earnings (loss) of investee companies for the Company’s domestic and international equity investments:
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Domestic$(60) $(68) $8
 12 % 
International4
 (11) 15
 136
 
Tax benefit22
 31
 (9) (29) 
Equity in loss of investee companies, net of tax$(34) $(48) $14
 29 % 
Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Net earnings from continuing operations$1,554
 $1,151
 $403
 35% 
Diluted EPS from continuing operations$3.18
 $2.05
 $1.13
 55% 
For 2015, the 35%increase in net earnings from continuing operations and the 55% increase in diluted EPS from continuing operations was driven by a 2014 loss on early extinguishment of debt of $352 million ($219 million, net of tax) and 2015 gains from the sales of internet businesses in China of $139 million ($131 million, net of tax). The diluted EPS comparison also benefited from lower weighted average shares outstanding as a result of the Company’s ongoing share repurchase program and the split-off of Outdoor Americas during 2014.

Discontinued Operations
The following table sets forth details of net earnings from discontinued operations for the year ended December 31, 2014:
Year Ended December 31, 2014CBS Radio Outdoor Americas Other Total
Revenues from discontinued operations$1,295
 $677
 $—
 $1,972
Costs and expenses:       
Operating401
 366
 —
 767
Selling, general and administrative498
 131
 (21) 608
Depreciation and amortization31
 88
 —
 119
Restructuring charges7
 —
 —
 7
Impairment charge52
 —
 —
 52
Total costs and expenses989
 585
 (21) 1,553
Operating income306
 92
 21
 419
Interest expense—
 (34) —
 (34)
Earnings from discontinued operations306
 58
 21
 385
Income tax provision(103) (18) (8) (129)
Net earnings from discontinued operations, net of tax203
 40
 13
 256
Gain on disposal—
 1,557
 —
 1,557
Less: Net earnings from discontinued operations attributable to noncontrolling interest, net of tax—
 5
 —
 5
Net earnings from discontinued operations attributable
to CBS Corp.
$203
 $1,592
 $13
 $1,808

During 2014, the Company completed the disposition of Outdoor Americas, which was previously a subsidiary of the Company and has been renamed OUTFRONT Media Inc. The disposition resulted in a gain of $1.56 billion, which is included in net earnings from discontinued operations for 2014.



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



In December 2014, the Company completed a radio station swap with Beasley Broadcast Group, Inc. through which the Company exchanged 13 of its radio stations in Tampa and CharlotteSmithsonian Channel, among others, as well as one radio stationthe international extensions of these brands operated by ViacomCBS Networks International; international broadcast networks, Network 10, Channel 5 and Telefe; and Pluto TV, a leading free streaming TV platform in Philadelphia, for two radio stations in Philadelphiathe United States. Cable Networks’ revenues are generated primarily from affiliate revenues, advertising sales and three radio stations in Miami. In connection with the radio station swap, the Company recorded a pretax noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill.

Net Earnings and Diluted EPS
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Net earnings$1,413
 $2,959
 $(1,546) (52)% 
Diluted EPS$2.89
 $5.27
 $(2.38) (45)% 
For 2014, included in net earnings is the gain of $1.56 billion, or $2.78 per diluted share, on the disposal of Outdoor Americas.

Segment Results of Operations - 2016 vs. 2015
In preparation for the planned separationlicensing of its radio business,content and brands.
FILMED ENTERTAINMENT:  Our Filmed Entertainment segment develops, produces, finances, acquires and distributes films, television programming and other entertainment content in various markets and media worldwide primarily through Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios. Filmed Entertainment’s revenues are generated primarily from the Company changedrelease and/or distribution of films theatrically, the manner in which it manages itsrelease and/or distribution of film and television product through home entertainment, the licensing of film and television product to television and radio operations duringdigital platforms and other ancillary activities.
PUBLISHING:  Our Publishing segment publishes and distributes Simon & Schuster consumer books domestically and internationally and includes imprints such as Simon & Schuster, Scribner, Atria Books and Gallery Books.Publishing generates revenues from the third quarterpublishing and distribution of 2016. Accordingly, the Company began presenting Local Media, which was previously combined with CBS Radioconsumer books in the Local Broadcasting segment, as a separate operating segment. In connection with the new segment presentation, the presentation of intercompany revenues was revised, including station affiliation fees paid by Local Media to the CBS Television Network. In addition, CBS Radio has been presented as a discontinued operation of the Company. Results for all periods presented have been reclassified to conform to this presentation.print, digital and audio formats.


The Company presentsWe present operating income (loss) excluding a pension settlement charge,depreciation and amortization, stock-based compensation, costs for restructuring and mergerother corporate matters, programming charges and acquisition-related costs, and other operating items, net,gain on sale of assets, each where applicable (“Segment Operating Income”Adjusted OIBDA”), as the primary measure of profit and loss for itsour operating segments (“segment profit measure”) in accordance with FASB guidance for segment reporting. The Company believesWe began presenting Adjusted OIBDA as our segment profit measure in the fourth quarter of 2019 in order to align with the primary method used by our management beginning after the Merger to evaluate segment performance and to make decisions regarding the allocation of resources to our segments. We believe the presentation of Segment Operating IncomeAdjusted OIBDA 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’sour management and enhances their ability to understand the Company’sour operating performance. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management. Stock-based compensation is included as a component of our consolidated Adjusted OIBDA. The reconciliation of Segment Operating IncomeAdjusted OIBDA to the Company’sour consolidated Netnet earnings is presented in Note 17 (Reportable Segments) to the consolidated financial statements.

   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2016 Revenues 2015 Revenues $ % 
Entertainment$8,877
  67 %  $8,438
  67 %  $439
 5 % 
Cable Networks2,160
  16
  2,242
  18
  (82) (4) 
Publishing767
  6
  780
  6
  (13) (2) 
Local Media1,779
  14
  1,592
  12
  187
 12
 
Corporate/Eliminations(417)  (3)  (381)  (3)  (36) (9) 
Total Revenues$13,166
  100 %  $12,671
  100 %  $495
 4 % 






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 - 2019 vs. 2018
   % of Total   % of Total   
   Segment   Segment   
   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2016 Income 2015 Income $ % 
Segment Operating Income (Loss):                
Entertainment$1,519
  53 %  $1,294
  51 %  $225
 17 % 
Cable Networks959
  33
  945
  37
  14
 1
 
Publishing119
  4
  114
  4
  5
 4
 
Local Media618
  22
  487
  19
  131
 27
 
Corporate(354)  (12)  (276)  (11)  (78) (28) 
Total Segment Operating Income2,861
  100 %  2,564
  100 %  297
 12
 
Pension settlement charge(211)     —
     (211) n/m
 
Restructuring and merger and
acquisition-related costs
(38)     (45)     7
 16
 
Other operating items, net9
     139
     (130) (94) 
Total Operating Income$2,621
     $2,658
     $(37) (1)% 
   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2019 Revenues 2018 Revenues $ % 
Revenues:                
TV Entertainment$11,924
  43 %  $11,061
  41 %  $863
 8 % 
Cable Networks12,449
  45
  12,683
  46
  (234) (2) 
Filmed Entertainment2,990
  10
  2,956
  11
  34
 1
 
Publishing814
  3
  825
  3
  (11) (1) 
Corporate/Eliminations(365)  (1)  (275)  (1)  (90) (33) 
Total Revenues$27,812
  100 %  $27,250
  100 %  $562
 2 % 
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Adjusted OIBDA:        
TV Entertainment$2,443
 $2,466
 $(23) (1)% 
Cable Networks3,515
 4,341
 (826) (19) 
Filmed Entertainment80
 (33) 113
 n/m
 
Publishing143
 153
 (10) (7) 
Corporate/Eliminations(449) (433) (16) (4) 
Stock-based compensation(201) (205) 4
 2
 
Total Adjusted OIBDA5,531
 6,289
 (758) (12) 
Depreciation and amortization(443) (433) (10) (2) 
Restructuring and other corporate matters(775) (490) (285) n/m
 
Programming charges(589) (162) (427) n/m
 
Gain on sale of assets549
 —
 549
 n/m
 
Total Operating Income$4,273
 $5,204
 $(931) (18)% 
n/m - not meaningful
    Increase/(Decrease)     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 2019 2018 $ % 
Depreciation and Amortization:                
Entertainment$117
 $126
 $(9) (7)% 
TV Entertainment$150
 $160
 $(10) (6)% 
Cable Networks23
 23
 —
 —
 219
 194
 25
 13
 
Filmed Entertainment37
 38
 (1) (3) 
Publishing6
 6
 —
 —
 5
 6
 (1) (17) 
Local Media44
 48
 (4) (8) 
Corporate35
 32
 3
 9
 32
 35
 (3) (9) 
Total Depreciation and Amortization$225
 $235
 $(10) (4)% $443
 $433
 $10
 2 % 
TV Entertainment(CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive, CBS Sports Network, CBS Television Stations and CBS-branded streaming services CBS Films)All Access and CBSN, among others)
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Revenues$8,877
 $8,438
 $439
 5 % 
Segment Operating Income$1,519
 $1,294
 $225
 17 % 
Segment Operating Income as a % of revenues17% 15% n/m
 n/m
 
Restructuring charges$16
 $26
 $(10) (38)% 
Depreciation and amortization$117
 $126
 $(9) (7)% 
Capital expenditures$98
 $99
 $(1) (1)% 
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Advertising$6,008
 $5,751
 $257
 4 % 
Affiliate2,550
 2,082
 468
 22
 
Content licensing3,157
 3,006
 151
 5
 
Other209
 222
 (13) (6) 
Revenues$11,924
 $11,061
 $863
 8 % 
         
Adjusted OIBDA$2,443
 $2,466
 $(23) (1)% 
n/m - not meaningful
2016 vs. 2015
For 2016, the 5%increase in revenues was primarily driven by 10% growth in network advertising revenues, mainly from the broadcast of Super Bowl 50 on CBS in 2016 and 3% growth in underlying network advertising revenues. Affiliate and subscription fees grew 45% as a result of higher station affiliation fees and subscription growth for CBS All Access. These increases were partially offset by 7% lower content licensing and distribution revenues compared to 2015, which included significant licensing sales of NCIS,Elementary and CSI, while 2016 benefited from the international licensing of five Star Trek series. The revenue comparison was also impacted by the sales of internet businesses in China.








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




TheRevenues
For 2019, the8% increase in operating incomeTV Entertainment revenues reflects growth across each of 17% primarily reflects the segment’s main revenue streams.
Advertising
The 4%increase in revenues. For 2016 advertising revenues was driven by 11% growth in CBS Network advertising, principally reflecting CBS’ broadcasts of Super Bowl LIII and 2015, restructuring chargesthe national semifinals and championship game of the NCAA Tournament, partially offset by the timing of other sporting events. Taken together these items contributed 9-percentage points of the growth in network advertising. Advertising sales at our owned television stations decreased 11%, primarily reflected severance costs and costs associated with exiting contractual obligations and other related costs.

In 2017,reflecting record political advertising in 2018 from the revenue comparison will be negatively affectedmidterm elections, partially offset by the benefit to 2016 from theCBS’ broadcast of the Super Bowl which will also airLIII. The Super Bowl is broadcast on the CBS Television Network in 2019 andon a rotating basis with other networks through the 2022 season under the current contract. Revenues in 2017 will benefit fromcontract with the CBS Television Network’s broadcast ofNFL and the National Semifinalsnational semifinals and National Championshipchampionship games of the NCAA Tournament which are broadcast on the CBS Television Network every other year through 2032 under the current agreementsagreement with the NCAA and Turner. In addition, results

Affiliate
Affiliate revenues grew 22%, primarily as a result of a 20% increase in 2017 are expectedstation affiliation fees and retransmission revenues as well as subscriber growth at CBS All Access.

Content Licensing
Content licensing increased 5%, driven by higher revenues from the production of programming for third parties, including Unbelievable and Dead to Me, and higher revenues from the licensing of library programming to SVOD providers.

Adjusted OIBDA
Adjusted OIBDA decreased 1% as a result of an increased investment in content and higher costs associated with the growth and expansion of our streaming services, partially offset by higher revenues.

Comparability in 2020 will be negatively affected by the benefit in 2019 from CBS’ broadcasts of Super Bowl LIII and the national semifinals and championship game of the NCAA Tournament. Results in 2020 will benefit from continued growthhigher political advertising revenues, mainly in affiliate and subscription fee revenues, driven by the renewal of severalsecond half of the Company’s agreementsyear, associated with its television station affiliates and annual contractual increases on multiyear agreements with television station affiliates. Revenue comparisons will also be impacted by fluctuations resulting from the timing of availability of television series for multiyear licensing agreements. Television license fee revenues are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition.U.S. Presidential election.
Cable Networks(Showtime Networks, CBS Sports Network and Smithsonian Networks)


     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Revenues$2,160
 $2,242
 $(82) (4)% 
Segment Operating Income$959
 $945
 $14
 1 % 
Segment Operating Income as a % of revenues44% 42% n/m
 n/m
 
Restructuring charges$4
 $—
 $4
 n/m
 
Depreciation and amortization$23
 $23
 $—
 — % 
Capital expenditures$19
 $18
 $1
 6 % 
n/m - not meaningful
2016 vs. 2015
For 2016, the 4% decrease in revenues was a result of the benefit in 2015 from Showtime Networks’ distribution of the Floyd Mayweather/Manny Pacquiao boxing event, which was the highest grossing pay-per-view event of all time. The decrease in pay-per-view revenues negatively impacted the revenue comparison by seven percentage points. In addition, content licensing and distribution revenues decreased 8% from 2015, reflecting the timing of multiyear agreements for the international licensing of Showtime original series, partially offset by the domestic licensing sale of Penny Dreadful in 2016. Higher revenues from the Showtime digital streaming subscription offering partially offset these declines. As of December 31, 2016, subscriptions totaled approximately 76 million for Showtime Networks (including Showtime, The Movie Channel and Flix), 55 million for CBS Sports Network and 32 million for Smithsonian Networks.
Operating income increased 1% driven by contributions from the Showtime digital streaming subscription offering, partially offset by lower television licensing revenues. Restructuring charges in 2016 primarily reflected severance costs.

Revenue comparisons in 2017 may be impacted by fluctuations resulting from the timing of availability of television series for multiyear licensing agreements. Television license fee revenues are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition.




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




PublishingCable Networks(Simon & Schuster)Showtime Networks, Nickelodeon, MTV, BET, Comedy Central, Paramount Network, Nick Jr., VH1, TV Land, CMT, Pop TV, Smithsonian Networks, ViacomCBS Networks International, Network 10, Channel 5, Telefe and Pluto TV)
     Increase/(Decrease) 
Year Ended December 31,2016
2015
$ % 
Revenues$767
 $780
 $(13) (2)% 
Segment Operating Income$119
 $114
 $5
 4 % 
Segment Operating Income as a % of revenues16% 15% n/m
 n/m
 
Restructuring charges$1
 $—
 $1
 n/m
 
Depreciation and amortization$6
 $6
 $—
 — % 
Capital expenditures$9
 $10
 $(1) (10)% 
     Increase/(Decrease) 
Year Ended December 31,2019 2018 $ % 
Advertising$5,129
 $5,130
 $(1) — % 
Affiliate6,052
 6,294
 (242) (4) 
Content licensing1,268
 1,259
 9
 1
 
Revenues$12,449
 $12,683
 $(234) (2)% 
         
Adjusted OIBDA$3,515
 $4,341
 $(826) (19)% 
n/m -
Revenues
For 2019, Cable Networks revenues decreased 2% from the prior year, reflecting an unfavorable impact from foreign exchange rate changes of 2-percentage points. Domestic revenues remained substantially flat compared with the prior year as higher advertising revenues were offset by a decline in affiliate revenues. International revenues decreased 9% mainly as a result of a 7-percentage point unfavorable impact of foreign exchange rate changes.

Advertising
Advertising revenues remained flat compared with the prior year and included an unfavorable impact of foreign exchange rate changes of 3-percentage points. Domestic advertising revenues increased 6%, reflecting higher revenues from AMS,which comprised approximately 19% of domestic advertising revenues in 2019, and includes Pluto TV, which was acquired in March 2019. The domestic advertising growth also reflects higher pricing and the inclusion of the results of Pop TV. We began consolidating Pop TVin March 2019 when we acquired the 50% stake we did not meaningfulown, which brought our ownership to 100%. These increases were partially offset by lower linear impressions. International advertising revenues decreased 13%, mainly reflecting the unfavorable impact of foreign exchange rate changes of 9-percentage points, as well as softness in the Australian and UK markets, partially offset by increases in pricing and political advertising in Argentina.
2016 vs. 2015
For 2016, the 2% decreaseAffiliate
Affiliate revenues decreased 4%, which included a 1-percentage point unfavorable impact from foreign exchange rate changes. Domestic affiliate revenues decreased 4%, primarily driven by declines in revenues reflects lower digital book sales,traditional MVPD subscribers at our basic and premium cable networks. These declines were partially offset by growth in digital audio sales. Digital sales represented 23%from Showtime OTT, the inclusion of Publishing’s totalthe results of Pop TV, and contractual rate increases under carriage agreements. International affiliate revenues for 2016. Best-selling titles for 2016 included Born to Run by Bruce Springsteen, Enddecreased 6%, reflecting a 6-percentage point unfavorable impact of Watch by Stephen King and A Man Called Ove by Fredrik Backman.foreign exchange rate changes. As of December 31, 2019, Showtime subscriptions, including Showtime OTT, totaled approximately 27 million.

Content Licensing
The 4%1% increase in operating income mainly resulted from lower production, inventory and selling costs. For 2016, restructuring charges primarily reflected severance costs.
Local Media(CBS Television Stations and CBS Local Digital Media)
     Increase/(Decrease) 
Year Ended December 31,2016
2015
$ % 
Revenues$1,779
 $1,592
 $187
 12 % 
Segment Operating Income$618
 $487
 $131
 27 % 
Segment Operating Income as a % of revenues35% 31% n/m
 n/m
 
Restructuring charges$6
 $19
 $(13) (68)% 
Depreciation and amortization$44
 $48
 $(4) (8)% 
Capital expenditures$37
 $28
 $9
 32 % 
n/m - not meaningful
2016 vs. 2015
For 2016,content licensing revenues, which includes the 12% increase in revenuesunfavorable impact of foreign exchange rate changes of 1-percentage point, was led by higher political advertising sales in 2016 as athe result of U.S. federalincreased revenues from the production of programming for third parties, including The Real World and state elections, 14% growth in retransmission and subscription revenues, and the broadcast of Super Bowl 50 on CBS during the first quarter of 2016.

The increase in operating income of 27% primarily reflects theBellator mixed martial arts events. These increases were partially offset by lower secondary market revenue, growth. For 2016 and 2015, restructuring charges reflected severance costs and costs associated with exiting contractual obligations and other related costs.

In 2017, the revenue comparison will be negatively affected by the benefit in 2016 from strong political advertising associated with U.S. federal and state elections and the broadcast of the Super Bowl, which will also air on the CBS Television Network in 2019 and 2022 under the current contract. Results in 2017 are expected to benefit from continued growth in retransmission revenues, driven by the renewal of several ofa significant domestic licensing agreement for the Company’s agreements with MVPDs and annual contractual increases on multiyear agreements with MVPDs.Showtime original series, Dexter, in 2018.








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




CorporateAdjusted OIBDA
Adjusted OIBDA decreased 19%, driven by lower revenues as well as increased investment in content and higher advertising and promotion expenses.
Filmed Entertainment (Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios)
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Segment Operating Loss$(354) $(276) $(78) (28)% 
Restructuring charges$3
 $—
 $3
 n/m
 
Depreciation and amortization$35
 $32
 $3
 9 % 
Capital expenditures (a)
$33
 $16
 $17
 106 % 
     Increase/(Decrease) 
Year Ended December 31,2019
2018
$ % 
Theatrical$547
 $744
 $(197) (26)% 
Home Entertainment623
 617
 6
 1
 
Licensing1,709
 1,493
 216
 14
 
Other111
 102
 9
 9
 
Revenues$2,990
 $2,956
 $34
 1 % 
         
Adjusted OIBDA$80
 $(33) $113
 n/m
 
n/m - not meaningful
(a) PrimarilyRevenues
For 2019, the 1% increase in Filmed Entertainment revenues reflects growth in licensing revenues, partially offset by lower theatrical revenues. Foreign exchange rate changes had a 1-percentage point unfavorable impact on the timingrevenue comparison.

Theatrical
The 26% decrease in theatrical revenues principally reflects a difficult comparison to the prior year, as a result of capital projects.the 2018 releases of Mission: Impossible - Fallout and A Quiet Place. Theatrical revenues in 2019 benefited from the releases of Rocketman, Gemini Man and Dora and the Lost City of Gold, as well as the continued success of the 2018 release, Bumblebee. Foreign exchange rate changes had a 1-percentage point unfavorable impact on theatrical revenues.
2016 vs. 2015
Corporate expenses include general corporate overhead, unallocated shared company expenses, pension and postretirement benefit costs for plans retainedHome Entertainment
The 1% increase in home entertainment revenues was driven by the Company for previously divested businesses,number and intercompany eliminations. mix of titles in release. Significant 2019 releases included Bumblebee, Rocketman, Instant Family, and Pet Sematary, while 2018 benefited from the releases of Mission: Impossible - Fallout, Daddy’s Home 2 and A Quiet Place.Changes in foreign exchange rates resulted in a 1-percentage point unfavorable impact on the revenue comparison.

Licensing
The 28%14% growth in licensing revenues was driven by increases in licensing of film catalog titles to SVOD providers and recent releases to pay television services. Foreign exchange rate changes had a 1-percentage point unfavorable impact on licensing revenues.

Other
The 9% increase in corporate expenses primarily reflectsother revenues was driven by higher incentive compensation, pension costs and expenses associated with an increase in the Company’s stock price. Restructuring charges in 2016 primarily reflected severance costs.studio rental revenues.

Segment Results of Operations - 2015 vs. 2014

   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2015 Revenues 2014 Revenues $ % 
Entertainment$8,438
  67 %  $8,309
  66 %  $129
 2 % 
Cable Networks2,242
  18
  2,176
  17
  66
 3
 
Publishing780
  6
  778
  6
  2
 —
 
Local Media1,592
  12
  1,624
  13
  (32) (2) 
Corporate/Eliminations(381)  (3)  (368)  (2)  (13) (4) 
Total Revenues$12,671
  100 %  $12,519
  100 %  $152
 1 % 

   % of Total   % of Total   
   Segment   Segment   
   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2015 Income 2014 Income $ % 
Segment Operating Income (Loss):                
Entertainment$1,294
  51 %  $1,316
  50 %  $(22) (2)% 
Cable Networks945
  37
  974
  37
  (29) (3) 
Publishing114
  4
  101
  4
  13
 13
 
Local Media487
  19
  515
  20
  (28) (5) 
Corporate(276)  (11)  (297)  (11)  21
 7
 
Total Segment Operating Income2,564
  100 %  2,609
  100 %  (45) (2) 
Restructuring charges(45)     (19)     (26) (137) 
Other operating items, net139
     —
     139
 n/m
 
Total Operating Income$2,658
     $2,590
     $68
 3 % 
n/m - not meaningful




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




Adjusted OIBDA
Adjusted OIBDA for 2019 increased to $80 million from a loss of $33 million for 2018, principally driven by higher profits from licensing of film library titles. This increase was partially offset by costs associated with future film releases and higher incentive compensation costs. Fluctuations in results for the Filmed Entertainment segment may occur as a result of the timing of the recognition of print and advertising expenses, which are generally incurred before and throughout the theatrical release of a film, while the revenues for the respective film are recognized as earned through the film’s theatrical exhibition and subsequent distribution windows.
Publishing (Simon & Schuster)
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Depreciation and Amortization:        
Entertainment$126
 $139
 $(13) (9)% 
Cable Networks23
 23
 —
 —
 
Publishing6
 6
 —
 —
 
Local Media48
 54
 (6) (11) 
Corporate32
 28
 4
 14
 
Total Depreciation and Amortization$235
 $250
 $(15) (6)% 
     Increase/(Decrease) 
Year Ended December 31,2019
2018
$ % 
Revenues$814
 $825
 $(11) (1)% 
         
Adjusted OIBDA$143
 $153
 $(10) (7)% 


Revenues
For 2019, the 1% decrease in revenues primarily reflects lower print book sales, partially offset by 15% growth in digital audio sales. Bestselling titles for 2019 included Howard Stern Comes Again by Howard Stern, The Institute by Stephen King and The Pioneers by David McCullough.

Adjusted OIBDA
The 7% decrease in Adjusted OIBDA primarily reflects lower revenues and higher costs from the mix of titles.

Entertainment(CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive and CBS Films)Segment Results of Operations - 2018 vs. 2017
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Revenues$8,438
 $8,309
 $129
 2 % 
Segment Operating Income$1,294
 $1,316
 $(22) (2)% 
Segment Operating Income as a % of revenues15% 16% n/m
 n/m
 
Restructuring charges$26
 $8
 $18
 n/m
 
Depreciation and amortization$126
 $139
 $(13) (9)% 
Capital expenditures$99
 $94
 $5
 5 % 
   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2018 Revenues 2017 Revenues $ % 
Revenues:                
TV Entertainment$11,061
  41 %  $10,476
  39 %  $585
 6 % 
Cable Networks12,683
  46
  12,479
  47
  204
 2
 
Filmed Entertainment2,956
  11
  3,075
  12
  (119) (4) 
Publishing825
  3
  830
  3
  (5) (1) 
Corporate/Eliminations(275)  (1)  (325)  (1)  50
 15
 
Total Revenues$27,250
  100 %  $26,535
  100 %  $715
 3 % 
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Adjusted OIBDA:        
TV Entertainment$2,466
 $2,301
 $165
 7 % 
Cable Networks4,341
 4,442
 (101) (2) 
Filmed Entertainment(33) (187) 154
 82
 
Publishing153
 146
 7
 5
 
Corporate/Eliminations(433) (442) 9
 2
 
Stock-based compensation(205) (220) 15
 7
 
Total Adjusted OIBDA6,289
 6,040
 249
 4
 
Depreciation and amortization(433) (443) 10
 2
 
Restructuring and other corporate matters(490) (258) (232) n/m
 
Programming charges(162) (144) (18) n/m
 
Gain on sale of assets—
 146
 (146) n/m
 
Total Operating Income$5,204
 $5,341
 $(137) (3)% 
n/m - not meaningful
2015 vs. 2014

For 2015, the 2% increase in revenues was primarily driven by 47% growth in affiliate and subscription fees. Network advertising revenues increased 1%, despite the broadcast of fewer sporting events on the CBS Television Network in 2015, reflecting higher scatter pricing in the second half of the year, primarily as a result of increased demand. The increase is also driven by more inventory available to be sold at higher prices in the scatter market as a result of fewer units sold in the Upfront for the 2015/2016 broadcast season, compared with the 2014/2015 season. Overall advertising revenues for the Entertainment segment remained flat as the increase in network advertising revenues was offset by the impact from the sale of an internet business in China during the first quarter of 2015. Content licensing and distribution revenues decreased 3% reflecting lower domestic television licensing revenues, which were partially offset by higher international television licensing revenues. Significant contributors to domestic television licensing revenues in 2015 included Elementary and NCIS, while 2014 included Blue Bloods, Hawaii Five-0 and Criminal Minds.
The decrease in operating income of 2% was primarily driven by increased investment in programming and digital distribution initiatives. For 2015 and 2014, restructuring charges primarily reflected severance costs and costs associated with exiting operating facilities.




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




Cable Networks
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Depreciation and Amortization:        
TV Entertainment$160
 $163
 $(3) (2)% 
Cable Networks194
 193
 1
 1
 
Filmed Entertainment38
 42
 (4) (10) 
Publishing6
 6
 —
 —
 
Corporate35
 39
 (4) (10) 
Total Depreciation and Amortization$433
 $443
 $(10) (2)% 
TV Entertainment(Showtime Networks,CBS Television Network, CBS Television Studios, CBS Television Distribution, CBS Interactive, CBS Sports Network, CBS Television Stations and Smithsonian Networks)CBS-branded streaming services CBS All Access and CBSN, among others)
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Revenues$2,242
 $2,176
 $66
 3 % 
Segment Operating Income$945
 $974
 $(29) (3)% 
Segment Operating Income as a % of revenues42% 45% n/m
 n/m
 
Depreciation and amortization$23
 $23
 $—
 — % 
Capital expenditures$18
 $16
 $2
 13 % 
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Advertising$5,751
 $5,696
 $55
 1 % 
Affiliate2,082
 1,674
 408
 24
 
Content licensing3,006
 2,880
 126
 4
 
Other222
 226
 (4) (2) 
Revenues$11,061
 $10,476
 $585
 6 % 
         
Adjusted OIBDA$2,466
 $2,301
 $165
 7 % 
n/m - not meaningful
2015 vs. 2014Revenues
For 2015,2018, the 3%6% increase in TV Entertainment revenues reflects growth across each of the segment’s main revenue streams.
Advertising
The 1% increase in advertising revenues was primarily driven by higher revenues from new long-term agreements for the international licensing of Showtime original series; pay-per-view boxing events; and affiliates, as well as revenues from new digital distribution initiatives. These increases were offset by lower domestic licensing revenues as 2014 benefited from significant domestic streamingrecord political advertising sales of Dexter. As of December 31, 2015, subscriptions totaled approximately 77 million for Showtime Networks (including Showtime, The Movie Channel and Flix), 55 million for CBS Sports Network and 33 million for Smithsonian Networks.

Operating income decreased 3% as the revenue growth was more than offset by higher costs associated with the increased pay-per-view boxing revenues2018 midterm elections, partially offset by the absence of Thursday Night Football and the mixnational semifinals and championship game of titles soldthe NCAA Tournament, which were broadcast by CBS in 2017. TV Entertainment advertising revenues also benefited from the adoption of a new revenue recognition standard in the first quarter of 2018, under television licensing arrangements.

During 2015,which revenues for certain distribution arrangements are recognized based on the Company launched its digital streaming subscription offeringgross amount of Showtime that is available on showtime.com and through the Showtime app on multiple platforms. Subscribers to this offering have on-demand access to Showtime original series, theatrical feature films, documentaries and sports-related programming, as well as the live east and west coast linear feeds of Showtime.
Publishing (Simon & Schuster)consideration

     Increase/(Decrease) 
Year Ended December 31,2015
2014
$ % 
Revenues$780
 $778
 $2
 —% 
Segment Operating Income$114
 $101
 $13
 13% 
Segment Operating Income as a % of revenues15% 13% n/m
 n/m
 
Restructuring charges$—
 $1
 $(1) n/m
 
Depreciation and amortization$6
 $6
 $—
 —% 
Capital expenditures$10
 $4
 $6
 150% 

n/m - not meaningful
2015 vs. 2014
For 2015, revenues increased slightly from 2014 with digital book sales representing 25% of Publishing’s total revenues. Best-selling titles for 2015 included the Pulitzer Prize-winning 2014 release All the Light We Cannot See by Anthony Doerr, The Wright Brothers by David McCullough and Finders Keepers by Stephen King.

The increase in operating income of 13% primarily reflected a favorable product mix, including strong backlist and digital audio sales, and lower production and distribution costs.





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




Local Media(CBS Television Stations received from the customer, with an offsetting increase to participation expense. Under previous accounting guidance, such revenues were recognized at the net amount retained by us after the payment of fees to the third party. This guidance was applied prospectively from the date of adoption and CBS Local Digital Media)therefore, amounts for 2017 are reported under previous accounting guidance.

     Increase/(Decrease) 
Year Ended December 31,2015
2014
$ % 
Revenues$1,592
 $1,624
 $(32) (2)% 
Segment Operating Income$487
 $515
 $(28) (5)% 
Segment Operating Income as a % of revenues31% 32% n/m
 n/m
 
Restructuring charges$19
 $5
 $14
 n/m
 
Depreciation and amortization$48
 $54
 $(6) (11)% 
Capital expenditures$28
 $37
 $(9) (24)% 
Affiliate
n/m - not meaningful
2015 vs. 2014
For 2015, the 2% decreaseAffiliate revenues grew 24% as a result of a 22% increase in revenues primarily reflected lower political advertisingstation affiliation fees and retransmission revenues as 2014 benefited from midterm elections. This decrease was partially offset bywell as subscriber growth at CBS All Access.

Content Licensing
Content licensing increased 4%, primarily reflecting higher international licensing and the impact of 21%the aforementioned adoption of a new revenue recognition standard in retransmission and subscription revenues.

The 5% decrease2018, which resulted in higher revenues under certain distribution arrangements, with an offsetting increase to operating income was driven by the revenue decline,expenses. These increases were partially offset by lower programmingdomestic licensing, as 2017 included the licensing of NCIS: New Orleans, Madam Secretary and employee-related coststitles from the CSI franchise.

Adjusted OIBDA
Adjusted OIBDA increased 7% as a result of cost-cutting measures. Restructuring chargeshigher revenues and lower programming costs associated with the absence of CBS’s broadcast of Thursday Night Football, partially offset by an increased investment in 2015content and 2014 principally reflected severance costs.

digital initiatives.
CorporateCable Networks (Showtime Networks, Nickelodeon, MTV, BET, Comedy Central, Paramount Network, Nick Jr., VH1, TV Land, CMT, Smithsonian Networks, ViacomCBS Networks International, Network 10, Channel 5 and Telefe)
     Increase/(Decrease) 
Year Ended December 31,2015 2014 $ % 
Segment Operating Loss$(276) $(297) $21
 7 % 
Restructuring charges$—
 $5
 $(5) n/m
 
Depreciation and amortization$32
 $28
 $4
 14 % 
Capital expenditures$16
 $27
 $(11) (41)% 
     Increase/(Decrease) 
Year Ended December 31,2018 2017 $ % 
Advertising$5,130
 $4,947
 $183
 4 % 
Affiliate6,294
 6,479
 (185) (3) 
Content licensing1,259
 1,053
 206
 20
 
Revenues$12,683
 $12,479
 $204
 2 % 
         
Adjusted OIBDA$4,341
 $4,442
 $(101) (2)% 
n/m - not meaningful

Revenues
2015 vs. 2014For 2018, the 2% increase in Cable Networks revenues was driven by 15% growth in international revenues, reflecting growth across each of the segment’s revenue streams. Domestic revenues decreased 2%, driven by lower affiliate revenues and advertising revenues, partially offset by increased content licensing revenues. International revenues included a 3-percentage point unfavorable impact from foreign exchange rate changes.
Corporate expenses include general corporate overhead, unallocated shared company expenses, pension
Advertising
Advertising revenues increased 4%, driven by 26% higher international revenues as a result of the acquisition of Network 10 in the fourth quarter of 2017, partially offset by an unfavorable impact from foreign exchange rate changes of 5-percentage points. Domestic advertising revenues decreased 4%, principally reflecting lower linear impressions, partially offset by higher pricing and postretirement benefit costs for plans retained by the Company for previously divested businesses, and intercompany eliminations. The decreasegrowth in corporate expenses of 7% primarily reflected lower employee-related costs and lower pension and postretirement benefit costs.revenues from AMS.








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




Financial PositionAffiliate
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Current assets:        
Cash and cash equivalents$598
 $317
 $281
 89 % 
Receivables, net (a)
3,314
 3,375
 (61) (2) 
Programming and other inventory (b)
1,427
 1,270
 157
 12
 
Prepaid income taxes (c)
30
 101
 (71) (70) 
Current assets of discontinued operations305
 323
 (18) (6) 
All other current assets, net389
 361
 28
 8
 
Total current assets$6,063
 $5,747
 $316
 5 % 
(a) The allowance for doubtful accounts as3% decrease in affiliate revenues was the result of a percentage4% decrease in domestic revenues, reflecting the benefit to 2017 from Showtime Networks’distribution of receivables was 1.8%the Floyd Mayweather/Conor McGregor pay-per-view boxing event and declines in traditional MVPD subscribers at December 31, 2016 compared with 1.7% at December 31, 2015.
(b) The increase mainly reflectsour basic cable networks. Growth from Showtime OTT and contractual rate increases partially offset the timing of payments for sports programming.
(c) The decrease is primarily due to the timing of income tax payments.
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Programming and other inventory (a)
$2,439
 $1,957
 $482
 25% 
(a) The increase is primarily due to increased investment in programming.
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Other assets (a)
$2,707
 $2,633
 $74
 3% 
(a) Included in other assets are receivables associated with long-term television licensing arrangements.decline. As of December 31, 2016, total outstanding receivables2018, Showtimesubscriptions, including Showtime OTT, totaled approximately 27 million. International affiliate revenues increased 6%, driven by the acquisition of Network 10, as well as subscriber growth and new channel launches. International affiliate revenues included a 1-percentage point unfavorable impact of foreign exchange rate changes.

Content Licensing
Content licensing revenues increased 20% reflecting higher revenues from the licensing arrangements, of original programming from our basic cable networks and Showtime, including both currentthe renewal of Dexter, as well as the benefit to 2018 from SpongeBob SquarePants: The Broadway Musical.

Adjusted OIBDA
Adjusted OIBDA decreased 2%, driven by an increased investment in content and noncurrent, were $3.82 billion versus $3.83 billion at December 31, 2015. At December 31, 2016,growth initiatives, partially offset by the total amount duerevenue growth and lower expenses resulting from these receivables was $1.63 billion in 2017, $1.03 billion in 2018, $595 million in 2019, $349 million in 2020,cost transformation initiatives.
Filmed Entertainment (Paramount Pictures, Paramount Players, Paramount Animation and $216 million in 2021 and thereafter.Paramount Television Studios)
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Assets of discontinued operations (a)
$4,291
 $4,747
 $(456) (10)% 
     Increase/(Decrease) 
Year Ended December 31,2018
2017
$ % 
Theatrical$744
 $716
 $28
 4 % 
Home Entertainment617
 789
 (172) (22) 
Licensing1,493
 1,468
 25
 2
 
Other102
 102
 —
 —
 
Revenues$2,956
 $3,075
 $(119) (4)% 
         
Adjusted OIBDA$(33) $(187) $154
 82 % 
(a)
Revenues
For 2018, Filmed Entertainment revenues decreased 4% reflecting lower home entertainment revenues, partially offset by increases in theatrical and licensing revenues.
Theatrical
Theatrical revenues increased 4%, principally reflecting the 2018 release of Mission: Impossible - Fallout. Other significant 2018 releasesincluded A Quiet Place and Bumblebee. Significant releases in 2017 included Transformers: The decreaseLast Knight, xXx: Return of Xander Cage, Daddy’s Home 2 and Baywatch. Foreign exchange rate changes had a 1-percentage point unfavorable impact on theatrical revenues.

Home Entertainment
Home entertainment revenues decreased 22% in 2018, primarily reflects an impairment chargereflecting the number and mix of $444 million ($427 million, net of tax)titles in release. Significant 2018 releases included Mission: Impossible - Fallout, Daddy’s Home 2 and A Quiet Place compared to reduce the carrying value of CBS Radio’s goodwill Transformers: The Last Knight, Jack Reacher: Never Go Back and FCC licenses to their fair value. (See Note 4 to the consolidated financial statements) Arrival in 2017.







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




Licensing
Licensing revenues increased 2% in 2018, driven by higher revenues from the production of programming for third parties, including Tom Clancy’s Jack Ryan, Maniac, The Haunting of Hill House and The Cloverfield Paradox.

Adjusted OIBDA
Adjusted OIBDA for Filmed Entertainment was a loss of $33 million in 2018 compared with a loss of $187 million in 2017, an improvement of 82%, reflecting lower print and advertising expenses, primarily driven by the number and mix of theatrical releases and a charge resulting from the termination of a slate financing agreement in 2017. Fluctuations in results for the Filmed Entertainment segment may occur as a result of the timing of the recognition of print and advertising expenses, which are generally incurred before and throughout the theatrical release of a film, while the revenues for the respective film are recognized as earned through the film’s theatrical exhibition and subsequent distribution windows.
Publishing (Simon & Schuster)
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Current liabilities:        
Accounts payable 
$148
 $159
 $(11) (7)% 
Accrued compensation (a)
369
 306
 63
 21
 
Program rights (b)
290
 372
 (82) (22) 
Deferred revenues (c)
152
 294
 (142) (48) 
Commercial paper450
 —
 450
 n/m
 
Current portion of long-term debt (d)
23
 222
 (199) (90) 
Current liabilities of discontinued operations155
 143
 12
 8
 
All other current liabilities, net2,121
 2,064
 57
 3
 
Current liabilities$3,708
 $3,560
 $148
 4 % 
     Increase/(Decrease) 
Year Ended December 31,2018
2017
$ % 
Revenues$825
 $830
 $(5) (1)% 
         
Adjusted OIBDA$153
 $146
 $7
 5 % 
n/m - not meaningful
(a) The increase is due to higher employee-related costs andRevenues
For 2018, the timing of payments.
(b) The 1%decrease in revenues primarily reflects the timinglower sales of paymentsprint and electronic books, partially offset by 20% growth in digital audio sales. Bestselling titles for sports programming.
(c) The decrease primarily reflects the timing of advertising revenues.
(d)The decrease is the result of the repayment of $200 million of outstanding senior debentures upon maturity in January 2016.
     Increase/(Decrease) 
At December 31,2016
2015 $ % 
Long-term debt (a)
$8,902
 $8,226
 $676
 8% 
(a) The increase is primarily the result of the Company’s issuance of $700 million of senior notes in July 2016. (See Note 9 to the consolidated financial statements).
     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Pension and postretirement benefit obligations (a)
$1,769
 $1,575
 $194
 12% 
(a) The increase was driven by changes in actuarial assumptions, primarily a decrease2018 included Fear: Trump in the discount rate.White House by Bob Woodward, The Outsider by Stephen King and Whiskey in a Teacup by Reese Witherspoon.

     Increase/(Decrease) 
At December 31,2016 2015 $ % 
Liabilities of discontinued operations (a)
$2,451
 $1,139
 $1,312
 115% 
Adjusted OIBDA
(a) The 5% increase is primarily the result of the incurrence of CBS Radio indebtedness. (See Note 4 to the consolidated financial statements).in Adjusted OIBDA mainly reflects lower production costs.




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 and restricted cash were as follows:
     Increase/ (Decrease)   Increase/ (Decrease)
Year Ended December 31,2016
2015
2016 vs. 2015 2014 2015 vs. 2014
Cash provided by operating activities from:             
Continuing operations$1,454
 $1,189
  $265
  $916
  $273
 
Discontinued operations231
 205
  26
  359
  (154) 
Cash provided by operating activities1,685
 1,394
  291
  1,275
  119
 
Cash (used for) provided by investing activities from:             
Continuing operations(334) 179
  (513)  (266)  445
 
Discontinued operations(6) (25)  19
  (335)  310
 
Cash (used for) provided by investing activities(340) 154
  (494)  (601)  755
 
Cash used for financing activities(1,046) (1,653)  607
  (643)  (1,010) 
Net increase (decrease) in cash and cash equivalents$299
 $(105)  $404
  $31
  $(136) 
Operating Activities.  In 2016, the increase in cash provided by operating activities from continuing operations was primarily driven by growth in affiliate and subscription fees and higher advertising revenues, including from the broadcast of Super Bowl 50, partially offset by increased investment in programming and higher payments for income taxes.

In 2015, the increase in cash provided by operating activities from continuing operations resulted from early-redemption premiums paid in 2014 in connection with the Company’s debt refinancing, with no comparable amount in 2015, and lower payments for income taxes, mainly resulting from federal tax refunds received in 2015. These increases were partially offset by increased investment in programming.
Cash provided by operating activities from discontinued operations primarily reflected the operating activities of CBS Radio. For 2016 and 2015, operating activities from discontinued operations also included payments for tax matters in foreign jurisdictions related to previously disposed businesses that are accounted for as discontinued operations. For 2014, cash provided by operating activities from discontinued operations also reflected cash flows relating to Outdoor Americas and Outdoor Europe.

