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, 2020
For the fiscal year ended December 31, 2017OR
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 valueVIACANew YorkThe Nasdaq Stock ExchangeMarket LLC
Class B Common Stock, $0.001 par valueVIACNew 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, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “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 companyo☐
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. o☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
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, 2017,2020, 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 $500,071,692$275,618,509 (based upon the closing price of $64.81$25.60 per share as reported by the New YorkThe Nasdaq Stock ExchangeMarket LLC 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 $22,432,425,432$12,618,241,490 (based upon the closing price of $63.78$23.32 per share as reported by the New YorkThe Nasdaq Stock ExchangeMarket LLC 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 $22,932,497,124.$12,893,859,999.
As of February 12, 2018, 37,572,43419, 2021, 52,066,317 shares of Class A Common Stock and 345,147,497567,539,816 shares of Class B Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of CBS Corporation’sViacomCBS Inc.’s Notice of 20182021 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 (Part III).


VIACOMCBS INC.
TABLE OF CONTENTS
Page
PART I
Item 1.
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Item 1A.
I-19
Item 1B.
I-31
Item 2.
I-31
Item 3.
I-32
Item 4.
I-32
PART II
Item 5.
II-1
Item 7.
II-3
Item 8.
II-51
Item 9.
II-118
Item 9A.
II-118
Item 9B.
II-118
PART III
Item 10.
III-1
Item 11.
III-1
Item 12.
III-1
Item 13.
III-1
Item 14.
III-1
PART IV
Item 15.
IV-1
Item 16.
IV-1





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. is a mass media company with operations in the following segments:

•
ENTERTAINMENT: The Entertainment segment is composed of the CBS® Television Network; CBS Television Studios®; CBS Studios International™ and CBS Television Distribution™; Network Ten®; CBS Interactive™; CBS Films®; and the Company’s digital streaming services, CBS All Access® and CBSN®.

•
CABLE NETWORKS: The Cable Networks segment is composed of Showtime Networks, which operates the Company’s premium subscription program services Showtime®, The Movie Channel®, and Flix®, 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 between Showtime Networks and Smithsonian Institution, which operates Smithsonian Channel®, a basic cable program service, and a digital streaming subscription service.

•
PUBLISHING: The Publishing segment is composed of Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster®, Pocket Books®, Scribner®, Gallery Books®, Touchstone® and Atria Books®.

LOCAL MEDIA: The Local Media segment is composed of CBS Television Stations, the Company’s 29 owned broadcast television stations; and CBS Local Digital Media™, which operates local Websites including content from the Company’s television stations.

For the year ended December 31, 2017, contributions to the Company’s consolidated revenues from its segments were as follows: Entertainment 67%, Cable Networks 18%, Publishing 6% and Local Media 12%. The Company generated approximately 15% of its total revenues from international regions in 2017. For the year ended December 31, 2017, approximately 51% and 14% of total international revenues of approximately $2.02 billion were generated in Europe and Canada, respectively.

The Company operates businesses which span theleading global 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 is to create and acquirecompany that creates premium content that is widely acceptedand experiences for audiences worldwide. Driven by audiences,iconic consumer brands, our portfolio includes CBS, SHOWTIME, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Smithsonian Channel, CBS All Access (soon to be rebranded Paramount+) and Pluto TV, among others. We deliver the largest share of television audience in the United States (“U.S.”) and one of the industry’s most extensive libraries of television and film titles. In addition 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 premium content to enhance its opportunities for revenue growth, which include exhibiting its content on multiple digital platforms, including the Company’s owned digitaloffering innovative streaming services as well as third-party live televisionand digital video products, we provide powerful capabilities in production, distribution and advertising solutions.

Through the synergistic combination of our studios, networks and streaming offerings;businesses, we strategically focus on creating value in three ways. First, we maximize the power of our content by leveraging our extensive intellectual property portfolio across our Company and by focusing on areas with growth potential. Second, we maximize value from our biggest lines of revenue: advertising, affiliate and content licensing. Third, we are accelerating our momentum in streaming by expanding our differentiated ecosystem of free, pay and premium streaming services to capitalize on 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’ carriageglobal opportunity in streaming. Ahead of the Company’s owned television stations (also knownrebranding of CBS All Access as “retransmission fees”)Paramount+, which is scheduled for March 4, 2021, we recently announced an integrated global streaming organization under new leadership to ensure a more holistic approach across our streaming services, more closely align our streaming initiatives globally and cableenhance our ability to leverage our content portfolio.

As part of our ongoing integration strategy since the Merger (as defined below), in early 2020 we conducted a strategic review of our assets to identify and ultimately divest assets that do not fit within our focus on studios, networks and securing compensation from television stations affiliatedstreaming. In connection with the CBS Television Networkthat review, in October 2020 we sold CNET Media Group and in November 2020 announced that we entered into an agreement to sell Simon & Schuster, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. As a result, Simon & Schuster, which previously comprised our Publishing segment (“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 November 17, 2017, the Company completed the disposition of its radio business, CBS Radio Inc. and its subsidiaries (“CBS Radio”Publishing”), in a transaction which involved the split-off of CBS Radio through an exchange offer followed by the merger of CBS Radio with a subsidiary of Entercom Communications Corp. CBS Radio has beenis presented as a discontinued operation in the Company’sour consolidated financial statements for all periods presented.presented in this Annual Report on Form 10-K.



We operate through the following segments:

•TV Entertainment. Our TV Entertainment segment (“TV Entertainment”) operates the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, our television production and syndication operations; our CBS-branded streaming services, including CBS All Access/Paramount+; CBS Sports Network, our cable network focused on college athletics and other sports; and CBS Television Stations, our owned broadcast television stations. TV Entertainment accounted for approximately 42% of our consolidated revenues in 2020.

•Cable Networks. Our Cable Networks segment (“Cable Networks”) operates a portfolio of streaming services, including Pluto TV, a leading free advertising-supported streaming television (“FAST”) service in the U.S., and Showtime Networks’ premium subscription streaming service (“SHOWTIME OTT”); premium subscription cable networks, including SHOWTIME; basic cable networks, including BET, Nickelodeon, MTV, Comedy Central, Paramount Network and Smithsonian Channel; international extensions of these brands; and our international free-to-air broadcast networks such as Network 10, Channel 5 and Telefe. Cable Networks accounted for approximately 50% of our consolidated revenues in 2020.

•Filmed Entertainment. Our Filmed Entertainment segment (“Filmed Entertainment”) operates Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios, and also includes Miramax, a consolidated joint venture. Filmed Entertainment accounted for approximately 10% of our consolidated revenues in 2020.



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The Company competesWe were organized as a Delaware corporation in 1986. On December 4, 2019, Viacom Inc. (“Viacom”) merged with many different entities and mediainto 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 name to ViacomCBS Inc. Unless the context requires otherwise, references in various markets worldwide. In additionthis document 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,“ViacomCBS,” “Company,” “we,” “us” and “our” mean ViacomCBS Inc. and Time Warnerour consolidated subsidiaries, to “CBS” mean CBS Corporation and its consolidated subsidiaries prior to the Merger and to “Viacom” mean Viacom Inc. and its consolidated subsidiaries prior to the Merger.


Our principal offices are located at 1515 Broadway, New York, New York 10036. Our telephone number is (212) 258-6000 and our website is www.ViacomCBS.com. Information included on or accessible through our website is not intended to be incorporated into this Annual Report on Form 10‑K.

We have two classes of common stock, Class A Common Stock and Class B Common Stock, both of which are listed on The Nasdaq Stock Market LLC. Owners of our Class A Common Stock are entitled to one vote per share. Our Class B Common Stock does not have voting rights. As of December 31, 2017,2020, National Amusements, Inc. (“NAI”), a closely held corporation that owns and operates approximately 945 movie screens in the U.S., the United Kingdom (“U.K.”) and South America and manages 2additional 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 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.


On February 1, 2018,
viac-20201231_g1.jpg

TV ENTERTAINMENT

Overview

TV Entertainment operates the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, our television production and syndication operations; our CBS-branded streaming services CBS All Access/Paramount+, CBSN, CBS Sports HQ and ET Live; CBS Sports Network, our cable network focused on college athletics and other sports; and CBS Television Stations, our owned broadcast television stations.
TV Entertainment’s revenues are generated primarily from advertising sales; the Company announced that its Boardlicensing and distribution of Directors established a special committeecontent; and affiliate revenues comprised of independent directors to evaluate a potential combinationfees received from television stations affiliated with Viacom Inc. There can be no assurance that this process will result in a transaction or on what terms any transaction may occur.

The Company was organized in Delaware in 1986. The Company’s principal offices are located at 51 W. 52nd Street, New York, New York 10019. Its telephone number is (212) 975-4321the CBS Television Network (“reverse compensation”), fees for authorizing multichannel video programming distributors’ (“MVPDs”) and its Website address is www.cbscorporation.com.

CBS CORP. BUSINESS SEGMENTS

virtual MVPDs’ (“vMVPDs”) carriage of our owned television stations (“retransmission fees”), and subscription fees for our streaming services. In 2020, TV Entertainment (67% advertising, affiliate and content licensing revenues generated approximately 47%, 29% and 22%, respectively, of the Company’ssegment’s total revenues. TV Entertainment generated approximately 42%, 44% and 42% of our consolidated revenues in each of 2017, 20162020, 2019 and 2015, and 55%, 53% and 51% of the Company’s total segment operating income in 2017, 2016 and 2015, respectively)2018, respectively.


The Entertainment segment consists of the CBS Television Network; CBS Television Studios, CBS Studios International and CBS Television Distribution, the Company’s television production and syndication operations; Network Ten, the Company’s commercial broadcast network in Australia; CBS Interactive, the Company’s online content networks for information and entertainment; CBS Films, the Company’s producer and distributor of theatrical motion pictures; and the Company’s digital streaming services, CBS All Accessand CBSN.


Television Network.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 affiliates reaching throughout the U.S., including 15 of the Company’s owned and operated television stations, and to affiliated stations in certain U.S. territories.

programming. 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 the 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.Network.


CBS Entertainment is responsible for acquiringacquires or developingdevelops and schedulingschedules the entertainment programming presented on the CBS Television Network, which includes primetime comedycomedies and drama series, reality‑based programming,dramas, reality, specials, children’skids’ programs, daytime dramas, game shows and late-night programs such as late night. CBS Television Network’s top-rated series include NCIS, The Late Show with Stephen Colbert and The Price is Right. CBS News operates a worldwide news organization, providing the CBS Television

Network and


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Network and CBS News Radio™Radio with regularly scheduled news and public affairs broadcasts, including 60 Minutes, 48 Hours, CBS Evening News, 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;CBS Television Network include: certain PGA Tour Golf Tournaments, the Masters and the PGA Championship; certainregular season games from the NCAANational Football League’s (the “NFL”) American Football Conference (“AFC”) and National Football Conference (NFC), as well as post-season AFC wild card playoff, AFC divisional playoff and championship games, and, on a rotating basis with other networks, the Super Bowl; the National Collegiate Athletic Association (the “NCAA”) Division I Men’s Basketball Tournament through 2032;and marquee regular-season college basketball games;games, including conference championship games from the Big Ten, Mountain West, Atlantic 10 and Missouri Valley; regular-season college football games, including games from the Southeastern ConferenceConference; and PGA Tour golf tournaments, for which we have broadcast rights through 2030, the Masters and the NFL’s AmericanPGA Championship. In 2020, CBS Sports, along with CBS All Access, became the exclusive English-language home in the U.S. of the Union of European Football Associations (“UEFA”) Champions League, UEFA Europa League and UEFA Europa Conference (AFC) regular-season, post-season wild card playoff, divisional playoff and championship games. In 2017, CBS broadcast certain AFC games under its agreement with the NFL to broadcast the AFC package through the 2022 season, which also includes certain National Football Conference regular season games and the Super Bowl, which is broadcast on the CBS Television Network on a rotating basis with other networks. The Company’s most recent Super Bowl broadcast was in 2016 and the next broadcast will be in 2019. The Company produced and broadcast certain NFL Thursday Night Football games for the 2017 season.League.


CBS Television Network content also is exhibited viaavailable on the internet, including through through: CBS.com,™; CBSSports.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; CBS All Access, the Company’s digital streaming subscription service which includes a commercial-free option for on-demand content; and digital televisionour streaming services, such as DIRECTV NOW, fuboTV,CBS All Access and CBSN; and vMVPDs, such as Hulu with Live TV PlayStation Vue and YouTube TV.CBS All Accessoffersbothcurrent and library programming as well as original series, such as The Good Fight, Star Trek: Discovery and No Activity, and CBSN’s live and original reporting. Live, local NFL games broadcast by the CBS Television Network are streamed on certain CBS All Access platforms under the Company’s multi-year deal with the NFL. Digital streaming services such as CBS All Access and CBSN are also known as “over-the-top,” “OTT” or “direct-to-consumer” services which provide video content via the internet to users without payment to a traditional MVPD. CBS All Access and CBSN are available at CBS.com and CBSNews.com™, respectively, and/or through CBS apps on multiple digital platforms, including Android, iOS, Amazon Fire and Windows 10 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Amazon Channels, Chromecast, PlayStation, Roku, Samsung Smart TVs and Xbox connected device platforms, among others. During 2017, the CBS Television Network broadcast the Tony Awards®, the Kennedy Center Honors, and the GrammyAwards®. The Company won 18 awards at the 44th Annual Daytime Emmy® Awards in May 2017.


The CW, a broadcast network and the Company’s 50/50our joint venture with Warner Bros. Entertainment, airs programming targeting younger viewers, including Jane the Virgin, Crazy Ex-Girlfriend, Dynasty, Supergirl Charmedand The Flash.Flash. Eight of the Company’sour owned television stations are affiliates of The CW. Certain

CBS Studios

CBS Studios is a leading content supplier that produces nearly 70 series across broadcast television, premium subscription cable and streaming services. CBS Studios maintains an extensive library of The CW’s series are streamed on Netflix,intellectual property, including the genre-defining and ever-growing Star Trek universe. CBS Studios’ portfolio spans a subscription video-on-demand service. The CW programming is also available via The CW app on multiple digital platforms, including Amazon Fire TV, Apple TV, Chromecast, Roku, Xboxdiverse slate of commercially successful and mobile devices.

Television Productioncritically acclaimed scripted programming. Broadcast television productions include Blue Bloods, the FBI franchise and Syndication.the NCIS franchise for the CBS Television Studios,Network, and Nancy Drew and Walker for The CW. In premium cable, CBS Studios Internationalproduced The Comey Rule and Our Cartoon President and produces Your Honor for SHOWTIME. Streaming productions include The Good Fight and The Stand for CBS Television Distribution produce, acquire and/All Access; Dead to Me and Unbelievable for Netflix; Diary of a Future President for Disney+; and Carpool Karaoke for Apple TV. CBS Studios also produces award-winning late night and daytime talk shows, such as The Late Show with Stephen Colbert, TheLate Late Show with James Corden and The Talk. Internationally, CBS Studios develops, produces and distributes local language and international series originated outside of the U.S.

CBS Media Ventures

CBS Media Ventures produces or distributedistributes first-run syndicated daily and weekly programming, worldwide,across various dayparts and genres, including series, specials, newstalk shows, court shows, game shows and public affairs, and generate revenue principally from the licensing and distribution of such programming.newsmagazines. The programming is produced primarily for broadcast on network television exhibition on basic cablestations across the country and premium subscription services, streaming services or distribution via first‑run syndication.sold market by market. First-run syndication is programming exhibited on television stations without prior exhibition on a network or cable service. exhibition. Revenue is generated from licensing and distributing such programming, as well as through national advertising sales and integrations. CBS Media Ventures’ first-run series include Dr. Phil, Entertainment Tonight, Jeopardy!, Judge Judy and the new daytime series The Company subsequentlyDrew Barrymore Show. CBS Media Ventures also distributes programming produced by other divisions, such as CBS Studios, CBS News and Showtime Networks, after its initial exhibition on a network,broadcast television, basic cable network or premium subscription servicecable networks or streaming services for domestic exhibition on television stations, cable networks or streaming 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 sales cycles of sales known as “first cycle,”cycle” sales, “second cycle” sales, and so on, which may occur on an exclusive or non-exclusive bases. Generally, license fees may decrease with successive sales cycles due to increased program exhibitions.basis. CBS Media Ventures operates Dabl, a multiplatform, advertiser-supported lifestyle network.





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Programming that was produced or co-produced by the Company’s production group and is broadcast on network television includes, among others, Seal Team (CBS), NCIS (CBS), Bull (CBS), Kevin Can Wait (CBS), Madam Secretary (CBS), Scorpion (CBS), Criminal Minds (CBS) and Jane the Virgin (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 distributes series, such as Hawaii Five-O, Criminal Minds, Blue Bloods, Elementary, NCIS, NCIS: Los Angeles and NCIS: New Orleans as well as a library of older television programs. The Company also produces and/or distributes first-run syndicated series such as Wheel of Fortune, Jeopardy!, Entertainment Tonight, Inside Edition, Dr. Phil, The Doctors, Rachael Ray, Hot Bench and Judge Judy and produces The Good Fight, Star Trek: Discovery and No Activity for streaming on CBS All Access. The Company also distributes 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 reaching countries throughout the world, particularly the U.S., Canada and in Europe.  These services include the digital streaming on subscription or advertiser supported video-on-demand services, including services by Amazon, Bell Media, Netflix, Stan Entertainment and Telefonica; broadband pay television services, including AT&T’s DIRECTV NOW, fuboTV, Hulu with Live TV, Sony’s PlayStation Vue and YouTube TV; and the digital downloading on various electronic sell-through services owned by Amazon, Apple, Google and Microsoft, among others.

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 $670 million and $749 million at December 31, 2017 and December 31, 2016, respectively.

In November 2017, the Company acquired Ten Network Holdings Limited, one of three major commercial broadcast networks in Australia, including the channels TEN®, ONE® and ELEVEN® which broadcast a mix of news, sports and entertainment programming, together with the digital platform tenplay®. Network Ten principally derives revenue from the sale of advertising for its network broadcasts and related digital services. The Company also has interests in 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 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 cable and satellite channels in Europe, the Middle East and Africa broadcasting CBS programming and branded as CBS Action, CBS Reality and CBS Europa™.

CBS Interactive. CBS Interactive is one of the leading global publishers of premium content on the internet, delivering this content via Web properties, mobile properties and CBS apps on mobile, as well as internet-connected television and other device platform apps. CBS Interactive is ranked among the top internet properties in the world according to comScore Media Metrix. CBS Interactive’s leading brands, including CNET®, CBS.com™, CBS All Access, CBSSports.com™, 247Sports®, 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


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business, which reached approximately 154 million U.S. multi-platform unique monthly visitors during December 2017 according to comScore Media Metrix, January 2018, CBS Interactive operates in Asia, Australia and Europe.

CBS Interactive generates revenue principally from the sale of advertising and sponsorships, in addition to fees derived from search and commerce partners, licensing fees, subscriptions, e-commerce activities, 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.Television Stations


CBS Interactive owns and operates 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; CNET en Espanol ®, which delivers CNET.com’s information in the U.S. to Spanish speakers; TVGuide Digital™,which provides comprehensive information about television programming; GameSpot, a leading gaming information digital property providing video game reviews 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; 247Sports; Scout; 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. During the first quarter of 2018, the Company expects to launch CBS Sports HQ™, a live digital streaming advertiser-supported sports news and highlights network available 24 hours a day, 7 days a week.

CBS Interactive also operates CBS.com, the online destination for CBS Television Network programming. Further extending the CBS.com experience, the Company offers a CBS app for on-demand streaming of various programs from the Company’s current network and library programming to users on multiple digital platforms, including Android, iOS, Amazon Fire and Windows 10 mobile platforms, and Amazon Fire TV, Android TV, Apple TV, Amazon Channels, Chromecast, PlayStation, Roku, Samsung Smart TVs and Xbox connected device platforms, among others. CBS Interactive operates CBS All Access, the Company’s digital streaming subscription service, which includes a commercial-free option for on-demand content. CBS All Access offers an on-demand selection of both current and library programming and original series, such as The Good Fight, Star Trek: Discovery and No Activity, CBSN’s live and original reporting as well as the ability to stream live programming from local CBS Television Stations and certain CBS television station affiliates. Also, live, local NFL games broadcast by the CBS Television Network are streamed on certain CBS All Access platforms. CBS All Access is available at CBS.com and on the multiple digital platforms described above through the CBS app and is scheduled to commence during the first half of 2018 in Canada. CBS Interactive also operates CBSN, a live digital streaming advertiser-supported news network available 24 hours a day, seven days a week. CBSN is available at CBSNews.com and on the multiple digital platforms described above through the CBS News app. Through the CBS Audience Network™, the Company delivers video content from its 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’s content available online includes full episodes, clips and highlights based on CBS, CBS Sports Network and Showtime Networks programming as well as original made-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 2017 were Dean, The Sense of An Ending and American Assassin.

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


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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 extended in November 2017, 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 broadcast television 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, such as Netflix and Hulu, 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.

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, Metro-Goldwyn-Mayer Studios Inc., Lakeshore Entertainment Group, and digital program services, such as Netflix, 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.



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Cable Networks (18%, 16% and 18% of the Company’s consolidated revenues in 2017, 2016 and 2015, respectively, and 35%, 33% and 37% of the Company’s total segment operating income in 2017, 2016 and 2015, 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. At December 31, 2017, subscriptions to Showtime (including its digital streaming subscription offering) totaled approximately 25 million in the U.S., certain U.S. territories and Bermuda.

The Showtime digital streaming subscription offering 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 a traditional MVPD video subscription) at showtime.com™, through the Showtime app on multiple digital platforms, including Apple, Android and Roku devices, and as an add-on subscription to Amazon Prime, DIRECTV NOW, fuboTV, Hulu, Sony’s PlayStation Vue, Sling TV and YouTube TV. Showtime Networks also makes Showtime Anytime®, an authenticated version of Showtime, available at showtimeanytime.com™ and, 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. Showtime Anytime enables Showtime subscribers to view on-demand programming as well as the live telecast of the east and west coast feeds of Showtime. Versions of Showtime, The Movie Channel and Flix are also available on-demand, enabling traditional television subscribers to watch individual programs at their convenience. 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 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 IFC Films. Showtime Networks’ original series telecast in 2017 included Ray Donovan, Billions, SMILF, The Affair, The Circus, I’m Dying Up Here, Shameless and Twin Peaks, among others. In 2017, Showtime Networks also telecast documentaries, such as Becoming Cary Grant, Whitney: Can I Be Me and George Michael: Freedom, and various sports-related programs, including Inside the NFL and A Season With Navy Football. Showtime Networks also produces and/or provides special events on a pay-per-view basis, including Floyd Mayweather’s pay-per-view boxing match against Conor McGregor in August 2017.

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, including with Bell Media Inc. for Canada, with Sky-affiliated entities for Austria, Germany, Ireland, Italy and the U.K., and with Moviestar + for Spain. During 2017, Showtime Networks entered into output agreements with Canal + Group for France, Fox Networks Group Asia for Southeast Asia, and Hotstar’s streaming service for India.


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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 makes Smithsonian Channel content available on an on-demand and authenticated basis to certain distributors in the U.S. and licenses Smithsonian Channel content outside of the U.S., including in connection with Smithsonian Channel in Canada, in which Smithsonian Networks owns a minority interest. In addition, Smithsonian Networks operates 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.

CBS Sports Network. CBS Sports Network is a 24 hours a day, seven days a week cable program service that provides sports and related content, with a strong focus on college sports. The network televises over 700 live professional, amateur and collegiate events annually, highlighted by Division I college football, basketball, hockey and lacrosse, as well as professional bull riding (PBR), professional lacrosse (MLL), arena football (AFL), Tough Mudder, CrossFit and various styles of motor sports events (including asphalt, dirt, and off road racing). 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), Inside College Basketball, Inside College Football, Time to Schein and a first of its kind all-female panel talk show, We Need to 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. CBS Sports Network produces weekday simulcasts of the radio shows The Morning Show withBoomer and Gio, Tiki and Tierney and, commencing in January 2018, The Jim 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 and cheerleading, among other events. CBS Sports Network had approximately 52 million subscribers as of December 31, 2017. 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 fuboTV, Hulu with Live TV, PlayStation Vue and YouTube TV.

Cable Networks Competition.

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 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


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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 industry consolidation and other marketplace factors make it more difficult to reach and maintain favorable terms and positioning, which could increase costs and have an adverse effect on revenues.

Publishing (6% of the Company’s consolidated revenues in each of 2017, 2016 and 2015, and 5%, 4% and 4% of the Company’s total segment operating income in 2017, 2016 and 2015, respectively)

The Publishing segmentgroup 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 those 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 2017, Simon & Schuster had 195 New York Times bestsellers in hardcover, paperback and electronic formats, collectively, including 30 New York Times #1 bestsellers. Best-selling titles in 2017 include What Happened by Hillary Rodham Clinton, Sleeping Beautiesby Stephen King and Owen King, and Leonardo DaVinci by Walter Isaacson. Best-selling children’s titles include Dork Diaries 12: Tales from a Not-So-Secret Crush Catastrophe by Rachel Renée Russell, Lord of Shadows by Cassandra Clare, and It Takes a Village by Hillary Rodham Clinton. Simon & 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 2017, the sale of digital content represented approximately 22% 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


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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 (12%, 14% and 12% of the Company’s consolidated revenues in 2017, 2016 and 2015, respectively, and 18%, 22% and 19% of the Company’s total segment operating income in 2017, 2016 and 2015, respectively)

The Local Media segment is composed of CBS Television Stations, the Company’sour 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 renewableLicensees must seek to renew each license every eight years. The Company’sCBS Television Stations group principally derives revenue from the sale of advertising on our television stations and retransmission fees. Our television stations are located in the 5seven 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:including New York, (market #1), Los Angeles (market #2), Philadelphia (market #4), Dallas-Fort Worth (market #5), San Francisco-Oakland-San Jose (market #8), Boston (market #10), Detroit (market #14), Miami-Ft. Lauderdale (market #16), Sacramento-Stockton-Modesto (market #20), and Pittsburgh (market #24). This group ofPhiladelphia. Our 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 (a national broadcast service that provides syndicated programming, including series from the ViacomCBS library, during primetime to stations across the country) programming and syndicated programming.

The stations also broadcast free, advertiser-supported digital channels using available broadcast spectrum. These channels include local and syndicated programming, Dabl (a multiplatform, advertiser-supported lifestyle network operated by CBS Television Stations group principally derives its revenuesMedia Ventures) and Start TV, a national entertainment program service featuring classic television content focused on female audiences, which is our joint venture with Weigel Broadcasting. Local versions of our CBSN streaming service offers local news from the salecertain 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’sour owned television stations. Our television stations have local websites that promote the stations’ programming.

Television Stations, Local Websites and CBSN Streaming Services

The Company also has agreements for the digital streaming of the Company’sfollowing table sets forth information regarding our owned television stations on several digitaland related local websites and CBSN streaming services, including DIRECTV NOW, fuboTV, Hulu with Live as of February 22, 2021, within U.S. television markets:

Television Market
DMA Rank(1)
StationsTypeNetwork Affiliation
Local Websites and CBSN
Streaming Services(2)
New York, NY1WCBS‑TVUHFCBSnewyork.cbslocal.com
WLNY‑TVUHFIndependentCBSN New York
Los Angeles, CA2KCAL‑TVVHFIndependentlosangeles.cbslocal.com
KCBS‑TVUHFCBSCBSN Los Angeles
Chicago, IL3WBBM‑TVVHFCBSchicago.cbslocal.com
CBSN Chicago
Philadelphia, PA4KYW‑TVUHFCBSphiladelphia.cbslocal.com
WPSG‑TVUHFThe CWCBSN Philly
Dallas‑Fort Worth, TX5KTVT‑TVUHFCBSdfw.cbslocal.com
KTXA‑TVUHFIndependentCBSN Dallas-Fort Worth
San Francisco, CA6KPIX‑TVUHFCBSsanfrancisco.cbslocal.com
KBCW‑TVUHFThe CWCBSN Bay Area
Atlanta, GA7WUPA-TVUHFThe CWatlanta.cbslocal.com
Boston, MA10WBZ-TVUHFCBSboston.cbslocal.com
WSBK-TVUHFMyNetworkTVCBSN Boston
Seattle-Tacoma, WA12KSTW-TVVHFThe CWseattle.cbslocal.com
Tampa-St. Petersburg, FL13WTOG-TVUHFThe CWtampa.cbslocal.com
Minneapolis, MN14WCCO‑TVUHFCBSminnesota.cbslocal.com
KCCW‑TV(3)
VHFCBSCBSN Minnesota
Detroit, MI15WWJ‑TVUHFCBSdetroit.cbslocal.com
WKBD‑TVUHFThe CW

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Television Market
DMA Rank(1)
StationsTypeNetwork Affiliation
Local Websites and CBSN
Streaming Services(2)
Denver, CO16KCNC‑TVUHFCBSdenver.cbslocal.com
CBSN Denver
Miami-Ft. Lauderdale, FL18WFOR‑TVUHFCBSmiami.cbslocal.com
WBFS‑TVUHFMyNetworkTV
Sacramento, CA20KOVR-TVUHFCBSsacramento.cbslocal.com
KMAX-TVUHFThe CW
Indianapolis, IN25
WBXI-CA(4)
UHFIndependent
Pittsburgh, PA26KDKA-TVUHFCBSpittsburgh.cbslocal.com
WPCW-TVVHFThe CWCBSN Pittsburgh
Baltimore, MD28WJZ‑TVVHFCBSbaltimore.cbslocal.com

(1)    Television market (DMA) rankings based on Nielsen Media Research Local Market Universe Estimates (September 2020).
(2)    Our television stations’ websites and YouTube TV. The Company’s digital streaming subscription service, CBS All Access, offers an extensive on-demand selectionthe local versions of both currentCBSN feature and promote the stations’ programming and library, original series as well as the ability to stream live programming from local CBS Television Stations and certain CBS television station affiliates. CBS All Access is available at CBS.com and through the CBS app on multiple digital platforms. The Company’s television stations have a digital presence on CBS Local 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.
(3)    KCCW-TV is operated as a satellite station of WCCO-TV.
(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.

CBS Sports Network

CBS Sports Network is a cable network that provides a diverse slate of sports and related content 24 hours a day, seven days a week (“24/7”), with a focus on college sports. CBS Sports Network generates revenue from carriage fees from MVPDs, vMVPDs and advertising sales. The network televises live professional, amateur and college events, including Division I college football, basketball, hockey and lacrosse, as well as professional bull riding. 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), Time to Schein and a first of its kind all-female panel sports talk show, We Need to Talk. CBS Local Websites principally derive revenuesSports Network also provides ancillary coverage for CBS Sports relating to major events, such as the NCAA Division I Men’s Basketball Tournament, The Masters Tournament and the PGA Championship, and for SHOWTIME relating to SHOWTIME Championship Boxing.

CBS All Access/Paramount+

CBS All Access is our direct-to-consumer digital subscription video-on-demand (“SVOD”) and live streaming service, which generates revenue from subscription fees and advertising, and has provided subscribers the ability to watch television and movies on-demand, as well as livestreamed sports and local CBS stations across the U.S.

The streaming service is expected to be relaunched as Paramount+ on March 4, 2021 and will feature content from our leading portfolio of broadcast, news, sports and entertainment brands. Building on our legacy of great storytelling, Paramount+ will present original series such as: The Offer, a limited event series about the making of The Godfather, one of Paramount’s most legendary films; a new edition of Behind the Music from MTV; The Real Criminal Minds, a true crime docu-series; Kamp Koral: SpongeBob’s Under Years from Nickelodeon; and The SpongeBob Movie: Sponge on the Run. Paramount+ will also include current and past seasons of hit shows 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 StationsNetwork; growing libraries from brands across our Cable Networks portfolio, including Nickelodeon, BET, Comedy Central, MTV, Paramount Network and Weigel Broadcasting ownSmithsonian Channel; and films from Paramount Pictures. Paramount+ will continue to be home to livestreamed CBS Sports programming, including golf, football and basketball, and every UEFA club competition match, including all UEFA Champions League and UEFA Europa League matches. Subscribers can also stream local CBS stations live across the U.S., as well as our other live channels: CBSN for news 24/7, CBS Sports HQ for sports news and analysis, and ET Live. The service is offered through mobile and connected devices, and third-party platforms.

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CABLE NETWORKS

Overview

Cable Networks operates a portfolio of free, pay and premium streaming services — Pluto TV, a leading FAST service in the U.S.; Noggin, Nickelodeon’s preschool subscription streaming service; BET+, a subscription streaming service focused on the Black audience; and SHOWTIME OTT — and a portfolio of both premium subscription and basic cable networks. Our premium subscription cable networks consist of SHOWTIME, The Movie Channel and Flix, and our basic cable networks consist of BET, Nickelodeon, MTV, Comedy Central,Paramount Network, Smithsonian Channel, Pop TV, CMT, VH1, TV Land and Logo.
Under ViacomCBS Networks International(“VCNI”), we operate international divisions of our domestic streaming and Cable Networks brands and businesses, program services created specifically for international audiences and our international free-to-air networks such as Channel 5 in the U.K., Televisión Federal S.A. (“Telefe”) in Argentina and Network 10 in Australia.

Cable Networks’ revenues are generated primarily from affiliate revenues comprised of fees from MVPDs and vMVPDs for carriage of our cable networks, and subscription fees from our streaming services; advertising sales; and the licensing of our content and brands. In 2020, Cable Networks affiliate, advertising and content licensing revenues generated approximately 48%, 38% and 14%, respectively, of the segment’s total revenues. Cable Networks generated approximately 50%, 46% and 48% of our consolidated revenues in 2020, 2019 and 2018, respectively.

Our most significant Cable Networks brands are discussed below.

SHOWTIME

Our three premium subscription cable networks in the U.S. are SHOWTIME, which offers original scripted and unscripted series, movies, documentaries and docu-series, sports, comedy and special events; The Movie Channel, which offers a variety of movies and related programming; and Flix, which primarily offers movies from the last several decades. Content highlights on SHOWTIME in 2020 include new seasons of The Chi, Billions, the final season of Homeland and the limited series The Good Lord Bird. SHOWTIME is also home to Shameless, The L Word: Generation Q, Black Monday, City on a Hill, Desus & Mero, the network’s first late-night talk show, a number of docu-series, including Couples Therapy, The Circus, and the news series Vice. SHOWTIME OTT, Showtime Networks’ premium subscription streaming service, is available for purchase without an MVPD subscription. SHOWTIME Anytime, an authenticated version of SHOWTIME, is available free of charge to SHOWTIME subscribers. 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. Showtime Networks owns and operates Bellator, a leading mixed martial arts and kickboxing organization.

Pluto TV

Pluto TV is a leading FAST service in the U.S., delivering over 250 live, linear channels and thousands of movies and television series on-demand to 30.1 million domestic monthly active users (“MAUs”) and 43.1 million global MAUs as of December 31, 2020. Pluto TV has an international footprint that spans three continents and 24 countries throughout North America, Europe and Latin America. With over 100,000 hours of premium content, Pluto TV offers a broad and diverse lineup of third-party branded and original, thematically-curated channels featuring categories including movies and television, sports, news & opinion, comedy, gaming & anime, home &

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DIY, music, kids, reality, crime, classic TV and Latino. Over fifty channels, or approximately 50/50one-fifth of Pluto TV’s lineup, are dedicated to ViacomCBS titles and brands. Pluto TV has over 400 global content partners, including studios, networks, news and sports organizations, publishers, and digital media entities. With over 30 distribution partners, Pluto TV is widely available on mobile, web and connected devices, including on major connected television brands such as Samsung, LG, Fire TV, TiVo and Vizio.

BET

BET is the nation’s leading provider of entertainment, music, news and experiences that entertain, engage and empower African-American audiences. BET can be seen in the U.S., Canada, the Caribbean, the U.K. and sub-Saharan Africa. In 2020, BET aired an array of content addressing systemic racism, including Justice Now: A BET News Special/Town Hall, American Injustice: The Fight for Police Reform, A March for Action and BET Remembers: George Floyd. Other highlights include John Lewis: In His Own Words, No Limit Chronicles, Twenties and Tyler Perry’s The Oval and Sistas, the first two series in our multi-year partnership with award-winning writer, director, producer, actor and playwright Tyler Perry. BET’s tentpoles and live events include the BET Awards & Experience, which in 2020 aired as the number one cable awards show for the sixth consecutive year among adults, and the BET Hip Hop Awards.

BET+, our joint venture DECADES™with Tyler Perry Studios, is a subscription streaming service for the Black audience, with exclusive originals, thousands of television episodes and movies from leading Black content creators. The service is the official home of Tyler Perry’s film, television and stage works, and provides users with access to original content, including First Wives Club, Ruthless and Bigger. BET brands include: BET.com, a leading internet destination for Black entertainment, music, culture, and news; BET Her, an entertainment network targeting the African-American woman; BET Music Networks; BET Home Entertainment; BET Live; BET Mobile; and BET International, which operates BET around the globe.

Kids & Family Entertainment Group

Nickelodeon

Nickelodeon, now in its 41st 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 advertising-supported basic cable network for 25 consecutive years among kids 2 to 11. Nickelodeon features leading original and licensed kids’ series across animation, live-action and preschool genres. Content highlights in 2020 include Ryan’s Mystery Playdate, SpongeBob SquarePants, PAW Patrol, The Loud House, The Casagrandes and Blue’s Clues & You!. Nickelodeon brands include Nick Jr., Nick at Nite, TeenNick, Nicktoons and Nick Music.

Noggin, Nickelodeon’s preschool subscription streaming service, features over 1,000 library episodes, interactive videos and short-form educational content. In partnership with Paramount, Nickelodeon Movies produces branded films based on some of Nickelodeon’s most iconic franchises and characters. Nickelodeon is a key part of our global consumer products business. In 2020, we entered into a licensing partnership with global toy brand Melissa & Doug to deliver PAW Patrol and Blue’s Clues and You! co-branded toys. Nickelodeon also licenses its brands for recreation and other location-based experiences such as hotels and theme parks and is involved in numerous live events such as the Kids’ Choice Awards.

Awesomeness

Awesomeness creates content focused on the global Gen Z audience through its digital publishing, film and television studio divisions. Awesomeness has become the destination for youth culture, cultivating a loyal audience with content such as To All the Boys I’ve Loved Before, Trinkets and Pen15.


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MTV Entertainment Group

MTV

MTV is the leading global youth media brand with operations that span cable and mobile networks, live events, films and MTV Studios, a unit focused on developing series for SVOD and other distribution platforms and partners. Content highlights in 2020 include The Challenge, Jersey Shore Family Vacation, Double Shot at Love with DJ Pauly D and Vinny, Floribama Shore, Teen Mom, Ridiculousness, Deliciousness, Wild ‘N Out, Catfish, Ghosted, Siesta Key, 16 & Recovering and the Oscar nominated St. Louis Superman from MTV Documentary Films. MTV’s signature event, the MTV Video Music Awards, drew 6.4 million viewers across its live linear simulcast and 41.1 million interactions across social media, making it the second most-social show of the year, behind only the Super Bowl. MTV’s annual tentpoles also include the MTV European Music Awards and the MTV Movie and TV Awards.

Comedy Central

Comedy Central is a leading destination for comedic and topical 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 and short-form. Content highlights in 2020 include South Park: The Pandemic Special, The Daily ‘Social Distancing’ Showwith Trevor Noah and Awkwafina is Nora From Queens. Comedy Central also produces a global podcast network and operates Comedy Central Radio on SiriusXM.

Paramount Network

Paramount Network is a premium entertainment destination with stories that are immersive, inclusive and deeply personal. Content highlights in 2020 include Yellowstone,written by Oscar nominee Taylor Sheridan and starring two-time Oscar winner Kevin Costner, and Dashing in December, an LGBTQ+ holiday film produced by the MTV Entertainment Group’s original movies and limited series division, which was launched in May 2020.

Smithsonian Channel

Smithsonian Channel is the home of popular genres such as air and space, travel, history, science, nature and pop culture. Among the brand’s series are Aerial America, America in Color, America’s Hidden Stories, Apollo’s Moon Shot, The Pacific War in Color and Air Disasters, as well as critically-acclaimed specials that include The Green Book: Guide to Freedom, Black in Space: Breaking the Color Barrier, Walk Against Fear: James Meredith and Princess Diana’s Wicked Stepmother.

ViacomCBS Networks International (VCNI)

VCNI operates international divisions of our domestic streaming and Cable Networks brands and businesses, as well as regional and free-to-air broadcast networks.

Network 10

Network 10 is one of the three major free-to-air commercial broadcast networks in Australia that focuses on delivering content targeted at the under 50s demographic across a variety of platforms and genres. Network 10 is home to popular franchises, including MasterChef Australia, Australian Survivor and I’m A Celebrity…Get Me Out of Here!, and news and current affairs show The Project. Network 10 brands consist of channel 10, 10 Bold, 10 Peach and 10 Shake, on-demand service 10 Play, and 10 All Access (soon to be rebranded Paramount+), a nationalsubscription streaming service in Australia featuring a collection of popular Network 10 series as well as exclusive CBS library content.


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Channel 5

Channel 5 is a free-to-air public service broadcaster (PSB) in the U.K. Channel 5 channels include 5Star, 5USA and 5Select, as well as its corresponding SVOD service, My5, which together offer a broad mix of popular content, including factual programming, entertainment, program service featuring classicreality, sports, acquired and original drama, and preschool programming through its award-winning Milkshake! brand. Content highlights in 2020 include All Creatures Great and Small and Our Yorkshire Farm.

Telefe

Telefe is the leading free-to-air entertainment broadcast network in Argentina and offers a wide range of programming, including Who Wants to Be a Millionaire?The Internationals: Buenos Aires Connection and MasterChef Celebrity. Telefe Noticias, Telefe’s flagship newscast, was in 2020 named Argentina’s most trusted news brand. Telefe also has an expansive digital presence that includes exclusive content, video-on-demand and a livestream.

COLORS

COLORS is a Hindi-language general entertainment pay television channel operated by Viacom18, our joint venture in India. COLORS is available in India and over100 additional countries. Content highlights in 2020 include Khatron Ke Khiladi, Bigg Boss 14 and Barrister Babu. Other COLORS brands include COLORS Infinity, COLORS Rishtey and COLORS Cineplex. 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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FILMED ENTERTAINMENT

Overview

Filmed Entertainment operates Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios, and also includes Miramax, a consolidated joint venture. It partners on various projects with key TV Entertainment and Cable Networks brands. Films produced, acquired and/or distributed by Filmed Entertainment are generally first exhibited theatrically in domestic and/or international markets and then released in various markets and media.
Filmed Entertainment’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, SVOD and other digital platforms and other ancillary activities. Our theatrical revenues in 2020 were negatively impacted by the closure or reduction in capacity of movie theaters as a result of COVID-19. We rescheduled certain planned 2020 theatrical releases to 2021, and licensed others to our owned or third-party streaming services. In 2020, Filmed Entertainment licensing, home entertainment and theatrical revenues generated approximately 62%, 28% and 7%, respectively, of the segment’s total revenues. Filmed Entertainment generated approximately 10%, 11% and 11% of our consolidated revenues in 2020, 2019 and 2018, respectively.

Paramount Pictures

Paramount Pictures is a major global producer and distributor of filmed entertainment and has an extensive library consisting of over 1,200 film titles produced by Paramount, acquired rights to nearly 2,900 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 ever Academy

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Award 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 2020, Paramount’s theatrical releases included Sonic the Hedgehog, the highest-grossing movie ever in the U.S. based on a video game.

Paramount Players

Paramount Players is committed to creating genre films from unique, contemporary voices and properties, as well as drawing from Paramount’s rich library of content.

Paramount Animation

Paramount Animation is our animation division and develops and produces top-quality animated films. Paramount Animation co-produced The SpongeBob Movie: Sponge on the Run, which will be digitally released domestically in March 2021 simultaneously on premium video on demand and Paramount+.

Paramount Television Studios

Paramount Television Studios develops and finances a wide range of original, premium television content movies across all platforms for distribution worldwide. Paramount Television Studios’ productions include The Haunting of Hill House and original programmingThe Haunting of Bly Manor for Netflix; 13 Reasons Why for Netflix; Tom Clancy’s Jack Ryan for Amazon Prime; The Alienist and The Angel of Darkness for TNT; Home Before Dark and Defending Jacob for AppleTV+; Catch-22 for Hulu; and Boomerang and First Wives Club for BET and BET+, respectively.

Miramax

Miramax, a consolidated joint venture with beIN Media Group, is a global film and television studio with an extensive library of content. We have exclusive, long-term rights to distribute Miramax’s library, adding nearly 700 titles to our existing library. We also have certain rights to co-produce, co-finance and/or distribute new film and television projects with Miramax.

Film Production, Distribution and Financing

Weproduce many of the films we release and also acquire films for distribution from third parties. In some cases, we co-finance and/or co-distribute films with third parties, including other studios. Wealso enter 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. Wedistribute films worldwide or in select territories or media and may engage third-party distributors for certain films in certain territories. We have several multi-film production, distribution and financing relationships, including with Skydance Productions, Hasbro Inc. and New Republic Pictures.

Domestically, wegenerally market and distribute our own theatrical and home entertainment releases. Internationally, we generally distribute theatrical releases through our international affiliates or, in territories where we have no operating presence, through United International Pictures, our joint venture with Universal Studios. For home entertainment releases, DVD and Blu-ray discs are distributed internationally by local licensees. We also license films and television stations’ digital sub-channels, which utilizeshows domestically and/or internationally to a local television station's available broadcast spectrumvariety of platforms.


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PUBLISHING

Publishing 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. In November 2020, we announced that we entered into an agreement to sell Simon & Schuster, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. Simon & Schuster is presented as a discontinued operation in our consolidated financial statements for all periods presented in this Annual Report on Form 10-K.
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 provide a companion to that station's primary channel.individual titles. International publishing includes the international distribution of English-language titles through Simon & Schuster in the U.K., Canada, Australia and India and other distributors, as well as the publication of locally originated titles by its international companies.


Local Media Competition. Television stationsBest-selling titles in 2020 include: Mary Trump’s Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man; Bob Woodward’s Rage; John Bolton’s The Room Where it Happened;Stephen King’s If It Bleeds and The Outsider; and Cassandra Clare’s Chain of Gold.

COMPETITION

All of our businesses operate in highly competitive environments, and compete for programming, on‑aircreative talent and intellectual property, as well as for audiences and distribution of our content.

TV Entertainment, Cable Networks and Filmed Entertainment compete with a variety of media, technology and entertainment 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, Publishing competes with many other 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 audiences from various sources. Filmed Entertainment competes for audiences for its films and television content with releases from other film studios, television producers and streaming services, as well as with other forms of entertainment and consumer spending outlets. TV Entertainment and Cable Networks compete for audiences and advertising revenues primarily with other stationscable and broadcast television networks; streaming services; social media platforms; websites, apps and other online experiences; radio programming; and print media. In addition, our television and basic 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 stationsbusinesses face increasing competition from technologies such asproviding digital audio and visual content


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delivered via the internet, which create new in ways forthat allow audiences to consume content of their choosing while avoiding traditional commercial advertising. The Company’s television stations’ WebsitesMoreover, 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 advertisersdistribution of our content. TV Entertainment and visitors fromCable Networks compete for distribution of our program services (and receipt of related fees) with other digital sources of local content.

broadcast networks, cable networks and programmers. The CBS Television Stations and CBS Local Digital Media Websites
The following table sets forth information regarding the Company’sNetwork competes with other broadcast networks to secure affiliations with independently owned television stations to ensure the effective distribution of network programming

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nationwide. TV Entertainment, Cable Networksand relatedFilmed Entertainment compete with studios and other producers of entertainment content for distribution on third-party platforms.

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

ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGY

The media and entertainment industry is uniquely positioned to shape culture, social attitudes and societal outcomes. As a global content company that reaches billions of people, we take seriously the opportunity and responsibility that comes with that reach.

We are committed to advancing and strengthening our approach to environmental, social and governance (“ESG”) topics to help serve our partners, audiences, employees and shareholders — and to enhance our success as a business. Our approach is grounded in an understanding of where our biggest impacts, risks and opportunities lie.

ViacomCBS is committed to responsible and sustainable business practices, which strengthen our ability to innovate and better serve our partners, audiences and stockholders. In 2020, we built upon the momentum at each of CBS Local Digital Media Websites,and Viacom and established three pillars for our ESG strategy moving forward: On-Screen Content and Social Impact, Workforce and Culture, and Sustainable Production and Operations. We also published our first companywide Materiality Assessment and our first ESG report. We are committed to continuing to identify, measure, and map the ESG impacts of our global operations and report on those impacts with stakeholders.

Human Capital Management

We aim to build a culture that attracts and retains the best employees and a workplace where everyone feels welcome, safe and inspired to bring their whole self to work. As of December 31, 2020, we employed approximately 22,109 full-time and part-time employees worldwide, and had approximately 4,231 additional project-based staff on our payroll. We also use other temporary employees in the ordinary course of our business. Our human capital management strategy is intended to address the following areas:

A Culture of Diversity, Equity and Inclusion

We seek to foster a culture of diversity, equity and inclusion through a range of partnerships, collaborations, programs and initiatives, some of which are described below.

•We partner with approximately 70 diversity-focused institutions that are committed to supporting women, BIPOC and LGBTQ+ individuals, veterans and/or persons with disabilities. We have placed a particular focus on organizations advancing the causes of racial justice, anti-hate and social equity on a global basis.

•Our job postings reach an expansive network that includes approximately 70 diversity-focused job boards. We leverage technology with the goal of removing potentially biasing language from our job descriptions and recruitment correspondence.

•We sponsor internal and external professional development programs and campus-to-career initiatives aimed at underrepresented groups. We nominate and support women and BIPOC employees for leadership training opportunities.

•We conduct a variety of training and other initiatives designed to educate our employees on unconscious bias, inclusive leadership, allyship, anti-Semitism and anti-racism, which are intended to help disrupt systemic bias and racism in the workplace.

•We conduct surveys to gather information about our employee population that self-identifies as LGBTQ+ or as having a disability and we provide education across the business intended to address associated stigma.


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•We support nine active employee-led Employee Resource Groups (ERGs) with 48 chapters in 14 locations worldwide. Our ERGs provide support for certain business and corporate initiatives.

•We are a founding participant of the Black Equity at Work Certification, designed to benchmark and index our performance to other companies to advance diversity and inclusion in the workplace, and of the CEO Action for Diversity Pledge.