Cash paid for income taxes for the years ended December 31, 2016, 2015 and 2014 was as follows:
     Increase/ (Decrease)   Increase/ (Decrease)
Year Ended December 31,2019
2018
2019 vs. 2018 2017 2018 vs. 2017
Cash provided by operating activities from:             
Continuing operations$1,230
 $3,463
  $(2,233)  $2,345
  $1,118
 
Discontinued operations—
 1
  (1)  94
  (93) 
Cash provided by operating activities1,230
 3,464
  (2,234)  2,439
  1,025
 
Cash (used for) provided by investing activities from:             
Continuing operations(153) (588)  435
  150
  (738) 
Discontinued operations(2) (23)  21
  (24)  1
 
Cash (used for) provided by investing activities(155) (611)  456
  126
  (737) 
Cash used for financing activities(1,216) (2,531)  1,315
  (3,009)  478
 
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
(1) (25)  24
  58
  (83) 
Net (decrease) increase in cash, cash equivalents and
restricted cash
$(142) $297
  $(439)  $(386)  $683
 

Year Ended December 31,2016
2015
2014
Cash taxes included in operating activities from continuing operations$390
 $287
 $365
Less: Excess tax benefits from the exercise of stock options and
vesting of restricted stock units, included in financing activities
17
 88
 243
Cash paid for income taxes from continuing operations$373
 $199
 $122

The increase in cash paid for income taxes for 2016 was driven by higher taxable income and a higher tax benefit in 2015 from the exercise of stock options and the vesting of restricted stock units. Cash taxes from continuing operations benefited from federal income tax refunds of $90 million in 2016, $169 million in 2015 and $25 million in 2014. Cash taxes for 2016 also included a one-time benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.





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




Operating Activities.  The decrease in cash provided by operating activities from continuing operations for 2019 compared with 2018 was primarily driven by an increased investment in television and film programming, higher payments for income taxes and payments of $132 million associated with costs related to the Merger. Operating cash flow for 2019 and 2018 also included payments for restructuring activities of $234 million and $219 million, respectively.

The increase in cash provided by operating activities from continuing operations for 2018 compared with 2017 was primarily driven by lower cash payments for income taxes and growth in affiliate revenues, which were partially offset by an increased investment in television and film programming. Operating cash flow for 2017 also included discretionary pension contributions of $600 million to prefund our qualified pension plans.

Cash provided by operating activities from discontinued operations primarily reflected the operating activities of CBS Radio. Operating activities from discontinued operations also included payments and refunds for tax matters in foreign jurisdictions related to previously disposed businesses that are accounted for as discontinued operations.
The increase in cash payments for income taxes for 2019 compared to 2018 was primarily due to a payment in 2019 as a result of guidance issued by the United States government in January 2019 relating to the transition tax on cumulative foreign earnings and profits that resulted from the enactment of federal tax legislation in December 2017. In addition, cash taxes for 2018 benefited from the application of a federal income tax overpayment carryforward from 2017.
The decrease in cash payments for income taxes for 2018 compared to 2017 reflects the benefit from a federal income tax overpayment, which included the impact from the retroactive renewal of a federal tax law. 

Investing Activities
Year Ended December 31,2016
2015
2014
Capital expenditures (a)
$(196) $(171) $(178)
Acquisitions (b)
(92) (12) (2)
Investments in and advances to investee companies (c)
(81) (98) (98)
Proceeds from dispositions (d)
20
 383
 4
All other investing activities from continuing operations, net15
 77
 8
Cash flow (used for) provided by investing activities from
continuing operations
(334) 179
 (266)
Cash flow used for investing activities from discontinued operations (e)
(6) (25) (335)
Cash flow (used for) provided by investing activities$(340) $154
 $(601)
Year Ended December 31,2019
2018
2017
Investments (a)
$(171) $(161) $(128)
Capital expenditures(353) (352) (356)
Acquisitions, net of cash acquired (b)
(399) (118) (289)
Proceeds from dispositions (c)
756
 39
 892
Other investing activities from continuing operations14
 4
 31
Cash flow (used for) provided by investing activities from continuing
operations
(153) (588) 150
Cash flow used for investing activities from discontinued operations(2) (23) (24)
Cash flow (used for) provided by investing activities$(155) $(611) $126
(a) Primarily includes our investment in The increase for 2016CW.
(b) 2019 primarily reflects the timingacquisition of capital projects. Capital expenditures for 2017 are anticipated to be atPluto Inc. and the remaining 50% interest in Pop TV, a similar level as 2016.
(b) 2016general entertainment cable network. 2018 primarily reflects the acquisitions of WhoSay Inc., a sports-focusedleading influence marketing firm, Pop Culture Media, a digital entertainment media businesscompany, and VidCon LLC, a publishing business.host of conferences dedicated to online video. 2017 primarily reflects the acquisition of Network 10, one of three major commercial broadcast networks in Australia, and the acquisition of a television library.
(c) Mainly includes the Company’s investment in The CW as well as its other domestic and international television joint ventures.
(d) Primarily reflects sales of internet businesses in China.
(e) 2014 principally2019 primarily reflects the dispositionsale of Outdoor Americas’ cash.CBS Television City. 2017 primarily reflects the sale of our 49.76% interest in EPIX and the sale of broadcast spectrum in connection with the FCC’s broadcast spectrum auction.





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


Financing Activities
Year Ended December 31,2016 2015 20142019 2018 2017
Repurchase of CBS Corp. Class B Common Stock$(2,997) $(2,813) $(3,595)
Proceeds from (repayments of) short-term debt borrowings, net450
 (616) 141
$25
 $(5) $229
Proceeds from issuance of senior notes684
 1,959
 1,728
492
 —
 3,157
Repayment of notes and debentures(199) —
 (1,152)(910) (1,102) (4,729)
Proceeds from debt borrowings of CBS Radio (2016) and
Outdoor Americas (2014)
1,452
 —
 1,569
Repayment of debt borrowings of CBS Radio(110) —
 —
Proceeds from IPO of Outdoor Americas—
 —
 613
Dividends(288) (300) (292)(595) (599) (616)
Repurchase of the Company’s Class B Common Stock(57) (586) (1,111)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(56) (67) (103)
Proceeds from exercise of stock options21
 142
 283
15
 29
 263
All other financing activities, net(59) (25) 62
Other financing activities(130) (201) (99)
Cash flow used for financing activities$(1,046) $(1,653) $(643)$(1,216) $(2,531) $(3,009)


Free Cash Flow
Free cash flow is a non-GAAP financial measure. Free cash flow reflects the Company’sour net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations, and includingless capital expenditures. The Company’sOur calculation of free cash flow includes capital expenditures because investment in capital expenditures is a use of cash that is directly related to the Company’sour operations. The Company’sOur net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.


Management believes free cash flow provides investors with an important perspective on the cash available to the Companyus to service debt, make strategic acquisitions and investments, maintain itsour capital assets, satisfy itsour tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow is a significant measure of the Company’sour 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’sour operating performance. The Company believesWe believe the presentation



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


of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from the Company’sour underlying operations in a manner similar to the method used by management. Free cash flow is one ofamong several components of incentive compensation targets for certain management personnel. In addition, free cash flow is a primary measure used externally by the Company’sour investors, analysts and industry peers for purposes of valuation and comparison of the Company’sour operating performance to other companies in itsour industry.


As free cash flow is not a measure calculated in accordance with GAAP, 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, as the Company calculateswe calculate it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow as a measure of liquidity has certain limitations, does not necessarily represent funds available for discretionary use and is not necessarily a measure of the Company’sour ability to fund itsour cash needs. When comparing 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.


The following table presents a reconciliation of the Company’sour net cash flow provided by operating activities to free cash flow.
Year Ended December 31,2016 2015 2014
Net cash flow provided by operating activities$1,685
 $1,394
 $1,275
Capital expenditures(196) (171) (178)
Exclude operating cash flow from discontinued operations231
 205
 359
Free cash flow$1,258
 $1,018
 $738
Year Ended December 31,2019 2018 2017
Net cash flow provided by operating activities (GAAP)$1,230
 $3,464
 $2,439
Capital expenditures(353) (352) (356)
Less: Operating cash flow from discontinued operations—
 1
 94
Free cash flow (Non-GAAP)$877
 $3,111
 $1,989





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


Dividends
On July 28, 2016, the Company announced that its Board of Directors approvedDecember 19, 2019, ViacomCBS declared a 20% increase to the quarterly cash dividend of $.24 per share on its Class A and Class B Common Stock, resulting in total dividends of $150 million, which were paid on January 10, 2020. Prior to $.18 from $.15 per share.
For the years ended December 31, 2016, 2015Merger, Viacom and 2014,CBS each declared a quarterly cash dividend during each of the Companyfirst three quarters of 2019 and during each of the four quarters of 2018 and 2017. During 2019, CBS declared total per share dividends of $.66, $.60,$.54, resulting in total dividends of $205 million. For each of the years ended December 31, 2018 and $.54, respectively, which resulted2017, CBS declared total per share dividends of $.72, resulting in total annual dividends of $294 million, $293$274 million and $296$289 million, respectively. During 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For each of the years ended December 31, 2018 and 2017, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million and $323 million, respectively.


On January 26, 2017, the Company announcedFebruary 12, 2020, ViacomCBS declared a quarterly cash dividend of $.18$.24 per share on its Class A and Class B Common Stock, payable on April 1, 2017.2020. 

Share Repurchase Program
On July 28, 2016, the Company announced that its Board of Directors approved an increase to the Company’s share repurchase program to a total availability of $6.0 billion. During 2016, the CompanyDecember 2019, we repurchased 54.31.2 million shares of CBS Corp.ViacomCBS Class B Common Stock under our share repurchase program for $3.0 billion.$50 million, at an average cost of $40.78 per share. At December 31, 2019, $2.41 billion of authorization remained under the share repurchase program.

Capital Structure
The following table sets forth our debt.


At December 31,2019 2018
Commercial paper$699
 $674
Senior debt (2.30%-7.875% due 2019-2045)16,690
 17,086
Junior debt (5.875%-6.250% due 2057)1,286
 1,284
Obligations under finance leases44
 69
Total debt (a)
18,719
 19,113
Less commercial paper699
 674
Less current portion of long-term debt18
 339
Total long-term debt, net of current portion$18,002
 $18,100
(a)At December 31, 2019 and 2018, the senior and junior subordinated debt balances included (i) a net unamortized discount of $412 million and $422 million, respectively, (ii) unamortized deferred financing costs of $92 million and $98 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $6 million and $5 million, respectively. The face value of our total debt was $19.23 billion at December 31, 2019 and $19.64 billion at December 31, 2018.


During the year ended December 31, 2019, we issued $500 million of 4.20% senior notes due 2029. We used the net proceeds from this issuance in the redemption of our $600 million outstanding 2.30% senior notes due August 2019. During 2019, we also repaid the $220 million aggregate principal amount of our 5.625% senior notes due September 2019 and the $90 million aggregate principal amount of our 2.75% senior notes due December 2019.

During the year ended December 31, 2018, we redeemed $1.13 billion of senior notes and debentures for a redemption price of $1.10 billion, resulting in a pre-tax gain on early extinguishment of debt of $18 million ($14 million, net of tax).

During the year ended December 31, 2017, we issued $3.10 billion of senior notes and junior subordinated debentures. Also during 2017, we redeemed and repaid $4.67 billion of senior notes, of which $4.27 billion was



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




Capital Structure
At December 31,2016 2015
Commercial paper$450
 $—
Senior debt (1.95%-7.875% due 2016-2045)8,850
 8,365
Obligations under capital leases75
 83
Total debt (a)
9,375
 8,448
Less commercial paper450
 —
Less current portion of long-term debt23
 222
Total long-term debt, net of current portion$8,902
 $8,226
(a)At December 31, 2016 and 2015, the senior debt balances included (i) a net unamortized discountredeemed prior to maturity, resulting in a pre-tax loss on early extinguishment of $52 million and $45 million, respectively, (ii) unamortized deferred financing costs of $43 million and $44 million, respectively, and (iii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $5 million and $14 million, respectively. The face value of the Company’s total debt was $9.47 billion at December 31, 2016 and $8.52 billion at December 31, 2015.

Long-term debt of $1.35 billion$38 million ($21 million, net of tax).

Our 5.875% junior subordinated debentures due February 2057 and 6.25% junior subordinated debentures due February 2057 accrue interest at December 31, 2016 is included in discontinued operationsthe stated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the Consolidated Balance Sheets. (See Note 4rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the consolidated financial statements).expiration of the fixed-rate period.


During July 2016,The subordination, interest deferral option and extended term of the Company issued $700 millionjunior subordinated debentures provide significant credit protection measures for senior creditors and, as a result of 2.90%these features, the debentures received a 50% equity credit by Standard & Poor’s Rating Services and Fitch Ratings Inc., and a 25% equity credit by Moody’s Investors Service, Inc.
The interest rate payable on our 2.25% senior notes due 2027.

During January 2016, the Company repaid its $200 million of outstanding 7.625% senior debentures upon maturity.

For the year ended December 31, 2015, debt issuances were as follows:
January 2015, $600 million 3.50%February 2022 and 3.45% senior notes due 2025
January 2015October 2026, collectively the “Senior Notes”, $600 million 4.60%will be subject to adjustment from time to time if Moody’s Investors Services, Inc. or S&P Global Ratings downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes. The interest rate on these Senior Notes would increase by 0.25% upon each credit agency downgrade up to a maximum of 2.00%, and would similarly be decreased for subsequent upgrades. At December 31, 2019, the outstanding principal amount of our 2.25% senior notes due 2045
July 2015, $800 million 4.00%February 2022 and 3.45% senior notes due October 2026 was $50 million and $124 million, respectively.


The Company usedSome of our outstanding notes and debentures provide for certain covenant packages typical for an investment grade company. There is an acceleration trigger for the net proceeds frommajority of the 2016notes and 2015 issuancesdebentures in the event of a change in control under specified circumstances coupled with ratings downgrades due to the change in control, as well as certain optional redemption provisions for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and repayment of short-term borrowings, including commercial paper.our junior debentures.


At December 31, 2016, the Company classified $399 million of debt maturing in July 2017 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

At December 31, 2016, the Company’s scheduled maturities of long-term debt at face value, excluding capital leases, were as follows:
                2022 and
 20172018201920202021Thereafter
Long-term debt $400
  $300
  $600
  $500
  $300
 $6,840
Commercial Paper
At December 31, 2016 the CompanyWe had $450 million of outstanding commercial paper borrowings under its $2.5our $2.50 billion commercial paper program of $699 million and $674 million at aDecember 31, 2019 and 2018, respectively, each with maturities of less than 90 days. The weighted average interest rate of 0.98%for these borrowings was 2.07% and with remaining maturities of less than 45 days. There were no outstanding commercial paper borrowings3.02% at December 31, 2015.2019 and 2018, respectively.

In January 2020, our commercial paper program was increased to $3.50 billion in conjunction with the new $3.50 billion revolving credit facility described below.

Credit Facility
DuringAt December 31, 2019, we had a $2.50 billion revolving credit facility held by CBS prior to the Merger (the “CBS Credit Facility”) with a maturity in June 2016,2021 and a $2.50 billion revolving credit facility held by Viacom prior to the CompanyMerger (the “Viacom Credit Facility”), with a maturity in February 2024. At December 31, 2019, we had no borrowings outstanding under the CBS Credit Facility or the Viacom Credit Facility and the remaining availability, net of outstanding letters of credit, was $2.50 billion for each facility.

In January 2020, the CBS Credit Facility was terminated and the Viacom Credit Facility was amended and restated its $2.5to a $3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”). The amended Credit Facility expires in June 2021is used for general corporate purposes and contains provisions that are substantially similar to



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


the previous credit facility, which was due to expire in December 2019. The Company,support commercial paper outstanding, if any. We may, at itsour option, may also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the Company’sour option at the time of each borrowing and are based generally on the prime rate in the U.S. or LIBOR plus a margin based on the Company’sour senior unsecured debt rating. The Company pays a facility fee based on the total amount of the commitments.

The Credit Facility requires the Company to maintain a maximumour Consolidated Total Leverage Ratio to be less than 4.5x (which we may elect to increase to 5.0x for up to four consecutive



Management’s Discussion and Analysis of
Results of 4.5xOperations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


quarters following a qualified acquisition) at the end of each quarter, as further described in the Credit Facility. Atto be applied retrospectively from December 31, 2016, the Company’s2019. The Consolidated Leverage Ratio was approximately 2.9x.

The ConsolidatedTotal Leverage Ratio reflects the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations,our Consolidated Indebtedness at the end of a quarter, to the Company’sour Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing four consecutive quarters.  Consolidated EBITDA is defined in the Credit Facilitytwelve-month period. We met this covenant as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. Atof December 31, 2016, 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.2019.


Liquidity and Capital Resources
The Company continually projectsWe project anticipated cash requirements for itsour operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. The Company’sOur operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, operating leases, interest payments, income taxes payments and pension funding obligations. The Company’sOur investing and financing spending includes capital expenditures, investments and acquisitions, share repurchases, dividends and principal payments on itsour outstanding indebtedness. The Company believes

We believe that itsour operating cash flows, cash and cash equivalents, borrowing capacity under itsthe $3.50 billion Credit Facility, which had $2.49 billion of remaining availability at December 31, 2016, and access to capital markets are sufficient to fund itsour operating, investing and financing requirements for the next twelve months.
 
The Company’sOur 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 us, the Company, the existing Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. The CompanyWe routinely assesses itsassess our capital structure and opportunistically entersenter into transactions to lower itsour interest expense, which could result in a charge from the early extinguishment of debt.


Funding for the Company’sour long-term debt obligations due over the next five years of $2.10$5.90 billion is expected to come from the Company’sour ability to refinance itsour debt and cash generated from operating activities.


Our access to capital markets can be impacted by factors outside our control, including economic conditions; however, we believe that our strong cash flows and balance sheet, our credit facility and our credit rating will provide us with adequate access to funding for our expected cash needs. The cost of any new borrowings are affected by market conditions and short and long-term debt ratings assigned by independent rating agencies, and there can be no assurance that we will be able to access capital markets on terms and conditions that will be favorable to us.

At December 31, 2016, the Company2019, we had $4.11$2.41 billion of remaining availability under itsour share repurchase program. Share repurchases under the program are expected to be funded by cash flows from operations and, as appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt.








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




Contractual Obligations
As of December 31, 20162019, payments due by period under the Company’sour significant contractual obligations excluding obligations of discontinued operations, with remaining terms in excess of one year were as follows:
Payments Due by PeriodPayments Due by Period
        2022 and






 and2025 and
Total 2017 2018-2019 2020-2021 thereafterTotal
2020
2021-2022
2023-2024
Thereafter
Off-Balance Sheet Arrangements













Programming and talent commitments (a)
$11,078
 $1,987
 $3,794
 $3,000
 $2,297
$10,355

$3,003

$5,350

$1,159

$843
Purchase obligations (b)
835
 222
 379
 176
 58
1,517

609

744

82

82















On-Balance Sheet Arrangements













Operating leases (c)
763
 134
 211
 142
 276
2,709

371

648

456

1,234
Long-term debt obligations (d)
8,940
 400
 900
 800
 6,840
18,486

—

2,345

3,557

12,584
Interest commitments on long-term debt (e)
5,112
 396
 756
 668
 3,292
13,046

868

1,627

1,418

9,133
Capital lease obligations (including interest) (f)
83
 19
 33
 26
 5
Finance leases (including interest) (f)
47

21

23

2

1
Other long-term contractual obligations (g)
1,373
 —
 1,028
 282
 63
2,076

—

1,479

412

185
Total$28,184
 $3,158
 $7,101
 $5,094
 $12,831
$48,236

$4,872

$12,216

$7,086

$24,062
(a) ProgrammingOur programming and talent commitments of the Company primarily include $8.06$5.39 billion for sports programming rights, $2.26$3.80 billion relating to the production and licensing of television and film programming, and $758 million$1.17 billion for talent contracts.
(b) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including open purchase orders.
(c) Consists of long-term noncancellable operating lease commitments for office space, equipment, satellite transponders and studio facilities.
(d) Long-term debt obligations are presented at face value, excluding capitalfinance leases.
(e) Future interest based on scheduled debt maturities, excluding capital leases.maturities. Interest payments on junior subordinated debentures subsequent to the expiration of their fixed-rate periods have been included based on their current fixed rates.
(f) Includes capital leasesfinance lease obligations for satellite transponders.transponders and equipment.
(g) Reflects long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet, including program liabilities,liabilities; participations due to producersproducers; residuals; and residuals.a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the remaining tax on our historical accumulated foreign earnings and profits, which is payable to the IRS in 2024 and 2025.
 
The table above excludes $102 million ofdoes not include payments relating to reserves for uncertain tax positions of $384 million, and the related accrued interest and penalties, asinterest under our credit facility and for commercial paper borrowings, redeemable noncontrolling interest of $254 million, our guarantee liability of $124 million relating to the Company cannot reasonably predict thesale of CBS Television City; lease indemnification obligations of $86 million or potential future contributions to our qualified defined benefit pension plans. The amount of and timing of cash payments relatingwith respect to this obligation.these items are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments.


In January 2017, the Company made discretionary contributions of $100 million to pre-fund its qualified pension plans. In 2017, the Company expects2020, we expect to make contributions of approximately $54$70 million to itsour non-qualified pension plans to satisfy the benefit payments due under these plans. Also in 2017, the Company expects2020, we expect to contribute approximately $50$43 million to itsour other postretirement benefit plans to satisfy the Company’sour portion of benefit payments due under these plans.


Guarantees
The Company hasLetters of Credit and Surety Bonds. We have 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 December 31, 2016,2019, the outstanding letters of credit and surety bonds approximated $103$136 million and were not recorded on the Consolidated Balance Sheet.




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


CBS Television City. During 2019, we completed the sale of CBS Television City. We have guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included on the Consolidated Balance Sheet at December 31, 2019 is a liability of $124 million, reflecting the present value of the estimated amount payable under the guarantee obligation.
Lease Guarantees. As noted above, we have indemnification obligations of $86 million with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc.

Film Financing Arrangements. From time to time we enter into film or television programming (collectively referred to as “film”) financing arrangements that involve the sale of a partial copyright interest in a film to third-party investors. Since the investors typically have the risks and rewards of ownership proportionate to their ownership in the film, we generally record the amounts received for the sale of copyright interest as a reduction of the cost of the film and related cash flows are reflected in net cash flow from operating activities. We also enter into collaborative arrangements with other studios to jointly finance and distribute films (“co-financing arrangements”), under which each partner is responsible for distribution of the film in specific territories or distribution windows. The partners’ share in the profits and losses of the films under these arrangements are included within participations expense.

In the course of itsour business, the Companywe both providesprovide and receivesreceive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Companywe 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 recordsWe record a liability for its indemnification obligations and other contingent liabilities when probable and reasonably estimable.



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


Critical Accounting Policies
The preparation of the Company’sour financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates itswe evaluate these estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions.


The Company considersWe consider the following accounting policies to be the most critical as they are important to the Company’sour financial condition and results of operations, and require significant judgment and estimates on the part of management in itstheir application. The risks and uncertainties involved in applying our critical accounting policies are provided below. Unless otherwise noted, we applied our critical accounting policies and estimation methods consistently in all material respects and for all periods presented, and have discussed such policies with our Audit Committee. For a summary of the Company’sour significant accounting policies, see the accompanying notes to the consolidated financial statements.


ProgrammingRevenue Recognition
Revenue is recognized when control of a good or service is transferred to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Significant judgments used in the determination of the amount and timing of revenue recognition include the identification of distinct performance obligations in contracts containing bundled advertising sales and content licenses, and the allocation of consideration among individual performance obligations within these arrangements based on their relative standalone selling prices.




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


Advertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or displayed on digital platforms. If a contract includes 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 to be satisfied over time and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. To the extent the amounts billed exceed the amount of revenue recognized, such excess is deferred until the guaranteed audience ratings or impressions are delivered. For contracts that do not include impressions guarantees, the individual advertising spots are the performance obligation and consideration is allocated among the individual advertising spots based on relative standalone selling price.

Content Licensing Revenues—For licenses of exhibition rights for internally-produced programming, each individual episode or film delivered represents a separate performance obligation and revenues are recognized when the episode or film is made available to the licensee for exhibition and the license period has begun. For license agreements that include delivery of content on one or more dates for a fixed fee, consideration is allocated based on the relative standalone selling price of each episode or film, which is based on licenses for comparable content within the marketplace. Estimation of standalone selling prices requires judgment, which can impact the timing of recognizing revenues.

Affiliate Revenues—The performance obligation for our affiliate agreements is a license to our programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs and subscribers to our digital streaming services, also includes a license to programming for video on demand viewing. Affiliate revenues are recognized over the term of the agreement as we satisfy our performance obligation by continuously providing our customer with the right to use our 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 toour customer’s service. For agreements that provide for a fixed fee, revenues are recognized based on the relative fair value of the content provided over the term of the agreement. These agreements primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”) for which fair value is determined based on the fair value of the network affiliate’s service and the value of our programming.

Film and Television Production Costs
Accounting forCosts incurred to produce television programs and feature films are capitalized and amortized over the Company’sprojected life of each television production costs requires management’s judgment as it relatesprogram or feature film based on the ratio of current period revenues to estimated remaining total estimated revenues to be earned (“Ultimate Revenues”). Management’s judgment is required in estimating Ultimate Revenues and the costs to be incurred throughout the life of each television program.program or feature film. These estimates are used to determine the amortization of capitalized production costs, expensing of participation costs, and any necessary net realizable value adjustmentsimpairments to capitalized production costs.

For television programming, our estimates of Ultimate Revenue are initially limited to the amount of revenue contracted for each episode in the initial market and estimates of revenue from a secondary market where we can demonstrate a history of earning such revenue in that market. Estimates for additional secondary market revenues such as domestic and foreign syndication and home entertainment are included in the estimates of Ultimate Revenues once it can be demonstrated that a program can be successfully licensed in such secondary market. For each television program, management bases these estimates on the performance in the initial markets, the existence of future firm commitments to sell and the past performance of similar television programs.


For feature films, our estimate of Ultimate Revenues includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial theatrical release. For acquired film libraries, our estimate of Ultimate Revenues is for a period within 20 years from the date of acquisition. Prior to the release of feature films, we estimate Ultimate Revenues based on the historical performance of similar content and pre-release market research



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


(including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. For films intended for theatrical release, we believe the performance during the theatrical exhibition is the most sensitive factor affecting our estimate of Ultimate Revenues as subsequent markets have historically exhibited a high correlation to theatrical performance. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future performance. Our estimates of revenues from succeeding windows and markets are revised based on historical relationships to theatrical performance and an analysis of current market trends. We also review and revise estimates of Ultimate Revenue and participation costs as of each reporting date to reflect the most current available information. After their theatrical release the most sensitive factor affecting our estimates for feature films is the extent of home entertainment sales. In addition to theatrical performance, home entertainment sales vary based on a variety of factors including demand for our titles, the volume and quality of competing products, marketing and promotional strategies, as well as economic conditions.

Estimates of Ultimate Revenues for internally-produced television programming are updated regularly based on information available as the television program progresses through its life cycle. If Ultimate Revenue estimates are revised, the difference between amortization expense determined using the new estimate and any amounts previously expensed during that year are reflected in our Consolidated Statement of Operations in the quarter in which the estimates are revised. Overestimating Ultimate Revenues for internally-produced programming could result in the understatement of the amortization of capitalized production costs and future net realizable value adjustments, as well as the misstatement of accruals for participation expense.

Acquired Program Rights
The costs incurred in acquiring television series and feature film programming rights, including advances, are capitalized when the program is accepted and available for airing andat the commencement of the license period. The costs of programming rights licensed under multi-year sports programming agreements are capitalized if the rights payments are made before the related economic benefit has been received. These costs are expensed over the shorter of the license period or the period in which an economic benefit is expected to be derived. The economic benefit is determined based on management’s estimates of revenues to be derived from the programming.programming, the expected number of future airings, which may differ from the contracted number of airings, and the length of the license period. If initial airings are expected to generate higher revenues an accelerated method of amortization is used. Management’s judgment is required in determining the value of the future economic benefit and the timing of the expensing of these costs.


Ultimate revenue estimates for internally produced television programming, and theThe estimated economic benefit for acquired programming, which includes television series, feature filmsincluding revenue projections for multi-year sports programming, are periodically reviewed and sports, are updated regularly based on information available asthroughout the television program or film progresses through its life cycle or contractual term. Overestimating Ultimate Revenues for internally produced programming or aA failure to adjust for a downward revision in the estimated economic benefit to be generated from acquired programming could result in the understatement of the amortization of capitalized production or programming costs or future net realizable value adjustments and/adjustments.

The net realizable value of acquired programming is regularly evaluated either by title or estimated accruals for participation expense.on a daypart basis, which is defined as an aggregation of programs broadcast during a particular time of day or an aggregation of programs of a similar type based on the specific demographic targeted by each respective program or program service. Net realizable value is determined by estimating advertising revenues to be derived from the future airing of the programming within the daypart and allocating affiliate revenues to the programming, each as applicable. An impairment charge may be necessary if our estimates of future cash flows are below the carrying value of the programming or if programming is abandoned.


Impairment



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


Goodwill and Intangible Assets Impairment Test
The Company performs aWe perform fair value-based impairment testtests of goodwill and intangible assets with indefinite lives, comprised primarily of television FCC licenses annually duringin the fourth quarterU.S. and broadcast licenses in Australia, on an annual basis and also between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value. Goodwill is tested for impairment at the reporting unit level. The Company’s reporting units are one level below its operating segments, except for the Publishing reporting unit, which is the same as its operating segment because this operating segment has only one component.

Television FCC Licenses and International Broadcast Licenses—FCC licenses are tested for impairment at the geographic market level. The Company considersWe consider each geographic market, which is comprised of



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


all of the Company’s radio orour television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use. At December 31, 2016 the Company2019, we had 11 reporting units and14 television markets with FCC license book values for stationsvalues. For broadcast licenses in 14 television marketsAustralia, we consider all of our broadcast licenses within the country to be a single unit of accounting because this represents their highest and 25 radio markets.best use.


In preparation for the planned separation of its radio business, the Company changed the manner in which it manages its television and radio operations during the third quarter of 2016. Accordingly, the Company’s previously reported operating segment, Local Broadcasting, which had been comprised of two reporting units, was separated into two operating segments, Local Media and Radio, each with three reporting units. The Company allocated goodwill to each of the new reporting units based on their relative fair values. Beginning in the fourth quarter of 2016, the former Radio operating segment has been presented as a discontinued operation. See Note 4 for discussion of impairment tests for the three reporting units and FCC licenses under the former Radio operating segment.

Television FCC Licenses—For itsour annual impairment test, the Company performswe perform qualitative assessments for each U.S. television market that management estimateswe estimate has an aggregate fair value of FCC licenses that significantly exceed their respective carrying values. In selecting marketsvalues, and for a qualitative assessmentour Australian broadcast licenses when we estimate that the Company also considersaggregate fair value significantly exceeds the carrying value. Additionally, we consider the duration of time since a quantitative test was performed. For the 20162019 annual impairment test, the Companywe performed qualitative assessments for 3all of our U.S. television markets. For each of these markets, the Companymarket, we weighed the relative impact of market-specific and macroeconomic factors. The market-specific factors considered include recent projections by geographic market from both independent and internal sources for advertising revenue and operating costs, as well as market share and capital expenditures. The CompanyWe also considered the macroeconomic impact on discount rates and growth rates.rates, as well as the impact from tax law changes that were enacted since the most recent quantitative tests were performed on these markets. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that it is not more likely than not that the fair values of the FCC licenses in each of these television markets are less than their respective carrying values. Therefore, performing the quantitative impairment test was unnecessary.


For FCC licenses in the remaining television markets, the Company performed aA quantitative impairment test that compares theof broadcast licenses calculates an estimated fair value of the FCC licenses by geographic market with their respective carrying values.  The estimated fair value of each FCC license is computed using the Greenfield Discounted Cash Flow Method, (‘‘Greenfield Method’’), which attempts to isolate the income that is attributable to the license alone. The Greenfield Method is based upon modelingvalues a hypothetical start-up station and building it up to a normalized operation that,in the relevant market by design, lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method adds the present value of the estimated annual cash flows of the start-up station over a projection period to the residual value at the end of the projection period. The annualadding discounted cash flows over a five-year build-up period to a residual value. The assumptions for the projectionbuild-up period include assumptions forindustry projections of overall advertising revenues in the relevant geographic market revenues; the start-up station’s operating costs and capital expenditures, and a three-year build-up period for the start-up station to reach a normalized state of operations, which reflects the point at which it achieves an average market share. The overall market advertising revenue in the subject market is estimated based on recent industry projections. Operating costs and capital expenditures are estimated based on both industry and internal data.data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a perpetual nominal growth rate, which is based on projected long-range inflation in the U.S. and long-term industry projections.

For 2019, we performed a quantitative impairment test for our Australian broadcast licenses. The discount rate is determined based on the average of the weighted average cost of capital of comparable entities in the broadcast industry. The discount rates and perpetual nominal growth rates used for each television station for 2016rate were 8.0%11% and 2.5%0.5%, respectively.

For the 11 television markets for which a quantitative The impairment test was performed in 2016, the Company concludedindicated that the estimated fair values of FCC licenses in each market exceeded their respective carrying values and therefore no impairment charge was necessary. The estimated fair value of one television market, which had a carrying value of FCC licenses of $74 million, exceeded its carrying value by 9%. In each of the remaining television markets, the estimated fair value of FCCthe broadcast licenses was lower than the carrying value, which was the result of a sustained decline in excessthe advertising marketplace in Australia. Accordingly, we recorded an impairment charge during the fourth quarter of 2019 of $20 million, which is included within “Depreciation and amortization” on the respective carrying values by more than 10%. Consolidated Statements of Operations.




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



The estimated fair values of the FCC licenses and Australian broadcast licenses are highly dependent on the assumptions of future economic conditions in the individual geographic markets in which the Company ownswe own and operatesoperate television stations. Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, or a decline in the local television advertising marketplace in the U.S. or further decline in the advertising marketplace in Australia could result in a downward revision to the Company’sour current assumptions and judgments. Various factors may contribute to a future decline in any local televisionan advertising marketplace including declines in economic conditions;



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


an other-than-temporary decrease in spending by advertisers in certain industries that have historically represented a significant portion of the local television advertising revenues;revenues in that market; a shift by advertisers to competing advertising platforms; changes in consumer behavior; and/or a change in population size. A downward revision to the present value of future cash flows could result in impairment and a noncash charge would be required.  Such a charge could have a material effect on the Company’s Consolidated Statement of Operations and Consolidated Balance Sheet.


Goodwill—Goodwill—Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below. At December 31, 2019, we had six reporting units with goodwill balances, which were determined based on the post-Merger reporting structure. For itsthe 2019 annual impairment test, the Company performsreporting units tested were those in place prior to the Merger, which closed after the testing dates. We tested two reporting units for impairment as of August 31 and eight reporting units as of October 31.

For our annual impairment test, we perform a qualitative assessmentsassessment for each reporting unit that management estimates havehas a fair valuesvalue that significantly exceed theirexceeds its respective carrying values.value. For the 20162019 annual impairment test, the Companywe performed qualitative assessments for sevenall of our reporting units. For each of these reporting units, the Companyunit, we weighed the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. The reporting unit specific factors that were considered included financial performance and changes to the reporting units’ carrying amounts since the most recent impairment tests. For each industry in which the reporting units operate, the Companywe considered growth projections from independent sources and significant developments or transactions within the industry. The CompanyWe also determined that the impact of macroeconomic factors on the discount rates and growth rates used for the most recent impairment tests would not significantly affect the fair value of the reporting units, and that the lower tax rate from tax law changes enacted since the most recent quantitative tests would positively impact the fair value of the reporting units. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that for these seven reporting units, it is not more likely than not that the fair value of each reporting unit is less than its respective carrying amount and therefore performing the quantitative impairment testtests was unnecessary.


For 2016,As of the Companyclosing date of the Merger on December 4, 2019, we performed qualitative assessments on the pre-Merger reporting units that were to be combined as a result of the new reporting structure, as well as the post-Merger reporting units that resulted from this combination. Based on these assessments, we concluded that there were no changes to the conclusions reached in our annual impairment test.

A quantitative goodwill impairment test, for the CBS Sports Network reporting unit. The first step of the goodwill impairment test examines whether the carryingwhen performed, requires estimating fair value of a reporting unit exceeds its fair value. The estimated fair value of each reporting unit is computed based uponon a discounted cash flow analysis. A discounted cash flow analysis requires us to make various judgmental assumptions, including assumptions about the present valuetiming and amount of future cash flows, (“Discounted Cash Flow Method”) and the traded or transaction values of comparable businesses (“Market Comparable Method”). The Discounted Cash Flow Method and Market Comparable Method resulted in similar estimated fair values. The Discounted Cash Flow Method adds the present value of the estimated annual cash flows over a discrete projection period to the residual value of the business at the end of the projection period. This technique requires the use of significant estimates and assumptions such as growth rates operating margins, capital expenditures and discount rates. The estimated growth rates, operating margins and capital expenditures for the projection period are based on the Company’s internal forecasts of future performance as well as historical trends.  The residual value is estimated based on a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections and for 2016 was 2.0%. The discount rate was determined based on the average of the weighted average cost of capital of comparable entities and for 2016 was 9.0%.

For the 2016 annual impairment test the Company concluded that the estimated fair value of the CBS Sports Network reporting unit exceeded its carrying value and therefore the second step of the impairment test was unnecessary. The estimated fair value of the CBS Sports Network reporting unit exceeded its carrying value by more than 10%.




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



Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in the advertising market, a decrease in audience acceptance of programming, a shift by advertisers to competing advertising platforms; and/or changes in consumer behavior could result in changes to the Company’sour assumptions and judgments used in itsthe goodwill impairment tests. A downward revision of these assumptions could cause the fair values of the reporting units to fall below their respective carrying values and a noncash impairment charge would be required. Such a charge could have a material effect on the Company’s Consolidated Statement of Operations and Consolidated Balance Sheet.
 
Reserves and Legal Matters
Estimates of reserves and liabilities related to legal issues and discontinued businesses, including asbestos and environmental matters, require significant judgments by management.  The CompanyWe continually evaluatesevaluate these estimates based on changes in the relevant facts and circumstances and events that may impact estimates.  It is difficult to predict future asbestos



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


liabilities as events and circumstances may impact the estimate of our liabilities. While management believeswe believe that the current reservesour liabilities for matters related to our predecessor operations, of the Company, including environmental and asbestos, are adequate to cover our liabilities, there can be no assurance that circumstances will not change in future periods. This beliefOur liability estimate 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.claims, as well as consultation with a third party firm on trends that may impact our future asbestos liability.
 
Pensions
Pension benefit obligations and net periodic pension costs are calculated using many actuarial assumptions. Two key assumptions used in accounting for pension liabilities and expenses are the discount rate and expected rate of return on plan assets. The discount rate is determined based on the yield on a portfolio of high quality bonds, constructed to provide cash flows necessary to meet the Company’sour pension plans’ expected future benefit payments, as determined for the projected benefit obligation. The expected return on plan assets assumption is derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets. As of December 31, 2016,2019, the unrecognized actuarial losses included in accumulated other comprehensive income decreasedincreased from the prior year endyear-end due primarily to a lump-sum distribution offered to plan participants which accelerated recognition of unamortized lossesdecrease in the plan, as well asdiscount rate, partially offset by the favorable performance of pension plan assets. These events were offset by a decrease in the discount rate. A decrease in the discount rate would increase the projected benefit obligation. A 25 basis point change in the discount rate willwould result in an estimated change to the projected benefit obligation of approximately $113$137 million and would not have a material impact on 20172020 pension expense. A decrease in the expected rate of return on plan assets would increase pension expense. The estimated impact of a 25 basis point change in the expected rate of return on plan assets is a change of approximately $8 million to 20172020 pension expense.
 
Income Taxes
The Company isWe are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes.taxes and evaluating our income tax positions.  When recording thean interim worldwide provision for income taxes, an estimated effective tax rate for the year is applied to interim operating results.  In the event there is a significant or unusual item recognized in the quarterly operating results, the tax attributable to that item is separately calculated and recorded in the same quarter. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. We evaluate the realizability of deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.
A number of years may elapse before a tax return containing tax matters for which a reserve has been established is audited and finally resolved. For positions taken in a previously filed tax return or expected to be taken in a future tax return, the Company evaluateswe evaluate each position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize in the Consolidated Statement of Operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold



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


a tax reserve is established and no benefit is recognized. The Company is continuallyWe evaluate our uncertain tax positions quarterly based on many factors, including, changes in tax laws and interpretations, information received from tax authorities, and other changes in facts and circumstances. Our income tax returns are routinely audited by U.S. federal and state as well as foreign tax authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believeswe believe that itsthe reserve for uncertain tax positions of $102$384 million at December 31, 20162019 is properly recorded pursuant to the recognition and measurement provisions of FASB guidance for uncertainty in income taxes.




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


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

Litigation Relating to the Merger.  On September 27, 2019, Bucks County Employees Retirement Fund (the “Bucks County Fund”), a purported holder of CBS Class B Common Stock, served us with a demand for inspection of books and records pursuant to 8 Del. C. § 220 in connection with the Merger (the “Demand”). On October 10, 2019, we offered to produce certain categories of documents properly within the scope of a books and records demand under § 220. The Bucks County Fund rejected our offer and filed litigation in the Court of Chancery of the State of Delaware on October 15, 2019, seeking to compel production of all documents requested in the Demand (the “Section 220 Complaint”). A trial on the Section 220 Complaint took place on November 22, 2019, and the Court ordered limited additional production on November 25, 2019. On December 2, 2019, we certified that we had completed production of all relevant documents. On February 20, 2020, the Bucks County Fund filed a putative derivative and class action complaint in the Court of Chancery of the State of Delaware against Shari Redstone, NAI, Sumner M. Redstone National Amusements Trust (“SMR Trust”), the CBS board of directors (comprised of Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Robert N. Klieger, Martha L. Minow, Susan Schuman, Frederick O. Terrell and Strauss Zelnick), former CBS President and Acting Chief Executive Officer Joseph Ianniello and ViacomCBS Inc. The complaint alleges breaches of fiduciary duties to CBS stockholders and waste in connection with the negotiation and approval of the Merger Agreement. The complaint seeks unspecified damages, costs and expenses as well as other relief. We believe that the claims are without merit and we intend to defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

On January 23, 2020, the Court of Chancery of the State of Delaware consolidated four putative class action suits filed by purported Viacom stockholders against NAI, NAI Entertainment Holdings LLC, Shari E. Redstone, the members of the Viacom special transaction committee of the Viacom board of directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish, in In re Viacom Inc. Stockholders Litigation. The four actions allege breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement, and seek unspecified damages, costs and expenses. On February 6, 2020, the Court appointed the California Public Employees’ Retirement System as the lead plaintiff in the consolidated action. We believe that the claims are without merit and we intend to defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

Investigation-Related Matters. As announced on August 1, 2018, the CBS Board of Directors (the “CBS Board”) retained two law firms to conduct a full investigation of the allegations in press reports about CBS’ former Chairman of the Board, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board announced the completion of its investigation, certain findings of the investigation and the CBS Board’s determination, discussed below, with respect to the termination of Mr. Moonves’ employment. We have 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 and the United States Securities and Exchange Commission have also requested information about these matters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other entities in the future. We are cooperating with these inquiries.