Of our U.S. employees, as of February 14, 2018, withinDecember 31, 2020, approximately 49% were female and approximately 37% self-identified as part of a racial or ethnic minority group. Of our U.S. television markets:employees with Vice President titles and above, as of December 31, 2020, approximately 48% were female and approximately 26% self-identified as part of a racial or ethnic minority group. We have set measurable goals intended to improve the diversity of our workforce through hiring and promotions.

Preventing Harassment and Discrimination

We have enacted policies addressing harassment, discrimination and other behaviors that could create a hostile workplace, some of which are described below.

•We make available to our employees, globally, training on preventing sexual harassment, discrimination and retaliation. We also make available to workers on ViacomCBS productions, including freelancers and others not directly employed by ViacomCBS, training on preventing sexual harassment.

•We monitor employee diversity data for trends that could suggest discrimination or unconscious bias.

•We expect employees to report any violations of Company policies, including sexual harassment, they witness. Among other ways, employees can report incidents of harassment using our anonymous complaint and reporting hotline, called OPENLINE.

Employee Attraction, Retention and Training

We provide a range of training, mentoring and career mobility programs aimed at attracting, retaining and engaging our employees. Some of these programs are described below.

•We offer our employees formal, six-month mentoring programs and “pop up” mentoring events. We also offer our employees leadership-specific training.

•We offer a range of financial and nonfinancial compensation and benefits, including health, life and disability insurance; matching retirement contributions; flexible paid time off; and paid volunteer time. In 2020, we implemented new parental, caregiving, bereavement and military leave benefits. We also offer tuition support for certain employees.

•We offer flexible work hours for many of our full-time and part-time employees.

Health, Safety and Security

We endeavor to take a proactive approach to identifying and mitigating health, safety and security risks. Some of the steps we take are described below.

•We have on-site health care at some office and production sites, as well as medics and medical support at many production sites.

•We perform risk assessments of daily work processes across our productions, offices and other work sites and develop hazard reduction, avoidance and mitigation plans. We also track and report safety, health and security incident data across the Company.


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Market and Market Rank(1)

Stations

Type

Network Affiliation
CBS Local Digital Media(2)
Websites

New York, NY (#1)WCBS‑TVUHFCBSnewyork.cbslocal.com
WLNY‑TVUHFIndependent
Los Angeles, CA(#2)
KCAL‑TVVHFIndependentlosangeles.cbslocal.com
KCBS‑TVUHFCBS
Chicago, IL (#3)WBBM‑TVVHFCBSchicago.cbslocal.com
Philadelphia, PA (#4)KYW‑TVUHFCBSphiladelphia.cbslocal.com
WPSG‑TVUHFThe CW
Dallas‑Fort Worth, TX (#5)KTVT‑TVUHFCBSdfw.cbslocal.com
KTXA‑TVUHFIndependent
San Francisco, CA (#8)KPIX‑TVUHFCBSsanfrancisco.cbslocal.com
KBCW‑TVUHFThe CW
Atlanta, GA (#9)WUPA-TVUHFThe CWatlanta.cbslocal.com
Boston, MA (#10)WBZ‑TVUHFCBSboston.cbslocal.com
WSBK‑TVUHFMyNetworkTV
Seattle‑Tacoma, WA (#12)KSTW‑TVVHFThe CWseattle.cbslocal.com
Tampa‑St. Petersburg, FL (#13)WTOG‑TVUHFThe CWtampa.cbslocal.com
Detroit, MI (#14)WKBD‑TVUHFThe CWdetroit.cbslocal.com
WWJ‑TVUHFCBS
Minneapolis, MN (#15)WCCO‑TVUHFCBSminnesota.cbslocal.com
KCCW‑TV(3)
VHFCBS
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
KMAX-TVUHFThe CW
Pittsburgh, PA (#24)KDKA-TVUHFCBSpittsburgh.cbslocal.com
WPCW-TVVHFThe CW
Baltimore, MD (#26)WJZ‑TVVHFCBSbaltimore.cbslocal.com
Indianapolis, IN (#28)
WBXI-CA(4)
UHFIndependent
(1)Television market (DMA) rankings based on Nielsen Media Research Local Market Universe Estimates, September 2017.
(2)The Company’s television stations’ Websites, which are operated by the CBS Local Digital Media group, promote the stations’ programming and provide news, traffic, weather, entertainment and sports information, among other services for their local communities.
(3)KCCW-TV is operated as a satellite station of WCCO-TV.
(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.



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•Our Global Security Operations Center oversees security and emergency response efforts and undertakes risk scans in an effort to identify potential security risks.

•Early in the COVID-19 pandemic, we closed our offices and productions out of an abundance of caution and concern for the safety of our workforce. While our workforce continues to be predominantly remote, we restarted some productions beginning in mid-2020 in accordance with local requirements. We also committed $100 million to help provide support to those impacted by COVID-19.

Social Impact and Corporate Social Responsibility

The content we produce both reflects and shapes culture and influences how people perceive and understand important issues. We endeavor to earn our viewers’ trust through a variety of practices, and we are focused on using our platforms to create positive social impacts.

Using our platforms for good includes community projects, philanthropy and employee engagement. Across the organization, we focus our social impact efforts on such issues as civic engagement, social justice, mental health, and diversity and inclusion, among others, and our brands also have strategic focus areas based on their diverse audiences and unique strengths. For example, we heighten social awareness on important issues through CBS Cares public service announcement campaigns, produce arts education programming for students through Paramount Animation’s Arts Matter initiative, and partner with social justice organizations to disseminate content that will combat systemic racism and inequality through BET’s Content for Change initiative. Our focus is also on our audiences: we spread messages to keep our audiences safe and informed from the earliest days of the COVID-19 pandemic with our award-winning #AloneTogether campaign, recruited hundreds of thousands of new poll workers and millions of new early voters with our civic engagement initiatives such as the Vote for Your Life and Reclaim Your Vote campaigns, and are bringing the entertainment industry together for a collaboration to transform mental-health storytelling with a first-of-its-kind Mental Health Media Guide for content creators.

REGULATION


The Company’sOur 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 (“E.U.”). 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 PropertyFCC and PrivacySimilar Regulation


Laws affecting intellectual property areThe FCC regulates broadcast television, and some aspects of significant importance to the Company. (See “Intellectual Property” on page I-15 for more information on the Company’s brands).

Unauthorized Distribution of Copyrighted Contentcable network programming and Piracy. Unauthorized distribution, reproduction or display of copyrighted material in digital formats without regard to content owners’ copyright rights in televisioncertain programming motion pictures, video 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, including in the U.S. and other laws in other jurisdictions, grants certain exclusive rights, including to reproduce, publicly perform and distribute such content. 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.

Broadcasting

General. Television broadcasting is subject to the jurisdiction of the FCCdelivered by internet protocol, pursuant to U.S. federal law, including the Communications Act. The Communications Act empowersViolation of FCC regulations can result in substantial monetary fines, the FCC, among other actions, to issue, renew, revoke and modify broadcasting licenses; determine stations’ frequencies, locations and operating power; regulate someimposition 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 renewalreporting obligations, limited renewals of licenses and, in egregious cases, license revocation or denial of license renewals.renewal or revocation of a license.


Under the Communications Act, the FCC also regulates certain aspectsLicense Renewals

Each of the operation of MVPDs and certain other electronic media that compete with broadcast stations.


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Indecency 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 $397,000 per indecent or profane utterance with a maximum forfeiture exposure of approximately $3.7 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 receiveour owned television stations in the future letters of inquiry fromU.S. must be licensed by the FCC prompted by complaints alleging that certain programming on its broadcast stations included indecent or profane material.

License Renewals.FCC. Television broadcast licenses are typically granted for standardeight-year terms, of eight years.and we must obtain renewals as they expire to continue operating our stations. The Communications Act requires the FCC to renew a broadcast license if the FCC finds that (1) the station has served the public interest, convenience and necessity and,necessity; (2) with respect to the station, there have been no serious violations by the licensee of either the Communications Act or the FCC’s rulesFCC regulations; and regulations and(3) there have been no other violations by the licensee of the Communications Act or the FCC’s rules andFCC regulations that, taken together, constitute a pattern of abuse. The Company has noAs of February 22, 2021, we had four pending renewal applications.applications, and we will be filing applications with respect to most of our remaining stations on a staggered basis between 2021 and 2023. A station remains authorized to operate while its license renewal application is pending. In addition, the


License Assignments. The I-14
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’s applications to assign, transfer or acquire broadcast licenses.


Broadcast Ownership Regulation.Regulation

The Communications Act and FCC rulesregulations impose limitations on local and regulations limit the ability of individuals and entities to have certain official positions ornational broadcast television ownership interests, known as “attributable” interests, above specific levels in broadcast stations as well as in other specified mass media entities. In seeking FCC approval for the acquisition of a broadcast 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 November 2017, as part of its quadrennial review ofU.S. The following broadcast ownership rules are the most relevant to our operations. In 2019, a federal appellate court vacated an FCC decision issued an Order on Reconsideration in 2017 that would have relaxed some of the broadcast ownership rules. The U.S. Supreme Court is currently reviewing that decision, the outcome of which it eliminated or modified many of itscould have significant implications for the FCC’s broadcast ownership rules, which are briefly summarized below.regulatory framework.


Local Television Ownership. Under theThe 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 the time the common ownership is created, at least eight independently owned and operating full-power stations remain in the market, and at least one of the twoowned stations is not amongoutside of the top-four ranked stations in the market based on audience share asshare.

Dual Network Rule. The dual network rule prohibits any of the date an application for approval of an acquisition is filed with the FCC. In addition, the FCC will consider whether to permit acquisitions of a second top-four ranked television station in the same market on a case-by-case basis if doing so would serve the public interest, conveniencefour major U.S. broadcast networks — ABC, CBS, FOX and necessity. “Satellite” television stations that simply rebroadcast the programming of a “parent” television station are exemptNBC — from the local television ownership rule if located in the same DMA as the “parent” station.combining or being under common control.


Television National Audience Reach Limitation.Under the national television ownership rule, one party may not own television stations whichthat reach more than 39% of all U.S. television households. In April 2017, the FCC reinstated the UHF discount, pursuant to whichHowever, for purposes of this rule, a UHF television station is afforded a “discount” and is therefore attributed with reaching only 50% of the television 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 discount. The CompanyWe currently ownsown and operatesoperate television stations that reach approximately 38% of all U.S. television households, not taking into account the UHF discount.



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Cross-Ownership Rules. In November 2017, The FCC’s Order on Reconsideration eliminated the radio-television cross-ownership rule, which limited the common ownershipbut we are attributed with reaching 25% of radio and television stations in the same market; and eliminated the newspaper-broadcast cross-ownership rule, which generally prohibited the common ownership of a television or radio station and daily newspaper in the same market.

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

Attribution of Ownership. Under the FCC’s attribution rules, a direct or indirect purchaser of various types of securities of an entity which holds FCC licenses,all 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” interesthouseholds for purposes of the FCC’s broadcastnational ownership rules generally includes: equity and debt interests which combined exceed 33% of a licensee’s total assets, if the interest holder supplies more than 15%rule because of the licensee’s total weekly programming, or has an attributable same-market media interest, whether 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 interest in a limited liability company 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”).discount.


AlienForeign 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.equity. FCC approval 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.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 in the U.S. Pursuant to these regulations, we have elected to negotiate with MVPDs for the right to carry the signals of all local televisionour 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 tovia retransmission consent agreements. The Communications Act and FCC regulations require that broadcasters and some types of 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.


Program Regulation

The FCC also regulates the content of broadcast, cable network, and other video programming. The FCC prohibits broadcasters from airing obscene material at any time and indecent or profane material between 6 a.m. and 10 p.m. The FCC’s maximum forfeiture penalty per station for broadcasting indecent or profane programming is approximately $419,000 per indecent or profane utterance or image, with a maximum forfeiture exposure of approximately $3.87 million for any continuing violation arising from a single act or failure to act. The FCC also actively monitors compliance with requirements that apply to broadcasters and cable networks relating to political advertising, identification of program sponsors, and the use and integrity of the Emergency Alert System. In addition, FCC regulations require the closed captioning of almost all broadcast and cable programming, as well as certain programming in the U.S. delivered by internet protocol, among other requirements intended to ensure that video programming is accessible to persons with disabilities.


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Children’s Television Programming. Federal legislationProgramming

Our business is subject to various regulations in the U.S. and abroad applicable to children’s programming. U.S. federal law and FCC rules limit the amount and content of commercial matter that may be shown on broadcast television stations and cable networks during programming designed for children 12 years of age and younger, and requirethe FCC also limits 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. FCC rules also impose E/I



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programming requirementsIn addition, some policymakers have sought limitations on each additional digital multicast program stream transmitted byfood and beverage marketing in media popular with children and teens. For example, restrictions on the television stations, with the requirement increasingadvertising of foods high in proportionfat, salt and sugar (“HFSS”) to the additional hours of free programming offered on multicast channels. These rules also limit the display during children’s programming of internet addresses of Websites that contain or link 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 forthchildren aged 15 and under have been in place in the FCC’s regulations.U.K. since 2007. The FCCU.K. 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 assesses the competitive impact of exclusive distribution arrangements between vertically integrated cable programmersbeen enacted in Ireland, Turkey, Mexico, Chile, Peru, Taiwan and cable operators on a complaint-based process, using a case-by-case review. A cable programmer is consideredSouth Korea, and significant pressure for similar restrictions continues to be vertically integrated under the FCC’s program access attribution rules if it owns or is ownedfelt globally, most acutely in whole or in part by either a cable operator or a telephone company that provides video programming directly to subscribers.

Australia, Brazil, Canada, Colombia, India, Hungary, Singapore, South Africa and France. 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 carriageimplementation of these servicesor similar limitations and its ability to offer cable operators exclusiverestrictions could have a negative impact on our Cable Networks advertising revenues, particularly for our networks with programming could be adversely affected if it were to become subject to the program access rules. Because the Companyfor children 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”).teens.


National Broadband Plan. 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. As part of these auctions, which commenced in 2016 and concluded in March 2017, the Company surrendered the spectrum for KCCO-TV, which was a satellite television station of the Company’s television station, WCCO-TV, in Minneapolis. The television stations that continue their operations after the auctions may have to change channels as the FCC “repacks” the remaining spectrum dedicated to broadcast television use. 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 was established to at least partially reimburse broadcasters for reasonable relocation expenses relating to the spectrum‑repacking.

Broadcast Transmission Standard.

In November 2017, the FCC adopted an Order authorizingrules to permit television broadcasters to voluntarily begin broadcasting inbroadcast using the “Next Generation” broadcast television transmission standard developed by the Advanced Television Systems Committee, Inc., also called “ATSC 3.0,3.0.” Those full-service television stations using the new standard are subject to certain requirements, including the obligation of high power television stations 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 upgradesupgrades. 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 ATSC 3.0 partnerships with other broadcasters and may enter into additional partnerships in the future.

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 E.U., the General Data Protection Regulation (“GDPR”) mandates data protection compliance obligations and authorizes significant fines for noncompliance, requiring extensive 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 E.U. to the U.S., such as utilizing standard contractual clauses approved by the European Commission, have been subject to legal challenges, and the E.U.-U.S. Privacy Shield framework, which permits the transfer of personal data from the E.U. to the U.S., has been challenged by the relevant E.U. authorities. The outcomes of these proceedings continue to be uncertain and will require consumerschanges to obtain new equipmentour 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 E.U., 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 view ATSC 3.0 broadcasts. It is too earlysell on these sites and apps and impose strict liability on us for certain actions of ViacomCBS, advertisers and

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other third parties, which could affect advertising demand and pricing. Recently, laws in Brazil and China that govern the processing of children’s data also went into effect. These laws will likely have similar impacts to predict the impact of the ATSC 3.0 transition by television stationsCOPPA and GDPR, especially with respect to data collected in connection with advertising. State and federal policymakers are also considering regulatory and legislative methods to protect consumer privacy on the Company’s operations.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 or private litigation.

INTELLECTUAL PROPERTY


The Company creates, owns, distributesWe are fundamentally a content company, and exploits under licenses itsthe trademark, copyright, patent and other intellectual property worldwide. laws that protect our brands and content are extremely important to us.It is the Company’sour practice to protect its products, including its television 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 logos, trade names, trademarks and related trademark families are among those strongly identifiedunauthorized reproduction, distribution, exhibition or other exploitation of copyrighted material interferes with the product lines they representmarket for copyrighted works and are significant assetsdisrupts our ability to distribute and monetize our content. The infringement of the Company: CBS®, CBS Entertainment™, CBS News®, CBS Sports®, CBSSports.com®, CBS All Access®, CBSN®, CNET®, Showtime®, Showtime Anytime®, The Movie Channel®, Flix®, CBS Films®, Network Ten®, TEN®, ONE®, ELEVEN®, tenplay®, CBS Audience Network®, TV.com™, Last.fm®,


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MetroLyrics®, CSI:®, NCIS®, Entertainment Tonight®, Star Trek®, Simon & Schuster®, CBS Sports Network®, CBS Interactive™, CBS Local Digital Media™ and all the call letters for the Company’s stations. As a result, domestic and foreign laws protectingour intellectual property rights in films, television and digital programming, books, consumer products and other entertainment content presents a significant challenge to our industry, and we take a number of steps to address this concern. For example, where possible, we use technologies, such as encryption, watermarking, and digital rights management tools, to protect our content from piracy and infringement. We are importantalso actively engaged in enforcement 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 social networks and other platforms hosting our content; working with intermediaries and other third parties to address current infringements and prevent more in the future; 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 partnerships with various organizations, we also are actively involved in educational outreach to the creative community, state and federal government officials and other stakeholders in an effort to marshal greater resources to combat intellectual property infringement. Additionally, we participate in various industry-wide enforcement initiatives, public relations programs and legislative activities on a worldwide basis. For example, we have had notable success with site-blocking efforts in parts of Europe and Asia, which can be effective in steering consumers away from piracy platforms and toward legitimate platforms.

Notwithstanding these efforts and the many legal protections that exist to combat piracy, the proliferation of content infringement and the technological tools with which to carry out those illicit activities continues to be a 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 costs of enforcing our rights as we continue to expend substantial resources to protect our content.


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OUR EXECUTIVE OFFICERS

ViacomCBS’ executive officers as of February 22, 2021 are as follows:

NameAgePosition
Robert M. Bakish57President and Chief Executive Officer, Director
Naveen Chopra47Executive Vice President, Chief Financial Officer
Christa A. D’Alimonte52Executive Vice President, General Counsel and Secretary
Katherine Gill-Charest56Executive Vice President, Controller and Chief Accounting Officer
Richard M. Jones55Executive Vice President, General Tax Counsel and Chief Veteran Officer
Doretha (DeDe) Lea56Executive Vice President, Global Public Policy and Government Relations
Julia Phelps43Executive Vice President, Chief Communications and Corporate Marketing Officer
Nancy Phillips53Executive Vice President, Chief People Officer

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, from 2007 to 2016; 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 served as a director of Avid Technology, Inc. since 2009.

Naveen Chopra has been our Executive Vice President, Chief Financial Officer since August 2020. Prior to that, he served as Vice President and Chief Financial Officer of Amazon Devices & Services, beginning in 2019. Prior to joining Amazon Devices & Services, Mr. Chopra served as Chief Financial Officer of Pandora Media from 2017 to 2019 and as its Interim Chief Executive Officer during part of this time, having previously served as Interim Chief Executive Officer of TiVo Inc. in 2016 and as its Chief Financial Officer from 2012 to 2016.

Christa A. D’Alimonte has been our Executive Vice President, General Counsel and Secretary since December 2019. Prior to that,she served as Executive Vice President, General Counsel and Secretary of Viacom beginning in 2017, having previously served asSenior Vice President, Deputy General Counsel and Assistant Secretary 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 Firm’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 Chief Accounting Officer since December 2019. Prior to that, she served as Senior Vice President, Controller and Chief Accounting Officer of Viacom beginning in 2010, having previously served as Senior Vice President, Deputy Controller of Viacom during 2010 and Vice President, Deputy 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 Vice President and Worldwide Controller of Young & Rubicam Inc. from 1998 to 2000. Ms. Gill-Charest also held roles in financial reporting and accounting policy at Time Warner Inc. from 1991 to 1998 and at NYNEX Corporation from 1988 to 1991 and served in the audit practice of Price Waterhouse for two years.

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

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Doretha (DeDe) Lea has been our Executive Vice President, Global 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 beginning in 2005. Prior to that, Ms. Lea served in various government relations positions at Former Viacom beginning in 1997, with the exception of 2004 to 2005, when she served as Vice President of Government Affairs at Belo Corp. Prior to joining Former Viacom, she was Senior Vice President of Government Relations at the National Association of Broadcasters.

Julia Phelps has been our Executive Vice President, Chief Communications and Corporate Marketing Officer since December 2019. Prior to that, she served as Executive Vice President, Communications, Culture and Marketing of Viacom beginning in 2017, having previously served as Senior Vice President, Communications and Culture of Viacom beginning earlier in 2017. Prior to that, she served as Executive Vice President of Communications for Viacom International Media Networks beginning in 2012, after having served as Vice President of Corporate Communications for Viacom. Ms. Phelps joined Former Viacom in 2005 from DeVries Public Relations, a New York-based communications agency.

Nancy Phillips has been our Executive Vice President, Chief People Officer since December 2019. Prior to that, she served as Executive Vice President and Chief Human Resources Officer of Nielsen Holdings PLC beginning in 2017, having served as Executive Vice President and Chief Human Resources Officer of Broadcom Corporation from 2014 to 2016. From 2010 to 2014, Ms. Phillips was Senior Vice President, Human Resources for the Imaging and Printing Group at Hewlett-Packard Company, and thepreviously 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, actively enforces its intellectual property rights against infringements.holding various human resources positions. Ms. Phillips practiced law from 1993 to 1997.


EMPLOYEESAVAILABLE INFORMATION


At December 31, 2017, the Company employed approximately 12,700 full-timeWe file annual, quarterly and part-time salaried employeescurrent reports, proxy and had approximately 4,030 additional project-based staff.

FINANCIAL INFORMATION ABOUT SEGMENTS AND FOREIGN AND DOMESTIC OPERATIONS

Financialinformation 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.ViacomCBS.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.


Item 1A. Risk Factors.CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT CONCERNING FORWARD‑LOOKING STATEMENTS


This document, 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 within the meaning of section 27A of thePrivate Securities Litigation Reform Act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking1995. 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,” “estimate” 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 theour actual results, performance or achievements of the Company to be different from any future results, performance andor achievements expressed or implied by these statements. More information about theseThese risks, uncertainties and other factors is set forthare discussed in “Item 1A. Risk Factors” below. AdditionalOther risks, uncertainties and other factorsor 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 documentAnnual Report on Form 10‑K are made only made as of the date of this document, and the Company doeswe do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.




Item 1A.Risk Factors.
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RISK FACTORS

For an enterprise as large and complex as the Company, aA wide range of factors couldrisks may affect itsour 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.

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Risks Relating to Our 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

Our success in the Company’s future results. Past financial performance may not be a reliable indicatormedia and entertainment industry depends on our ability to adapt to shifting patterns of future performancecontent consumption. The ways in which consumers view content, and historical trends should not be usedtechnology and business models in our industry, continue to anticipate results or trends in future periods.evolve rapidly, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining predictable revenue streams.

Technological advancements have empowered consumers to 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 and Analysis of Results of Operations and Financial Condition”other subscription services, and the consolidated financial statements and related notessubstantial increase in “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

The Company’s Success and Profitability Are Dependent Upon Audience Acceptance of Its Content, Including Its Television Programs and Motion Pictures, Which Is Difficult to Predict

Television, motion picture and other content production and distribution are inherently risky businesses because 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 entertainmentprogramming without advertising or adequate methodologies for audience measurement, have had, and leisure time activities, general economic conditions and other tangible and intangible factors, all of which are difficultmay continue to predict. Rating points are also factors that are weighed when determining the advertising rates that the Company receives. The use of evolving ratings technologies and measurements, and viewership on platforms or devices, such as tablets, smart phones and other mobile devices, that is not being measured, could have an impact on the Company’s program ratings and advertising revenues. For example, while C-7, a current television industry ratings system, measures live commercial viewing plus seven days of digital video recorder (“DVR”) and video-on-demand playback, the viewership occurring on subsequent days of DVR and video‑on‑demand playback and online and mobile viewership are excluded from C-7 and other subsequent ratings. Also, consumer viewership of OTT services continues to grow and is under measured. Low ratings can lead to lower pricing and advertising spending. For example, there can be no assurance that any replacement programming on the Company’s television stations will generate the same level of revenues or profitability as previous programming. In addition, the success of the Company’s cable networks and Simon & Schuster is similarly dependent on audience acceptance of its programming and publications, respectively. The theatrical success of a motion picture, based in large part upon audience acceptance, is a significant factor in determining the revenues it is likely to generate in 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 OTT programs, motion pictures and publications, will have, an adverse effect on the Company’sour business, financial condition and 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. Programmingconsumers are increasingly using time-shifting and talent commitments of the Company, estimated to aggregate approximately $10.41 billion as of December 31, 2017, primarily included $7.30 billion for sports programming rights, $2.44 billion relating to the production and licensing of television and film programming, and $672 million for talent contracts with $794 million of these amounts payable in and after 2023. A shortfall, now or in the future, in the expected popularity of the sports events for which the Company has acquired rights, or in the programming the Company expects to distribute, could lead to decreased profitability or losses for a significant period of time.

A Decline in Advertising Expenditures Could Cause the Company’s Revenues and Operating Results to Decline Significantly in Any Given Period or in Specific Markets

The Company derives substantial revenues from the sale of advertising on its broadcast and basic cable networks, television 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


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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 ratings for 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 and newadvertising-blocking technologies which allow consumers to live stream and time shift programming, make and store digital copies and skip or fast‑forward through advertisements. 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 newer 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 Company as traditional advertising methods. Any reduction in advertising expenditures could have an adverse effect on the Company’s revenues and results of operations.

Failure by the Company to Obtain, Create and Retain the Rights Related to Popular Programming Could Adversely Affect the Company’s Revenues

The Company’s revenue from its television, cable networks, digital services and motion picture business is partially dependent on the Company’s continued ability to anticipate and adapt to changes in consumer tastes and behavior on a timely basis. Moreover, the Company derives a portion of its revenues from the exploitation of its extensive library of television programming. Generally, a television series must have a network run of at least three or four years to be successfully sold in domestic syndication, however, increasingly, 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. 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 Theory, are made available based upon programming rights of varying duration that the Company has negotiated with third parties. In addition, Showtime Networks enters into commitments to acquire rights to certain programming for Showtime, The Movie Channel and Flix from motion picture producers and other suppliers for varying durations. CBS Films competes for compelling source material for and the talent necessary to produce motion pictures, as well as with other buyers for the acquisition of third‑party produced motion pictures. Competition for popular programming that is licensed from third parties is intense, and the Company may be outbid by its competitors for the rights to new, popular programming or in connection with the renewal of popular programming currently licensed by the Company. The Company’s failure to obtain or retain rights to popular content could adversely affect the Company’s revenues.

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

Video, telecommunications 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, new video and electronic book formats, user-generated content sites, internet and mobile distribution of video content via streaming and downloading, simultaneous live streaming of broadcast content, and place-shifting of content from the home to portable devices on which content is viewable outside the home. For example, devices that allow users to view television programs on a


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time-delayed basis; technologies, such as DVRs, that enable users to fast-forward or skipcircumvent advertisements, such as DVRs, or increase the sharing of subscription content; systems that allow users to access copyrighted productcontent and reduce the demand for electronic sell-through, DVD and Blu-ray disc products. Substantial use 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 thatthese technologies could affectimpact the attractiveness of the Company’s offeringsour programming to advertisers, and adversely affect its revenues. Also,affecting our advertising revenue. Our business also may be adversely affected by the growing usesuse of antennas (and their integration with set-top boxes or other consumer devices) to access broadcast signals to avoid subscriptions, user-generated content sites andas well as live and stored video streaming sites,boxes and services, which deliver unauthorized copies of copyrighted content, including those emanating from other countries in various languages, may adversely impact the Company’s businesses. languages.

In addition, further increases in the useresponse to perceived consumer demand, distributors of internet-connected television or other digital devices, which allow users to consume content on-demandprogramming and in remote locations while avoiding traditional commercial advertisements or subscription payments, could adversely affect the Company’s television broadcasting advertising and subscription revenues. Users who reduce, cancel or never had cable television subscriptionprogram services are also known as “cord-shavers,” “cord-cutters” or “cord-nevers,” respectively. Cable providerscontinuing to develop alternative offerings for consumers, including SVOD 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 channelsother subscription services; FAST services; and potentially leading to the division of the television marketplace into more specialized niche audiences. More televisionoriginal content for mobile 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 viewership of the Company’s programming. Generally, changing consumer behavior may impact the Company’s traditional distribution methods, for example, by reducing viewership of its programming (including motion pictures), the demand for DVD and Blu-ray Disc product and/or the desire to see motion pictures in theaters, which could have an adverse impact on the Company’s revenues and profitability.social media platforms. Also, the impact of technological changes on traditional distributors of video programmingMVPDs may adversely affect the Company’sour cable networks’ ability to grow revenue. AnticipatingIf our networks and adaptingbrands are not included in these offerings and services, or if consumers increasingly favor alternative offerings over traditional broadcast television and cable subscriptions, we may continue to changesexperience a decline in technologyviewership and the consumption of content on a timely basis and exploiting new sources of revenue from these changes will affect the Company’sultimately demand for our programming, which could lead to lower revenues. These changing distribution models may also impact our ability to continuenegotiate carriage deals on terms favorable to increase its revenue.

Piracy 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 Profitability

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, hasus, thereby having an adverse effect on the Company’s businessesour business, financial condition or results of operations.

In order to respond to these developments, we regularly adopt or develop new technologies and profitability becauseconsider, and from time to time implement, changes to our business models and strategies to remain competitive, such as our focus on streaming, and there can be no assurance that we will successfully anticipate or respond to these unauthorized actions reduce the revenuedevelopments, that we will not experience disruption, even as we respond to such developments, or that the Company potentially could receivenew technologies or business models we develop will be as successful as our current technology and business models.

Our advertising revenues have been and may continue to be adversely impacted by changes in consumers’ content viewership, deficiencies in audience measurement and advertising market conditions

We derive substantial revenues from the legitimate sale of advertising, and a decline in advertising revenues could have a significant adverse effect on our business, financial condition or results of operations.

Consumers are increasingly turning to “over-the-top” sources for viewing and purchasing content, and an increasing number of companies offer SVOD and/or FAST services, including some that offer exclusive high-quality original programming delivered over the internet. The increasing number of entertainment choices available to consumers has intensified audience fragmentation and reduced the viewing of content through traditional linear distribution models, which has caused, and may continue to cause, ratings declines for broadcast and cable networks. This decline may adversely affect the amount of itsadvertising dollars invested in broadcast and cable networks. Although we expect our digital advertising products in both local and services. national markets (through

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direct and automated transactional models) to provide some offsetting benefit, increased advertising investment in digital offerings could adversely affect our advertising volume in linear.

In addition, advertising sales are largely dependent on audience measurement, and the results of audience measurement techniques can vary for a variety of reasons, including the platforms on which viewing is measured and variations in statistical sampling methods used. While Nielsen’s statistical sampling method is the primary measurement technique used in our television advertising sales, we measure and monetize across over-the-top platforms based on census-based advertising-server data establishing the number of impressions served, combined with third-party data providing demographic composition estimates. Multiplatform campaign verification remains in its infancy and is still not measured by any one consistently applied method. While we expect innovation and standards around multiplatform measurement to benefit us as the video advertising market continues to evolve, we are nevertheless partially dependent on third parties to deliver those solutions.

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, and this may adversely affect our advertising revenues. Natural and other disasters, pandemics, 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 2020, we experienced a material negative impact on advertising revenues because of weakness in the advertising market as a result of COVID-19. 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.

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 to create, distribute and/or license popular content are key to our success and ability to generate revenues. The revenues we generate primarily depend on our ability to anticipate and consistently satisfy consumer tastes and expectations, both in the U.S. and internationally. The popularity of our content is affected by our ability to develop and maintain strong brand awareness and a strong reputation; our ability to target key audiences; the quality and attractiveness of competing entertainment content; and the availability of alternative forms of entertainment and leisure time activities. Audience tastes change frequently, and it is a challenge to anticipate what 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, before learning the extent to which it will garner critical success and popularity with consumers. A shortfall in the expected popularity of content we expect to distribute or of sports events for which we have acquired rights, could lead to decreased profitability or losses for a significant period of time. Significant negative claims or publicity regarding the Company or its operations, products, management, employees, practices, business partners and culture, including individuals associated with the content we create and/or license, as well as our inability to adequately respond to such negative claims or publicity, may damage our brands or reputation, even if piracy weresuch claims are untrue. A lack of popularity of our offerings or damage to increase, it wouldour 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 other rights, and judgments we make on the Company’s businessespotential performance of our content, may adversely affect our business, financial condition or results of operations

In TV Entertainment and profitability. Also, while legal protections exist, piracyCable Networks, we produce a significant amount of original programming and technological toolsother content and we invest significant resources in our brands, in part with the aim of developing higher quality and quantity of original content, and we also derive a portion of our revenue from the exploitation of our extensive library of television programming. In Filmed Entertainment, we invest significant amounts in the production, marketing and distribution of films and television series. We also acquire programming, films and television series, as well as a variety of digital content and other ancillary rights such as consumer and home entertainment product offerings, and we pay license fees, royalties and/or contingent compensation in connection with these acquired rights. For example, some of CBS Sports’ most widely viewed programming, including The Masters Tournament and NFL games, are made available based on programming rights of varying duration that we have

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negotiated with third parties. We also license various music rights from the major record companies, music publishers and performing rights organizations.

Our investments in original and acquired programming are significant and involve complex negotiations with numerous third parties, and rapid changes in consumer behavior have increased the risk associated with the success of all kinds of programming. Competition for popular content is intense, and we may have to increase the price we are willing to pay for talent and intellectual property rights, which to carry it out continue to escalate, evolvemay result in significantly increased costs. Further, increased competition in the market for development and present challenges for enforcement. The Company enforces its rights against entities that illegally secure and exhibit itsproduction of original content, particularly from streaming services providers, including our streaming the Company’sservices, increases our content without obtaining the consent 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 difficultcosts. We may be outbid by our competitors for the Companyrights to adequately protect its intellectual property,new, popular programming or in connection with the renewals of popular programming that we currently license. Finally, certain of our counterparties and vendors may encounter financial and operational pressures, which could negatively impact its value and further increaseresult in increased costs to us or delays in production. As such, there can be no assurance that we will recoup our investments when the Company’s enforcement costs.content is broadcast or distributed.



Our businesses operate in industries that are highly competitive


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The Company’s Businesses Operate in Highly Competitive and Consolidating Industries

The Company competesWe compete with other media companies for high qualityto 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 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 other broadcast television stations and networks;networks, cable television systems and networks; motion picture studios;networks, streaming service providers, the internet; non-traditional programming services; technological innovations in content distribution; terrestrialinternet and satellite radiosocial media platforms, film studios and portable devices; local, regionalindependent film producers and national newspapers; direct mail;distributors, consumer products companies and other communicationsentertainment outlets and advertising media that operate in these markets. Otherplatforms, as well as from search engines, program guides and “second screen” applications. Additionally, other television 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. In book publishing,Further, competition among electronicfrom additional entrants into the market for development and print book retailersproduction of original content and streaming services continues to increase.

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 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. Our competitors generally include companies 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 competitive advantages, which could decreaseadversely affect our ability to negotiate favorable terms for distribution or otherwise compete effectively in the prices for new releases and the outlets available for book sales. Moreover, the growing use of self-publishingdelivery marketplace. Our competitors could also have preferential access to important technologies, by authors increasescustomer data or other competitive information, as well as significant financial resources.

This competition and could result in decreased use of traditional publishing services. This competitionconsolidation 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 thereof could have a significant adverse effect on our business, financial condition or results of operations

A significant portion of our revenues are attributable to agreements with a limited number of distributors. 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 those related to pricing

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and programming tiers. We may also be unable to modify existing agreements with terms that have become less favorable over time. The Lossloss of Affiliation Agreementsexisting packaging, positioning, pricing or Retransmission Agreementsother marketing opportunities and the loss of carriage 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 Operations

Theour 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. CBS Television Network provides its affiliates with up to approximately 98 hours ofaffiliated television stations regularly scheduled programming per week. Inin return for the CBS Television Network’s affiliated stations broadcast network-insertedinsertion of network commercials during that programming and pay the Company station affiliation fees. Losspayment of reverse compensation. The loss of such 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.

Consolidation among and vertical integration of distributors in the cable or broadcast network business has provided more leverage to these distributors and could adversely affect our ability to maintain or obtain distribution for our network programming or distribution and/or marketing of our subscription services on favorable or commercially reasonable terms, or at all. Also, consolidation among television station group owners could increase their negotiating leverage. The non-renewal or terminationMoreover, competitive pressures faced by MVPDs, particularly in light 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 resultslower retail prices 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’ programstreaming 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 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’s ability to maintain or obtain distribution for its network programming or distribution and/or marketingterms of its subscription program services on favorable or commercially reasonable terms, or at all.our renewals with MVPDs. In addition, MVPDs and digital streaming services continue to develop alternative offerings for consumers, including “skinny bundles,” which are generally smaller than the traditional program package or may allow the consumer to customize its package of program services.consumers. To the extent these packagesofferings do not include the Company’s


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our programming and become widely accepted in lieu of traditional program packages, the Companyofferings, we could experience a decline in affiliate and subscription revenues.


Our revenues are dependent on the 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 their interpretation and even their validity has grown, resulting in greater uncertainty and, from time to time, litigation with respect to our rights and obligations. 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 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. Disagreements with a distributor on the interpretation or validity of an agreement could adversely impact our affiliate and advertising revenues, as well as our relationship with that distributor.

We could suffer losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming

We test goodwill and indefinite-lived intangible assets, including FCC licenses, for impairment on an annual basis and between annual tests if events or circumstances require an interim impairment assessment. Certain 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. Any such impairment charge for goodwill, intangible assets and/or programming could have a material adverse effect on our reported net earnings.

Risks Relating to the Merger and Other Strategic Initiatives

The integration of the CBS and Viacom businesses may be more difficult, time-consuming or costly than expected. Synergies and other anticipated benefits may not be realized within the expected time frames, or at all.

Our ability to realize the anticipated benefits of the Merger 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 projected standalone cost savings and revenue growth trends without adversely affecting 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 adversely affect the results of operations of ViacomCBS. The overall combination of our businesses may also result in material

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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.

Even if our operations are integrated successfully, the full benefits of the Merger, including anticipated synergies, cost savings or sales or growth opportunities, may not be realized, and 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.

We have acquired and invested in, 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 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 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.

If our streaming initiatives are unsuccessful, our business, financial condition or results of operations could be adversely affected

There can be no assurance that our streaming initiatives will be successful. The streaming market is intensely competitive and our ability to attract and retain subscribers to our pay streaming services, including Paramount+, SHOWTIME OTT and BET+, and MAUs on our FAST service, Pluto TV, as well as the corresponding subscription and advertising revenues they enable us to generate, will depend on our ability to consistently provide appealing and differentiated content, effectively market these services and provide a quality experience for selecting and viewing that content. Our success will also require significant investments to produce original content and acquire the rights to third-party content, including with respect to live sports, as well as the establishment and maintenance of key content and distribution partnerships. We will need to find the right balance between licensing our content to our own streaming services, forgoing traditional sources of content licensing revenues, and licensing our content to third parties.

In addition, the relative service levels, content offerings, promotions, and pricing and related features of our competitors’ services may adversely impact our ability to attract and retain subscribers and MAUs. Competitors include MVPDs, vMVPDs and other content providers. If consumers do not consider our streaming services to be of value compared to our competitors’ services, including because we fail to introduce new features, increase our pricing, terminate or modify promotional or trial period offerings, experience technical issues, or change the mix of content in a manner that is not favorably received, we may not be able to attract and retain subscribers and MAUs. In addition, many subscribers and MAUs originate from word-of-mouth advertising from existing subscribers and MAUs. If we are not be able to attract subscribers and MAUs, or our subscribers or MAUs decide to not continue subscriptions on our services for a variety of reasons, including a perception that they do not use it

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sufficiently, the need to cut household expenses, unsatisfactory content, promotions or trial-period offers expire or are modified, competitive services or promotions provide a better value or experience or customer service or technical issues are not satisfactorily resolved, our business, financial condition or results of operations could be adversely affected.

We must continually add new subscribers and MAUs both to replace canceled subscribers and to grow our business, including offsetting subscriber declines in our traditional linear distribution model. If we are unable to successfully compete with competitors in retaining and attracting new subscribers and MAUs, our business, financial condition or results of operations could be adversely affected.

Risks Relating to Business Continuity, Cybersecurity and Privacy and Data Protection

Disruptions or failures of, or cybersecurity attacks upon, our or our service providers’ networks, information systems and other technologies, and a failure of our business continuity plans in response thereto, 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

Cloud services, networks, information systems and other technologies we use or that are used by our third-party providers, including technology systems used in connection with the production and distribution of our content (“Systems”), are critical to our business activities, and shutdowns or disruptions of, and cybersecurity attacks on, these Systems pose increasing risks. 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. 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, 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 to otherwise 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. In addition, our recovery and business continuity plans may prove inadequate to address any such disruption, failure or cybersecurity attack.

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 sophistication of attempted and successful information security breaches in the U.S. and elsewhere have increased significantly 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 effectiveness of our security measures could be harmed, we could lose subscribers, viewers, revenues in the case of leaked content, advertisers and other business partners, and users of our online, mobile and app offerings; our

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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.

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 E.U., for example, the GDPR mandates data protection compliance obligations and authorizes significant fines for noncompliance, requiring extensive 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 E.U., and we have been required to limit some functionality on digital properties as a result of these regulations. Such regulations also restrict the types of advertising we are able to sell on these digital properties and impose strict liability on us for certain actions of ViacomCBS, advertisers and other third parties, which could affect advertising demand and pricing. Recently, laws in Brazil and China that govern the processing of children’s data also went into effect. These laws will likely have similar impacts to COPPA and GDPR, especially with respect to data collected in connection with advertising. We will continue to expend resources to comply with data protection and privacy standards imposed by law, industry standards or contractual obligations, which may be inconsistent with one another, and despite such efforts we may face regulatory and other legal actions. Each of these factors could have an adverse effect on our reputation, business, financial condition or results of operations.

Risks Relating to Intellectual Property

Infringement of our content, including digital copyright piracy 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 and results of operations

The Company’s Operating Results Are Subjectsuccess of our businesses depends in part on our ability to Seasonal Variationsmaintain and Other Factorsmonetize our intellectual property rights. We are fundamentally a content company and infringement of our content — specifically, the infringement of our films and home entertainment products, television programming, digital content, books and other intellectual property rights — affects the value of our content. Copyright infringement is particularly prevalent in many parts of the world that either lack effective laws and technical protection measures similar to those existing in the U.S. and Europe or lack effective enforcement of such measures, or both. Such foreign copyright infringement often creates a supply of pirated content for 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 and monetize our intellectual property and thus negatively affect its value.


Copyright piracy 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 disguise 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. Internet-connected televisions, set-top boxes and mobile devices are ubiquitous, and many can support illegal retransmission platforms, illicit video-on-demand or streaming services and pre-loaded hardware, providing more accessible, versatile and legitimate-looking environments for consuming unlicensed film and television content. Unauthorized access to our content could result in the premature release of films, television programs or other

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content as well as a reduction in demand for authorized content, which would likely have significant adverse effects on the value of the affected content and our ability to monetize our content.

Copyright infringement 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. 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 initiatives. 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.

Risks Relating to Macroeconomic and Political Conditions

COVID-19 and other pandemics could have a material adverse effect on our business, financial condition and results of operations.

The Company’s businessCOVID-19 pandemic has experiencednegatively impacted, 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,impact, the Company’s revenue from advertising increasesmacroeconomic environment in the fourthU.S. and globally. Federal, state and local governmental authorities in the U.S. and foreign governments around the world have implemented numerous orders, policies and initiatives to try to reduce the transmission of COVID-19, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. The difficult macroeconomic environment, which has included increased and prolonged unemployment and a decline in consumer confidence, and any resulting recession or prolonged declines in economic growth, as well as changes in consumer behavior in response to the pandemic, have had, and may continue to have, a negative impact on our business, financial condition and results of operations. Other pandemics or widespread health emergencies may have similar effects.

As a result of COVID-19, we experienced a material negative impact on our advertising revenues in 2020, particularly at the end of the first quarter Simon & Schuster generatesand throughout the second quarter, as a substantial portionresult of its revenuesweakness in the advertising market as advertisers sought to reduce costs in response to the pandemic’s impact on their businesses, the cancellation or postponement of sporting events for which we have broadcast rights, including the NCAA Division I Men’s Basketball Championship in the first quarter, and the delay of the 2020-21 television broadcast season as a result of production shutdowns. While the rate of decline improved in the second half of the year, and license fees for television programming and CBS Films’ revenue from motion pictureswe are dependent on the commencement of a license period, mix, number and availability of the Company’s television programming and motion pictures, as applicable, which may cause operating resultsnot able to increasepredict whether future sporting events will be canceled or decrease during a period and create non-comparable results relative to the corresponding period in the prior year. In addition,postponed, or whether advertising revenues from these broadcasts, or advertising budgets and the advertising market generally, will return or be comparable to historical levels. Any prolonged decline in even-numbered years benefit fromour 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 quarter and may adversely affect operating results.

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 or degradation of the Company’s services and operations, damage to equipment and data, loss of viewers and customer or advertiser dissatisfaction. These events could also result in the improper disclosure or loss of personal data, confidential information, intellectual property or other 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 couldrevenues would have a material adverse effectnegative impact on the Company’sour business, financial condition and results of operations.


Economic Conditions May Adversely AffectCOVID-19 had a negative effect on our content licensing revenues in 2020. Temporary television and film production shutdowns resulted in the Company’s Businessesabandonment of content that was not completed, delays in the delivery of programming to third parties, and Customersfewer original programs and live events airing on our broadcast and cable networks. We also experienced lower demand for the licensing of our content from advertising-supported licensees. While production has resumed, we are not able to predict whether we will encounter future production delays or shutdowns or if and to what extent content licensing revenues will continue to be negatively impacted. Additionally, with the resumption of production we began incurring incremental costs related to health and safety protocols in response to COVID-19, which are expected to continue in 2021.


Our theatrical revenues have been negatively impacted by the closure or reduction in capacity of movie theaters that show our films as a result of COVID-19, which has impacted our theatrical releases. Accordingly, we have rescheduled certain theatrical releases and licensed others to our owned or third-party streaming services. We are not able to predict when or whether movie theaters will reopen at scale, whether consumers will return at the same levels they previously did because of concerns related to COVID-19 or because of changes to viewing habits, or whether revenues from theatrical releases will be comparable to historical levels.

In addition, COVID-19 could impact our business, financial condition and results of operations in a number of other ways, including: negatively impacting our affiliate and advertising revenues as consumers reduce

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discretionary spending by cancelling or forgoing subscriptions to MVPD or vMVPD services; negatively impacting our financial condition or our ability to fund operations, dividends or future investment opportunities due to an increase in the cost or difficulty in obtaining debt or equity financing, or refinancing our debt in the future, our ability to comply with the leverage covenant in our Credit Facility, or a decrease in our debt ratings; impairments of our programming and other inventory, goodwill and other indefinite-lived intangible assets, and other long-lived assets; and increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online activity.

The U.S. and other countries where the Company operates experience slowdowns and volatilities in their economies from time to time. A downturn could lead to lower consumer and business spending for the Company’s products and services, particularly if customers, including advertisers, subscribers, licensees, retailers, theater operators and other consumersmagnitude of the Company’s content offerings and services, reduce demands for the Company’s products and services. In addition, in unfavorable economic environments, the Company’s customers may have difficulties obtaining capital at adequate or historical levels to finance their ongoing business and operations and may face insolvency, allcontinuing impact of COVID-19, which could impair their abilitybe material to make timely paymentsour business, financial condition and continueresults of operations, including distribution of the Company’s content. The Company is unablewill depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and severityextent of weakenedthe pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and economic and operating conditions in the aftermath of COVID-19. Even after COVID-19 has subsided, we may experience materially adverse impacts to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future. Due to the evolving and uncertain nature of the pandemic, we are not able to estimate the full extent of the impact that COVID-19 will have on our business, financial condition and results of operations, and that impact could also exacerbate the other risks described herein.

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 suchhave 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. Economic conditions in each market can also impact our audience’s discretionary spending and resultant effects could adversely impact the Company’s businesses, operating results, and financial condition.

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

The Company produces and acquires programming (including motion pictures) and othertherefore their willingness to access our content, and incurs costs with respect to its content, including for all types of creative talent, including actors, authors, writers and producers, composers and publishers of music, as well as for marketingthe businesses of our partners who purchase advertising on our networks, causing them to reduce their spending on advertising. We may also be subject to longer payment cycles. In addition, as we have expanded our international operations, our exposure to foreign currency fluctuations against the U.S. dollar has increased, and distribution. An increase in any of these costs and


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increased competition from consolidated entities and new entrants with substantial resources into the market for the production and acquisition of new content may lead to decreased profitability.

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, and the related cost of refinancing, some or all of its debt could be adversely affected. Although the Company can currently access the bank and capital markets, there is no assurance that suchdownward trending currencies will rebound or that stable currencies will remain stable in any period. Such fluctuations could have an adverse effect on our business, financial condition or results of operations. Also, volatility and weakness in the capital markets, will continue to be a reliable source of financing for the Company. In addition, the Company’s access 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 decrease in the Company’sour debt ratings could adversely affect the Company’sour ability to obtain cost‑effectivecost-effective financing.


ChangesOur businesses are also exposed to certain political risks inherent in Communications Lawsconducting a global business, including retaliatory actions by governments reacting to changes in the U.S. and other countries, including in connection with trade negotiations; issues related to the presence of corruption in certain markets and enforcement of anti-corruption laws and regulations; increased risk of 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 Regulations May Haveother hostilities; and other political, economic or other uncertainties.

These political and economic risks could create instability in any of the markets where our businesses derive revenues, which could result in a reduction of revenue or loss of investment that adversely affects our businesses, financial condition or results of operations.

Risks Relating to Regulatory and Legal Matters

Failures to comply with or changes in U.S. or foreign laws or regulations may have an Adverse Effectadverse effect on our business, financial condition or results of operations

We 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 laws and regulations 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


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investment, export and market access restrictions, and exceptions and limitations on copyright and censorship, among others.