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


On August 27, 2018 and on October 1, 2018, each of Gene Samit and John Lantz, respectively, filed putative class action suits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below. On November 6, 2018, the Court entered an order consolidating the two actions. On November 30, 2018, the Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action. On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against CBS, certain current and former senior executives and members of the CBS Board. The consolidated action is stated to be on behalf of purchasers of CBS Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We believe that the remaining claims are without merit and we intend to defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

Separation Agreement. On September 9, 2018, CBS entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Board, President and Chief Executive Officer of CBS. In October 2018, we contributed $120 million to a grantor trust pursuant to the Separation Agreement betweenAgreement. On December 17, 2018, the CompanyCBS Board announced that, following its consideration of the findings of the investigation referred to above, it had determined that there were grounds to terminate Mr. Moonves’ employment for cause under his employment agreement with CBS. Any dispute related to the CBS Board’s determination is subject to binding arbitration as set forth in the Separation Agreement. On January 16, 2019, Mr. Moonves commenced a binding arbitration proceeding with respect to this matter and Viacom Inc., the Companyrelated CBS Board investigation, which proceeding is ongoing. The assets of the grantor trust will remain in the trust until a final determination in the arbitration. We are currently unable to determine the outcome of the arbitration and Viacom Inc. have agreed to defendthe amount, if any, that may be awarded thereunder and, indemnify the otheraccordingly, no accrual for this matter has been made in certain litigation in which the Company and/or Viacom Inc. is named.our consolidated financial statements.


Claims Related to Former Businesses: Asbestos. The Company isWe are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred principally 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 isWe are 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’sour products is the basis of a claim. Claims against the Companyus in which a product has been identified principallymost commonly relate to exposures allegedly caused byallegations of exposure to asbestos-containing insulating material used in conjunction with turbines sold for power-generation, industrial and marine use.electrical equipment.


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 doesWe do not report as pending those claims on inactive, stayed, deferred or similar dockets whichthat some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2016, the Company2019, we had pending approximately 33,61030,950 asbestos claims, as compared with approximately 36,03031,570 as of December 31, 20152018 and 41,10031,660 as of December 31, 2014.2017. During 2016, the Company2019, we received approximately 4,1603,460 new claims and closed or moved to an inactive docket approximately 6,5804,080 claims. The Company reportsWe report claims as closed when it becomeswe become aware that a dismissal order has been entered by a court or when the Company haswe have 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



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


factors. In 2016,Our total costs for the Company’s costsyears 2019 and 2018 for settlement and defense of asbestos claims after insurance recoveries and taxesnet of tax were approximately $48 million. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement$58 million and defense of asbestos claims by approximately $5 million. The Company’s$45 million, respectively. Our 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 Companyus are non-cancer claims. The Company believesIt is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that its reservesa liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are adequate to cover itsour asbestos liabilities. This beliefOur liability estimate 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



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


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 predictas well as consultation with a third party firm on trends that may impact our 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.liability.


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


Market Risk
The Company isWe are exposed to fluctuations in foreign currency exchange rates and interest rates and usesuse derivative financial instruments to modifymanage this exposure. In accordance with itsour policy, the Company doeswe do not use derivative instruments unless there is an underlying exposure and, therefore, the Company doeswe do not hold or enter into derivative financial instruments for speculative trading purposes.


Foreign Exchange Risk
The Company conductsWe conduct business in various countries outside the U.S., resulting in exposure to movements in foreign exchange rates when translating from the foreign local currency to the U.S. dollar. In order to hedge anticipated cash flows in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, foreign currency forward contracts, for periods generally up to 24 months, are used. Additionally, the Company designateswe designate forward contracts used to hedge committed and forecasted foreign currency transactions, including future production costs and programming obligations, as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income (loss) and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enterswe enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows. The change in fair value of the non-designated contracts is included in “Other items, net” in the Consolidated Statements of Operations. The Company managesWe manage the use of foreign exchange derivatives centrally.


At December 31, 20162019 and 2015,2018, the notional amount of all foreign currency contracts was $433$1.44 billion and $995 million, respectively. For 2019, $833 million related to future production costs and $291$606 million respectively, which represents hedges ofrelated to our foreign currency balances and other expected foreign currency cash flows. For 2018, $481 million related to future production costs and $514 million related to our foreign currency balances and other expected foreign currency cash flows.





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


Interest Risk
All ofInterest on commercial paper borrowings is exposed to risk related to movements in short-term interest rates. A 100 basis point change to the Company’sweighted average interest rate on commercial paper borrowings in 2019 would increase or decrease interest expense by approximately $7 million. In addition, interest rates on future long-term debt has been issued under fixedissuances are exposed to risk related to movements in long-term interest rates. Interest rate hedges may be used to modify both of these exposures at our discretion. There were no interest rate agreements. During 2014,hedges outstanding at December 31, 2019 or 2018 but in connection with the issuance of its $600 million of 2.30% senior notes duefuture we may use derivatives to manage our exposure to interest rates.

At December 31, 2019, the Company entered into $600 million notional amount of fixed-to-floating rate swap agreements to hedge this debt. During 2015, prior to maturity, the Company settled these interest rate swaps and received $12 million in cash, plus accrued interest. The resulting increase in the carrying value of our outstanding notes and debentures was $17.98 billion and the previously hedged debt is being amortized as a reduction toestimated fair value was $20.6 billion. A 1% increase or decrease in interest expense overrates would decrease or increase the remaining termfair value of the debt. The Company did not have any interest rate swaps outstanding at December 31, 2016 or December 31, 2015 but in the future may use derivatives to modify its exposure to interest rates.our notes and debentures by approximately $1.22 billion and $2.68 billion, respectively.




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



Credit Risk
The CompanyWe continually monitors itsmonitor our positions with, and credit quality of, the financial institutions that are counterparties to itsour financial instruments. The Company isWe are exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company doeswe do not anticipate nonperformance by the counterparties.


The Company’sOur receivables do not represent significant concentrations of credit risk at December 31, 20162019 or 2015,2018, due to the wide variety of customers, markets and geographic areas to which the Company’sour products and services are sold.


Related Parties
For a discussion of related parties, see Note 76 to the consolidated financial statements.


RecentRecently Adopted Accounting Pronouncements and Adoption of New Accounting StandardsPronouncements Not Yet Adopted
See Note 1 to the consolidated financial statements.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk.

Information required by this item is presented in “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Market Risk.”



Item 8.Financial Statements and Supplementary Data.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
The following Consolidated Financial Statements and schedule of the registrant and its subsidiaries are submitted herewith as part of this report:
    
Reference
(Page/s)
Page
Item 15(a)(1) Financial Statements:  
1. 
Management’s Report on Internal Control Over Financial Reporting
 
II-4348
2. 
Report of Independent Registered Public Accounting Firm
 
II-4449
3. 
Consolidated Statements of Operations for the years ended
December 31, 2016, 20152019, 2018 and 20142017
 
II-4553
4. 
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2016, 20152019, 2018 and 20142017
 
II-4654
5. 
Consolidated Balance Sheets at December 31, 20162019 and 20152018
 
II-4755
6. 
Consolidated Statements of Cash Flows for the years ended
December 31, 2016, 20152019, 2018 and 20142017
 
II-4856
7. 
Consolidated Statements of Stockholders’ Stockholders’ Equity for the years ended
December 31, 2016, 20152019, 2018 and 20142017
 
II-4957
8. 
Notes to Consolidated Financial Statements
 
II-5058
Item 15(a)(2) Financial Statement Schedule:  
  
II. Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017
 
F-1
All other Schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule.



MANAGEMENT’ S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the effectiveness of internal control over financial reporting, as such term is defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act. OurViacomCBS Inc. and its subsidiaries’ (the “Company”) internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 20162019 based on the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2016.2019.
The effectiveness of our internal control over financial reporting as of December 31, 20162019 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
  CBS CORPORATIONVIACOMCBS INC.
    
  By:/s/ Leslie MoonvesRobert M. Bakish
   
Leslie MoonvesRobert M. Bakish
Chairman of the Board, President and
Chief Executive Officer
    
  By:/s/ Joseph R. IannielloChristina Spade
   
Joseph R. IannielloChristina Spade
Executive Vice President,
Chief OperatingFinancial Officer
    
�� By:/s/ Lawrence LidingKatherine Gill-Charest
   
Lawrence LidingKatherine Gill-Charest
Executive Vice President, Controller and
Chief Accounting Officer



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of CBS Corporation:ViacomCBS Inc.
In our opinion,Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of ViacomCBS Inc. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, of comprehensive income, cash flows, andof stockholders’ equity present fairly, in all material respects, the financial positionand of CBS Corporation and its subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 20162019, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,2019, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations ofCOSO.
Changes in Accounting Principles
As discussed in Note 1 to the Treadway Commission (COSO). consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenues from contracts with customers in 2018.
Basis for Opinions
The Company’sCompany's management is responsible for these consolidated financial statements, and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on thesethe Company’s consolidated financial statements on the financial statement schedule, and on the Company’sCompany's internal control over financial reporting based on our integrated audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the consolidated financial statement presentation.statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.


Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Merger with Viacom Inc.

As described in Note 1 to the consolidated financial statements, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”) on December 4, 2019 (the “Merger”), with CBS continuing as the surviving company. At the effective time of the Merger, the combined company changed its name to ViacomCBS Inc. The Merger has been accounted for as a transaction between entities under common control as National Amusements, Inc. was the controlling stockholder of each of CBS and Viacom. Upon the closing of the Merger, the net assets of Viacom were combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented in the consolidated financial statements.

The principal considerations for our determination that the Merger is a critical audit matter are significant audit effort was necessary to perform procedures and evaluate the audit evidence obtained relating to management’s accounting for the Merger due to the pervasive nature of the Merger on the composition of the Company’s consolidated financial statements and disclosures to include the entirety of the legacy Viacom businesses.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls over the accounting for the Merger, including the combination and presentation of the historical carrying amounts in the consolidated financial statements. The procedures also included evaluating management’s assessment of the accounting associated with the transaction between entities under common control and the completeness and accuracy of the consolidated financial statements, including the presentation of Viacom’s financial information given the change in Viacom’s fiscal year-end, and the retrospective combination of Viacom and CBS. Procedures were also performed to evaluate the sufficiency of the disclosures in the consolidated financial statements of the Company.


Amortization of Internally Produced Television Programming Inventory Based on Estimated Secondary Market Revenues

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s internally produced television programming inventory was $6.3 billion as of December 31, 2019, a portion of which relates to costs that will be amortized based on estimated secondary market revenues. Television programming costs incurred subsequent to the establishment of the secondary market are initially capitalized and amortized, based on the proportion that current period revenues bear to the estimated remaining total lifetime revenues. Estimates for secondary market revenues such as domestic and foreign syndication are included in the estimated lifetime revenues once it can be demonstrated that a program can be successfully licensed in such secondary market. Management bases these estimates on the performance in the initial markets, the existence of future firm commitments to sell and the past performance of similar television programs.

The principal considerations for our determination that performing procedures relating to amortization of internally produced television programming inventory based on estimated secondary market revenues is a critical audit matter are there was significant judgment required by management when estimating secondary market revenues. This led to a high degree of auditor judgment, effort and subjectivity in performing procedures to evaluate management’s estimate of secondary market revenues and the significant assumptions, including consideration of the performance in the initial markets and past performance of similar television programs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to amortization of internally produced television programming inventory, including the control over the estimation of secondary market revenues. These procedures also included, among others, testing management’s process for estimating secondary market revenues, including evaluating whether the significant assumptions were reasonable considering information such as the historical performance in the initial markets and past performance of television programs. Procedures were also performed to test the reliability, completeness and relevance of management's data used in the estimate of ultimate revenues.

Amortization of Film Inventory

As described in Notes 1 and 3 to the consolidated financial statements, film inventory was approximately $1.6 billion as of December 31, 2019. Management uses an individual-film-forecast-computation method to amortize capitalized production costs based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. The estimate of Ultimate Revenues for feature films includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial theatrical release. Prior to the release of feature films, management estimates Ultimate Revenues based on the historical performance of similar content and pre-release market research (including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. Upon a film’s initial release, management updates their estimate of Ultimate Revenues based on actual and expected future performance. As disclosed by management, management believes the most sensitive factor affecting the estimate of Ultimate Revenues for films intended for theatrical release is theatrical exhibition, as revenues from subsequent markets have historically exhibited a high correlation to theatrical performance.

The principal considerations for our determination that performing procedures relating to amortization of film inventory is a critical audit matter are there was significant judgment by management when estimating ultimate revenues. This in turn led to a high degree of auditor judgment, effort and subjectivity in performing procedures to evaluate management’s estimate of ultimate revenues and the significant assumptions, including the historical performance of similar films and theatrical exhibition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of

controls over management’s estimation of ultimate revenues and controls over the significant assumptions used in the ultimate revenues estimate. These procedures also included, among others, testing management’s process for estimating ultimate revenues, including evaluating whether the significant assumptions were reasonable considering information such as historical performance of similar content, market research performed, impact of competing products, marketing budget and strategy, economic conditions, and theatrical exhibition, including actual box office performance. Procedures were also performed to test the reliability, completeness and relevance of management's data used in the estimate of ultimate revenues.






/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
New York, New York
February 17, 201720, 2020


We have served as the Company’s or its predecessor’s auditor since 1970.
CBS CORPORATION

VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Year Ended December 31,Year Ended December 31,
2016 2015 20142019 2018 2017
Revenues$13,166
 $12,671
 $12,519
$27,812
 $27,250
 $26,535
Costs and expenses:          
Operating7,956
 7,911
 7,689
17,223
 15,917
 15,483
Selling, general and administrative2,124
 1,961
 1,971
5,647
 5,206
 5,156
Depreciation and amortization225
 235
 250
443
 433
 443
Pension settlement charge (Note 15)211
 —
 —
Restructuring and merger and acquisition-related costs (Note 5)38
 45
 19
Other operating items, net(9) (139) —
Restructuring and other corporate matters775
 490
 258
Total costs and expenses10,545
 10,013
 9,929
24,088
 22,046
 21,340
Gain on sale of assets549
 —
 146
Operating income2,621
 2,658
 2,590
4,273
 5,204
 5,341
Interest expense(411) (392) (363)(962) (1,030) (1,088)
Interest income32
 24
 13
66
 79
 87
Loss on early extinguishment of debt—
 —
 (352)
Gain (loss) on marketable securities113
 (23) —
Gain (loss) on early extinguishment of debt—
 18
 (38)
Gain on sale of EPIX—
 —
 285
Pension settlement charge—
 —
 (352)
Other items, net(12) (26) (30)(145) (124) (115)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
2,230
 2,264
 1,858
Provision for income taxes(628) (676) (659)
Equity in loss of investee companies, net of tax(50) (34) (48)
Earnings from continuing operations before income taxes
and equity in earnings (loss) of investee companies
3,345
 4,124
 4,120
Benefit (provision) for income taxes9
 (617) (804)
Equity in earnings (loss) of investee companies, net of tax(53) (47) 4
Net earnings from continuing operations1,552
 1,554
 1,151
3,301
 3,460
 3,320
Net earnings (loss) from discontinued operations, net of tax (Note 4)(291) (141) 1,808
Net earnings$1,261
 $1,413
 $2,959
Basic net earnings (loss) per common share:     
Net earnings (loss) from discontinued operations, net of tax38
 32
 (947)
Net earnings (ViacomCBS and noncontrolling interests)3,339
 3,492
 2,373
Net earnings attributable to noncontrolling interests(31) (37) (52)
Net earnings attributable to ViacomCBS$3,308
 $3,455
 $2,321
     
Amounts attributable to ViacomCBS:     
Net earnings from continuing operations$3,270
 $3,423
 $3,268
Net earnings (loss) from discontinued operations, net of tax38
 32
 (947)
Net earnings attributable to ViacomCBS$3,308
 $3,455
 $2,321
     
Basic net earnings (loss) per common share attributable to ViacomCBS:     
Net earnings from continuing operations$3.50
 $3.21
 $2.09
$5.32
 $5.55
 $5.11
Net earnings (loss) from discontinued operations$(.66) $(.29) $3.29
$.06
 $.05
 $(1.48)
Net earnings$2.84
 $2.92
 $5.38
$5.38
 $5.60
 $3.63
          
Diluted net earnings (loss) per common share:     
Diluted net earnings (loss) per common share attributable to ViacomCBS:     
Net earnings from continuing operations$3.46
 $3.18
 $2.05
$5.30
 $5.51
 $5.05
Net earnings (loss) from discontinued operations$(.65) $(.29) $3.22
$.06
 $.05
 $(1.46)
Net earnings$2.81
 $2.89
 $5.27
$5.36
 $5.56
 $3.59
          
Weighted average number of common shares outstanding:          
Basic444
 484
 550
615
 617
 640
Diluted448
 489
 561
617
 621
 647
     
Dividends per common share$.66
 $.60
 $.54
See notes to consolidated financial statements.



CBS CORPORATION
VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
 Year Ended December 31,
 2016 2015 2014
Net earnings$1,261
 $1,413
 $2,959
Other comprehensive income (loss) from continuing operations, net of tax:     
Cumulative translation adjustments(1) (5) (9)
Net actuarial gain (loss) and prior service costs (Note 15)4
 (30) (163)
Unrealized loss on securities—
 —
 (3)
Other comprehensive income (loss) from continuing operations, net of tax3
 (35) (175)
Other comprehensive income from discontinued operations,
before reclassifications
—
 —
 15
Reclassification from accumulated other comprehensive income (loss) from
discontinued operations to net earnings
—
 —
 (30)
Total other comprehensive income (loss), net of tax3
 (35) (190)
Total comprehensive income$1,264
 $1,378
 $2,769
 Year Ended December 31,
 2019 2018 2017
Net earnings (ViacomCBS and noncontrolling interests)$3,339
 $3,492
 $2,373
Other comprehensive income (loss), net of tax:     
Cumulative translation adjustments15
 (254) 192
Net actuarial gain (loss) and prior service costs(145) (61) 73
Available-for-sale securities—
 —
 30
Other comprehensive income (loss), net of tax
(ViacomCBS and noncontrolling interests)
(130) (315) 295
Comprehensive income3,209
 3,177
 2,668
Less: Comprehensive income attributable to noncontrolling interests33
 31
 52
Comprehensive income attributable to ViacomCBS$3,176
 $3,146
 $2,616
See notes to consolidated financial statements.


CBS CORPORATION
VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
  At December 31, 
  2016 2015 
ASSETS     
Current Assets:     
Cash and cash equivalents $598
 $317
 
Receivables, less allowances of $60 (2016) and $59 (2015) 3,314
 3,375
 
Programming and other inventory (Note 6) 1,427
 1,270
 
Prepaid income taxes 30
 101
 
Prepaid expenses 185
 133
 
Other current assets 204
 228
 
Current assets of discontinued operations (Note 4) 305
 323
 
Total current assets 6,063
 5,747
 
Property and equipment 2,935
 2,880
 
Less accumulated depreciation and amortization 1,694
 1,627
 
Net property and equipment (Note 2) 1,241
 1,253
 
Programming and other inventory (Note 6) 2,439
 1,957
 
Goodwill (Note 3) 4,864
 4,789
 
Intangible assets (Note 3) 2,633
 2,639
 
Other assets (Note 1) 2,707
 2,633
 
Assets of discontinued operations (Note 4) 4,291
 4,747
 
Total Assets $24,238
 $23,765
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
     
Current Liabilities:     
Accounts payable $148
 $159
 
Accrued expenses 632
 561
 
Accrued compensation 369
 306
 
Participants’ share and royalties payable 1,024
 1,013
 
Program rights 290
 372
 
Deferred revenues 152
 294
 
Commercial paper (Note 9) 450
 —
 
Current portion of long-term debt (Note 9) 23
 222
 
Other current liabilities 465
 490
 
Current liabilities of discontinued operations (Note 4) 155
 143
 
Total current liabilities 3,708
 3,560
 
Long-term debt (Note 9) 8,902
 8,226
 
Participants’ share and royalties payable 1,322
 1,318
 
Pension and postretirement benefit obligations (Note 15) 1,769
 1,575
 
Deferred income tax liabilities, net (Note 14) 590
 495
 
Other liabilities 1,807
 1,889
 
Liabilities of discontinued operations (Note 4) 2,451
 1,139
 
      
Commitments and contingencies (Note 16) 

 

 
      
Stockholders’ Equity:     
Class A Common Stock, par value $.001 per share; 375 shares authorized;
38 (2016 and 2015) shares issued
 —
 —
 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
829 (2016) and 826 (2015) shares issued
 1
 1
 
Additional paid-in capital 43,913
 44,055
 
Accumulated deficit (19,257) (20,518) 
Accumulated other comprehensive loss (Note 12) (767) (770) 
  23,890
 22,768
 
Less treasury stock, at cost; 455 (2016) and 401 (2015) Class B Shares 20,201
 17,205
 
Total Stockholders’ Equity 3,689
 5,563
 
Total Liabilities and Stockholders’ Equity
 $24,238
 $23,765
 
  At December 31, 
  2019 2018 
ASSETS     
Current Assets:     
Cash and cash equivalents $632
 $856
 
Receivables, net 7,206
 7,199
 
Programming and other inventory 2,876
 2,785
 
Prepaid expenses 401
 372
 
Other current assets 787
 668
 
Total current assets 11,902
 11,880
 
Property and equipment, net 2,085
 2,079
 
Programming and other inventory 8,652
 7,298
 
Goodwill 16,980
 16,526
 
Intangible assets, net 2,993
 2,943
 
Operating lease assets 1,939
 —
 
Deferred income tax assets, net 939
 266
 
Other assets 4,006
 3,449
 
Assets held for sale 23
 56
 
Total Assets $49,519
 $44,497
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
     
Current Liabilities:     
Accounts payable $667
 $502
 
Accrued expenses 1,760
 1,633
 
Participants’ share and royalties payable 1,977
 1,828
 
Accrued programming and production costs 1,500
 1,453
 
Deferred revenues 739
 643
 
Debt 717
 1,013
 
Other current liabilities 1,688
 1,249
 
Total current liabilities 9,048
 8,321
 
Long-term debt 18,002
 18,100
 
Participants’ share and royalties payable 1,546
 1,587
 
Pension and postretirement benefit obligations 2,121
 1,908
 
Deferred income tax liabilities, net 500
 656
 
Operating lease liabilities 1,909
 —
 
Program rights obligations 356
 459
 
Other liabilities 2,494
 2,724
 
Redeemable noncontrolling interest 254
 239
 
      
Commitments and contingencies 


 


 
      
ViacomCBS stockholders’ equity:     
Class A Common Stock, par value $.001 per share; 375 shares authorized;
52 (2019) and 64 (2018) shares issued
 —
 —
 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
1,064 (2019) and 1,283 (2018) shares issued
 1
 1
 
Additional paid-in capital 29,590
 49,907
 
Treasury stock, at cost; 501 (2019) and 734 (2018) Class B Shares (22,908) (43,420) 
Retained earnings 8,494
 5,569
 
Accumulated other comprehensive loss (1,970) (1,608) 
Total ViacomCBS stockholders’ equity 13,207
 10,449
 
Noncontrolling interests
82

54
 
Total Equity 13,289
 10,503
 
Total Liabilities and Equity $49,519
 $44,497
 
See notes to consolidated financial statements.


CBS CORPORATION
VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31, Year Ended December 31,
 2016 2015 2014 2019 2018 2017
Operating Activities:            
Net earnings $1,261
 $1,413
 $2,959
Less: Net earnings (loss) from discontinued operations (291) (141) 1,808
Net earnings (ViacomCBS and noncontrolling interests) $3,339
 $3,492
 $2,373
Less: Net earnings (loss) from discontinued operations, net of tax 38
 32
 (947)
Net earnings from continuing operations 1,552
 1,554
 1,151
 3,301
 3,460
 3,320
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:
            
Depreciation and amortization 225
 235
 250
 443
 433
 443
Deferred tax provision 144
 445
 592
Television programming and feature film cost amortization 12,554
 11,595
 10,911
Deferred tax (benefit) provision (769) 58
 (367)
Stock-based compensation 165
 157
 137
 291
 191
 232
Net gain on disposition and write-down of assets (18) (139) (11)
Net (gain) loss on dispositions and impairment of assets (498) 38
 (377)
(Gain) loss on marketable securities (113) 23
 —
Equity in loss of investee companies, net of tax and distributions 53
 37
 57
 58
 54
 15
Change in assets and liabilities, net of investing and financing activities      
Decrease (increase) in receivables 36
 (376) (599)
Change in assets and liabilities      
Increase in receivables (256) (368) (147)
Increase in inventory and related program and participation liabilities, net (804) (498) (214) (14,215) (12,185) (11,544)
(Increase) decrease in other assets (85) 23
 53
Increase (decrease) in accounts payable and accrued expenses 23
 (220) (152)
Increase (decrease) in accounts payable and other liabilities 297
 (158) (248)
Increase (decrease) in pension and postretirement benefit obligations 205
 (46) (34) 16
 (65) (239)
Increase (decrease) in income taxes 94
 (56) (298)
(Decrease) increase in deferred revenue (137) 66
 (47)
Increase in income taxes 160
 398
 345
Other, net 1
 7
 31
 (39) (11) 1
Net cash flow provided by operating activities from continuing operations 1,454
 1,189
 916
 1,230
 3,463
 2,345
Net cash flow provided by operating activities from discontinued operations 231
 205
 359
 —
 1
 94
Net cash flow provided by operating activities 1,685
 1,394
 1,275
 1,230
 3,464
 2,439
Investing Activities:            
Acquisitions (92) (12) (2)
Investments (171) (161) (128)
Capital expenditures (196) (171) (178) (353) (352) (356)
Investments in and advances to investee companies (81) (98) (98)
Proceeds from sale of investments —
 80
 12
Acquisitions, net of cash acquired (399) (118) (289)
Proceeds from dispositions 20
 383
 4
 756
 39
 892
Other investing activities 15
 (3) (4) 14
 4
 31
Net cash flow (used for) provided by investing activities from continuing operations (334) 179
 (266) (153) (588) 150
Net cash flow used for investing activities from discontinued operations (6) (25) (335) (2) (23) (24)
Net cash flow (used for) provided by investing activities (340) 154
 (601) (155) (611) 126
Financing Activities:            
Proceeds from (repayments of) short-term debt borrowings, net 450
 (616) 141
 25
 (5) 229
Proceeds from issuance of senior notes 684
 1,959
 1,728
 492
 —
 3,157
Repayment of notes and debentures (199) —
 (1,152) (910) (1,102) (4,729)
Proceeds from debt borrowings of CBS Radio (2016) and Outdoor Americas (2014) 1,452
 —
 1,569
Repayment of debt borrowings of CBS Radio (110) —
 —
Proceeds from IPO of Outdoor Americas —
 —
 613
Payment of capital lease obligations (18) (17) (17)
Dividends (288) (300) (292) (595) (599) (616)
Purchase of Company common stock (2,997) (2,813) (3,595) (57) (586) (1,111)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation (58) (96) (146) (56) (67) (103)
Proceeds from exercise of stock options 21
 142
 283
 15
 29
 263
Excess tax benefit from stock-based compensation 17
 88
 243
Other financing activities —
 —
 (18) (130) (201) (99)
Net cash flow used for financing activities (1,046) (1,653) (643) (1,216) (2,531) (3,009)
Net increase (decrease) in cash and cash equivalents 299
 (105) 31
Cash and cash equivalents at beginning of year
(includes $6 (2016 and 2015) and $33 (2014) of discontinued operations cash)
 323
 428
 397
Cash and cash equivalents at end of year
(includes $24 (2016) and $6 (2015 and 2014) of discontinued operations cash)
 $622
 $323
 $428
Effect of exchange rate changes on cash, cash equivalents and restricted cash (1) (25) 58
Net (decrease) increase in cash, cash equivalents and restricted cash (142) 297
 (386)
Cash, cash equivalents and restricted cash at beginning of year
(includes $120 (2019) of restricted cash and $24 (2017) of discontinued
operations cash)
 976
 679
 1,065
Cash, cash equivalents and restricted cash at end of year
(includes $202 (2019) and $120 (2018) of restricted cash)
 $834
 $976
 $679
See notes to consolidated financial statements.


CBS CORPORATION
VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
 Year Ended December 31,
 2016 2015 2014
 Shares Amount Shares Amount Shares Amount
Class A Common Stock:           
Balance, beginning of year38
 $—
 38
 $—
 39
 $—
Conversion of A shares into B shares—
 —
 —
 —
 (1) —
Balance, end of year38
 —
 38
 —
 38
 —
Class B Common Stock:           
Balance, beginning of year826
 1
 818
 1
 801
 1
Conversion of A shares into B shares—
 —
 —
 —
 1
 —
Restricted stock unit vests3
 —
 4
 —
 5
 —
Exercise of stock options1
 —
 6
 —
 14
 —
Retirement of treasury stock(1) —
 (2) —
 (3) —
Balance, end of year829
 1
 826
 1
 818
 1
Additional Paid-In Capital:           
Balance, beginning of year
 44,055
 
 44,041
   43,474
Stock-based compensation  177
   174
   168
Tax benefit related to employee stock-based transactions  12
   87
   246
Exercise of stock options  21
   142
   282
Retirement of treasury stock  (58)   (96)   (146)
Dividends  (294)   (293)   (296)
Gain on Outdoor Americas IPO  —
   —
   313
Balance, end of year
 43,913
 
 44,055
 
 44,041
Accumulated Deficit:           
Balance, beginning of year
 (20,518) 
 (21,931) 
 (24,890)
Net earnings  1,261
   1,413
   2,959
Balance, end of year
 (19,257) 
 (20,518) 
 (21,931)
Accumulated Other Comprehensive Loss:           
Balance, beginning of year  (770)   (735)   (545)
Other comprehensive income (loss)  3
   (35)   (190)
Balance, end of year  (767)   (770)   (735)
Treasury Stock, at cost:           
Balance beginning of year401
 (17,205) 349
 (14,406) 244
 (8,074)
Class B Common Stock purchased54
 (2,997) 52
 (2,800) 60
 (3,612)
Outdoor Americas Split-Off—
 —
 —
 —
 45
 (2,721)
Shares paid for tax withholding for stock-based compensation1
 (58) 2
 (96) 3
 (146)
Issuance of stock for deferred compensation—
 1
 —
 1
 —
 1
Retirement of treasury stock(1) 58
 (2) 96
 (3) 146
Balance, end of year455
 (20,201) 401
 (17,205) 349
 (14,406)
Total Stockholders’ Equity
 $3,689
 
 $5,563
 
 $6,970
 Class A and B Common Stock 
Treasury
Stock
Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total ViacomCBS Stockholders’ Equity Non-Controlling Interests Total Equity
 (Shares)                         
December 31, 2016648
 $1
 $(40,997) $50,499
   $296
   $(1,564)   $8,235
   $51
  $8,286
Stock-based compensation
activity
8
 —
 122
 281
   —
   —
   403
   —
  403
Retirement of treasury
stock
—
 —
 89
 (89)   —
   —
   —
   —
  —
Class B Common Stock
purchased
(16) —
 (1,050) —
   —
   —
   (1,050)   —
  (1,050)
CBS Radio Split-off(18) —
 (1,007) —
   —
   —
   (1,007)   —
  (1,007)
Dividends—
 —
 —
 (612)   —
   —
   (612)   —
  (612)
Noncontrolling interests—
 —
 —
 (11)   (55)   —
   (66)   (22)  (88)
Net earnings—
 —
 —
 —
   2,321
   —
   2,321
   52
  2,373
Other comprehensive
income
—
 —
 —
 —
   —
   295
   295
   —
  295
December 31, 2017622
 1
 (42,843) 50,068
   2,562
   (1,269)   8,519
   81
  8,600
Stock-based compensation
activity
3
 —
 (36) 198
   —
   —
   162
   —
  162
Retirement of treasury
stock
—
 —
 59
 (59)   —
   —
   —
   —
  —
Class B Common Stock
purchased
(12) —
 (600) —
   —
   —
   (600)   —
  (600)
Dividends—
 —
 —
 (300)   (299)   —
   (599)   —
  (599)
Noncontrolling interests—
 —
 —
 —
   —
   —
   —
   (58)  (58)
Net earnings—
 —
 —
 —
   3,455
   —
   3,455
   37
  3,492
Adoption of accounting
standards
—
 —
 —
 —
   (149)   (30)   (179)   —
  (179)
Other comprehensive
loss
—
 —
 —
 —
   —
   (309)   (309)   (6)  (315)
December 31, 2018613
 1
 (43,420) 49,907
   5,569
   (1,608)   10,449
   54
  10,503
Stock-based compensation
activity and other
3
 —
 (15) 270
   (4)   —
   251
   —
  251
Retirement of treasury
stock
—
 —
 20,577
 (20,577)   —
   —
   —
   —
  —
Class B Common Stock
purchased
(1) —
 (50) —
   —
   —
   (50)   —
  (50)
Dividends—
 —
 —
 —
   (600)   —
   (600)   —
  (600)
Noncontrolling interests—
 —
 —
 (10)   (9)   —
   (19)   (5)  (24)
Net earnings—
 —
 —
 —
   3,308
   —
   3,308
   31
  3,339
Reclassification of income
tax effect of the Tax
Reform Act 
—
 —
 —
 —
   230
   (230)   —
   —
  —
Other comprehensive
income (loss)
—
 —
 —
 —
   —
   (132)   (132)   2
  (130)
December 31, 2019615
 $1
 $(22,908) $29,590
   $8,494
   $(1,970)   $13,207
   $82
  $13,289
See notes to consolidated financial statements.




CBS CORPORATIONVIACOMCBS INC. 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—ViacomCBS Inc. is comprised of the following segments: TV Entertainment (CBS Corporation (together withTelevision Network, CBS Television Studios, CBS Television Distribution, CBS Interactive, CBS Sports Network, CBS Television Stations and CBS-branded streaming services), Cable Networks (Showtime Networks, Nickelodeon, MTV, BET, Comedy Central, Paramount Network, Nick Jr., VH1, TV Land, CMT, Pop TV, Smithsonian Networks, ViacomCBS Networks International, Network 10, Channel 5, Telefe and Pluto TV), Filmed Entertainment (Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios); and Publishing (Simon & Schuster). References to “ViacomCBS”, the “Company”, “we”, “us” and “our” refer to ViacomCBS Inc. and its consolidated subsidiaries, unless the context otherwise requires,requires.

Merger with Viacom Inc.—On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the “Company” or “CBS Corp.”surviving company (the “Merger”) is comprised. At the effective time of the following segments: Entertainment (CBS Television, comprisedMerger (the “Effective Time”), the combined company changed its name to ViacomCBS Inc. (“ViacomCBS”). At the Effective Time, (1) each share of Viacom Class A Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, Television Network, CBS Television Studios, CBS Studios International, and CBS Television Distribution; 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 February 2, 2017, the Company enteredwas converted automatically into an agreement with Entercom Communications Corp. to combine the Company’s radio business, CBS Radio, with Entercom in a merger to be effected through a Reverse Morris Trust transaction, which is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction, the Company intends to split-off CBS Radio through an exchange offer, in which the Company’s stockholders may elect to exchange0.59625 shares of the Company’sViacomCBS Class A Common Stock, and (2) each share of Viacom Class B Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of ViacomCBS Class B Common Stock (together with ViacomCBS Class A Common Stock, the “ViacomCBS Common Stock”). At the Effective Time, each share of CBS Class A Common Stock and each share of CBS Class B Common Stock (together with CBS Class A Common Stock, the “CBS Common Stock”) issued and outstanding immediately prior to the Effective Time, remained an issued and outstanding share of ViacomCBS Class A Common Stock and ViacomCBS Class B Common Stock, respectively, and was not affected by the Merger.

Following the Merger, the CBS Common Stock was delisted from the New York Stock Exchange and the Viacom Common Stock ceased trading on the Nasdaq Stock Market LLC (“Nasdaq”). On December 5, 2019, ViacomCBS Class A Common Stock and ViacomCBS Class B Common Stock were listed on Nasdaq and began trading under the ticker symbols VIACA and VIAC, respectively.

Change in Reporting Entity—The Merger has been accounted for sharesas a transaction between entities under common control as National Amusements, Inc. (“NAI”) was the controlling stockholder of each of CBS and Viacom (and remains the controlling stockholder of ViacomCBS). Upon the closing of the Merger, the net assets of Viacom were combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented in the consolidated financial statements. This presentation constitutes a change in reporting entity. The following table provides the impact of the change in reporting entity on our results of operations for periods prior to the Merger.
 Period from January 1 Year Ended December 31,
 to December 4, 2019 2018 2017
Net earnings from continuing operations
attributable to ViacomCBS
 $1,353
  $1,463
 $1,959
Net earnings per common share from continuing
operations attributable to ViacomCBS:
       
Basic $.44
  $.35
 $1.85
Diluted $.45
  $.37
 $1.83
Other comprehensive income (loss) $(148)  $(202) $190

Discontinued Operations—On November 16, 2017, we completed the disposition of CBS Radio which will then be immediately converted into shares of Entercom common stock at the time of the merger. Beginning in the fourth quarter of 2016,Inc. (“CBS Radio”) through a split-off. CBS Radio was classified as held for sale and has been presented as a discontinued operation in the Company’sour consolidated financial

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


statements for all periods presented (See(see Note 4)18). During 2014, the Company completed the disposition of CBS Outdoor Americas Inc., which was previously a subsidiary of the Company and has been renamed OUTFRONT Media, Inc. (“Outdoor Americas”). Outdoor Americas has been presented as a discontinued operationAlso included in the Company’s consolidated financial statements. In addition, certain businesses that were previously disposed of by the Company prior to January 1, 2002, were accounted for as discontinued operations in accordanceare liabilities associated with accounting rules in effect prior to 2002. indemnification obligations for leases primarily associated with the previously discontinued operations of Famous Players Inc.


Principles of Consolidation—Consolidation—The consolidated financial statements include the accounts of CBS Corp. and all ofViacomCBS, its subsidiaries in which a controlling interest is maintained.maintained and variable interest entities (“VIEs”) where we are considered the primary beneficiary, after the elimination of intercompany accounts and transactions. Controlling interest is determined by majority ownership interest and the absence of substantive third party participating rights.  Investments over which the Company haswe have a significant influence, or ownership of more than 20% but less than or equal to 50%, without a controlling interest, are accounted for under the equity method. InvestmentsOur proportionate share of 20%net earnings or less, over whichloss of the Company has no significant influence, are accounted for underentity is recorded in “Equity in earnings (loss) of investee companies, net of tax” on the cost method if the fair value is not readily determinable and are accounted for as available for sale securities if the fair value is readily determinable. All significant intercompany transactions have been eliminated.Consolidated Statements of Operations. 


Reclassifications—Certain amounts reported for prior years have been reclassified to conform to the current year’s presentation.

Use of Estimates—Estimates—The preparation of the Company’sour 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, disclosurethe disclosures of contingent assets and liabilities atas of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period.  The Company bases itsperiods presented. We base our 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 differvary from these estimates under different assumptions or conditions.


Business Combinations—We generally account for business combinations using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, 100% of the assets, liabilities and certain contingent liabilities acquired, as well as amounts attributed to noncontrolling interests, are recorded at fair value. Any transaction costs are expensed as incurred. The Merger was accounted for as a transaction between entities under common control as NAI was the controlling stockholder of each of CBS and Viacom.

Cash and Cash Equivalents—Equivalents—Cash and cash equivalents consist of cash on hand and short-term (maturitieshighly liquid investments with maturities of three months or less at the date of purchase) highly liquid investments,purchase, including money market funds, commercial paper and bank time deposits. At December 31, 2019 and 2018, we had restricted cash of $202 million and $120 million, respectively, consisting of amounts held in grantor trusts related to agreements with former executives. Restricted cash is included within “Other current assets” and “Other assets” on the Consolidated Balance Sheets.


Programming Inventory—We acquire rights to programming and produce programming to exhibit on our broadcast and cable networks, on our broadcast television stations, direct to consumers through our digital streaming services, and in theaters. We also produce programming for third parties. 

Internally-Produced Programming—Costs incurred to produce television programs and feature films (which include direct production costs, production overhead, acquisition costs and development costs) are capitalized when incurred. We use an individual-film-forecast-computation method to amortize capitalized production costs and to accrue estimated liabilities for residuals and participations over the applicable title’s life cycle based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. The estimate of Ultimate Revenues impacts the timing of amortization and accrual of residuals and participations. For television programming, Ultimate Revenue estimates are initially limited to the amount of revenue contracted for each episode in the initial market and estimates of revenue from a secondary market where we can demonstrate a history of earning such revenue in that market. Television programming costs and participation costs incurred in excess of such amounts are expensed as incurred on an episode by episode basis. Estimates for additional secondary market revenues such as domestic and foreign syndication and home entertainment are included in the estimated lifetime revenues once it can be demonstrated that a program can be successfully licensed in such secondary market. For each television program, management bases these estimates on the performance in the initial markets, the existence


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Programming Inventory—The Company acquires rightsof future firm commitments to programming and produces programming to exhibit on its broadcast and cable networks, broadcast television stations, direct to consumers through its digital streaming servicessell and the internet, and in theaters. The costs incurred in acquiring and producing programs are capitalized and amortized over the license period or projected useful lifepast performance of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable, and the program is accepted and available for airing.

Television production costs (which include direct production costs, production overhead and acquisition costs) are stated at the lower of unamortized cost or net realizable value. The Company then estimates total revenues to be earned and costs to be incurred throughout the life of eachsimilar television program.  For television programming, estimates for remaining total lifetime revenues are limited to the amount of revenue contracted for each episode in the initial market. Accordingly, television programming costs and participation costs incurred in excess of the amount of revenue contracted for each episode in the initial market are expensed as incurred on an episode by episode basis. Estimates for all secondary market revenues such as domestic and foreign syndication, basic cable, digital streaming, home entertainment and merchandising are included in the estimated lifetime revenues of such television programming once it can be demonstrated that a program can be successfully licensed in such secondary market.programs. Television programming costs incurred subsequent to the establishment of the secondary market are initially capitalized and amortized, and estimated liabilities for participations are accrued, based on the proportion that current period revenues bear to the estimated remaining total lifetime revenues.


TheFor feature films, our estimate of Ultimate Revenues includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial theatrical release. Prior to the release of feature films, we estimate Ultimate Revenues based on the historical performance of similar content and pre-release market research (including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future performance. Our estimates of revenues from succeeding windows and markets are revised based on historical relationships to theatrical performance and an analysis of current market trends. For acquired film libraries, our estimate of Ultimate Revenues is for a period within 20 years from the date of acquisition.

Ultimate Revenue estimates are periodically reviewed and adjustments, if any, will result in changes to inventory amortization rates and estimated accruals for residuals and participations. An impairment charge is recorded if the fair value of a television program or feature film falls below the unamortized production costs. Film development costs that have not been set for production are expensed within three years unless they are abandoned earlier, in which case these projects are written down to their estimated fair value in the period the decision to abandon the project is determined.

Acquired Programming Rights—Costs incurred in acquiring television series and feature film programmingprogram rights, including advances, are capitalized when the license period has begun and the program is accepted and available for airing. These costs are amortized over the shorter of the license period or the period in which an economic benefit is expected to be derived based on the timing of the Company’sour usage of and benefit from such programming. The net realizable value of acquired programming rights is regularly evaluated by us either by title or on a daypart basis, which is defined as an aggregation of programs broadcast during a particular time of day or an aggregation of programs of a similar type based on the specific demographic targeted by each respective program or program service. Net realizable value is determined by estimating advertising revenues to be derived from the future airing of the programming and allocating affiliate revenue to the programming, each as applicable. An impairment charge is recorded if our estimates of future cash flows are below the carrying amount of the programming or if programming is abandoned.

The costs of programming rights licensed under multi-year sports programming agreements are capitalized if the rights payments are made before the related economic benefit has been received. These costs are expensed over the period in which an economic benefit is expected to be derived based on the relative value of the events broadcast by the Companyus during a period. The relative value for an event is determined based on the revenues generated for that event in relation to the estimated total revenues over the remaining term of the sports programming agreement. 