The television broadcasting and distributioncable programming 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 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 stations. The Companystations and periodically renew them. It 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, 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 inlimits on the ownership and operation of itsour television stations and itsour television networks. FCC regulations prohibit the common ownership of more than one of the top four networks, ABC, CBS, FOX and NBC, and limit the number of television stations that a licensee can own in a market and the number of television stations that can be owned nationwide, which could restrict the Company’sour ability to consummate future transactions and in certain circumstances could require itus to divest some television stations. 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’s television properties. For example, from time to time, proposals have been advanced in the U.S. Congress and at the FCC to require television 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’s 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. 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’s ability to obtain the most favorable terms available for its content

Our businesses could be adversely affected should such an extension be enacted into law. Congress authorized 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 will continue their operations after the auctions, which commenced in 2016 and concluded in March 2017, may have to change channels as the FCC “repacks” the remaining spectrum dedicated to broadcast television use. Congress allocated funds that will at least partially reimburse the costs related to stations repacking. It is difficult to predict the outcome of the FCC’s actions or their effect, if any, on the Company’s broadcasting properties. In addition, changes in or new interpretations of international laws and regulations, governing the broadcastchanges in existing laws, changes in interpretations of existing laws by courts and distribution of content, competitionregulators and the internet, including those affecting data privacy, threat that additional laws or regulations may be forthcoming, as well as proposed amendmentsour ability to the law governing territorial exclusivityenforce our legal rights. We could be required to change or limit certain of the distribution of content in Europe, may have an adverseour business practices, which could impact on the Company’s international businesses and internet properties. The Company is unableour ability to predict the effect that any such laws, regulations or policies may have on its operations.



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Vigorous Enforcement or Enhancement of FCC Indecency and Other Program Content Rules Against the Broadcast and Cable Industries Could Have an Adverse Effect on the Company’s Businesses and Results of Operations

The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material on television 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 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 broadcasting indecent material per station are a maximum of approximately $397,000 per utterance. If the FCC denied a license renewal or revoked the license for one of the Company’s television stations, the Company would lose its 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 contentgenerate revenues. We 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’s abilityalso incur substantial costs to comply with the rules. Violation of indecency rules could lead to sanctions which may adversely affect the Company’s businessesnew and results of operations. Some policymakers support the extension of the indecency rules that are applicable to over-the-air 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 enforcementregulations, or substantial fines and penalties or other expansion took placeliabilities if we fail to comply with such laws and were foundregulations.

Our liabilities related to be constitutional, some of the Company’s cable contentdiscontinued operations and former businesses could be subject to additional regulation and might not be able to attract the same subscription and viewership levels.adversely impact our financial conditions


The Failure or Destruction of Satellites and Transmitter Facilities that the Company Depends Upon 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 disrupted as a result of local disasters including extreme weather that impair on-ground uplinks or downlinks, or as a result of an impairment of a satellite. Currently, there are 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 manner couldWe have a material adverse effect on the Company’s businesses and results of operations. Each of the Company’s television 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.

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

The Company will test goodwill and indefinite-lived intangible assets, including FCC licenses, for impairment during the fourth quarter of each year and between annual tests if events or circumstances require an interim impairment assessment. A downward revision in the estimated fair value of a reporting unit or intangible assets, including FCC licenses, 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’s reported net earnings.



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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.

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 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 Liabilities Related to Discontinued Operations and Former Businesses Could Adversely Impact Its Financial Condition

The Company hasboth 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,condition, operating performance or cash flow.


Risks Relating to Human Capital

The Company Could Be Adversely Affectedloss 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 our executive teams, and the various creative talent and entertainment personalities with whom we work. We compete for talented executives in a highly-specialized industry, and our ability to attract and retain such individuals may be impacted by Strikesour reputation, workplace culture, efforts with respect to diversity and Other Union Activityinclusion, the compensation and benefits we provide, and our commitment to effectively managing executive succession. We also 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 attracting viewers of our content and 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.


The CompanyIn addition, we and its suppliersour business partners engage the services of writers, directors, actors, musicians and other talent, production crew members, trade employees, professional athletes and others who are subject 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 form ofAny labor disputes, including lockouts, 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, cable networks, interactivestoppages, may disrupt our operations and motion picture businesses by disrupting the Company’s ability to provide scheduled services and programming or by causingcause delays in the production of the Company’sour programming, or motion pictures. Depending on its duration, any lockout, strike


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or work stoppagewhich could increase our costs and have an adverse effect on the Company’sour revenues, cash flows and/or operating income and/or the timing thereof.income.


Fluctuations in Foreign Exchange Rates and Political and Economic

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Risks Associated with the Company’s International Businesses Could Harm the Company’s Financial Condition or Results of OperationsRelating to our Ownership Structure

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, longer payment cycles, and changes in privacy and data protection laws. 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 ongoing “Brexit” processes to withdraw the U.K. from the European Union, which is expected to occur in March 2019, may adversely affect economic and market conditions in the U.K. and other regions where the Company conducts business and could contribute to volatility in foreign exchange markets. 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 Its Voting Controlthrough its voting control of the Company, IsViacomCBS, is 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, 2017,2020, 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 10.2% of the Company’s Class A Common Stock and non-votingour Class B Common Stock outstanding on a combined basis. Shari E. Redstone, the Chairperson, CEO and President of NAI, serves as non-executive Chair of the ViacomCBS Board of Directors (the “ViacomCBS Board”). Until the death of Mr. Sumner M. Redstone is the beneficial owner of the controlling interest inon August 11, 2020, NAI and, accordingly, beneficially owns all such shares. Mr. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, serves as Chairman Emeritus of the Company's Board of Directors, and Ms. Shari Redstone, the president and a director of NAI, serves as Vice Chair of the Company’s Board of Directors. In addition, Mr. David R. Andelman is a director of NAI and serves as a director of the Company. NAI iswas controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which ownsowned 80% of the voting interest of NAI, andwith 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 ofRedstone. Upon Mr. Redstone’s death or incapacity, voting controland in accordance with the terms of the trust agreement governing the SMR Trust and the Continuing Trusts (as defined below), the SMR Trust was succeeded by two continuing trusts (the “Continuing Trusts”), each of which holds 40% of the voting stock of NAI. Under the terms of the trust agreement governing the SMR Trust and the Continuing Trusts, the Continuing Trusts are required to share the same seven voting trustees, who have equal voting power, and each trustee is required to cause each Continuing Trust to vote the NAI voting interestshares held by that Continuing Trust in the same manner as the NAI shares held by the SMRother Continuing Trust. Ms. Redstone is one of the seven voting trustees for each Continuing Trust will pass to sevenand is one of two voting trustees who will include CBS Corporation directors Ms. Shari Redstone and Mr. David R. Andelman.are beneficiaries of one of the Continuing Trusts. No member of our management, or other member of our the Company’s managementViacomCBS Board, is a trustee of either of the SMR Trust.Continuing Trusts.

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 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.



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Sales of NAI’s Sharesshares of ViacomCBS Common Stock, Could Adversely Affectsome of which are pledged to lenders, could adversely affect the Stock Pricestock price


At December 31, 2017, NAI directly or indirectly owned approximately 79.5% of the Company’s voting Class A Common Stock, and approximately 10.2% of the Company’s Class A Common Stock and non-voting Class B Common Stock 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 commonCommon Stock and non-votingour Class B Common Stock owned directly or indirectly by NAI. TheAt December 31, 2020, the aggregate number of shares of our Common Stock pledged by NAI representsto its lenders represented approximately 4.4%4.1% of the total outstanding shares of votingour Class A Common Stock and non-votingour Class B Common Stock on a combined basis.  The amount of the Company’s voting Class A Common Stock which NAI directly or indirectly owns and which has not been pledged by NAI to its lenders represents approximately 59.6% of the Company’s total voting Class A Common stock outstanding. If there is a default on NAI’s debt obligations and the lenders foreclose on the collateral,pledged shares, the lenders


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cannot sell may not effect a transfer, sale or transferdisposition of any pledged shares of the Company’s votingour Class A Common Stock unless such shares are converted into sharesNAI and its affiliates beneficially own 50% or less of the Company’s non-voting Class B Common Stock, and then such Class B Common Stock could be sold, which sale 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 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

Item 1B.Unresolved Staff Comments.
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 which
Not applicable.

Item 2.Properties.

Our significant 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 global headquarters is located at 1515 Broadway, New York, New York, where we lease approximately 1.6 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.


I-26



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 announced our intention to sell this property when market conditions allow.

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, studio and studioproduction space. The Company also owns two studio facilities in California: (a)

•We own the CBS Studio Center at 4024 Radford Avenue, Studio City, California, located on approximately 40 acres and (b) CBS Television Cityused for executive and administrative offices, sounds stages and production facilities and other ancillary uses.

•We occupy approximately 330,000 square feet of office and production space at 7800 Beverly Boulevard,555 West 57th Street, New York, New York under a lease expiring in 2023.

Cable Networks

•We occupy approximately 281,000 square feet of office and production space at 345 Hudson Street, New York, New York, under a lease expiring in 2022.


I-31
•We occupy approximately 210,000 square feet of office and production space at 1575 North Gower Street, Los Angeles, California, locatedunder a lease expiring in 2028.

•Our 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 of office and production space at 1633 Broadway, New York, New York, under a lease which expiresexpiring in 2026. Simon & Schuster2026 and leases approximately 300,00056,000 square feet of office space at 1230The Lot, 1041 N. Formosa Avenue, of the Americas, New York, New York, which lease runs to 2034. CBS Interactive leases approximately 283,000 square feet of space at 235 Second Street, San Francisco,West Hollywood, California, under a lease which expiresexpiring in 2022. CBS Interactive subleases2028.

•Telefe occupies approximately 90,000496,000 square feet of this space to third parties. The Company and its subsidiaries also own and lease office, studio and warehouseproduction space, and broadcast, antenna and satellite transmission facilities throughoutand for other ancillary uses at its owned and leased facilities in Buenos Aires, Argentina.

•VCNI occupies approximately 140,000 square feet of office, studio and production space at its owned and leased Hawley Crescent facilities in London.

•Network 10 leases approximately 120,000 square feet of office, studio and production space at 1 Saunders Street, Pyrmont, New South Wales, Australia, under a lease expiring in 2023.

Filmed Entertainment

•Paramount owns the U.S., CanadaParamount Pictures Studio lot situated at 5555 Melrose Avenue, Los Angeles, California, located on approximately 62 acres of land, and several other foreign countriescontaining approximately 1.85 million square feet of floor space used for its businesses. The Company considers its properties adequate for its present needs.




I-27


Item 3. Legal Proceedings.

General. On an ongoing basis, the Company vigorously defends itself in numerous lawsuitsexecutive, administrative 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 difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal mattersbusiness offices, sound stages, production facilities, theatres, equipment facilities 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.ancillary uses.


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 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 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 caused by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.

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, 2017, the Company had pending approximately 31,660 asbestos claims, as compared with approximately 33,610 as of December 31, 2016 and 36,030 as of December 31, 2015. During 2017, the Company received approximately 3,530 new claims and closed or moved to an inactive docket approximately 5,480 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. The Company’s total costs for the years 2017 and 2016 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57 million and $48 million, respectively. 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 pending 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.



I-28


Item 4.    Mine Safety Disclosures.

Not applicable.

EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is certain information concerning the executive officers of the Company as of February 14, 2018.
NameItem 3.AgeTitle
Leslie Moonves68Chairman of the Board, President and Chief Executive Officer
Anthony G. Ambrosio57
Senior Executive Vice President, Chief Administrative Officer and
Chief Human Resources Officer
Jonathan H. Anschell49Executive Vice President, Deputy General Counsel and Secretary
Joseph R. Ianniello50Chief Operating Officer
Richard M. Jones52Executive Vice President and General Tax Counsel
Lawrence Liding49Executive Vice President, Controller and Chief Accounting Officer
Gil Schwartz66Senior Executive Vice President and Chief Communications Officer
Lawrence P. Tu63Senior Executive Vice President and Chief Legal Officer
Proceedings.
None of
The information set forth under the executive officers ofcaption “Legal Matters” in Note 20 to the Companyconsolidated financial statements in “Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements” is related to any other executive officer or directorincorporated herein by blood, marriage or adoption.reference.


Mr. Moonves 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.

Item 4.Mine Safety Disclosures.
Mr. Ambrosio has been Senior Executive Vice President, Chief Administrative Officer and Chief Human Resources Officer of the Company since June 2013. Prior to that, Mr. Ambrosio served as Executive Vice President, Human Resources and Administration of the Company since January 1, 2006. Previously, he 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 Secretary of the Company since January 1, 2016.  Mr. Anschell also serves as Executive Vice President and General Counsel of CBS Broadcasting Inc., a position he has held 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. Prior to that, Mr. Ianniello 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, Chief Development Officer and Treasurer of the Company since September 2007, as Senior Vice President, Finance and Treasurer of the Company since January 1, 2006, as Senior Vice President and Treasurer of Former Viacom since July 2005 and as Vice President, Corporate Development of Former Viacom from 2000 to 2005.

Mr. Jones has been Executive Vice President and General Tax Counsel since August 2014. Previously, he served as Senior Vice President and General Tax Counsel of the Company since January 1, 2006 and for Former Viacom in


December 2005. Prior to that, he served as Vice President of Tax, Assistant Treasurer and Tax Counsel for NBC Universal, Inc. since 2003 and he spent 13 years with Ernst & Young in their 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.

Mr. Liding has been Executive Vice President, Controller and Chief Accounting Officer of the Company since August 2014. Previously, he served as Senior Vice President, Controller and Chief Accounting Officer of the Company since October 2011, 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 Former Viacom in 1995 and served as Vice President of Financial Reporting from 2002 through 2005.

Mr. Schwartz has been Senior Executive Vice President and Chief Communications Officer of the Company since June 2013. Prior to that, he served as Executive Vice President and Chief Communications 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 Broadcasting 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. Tu served as Executive Vice President and General Counsel of NBC Universal since 2001. He previously 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, attorney for the U.S. State Department, and law clerk for U.S. Supreme Court Justice Thurgood Marshall.

Not applicable.


I-30I-32


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 YorkThe Nasdaq 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 per share range of high and low sales prices for CBS Corporation’s
We declared a quarterly cash dividend on our Class A and Class B Common Stock as reportedduring each of the quarters of 2020, resulting in total dividends for the year of $601 million, or $.96 per share. On December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. 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. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For the year ended December 31, 2018, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For the year ended December 31, 2018, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million.
 Voting Class A Non-Voting Class B
 Common Stock Common Stock
 High Low High Low
        
2017       
1st quarter$70.68
 $62.25
 $69.60
 $61.95
2nd quarter$71.07
 $61.01
 $70.10
 $59.72
3rd quarter$68.86
 $57.45
 $68.75
 $56.91
4th quarter$61.70
 $53.00
 $60.77
 $52.75
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

On February 1, 2018, the Company9, 2021, we announced a quarterly cash dividend of $.18$.24 per share on itsour Class A and Class B Common Stock, payable on April 1, 2018. The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2017 and 2016, resulting in total annual dividends of $289 million, or $.72 per share, for 2017 and $294 million, or $.66 per share, for 2016. CBS Corp.2021. 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 summaryDuring the fourth quarter of CBS Corp.’s purchases of its Class B Common Stock during the three months ended December 31, 2017.
(in millions, except per share amounts)
Total
Number of
Shares
Purchased (a)
 
Average
Price Per
Share
 
Total Number of
Shares Purchased
as Part of Publicly
Announced Programs
 
Remaining
Authorization
October 1, 2017 - October 31, 2017 —
  $—
  —
   $3,057
 
November 1, 2017 - November 30, 2017 17.9
  $56.40
  (a)
   $3,057
 
December 1, 2017 - December 31, 2017 —
  $—
  —
   $3,057
 
Total 17.9
     (a)
   $3,057
 
(a) During November 2017, the Company completed the split-off of CBS Radio Inc. and in connection with this transaction, received 17.9 million2020, we did not purchase any shares of CBS Corp. Class B Common Stock in exchange for the 101.4 million shares of CBS Radio Inc.our common stock that it owned. The exchange offer was not part of the Company’sstock. Our publicly announced share repurchase program and did not have an effect on thehad remaining authorization under such program.of $2.36 billion at December 31, 2020.

As of February 12, 2018,19, 2021, there were approximately 1,4372,133 record holders of CBS Corp.our Class A Common Stock and approximately 19,54129,999 record holders of CBS Corp.our Class B Common Stock.

II-1


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 the Standard & Poor’s 500 Media and Entertainment Industry Group Index (“S&P 500 Media and Entertainment Index”). We began presenting the S&P Media and Entertainment Index in 2020 in order to provide a comparison to a wider range of companies in the media industry than the peer group of companies that was presented in prior years (“Prior Peer Group”). Accordingly, this graph also presents the cumulative shareholder return for the Prior Peer Group, as required by the SEC in the year of companies identified below.change.

The performance graph assumes $100 invested on December 31, 20122015 in each of theour Class A and Class B Common Stock, of CBS Corp., the S&P 500, the S&P 500 Media and Entertainment Index, and the Prior Peer Group identified below, including reinvestment of dividends, through the calendar year ended December 31, 2017.2020.



Total Cumulative Stockholder Return
For Five-Year Period EndingEnded December 31, 20172020

viac-20201231_g5.jpg
December 31,201220132014201520162017
CBS Corp. Class A Common Stock$100$169$151$141$178$166
CBS Corp. Class B Common Stock$100$169$148$128$174$164
S&P 500$100$132$151$153$171$206
Peer Group (a)
$100$151$181$171$190$202
December 31,201520162017201820192020
Class A Common Stock$100$126$117$87$91$79
Class B Common Stock$100$137$128$96$94$87
S & P 500$100$112$136$130$171$203
Prior Peer Group (a)
$100$102$110$125$157$189
S&P 500 Media & Entertainment Index$100$114$121$108$145$190
(a) The Prior Peer Group consists of the following companies: The Walt Disney Company Twenty-First Century(“Disney”), Fox Inc.Corporation and Time WarnerDiscovery Inc.

II-2

Item 6.Selected Financial Data.
CBS CORPORATION AND SUBSIDIARIES
(In millions, except per share amounts)
 
Year Ended December 31, (a)
 
2017 (b) (c) (d) (e)
 
2016 (b) (c)
 
2015 (b) (f)
 
2014 (b) (e)
 2013
Revenues$13,692
 $13,166
 $12,671
 $12,519
 $12,713
Operating income$2,423
 $2,621
 $2,658
 $2,590
 $2,663
Net earnings from continuing operations$1,309
 $1,552
 $1,554
 $1,151
 $1,520
Net earnings (loss) from discontinued operations,
net of tax
$(952) $(291) $(141) $1,808
 $359
Net earnings$357
 $1,261
 $1,413
 $2,959
 $1,879
          
Basic net earnings (loss) per common share:         
Net earnings from continuing operations$3.26
 $3.50
 $3.21
 $2.09
 $2.50
Net earnings (loss) from discontinued
operations
$(2.37) $(.66) $(.29) $3.29
 $.59
Net earnings$.89
 $2.84
 $2.92
 $5.38
 $3.09
          
Diluted net earnings (loss) per common share:         
Net earnings from continuing operations$3.22
 $3.46
 $3.18
 $2.05
 $2.44
Net earnings (loss) from discontinued
operations
$(2.34) $(.65) $(.29) $3.22
 $.58
Net earnings$.88
 $2.81
 $2.89
 $5.27
 $3.01
          
Dividends per common share$.72
 $.66
 $.60
 $.54
 $.48
          
At Year End:         
Total assets:         
Continuing operations$20,830
 $19,642
 $18,695
 $18,372
 $17,191
Discontinued operations13
 4,596
 5,070
 5,563
 9,014
Total assets$20,843
 $24,238
 $23,765
 $23,935
 $26,205
Total debt:         
Continuing operations$10,162
 $9,375
 $8,448
 $7,112
 $6,403
Discontinued operations—
 1,345
 —
 —
 14
Total debt$10,162
 $10,720
 $8,448
 $7,112
 $6,417
Total Stockholders’ Equity$1,978
 $3,689
 $5,563
 $6,970
 $9,966
(a) On November 16, 2017, CBS Corporation (the “Company” or “CBS Corp.”) completed the disposition of CBS Radio Inc. (“CBS Radio”) through a 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) For 2017, net loss from discontinued operations, net of tax, includes a loss on the split-off of CBS Radio of $105 million, or $.26 per diluted share, and a market value adjustment of $980 million, or $2.41 per diluted share, recorded prior to the split-off to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”). Included in net 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 2017, operating income included a pension settlement charge of $352 million ($237 million, net of tax), or $.58 per diluted share, resulting from the transfer of pension obligations to an insurance company through the purchase of a group annuity contract. In 2016, operating income included a pension settlement charge of $211 million ($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 2017, the Company recorded a provisional charge of $129 million, or $.32 per diluted share, resulting from the enactment of federal tax legislation in December 2017.
(e) In 2017, in connection with the early redemption of $800 million of its debt, the Company recorded a pretax loss on early extinguishment of debt of $49 million ($31 million, net of tax), or $.08 per diluted share. 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.
(f) 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.


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—Summary of ViacomCBS and our business and operational highlights.
•Consolidated Results of Operations—Analysis of our results on a consolidated basis for each of the three years ended December 31, 2020.
•Segment Results of Operations—Analysis of our results on a reportable segment basis for each of the three years ended December 31, 2020.
•Liquidity and Capital Resources—Discussion of our cash flows for each of the three years ended December 31, 2020, and of our outstanding debt, commitments and contingencies as of December 31, 2020.
•Critical Accounting Policies—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—Discussion of legal matters to which we are involved.
•Market Risk—Discussion of 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, content production and distribution, television stations, internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquirecompany that creates premium content that is widely accepted byand experiences for audiences worldwide.
Merger with Viacom Inc.
On December 4, 2019, Viacom Inc. (“Viacom”) merged with and generate both advertising and non-advertising revenues frominto CBS Corporation (“CBS”), with CBS continuing as the distribution of this content on multiple media platforms and to various geographic locations. The Company continues to increase its investment in premium content to enhance its opportunities for revenue growth, which include exhibitingsurviving company (the “Merger”). At 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 affiliated 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.

Operational Highlights 2017 vs. 2016
Consolidated results of operations    Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
GAAP:        
Revenues$13,692
 $13,166
 $526
 4 % 
Operating income$2,423
 $2,621
 $(198) (8)% 
Net earnings from continuing operations$1,309
 $1,552
 $(243) (16)% 
Net earnings$357
 $1,261
 $(904)
(72)% 
Diluted EPS from continuing operations$3.22
 $3.46
 $(.24) (7)% 
Diluted EPS$.88
 $2.81
 $(1.93) (69)% 
         
Non-GAAP: (a)
        
Adjusted operating income$2,819
 $2,861
 $(42) (1)% 
Adjusted net earnings from continuing operations$1,705
 $1,663
 $42
 3 % 
Adjusted net earnings$1,791
 $1,840
 $(49) (3)% 
Adjusted diluted EPS from continuing operations$4.19
 $3.71
 $.48
 13 % 
Adjusted diluted EPS$4.40
 $4.11
 $.29
 7 % 
(a) See pages II-7 and II-8 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 2017, revenues grew 4% to an all-time high of $13.69 billion, led by strong growth from affiliate and subscription fee revenues, which increased 26%, driven by higher station affiliation fees and retransmission revenues; Showtime Networks’ distributioneffective time of the Floyd Mayweather/Conor McGregor pay-per-view boxing event;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. (“NAI”) was the controlling stockholder of each of CBS and growth from new digital initiatives, includingViacom (and remains the Company’s owned streaming subscription services, controlling stockholder of ViacomCBS). Upon the closing of the Merger, the net assets of Viacom were combined with those of CBS All Accessat their historical carrying amounts and the Showtime digital streaming subscription service, and third-party live television streaming services. Growth in content licensing and distribution revenues also contributed to the revenue increase, and was driven by higher licensing sales. These increases were partially offset by lower advertising revenues, mainly resulting from the benefit to 2016 from the broadcast of Super Bowl 50companies have been presented on CBS and record political advertising sales during the 2016 Presidential election cycle.

a combined basis for all periods presented.

II-3





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



Impact of COVID-19
Operating income decreased 8% from 2016. Comparability of operating income wasThe coronavirus disease (“COVID-19”) pandemic negatively impacted by several discrete itemsthe macroeconomic environment in 2017the United States and 2016, including charges for pension settlements and restructuring activities. Adjusted operating income was down 1%, primarily due to a mix of lower-margin revenues in 2017 compared to 2016,globally, as well as an increased investment in programming, which the Company expects to monetize in the future across multiple platformsour business, financial condition and geographic regions. Net earnings from continuing operations decreased 16% due to the lower operating income as well as charges in 2017 resulting from the enactment of federal tax legislation and the early extinguishment of debt. Adjusted net earnings from continuing operations increased 3%.

Net earnings, which include the results of CBS Radio Inc. (“CBS Radio”)operations in discontinued operations, were $357 million in 2017 compared with $1.26 billion in 20162020. We experienced a material negative impact on our advertising revenues, particularly at the end of the first quarter and diluted earnings per share (“EPS”) was $.88 in 2017 compared with $2.81 in 2016. Discontinued operations for 2017 includes a net loss of $105 million fromthroughout the split-off of CBS Radio and a market value adjustment of $980 million recorded prior to the split-off to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”). (See Note 4 to the consolidated financial statements.) Discontinued operations for 2016 includes an impairment charge at CBS Radio of $444 million. Adjusted net earnings decreased 3% and adjusted diluted EPS grew 7% to $4.40. Diluted EPS benefited from lower weighted average shares outstandingsecond quarter, as a result of weakness in the shares retiredadvertising market as advertisers sought to reduce costs in response to the pandemic’s impact on their businesses, the cancellation of sporting events for which we have broadcast rights, including the NCAA Division I Men’s Basketball Championship (the “NCAA Tournament”) in the first quarter, and the delay of the 2020-21 television broadcast season as a result of temporary production shutdowns. The rate of decline was lower in the split-off of CBS Radio and the Company’s share repurchase program. Adjusted net earnings and adjusted diluted EPS are non-GAAP financial measures. See pages II-7 and II-8 for detailssecond half of the discrete items excludedyear, with sequential improvement in the third and fourth quarters. While we are not able to predict when or if advertising revenue will return to historical levels, we expect that it will be impacted to a lesser extent in 2021.

COVID-19 also had a negative effect on our content licensing revenues in 2020. Temporary television and film production shutdowns resulted in the abandonment of content that was not completed, delays in the delivery of programming to third parties, and fewer original programs and live events airing on our broadcast and cable networks. We also experienced lower demand for the licensing of our content from advertising-supported licensees. While production has resumed, we are not able to predict whether we will encounter future production delays or shutdowns, or if and to what extent content licensing revenues will continue to be negatively impacted. Additionally, with the resumption of production we began incurring incremental costs relating to health and safety protocols, which are expected to continue throughout 2021.

In addition, our theatrical revenues have been negatively impacted by the closure or reduction in capacity of movie theaters that show our films as a result of COVID-19, which impacted our theatrical releases in 2020. Accordingly, we have rescheduled certain theatrical releases and licensed others to our owned or third-party streaming services. We are not able to predict when or whether movie theaters will reopen at scale, whether consumers will return at the same levels they previously did because of concerns related to COVID-19 or because of changes to viewing habits, or whether revenues from theatrical releases will be comparable to historical levels.

While COVID-19 has negatively impacted parts of our business, we have benefited from increases in subscribers for our subscription streaming services and monthly active users (“MAUs”) for Pluto TV. Additionally, the impact from the lower revenues has been partially mitigated by lower costs as a result of decreases in production and distribution costs, mainly resulting from production shutdowns and fewer theatrical releases; lower advertising and promotion costs; and cost-savings initiatives. We have taken steps to strengthen our financial position during this period of market uncertainty, such as the issuance of long-term debt and redemption of near-term debt discussed under “Liquidity and Capital Resources,” and we will continue to actively monitor the potential impact of COVID-19 and related events on the commercial paper and credit markets.

The magnitude of the continuing impact of COVID-19 on our business, financial condition and results of operations will depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and reconciliationsextent of adjusted resultsthe pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the most directly comparable financial measurespandemic and such governmental actions, and economic and operating conditions in accordance with GAAP.

The Company generated operating cash flow from continuing operationsthe aftermath of $793 millionCOVID-19. Even after COVID-19 has subsided, we may experience materially adverse impacts to our business as a result of its global economic impact, including any recession that has occurred or may occur in 2017, which included discretionary pension contributions of $600 millionthe future. Due to prefund the Company’s qualified pension plans, compared with $1.45 billion in 2016. Free cash flow was $989 million for 2017 compared with $1.26 billion for 2016. These decreases were impacted by a decline in advertising revenues including from the benefit in 2016 from CBS’s broadcast of Super Bowl 50,evolving and an increased investment in internally-produced television programming, partially offset by higher affiliate and subscription fee revenues. Free cash flow is a non-GAAP financial measure. See “Free Cash Flow” on pages II-33 and II-34 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.

Recent Developments

Special Committee to Evaluate Potential Combination with Viacom Inc.
On February 1, 2018, the Company announced that its Board of Directors established a special committee of independent directors to evaluate a potential combination with Viacom Inc. There can be no assurance that this process will result in a transaction or on what terms any transaction may occur.

Pension Settlement
During the fourth quarter of 2017, the Company purchased a group annuity contract under which an insurance company has permanently assumed the Company’s obligation to pay and administer pension benefits to certainuncertain nature of the Company’s 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,pandemic, we are not able to estimate the Company’s outstanding pension benefit obligation was reduced by approximately $800 million, representing approximately 20%full extent of the total obligationsimpact on our business, financial condition and results of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a settlement charge of $352 million in the fourth quarter of 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.

operations.

II-4





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



Operational Highlights 2020 vs. 2019
Federal Tax Reform
Consolidated results of operationsIncrease/(Decrease)
Year Ended December 31,20202019$%
GAAP:
Revenues$25,285 $26,998 $(1,713)(6)%
Operating income$4,139 $4,146 $(7)— %
Net earnings from continuing operations
attributable to ViacomCBS
$2,305 $3,168 $(863)(27)%
Diluted EPS from continuing operations
attributable to ViacomCBS
$3.73 $5.13 $(1.40)(27)%
Net cash flow provided by operating activities from
continuing operations
$2,215 $1,171 $1,044 89 %
Non-GAAP: (a)
Adjusted OIBDA$5,132 $5,393 $(261)(5)%
Adjusted net earnings from continuing operations
attributable to ViacomCBS
$2,595 $2,983 $(388)(13)%
Adjusted diluted EPS from continuing operations
attributable to ViacomCBS
$4.20 $4.83 $(.63)(13)%
Free cash flow$1,891 $826 $1,065 129 %
On December 22, 2017,(a) See “Reconciliation of Non-GAAP Measures” and “Free Cash Flow” for reconciliations of non-GAAP results to the U.S. government enacted tax legislation containing significant changesmost directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).

For 2020, revenues decreased 6% to U.S. federal tax law (the “Tax Reform Act“),$25.29 billion from $27.00 billion in 2019, driven by the adverse effects of COVID-19 on our business, including alower demand in the advertising market, the closure or reduction in capacity of movie theaters, the federal corporate tax rate from 35%cancellation of live events for which we have the broadcast rights, and production shutdowns. The revenue comparison was also impacted by CBS’ broadcasts in 2019 of annual tentpole sporting events, the Super Bowl and the semifinals and championship games of the NCAA Tournament, which we have the rights to 21%broadcast on a rotational basis with other networks, including in 2019 and a one-time transition tax on cumulative foreign earnings2021. In addition, the games in the preceding rounds of the NCAA Tournament are shared equally each year between CBS and profits. The Company recorded a net provisional charge of $129 million forTurner Broadcasting System, Inc. (“Turner”). However, the year ended December 31, 2017, reflecting an estimated tax impact of $407 million on the Company’s historical accumulated foreign earnings and profits, partially offset by an estimated benefit of $278 million to adjust the Company’s deferred income tax balances2020 NCAA Tournament was cancelled as a result of COVID-19. These decreases were partially offset by a 49% increase in streaming revenues, reflecting growth across our streaming services, including Pluto TV, CBS All Access (to be rebranded as Paramount+ in March 2021), Showtime Networks’ premium subscription streaming service (“Showtime OTT”), and BET+, as well as record political advertising sales.

Operating income for 2020 remained flat at $4.14 billion. Each year was impacted by items identified as affecting comparability, including programming, restructuring and impairment charges and costs for other corporate matters, as well as a gain on the reduced corporate income tax rate.

The final impactssale of CNET Media Group (“CMG”) in 2020 and a gain on the sale of the Tax Reform Act may differ materially fromCBS Television City property and sound stage operation (“CBS Television City”) in 2019. See “Reconciliation of Non-GAAP Measures.” Adjusted OIBDA decreased 5%, primarily reflecting the current estimates since alldecline in revenues, partially offset by lower expenses as a result of production shutdowns, the necessary information was not available, prepared or analyzedabsence in sufficient detail to complete2020 of certain major sporting events, fewer theatrical releases, lower advertising and promotion costs reflecting the assessmentbroadcast of the Tax Reform Act. In addition, future interpretive guidance issued by federal and state tax authorities may impact the provisional amount. The Company will complete its analysis of this provisional amount and finalize and record any adjustments to its estimates within one year from the enactment of the Tax Reform Act.

CBS Radio Separation
On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Class A common stock upon completion of the merger of CBS Radio with Entercom.

Share Repurchases
The following is a summary of the Company’s purchases of its Class B Common Stock during the year ended December 31, 2017:
 
Total Number
of Shares
(in millions)
 
Average Price
Per Share
 
Dollar Value
of Shares Repurchased
 Remaining Authorization
Share repurchase program 16.2
   $64.70
   $1,050
   $3,057
 
Shares retired in split-off of CBS Radio 17.9
   $56.40
   1,007
     
Total 34.1
   $60.35
   $2,057
     

Dividends
      Increase/(Decrease) 
Year Ended December 31, 2017 2016 $ % 
Dividends per share $.72
 $.66
 $.06
 9 % 
Total dividends $289
 $294
 $(5) (2)% 

Debt
During 2017, the Company issued a total of $1.80 billion of senior debt at interest rates between 2.50% and 3.70%. The proceeds of these issuances were used to repay $400 million of senior notes which matured in July 2017 and to early redeem a total of $800 million of senior debt with interest rates of 4.625% and 5.75%. The remaining proceeds were used for general corporate purposes, including discretionary contributions to the Company’s qualified pension plansfewer original programs, and the repaymentbenefit from cost savings, including from restructuring activities. The lower expenses were partially offset by increased costs to support the growth and expansion of short-term borrowings,our streaming services.

For 2020, net earnings from continuing operations attributable to ViacomCBS and diluted EPS from continuing operations each decreased 27% from 2019. These comparisons were impacted by items identified as affecting comparability, including commercial paper. The redemptions resulted inthe aforementioned items impacting operating income, a loss on early extinguishment of debt of $49 million ($31 million, net of tax) for 2017.

II-5





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



in 2020, net gains from investments, and discrete tax items. Adjusted net earnings from continuing operations attributable to ViacomCBS and adjusted diluted EPS each decreased 13%, reflecting the lower Adjusted OIBDA and the noncontrolling interest’s share of profit from the licensing of South Park during the second quarter of 2020. Adjusted OIBDA, adjusted net earnings from continuing operations attributable to ViacomCBS and adjusted diluted EPS from continuing operations are non-GAAP financial measures. See “Reconciliation of Non-GAAP Measures” for details of the items excluded from financial results, and reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

We generated operating cash flows from continuing operations of $2.22 billion in 2020 compared with $1.17 billion in 2019. Free cash flow was $1.89 billion for 2020 compared with $826 million for 2019. These increases primarily reflect lower spending, including for programming, production, advertising and distribution costs resulting from production shutdowns related to COVID-19 and cost savings, as well as lower payments for income taxes in 2020. These items were partially offset by the decline in revenues and higher payments for restructuring, merger-related costs and costs to achieve synergies. Operating cash flow and free cash flow included payments for restructuring, merger-related costs and costs to achieve synergies which totaled $584 million and $362 million for 2020 and 2019, respectively. Also included in free cash flow for 2020 are capital expenditures of $40 million associated with costs to achieve synergies. Free cash flow is a non-GAAP financial measure. See “Free Cash Flow” for a reconciliation of net cash flow provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow.

Reconciliation of Non-GAAP Measures
Results for the years ended December 31, 20172020, 2019 and 20162018 included discretecertain items that were not part ofidentified 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 normal course of operations. The following tables present non-GAAP financial measures, which“adjusted measures”) exclude the impact of these discrete items reconciled to the most directly comparable financialand are measures of performance not calculated in accordance with GAAP. The Company believes that presenting its financial results adjustedWe use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for the impactplanning and forecasting of discrete items isfuture 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 it allowsthey allow investors to view performance in a manner similar to the method used by the Company’s management and providesour 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 underlyingadjusted measures are measures of performance not calculated in accordance with GAAP, they should not be considered in isolation of, the Company.or as a substitute for, operating income, earnings from continuing operations before income taxes, 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.

II-6
    
Year Ended December 31,2017
2016
Operating income$2,423
 $2,621
Discrete items:   
Pension settlement charges352
 211
Restructuring and merger and acquisition-related costs63
 38
Other operating items, net (a)
(19) (9)
Adjusted operating income$2,819
 $2,861


 Net Earnings from Continuing Operations 
Diluted EPS from Continuing Operations (f)
 
Year Ended December 31,2017 2016 2017 2016 
Reported (GAAP)$1,309
 $1,552
 $3.22
 $3.46
 
Discrete items:        
Pension settlement charges
(net of a tax benefit of $115 million in 2017 and $81 million in 2016)
237

130
 .58
 .29
 
Restructuring and merger and acquisition-related costs
(net of a tax benefit of $24 million in 2017 and $15 million in 2016)		39

23
 .10
 .05
 
Other operating items, net (net of a tax benefit of $4 million in 2017 and a tax provision of $4 million in 2016) (a)
(23)
(5) (.06) (.01) 
Loss on early extinguishment of debt
(net of a tax benefit of $18 million)
31

—
 .08
 —
 
Write-down of investments
(net of a tax benefit of $3 million in 2017) (b)
5

10
 .01
 .02
 
Federal tax reform (c)
129

—
 .32
 —
 
Tax items (d)
(22)
(47) (.05) (.10) 
Adjusted (Non-GAAP)$1,705
 $1,663
 $4.19
 $3.71
 





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



The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with GAAP.
 Net Earnings 
Diluted EPS (f)
 
Year Ended December 31,2017 2016 2017 2016 
Reported (GAAP)$357
 $1,261
 $.88
 $2.81
 
Discrete items:        
Pension settlement charges
(net of a tax benefit of $115 million in 2017 and $81 million in 2016)
237
 130
 .58
 .29
 
Restructuring and merger and acquisition-related costs
(net of a tax benefit of $24 million in 2017 and $15 million in 2016)		39
 23
 .10
 .05
 
Other operating items, net (net of a tax benefit of $4 million in 2017 and a tax provision of $4 million in 2016) (a)
(23) (5) (.06) (.01) 
Loss on early extinguishment of debt
(net of a tax benefit of $18 million)
31
 —
 .08
 —
 
Write-down of investments
(net of a tax benefit of $3 million in 2017) (b)
5
 10
 .01
 .02
 
Federal tax reform (c)
129
 —
 .32
 —
 
Tax items (d)
(64) (11) (.16) (.02) 
Discontinued operations items (e)
1,080
 432
 2.65
 .96
 
Adjusted (Non-GAAP)$1,791
 $1,840
 $4.40
 $4.11
 
Year Ended December 31,202020192018
Operating Income (GAAP)$4,139 $4,146 $5,062 
Depreciation and amortization (a)
430 438 427 
Restructuring and other corporate matters (b)
618 769 489 
Programming charges (b)
159 589 162 
Gain on sales (b)
(214)(549)— 
Adjusted OIBDA (Non-GAAP)$5,132 $5,393 $6,140 
(a) For 2017,Includes impairment charges of $25 million and $20 million to reduce the carrying value of intangible assets to fair value for 2020 and 2019, respectively. 2020 also includes a net gain relatingaccelerated depreciation of $12 million for technology that was abandoned in connection with synergy plans related to the disposition ofMerger.
(b) See notes on the following tables for additional information on items affecting comparability.
Year Ended December 31, 2020
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ViacomCBSDiluted EPS from Continuing Operations
Reported (GAAP)$3,147 $(535)$2,305 $3.73 
Items affecting comparability:
Restructuring and other corporate matters (a)
618 (133)485 .79 
Impairment charge (b)
25 (6)19 .03 
Depreciation of abandoned technology (c)
12 (3)9 .01 
Programming charges (d)
159 (39)120 .20 
Gain on sales (e)
(214)31 (183)(.30)
Net gains from investments (f)
(206)50 (156)(.25)
Loss on extinguishment of debt126 (29)97 .16 
Discrete tax items (g)
— (110)(110)(.18)
Impairment of equity-method investment— — 9 .01 
Adjusted (Non-GAAP)$3,667 $(774)$2,595 $4.20 
(a) Reflects severance, exit costs and other costs related to the Merger and a charge to write down property and equipment. For 2016, includes a gain from the sale of an internet business in China and a multiyear, retroactive impact of a new operating tax.equipment classified as held for sale.
(b) Reflects a charge to reduce the write-downcarrying values of a cost investmentFCC licenses in 2017 and an equity-method investment in 2016two markets to their fair values.
(c) Reflects a provisional chargeaccelerated depreciation for technology that was abandoned in connection with synergy plans related to the Merger.
(d) Programming charges primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.
(e) Reflects a gain on the enactmentsale of CMG.
(f) Primarily reflects an increase in the Tax Reform Actvalue of our investment in December 2017.fuboTV, Inc. (“fuboTV”), which was sold in the fourth quarter of 2020.
(d) For 2017, primarily(g) Primarily reflects a tax benefit from the resolutionremeasurement of certain stateour U.K. net deferred income tax matters andasset as a result of an increase in discontinued operations, athe U.K. corporate income tax benefitrate from the resolution of a tax matter in a foreign jurisdiction relating17% to a previously disposed business. For 2016, reflects a one-time tax benefit associated with a multiyear adjustment to a tax deduction, which was approved by the IRS19% enacted during the third quarter of 2016 and in discontinued operations, a charge from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.
(e) For 2017, reflects a loss on the split-off of CBS Radio of $105 million, or $.26 per diluted share; a market value adjustment of $980 million, or $2.41 per diluted share, recorded prior to the split-off to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom; adjustments to the loss on disposal of the Company’s Outdoor advertising business; and restructuring charges at CBS Radio of $7 million ($4 million, net of tax). For 2016, reflects a noncash impairment charge of $444 million ($427 million, net of tax) to reduce the carrying value of CBS Radio’s goodwill and FCC licenses to their fair value and restructuring charges at CBS Radio of $8 million ($5 million, net of tax).
(f) Amounts may not sum as a result of rounding.

Segments

CBS Corp. operates in the following four segments:
ENTERTAINMENT:  The Entertainment segment consists of the CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, Network Ten, CBS Interactive, and CBS Films as well as the Company’s digital streaming services, CBS All Access and CBSN.  Entertainment’s revenues are generated primarily from advertising sales, the licensing and distribution of its content, and affiliate and subscription fees.  The Entertainment segment contributed 67% to consolidated revenues in each of the years 2017, 2016 and 2015, and 55%, 53% and 51% to total segment operating income in 2017, 2016 and 2015, respectively.
2020.

II-7





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



Year Ended December 31, 2019
Earnings from Continuing Operations Before Income TaxesBenefit (Provision) for Income TaxesNet Earnings from Continuing Operations Attributable to ViacomCBSDiluted EPS from Continuing Operations
Reported (GAAP)$3,223 $29 $3,168 $5.13 
Items affecting comparability:
Restructuring and other corporate matters (a)
769 (133)636 1.03 
Impairment charge (b)
20 (6)14 .02 
Programming charges (c)
589 (142)447 .73 
Gain on sales (d)
(549)163 (386)(.63)
Net gains from investments (e)
(85)16 (69)(.11)
Discrete tax items (f)
— (827)(827)(1.34)
Adjusted (Non-GAAP)$3,967 $(900)$2,983 $4.83 
CABLE NETWORKS:  The Cable Networks segment consists(a) Reflects severance and exit costs relating to restructuring activities and costs incurred in connection with the Merger, legal proceedings involving the Company and other corporate matters.
(b) Reflects a charge to reduce the carrying value of Showtime Networks, including its digital subscription streaming offering, CBS Sports Networkour 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 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 18%, 16% and 18%decisions to consolidated revenuescease airing, alter future airing patterns or not renew certain programs, in 2017, 2016, and 2015, respectively, and 35%, 33% and 37% to total segment operating income in 2017, 2016 and 2015, respectively.
PUBLISHING:  The Publishing segment consists of Simon & Schuster’s consumer book publishing businessconnection 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 2017, 2016, and 2015, and 5% to total segment operating income in 2017 and 4% to total segment operating income in each of the years 2016 and 2015.
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 12%, 14% and 12% to consolidated revenues in 2017, 2016, and 2015, respectively, and 18%, 22%, and 19% to total segment operating income in 2017, 2016, and 2015, respectively.

Consolidated Results of Operations—2017 vs. 2016
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Advertising$5,753
  42%  $6,288
  48%  $(535) (9)% 
Content licensing and distribution3,952
  29
  3,673
  28
  279
 8
 
Affiliate and subscription fees3,758
  27
  2,978
  22
  780
 26
 
Other229
  2
  227
  2
  2
 1
 
Total Revenues$13,692
  100%  $13,166
  100%  $526
 4 % 
Advertising
For 2017, the 9% decrease in advertising revenues primarily reflects the benefit to 2016 from CBS’s broadcast of the Super Bowl, which is broadcast on the CBS Television Network on a rotating basis with other networks. CBS’s most recent Super Bowl broadcast was in 2016 and the next broadcast will be in 2019. The decline also reflects the benefit in 2016 from record political advertising sales during the 2016 Presidential election cycle. Underlying CBS Television Network advertising declined 2% in 2017, mainlymanagement changes implemented as a result of lower ratings for the Company’s programming, which was partially offset by higher pricing. In addition,Merger.
(d) Reflects a majoritygain on the sale of 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 fair value.
(f) Primarily reflects a deferred tax benefit of $768 million resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations; a tax benefit of $44 million realized in connection with the preparation of the CBS Television Network’s upfront advertising sales (“Upfront”) for the 2017/2018 television broadcast season are measuredfederal tax return, based on a live-plus-seven day viewing window, which began to benefit the Company’s advertising revenues in the fourth quarter of 2017.
In 2018, advertising revenues will benefit from political advertising sales from the U.S. midterm elections and the Company’s acquisition of Ten Network Holdings Limited (“Network Ten”) in the fourth quarter of 2017. The CBS Television Network’s Upfront for the 2017/2018 television broadcast season, which runs from the middle of September 2017 through the middle of September 2018, concluded with increases in pricing compared with the prior broadcast season, as well as a majority of agreements being based on a live-plus-seven day viewing window, which are each expected to benefit advertising revenues during the 2017/2018 broadcast season (See page I-2 for a description of the Upfront market). The advertising comparison in the second half of 2018 will be negatively affectedfurther clarity provided by the broadcastUnited States government on tax positions relating to federal tax legislation enacted in December 2017 (the “Tax Reform Act”); and a tax benefit of five Thursday Night Football games in 2017, which CBS will not broadcast in 2018. However, this will result in$39 million triggered by the bankruptcy of an improvement in the Company’s operating income margin. Overall advertising revenues for the Company will be dependent on ratings for its programming and market conditions, including demand in the scatter advertisinginvestee.

II-8





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



Year Ended December 31, 2018
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ViacomCBSDiluted EPS from Continuing Operations
Reported (GAAP)$3,984 $(580)$3,320 $5.35 
Items affecting comparability:
Restructuring and other corporate matters (a)
489 (116)373 .59 
Programming charges (b)
162 (39)123 .20 
Gain on 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)$4,670 $(1,044)$3,542 $5.70 
market, which is when advertisers purchase the remaining advertising spots closer(a) Primarily reflects severance and exit costs relating to the broadcast of the related programming.
Content Licensing and Distribution
Content licensing and distribution revenues are principally comprised of fees from the licensing of internally-produced television programming; fees from the distribution of third-party programming; and revenues from the publishing and distribution of consumer books. For 2017, the 8% increase in content licensing and distribution revenues reflected growth in both international and domestic licensing sales. The increase in domestic licensing sales was primarily driven by sales of NCIS: New Orleans, Madam Secretary and several titles from the CSI franchise. Internationally, the Company benefited from strong demand for its content during 2017, reflecting additional titles available for sale as a result of the Company’s recent increased investment in internally-produced series.

Content licensing and distribution revenue comparisons are impacted by fluctuations resulting from the timing of the availability of Company-owned 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. Unrecognized revenues attributable to signed license agreements for produced programming that is not yet available for exhibition were $670 million and $749 million at December 31, 2017 and 2016, respectively. The adoption of new Financial Accounting Standards Board (“FASB”) guidance on January 1, 2018, discussed below, increases the amount of unrecognized revenues attributable to license agreements for produced programming that is not yet available for exhibition to $1.33 billion. At December 31, 2017, the Company had approximately 650 episodes of scripted original programming that had not yet been made available in the secondary domestic marketplace (See page II-55 for a description of the secondary marketplace).

Total outstanding receivables attributable to revenues recognized under licensing agreements at December 31, 2017 and 2016 were $4.06 billion and $3.82 billion, respectively. At December 31, 2017, the total amount due from these receivables was $1.85 billion in 2018, $1.03 billion in 2019, $626 million in 2020, $327 million in 2021, and $230 million in 2022 and thereafter.

Affiliate and Subscription Fees
Affiliate and subscription fees are principally comprised of revenues received from MVPDs for carriage of the Company’s cable networks (“cable affiliate fees”),restructuring activities as well as for authorizingprofessional fees related to legal proceedings, cost transformation initiatives, investigations at our Company and the MVPDs’ carriageevaluation of potential merger activity.
(b) Reflects programming charges resulting from changes to our programming strategy, including at CBS Films and our Cable Networks segment, in connection with management changes.
(c) Reflects a loss on marketable securities of $23 million; an impairment charge of $46 million to write down an investment to its fair value; and a gain of $16 million on the Company’s owned television stationssale of a 1% equity interest in Viacom18 to our joint venture partner.
(d) Primarily reflects a net discrete tax benefit of $80 million related to the Tax 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 (“retransmission fees”IRS”); fees received from television stations affiliatedand 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 Network (“station affiliation fees”); subscription fees for digital streaming services; fees received from third-party live television streaming offerings (“virtual MVPDs”); and revenues received for the distributionCity in 2019.
Consolidated Results of pay-per-view boxing events. For 2017, the 26% increase in affiliate and subscription fees reflects revenues from Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, which contributed nine points of the growth. Underlying affiliate and subscription fee revenues increased 17%, led by 27% growth in station affiliation fees and retransmission fees, and 98% growth from digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime digital streaming subscription offering, and virtual MVPDs.Operations—2020 vs. 2019

Revenues
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.

Revenues by Type% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2020Revenues2019Revenues$%
Advertising$9,751 38 %$11,074 41 %$(1,323)(12)%
Affiliate9,166 36 8,602 32 564 7 
Content licensing5,963 24 6,483 24 (520)(8)
Theatrical180 1 547 2 (367)(67)
Other225 1 292 1 (67)(23)
Total Revenues$25,285 100 %$26,998 100 %$(1,713)(6)%

II-9





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



Streaming Revenues
AdoptionThe following tables present our global streaming revenues by type and by segment. Streaming revenues are earned from advertising on our pay and free streaming services, including Pluto TV, CBS All Access (to be rebranded as Paramount+ in March 2021), and CBSN; subscription fees for our pay streaming services, including CBS All Access, Showtime OTT, BET+ and Noggin; and advertising and subscriptions for our other digital video products.
Streaming Revenues by TypeIncrease/(Decrease)
Year Ended December 31,20202019$%
Advertising$1,418 $1,005 $413 41 %
Subscription (a)
1,143 709 434 61 
Total Streaming Revenues$2,561 $1,714 $847 49 %
Streaming Revenues by SegmentIncrease/(Decrease)
Year Ended December 31,20202019$%
TV Entertainment (b)
$911 $701 $210 30 %
Cable Networks (c)
1,650 1,013 637 63 
Total Streaming Revenues$2,561 $1,714 $847 49 %
(a) Subscription streaming revenues are included within affiliate revenues.
(b) Primarily includes CBS All Access, CBSN and other CBS branded digital video products.
(c) Primarily includes Pluto TV, Showtime OTT, BET+, Noggin, our international streaming services, and other digital video products.
Included in total streaming revenues are $2.46 billion and $1.63 billion of New Revenue Recognition Guidancedomestic revenues for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, our global streaming subscribers totaled 29.9 million, which included domestic subscribers of 19.2 million, and global MAUs for Pluto TV were 43.1 million, which included 30.1 million domestic MAUs. Global subscribers include customers who access our domestic or international streaming services, either directly through our owned and operated apps and websites, or through third-party distributors.
DuringAdvertising
Advertising revenues are generated primarily from the first quartersale of 2018, the Company will adopt new FASB guidanceadvertising spots on the recognition ofCBS Television Network, our basic cable networks and our television stations, as well as on our advertising-supported streaming services, and on our websites. Our advertising revenues include integrated marketing services, which will impactprovide unique branded content and custom sponsorship opportunities to our advertisers. For 2020, the comparability of12% decrease in advertising revenues during 2018. The adoption of this guidance will result in changes to the Company’s revenue recognition policies primarily relating to two areas of its content licensing and distribution operations. First, revenues from certain distribution arrangements of third-party content will be recognized based on the gross amount of consideration receivedwas driven by the Company,adverse effects of COVID-19, including lower demand in the advertising market and the cancellation of the NCAA Tournament, as well as the comparison against CBS’ broadcasts in 2019 of annual tentpole sporting events that we have the rights to broadcast on a rotational basis with a participation expense recognized forother networks, the fees paid toSuper Bowl and the third party. Under current accounting guidance, such revenues are recognized atnational semifinals and championship games of the net amount retainedNCAA Tournament. These decreases were partially offset by the Company after the payment of fees to the third party. This accounting change if adopted41% growth in 2017 would have increased 2017 revenuesadvertising from our streaming businesses, led by approximately $275 million, with no impact on operating income. Second,Pluto TV, as well as record political advertising revenues associated with the extensionU.S. presidential election in 2020.

In 2021, the advertising revenue comparison will benefit from the broadcasts of an existing licensing arrangement, which are currently recognized uponSuper Bowl LV and the execution of such extension, will be recognized at a later date onceNCAA Tournament. Under the extension period begins. This change will result in quarterly fluctuations incurrent contract with the Company’s results; however, itNFL, the Super Bowl is not expected to have a material impactbroadcast on the Company’s operating incomeCBS Television Network on an annuala rotating basis since revenues from extensions executed each year approximate revenues from extensions for whichwith other networks through the license period has begun. The Company will apply2022 season, with CBS broadcasting these games in 2019 and 2021. Under agreements with the modified retrospective method forNCAA and Turner, the adoption of this guidance and therefore revenues for reporting periods prior to 2018 will not be affected.
International Revenues
For 2017, international revenues increased 9% primarily as a result of higher television licensing sales. The Company generated approximately 15% and 14% of its total revenues from international regions in 2017 and 2016, respectively. In 2018, international revenues are expected to increase compared to the prior year as a result of the Company’s acquisition of Network Ten in the fourth quarter of 2017.
    % of   % of 
Year Ended December 31, 2017 International 2016 International 
United Kingdom $300
  15%  $279
  15%  
Other Europe 735
  37
  717
  39
  
Canada 279
  14
  256
  14
  
Asia 210
  10
  190
  10
  
Australia 166
  8
  167
  9
  
Other 327
  16
  240
  13
  
Total International Revenues $2,017
  100%  $1,849
  100%  
Operating Expenses
   % of   % of   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2017 Expenses 2016 Expenses $ % 
Programming$3,156
  37%  $2,941
  37%  $215
 7 % 
Production2,873
  34
  2,658
  34
  215
 8
 
Participation, distribution and
royalty
1,050
  13
  1,058
  13
  (8) (1) 
Other1,359
  16
  1,299
  16
  60
 5
 
Total Operating Expenses$8,438
  100%  $7,956
  100%  $482
 6 % 
Programming
Programming expenses reflect the amortization of acquired programs exhibited on television broadcast and cable networks, and television stations. For 2017, the 7% increase in programming expenses was driven by costs associated with Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event; CBS’s broadcast of thenational semifinals and finalschampionship games of the NCAA Tournament are broadcast on CBS every other year through 2032, including in 2019 and an increased investment2021, and in cable programming. Costseach year the games in 2016 associated with CBS’s broadcastthe preceding rounds of Super Bowl 50 partially offset these increases.the tournament are shared equally between CBS and Turner.

II-10





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



However, the 2020 NCAA Tournament was cancelled as a result of COVID-19. The benefit from the broadcasts of these sporting events in 2021 will be partially offset by lower political advertising sales.
Production
Production expenses reflectFor 2020, domestic advertising revenues decreased 12% to $8.57 billion from $9.72 billion for 2019, and international advertising revenues decreased 13% to $1.18 billion from $1.36 billion for 2019, including the amortizationunfavorable impact of direct costsforeign exchange rate changes of internally-developed2 percentage points.

Affiliate
Affiliate revenues are principally comprised of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television streaming services (“virtual MVPDs” or “vMVPDs”) for carriage of our cable networks (“cable affiliate fees”), fees received from television stations affiliated with the CBS Television Network (“reverse compensation”); fees for authorizing the MVPDs’ and vMVPDs’ carriage of our owned television stations (“retransmission fees”); and subscription fees for our streaming services. For 2020, affiliate revenues increased 7% reflecting growth from subscription streaming revenues, higher reverse compensation and retransmission fee revenues, and the launch of our basic cable networks on a vMVPD service. Subscription streaming revenues grew 61% primarily reflecting subscriber growth for CBS All Access and Showtime OTT, and the launch of BET+ in September 2019. Reverse compensation and retransmission fee revenues increased 19%, driven by annual contractual increases and contract renewals with television stations affiliated with the CBS Television Network, MVPDs and vMVPDs. These increases were partially offset by lower linear affiliate fees for our cable networks from MVPDs, reflecting subscriber declines. For 2020, domestic affiliate revenues increased 7% to $8.52 billion from $7.94 billion for 2019, while international affiliate revenues decreased 3% to $645 million from $665 million for 2019, including the unfavorable impact of foreign exchange rate changes of 2 percentage points.

Content Licensing
Content licensing revenues are principally comprised of fees from the licensing of exhibition rights for our internally-produced television and theatrical film programming to cable and broadcast networks, television stations, 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 other televisionfrom 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. For 2020, content licensing revenues decreased 8%, reflecting a lower volume of licensing primarily as a result of several significant licensing agreements for library programming in the prior-year periods, production costs,shutdowns because of COVID-19, and significant revenues in the 2019 periods from the licensing of the final season of several series, including on-air talent. For 2017,Jane the 8% increase in production expenses reflected an increased investment in internally-developed television seriesVirgin and higher costs associated with the increase in television licensing revenues.

Participation, Distribution and Royalty
Participation, distribution and royalty costs primarily include participation and residual expenses for television programming, royalty costs for Publishing content and other distribution expenses incurred with respect to television content, such as print and advertising. For 2017, the 1%decrease in participation, distribution and royalty costs was primarily drivenElementary. These declines were partially offset by the mixlicensing of titles sold under televisionthe domestic streaming rights to South Park to an SVOD provider in 2020.

Revenues from the licensing arrangements.

During the first quarter of 2018, the Company will adopt new FASB guidance on the recognition of revenues which will result in changes to the Company’s revenue recognition policies relating to certain distribution arrangements of third-party content. Beginning in 2018, these revenues will be recognized based on the gross amount of consideration received by the Company for such sale, with an associated participation expense recognized for the fees paid to the third party. Under current accounting guidance, such revenuesexhibition rights are recognized at the net amount retained bybeginning of the Company after the payment of participationslicense period in which programs are made available to the third party. This accounting change if adopted in 2017 would have increased 2017 participation, distributionlicensee for exhibition, and royalty expensestherefore, content licensing revenue comparisons are impacted by approximately $275 million, with a corresponding increase in revenues.
Other
Other operating expenses primarily include compensation and costs associated with book sales, including printing and warehousing. For 2017, the 5% increase in other operating expenses mainly reflected higher compensation costs associated with the Company’s growth initiatives and increased costsfluctuations resulting from a higher volumethe timing of book sales.the availability of our programming for multiyear licensing agreements.

Selling, General and Administrative ExpensesTheatrical
   % of   % of Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Selling, general and administrative
expenses
$2,212
  16%  $2,124
  16%  $88
 4% 
Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy and back office support. The 4% increase in SG&A expenses primarily reflected higher advertising and marketing costs, mainly to support the Company’s growth initiatives. During the first quarter of 2018, the Company will adopt new FASB guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”) which requires that the components of net benefit cost other than service cost be presented in the statement of operations separatelyTheatrical revenues are principally earned from the service cost component and belowworldwide theatrical distribution of films through audience ticket sales. For 2020, the subtotaldeclines in theatrical revenues reflect the impact from the closure or reduction in capacity of operating income. As a resultmovie theaters in response to COVID-19 throughout most of the adoption of this guidance, the Company’s SG&A expenses for 2017 and 2016 will decrease by $89 million and $72 million, respectively. (See Note 15 to the consolidated financial statements.)

Depreciation and Amortization2020.
II-11
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Depreciation and amortization$223
 $225
 $(2) (1)% 







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



Other
Pension SettlementOther revenues are principally comprised of revenues from the rental of production facilities and digital revenues from search and e-commerce partners. For 2020, other revenues decreased 23%, primarily reflecting lower revenues from the rental of our production facilities as a result of the shutdown of production due to COVID-19.

Operating Expenses
% of% of
Operating Expenses by TypeOperatingOperatingIncrease/(Decrease)
Year Ended December 31,2020Expenses2019Expenses$%
Production$6,425 43 %$6,797 41 %$(372)(5)%
Programming3,779 25 4,287 26 (508)(12)
Participation, residual and
distribution
2,634 18 3,147 19 (513)(16)
Programming charges159 1 589 3 (430)n/m
Other1,995 13 1,893 11 102 5 
Total Operating Expenses$14,992 100 %$16,713 100 %$(1,721)(10)%
n/m - not meaningful
Production
Production expenses principally reflect the amortization of costs of internally-produced television and theatrical film content as well as other television production costs, including on-air talent. For 2020, the 5% decrease primarily reflects a lower volume of production resulting from the impact of COVID-19, including fewer episodes of our original programming and a lower number of theatrical releases.

Programming
Programming expenses reflect the amortization of acquired programs exhibited on our television broadcast networks, cable networks and television stations. For 2020, the 12% decrease in programming expenses was driven by lower sports programming costs, including from the comparison against CBS’ broadcasts of NCAA Tournament games in 2019. The decline also reflects the mix of programming on our broadcast network.

Participation, Residual and Distribution
Participation, residual and distribution costs primarily include participation and residual expenses for television and film programming and other distribution expenses incurred with respect to film and television content, such as print and advertising. For 2020, participation, residual and distribution costs decreased 16% reflecting distribution costs in the prior-year periods to support theatrical releases, including Gemini Man, Rocketman,and Dora and the Lost City of Gold. Theatrical distribution costs were significantly lower in the 2020 periods as a result of the closure or reduced capacity of movie theaters due to COVID-19. The lower expenses also reflect the decline in content licensing revenues, as well as the mix of titles licensed in each year.

Programming Charges
During 2020, we recorded programming charges of $159 million primarily related to the fourth quarterabandonment of 2017,certain incomplete programs resulting from production shutdowns related to COVID-19.

During 2019, in connection with the Company purchased a group annuity contract under which an insurance company has permanently assumedMerger, we implemented management changes across the Company’s obligation to pay and administer pension benefits to certain of the Company’s 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, the Company’s outstanding pension benefit obligation was reduced by approximately $800 million, representing approximately 20% of the total obligations of the Company’s qualified pension plans.organization. In connection with this transaction, the Company recorded a settlement chargethese changes, we performed an evaluation of $352 million in the fourth quarterour programming portfolio across all of 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.

During 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 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 settlement charge of $211 million reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.

Restructuring and Merger and Acquisition-Related Costs
During the year ended December 31, 2017, 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 $63 million, reflecting $54 million of severance costs and $9 million of costs associated with exiting contractual obligations and other related costs. These restructuring activities are expected to reduce the Company’s annual cost structure by approximately $50 million.

During the year ended December 31, 2016, 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.

As of December 31, 2017, the cumulative settlements for the 2017, 2016, and 2015 restructuring charges were $68 million, of which $45 million was for severance costs and $23 million related to costs associated with exiting contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reserves by the end of 2018.our
II-12
 Balance at 2017 2017 Balance at
 December 31, 2016 Charges Settlements December 31, 2017
Entertainment $20
  $44
  $(18)   $46
 
Cable Networks 4
  —
  (3)   1
 
Publishing 1
  5
  (3)   3
 
Local Media 12
  12
  (7)   17
 
Corporate 2
  2
  (1)   3
 
Total $39
  $63
  $(32)   $70
 






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
 
In 2016,businesses, including an assessment of the Company incurred professional feesoptimal use of $8our 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 mergerchanges in the expected monetization of certain programs, and acquisition-related activities.decisions to cease airing, alter future airing patterns or not renew certain programs.

Other
Other Operating Items, Net
operating expenses primarily include compensation, revenue-sharing costs with our affiliated stations, and other ancillary and overhead costs associated with our operations. For 2017,2020, the 5% increase in other operating items, net reflectedexpenses was driven by increased revenue-sharing costs as a net gain relating toresult of the disposition of propertygrowth in retransmission and equipment. For 2016,subscription streaming revenues.

Selling, General and Administrative Expenses
Increase/(Decrease)
Year Ended December 31,20202019$%
Selling, general and administrative expenses$5,320 $5,481 $(161)(3)%
Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy, professional service fees and back office support, including employee compensation. The 3% decrease in SG&A expenses was driven by savings from restructuring and other operating items, net included a gain from the disposition of an internet business in Chinacost savings initiatives, as well as lower travel and a multiyear, retroactive impact of a new operating tax.

Interest Expenseentertainment and Interest Income
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Interest expense$(457) $(411) $46
 11% 
Interest income$64
 $32
 $32
 100% 
The following table presents the Company’s outstanding debt balances, excluding capital leases and discontinued operations debt, and the weighted average interest rate as of December 31, 2017 and 2016:
   Weighted Average   Weighted Average 
At December 31,2017 Interest Rate 2016 Interest Rate 
Total long-term debt$9,426
  4.26%  $8,850
  4.47%  
Commercial paper$679
  1.88%  $450
  0.98%  
Loss on Early Extinguishment of Debt
For 2017, the loss on early extinguishment of debt of $49 million reflected a pretax lossother expense decreases associated with shutdowns resulting from COVID-19. The decrease in SG&A expenses also includes lower advertising and promotion costs reflecting the redemptionbroadcast of fewer original programs, partially offset by increased costs to support the Company’s $500growth and expansion of our streaming services.

Depreciation and Amortization
Increase/(Decrease)
Year Ended December 31,20202019$%
Depreciation and amortization$430 $438 $(8)(2)%

Depreciation and amortization expense reflects depreciation of fixed assets, including transponders and equipment under finance leases, amortization of finite-lived intangible assets, and impairment of fixed and intangible assets, when applicable. For 2020, amortization expenseincluded an impairment charge of $25 million outstanding 5.75% senior notes due April 2020 andin the Company’s $300 million outstanding 4.625% senior notes due May 2018.

Other Items, Net
Other items, net for 2017 and 2016 primarily consistedTV Entertainment segment to write down the carrying values of foreign exchange gains and losses and for 2017, also included write-downs of cost investmentsFCC licenses in two markets to their fair values (see Note 6 to the consolidated financial statements) and accelerated depreciation of $12 million resulting from the abandonment of technology in connection with synergy plans related to the Merger (see Note 4 to the consolidated financial statements). For 2019, amortization expense included an impairment charge of $20 million to reduce the carrying value of broadcast licenses in Australia to their fair value. The comparison for depreciation and amortization also includes a decline as a result of assets that became fully depreciated.


II-13





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



Restructuring and Other Corporate Matters
During 2020 and 2019, we recorded costs for restructuring and other corporate matters as follows:
Year Ended December 31,20202019
Severance$472 $395 
Exit costs and other70 23 
Restructuring charges542 418 
Merger-related costs56 294 
Other corporate matters20 57 
Restructuring and other corporate matters$618 $769 
During the year ended December 31, 2020, we recorded restructuring charges of $542 million, associated with cost-transformation initiatives in connection with the Merger in an effort to reduce redundancies across our businesses. These charges primarily consist of severance costs, including the accelerated vesting of stock-based compensation. In addition, in 2020 we incurred costs of $56 million in connection with the Merger, consisting of professional fees mainly associated with integration activities, as well as transaction-related bonuses. We also incurred costs of $5 million for professional fees associated with dispositions and other corporate matters, and we recorded a charge of $15 million to write down property and equipment that has been classified as held for sale to its fair value less costs to sell.

During the year ended December 31, 2019, we recorded restructuring charges of $418 million, primarily for severance costs, including the accelerated vesting 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 were 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 financial 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 $17 million associated with legal proceedings involving the Company (see Note 20 to the consolidated financial statements) and other corporate matters.
Included in restructuring charges for both 2020 and 2019 were costs resulting from the termination of contractual obligations and charges associated with the exit of leases.

Gain on Sales
In 2020, we completed the sale of CMG to Red Ventures for $484 million, including an estimated working capital adjustment.The purchase price consisted of a cash payment at closing of $459 million and a credit of $25 million to be used over five years for the purchase of advertising and licensing of data from Red Ventures. This transaction resulted in a gain of $214 million.

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. This transaction resulted in a gain of $549 million for 2019, which included a reduction for the present value of the estimated amount payable under the guarantee obligation.

II-14



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

Interest Expense and Interest Income
Increase/(Decrease)
Year Ended December 31,20202019$%
Interest expense$(1,031)$(962)$69 7 %
Interest income$60 $66 $(6)(9)%
The following table presents our outstanding debt balances, excluding finance leases, and the weighted average interest rate as of December 31, 2020 and 2019:
Weighted AverageWeighted Average
At December 31,2020Interest Rate2019Interest Rate
Total long-term debt$19,612 4.80 %$17,976 4.70 %
Commercial paper$— n/a$699 2.07 %
Other bank borrowings$95 3.50 %$— n/a
n/a - not applicable
Net Gains from Investments
For 2020, net gains from investments of $206 million primarily reflect an increase of $213 million in the fair value of our investment in fuboTV, which was sold in the fourth quarter of 2020, and for 2019 net gains from investments of $85 million reflect 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 fair value.

Loss on Extinguishment of Debt
For 2020, we recorded a loss on extinguishment of debt of $126 million associated with the early redemption of $2.77 billion of our long-term debt.

Other Items, Net
The following table presents the components of Other items, net.
Year Ended December 31,20202019
Pension and postretirement benefit costs$(69)$(99)
Foreign exchange losses(35)(18)
Other3 5 
Other items, net$(101)$(112)
Provision for Income Taxes
The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.
Year Ended December 31,2017 2016 Increase/(Decrease)
Provision for income taxes, including interest and before other
discrete items

$(565) $(686)  (18)% 
Excess tax benefits from stock-based compensation (a)
44
 —
    
Other discrete items (b)
17
 58
    
Federal tax reform (c)
(129) —
    
Provision for income taxes$(633) $(628)  1 % 
Effective income tax rate32.0% 28.2%    
(a) Reflects excess tax benefits associated with the exercise For 2020, we recorded a provision for income taxes of stock options and vesting of RSUs. During the first quarter of 2017, the Company adopted FASB guidance which requires that the difference between the tax benefit from stock-based compensation expense and the deduction on the tax return be recognized within the$535 million, reflecting an effective income tax rate of 17.0%. Included in the provision on the statement of operations. Previously, such differencefor income taxes was recognized in stockholders’ equity on the balance sheet. This difference occurs because stock-based compensation expense is determined based on the grant-date fair value of the award, whereas the tax deduction is based on the fair value on the date the stock option is exercised or the RSU vests. This guidance requires the income statement classification to be applied prospectively, and therefore, excess tax benefits for prior periods remain classified in stockholders’ equity.
(b) For the year ended December 31, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters. For the year ended December 31, 2016, primarily reflects a one-timediscrete tax benefit of $47$110 million, associated withprimarily consisting of a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.
(c) Reflects the impact of the enactment of the Tax Reform Act in December 2017. As a result of this tax law, the Company recorded a net provisional charge of $129 million for the year ended December 31, 2017, reflecting an estimated tax impact of $407 million on the Company’s historical accumulated foreign earnings and profits, partially offset by an estimated benefit of $278$100 million to adjust the Company’sremeasure our U.K. net deferred income tax balancesasset as a result of the reductionan increase in the federalU.K. corporate income tax rate from 35%17% to 21%.

For 2018,19% enacted during the Company’s annual effective income tax rate is expected to be approximately 24% before any potential discrete items, including the tax impacts from stock-based compensation. This rate reflects a reduction in the federal corporate income tax rate to 21% beginning in 2018third quarter, as well as a resultbenefit of $13 million realized in connection with the preparation of the enactment2019 tax returns. These items, together with a net tax benefit of $129 million on the Tax Reform Act.

Equityitems identified as affecting comparability in LossReconciliation of Investee Companies, Net of Tax
The following table presents equity in earnings (loss) of investee companies for the Company’s domesticNon-GAAP Measures, including restructuring and international equity investments.other
II-15
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Domestic$(61) $(67) $6
 9 % 
International2
 (8) 10
 125 % 
Tax benefit22
 25
 (3) (12) 
Equity in loss of investee companies, net of tax$(37) $(50) $13
 26 % 







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



corporate matters, programming charges, and net gains from investments, reduced our effective income tax rate by 4.1 percentage points.

For 2019, we recorded a tax benefit of $29 million, reflecting an effective income tax rate of (0.9)%. Included in the benefit for income taxes were discrete items of $827 million, primarily consisting of a tax benefit of $768 million resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations, a tax benefit of $44 million realized in connection with the preparation of the 2018 federal tax return, based on further clarity provided by the U.S. government on tax positions relating to the Tax Reform Act, and a tax benefit of $39 million principally related to the bankruptcy of an investee. These items, taken together with a net tax benefit of $102 million on the items identified as affecting comparability in Reconciliation of Non-GAAP Measures, including restructuring and other corporate matters, programming charges, and gain on sales, reduced the effective income tax rate by 23.6 percentage points.

In March 2020, the U.S. government enacted tax legislation containing provisions to support businesses during the COVID-19 pandemic (the “CARES Act”), including deferment of the employer portion of certain payroll taxes, refundable payroll tax credits, and technical amendments to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on our consolidated financial statements for 2020. We do not expect the future impact of the CARES Act provisions to be material.

Equity in Loss of Investee Companies, Net of Tax
The following table presents equity in loss of investee companies for our equity-method investments.
Increase/(Decrease)
Year Ended December 31,20202019$%
Equity in loss of investee companies$(47)$(72)$25 35 %
Tax benefit19 19 — — 
Equity in loss of investee companies, net of tax$(28)$(53)$25 47 %
For 2016,2020, equity in loss of investee companies, net of tax included $10includes an impairment charge of $9 million for the write-down ofrelating to an international television joint venture to its fair value.venture.

Net Earnings from Continuing Operations and Diluted EPS from Continuing OperationsAttributable to Noncontrolling Interests
Year Ended December 31,20202019
Net earnings attributable to noncontrolling
    interests
$(279)$(31)
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Net earnings from continuing operations$1,309
 $1,552
 $(243) (16)% 
Diluted EPS from continuing operations$3.22
 $3.46
 $(.24) (7)% 
For 2017, the decreases in 2020,net earnings from continuing operations and diluted EPS from continuing operationsattributable to noncontrolling interests primarily reflects our joint venture partners’ share of 16% and 7%, respectively, were driven by pension settlement charges of $352 million ($237 million, net of tax); in 2017 compared with $211 million ($130 million, net of tax) in 2016; a provisional charge of $129 millionprofit from the enactmentlicensing of the Tax Reform Actdomestic streaming rights to South Park to an SVOD provider in December 2017; and a charge of $49 million ($31 million, net of tax) from the early extinguishment of debt. Diluted EPS from continuing operations benefited from lower weighted average shares outstanding as a result of the Company’s share repurchases and the shares retired as a result of the split-off of CBS Radio during the fourthsecond quarter of 2017.2020.

Net Loss from Discontinued Operations
On February 2, 2017, the Company entered into an agreement with Entercom to combine the Company’s radio business, CBS Radio, with Entercom in a merger effected through a Reverse Morris Trust transaction, which was tax-free to CBS Corp. and its stockholders. Beginning in the fourth quarter of 2016, CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.

On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Class A common stock upon completion of the merger.

During the fourth quarter of 2017, upon closing of the transaction, the Company recorded a net loss of $105 million calculated as follows:
II-16
Fair value of CBS Corp. Class B Common Stock accepted  
(17,854,689 shares at $56.40 per share on November 16, 2017) $1,007
Carrying value of CBS Radio (a)
 (1,112)
Net loss on split-off of CBS Radio $(105)

(a) Net of a market value adjustment of $980 million recorded prior to the split-off.

The split-off was a tax-free transaction and therefore, there is no tax impact on the loss.

In connection with the Company’s plan to dispose of CBS Radio, in October 2016, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 and the issuance of $400 million of 7.25% senior unsecured notes due 2024 through a private placement.




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 31,20202019$%
Net earnings from continuing operations attributable to
ViacomCBS		$2,305 $3,168 $(863)(27)%
Diluted EPS from continuing operations attributable to
ViacomCBS		$3.73 $5.13 $(1.40)(27)%
For 2020, net earnings from continuing operations attributable to ViacomCBS and diluted EPS from continuing operations each decreased 27%, reflecting higher discrete tax benefits in 2019.

Net Earnings from Discontinued Operations, Net of Tax
During the fourth quarter of 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House LLC, a wholly owned subsidiary of Bertelsmann SE & Co. KGaA. Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented.

The following tables set forth details of net earnings (loss) from discontinued operations for the years ended December 31, 20172020 and 2016.2019.
Year Ended December 31, 2020Simon & Schuster
Other (a)
Total
Revenues$901 $— $901 
Costs and expenses:
Operating573 (19)554 
Selling, general and administrative172 — 172 
Depreciation and amortization5 — 5 
Restructuring charges10 — 10 
Total costs and expenses760 (19)741 
Operating income141 19 160 
Other items, net(5)— (5)
Earnings from discontinued operations136 19 155 
Income tax provision(34)(4)(38)
Net earnings from discontinued operations, net of tax$102 $15 $117 
Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
 $—
 $1,018
Costs and expenses:     
Operating364
 —
 364
Selling, general and administrative446
 (1) 445
Market value adjustment980
(a) 
—
 980
Restructuring charges7
(b) 
—
 7
Total costs and expenses1,797
 (1) 1,796
Operating income (loss)(779) 1
 (778)
Interest expense(70) —
 (70)
Earnings (loss) from discontinued operations(849) 1
 (848)
Income tax benefit (provision)(55) 45
(c) 
(10)
Earnings (loss) from discontinued operations, net of tax(904) 46
 (858)
Net gain (loss) on disposal(109) 13
 (96)
Income tax benefit (provision)4
 (2) 2
Net gain (loss) on disposal, net of tax(105) 11
(d) 
(94)
Net earnings (loss) from discontinued operations, net of tax$(1,009) $57
 $(952)
Year Ended December 31, 2019Simon & Schuster
Other (a)
Total
Revenues$814 $— $814 
Costs and expenses:
Operating510 (50)460 
Selling, general and administrative166 — 166 
Depreciation and amortization5 — 5 
Restructuring charges6 — 6 
Total costs and expenses687 (50)637 
Operating income127 50 177 
Other items, net(5)— (5)
Earnings from discontinued operations122 50 172 
Income tax provision(20)(12)(32)
Net earnings from discontinued operations, net of tax$102 $38 $140 
(a) During 2017, priorPrimarily relates to the split-off, CBS Radio was measured each reporting period, beginning with the first quarter of 2017, 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, the carrying value of CBS Radio was measured at the value indicated by the stock valuation of Entercom. As a result, the Company recorded a market value adjustment of $980 million during the nine months ended September 30, 2017 to adjust the carrying value of CBS Radio as follows:
First Quarter 2017 $(715)
Second Quarter 2017 (365)
Third Quarter 2017 100
  $(980)
(b) Reflects restructuring chargesindemnification obligations for leases associated with the reorganizationpreviously discontinued operations of certain business operations, including severance costs and costs associated with exiting contractual obligations.
(c) 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.
(d) Reflects adjustments to the loss on disposal of the Company’s outdoor advertising businesses, primarily from a decrease to the guarantee liability associated with the 2013 disposal of the Company’s outdoor advertising business in EuropeFamous Players Inc. (“Outdoor Europe”Famous Players”).



II-17





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



Year Ended December 31, 2016CBS Radio 
Other (b)
 Total
Revenues$1,220
 $—
 $1,220
Costs and expenses:     
Operating397
 —
 397
Selling, general and administrative497
 —
 497
Depreciation and amortization26
 —
 26
Restructuring charges8
(a) 
—
 8
Impairment charge444
 —
 444
Total costs and expenses1,372
 —
 1,372
Operating loss(152) —
 (152)
Interest expense(17) —
 (17)
Other income2
 —
 2
Loss from discontinued operations(167) —
 (167)
Income tax provision(88) (36) (124)
Net loss from discontinued operations, net of tax$(255) $(36) $(291)
(a) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.
(b) Reflects a charge 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.
The results of CBS Radio for 2016 included a pretax noncash impairment charge of $444 million ($427 million, net of tax) to reduce the carrying value of CBS Radio’s goodwill and FCC licenses in 11 markets to their fair value.

Net Earnings and Diluted EPS
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Net earnings$357
 $1,261
 $(904) (72)% 
Diluted EPS$.88
 $2.81
 $(1.93) (69)% 
Consolidated Results of Operations— 20162019 vs. 20152018
Revenues
Revenues by Type  % of Total   % of Total Increase/(Decrease) Revenues by Type% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2016 Revenues 2015 Revenues $ % Year Ended December 31,2019Revenues2018Revenues$%
Advertising$6,288
 48% $5,824
 46% $464
 8 % Advertising$11,074 41 %$10,841 41 %$233 2 %
Content licensing and distribution3,673
 28
 3,903
 31
 (230) (6) 
Affiliate and subscription fees2,978
 22
 2,724
 21
 254
 9
 
AffiliateAffiliate8,602 32 8,376 32 226 3 
Content licensingContent licensing6,483 24 6,163 23 320 5 
TheatricalTheatrical547 2 744 3 (197)(26)
Other227
 2
 220
 2
 7
 3
 Other292 1 301 1 (9)(3)
Total Revenues$13,166
 100% $12,671
 100% $495
 4 % Total Revenues$26,998 100 %$26,425 100 %$573 2 %
Advertising
For 2016,2019, the 8%2% increase in advertising revenues was driven by CBS’s5% growth in domestic advertising revenues, reflecting CBS’ broadcast of the tentpole sporting events in 2019, mainly Super Bowl which is broadcast onLIII and the CBS Television Network on a rotating basis with other networks;national semifinals and championship games of the NCAA Tournament, as well as higher political advertising sales; and 3% growth in underlying network advertising. The increase in network advertising reflects higher pricing,revenues from our streaming businesses, including from increased demand,Pluto TV. These increases were partially offset by lower ratings,political advertising sales at our owned television stations, as a result of the benefit to 2018 from midterm elections. International advertising revenues decreased 14%, reflecting the unfavorable impact of foreign exchange rate changes, as well as softness in the Australian and U.K. 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.
Affiliate
For 2019, the 3% increase in affiliate revenues reflects 20% growth in reverse compensation and retransmission fee revenues, driven by annual contractual increases and contract renewals with MVPDs and vMVPDs, 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 2018 driven by the unfavorable impact of foreign exchange rate changes. Foreign exchange rate changes had an unfavorable impact of 1-percentage point on the total affiliate revenues comparison and 6-percentage points on the international affiliate revenues comparison.

Content Licensing
For 2019, content licensing revenues increased 5%, primarily reflecting higher revenues from the broadcastdomestic licensing of NFL games.our content, driven by the production of programming for third parties and the licensing of programming to SVOD providers. These increases were partially offset by a decline in international licensing revenues.


Theatrical
For 2019, theatrical revenues decreased 26%, principally reflecting a difficult comparison to 2018, which included the 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. Domestic theatrical revenues decreased 31% and international theatrical revenues decreased 23%.

II-18





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



Other
Content LicensingFor 2019, other revenues decreased 3%, mainly reflecting lower revenues from the rental of our production facilities as a result of the sale of CBS Television City in January 2019.

Operating Expenses
% of Total% of Total
Operating Expenses by TypeOperatingOperatingIncrease/(Decrease)
Year Ended December 31,2019Expense2018Expense$%
Production$6,797 41 %$6,483 42 %$314 5 %
Programming4,287 26 3,965 26 322 8 
Participation, residual and
distribution
3,147 19 3,057 20 90 3 
Programming charges589 3 162 1 427 n/m
Other1,893 11 1,732 11 161 9 
Total Operating Expenses$16,713 100 %$15,399 100 %$1,314 9 %
n/m - not meaningful
Production
For 2019, the 5% increase in production expenses reflected an increased investment in content, including a higher number of series produced for distribution on multiple platforms, including our streaming services and Distribution
For 2016,cable networks, as well as higher amortization of television production costs associated with the 6%decreaseincrease in content licensing and distribution revenues primarily reflected lower domestic television licensing revenues compared with 2015, which included sales of NCIS,Elementary and CSI. A significant contributor to television licensing revenues in 2016 was the international licensing of five Star Trek series.

Affiliate and Subscription Fees
For 2016, the 9% increase in affiliate and subscription fees reflected 35% growth in station affiliation fees and retransmission fees, and revenues from the Company’s streaming subscription services, including CBS All Access and the Showtime digital streaming subscription offering.revenues. These increases were partially offset by the benefit to 2015 from Showtime Networks’ distributionlower amortization of the Floyd Mayweather/Manny Pacquiao boxing event.feature film costs, driven by costs in 2018 associated with Mission: Impossible - Fallout.

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 Total   % of Total   
Operating Expenses by Type  Operating   Operating Increase/(Decrease) 
Year Ended December 31,2016 Expense 2015 Expense $ % 
Programming$2,941
  37%  $2,892
  37%  $49
 2 % 
Production2,658
  34
  2,604
  33
  54
 2
 
Participation, distribution and
royalty
1,058
  13
  1,109
  14
  (51) (5) 
Other1,299
  16
  1,306
  16
  (7) (1) 
Total Operating Expenses$7,956
  100%  $7,911
  100%  $45
 1 % 

Programming
For 2016,2019, the 2%8% increase in programming expenses was primarily driven by increasedhigher sports programming costs, mainly from CBS’ broadcasts of Super Bowl LIII and the national semifinals and championship games 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, Residual and Distribution
For 2019, the 3% increase in participation, residual and distribution costs was driven by higher participation costs associated with the broadcastincrease 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 NFL games,our programming portfolio across all of our businesses, including Super Bowl 50,an assessment of the optimal use of our programming in the marketplace, which was broadcast by CBSresulted in 2016, partially offset by three fewer Thursday Night Football games than 2015. This increase was partially offset by costs in 2015the 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 Showtime Networks’ distributionchanges in the expected monetization of the Floyd Mayweather/Manny Pacquiao pay-per-view boxing eventcertain programs, and lower costs for acquired television series as a result of a shiftdecisions to a higher mix of internally developed television series.

Production
For 2016, the 2% increase in production expenses reflected increased investment in internally developed television series, partially offset by lower expenses associated with the decrease in television licensing revenues.

cease airing, alter future airing patterns or not renew certain programs.

II-19





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



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.
Participation, Distribution and RoyaltyOther
For 2016,2019, the 5% decrease9% increase in participation, distribution and royaltyother operating expenses mainly reflected higher costs primarily reflected lower participations associated with lower licensing salesgrowth and expansion of the CSI franchise.our streaming services.


Selling, General and Administrative Expenses
  % of   % of Increase/(Decrease) Increase/(Decrease)
Year Ended December 31,2016 Revenues 2015 Revenues $ % Year Ended December 31,20192018$%
Selling, general and administrative
expenses
$2,124
  16%  $1,961
  15%  $163
 8% Selling, general and administrative expenses$5,481 $5,048 $433 9 %
For 2016,2019, the 8%9% increase in SG&A expenses primarily reflects incrementalwas 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 $ % Year Ended December 31,20192018$%
Depreciation and amortization$225
 $235
 $(10) (4)% Depreciation and amortization$438 $427 $11 3 %
For 2016, the 4% decrease in2019, depreciation and amortization wasexpense includes an impairment charge of $20 million to reduce the resultcarrying value of intangiblesbroadcast licenses in Australia to their fair value.

Restructuring and property and equipment that became fully amortized, and the sales of internet businesses in China.

Pension Settlement ChargeOther Corporate Matters
During 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 benefits2019 and 2018, we recorded costs for restructuring and other corporate matters 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 settlement charge of $211 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.follows:

Year Ended December 31,20192018
Severance$395 $234 
Exit costs and other23 75 
Restructuring charges418 309 
Restructuring-related costs— 52 
Merger-related costs294 — 
Other corporate matters57 128 
Restructuring and other corporate matters$769 $489 
Restructuring Charges
During the year ended December 31, 2015, the Company2019, we recorded restructuring charges of $45$418 million, reflecting $24 million ofprimarily for severance costs, and $21including the accelerated vesting 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 were 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 costs associated with exiting contractual obligationsfinancial advisory, legal and other related costs.

Other Operating Items, Net
For 2015, other operating items, net included gains fromprofessional fees, transaction-related bonuses, and contractual executive compensation, including the disposition of businesses in China.

Interest Expense and Interest Incomeaccelerated
II-20
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Interest expense$(411) $(392) $19
 5% 
Interest income$32
 $24
 $8
 33% 






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



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 $17 million associated with legal proceedings involving the Company (see Note 20 to the consolidated financial statements) and other corporate matters.

During the year ended December 31, 2018, we recorded restructuring charges of $309 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.

Included in restructuring charges for both 2019 and 2018 were costs resulting from the termination of contractual obligations and charges associated with the exit of leases.

Gain on Sales
In 2019, we completed the sale of CBS Television City for $750 million, which resulted in a gain of $549 million. We also recognized a tax benefit of $140 million in the fourth quarter of 2018 for the reversal of a valuation allowance relating to capital loss carryforwards that were utilized in connection with this sale.

Interest Expense and Interest Income
Increase/(Decrease)
Year Ended December 31,20192018$%
Interest expense$(962)$(1,030)$(68)(7)%
Interest income$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 AverageWeighted Average
At December 31,2019Interest Rate2018Interest Rate
Total long-term debt$17,976 4.70 %$18,370 4.64 %
Commercial paper$699 2.07 %$674 3.02 %
   Weighted Average   Weighted Average 
At December 31,2016 Interest Rate 2015 Interest Rate 
Total long-term debt$8,850
  4.47%  $8,365
  4.68%  
Commercial paper$450
  0.98%  $—
  n/a
  
Net Gains (Losses) from Investments
n/a - not applicable
Other Items, Net
Other items,For 2019, net for 2016 and 2015 primarily consistedgains from investment of foreign exchange losses.
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 Company’s income tax provision for 2016$85 million included a one-time tax benefitgain on marketable securities of $47$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 fair value. For 2018, the net loss on investments of $53 million included a loss on marketable securities of $23 million, an impairment charge of $46 million to write an investment down to its fair value, and a gain of $16 million on the sale of a 1% equity interest in Viacom18 to our joint venture partner.

Gain on Early Extinguishment of Debt
For 2018, we recorded a gain on extinguishment of debt of $18 million associated with a multiyear adjustmentthe redemption of senior notes and debentures prior to a tax deduction, which was approved by the IRS during the third quarter of 2016, and a tax benefit of $81 million related to the pension settlement charge of $211 million. In 2015, the Company’s income tax provision included a tax provision of $8 million related to gains from the sales of internet businesses in China of $139 million.maturity totaling $1.13 billion.
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.
II-21
     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
Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations
     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% 
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), and 2015 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 was driven by lower weighted average shares outstanding as a result of the Company’s share repurchases during 2016, which totaled $3.0 billion.




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



Other Items, Net Loss from Discontinued Operations
The following table sets forth detailspresents the components of net earnings (loss)Other items, net.
Year Ended December 31,20192018
Pension and postretirement benefit costs$(99)$(65)
Foreign exchange losses(18)(19)
Other5 (8)
Other items, net$(112)$(92)
Benefit (Provision) for Income Taxes
For 2019, we recorded a tax benefit of $29 million, reflecting an effective income tax rate of (0.9)%. Included in the benefit for income taxes were discrete items of $827 million, primarily consisting of a tax benefit of $768 million resulting from discontinuedthe transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations, fora tax benefit of $44 million realized in connection with the year ended December 31, 2015:
Year Ended December 31, 2015CBS Radio 
Other (a)
 Total
Revenues$1,223
 $—
 $1,223
Costs and expenses:     
Operating415
 —
 415
Selling, general and administrative500
 —
 500
Depreciation and amortization29
 —
 29
Restructuring charges36
 —
 36
Impairment charge484
 —
 484
Total costs and expenses1,464
 —
 1,464
Operating loss(241) —
 (241)
Other income1
 —
 1
Loss from discontinued operations(240) —
 (240)
Income tax benefit89
 —
 89
Loss from discontinued operations, net of tax(151) —
 (151)
Net gain on disposal—
 17
 17
Income tax provision—
 (7) (7)
Net gain on disposal, net of tax—
 10
 10
Net earnings (loss) from discontinued operations, net of tax$(151) $10
 $(141)
(a) Reflects a decreasepreparation of the 2018 federal tax return, based on further clarity provided by the U.S. government on tax positions relating to the guarantee liability associatedTax Reform Act, and a tax benefit of $39 million principally related to the bankruptcy of an investee. These items, taken together with a net tax benefit of $102 million on the items identified as affecting comparability in Reconciliation of Non-GAAP Measures, including restructuring and other corporate matters, programming charges, and gain on sales, reduced the effective income tax rate by 23.6 percentage points.

For 2018, the provision for income taxes was $580 million, reflecting an effective income tax rate of 14.6%. The provision for income taxes included discrete items of $297 million, primarily consisting of the reversal of a valuation allowance of $140 million relating to capital loss carryforwards that were utilized in connection with the 2013 disposalsale of Outdoor Europe.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 IRS.

Equity in Loss of Investee Companies, Net of Tax
The resultsfollowing table presents equity in loss of CBS Radioinvestee companies for 2015 included 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.our equity-method investments.

Net Earnings and Diluted EPS
Increase/(Decrease)
Year Ended December 31,20192018$%
Equity in loss of investee companies$(72)$(62)$(10)(16)%
Tax benefit19 15 4 27 
Equity in loss of investee companies, net of tax$(53)$(47)$(6)(13)%
II-22
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Net earnings$1,261
 $1,413
 $(152) (11)% 
Diluted EPS$2.81
 $2.89
 $(.08) (3)% 







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
Segment
Increase/(Decrease)
Year Ended December 31,20192018$%
Net earnings from continuing operations attributable to
ViacomCBS		$3,168 $3,320 $(152)(5)%
Diluted EPS from continuing operations attributable to
ViacomCBS		$5.13 $5.35 $(.22)(4)%
For 2019, net earnings from continuing operations attributable to ViacomCBS and diluted EPS from continuing operations decreased 5% and 4%, respectively, 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 from Discontinued Operations, Net of Tax
The following tables set forth details of net earnings from discontinued operations for the years ended December 31, 2019 and 2018.
Year Ended December 31, 2019Simon & Schuster
Other (a)
Total
Revenues$814 $— $814 
Costs and expenses:
Operating510 (50)460 
Selling, general and administrative166 — 166 
Depreciation and amortization5 — 5 
Restructuring charges6 — 6 
Total costs and expenses687 (50)637 
Operating income127 50 177 
Other items, net(5)— (5)
Earnings from discontinued operations122 50 172 
Income tax provision(20)(12)(32)
Net earnings from discontinued operations, net of tax$102 $38 $140 
Year Ended December 31, 2018Simon & Schuster
Other (a)
Total
Revenues$825 $— $825 
Costs and expenses:
Operating518 (42)476 
Selling, general and administrative158 — 158 
Depreciation and amortization6 — 6 
Restructuring charges1 — 1 
Total costs and expenses683 (42)641 
Operating income142 42 184 
Other items, net(2)— (2)
Earnings from discontinued operations140 42 182 
Income tax provision(37)(10)(47)
Net earnings from discontinued operations, net of tax$103 $32 $135 
(a) Primarily relates to indemnification obligations for leases associated with the previously discontinued operations of Famous Players.

II-23



Management’s Discussion and Analysis of
Results of Operations - 2017 vs. 2016and Financial Condition (Continued)
The Company presents(Tabular dollars in millions, except per share amounts)

Segments
We operate in the following three segments:
TV ENTERTAINMENT: TV Entertainment consists of the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, our television production and syndication operations; our CBS-branded streaming services, including CBS All Access (to be rebranded as Paramount+ in March 2021) and CBSN, among others; CBS Sports Network, our cable network focused on college athletics and other sports; and CBS Television Stations, our owned broadcast television stations. TV Entertainment’s revenues are generated primarily from advertising sales, the licensing and distribution of content, and affiliate revenues, comprised of reverse compensation, retransmission fees, and subscription fees for our streaming services.
CABLE NETWORKS: Cable Networks operates a portfolio of premium subscription cable networks, including Showtime; basic cable networks including BET, Nickelodeon, MTV, Comedy Central, Paramount Network, and Smithsonian Channel, among others; streaming services including Pluto TV, Showtime OTT, Noggin, and BET+; international extensions of these brands; and our international free-to-air broadcast networks, including Network 10, Channel 5 and Telefe. Cable Networks’ revenues are generated primarily from affiliate revenues, comprised of fees from MVPDs and vMVPDs for carriage of our cable networks, and subscription fees from our streaming services; advertising sales; and the licensing of our content and brands.
FILMED ENTERTAINMENT: Our Filmed Entertainment segment operates Paramount Pictures, Paramount Players, Paramount Animation, and Paramount Television Studios, and also includes Miramax, a consolidated joint venture. Filmed Entertainment’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.

During the fourth quarter of 2020, we entered into an agreement to sell Simon & Schuster, which was previously reported as the Publishing segment. Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented.

We present operating income (loss) excluding pension settlement charges,depreciation and amortization, stock-based compensation, costs for restructuring charges, merger and acquisition-related costs, and other operating items, net,corporate matters, programming charges and gain on sales, 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 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)19 to the consolidated financial statements.