Lifetime revenue estimates for internally produced television programming, and theThe estimated economic benefit for the acquired programming, including revenue projections for multi-year sports programming, are periodically reviewed. Adjustments, if any, will result in changes to amortization rates and could result in future net realizable value adjustments and/or estimated accruals for participation expense.adjustments.


Television and feature film programming and production costs, including inventory amortization, development costs, residuals and participations and impairment charges, if any, are included within “Operating expenses” in the Consolidated Statements of Operations.


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Property and Equipment—Equipment—Property and equipment is stated at cost.  Depreciation is computed bycalculated using the straight-line method over estimated useful lives as follows:
Buildings and building improvements10 to 40 years
Leasehold ImprovementsimprovementsShorter of lease term or useful life
Equipment and other (including capitalfinance leases)3 to 20 years

Costs associated with repairs and maintenance of property and equipment are expensed as incurred.

Impairment of Long-Lived Assets—Assets—The Company assesses long-lived assets and intangible assets, other than goodwill and intangible assets with indefinite lives, for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable.  Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows expected to be generated by these assets which is the estimated fair value, to their net carrying value. TheIf the carrying value is not recoverable, the amount of impairment loss,charge, if any, will generally beis measured by the difference between the net carrying value and the estimated fair value of the asset.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Impairment of Investments—Investments—Investments over which we have a significant influence, without a controlling interest, are reviewedaccounted for impairment on a quarterly basis by comparing theirunder the equity method. Investments for which we have no significant influence are measured at fair value to their respective carrying amounts. The Company determineswhere a readily determinable fair value exists. Investments that do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for observable price changes. Gains and losses resulting from changes in the fair value of its public companyequity investments by referenceare recorded in the Consolidated Statements of Operations. Prior to theirthe adoption of new Financial Accounting Standards Board (“FASB”) guidance in 2018, we recorded unrealized gains and losses on publicly traded stock price. With respect to private companyequity investments in other comprehensive income. We monitor our investments for impairment and reduce the Company makes its estimate of fair value by considering recent investee equity transactions, discounted cash flow analyses, recent operating results, estimates based on comparable public company operating cash flow multiples and, in certain situations, balance sheet liquidation values.  If the faircarrying value of the investment has dropped belowif we determine that an impairment charge is required based on qualitative and quantitative information. Our investments are included in “Other assets” on the carrying amount, management considers several factors when determining whether an other-than-temporary decline has occurred.  These factors include the length of time and the extent to which the estimated fair value or market value has been below the carrying value, the financial condition and the near-term prospects of the investee, the intent and ability of the Company to retain its investment in the investee for a period of time sufficient to allow for any anticipated recovery in market value, and other factors influencing the fair market value, such as general market conditions.Consolidated Balance Sheets.


Goodwill and Intangible Assets—Assets—Goodwill is allocated to various reporting units, which are generallyat or one level below the Company’sour operating segments. Intangible assets with finite lives, which primarily consist of trade names, licenses, and customer agreements are generally amortized using the straight-line method over their estimated useful lives, which range from 4 to 40 years.  Goodwill and other intangible assets with indefinite lives, which consist primarily of FCC licenses in the U.S. and broadcast licenses in Australia, are not amortized but are tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount.  If the carrying value of goodwill or the indefinite-lived intangible asset exceeds its fair value, an impairment charge is recognized (see Note 4).

Guarantees—At the inception of a guarantee, we recognize a liability for the fair value of an obligation assumed by issuing the guarantee. The related liability is subsequently reduced as utilized or extinguished and increased if there is a probable loss associated with the guarantee which exceeds the value of the recorded liability.

Treasury Stock—Treasury stock is accounted for using the cost method. Retirements of treasury stock are reflected as a reduction to additional paid-in capital.
Fair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The framework for measuring fair value provides a hierarchy that prioritizes the inputs to valuation techniques 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 our own assumptions

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


about the assumptions that market participants would use in pricing the asset or liability. Certain assets and liabilities, including foreign currency hedges and deferred compensation liabilities, are measured and recorded at fair value on a recurring basis. Film and television production costs, goodwill, intangible assets, and equity method investments are recorded at fair value only if an impairment charge is recognized. Impairment charges, if applicable, are determined using discounted cash flows, which is a Level 3 valuation technique.

Derivative Financial Instruments—Derivative financial instruments are recorded on the Consolidated Balance Sheets as assets or liabilities and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair value of both the derivatives and the hedged items are recorded in “Other items, net”in the Consolidated Statements of Operations. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets and subsequently recognized in net earnings.

Pension and Postretirement Benefits—The service cost component of net benefit cost for our pension and postretirement benefits is recorded on the same line items in the Consolidated Statements of Operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented separately from the service cost component and below the subtotal of operating income in “Other items, net” or “Pension settlement charge” in the Consolidated Statements of Operations.

Other Liabilities—Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, long-term income tax liabilities, deferred compensation and other employee benefit accruals.

Revenues
Revenue is recognized when control of a good or service is transferred to a customer. Control is considered to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service.

Advertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or displayed on digital platforms. Advertising spots are typically sold as part of advertising campaigns consisting of multiple commercial units. If a contract includes 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 to be satisfied over time 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. To the extent the amounts billed exceed the amount of revenue recognized, such excess is deferred until the guaranteed audience ratings or impressions are delivered. For contracts that do not include impressions guarantees, the individual advertising spots are the performance obligation and consideration is allocated among the individual advertising spots based on relative standalone selling price. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.

Advertising revenues are generated by the TV Entertainment and Cable Networks segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Affiliate Revenues—Affiliate revenues primarily consist of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television digital streaming offerings (“virtual MVPDs”) for carriage of our cable networks (“cable affiliate fees”) and television stations (“retransmission fees”); fees from television stations affiliated with the CBS Television Network (“station affiliation fees”); and subscription fees for our digital streaming subscription offerings, including CBS All Access, the Showtime streaming subscription offering (“Showtime OTT”) andBET+. Costs incurred for advertising, marketing and other services provided to us by cable, satellite and other distributors that are in exchange for a distinct service are recorded as expenses. If a distinct service is not received, such costs are recorded as a reduction to revenues.

The performance obligation for our affiliate agreements is a license to our programming provided through the continuous delivery of live linear feeds and, for agreements with MVPDs and subscribers to our digital streaming services, also includes a license to programming for video-on-demand viewing. Affiliate revenues are recognized over the term of the agreement as we satisfy our performance obligation by continuously providing our customer with the right to use our 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 toour customer’s service. For agreements that provide for a fixed fee, revenues are recognized based on the relative fair value of the content provided over the term of the agreement. These agreements primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”) for which fair value is determined based on the fair value of the network affiliate’s service and the value of our programming. For affiliate revenues, payments are generally due monthly.

Affiliate revenues are generated by the TV Entertainment and Cable Networks segments.

Content Licensing Revenues—Content licensing revenues are generated from the licensing of exhibition rights for our internally-produced television and film programming to television stations, cable networks and subscription streaming services; licensing of our content for distribution on transactional video-on-demand services; the distribution of our content through DVD and Blu-ray disc sales to wholesale and retail partners; the use of our trademarks and brands for consumer products, recreation and live events; and fees from the distribution of third-party programming.

For licenses of exhibition rights for internally-produced programming, each individual episode or film delivered represents a separate performance obligation and revenues are recognized when the episode or film is made available to the licensee for exhibition and the license period has begun. For license agreements that include delivery of content on one or more dates for a fixed fee, consideration is allocated based on the relative standalone selling price of each episode or film. Estimation of standalone selling prices requires judgment, which can impact the timing of recognizing revenues. Agreements to license programming are often long term, with collection terms ranging from one to five years.

When payment is due from a customer more than one year before or after revenue is recognized, we consider the contract to contain a significant financing component and the transaction price is adjusted for the effects of the time value of money. We do not adjust the transaction price for the time value of money if payment is expected within one year of recognizing revenues.

We also license our programming to distributors of transactional video-on-demand and similar services. Under these arrangements, our performance obligation is the delivery of our content to such distributors who then license our content to the end customer. Our revenues are determined each month based on a contractual rate applied to the number of licenses to the distributors’ end customers. Similarly, revenues earned from electronic sell-through services are recognized as each program is downloaded by the end customer.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Revenues associated with the licensing of our brands for consumer products, recreation and live events are generally determined based on contractual royalty rates applied to sales reported by the licensees. For consumer products and recreation arrangements that include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee, if the sales-based consideration is expected to exceed the minimum guarantee, or ratably if it is not expected to exceed the minimum guarantee. For live events, we recognize revenue when the event is held.

Revenues from the sales of DVDs and Blu-ray discs to wholesalers and retailers are recognized upon the later of the physical delivery to the customer or the date that any sales restrictions on the retailers are lifted.

We earn revenues from the distribution of content on behalf of third parties. We also have arrangements for the distribution or sale of our content by third parties. Under such arrangements, we determine whether revenues should be recognized based on the gross amount of consideration received from the customer or the net amount of revenue we retain after payment to the third party producer or distributor, based on an assessment of which party controls the good or service being transferred.

Content licensing revenues are generated by the TV Entertainment, Cable Networks and Filmed Entertainment segments.

Theatrical Revenues—Theatrical revenue is earned from the theatrical distribution of our films during the exhibition period. Under these arrangements, revenues are recognized based on sales to the end customer. Theatrical revenues are generated by the Filmed Entertainment segment.

Publishing—Publishing revenues are recognized when merchandise is shipped or electronically delivered to the consumer. Payments for publishing revenues are due shortly after shipment or electronic delivery.

Revenue Allowances—Print books, DVDs and Blu-ray discs are generally sold with a noncash charge (See Note 3).right of return. We record a provision for sales returns and allowances at the time of sale based upon an estimate of future returns, rebates and other incentives. In determining this provision, we consider sources of qualitative and quantitative evidence including forecast sales data, customers’ rights of return, sales levels for units already shipped, historical return rates for similar products, current economic trends, the competitive environment, promotions and our sales strategies. Reserves for sales returns and allowances of $153 million and $186 million at December 31, 2019 and 2018, respectively, are recorded in “Other current liabilities” on the Consolidated Balance Sheets.


Other Assets—Other assets includeReserves for accounts receivable are estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, as well as recent payment history for specific customers. Our allowance for doubtful accounts was $86 million at both December 31, 2019 and 2018. The provision for doubtful accounts charged to expense was $26 million in each of the years 2019 and 2018, and $31 million in 2017.

Noncurrent Accounts Receivables—Included in “Other assets” on the Consolidated Balance Sheets are noncurrent accounts receivables of $2.11 billion at December 31, 2016 and $2.09$1.84 billion at December 31, 2015, which are2019 and 2018, respectively. Noncurrent accounts receivables primarily relatedrelate to revenues recognized under long-term television licensing arrangements. Television license fee revenues are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition, while the related cash is generally collected over the term of the license period.

Other Liabilities—Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, program rights obligations, deferred compensation and other employee benefit accruals.

Revenue Recognition—Advertising revenues, net of agency commissions, are recognized in the period during which advertising spots are aired or displayed.  If there is a guarantee to deliver a targeted audience rating, revenues are recognized for the actual audience rating delivered, based on the ratings data published by independent audience ratings measurement companies.  Revenues are deferred for any shortfall in the audience rating with respect to an advertising spot until such time as the required audience rating is delivered.

Revenues from the licensing of television programming are recognized in the period that the television series is made available to the licensee, which may cause fluctuations in operating results.  Television series initially produced for networks and first-run syndication are generally licensed to domestic and international markets concurrently (“initial market”). Network series are also licensed to digital streaming providers, television stations, and cable networks (“secondary market”). Licensing in the secondary market typically occurs at a later date but can also be concurrent with sales in the initial market. The length of the revenue cycle for television series will vary depending on the number of seasons a series remains in active production.

Affiliate and subscription fees for cable and broadcast networks, television stations and online content, including digital streaming services, are recognized in the period the service is provided.  Costs for advertising and marketing services provided to the Company by cable, satellite and other distributors are recorded in selling, general and administrative expenses.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Publishing revenues are recognizedContract Liabilities—A contract liability is recorded when merchandiseconsideration is shipped or electronically deliveredreceived from a customer prior to the consumer.  The Company recordsfully satisfying a provision for sales returns and allowances at the time of sale based upon historical trends which allow forperformance obligation in a percentage of revenue recognized.

Deferred revenuescontract. Our contract liabilities primarily consist of revenuescash received related to advertising arrangements and the licensing of television programming for which the revenuesrequired audience rating or impressions have not been delivered; consumer products arrangements with minimum guarantees; and television licensing arrangements under which the content has not yet been earned.made available to the customer. These contract liabilities will be recognized as revenues when control of the related product or service is transferred to the customer.
Contract liabilities are included in “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets and were $910 million and $745 million at December 31, 2019 and December 31, 2018, respectively. The amounts classified as current arechange in contract liabilities for the year ended December 31, 2019 primarily reflects cash payments received during the period for which the performance obligation was not satisfied prior to the end of the period partially offset by $501 million of revenues recognized that were included in deferred revenues at December 31, 2018. For the year ended December 31, 2018, we recognized revenues of $560 million that were included in deferred revenues at December 31, 2017.

Unrecognized Revenues Under Contract—As of December 31, 2019, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts was $7.72 billion, of which $4.27 billion is expected to be earned withinrecognized in 2020, $1.93 billion in 2021, $1.04 billion in 2022, and $478 million thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the next twelve months.

Salesguaranteed minimum under variable contracts, primarily consisting of Multiple Productstelevision and film licensing contracts and affiliate arrangements that are subject to a fixed or Services—Revenues derived fromguaranteed minimum fee. Such amounts change on a single salesregular basis as we renew existing agreements or enter into new agreements. Unrecognized revenues under contract that contains multiple products and services are allocateddisclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of our advertising contracts (ii) contracts for which variable consideration is determined based on the relative faircustomer’s subsequent sale or usage, mainly consisting of affiliate agreements and (iii) long-term licensing agreements for multiple programs for which our right to invoice corresponds with the value of each delivered itemthe programs provided to the customer.

Performance Obligations Satisfied in Previous Periods—Under certain licensing arrangements, the amount and recognized in accordance with the applicabletiming of our revenue recognition criteriais determined based on our licensees’ subsequent sale to its end customers. As a result, under such arrangements, which primarily include licensing of our content to distributors of transactional video-on-demand and electronic sell-through services, we often satisfy our performance obligation of delivery of our content in advance of revenue recognition. During the years ended December 31, 2019 and 2018, we recognized revenues of approximately $235 million and $172 million, respectively in our Filmed Entertainment segment for the specific unit of accounting.such performance obligations satisfied, or partially satisfied, in a prior period.


Collaborative Arrangements—Arrangements—Collaborative arrangements primarily consist of joint efforts with third parties to produce and distribute programming such as television series and live sporting events, including the agreement between the Companyus and Turner Broadcasting System, Inc. to telecast the NCAA Division I Men’s Basketball Championship (“NCAA Tournament”), which runs through 2032. In connection with this agreement for the NCAA Tournament, advertisements aired on the CBS Television Network are recorded as revenues and the Company’sour share of the program rights fees and other operating costs are recorded as operating expenses.


For episodicWe also enter into collaborative arrangements with other studios to jointly finance and distribute film and television programming, under which each partner is responsible for distribution of the program in specific territories or distribution windows. Under these arrangements, co-production costs are initially capitalized as programming inventory and amortized over the television series’ estimated economic life.life of the program. In such arrangements where the Company haswe have distribution rights, all proceeds generated from such distribution are recorded as revenues and any participation profits due to third party collaborators are recorded as operatingparticipation expenses.  In co-production arrangements where third party collaborators have distribution rights, the Company’sour net participating profits are recorded as revenues.



VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Amounts attributable to transactions arising from collaborative arrangements between participants were not material to the Company’s consolidated financial statements for all periodsany period presented.

Adoption of Revenue Recognition Standard— On January 1, 2018, we adopted 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 primary impact to our revenue recognition policies resulting from this standard relates to the timing of revenue recognition for the renewal of an existing licensing agreement, which under the new standard is recognized as revenue when the renewal term begins. Under previous guidance, these revenues were recognized upon the execution of such renewal. In addition, under the new standard, revenues for certain distribution arrangements are recognized based on the gross amount of consideration received from the customer, with an offsetting increase to operating expenses. Under previous accounting guidance, such revenues were recognized at the net amount retained by us after the payment of fees to the third party. Results for reporting periods beginning after January 1, 2018 are presented under the new standard while prior periods have not been adjusted. We applied the modified retrospective method of adoption with the cumulative effect of the initial adoption of $350 million reflected as an adjustment to the opening balance of retained earnings as of January 1, 2018.
Advertising—
Leases—We have operating leases primarily for office space, equipment, satellite transponders and studio facilities and finance leases for satellite transponders and equipment. We determine that a contract contains a lease if we obtain substantially all of the economic benefits of, and the right to direct the use of, an asset identified in the contract. For leases with terms greater than 12 months, we record a right-of-use asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or our collateralized incremental borrowing rate. For those contracts that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), we generally include both the lease costs and non-lease costs in the measurement of the lease asset and liability. We also own buildings and production facilities where we lease space to lessees.

Our leases have remaining terms ranging from one to 17 years and often contain renewal options to extend the lease for periods of generally up to ten years. For leases that contain renewal options, we include the renewal period in the lease term if it is reasonably certain that the option will be exercised. Lease expense and income for our operating leases are recognized on a straight-line basis over the lease term, with the exception of variable lease costs, which are expensed as incurred, and leases of assets used in the production of programming, which are capitalized in programming assets and amortized over the projected useful life of the related programming. For finance leases, amortization of the right-of-use asset is recognized in amortization expense on a straight-line basis over the lease term and interest expense is accreted on the lease liability using the effective interest method. This results in an accelerated recognition of cost over the lease term.

Advertising—Advertising costs are expensed as incurred. The CompanyWe incurred total advertising expenses of $373 million$1.70 billion in 2016, $338 million2019, $1.41 billion in 20152018 and $377 million$1.58 billion in 2014.2017.


Other Operating Items, Net—Other operating items, net for 2016 and 2015 includes gains from the sales of businesses, and for 2016, also includes a multiyear, retroactive impact of a new operating tax.

Interest—Interest—Costs associated with the refinancing or issuance of debt, as well as debt discounts or premiums, are recorded as interest over the term of itsthe related debt.  The CompanyWe may enter into interest rate exchange agreements; the amount to be paid or received under such agreements is accrued and recognized over the life of the agreementsagreement as an adjustment to interest expense.


Income Taxes—Taxes—The provision for income taxes includes federal, state, local, and foreign taxes. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. The Company evaluates

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


We evaluate the realizability of deferred tax assets and establishesestablish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Deferred tax assets and deferred tax liabilities are classified as noncurrent on the Consolidated Balance Sheets.

For tax positions taken in a previously filed tax return or expected to be taken in a future tax return, the Company evaluateswe evaluate each position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to be recognized in the Consolidated Statement of

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, a tax reserve is established and no benefit is recognized.  A number of years may elapse before a tax return containing tax matters for which a reserve has been established is audited and finally resolved. We recognize interest and penalty charges related to the reserve for uncertain tax positions as income tax expense.


Foreign Currency Translation and Transactions—The Company’s assetsTransactions—Assets and liabilities denominated in foreign currenciesof subsidiaries with a functional currency other than the United States (“U.S.”) Dollar are translated into U.S. Dollars at foreign exchange rates in effect at the balance sheet date, while results of operations are translated at average foreign exchange rates for the respective periods.  The resulting translation gains orand losses are included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss).  Foreign in the Consolidated Balance Sheet. Effective July 1, 2018, Argentina has been designated as a highly inflationary economy. Transactions denominated in currencies other than the functional currency transactionwill result in remeasurement gains and losses, have beenwhich are included in “Other items, net” in the Consolidated Statements of Operations.


Other Items, net—For all periods presented, “Other items, net” primarily consists of foreign exchange gains and losses.

Provision for Doubtful Accounts—The provision for doubtful accounts is estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, as well as recent payment history for specific customers. The provision for doubtful accounts charged to expense was $12 million in 2016 and $9 million in each of the years 2015 and 2014.

Net Earnings (Loss) per Common Share—Basic 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 419 million stock options and RSUs for each of the years ended December 31, 20162019 and 20152018 and 214 million stock options and RSUs for the year ended December 31, 2014.2017.


The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.
Year Ended December 31,2019 2018 2017
(in millions)     
Weighted average shares for basic EPS615
 617
 640
Dilutive effect of shares issuable under stock-based compensation plans2
 4
 7
Weighted average shares for diluted EPS617
 621
 647

Year Ended December 31,2016 2015 2014
(in millions)     
Weighted average shares for basic EPS444
 484
 550
Dilutive effect of shares issuable under stock-based compensation plans4
 5
 11
Weighted average shares for diluted EPS448
 489
 561
Stock-based Compensation—The Company measuresCompensation—We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-dategrant date fair value of the award. The cost is recognized over the vesting period during which an employee is required to provide service in exchange for the award.


Adoption of NewRecently Adopted Accounting StandardsPronouncements
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
During the fourth quarter of 2016, the Company adopted Financial Accounting Standards Board (“FASB”) guidance which requires management to evaluate, for each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. If management identifies conditions or events that raise substantial doubt, disclosures are required in the financial statements, including any plans that will alleviate the substantial doubt

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


about the entity’s ability to continue as a going concern. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Simplifying the Accounting for Measurement Period AdjustmentsLeases
During the first quarter of 2016, the Company2019, we adopted amended FASB guidance which eliminates the requirement to retrospectively account for adjustments to provisional amounts recognized in a business combination when new information is obtained during the measurement period about facts and circumstances that existed as of the acquisition date. Under the amended guidance, the acquirer is required to recognize such adjustments in the reporting period in which the adjustment amounts are identified. Such adjustments also include the effect on earnings from any changes in depreciation, amortization, or other income effects resulting from the change to provisional amounts, as if the change occurred at the acquisition date. The amendment also requires disclosure or separate presentation on the face of the income statement of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items
During the first quarter of 2016, the Company adopted amended FASB guidance which eliminates the concept of extraordinary items. This guidance removes the requirement to assess whether an event or transaction is both unusual in nature and infrequent in occurrence and to separately present any such items on the statement of operations after income from continuing operations. Rather, such items are required to be presented as a separate component of income from continuing operations or disclosed in the notes to the financial statements. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period
During the first quarter of 2016, the Company adopted FASB guidance on the accounting for stock-based compensation when the terms of an award provide that a performance target that affects vesting could be achieved after the requisite service period. Under this guidance, such performance target should not be reflected in estimating the grant-date fair value of the award. The Company should begin recognizing compensation cost in the period in which it becomes probable that the performance target will be achieved, for the cumulative amount of compensation cost attributable to the period(s) for which the requisite service has already been rendered. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Disclosures for Investments in Certain Entities That Calculate Net Asset Value Per Share (or Its Equivalent)
During the first quarter of 2016, the Company adopted amended FASB guidance which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient. The amended guidance also limits disclosures about investments that are eligible to be measured at fair value using the NAV per share practical expedient to those investments for which the entity has elected to measure the fair value using this practical expedient. The Company applied this guidance retrospectively to all comparative periods presented (See Note 15).

Recent Pronouncements

Simplifying the Accounting for Goodwill Impairment
In January 2017, the FASB issued amended guidance to simplify the accounting for goodwill impairment. This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for interim and annual period beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017.
Clarifying the Definition of a Business
In January 2017, the FASB issued 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. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted.
Intra-Entity Transfers of Assets Other than Inventory
In October 2016, the FASB issued amended guidance on the accounting for income taxes, which eliminates the exception in existing guidance which 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. Rather, the amended guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently assessing the impact of this guidance on its consolidated financial statements.

Statement of Cash Flows: Classification of Cash Receipts and Cash Payments
In August 2016, the FASB issued amended guidance which clarifies how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new guidance is intended to reduce the existing diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted.

Improvements to Employee Share-Based Payment Accounting
In March 2016, the FASB issued amended guidance which simplifies several aspects of the accounting for employee share-based payment transactions. Under this amended guidance, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement in the period in which the awards vest or are exercised. In the statement of cash flows, excess tax benefits will be classified with other income tax cash flows in operating activities. The amended guidance also gives the option to make a policy election to account for forfeitures as they occur and increases the threshold for awards that are partially settled in cash to qualify for equity classification. The Company expects that the adoption of this guidance will introduce volatility into the Company’s income tax provision, which will be impacted by the timing of employee exercises and changes in the Company’s stock price. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted.

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 Companywe recognize on our


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing itsour 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. We applied the modified retrospective method of adoption and therefore, results for reporting periods beginning after January 1, 2019 are presented under the new guidance while prior periods have not been adjusted. This guidance did not have an impact on the Consolidated Statement of Operations. See Note 9 for the impact of this guidance on the Consolidated Balance Sheet and additional information.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
During the first quarter of 2019, we adopted FASB guidance that permits an entity to reclassify certain income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive income (“AOCI”) to retained earnings. As a result of the Tax Reform Act, in 2017, we remeasured our deferred income tax assets and liabilities to reflect the reduction in the federal income tax rate from 35% to 21%. The Company isremeasurement was recognized in net earnings and as a result, the income tax effects of the Tax Reform Act on items within AOCI remained at historical rates (“stranded tax effects”). During the first quarter of 2019, as a result of the adoption of this guidance, we elected to reclassify the stranded tax effects of $230 million relating to our pension and postretirement benefit obligations from AOCI to retained earnings. This guidance also requires entities to disclose their accounting policy for releasing stranded tax effects unrelated to the Tax Reform Act from AOCI. For pension and postretirement benefit plans, we release stranded tax effects from AOCI when the pension and postretirement plans are terminated.

Accounting Pronouncements Not Yet Adopted
Simplifying the Accounting for Income Taxes
In December 2019, the FASB issued guidance on the accounting for income taxes that, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. We are currently evaluating the impact of this guidance, on its consolidated balance sheets. This guidancewhich is effective for interim and annual reporting periods beginning after December 15, 2018,2020, with early adoption permitted.


Revenue from Contracts with CustomersImprovements to Accounting for Costs of Films and License Agreements for Program Materials
In May 2014,March 2019, the FASB issued guidance on the recognitionaccounting for costs of revenuesfilms and episodic television series, which providesaligns the accounting for capitalizing production costs of episodic television series with the guidance for films. As a single, comprehensiveresult, the capitalization of costs incurred to produce episodic television series will no longer be limited to the amount of revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle undercontracted in the initial market until persuasive evidence of a secondary market exists. In addition, this guidance isrequires an entity to test for impairment of films or television series on a title-by-title basis or together with other films and series as part of a group, based on the predominant monetization strategy of the film or series. Further, this guidance requires that an entity should recognize revenue atreassess estimates of the amount it expects to be entitled touse of a film or series in exchangea film group and account for the transfer of goods or services to customers. The Company has identified the predominant changes, to its accounting policies resulting from the application ofif any, prospectively. In addition, this guidance eliminates existing balance sheet classification guidance and is in the process of quantifying the impact on its consolidated financial statements. The cumulative effect of the initial adoption will be reflected as an adjustmentadds new disclosure requirements relating to the opening balance of retained earnings as of the date of application of the guidance; however, the Company does not expect this guidance to have a significant impact on the Company’s consolidated financial statements on an annual basis. This guidance is effectivecosts for interimacquired and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016.

2) PROPERTY AND EQUIPMENTproduced television series. We are currently

At December 31,2016 2015
Land$195
 $195
Buildings733
 696
Capital leases (a)
164
 162
Equipment and other1,843
 1,827
 2,935
 2,880
Less accumulated depreciation and amortization1,694
 1,627
Net property and equipment$1,241
 $1,253
(a) Accumulated amortization of capital leases was $98 million and $89 million at December 31, 2016 and 2015, respectively.
Year Ended December 31,2016 2015 2014
Depreciation expense, including capitalized lease amortization (a)
$205
 $212
 $218
(a) Amortization expense related to capital leases was $17 million in 2016 and $16 million in each of the years 2015 and 2014.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019.

Collaborative Arrangements: Clarifying the Interaction with the New Revenue Standard

In November 2018, the FASB issued guidance to clarify that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance when the counterparty is a customer. This guidance also prohibits the presentation of collaborative arrangements as revenues from contracts with customers if the counterparty is not a customer. This guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2019, is not expected to have a material impact on the consolidated financial statements.

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. We are currently evaluating the impact of this guidance, which is effective for interim and annual periods beginning after December 15, 2019.

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. We are currently evaluating the impact of this guidance, which is required to be applied retrospectively and is effective for annual periods ending after December 15, 2020.

Financial Instruments
In June 2016, the FASB issued amended guidance on the accounting for credit losses on financial instruments. Among other provisions, this guidance introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model that will generally result in the earlier recognition of allowances for losses. This guidance is effective for interim and annual periods beginning after December 15, 2019. We are currently evaluating the impact of this guidance.
2) PROPERTY AND EQUIPMENT
At December 31,2019 2018
Land$439
 $439
Buildings1,263
 1,242
Finance leases (a)
195
 335
Equipment and other4,096
 3,899
 5,993
 5,915
Less accumulated depreciation and amortization3,908
 3,836
Net property and equipment$2,085
 $2,079

(a) Accumulated amortization of finance leases was $160 million and $279 million at December 31, 2019 and 2018, respectively.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Year Ended December 31,2019 2018 2017
Depreciation expense, including amortization of finance leases (a)
$366
 $382
 $395
(a) Amortization expense related to finance leases was $23 million, $28 million and $32 million in 2019, 2018 and 2017, respectively.
During 2019, we completed the sale of our CBS Television City property and sound stage operation (“CBS Television City”) for $750 million. We have guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included on the Consolidated Balance Sheet at December 31, 2019 is a liability of $124 million, reflecting the present value of the estimated amount payable under the guarantee obligation. This transaction resulted in a gain of $549 million ($386 million, net of tax), which included a reduction for the guarantee obligation. CBS Television City was classified as held for sale on the Consolidated Balance Sheet at December 31, 2018.

In 2017, we recorded a net gain of $19 million relating to the disposition of property and equipment, which is included within “Gain on sale of assets” on the Consolidated Statement of Operations.
3)PROGRAMMING AND OTHER INVENTORY
At December 31,2019 2018
Acquired television program rights$3,477

$3,655
Acquired television library99

99
Internally produced television programming:   
Released3,627

2,986
In process and other2,626

1,917
Film inventory:   
Released502

619
Completed, not yet released55

31
In process and other1,037

674
Home entertainment and Publishing (primarily finished goods)105

102
Total programming and other inventory11,528
 10,083
Less current portion2,876
 2,785
Total noncurrent programming and other inventory$8,652
 $7,298

We expect to amortize approximately $2.95 billion of our internally produced television and film programming inventory, including released and completed, not yet released, during the year ended December 31, 2020. In addition, while it is difficult to determine the precise timing of the amortization of the remaining internally produced programming, we estimate that substantially all of the released internally produced television programming and 85% of the film inventory at December 31, 2019 will be amortized over the next three years.
During 2019, we recorded programming charges of $589 million. See Note 5 for additional information.
4) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and Intangible Assets Impairment Test
The Company performsWe perform a fair value-based impairment test of goodwill and intangible assets with indefinite lives, comprised primarily of television FCC licenses annually duringin the fourth quarterU.S. and broadcast licenses in Australia, on an annual basis, and also between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value. Goodwill is tested for impairment at the reporting unit level. The Company’s reporting units are one level below its operating segments,


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except for the Publishing reporting unit, which is the same as its operating segment because this operating segment has only one component. per share amounts)


FCC licenses are tested for impairment at the geographic market level. The Company considersWe consider each geographic market, which is comprised of all of the Company’s radio orour television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use. At December 31, 2016, the Company2019, we had 11 reporting units, and14 television markets with FCC license book valuesvalues. For broadcast licenses in Australia, we consider all of our licenses within the country to be a single unit of accounting because this represents their highest and best use.

Goodwill is tested for stations in 14 television markets and 25 radio markets.

In preparation forimpairment at the planned separation of its radio business, the Company changed the manner inreporting unit level, which it manages its television and radio operations during the third quarter of 2016. Accordingly, the Company’s previously reportedis an operating segment, Local Broadcasting, whichor one level below. At December 31, 2019, we had been comprised of two6 reporting units was separated into two operating segments, Local Media and Radio, each with three reporting units. The Company allocated goodwill to each of the new reporting unitsbalances, which were determined based on their relative fair values. Beginning in the fourth quarter of 2016, the former Radio operating segment has been presented as a discontinued operation. See Note 4 for discussion of impairment tests for the threepost-Merger reporting units and FCC licenses under the former Radio operating segment.structure.


For itsour annual impairment test, the Company performswe perform qualitative assessments for eachthe reporting unitunits, U.S. television markets with FCC licenses, and market with FCCAustralian broadcast licenses that management estimates have fair values that significantly exceed their respective carrying values. In selecting markets and reporting units for a qualitative assessment, the Companymaking this determination, we also considersconsider the duration of time since a quantitative test was performed. For the 20162019 annual impairment test, the Companywe performed qualitative assessments for seven all of our U.S. television markets and all of ourreporting units and three television markets.units. As of the date of our annual impairment tests, which were performed prior to the Merger, we had 10 reporting units. For each reporting unit, the Companywe weighed the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. For each television market, the Companywe weighed the relative impact of market-specific and macroeconomic factors. Based on the qualitative assessments, considering the aggregation of the relevant factors, the Companywe concluded that it is not more likely than not that the fair values of these reporting units and the fair value of FCC licenses within each market are less than their respective carrying values. Therefore, performing the quantitative impairment test was unnecessary.


For FCC licensesAs of the closing date of the Merger on December 4, 2019, we performed qualitative assessments on the pre-Merger reporting units that were to be combined as a result of the new reporting structure, as well as the post-Merger reporting units that resulted from this combination. Based on these assessments, we concluded that there were no changes to the conclusions reached in the remaining television markets, the Company performed theour annual impairment test.

A quantitative impairment test that compares theof broadcast licenses calculates an estimated fair value of the FCC licenses by geographic market with their respective carrying values.  The estimated fair value of each FCC license is computed using the Greenfield Discounted Cash Flow Method, (‘‘Greenfield Method’’), which attempts to isolate the income that is attributable to the license alone. The Greenfield Method is based upon modelingvalues a hypothetical start-up station and building it up to a normalized operation that,in the relevant market by design, lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method adds the present value of the estimated annual cash flows of the start-up station over a projection period to the residual value at the end of the projection period. The annualadding discounted cash flows over a five-year build-up period to a residual value. The assumptions for the projectionbuild-up period include assumptions forindustry projections of overall advertising revenues in the relevant geographic market revenues; the start-up station’s operating costs and capital expenditures, and a three-year build-up period for the start-up station to reach a normalized state of operations, which reflects the point at which it achieves an average market share. The overall market advertising revenue in the subject market is estimated based on recent industry projections. Operating costs and capital expenditures are estimated based on both industry and internal data.data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a perpetual nominal growth rate, which is based on projected long-range inflation and industry projections.

For 2019, we performed a quantitative impairment test for our Australian broadcast licenses. The discount rate and perpetual nominal growth rate were 11% and 0.5%, respectively. The impairment test indicated that the estimated fair value of the broadcast licenses was lower than the carrying value, which was the result of a sustained decline in the U.S.advertising marketplace in Australia. Accordingly, we recorded an impairment charge during the fourth quarter of 2019 of $20 million, which is included within “Depreciation and long-term industry projections. Theamortization” on the Consolidated Statements of Operations, and recorded in our Cable Networks segment.



CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




discount rate is determined based onThe following tables present the average of the weighted average cost of capital of comparable entitieschanges in the broadcast industry.  For each television station, the discount rate used for 2016 was 8.0% and the perpetual nominal growth rate was 2.5%. For the 2016 quantitative impairment test, the Company concluded that the estimated fair valuesbook value of FCC licenses in each of the 11 television markets for which the quantitative test was performed exceeded their respective carrying values.

For 2016, the Company performed the quantitative goodwill impairment testby segment for the CBS Sports Network reporting unit. The first stepyears ended December 31, 2019 and 2018.
  Balance at Acquisitions /  Foreign Balance at
  December 31, 2018 (Dispositions)  Currency December 31, 2019
TV Entertainment:             
Goodwill  $17,618
  $(3)  $—
  $17,615
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  4,264
  (3)  —
  4,261
 
Cable Networks:             
Goodwill  10,234
  451
(a) 
 6
  10,691
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  10,234
  451
  6
  10,691
 
Filmed Entertainment:             
Goodwill  1,593
  —
  —
  1,593
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  1,593
  —
  —
  1,593
 
Publishing:             
Goodwill  435
  —
  —
  435
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  435
  —
  —
  435
 
Total:             
Goodwill  29,880
  448
  6
  30,334
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  $16,526
  $448
  $6
  $16,980
 
(a) Primarily reflects the acquisitions of the goodwill impairment test examines whether the carrying value of a reporting unit exceeds its fair value. If the carrying value exceeds the fair value, the second step of the test compares the implied fair value of a reporting unit’s goodwill with the carrying value of its goodwill to determine the amount of impairment charge, if any. The estimated fair value of each reporting unit is computed based upon the present value of future cash flows (“Discounted Cash Flow Method”)Pluto Inc. and the traded or transaction values of comparable businesses (“Market Comparable Method”). The Discounted Cash Flow Method and Market Comparable Method resulted in similar estimated fair values. The Discounted Cash Flow Method includes the Company’s assumptions for growth rates, operating margins and capital expenditures for the projection period plus the residual value of the business at the end of the projection period.  The estimated growth rates, operating margins and capital expenditures for the projection period are based on the Company’s internal forecasts of future performance as well as historical trends. The residual value is estimated based on a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections and for 2016 was 2.0%. The discount rate is determined based on the average of the weighted average cost of capital of comparable entities and for 2016was9.0%Pop TV.

For the 2016 annual impairment test, the Company concluded that the estimated fair value of the CBS Sports Network reporting unit exceeded its carrying value and therefore the second step of the impairment test was unnecessary.

Transactions
In 2015, the Company disposed of internet businesses in China for $383 million, which resulted in gains of $139 million. The assets associated with the disposed businesses primarily consisted of goodwill of $217 million.




CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




For the years ended December 31, 2016 and 2015, the changes in the book value of goodwill by segment
  Balance at    Foreign Balance at
  December 31, 2017 Acquisitions  Currency December 31, 2018
TV Entertainment:             
Goodwill  $17,591
  $27
  $—
  $17,618
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  4,237
  27
  —
  4,264
 
Cable Networks:             
Goodwill  10,286
  64
  (116)  10,234
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  10,286
  64
  (116)  10,234
 
Filmed Entertainment:             
Goodwill  1,593
  —
  —
  1,593
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  1,593
  —
  —
  1,593
 
Publishing:             
Goodwill  435
  

  —
  435
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  435
  —
  —
  435
 
Total:             
Goodwill  29,905
  91
  (116)  29,880
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  $16,551
  $91
  $(116)  $16,526
 


Our intangible assets were as follows:
  Balance at      Balance at
  December 31, 2015 Acquisitions  Dispositions December 31, 2016
Entertainment:             
Goodwill  $9,250
  $52
(a) 
 $(2)
(b) 
 $9,300
 
Accumulated impairment losses  (6,294)  —
  —
  (6,294) 
Goodwill, net of impairment  2,956
  52
  (2)  3,006
 
Cable Networks:             
Goodwill  480
  —
  —
  480
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  480
  —
  —
  480
 
Publishing:             
Goodwill  406
  25
(c) 
 —
  431
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  406
  25
  —
  431
 
Local Media:             
Goodwill  8,007
  —
  —
  8,007
 
Accumulated impairment losses  (7,060)  —
  —
  (7,060) 
Goodwill, net of impairment  947
  —
  —
  947
 
Total:             
Goodwill  18,143
  77
  (2)  18,218
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  $4,789
  $77
  $(2)  $4,864
 
   Accumulated  
At December 31, 2019Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$404
 $(171) $233
Licenses159
 (38) 121
Customer agreements119
 (92) 27
Other intangible assets263
 (151) 112
Total intangible assets subject to amortization945
 (452) 493
FCC licenses2,441
 —
 2,441
International broadcast licenses25
 —
 25
Other intangible assets34
   34
Total intangible assets$3,445
 $(452) $2,993
   Accumulated  
At December 31, 2018Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$384
 $(148) $236
Licenses145
 (29) 116
Customer agreements92
 (88) 4
Other intangible assets195
 (128) 67
Total intangible assets subject to amortization816
 (393) 423
FCC licenses2,441
 —
 2,441
International broadcast licenses45
 —
 45
Other intangible assets34
 —
 34
Total intangible assets$3,336
 $(393) $2,943
  Balance at   Balance at
  December 31, 2014 Dispositions December 31, 2015
Entertainment:          
Goodwill  $9,467
  $(217)
(b) 
 $9,250
 
Accumulated impairment losses  (6,294)  —
  (6,294) 
Goodwill, net of impairment  3,173
  (217)  2,956
 
Cable Networks:        

 
Goodwill  480
  —
  480
 
Accumulated impairment losses  —
  —
  —
 
Goodwill, net of impairment  480
  —
  480
 
Publishing:        

 
Goodwill  406
  —
  406
 
Accumulated impairment losses  —
  —
  —
 
Goodwill, net of impairment  406
  —
  406
 
Local Media:        

 
Goodwill  8,007
  —

 8,007
 
Accumulated impairment losses  (7,060)  —
  (7,060) 
Goodwill, net of impairment  947
  —
  947
 
Total:        

 
Goodwill  18,360
 
(217)  18,143
 
Accumulated impairment losses  (13,354) 
—

 (13,354) 
Goodwill, net of impairment  $5,006
  $(217)  $4,789
 
(a) Amount reflects the acquisition of a sports-focused digital media business.
(b) Amount reflects the disposition of internet businesses in China.
(c) Amount reflects the acquisition of a publishing business.




CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



The Company’s intangible assets were as follows:
   Accumulated  
At December 31, 2016Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$188
 $(41) $147
Other intangible assets147
 (107) 40
Total intangible assets subject to amortization335
 (148) 187
FCC licenses2,446
 —
 2,446
Total intangible assets$2,781
 $(148) $2,633
   Accumulated  
At December 31, 2015Gross Amortization Net
Intangible assets subject to amortization:     
Trade names$211
 $(59) $152
Other intangible assets161
 (120) 41
Total intangible assets subject to amortization372
 (179) 193
FCC licenses2,446
 —
 2,446
Total intangible assets$2,818
 $(179) $2,639

Amortization expense was as follows:
Year Ended December 31,2016 2015 20142019 2018 2017
Amortization expense(a) $20
 $23
 $32
  $77
 $51
 $48
 
The Company expects its(a) For 2019, amortization expense includes an impairment charge of $20 million, which reduced the carrying value of broadcast licenses in Australia to their fair value.

We expect our aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 20172020 through 2021,2024, to be as follows:
 2020 2021 2022 2023 2024
Future amortization expense $64
   $55
   $52
   $47
   $39
 
 2017 2018 2019 2020 2021
Future amortization expense $19
   $18
   $18
   $15
   $13
 

4) DISCONTINUED OPERATIONS5) RESTRUCTURING, PROGRAMMING CHARGES AND OTHER CORPORATE MATTERS
On February 2,During the years ended December 31, 2019, 2018 and 2017, we recorded restructuring charges, merger-related costs, programming charges and costs for other corporate matters as follows:

Year Ended December 31,2019 2018 2017
Severance$401
 $235
 $224
Exit costs and other23
 75
 12
Asset impairment—
 —
 22
Restructuring charges424
 310
 258
Restructuring-related costs—
 52
 —
Merger-related costs294
 —
 —
Other corporate matters57
 128
 —
Restructuring and other corporate matters$775
 $490
 $258
      
Programming charges$589
 $162
 $144


Restructuring Charges and Related Costs

During the Company entered into an agreementyear ended December 31, 2019, we recorded restructuring charges of $424 million, primarily for severance and the acceleration of stock-based compensation in connection with Entercom Communications Corp.the Merger; costs related to combinea restructuring plan initiated in the Company’s radio business, CBS Radio,first quarter of 2019 under which severance payments are being provided to certain eligible employees who voluntarily elected to participate.