II-24
   % of Total   % of Total Increase/(Decrease) 
Year Ended December 31,2017 Revenues 2016 Revenues $ % 
Entertainment$9,164
  67 %  $8,877
  67 %  $287
 3 % 
Cable Networks2,501
  18
  2,160
  16
  341
 16
 
Publishing830
  6
  767
  6
  63
 8
 
Local Media1,668
  12
  1,779
  14
  (111) (6) 
Corporate/Eliminations(471)  (3)  (417)  (3)  (54) (13) 
Total Revenues$13,692
  100 %  $13,166
  100 %  $526
 4 % 


   % of Total   % of Total   
   Segment   Segment   
   Operating   Operating Increase/(Decrease) 
Year Ended December 31,2017 Income 2016 Income $ % 
Segment Operating Income (Loss):                
Entertainment$1,554
  55 %  $1,519
  53 %  $35
 2 % 
Cable Networks996
  35
  959
  33
  37
 4
 
Publishing132
  5
  119
  4
  13
 11
 
Local Media492
  18
  618
  22
  (126) (20) 
Corporate(355)  (13)  (354)  (12)  (1) —
 
Total Segment Operating Income2,819
  100 %  2,861
  100 %  (42) (1) 
Pension settlement charges(352)     (211)     (141) (67) 
Restructuring and merger and
acquisition-related costs
(63)     (38)     (25) (66) 
Other operating items, net19
     9
     10
 111
 
Total Operating Income$2,423
     $2,621
     $(198) (8)% 
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Depreciation and Amortization:        
Entertainment$115
 $117
 $(2) (2)% 
Cable Networks23
 23
 —
 —
 
Publishing6
 6
 —
 —
 
Local Media45
 44
 1
 2
 
Corporate34
 35
 (1) (3) 
Total Depreciation and Amortization$223
 $225
 $(2) (1)% 




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 - 2020 vs. 2019
Entertainment(CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, Network Ten, CBS Interactive, and CBS Films)
% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2020Revenues2019Revenues$%
Revenues:
TV Entertainment$10,700 42 %$11,924 44 %$(1,224)(10)%
Cable Networks12,589 50 12,449 46 140 1 
Filmed Entertainment2,562 10 2,990 11 (428)(14)
Corporate/Eliminations(566)(2)(365)(1)(201)(55)
Total Revenues$25,285 100 %$26,998 100 %$(1,713)(6)%
Increase/(Decrease)
Year Ended December 31,20202019$%
Adjusted OIBDA:
TV Entertainment$1,857 $2,443 $(586)(24)%
Cable Networks3,746 3,515 231 7 
Filmed Entertainment215 80 135 169 
Corporate/Eliminations(500)(449)(51)(11)
Stock-based compensation(186)(196)10 5 
Total Adjusted OIBDA5,132 5,393 (261)(5)
Depreciation and amortization(430)(438)8 2 
Restructuring and other corporate matters(618)(769)151 n/m
Programming charges(159)(589)430 n/m
Gain on sales214 549 (335)n/m
Total Operating Income$4,139 $4,146 $(7)— %
n/m - not meaningful
Increase/(Decrease)
Year Ended December 31,20202019$%
Depreciation and Amortization:
TV Entertainment$162 $150 $12 8 %
Cable Networks205 219 (14)(6)
Filmed Entertainment36 37 (1)(3)
Corporate27 32 (5)(16)
Total Depreciation and Amortization$430 $438 $(8)(2)%
II-25
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Revenues$9,164
 $8,877
 $287
 3 % 
Segment Operating Income$1,554
 $1,519
 $35
 2 % 
Segment Operating Income as a % of revenues17% 17% 

   
Restructuring charges$44
 $16
 $28
 175 % 
Depreciation and amortization$115
 $117
 $(2) (2)% 
Capital expenditures$98
 $98
 $—
 — % 

2017 vs. 2016
For 2017, the 3%increase in revenues was led by growth in affiliate and subscription fees and content licensing and distribution revenues. Affiliate and subscription fees grew 35% as a result of higher station affiliation fees and growth from digital initiatives, including CBS All Access and virtual MVPDs. Content licensing and distribution revenues increased 10%, driven by the domestic licensing sales of NCIS: New Orleans, Madam Secretary and titles from the CSI franchise, and higher international licensing sales resulting from strong demand for the Company’s content internationally, due in part to increased investment in internally-produced series. These increases were partially offset by lower advertising revenues, mainly as a result of the benefit to 2016 from CBS’s broadcast of Super Bowl 50.

Operating income increased 2% driven by the higher revenues, partially offset by an increased investment in programming, as well as other costs associated with the Company’s growth initiatives. For 2017 and 2016, restructuring charges primarily reflected severance costs and costs associated with exiting contractual obligations and other related costs.

Results in 2018 are expected to benefit from continued growth in affiliate and subscription fee revenues, driven by the renewal of several of the Company’s agreements with its television station affiliates and annual contractual increases on multiyear agreements with television station affiliates. The revenue comparison in 2018 will be negatively affected by the broadcast of five Thursday Night Football games in 2017, which CBS will not broadcast in 2018. However, this will result in an improvement in the operating income margin. The revenue comparison will also be affected by the CBS Television Network’s 2017 broadcast of the National Semifinals and National Championship games of the NCAA Tournament, which are broadcast on the CBS Television Network every other year through 2032 under the current agreements with the NCAA and Turner. 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.
In addition, during the first quarter of 2018, the Company will adopt new FASB guidance on the recognition of revenues, which will impact the comparability of Entertainment revenues during 2018. (See Note 1 to the consolidated financial statements.)




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



TV Entertainment
Cable Networks(Showtime Networks, CBS Sports Network and Smithsonian Networks)
Increase/(Decrease)
Year Ended December 31,20202019$%
Advertising$5,035 $6,008 $(973)(16)%
Affiliate3,129 2,550 579 23 
Content licensing2,369 3,157 (788)(25)
Other167 209 (42)(20)
Revenues$10,700 $11,924 $(1,224)(10)%
Adjusted OIBDA$1,857 $2,443 $(586)(24)%

     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Revenues$2,501
 $2,160
 $341
 16 % 
Segment Operating Income$996
 $959
 $37
 4 % 
Segment Operating Income as a % of revenues40% 44%     
Restructuring charges$—
 $4
 $(4) (100)% 
Depreciation and amortization$23
 $23
 $—
 — % 
Capital expenditures$20
 $19
 $1
 5 % 
Revenues
2017 vs. 2016
For 2017,2020, the 16% increase10% decrease in revenues was mainly driven by Showtime Networks’ distributionthe comparison against CBS’ broadcasts of tentpole sporting events in 2019, the impact of COVID-19 on our business during 2020, including weakness in the advertising market and the delay to the start of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, growth from the Showtime digital streaming subscription offeringtelevision broadcast season, and higher internationallower content licensing sales of Showtime content. These increases wererevenues, partially offset by lower domestic licensing sales,growth in affiliate revenues.
Advertising
The 16%decrease in advertising revenues was primarily driven by the aforementioned impact of COVID-19, as well as the comparison against CBS’ broadcasts of Super Bowl LIII and the NCAA Tournament in 2019. Under the current contract with the NFL, the Super Bowl is broadcast on the CBS Television Network on a rotating basis with other networks through the 2022 season, with CBS broadcasting these games in 2019 and 2021. The 2020 NCAA Tournament, which was scheduled to be broadcast by CBS in the first quarter of 2020, was cancelled as a result of salesCOVID-19. In addition, the national semifinals and championship games of several titles, including Penny Dreadful,the NCAA Tournament, which are broadcast by CBS every other year through 2032 under agreements with the NCAA and Turner, were broadcast on CBS in 2016. Asthe second quarter of December 31, 2017, subscriptions totaled approximately 25 million for Showtime, the Company’s premium television network, and the Showtime digital streaming subscription offering combined, 52 million for CBS Sports Network and 30 million for Smithsonian Networks.
Operating income increased 4% driven by the revenue growth, which was significantly offset by higher costs2019. Advertising revenues in 2020 benefited from record political advertising associated with the pay-per-view boxing eventU.S. presidential election in 2020.

Affiliate
Affiliate revenues grew 23%, reflecting 19% growth in reverse compensation and an increased investment in programming. Restructuring charges in 2016 primarily reflected severance costs.

Television licenseretransmission fee revenues, are recognizedas well as subscriber growth at CBS All Access.

Content Licensing
Content licensing revenues decreased 25%, mainly due to a lower volume of licensing of our programming during 2020, as 2019 included several significant licensing agreements for library programming and the beginninglicensing of the license period in which programs are made availablefinal season of several series, including Jane the Virgin and Elementary, and 2020 was impacted by production delays related to COVID-19.

Other
Other revenues decreased 20%, primarily reflecting lower revenues from the licensee for exhibition, which may impact the comparabilityrental of revenues in 2018our production facilities as a result of production shutdowns due to fluctuations resultingCOVID-19.

Revenues in 2021 will benefit from the timingCBS Television Network’s broadcasts of availabilitySuper Bowl LV and the national semifinals and championship games of television series for multiyear licensing agreements.

In addition, during the first quarter of 2018, the CompanyNCAA Tournament. Comparability in 2021 will adopt new FASB guidance on the recognition of revenues, which will impact the comparability of Cable Networks revenues during 2018. (See Note 1 to the consolidated financial statements.)
Publishing (Simon & Schuster)be negatively
II-26
     Increase/(Decrease) 
Year Ended December 31,2017
2016
$ % 
Revenues$830
 $767
 $63
 8 % 
Segment Operating Income$132
 $119
 $13
 11 % 
Segment Operating Income as a % of revenues16% 16%     
Restructuring charges$5
 $1
 $4
 n/m
 
Depreciation and amortization$6
 $6
 $—
 — % 
Capital expenditures$5
 $9
 $(4) (44)% 

n/m - not meaningful
2017 vs. 2016
For 2017, the 8% increase in revenues reflects higher print book sales and 39% growth in digital audio sales. Bestselling titles for 2017 included What Happened by Hillary Rodham Clinton, Leonardo da Vinci by Walter Isaacson and Sleeping Beauties by Stephen King and Owen King.
The 11%increase in operating income reflects the revenue growth. For 2017 and 2016, restructuring charges primarily reflected severance costs.




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



impacted, however, by lower political advertising revenues driven by the comparison against the U.S. presidential election in 2020.
Local Media(CBS Television Stations and CBS Local Digital Media)
Adjusted OIBDA
     Increase/(Decrease) 
Year Ended December 31,2017
2016
$ % 
Revenues$1,668
 $1,779
 $(111) (6)% 
Segment Operating Income$492
 $618
 $(126) (20)% 
Segment Operating Income as a % of revenues29% 35%     
Restructuring charges$12
 $6
 $6
 100 % 
Depreciation and amortization$45
 $44
 $1
 2 % 
Capital expenditures$32
 $37
 $(5) (14)% 
2017 vs. 2016
For 2017,Adjusted OIBDA decreased 24% driven by the 6% decreasedecline in revenues and increased costs to support the growth and expansion of CBS All Access. These decreases were partially offset by lower production and programming costs as a result of the comparison against the broadcast of major sporting events in 2019, production shutdowns in 2020 due to COVID-19, and the mix of programming. Participation expense was also lower as a result of the decline in content licensing revenues.
Cable Networks
Increase/(Decrease)
Year Ended December 31,20202019$%
Advertising$4,743 $5,129 $(386)(8)%
Affiliate6,037 6,052 (15)— 
Content licensing1,809 1,268 541 43 
Revenues$12,589 $12,449 $140 1 %
Adjusted OIBDA$3,746 $3,515 $231 7 %

Revenues
For 2020, revenues increased 1%, due to higher content licensing revenues, mainly reflecting the licensing of the domestic streaming rights for South Park to an SVOD provider, partially offset by a decline in advertising revenues. Domestic revenues increased 4% while international revenues decreased 10%, including a 2-percentage point unfavorable impact of foreign exchange rate changes.

Advertising
Advertising revenues decreased 8% primarily driven by lowerthe adverse effects of COVID-19. Domestic advertising revenues primarilydecreased 6%, reflecting lower linear impressions, including from weakness in the benefit to 2016 from record political advertising sales during the 2016 Presidential election cycle and CBS’s broadcastmarket as a result of Super Bowl 50. COVID-19. This decrease was partially offset by growth from our streaming businesses, including revenues from Pluto TV, which was acquired in retransmission revenuesMarch 2019, and fees from virtual MVPDs.

The decrease in operating income of 20% primarily reflected a decline in high-margin political advertising sales. For 2017 and 2016, restructuring charges reflected severance costs and costs associated with exiting contractual obligations and other related costs.

In 2018,higher pricing. International advertising revenues are expecteddecreased 12%, primarily reflecting weakness in the advertising market. Foreign exchange rate changes had an unfavorable impact of 1 percentage point on both worldwide and international advertising revenues.

Affiliate
Domestic affiliate revenues remained flat, as the declines in subscribers at our cable networks were offset by growth from our subscription streaming services, including Showtime OTT, BET+, and Noggin, and the launch of our basic cable networks on a vMVPD service. International affiliate revenues decreased 3%, including a 1-percentage point unfavorable impact of foreign exchange rate changes.

Content Licensing
The 43% increase in content licensing revenues was primarily the result of growth from the domestic licensing of programming to benefitSVOD providers, mainly from increased political advertisingSouth Park, and higher download-to-own revenues, led by sales associated with the U.S. midterm elections. Results in 2018 are also expected to benefit from continued growth in retransmission revenues, driven by the renewal of several of the Company’s agreements with MVPDs and annual contractual increases on multiyear agreements with MVPDs.Yellowstone.

Corporate
II-27
     Increase/(Decrease) 
Year Ended December 31,2017 2016 $ % 
Segment Operating Loss$(355) $(354) $(1) — % 
Restructuring charges$2
 $3
 $(1) (33)% 
Depreciation and amortization$34
 $35
 $(1) (3)% 
Capital expenditures$30
 $33
 $(3) (9)% 

2017 vs. 2016
Corporate expenses include general corporate overhead, unallocated shared company expenses, pension and postretirement benefit costs for plans retained by the Company for previously divested businesses, and intercompany eliminations. Restructuring charges in 2017 and 2016 primarily reflected severance costs.

Segment Results of Operations - 2016 vs. 2015
   % 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)



Adjusted OIBDA
Adjusted OIBDA increased 7%, driven by the revenue growth and lower SG&A expenses, reflecting lower advertising and promotion costs due to the broadcast of fewer original programs, savings from restructuring and other cost savings initiatives, as well as lower travel and entertainment expenses associated with shutdowns resulting from COVID-19. These cost decreases were partially offset by higher participation costs associated with the mix of titles licensed each year.
Filmed Entertainment
   % 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
     $(37) (1)% 
Increase/(Decrease)
Year Ended December 31,20202019$%
Theatrical$180 $547 $(367)(67)%
Home Entertainment709 623 86 14 
Licensing1,598 1,709 (111)(6)
Other75 111 (36)(32)
Revenues$2,562 $2,990 $(428)(14)%
Adjusted OIBDA$215 $80 $135 169 %
n/m - not meaningfulRevenues
For 2020, the 14% decrease in revenues reflects the impact from the closure or reduction in capacity of movie theaters in response to COVID-19 throughout most of 2020.
     Increase/(Decrease) 
Year Ended December 31,2016 2015 $ % 
Depreciation and Amortization:        
Entertainment$117
 $126
 $(9) (7)% 
Cable Networks23
 23
 —
 —
 
Publishing6
 6
 —
 —
 
Local Media44
 48
 (4) (8) 
Corporate35
 32
 3
 9
 
Total Depreciation and Amortization$225
 $235
 $(10) (4)% 


Theatrical
The 67% decrease in theatrical revenues reflects the impact from the closure or reduction in capacity of movie theaters throughout most of 2020. Theatrical revenues during the current year benefited from the theatrical release of Sonic the Hedgehog in the first quarter, while the prior year benefited from several significant theatrical releases.
Entertainment(CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive and CBS Films)
Home Entertainment
     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%     
Restructuring charges$16
 $26
 $(10) (38)% 
Depreciation and amortization$117
 $126
 $(9) (7)% 
Capital expenditures$98
 $99
 $(1) (1)% 
2016 vs. 2015
For 2016, the 5%The 14% increase in home entertainment revenues was driven by higher sales of catalog titles and titles from Miramax, which was acquired in 2020. The current year benefited from the 2020 releases of Sonic the Hedgehog and Terminator: Dark Fate, as well as Gemini Man, which was released in the home entertainment market in late 2019, while the prior-year benefited from Bumblebee, Rocketman, Mission: Impossible - Fallout and Instant Family.

Licensing
The 6% decrease in licensing revenues was primarily driven by 10% growth in network advertisingdue to lower revenues mainly from the broadcastlicensing of Super Bowl 50catalog titles, television programming produced for third partiesand music rights. These decreases were partially offset by the licensing of Miramax titles in 2020 and current year releases, including Lovebirds and the international licensing of The SpongeBob Movie: Sponge on CBSthe Run.

Adjusted OIBDA
Adjusted OIBDA increased $135 million as the revenue decline was more than offset by lower distribution and film production costs resulting from fewer theatrical releases in 2016 and 3% growththe current year due to COVID-19. Fluctuations in underlying network advertising revenues. Affiliate and subscription fees grew 45%results for the Filmed Entertainment segment may occur 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 salesthe timing of NCIS, Elementary and CSI, while 2016 benefited from the international licensingrecognition of five Star Trek series. The revenue comparison was also impacted by the sales of internet businesses in China.

II-28





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



distribution costs, including print and advertising, 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.
The increase in operating income
Segment Results of 17% primarily reflected the increase in revenues. For 2016 and2015, restructuring charges primarily reflected severance costs and costs associated with exiting contractual obligations and other related costs.Operations - 2019 vs. 2018
% of Total% of TotalIncrease/(Decrease)
Year Ended December 31,2019Revenues2018Revenues$%
Revenues:
TV Entertainment$11,924 44 %$11,061 42 %$863 8 %
Cable Networks12,449 46 12,683 48 (234)(2)
Filmed Entertainment2,990 11 2,956 11 34 1 
Corporate/Eliminations(365)(1)(275)(1)(90)(33)
Total Revenues$26,998 100 %$26,425 100 %$573 2 %
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%     
Restructuring charges$4
 $—
 $4
 n/m
 
Depreciation and amortization$23
 $23
 $—
 — % 
Capital expenditures$19
 $18
 $1
 6 % 
Increase/(Decrease)
Year Ended December 31,20192018$%
Adjusted OIBDA:
TV Entertainment$2,443 $2,466 $(23)(1)%
Cable Networks3,515 4,341 (826)(19)
Filmed Entertainment80 (33)113 n/m
Corporate/Eliminations(449)(433)(16)(4)
Stock-based compensation(196)(201)5 2 
Total Adjusted OIBDA5,393 6,140 (747)(12)
Depreciation and amortization(438)(427)(11)(3)
Restructuring and other corporate matters(769)(489)(280)n/m
Programming charges(589)(162)(427)n/m
Gain on sale549 — 549 n/m
Total Operating Income$4,146 $5,062 $(916)(18)%
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. 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 25 million for Showtime, the Company’s premium television network, and the Showtime digital streaming subscription offering combined, 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.
Publishing (Simon & Schuster)
Increase/(Decrease)
Year Ended December 31,20192018$%
Depreciation and Amortization:
TV Entertainment$150 $160 $(10)(6)%
Cable Networks219 194 25 13 
Filmed Entertainment37 38 (1)(3)
Corporate32 35 (3)(9)
Total Depreciation and Amortization$438 $427 $11 3 %
II-29
     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%     
Restructuring charges$1
 $—
 $1
 n/m
 
Depreciation and amortization$6
 $6
 $—
 — % 
Capital expenditures$9
 $10
 $(1) (10)% 

n/m - not meaningful
2016 vs. 2015
For 2016, the 2% decrease in revenues reflected lower digital book sales, partially offset by growth in digital audio sales. Digital sales represented 23% of Publishing’s total revenues for 2016. Best-selling titles for 2016 included Born to Run by Bruce Springsteen, End of Watch by Stephen King and A Man Called Ove by Fredrik Backman.

The 4%increase in operating income mainly resulted from lower production, inventory and selling costs. For 2016, restructuring charges primarily reflected severance costs.





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



TV Entertainment
Local Media(
Increase/(Decrease)
Year Ended December 31,20192018$%
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)%

Revenues
For 2019, the 8% increase in TV Entertainment revenues reflects growth across each of the segment’s main revenue streams.
Advertising
The 4% increase in advertising revenues was driven by CBS’ broadcasts of Super Bowl LIII and the national semifinals and championship games of the NCAA Tournament in 2019, partially offset by the timing of other sporting events and lower political advertising as a result of the benefit to 2018 from midterm elections. The Super Bowl is broadcast on the CBS Television Stations Network on a rotating basis with other networks through the 2022 season under the current contract with the NFL and the national semifinals and championship games of the NCAA Tournament are broadcast on the CBS Local Digital Media)Television Network every other year through 2032 under the current agreement with the NCAA and Turner.

     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%     
Restructuring charges$6
 $19
 $(13) (68)% 
Depreciation and amortization$44
 $48
 $(4) (8)% 
Capital expenditures$37
 $28
 $9
 32 % 
Affiliate
2016 vs. 2015
For 2016, the 12%Affiliate revenues grew 22% primarily as a result of a 20% increase in reverse compensation and retransmission fee revenues was ledas well as subscriber growth at CBS All Access.

Content Licensing
Content licensing increased 5%, driven by record political advertising sales duringhigher revenues from the 2016 Presidential election cycle, 14% growthproduction 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 retransmissioncontent and subscription revenues, and the broadcast of Super Bowl 50 on CBS during the first quarter of 2016.

The increasein operating income of 27% primarily reflected the revenue growth. For 2016 and 2015, restructuring charges reflected severance costs andhigher costs associated with exiting contractual obligationsthe growth and other related costs.

Corporateexpansion of our streaming services, partially offset by higher revenues.
II-30
     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 % 

(a) Primarily reflects the timing of capital projects.
n/m - not meaningful

2016 vs. 2015
Corporate expenses include general corporate overhead, unallocated shared company expenses, pension and postretirement benefit costs for plans retained by the Company for previously divested businesses, and intercompany eliminations. The 28%increase in corporate expenses primarily reflected 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.





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



Cable Networks
Financial Position
Increase/(Decrease)
Year Ended December 31,20192018$%
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)%

     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Current assets:        
Cash and cash equivalents$285
 $598
 $(313) (52)% 
Receivables, net (a)
3,697
 3,314
 383
 12
 
Programming and other inventory (b)
1,828
 1,427
 401
 28
 
Prepaid income taxes78
 30
 48
 160
 
Current assets of discontinued operations (c)
1
 305
 (304) (100) 
All other current assets, net384
 389
 (5) (1) 
Total current assets$6,273
 $6,063
 $210
 3 % 
Revenues
(a) The increase primarily relates toFor 2019, revenues decreased 2% from 2018, reflecting an unfavorable impact from foreign exchange rate changes of 2-percentage points. Domestic revenues remained substantially flat compared with 2018 as higher receivables associatedadvertising 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 television licensing arrangements.
(b) The increase primarily reflects2018 and included an unfavorable impact of foreign exchange rate changes of 3-percentage points. Domestic advertising revenues increased 6%, reflecting higher investment in entertainment programming and the timing of sporting events.
(c) The decrease reflects the split-off of CBS Radio during the fourth quarter of 2017. (See Note 4 to the consolidated financial statements.)
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Other assets (a)
$2,840
 $2,707
 $133
 5% 
(a) The increase primarily reflects additional investment in the Company’s equity-method investments; assets related to Network Ten, revenues from our streaming businesses,including Pluto TV, which was acquired in March 2019. The domestic advertising growth also reflects higher pricing and the fourth quarterinclusion of 2017;the results of Pop TV. We began consolidating Pop TVin March 2019 when we acquired the 50% stake we did not own, 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 U.K. markets, partially offset by increases in pricing and political advertising in Argentina.

Affiliate
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 traditional MVPD subscribers at our cable networks. These declines were partially offset by growth from Showtime OTT, the inclusion of the results of Pop TV, and contractual rate increases under carriage agreements. International affiliate revenues decreased 6%, reflecting a 6-percentage point unfavorable impact of foreign exchange rate changes.

Content Licensing
The 1% increase in content licensing revenues, which includes the unfavorable impact of foreign exchange rate changes of 1-percentage point, was the result of increased revenues from the production of programming for third parties, including The Real World and Bellator mixed martial arts events. These increases were partially offset by lower secondary market revenue, driven by the renewal of a significant domestic licensing agreement for the Showtime original series, Dexter, in 2018.

Adjusted OIBDA
Adjusted OIBDA decreased 19%, driven by lower revenues as well as increased investment in content and higher receivables associated with television licensing arrangements. As of December 31, 2017, total outstanding receivables from television licensing arrangements, including both currentadvertising and noncurrent, were $4.06 billion versus $3.82 billion at December 31, 2016. At December 31, 2017, the total amount due from these receivables was $1.85 billion in 2018, $1.03 billion in 2019, $626 million in 2020, $327 million in 2021, and $230 million in 2022 and thereafter.promotion expenses.
II-31
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Assets of discontinued operations (a)
$12
 $4,291
 $(4,279) (100)% 

(a) The decrease reflects the split-off of CBS Radio during the fourth quarter of 2017. (See Note 4 to the consolidated financial statements.)
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Current liabilities:        
Accounts payable (a)
$231
 $148
 $83
 56 % 
Accrued compensation343
 369
 (26) (7) 
Participants’ share and royalties payable986
 1,024
 (38) (4) 
Program rights (b)
373
 290
 83
 29
 
Commercial paper (c)
679
 450
 229
 51
 
All other current liabilities, net1,360
 1,427
 (67) (5) 
Current liabilities$3,972
 $3,708
 $264
 7 % 
(a) The increase reflects the timing of payments.
(b) The increase is primarily associated with Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event.
(c) The increase reflects higher commercial paper borrowings.




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



Filmed Entertainment
Increase/(Decrease)
Year Ended December 31,20192018$%
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

Revenues
For 2019, the 1% increase in 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 revenue comparison.
Theatrical
     Increase/(Decrease) 
At December 31,2017
2016 $ % 
Long-term debt (a)
$9,464
 $8,902
 $562
 6% 
The 26% decrease in theatrical revenues principally reflects a difficult comparison to 2018, which included the 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.
(a)
Home Entertainment
The 1% increase is primarilyin home entertainment revenues was driven by the number and 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 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 other revenues was driven by higher studio rental revenues.

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 Company’s issuance of $1.80 billion of senior notes, partially offset by the repayment of $1.20 billion of outstanding senior notes. (See Note 9 to the consolidated financial statements.)
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Pension and postretirement benefit obligations (a)
$1,328
 $1,769
 $(441) (25)% 
(a) The decrease primarily relates to discretionary contributions made during 2017 to prefund the Company’s qualified pension plans, offset by changes in actuarial assumptions.
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Other liabilities (a)
$2,155
 $1,807
 $348
 19% 
(a) The increase is primarily due to a tax liability resulting from the enactmenttiming of the Tax Reform Act in December 2017.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.
II-32
     Increase/(Decrease) 
At December 31,2017 2016 $ % 
Liabilities of discontinued operations (a)
$42
 $2,451
 $(2,409) (98)% 

(a) The decrease reflects the split-off of CBS Radio during the fourth quarter of 2017. (See Note 4 to the consolidated financial statements.)
Cash Flows
The changes in cash and cash equivalents were as follows:
     Increase/ (Decrease)   Increase/ (Decrease)
Year Ended December 31,2017
2016
2017 vs. 2016 2015 2016 vs. 2015
Cash provided by operating activities from:             
Continuing operations$793
 $1,454
  $(661)  $1,189
  $265
 
Discontinued operations94
 231
  (137)  205
  26
 
Cash provided by operating activities887
 1,685
  (798)  1,394
  291
 
Cash (used for) provided by investing activities from:             
Continuing operations(523) (334)  (189)  179
  (513) 
Discontinued operations(24) (6)  (18)  (25)  19
 
Cash (used for) provided by investing activities(547) (340)  (207)  154
  (494) 
Cash used for financing activities(677) (1,046)  369
  (1,653)  607
 
Net (decrease) increase in cash and cash equivalents$(337) $299
  $(636)  $(105)  $404
 
Operating Activities.  In 2017, the decrease in cash provided by operating activities from continuing operations was driven by discretionary pension contributions of $600 million made during 2017 to prefund the Company’s qualified plans; a decline in advertising revenues including from the benefit in 2016 from CBS’s broadcast of Super Bowl 50; and an increased investment in internally-produced television programming. These decreases were partially offset by higher affiliate and subscription fee revenues.





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



Liquidity and Capital Resources
Sources and Uses of Cash
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. Our operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, leases, interest payments, income tax payments and pension funding obligations. Our investing and financing spending includes capital expenditures, investments and acquisitions, share repurchases, dividends and principal payments on our outstanding indebtedness. We believe that our operating cash flows, cash and cash equivalents, borrowing capacity under our $3.50 billion Credit Facility, and access to capital markets are sufficient to fund our operating, investing and financing requirements for the next twelve months.

Our 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 Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. We routinely assess our capital structure and opportunistically enter into transactions to lower our interest expense, which could result in a charge from the early extinguishment of debt.

Funding for our long-term debt obligations due over the next five years of $5.11 billion is expected to come from our ability to refinance our debt, cash generated from operating activities, and proceeds from non-core asset sales.

During the year ended December 31, 2020, we issued $4.50 billion of senior notes with interest rates ranging from 4.20% to 4.95% and due dates from 2025 to 2050. The net proceeds from these issuances are being used for the redemption of our long-term debt as well as for general corporate purposes. During the year ended December 31, 2020, we redeemed, prior to maturity, senior notes, debentures, and junior subordinated debentures totaling $2.77 billion, for an aggregate redemption price of $2.88 billion.

During the fourth quarter of 2020, we announced that we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. In 2016,addition, we completed the sale of CMG for cash proceeds of $459 million and advertising and data licensing credits of $25 million. These divestitures are a result of a strategic review of our non-core assets. Proceeds from these transactions will be used to invest in our strategic growth priorities, including in streaming, as well as to fund the dividend and pay down debt.

The ongoing impact of COVID-19 could have a negative effect on our financial condition or our ability to fund operations, dividends or future investment opportunities due to an increase in the cost of, or difficulty in, obtaining debt or equity financing, or our ability to comply with the leverage covenant in our Credit Facility in the future. The magnitude of the continuing impact on our financial condition and results of operations will depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

II-33



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

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, 2020, we had $2.36 billion of remaining availability under our share repurchase program. Any 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.
Cash Flows
The changes in cash, cash equivalents and restricted cash were as follows:
Increase/ (Decrease)Increase/ (Decrease)
Year Ended December 31,202020192020 vs. 201920182019 vs. 2018
Cash provided by operating activities from:
Continuing operations$2,215 $1,171 $1,044 $3,324 $(2,153)
Discontinued operations79 59 20 140 (81)
Cash provided by operating activities2,294 1,230 1,064 3,464 (2,234)
Cash provided by (used for) investing activities from:
Continuing operations63 (145)208 (581)436 
Discontinued operations(7)(10)3 (30)20 
Cash provided by (used for) investing activities56 (155)211 (611)456 
Cash used for financing activities(90)(1,216)1,126 (2,531)1,315 
Effect of exchange rate changes on cash, cash
equivalents and restricted cash		25 (1)26 (25)24 
Net increase (decrease) in cash, cash equivalents and
restricted cash		$2,285 $(142)$2,427 $297 $(439)
Operating Activities.  The increase in cash provided by operating activities from continuing operations for 2020 compared to 2019 was primarily driven by growth in affiliatesignificantly lower spending, including for programming, production, advertising and subscription feesdistribution costs resulting from production shutdowns related to COVID-19 and higher advertising revenues, including from the broadcast of Super Bowl 50,cost savings, as well as lower payments for income taxes. These impacts were partially offset by increased investmentthe decline in programmingrevenues and higher payments for restructuring, merger-related costs, and costs to achieve synergies.

The decrease in cash provided by operating activities from continuing operations for 2019 compared with 2018 was primarily driven by increased spending for television and film programming, higher payments for income taxes.taxes and payments of $132 million associated with costs related to the Merger.

Cash paid for income taxes from continuing operations decreased to $411 million for 2020 from $560 million for 2019. The comparison was impacted by a payment in 2019 as a result of guidance issued by the U.S. 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. The increase in cash payments for income taxes from continuing operations for 2019 compared to $153 million for 2018 was primarily due to the aforementioned payment in 2019, as well as a benefit to 2018 from the application of a federal income tax overpayment carryforward from 2017.
II-34



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

Cash provided by operating activities from discontinued operations primarily reflectedreflects 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.Simon & Schuster.

Cash paid for income taxes for the years ended December 31, 2017, 2016 and 2015 was as follows:
Year Ended December 31,2017
2016
2015
Cash taxes included in operating activities from continuing operations$365
 $390
 $287
Less: Excess tax benefits from the exercise of stock options and
vesting of restricted stock units, included in financing activities
—
 17
 88
Cash paid for income taxes from continuing operations$365
 $373
 $199
The decrease in cash paid for income taxes in 2017 reflects a tax benefit from contributions of $600 million to prefund the Company’s qualified pension plans and a higher tax benefit associated with the exercise of stock options and vesting of RSUs, offset by the impact from the expiration of a tax law which benefited cash taxes for 2016. 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 $32 million in 2017, $90 million in 2016 and $169 million in 2015. 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.

For 2018, cash taxes are expected to be significantly lower than 2017 primarily due to the enactment of the Tax Reform Act. However, a more precise estimate cannot currently be determined.

Investing Activities
Year Ended December 31,2017
2016
2015
Acquisitions (including acquired television library), net of cash acquired (a)
$(270) $(92) $(12)
Capital expenditures (b)
(185) (196) (171)
Investments in and advances to investee companies (c)
(110) (81) (98)
Proceeds from dispositions (d)
11
 20
 383
All other investing activities from continuing operations, net31
 15
 77
Cash flow (used for) provided by investing activities from
continuing operations
(523) (334) 179
Cash flow used for investing activities from discontinued operations(24) (6) (25)
Cash flow (used for) provided by investing activities$(547) $(340) $154
Year Ended December 31,202020192018
Investments (a)
$(59)$(171)$(161)
Capital expenditures(324)(345)(345)
Acquisitions, net of cash acquired (b)
(147)(399)(118)
Proceeds from dispositions (c)
593 756 39 
Other investing activities from continuing operations— 14 4 
Cash flow provided by (used for) investing activities from continuing
operations		63 (145)(581)
Cash flow used for investing activities from discontinued operations(7)(10)(30)
Cash flow provided by (used for) investing activities$56 $(155)$(611)
(a) 2017Primarily includes our investment in The CW.
(b) 2020 primarily reflects the acquisition of Network Ten, one of three major commercial broadcast networks in Australia, for approximately $124 million, net of cash acquired,Miramax, a global film and television studio. 2019 primarily reflects the acquisition of Pluto Inc. and the remaining 50% interest in Pop TV, a television library. 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.
(b) Capital expenditures for 2018 are anticipatedhost of conferences dedicated to be approximately $200 million.online video.
(c) Mainly includes2020 reflects the Company’s investment in The CW as well as its other domesticsale of CMG and international television joint ventures.marketable securities. 2019 primarily reflects the sale of CBS Television City.
(d) 2016 and 2015 primarily reflect 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)



Financing Activities
Year Ended December 31,202020192018
(Repayments of) proceeds from short-term debt borrowings, net$(706)$25 $(5)
Proceeds from issuance of senior notes4,375 492 — 
Repayment of long-term debt(2,901)(910)(1,102)
Dividends(600)(595)(599)
Purchase of the Company’s Class B Common Stock(58)(57)(586)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(93)(56)(67)
All other financing activities, net(107)(115)(172)
Cash flow used for financing activities$(90)$(1,216)$(2,531)
Year Ended December 31,2017 2016 2015
Repurchase of CBS Corp. Class B Common Stock$(1,111) $(2,997) $(2,813)
Proceeds from (repayments of) short-term debt borrowings, net229
 450
 (616)
Proceeds from issuance of senior notes1,773
 684
 1,959
Repayment of senior notes and debentures(1,244) (199) —
Proceeds from debt borrowings of CBS Radio40
 1,452
 —
Repayment of debt borrowings of CBS Radio(43) (110) —
Dividends(296) (288) (300)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(89) (58) (96)
Proceeds from exercise of stock options91
 21
 142
All other financing activities, net(27) (1) 71
Cash flow used for financing activities$(677) $(1,046) $(1,653)


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 discontinuedcontinuing operations and discretionary contributions to prefund the Company’s pension plans, 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. Free cash flow excludes discretionary contributions to prefund the Company’s pension plans because management assesses the Company’s ability to generate operating cash flows without considering the impact from discretionary pension contributions, and decisions regarding the timing of pension plan funding are not dependent on the level of operating cash flows generated during the period. The Company’sOur net cash flow provided by (used for) operating activities from continuing operations 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 of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from the Company’sour underlying
II-35



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

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 from continuing operations as a measure of liquidity or net earnings 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.




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



The following table presents a reconciliation of the Company’s free cash flow toour net cash flow provided by operating activities.activities from continuing operations to free cash flow.
Year Ended December 31,202020192018
Net cash flow provided by operating activities from continuing operations (GAAP)$2,215 $1,171 $3,324 
Capital expenditures(324)(345)(345)
Free cash flow (Non-GAAP)$1,891 $826 $2,979 
Year Ended December 31,2017 2016 2015
Net cash flow provided by operating activities$887
 $1,685
 $1,394
Capital expenditures(185) (196) (171)
Exclude discretionary pension plan contributions,
net of tax of $219 million
(381) —
 —
Exclude operating cash flow from discontinued operations94
 231
 205
Free cash flow$989
 $1,258
 $1,018


Dividends
We declared a quarterly cash dividend on our Class A and Class B Common Stock during each of the quarters of 2020, resulting in total dividends for the year of $601 million, or $.96 per share. On December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. 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. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For the yearsyear ended December 31, 2017, 2016 and 2015, the Company2018, CBS declared total per share dividends of $.72, $.66, and $.60, respectively, which resultedresulting in total annual dividends of $289 million, $294 million and $293 million, respectively.$274 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For the year ended December 31, 2018, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million.


On February 1, 2018, the Company announced9, 2021, ViacomCBS declared a quarterly cash dividend of $.18$.24 per share on its Class A and Class B Common Stock, payable on April 1, 2018.2021. 


Share Repurchase ProgramLiquidity and Capital Resources
Sources and Uses of Cash
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. Our operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, leases, interest payments, income tax payments and pension funding obligations. Our investing and financing spending includes capital expenditures, investments and acquisitions, share repurchases, dividends and principal payments on our outstanding indebtedness. We believe that our operating cash flows, cash and cash equivalents, borrowing capacity under our $3.50 billion Credit Facility, and access to capital markets are sufficient to fund our operating, investing and financing requirements for the next twelve months.

Our 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 Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. We routinely assess our capital structure and opportunistically enter into transactions to lower our interest expense, which could result in a charge from the early extinguishment of debt.

Funding for our long-term debt obligations due over the next five years of $5.11 billion is expected to come from our ability to refinance our debt, cash generated from operating activities, and proceeds from non-core asset sales.

During 2017, the Company repurchased 16.2year ended December 31, 2020, we issued $4.50 billion of senior notes with interest rates ranging from 4.20% to 4.95% and due dates from 2025 to 2050. The net proceeds from these issuances are being used for the redemption of our long-term debt as well as for general corporate purposes. During the year ended December 31, 2020, we redeemed, prior to maturity, senior notes, debentures, and junior subordinated debentures totaling $2.77 billion, for an aggregate redemption price of $2.88 billion.

During the fourth quarter of 2020, we announced that we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. In addition, we completed the sale of CMG for cash proceeds of $459 million sharesand advertising and data licensing credits of CBS Corp. Class B Common Stock under its share repurchase program for $1.05 billion, at$25 million. These divestitures are a result of a strategic review of our non-core assets. Proceeds from these transactions will be used to invest in our strategic growth priorities, including in streaming, as well as to fund the dividend and pay down debt.

The ongoing impact of COVID-19 could have a negative effect on our financial condition or our ability to fund operations, dividends or future investment opportunities due to an averageincrease in the cost of, $64.70 per share. At December 31, 2017, $3.06 billionor difficulty in, obtaining debt or equity financing, or our ability to comply with the leverage covenant in our Credit Facility in the future. The magnitude of authorization remained under the share repurchase program.

Also during 2017,continuing impact on our financial condition and results of operations will depend on numerous evolving factors that we may not be able to accurately predict or control, including the Company completedduration and extent of the split-offpandemic, the impact of CBS Radio through an exchange offer,federal, state, local and foreign governmental actions, consumer behavior in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. (See Note 4response to the consolidated financial statements.)pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

Capital Structure
The following table sets forth the Company’s debt.
II-33
At December 31,2017 2016
Commercial paper$679
 $450
Senior debt (1.95%-7.875% due 2017-2045)9,426
 8,850
Obligations under capital leases57
 75
Total debt (a)
10,162
 9,375
Less commercial paper679
 450
Less current portion of long-term debt19
 23
Total long-term debt, net of current portion$9,464
 $8,902
(a)At December 31, 2017 and 2016, the senior debt balances included (i) a net unamortized discount of $65 million and $52 million, respectively, (ii) unamortized deferred financing costs of $47 million and $43 million, respectively, and (iii) a $3 million decrease and a $5 million increase, respectively, in the carrying value of the debt relating to previously settled fair value hedges. The face value of the Company’s total debt was $10.28 billion at December 31, 2017 and $9.47 billion at December 31, 2016.







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



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.
For the year ended
At December 31, 2017, debt issuances, redemptions2020, we had $2.36 billion of remaining availability under our share repurchase program. Any share repurchases under the program are expected to be funded by cash flows from operations and, repaymentsas appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt.
Cash Flows
The changes in cash, cash equivalents and restricted cash were as follows:

Increase/ (Decrease)Increase/ (Decrease)
Year Ended December 31,202020192020 vs. 201920182019 vs. 2018
Cash provided by operating activities from:
Continuing operations$2,215 $1,171 $1,044 $3,324 $(2,153)
Discontinued operations79 59 20 140 (81)
Cash provided by operating activities2,294 1,230 1,064 3,464 (2,234)
Cash provided by (used for) investing activities from:
Continuing operations63 (145)208 (581)436 
Discontinued operations(7)(10)3 (30)20 
Cash provided by (used for) investing activities56 (155)211 (611)456 
Cash used for financing activities(90)(1,216)1,126 (2,531)1,315 
Effect of exchange rate changes on cash, cash
equivalents and restricted cash		25 (1)26 (25)24 
Net increase (decrease) in cash, cash equivalents and
restricted cash		$2,285 $(142)$2,427 $297 $(439)
Debt IssuancesOperating Activities.  The increase in cash provided by operating activities from continuing operations for 2020 compared to 2019 was primarily driven by significantly lower spending, including for programming, production, advertising and distribution costs resulting from production shutdowns related to COVID-19 and cost savings, as well as lower payments for income taxes. These impacts were partially offset by the decline in revenues and higher payments for restructuring, merger-related costs, and costs to achieve synergies.
November 2017, $400 million 2.90% senior notes due 2023
November 2017, $500 million 3.70% senior notes due 2028
July 2017, $400 million 2.50% senior notes due 2023
July 2017, $500 million 3.375% senior notes due 2028

Debt Redemptions
November 2017, $500 million 5.750% senior notes due 2020
July 2017, $300 million 4.625% senior notes due 2018

Debt Repayments
July 2017, $400 million 1.950% senior notes due 2017, upon maturity


The Company useddecrease in cash provided by operating activities from continuing operations for 2019 compared with 2018 was primarily driven by increased spending for television and film programming, higher payments for income taxes and payments of $132 million associated with costs related to the net proceedsMerger.

Cash paid for income taxes from continuing operations decreased to $411 million for 2020 from $560 million for 2019. The comparison was impacted by a payment in 2019 as a result of guidance issued by the U.S. government in January 2019 relating to the transition tax on cumulative foreign earnings and profits that resulted from the 2017 issuancesenactment of federal tax legislation in December 2017. The increase in cash payments for the redemption and repayment of $1.20 billion of senior notes andincome taxes from continuing operations for general corporate purposes, including discretionary contributions2019 compared to $153 million for 2018 was primarily due to the Company’s qualified pension plans andaforementioned payment in 2019, as well as a benefit to 2018 from the repaymentapplication of short-term borrowings, including commercial paper.

The early redemption of the $500 million 5.750% senior notes due April 2020 and the $300 million 4.625% senior notes due May 2018 resulted in a pre-tax loss on early extinguishment of debt of $49 million ($31 million, net of tax) for the year ended December 31,federal income tax overpayment carryforward from 2017.

II-34

During July 2016, the Company issued $700 million of 2.90% senior notes due 2027 and used the net proceeds for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and the repayment of short-term borrowings, including commercial paper. During January 2016, the Company repaid its $200 million of outstanding 7.625% senior debentures upon maturity.

At December 31, 2017, the Company’s scheduled maturities of long-term debt at face value, excluding capital leases, were as follows:
                2023 and
 20182019202020212022Thereafter
Long-term debt $—
  $600
  $—
  $300
  $700
 $7,940
Commercial Paper
The Company had outstanding commercial paper borrowings under its $2.50 billion commercial paper program of $679 million and $450 million at December 31, 2017 and 2016, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 1.88% and 0.98% at December 31, 2017 and 2016, respectively.
Credit Facility
At December 31, 2017, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Company, at its 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’s 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’s senior unsecured debt rating. The Company pays a facility fee based on the total amount of the commitments.




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



The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At December 31, 2017, the Company’s Consolidated Leverage Ratio was approximately 3.1x.

The Consolidated Leverage RatioCash provided by operating activities from discontinued operations reflects the ratiooperating activities of Simon & Schuster.
Investing Activities
Year Ended December 31,202020192018
Investments (a)
$(59)$(171)$(161)
Capital expenditures(324)(345)(345)
Acquisitions, net of cash acquired (b)
(147)(399)(118)
Proceeds from dispositions (c)
593 756 39 
Other investing activities from continuing operations— 14 4 
Cash flow provided by (used for) investing activities from continuing
operations		63 (145)(581)
Cash flow used for investing activities from discontinued operations(7)(10)(30)
Cash flow provided by (used for) investing activities$56 $(155)$(611)
(a) Primarily includes our investment in The CW.
(b) 2020 primarily reflects the Company’s indebtednessacquisition of Miramax, a global film and television studio. 2019 primarily reflects the acquisition of Pluto Inc. and the remaining 50% interest in Pop TV, a general entertainment cable network. 2018 primarily reflects the acquisitions of WhoSay Inc., a leading influence marketing firm, Pop Culture Media, a digital entertainment media company, and VidCon LLC, a host of conferences dedicated to online video.
(c) 2020 reflects the sale of CMG and marketable securities. 2019 primarily reflects the sale of CBS Television City.

Financing Activities
Year Ended December 31,202020192018
(Repayments of) proceeds from short-term debt borrowings, net$(706)$25 $(5)
Proceeds from issuance of senior notes4,375 492 — 
Repayment of long-term debt(2,901)(910)(1,102)
Dividends(600)(595)(599)
Purchase of the Company’s Class B Common Stock(58)(57)(586)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(93)(56)(67)
All other financing activities, net(107)(115)(172)
Cash flow used for financing activities$(90)$(1,216)$(2,531)

Free Cash Flow
Free cash flow is a non-GAAP financial measure. Free cash flow reflects our net cash flow provided by operating activities from continuing operations adjustedless capital expenditures. Our calculation of free cash flow includes capital expenditures because investment in capital expenditures is a use of cash that is directly related to exclude certainour operations. Our net cash flow provided by operating activities from continuing operations is the most directly comparable GAAP financial measure.

Management believes free cash flow provides investors with an important perspective on the cash available to us to service debt, make strategic acquisitions and investments, maintain our capital leaseassets, satisfy our tax obligations, atand fund ongoing operations and working capital needs. As a result, free cash flow is a significant measure of our 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 our operating performance. We believe the endpresentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from our underlying
II-35



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

operations in a quarter,manner similar to the Company’s Consolidated EBITDAmethod used by management. Free cash flow is among several components of incentive compensation targets for certain management personnel. In addition, free cash flow is a primary measure used externally by our investors, analysts and industry peers for purposes of valuation and comparison of our operating performance to other companies in our 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 operating activities from continuing operations as a measure of liquidity or net earnings as a measure of operating performance. Free cash flow, as we 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 our ability to fund our cash needs.

The following table presents a reconciliation of our net cash flow provided by operating activities from continuing operations to free cash flow.
Year Ended December 31,202020192018
Net cash flow provided by operating activities from continuing operations (GAAP)$2,215 $1,171 $3,324 
Capital expenditures(324)(345)(345)
Free cash flow (Non-GAAP)$1,891 $826 $2,979 

Dividends
We declared a quarterly cash dividend on our Class A and Class B Common Stock during each of the quarters of 2020, resulting in total dividends for the trailingyear of $601 million, or $.96 per share. On December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. 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 consecutive quarters.  Consolidated EBITDA is definedquarters of 2018. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. Atyear ended December 31, 2017,2018, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million. During the Company had no borrowings outstanding underfirst three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For the Credit Facilityyear ended December 31, 2018, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million.

On February 9, 2021, ViacomCBS declared a quarterly cash dividend of $.24 per share on its Class A and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.Class B Common Stock, payable on April 1, 2021. 


Liquidity and Capital Resources
The Company continually projectsSources and Uses of Cash
We 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 tax 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 believesWe believe that itsour operating cash flows, cash and cash equivalents, borrowing capacity under itsour $3.50 billion Credit Facility, which had $2.49 billion of remaining availability at December 31, 2017, 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 $1.60$5.11 billion is expected to come from the Company’sour ability to refinance itsour debt, and cash generated from operating activities.activities, and proceeds from non-core asset sales.


During the year ended December 31, 2020, we issued $4.50 billion of senior notes with interest rates ranging from 4.20% to 4.95% and due dates from 2025 to 2050. The net proceeds from these issuances are being used for the redemption of our long-term debt as well as for general corporate purposes. During the year ended December 31, 2020, we redeemed, prior to maturity, senior notes, debentures, and junior subordinated debentures totaling $2.77 billion, for an aggregate redemption price of $2.88 billion.

During the fourth quarter of 2020, we announced that we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. In addition, we completed the sale of CMG for cash proceeds of $459 million and advertising and data licensing credits of $25 million. These divestitures are a result of a strategic review of our non-core assets. Proceeds from these transactions will be used to invest in our strategic growth priorities, including in streaming, as well as to fund the dividend and pay down debt.

The ongoing impact of COVID-19 could have a negative effect on our financial condition or our ability to fund operations, dividends or future investment opportunities due to an increase in the cost of, or difficulty in, obtaining debt or equity financing, or our ability to comply with the leverage covenant in our Credit Facility in the future. The magnitude of the continuing impact on our financial condition and results of operations will depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

II-33



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

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, 2017, the Company2020, we had $3.06$2.36 billion of remaining availability under itsour share repurchase program. ShareAny 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.

Cash Flows
The changes in cash, cash equivalents and restricted cash were as follows:
Increase/ (Decrease)Increase/ (Decrease)
Year Ended December 31,202020192020 vs. 201920182019 vs. 2018
Cash provided by operating activities from:
Continuing operations$2,215 $1,171 $1,044 $3,324 $(2,153)
Discontinued operations79 59 20 140 (81)
Cash provided by operating activities2,294 1,230 1,064 3,464 (2,234)
Cash provided by (used for) investing activities from:
Continuing operations63 (145)208 (581)436 
Discontinued operations(7)(10)3 (30)20 
Cash provided by (used for) investing activities56 (155)211 (611)456 
Cash used for financing activities(90)(1,216)1,126 (2,531)1,315 
Effect of exchange rate changes on cash, cash
equivalents and restricted cash		25 (1)26 (25)24 
Net increase (decrease) in cash, cash equivalents and
restricted cash		$2,285 $(142)$2,427 $297 $(439)
Operating Activities.  The increase in cash provided by operating activities from continuing operations for 2020 compared to 2019 was primarily driven by significantly lower spending, including for programming, production, advertising and distribution costs resulting from production shutdowns related to COVID-19 and cost savings, as well as lower payments for income taxes. These impacts were partially offset by the decline in revenues and higher payments for restructuring, merger-related costs, and costs to achieve synergies.