During the year ended December 31, 2018, we recorded restructuring charges of $310 million resulting from cost transformation initiatives to improve margins. In addition, in 2018 we recorded restructuring-related costs of $52 million, comprised of third-party professional services associated with Entercomsuch initiatives.

During the year ended December 31, 2017, we recorded restructuring charges of $258 million, resulting from the execution of a strategy for certain of our flagship brands and strategic initiatives at Paramount, as well as costs relating to other restructuring plans across several of our businesses in a mergercontinued effort to be effected throughreduce our cost structure. The restructuring charges for 2017 included a Reverse Morris Trust transaction,non-cash impairment charge resulting from the decision to abandon an international trade name in connection with the strategic initiatives.

The following is a rollforward of our restructuring liability, which is recorded in “Other current liabilities” and “Other liabilities” in the Consolidated Balance Sheets. The remaining restructuring liability at December 31, 2019, which primarily relates to severance payments, is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction,substantially paid by the Company intends to split-off CBS Radio through an exchange offer, in which the Company’s stockholders may elect to exchange sharesend of the Company’s Class B Common Stock for shares of CBS Radio, which will then be immediately converted into shares of Entercom common stock at the time of the merger. This transaction is subject to customary approvals and closing conditions.  The Company expects to complete the transaction during the second half of 2017. CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented.

During 2014, the Company completed the disposition of Outdoor Americas. Outdoor Americas has been presented as a discontinued operation in the Company’s consolidated financial statements. On April 2, 2014, Outdoor Americas completed an initial public offering (“Outdoor IPO”) through which it sold approximately 19% of its common stock. On July 16, 2014, the Company completed the disposition of its 81% ownership of Outdoor Americas common stock through a tax-free split-off (the “Split-Off”) through which the Company accepted 44.7 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97.0 million shares of Outdoor Americas common stock that it owned. In aggregate, the Company received $4.76 billion from the disposition of Outdoor Americas, including cash from the Outdoor IPO and proceeds from Outdoor Americas’ debt issuance, which totaled $2.04 billion, and the fair value of the shares of CBS. Corp. Class B Common Stock that were accepted in the Split-Off of $2.722021.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



billion. The Split-Off resulted in a gain of $1.56 billion for the year ended December 31, 2014 which is included in net earnings from discontinued operations and is calculated as follows:
Fair value of CBS Corp. Class B Common Stock accepted $2,721
(44,723,131 shares at $60.85 per share on July 16, 2014)  
Carrying value of Outdoor Americas (1,162)
Accumulated other comprehensive income 30
Transaction costs (32)
Net gain on Split-Off of Outdoor Americas $1,557
 Balance at 2019 Activity Balance at
 December 31, 2018 
Charges (a)
 Payments Other December 31, 2019
TV Entertainment $54
  $93

 $(82)  $(1)  $64
 
Cable Networks 151
  93
  (104)  (7)  133
 
Filmed Entertainment 22
  8
  (12)  (1)  17
 
Publishing 2
  6

 (4)  —
  4
 
Corporate 57
  157

 (32)  —
  182
 
Total $286
  $357
  $(234)  $(9)  $400
 
The Split-Off
 Balance at 2018 Activity Balance at
 December 31, 2017 
Charges (a)
 Payments Other December 31, 2018
TV Entertainment $50
  $45
  $(40)  $(1)  $54
 
Cable Networks 91
  185
  (117)  (8)  151
 
Filmed Entertainment 32
  18
  (28)  —
  22
 
Publishing 3
  1
  (2)  —
  2
 
Corporate 37
  53
  (32)  (1)  57
 
Total $213
  $302
 
$(219)  $(10)  $286
 

(a)Excludes stock-based compensation expense of $67 million and $8 million in 2019 and 2018, respectively.

Merger-related Costs and Other Corporate Matters
In 2019, in addition to the above-mentioned restructuring charges and related costs, we incurred costs of $294 million in connection with the Merger, consisting of financial advisory, legal and other professional fees, transaction-related bonuses, and contractual executive compensation, including the accelerated vesting of stock-based compensation, that was a tax-free transaction and therefore, there is no tax impact ontriggered by the gain.

The following tables set forth detailsMerger. We also incurred costs of net earnings (loss) from discontinued operations for$40 million in connection with the years ended December 31, 2016, 2015 and 2014. Net earnings (loss) from discontinued operations included the operating results of CBS Radio for all periods presented. For 2016, net loss from discontinued operations also included a charge of $36 million from the resolutionsettlement of a tax mattercommercial dispute and $17 million associated with legal proceedings involving the Company (see Note 19) and other corporate matters.

In 2018, we recorded expenses of $128 million primarily for professional fees related to legal proceedings, investigations at our Company and the evaluation of potential merger activity.

Programming Charges
During 2019, in connection with the Merger, we implemented management changes across the organization. In connection with these changes, we performed an evaluation of our programming portfolio across all of our businesses, including an assessment of the optimal use of our programming in the marketplace, which resulted in the identification of programs not aligned with management’s strategy. As a foreign jurisdictionresult, we recorded programming charges of $589 million principally reflecting accelerated amortization associated with changes in the expected monetization of certain programs, and decisions to cease airing, alter future airing patterns or not renew certain programs.
During 2018, in connection with management changes, we recorded programming charges of $162 million, relating to a previously disposed business that was accountedchanges to our programming strategy, including at CBS Films, which shifted its focus from theatrical films to developing content for our digital streaming services, as a discontinued operation. For 2015 and 2014, net earnings (loss) from discontinued operations also included decreases towell as at our Cable Networks segment where we ceased the guarantee liabilityuse of certain programming.
During 2017, we recorded programming charges of $144 million associated with management’s decision to cease use of certain original and acquired programming, in connection with the 2013 disposition of the Company’s outdoor advertising business in Europe (“Outdoor Europe”) as a resultexecution of a reduction to the risk associated with the guarantee. For 2014, net earnings from discontinued operations also included the operating resultsstrategy for certain of our flagship brands and the gain on the Split-Off of Outdoor Americas.strategic initiatives at Paramount.

Year Ended December 31, 2016CBS Radio Other Total
Revenues from discontinued operations$1,220

$—
 $1,220
Costs and expenses:     
Operating397

—
 397
Selling, general and administrative497

—
 497
Depreciation and amortization26

—
 26
Restructuring charges8

—
 8
Impairment charge444

—
 444
Total costs and expenses1,372
 —
 1,372
Operating loss(152) —
 (152)
Interest expense(17)
—
 (17)
Other income2

—
 2
Loss from discontinued operations(167) —
 (167)
Income tax provision(88)
(36) (124)
Net loss from discontinued operations, net of tax$(255) $(36) $(291)

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Year Ended December 31, 2015CBS Radio Other Total
Revenues from discontinued operations$1,223

$—
 $1,223
Costs and expenses:     
Operating415

—
 415
Selling, general and administrative500

(17) 483
Depreciation and amortization29

—
 29
Restructuring charges36

—
 36
Impairment charge484

—
 484
Total costs and expenses1,464
 (17) 1,447
Operating income (loss)(241) 17
 (224)
Other income1

—
 1
Earnings (loss) from discontinued operations(240) 17
 (223)
Income tax benefit (provision)89

(7) 82
Net earnings (loss) from discontinued operations, net of tax$(151) $10
 $(141)
Year Ended December 31, 2014CBS Radio Outdoor Americas Other Total
Revenues from discontinued operations$1,295

$677
 $—
 $1,972
Cost and expenses:       
Operating401

366
 —
 767
Selling, general and administrative498

131
 (21) 608
Depreciation and amortization31

88
 —
 119
Restructuring charges7

—
 —
 7
Impairment charge52

—
 —
 52
Total costs and expenses989
 585
 (21) 1,553
Operating income306
 92
 21
 419
Interest expense—

(34) —
 (34)
Earnings from discontinued operations306
 58
 21
 385
Income tax provision(103)
(18) (8) (129)
Net earnings from discontinued operations, net of tax203
 40
 13
 256
Gain on disposal—

1,557
 —
 1,557
Less: Net earnings from discontinued operations attributable to noncontrolling interest, net of tax—

5
 —
 5
Net earnings from discontinued operations attributable
to CBS Corp.
$203
 $1,592
 $13
 $1,808
During the year ended December 31, 2016, the Company recorded a pretax noncash impairment charge of $444 million ($427 million, net of tax) to reduce the carrying value of CBS Radio’s goodwill by $408 million ($405 million, net of tax)The programming charges for 2019, 2018, and FCC licenses in 11 radio markets by $36 million ($22 million, net of tax). The estimated fair value of FCC licenses was determined in connection with the Company’s annual impairment test, using the Greenfield Method (See Note 3). The goodwill impairment charge was determined based on the Company’s annual impairment test, which was performed at the reporting unit level (See Note 3). The carrying value of CBS Radio after the impairment charge of approximately $1.9 billion reflects the Company’s estimate of the value of the planned merger with Entercom. This estimated transaction value was derived by multiplying the historical trading multiples of Entercom and other similar companies by the total estimated earnings of the combined entity. The Company believes that this estimated transaction value is currently a better indicator of the transaction value than Entercom’s current stock price. However, the ultimate transaction value will be dependent on Entercom’s trading price at the time of the closing of the transaction. Entercom’s opening stock price on the day the transaction was announced indicates an estimated fair value of CBS Radio’s equity of approximately $1.7 billion. A 10% increase or decrease2017 were included within “Operating expenses” in the stock price would result in a change in the fair valueConsolidated Statements of approximately $175 million.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


During the year ended December 31, 2015, the Company recorded a pretax noncash impairment charge of $484 million ($297 million, net of tax) to reduce the carrying value of radio FCC licenses in 18 markets to their fair value. In December 31, 2014, the Company completed a radio station swap with Beasley Broadcast Group, Inc. through which the Company exchanged 13 of its radio stations in Tampa and Charlotte as well as one radio station in Philadelphia, for two radio stations in Philadelphia and three radio stations in Miami. In connection with the radio station swap, the Company recorded a pretax noncash impairment charge of $52 million ($74 million, including a tax provision) to reduce the carrying value of the allocated goodwill.

During the years ended December 31, 2016, 2015 and 2014, in a continued effort to reduce the cost structure of its radio business, the Company initiated restructuring plans at CBS Radio, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $8 million, $36 million and $7 million in 2016, 2015 and 2014, respectively, reflecting severance costs and costs associated with exiting contractual obligations.

The following table presents the major classes of assets and liabilities of the Company’s discontinued operations.
At December 31,2016 2015
Receivables, net$244
 $253
Other current assets61
 70
Goodwill1,285
 1,692
Intangible assets2,832
 2,875
Net property and equipment145
 152
Other assets29
 28
Total Assets$4,596
 $5,070
Current portion of long-term debt$10
 $—
Other current liabilities145
 143
Long-term debt1,335
 —
Deferred income tax liabilities998
 1,014
Other liabilities118
 125
Total Liabilities$2,606
 $1,282
CBS Radio Indebtedness
In connection with the Company’s previously announced plans to separate its radio business, in October 2016, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 (“Term Loan”) and the issuance of $400 million of 7.25% senior unsecured notes due 2024 through a private placement. The Term Loan bears interest at a rate equal to 3.50% plus the greater of the London Interbank Offered Rate (“LIBOR”) and 1.00%. During the fourth quarter of 2016, CBS Radio prepaid $100 million of the Term Loan, leaving $960 million outstanding at December 31, 2016.

The Term Loan is part of a credit agreement which also includes a $250 million senior secured revolving credit facility (the “Radio Revolving Credit Facility”) which expires in 2021. Interest on the Radio Revolving Credit Facility is based on either LIBOR or a base rate plus a margin based on CBS Radio’s Consolidated Net Secured Leverage Ratio. The Consolidated Net Secured Leverage Ratio reflects the ratio of CBS Radio’s secured debt (less up to $150 million of cash and cash equivalents) to CBS Radio’s consolidated EBITDA (as defined in the credit agreement). The Radio Revolving Credit Facility requires CBS Radio to maintain a maximum Consolidated Net Secured Leverage Ratio of 4.00 to 1.00. At December 31, 2016, the total outstanding borrowing under the Radio Revolving Credit Facility was $10 million.

This debt is guaranteed by certain subsidiaries of CBS Radio. The Company does not guarantee, or otherwise provide credit support for, the senior notes, Term Loan, or Radio Revolving Credit Facility.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


5) RESTRUCTURING AND MERGER AND ACQUISITION-RELATED COSTS
During the year ended December 31, 2016, 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 $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2015, the Company recorded restructuring charges of $45 million, reflecting $24 million of severance costs and $21 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2014, the Company recorded restructuring charges of $19 million, reflecting $11 million of severance costs and $8 million of costs associated with exiting contractual obligations. As of December 31, 2016, the cumulative settlements for the 2016, 2015, and 2014 restructuring charges were $55 million, of which $33 million was for the severance costs and $22 million related to costs associated with exiting contractual obligations. The Company expects to substantially utilize its restructuring reserves by the end of 2018.
 Balance at 2016 2016 Balance at
 December 31, 2015 Charges Settlements December 31, 2016
Entertainment $19
  $16

 $(15)   $20
 
Cable Networks —
  4
  —
   4
 
Publishing —
  1
  —
   1
 
Local Media 11
  6

 (5)   12
 
Corporate 1
  3

 (2)   2
 
Total $31
  $30
  $(22)   $39
 
 Balance at 2015 2015 Balance at
 December 31, 2014 Charges Settlements December 31, 2015
Entertainment $6
  $26
  $(13)   $19
 
Local Media 5
  19
  (13)   11
 
Corporate 2
  —
  (1)   1
 
Total $13
  $45
 
$(27)   $31
 

In 2016, the Company incurred professional fees of $8 million associated with merger and acquisition-related activities.Operations.
6) PROGRAMMING AND OTHER INVENTORY
At December 31,2016 2015
Acquired program rights$1,773
 $1,532
Internally produced programming:   
Released1,746
 1,261
In process and other298
 392
Publishing, primarily finished goods49
 42
Total programming and other inventory3,866
 3,227
Less current portion1,427
 1,270
Total noncurrent programming and other inventory$2,439
 $1,957
The Company expects to amortize approximately $775 million of its released internally produced programming during the year ended December 31, 2017. In addition, while it is difficult to determine the precise timing of the amortization of the remaining released internally produced programming, the Company estimates that substantially all of the December 31, 2016 balance will be amortized over the next three years.

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


7) RELATED PARTIES
National Amusements, Inc. National Amusements, Inc. (“NAI”) NAI is the controlling stockholder of ViacomCBS and was the controlling stockholder of each of CBS Corp. and Viacom Inc.  Mr.prior to the Merger. Sumner M. Redstone is the controlling stockholder, chairmanChairman of the boardBoard of directorsDirectors and chief executive officerChief Executive Officer of NAI, is the Chairman Emeritus of CBS Corp. and the Chairman Emeritus of Viacom Inc. In addition, Ms.NAI. Shari E. Redstone, Mr. Sumner M. Redstone’s daughter, is the presidentPresident and a director of NAINAI. She is the non-executive Chair of our Board of Directors and was the vice chairnon-executive Vice Chair of the Board of Directors of each of CBS Corp. and Viacom Inc.  Mr. David R. Andelman is a director of CBS Corp. and serves as a director of NAI.prior to the Merger. At December 31, 2016,2019, NAI directly or indirectly owned approximately 79.5%79.4% of CBS Corp.’sour voting Class A Common Stock and owned approximately 9.5%10.2% of CBS Corp.’sour 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 seven7 trustees, who will include CBS Corporation directors Ms. Shari Redstone and Mr. David R. Andelman.Redstone. No member of the Company’sour management is a trustee of the SMR Trust. Pursuant to a settlement and release agreement entered into by us, NAI and others, with respect to legal proceedings involving these parties, we paid $30 million for professional fees incurred by NAI during 2018 relating to these legal proceedings, which are included in “Restructuring and other corporate matters” on the Consolidated Statement of Operations for the year ended December 31, 2018.


Other Related Parties.In December 2016, the Company’s Board of Directors received a letter from NAI withdrawing NAI’s September 2016 request that the Company consider a potential combination of the Company and Viacom Inc. The Company has discontinued evaluating such potential transaction.

Viacom Inc.  As part of its normalordinary 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 programswe are involved in the home entertainment market. The Company’s total revenues from these transactions were $120 million, $176 million and $180 millionwith our equity-method investees, primarily for the years ended December 31, 2016, 2015licensing of television and 2014, respectively.

The Company places advertisements with and leases production facilities from various subsidiaries of Viacom Inc. The total amounts for these transactions were $24 million, $25 million and $19 million for the years ended December 31, 2016, 2015 and 2014, respectively.

film programming. The following table presents the amounts due from Viacom Inc.recorded in our consolidated financial statements related to these transactions.
Year Ended December 31,2019
2018 2017
Revenues$179
 $170
 $183
Operating expenses$14
 $22
 $41
At December 31,2019
2018
Amounts due to/from other related parties   
Accounts receivable$45
 $83
Accounts payable$3
 $9


Through the normal course of business, as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at December 31, 2016 and 2015.
At December 31,2016 2015
Receivables$113
 $114
Other assets (Receivables, noncurrent)35
 38
Total amounts due from Viacom Inc.$148
 $152
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 $112 million, $160 million and $122 million for the years ended December 31, 2016, 2015 and 2014, respectively. Total amounts due from these joint ventures were $47 million and $48 million at December 31, 2016 and 2015, respectively.

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

7) ACQUISITIONS AND INVESTMENTS
Pluto TV Acquisition
On March 1, 2019, we acquired Pluto Inc., the provider of Pluto TV, a leading free streaming television service in the U.S., for $324 million, net of cash acquired. The purchase price excludes $18 million of post-combination expenses that are subject to continuous employment and will be recognized over the required service period in the Consolidated Statements of Operations within “Selling, general and administrative expenses”. Pluto TV expands our presence across next-generation distribution platforms and accelerates the growth of our advanced marketing solutions business. Pluto TV is available across mobile devices, desktops, streaming players and game consoles and is integrated across a growing number of Smart TVs and other video and broadband platforms.



CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



8) INVESTMENTS
The Company accountsfollowing table summarizes our allocation of the purchase price as of the acquisition date for Pluto TV.
 Year Ended
 December 31, 2019
Assets   
Receivables $31
 
Prepaid expenses and other current assets 3
 
Goodwill 277
 
Intangible assets 41
 
Other assets (noncurrent) 8
 
Assets acquired $360
 
    
Liabilities   
Accounts payable $27
 
Accrued expenses 4
 
Other liabilities 5
 
Liabilities assumed $36
 
Total purchase price $324
 

The goodwill, which is not deductible for tax purposes, reflects the Company-specific synergies arising from the acquisition and is included in the Cable Networks segment. Intangible assets consist of distribution relationships, developed technology and trade names, all with useful lives of five years.

The operating results of Pluto TV from the date of acquisition through December 31, 2019 were not material to our consolidated financial statements.

Other Acquisitions
In 2019, we acquired the remaining 50% interest in Pop TV, a general entertainment cable network, for $39 million, net of cash acquired, bringing our ownership to 100%. The assets acquired primarily consist of goodwill and other identifiable intangible assets. The results of Pop TV are included in the Cable Networks segment from the date of acquisition.

In 2018, we made payments totaling $118 million, which were net of cash acquired, for acquisitions that included WhoSay Inc., a leading influence marketing firm; Pop Culture Media, a digital entertainment media company; VidCon LLC, a host of conferences dedicated to online video; and Awesomeness TV Holdings, LLC, a multi-platform media company serving global Gen-Z audiences as a digital-first destination for original programming.

In 2017, we acquired Ten Network Holdings Limited (“Network 10”) for approximately $124 million, net of cash acquired. Included in this acquisition was Network 10, one of three major commercial broadcast networks in Australia, as well as two multi-channel networks, channels One and Eleven. The assets acquired primarily consist of broadcast licenses, net operating loss carryforwards and working capital.

The operating results of these acquisitions were not material to our consolidated financial statements.


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Miramax Acquisition
In December 2019, we entered into a definitive agreement with beIN Media Group to acquire a 49% stake in Miramax, a global film and television studio, for $375 million, which includes an upfront cash payment of approximately $150 million, along with a commitment to invest $45 million annually over the next five years, or $225 million, to be used for new film and television productions and working capital. In conjunction with this agreement, we entered into a series of commercial agreements with Miramax under which we will have exclusive, long-term distribution rights to Miramax’s catalog adding more than 700 titles to our existing library. In addition to maximizing library content, the agreement will enable us to co-produce, co-finance and distribute new film and television projects under the Miramax banner. The investment will be accounted for as a consolidated variable interest entity. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2020.
Investments
At December 31, 2019 and 2018, we had investments of $753 million and $719 million, respectively, consisting of marketable securities, non-marketable equity investments and equity-method investments. Our investments are included in “Other assets” on the Consolidated Balance Sheets.

Investments over which it haswe have significant influence, or ownership of more than 20% but less than or equal to 50%, without a controlling interest, are accounted for under the equity method. Such investments include the Company’sour 50% interestsinterest in the broadcast network, The CW, and the entertainment cable network, Pop. In addition, the Company hasas well as interests in several international television joint ventures including a 49% interest in a joint venture with a subsidiary of AMC Networks Inc., which owns and operates six channels in the United Kingdom and Ireland, including CBS branded channels; a 30% interest in a joint venture with another subsidiary of AMC Networks Inc., which owns and operates six cable and satellite channels in Europe, the Middle East and Africa; and a 33%49% interest in Viacom18, a joint venture with a subsidiary of Ten Network Holdings Limited to provide content to ELEVEN, a digital television channel service in Australia; and a 30% interest in a joint venture with RTL GroupIndia which owns and operates two cable channels in Southeast Asia.

COLORS pay television channel, a digital advertising platform and a filmed entertainment business. At December 31, 20162019 and 2015,2018, respectively, the Companywe had $227$494 million and $224$573 million of equity investments that are included in “Other assets” on the Consolidated Balance Sheets.equity-method investments.


Investments of 20% or less, over which the Company has no significant influence, that do not havewithout a readily determinable fair value for which we have no significant influence are accountedmeasured at cost less impairment, if any, and adjusted for under the cost method.any observable price changes. At December 31, 20162019 and 2015,2018, respectively, the Companywe had $113 million and $112 million of such investments.
The fair value of our marketable securities was $146 million and $34 million and $32 millionas of cost investments that are included in “Other assets” on the Consolidated Balance Sheets.

The Company invested $81 million during the year ended December 31, 20162019 and $98 million during each of2018, respectively, as determined based on quoted market prices in active markets (Level 1 in the fair value hierarchy). During the years ended December 31, 20152019 and 2014 into its equity2018, we recorded an unrealized gain of $113 million and cost investments.

For 2016, equity inan unrealized loss of investee companies, net$23 million, respectively, resulting from changes in the fair value of taxour marketable securities. Beginning in the first quarter of 2018, in connection with the adoption of FASB guidance on financial instruments, changes in the statementfair value of operations included $10marketable securities are recognized in the Consolidated Statements of Operations. Prior to the adoption of this guidance, we recorded unrealized gains and losses on marketable securities in other comprehensive income.

We invested $171 million for, $161 million and $128 million into our investments during the write-downyears ended December 31, 2019, 2018 and 2017, respectively.

In 2019, we completed the sale of an international television joint venture resulting in a gain of $10 million. In 2018, we completed the sale of a 1% equity interest in Viacom18 to its fair value.our joint venture partner for $20 million, resulting in a gain of $16 million. These gains have been included in “Other items, net” in the Consolidated Statements of Operations.


During 2017, we completed the sale of our 49.76% interest in EPIX, a premium entertainment network, for $593 million, net of transaction costs of $4 million, resulting in a gain of $285 million. In addition, prior to the closing of the sale, EPIX paid a dividend, of which our pro rata share was $37 million.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




9) BANK FINANCING AND DEBT
The Company’s debt consists of the following (a):
At December 31,2016 2015
Commercial paper$450
 $—
7.625% Senior Debentures due 2016—
 200
1.95% Senior Notes due 2017399
 398
4.625% Senior Notes due 2018305
 309
2.30% Senior Notes due 2019606
 609
5.75% Senior Notes due 2020499
 498
4.30% Senior Notes due 2021299
 299
3.375% Senior Notes due 2022695
 694
7.875% Debentures due 2023187
 186
7.125% Senior Notes due 2023 (b)
46
 46
3.70% Senior Notes due 2024596
 596
3.50% Senior Notes due 2025587
 585
4.00% Senior Notes due 2026783
 781
2.90% Senior Notes due 2027683
 —
7.875% Senior Debentures due 2030833
 833
5.50% Senior Debentures due 2033425
 425
5.90% Senior Notes due 2040297
 297
4.85% Senior Notes due 2042485
 484
4.90% Senior Notes due 2044538
 538
4.60% Senior Notes due 2045587
 587
Obligations under capital leases75
 83
Total debt (c)
9,375
 8,448
Less commercial paper450
 —
Less current portion23
 222
Total long-term debt, net of current portion$8,902
 $8,226
(a) Unless otherwise noted, the long-term debt instruments are issuances of CBS Corp.For 2019, 2018, and are guaranteed by CBS Operations Inc.
(b) Debt instrument is an issuance of CBS Broadcasting Inc., a wholly owned subsidiary of CBS Corp., and has no guarantor.
(c) At December 31, 2016 and 2015, the senior debt balances included (i) a net unamortized discount of $52 million and $45 million, respectively, (ii) unamortized deferred financing costs of $43 million and $44 million, respectively, and (iii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $5 million and $14 million, respectively.  The face value of the Company’s total debt was $9.47 billion at December 31, 2016 and $8.52 billion at December 31, 2015.

Long-term debt of $1.35 billion at December 31, 2016 is2017, included in discontinued operations“Other items, net” on the Consolidated Statements of Operations was $50 million, $46 million and$18 million, respectively, for the impairment of investments without readily determinable fair values.

Variable Interest Entities
In the normal course of business, we enter into joint ventures or make investments with business partners that support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which we make an investment may qualify as a VIE. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and have the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Consolidated Balance Sheets (See Note 4).

During July 2016, the Company issued $700include assets and liabilities related to consolidated VIEs totaling $141 million of 2.90% senior notes due 2027.

During January 2016, the Company repaid its $200and $22 million, respectively, as of outstanding 7.625% senior debentures upon maturity.

For the year ended December 31, 2015,2019, and $63 million and $4 million, respectively, as of December 31, 2018. In 2017, a consolidated VIE completed the sale of broadcast spectrum in connection with the FCC’s broadcast spectrum auction for $147 million, a portion of which was used to repay outstanding debt, issuancesresulting in a pre-tax gain of $127 million, with $11 million attributable to the noncontrolling interest. Other than this gain, the consolidated VIEs’ revenues, expenses and operating income were as follows:not significant for all periods presented.
January 2015, $600 million 3.50% senior notes due 2025
January 2015, $600 million 4.60% senior notes due 2045
July 2015, $800 million 4.00% senior notes due 2026

The Company used the net proceeds from the 2016 and 2015 issuances for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and repayment of short-term borrowings, including commercial paper.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




8) DEBT
Our debt consists of the following:
At December 31,2019 2018
Commercial paper$699
 $674
2.30% Senior Notes due 2019—
 601
5.625% Senior Notes due 2019—
 221
2.750% Senior Notes due 2019—
 90
4.30% Senior Notes due 2021300
 300
4.50% Senior Notes due 2021499
 498
3.875% Senior Notes due 2021597
 596
2.250% Senior Notes due 202249
 49
3.375% Senior Notes due 2022698
 697
3.125% Senior Notes due 2022194
 194
2.50% Senior Notes due 2023398
 397
3.25% Senior Notes due 2023181
 181
2.90% Senior Notes due 2023396
 396
4.25% Senior Notes due 20231,242
 1,240
7.875% Debentures due 2023187
 187
7.125% Senior Notes due 202346
 46
3.875% Senior Notes due 2024489
 489
3.70% Senior Notes due 2024598
 597
3.50% Senior Notes due 2025592
 590
4.00% Senior Notes due 2026789
 787
3.45% Senior Notes due 2026123
 123
2.90% Senior Notes due 2027688
 686
3.375% Senior Notes due 2028494
 493
3.70% Senior Notes due 2028491
 490
4.20% Senior Notes due 2029493
 —
7.875% Senior Debentures due 2030831
 832
5.50% Senior Debentures due 2033426
 426
4.85% Senior Debentures due 203487
 86
6.875% Senior Debentures due 20361,068
 1,068
6.75% Senior Debentures due 203775
 75
5.90% Senior Notes due 2040297
 297
4.50% Senior Debentures due 204245
 45
4.85% Senior Notes due 2042486
 486
4.375% Senior Debentures due 20431,109
 1,103
4.875% Senior Debentures due 204318
 18
5.850% Senior Debentures due 20431,231
 1,230
5.25% Senior Debentures due 2044345
 345
4.90% Senior Notes due 2044539
 539
4.60% Senior Notes due 2045589
 588
5.875% Junior Subordinated Debentures due 2057643
 642
6.25% Junior Subordinated Debentures due 2057643
 642
Obligations under finance leases44

69
Total debt (a)
18,719
 19,113
Less commercial paper699
 674
Less current portion18
 339
Total long-term debt, net of current portion$18,002
 $18,100
(a) At December 31, 2019 and 2018, the senior and junior subordinated debt balances included (i) a net unamortized discount of $412 million and $422 million, respectively, (ii) unamortized deferred financing costs of $92 million and $98 million, respectively, and (iii) a decrease in the carrying value of the debt relating to previously settled fair value hedges of $6 million and $5 million, respectively. The face value of our total debt was $19.23 billion at December 31, 2019 and $19.64 billion at December 31, 2018.


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


During the year ended December 31, 2019, we issued $500 million of 4.20% senior notes due 2029. We used the net proceeds from this issuance in the redemption of our $600 million outstanding 2.30% senior notes due August 2019. During 2019, we also repaid the $220 million aggregate principal amount of our 5.625% senior notes due September 2019 and the $90 million aggregate principal amount of our 2.75% senior notes due December 2019.

During the year ended December 31, 2018, we redeemed $1.13 billion of senior notes and debentures for a redemption price of $1.10 billion, resulting in a pre-tax gain on early extinguishment of debt of $18 million ($14 million, net of tax).

During the year ended December 31, 2017, we issued $3.10 billion of senior notes and junior subordinated debentures. Also during 2017, we redeemed and repaid $4.67 billion of senior notes, of which $4.27 billion was redeemed prior to maturity, resulting in a pre-tax loss on early extinguishment of debt of $38 million ($21 million, net of tax).

Our 5.875% junior subordinated debentures due February 2057 and 6.25% junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the expiration of the fixed-rate period.

The interest rate payable on our 2.25% senior notes due February 2022 and 3.45% senior notes due October 2026, collectively the “Senior Notes”, will be subject to adjustment from time to time if Moody’s Investor Services, Inc. or S&P Global Ratings downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes. The interest rate on these Senior Notes would increase by 0.25% upon each credit agency downgrade up to a maximum of 2.00%, and would similarly be decreased for subsequent upgrades. At December 31, 2019, the outstanding principal amount of our 2.25% senior notes due February 2022 and 3.45% senior notes due October 2026 was $50 million and $124 million, respectively.

Some of our outstanding notes and debentures provide for certain covenant packages typical for an investment grade company. There is an acceleration trigger for the majority of the notes and debentures in the event of a change in control under specified circumstances coupled with ratings downgrades due to the change in control, as well as certain optional redemption provisions for our junior debentures.

At December 31, 2016, the Company classified $399 million of debt maturing in July 2017 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

At December 31, 2016, the Company’s2019, our scheduled maturities of long-term debt at face value, excluding capitalfinance leases, and the related interest payments were as follows:
                2025 and
 20202021202220232024Thereafter
Long-term debt $—
  $1,400
  $945
  $2,465
  $1,092
 $12,584
                2022 and
 20172018201920202021Thereafter
Long-term debt $400
  $300
  $600
  $500
  $300
 $6,840

Commercial Paper
At December 31, 2016 the CompanyWe had $450 million of outstanding commercial paper borrowings under its $2.5our $2.50 billion commercial paper program of $699 million and $674 million at aDecember 31, 2019 and 2018, respectively, each with maturities of less than 90 days. The weighted average interest rate of 0.98%for these borrowings was 2.07% and with remaining maturities of less than 45 days. There were no outstanding commercial paper borrowings3.02% at December 31, 2015.2019 and 2018, respectively.

In January 2020, our commercial paper program was increased to $3.50 billion in conjunction with the new $3.50 billion revolving credit facility described below.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Credit Facility
DuringAt December 31, 2019, we had a $2.50 billion revolving credit facility held by CBS prior to the Merger (the “CBS Credit Facility”) with a maturity in June 2016,2021 and a $2.50 billion revolving credit facility held by Viacom prior to the CompanyMerger (the “Viacom Credit Facility”), with a maturity in February 2024. At December 31, 2019, we had no borrowings outstanding under the CBS Credit Facility or the Viacom Credit Facility and the remaining availability, net of outstanding letters of credit, was $2.50 billion for each facility.
In January 2020, the CBS Credit Facility was terminated and the Viacom Credit Facility was amended and restated its $2.5to a $3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”). The amended Credit Facility expires in June 2021 and contains provisions that are substantially similar to the previous credit facility which was dueis used for general corporate purposes and to expire in December 2019. The Company,support commercial paper outstanding, if any. We may, at itsour option, may also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the Company’sour option at the time of each borrowing and are based generally on the prime rate in the U.S. or LIBOR plus a margin based on the Company’sour senior unsecured debt rating. The Company pays a facility fee based on the total amount of the commitments.

The Credit Facility requires the Company to maintain a maximumour Consolidated Total Leverage Ratio ofto be less than 4.5x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualified acquisition) at the end of each quarter, as further described in the Credit Facility. Atto be applied retrospectively from December 31, 2016, the Company’s2019. The Consolidated Leverage Ratio was approximately 2.9x.

The ConsolidatedTotal Leverage Ratio reflects the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations,our Consolidated Indebtedness at the end of a quarter, to the Company’sour Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing four consecutive quarters.  Consolidated EBITDA is definedtwelve-month period. We met the covenant as of December 31, 2019.
9) LEASES
On January 1, 2019, we adopted FASB guidance on the accounting for leases. We applied the modified retrospective method of adoption and therefore, results for reporting periods beginning after January 1, 2019 are presented under the new guidance while prior periods have not been adjusted.

The adoption of this guidance resulted in the Credit Facility as operating income plus interest incomerecognition on the Consolidated Balance Sheet of right-of-use assets and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes.lease liabilities representing the present value of future lease payments of all leases with terms in excess of one year. At December 31, 2016,2019, the Companyfollowing amounts were recorded on the Consolidated Balance Sheet relating to our leases.
 Leases
 Operating Finance
Right-of-Use Assets   
Operating lease assets$1,939
 $—
Property and equipment, net$—
 $35
    
Lease Liabilities   
Other current liabilities$292
 $—
Debt—
 19
Operating lease liabilities1,909
 —
Long-term debt—
 25
Total lease liabilities$2,201
 $44

 Leases
 Operating Finance
Weighted average remaining lease term9 years
 3 years
    
Weighted average discount rate4.1% 4.5%


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


For existing leases at the time of adoption, we elected to not reassess (i) whether each contract is or contains a lease, (ii) the classification of leases as operating or finance leases, and (iii) initial direct costs for existing leases.

Lessee Contracts
We have operating leases primarily for office space, equipment, satellite transponders and studio facilities. We also have finance leases for satellite transponders and equipment. Lease costs are generally fixed, with certain contracts containing variable payments for non-lease costs based on usage and escalations in the lessors’ annual costs.

The following table presents our lease cost.
 Year Ended
 December 31, 2019
Operating lease cost (a) (b)
 $406
 
Finance lease cost:   
Amortization of right-of-use assets 23
 
Interest expense on lease liabilities 3
 
Short-term lease cost (b) (c)
 242
 
Variable lease cost (d)
 80
 
Sublease income (31) 
Total lease cost $723
 
(a) Includes fixed lease costs and non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) associated with long-term operating leases.
(b) Includes costs capitalized in programming assets during the period for leased assets used in the production of programming.
(c) Short-term leases have a term of 12 months or less and exclude month-to-month leases. Short-term leases are not recorded on the Consolidated Balance Sheet.
(d) Primarily includes non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) and costs for equipment leases that vary based on usage.

The following table presents supplemental cash flow information related to our leases.
 Year Ended
 December 31, 2019
Cash paid for amounts included in lease liabilities   
Operating lease payments, included in operating cash flows $341
 
Finance lease payments, included in financing cash flows $27
 
    
Noncash additions to operating lease assets $389
 


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The expected future payments relating to our operating and finance lease liabilities at December 31, 2019 are as follows:
 Leases
 Operating Finance
2020$371
 $21
2021352
 16
2022296
 7
2023251
 1
2024205
 1
2025 and thereafter1,234
 1
Total minimum payments2,709
 47
Less amounts representing interest508
 3
Present value of minimum payments$2,201
 $44

The following table presents the future payments under our operating and finance leases as of December 31, 2018 based on lease guidance in effect prior to the adoption of new FASB lease guidance on January 1, 2019.
 Leases
 
Operating (a)
 Finance
2019$305
 $29
2020309
 20
2021282
 15
2022247
 7
2023211
 2
2024 and thereafter1,228
 2
Total minimum payments$2,582
 $75
Less amounts representing interest

 6
Present value of minimum payments

 $69
(a) Future minimum operating lease payments have been reduced by future minimum sublease income of $57 million. Rent expense based on lease guidance in effect prior to January 1, 2019 was $474 million in 2018 and $449 million in 2017. Included in net earnings (loss) from discontinued operations was rent expense of $32 million in 2017.
As of December 31, 2019, we had no borrowings outstandingsigned additional operating leases with lease terms ranging from two to 11 years that have not yet commenced. The total future undiscounted lease payments under these leases are
$98 million, which were not recorded on the Credit FacilityConsolidated Balance Sheet at December 31, 2019.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Lessor Contracts
We enter into operating leases for the use of our owned production facilities and office buildings. Lease payments received under these agreements consist of fixed payments for the remaining availabilityrental of space and certain building operating costs, as well as variable payments based on usage of production facilities and services, and escalating costs of building operations. We recorded total lease income of $149 million, including both fixed and variable amounts, for the year ended December 31, 2019.
At December 31, 2019, future fixed lease income under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.noncancellable operating leases is as follows:
2020$68
202152
202245
202344
202436
2025 and thereafter57
Total$302

10) FINANCIAL INSTRUMENTS
The carrying value of financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value.  At December 31, 20162019 and 2015,2018, the carrying value of the Company’s senior debtour notes and debentures was $8.85$17.98 billion and $8.37$18.37 billion, respectively, and the fair value, which is estimateddetermined based on quoted market prices for similar liabilitiesin active markets (Level 2) and includes accrued interest,1 in the fair value hierarchy) was $9.51$20.6 billion and $8.78$18.4 billion, respectively.


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



CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


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 designatesWe designate foreign exchange 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 (loss) and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enterswe enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows. 


At December 31, 20162019 and 2015,2018, the notional amount of all foreign currency contracts was $433$1.44 billion and $995 million, respectively. For 2019, $833 million related to future production costs and $291$606 million respectively.related to our foreign currency balances and other expected foreign currency cash flows. For 2018, $481 million related to future production costs and $514 million related to our foreign currency balances and other expected foreign currency cash flows.

Interest Rate Swaps
All of the Company’s long-term debt has been issued under fixed interest rate agreements. During 2014, in connection with the issuance of its $600 million of 2.30% senior notes due 2019, the Company entered into $600 million notional amount of fixed-to-floating rate swap agreements to hedge this debt. During 2015, prior to maturity, the Company settled these interest rate swaps and received $12 million in cash, plus accrued interest. The resulting increase in the carrying value of the previously hedged debt is being amortized as a reduction to interest expense over the remaining term of the debt. The Company did not have any interest rate swaps outstanding at December 31, 2016 or December 31, 2015.


Gains (losses) recognized on derivative financial instruments were as follows:
Year Ended December 31,2019 2018 Financial Statement Account
Non-designated foreign exchange contracts $(4)   $25
  Other items, net
Year Ended December 31,2016 2015 Financial Statement Account
Non-designated foreign exchange contracts $33
   $22
  Other items, net
          
Designated interest rate swaps $—
   $7
  Interest expense


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


The Company continually monitors its positions with, and credit quality of, the financial institutions that are counterparties to its financial instruments. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company does not anticipate nonperformance by the counterparties.

The Company’s receivables do not represent significant concentrations of credit risk at December 31, 2016 and 2015, due to the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold.

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




We continually monitor our position with, and credit quality of, the financial institutions that are counterparties to our financial instruments. We are exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, we do not anticipate nonperformance by the counterparties.

Our receivables do not represent significant concentrations of credit risk at December 31, 2019 and 2018, due to the wide variety of customers, markets and geographic areas to which our products and services are sold.
11) FAIR VALUE MEASUREMENTS
The following tables set forth the Company’sour assets and liabilities measured at fair value on a recurring basis at December 31, 20162019 and 2015.2018. 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’sour own assumptions about the assumptions that market participants would use in pricing the asset or liability.
At December 31, 2016Level 1 Level 2 Level 3 Total
At December 31, 2019Level 1 Level 2 Level 3 Total
Assets:              
Marketable securities$146
 $—
 $—
 $146
Foreign currency hedges$—
 $34
 $—
 $34
—
 13
 —
 13
Total Assets$—

$34

$—
 $34
$146

$13

$—

$159
Liabilities:      $—
      $—
Deferred compensation$—
 $347
 $—
 $347
$—
 $490
 $—
 $490
Foreign currency hedges—
 1
 —
 $1
—
 14
 —
 14
Total Liabilities$—

$348

$—
 $348
$—

$504

$—
 $504
At December 31, 2015Level 1 Level 2 Level 3 Total
At December 31, 2018Level 1 Level 2 Level 3 Total
Assets:              
Marketable securities$34
 $—
 $—
 $34
Foreign currency hedges$—
 $13
 $—
 $13
—
 21
 —
 21
Total Assets$—
 $13
 $—
 $13
$34
 $21
 $—
 $55
Liabilities:      $—
      $—
Deferred compensation$—
 $312
 $—
 $312
$—
 $501
 $—
 $501
Foreign currency hedges—
 18
 —
 18
Total Liabilities$—
 $312
 $—
 $312
$—
 $519
 $—
 $519

The fair value of marketable securities is determined based on quoted market prices in active markets. 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.
12) STOCKHOLDERS’ EQUITY
In general, CBS Corp.ViacomCBS Class A Common Stock and CBS Corp.ViacomCBS Class B Common Stock have the same economic rights; however, holders of CBS Corp.ViacomCBS Class B Common Stock do not have any voting rights, except as required by law. Holders of CBS Corp.ViacomCBS Class A Common Stock are entitled to one vote per share with respect to all matters on which the holders of CBS Corp.ViacomCBS Common Stock are entitled to vote.

Dividends—On July 28, 2016, the Company announced that its Board of Directors approved a 20% increase to the quarterly cash dividend on its Class A and Class B Common Stock to $.18 from $.15 per share. The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2016, 2015, and 2014. For the years ended December 31, 2016, 2015 and 2014, the Company declared total per share dividends of $.66, $.60, and $.54, respectively, resulting in total annual dividends of $294 million, $293 million and$296 million, respectively. Dividends have been recorded as a reduction to additional paid-in capital as the Company has an accumulated deficit balance.