The decrease in cash provided by operating activities from continuing operations for 2019 compared with 2018 was primarily driven by increased spending for television and film programming, higher payments for income taxes and payments of $132 million associated with costs related to the Merger.

Cash paid for income taxes from continuing operations decreased to $411 million for 2020 from $560 million for 2019. The comparison was impacted by a payment in 2019 as a result of guidance issued by the U.S. 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. The increase in cash payments for income taxes from continuing operations for 2019 compared to $153 million for 2018 was primarily due to the aforementioned payment in 2019, as well as a benefit to 2018 from the application of a federal income tax overpayment carryforward from 2017.

II-34





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



Cash provided by operating activities from discontinued operations reflects the operating activities of Simon & Schuster.
Investing Activities
Year Ended December 31,202020192018
Investments (a)
$(59)$(171)$(161)
Capital expenditures(324)(345)(345)
Acquisitions, net of cash acquired (b)
(147)(399)(118)
Proceeds from dispositions (c)
593 756 39 
Other investing activities from continuing operations— 14 4 
Cash flow provided by (used for) investing activities from continuing
operations		63 (145)(581)
Cash flow used for investing activities from discontinued operations(7)(10)(30)
Cash flow provided by (used for) investing activities$56 $(155)$(611)
(a) Primarily includes our investment in The CW.
(b) 2020 primarily reflects the acquisition of Miramax, a global film and television studio. 2019 primarily reflects the acquisition of Pluto Inc. and the remaining 50% interest in Pop TV, a general entertainment cable network. 2018 primarily reflects the acquisitions of WhoSay Inc., a leading influence marketing firm, Pop Culture Media, a digital entertainment media company, and VidCon LLC, a host of conferences dedicated to online video.
(c) 2020 reflects the sale of CMG and marketable securities. 2019 primarily reflects the sale of CBS Television City.

Financing Activities
Year Ended December 31,202020192018
(Repayments of) proceeds from short-term debt borrowings, net$(706)$25 $(5)
Proceeds from issuance of senior notes4,375 492 — 
Repayment of long-term debt(2,901)(910)(1,102)
Dividends(600)(595)(599)
Purchase of the Company’s Class B Common Stock(58)(57)(586)
Payment of payroll taxes in lieu of issuing shares for
stock-based compensation		(93)(56)(67)
All other financing activities, net(107)(115)(172)
Cash flow used for financing activities$(90)$(1,216)$(2,531)

Free Cash Flow
Free cash flow is a non-GAAP financial measure. Free cash flow reflects our net cash flow provided by operating activities from continuing operations less capital expenditures. Our calculation of free cash flow includes capital expenditures because investment in capital expenditures is a use of cash that is directly related to our operations. Our net cash flow provided by operating activities from continuing operations is the most directly comparable GAAP financial measure.

Management believes free cash flow provides investors with an important perspective on the cash available to us to service debt, make strategic acquisitions and investments, maintain our capital assets, satisfy our tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow is a significant measure of our 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 our operating performance. We believe the presentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from our underlying
II-35



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

operations in a manner similar to the method used by management. Free cash flow is among several components of incentive compensation targets for certain management personnel. In addition, free cash flow is a primary measure used externally by our investors, analysts and industry peers for purposes of valuation and comparison of our operating performance to other companies in our 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 operating activities from continuing operations as a measure of liquidity or net earnings as a measure of operating performance. Free cash flow, as we 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 our ability to fund our cash needs.

The following table presents a reconciliation of our net cash flow provided by operating activities from continuing operations to free cash flow.
Year Ended December 31,202020192018
Net cash flow provided by operating activities from continuing operations (GAAP)$2,215 $1,171 $3,324 
Capital expenditures(324)(345)(345)
Free cash flow (Non-GAAP)$1,891 $826 $2,979 

Dividends
We declared a quarterly cash dividend on our Class A and Class B Common Stock during each of the quarters of 2020, resulting in total dividends for the year of $601 million, or $.96 per share. On December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. 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. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For the year ended December 31, 2018, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For the year ended December 31, 2018, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million.

On February 9, 2021, ViacomCBS declared a quarterly cash dividend of $.24 per share on its Class A and Class B Common Stock, payable on April 1, 2021. 

Share Repurchase Program
During 2020, we repurchased 1.3 million shares of ViacomCBS Class B Common Stock under our share repurchase program for $50 million, at an average cost of $38.63 per share. At December 31, 2020, $2.36 billion of authorization remained under the share repurchase program.
II-36



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

Capital Structure
The following table sets forth our debt.
At December 31,20202019
Commercial paper$— $699 
Senior debt (2.250%-7.875% due 2021-2050)18,455 16,690 
Junior debt (5.875%-6.250% due 2057)1,157 1,286 
Other bank borrowings95 — 
Obligations under finance leases26 44 
Total debt (a)
19,733 18,719 
Less commercial paper— 699 
Less current portion of long-term debt16 18 
Total long-term debt, net of current portion$19,717 $18,002 
(a)    At December 31, 2020 and 2019, the senior and junior subordinated debt balances included (i) a net unamortized discount of $491 million and $412 million, respectively, and (ii) unamortized deferred financing costs of $107 million and $92 million, respectively. The face value of our total debt was $20.33 billion at December 31, 2020 and $19.23 billion at December 31, 2019.

During the year ended December 31, 2020, we issued $4.50 billion of senior notes with interest rates ranging from 4.20% to 4.95% and due dates from 2025 to 2050. The net proceeds from these issuances are being used for the redemption of our long-term debt as well as for general corporate purposes. During the year ended December 31, 2020, we redeemed, prior to maturity, senior notes, debentures, and junior subordinated debentures totaling $2.77 billion, for an aggregate redemption price of $2.88 billion. These redemptions resulted in a pre-tax loss on extinguishment of debt of $126 million ($97 million, net of tax).

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 extinguishment of debt of $18 million ($14 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 subordination, interest deferral option and extended term of the junior subordinated debentures provide significant credit protection measures for senior creditors and, as a result of 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 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
II-37



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

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, 2020, the outstanding principal amount of our 2.25% senior notes due February 2022 and 3.45% senior notes due October 2026 was $35 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.

Commercial Paper
In January 2020, our commercial paper program was increased to $3.50 billion from $2.50 billion in conjunction with the new $3.50 billion revolving credit facility described below. At December 31, 2020, we had no outstanding commercial paper borrowings. At December 31, 2019, we had $699 million outstanding commercial paper borrowings under our commercial paper program at a weighted average interest rate of 2.07% and maturities of less than 90 days.

Credit Facility
In January 2020, the $2.50 billion revolving credit facility held by CBS prior to the Merger, with a maturity in June 2021, was terminated and the revolving credit facility held by Viacom prior to the Merger, with a maturity in February 2024, was amended and restated to a $3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”). The credit facility is used for general corporate purposes and to support commercial paper outstanding, if any. We may, at our option, also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at our option at the time of each borrowing and are generally based on either the prime rate in the U.S. or LIBOR plus a margin based on our senior unsecured debt rating, depending on the type and tenor of the loans entered. The Credit Facility has one principal financial covenant that requires our Consolidated Total Leverage Ratio to 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. The Consolidated Total Leverage Ratio reflects the ratio of our Consolidated Indebtedness at the end of a quarter, to our Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing twelve-month period. We met the covenant as of December 31, 2020.

At December 31, 2020, we had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $3.50 billion.
Other Bank Borrowings
At December 31, 2020, we had $95 million of bank borrowings with a weighted average interest rate of 3.50% under Miramax’s $300 million credit facility, which matures in April 2023.
II-38



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, 2017,2020, payments due by period under the Company’sour significant contractual obligations with remaining terms in excess of one year were as follows:
Payments Due by Period
Payments Due by Period2026 and
        2023 andTotal20212022-20232024-2025Thereafter
Total 2018 2019-2020 2021-2022 thereafter
Off-Balance Sheet ArrangementsOff-Balance Sheet Arrangements
Programming and talent commitments (a)
$10,414
 $2,281
 $4,063
 $3,276
 $794
Programming and talent commitments (a)
$9,852 $2,625 $4,269 $1,224 $1,734 
Purchase obligations (b)
790
 218
 423
 78
 71
Purchase obligations (b)
1,377 501 614 201 61 
On-Balance Sheet ArrangementsOn-Balance Sheet Arrangements
Operating leases (c)
1,122
 155
 240
 200
 527
Operating leases (c)
2,269 372 575 406 916 
Long-term debt obligations (d)
9,540
 —
 600
 1,000
 7,940
Long-term debt obligations (d)
20,210 — 2,165 2,942 15,103 
Interest commitments on long-term debt (e)
5,122
 406
 793
 741
 3,182
Interest commitments on long-term debt (e)
14,756 970 1,904 1,680 10,202 
Capital lease obligations (including interest) (f)
62
 19
 27
 16
 —
Finance leases (including interest) (f)
Finance leases (including interest) (f)
28 17 9 2 — 
Other long-term contractual obligations (g)
1,834
 —
 1,081
 425
 328
Other long-term contractual obligations (g)
1,734 — 1,261 440 33 
Total$28,884
 $3,079
 $7,227
 $5,736
 $12,842
Total$50,226 $4,485 $10,797 $6,895 $28,049 
(a) ProgrammingOur programming and talent commitments of the Company primarily include $7.30$5.98 billion for sports programming rights $2.44and $3.87 billion relating to the production and licensing of television and film programming, and $672 million forincluding 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. Amounts reflect future minimum payments, excluding interest.
(d) Long-termReflects 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, excluding interest.
(g) Reflects long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet, including program liabilities; participations due to producers;participations; residuals; and a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the estimatedremaining tax on the Company’sour historical accumulated foreign earnings and profits, which is payable to the IRS over eight years.in 2024 and 2025.
 
The table above excludes $138 million ofdoes not include payments relating to reserves for uncertain tax positions of $308 million and the related accrued interest and penalties, asredeemable noncontrolling interest of $197 million, our guarantee liability of $100 million relating to the Company cannot reasonably predict thesale of CBS Television City, lease indemnification obligations of $67 million, residual liabilities of previously disposed businesses, and 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 2018, the Company expects2021, we expect to make contributions of approximately $53$15 million to itsour qualified pension plans for minimum funding requirements under ERISA and $86 million to our non-qualified pension plans to satisfy the benefit payments due under these plans. Also in 2018, the Company expects2021, we expect to contribute approximately $49$39 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
II-39



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

December 31, 2017,2020, the outstanding letters of credit and surety bonds approximated $99$144 million and were not recorded on the Consolidated Balance Sheet.

CBS Television City. In connection with the sale of CBS Television City in 2019, we 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, 2020 is a liability of $100 million, reflecting the present value of the remaining 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. These lease commitments amounted to $67 million as of December 31, 2020, and are presented within “Other liabilities” on the Consolidated Balance Sheet. The amount of lease commitments varies over time depending on expiration or termination of 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.

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 itsour 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
II-40



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

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.

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.

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 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.

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.

Film and Television Production and Programming Costs
Accounting forCosts incurred to produce television programs and feature films are capitalized when incurred and amortized over the Company’s television production costs requires management’s judgment as it relates to total estimated revenues to be earned (“Ultimate Revenues”) and costs to be incurred throughout theprojected life of each television program.  These estimates are used to determine the amortization of capitalized production costs, expensing of participation costs, and any necessary net realizable value adjustments to capitalized production costs.  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.

or feature film. The costs incurred in acquiring television series and feature film programming rights, including advances, are capitalized when the license period has begun and the program is accepted and available for airing and theairing. The costs of programming rights licensed under multi-year sports
II-41



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

programming agreements are capitalized if the rights payments are made before the related economic benefit has been received. These costsAcquired programming rights, including rights for sports programming, 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

For internally-produced television programs and feature films that are predominantly monetized on an individual basis, we use an individual-film-forecast computation method to amortize capitalized production costs and to accrue estimated liabilities for participations and residuals 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. Management’s judgment is determinedrequired in estimating Ultimate Revenues and the costs to be incurred throughout the life of each television program or feature film. These estimates are used to determine the timing of amortization of capitalized production costs and expensing of participation and residual costs.

For television programming, our estimate of Ultimate Revenues includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, 5 years from the delivery of the most recent episode, if later. These estimates are based on management’sthe past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license 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. 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. 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.

For acquired film libraries, our estimate of Ultimate Revenues is for a period within 20 years from the date of acquisition.

For programming that is predominantly monetized as part of a film group, which includes our acquired programming rights and certain internally-produced television programs, capitalized costs are amortized based on an estimate of the timing of our usage of and benefit from such programming. Such estimates require management’s judgement and include consideration of factors such as expected revenues to be derived from the programming. Management’s judgment is required in determiningprogramming, the valueexpected number of the future economic benefitairings, and, timing of the expensing of these costs.

Ultimate revenue estimates for internally produced television programming, and the estimated economic benefit for acquired programming, which includes television series, feature filmsthe length of the license period. If initial airings are expected to generate higher revenues, an accelerated method of amortization is used. These estimates are periodically reviewed and sports, are updated regularly based on information available asthroughout the contractual term or life of each program.

We test a film group or individual television program or feature film progresses throughfor impairment when events or circumstances indicate that its life cycle or contractual term. Overestimating Ultimate Revenues for internally produced programming or a failure to adjust for a downward revisionfair value may be less than its unamortized cost. If the result of the impairment test
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

indicates that the carrying value exceeds the estimated economic benefit tofair value, an impairment charge will then be generated fromrecorded for the amount of the difference. In addition, unamortized costs for internally-produced or acquired programming could result in the understatement of the amortization of capitalized production or programming costs, future net realizable value adjustments and/or estimated accruals for participation expense.that have been substantively abandoned are written off.


Impairment of 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 during the fourth quarteron 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.

FCC 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’sour 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, 2017 the Company2020, we had eight reporting units with goodwill balances, and 14 television markets with FCC license book values.


Television FCC Licenses—For itsour annual impairment test, the Company performswe perform qualitative assessments for each television market that management estimateswe estimate has an aggregate fair value of FCC licenses that significantly exceed their respective carrying values. In selecting markets for a qualitative assessment the Company also considersAdditionally, we consider the duration of time since a quantitative test was performed. For the 20172020 annual impairment test, the Companywe performed qualitative assessments for 11 television10 of our 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 average market share and capital expenditures. The Companyshare. We also considered the macroeconomic impact on discount rates and growth rates. 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 a quantitative impairment test that compares theon these markets was unnecessary.

A quantitative impairment test of FCC 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 five-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 nominallong-term growth rate, which is based on projected long-range inflation in the U.S. and long-term industry projections. The discount rate is determined

During the second quarter of 2020, based on the averagean assessment of the weighted average costrelevant factors that could impact the fair value of capitalFCC licenses, including the effects of comparable entities in the broadcast industry. The discount rates and perpetual nominal growth rates used for each television station for 2017 were 7.5% and 2.0%, respectively.

For the three television markets for which a quantitativeCOVID-19, we determined that an interim impairment test was performednecessary for three markets in 2017, the Company concludedwhich we hold FCC licenses. The impairment test indicated that the estimated fair values of FCC licenses in each market exceededtwo markets were lower than their respective carrying values, and therefore nowhich resulted from recent declines in industry projections in the markets where these FCC licenses are held, that were further accelerated by COVID-19. Accordingly, we recorded an impairment charge was required. Theof $25 million to write down the carrying values of these FCC licenses to their aggregate estimated fair value of one$216 million. This charge is included within “Depreciation and amortization” in the Consolidated Statement of Operations recorded within the TV Entertainment segment. Additionally, the estimated fair value of the FCC license in the third market exceeded its carrying value of $53 million by 7%.

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

For the 2020 annual test, we performed a quantitative impairment test for the three markets tested during the second quarter, as well as a fourth U.S. television market,market. The impairment tests indicated that the estimated fair values of FCC licenses in the three markets we tested during the second quarter, which had aan aggregate carrying value of FCC licenses of $74$269 million at December 31, 2020, were within 10% of their respective carrying values. The fourth market had a fair value that exceeded its carrying value by 6%. In each of the remaining television markets, the estimated fair value of FCC licenses was in excess of the respective carrying values by more than 10%20%.


The estimated fair values of the FCC 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 further decline in the local television advertising marketplace 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; 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.



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


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, 2020, we had four reporting units. For itsthe 2020 annual impairment test, we tested two reporting units for impairment as of August 31 and the Company performsremaining 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 20172020 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 actual and expected 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 2017, the Company performed aA quantitative goodwill impairment test, forwhen performed, includes estimating the CBS Sports Network reporting unit. The quantitative goodwill impairment test examines whether the carryingfair value of a reporting unit exceeds its estimated fair value, which is computedusing an income approach based uponon a discounted cash flow analysis and/or a market-based approach. 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”). If the carrying value exceeds the estimated fair value, an impairment charge is recognized as the amount by which the carrying value exceeds the fair value. For 2017, the Discounted Cash Flow Method and Market Comparable Method for CBS Sports Network 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 2017 was 2.0%. The discount rate was determined based on the average of the weighted average cost of capital of comparable entities and for 2017 was 8.5%.

For the 2017 annual impairment test the Company concluded that the estimated fair value of the CBS Sports Network reporting unit, which had a goodwill balance of $261 million, exceeded its carrying value by 4% and therefore no impairment charge was required. An increase to the discount rate of 25 basis points, or a decrease to the perpetual nominal growth rate of 35 basis points, assuming no changes to other factors, would cause the fair value of the CBS Sports Network reporting unit to fall below its carrying value.


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/orplatforms, changes in consumer behavior and/or a decrease in audience acceptance of our content 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.

II-44





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



be required. Such a charge could have a material effect on the 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 record an accrual for a loss contingency when it is both probable that a liability has been incurred and when the amount of the loss can be reasonably estimated. We continually evaluatesevaluate these estimates based on changes in the relevant facts and circumstances and events that may impact estimates. While management believeswe believe that the current reservesour accrual for matters related to our predecessor operations, of the Company, including environmental and asbestos, are adequate, there can be no assurance that circumstances will not change in future periods. This beliefIt is difficult to predict future asbestos liabilities as events and circumstances may impact the estimate of our liabilities. Our 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 projectedaccumulated 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, 2017,2020, the unrecognized actuarial losses included in accumulated other comprehensive incomeloss decreased slightly from the prior year-end due primarily to the Company’s purchasefavorable performance of pension plan assets and the inclusion of a group annuity contract, under which an insurance company has permanently assumedcurtailment gain associated with the obligation to pay and administerelimination of benefit accruals for future service as a result of a plan amendment for our remaining active pension benefits to certain of the Company’s pension plan participants, or their designated beneficiaries, which accelerated the recognition of unamortized actuarial losses. This reduction in unrecognized actuarial losses was partiallyplans. These items were mostly offset by the impact from a decrease in the discount rate. A 25 basis point change in the discount rate willwould result in an estimated change to the projectedaccumulated benefit obligation of approximately $104$135 million and would not have a material impact on 20182021 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 $7$8 million to 20182021 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 an 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
II-45



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

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 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 $138$308 million at December 31, 20172020 is properly recorded pursuantrecorded.
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 following matters are not likely, in the aggregate, to result in a material adverse effect on our business, financial condition and results of operations.

Litigation Relating to the recognitionMerger
Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or putative class action lawsuits in the Court of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the three lawsuits and measurement provisionsappointed Bucks County Employees’ Retirement Fund and International Union of FASB guidanceOperating Engineers of Eastern Pennsylvania and Delaware as co-lead plaintiffs for uncertaintythe consolidated action. On April 14, 2020, the lead plaintiffs filed a Verified Consolidated Class Action and Derivative Complaint (as used in income taxes.this paragraph, the “Complaint”) against Shari E. Redstone, NAI, Sumner M. Redstone National Amusements Trust, members of 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 nominal defendant ViacomCBS Inc. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and approval of the Agreement and Plan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the surviving claims will now proceed. 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.


Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the four lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) against NAI, NAI

II-46





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



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. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims will now proceed. 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.

Investigation-Related Matters
As announced on August 1, 2018, the CBS Board of Directors retained two law firms to conduct a resultfull investigation of the enactmentallegations in press reports about CBS’ former Chairman of the Tax ReformBoard, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board of Directors announced the completion of its investigation, certain findings of the investigation and the CBS Board of Directors’ 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.

On August 27, 2018 and on October 1, 2018, Gene Samit and John Lantz, respectively, filed putative class action lawsuits 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 of Directors. 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
II-47



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

trust pursuant to the Separation Agreement. On December 22, 2017,17, 2018, the CBS Board of Directors 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 of Directors’ 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 the related CBS Board of Directors 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 the amount, if any, that may be awarded thereunder. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

Litigation Related to Television Station Owners
On September 9, 2019, the Company recordedwas added as a provisional charge of $407 milliondefendant in a multi-district putative class action lawsuit filed in the United States District Court for the estimated tax impactNorthern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on the Company’s historical accumulated foreign earnings and profits. This amount was basedor about January 1, 2014 on the Company’s current estimate; however, the final impacttelevision stations owned by one or more of the Tax Reform Act may differ materially from this estimate since alldefendant television station owners and alleges the sharing of allegedly competitively sensitive information among such television stations in alleged violation of the necessary information was not available, prepared or analyzed in sufficient detail to complete the assessment of the Tax ReformSherman Antitrust Act. In addition, future interpretive guidance issued by federal and state tax authorities may impact this provisional amount. The Company will complete its analysis of this provisional amount and finalize and record any adjustments to its estimate within one year from the enactment of the Tax Reform Act.
Legal Matters
General. On an ongoing basis,action, which names the Company vigorously defends itself in numerous lawsuitsamong fourteen total defendants, seeks monetary damages, attorneys’ fees, costs and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, ‘‘litigation’’). Litigation may be broughtinterest as well as injunctions against the Company without merit, is inherently uncertain 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, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under the Separation Agreement betweenallegedly unlawful conduct. On October 8, 2019, the Company and Viacom Inc.,other defendants filed a motion to dismiss the Companymatter, which was denied by the court on November 6, 2020. We believe that the claims are without merit and Viacom Inc. have agreedwe intend to defend and indemnify the otheragainst 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 certain litigation in which the Company and/or Viacom Inc. is named.our consolidated financial statements.


Claims Related to Former Businesses: Asbestos. The Company isAsbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred 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, 2017, the Company2020, we had pending approximately 31,66030,710 asbestos claims, as compared with approximately 33,61030,950 as of December 31, 20162019 and 36,03031,570 as of December 31, 2015.2018. During 2017, the Company2020, we received approximately 3,5302,910 new claims and closed or moved to an inactive docket approximately 5,4803,150 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. The Company’sOur total costs for the years 20172020 and 20162019 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57$35 million and $48$58 million, respectively. The Company’sOur 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.


II-48



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

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



Management’s Discussion when the amount of the loss can be reasonably estimated. We believe that our accrual and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)


insurance are adequatesufficient 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 fromOther
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 manage 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, 20172020 and 2016,2019, the notional amount of all foreign currency contracts was $410$1.27 billion and $1.44 billion, respectively. For 2020, $740 million related to future production costs and $433$529 million respectively, which represents hedges ofrelated to our foreign currency balances and other expected foreign currency cash flows. For 2019, $833 million related to future production costs and $606 millionrelated to our foreign currency balances and other expected foreign currency cash flows.


II-49



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

Interest Risk
The Company did not have anyInterest on commercial paper borrowings is exposed to risk related to movements in short-term interest rates. A 100 basis point change to the weighted average interest rate swapson commercial paper borrowings in 2020 would increase or decrease interest expense by approximately $4 million. In addition, interest rates on future long-term debt issuances 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 hedges outstanding at December 31, 20172020 or December 31, 20162019 but in the future we may use derivatives to manage itsour exposure to interest rates.



At December 31, 2020, the carrying value of our outstanding notes and debentures was $19.61 billion and the estimated fair value was $24.5 billion. A 1% increase or decrease in interest rates would decrease or increase the fair value of our notes and debentures by approximately $1.61 billion and $3.28 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, 20172020 or 2016,2019, 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, seeSee Note 78 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.”

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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:
Page
Reference
(Page/s)
Item 15(a)(1) Financial Statements:
1.
II-4652
2.
II-4753
3.
December 31, 2017, 20162020, 2019 and 20152018
II-4956
4.
December 31, 2017, 20162020, 2019 and 20152018
II-5057
5.
II-5158
6.
December 31, 2017, 20162020, 2019 and 20152018
II-5259
7.
December 31, 2017, 20162020, 2019 and 20152018
II-5360
8.
II-5461
Item 15(a)(2) Financial Statement Schedule:
December 31, 2017, 20162020, 2019 and 20152018
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.

II-51

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, 20172020 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, 2017.2020.

The effectiveness of our internal control over financial reporting as of December 31, 20172020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
VIACOMCBS INC.
CBS CORPORATIONBy:/s/ Robert M. Bakish
By:/s/ Leslie Moonves
Leslie MoonvesRobert M. Bakish
Chairman of the Board, President and
Chief Executive Officer
By:/s/ Joseph R. IannielloNaveen Chopra
Joseph R. IannielloNaveen Chopra
Executive Vice President,
Chief OperatingFinancial Officer
By:/s/ Lawrence LidingKatherine Gill-Charest
Lawrence LidingKatherine Gill-Charest
Executive Vice President, Controller and
Chief Accounting Officer

II-52


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.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of CBS CorporationViacomCBS Inc. and its subsidiaries (the “Company”) as of December 31, 20172020 and 2016,2019, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2017,2020, 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’sCompany's internal control over financial reporting as of December 31, 2017,2020, 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, 20172020 and 2016,2019, and the results of theirits operations and theirits cash flows for each of the three years in the period ended December 31, 20172020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2020, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.

Changes in Accounting Principles
As discussed in Note 1 to the 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, 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 the Company’s consolidated financial statements and on the Company’sCompany's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(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 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 regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial 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.

II-53


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 matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


Amortization of Internally Produced Television Programming Inventory that is Predominantly Monetized on an Individual Basis
As described in Notes 1 and 5 to the consolidated financial statements, the Company’s internally-produced television programming inventory that is predominantly monetized on an individual basis was $2.2 billion as of December 31, 2020. For internally-produced television programs that are predominantly monetized on an individual basis, management uses an individual-film-forecast computation method to amortize capitalized production costs 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 includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, 5 years from the delivery of the most recent episode, if later. These estimates are based on the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license programs.
The principal considerations for our determination that performing procedures relating to amortization of internally-produced television programming inventory that is predominantly monetized on an individual basis is a critical audit matter are the significant judgment by management when estimating Ultimate Revenues; this 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 related to consideration of the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license 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
II-54

of controls relating to amortization of internally-produced television programming inventory that is predominantly monetized on an individual basis, including the controls over the estimation of Ultimate Revenues. 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 the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license programs. Procedures were also performed to test the completeness and accuracy of management's data used in these estimates.


/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
New York, New York
February 16, 201824, 2021


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

II-55

CBS CORPORATION
VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Year Ended December 31,Year Ended December 31,
2017 2016 2015202020192018
Revenues$13,692
 $13,166
 $12,671
Revenues$25,285 $26,998 $26,425 
Costs and expenses:     Costs and expenses:
Operating8,438
 7,956
 7,911
Operating14,992 16,713 15,399 
Selling, general and administrative2,212
 2,124
 1,961
Selling, general and administrative5,320 5,481 5,048 
Depreciation and amortization223
 225
 235
Depreciation and amortization430 438 427 
Pension settlement charges (Note 15)352
 211
 —
Restructuring and merger and acquisition-related costs (Note 5)63
 38
 45
Other operating items, net(19) (9) (139)
Restructuring and other corporate mattersRestructuring and other corporate matters618 769 489 
Total costs and expenses11,269
 10,545
 10,013
Total costs and expenses21,360 23,401 21,363 
Gain on salesGain on sales214 549 0 
Operating income2,423
 2,621
 2,658
Operating income4,139 4,146 5,062 
Interest expense(457) (411) (392)Interest expense(1,031)(962)(1,030)
Interest income64
 32
 24
Interest income60 66 79 
Loss on early extinguishment of debt(49) —
 —
Net gains (losses) from investmentsNet gains (losses) from investments206 85 (53)
Gain (loss) on extinguishment of debtGain (loss) on extinguishment of debt(126)0 18 
Other items, net(2) (12) (26)Other items, net(101)(112)(92)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
1,979
 2,230
 2,264
Earnings from continuing operations before income taxes
and equity in loss of investee companies
3,147 3,223 3,984 
Provision for income taxes(633) (628) (676)
(Provision) benefit for income taxes(Provision) benefit for income taxes(535)29 (580)
Equity in loss of investee companies, net of tax(37) (50) (34)Equity in loss of investee companies, net of tax(28)(53)(47)
Net earnings from continuing operations1,309
 1,552
 1,554
Net earnings from continuing operations2,584 3,199 3,357 
Net loss from discontinued operations, net of tax (Note 4)(952) (291) (141)
Net earnings$357
 $1,261
 $1,413
Basic net earnings (loss) per common share:     
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax117 140 135 
Net earnings (ViacomCBS and noncontrolling interests)Net earnings (ViacomCBS and noncontrolling interests)2,701 3,339 3,492 
Net earnings attributable to noncontrolling interestsNet earnings attributable to noncontrolling interests(279)(31)(37)
Net earnings attributable to ViacomCBSNet earnings attributable to ViacomCBS$2,422 $3,308 $3,455 
Amounts attributable to ViacomCBS:Amounts attributable to ViacomCBS:
Net earnings from continuing operations$3.26
 $3.50
 $3.21
Net earnings from continuing operations$2,305 $3,168 $3,320 
Net loss from discontinued operations$(2.37) $(.66) $(.29)
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax117 140 135 
Net earnings attributable to ViacomCBSNet earnings attributable to ViacomCBS$2,422 $3,308 $3,455 
Basic net earnings per common share attributable to ViacomCBS:Basic net earnings per common share attributable to ViacomCBS:
Net earnings from continuing operationsNet earnings from continuing operations$3.74 $5.15 $5.38 
Net earnings from discontinued operationsNet earnings from discontinued operations$.19 $.23 $.22 
Net earnings$.89
 $2.84
 $2.92
Net earnings$3.93 $5.38 $5.60 
     
Diluted net earnings (loss) per common share:     
Diluted net earnings per common share attributable to ViacomCBS:Diluted net earnings per common share attributable to ViacomCBS:
Net earnings from continuing operations$3.22
 $3.46
 $3.18
Net earnings from continuing operations$3.73 $5.13 $5.35 
Net loss from discontinued operations$(2.34) $(.65) $(.29)
Net earnings from discontinued operationsNet earnings from discontinued operations$.19 $.23 $.22 
Net earnings$.88
 $2.81
 $2.89
Net earnings$3.92 $5.36 $5.56 
     
Weighted average number of common shares outstanding:     Weighted average number of common shares outstanding:
Basic401
 444
 484
Basic616 615 617 
Diluted407
 448
 489
Diluted618 617 621 
     
Dividends per common share$.72
 $.66
 $.60
See notes to consolidated financial statements.

II-56

CBS CORPORATION

VIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
 Year Ended December 31,
 2017 2016 2015
Net earnings$357
 $1,261
 $1,413
Other comprehensive income (loss) from continuing operations, net of tax:     
Cumulative translation adjustments8
 (1) (5)
Net actuarial gain (loss) and prior service costs (Note 15)97
 4
 (30)
Total other comprehensive income (loss), net of tax105
 3
 (35)
Total comprehensive income$462
 $1,264
 $1,378
Year Ended December 31,
202020192018
Net earnings (ViacomCBS and noncontrolling interests)$2,701 $3,339 $3,492 
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments134 9 (242)
Net actuarial loss and prior service costs(2)(145)(61)
Other comprehensive income (loss) from continuing operations, net of tax
(ViacomCBS and noncontrolling interests)
132 (136)(303)
Other comprehensive income (loss) from discontinued operations5 6 (12)
Comprehensive income2,838 3,209 3,177 
Less: Comprehensive income attributable to noncontrolling interests278 33 31 
Comprehensive income attributable to ViacomCBS$2,560 $3,176 $3,146 
See notes to consolidated financial statements.

II-57

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
  At December 31, 
  2017 2016 
ASSETS     
Current Assets:     
Cash and cash equivalents $285
 $598
 
Receivables, less allowances of $49 (2017) and $60 (2016) 3,697
 3,314
 
Programming and other inventory (Note 6) 1,828
 1,427
 
Prepaid income taxes 78
 30
 
Prepaid expenses 194
 185
 
Other current assets 190
 204
 
Current assets of discontinued operations (Note 4) 1
 305
 
Total current assets 6,273
 6,063
 
Property and equipment 3,051
 2,935
 
Less accumulated depreciation and amortization 1,771
 1,694
 
Net property and equipment (Note 2) 1,280
 1,241
 
Programming and other inventory (Note 6) 2,881
 2,439
 
Goodwill (Note 3) 4,891
 4,864
 
Intangible assets (Note 3) 2,666
 2,633
 
Other assets (Note 1) 2,840
 2,707
 
Assets of discontinued operations (Note 4) 12
 4,291
 
Total Assets $20,843
 $24,238
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
     
Current Liabilities:     
Accounts payable $231
 $148
 
Accrued expenses 578
 632
 
Accrued compensation 343
 369
 
Participants’ share and royalties payable 986
 1,024
 
Program rights 373
 290
 
Deferred revenues 219
 152
 
Commercial paper (Note 9) 679
 450
 
Current portion of long-term debt (Note 9) 19
 23
 
Other current liabilities 512
 465
 
Current liabilities of discontinued operations (Note 4) 32
 155
 
Total current liabilities 3,972
 3,708
 
Long-term debt (Note 9) 9,464
 8,902
 
Participants’ share and royalties payable 1,424
 1,322
 
Pension and postretirement benefit obligations (Note 15) 1,328
 1,769
 
Deferred income tax liabilities, net (Note 14) 480
 590
 
Other liabilities 2,155
 1,807
 
Liabilities of discontinued operations (Note 4) 42
 2,451
 
      
Commitments and contingencies (Note 16) 

 

 
      
Stockholders’ Equity:     
Class A Common Stock, par value $.001 per share; 375 shares authorized;
38 (2017 and 2016) shares issued
 —
 —
 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
834 (2017) and 829 (2016) shares issued
 1
 1
 
Additional paid-in capital 43,797
 43,913
 
Accumulated deficit (18,900) (19,257) 
Accumulated other comprehensive loss (Note 12) (662) (767) 
  24,236
 23,890
 
Less treasury stock, at cost; 489 (2017) and 455 (2016) Class B Shares 22,258
 20,201
 
Total Stockholders’ Equity 1,978
 3,689
 
Total Liabilities and Stockholders’ Equity
 $20,843
 $24,238
 
At December 31,
20202019
ASSETS
Current Assets:
Cash and cash equivalents$2,984 $632 
Receivables, net7,017 6,837 
Programming and other inventory1,757 2,813 
Prepaid expenses622 399 
Other current assets769 677 
Current assets of discontinued operations630 544 
Total current assets13,779 11,902 
Property and equipment, net1,994 2,045 
Programming and other inventory10,363 8,652 
Goodwill16,612 16,545 
Intangible assets, net2,826 2,990 
Operating lease assets1,602 1,738 
Deferred income tax assets, net993 938 
Other assets3,657 3,955 
Assets held for sale28 23 
Assets of discontinued operations809 797 
Total Assets$52,663 $49,585 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$571 $632 
Accrued expenses1,714 1,729 
Participants’ share and royalties payable2,005 1,861 
Accrued programming and production costs1,141 1,500 
Deferred revenues978 737 
Debt16 717 
Other current liabilities1,391 1,439 
Current liabilities of discontinued operations480 433 
Total current liabilities8,296 9,048 
Long-term debt19,717 18,002 
Participants’ share and royalties payable1,317 1,546 
Pension and postretirement benefit obligations2,098 2,121 
Deferred income tax liabilities, net778 565 
Operating lease liabilities1,583 1,705 
Program rights obligations243 356 
Other liabilities2,158 2,436 
Liabilities of discontinued operations220 263 
Redeemable noncontrolling interest197 254 
Commitments and contingencies (Note 20)00
ViacomCBS stockholders’ equity:
Class A Common Stock, par value $.001 per share; 375 shares authorized;
52 (2020 and 2019) shares issued
0 0 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
1,068 (2020) and 1,064 (2019) shares issued
1 1 
Additional paid-in capital29,785 29,590 
Treasury stock, at cost; 503 (2020) and 501 (2019) Class B Shares(22,958)(22,908)
Retained earnings10,375 8,494 
Accumulated other comprehensive loss(1,832)(1,970)
Total ViacomCBS stockholders’ equity15,371 13,207 
Noncontrolling interests685 82 
Total Equity16,056 13,289 
Total Liabilities and Equity$52,663 $49,585 
See notes to consolidated financial statements.

II-58

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31,Year Ended December 31,
 2017 2016 2015202020192018
Operating Activities:      Operating Activities:
Net earnings $357
 $1,261
 $1,413
Less: Net loss from discontinued operations (952) (291) (141)
Net earnings (ViacomCBS and noncontrolling interests)Net earnings (ViacomCBS and noncontrolling interests)$2,701 $3,339 $3,492 
Less: Net earnings from discontinued operations, net of taxLess: Net earnings from discontinued operations, net of tax117 140 135 
Net earnings from continuing operations 1,309
 1,552
 1,554
Net earnings from continuing operations2,584 3,199 3,357 
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:
      
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:
Depreciation and amortization 223
 225
 235
Depreciation and amortization430 438 427 
Deferred tax (benefit) provision (188) 144
 445
Television programming and feature film cost amortizationTelevision programming and feature film cost amortization11,045 12,554 11,595 
Deferred tax provision (benefit)Deferred tax provision (benefit)122 (765)48 
Stock-based compensation 179
 165
 157
Stock-based compensation274 286 187 
Redemption of debt 42
 —
 —
Net gain on disposition and write-down of assets (9) (18) (139)
Gain on salesGain on sales(214)(549)0 
Net (gains) losses from investmentsNet (gains) losses from investments(206)(85)53 
(Gain) loss on extinguishment of debt(Gain) loss on extinguishment of debt126 0 (18)
Equity in loss of investee companies, net of tax and distributions 38
 53
 37
Equity in loss of investee companies, net of tax and distributions34 58 54 
Change in assets and liabilities, net of investing and financing activities      
(Increase) decrease in receivables (268) 36
 (376)
Change in assets and liabilitiesChange in assets and liabilities
Increase in receivablesIncrease in receivables(68)(247)(389)
Increase in inventory and related program and participation liabilities, net (723) (804) (498)Increase in inventory and related program and participation liabilities, net(12,170)(14,215)(12,185)
(Increase) decrease in other assets (52) (85) 23
(Decrease) increase in accounts payable and accrued expenses (35) 23
 (220)
Increase (decrease) in accounts payable and other liabilitiesIncrease (decrease) in accounts payable and other liabilities188 302 (145)
(Decrease) increase in pension and postretirement benefit obligations (238) 205
 (46)(Decrease) increase in pension and postretirement benefit obligations(20)16 (65)
Increase (decrease) in income taxes 456
 94
 (56)
Increase (decrease) in deferred revenue 54
 (137) 66
Increase in income taxesIncrease in income taxes2 176 379 
Other, net 5
 1
 7
Other, net88 3 26 
Net cash flow provided by operating activities from continuing operations 793
 1,454
 1,189
Net cash flow provided by operating activities from continuing operations2,215 1,171 3,324 
Net cash flow provided by operating activities from discontinued operations 94
 231
 205
Net cash flow provided by operating activities from discontinued operations79 59 140 
Net cash flow provided by operating activities 887
 1,685
 1,394
Net cash flow provided by operating activities2,294 1,230 3,464 
Investing Activities:      Investing Activities:
Acquisitions (including acquired television library), net of cash acquired (270) (92) (12)
InvestmentsInvestments(59)(171)(161)
Capital expenditures (185) (196) (171)Capital expenditures(324)(345)(345)
Investments in and advances to investee companies (110) (81) (98)
Proceeds from sale of investments 10
 —
 80
Acquisitions, net of cash acquiredAcquisitions, net of cash acquired(147)(399)(118)
Proceeds from dispositions 11
 20
 383
Proceeds from dispositions593 756 39 
Other investing activities 21
 15
 (3)Other investing activities0 14 4 
Net cash flow (used for) provided by investing activities from continuing operations (523) (334) 179
Net cash flow provided by (used for) investing activities from continuing operationsNet cash flow provided by (used for) investing activities from continuing operations63 (145)(581)
Net cash flow used for investing activities from discontinued operations (24) (6) (25)Net cash flow used for investing activities from discontinued operations(7)(10)(30)
Net cash flow (used for) provided by investing activities (547) (340) 154
Net cash flow provided by (used for) investing activitiesNet cash flow provided by (used for) investing activities56 (155)(611)
Financing Activities:      Financing Activities:
Proceeds from (repayments of) short-term debt borrowings, net 229
 450
 (616)
(Repayments of) proceeds from short-term debt borrowings, net(Repayments of) proceeds from short-term debt borrowings, net(706)25 (5)
Proceeds from issuance of senior notes 1,773
 684
 1,959
Proceeds from issuance of senior notes4,375 492 0 
Repayment of senior notes and debentures (1,244) (199) —
Proceeds from debt borrowings of CBS Radio 40
 1,452
 —
Repayment of debt borrowings of CBS Radio (43) (110) —
Payment of capital lease obligations (18) (18) (17)
Repayment of long-term debtRepayment of long-term debt(2,901)(910)(1,102)
Dividends (296) (288) (300)Dividends(600)(595)(599)
Purchase of Company common stock (1,111) (2,997) (2,813)Purchase of Company common stock(58)(57)(586)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation (89) (58) (96)Payment of payroll taxes in lieu of issuing shares for stock-based compensation(93)(56)(67)
Proceeds from exercise of stock options 91
 21
 142
Proceeds from exercise of stock options5 15 29 
Excess tax benefit from stock-based compensation —
 17
 88
Other financing activities (9) —
 —
Other financing activities(112)(130)(201)
Net cash flow used for financing activities (677) (1,046) (1,653)Net cash flow used for financing activities(90)(1,216)(2,531)
Net (decrease) increase in cash and cash equivalents (337) 299
 (105)
Cash and cash equivalents at beginning of year
(includes $24 (2017) and $6 (2016 and 2015) of discontinued operations cash)
 622
 323
 428
Cash and cash equivalents at end of year
(includes $24 (2016) and $6 (2015) of discontinued operations cash)
 $285
 $622
 $323
Effect of exchange rate changes on cash, cash equivalents and restricted cashEffect of exchange rate changes on cash, cash equivalents and restricted cash25 (1)(25)
Net increase (decrease) in cash, cash equivalents and restricted cashNet increase (decrease) in cash, cash equivalents and restricted cash2,285 (142)297 
Cash, cash equivalents and restricted cash at beginning of year
(includes $202 (2020) and $120 (2019) of restricted cash)
Cash, cash equivalents and restricted cash at beginning of year
(includes $202 (2020) and $120 (2019) of restricted cash)
834 976 679 
Cash, cash equivalents and restricted cash at end of year
(includes $135 (2020), $202 (2019) and $120 (2018) of restricted cash)
Cash, cash equivalents and restricted cash at end of year
(includes $135 (2020), $202 (2019) and $120 (2018) of restricted cash)
$3,119 $834 $976 
See notes to consolidated financial statements.

II-59

CBS CORPORATIONVIACOMCBS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
Class A and B Common StockTreasury
Stock		Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal ViacomCBS Stockholders’ EquityNon-Controlling InterestsTotal Equity
(Shares)
December 31, 2017622 $1 $(42,843)$50,068 $2,562 $(1,269)$8,519 $81 $8,600 
Stock-based compensation
activity		3 — 23 139 — — 162 — 162 
Class B Common Stock
purchased		(12)— (600)— — — (600)— (600)
Dividends— — — (300)(299)— (599)— (599)
Noncontrolling interests— — — 0 0 — 0 (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 — 29 226 (4)— 251 — 251 
Cancellation of treasury
stock in the Merger		0 — 20,533 (20,533)— — — — 0 
Class B Common Stock
purchased		(1)— (50)— — — (50)— (50)
Dividends— — — 0 (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)0 — 0 
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 
Stock-based compensation
activity		3 — 0 195 0— 195 — 195 
Class B Common Stock
purchased		(1)— (50)— — — (50)— (50)
Dividends— — — — (601)— (601)— (601)
Noncontrolling interests— — — 060 — 60 325 (a)385 
Net earnings— — — — 2,422 — 2,422 279 2,701 
Other comprehensive
income (loss)		— — — — — 138 138 (1)137 
December 31, 2020617 $1 $(22,958)$29,785 $10,375 $(1,832)$15,371 $685 $16,056 
 Year Ended December 31,
 2017 2016 2015
 Shares Amount Shares Amount Shares Amount
Class A Common Stock:           
Balance, beginning of year38
 $—
 38
 $—
 38
 $—
Conversion of A shares into B shares—
 —
 —
 —
 —
 —
Balance, end of year38
 —
 38
 —
 38
 —
Class B Common Stock:           
Balance, beginning of year829
 1
 826
 1
 818
 1
Conversion of A shares into B shares—
 —
 —
 —
 —
 —
Restricted stock unit vests3
 —
 3
 —
 4
 —
Exercise of stock options3
 —
 1
 —
 6
 —
Retirement of treasury stock(1) —
 (1) —
 (2) —
Balance, end of year834
 1
 829
 1
 826
 1
Additional Paid-In Capital:           
Balance, beginning of year
 43,913
 
 44,055
   44,041
Stock-based compensation  181
   177
   174
Tax benefit related to employee
stock-based transactions
  —
   12
   87
Exercise of stock options  92
   21
   142
Retirement of treasury stock  (89)   (58)   (96)
Dividends  (289)   (294)   (293)
Decrease in noncontrolling interest  (11)   —
   —
Balance, end of year
 43,797
 
 43,913
 
 44,055
Accumulated Deficit:           
Balance, beginning of year
 (19,257) 
 (20,518) 
 (21,931)
Net earnings  357
   1,261
   1,413
Balance, end of year
 (18,900) 
 (19,257) 
 (20,518)
Accumulated Other Comprehensive Loss:           
Balance, beginning of year  (767)   (770)   (735)
Other comprehensive income (loss)  105
   3
   (35)
Balance, end of year  (662)   (767)   (770)
Treasury Stock, at cost:           
Balance beginning of year455
 (20,201) 401
 (17,205) 349
 (14,406)
Class B Common Stock purchased16
 (1,050) 54
 (2,997) 52
 (2,800)
CBS Radio Split-Off18
 (1,007) —
 —
 —
 —
Shares paid for tax withholding for
stock-based compensation
1
 (89) 1
 (58) 2
 (96)
Issuance of stock for deferred compensation—
 —
 —
 1
 —
 1
Retirement of treasury stock(1) 89
 (1) 58
 (2) 96
Balance, end of year489
 (22,258) 455
 (20,201) 401
 (17,205)
Total Stockholders’ Equity
 $1,978
 
 $3,689
 
 $5,563
(a) Primarily reflects the acquisition of Miramax (see Note 2).
See notes to consolidated financial statements.


II-60
CBS CORPORATION

VIACOMCBS 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 Studios; CBS Media Ventures; CBS-branded streaming services, including CBS All Access, which will be rebranded as Paramount+ in March 2021, and CBSN; CBS Sports Network; and CBS Television Stations), Cable Networks (premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, and Smithsonian Channel, among others; streaming services, including Pluto TV and Showtime OTT; ViacomCBS Networks International, including Channel 5, Telefe and Network 10) and Filmed Entertainment (Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television Studios and Miramax). 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; Network Ten; 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 November 16, 2017, the Company completed the split-off of CBS Radio Inc. (“CBS Radio”) through an exchange offer, in which the Company accepted 17.9 millionwas converted automatically into 0.59625 shares of CBS Corp.ViacomCBS Class A Common Stock, and (2) each share of Viacom Class B Common Stock from its stockholders in exchange forissued and outstanding immediately prior to the 101.4 millionEffective Time, other than shares held directly by Viacom as treasury shares or held by CBS, was converted automatically into 0.59625 shares of CBS Radio common stock that it owned. Immediately followingViacomCBS Class B Common Stock (together with ViacomCBS Class A Common Stock, the exchange offer,“ViacomCBS Common Stock”). At the Effective Time, each share of CBS Radio common stock was converted into oneClass A Common Stock and each share of Entercom Communications Corp. (“Entercom”)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.

The Merger has been accounted for as a transaction between entities under common stock upon completioncontrol 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 mergerMerger, the net assets of Viacom were combined with those of CBS Radio with Entercom. CBS Radioat their historical carrying amounts and the companies have been presented on a combined basis for all periods presented in the consolidated financial statements.

Discontinued Operations—On November 25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House LLC (“Penguin Random House”), a wholly owned subsidiary of Bertelsmann SE & Co. KGaA, for $2.175 billion in cash. As a result, Simon & Schuster has been presented as a discontinued operation in theour consolidated financial statements for all periods presented (See(see Note 4)3). In addition, certain businesses that were previously disposed of by the Company prior to January 1, 2002, were accounted for as discontinued operations in accordance with accounting rules in effect prior to 2002.


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
II-61

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

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 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. Amounts attributable to noncontrolling interests are immaterial for all periods presentedConsolidated Statements of Operations. 


Reclassifications—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.


The coronavirus disease (“COVID-19”) pandemic has negatively impacted the macroeconomic environment in the United States and globally, as well as our business, financial condition and results of operations. Due to the evolving and uncertain nature of COVID-19, it is reasonably possible that it could materially impact our estimates, particularly those that require consideration of forecasted financial information. These estimates relate to certain accounts including, but not limited to, receivables, programming and other inventory, deferred income tax assets, finite and indefinite lived intangible assets, including goodwill and FCC licenses, and other long-lived assets. The magnitude of the impact will depend on numerous evolving factors that we may not be able to accurately predict or control, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

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, 2020 and 2019, we had restricted cash of $135 million and $202 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—The Company acquiresInventory—We produce and acquire rights to programming and produces programming to exhibit on itsour broadcast and cable networks, on our broadcast television stations, direct to consumers through its digitalour streaming services, and the internet, and in theaters. TheWe also produce programming for third parties. Costs for internally-produced and acquired programming inventory, including prepayments for such costs, are recorded within the non-current portion of “Programming and other inventory” on the Consolidated Balance Sheet. Prepayments for the rights to air sporting and other live events that are expected to be expensed over the next 12 months are classified within the current portion of “Programming and other inventory” on the Consolidated Balance Sheet.