Purchase of Company Stock—On July 28, 2016, the Company announced that its Board of Directors approved an increase to the Company’s share repurchase program to a total availability of $6.0 billion. During 2016, the Company repurchased 54.3 million shares of CBS Corp. Class B Common Stock under its share repurchase program for $3.0 billion, at an average cost of $55.15 per share. At December 31, 2016, $4.11 billion of authorization remained under the share repurchase program.




CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Merger with Viacom—At the Effective Time, (1) each share of Viacom Class A Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of ViacomCBS Class A Common Stock, and (2) each share of Viacom Class B Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of ViacomCBS Class B Common Stock, resulting in the issuance of 29 million shares of ViacomCBS Class A Common Stock and 211 million shares of ViacomCBS Class B Common Stock. At the Effective Time, each share of CBS Class A Common Stock and each share of CBS Class B Common Stock issued and outstanding immediately prior to the Effective Time, remained an issued and outstanding share of ViacomCBS Class A Common Stock and ViacomCBS Class B Common Stock, respectively, and was not affected by the Merger.

Dividends—On December 19, 2019, ViacomCBS declared a quarterly cash dividend of $.24 per share on its Class A and Class B Common Stock, resulting in total dividends of $150 million, which were paid on January 10, 2020. Prior to the Merger, Viacom and CBS each declared a quarterly cash dividend during each of the first three quarters of 2019 and during each of the four quarters of 2018 and 2017. During 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For each of the years ended December 31, 2018 and 2017, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million and $289 million, respectively. During 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For each of the years ended December 31, 2018 and 2017, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million and $323 million, respectively. For 2017, dividends were recorded as a reduction to additional paid-in capital as we had an accumulated deficit balance. During 2018, our retained earnings became positive and as a result, dividends for 2018 were recorded as a reduction to additional paid-in-capital until such time as retained earnings became positive. For the remainder of 2018 and for 2019, dividends have been recorded to retained earnings.

Treasury Stock—During December 2019, we repurchased 1.2 million shares of ViacomCBS Class B Common Stock under our share repurchase program for $50 million, at an average cost of $40.78 per share. At December 31, 2019, $2.41 billion of authorization remained under the share repurchase program.

In the Merger, all shares of Viacom Class B Common Stock held by Viacom as treasury stock were canceled and recorded to additional paid-in-capital.

Conversion Rights—Holders of Class A Common Stock have the right to convert their shares to Class B Common Stock as long as there are at least 5,000 shares of Class A Common Stock outstanding. Conversions of CBS Corp. Class A Common Stock into Class B Common Stock were 0.112.2 million for both 20162019 and 2015 and 1.32.5 million for 2014.2018. Conversions of Class A Common Stock into Class B Common Stock for 2017 were minimal.



VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Accumulated Other Comprehensive Income (Loss)—The following table presents the changes in the components of accumulated other comprehensive income (loss).
Continuing Operations Discontinued Operations     Net Actuarial   Accumulated
  Net Actuarial     AccumulatedCumulative Loss and   Other
Cumulative Gain (Loss) Unrealized Other OtherTranslation Prior Available-For-Sale Comprehensive
Translation and Prior Gain on Comprehensive ComprehensiveAdjustments Service Cost Securities Loss
Adjustments Service Cost Securities Income (Loss)
(a) 
Loss
At December 31, 2013$166
 $(729) $3
 $15
 $(545)
At December 31, 2016 $(420) $(1,144) $—
  $(1,564) 
Other comprehensive income (loss) before reclassifications(9) (189) —
 15
 (183) 190
 (201) 30
  19
 
Reclassifications to net earnings—
 26
(b) 
(3) (30)
(c) 
(7) 2
 274
(a) 
 —
 276
 
Other comprehensive loss(9) (163) (3) (15) (190)
At December 31, 2014157
 (892) —
 —
 (735)
Other comprehensive income (loss) before reclassifications(5) (66) —
 —
 (71)
Other comprehensive income 192
  73
  30
  295
 
At December 31, 2017 (228)  (1,071)  30
  (1,269) 
Other comprehensive loss before reclassifications (248) (123) —
 (371) 
Reclassifications to net earnings—
 36
(b) 
—
 —
 36
 —
 62
(a) 
 —
 62
 
Other comprehensive loss(5) (30) —
 —
 (35) (248) (61) —
 (309) 
At December 31, 2015152
 (922) —
 —
 (770)
Adoption of accounting standard —
  —
 (30)  (30) 
At December 31, 2018 (476)  (1,132) —
  (1,608) 
Other comprehensive income (loss) before reclassifications(1) (165) —
 —
 (166) 13
 (205) —
 (192) 
Reclassifications to net earnings—
 169
(b) 
—
 —
 169
 —
 60
(a) 
 —
 60
 
Other comprehensive income (loss)(1) 4
 —
 —
 3
 13
 (145) —
 (132) 
At December 31, 2016$151
 $(918) $—
 $—
 $(767)
Tax effects reclassified to retained earnings —
 (230)
(b) 
 —
 (230) 
At December 31, 2019 $(463)  $(1,507)  $—
  $(1,970) 
(a) Primarily reflects cumulative translation adjustments.
(b) Reflects amortization of net actuarial losses, (Seewhich, for the year ended December 31, 2017 includes the accelerated recognition of a portion of the unamortized actuarial losses as a result of pension settlements (see Note 15).
(c) Reclassified in connection with(b) Reflects the disposalreclassification of Outdoor Americas in 2014 and Outdoor Europe in 2013 (Seecertain income tax effects of the Tax Reform Act on items within accumulated other comprehensive loss to retained earnings upon the adoption of new FASB guidance (see Note 4)1).

The net actuarial gain (loss)loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax benefit (provision) benefit for the years ended December 31, 2016, 20152019, 2018 and 20142017 of $(3)$44 million, $19$23 million and $105$(90) million, respectively. The tax provision related to the other comprehensive loss from discontinued operations and the tax provision related to the unrealized gain on available-for-sale securities were minimalincluded in other comprehensive income for all periods presented.

2017 is net of a tax provision of $18 million.
13) STOCK-BASED COMPENSATION

The Company hasWe have equity incentive plans (the “Plans”) under which stock options and RSUs and market-based performance share units (“PSUs”) wereare issued. The purpose of the Plans is to benefit and advance the interests of the Companyour company by attracting, retaining and motivating participants and to compensate participants for their contributions to the financial success of the Company.our company. The Plans provide for awards of stock options, stock appreciation rights, restricted and unrestricted shares, RSUs, dividend equivalents, performance awards and other equity-related awards. Upon exercise of stock options or vesting of RSUs, and PSUs, the Company issueswe issue new shares from itsour existing authorization. At December 31, 2016,2019, there were 48 million shares available for future grant under the Plans. Prior to the Merger, stock-based compensation awards were also granted under Viacom’s equity incentive plans. Upon exercise of stock options or vesting of RSUs under Viacom’s equity incentive plans, shares were either issued from Viacom’s existing authorization or from treasury stock.

At the Effective Time, each RSU for Viacom Class B common stock was converted into 0.59625 RSUs for ViacomCBS Class B Common Stock and each outstanding stock option for Viacom Class B common stock was converted into 0.59625 options for ViacomCBS Class B common stock. The exercise price of stock options was


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




adjusted by dividing the exercise price of the Viacom stock options by 0.59625. RSU and stock option information is presented herein as if Viacom and CBS had been combined for all periods presented, unless otherwise noted.
The following table summarizes the Company’s stock-based compensation expense for the years ended December 31, 2016, 20152019, 2018 and 2014.2017.
Year Ended December 31,2016 2015 20142019
2018
2017
RSUs and PSUs$137
 $129
 $116
$173
 $170
 $181
Stock options28
 28
 21
28
 35
 39
Compensation cost included in operating and SG&A expense201
 205
 220
Compensation cost included in restructuring and other
corporate matters (a)
90
 (14) 12
Stock-based compensation expense, before income taxes165
 157
 137
291
 191
 232
Related tax benefit(63) (61) (55)(59) (45) (84)
Stock-based compensation expense, net of tax benefit$102
 $96
 $82
$232
 $146
 $148
Included(a) 2019 primarily reflects accelerations triggered by the Merger and other restructuring activities. 2018 includes forfeitures of $28 million and accelerations of $14 million related to changes in net earnings (loss) from discontinued operations was stock-based compensation expense of $12 million for 2016senior management and $17 million for each of the years 2015 and 2014.other restructuring activities. 2017 reflects accelerations related to restructuring activities.
RSUs and PSUs
Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is generally a one- to four-year service period. Certain RSU awards are also subject to satisfying internal performance conditions. Compensation expense is recorded based on the probable outcome of the internal performance conditions. Forfeitures for RSUs are estimated on the date of grant based on historical forfeiture rates. On an annual basis, the Company adjustsWe adjust the compensation expense based on actual forfeitures and reviseson an annual basis we revise the forfeiture rate as necessary. RSUs accrue dividends each time we declare a quarterly cash dividend, which are paid upon vesting when the shares are delivered and are forfeited if the award does not vest.


The weighted average grant date fair value of RSUs granted was $41.71, $53.90 and $64.26 in 2019, 2018, and 2017, respectively. The total market value of RSUs that vested during 2019, 2018, and 2017 was $159 million, $158 million and $228 million, respectively. Total unrecognized compensation cost related to non-vested RSUs at December 31, 2019 was $445 million which is expected to be recognized over a weighted average period of 3.0 years.

During 2016, the Company2018 and 2017, we also granted a PSU award.awards. The number of shares that willto be issued upon vesting of the PSU isPSUs was based on the Company’s stock price performance of CBS Class B Common Stock or the total shareholder return of Viacom Class B Common Stock measured against the companies comprising the S&P 500 Index, as applicable, over a designated measurement period, as well as the achievement of established operating goals. The fair value of the PSU awardawards is determined using a Monte Carlo simulation model. Compensation expense for the PSUPSUs is expensed over the required employee service period.

The weighted average grant date fair value of RSUsthe PSU awards granted during the years ended December 31, 2018 and 2017 was $47.30, $59.11 and $62.70 in 2016, 2015, and 2014, respectively. The total market value of RSUs that vested during 2016, 2015, and 2014 was $129 million, $212$35 million and $319$32 million, respectively. Total unrecognized compensation cost related to non-vestedThere were no PSU awards granted in 2019. As a result of the Merger, all outstanding PSU awards for which the performance period had not been completed were converted into time-based RSUs at December 31, 2016 was $181 million which is expected to be recognized over a weighted average periodbased on the target number of 2.3 years.shares included in the terms of the original PSU award.


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following table summarizes the Company’sour RSU activity.and PSU share activity:
  Weighted Average
 SharesGrant Date Fair Value
Non-vested at December 31, 2018 8,011,104
  $55.96
 
Granted 10,620,187
  $41.71
 
Vested (3,374,331)  $55.90
 
Forfeited (767,231)  $53.89
 
Non-vested at December 31, 2019 14,489,729
  $45.64
 
     Weighted Average
 RSUs Grant Date Fair Value
Non-vested at December 31, 2015 5,745,080
   $54.88
 
Granted 3,702,313
   $47.30
 
Vested (2,731,513)   $50.04
 
Forfeited (258,260)   $55.19
 
Non-vested at December 31, 2016 6,457,620
   $52.57
 

Stock Options
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. Stock options generally vest over a three- to four-year service period and expire eight years from the date of grant. Forfeitures are estimated on the date of grant based on historical forfeiture rates. On an annual basis, the Company adjustsWe adjust the compensation expense based on actual forfeitures and revises the forfeiture rate as necessary.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


forfeitures.
The weighted average fair value of stock options granted for CBS Class B Common Stock as of the grant date was $12.30, $15.73$14.48 and $18.23$17.50 in 2016, 2015,2018 and 2014,2017, respectively. CBS did not have any stock option grants in 2019. The fair value of each option grant iswas estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:
 2018
2017
Expected dividend yield1.33% 1.09%
Expected stock price volatility29.52% 29.89%
Risk-free interest rate2.73% 2.00%
Expected term of options (years)5.00
 5.00

 2016 2015 2014
Expected dividend yield1.31% 1.25% 1.25%
Expected stock price volatility32.55% 31.45% 33.06%
Risk-free interest rate1.35% 1.63% 1.60%
Expected term of options (years)5.00
 5.00
 5.00
The weighted average fair value of stock options granted for Viacom Class B Common Stock as of the grant date, adjusted by the conversion ratio of 0.59625, was $13.77 and $12.08 in 2018 and 2017, respectively. Viacom did not have any stock option grants in 2019. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions in effect for Viacom at the time of grant:
 2018 2017
Expected dividend yield2.52% 2.48%
Expected stock price volatility32.60% 29.83%
Risk-free interest rate2.81% 1.96%
Expected term of options (years)5.12
 4.94

The expected stock price volatility isfor stock options for CBS Class B Common Stock was determined using a weighted average of historical volatility for CBS Corp. Class B Common Stock and implied volatility of publicly traded options to purchase CBS Corp.Class B Common Stock. The expected stock price volatility for stock options for Viacom Class B Common Stock was principally determined based on the implied volatility of publicly traded options to purchase Viacom Class B Common Stock. Given the existence of an actively traded market for CBS Corp.and Viacom options prior to the Company wasclosing of the Merger, we were able to derive implied volatility using publicly traded options to purchase CBS Corp. Class B Common Stock that were trading near the grant date of the employee stock options at a similar exercise price and a remaining term of greater than one year.

The risk-free interest rate is based on a U.S. Treasury rate in effect on the date of grant with a term equal to the expected term. The expected term is determined based on historical employee exercise and post-vesting termination

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


behavior. The expected dividend yield represents the Company’sour future expectation of the annual dividend yield based on current ratesthe dividend rate on the grant date and historical patterns of dividend changes.

Total unrecognized compensation cost related to non-vested stock option awards at December 31, 20162019 was $42$37 million, which is expected to be recognized over a weighted average period of 2.22.1 years.


The following table summarizes the Company’sour stock option activity under the Plans.
     Weighted Average
 Stock Options Exercise Price
Outstanding at December 31, 2018 21,725,132
   $65.52
 
Granted —
   $—
 
Exercised (605,867)   $24.72
 
Forfeited or expired (4,827,556)   $92.70
 
Outstanding at December 31, 2019 16,291,709
   $58.98
 
Exercisable at December 31, 2019 11,458,112
   $60.65
 
     Weighted Average
 Stock Options Exercise Price
Outstanding at December 31, 2015 11,305,035
   $41.75
 
Granted 1,750,577
   $46.12
 
Exercised (1,042,839)   $20.16
 
Forfeited or expired (101,126)   $57.52
 
Outstanding at December 31, 2016 11,911,647
   $44.14
 
Exercisable at December 31, 2016 7,352,349
   $38.16
 

The following table summarizes other information relating to stock option exercises during the years ended December 31, 2016, 20152019, 2018 and 2014.2017.
Year Ended December 31, 2019 2018 2017
Cash received from stock option exercises$15
 $29
 $263
Tax benefit of stock option exercises$4
 $4
 $52
Intrinsic value of stock option exercises$15
 $16
 $138

Year Ended December 31, 2016 2015 2014
Cash received from stock option exercises$21
 $142
 $283
Tax benefit of stock option exercises$14
 $74
 $200
Intrinsic value of stock option exercises$37
 $192
 $517
At December 31, 2019, stock options outstanding have a weighted average remaining contractual life of 3.78 years and the total intrinsic value for “in-the-money” options, based on our closing stock price of $41.97, was $11 million. At December 31, 2019 stock options exercisable have a weighted average remaining contractual life of 2.93 years and the total intrinsic value for “in-the-money” exercisable options was $11 million.

14) INCOME TAXES
The U.S. and foreign components of earnings from continuing operations before income taxes and equity in earnings (loss) of investee companies were as follows:

Year Ended December 31,2019
2018
2017
United States$2,337
 $3,044
 $3,006
Foreign1,008
 1,080
 1,114
Total$3,345
 $4,124
 $4,120

CBS CORPORATION

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



The following table summarizes information concerning outstanding and exercisable stock options to purchase CBS Corp. Class B Common Stock under the Plans at December 31, 2016.
 Outstanding Exercisable
   Remaining Weighted   Weighted
Range ofNumber Contractual Average Number Average
Exercise Priceof Options Life (Years) Exercise Price of Options Exercise Price
$5 to 9.99301,305
 0.35  $5.28
  301,305
  $5.28
 
$10 to 19.99320,447
 1.66  $14.12
  320,447
  $14.12
 
$20 to 29.992,415,271
 2.85  $27.72
  2,415,271
  $27.72
 
$30 to 39.991,314,623
 3.75  $34.13
  1,314,623
  $34.13
 
$40 to 49.993,767,119
 5.54  $45.01
  1,487,149
  $44.41
 
$50 to 59.991,785,593
 6.03  $59.54
  490,242
  $59.54
 
$60 to 69.992,007,289
 5.14  $65.77
  1,023,312
  $65.89
 
 11,911,647
       7,352,349
    
At December 31, 2016 stock options outstanding have a weighted average remaining contractual life of 4.57 years and the total intrinsic value for “in-the-money” options, based on the Company’s closing stock price of $63.62, was $236 million. At December 31, 2016 stock options exercisable have a weighted average remaining contractual life of 3.64 years and the total intrinsic value for “in-the-money” exercisable options was $189 million.

14) INCOME TAXES
The U.S. and foreign components of earnings from continuing operations before income taxes and equity in loss of investee companies were as follows:
Year Ended December 31,2016 2015 2014
United States$1,803
 $1,840
 $1,484
Foreign427
 424
 374
Total$2,230
 $2,264
 $1,858

The components of the (benefit) provision for income taxes were as follows:
Year Ended December 31,2019 2018 2017
Current:     
Federal$389
 $296
 $883
State and local167
 97
 93
Foreign204
 166
 195
Total current760
 559
 1,171
Deferred:     
Federal(66) 25
 (388)
State and local(48) 22
 10
Foreign(655) 11
 11
Total deferred(769) 58
 (367)
(Benefit) provision for income taxes$(9) $617
 $804

Year Ended December 31,2016 2015 2014
Current:     
Federal$359
 $110
 $(17)
State and local64
 30
 15
Foreign61
 91
 69
 484
 231
 67
Deferred144
 445
 592
Provision for income taxes$628
 $676
 $659

In addition, included in net earnings (loss)loss from discontinued operations was an income tax (provision) benefitprovision of $(124)$12 million $82 for 2019 and $10 million for each of 2018 and $(129) million in 2016, 2015, and 2014, respectively.2017.


The equity in lossearnings (loss) of investee companies is shown net of tax on the Company’s Consolidated Statements of Operations. The tax (provisions) benefits relating to earnings and losses from equity investments in 2016, 2015,2019, 2018, and 20142017 were $25$19 million, $22$15 million, and $31$(10) million, respectively, which represented an effective tax rate of 33.5%26.5%, 24.2% and 71.4% for 20162019, 2018, and 38.7%2017, respectively.
The difference between income taxes expected at the U.S. federal statutory income tax rate (21% in 2019 and 2018 and 35% in 2017) and the (benefit) provision for eachincome taxes is summarized as follows:
Year Ended December 31,2019 2018 2017
Taxes on income at U.S. federal statutory rate$702
 $865
 $1,451
State and local taxes, net of federal tax benefit114
 114
 78
Effect of foreign operations(50) (105) (294)
Reorganization of foreign operations (a)
(768) —
 —
Bankruptcy of an investee(39) —
 —
Foreign tax credits on distribution of securities—
 —
 (279)
Impact of tax law changes—
 (80) 8
Tax benefits from positions relating to the Tax Reform Act (b)
(44) —
 —
Merger related costs41
 —
 —
Establishment (reversal) of valuation allowance (c)
1
 (153) (25)
Excess tax benefits from stock-based compensation20
 8
 (26)
Domestic production deduction(1) 24
 (100)
Tax accounting method change—
 (78) —
Other, net 
15
 22
 (9)
(Benefit) provision for income taxes$(9) $617
 $804
(a) Reflects a deferred tax benefit resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. The related deferred tax asset is primarily expected to be realized over the next 25 years.
(b) Reflects tax benefits realized in connection with the preparation of the years 2015 and 2014.2018 federal tax return, based on further clarity provided by the United States government on tax positions relating to the Tax Reform Act.

(c) 2018 includes the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that were utilized in connection with the sale of CBS Television City in 2019.
In 2016 and 2015, the Company realized tax benefits from the exercise of stock options and vesting of RSUs of $57 million and $148 million, respectively.


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




The difference between income taxes expected at the U.S. federal statutory income tax rate of 35% and the provision for income taxes is summarized as follows:
Year Ended December 31,2016 2015 2014
Taxes on income at U.S. federal statutory rate$780
 $792
 $650
State and local taxes, net of federal tax benefit59
 55
 104
Effect of foreign operations(112) (100) (90)
Domestic production deduction(42) (25) —
Sales of businesses—
 (42) —
Audit settlements, net—
 (9) (4)
Other, net (a)
(57) 5
 (1)
Provision for income taxes$628
 $676
 $659
(a) 2016 includes a one-time tax benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.
The following table summarizes the components of deferred income tax assets and liabilities.
At December 31,2019 2018
Deferred income tax assets:   
Reserves and other accrued liabilities$540
 $566
Pension, postretirement and other employee benefits761
 741
Lease liability531
 —
Tax credit and loss carryforwards394
 849
Other85
 41
Total deferred income tax assets2,311
 2,197
Valuation allowance(550) (841)
Deferred income tax assets, net1,761
 1,356
Deferred income tax liabilities:   
Intangible assets(241) (1,090)
Unbilled licensing receivables(390) (420)
Lease asset(467) —
Property, equipment and other assets(152) (166)
Financing obligations(72) (70)
Total deferred income tax liabilities(1,322) (1,746)
Deferred income tax assets (liabilities), net$439
 $(390)
At December 31,2016 2015
Deferred income tax assets:   
Reserves and other accrued liabilities$671
 $682
Pension, postretirement and other employee benefits843
 791
Tax credit and loss carryforwards966
 934
Other113
 102
Total deferred income tax assets2,593
 2,509
Valuation allowance(928) (914)
Deferred income tax assets, net1,665
 1,595
Deferred income tax liabilities:   
Intangible assets(1,469) (1,333)
Unbilled licensing receivables(636) (599)
Property, equipment and other assets(140) (155)
Total deferred income tax liabilities(2,245) (2,087)
Deferred income tax liabilities, net$(580) $(492)

In addition to the deferred income taxes reflected in the table above, included in the liabilities of discontinued operations“Other liabilities” on the Consolidated Balance Sheets are net deferred income tax liabilitiesassets of $975$10 million and $990$12 million at December 31, 20162019 and 2015, respectively.2018, respectively, relating to discontinued operations.


At December 31, 2016, the Company2019, we had federal foreign tax credit carryforwards of $6 million and net operating loss carryforwards for federal, state and local, and foreign jurisdictions of approximately $980 million,$1.73 billion, the majority of which expire in various years from 20172020 through 2036.2039.


The 20162019 and 20152018 deferred income tax assets were reduced by a valuation allowance of $928$550 million and $914$841 million, respectively, principally relating to income tax benefits from capital losses and net operating losses in foreign jurisdictions which are not expected to be realized.


The Company’s share ofIn December 2017, the undistributedU.S. government enacted the Tax Reform Act which contained 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 of certain foreign subsidiaries not included in its consolidated federal income tax return that could be subject to additional income taxes if remitted was approximately $4.55 billion atand profits. For the year ended December 31, 20162017, we recorded a net provisional charge of $28 million, reflecting the estimated transition tax of $455 million on cumulative foreign earnings and $4.15 billion at December 31, 2015. For certain foreign subsidiaries, no provision has been recorded for the U.S. or foreign taxes that could result from the remittance of such undistributed earnings since the Company intends to distribute only the portion of such earnings which would beprofits, offset by U.S. foreign tax credits or remitted in tax-free transactions, and intendsan estimated benefit of $427 million to reinvest the remainder outside the U.S. indefinitely. The determination of the unrecognized U.S. federaladjust our deferred income tax liabilitybalances as a result of the reduced corporate income tax rate. During 2018, we completed our analysis of these provisional amounts and recorded a charge of $48 million to adjust the provisional amount of transition tax on cumulative foreign earnings and profits. In January 2019, the U.S. government issued guidance relating to the transition tax, which resulted in a decrease of $146 million to our reserve for such undistributed earningsuncertain tax positions during 2019 for amounts paid as a result of this guidance; however, it did not have a material impact on the Consolidated Statements of Operations.

The Tax Reform Act 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 our foreign subsidiaries. We elected to treat the tax on GILTI as a period cost when incurred and therefore, the tax on GILTI is not practicable.included in our tax provision for the years ended December 31, 2019 and 2018.



CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Generally, the future remittance of foreign undistributed earnings will not be subject to U.S. federal income taxes under the provisions of the Tax Reform Act and as a result, for substantially all of our foreign subsidiaries, we do not intend to assert indefinite reinvestment of both cash held outside of the U.S. and future cash earnings. However, a future repatriation of cash could be subject to state and local income taxes, foreign income taxes, and withholding taxes. Accordingly, we recorded deferred income tax liabilities associated with future repatriations, which were not material to the consolidated financial statements. Additional income taxes have not been provided for outside basis differences inherent in these entities, which could be recognized upon sale or other transaction, as these amounts continue to be indefinitely invested in foreign operations. The determination of the U.S. federal deferred income tax liability for such outside basis difference is not practicable.

The following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.
At January 1, 2017$268
Additions for current year tax positions86
Additions for prior year tax positions45
Reductions for prior year tax positions(56)
Cash settlements(13)
Statute of limitations lapses(30)
At December 31, 2017300
Additions for current year tax positions27
Additions for prior year tax positions204
Reductions for prior year tax positions(60)
Cash settlements(19)
Statute of limitations lapses(6)
At December 31, 2018446
Additions for current year tax positions49
Additions for prior year tax positions67
Reductions for prior year tax positions(26)
Cash settlements(149)
Statute of limitations lapses(3)
At December 31, 2019$384
At January 1, 2014$139
Additions for current year tax positions14
Additions for prior year tax positions31
Reductions for prior year tax positions(26)
Cash settlements(16)
Statute of limitations lapses(2)
At December 31, 2014140
Additions for current year tax positions14
Additions for prior year tax positions6
Reductions for prior year tax positions(32)
Cash settlements(23)
Statute of limitations lapses(1)
At December 31, 2015104
Additions for current year tax positions9
Additions for prior year tax positions4
Reductions for prior year tax positions(8)
Cash settlements(6)
Statute of limitations lapses(1)
At December 31, 2016$102
At December 31, 2016 and 2015, $20 million and $25 million, respectively, of the reserve for uncertain tax positions were included in “Liabilities of discontinued operations” on the Consolidated Balance Sheets.


The reserve for uncertain tax positions of $102$384 million at December 31, 20162019 includes $76$295 million which would affect the Company’sour effective income tax rate, including discontinued operations, if and when recognized in future years.


The Company recognizesWe recognize interest and penalty charges related to the reserve for uncertain tax positions as income tax expense. The CompanyWe recognized interest and penalties of $7$24 million for each of the years ended December 31, 20162019 and 2015,2018 and $14$16 million for the year ended December 31, 2014,2017, in the Consolidated Statements of Operations. As of December 31, 20162019 and 2015, the Company has2018, we have recorded liabilities for accrued interest and penalties of $35$51 million and $33$47 million, respectively, on the Consolidated Balance Sheets.


ViacomCBS and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and international jurisdictions. For periods prior to the Merger, Viacom and CBS filed separate tax returns. For CBS, the U.S. federal statute of limitations for the 2015 tax year expired in September 2019. During 2015, the Companythird quarter of 2019, CBS and the IRS settled the Company’s income tax audit for the years 2011 and 2012,year 2016, which did not have a material effect on the Company’s consolidated financial statements. The IRS is expected to commencecommenced its examination of the years 2013,2017 tax year during the fourth quarter of 2019 and commenced its examination of the 2018 tax year in February 2020. For Viacom, the IRS began its examination of the 2014 and 2015 duringtax years in April 2017. In addition, variousVarious tax years are also currently under examination by state and local and other foreign tax authorities. With respect to open tax years in all jurisdictions, the Company does notwe currently believe that it is reasonably possible that the reserve for uncertain tax positions will significantly changemay decrease by $125 million within the next twelve months;12

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


months primarily related to potential resolutions of matters involving multiple tax periods and jurisdictions; however, it is difficult to predict the final outcome or timing of resolution of any particular tax matter and accordingly, unforeseen events could cause the Company’sour current expectation to change in the future.
15) PENSION AND OTHER POSTRETIREMENT BENEFITS
The CompanyViacomCBS and certain of its subsidiaries sponsor qualified and non-qualified defined benefit pension plans, principally non-contributory, covering eligible employees. Our pension plans consist of both funded and unfunded plans. The majority of participants in these plans are retired employees or former employees of previously divested businesses. Most of the Company’sour pension plans are closed to new entrants.entrants and pension plans sponsored by Viacom prior to the Merger are frozen to future benefit accruals. The benefits for some plans are based primarily on an employee’s years of service and average pay near retirement. Benefits under other plans are based primarily on an employee’s pay for each year that the employee

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


participated in the plan. Participating employees are vested in the plans after five years of service. The Company funds itsWe fund our pension plans in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), the Pension Protection Act of 2006, the Internal Revenue Code of 1986 and theother applicable rules and regulations. Plan assets consist principally of corporate bonds, equity securities, common collective trust funds and U.S. government securities. The Company’s common stock representsAt December 31, 2019, ViacomCBS Common Stock represented approximately 2.8% and 1.8%2.1% of the fair value of plan assets’ fair values atassets. At December 31, 20162018, 2.4% of the fair value of plan assets was invested in CBS Common Stock or Viacom Common Stock.

During 2017, we purchased a group annuity contract under which an insurance company permanently assumed our obligation to pay and 2015, respectively.

In September 2016, the Company offered eligible former employeesadminister pension benefits to certain pension plan participants, or their designated beneficiaries, who had not yet initiatedbeen receiving pension benefit payments the option to make a one-time election to receive the present valuebenefits. The purchase of theirthis group annuity contract was funded with pension benefits as a lump-sum distribution or to commence an immediate monthly annuity benefit.plan assets. As a result, the Company paid a total of $518 million of lump-sum distributions in 2016 using itsour outstanding pension plan assets, representing 12% of the total obligations of its qualified pension plans. Accordingly, the Companybenefit obligation was reduced by approximately $800 million. In connection with this transaction, we recorded a one-time settlement charge of $211$352 million in 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, we made discretionary contributions totaling $600 million to prefund our qualified pension plans.


In addition, the CompanyViacomCBS sponsors health and welfare plans that provide postretirement health care and life insurance benefits to eligible retired employees and their covered dependents. Eligibility is based in part on certain age and service requirements at the time of their retirement. Most of the plans are contributory and contain cost-sharing features such as deductibles and coinsurance which are adjusted annually.annually, as well as caps on the annual dollar amount we will contribute toward the cost of coverage. Claims and premiums for which we are responsible are paid primarily with the Company’sour own funds.


The Company usespension plan disclosures herein include information related to our domestic plans only, unless otherwise noted. At December 31, 2019 and 2018, the Consolidated Balance Sheets include a liability of $80 million and $67 million, respectively, in “Pension and postretirement benefit obligations” relating to our non-U.S. pension plans.

We use a December 31 measurement date for all pension and other postretirement benefit plans.

The following table sets forth the change in benefit obligation for the Company’s pension and postretirement benefit plans.

 Pension Benefits Postretirement Benefits
 2016 2015 2016 2015
Change in benefit obligation:       
Benefit obligation, beginning of year$4,911
 $5,323
 $486
 $562
Service cost29
 31
 —
 —
Interest cost215
 209
 20
 20
Actuarial loss (gain)353
 (210) (5) (45)
Benefits paid(328) (416) (69) (66)
Participants’ contributions—
 —
 11
 11
Retiree Medicare drug subsidy—
 —
 4
 4
Settlements(518) —
 —
 —
Cumulative translation adjustments(2) (26) —
 —
Benefit obligation, end of year$4,660
 $4,911
 $447
 $486

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




The following table sets forth the change in benefit obligation for our pension and postretirement benefit plans.
 Pension Benefits Postretirement Benefits
 2019 2018 2019 2018
Change in benefit obligation:       
Benefit obligation, beginning of year$4,511
 $4,877
 $376
 $456
Service cost28
 30
 1
 1
Interest cost191
 180
 16
 17
Actuarial loss (gain)593
 (240) 8
 (8)
Benefits paid(360) (336) (59) (106)
Participants’ contributions—
 —
 13
 12
Retiree Medicare drug subsidy—
 —
 5
 4
Benefit obligation, end of year$4,963
 $4,511
 $360
 $376

The following table sets forth the change in plan assets for the Company’sour pension and postretirement benefit plans.
 Pension Benefits Postretirement Benefits
 2019 2018 2019 2018
Change in plan assets:       
Fair value of plan assets, beginning of year$2,932
 $3,412
 $1
 $—
Actual return on plan assets530
 (205) (1) —
Employer contributions74
 61
 41
 91
Benefits paid(360) (336) (59) (106)
Participants’ contributions—
 —
 13
 12
Retiree Medicare drug subsidy—
 —
 5
 4
Fair value of plan assets, end of year$3,176
 $2,932
 $—
 $1
 Pension Benefits Postretirement Benefits
 2016 2015 2016 2015
Change in plan assets:       
Fair value of plan assets, beginning of year$3,734
 $4,224
 $4
 $5
Actual return (loss) on plan assets305
 (99) —
 —
Employer contributions52
 52
 54
 50
Benefits paid(328) (416) (69) (66)
Participants’ contributions—
 —
 11
 11
Retiree Medicare drug subsidy—
 —
 4
 4
Settlements(518) —
 —
 —
Cumulative translation adjustments(1) (27) —
 —
Fair value of plan assets, end of year$3,244
 $3,734
 $4
 $4

The funded status of pension and postretirement benefit obligations and the related amounts recognized on the Company’s Consolidated Balance Sheets were as follows:
 Pension Benefits Postretirement Benefits
At December 31,2019 2018 2019 2018
Funded status at end of year$(1,787) $(1,579) $(360) $(375)
Amounts recognized on the Consolidated Balance Sheets:       
Other assets$5
 $5
 $—
 $—
Current liabilities(69) (70) (42) (48)
Noncurrent liabilities(1,723) (1,514) (318) (327)
Net amounts recognized$(1,787) $(1,579) $(360) $(375)

 Pension Benefits Postretirement Benefits
At December 31,2016 2015 2016 2015
Funded status at end of year$(1,416) $(1,177) $(443) $(482)
Amounts recognized on the Consolidated Balance Sheets:       
Other assets$13
 $17
 $—
 $—
Current liabilities(53) (51) (50) (50)
Noncurrent liabilities(1,376) (1,143) (393) (432)
Net amounts recognized$(1,416) $(1,177) $(443) $(482)
The Company’sOur qualified pension plans were underfunded by $742$734 million and $533$623 million at December 31, 20162019 and 2015,2018, respectively.



VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The following amounts were recognized in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.
 Pension Benefits Postretirement Benefits
At December 31,2019 2018 2019 2018
Net actuarial (loss) gain$(2,153) $(2,001) $147
 $174
Net prior service cost(3) (5) (1) (2)
Share of equity investee(2) (1) —
 —
 (2,158) (2,007) 146
 172
Deferred income taxes (a)
563
 756
 (14) (19)
Net amount recognized in accumulated other
comprehensive income (loss)
$(1,595) $(1,251) $132
 $153

 Pension Benefits Postretirement Benefits
At December 31,2016 2015 2016 2015
Net actuarial (loss) gain$(1,827) $(1,848) $230
 $246
Net prior service cost(7) (9) —
 —
Share of equity investee(1) (1) —
 —
 (1,835) (1,858) 230
 246
Deferred income taxes725
 734
 (38) (44)
Net amount recognized in accumulated other
comprehensive income (loss)
$(1,110) $(1,124) $192
 $202
(a) The decrease in 2019 primarily reflects the reclassification of certain income tax effects of the Tax Reform Act on items within accumulated other comprehensive loss to retained earnings upon the adoption of new FASB guidance (see Note 1).
The accumulated benefit obligation for all defined benefit pension plans was $4.59$4.87 billion and $4.83$4.43 billion at December 31, 20162019 and 2015,2018, respectively.
 
Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below.
At December 31,2019 2018
Projected benefit obligation$4,962
 $4,511
Accumulated benefit obligation$4,873
 $4,427
Fair value of plan assets$3,170
 $2,926
At December 31,2016 2015
Projected benefit obligation$4,558
 $4,795
Accumulated benefit obligation$4,485
 $4,717
Fair value of plan assets$3,129
 $3,602

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



The following tables present the components of net periodic benefit cost and amounts recognized in other comprehensive income (loss).
 Pension Benefits Postretirement Benefits
Year Ended December 31,2019
2018
2017
2019
2018
2017
Components of net periodic cost:           
Service cost$28
 $30
 $28
 $1
 $1
 $1
Interest cost191
 180
 219
 16
 17
 19
Expected return on plan assets(183) (214) (230) —
 —
 —
Amortization of actuarial losses (gains)94
 87
 105
 (18) (18) (22)
Amortization of prior service cost1
 1
 1
 1
 1
 1
Settlements—
 —
 352
 —
 —
 —
Net periodic cost$131
 $84
 $475
 $—
 $1
 $(1)

The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income. All other components of net periodic cost are presented below operating income, in “Other items, net” and “Pension settlement charge.” Included in net loss from discontinued operations was net periodic cost of $3 million in 2017.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

 Pension Benefits Postretirement Benefits
Year Ended December 31,2016 2015 2014 2016 2015 2014
Components of net periodic cost:           
Service cost$29
 $31
 $31
 $—
 $—
 $—
Interest cost215
 209
 237
 20
 20
 25
Expected return on plan assets(227) (261) (262) —
 —
 —
Amortization of actuarial losses (gains)84
 79
 63
 (21) (21) (21)
Amortization of prior service cost (credit)1
 1
 1
 —
 —
 (1)
Settlements211
 —
 —
 —
 —
 —
Net periodic cost$313
 $59
 $70
 $(1) $(1) $3

Pension PostretirementPension Benefits Postretirement Benefits
Year Ended December 31, 2016Benefits Benefits
Year Ended December 31,2019 2018 2017 2019 2018 2017
Other comprehensive income (loss):   45
  -200   45     
Actuarial (loss) gain $(275) $5
 $(246) $(179) $(269) $(9) $8
 $(20)
Amortization of actuarial losses (gains) (a)
 84
 (21) 94
 87
 105
 (18) (18) (22)
Amortization of prior service cost (a)
 1
 —
 1
 1
 1
 1
 1
 1
Settlements (a)
 211
 —
 —
 —
 352
 —
 —
 —
Cumulative translation adjustments 2
 —
 
 23
 (16) (151) (91) 189
 (26) (9) (41)
Deferred income taxes (9) 6
 37
 25
 (94) 5
 2
 13
Recognized in other comprehensive income (loss), net of tax $14
 $(10) $(114) $(66) $95
 $(21) $(7) $(28)
(a)Reflects amounts reclassified from accumulated other comprehensive income (loss) to net earnings.


Estimated net actuarial losses and prior service costs related to the defined benefit pension plans of approximately $101$103 million and $1 million, respectively, will be amortized from accumulated other comprehensive income (loss)loss into net periodic benefit costs in 2017.2020.


Estimated net actuarial gains related to the other postretirement benefit plans of approximately $22$15 million will be amortized from accumulated other comprehensive income (loss)loss into net periodic benefit costs in 2017.2020.
Pension Postretirement
Benefits BenefitsPension Benefits Postretirement Benefits
2016 2015 2016 20152019 2018 2017 2019 2018 2017
Weighted average assumptions used to determine benefit obligations at December 31:                  
Discount rate4.3% 4.6% 4.1% 4.2%3.5% 4.5% 3.9% 3.3% 4.4% 3.9%
Rate of compensation increase3.0% 3.0% N/A
 N/A
3.0% 3.0% 3.0% N/A
 N/A
 N/A
Weighted average assumptions used to determine net periodic costs for the year ended December 31:                  
Discount rate4.6% 4.1% 4.2% 3.8%4.5% 3.8% 4.2% 4.4% 3.9% 4.1%
Expected long-term return on plan assets6.4% 6.5% 2.0% 2.0%6.6% 6.6% 6.6% N/A
 N/A
 2.0%
Rate of compensation increase3.0% 3.0% N/A
 N/A
3.0% 3.0% 3.0% N/A
 N/A
 N/A
N/A - not applicable


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



The discount rates are determined primarily based on the yield onof a portfolio of high quality bonds, constructed to provideproviding cash flows necessary to meet the Company’s pension plans’ expected future benefit payments, as determined for the projected benefit obligations. The expected return on plan assets assumption is derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets.


The following additional assumptions were used in accounting for postretirement benefits.
 CBS Viacom
 2019 2018 2019 2018
Projected health care cost trend rate (pre-65)7.0% 6.6% 6.3% 6.7%
Projected health care cost trend rate (post-65)7.0% 6.6% 5.7% 5.9%
Ultimate trend rate5.0% 5.0% 4.5% 4.5%
Year ultimate trend rate is achieved2025
 2023
 2026
 2026


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

 2016 2015
Projected health care cost trend rate6.6% 7.0%
Ultimate trend rate5.0% 5.0%
Year ultimate trend rate is achieved2021
 2021

A one percentage point change in assumed health care cost trend rates would have the following effects:
 One Percentage One Percentage
 Point Increase Point Decrease
Effect on total service and interest cost components $—
   $—
 
Effect on the accumulated postretirement benefit obligation $5
   $(5) 
 One Percentage One Percentage
 Point Increase Point Decrease
Effect on total service and interest cost components $—
   $—
 
Effect on the accumulated postretirement benefit obligation $5
   $(5) 

Plan Assets
ThePrior to the Merger, the investments committees of Viacom and CBS determined the strategies for the investment of pension plan assets. These committees established target asset allocations for the Company’s U.S. qualified defined benefitour pension plan trust and international pension plan trusts are based upon an analysis of the timing and amount of projected benefit payments, projected company contributions, the expected returns and risk of the asset classes and the correlation of those returns. The target asset allocation for the Company’s U.S.CBS’s domestic pension plan trust, which accounted for 95% of total plan assets at December 31, 2016,plans is to invest between 70% - 80% in long duration fixed income investments, 16% - 28% in equity securities and the remainder in cash and other investments. At December 31, 2016,2019, this trust was invested approximately 74%73% in long duration fixed income portfolios,securities, 24% in equity investments, and the remainder in cash, cash equivalents and other investments. Other trusts, which fund the Company’s international pension plans, accounted for 5% of total plan assets at December 31, 2016 and are invested approximately 70% in fixed income investments, 21% in equity investments, and the remainder in cash, cash equivalents and other investments. Long duration fixed income investments primarily consist of a diversified portfolio of investment grade fixed income instruments that are substantially investment grade, with a duration that approximates the duration of the liabilities covered by the trust. All equity portfolios are diversified between U.S. and non-U.S. equities and include large and small capitalization equities. The asset allocations are reviewed regularly.