Costs incurred in acquiringto produce television programs and producing programsfeature films (which include direct production costs, production overhead, acquisition costs and development costs) are capitalized when incurred and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities

II-62

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



the projected life of each television program or feature film. Costs incurred to acquire television series and feature film programming rights, including advances, are recorded at the gross amount of the liabilitiescapitalized 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 overheadairing and acquisition costs) are stated atamortized over 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 each television program.  For television programming, estimates for remaining total lifetime revenues are initially limited to the amount of revenue contracted for each episode in the initial market. Accordingly, television programming costs and participation costs incurred in excessshorter 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. 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 currentlicense period revenues bear to the estimated remaining total lifetime revenues.

The costs incurred in acquiring television series and feature film programming are capitalized when the program is accepted and available for airing.  These costs are amortized overor the period in which an economic benefit is expected to be derivedderived.

For internally-produced television programs and feature films that are predominantly monetized on an individual basis, we use an individual-film-forecast computation method to amortize capitalized production costs and to accrue estimated liabilities for participations and residuals 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 of capitalized production costs and expensing of participations and residual costs. For television programming, our estimate of Ultimate Revenues includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, 5 years from the delivery of the most recent episode, if later. These estimates are based on the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license 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. 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 television and 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.

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.

For programming that is predominantly monetized as part of a film group, which includes our acquired programming rights and certain internally-produced television programs, capitalized costs are amortized based on an estimate of the timing of the Company’sour usage of and benefit from such programming. 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 expensedreceived and amortized 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 estimatesWe test a film group or individual television program or feature film for internally producedimpairment when events or circumstances indicate that its fair value may be less than its unamortized cost. If the carrying value of a film group or individual television program or feature film exceeds the estimated fair value, an impairment charge will then be recorded in the amount of the difference. In addition, unamortized costs for internally-produced or acquired programming that have been substantively abandoned are written off.

II-63

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

Television and feature film programming and the estimated economic benefit for the acquired programming,production costs, including revenue projections for multi-year sports programming, are periodically reviewed. Adjustments,inventory amortization, development costs, residuals and participations and impairment charges, if any, will resultare included within “Operating expenses” in changes to amortization rates, future net realizable value adjustments and/or estimated accruals for participation expense.the Consolidated Statements of Operations.


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 group may not be recoverable.  Recoverability of these assetsasset groups is determined by comparing the forecasted undiscounted cash flows expected to be generated by these assets, which is the estimated fair value,asset groups 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.assets.


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. Equity 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. Equity 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 public companyequity investments by reference to their publicly traded stock price. With respect to private companyare recorded in “Net gains (losses) from investments” in the Consolidated Statements of Operations. 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, 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 losscharge is recognized (see Note 6).

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 a noncash charge (See Note 3).

Other Assets—Other assets include noncurrent accounts receivables of $2.12 billion at December 31, 2017utilized or extinguished and $2.11 billion at December 31, 2016, which are primarily related 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 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, long-term income tax liabilities, 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.  Ifincreased 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 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 timeadditional paid-in capital.
Fair Value Measurements—Fair value is defined as the required audience ratingprice 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 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.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



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 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. Other assets and liabilities, including television and film 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.
Publishing
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 when the hedged items are recognized.

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” 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 merchandise is shippedthe advertising spots are aired on television or electronicallydisplayed 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 consumer.  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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Affiliate Revenues—Affiliate revenues primarily consist of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television streaming services (“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 (“reverse compensation”); and subscription fees for our streaming subscription offerings, including CBS All Access (to be rebranded as Paramount+ in March 2021), Showtime Networks’ premium subscription streaming service (“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 Company recordsperformance 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 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.

Revenue Allowances—DVDs and Blu-ray discs are generally sold with a 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 $64 million and $58 million at December 31, 2020 and 2019, respectively, are recorded in “Other current liabilities” on the Consolidated Balance Sheets.

Reserves for accounts receivable reflect our expected credit losses, which alloware estimated based on historical experience, as well as current and expected economic conditions and industry trends. Our allowance for doubtful accounts was $85 million and $80 million at December 31, 2020 and 2019, respectively. The provision for doubtful accounts charged to expense was $32 million in 2020, $25 million in 2019 and $24 million in 2018.

Contract Liabilities—A contract liability is recorded when consideration is received from a percentage of revenue recognized.

Deferred revenuescustomer prior to fully satisfying a performance obligation in a contract. Our contract liabilities primarily consist of cash received or receivable 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.  The amounts classifiedmade available to the customer. These contract liabilities will be recognized as currentrevenues when control of the related product or service is transferred to the customer. Contract liabilities are expected to be earnedincluded within the next twelve months.

Sales of Multiple Products or Services—Revenues derived from a single sales contract that contains multiple products“Deferred revenues” and services are allocated based“Other liabilities” on the relative fair value of each delivered item and recognized in accordance with the applicable revenue recognition criteria for the specific unit of accounting.Consolidated Balance Sheets.

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 (the “NCAA Tournament”), which runs through 2032. In connection with this agreement for the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

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.


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.


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 generally have remaining terms ranging from one to 16 years and often contain renewal options to extend the lease for periods of generally up to 10 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 $426 million$1.31 billion in 2017, $373 million2020, $1.67 billion in 20162019 and $338 million$1.39 billion in 2015.2018.


Other Operating Items, Net—Other operating items, net for 2017 reflects a net gain relating to the disposal of property and equipment. For 2016 and 2015, other operating items, net 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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

differences are expected to be reversed. The Company evaluatesWe 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

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


measurement assessment to determine the amount of benefit to be recognized 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, 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).  Foreignloss in the Consolidated Balance Sheets. 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. For 2017, other items, net also includes write-downs of cost investments to their fair value.

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 $5 million, $12 million and $9 million in 2017, 2016 and 2015, respectively.

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 4stock options and RSUs of 22 million stock optionsfor the year ended December 31, 2020 and 19 million for each of the years ended December 31, 2017, 20162019 and 2015.2018.


The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.
Year Ended December 31,202020192018
(in millions)
Weighted average shares for basic EPS616 615 617 
Dilutive effect of shares issuable under stock-based compensation plans2 2 4 
Weighted average shares for diluted EPS618 617 621 
Year Ended December 31,2017 2016 2015
(in millions)     
Weighted average shares for basic EPS401
 444
 484
Dilutive effect of shares issuable under stock-based compensation plans6
 4
 5
Weighted average shares for diluted EPS407
 448
 489
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 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.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)



Recently Adopted Accounting Pronouncements
Statement of Cash Flows: Classification of Cash Receipts and Cash PaymentsChanges to the Disclosure Requirements for Defined Benefit Plans
During 2017, the Company earlyOn December 31, 2020, we adopted Financial Accounting Standards Board (“FASB”) amended guidance that eliminates, adds and clarifies certain disclosure requirements for defined benefit pension or other postretirement plans. The amendments affect annual disclosures only and are required to be applied retrospectively. The adoption of this guidance did not have a material impact on our consolidated financial statements. See Note 17 for additional disclosures relating to the adoption of this guidance.
Improvements to Accounting for Costs of Films and License Agreements for Program Materials
On January 1, 2020, we adopted FASB guidance on the accounting for costs of films and episodic television series, which clarifies how certain cash receipts and cash payments should be presented and classified inaligns the statementaccounting for capitalizing production costs of cash flows. The newepisodic television series with the guidance is intended to reduce the existing diversity in practice in how certain transactions are classified in the statement of cash flows.for films. As a result of the adoption of this guidance, the Company now classifies debt prepaymentcapitalization of costs within financing activitiesincurred to produce episodic television series is no longer limited to the amount of revenue contracted in the initial market until persuasive evidence of a secondary market exists. In addition, under this guidance our film and television programming is tested for impairment individually on a title-by-title basis, or together with other films and television programming as part of a group, based on the statementpredominant monetization strategy of cash flows. Previously, such costs were classified within operating activities. For 2017, debt prepayment coststhe film or television programming. Further, for programming monetized in a film group, this guidance requires any changes to the estimated use of $52 million have been classified within financing activities.the film or television series to be accounted for prospectively. This guidance was applied retrospectively; however, the Company did not have debt prepaymentalso eliminates existing balance sheet classification guidance and adds new disclosure requirements relating to costs in any prior year for which cash flow information is presented.

Improvements to Employee Share-Based Payment Accounting
Duringacquired and internally-produced programming. As a result of this guidance, beginning in the first quarter of 2017,2020, all of our programming inventory, other than prepayments for the Company adopted amended FASBrights to air sporting and other live events, is now classified as noncurrent on the Consolidated Balance Sheet. Therefore, $1.17 billion of programming inventory that was classified in current assets at December 31, 2019 was reclassified to noncurrent assets on January 1, 2020. This guidance which simplifies several aspectsdid not have a material impact on the Consolidated Statement of the accounting for employee share-based payment transactions. Under this amended guidance, all excess tax benefits and tax deficiencies are 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 are classified with other income tax cash flows in operating activities. As a result ofOperations. See Note 5 for additional disclosures relating to the adoption of this guidance,guidance.

Collaborative Arrangements: Clarifying the Company’s excess tax benefits associatedInteraction with the exercise of stock options and vesting of RSUs for the year ended December 31, 2017 were recorded in the provision for income taxes on the Consolidated Statements of Operations. The guidance requires the income statement classification to be applied prospectively, and therefore, excess tax benefits for prior periods remain classified in stockholders’ equity on the balance sheet. The Company elected to apply the cash flow classification provision of this guidance prospectively and therefore, excess tax benefits for prior periods remain classified as financing activities on the statements of cash flows. The amended guidance also gives the option to make a policy election to account for forfeitures as they occur. The Company, however, has elected to continue its existing practice of estimating forfeitures.New Revenue Standard


Simplifying the Accounting for Goodwill Impairment
During the first quarter of 2017, the Company earlyOn January 1, 2020, we adopted amended FASB guidance which simplifieson the accounting for goodwill impairment. Thiscollaborative arrangements, which clarifies that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance removes Step 2 ofwhen the goodwill impairment test, which requirescounterparty is a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge is 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.customer. The adoption of this guidance did not have ana material impact on the Company’sour consolidated financial statements.


Accounting Pronouncements Not Yet Adopted

Targeted Improvements toCustomer’s Accounting for Hedging ActivitiesImplementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract
In August 2017,
On January 1, 2020, we adopted FASB guidance on the FASB issued amendedaccounting 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 hedge accounting,capitalizing costs associated with internal-use software to determine which expands the eligibility of hedging strategiescosts to capitalize in a cloud computing arrangement that qualify for hedge accounting, modifies the recognition and presentation of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition,is a service contract. Under this guidance, amendssuch implementation costs will be capitalized in “Other assets” on the Consolidated Balance Sheet, with the related amortization presented in “Selling, general and expands disclosure requirements.administrative expenses” on the Consolidated Statement of Operations. This guidance which is effective for interim and annual periods beginningwas applied prospectively to implementation costs incurred after December 15, 2018, with earlyJanuary 1, 2020. The adoption permitted, isof this guidance did not expected to have a material impact on the Company’sour consolidated financial statements.


CBS CORPORATION
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Financial Instruments
Stock Compensation: Scope of Modification Accounting
In May 2017, theOn January 1, 2020, we adopted FASB issued amended guidance on the accounting for stock-based compensation which clarifies whencredit losses on financial instruments. Among other provisions, this guidance introduces a new impairment model for most financial assets and certain other instruments. The guidance applies primarily to account for a change toour trade and other receivables, and requires the terms or conditionsuse of a share-based payment award as a modification. Under this guidance, modification accounting is required only if the fair value, the vesting conditions, or the classificationforward-looking “expected loss” model instead of the award as equity or liability changes as a result of the change in the terms or conditions of a share-based payment award. This guidance, which is effective for the Company in the first quarter of 2018, is not expected to have an impact on the Company’s consolidated financial statements.
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
In March 2017, the FASB issued amended guidance on the presentation of net periodic pension and postretirement benefit cost (“net benefit cost”). This guidance requires an employer to present on the statement of operations the service cost component of net benefit cost in the same line item(s) as other compensation costs of the related employees. The other components of net benefit cost will be presented in the statement of operations separately from the service cost component and below the subtotal of operating income. This guidance is required to be applied retrospectively and is effective for the Company in the first quarter of 2018. Upon adoption, the Company’s operating income for 2017 and 2016 will increase by $441 million and $283 million, respectively, representing the components of net benefit cost other than service cost (See Note 15).
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“incurred loss” model 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 inwas used under previous FASB guidance for revenue recognition. Thisdetermining an allowance for credit losses. The adoption of this guidance is effective for the Company in the first quarter of 2018.
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, which is effective for the Company in the first quarter of 2018, isdid not expected to have a material impact on the Company’sour consolidated financial statements.


Leases
In February 2016,
During the first quarter of 2019, we adopted 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 Company will be required towe recognize on itsour balance sheet a lease liability and a right-of-use asset representing itsour right to use the underlying asset for the lease term. The newThis 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 this guidance while prior periods have not been adjusted. This guidance did not have an impact on the Consolidated Statement of Operations.

Revenues

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. The Companyprimary 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 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 this 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.

Accounting Pronouncements Not Yet Adopted
Reference Rate Reform
In March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022 and may not be applied to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with a few exceptions for certain hedging relationships existing as of December 31, 2022. We are currently reviewing its lease portfolio, evaluating the impact of the changes in reference rates and the exemptions and exceptions in this guidance on itsour consolidated balance sheet and assessing system requirements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.financial statements.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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Revenue from Contracts with CustomersSimplifying the Accounting for Income Taxes
In May 2014,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 revenues which provides a single, comprehensive revenue recognition modeldeferred tax liabilities for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under thisoutside basis differences. This guidance is thatalso requires an entity should recognize revenue atto reflect the amount it expects to be entitled toeffect of an enacted change in exchange fortax laws or rates in its effective income tax rate in the transferfirst interim period that includes the enactment date of goods or services to customers.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. This guidance is effective for the Companyinterim and annual periods beginning in the first quarter of 2018. The Company has identified the changes to its accounting policies and is in the process of preparing the expanded disclosures required under the new standard, including the disaggregation of revenue from contractsafter December 15, 2020 with customers into categories that depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s total revenues. The Company has identified changes to its revenue recognition policies primarily relating to two areas of its content licensing and distribution operations. First, revenues from certain distribution arrangements of third-party content will be recognized based on the gross amount of consideration received by the Company, with participation expense recognized for the fees paid to the third party. Under current accounting guidance, such revenues are recognized at the net amount retained by the Company after the payment of fees to the third party. This accounting change if adopted in 2017 would have increased 2017 revenues and participation expense by approximately $275 million, with no impact on the Company’s operating income. Second, revenues associated with the extension of an existing licensing arrangement, which are currently recognized upon the execution of such extension, will be recognized at a later date once the extension period begins. The Company will apply the modified retrospective method of adoption with the cumulative effect of the initial adoption, currently estimated at $263 million, reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. This change is not expected to have a material impact on the Company’s operating income on an annual basis, since revenues from extensions executed each year approximate revenues from extensions for which the license period has begun.our consolidated financial statements.
2) PROPERTY AND EQUIPMENTACQUISITIONS
Miramax
On April 3, 2020, we acquired a 49% interest in Miramax, a global film and television studio, for $375 million, which included a cash payment at closing 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 acquisition, we entered into commercial agreements with Miramax under which we have exclusive, long-term distribution rights to Miramax’s catalog, adding more than 700 titles to our existing library. We also have certain rights to co-produce, co-finance and/or distribute new film and television projects. The investment is accounted for as a consolidated variable interest entity (“VIE”). We are the primary beneficiary of the VIE due to our power to direct the distribution of Miramax’s films and television series, which is considered the most significant activity of the VIE.
The following table summarizes our allocation of the purchase price as of the acquisition date.
Assets
Cash$32 
Accounts receivable and other current assets19 
Programming inventory536 
Goodwill99 
Intangible assets12 
Other assets (noncurrent)7 
Assets acquired$705 
Liabilities
Accounts payable and accrued expenses$13 
Participants’ share and royalties payable (current)16 
Deferred revenues10 
Participants’ share and royalties payable (noncurrent)20 
Debt105 
Other liabilities (noncurrent)28 
Liabilities assumed192 
Noncontrolling interests363 
Total purchase price$150 


II-72
At December 31,2017 2016
Land$193
 $195
Buildings769
 733
Capital leases (a)
162
 164
Equipment and other1,927
 1,843
 3,051
 2,935
Less accumulated depreciation and amortization1,771
 1,694
Net property and equipment$1,280
 $1,241

(a) Accumulated amortization of capital leases was $112 million and $98 million at December 31, 2017 and 2016, respectively.
Year Ended December 31,2017 2016 2015
Depreciation expense, including capitalized lease amortization (a)
$203
 $205
 $212
(a) Amortization expense related to capital leases was $16 million, $17 million and $16 million in 2017, 2016, and 2015, respectively.

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



The goodwill, which is not deductible for tax purposes, reflects the expected Company-specific synergies arising from the acquisition and is included in the Filmed Entertainment segment. Intangible assets consist of a trade name with a useful life of 10 years.

The operating results of Miramax from the date of acquisition through December 31, 2020 were not material.

Other Acquisitions
During 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 excluded $18 million of post-combination expenses that are subject to continuous employment and are recognized over the required service period in the Consolidated Statements of Operations within “Selling, general and administrative expenses”. The results of Pluto TV are included in the Cable Networks segment from the date of acquisition.
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, 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.

The operating results of these acquisitions were not material to our consolidated financial statements.
3) DISPOSITIONS
Simon & Schuster
On November 25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House for $2.175 billion in cash. This divestiture follows a strategic review of our non-core assets that was completed in early 2020. The transaction is subject to customary closing conditions, including regulatory approval and is expected to close in 2021. Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented.

The following tables set forth details of net earnings from discontinued operations for the years ended December 31, 2020, 2019 and 2018.
Year Ended December 31, 2020Simon & Schuster
Other (a)
Total
Revenues$901 $0 $901 
Costs and expenses:
Operating573 (19)554 
Selling, general and administrative172 0 172 
Depreciation and amortization5 0 5 
Restructuring charges10 0 10 
Total costs and expenses760 (19)741 
Operating income141 19 160 
Other items, net(5)0 (5)
Earnings from discontinued operations136 19 155 
Income tax provision(34)(4)(38)
Net earnings from discontinued operations, net of tax$102 $15 $117 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Year Ended December 31, 2019Simon & Schuster
Other (a)
Total
Revenues$814 $0 $814 
Costs and expenses:
Operating510 (50)460 
Selling, general and administrative166 0 166 
Depreciation and amortization5 0 5 
Restructuring charges6 0 6 
Total costs and expenses687 (50)637 
Operating income127 50 177 
Other items, net(5)0 (5)
Earnings from discontinued operations122 50 172 
Income tax provision(20)(12)(32)
Net earnings from discontinued operations, net of tax$102 $38 $140 
Year Ended December 31, 2018Simon & Schuster
Other (a)
Total
Revenues$825 $0 $825 
Costs and expenses:
Operating518 (42)476 
Selling, general and administrative158 0 158 
Depreciation and amortization6 0 6 
Restructuring charges1 0 1 
Total costs and expenses683 (42)641 
Operating income142 42 184 
Other items, net(2)0 (2)
Earnings from discontinued operations140 42 182 
Income tax provision(37)(10)(47)
Net earnings from discontinued operations, net of tax$103 $32 $135 
(a) Primarily relates to indemnification obligations for leases associated with the previously discontinued operations of Famous Players Inc. (“Famous Players”).
The following table presents the major classes of assets and liabilities of our discontinued operations.
At December 31,20202019
Receivables, net$447 $369 
Other current assets183 175 
Goodwill435 435 
Property and equipment, net42 40 
Operating lease assets191 201 
Other assets141 121 
Total Assets$1,439 $1,341 
Royalties payable$131 $116 
Other current liabilities349 317 
Operating lease liabilities194 204 
Other liabilities26 59 
Total Liabilities$700 $696 
CNET Media Group
On October 30, 2020, we completed the sale of CNET Media Group (“CMG”) to Red Ventures for $484 million, including an estimated working capital adjustment.The purchase price consisted of a cash payment at closing of
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

$459 million and a credit of $25 million to be used over five years for the purchase of advertising and licensing of data from Red Ventures. This transaction resulted in a gain of $214 million ($183 million, net of tax).

CBS Television City
During 2019, we completed the sale of CBS Television City for $750 million. We guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. This transaction resulted in a gain of $549 million ($386 million, net of tax) for 2019, which included a reduction for the present value of the estimated amount payable under the guarantee obligation.
4) PROPERTY AND EQUIPMENT
At December 31,20202019
Land$437 $438 
Buildings1,253 1,232 
Finance leases (a)
159 195 
Equipment and other4,151 4,052 
6,000 5,917 
Less accumulated depreciation and amortization4,006 3,872 
Net property and equipment$1,994 $2,045 
(a) Accumulated amortization of finance leases was $140 million and $160 million at December 31, 2020 and 2019, respectively.
Year Ended December 31,202020192018
Depreciation expense, including amortization of finance leases (a) (b)
$345 $362 $377 
(a) Amortization expense related to finance leases was $18 million, $23 million and $28 million in 2020, 2019 and 2018, respectively.
(b) Included in depreciation expense for 2020 is $12 million of accelerated depreciation resulting from the abandonment of technology in connection with synergy plans related to the Merger.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

5) PROGRAMMING AND OTHER INVENTORY
The following tables present our programming and other inventory by type at December 31, 2020 and 2019. Programming inventory at December 31, 2020 has been grouped according to the predominant monetization strategy in accordance with new FASB guidance adopted in 2020 (see Note 1).
At
December 31, 2020
Film Group Monetization:
Acquired television and film program rights, including prepaid sports rights$3,413 
Internally-produced television programming:
Released2,558 
In process and other1,682 
Individual Monetization:
Acquired libraries483 
Film inventory:
Released374 
Completed, not yet released543 
In process and other816 
Internally-produced television programming:
Released1,206 
In process and other1,013 
Home entertainment32 
Total programming and other inventory12,120 
Less current portion1,757 
Total noncurrent programming and other inventory$10,363 
At
December 31, 2019
Acquired television and film program rights, including prepaid sports rights$3,477 
Acquired television library99 
Internally-produced television programming:
Released3,627 
In process and other2,626 
Film inventory:
Released502 
Completed, not yet released55 
In process and other1,037 
Home entertainment42 
Total programming and other inventory11,465 
Less current portion2,813 
Total noncurrent programming and other inventory$8,652 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The following table presents amortization of television and film programming and production costs.
For the Year Ended
December 31, 2020
Programming costs, acquired programming$3,779 
Production costs, internally-produced television and film programming:
Individual monetization$2,669 
Film group monetization$3,133 
Programming Charges
During 2020, we recorded programming charges of $159 million primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19. These programming charges are included within the TV Entertainment,Cable Networks and Filmed Entertainment segments for $101 million, $53 million and $5 million, respectively.
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 result, 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 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.
The programming charges for 2020, 2019, and 2018 were included within “Operating expenses” in the Consolidated Statements of Operations.
The following table presents the expected amortization over each of the next three years of released programming inventory on the Consolidated Balance Sheet at December 31, 2020.
202120222023
Programming costs, acquired programming and acquired libraries$2,717 $422 $232 
Production costs, internally-produced television and film programming:
Individual monetization$1,089 $165 $94 
Film group monetization$1,251 $618 $393 
We expect to amortize approximately $456 million of our completed, not yet released film inventory, which is monetized on an individual basis, during the year ended December 31, 2021.
6) 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 during the fourth quarteron an annual basis, and also between annual tests if an event occurs or if
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

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.

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’sour 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, 2017, the Company2020, we had eight reporting units with goodwill balances, and 14 television markets with FCC license book values.


Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below. At December 31, 2020, we had 4 reporting units.

For itsour annual impairment test, the Company performswe perform qualitative assessments for eachthe reporting unitunits and markettelevision markets with FCC 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 20172020 annual impairment test, the Companywe performed qualitative assessments for seven 10 of our television markets and all of ourreporting units and 11 television markets.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 marketof these markets are less than their respective carrying values. Therefore, performing thea quantitative impairment test was unnecessary.


For FCC licenses in the remaining television markets, the Company performed aA quantitative impairment test that compares theof FCC 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 five-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 nominallong-term growth rate, which is based on projected long-range inflation and industry projections.

During the second quarter of 2020, based on an assessment of the relevant factors that could impact the fair value of FCC licenses, including the effects of COVID-19, we determined that an interim impairment test was necessary for 3 markets in which we hold FCC licenses. The impairment test indicated that the estimated fair values of FCC licenses in 2 markets were lower than their respective carrying values, which resulted from recent declines in industry projections in the U.S.markets where these FCC licenses are held, that were further accelerated by COVID-19. Accordingly, we recorded an impairment charge of $25 million to write down the carrying values of these FCC licenses to their aggregate estimated fair value of $216 million. This charge is included within “Depreciation and long-term industry projections. The discount rate is determined based on the average of the weighted average cost of capital of comparable entitiesamortization” in the broadcast industry.  For each television station, the discount rate used for 2017 was 7.5% and the perpetual nominal growth rate was 2.0%. For the 2017 quantitative impairment test, the Company concluded thatConsolidated Statement of Operations. Additionally, the estimated fair value of the FCC license in the third market exceeded its carrying value of $53 million by 7%.

For the 2020 annual test, which was performed during the fourth quarter, we performed a quantitative impairment test for the three markets tested during the second quarter, as well as a 4th television market. The impairment tests indicated that the estimated fair values of FCC licenses in each of the three television markets forwe tested during the second quarter, which the quantitative test was performed exceededhad an aggregate carrying value of FCC licenses of $269 million at December 31, 2020, were within 10% of their respective carrying values. The fourth market had an estimated fair value that exceeded its carrying value by more than 20%.



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



For 2017,The following tables present the Company performed a quantitativechanges in the book value of goodwill impairment testby segment for the CBS Sports Network reporting unit. The quantitative goodwill impairment test examines whetheryears ended December 31, 2020 and 2019.
Balance atAcquisitions /ForeignBalance at
December 31, 2019(Dispositions)CurrencyDecember 31, 2020
TV Entertainment:
Goodwill$17,615 $(113)(a)$0 $17,502 
Accumulated impairment losses(13,354)0 0 (13,354)
Goodwill, net of impairment4,261 (113)0 4,148 
Cable Networks:
Goodwill10,691 28 53 10,772 
Accumulated impairment losses0 0 0 0 
Goodwill, net of impairment10,691 28 53 10,772 
Filmed Entertainment:
Goodwill1,593 99 (b)0 1,692 
Accumulated impairment losses0 0 0 0 
Goodwill, net of impairment1,593 99 0 1,692 
Total:
Goodwill29,899 14 53 29,966 
Accumulated impairment losses(13,354)0 0 (13,354)
Goodwill, net of impairment$16,545 $14 $53 $16,612 
(a) Amount reflects the carrying valuedisposition of a reporting unit exceeds its estimated fair value, which is computed based upon the present value of future cash flows (“Discounted Cash Flow Method”) and the traded or transaction values of comparable businesses (“Market Comparable Method”). If the carrying value exceeds the estimated fair value, an impairment charge is recognized as the amount by which the carrying value exceeds the fair value. For 2017, the Discounted Cash Flow Method and Market Comparable Method for CBS Sports Network 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 2017 was 2.0%. The discount rate was determined based on the average of the weighted average cost of capital of comparable entities and for 2017was8.5%CMG.

For the 2017 annual impairment test, the Company concluded that the estimated fair value of the CBS Sports Network reporting unit exceeded its carrying value and therefore no impairment charge was required.

Transactions
During the fourth quarter of 2017, the Company completed(b) Amount relates to the acquisition of Ten Network Holdings Limited (“Network Ten”), oneMiramax.
Balance atAcquisitionsForeignBalance at
December 31, 2018(Dispositions)CurrencyDecember 31, 2019
TV Entertainment:
Goodwill$17,618 $(3)$0 $17,615 
Accumulated impairment losses(13,354)0 0 (13,354)
Goodwill, net of impairment4,264 (3)0 4,261 
Cable Networks:
Goodwill10,234 451 (a)6 10,691 
Accumulated impairment losses0 0 0 0 
Goodwill, net of impairment10,234 451 6 10,691 
Filmed Entertainment:
Goodwill1,593 0 0 1,593 
Accumulated impairment losses0 0 0 0 
Goodwill, net of impairment1,593 0 0 1,593 
Total:
Goodwill29,445 448 6 29,899 
Accumulated impairment losses(13,354)0 0 (13,354)
Goodwill, net of impairment$16,091 $448 $6 $16,545 
(a) Primarily reflects the acquisitions of three major commercial broadcast networks in Australia, for approximately $124 million, which is net of cash acquired. The assets acquired primarily consist of broadcast licenses, net operating loss carryforwardsPluto Inc. and working capital.Pop TV.

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.



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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, 2017 and 2016, the changes in the book value of goodwill by segmentOur intangible assets were as follows:
Accumulated
At December 31, 2020GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$249 $(123)$126 
Licenses168 (50)118 
Customer agreements120 (97)23 
Other intangible assets251 (169)82 
Total intangible assets subject to amortization788 (439)349 
FCC licenses2,416 — 2,416 
International broadcast licenses27 — 27 
Other intangible assets34 — 34 
Total intangible assets$3,265 $(439)$2,826 
Accumulated
At December 31, 2019GrossAmortizationNet
Intangible assets subject to amortization:
Trade names$404 $(171)$233 
Licenses159 (38)121 
Customer agreements119 (92)27 
Other intangible assets255 (146)109 
Total intangible assets subject to amortization937 (447)490 
FCC licenses2,441 — 2,441 
International broadcast licenses25 — 25 
Other intangible assets34 — 34 
Total intangible assets$3,437 $(447)$2,990 
Amortization expense was as follows:
Year Ended December 31,202020192018
Amortization expense (a)
$85 $76 $50 
(a) For 2020, amortization expense includes an impairment charge of $25 million to write down the carrying value of FCC licenses, and was recorded within the TV Entertainment segment. 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, and was recorded within the Cable Networks segment.

We expect our aggregate annual amortization expense for existing intangible assets subject to amortization for each of the years, 2021 through 2025, to be as follows:
20212022202320242025
Future amortization expense$45 $41 $39 $31 $27 
II-80
  Balance at      Balance at
  December 31, 2016 Acquisitions  Dispositions December 31, 2017
Entertainment:             
Goodwill  $9,300
  $23
(a) 
 $—
  $9,323
 
Accumulated impairment losses  (6,294)  —
  —
  (6,294) 
Goodwill, net of impairment  3,006
  23
  —
  3,029
 
Cable Networks:             
Goodwill  480
  —
  —
  480
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  480
  —
  —
  480
 
Publishing:             
Goodwill  431
  4
(b) 
 —
  435
 
Accumulated impairment losses  —
  —
  —
  —
 
Goodwill, net of impairment  431
  4
  —
  435
 
Local Media:             
Goodwill  8,007
  —
  —
  8,007
 
Accumulated impairment losses  (7,060)  —
  —
  (7,060) 
Goodwill, net of impairment  947
  —
  —
  947
 
Total:             
Goodwill  18,218
  27
  —
  18,245
 
Accumulated impairment losses  (13,354)  —
  —
  (13,354) 
Goodwill, net of impairment  $4,864
  $27
  $—
  $4,891
 

  Balance at      Balance at
  December 31, 2015 Acquisitions  Dispositions December 31, 2016
Entertainment:             
Goodwill  $9,250
  $52
(c) 
 $(2)
(d) 
 $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
(b) 
 —
  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
 
(a) Amount reflects the acquisitions of a television production business and a digital sports publishing business.
(b) Amounts relate to the acquisition of a publishing business in the fourth quarter of 2016.
(c) Amount reflects the acquisition of a sports-focused digital media business.
(d) Amount reflects the disposition of internet businesses in China.

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



7) RESTRUCTURING AND OTHER CORPORATE MATTERS
During the years ended December 31, 2020, 2019 and 2018, we recorded the following for costs associated with restructuring and other corporate matters.
Year Ended December 31,202020192018
Severance$472 $395 $234 
Exit costs and other70 23 75 
Restructuring charges542 418 309 
Restructuring-related costs0 0 52 
Merger-related costs56 294 0 
Other corporate matters20 57 128 
Restructuring and other corporate matters$618 $769 $489 

Restructuring Charges and Related Costs

During the year ended December 31, 2020, we recorded restructuring charges of $542 million, associated with cost-transformation initiatives in connection with the Merger in an effort to reduce redundancies across our businesses. These charges primarily consist of severance costs, including the accelerated vesting of stock-based compensation.

During the year ended December 31, 2019, we recorded restructuring charges of $418 million, primarily for severance costs, including the accelerated vesting 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 were provided to certain eligible employees who voluntarily elected to participate.

During the year ended December 31, 2018, we recorded restructuring charges of $309 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 such initiatives.

Restructuring charges during the years ended December 31, 2020, 2019 and 2018 also included exit costs of $70 million, $23 million, and $75 million, respectively. These costs relate to the termination of contractual obligations and charges associated with the exit of leases.

The Company’s intangible assets were as follows:
   Accumulated  
At December 31, 2017Gross Amortization Net
Intangible assets subject to amortization:190
    
Trade names$190
 $(51) $139
Other intangible assets134
 (101) 33
Total intangible assets subject to amortization324
 (152) 172
FCC licenses2,441
 —
 2,441
International broadcast licenses (a)
53
 —
 53
Total intangible assets$2,818
 $(152) $2,666
(a) Reflects broadcast licensesfollowing is a rollforward of Network Ten,our restructuring liability, which was acquired duringis recorded in “Other current liabilities” and “Other liabilities” on the fourth quarter of 2017.
   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
Amortization expense was as follows:
Year Ended December 31,2017 2016 2015
Amortization expense $20
   $20
   $23
 
Consolidated Balance Sheets. The Company expects its aggregate annual amortization expense for existing intangible assets subjectremaining restructuring liability at December 31, 2020, which primarily relates to amortization for each of the years, 2018 through 2022,severance payments, is expected to be as follows:substantially paid by the end of 2021.
Balance at2020 ActivityBalance at
December 31, 2019
Charges (a)
PaymentsOtherDecember 31, 2020
TV Entertainment$99 $137 $(111)$(13)$112 
Cable Networks137 179 (158)(14)144 
Filmed Entertainment17 25 (12)0 30 
Corporate143 71 (117)(11)86 
Total$396 $412 $(398)$(38)$372 
II-81
 2018 2019 2020 2021 2022
Future amortization expense $19
   $18
   $15
   $13
   $12
 

4) DISCONTINUED OPERATIONS
On February 2, 2017, the Company entered into an agreement with Entercom to combine the Company’s radio business, CBS Radio, with Entercom in a merger effected through a Reverse Morris Trust transaction, which was tax-free to CBS Corp. and its stockholders. Beginning in the fourth quarter of 2016, CBS Radio has been presented as a discontinued operation in the consolidated financial statements for all periods presented.

On November 16, 2017, the Company completed the split-off of CBS Radio through an exchange offer, in which the Company accepted 17.9 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 101.4 million shares of CBS Radio common stock that it owned. Immediately following the exchange offer, each share of CBS Radio common stock was converted into one share of Entercom Class A common stock upon completion of the merger.

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



During the fourth quarter of 2017, upon closing of the transaction, the Company recorded a net loss of $105 million calculated as follows:
Fair value of CBS Corp. Class B Common Stock accepted 

(17,854,689 shares at $56.40 per share on November 16, 2017) $1,007
Carrying value of CBS Radio (a)
 (1,112)
Net loss on split-off of CBS Radio $(105)
Balance at2019 ActivityBalance at
December 31, 2018
Charges (a)
PaymentsOtherDecember 31, 2019
TV Entertainment$54 $128 $(82)$(1)$99 
Cable Networks151 97 (104)(7)137 
Filmed Entertainment22 8 (12)(1)17 
Corporate57 118 (32)0 143 
Total$284 $351 $(230)$(9)$396 
(a) NetExcludes stock-based compensation expense of a market value adjustment of $980$88 million recorded prior to the split-off.
The split-off was a tax-free transaction and therefore, there is no tax impact on the loss.

In connection with the Company’s plan to dispose of CBS Radio, in October 2016, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 and the issuance of $400$67 million of 7.25% senior unsecured notes due 2024 through a private placement.

The following tables set forth details of net earnings (loss) from discontinued operations for the years ended December 31, 2017, 20162020 and 2015.2019, respectively, and excludes lease asset impairments of $42 million for the year ended December 31, 2020.

Year Ended December 31, 2017CBS Radio Other Total
Revenues$1,018
 
$—
  $1,018
Costs and expenses:       
Operating364
 
—
  364
Selling, general and administrative446
 
(1)  445
Market value adjustment980
(a) 
 —
  980
Restructuring charges7
(b) 

—
  7
Total costs and expenses1,797
  (1)  1,796
Operating income (loss)(779)  1
  (778)
Interest expense(70) 
—
  (70)
Earnings (loss) from discontinued operations(849)  1
  (848)
Income tax benefit (provision)(55) 
45
(c) 
 (10)
Earnings (loss) from discontinued operations, net of tax(904)  46
  (858)
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
(d) 
 (94)
Net earnings (loss) from discontinued operations, net of tax$(1,009)  $57
  $(952)
Merger-related Costs and Other Corporate Matters
(a) During 2017, priorIn 2020, in addition to the split-off, CBS Radio was measured each reporting period, beginningabove-mentioned restructuring charges and related costs, we incurred costs of $56 million in connection with the first quarterMerger, consisting of 2017, at the lowerprofessional fees mainly associated with integration activities, as well as transaction-related bonuses. We also incurred costs of $5 million for professional fees associated with dispositions and other corporate matters, and we recorded a charge of $15 million to write down property and equipment that has been classified as held for sale to its carrying amount or fair value less costcosts to sell. The value

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 triggered by the Merger. We also incurred costs of $40 million in connection with the settlement of a commercial dispute and $17 million associated with legal proceedings involving the Company (see Note 20) 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.
8) RELATED PARTIES
National Amusements, Inc. NAI is the controlling stockholder of ViacomCBS. Shari E. Redstone is the Chairperson, CEO and President of NAI and the non-executive Chair of our Board of Directors. At December 31, 2020, NAI directly or indirectly owned approximately 79.4% of our voting Class A Common Stock and 10.2% of our Class A Common Stock and non-voting Class B Common Stock on a combined basis. Until the death of Mr. Sumner M. Redstone on August 11, 2020, NAI was controlled by Mr. Redstone through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which owned 80% of the transactionvoting interest of NAI, with Entercom was determined based on Entercom’s stock price atsuch voting interest voted solely by Mr. Redstone. Upon Mr. Redstone’s death and in accordance with the closingterms of the transactiontrust agreement governing the SMR Trust and therefore, the carrying valueContinuing Trusts (as defined below), the SMR Trust was succeeded by 2 continuing trusts (the “Continuing Trusts”), each of CBS Radio was measured atwhich holds 40% of the value indicatedvoting stock of NAI. Under the terms of the trust agreement governing the SMR Trust and the Continuing Trusts, the Continuing Trusts are required to share the same 7 voting trustees, who have equal voting power, and each trustee is required to cause each Continuing Trust to vote the NAI shares held by that Continuing Trust in the same manner as the NAI shares held by the stock valuationother Continuing Trust. Ms. Redstone is one of Entercom. Asthe 7 voting trustees for each Continuing Trust and is one of 2 voting trustees who are beneficiaries of one of the Continuing Trusts. No member of our management or other member of our Board, is a result,trustee of either of the Company recorded a market value adjustment of $980 million during the nine months ended September 30, 2017 to adjust the carrying value of CBS Radio as follows:Continuing Trusts.

First Quarter 2017 $(715)
Second Quarter 2017 (365)
Third Quarter 2017 100
  $(980)
(b) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.
(c) Reflects a tax benefit from the resolution of a tax matter in a foreign jurisdiction relatingPursuant to a previously disposed business that was accountedsettlement and release agreement entered into by us, NAI and others, with respect to legal proceedings involving these parties, we paid $30 million for as a discontinued operation.
(d) Reflects adjustments to the loss on disposal of the Company’s outdoor advertising businesses, primarily from a decrease to the guarantee liability associated with the 2013 disposal of the Company’s outdoor advertising business in Europe (“Outdoor Europe”).professional fees incurred by NAI during 2018

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



Year Ended December 31, 2016CBS Radio 
Other (b)
 Total
Revenues$1,220

 $—
  $1,220
Costs and expenses:       
Operating397

 —
  397
Selling, general and administrative497

 —
  497
Depreciation and amortization26

 —
  26
Restructuring charges8
(a) 
 —
  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)
(a) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.
(b) Reflects a charge from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accountedthese legal proceedings, which are included in “Restructuring and other corporate matters” in the Consolidated Statement of Operations for as a discontinued operation.
Year Ended December 31, 2015CBS Radio 
Other (b)
 Total
Revenues$1,223
  $—
  $1,223
Costs and expenses:       
Operating415
  —
  415
Selling, general and administrative500
  —
  500
Depreciation and amortization29
  —
  29
Restructuring charges36
(a) 
 —
  36
Impairment charge484
  —
  484
Total costs and expenses1,464
  —
  1,464
Operating loss(241)  —
  (241)
Other income1

 —
  1
Loss from discontinued operations(240)  —
  (240)
Income tax benefit89
  —
  89
Loss from discontinued operations, net of tax(151)  —
  (151)
Net gain on disposal—
  17
  17
Income tax provision—
  (7)  (7)
Net gain on disposal, net of tax—
  10
  10
Net earnings (loss) from discontinued operations, net of tax$(151)  $10
  $(141)
(a) Reflects restructuring charges associated with the reorganization of certain business operations, including severance costs and costs associated with exiting contractual obligations.
(b) Reflects a decrease to the guarantee liability associated with the 2013 disposal of Outdoor Europe.
During the year ended December 31, 2016,2018.

Other Related Parties.  In the Companyordinary course of business, we are involved in transactions with our equity-method investees, primarily for the licensing of television and film programming. The following tables present the amounts recorded in our consolidated financial statements related to these transactions.
Year Ended December 31,202020192018
Revenues$106 $179 $170 
Operating expenses$13 $14 $22 
At December 31,20202019
Amounts due to/from other related parties
Accounts receivable$69 $45 
Accounts payable$0 $3 

Through the normal course of business, we are involved in transactions with other related parties that have not been material in any of the periods presented.
9) REVENUES
The following table presents our revenues disaggregated into categories based on the nature of such revenues.
Year Ended December 31,202020192018
Revenues by Type:
Advertising$9,751 $11,074 $10,841 
Affiliate9,166 8,602 8,376 
Content licensing5,963 6,483 6,163 
Theatrical180 547 744 
Other225 292 301 
Total Revenues$25,285 $26,998 $26,425 
Unrecognized Revenues Under Contract
At December 31, 2020, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts was $6.79 billion, of which $3.75 billion is expected to be recognized in 2021, $2.11 billion in 2022, $589 million in 2023, and $339 million thereafter. These amounts only include contracts subject to a pretax noncash impairment chargeguaranteed fixed amount or the guaranteed minimum under variable contracts, primarily consisting of $444 million ($427 million, nettelevision and film licensing contracts and affiliate agreements that are subject to a fixed or guaranteed minimum fee. Such amounts change on a regular basis as we renew existing agreements or enter into new agreements. Unrecognized revenues under contract disclosed above do not include (i) contracts with an original expected term of tax) to reduceone year or less, mainly consisting of advertising contracts (ii) contracts for which variable consideration is determined based on the carryingcustomer’s subsequent sale or usage, mainly consisting of affiliate agreements and (iii) long-term licensing agreements for multiple programs for which variable consideration is determined based on the value of CBS Radio’s goodwill by $408 million ($405 million, netthe programs delivered to the customer and our right to invoice corresponds with the value delivered.

Performance Obligations Satisfied in Previous Periods
Under certain licensing arrangements, the amount and timing of tax) and FCC licenses in 11 radio markets by $36 million ($22 million, net of tax).

During the year ended December 31, 2015, the Company recordedour revenue recognition is determined based on our licensees’ subsequent sale to its end customers. As 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.

result, under such arrangements, which primarily include

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



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, 2020, 2019 and 2018, we recognized revenues of $250 million, $235 million, and $172 million, respectively, in our Filmed Entertainment segment for performance obligations satisfied, or partially satisfied, in a prior period.
The following table presents the major classes of assets
Contract Liabilities
Contract liabilities were $1.12 billion, $908 million and liabilities of the Company’s discontinued operations.
At December 31,
2017 (a)
 2016
Receivables, net$—
 $244
Other current assets1
 61
Goodwill—
 1,285
Intangible assets—
 2,832
Net property and equipment—
 145
Other assets12
 29
Total Assets$13
 $4,596
Current portion of long-term debt$—
 $10
Other current liabilities32
 145
Long-term debt—
 1,335
Deferred income tax liabilities—
 998
Other liabilities42
 118
Total Liabilities$74
 $2,606
(a) Assets and liabilities of discontinued operations$743 million at December 31, 2017 primarily reflect deferred income taxes, accruals2020, 2019 and 2018, respectively and are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets. The change in contract liabilities for transaction costs and other liabilities related to previously disposed businesses.

The following table presents CBS Radio’s long-term debt at December 31, 2016.
Term Loan due October 2023, net of discount $955
 
7.250% Senior Notes due November 2024 400
 
Revolving Credit Facility 10
 
Deferred financing costs (20) 
Total long-term debt, including current portion $1,345
 
5) RESTRUCTURING AND MERGER AND ACQUISITION-RELATED COSTS
During the year ended December 31, 2017, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses,2020 primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $63 million, reflecting $54reflects $591 million of severance costs and $9 millionrevenues recognized that were included in deferred revenues at December 31, 2019 partially offset by cash payments received during the period for which the performance obligation was not satisfied prior to the end of costs associated with exiting contractual obligations and other related costs. Duringthe period. For the year ended December 31, 2016, the Company recorded restructuring charges2019, we recognized revenues of $30$498 million reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs. Duringthat were included in deferred revenues at December 31, 2018. For the year ended December 31, 2015, the Company recorded restructuring charges2018, we recognized revenues of $45$558 million reflecting $24 million of severance costs and $21 million of costs associated with exiting contractual obligations and other related costs. As ofthat were included in deferred revenues at December 31, 2017.

Receivables

Included in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of $2.02 billion and $2.15 billion atDecember 31, 2020 and 2019, respectively. Noncurrent receivables primarily relate 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 collected over the term of the license period. The year of origination for these receivables at December 31, 2020 was $1.02 billion in 2020, $608 million in 2019, $299 million in 2018, $82 million in 2017, the cumulative settlementsand $15 million for the 2017, 2016 and 2015 restructuring charges were $68 million,prior.

Our receivables do not represent significant concentrations of credit risk at December 31, 2020 and 2019, due to the wide variety of customers, markets and geographic areas to which $45 million was for severance costsour products and $23 million related to costs associated with exiting contractual obligations and other related costs. The Company expects to substantially utilize its restructuring reserves by the end of 2018.services are sold.

II-84
 Balance at 2017 2017 Balance at
 December 31, 2016 Charges Settlements December 31, 2017
Entertainment $20
  $44

 $(18)   $46
 
Cable Networks 4
  —
  (3)   1
 
Publishing 1
  5
  (3)   3
 
Local Media 12
  12

 (7)   17
 
Corporate 2
  2

 (1)   3
 
Total $39
  $63
  $(32)   $70
 


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



10) DEBT
Our debt consists of the following:
 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
 
At December 31,20202019
Commercial paper$0 $699 
4.3% Senior Notes due 20210 300 
4.5% Senior Notes due 20210 499 
3.875% Senior Notes due 20210 597 
2.250% Senior Notes due 202235 49 
3.375% Senior Notes due 2022415 698 
3.125% Senior Notes due 2022117 194 
2.50% Senior Notes due 2023196 398 
3.25% Senior Notes due 2023141 181 
2.90% Senior Notes due 2023242 396 
4.25% Senior Notes due 2023837 1,242 
7.875% Debentures due 2023139 187 
7.125% Senior Notes due 202335 46 
3.875% Senior Notes due 2024490 489 
3.70% Senior Notes due 2024598 598 
3.50% Senior Notes due 2025596 592 
4.75% Senior Notes due 20251,239 0 
4.0% Senior Notes due 2026791 789 
3.45% Senior Notes due 2026123 123 
2.90% Senior Notes due 2027691 688 
3.375% Senior Notes due 2028495 494 
3.70% Senior Notes due 2028492 491 
4.20% Senior Notes due 2029493 493 
7.875% Senior Debentures due 2030831 831 
4.95% Senior Notes due 20311,220 0 
4.20% Senior Notes due 2032969 0 
5.50% Senior Debentures due 2033427 426 
4.85% Senior Debentures due 203487 87 
6.875% Senior Debentures due 20361,069 1,068 
6.75% Senior Debentures due 203775 75 
5.90% Senior Notes due 2040298 297 
4.50% Senior Debentures due 204245 45 
4.85% Senior Notes due 2042487 486 
4.375% Senior Debentures due 20431,116 1,109 
4.875% Senior Debentures due 204318 18 
5.85% Senior Debentures due 20431,232 1,231 
5.25% Senior Debentures due 2044345 345 
4.90% Senior Notes due 2044540 539 
4.60% Senior Notes due 2045589 589 
4.95% Senior Notes due 2050942 0 
5.875% Junior Subordinated Debentures due 2057514 643 
6.25% Junior Subordinated Debentures due 2057643 643 
Other bank borrowings95 0 
Obligations under finance leases26 44 
Total debt (a)
19,733 18,719 
Less commercial paper0 699 
Less current portion of long-term debt16 18 
Total long-term debt, net of current portion$19,717 $18,002 

(a) At December 31, 2020 and 2019, the senior and junior subordinated debt balances included (i) a net unamortized discount of $491 million and $412 million, respectively, and (ii) unamortized deferred financing costs of $107 million and $92 million, respectively. The face value of our total debt was $20.33 billion at December 31, 2020 and $19.23 billion at December 31, 2019.
In 2016, the Company incurred professional fees of $8 million associated with merger and acquisition-related activities.
6) PROGRAMMING AND OTHER INVENTORY
At December 31,2017 2016
Acquired program rights$2,234
 $1,773
Acquired television library99
 —
Internally produced programming:   
Released1,780
 1,746
In process and other543
 298
Publishing, primarily finished goods53
 49
Total programming and other inventory4,709
 3,866
Less current portion1,828
 1,427
Total noncurrent programming and other inventory$2,881
 $2,439
The Company expects to amortize approximately $725 million of its released internally produced programming duringDuring the year ended December 31, 2018. In addition, while it is difficult2020, we issued $4.50 billion of senior notes with interest rates ranging from 4.20% to determine4.95% and due dates from 2025 to 2050. The net proceeds from these issuances are being used for the precise timingredemption of our long-term debt as well as for general corporate purposes. During the amortization of the remaining released internally produced programming, the Company estimates that substantially all of theyear ended December 31, 2017 balance will be amortized over the next three years.
7) RELATED PARTIES
National Amusements, Inc. National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp.2020, we redeemed, prior to maturity, senior notes, debentures, and Viacom Inc.  Mr. Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Chairman Emeritus of CBS Corp. and the Chairman Emeritus of Viacom Inc. In addition, Ms. Shari Redstone, Mr. Sumner M. Redstone’s daughter, is the president and a director of NAI and the 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. At December 31, 2017, NAI directly or indirectly owned approximately 79.5% of CBS Corp.’s voting Class A Common Stock and owned approximately 10.2% of CBS Corp.’s 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 seven trustees, who will include CBS Corporation directors Ms. Shari Redstone and Mr. David R. Andelman. No member of the Company’s management is a trustee of the SMR Trust. 