The target asset allocation for Viacom’s domestic pension plans is to invest 70% - 90% in return-seeking investments, 10% - 30% in liability hedging and 0% - 10% in cash and cash equivalents. Return-seeking investments consist of diversified equity and credit funds and liability hedging investments consist of U.S. treasury rate funds. At December 31, 2019, the Viacom Pension Plan was invested 76% in return seeking, 18% in liability hedging and 6% in cash and cash equivalents.
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’sour pension plan assets measured at fair value on a recurring basis at December 31, 20162019 and 2015.2018. These assets 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 quoted prices for the asset 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 in inactive markets or quoted prices for similar assets. Level 3 is based on unobservable inputs that market participants would use in pricing the asset.
At December 31, 2016Level 1 Level 2 Level 3 Total
Cash and cash equivalents (a)
$11
 $53
 $—
 $64
Fixed income securities:      

U.S. treasury securities132
 —
 —
 132
Government-related securities18
 207
 —
 225
Corporate bonds (b)
—
 1,895
 —
 1,895
Mortgage-backed and asset-backed securities—
 135
 2
 137
Equity securities:      

U.S. large capitalization187
 3
 —
 190
U.S. small capitalization64
 —
 —
 64
International equity—
 3
 —
 3
Other—
 (18) —
 (18)
Total assets in fair value hierarchy$412
 $2,278
 $2
 $2,692
Common collective funds measured at net asset value (c) (d)
      521
Limited partnerships measured at net asset value (c)
      31
Investments, at fair value      $3,244
At December 31, 2015Level 1 Level 2 Level 3 Total
At December 31, 2019Level 1 Level 2 Level 3 Total
Cash and cash equivalents (a)
$3
 $72
 $—
 $75
$1
 $34
 $—
 $35
Fixed income securities:             

U.S. treasury securities118
 —
 —
 118
83
 —
 —
 83
Government-related securities29
 260
 —
 289
—
 171
 —
 171
Corporate bonds (b)
—
 2,196
 —
 2,196
—
 1,562
 —
 1,562
Mortgage-backed and asset-backed securities—
 114
 2
 116
—
 98
 —
 98
Equity securities:      

      

U.S. large capitalization233
 3
 —
 236
113
 —
 —
 113
U.S. small capitalization70
 —
 —
 70
40
 —
 —
 40
International equity—
 4
 —
 4
Other—
 22
 —
 22
—
 25
 —
 25
Total assets in fair value hierarchy$453
 $2,671
 $2
 $3,126
$237
 $1,890
 $—
 $2,127
Common collective funds measured at net asset value (c) (d)
      565
      978
Limited partnerships measured at net asset value (c)
      43
      23
Mutual funds measured at net asset value (c)
      48
Investments, at fair value      $3,734
      $3,176

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31, 2018Level 1 Level 2 Level 3 Total
Cash and cash equivalents (a)
$4
 $7
 $—
 $11
Fixed income securities:       
U.S. treasury securities85
 31
 —
 116
Government-related securities—
 169
 —
 169
Corporate bonds (b)
—
 1,529
 —
 1,529
Mortgage-backed and asset-backed securities—
 120
 —
 120
Equity securities:      

U.S. large capitalization150
 —
 —
 150
U.S. small capitalization35
 —
 —
 35
Other1
 18
 —
 19
Total assets in fair value hierarchy$275
 $1,874
 $—
 $2,149
Common collective funds measured at net asset value (c) (d)
      688
Limited partnerships measured at net asset value (c)
      63
Mutual funds measured at net asset value (c)
      32
Investments, at fair value      $2,932
(a)  Assets categorized as Level 2 reflect investments in money market funds.
(b)  Securities of diverse sectors and industries, substantially all investment grade.
(c)  In accordance with FASB guidance investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.
(d)  Underlying investments consist mainly of U.S. large capitalization and international equity securities.

Money market investments are carried at amortized cost which approximates fair value due to the short-term maturity of these investments. Investments in equity securities are reported at fair value based on quoted market prices on national security exchanges. The fair value of investments in common collective funds and mutual funds are determined using the net asset value (“NAV”) provided by the administrator of the fund as a practical expedient. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. The fair value of U.S. treasury securities is determined based on quoted market

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


prices in active markets. The fair value of government related securities and corporate bonds is determined based on quoted market prices on national security exchanges, when available, or using valuation models which incorporate certain other observable inputs including recent trading activity for comparable securities and broker quoted prices. The fair value of mortgage-backed and asset-backed securities is based upon valuation models which incorporate available dealer quotes, projected cash flows and market information. The fair value of limited partnerships has been estimated using the NAV of the ownership interest. The NAV is determined using quarterly financial statements issued by the partnership which determine the value based on the fair value of the underlying investments.

The table below sets forth a summary of changes in the fair value of investments reflected as Level 3 at December 31, 2016.
  
Mortgage-backed
Securities
At January 1, 2015  $3
 
Contributions and distributions, net  (1) 
At December 31, 2015  2
 
Contributions and distributions, net  —
 
At December 31, 2016  $2
 
The Company’s other postretirement benefits plan assets of $4 million at both December 31, 2016 and 2015, were invested in U.S. fixed income index funds, which are categorized as Level 1 assets.


Future Benefit Payments
Estimated future benefit payments are as follows:
 2020 2021 2022 2023 2024 2025-2029
Pension$357
 $304
 $305
 $307
 $304
 $1,487
Postretirement$48
 $45
 $42
 $40
 $37
 $144
Retiree Medicare drug subsidy$5
 $5
 $5
 $5
 $4
 $20
 2017 2018 2019 2020 2021 2022-2026
Pension$419
 $356
 $347
 $336
 $328
 $1,491
Postretirement$58
 $56
 $53
 $51
 $47
 $192
Retiree Medicare drug subsidy$(8) $(8) $(7) $(7) $(7) $(32)

In January 2017, the Company made discretionary contributions of $100 million to pre-fund its qualified pension plans. In 2017, the Company expects2020, we expect to make contributions of approximately $54$70 million to itsour non-qualified pension plans to satisfy the benefit payments due under these plans. Also in 2017, the Company expects2020, we expect to contribute approximately $50$43 million to itsour other postretirement benefit plans to satisfy the Company’sour portion of benefit payments due under these plans.



VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Multiemployer Pension and Postretirement Benefit Plans
The Company contributesWe contribute to a number of multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover itsour union-represented employees including talent, writers, directors, producers and other employees, primarily in the entertainment industry. The other employers participating in these multiemployer plans are primarily in the entertainment and other related industries. The risks of participating in multiemployer plans are different from single-employer plans as assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers and if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if the Company chooseswe choose to stop participating in some of its multiemployer plans itwe may be required to pay those plans a withdrawal liability based on the underfunded status of the plan.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


The financial health of a multiemployer plan is indicated by the zone status, as defined by the Pension Protection Act of 2006, which represents the funded status of the plan as certified by the plan’s actuary.2006. Plans in the red zone are less than 65% funded,in critical status; those in the yellow zone are between 65%in endangered status; and 80% funded, andthose in the green zone are at least 80% funded.neither critical nor endangered.


The table below presents information concerning the Company’sour participation in multiemployer defined benefit pension plans.
 
Employer
Identification
 
Pension
Protection Act
       
Expiration
Date of
Collective
 Employer Identification Number/Pension Plan Number 
Pension
Protection Act
 Company Contributions Expiration Date of Collective Bargaining Agreement
 Number/Pension 
Zone Status (a)
 Company Contributions Bargaining 
Zone Status (a)
 
Pension Plan Plan Number 20162015 2016 2015 2014 Agreement 20192018 2019 2018 2017 
AFTRA Retirement Plan (b)
 13-6414972-001 Green $6
 $5
 $5
 (c) 13-6414972-001 Green $12
 $11
 $12
 (c)
Directors Guild of America - Producer(d) 95-2892780-001 Green 6
 6
 5
 6/30/2020 95-2892780-001 Green 19
 15
 15
 6/30/2020
Producer-Writers Guild of America 95-2216351-001 Green 12
 11
 10
 5/1/2017 95-2216351-001 Green 26
 25
 22
 5/1/2020
Screen Actors Guild - Producers 95-2110997-001 Green 11
 9
 7
 6/30/2017 95-2110997-001 Green 43
 36
 29
 6/30/2020
Motion Picture Industry 95-1810805-001 Green 11
 10
 8
 (d) 95-1810805-001 Green 43
 42
 40
 (e)
I.A.T.S.E. Local No. 33 Pension Trust Fund (f)
 95-6377503-001 Green 5
 10
 9
 12/31/2019
Other Plans 14
 9
 10
  16
 12
 10
 
 Total contributions $60
 $50
 $45
  Total contributions $164
 $151
 $137
 
(a) The Zone status for each individual plan listed was certified by each plan’s actuary as of the beginning of the plan years for 20162019 and 2015.2018. The plan year is the twelve months ending December 31 for each plan listed above except AFTRA Retirement Plan which has a plan year ending November 30.
(b) The Company was listed in AFTRA Retirement Plan’s Form 5500 as providing more than 5% of total contributions for the plan year ended November 30, 2014.2018.
(c) The expiration dates range from June 30, 20172020 through August 31,June 30, 2021.
(d) The Company was listed in Directors Guild of America - Producer Pension Plan’s Form 5500 as providing more than 5% of total contributions for the plan year ended December 2018.
(d)(e) The expiration dates range from JulyMay 15, 2021 through March 2, 2022.
(f) The Company was listed in I.A.T.S.E. Local No. 33 Pension Trust Fund’s Form 5500 as providing more than 5% of total contributions for the plan year ended December 31, 2018 through September 30, 2018.


As a result of the above noted zone status there were no funding improvements or rehabilitation plans implemented, as defined by ERISA, nor any surcharges imposed for any of the individual plans listed.


The CompanyWe also contributescontribute to multiemployer plans that provide postretirement healthcare defined contribution and other benefits to certain employees under collective bargaining agreements. The contributions to these plans were $28$89 million, $26$74 million and $20$74 million for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, respectively.


The Company recognizes

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


We recognize the net periodic cost for multiemployer pension and postretirement benefit plans based on the required contributions to the plans.


Defined Contribution Plans
The Company sponsorsWe sponsor defined contribution plans for the benefit of substantially all employees meeting eligibility requirements. Employer contributions to such plans were $35$95 million, $39$87 million and $38$94 million for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, respectively.
16) COMMITMENTSREDEEMABLE NONCONTROLLING INTEREST
We are subject to a redeemable put option, payable in a foreign currency, with respect to an international subsidiary. The put option expires in December 2022 and is classified as “Redeemable noncontrolling interest” in the Consolidated Balance Sheets. The activity reflected within redeemable noncontrolling interest for the years ended December 31, 2019, 2018 and 2017 is presented below.
Year Ended December 31,2019 2018 2017
Beginning balance$239
 $249
 $200
Net earnings14
 18
 17
Distributions(16) (15) (16)
Translation adjustment8
 (14) 21
Redemption value adjustment9
 1
 27
Ending balance$254
 $239
 $249

17) SEGMENT AND CONTINGENCIESREVENUE INFORMATION
The Company’s commitments not recorded onfollowing tables set forth our financial performance by reportable segment. Our operating segments, which are the balance sheet primarily consist of programmingsame as our reportable segments, have been determined in accordance with our internal management structure, which is organized based upon products and talent commitments, operating lease arrangements and purchase obligations for goods and services resulting from the Company’s normal course of business.
Programming and talent commitments of the Company, estimated to aggregate $11.08 billion as of December 31, 2016, primarily include $8.06 billion for sports programming rights, $2.26 billion relating to the production andservices.

Year Ended December 31,2019
2018
2017
Revenues:     
Advertising$6,008
 $5,751
 $5,696
Affiliate2,550
 2,082
 1,674
Content licensing3,157
 3,006
 2,880
Other209
 222
 226
TV Entertainment11,924
 11,061
 10,476
Advertising5,129
 5,130
 4,947
Affiliate6,052
 6,294
 6,479
Content licensing1,268
 1,259
 1,053
Cable Networks12,449
 12,683
 12,479
Theatrical547
 744
 716
Home Entertainment623
 617
 789
Licensing1,709
 1,493
 1,468
Other111
 102
 102
Filmed Entertainment2,990
 2,956
 3,075
Publishing814
 825
 830
Corporate/Eliminations(365) (275) (325)
Total Revenues$27,812
 $27,250
 $26,535

CBS CORPORATION

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Revenues generated between segments primarily reflect advertising and content licensing sales. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.
Year Ended December 31,2019
2018
2017
Intercompany Revenues:     
TV Entertainment$226
 $164
 $189
Cable Networks53
 47
 70
Filmed Entertainment117
 95
 89
Total Intercompany Revenues$396
 $306
 $348

We present operating income (loss) excluding depreciation and amortization, stock-based compensation, costs for restructuring and other corporate matters, programming charges and gain on sale of assets, each where applicable (“Adjusted OIBDA”), as the primary measure of profit and loss for our operating segments in accordance with FASB guidance for segment reporting. We began presenting Adjusted OIBDA as our segment profit measure in the fourth quarter of 2019 in order to align with the primary method used by our management beginning after the Merger to evaluate segment performance and to make decisions regarding the allocation of resources to our segments. We believe the presentation of Adjusted OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by our management and enhances their ability to understand our operating performance. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management.
Year Ended December 31,2019 2018 2017
Adjusted OIBDA:     
TV Entertainment$2,443
 $2,466
 $2,301
Cable Networks3,515
 4,341
 4,442
Filmed Entertainment80
 (33) (187)
Publishing143
 153
 146
Corporate/Eliminations(449) (433) (442)
Stock-based compensation(201) (205) (220)
Depreciation and amortization(443) (433) (443)
Restructuring and other corporate matters(775) (490) (258)
Programming charges(589) (162) (144)
Gain on sale of assets549
 —
 146
Operating income4,273
 5,204
 5,341
Interest expense(962) (1,030) (1,088)
Interest income66
 79
 87
Gain (loss) on marketable securities113
 (23) —
Gain (loss) on early extinguishment of debt—
 18
 (38)
Gain on sale of EPIX—
 —
 285
Pension settlement charge—
 —
 (352)
Other items, net(145) (124) (115)
Earnings from continuing operations before income taxes and
equity in earnings (loss) of investee companies
3,345
 4,124
 4,120
Benefit (provision) for income taxes9
 (617) (804)
Equity in earnings (loss) of investee companies, net of tax(53) (47) 4
Net earnings from continuing operations3,301
 3,460
 3,320
Net earnings (loss) from discontinued operations, net of tax38
 32
 (947)
Net earnings (ViacomCBS and noncontrolling interests)3,339
 3,492
 2,373
Net earnings attributable to noncontrolling interests(31) (37) (52)
Net earnings attributable to ViacomCBS$3,308
 $3,455
 $2,321


VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


Year Ended December 31,2019 2018 2017
Depreciation and Amortization:

 

 

TV Entertainment$150
 $160
 $163
Cable Networks219
 194
 193
Filmed Entertainment37
 38
 42
Publishing5
 6
 6
Corporate32
 35
 39
Total Depreciation and Amortization$443
 $433
 $443

Year Ended December 31,2019 2018 2017
Capital Expenditures:     
TV Entertainment$113
 $112
 $134
Cable Networks166
 156
 156
Filmed Entertainment43
 52
 27
Publishing8
 7
 5
Corporate23
 25
 34
Total Capital Expenditures$353
 $352
 $356

At December 31,2019 2018
Assets:   
TV Entertainment (a)
$19,689
 $17,378
Cable Networks (b)
22,109
 20,334
Filmed Entertainment5,477
 5,393
Publishing1,262
 1,054
Corporate/Eliminations967
 326
Discontinued Operations15
 12
Total Assets$49,519
 $44,497

(a) Includes assets held for sale of $33 million at December 31, 2018.
(b) Includes assets held for sale of $23 million at December 31, 2019 and 2018.
The following table presents our revenues disaggregated into categories based on the nature of such revenues.
Year Ended December 31,2019
2018
2017
Revenues by Type:     
Advertising$11,074
 $10,841
 $10,582
Affiliate8,602
 8,376
 8,153
Content licensing6,483
 6,163
 5,947
Theatrical547
 744
 716
Publishing814
 825
 830
Other292
 301
 307
Total Revenues$27,812
 $27,250
 $26,535

Year Ended December 31,2019 2018 2017
Revenues: (a)
     
United States$22,160
 $21,160
 $20,652
International5,652
 6,090
 5,883
Total Revenues$27,812
 $27,250
 $26,535

(a) Revenue classifications are based on customers’ locations.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


At December 31,2019
2018
Long-lived Assets: (a)
   
United States$12,417
 $9,322
International498
 300
Total Long-lived Assets$12,915
 $9,622

(a) Reflects total assets less current assets, investments, goodwill, intangible assets, noncurrent receivables and noncurrent deferred tax assets.

Transactions within the Company between the United States and international regions were not significant.
18) DISCONTINUED OPERATIONS
On November 16, 2017, we completed the split-off of CBS Radio through an exchange offer, in which we accepted 17.9 million shares of CBS Class B Common Stock from CBS stockholders in exchange for the 101.4 million shares of CBS Radio common stock that we 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 of CBS Radio and Entercom. CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.
The following table sets forth details of net earnings (loss) from discontinued operations for the year ended December 31, 2017. Net earnings from discontinued operations for the years ended December 31, 2019 and 2018 were not material to our consolidated financial statements.
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
 
$—
  $1,018
Costs and expenses:       
Operating364
 
—
  364
Selling, general and administrative444
 
(8)  436
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
 
—
  7
Total costs and expenses1,795
  (8)  1,787
Operating income (loss)(777)  8
  (769)
Interest expense(70) 
—
  (70)
Other items, net(2)  —
  (2)
Earnings (loss) from discontinued operations(849)  8
  (841)
Income tax benefit (provision)(55) 
43
(b) 
 (12)
Earnings (loss) from discontinued operations, net of tax(904)  51
  (853)
Net gain (loss) on disposal(109)  13
  (96)
Income tax benefit (provision)4
  (2)  2
Net gain (loss) on disposal, net of tax(105)  11
(c) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $62
  $(947)
(a) During 2017, prior to the 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, we recorded a market value adjustment of $980 million in 2017 to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom.
(b) Primarily reflects a tax benefit from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.
(c) Reflects adjustments to the loss on disposal of our outdoor advertising businesses, primarily from a decrease to the guarantee liability associated with the 2013 disposal of our outdoor advertising business in Europe.

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


19) COMMITMENTS AND CONTINGENCIES
Commitments
Our commitments not recorded on the balance sheet primarily consist of programming and talent commitments and purchase obligations for goods and services resulting from our normal course of business.
Our programming and talent commitments, estimated to aggregate $10.36 billion as of December 31, 2019, include $5.39 billion for sports programming rights, $3.80 billion relating to the production and licensing of television and film programming, and $758 million$1.17 billion for talent contracts.  The CompanyWe also hashave committed purchase obligations which include agreements to purchase goods or services in the future that totaled $835 million$1.52 billion as of December 31, 2016.2019.

Other long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet include program liabilities, participations due to producers, residuals, and residuals.a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the remaining tax on the Company’s historical accumulated foreign earnings and profits, which is payable to the IRS in 2024 and 2025.
 
At December 31, 2016,2019, commitments for programming and talent and purchase obligations not recorded on the balance sheet, and other long-term contractual obligations recorded on the balance sheet were payable as follows:
 Payments Due by Period
             2025 and
 Total 2020 2021 2022 2023 2024 Thereafter
Off-Balance Sheet Arrangements             
Programming and talent commitments$10,355
 $3,003
 $2,980
 $2,370
 $744
 $415
 $843
Purchase obligations$1,517
 $609
 $558
 $186
 $45
 $37
 $82
              
On-Balance Sheet Arrangements             
Other long-term contractual obligations$2,076
 $—
 $988
 $491
 $232
 $180
 $185

 Programming and Talent Purchase Obligations Other Long-Term Contractual Obligations
2017$1,987
 $222
  $—
 
20182,036
 216
  635
 
20191,758
 163
  393
 
20201,485
 156
  196
 
20211,515
 20
  86
 
2022 and thereafter2,297
 58
  63
 
Total$11,078
 $835
  $1,373
 
The Company hasWe also have long-term noncancellable operating and finance lease commitments for office space, equipment, transponders and studio facilities. The Company also enters into capital leases for satellite transponders.
Atfacilities, which are recorded on the Consolidated Balance Sheet at December 31, 2016, future minimum rental payments under noncancellable2019. See Note 9 for detail of our operating leases with terms in excess of one year and payments under capital leases are as follows:finance lease commitments.
 Leases
 Capital Operating
2017$19
 $134
201818
 113
201915
 98
202014
 74
202112
 68
2022 and thereafter5
 276
Total minimum payments$83
 $763
Less amounts representing interest8
  
Present value of minimum payments$75
  
Future minimum operating lease payments have been reduced by future minimum sublease income of $64 million. Rent expense was $167 million in 2016, $174 million in 2015 and $170 million in 2014. Included in net earnings (loss) from discontinued operations was rent expense of $36 million in 2016, $37 million in 2015 and $194 million in 2014.


Guarantees

The Company hasLetters of Credit and Surety Bonds. We have 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 December 31, 2016,2019, the outstanding letters of credit and surety bonds approximated $103$136 million and were not recorded on the Consolidated Balance Sheet.

CBS Television City. During 2019, we completed the sale of CBS Television City. We have guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheet at December 31, 2019 is a liability of $124 million, reflecting the present value of the estimated amount payable under the guarantee obligation.
Lease Guarantees. We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc. (“Famous Players”). These lease commitments amounted to $86 million as of December 31, 2019, and are presented on the Consolidated Balance Sheets within “Other liabilities”. The amount of lease commitments varies over time depending on expiration or termination of

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


individual underlying leases, or the related indemnification obligation, and foreign exchange rates, among other things. We may also have exposure for certain other expenses related to the leases, such as property taxes and common area maintenance. We believe our accrual is sufficient to meet any future obligations based on our consideration of available financial information, the lessees’ historical performance in meeting their lease obligations and the underlying economic factors impacting the lessees’ business models.

In the course of itsour business, the Companywe both providesprovide and receivesreceive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Companywe 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. We record a liability for our indemnification obligations and other contingent liabilities when probable and reasonably estimable.
Legal Matters
General.    On an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation’’). Litigation may be brought against us without merit, is inherently uncertain and always difficult to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the below-described legal matters and other litigation to which we are a party are not likely, in the aggregate, to have a material adverse effect on our results of operations, financial position or cash flows.

Litigation Relating to the Merger.  On September 27, 2019, Bucks County Employees Retirement Fund (the “Bucks County Fund”), a purported holder of CBS Class B Common Stock, served us with a demand for inspection of books and records pursuant to 8 Del. C. § 220 in connection with the Merger (the “Demand”). On October 10, 2019, we offered to produce certain categories of documents properly within the scope of a books and records demand under § 220. The Bucks County Fund rejected our offer and filed litigation in the Court of Chancery of the State of Delaware on October 15, 2019, seeking to compel production of all documents requested in the Demand (the “Section 220 Complaint”). A trial on the Section 220 Complaint took place on November 22, 2019, and the Court ordered limited additional production on November 25, 2019. On December 2, 2019, we certified that we had completed production of all relevant documents. On February 20, 2020, the Bucks County Fund filed a putative derivative and class action complaint in the Court of Chancery of the State of Delaware against Shari Redstone, NAI, Sumner M. Redstone National Amusements Trust (“SMR Trust”), the CBS board of directors (comprised of Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Robert N. Klieger, Martha L. Minow, Susan Schuman, Frederick O. Terrell and Strauss Zelnick), former CBS President and Acting Chief Executive Officer Joseph Ianniello and ViacomCBS Inc. The complaint alleges breaches of fiduciary duties to CBS stockholders and waste in connection with the negotiation and approval of the Merger Agreement. The complaint seeks unspecified damages, costs and expenses as well as other relief. We believe that the claims are without merit and we intend to defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

On January 23, 2020, the Court of Chancery of the State of Delaware consolidated 4 putative class action suits filed by purported Viacom stockholders against NAI, NAI Entertainment Holdings LLC, Shari E. Redstone, the members of the Viacom special transaction committee of the Viacom board of directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish, in In re Viacom Inc. Stockholders Litigation. The four actions allege breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement, and seek unspecified damages, costs and expenses. On February 6, 2020, the Court appointed the California Public Employees’ Retirement System as the lead plaintiff in the consolidated action. We believe that the claims are without merit and we intend to


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




an indemnification obligation.defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

Investigation-Related Matters. As announced on August 1, 2018, the CBS Board of Directors (the “CBS Board”) retained two law firms to conduct a full investigation of the allegations in press reports about CBS’ former Chairman of the Board, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board announced the completion of its investigation, certain findings of the investigation and the CBS Board’s determination, discussed below, with respect to the termination of Mr. Moonves’ employment. We have 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 Company records a liability for its indemnification obligationsNew York State Attorney General’s Office and the United States Securities and Exchange Commission have also requested information about these matters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other contingent liabilities when probableentities in the future. We are cooperating with these inquiries.

On August 27, 2018 and reasonably estimable.on October 1, 2018, each of Gene Samit and John Lantz, respectively, filed putative class action suits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below. On November 6, 2018, the Court entered an order consolidating the two actions. On November 30, 2018, the Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action. On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against CBS, certain current and former senior executives and members of the CBS Board. The consolidated action is stated to be on behalf of purchasers of CBS Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We believe that the remaining claims are without merit and we intend to defend against them vigorously. We are currently unable to determine a range of potential liability, if any. Accordingly, no accrual for this matter has been made in our consolidated financial statements.
Legal Matters
General.Separation Agreement. On an ongoing basis,September 9, 2018, CBS entered into a separation and settlement agreement and releases (the “Separation Agreement”) with Mr. Moonves, pursuant to which Mr. Moonves resigned as a director and as Chairman of the Company vigorously defends itselfBoard, President and Chief Executive Officer of CBS. In October 2018, we contributed $120 million to a grantor trust pursuant to the Separation Agreement. On December 17, 2018, the CBS Board announced that, following its consideration of the findings of the investigation referred to above, it had determined that there were grounds to terminate Mr. Moonves’ employment for cause under his employment agreement with CBS. Any dispute related to the CBS Board’s determination is subject to binding arbitration as set forth in numerous lawsuitsthe Separation Agreement. On January 16, 2019, Mr. Moonves commenced a binding arbitration proceeding with respect to this matter and proceedingsthe related CBS Board investigation, which proceeding is ongoing. The assets of the grantor trust will remain in the trust until a final determination in the arbitration. We are currently unable to determine the outcome of the arbitration and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, ‘‘litigation’’). Litigationthe amount, if any, that may be brought against the Company without merit, is inherently uncertainawarded thereunder 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,accordingly, no accrual for this matter has been made in the aggregate, to have a material adverse effect on its results of operations,our consolidated 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.statements.


Claims Related to Former Businesses: Asbestos. The Company isWe are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred principally 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

VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


nor a manufacturer of asbestos. The Company isWe are 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’sour products is the basis of a claim. Claims against the Companyus in which a product has been identified principallymost commonly relate to exposures allegedly caused byallegations of exposure to asbestos-containing insulating material used in conjunction with turbines sold for power-generation, industrial and marine use.electrical equipment.


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 doesWe do not report as pending those claims on inactive, stayed, deferred or similar dockets whichthat some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2016, the Company2019, we had pending approximately 33,61030,950 asbestos claims, as compared with approximately 36,03031,570 as of December 31, 20152018 and 41,10031,660 as of December 31, 2014.2017. During 2016, the Company2019, we received approximately 4,1603,460 new claims and closed or moved to an inactive docket approximately 6,5804,080 claims. The Company reportsWe report claims as closed when it becomeswe become aware that a dismissal order has been entered by a court or when the Company haswe have 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. In 2016,Our total costs for the Company’s costsyears 2019 and 2018 for settlement and defense of asbestos claims after insurance recoveries and taxesnet of tax were approximately $48 million. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement$58 million and defense of asbestos claims by approximately $5 million. The Company’s$45 million, respectively. Our 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 Company believespredominant number of pending claims against us are non-cancer claims. It is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that its reservesa liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are adequate to cover itsour asbestos liabilities. This beliefOur liability estimate 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 predictas well as consultation with a third party firm on trends that may impact our 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.liability.


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


CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations20) SUPPLEMENTAL FINANCIAL INFORMATION
The following table presents the components of Other items, net on the Company and its predecessors.Consolidated Statements of Operations.
Year Ended December 31,2019 2018 2017
Pension and postretirement benefit costs$(105) $(68) $(96)
Foreign exchange losses(17) (18) (20)
Impairment of investments(50) (46) (18)
Gains from investments22
 16
 —
Other5
 (8) 19
Other items, net$(145) $(124) $(115)

Supplemental Cash Flow Information
Year Ended December 31,2019
2018
2017
Cash paid for interest:     
Continuing operations$922
 $1,012
 $1,056
Discontinued operations—
 —
 70
Total$922
 $1,012
 $1,126
Year Ended December 31,2019
2018
2017
Cash paid (refunded) for income taxes:     
Continuing operations$598

$161

$827
Discontinued operations—
 (4) 26
Total$598
 $157
 $853

In addition, during 2017 we received shares with a total value of $1.01 billion upon the split-off of CBS Radio in a noncash disposition (see Note 18).

17) REPORTABLE SEGMENTS

The following tables set forth the Company’s financial performance 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.

In preparation for the planned separation of its radio business, the Company changed the manner in which it manages its television and radio operations during the third quarter of 2016. Accordingly, the Company began presenting Local Media, which was previously combined with CBS Radio in the Local Broadcasting segment, as a separate operating segment. In connection with this segment presentation, the presentation of intercompany revenues was revised, including station affiliation fees paid by Local Media to the CBS Television Network. In addition, CBS Radio has been presented as a discontinued operation of the Company. Results for all periods presented have been reclassified to conform to this presentation.
Year Ended December 31,2016
2015
2014
Revenues:     
Entertainment$8,877
 $8,438
 $8,309
Cable Networks2,160
 2,242
 2,176
Publishing767
 780
 778
Local Media1,779
 1,592
 1,624
Corporate/Eliminations(417) (381) (368)
Total Revenues$13,166
 $12,671
 $12,519
Revenues generated between segments primarily reflect advertising sales, television and feature film license fees and station affiliation fees. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.
Year Ended December 31,2016
2015
2014
Intercompany Revenues:     
Entertainment$434
 $384
 $368
Cable Networks1
 —
 1
Local Media8
 9
 11
Total Intercompany Revenues$443
 $393
 $380

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




The Company presents operating income (loss) excluding a pension settlement charge, restructuring and merger and acquisition-related costs, and other operating items, net, each where applicable, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments (“segment profit measure”) 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.21) QUARTERLY FINANCIAL DATA (unaudited):
Year Ended December 31,2016 2015 2014
Segment Operating Income (Loss):     
Entertainment$1,519
 $1,294
 $1,316
Cable Networks959
 945
 974
Publishing119
 114
 101
Local Media618
 487
 515
Corporate(354) (276) (297)
Total Segment Operating Income2,861
 2,564
 2,609
Pension settlement charge(211) —
 —
Restructuring and merger and acquisition-related costs(38) (45) (19)
Other operating items, net9
 139
 —
Operating income2,621
 2,658
 2,590
Interest expense(411) (392) (363)
Interest income32
 24
 13
Loss on early extinguishment of debt—
 —
 (352)
Other items, net(12) (26) (30)
Earnings from continuing operations before income taxes and
equity in loss of investee companies
2,230
 2,264
 1,858
Provision for income taxes(628) (676) (659)
Equity in loss of investee companies, net of tax(50) (34) (48)
Net earnings from continuing operations1,552
 1,554
 1,151
Net earnings (loss) from discontinued operations, net of tax(291) (141) 1,808
Net earnings$1,261
 $1,413
 $2,959
 First Second Third Fourth  
2019 (a) (b)
Quarter (c)
 Quarter Quarter 
Quarter (d)
 Total Year
Revenues$7,100
 $7,143
 $6,698
 $6,871
 $27,812
Operating income (loss)$1,804
 $1,446
 $1,036
 $(13) $4,273
Net earnings (loss) from continuing operations
(ViacomCBS and noncontrolling interests)
$1,951
 $977
 $642
 $(269) $3,301
Net earnings (loss)
(ViacomCBS and noncontrolling interests)
$1,964
 $983
 $646
 $(254) $3,339
Net earnings (loss) from continuing operations
attributable to ViacomCBS
$1,946
 $971
 $626
 $(273) $3,270
Net earnings (loss) attributable to ViacomCBS$1,959
 $977
 $630
 $(258) $3,308
          
Basic net earnings (loss) per common share:         
Net earnings (loss) from continuing operations
attributable to ViacomCBS
$3.17
 $1.58
 $1.02
 $(.44) $5.32
Net earnings (loss) attributable to ViacomCBS$3.20
 $1.59
 $1.02
 $(.42) $5.38
          
Diluted net earnings (loss) per common share:         
Net earnings (loss) from continuing operations
attributable to ViacomCBS
$3.15
 $1.57
 $1.01
 $(.44) $5.30
Net earnings (loss) attributable to ViacomCBS$3.18
 $1.58
 $1.02
 $(.42) $5.36
          
Weighted average number of common shares         
outstanding:         
Basic613
 615
 615
 615
 615
Diluted617
 617
 617
 615
 617
(a) On December 4, 2019, Viacom merged with and into CBS, with CBS continuing as the surviving company. At the effective time of the Merger, the combined company changed its name to ViacomCBS Inc. The Merger has been accounted for as a transaction between entities under common control and therefore, the net assets of Viacom were combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented.
(b) Includes costs for restructuring and other corporate matters of $178 million in the first quarter, $7 million in the second quarter, $122 million in the third quarter and $468 million in the fourth quarter.
(c) The first quarter includes a gain of $549 million ($386 million, net of tax) on the sale of CBS Television City and a discrete tax benefit of $768 million resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations.
(d) The fourth quarter includes programming charges of $589 million.



Year Ended December 31,2016 2015 2014
Depreciation and Amortization:

 

 

Entertainment$117
 $126
 $139
Cable Networks23
 23
 23
Publishing6
 6
 6
Local Media44
 48
 54
Corporate35
 32
 28
Total Depreciation and Amortization$225
 $235
 $250
Year Ended December 31,2016 2015 2014
Stock-based Compensation:     
Entertainment$61
 $61
 $56
Cable Networks12
 11
 9
Publishing4
 4
 4
Local Media12
 11
 11
Corporate76
 70
 57
Total Stock-based Compensation$165
 $157
 $137

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)




Year Ended December 31,2016 2015 2014
Capital Expenditures:     
Entertainment$98
 $99
 $94
Cable Networks19
 18
 16
Publishing9
 10
 4
Local Media37
 28
 37
Corporate33
 16
 27
Total Capital Expenditures$196
 $171
 $178
At December 31,2016 2015
Assets:   
Entertainment$11,262
 $10,910
Cable Networks2,618
 2,369
Publishing880
 880
Local Media4,065
 4,051
Corporate/Eliminations817
 485
Discontinued operations4,596
 5,070
Total Assets$24,238
 $23,765
Year Ended December 31,2016
2015
2014
Revenues by Type:     
Advertising$6,288
 $5,824
 $5,934
Content licensing and distribution3,673
 3,903
 3,990
Affiliate and subscription fees2,978
 2,724
 2,362
Other227
 220
 233
Total Revenues$13,166
 $12,671
 $12,519
Year Ended December 31,2016 2015 2014
Revenues: (a)
     
United States$11,317
 $10,667
 $10,726
International1,849
 2,004
 1,793
Total Revenues$13,166
 $12,671
 $12,519
 First Second Third Fourth  
2018 (a) (b)
Quarter Quarter Quarter 
Quarter (c)
 Total Year
Revenues$6,825
 $6,703
 $6,630
  $7,092
  $27,250
Operating income$1,190
 $1,448
 $1,307
  $1,259
  $5,204
Net earnings from continuing operations
(ViacomCBS and noncontrolling interests)
$726
 $946
 $891
  $897
  $3,460
Net earnings
(ViacomCBS and noncontrolling interests)
$736
 $957
 $899
  $900
  $3,492
Net earnings from continuing operations
attributable to ViacomCBS
$718
 $943
 $878
  $884
  $3,423
Net earnings attributable to ViacomCBS$728
 $954
 $886
  $887
  $3,455
            
Basic net earnings per common share:           
Net earnings from continuing operations
attributable to ViacomCBS
$1.15
 $1.53
 $1.43
  $1.44
  $5.55
Net earnings attributable to ViacomCBS$1.17
 $1.54
 $1.44
  $1.44
  $5.60
            
Diluted net earnings per common share:           
Net earnings from continuing operations
attributable to ViacomCBS
$1.15
 $1.52
 $1.42
  $1.43
  $5.51
Net earnings attributable to ViacomCBS$1.16
 $1.54
 $1.43
  $1.44
  $5.56
            
Weighted average number of common shares           
outstanding:           
Basic622
 618
 615
  614
  617
Diluted626
 621
 619
  618
  621
(a) Revenue classifications are based on customers’ locations.
At December 31,2016
2015
Long-lived Assets: (a)
   
United States$17,476
 $17,378
International407
 357
Total Long-lived Assets$17,883
 $17,735
(a) Reflects total assets from bothOn December 4, 2019, Viacom merged with and into CBS, with CBS continuing and discontinued operations less current assets, investments and noncurrent deferred tax assets.

Transactions withinas the Company betweensurviving company. At the United States and international regions were not significant.


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


18) SUPPLEMENTAL CASH FLOW INFORMATION
Year Ended December 31,2016 2015 2014
Cash paid for interest:     
Continuing operations (a)
$407
 $349
 $707
Discontinued operations8
 —
 —
Total$415
 $349
 $707
(a) Included in 2014 are paymentseffective time of $360 million associated with the early extinguishment of debt, mainly for early redemption premiums.
Year Ended December 31,2016 2015 2014
Cash paid for income taxes:     
Continuing operations$373

$199

$122
Discontinued operations119
 84
 137
Total$492
 $283
 $259
Year Ended December 31,2016 2015 2014
Noncash investing and financing activities:     
Shares received in Split-Off (Note 4)$—
 $—
 $2,721
Equipment acquired under capitalized leases$10
 $3
 $1
Radio station swap (Note 4)$—
 $—
 $262


CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


19) QUARTERLY FINANCIAL DATA (unaudited):
 First Second Third Fourth  
2016 (a)
Quarter Quarter Quarter 
Quarter (b) (c)
 Total Year
Revenues:         
Entertainment$2,587
 $1,947
 $1,949
 $2,394
 $8,877
Cable Networks525
 536
 598
 501
 2,160
Publishing145
 187
 226
 209
 767
Local Media448
 396
 409
 526
 1,779
Corporate/Eliminations(117) (90) (98) (112) (417)
Total Revenues$3,588
 $2,976
 $3,084
 $3,518
 $13,166
Segment Operating Income (Loss):

        
Entertainment$449
 $351
 $348
 $371
 $1,519
Cable Networks228
 227
 285
 219
 959
Publishing13
 26
 44
 36
 119
Local Media150
 130
 122
 216
 618
Corporate(84) (83) (78) (109) (354)
Total Segment Operating Income756
 651
 721
 733
 2,861
Pension settlement charge—
 —
 —
 (211) (211)
Restructuring and merger and
acquisition-related costs
—
 —
 —
 (38) (38)
Other operating items, net9
 —
 —
 —
 9
Total Operating Income$765
 $651
 $721
 $484
 $2,621
Net earnings from continuing operations$442
 $373
 $466
 $271
 $1,552
Net earnings (loss)$473
 $423
 $478
 $(113) $1,261
          
Basic net earnings per common share:         
Net earnings from continuing operations$.96
 $.83
 $1.05
 $.64
 $3.50
Net earnings (loss)$1.03
 $.94
 $1.08
 $(.27) $2.84
Diluted net earnings per common share:         
Net earnings from continuing operations$.95
 $.82
 $1.04
 $.63
 $3.46
Net earnings (loss)$1.02
 $.93
 $1.07
 $(.26) $2.81
          
Weighted average number of common shares         
outstanding:         
Basic459
 451
 442
 424
 444
Diluted464
 455
 446
 429
 448
          
Dividends per common share$.15
 $.15
 $.18
 $.18
 $.66
(a) CBS RadioMerger, the combined company changed its name to ViacomCBS Inc. The Merger has been presentedaccounted for as a discontinued operationtransaction between entities under common control and therefore, the net assets of Viacom were combined with those of CBS at their historical carrying amounts and the companies have been presented on a combined basis for all periods presented.
(b) InIncludes costs for restructuring and other corporate matters of $194 million in the first quarter, $50 million in the second quarter, $70 million in the third quarter and $176 million in the fourth quarter.
(c) The fourth quarter includes programming charges of 2016,$162 million and the Company recordedreversal of a noncash impairment chargevaluation allowance of $444$140 million relating to reducecapital loss carryforwards that were utilized in connection with the carrying valuesale of CBS Radio’s goodwill and FCC licenses to their fair value. This charge has been presentedTelevision City in discontinued operations (See Note 4).2019.
(c) In the fourth quarter of 2016, the Company recorded a one-time pension settlement charge of $211 million for the settlement of pension obligations resulting from the completion of the Company’s offer to eligible former employees to receive lump-sum distributions of their pension benefits (See Note 15).



CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 First Second Third Fourth  
2015 (a)
Quarter Quarter Quarter 
Quarter (b) (c)
 Total Year
Revenues:         
Entertainment$2,261
 $1,785
 $1,932
 $2,460
 $8,438
Cable Networks539
 615
 526
 562
 2,242
Publishing145
 199
 203
 233
 780
Local Media375
 387
 376
 454
 1,592
Corporate/Eliminations(87) (82) (94) (118) (381)
Total Revenues$3,233
 $2,904
 $2,943
 $3,591
 $12,671
Segment Operating Income (Loss):         
Entertainment$346
 $262
 $339
 $347
 $1,294
Cable Networks251
 220
 246
 228
 945
Publishing12
 25
 43
 34
 114
Local Media109
 128
 101
 149
 487
Corporate(68) (65) (49) (94) (276)
Total Segment Operating Income650
 570
 680
 664
 2,564
Restructuring charges—
 (31) —
 (14) (45)
Other operating items, net19
 —
 —
 120
 139
Total Operating Income$669
 $539
 $680
 $770
 $2,658
Net earnings from continuing operations$364
 $306
 $377
 $507
 $1,554
Net earnings$394
 $332
 $426
 $261
 $1,413
          
Basic net earnings per common share:         
Net earnings from continuing operations$.73
 $.62
 $.79
 $1.08
 $3.21
Net earnings$.79
 $.68
 $.89
 $.56
 $2.92
Diluted net earnings per common share:         
Net earnings from continuing operations$.72
 $.62
 $.78
 $1.07
 $3.18
Net earnings$.78
 $.67
 $.88
 $.55
 $2.89
          
Weighted average number of common shares         
outstanding:         
Basic498
 490
 480
 469
 484
Diluted506
 495
 484
 474
 489
          
Dividends per common share$.15
 $.15
 $.15
 $.15
 $.60
(a) CBS Radio has been presented as a discontinued operation for all periods presented.
(b) In the fourth quarter of 2015, the Company recorded a noncash impairment charge of $484 million to reduce the carrying value of radio FCC licenses to their fair value. This charge has been presented in discontinued operations (See Note 4).
(c) During 2015, the Company recorded gains on the sales of internet businesses in China (See Note 3).

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


20) 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 (See Note 9).  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 Year Ended December 31, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$181
 $12
 $12,973
 $—
 $13,166
Costs and expenses:         
Operating67
 6
 7,883
 —
 7,956
Selling, general and administrative80
 297
 1,747
 —
 2,124
Depreciation and amortization5
 23
 197
 —
 225
Pension settlement charge211
 —
 —
 —
 211
Restructuring and merger and acquisition-related costs—
 2
 36
 —
 38
Other operating items, net—
 —
 (9) —
 (9)
Total costs and expenses363
 328
 9,854
 —
 10,545
Operating income (loss)(182) (316) 3,119
 —
 2,621
Interest (expense) income, net(502) (433) 556
 —
 (379)
Other items, net(3) 19
 (28) —
 (12)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(687) (730) 3,647
 —
 2,230
Benefit (provision) for income taxes212
 224
 (1,064) —
 (628)
Equity in earnings (loss) of investee companies,
net of tax
1,736
 1,077
 (50) (2,813) (50)
Net earnings from continuing operations1,261
 571
 2,533
 (2,813) 1,552
Net loss from discontinued operations, net of tax—
 (1) (290) —
 (291)
Net earnings$1,261
 $570
 $2,243
 $(2,813) $1,261
Total comprehensive income$1,264
 $595
 $2,212
 $(2,807) $1,264

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Operations
 For the Year Ended December 31, 2015
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$148
 $11
 $12,512
 $—
 $12,671
Costs and expenses:         
Operating65
 5
 7,841
 —
 7,911
Selling, general and administrative46
 243
 1,672
 —
 1,961
Depreciation and amortization6
 20
 209
 —
 235
Restructuring charges—
 —
 45
 —
 45
Other operating items, net(117) —
 (22) —
 (139)
Total costs and expenses—
 268
 9,745
 —
 10,013
Operating income (loss)148
 (257) 2,767
 —
 2,658
Interest (expense) income, net(486) (403) 521
 —
 (368)
Other items, net(3) 9
 (32) —
 (26)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(341) (651) 3,256
 —
 2,264
Benefit (provision) for income taxes160
 215
 (1,051) —
 (676)
Equity in earnings (loss) of investee companies,
net of tax
1,593
 1,090
 (34) (2,683) (34)
Net earnings from continuing operations1,412
 654
 2,171
 (2,683) 1,554
Net earnings (loss) from discontinued operations, net of tax1
 (1) (141) —
 (141)
Net earnings$1,413
 $653
 $2,030
 $(2,683) $1,413
Total comprehensive income$1,378
 $660
 $2,030
 $(2,690) $1,378

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Operations
 For the Year Ended December 31, 2014
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$159
 $11
 $12,349
 $—
 $12,519
Costs and expenses:         
Operating68
 6
 7,615
 —
 7,689
Selling, general and administrative61
 254
 1,656
 —
 1,971
Depreciation and amortization6
 16
 228
 —
 250
Restructuring charges—
 3
 16
 —
 19
Total costs and expenses135
 279
 9,515
 —
 9,929
Operating income (loss)24
 (268) 2,834
 —
 2,590
Interest (expense) income, net(443) (383) 476
 —
 (350)
Loss on early extinguishment of debt(351) —
 (1) —
 (352)
Other items, net(1) 4
 (33) —
 (30)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(771) (647) 3,276
 —
 1,858
Benefit (provision) for income taxes280
 229
 (1,168) —
 (659)
Equity in earnings (loss) of investee companies,
net of tax
3,444
 1,270
 (48) (4,714) (48)
Net earnings from continuing operations2,953
 852
 2,060
 (4,714) 1,151
Net earnings (loss) from discontinued operations, net of tax6
 (2) 1,804
 —
 1,808
Net earnings$2,959
 $850
 $3,864
 $(4,714) $2,959
Total comprehensive income$2,769
 $857
 $3,819
 $(4,676) $2,769

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Balance Sheet
 At December 31, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$321
 $—
 $277
 $—
 $598
Receivables, net27
 2
 3,285
 —
 3,314
Programming and other inventory3
 3
 1,421
 —
 1,427
Prepaid expenses and other current assets102
 55
 297
 (35) 419
Current assets of discontinued operations—
 —
 305
 —
 305
Total current assets453
 60
 5,585
 (35) 6,063
Property and equipment47
 201
 2,687
 —
 2,935
Less accumulated depreciation and amortization25
 140
 1,529
 —
 1,694
Net property and equipment22
 61
 1,158
 —
 1,241
Programming and other inventory5
 7
 2,427
 —
 2,439
Goodwill98
 62
 4,704
 —
 4,864
Intangible assets—
 —
 2,633
 —
 2,633
Investments in consolidated subsidiaries44,473
 13,853
 —
 (58,326) —
Other assets150
 8
 2,549
 —
 2,707
Intercompany—
 1,785
 26,976
 (28,761) —
Assets of discontinued operations—
 3
 4,288
 —
 4,291
Total Assets$45,201
 $15,839
 $50,320
 $(87,122) $24,238
Liabilities and Stockholders’ Equity
         
Accounts payable$1
 $3
 $144
 $—
 $148
Participants’ share and royalties payable
—
 —
 1,024
 —
 1,024
Program rights4
 4
 282
 —
 290
Commercial paper450
 —
 —
 —
 450
Current portion of long-term debt6
 —
 17
 —
 23
Accrued expenses and other current liabilities421
 284
 948
 (35) 1,618
Current liabilities of discontinued operations—
 —
 155
 —
 155
Total current liabilities882
 291
 2,570
 (35) 3,708
Long-term debt8,798
 —
 104
 —
 8,902
Other liabilities3,071
 244
 2,173
 —
 5,488
Liabilities of discontinued operations—
 —
 2,451
 —
 2,451
Intercompany28,761
 —
 —
 (28,761) —
Stockholders’ Equity:         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital43,913
 —
 60,894
 (60,894) 43,913
Retained earnings (deficit)(19,257) 15,483
 (13,838) (1,645) (19,257)
Accumulated other comprehensive income (loss)(767) 29
 50
 (79) (767)
 23,890
 15,635
 47,822
 (63,457) 23,890
Less treasury stock, at cost20,201
 331
 4,800
 (5,131) 20,201
Total Stockholders’ Equity
3,689
 15,304
 43,022
 (58,326) 3,689
Total Liabilities and Stockholders’ Equity
$45,201
 $15,839
 $50,320
 $(87,122) $24,238

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Balance Sheet
 At December 31, 2015
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$267
 $1
 $49
 $—
 $317
Receivables, net28
 2
 3,345
 —
 3,375
Programming and other inventory3
 3
 1,264
 —
 1,270
Prepaid expenses and other current assets192
 26
 274
 (30) 462
Current assets of discontinued operations—
 —
 323
 —
 323
Total current assets490
 32
 5,255
 (30) 5,747
Property and equipment46
 180
 2,654
 —
 2,880
Less accumulated depreciation and amortization20
 118
 1,489
 —
 1,627
Net property and equipment26
 62
 1,165
 —
 1,253
Programming and other inventory6
 9
 1,942
 —
 1,957
Goodwill98
 62
 4,629
 —
 4,789
Intangible assets—
 —
 2,639
 —
 2,639
Investments in consolidated subsidiaries42,744
 12,775
 —
 (55,519) —
Other assets163
 11
 2,459
 —
 2,633
Intercompany—
 2,248
 23,988
 (26,236) —
Assets of discontinued operations—
 —
 4,747
 —
 4,747
Total Assets$43,527
 $15,199
 $46,824
 $(81,785) $23,765
Liabilities and Stockholders’ Equity
         
Accounts payable$1
 $4
 $154
 $—
 $159
Participants’ share and royalties payable—
 —
 1,013
 —
 1,013
Program rights4
 4
 364
 —
 372
Current portion of long-term debt206
 —
 16
 —
 222
Accrued expenses and other current liabilities418
 229
 1,034
 (30) 1,651
Current liabilities of discontinued operations—
 1
 142
 —
 143
Total current liabilities629
 238
 2,723
 (30) 3,560
Long-term debt8,113
 —
 113
 —
 8,226
Other liabilities2,961
 252
 2,064
 —
 5,277
Liabilities of discontinued operations25
 —
 1,114
 —
 1,139
Intercompany26,236
 —
 —
 (26,236) —
Stockholders’ Equity:
         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital44,055
 —
 60,894
 (60,894) 44,055
Retained earnings (deficit)(20,518) 14,913
 (16,081) 1,168
 (20,518)
Accumulated other comprehensive income (loss)(770) 4
 81
 (85) (770)
 22,768
 15,040
 45,610
 (60,650) 22,768
Less treasury stock, at cost17,205
 331
 4,800
 (5,131) 17,205
Total Stockholders’ Equity5,563
 14,709
 40,810
 (55,519) 5,563
Total Liabilities and Stockholders’ Equity
$43,527
 $15,199
 $46,824
 $(81,785) $23,765

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(846) $(157) $2,688
 $—
 $1,685
Investing Activities:         
Acquisitions—
 —
 (92) —
 (92)
Capital expenditures—
 (33) (163) —
 (196)
Investments in and advances to investee companies—
 —
 (81) —
 (81)
Proceeds from dispositions(4) —
 24
 —
 20
Other investing activities15
 —
 —
 —
 15
Net cash flow provided by (used for) investing activities from continuing operations11
 (33) (312) —
 (334)
Net cash flow used for investing activities from discontinued operations—
 (1) (5) —
 (6)
Net cash flow provided by (used for) investing activities11
 (34) (317) —
 (340)
Financing Activities:         
Proceeds from short-term debt borrowings, net450
 —
 —
 —
 450
Proceeds from issuance of senior notes684
 —
 —
 —
 684
Repayment of senior debentures(199) —
 —
 —
 (199)
Proceeds from debt borrowings of CBS Radio—
 —
 1,452
 —
 1,452
Repayment of debt borrowings of CBS Radio—
 —
 (110) —
 (110)
Payment of capital lease obligations—
 —
 (18) —
 (18)
Dividends(288) —
 —
 —
 (288)
Purchase of Company common stock(2,997) —
 —
 —
 (2,997)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(58) —
 —
 —
 (58)
Proceeds from exercise of stock options21
 —
 —
 —
 21
Excess tax benefit from stock-based compensation17
 —
 —
 —
 17
Increase (decrease) in intercompany payables3,259
 190
 (3,449) —
 —
Net cash flow provided by (used for) financing activities889
 190
 (2,125) —
 (1,046)
Net increase (decrease) in cash and cash equivalents54
 (1) 246
 —
 299
Cash and cash equivalents at beginning of year
(includes $6 of discontinued operations cash)		267
 1
 55
 —
 323
Cash and cash equivalents at end of year
(includes $24 of discontinued operations cash)		$321
 $—
 $301
 $—
 $622

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2015
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(634) $(201) $2,229
 $—
 $1,394
Investing Activities:         
Acquisitions—
 —
 (12) —
 (12)
Capital expenditures—
 (16) (155) —
 (171)
Investments in and advances to investee companies—
 —
 (98) —
 (98)
Proceeds from sale of investments79
 —
 1
 —
 80
Proceeds from dispositions318
 —
 65
 —
 383
Other investing activities(3) —
 —
 —
 (3)
Net cash flow provided by (used for) investing activities from continuing operations394
 (16) (199) —
 179
Net cash flow used for investing activities from discontinued operations(3) —
 (22) —
 (25)
Net cash flow provided by (used for) investing activities391
 (16) (221) —
 154
Financing Activities:         
Repayments of short-term debt borrowings, net(616) —
 —
 —
 (616)
Proceeds from issuance of senior notes1,959
 —
 —
 —
 1,959
Payment of capital lease obligations—
 —
 (17) —
 (17)
Dividends(300) —
 —
 —
 (300)
Purchase of Company common stock(2,813) —
 —
 —
 (2,813)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(96) —
 —
 —
 (96)
Proceeds from exercise of stock options142
 —
 —
 —
 142
Excess tax benefit from stock-based compensation88
 —
 —
 —
 88
Increase (decrease) in intercompany payables2,083
 217
 (2,300) —
 —
Net cash flow provided by (used for) financing activities447
 217
 (2,317) —
 (1,653)
Net increase (decrease) in cash and cash equivalents204
 —
 (309) —
 (105)
Cash and cash equivalents at beginning of year
(includes $6 of discontinued operations cash)		63
 1
 364
 —
 428
Cash and cash equivalents at end of year
(includes $6 of discontinued operations cash)		$267

$1

$55

$—
 $323

CBS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)


 Statement of Cash Flows
 For the Year Ended December 31, 2014
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(1,107) $(194) $2,576
 $—
 $1,275
Investing Activities:         
Acquisitions—
 —
 (2) —
 (2)
Capital expenditures—
 (27) (151) —
 (178)
Investments in and advances to investee companies—
 —
 (98) —
 (98)
Proceeds from sale of investments—
 —
 12
 —
 12
Proceeds from dispositions—
 —
 4
 —
 4
Other investing activities(4) —
 —
 —
 (4)
Net cash flow used for investing activities from continuing operations(4) (27) (235) —
 (266)
Net cash flow used for investing activities from discontinued operations(29) —
 (306) —
 (335)
Net cash flow used for investing activities(33) (27) (541) —
 (601)
Financing Activities:         
Proceeds from short-term debt borrowings, net141
 —
 —
 —
 141
Proceeds from issuance of senior notes1,728
 —
 —
 —
 1,728
Repayment of notes and debentures(1,146) —
 (6) —
 (1,152)
Proceeds from debt borrowings of Outdoor Americas(5) —
 1,574
 —
 1,569
Proceeds from IPO of Outdoor Americas—
 —
 613
 —
 613
Payment of capital lease obligations—
 —
 (17) —
 (17)
Dividends(292) —
 —
 —
 (292)
Purchase of Company common stock(3,595) —
 —
 —
 (3,595)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(146) —
 —
 —
 (146)
Proceeds from exercise of stock options283
 —
 —
 —
 283
Excess tax benefit from stock-based compensation243
 —
 —
 —
 243
Other financing activities(9) —
 (9) —
 (18)
Increase (decrease) in intercompany payables3,921
 221
 (4,142) —
 —
Net cash flow provided by (used for) financing activities1,123
 221
 (1,987) —
 (643)
Net (decrease) increase in cash and cash equivalents(17) —
 48
 —
 31
Cash and cash equivalents at beginning of year
(includes $33 of discontinued operations cash)
80
 1
 316
 —
 397
Cash and cash equivalents at end of year
(includes $6 of discontinued operations cash)
$63

$1

$364

$—
 $428




Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A.Controls and Procedures.
The Company’sOur chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, the Company’sour disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. No change in the Company’sour internal control over financial reporting occurred during the Company’s lastour fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’sour internal control over financial reporting.
Management’s report on internal control over financial reporting and the report of the Company’sour independent registered public accounting firm thereon are set forth in Item 8, on pages II- 43II-49 and II - 44,II-50, of this report.
Item 9B.Other Information.
None.



PART III
Item 10.Directors, Executive Officers and Corporate Governance.
The information required by this item with respect to the Company’s directors (i) is contained in Part I of this Form 10-K under the CBS Corporationcaption “Our Board of Directors” and (ii) will be contained in the ViacomCBS Inc. Proxy Statement for the Company’s 20172020 Annual Meeting of Stockholders (the “Proxy Statement”) under the headings “CBS Corporation’s“ViacomCBS Board of Directors,”Directors” and “Item 1—Election1-Election of Directors,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” which information is incorporated herein by reference.

The information required by this item with respect to the Company’s executive officers (i) is (i) contained in the Proxy Statement under the headings “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” and (ii) included in Part I of this Form 10-K under the caption “Executive Officers of“Information About Our Executive Officers” and (ii) will be contained in the Company,Proxy Statement under the heading “Corporate Governance,” which information is incorporated herein by reference.
Item 11.Executive Compensation.
The information required by this item iswill be contained in the Proxy Statement under the headings “CBS Corporation’s“ViacomCBS’ Board of Directors,” “Director Compensation,” “Executive Compensation,” “Compensation Discussion and Analysis” and “Compensation Committee Report,” which information is incorporated herein by reference.
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item iswill be contained in the Proxy Statement under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” which information is incorporated herein by reference.
Item 13.Certain Relationships and Related Transactions, and Director Independence.
The information required by this item iswill be contained in the Proxy Statement under the headings “Related Person Transactions” and “CBS Corporation’s“ViacomCBS’ Board of Directors,” which information is incorporated herein by reference.
Item 14.Principal Accounting Fees and Services.
The information required by this item iswill be contained in the Proxy Statement under the heading “Fees for Services Provided by the Independent Registered Public Accounting Firm,” which information is incorporated herein by reference.



PART IV
Item 15.Exhibits, Financial Statement Schedules.
(a)
1. Financial Statements.
The financial statements of the CompanyViacomCBS filed as part of this report on Form 10-K are listed on the Index on page II-42.II-50.
2. Financial Statement Schedules.
The financial statement schedule required to be filed by Item 8 of this Form 10-K is listed on the Index on page II-42.II-50
3. Exhibits.
The exhibits listed in Item 15(b) of this Part IV are filed or incorporated by reference as part of this Form 10-K. The Index to Exhibits isbegins on page E-1.
(b)Exhibits.
The exhibits listed in Item 15(b) of this Part IV are filed or incorporated by reference as part of this Form 10-K. The Index to Exhibits isbegins on page E-1.
Item 16.Form 10-K Summary.
None.




SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, CBS Corporation has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
CBS CORPORATION
By:/s/ Leslie Moonves
Leslie Moonves
Chairman of the Board, President and
Chief Executive Officer

Date: February 17, 2017VIACOMCBS INC. AND SUBSIDIARIES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of CBS Corporation andSCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(Tabular dollars in the capacities and on the dates indicated:millions)
Col. A Col. B Col. C Col. D Col. E
Description Balance at Beginning of Period Balance Acquired through Acquisitions Charged to Expenses and Other Accounts Deductions Balance at End of Period
Allowance for doubtful accounts:                    
Year ended December 31, 2019  $86
   $—
   $26
   $26
   $86
 
Year ended December 31, 2018  $101
   $—
   $26
   $41
   $86
 
Year ended December 31, 2017  $105
   $—
   $31
   $35
   $101
 
                   

 
Valuation allowance on deferred tax assets:                  

 
Year ended December 31, 2019  $841
   $—
   $76
   $366
   $551
 
Year ended December 31, 2018  $1,120
   $—
   $37
   $316
   $841
 
Year ended December 31, 2017  $1,108
   $218
   $157
   $363
   $1,120
 
                   

 
Reserves for inventory obsolescence:                  

 
Year ended December 31, 2019  $56
   $—
   $11
   $6
   $61
 
Year ended December 31, 2018  $67
   $—
   $5
   $16
   $56
 
Year ended December 31, 2017  $59
   $—
   $26
   $18
   $67
 




SignatureTitleDate
/s/ Leslie Moonves
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
(Chairman of the Board of Directors)
February 17, 2017
Leslie Moonves
/s/ Joseph R. Ianniello
Chief Operating Officer
(Principal Financial Officer)
February 17, 2017
Joseph R. Ianniello
/s/ Lawrence Liding
Executive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)
February 17, 2017
Lawrence Liding
*DirectorFebruary 17, 2017
David R. Andelman
*DirectorFebruary 17, 2017
Joseph A. Califano, Jr.
*DirectorFebruary 17, 2017
William S. Cohen
*DirectorFebruary 17, 2017
Gary L. Countryman




SignatureTitleDate
*DirectorFebruary 17, 2017
Charles K. Gifford
*DirectorFebruary 17, 2017
Leonard Goldberg
*DirectorFebruary 17, 2017
Bruce S. Gordon
*DirectorFebruary 17, 2017
Linda M. Griego
*DirectorFebruary 17, 2017
Arnold Kopelson
*DirectorFebruary 17, 2017
Doug Morris
*DirectorFebruary 17, 2017
Shari Redstone
*
Director,
Chairman Emeritus
February 17, 2017
Sumner M. Redstone
*By:/s/ Lawrence P. TuFebruary 17, 2017
Lawrence P. Tu
Attorney-in-Fact
for Directors





INDEX TO EXHIBITS
ITEM 15(b)

Effective December 31, 2005, Former Viacom was renamed CBS Corporation. Effective December 4, 2019, Viacom Inc. merged with and into CBS Corporation with CBS Corporation continuing as the surviving company and the combined company changed its name to “ViacomCBS Inc.”
Exhibit No.Description of Document
(2) Plan of acquisition, reorganization, arrangement, liquidation or succession
 (a)
Agreement and Plan of Merger, dated as of February 2, 2017, amongAugust 13, 2019, by and between CBS Corporation CBS Radioand Viacom Inc., Entercom Communications Corp. and Constitution Merger Sub Corp. (incorporated by reference to Exhibit 2.22.1 to the Current Report on Form 8‑K8-K of CBS Corporation filed February 2, 2017)August 19, 2019) (File No. 001‑09553)001-09553).
 (b)Master Separation
Amendment No. 1 to the Agreement and Plan of Merger, dated February 2, 2017,as of October 16, 2019, by and between CBS Corporation and CBS RadioViacom Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8‑K8-K of CBS Corporation, filed February 2, 2017)October 17, 2019) (File No. 001‑09553)001-09553).
(3) Articles of Incorporation and Bylaws
 (a)
Amended and Restated Certificate of Incorporation of CBS CorporationViacomCBS Inc., effective December 31, 20054, 2019 (incorporated by reference to Exhibit 3(a) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553).
(b)Amended and Restated Bylaws of CBS Corporation effective December 11, 2014 (incorporated by reference to Exhibit 3(b)3.1 to the Current Report on Form 8‑K of CBS Corporation filed December 17, 2014)4, 2019) (File No. 001‑09553).
(b)
Amended and Restated Bylaws of ViacomCBS Inc., effective as of December 4, 2019 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of CBS Corporation filed December 4, 2019) (File No. 001-09553).
(4) Instruments defining the rights of security holders, including indentures
 (a)
Description of Class A Common Stock and Class B Common Stock (filed herewith).
(b)
Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) among 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)(c)
First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 among 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).
(d)
Indenture, dated as of April 12, 2006, between Viacom Inc. and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Viacom Inc. filed April 17, 2006) (File No. 001-32686).
(e)
Twenty-First Supplemental Indenture, dated as of December 4, 2019, by and among CBS Corporation, Viacom Inc. and The Bank of New York Mellon, a New York banking corporation, as trustee (in such capacity, the “Trustee”), to the Indenture, dated as of April 12, 2006, between Viacom Inc. and the Trustee (incorporated by reference to Exhibit 4.1  to the Current Report on Form 8-K of ViacomCBS Inc. filed December 4, 2019) (File No. 001-09553).
  The other instruments defining the rights of holders of the long‑term debt securities of CBS CorporationViacomCBS Inc. and its subsidiaries are omitted pursuant to sectionparagraph (b)(4)(iii)(A) of Item 601 of Regulation S‑K. CBS CorporationViacomCBS Inc. hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
(10) Material Contracts
 (a)
CBS Corporation 2009 Long‑Term Incentive Plan (as amended and restated May 23, 2013)December 11, 2018) (incorporated by reference to Exhibit 10(c)10(a) to the QuarterlyAnnual Report on Form 10‑Q10-K of CBS Corporation for the quarterfiscal year ended June 30, 2013)December 31, 2018) (File No. 001‑09553)001-09553).*
 (b)Forms of Certificate and Terms and Conditions for equity awards for:
  (i)
Stock Options (incorporated by reference to Exhibit 10(c)(ii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
(ii)
Performance‑Based Restricted Share Units with Time Vesting and Performance Vesting (incorporated by reference to Exhibit 10(c)(v) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).



Exhibit No.Description of Document
  (ii)(iii)Performance‑Based
Restricted Share Units with Time Vesting and Performance Vesting (incorporated by reference to Exhibit 10(c)(v)(vii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
(iii)Restricted Share Units with Time Vesting (incorporated by reference to Exhibit 10(c)(vii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2011) (File No. 001‑09553).*
 (c)
CBS Corporation Senior Executive Short‑Term Incentive Plan (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as amended by the First Amendment to the CBS Corporation Senior Executive Short‑Term Incentive Plan effective January 1, 2009) (incorporated by reference to Exhibit 10(d) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2008) (File No. 001‑09553).*
 (d)
CBS Retirement Excess Pension Plan (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(o) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2009) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010) (File No. 001‑09553) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (File No. 001‑09553).*
 (e)
CBS Excess 401(k) Plan for Designated Senior Executives (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(p) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as amended by Part B effectiveas of January 1, 2009) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2008) (File No. 001‑09553) (as Part B was amended by Amendment No. 1 as of January 1, 2009) (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10‑Q of CBS Corporation for the quarter ended March 31, 2010) (File No. 001‑09553) (as Part B was amended by Amendment No. 2 as of January 1, 2009) (incorporated by reference to Exhibit 10(h) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010 (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2014) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part B was amended by Amendment No. 3 as of January 1, 2014) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part A was amended by Amendment No. 2 as of February 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553), (as Part B was amended by Amendment No. 4 as of February 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553), (as Part A was amended by Amendment No. 3 as of January 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553), (as Part B was amended by Amendment No. 5 as of January 1, 2015) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2014) (File No. 001-09553) (as Part A was amended by Amendment No. 4 as of October 2, 2017) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part B was amended by Amendment No. 6 as of October 2, 2017) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part A was amended by Amendment No. 5 as of July 1, 2019) (incorporated by reference to Exhibit 10(a) for the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2019) (as Part B was amended by Amendment No. 7 as of July 1, 2019) (incorporated by reference to Exhibit 10(a) for the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2019) (File No. 001-09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).


Exhibit No.Description of Document
 (f)
CBS Bonus Deferral Plan for Designated Senior Executives (as amended and restated as of December 31, 2005) (incorporated by reference to Exhibit 10(q) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2005) (File No. 001‑09553) (as amended by Part B effectiveas of January 1, 2009) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2008) (File No. 001‑09553) (as Part B was amended by Amendment No. 1 as of January 1, 2009) (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10‑Q of CBS Corporation for the quarter ended March 31, 2010) (File No. 001‑09553) (as Part B was amended by Amendment No. 2 as of January 1, 2009) (incorporated by reference to Exhibit 10(i) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2010) (File No. 001‑09553) (as Part A was amended by Amendment No. 1 as of January 1, 2014) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part B was amended by Amendment No. 3 as of January 1, 2014) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2013) (File No. 001‑09553) (as Part A was amended by Amendment No. 2 as of January 1, 2015) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553), (as Part B was amended by Amendment No. 4 as of January 1, 2015) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(g)Summary of CBS Corporation Compensation for Outside Directors (as of January 28, 2016) (incorporated by reference to Exhibit 10(h) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2015) (File No. 001-09553).*
(h)Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10 to the Current Report on Form 8‑K of CBS Corporation filed September 18, 2009) (File No. 001‑09553).*
(i)Former Viacom Deferred Compensation Plan for Non‑Employee Directors (as amended and restated as of October 14, 2003) (incorporated by reference to Exhibit 10(e) to the Annual Report on Form 10‑K of Former Viacom for the fiscal year ended December 31, 2003) (File No. 001‑09553).*
(j)CBS Corporation Deferred Compensation Plan for Outside Directors (as amended and restated as of January 29, 2015) (incorporated by reference to Exhibit 10(k) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(k)CBS Corporation 2000 Stock Option Plan for Outside Directors (as amended and restated through December 14, 2016) (filed herewith).*
(l)CBS Corporation 2005 RSU Plan for Outside Directors (as amended and restated through January 29, 2015) (incorporated by reference to Exhibit 10(m) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(m)CBS Corporation 2015 Equity Plan for Outside Directors (effective May 21, 2015) (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended June 30, 2015) (File No. 001-09553).*
(n)Summary of Compensation for Sumner M. Redstone, Chairman Emeritus (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2016) (File No. 001-09553). Employment Agreement dated December 29, 2005 between CBS Corporation and Sumner M. Redstone (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K of Former Viacom filed December 30, 2005) (File No. 001‑09553), as amended by a Letter Agreement dated March 13, 2007 (incorporated by reference to Exhibit 10 to the Current Report on Form 8‑K of CBS Corporation filed March 16, 2007) (File No. 001‑09553), as amended by a 409A Letter Agreement dated December 10, 2008 (incorporated by reference to Exhibit 10(m) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2008) (File No. 001‑09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).



Exhibit No.Description of Document
 (o)Employment Agreement dated December 11, 2014 between CBS Corporation and Leslie Moonves
Part A was amended by Amendment No. 2 as of January 1, 2015) (incorporated by reference to Exhibit 10(o)10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553), as (as Part B was amended by a Letter Agreement dated February 24, 2015Amendment No. 4 as of January 1, 2015) (incorporated by reference to Exhibit 10(a)10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553) (as Part A was amended by Amendment No. 3 as of October 2, 2017) (incorporated by reference to Exhibit 10(f) of the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part B was amended by Amendment No. 5 as of October 2, 2017) (incorporated by reference to Exhibit 10(f) to the Annual Report on Form 10-K of CBS Corporation for the year ended December 31, 2017) (File No. 001-09553) (as Part A was amended by Amendment No. 4 as of July 1, 2019) (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2015) (File No. 001-09553), as2019) (as Part B was amended by a Letter Agreement dated February 26, 2016Amendment No. 6 as of July 1, 2019) (incorporated by reference to Exhibit 10(a)10(b) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2016)2019) (File No. 001-09553).*
 (p)(g)
Letter Agreement dated December 11, 2014 between CBS Corporation and Leslie Moonves amending and restating the Letter Agreement dated May 2, 2012 between CBS Corporation and Leslie MoonvesViacom Inc. 2016 Long-Term Management Incentive Plan (incorporated by reference to Exhibit 10(p)A to the Definitive Proxy Statement of Viacom Inc. filed January 23, 2015) (File No. 001-32686).*
(h)Forms of Terms and Conditions to the Certificates for equity awards for:
(i)
Stock Options (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(ii)
Restricted Share Units (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(iii)
Performance Share Units (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended December 31, 2017) (File No. 001-32686).*
(iv)
Performance Share Units (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Viacom Inc. for the quarter ended December 31, 2018) (File No. 001-32686).*
(i)
Viacom Excess Pension Plan, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Viacom Inc. for the fiscal year ended December 31, 2008) (File No. 001-32686), and Amendment, effective as of March 31, 2009, to Viacom Excess Pension Plan, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.13 to the Transition Report on Form 10-K of Viacom Inc. for the nine-month transition period ended September 30, 2010) (File No. 001-32686).*
(j)
Viacom Excess 401(k) Plan for Designated Senior Executives, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of Viacom Inc. for the fiscal year ended December 31, 2008) (File No. 001-32686), and Amendments, effective as of April 1, 2009 and December 31, 2009, to Viacom Excess 401(k) Plan for Designated Senior Executives, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.15 to the Transition Report on Form 10-K of Viacom Inc. for the nine-month transition period ended September 30, 2010) (File No. 001-32686).*
(k)
Viacom Bonus Deferral Plan for Designated Senior Executives, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of Viacom Inc. for the fiscal year ended December 31, 2008) (File No. 001-32686), and Amendment, effective as of December 31, 2009, to Viacom Bonus Deferral Plan for Designated Senior Executives, as amended and restated January 1, 2009 (incorporated by reference to Exhibit 10.17 to the Transition Report on Form 10-K of Viacom Inc. for the nine-month transition period ended September 30, 2010) (File No. 001-32686).*
(l)
Summary of CBS Corporation Compensation for Outside Directors (as of January 31, 2019) (incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2018) (File No. 001-09553).*
(m)
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10 to the Current Report on Form 8‑K of CBS Corporation filed September 18, 2009) (File No. 001‑09553).*
(n)
CBS Corporation Deferred Compensation Plan for Outside Directors (as amended and restated as of January 29, 2015) (incorporated by reference to Exhibit 10(k) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
Certain portions of this exhibit have been omitted pursuant to a confidential treatment order granted by the Securities and Exchange Commission.
 (q)(o)Employment Agreement dated as of June 4, 2013 between
CBS Corporation 2005 RSU Plan for Outside Directors (as amended and Joseph R. Ianniellorestated through January 29, 2015) (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10‑Q of CBS Corporation for the quarter ended June 30, 2013) (File No. 001‑09553).*
(r)Employment Agreement dated as of September 29, 2016 between CBS Corporation and Anthony G. Ambrosio (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2016) (File No. 001-09553).*
(s)Employment Agreement dated December 17, 2015 (effective as of July 1, 2016) between CBS Corporation and Gil Schwartz (incorporated by reference to Exhibit 10(u) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2015) (File No. 001-09553).*
(t)Employment Agreement dated as of November 11, 2013 between CBS Corporation and Lawrence Tu (incorporated by reference to Exhibit 10(s)10(m) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014) (File No. 001-09553).*
(p)
CBS Corporation 2015 Equity Plan for Outside Directors (effective May 21, 2015) (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended June 30, 2015) (File No. 001-09553).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

Exhibit No.Description of Document
(q)
Viacom Inc. 2011 RSU Plan for Outside Directors, as amended and restated as of January 1, 2016 (incorporated by reference to Exhibit B to the Definitive Proxy Statement of Viacom Inc. filed January 23, 2015) (File No. 001-32686), as further amended and restated as of May 18, 2016 (incorporated by reference to Exhibit 10.2 to the Quarterly Report of Viacom Inc. for the quarter ended June 30, 2016) (File No. 001-32686).*
(r)
CBS Corporation Senior Executive Retention Plan, including the form of Letter to Participants (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4 of CBS Corporation filed October 17, 2019 (Registration No. 333-234238) (File No. 001-09553).*
(s)
Viacom Inc. Executive Retention Plan for Section 16 Officers (incorporated by reference to Exhibit 10.15 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(t)
Employment Agreement, dated as of August 13, 2019, between Viacom Inc. and Robert M. Bakish (incorporated by reference to Exhibit 10.4 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
 (u)
Letter Agreement, dated as of August 13, 2019, between Viacom Inc. and Robert M. Bakish (incorporated by reference to Exhibit 10.5 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(v)
Employment Agreement dated October 18, 2018 between CBS Corporation plansand 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).*
(w)
Employment Agreement, dated as of August 13, 2019, between CBS Corporation and Christina Spade (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-4 of CBS Corporation filed October 17, 2019) (Registration No. 333-234238) (File No. 001-09553).*
(x)
Employment Agreement, dated as of August 13, 2019, between Viacom Inc. and Christa A. D’Alimonte (incorporated by reference to Exhibit 10.9 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(y)
Letter Agreement, dated as of August 13, 2019, between Viacom Inc. and Christa A. D’Alimonte (incorporated by reference to Exhibit 10.10 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(z)
Employment Agreement dated as of January 1, 2019 between CBS Corporation and Richard M. Jones (incorporated by reference to Exhibit 10(r) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2018) (File No. 001-09553).*
(aa)
Employment Agreement, dated as of November 19, 2019, between CBS Corporation and Richard M. Jones (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of CBS Corporation filed November 22, 2019) (File No. 001-09553).*
(bb)
Employment Agreement, dated as of December 2, 2019, between Viacom Inc. and Nancy Phillips (filed herewith).*
(cc)
Letter Agreement, dated as of December 2, 2019, between Viacom Inc. and Nancy Phillips (filed herewith).*
(dd)
Employment Agreement dated as of July 1, 2017 between CBS Corporation and Joseph R. Ianniello (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2017) (File No. 001-09553), as amended by Letter Agreement dated 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 27, 2018) (File No. 001-09553).*
(ee)
Letter Agreement dated as of April 23, 2019 between CBS Corporation and Joseph R. Ianniello (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed April 26, 2019) (File No. 001-09553).*
(ff)
Letter Agreement, dated as of August 13, 2019, between CBS Corporation and Joseph R. Ianniello (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-4 of CBS Corporation filed October 17, 2019 (Registration No. 333-234238) (File No. 001-09553)).*
(gg)
Employment Agreement, dated as of December 4, 2019, between ViacomCBS Inc. and Joseph R. Ianniello (filed herewith).*
(hh)
Letter Agreement, dated as of January 31, 2020, between ViacomCBS Inc. and Joseph R. Ianniello (filed herewith).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

Exhibit No.Description of Document
(ii)
Employment Agreement, dated as of August 13, 2019, between CBS Corporation and Laura Franco (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-4 of CBS Corporation filed October 17, 2019) (Registration No. 333-234238) (File No. 001-09553).*
(jj)
Employment Agreement dated as of December 10, 2019 between CBS Corporation and Jonathan H. Anschell (filed herewith).*
(kk)
Employment Agreement dated as of June 1, 2017 between CBS Corporation and Lawrence P. Tu (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2017) (File No. 001-09553), as amended by Letter Agreement dated April 25, 2018 (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2018) (File No. 001-09553).*
(ll)
Separation Agreement dated February 22, 2019 between CBS Corporation and Lawrence P. Tu (incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of CBS Corporation filed February 27, 2019) (File No. 001-09553).*
(mm)Plans assumed by Former Viacom after the merger with former CBS Corporation in May 2000, consisting of the following:
  (i)
CBS Supplemental Executive Retirement Plan (as amended as of April 1, 1999) (incorporated by reference to Exhibit 10(h) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(t)(i) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (File No. 001‑09553).*
  (ii)
CBS Bonus Supplemental Executive Retirement Plan (as amended as of April 1, 1999) (incorporated by reference to Exhibit 10(i) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977) (as amended by Part B, effective as of January 1, 2009, as amended and restated as of January 1, 2012) (incorporated by reference to Exhibit 10(t)(ii) to the Annual Report on Form 10‑K of CBS Corporation for the fiscal year ended December 31, 2012) (File No. 001‑09553).*
  (iii)
CBS Supplemental Employee Investment Fund (as amended as of January 1, 1998) (incorporated by reference to Exhibit 10(j) to the Quarterly Report on Form 10‑Q of CBS for the quarter ended September 30, 1999) (File No. 001‑00977).*
 (v)(nn)CBS Corporation
Matching Gifts Program for Directors (incorporated by reference to Exhibit 10(t)10(aa) to the Annual Report on Form 10‑K10-K of CBS Corporation for the fiscal year ended December 31, 2008)2018) (File No. 001‑09553)001-09553).*
(oo)
Amended and Restated $3.5 Billion Credit Agreement, dated as of January 23, 2020, among ViacomCBS Inc.; the Subsidiary Borrowers party thereto; the Lenders named therein; JPMorgan Chase Bank, N.A., as Administrative Agent; Citibank, N.A., Bank of America, N.A. and Wells Fargo Bank, National Association, as Syndication Agents; and Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd. and Morgan Stanley MUFG Loan Partners, LLC, as Documentation Agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of ViacomCBS Inc. filed January 23, 2020) (File No. 001-09553).
(pp)
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).
(qq)
Amendment No. 1 to the Settlement and Release Agreement, dated as of August 13, 2019, by and among the parties listed therein (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of CBS Corporation filed August 19, 2019) (File No. 001-09553).
(rr)
Support Agreement, dated as of August 13, 2019, by and among the parties listed therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of CBS Corporation filed August 19, 2019) (File No. 001-09553).
(ss)
Governance Agreement, dated as of August 13, 2019, by and among the parties listed therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of CBS Corporation filed August 19, 2019) (File No. 001-09553).

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).



Exhibit No.Description of Document
(w)Amended and Restated $2.5 Billion Credit Agreement, dated as of June 9, 2016, among CBS Corporation; CBS Operations Inc.; the Subsidiary Borrowers Parties thereto; the Lenders named therein; JPMorgan Chase Bank, N.A., as Administrative Agent; Citibank, N.A., as Syndication Agent; and Bank of America, N.A., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., Morgan Stanley MUFG Loan Partners, LLC, and Wells Fargo Bank, N.A., as Co‑Documentation Agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of CBS Corporation filed June 10, 2016) (File No. 001-09553).
(x)CBS Radio Inc. $1.06 Billion Credit Agreement, dated as of October 17, 2016, among CBS Radio Inc., the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and an L/C Issuer; and J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs Bank USA, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and as Joint Book Runners; Deutsche Bank Securities Inc. and Citigroup Global Markets Inc., as Co-Syndication Agents; and J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Wells Fargo Bank, N.A., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of CBS Corporation filed October 18, 2016) (File No. 001-09553).
(y)Separation Agreement dated as of December 19, 2005 by and between Former Viacom and New Viacom Corp. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K of Former Viacom filed December 21, 2005) (File No. 001‑09553).
(z)Tax Matters Agreement dated as of December 30, 2005 by and between Former Viacom and New Viacom Corp. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K of CBS Corporation filed January 5, 2006) (File No. 001‑09553).
(12)
Statement re Computations of Ratios (filed herewith).
(21) 
Subsidiaries of CBS Corporation (filed herewith)ViacomCBS Inc. (filed herewith).
(23) Consents of Experts and Counsel
 (a)
Consent of PricewaterhouseCoopers LLP (filed herewith)(filed herewith).
(24) 
Powers of Attorney (filed herewith) (filed herewith).
(31) Rule 13a‑14(a)/15d‑14(a) Certifications
 (a)
Certification of the Chief Executive Officer of CBS CorporationViacomCBS Inc. 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)(filed herewith).
 (b)
Certification of the Chief Financial Officer of CBS CorporationViacomCBS Inc. 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)(filed herewith).
(32) Section 1350 Certifications
 (a)
Certification of the Chief Executive Officer of CBS CorporationViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 (furnished herewith)(furnished herewith).
 (b)
Certification of the Chief Financial Officer of CBS CorporationViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 (furnished herewith)(furnished herewith).
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*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).





CBS CORPORATION AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(Tabular dollars in millions)
Col. A Col. B Col. C  Col. D Col. E
Description Balance at Beginning of Period Balance Acquired through Acquisitions Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period
Allowance for doubtful accounts:                        
Year ended December 31, 2016  $59
   $1
   $12
   $—
   $12
   $60
 
Year ended December 31, 2015  $47
   $—
   $9
   $15
(a) 
  $12
   $59
 
Year ended December 31, 2014  $51
   $—
   $9
   $—
   $13
   $47
 
                       

 
Valuation allowance on deferred tax assets:                      

 
Year ended December 31, 2016  $914
   $—
   $41
   $—
   $27
   $928
 
Year ended December 31, 2015  $574
   $—
   $394
(b) 
  $—
   $54
   $914
 
Year ended December 31, 2014  $634
   $—
   $36
   $—
   $96
   $574
 
                       

 
Reserves for inventory obsolescence:                      

 
Year ended December 31, 2016  $23
   $1
   $2
   $—
   $7
   $19
 
Year ended December 31, 2015  $30
   $—
   $10
   $—
   $17
   $23
 
Year ended December 31, 2014  $35
   $—
   $8
   $—
   $13
   $30
 

(a) Reclassification from long-termSIGNATURES
Pursuant to current.
(b) Primarily relatesthe requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ViacomCBS Inc. has duly caused this report to a valuation allowance for a U.S. capital loss carryforward deferred tax asset that arose frombe signed on its behalf by the sale of internet businesses in China.



undersigned, thereto duly authorized.
F-1
VIACOMCBS INC.
By:/s/ Robert M. Bakish
Robert M. Bakish
President and
Chief Executive Officer
Date: February 20, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of ViacomCBS Inc. and in the capacities and on the dates indicated:
SignatureTitleDate
/s/ Robert M. Bakish
President and Chief
Executive Officer; Director
(Principal Executive Officer)
February 20, 2020
Robert M. Bakish
/s/ Christina Spade
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
February 20, 2020
Christina Spade
/s/ Katherine Gill-Charest
Executive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)
February 20, 2020
Katherine Gill-Charest
*DirectorFebruary 20, 2020
Candace K. Beinecke
*DirectorFebruary 20, 2020
Barbara M. Byrne
*DirectorFebruary 20, 2020
Brian Goldner
*DirectorFebruary 20, 2020
Linda M. Griego



SignatureTitleDate
*DirectorFebruary 20, 2020
Robert N. Klieger
*DirectorFebruary 20, 2020
Judith A. McHale
*DirectorFebruary 20, 2020
Ronald L. Nelson
*DirectorFebruary 20, 2020
Charles E. Phillips, Jr.
*ChairFebruary 20, 2020
Shari E. Redstone
*DirectorFebruary 20, 2020
Susan Schuman
*
Director

February 20, 2020
Nicole Seligman
*
Director

February 20, 2020
Frederick O. Terrell
*By:/s/ Christa A. D’AlimonteFebruary 20, 2020
Christa A. D’Alimonte
Attorney-in-Fact
for Directors