Viacom Inc.  On February 1, 2018, the Company announced that its Board of Directors established a special committee of independent directors to evaluate a potential combination with Viacom Inc. There can be no assurance that this process will result in a transaction or on what terms any transaction may occur.

junior subordinated debentures totaling $2.77

II-85

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



billion, for an aggregate redemption price of $2.88 billion. These redemptions resulted in a pre-tax loss on extinguishment of debt of $126 million ($97 million, net of tax).
As part of its normal course of business,
During 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 programs in the home entertainment market. The Company’s total revenues from these transactions were $145 million, $120 million and $176 million for the yearsyear ended December 31, 2017, 20162019, 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 2015, respectively.the $90 million aggregate principal amount of our 2.75% senior notes due December 2019.


The Company leases production facilities, licenses feature films and purchases advertising spots from various subsidiaries of Viacom Inc. The total amounts for these transactions were $21 million, $24 million and $25 million forDuring the yearsyear ended December 31, 2017, 20162018, we redeemed $1.13 billion of senior notes and 2015, respectively.debentures for a redemption price of $1.10 billion, resulting in a pre-tax gain on extinguishment of debt of $18 million ($14 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 following table presentsinterest rate payable on our 2.25% senior notes due February 2022 and 3.45% senior notes due October 2026, collectively the amounts“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, 2020, the outstanding principal amount of our 2.25% senior notes due from Viacom Inc.February 2022 and 3.45% senior notes due October 2026 was $35 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 normal courseevent of business as reflected on the Company’s Consolidated Balance Sheets. Amountsa change in control under specified circumstances coupled with ratings downgrades due to Viacom Inc. were minimal at December 31, 2017 and 2016.the change in control, as well as certain optional redemption provisions for our junior debentures.
At December 31,2017 2016
Receivables$93
 $113
Other assets (Receivables, noncurrent)11
 35
Total amounts due from Viacom Inc.$104
 $148
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 $99 million, $112 million and $160 million for the years ended December 31, 2017, 2016 and 2015, respectively. Total amounts due from these joint ventures were $27 million and $47 million at December 31, 2017 and 2016, respectively.

The Company, through the normal course of business, is involved in transactions with other related parties that have not been material in any of the periods presented.

8) INVESTMENTS
The Company accounts for investments over which it has significant influence or ownership of more than 20% but less than or equal to 50%, without a controlling interest, under the equity method. Such investments include the Company’s 50% interests in the broadcast network, The CW, and the entertainment cable network, Pop. In addition, the Company has 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 channels in the United Kingdom and Ireland, including CBS branded channels; and a 30% interest in a joint venture with another subsidiary of AMC Networks Inc., which owns and operates cable and satellite channels in Europe, the Middle East and Africa.


At December 31, 20172020, our scheduled maturities of long-term debt at face value, excluding finance leases, and 2016, respectively, the Company had $283 million and $227 million of equity investments that are includedrelated interest payments were as follows:
2026 and
20212022202320242025Thereafter
Long-term debt$0 $569 $1,596 $1,092 $1,850 $15,103 
Commercial Paper
In January 2020, our commercial paper program was increased to $3.50 billion from $2.50 billion in “Other assets” onconjunction with the Consolidated Balance Sheets.

Investments of 20% or less, over which the Company has no significant influence, that do not have a readily determinable fair value are accounted for under the cost method.new $3.50 billion revolving credit facility described below. At December 31, 20172020, we had 0 outstanding commercial paper borrowings. At December 31, 2019, we had $699 million outstanding commercial paper borrowings under our commercial paper program at a weighted average interest rate of 2.07% and 2016, respectively,maturities of less than 90 days.

Credit Facility
In January 2020, the Company had $24 million$2.50 billion revolving credit facility held by CBS prior to the Merger, with a maturity in June 2021, was terminated and $34 million of cost investments that are includedthe revolving credit facility held by Viacom prior to the Merger, with a maturity in “Other assets” on the Consolidated Balance Sheets.

II-86

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



February 2024, was amended and restated to a $3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”). The Company invested $110 million, $81 million and $98 million into its equity and cost investments during the years ended December 31, 2017, 2016 and 2015, respectively.

For 2017, other items, net on the statement of operations included $13 million for the write-down of cost investments to their fair value. For 2016, equity in loss of investee companies, net of tax on the statement of operations included $10 million for the write-down of an international television joint venture to its fair value.

9) BANK FINANCING AND DEBT
The Company’s debt consists of the following (a):
At December 31,2017 2016
Commercial paper$679
 $450
1.95% Senior Notes due 2017—
 399
4.625% Senior Notes due 2018—
 305
2.30% Senior Notes due 2019604
 606
5.75% Senior Notes due 2020—
 499
4.30% Senior Notes due 2021299
 299
3.375% Senior Notes due 2022696
 695
2.50% Senior Notes due 2023396
 —
2.90% Senior Notes due 2023395
 —
7.875% Debentures due 2023187
 187
7.125% Senior Notes due 2023 (b)
46
 46
3.70% Senior Notes due 2024597
 596
3.50% Senior Notes due 2025589
 587
4.00% Senior Notes due 2026785
 783
2.90% Senior Notes due 2027684
 683
3.375% Senior Notes due 2028493
 —
3.70% Senior Notes due 2028489
 —
7.875% Senior Debentures due 2030832
 833
5.50% Senior Debentures due 2033425
 425
5.90% Senior Notes due 2040297
 297
4.85% Senior Notes due 2042485
 485
4.90% Senior Notes due 2044539
 538
4.60% Senior Notes due 2045588
 587
Obligations under capital leases57
 75
Total debt (c)
10,162
 9,375
Less commercial paper679
 450
Less current portion19
 23
Total long-term debt, net of current portion$9,464
 $8,902
(a) Unless otherwise noted, the long-term debt instruments are issuances of CBS Corp. and are guaranteed by CBS Operations Inc.
(b) Debt instrumentcredit facility is an issuance of CBS Broadcasting Inc., a wholly owned subsidiary of CBS Corp., and has no guarantor.
(c) At December 31, 2017 and 2016, the senior debt balances included (i) a net unamortized discount of $65 million and $52 million, respectively, (ii) unamortized deferred financing costs of $47 million and $43 million, respectively, and (iii) a $3 million decrease and a $5 million increase, respectively, in the carrying value of the debt relating to previously settled fair value hedges. The face value of the Company’s total debt was $10.28 billion at December 31, 2017 and $9.47 billion at December 31, 2016.

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


For the year ended December 31, 2017, debt issuances, redemptions and repayments were as follows:

Debt Issuances
November 2017, $400 million 2.90% senior notes due 2023
November 2017, $500 million 3.70% senior notes due 2028
July 2017, $400 million 2.50% senior notes due 2023
July 2017, $500 million 3.375% senior notes due 2028

Debt Redemptions
November 2017, $500 million 5.750% senior notes due 2020
July 2017, $300 million 4.625% senior notes due 2018

Debt Repayments
July 2017, $400 million 1.950% senior notes due 2017, upon maturity

The Company used the net proceeds from the 2017 issuances for the redemption and repayment of $1.20 billion of senior notes and for general corporate purposes including discretionary contributionsand to the Company’s qualified pension plans and the repayment of short-term borrowings, including commercial paper.

The early redemption of the $500 million 5.750% senior notes due April 2020 and the $300 million 4.625% senior notes due May 2018 resulted in a pre-tax loss on early extinguishment of debt of $49 million ($31 million, net of tax) for the year ended December 31, 2017.

During July 2016, the Company issued $700 million of 2.90% senior notes due 2027 and used the net proceeds for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and the repayment of short-term borrowings, including commercial paper. During January 2016, the Company repaid its $200 million of outstanding 7.625% senior debentures upon maturity.

At December 31, 2017, the Company’s scheduled maturities of long-term debt at face value, excluding capital leases, were as follows:
                2023 and
 20182019202020212022Thereafter
Long-term debt $—
  $600
  $—
  $300
  $700
 $7,940
Commercial Paper
The Company had outstandingsupport commercial paper borrowings under its $2.50 billion commercial paper program of $679 million and $450 millionoutstanding, if any. We may, at December 31, 2017 and 2016, respectively, each with maturities of less than 90 days. The weighted average interest rate for these borrowings was 1.88% and 0.98% at December 31, 2017 and 2016, respectively.

Credit Facility
At December 31, 2017, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Company, 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 generally based generally on either 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 basedrating, depending on the total amounttype and tenor of the commitments.

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


loans entered. The Credit Facility has one principal financial covenant that 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. At December 31, 2017, the Company’squarter. The Consolidated Leverage Ratio was approximately 3.1x.

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 intwelve-month period. We met the Credit Facilitycovenant as operating income plus interest income and before depreciation, amortization and certain other noncash items.of December 31, 2020.

The Credit Facility is used for general corporate purposes. At December 31, 2017, the Company2020, we had no0 borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49$3.50 billion.
Other Bank Borrowings
10)At December 31, 2020, we had $95 million of bank borrowings with a weighted average interest rate of 3.50% under Miramax’s $300 million credit facility, which matures in April 2023.
11) LEASES
At December 31, 2020 and 2019, the following amounts were recorded on the Consolidated Balance Sheets relating to our leases.
OperatingFinance
2020201920202019
Right-of-Use Assets
Operating lease assets$1,602 $1,738 $— $— 
Property and equipment, net$— $— $19 $35 
Lease Liabilities
Other current liabilities$306 $289 $— $— 
Debt— — 16 19 
Operating lease liabilities1,583 1,705 — — 
Long-term debt— — 10 25 
Total lease liabilities$1,889 $1,994 $26 $44 
OperatingFinance
2020201920202019
Weighted average remaining lease term8 years9 years2 years3 years
Weighted average discount rate4.0 %4.0 %4.2 %4.5 %
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

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 31,20202019
Operating lease cost (a) (b)
$379 $382 
Finance lease cost:
Amortization of right-of-use assets18 23 
Interest expense on lease liabilities2 3 
Short-term lease cost (b) (c)
162 242 
Variable lease cost (d)
58 80 
Sublease income(24)(31)
Total lease cost$595 $699 
(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, which are not recorded in right-of-use assets and lease liabilities on the Consolidated Balance Sheets, have a term of 12 months or less and exclude month-to-month leases.
(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 31,20202019
Cash paid for amounts included in lease liabilities
Operating lease payments, included in operating cash flows$385 $324 
Finance lease payments, included in financing cash flows$21 $27 
Noncash additions to operating lease assets$221 $387 
II-88

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, 2020 are as follows:
Leases
OperatingFinance
2021$372 $17 
2022315 7 
2023260 2 
2024209 1 
2025197 1 
2026 and thereafter916 0 
Total minimum payments2,269 28 
Less amounts representing interest380 2 
Present value of minimum payments$1,889 $26 
As of December 31, 2020, we had no material leases that were executed but not yet commenced.

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 rental 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 $133 million and $148 million, including both fixed and variable amounts, for the years ended December 31, 2020 and 2019, respectively.

At December 31, 2020, future fixed lease income under noncancellable operating leases is as follows:
2021$56 
202249 
202347 
202437 
202528 
2026 and thereafter29 
Total$246 
12) FINANCIAL INSTRUMENTS
The carrying value of our financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value.debentures.  At December 31, 20172020 and 2016,2019, the carrying value of the Company’s senior debtour outstanding notes and debentures was $9.43$19.61 billion and $8.85$17.98 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 $10.16$24.5 billion and $9.51$20.6 billion, respectively.


The Company usesWe use derivative financial instruments primarily to manage itsour 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.


Investments
At December 31, 2020 and 2019, we had investments of $601 million and $753 million, respectively, consisting of equity-method investments, equity investments without a readily determinable fair value and marketable
II-89

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

securities. We contributed $59 million, $171 million and $161 million to our investments during the years ended December 31, 2020, 2019 and 2018, respectively.

Our equity method investments include a 50% interest in the broadcast network, The CW, as well as interests in several international television joint ventures including a 49% interest in Viacom18, a joint venture in India which owns and operates COLORS pay television channel, a digital advertising platform and a filmed entertainment business. At December 31, 2020 and 2019, respectively, we had $536 million and $494 million of equity-method investments. For the year ended December 31, 2020, “Equity in loss of investee companies, net of tax” on the Consolidated Statements of Operations includes an impairment charge of $9 million relating to an international television joint venture.

At December 31, 2020 and 2019, respectively, we had $65 million and $113 million of equity investments without a readily determinable fair value. During 2020, we recorded a gain of $213 million related to an increase in the value of our investment in fuboTV, which was sold in the fourth quarter of 2020. For 2020, 2019, and 2018, included in “Net gains (losses) from investments” on the Consolidated Statements of Operations was $7 million, $50 million and$46 million, respectively, for the impairment of investments without a readily determinable fair value.

During 2020, we sold marketable securities for proceeds of $146 million. We did not have any marketable securities at December 31, 2020. The fair value of our marketable securities was $146 million at December 31, 2019 as determined based on quoted market prices in active markets (Level 1 in the fair value hierarchy). For 2019 and 2018, included in “Net gains (losses) from investments” on the Consolidated Statements of Operations was an unrealized gain of $113 million and an unrealized loss of $23 million, respectively, resulting from changes in the fair value of our marketable securities.

In 2019, we completed the sale of an international joint venture resulting in a gain of $10 million. In 2018, we completed the sale of a 1% equity interest in Viacom18 to our joint venture partner for $20 million, resulting in a gain of $16 million. These gains have been included in “Net gains (losses) from investments” in the Consolidated Statements of Operations.

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 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, 20172020 and 2016,2019, the notional amount of all foreign currency contracts was $410$1.27 billion and $1.44 billion, respectively. For 2020, $740 million related to future production costs and $433$529 million respectively.related to our foreign currency balances and other expected foreign currency cash flows. For 2019, $833 million related to future production costs and $606 million related to our foreign currency balances and other expected foreign currency cash flows.


Gains (losses)Losses recognized on derivative financial instruments were as follows:
Year Ended December 31,20202019Financial Statement Account
Non-designated foreign exchange contracts$(20)$(4)Other items, net
Year Ended December 31,2017 2016 Financial Statement Account
Non-designated foreign exchange contracts $(27)   $33
  Other items, net
The fair value of the Company’s 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.

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



The Company’s receivablesfair value of our derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.

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 represent significant concentrations of credit risk at December 31, 2017 and 2016, due toanticipate nonperformance by the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold.counterparties.
11)13) FAIR VALUE MEASUREMENTS
The following tables set forth the Company’sbalances at December 31, 2020 and 2019 of our assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and 2016.basis. 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. We do not have any assets or liabilities that are measured at fair value on a recurring basis using level 3 inputs.
At December 31, 2017Level 1 Level 2 Level 3 Total
At December 31, 2020At December 31, 2020Level 1Level 2Total
Assets:       Assets:
Foreign currency hedges$—
 $5
 $—
 $5
Foreign currency hedges$0 $20 $20 
Total Assets$—

$5

$—
 $5
Total Assets$0 $20 $20 
Liabilities:      $—
Liabilities:$— 
Deferred compensation$—
 $363
 $—
 $363
Deferred compensation$0 $529 $529 
Foreign currency hedges—
 10
 —
 10
Foreign currency hedges0 39 39 
Total Liabilities$—

$373

$—
 $373
Total Liabilities$0 $568 $568 
At December 31, 2016Level 1 Level 2 Level 3 Total
At December 31, 2019At December 31, 2019Level 1Level 2Total
Assets:       Assets:
Marketable securitiesMarketable securities$146 $0 $146 
Foreign currency hedges$—
 $34
 $—
 $34
Foreign currency hedges0 13 13 
Total Assets$—
 $34
 $—
 $34
Total Assets$146 $13 $159 
Liabilities:      $—
Liabilities:$— 
Deferred compensation$—
 $347
 $—
 $347
Deferred compensation$0 $490 $490 
Foreign currency hedges—
 1
 —
 1
Foreign currency hedges0 14 14 
Total Liabilities$—
 $348
 $—
 $348
Total Liabilities$0 $504 $504 
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. The fair value of marketable securities at December 31, 2019 was determined based on quoted market prices in active markets.
12)14) 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.

II-91

Dividends—The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2017, 2016, and 2015. For the years ended December 31, 2017, 2016 and 2015, the Company declared total per share dividends of $.72, $.66, and $.60, respectively, resulting in total annual dividends of $289 million, $294 million and $293 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—During 2017, the Company repurchased 16.2 million shares of CBS Corp. Class B Common Stock under its share repurchase program for $1.05 billion, at an average cost of $64.70 per share. At December 31, 2017, $3.06 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)



Also during 2017,Merger with Viacom—At the Company completedEffective Time of the split-offMerger, (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, Radio through an exchange offer, in which the Company accepted 17.9 millionwas converted automatically into 0.59625 shares of CBS Corp.ViacomCBS Class A Common Stock, and (2) each share of Viacom Class B Common Stock from its stockholdersissued 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 exchange for the 101.4issuance 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 Radio commonClass 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—We declared a quarterly cash dividend on our Class A and Class B Common Stock during each of the quarters of 2020, resulting in total dividends for the year of $601 million, or $.96 per share. On December 19, 2019, we declared a quarterly cash dividend of $.24 per share on our Class A and Class B Common Stock, resulting in total dividends of $150 million. 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. During the first three quarters of 2019, CBS declared total per share dividends of $.54, resulting in total dividends of $205 million. For the year ended December 31, 2018, CBS declared total per share dividends of $.72, resulting in total annual dividends of $274 million. During the first three quarters of 2019, Viacom declared total per share dividends of $.60, resulting in total dividends of $245 million. For the year ended December 31, 2018, Viacom declared total per share dividends of $.80, resulting in total annual dividends of $325 million. During the first half of 2018, dividends were recorded as a reduction to additional paid-in capital as we had an accumulated deficit balance. During the second half of 2018, our retained earnings became positive and as a result, for the remainder of 2018, and for 2019 and 2020, dividends have been recorded to retained earnings.

Treasury Stock—During 2020, we repurchased 1.3 million shares of ViacomCBS Class B Common Stock under our share repurchase program for $50 million, at an average cost of $38.63 per share. At December 31, 2020, $2.36 billion of authorization remained under the share repurchase program. During 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.

In the Merger, all shares of Viacom Class B Common Stock held by Viacom as treasury stock that it owned (See Note 4).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. ConversionsFor 2020, conversions of CBS Corp. Class A Common Stock into Class B Common Stock were 0.1minimal. Conversions of Class A Common Stock into Class B Common Stock were 12.2 million for each of the years 20162019 and 2015.2.5 million for 2018.


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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).
   Net Actuarial Accumulated
 Cumulative Loss and Other
 Translation Prior Comprehensive
 Adjustments Service Cost Loss
At December 31, 2014$157
 $(892) $(735)
Other comprehensive loss before reclassifications(5) (66) (71)
Reclassifications to net earnings—
 36
(a) 
36
Other comprehensive loss(5) (30) (35)
At December 31, 2015152
 (922) (770)
Other comprehensive loss before reclassifications(1) (165) (166)
Reclassifications to net earnings—
 169
(a) 
169
Other comprehensive income (loss)(1) 4
 3
At December 31, 2016151
 (918) (767)
Other comprehensive income (loss) before reclassifications6
 (173) (167)
Reclassifications to net earnings2
 270
(a) 
272
Other comprehensive income8
 97
 105
At December 31, 2017$159
 $(821) $(662)
Continuing OperationsDiscontinued Operations
Net ActuarialAccumulated
CumulativeLoss andOtherOther
TranslationPriorAvailable-For-SaleComprehensiveComprehensive
AdjustmentsService CostSecurities
Income (Loss) (a)
Loss
At December 31, 2017$(209)$(1,071)$30 $(19)$(1,269)
Other comprehensive loss before
reclassifications		(236)(123)0 (12)(371)
Reclassifications to net earnings0 62 (b)0 0 62 
Other comprehensive loss(236)(61)0 (12)(309)
Adoption of accounting standard0 0 (30)0 (30)
At December 31, 2018(445)(1,132)0 (31)(1,608)
Other comprehensive income (loss)
before reclassifications		7 (205)0 6 (192)
Reclassifications to net earnings0 60 (b)0 0 60 
Other comprehensive income (loss)7 (145)0 6 (132)
Tax effects reclassified to retained
earnings		0 (230)(c)0 0 (230)
At December 31, 2019(438)(1,507)0 (25)(1,970)
Other comprehensive income (loss)
before reclassifications		135 (74)0 5 66 
Reclassifications to net earnings0 72 (b)0 0 72 
Other comprehensive income
(loss)		135 (2)0 5 138 
At December 31, 2020$(303)$(1,509)$0 $(20)$(1,832)
(a) Reflects cumulative translation adjustments.
(b) Reflects amortization of net actuarial losseswhich includeslosses and prior service cost.
(c) Reflects the accelerated recognitionreclassification of a portioncertain income tax effects of federal tax legislation enacted in December 2017 (the “Tax Reform Act”) on items within accumulated other comprehensive loss to retained earnings upon the unamortized actuarial losses as a resultadoption of pension settlements for the years ended December 31, 2017 and 2016 (See Note 15).new FASB guidance.

The net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax (provision) benefit for the years ended December 31, 2017, 20162020, 2019 and 20152018 of $(106)$1 million, $(3)$44 million and $19$23 million, respectively. The tax provision related to the other comprehensive loss from discontinued operations and the tax provision related to the unrealized gain on securities were minimal for all periods presented.

13) 15) STOCK-BASED COMPENSATION

The Company hasWe have equity incentive plans (the “Plans”) under which stock options, 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. RSUs and PSUs 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. Upon exercise of stock options or vesting of RSUs and PSUs, the Company issueswe issue new shares from itsour existing authorization. At December 31, 2017,2020, there were 4533 million shares available for future grant under the Plans. Stock-based compensation awards were also granted under Viacom’s equity incentive plans until December 31, 2020. Upon exercise of outstanding stock

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



options or vesting of RSUs and PSUs under Viacom’s equity incentive plans, shares will be issued from Viacom’s existing authorization or from treasury stock.
At the Effective Time of the Merger, 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 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, 2017, 20162020, 2019 and 2015.2018.
Year Ended December 31,202020192018
RSUs and PSUs$167 $169 $167 
Stock options19 27 34 
Compensation cost included in operating and SG&A expense186 196 201 
Compensation cost included in restructuring and other
corporate matters (a)
88 90 (14)
Stock-based compensation expense, before income taxes274 286 187 
Related tax benefit(54)(58)(44)
Stock-based compensation expense, net of tax benefit$220 $228 $143 
Year Ended December 31,2017 2016 2015
RSUs and PSUs$152
 $137
 $129
Stock options27
 28
 28
Stock-based compensation expense, before income taxes179
 165
 157
Related tax benefit(69) (63) (61)
Stock-based compensation expense, net of tax benefit$110
 $102
 $96
(a) Reflects accelerations as a result of restructuring activities, as well as accelerations triggered by the Merger in 2019, and forfeitures related to changes in senior management in 2018.

Included in net lossearnings from discontinued operations was stock-based compensation expense of $2$10 million, $12$5 million, and $17$4 million for the years 2017, 2016,2020, 2019, and 2015,2018, respectively.

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-one- to four-yearfour-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.


During 20172020 and 2016, the Company2018, we also granted PSU awards. TheFor the 2020 awards, the number of shares that willto be issued upon vesting of the PSUs is based on the Company’s stock price performancetotal shareholder return of ViacomCBS Class B Common Stock measured against the companies comprising the S&P 500 Index over a designated measurement period. For the 2018 awards, the number of shares to be issued upon vesting of the PSUs was based on the total shareholder return of Viacom Class B Common Stock measured against the companies comprising the S&P 500 Index over a designated measurement period, as well as the achievement of established operating goals. The fair value of PSU awards is determined using a Monte Carlo simulation model. Compensation expense for PSUs is expensed over the required employee service period. The fair value of the PSU awards granted during the years ended December 31, 20172020 and 2016December 31, 2018 was $23$34 million and $4$35 million, respectively. There were 0 PSU awards granted in 2019. At the Effective Time of the Merger, all outstanding PSU awards for which the performance period had not been completed were converted into time-based RSUs based on the target number of shares included in the terms of the original PSU award.

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

The weighted average grant date fair value of RSUs and PSUs granted was $66.59$32.35, $47.3041.71 and $59.11$51.41 in 2017, 2016,2020, 2019, and 2015,2018, respectively. The total market value of RSUs that vested during 2017, 2016,2020, 2019, and 20152018 was $193$222 million, $129$159 million and $212$158 million, respectively. Total unrecognized compensation cost related to non-vested RSUs and PSUs at December 31, 20172020 was $192$358 million which is expected to be recognized over a weighted average period of 2.22.9 years.

The following table summarizes the Company’sour RSU activity.and PSU share activity:
Weighted Average
SharesGrant Date Fair Value
Non-vested at December 31, 201914,489,729 $45.64 
Granted (a)
6,757,535 $32.35 
Vested(7,014,797)$46.40 
Forfeited(231,837)$42.05 
Non-vested at December 31, 202014,000,630 $38.91 
     Weighted Average
 RSUs Grant Date Fair Value
Non-vested at December 31, 2016 6,457,620
   $52.57
 
Granted 2,506,607
   $66.59
 
Vested (2,892,533)   $52.69
 
Forfeited (747,707)   $59.04
 
Non-vested at December 31, 2017 5,323,987
   $58.19
 
(a) Grant activity includes 1 million of performance-based share units at target for 2020.
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-three- to four-yearfour-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 forfeituresforfeitures.
There were 0 stock option grants during 2020 and revises2019.
In 2018, the forfeiture rateweighted average fair value of stock options granted for CBS Class B Common Stock as necessary.of the grant date was $14.48. 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:
2018
Expected dividend yield1.33 %
Expected stock price volatility29.52 %
Risk-free interest rate2.73 %
Expected term of options (years)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 in 2018. 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
Expected dividend yield2.52 %
Expected stock price volatility32.60 %
Risk-free interest rate2.81 %
Expected term of options (years)5.12

The expected stock price volatility for stock options for CBS Class B Common Stock was determined using a weighted average of historical volatility for CBS Class B Common Stock and implied volatility of publicly traded options to purchase CBS Class B Common Stock. The expected stock price volatility for stock options for

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



The weighted average fair value of stock options as of the grant date was $17.50, $12.30 and $15.73 in 2017, 2016, and 2015, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:
 2017 2016 2015
Expected dividend yield1.09% 1.31% 1.25%
Expected stock price volatility29.89% 32.55% 31.45%
Risk-free interest rate2.00% 1.35% 1.63%
Expected term of options (years)5.00
 5.00
 5.00
The expected stock price volatility is determined using a weighted average of historical volatility for CBS Corp.Viacom Class B Common Stock andwas principally determined based on the implied volatility of publicly traded options to purchase CBS Corp.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 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, 20172020 was $37$13 million, which is expected to be recognized over a weighted average period of 2.31.4 years.


The following table summarizes the Company’sour stock option activity under the Plans.
Weighted Average
   Weighted AverageStock OptionsExercise Price
Stock Options Exercise Price
Outstanding at December 31, 2016 11,911,647
 $44.14
 
Outstanding at December 31, 2019Outstanding at December 31, 201916,291,709 $58.98 
Granted 1,361,464
 $66.31
 Granted0 $0 
Exercised (2,940,667) $31.12
 Exercised(378,648)$29.31 
Forfeited or expired (218,608) $59.04
 Forfeited or expired(1,772,337)$51.47 
Outstanding at December 31, 2017 10,113,836
 $50.59
 
Exercisable at December 31, 2017 6,376,286
 $46.30
 
Outstanding at December 31, 2020Outstanding at December 31, 202014,140,724 $60.72 
Exercisable at December 31, 2020Exercisable at December 31, 202012,269,735 $61.63 
The following table summarizes other information relating to stock option exercises during the years ended December 31, 2017, 20162020, 2019 and 2015.2018.
Year Ended December 31, 2017 2016 2015
Cash received from stock option exercises$91
 $21
 $142
Tax benefit of stock option exercises$36
 $14
 $74
Intrinsic value of stock option exercises$96
 $37
 $192

CBS CORPORATION 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, 2017.
 Outstanding Exercisable
   Remaining Weighted   Weighted
Range ofNumber Contractual Average Number Average
Exercise Priceof Options Life (Years) Exercise Price of Options Exercise Price
$5 to 9.9925,465
 1.08  $5.72
  25,465
  $5.72
 
$10 to 19.99174,668
 0.95  $14.46
  174,668
  $14.46
 
$20 to 29.991,086,770
 1.70  $26.62
  1,086,770
  $26.62
 
$30 to 39.99791,703
 2.82  $34.27
  791,703
  $34.27
 
$40 to 49.993,213,930
 4.61  $45.17
  1,977,910
  $44.77
 
$50 to 59.991,635,410
 5.13  $59.54
  772,552
  $59.54
 
$60 to 69.993,185,890
 5.38  $66.04
  1,547,218
  $65.89
 
 10,113,836
       6,376,286
    
Year Ended December 31, 202020192018
Cash received from stock option exercises$5 $15 $29 
Tax benefit of stock option exercises$1 $4 $4 
Intrinsic value of stock option exercises$2 $15 $16 
At December 31, 20172020, stock options outstanding have a weighted average remaining contractual life of 4.41 years and the total intrinsic value for “in-the-money” options, based on the Company’s closing stock price of $59.00, was $108 million. At December 31, 2017 stock options exercisable have a weighted average remaining contractual life of 3.443.10 years and the total2.79 years, respectively. There was 0 intrinsic value for “in-the-money”options outstanding and exercisable, options was $92 million.based on our closing stock price of $37.26.

14)16) 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 31,2017 2016 2015
United States$1,441
 $1,803
 $1,840
Foreign538
 427
 424
Total$1,979
 $2,230
 $2,264
The components of the provision for income taxes were as follows:
Year Ended December 31,202020192018
United States$2,353 $2,225 $2,916 
Foreign794 998 1,068 
Total$3,147 $3,223 $3,984 
II-96
Year Ended December 31,2017 2016 2015
Current:     
Federal$720
 $359
 $110
State and local38
 64
 30
Foreign63
 61
 91
 821
 484
 231
Deferred(188) 144
 445
Provision for income taxes$633
 $628
 $676


In addition, included in net loss from discontinued operations was an income tax (provision) benefit of $(8) million, $(124) million and $82 million in 2017, 2016, and 2015, respectively.

The equity in loss of investee companies is shown net of tax on the Company’s Consolidated Statements of Operations. The tax benefits relating to losses from equity investments in 2017, 2016, and 2015 were $22 million, $25 million, and $22 million, respectively, which represented an effective tax rate of 37.9%, 33.5% and 38.7% for 2017, 2016, and 2015, respectively.

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



The components of the provision (benefit) for income taxes were as follows:
Year Ended December 31,202020192018
Current:
Federal$160 $370 $277 
State and local73 164 92 
Foreign180 202 163 
Total current413 736 532 
Deferred:
Federal146 (67)20 
State and local42 (43)20 
Foreign(66)(655)8 
Total deferred122 (765)48 
Provision (benefit) for income taxes$535 $(29)$580 
In 2017addition, included in net earnings from discontinued operations was an income tax provision of $38 million, $32 million and 2016,$47 million for 2020, 2019, and 2018, respectively.

The equity in loss of investee companies is shown net of tax in the Company realizedConsolidated Statements of Operations. The tax benefits relating to losses from the exerciseequity investments was $19 million in both 2020 and 2019 and $15 million in 2018, which represented an effective tax rate of stock options40.4%, 26.4% and vesting of RSUs of $104 million24.2% for 2020, 2019, and $57 million,2018, respectively.
The difference between income taxes expected at the U.S. federal statutory income tax rate of 35%21% and the provision (benefit) for income taxes is summarized as follows:
Year Ended December 31,2017 2016 2015Year Ended December 31,202020192018
Taxes on income at U.S. federal statutory rate$693
 $780
 $792
Taxes on income at U.S. federal statutory rate$661 $676 $836 
State and local taxes, net of federal tax benefit47
 59
 55
State and local taxes, net of federal tax benefit116 116 109 
Effect of foreign operations(162) (112) (100)Effect of foreign operations(98)(49)(108)
Impact of federal tax legislation129
 —
 —
Noncontrolling interestsNoncontrolling interests(52)(2)(1)
U.K. statutory rate changeU.K. statutory rate change(100)0 0 
Reorganization of foreign operations (a)
Reorganization of foreign operations (a)
0 (768)0 
Bankruptcy of an investeeBankruptcy of an investee0 (39)0 
Impact of tax law changesImpact of tax law changes0 0 (80)
Tax benefits from positions relating to the Tax Reform Act (b)
Tax benefits from positions relating to the Tax Reform Act (b)
0 (44)0 
Merger related costsMerger related costs0 41 0 
Establishment (reversal) of valuation allowance (c)
Establishment (reversal) of valuation allowance (c)
0 2 (153)
Excess tax benefits from stock-based compensation(44) —
 —
Excess tax benefits from stock-based compensation29 20 8 
Domestic production deduction(31) (42) (25)Domestic production deduction0 (1)24 
Sales of businesses—
 —
 (42)
Audit settlements, net—
 —
 (9)
Other, net (a)
1
 (57) 5
Provision for income taxes$633
 $628
 $676
Tax accounting method changeTax accounting method change0 0 (78)
Other, net
Other, net
(21)19 23 
Provision (benefit) for income taxesProvision (benefit) for income taxes$535 $(29)$580 
(a) 2016 includesReflects a one-timedeferred tax benefit resulting from the transfer of $47 million associatedintangible assets between our subsidiaries in connection with a multiyear adjustmentreorganization of our international operations. The related deferred tax asset is primarily expected to be realized over a 25-year period.
(b) Reflects tax deduction, which was approvedbenefits 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 quarterTax Reform Act.
(c) 2018 includes the reversal of 2016.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.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

The following table summarizes the components of deferred income tax assets and liabilities.
At December 31,2017 2016At December 31,20202019
Deferred income tax assets:   Deferred income tax assets:
Reserves and other accrued liabilities$391
 $671
Reserves and other accrued liabilities$476 $481 
Pension, postretirement and other employee benefits478
 843
Pension, postretirement and other employee benefits772 766 
Lease liabilityLease liability466 485 
Tax credit and loss carryforwards835
 966
Tax credit and loss carryforwards448 394 
Other70
 113
Other56 85 
Total deferred income tax assets1,774
 2,593
Total deferred income tax assets2,218 2,211 
Valuation allowance(974) (928)Valuation allowance(593)(547)
Deferred income tax assets, net800
 1,665
Deferred income tax assets, net1,625 1,664 
Deferred income tax liabilities:   Deferred income tax liabilities:
Intangible assets(847) (1,469)Intangible assets(460)(251)
Unbilled licensing receivables(291) (636)Unbilled licensing receivables(237)(393)
Lease assetLease asset(400)(422)
Property, equipment and other assets(86) (140)Property, equipment and other assets(198)(153)
Financing obligationsFinancing obligations(71)(72)
OtherOther(44)0 
Total deferred income tax liabilities(1,224) (2,245)Total deferred income tax liabilities(1,410)(1,291)
Deferred income tax liabilities, net$(424) $(580)
Deferred income tax assets, netDeferred income tax assets, net$215 $373 
In addition to the deferred income taxesamounts reflected in the table above, included in the liabilities“Assets of discontinued operationsoperations” on the Consolidated Balance Sheets are net deferred income tax assets (liabilities) of $12$93 million and $(975)$76 million at December 31, 20172020 and 2016,2019, respectively.


At December 31, 2017, the Company2020, we had federal foreign tax credit carryforwards of $29 million and net operating loss carryforwards for federal, state and local, and foreign jurisdictions of approximately $1.74$2.06 billion, the majority of which expire in various years from 20182021 through 2037.2040.


The 20172020 and 20162019 deferred income tax assets were reduced by a valuation allowance of $974$593 million and $928$547 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.


On December 22, 2017,In March 2020, the U.S. government enacted tax legislation containing provisions to support businesses during the COVID-19 pandemic (the “CARES Act”), including deferment of the employer portion of certain payroll taxes, refundable payroll tax credits, and technical amendments to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on our consolidated financial statements for 2020. We do not expect the future impact of the CARES Act provisions to be material.

In December 2017, the U.S. government enacted the Tax Reform Act which contained significant changes to U.S. federal tax law, (the “Tax Reform Act“), including a reduction in the federal corporate tax rate from 35% to 21% and a one-time transition tax on cumulative foreign earnings and profits. The CompanyDuring 2017, we recorded a net provisional charge associated with the estimated transition tax on cumulative foreign earnings and profits. We completed our analysis of this transition tax in 2018 and as a result, recorded a charge of $48 million in 2018 to adjust the provisional amount. In January 2019, the U.S. government issued guidance relating to the transition tax, which resulted in a decrease of $146

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



$129 million for the year ended December 31, 2017, reflecting an estimated tax impact of $407 million on the Company’s historical accumulated foreign earnings and profits, partially offset by an estimated benefit of $278 million to adjust the Company’s deferred incomeour reserve for uncertain tax balancespositions during 2019 for amounts paid as a result of this guidance; however, it did not have a material impact on the reduced corporateConsolidated Statements of Operations.

The Tax Reform Act includes a deduction for foreign derived intangible income and a tax rate.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 included in our tax provision for the years ended December 31, 2020, 2019 and 2018.


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 itsour foreign subsidiaries, the Company no longer intendswe 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, the Companywe recorded an estimated deferred income tax liabilityliabilities associated with future repatriations, which waswere not material to the Company’s 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 final impacts of the Tax Reform Act may differ materially from the current estimates since all of the necessary information was not available, prepared or analyzed in sufficient detail to complete the assessment of the Tax Reform Act. In addition, future interpretive guidance issued by federal and state tax authorities may impact the provisional amount. The Company will complete its analysis of this provisional amount and finalize and record any adjustments to its estimates within one year from the enactment of the Tax Reform Act.
The following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.
At January 1, 2018$300 
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, 2019384 
Additions for current year tax positions15 
Additions for prior year tax positions18 
Reductions for prior year tax positions(34)
Cash settlements(2)
Statute of limitations lapses(9)
Reclassification to deferred income tax liability(64)
At December 31, 2020$308 
At January 1, 2015$140
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, 2016102
Additions for current year tax positions50
Additions for prior year tax positions39
Reductions for prior year tax positions(41)
Cash settlements(5)
Statute of limitations lapses(7)
At December 31, 2017$138
AtThe reserve for uncertain tax positions of $308 million at December 31, 20172020 includes $281 million which would affect our effective income tax rate, including discontinued operations, if and 2016, $3 millionwhen recognized in future years.

We recognize interest and $20 million, respectively, ofpenalty charges related to the reserve for uncertain tax positions were includedas income tax expense. We recognized interest and penalties of $16 million for the year ended December 31, 2020 and $24 million for each of the years ended December 31, 2019 and 2018 in “Liabilities of discontinued operations” on the Consolidated Balance Sheets.Statements of Operations. As of

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



The reserve for uncertain tax positions of $138 million at December 31, 2017 includes $127 million which would affect the Company’s effective income tax rate, including discontinued operations, if2020 and when recognized in future years.
The Company recognizes interest and penalty charges related to the reserve for uncertain tax positions as income tax expense. The Company recognized interest and penalties of $6 million for the year ended December 31, 2017, and $7 million for each of the years ended December 31, 2016 and 2015, in the Consolidated Statements of Operations. As of December 31, 2017 and 2016, the Company has2019, we have recorded liabilities for accrued interest and penalties of $14$57 million and $35$51 million, respectively, on the Consolidated Balance Sheets.


During 2015,ViacomCBS and its subsidiaries file income tax returns with the CompanyInternal 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 IRS settled the Company’s income tax audit for the years 2011 and 2012, which did not have a material effect on the Company’s consolidated financial statements. The statute of limitations for the 2013 tax year expired in September 2017. The IRS is expected to commencecommenced its examination of the years2017 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 2015, and 2016 during 2018. In addition, various2015 tax years in April 2017. Various tax years are also currently under examination by state and local and 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 $50 million within the next twelve months;12 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)17) 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. MostIn November 2020, our remaining defined benefit pension plans subject to benefit accruals, which were sponsored by CBS prior to the merger, were amended to freeze future benefit accruals and benefits were enhanced under defined contribution plans that were previously sponsored by CBS, both of which are effective January 1, 2021. As a result of the Company’s pension plans are closed to new entrants.plan amendments, a curtailment gain of $79 million associated with the elimination of benefit accruals for future services of the impacted employees, is reflected in unrecognized actuarial loss included within “Accumulated other comprehensive loss” on the Consolidated Balance Sheet. 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 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 representsViacomCBS Common Stock represented approximately 2.8%1.8% and 2.1% of the fair value of plan assets’ fair valuesassets at both December 31, 20172020 and 2016,2019, respectively.

During the fourth quarter of 2017, the Company purchased a group annuity contract under which an insurance company has permanently assumed the Company’s obligation to pay and administer pension benefits to certain of the Company’s 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, the Company’s outstanding pension benefit obligation was reduced by approximately $800 million, representing approximately 20% of the total obligations of the Company’s qualified pension plans. In connection with this transaction, the Company recorded a settlement charge of $352 million in the fourth quarter of 2017, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. Additionally, during 2017, the Company made discretionary contributions totaling $600 million to prefund its qualified pension plans.

During 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 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 settlement charge of $211 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan.

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



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, as well as caps on the annual dollar amount the Companywe 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 pension and postretirement benefit plans only, unless otherwise noted. At December 31, 2020 and 2019, the Consolidated Balance Sheets also include a liability of $77 million and $80 million, respectively, in “Pension and postretirement benefit obligations” relating to our non-U.S. pension plans and certain other retirement severance 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.
II-100
 Pension Benefits Postretirement Benefits
 2017 2016 2017 2016
Change in benefit obligation:       
Benefit obligation, beginning of year$4,660
 $4,911
 $447
 $486
Service cost29
 29
 —
 —
Interest cost191
 215
 18
 20
Actuarial loss (gain)337
 353
 19
 (5)
Benefits paid(326) (328) (73) (69)
Participants’ contributions—
 —
 10
 11
Retiree Medicare drug subsidy—
 —
 3
 4
Settlements(862) (518) —
 —
Cumulative translation adjustments11
 (2) —
 —
Benefit obligation, end of year$4,040
 $4,660
 $424
 $447

The following table sets forth the change in plan assets for the Company’s pension and postretirement benefit plans.
 Pension Benefits Postretirement Benefits
 2017 2016 2017 2016
Change in plan assets:       
Fair value of plan assets, beginning of year$3,244
 $3,734
 $4
 $4
Actual return on plan assets328
 305
 —
 —
Employer contributions650
 52
 56
 54
Benefits paid(326) (328) (73) (69)
Participants’ contributions—
 —
 10
 11
Retiree Medicare drug subsidy—
 —
 3
 4
Settlements(862) (518) —
 —
Cumulative translation adjustments12
 (1) —
 —
Fair value of plan assets, end of year$3,046
 $3,244
 $—
 $4
The funded status of pension and postretirement benefit obligations and the related amounts recognized on the Company’s Consolidated Balance Sheets were as follows:
 Pension Benefits Postretirement Benefits
At December 31,2017 2016 2017 2016
Funded status at end of year$(994) $(1,416) $(424) $(443)
Amounts recognized on the Consolidated Balance Sheets:       
Other assets$12
 $13
 $—
 $—
Current liabilities(53) (53) (49) (50)
Noncurrent liabilities(953) (1,376) (375) (393)
Net amounts recognized$(994) $(1,416) $(424) $(443)

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



The Company’sfollowing table sets forth the change in benefit obligation for our pension and postretirement benefit plans.
Pension BenefitsPostretirement Benefits
2020201920202019
Change in benefit obligation:
Benefit obligation, beginning of year$4,963 $4,511 $360 $376 
Service cost30 28 2 1 
Interest cost164 191 11 16 
Actuarial loss (gain)408 593 (8)8 
Curtailment gain(79)0 0 0 
Benefits paid(324)(360)(58)(59)
Participants’ contributions0 0 12 13 
Retiree Medicare drug subsidy0 0 3 5 
Benefit obligation, end of year$5,162 $4,963 $322 $360 
The actuarial loss of $408 million, included in the change in benefit obligation for pension benefits in 2020, is primarily the result of a 60 basis point decrease in the discount rate from December 31, 2019 to December 31, 2020.

The following table sets forth the change in plan assets for our pension and postretirement benefit plans.
Pension BenefitsPostretirement Benefits
2020201920202019
Change in plan assets:
Fair value of plan assets, beginning of year$3,176 $2,932 $0 $1 
Actual return on plan assets429 530 0 (1)
Employer contributions66 74 43 41 
Benefits paid(324)(360)(58)(59)
Participants’ contributions0 0 12 13 
Retiree Medicare drug subsidy0 0 3 5 
Fair value of plan assets, end of year$3,347 $3,176 $0 $0 
The funded status of pension and postretirement benefit obligations and the related amounts recognized on the Consolidated Balance Sheets were as follows:
Pension BenefitsPostretirement Benefits
At December 31,2020201920202019
Funded status at end of year$(1,815)$(1,787)$(322)$(360)
Amounts recognized on the Consolidated Balance Sheets:
Other assets$7 $5 $0 $0 
Current liabilities(85)(69)(38)(42)
Noncurrent liabilities(1,737)(1,723)(284)(318)
Net amounts recognized$(1,815)$(1,787)$(322)$(360)
Our qualified pension plans were underfunded by $309$712 million and $742$734 million at December 31, 20172020 and 2016,2019, respectively.


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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 BenefitsPension BenefitsPostretirement Benefits
At December 31,2017 2016 2017 2016At December 31,2020201920202019
Net actuarial (loss) gain$(1,583) $(1,827) $189
 $230
Net actuarial (loss) gain$(2,144)$(2,153)$140 $147 
Net prior service cost(6) (7) —
 —
Net prior service cost(1)(3)0 (1)
Share of equity investee(2) (1) —
 —
Share of equity investee(2)(2)0 0 
(1,591) (1,835) 189
 230
(2,147)(2,158)140 146 
Deferred income taxes606
 725
 (25) (38)Deferred income taxes560 563 (13)(14)
Net amount recognized in accumulated other
comprehensive income (loss)
$(985) $(1,110) $164
 $192
Net amount recognized in accumulated other
comprehensive income (loss)
$(1,587)$(1,595)$127 $132 
The accumulated benefit obligation for all defined benefit pension plans was $3.96$5.16 billion and $4.59$4.87 billion at December 31, 20172020 and 2016,2019, respectively.
 
Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below.
At December 31,2017 2016At December 31,20202019
Projected benefit obligation$3,933
 $4,558
Projected benefit obligation$5,161 $4,962 
Accumulated benefit obligation$3,852
 $4,485
Accumulated benefit obligation$5,161 $4,873 
Fair value of plan assets$2,928
 $3,129
Fair value of plan assets$3,340 $3,170 
The following tables present the components of net periodic benefit cost and amounts recognized in other comprehensive income (loss).
Pension BenefitsPostretirement Benefits
Year Ended December 31,202020192018202020192018
Components of net periodic cost:
Service cost$30 $28 $30 $2 $1 $1 
Interest cost164 191 180 11 16 17 
Expected return on plan assets(194)(183)(214)0 0 0 
Amortization of actuarial losses (gains)103 94 87 (15)(18)(18)
Amortization of prior service cost2 1 1 1 1 1 
Net periodic cost (a)
$105 $131 $84 $(1)$0 $1 
 Pension Benefits Postretirement Benefits
Year Ended December 31,2017 2016 2015 2017 2016 2015
Components of net periodic cost:           
Service cost$29
 $29
 $31
 $—
 $—
 $—
Interest cost191
 215
 209
 18
 20
 20
Expected return on plan assets(201) (227) (261) —
 —
 —
Amortization of actuarial losses (gains)101
 84
 79
 (22) (21) (21)
Amortization of prior service cost2
 1
 1
 —
 —
 —
Settlements352
 211
 —
 —
 —
 —
Net periodic cost$474
 $313
 $59
 $(4) $(1) $(1)
(a) Includes amounts reflected in net earnings from discontinued operations of $5 million for 2020, $6 million for 2019 and $3 million for 2018.
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.”
II-102
 Pension Postretirement
Year Ended December 31, 2017Benefits Benefits
Other comprehensive income (loss):     45
 
Actuarial loss $(210)   $(19) 
Amortization of actuarial losses (gains) (a)
 101
   (22) 
Amortization of prior service cost (a)
 2
   —
 
Settlements (a)
 352
   —
 
Cumulative translation adjustments (1)   —
 
  244
   (41) 
Deferred income taxes (119)   13
 
Recognized in other comprehensive income (loss), net of tax $125
   $(28) 

(a)Reflects amounts reclassified from accumulated other comprehensive income (loss) to net earnings.

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



Pension BenefitsPostretirement Benefits
Year Ended December 31,202020192018202020192018
Other comprehensive income (loss):
Actuarial (loss) gain$(173)$(246)$(179)$8 $(9)$8 
Curtailment gain79 0 0 0 0 0 
Amortization of actuarial losses (gains)103 94 87 (15)(18)(18)
Amortization of prior service cost2 1 1 1 1 1 
11 (151)(91)(6)(26)(9)
Deferred income taxes(3)37 25 1 5 2 
Recognized in other comprehensive income
(loss), net of tax		$8 $(114)$(66)$(5)$(21)$(7)
Estimated net actuarial losses and prior service costs related to the defined benefit pension plans of approximately $81 million and $1 million, respectively, will be amortized from accumulated other comprehensive income (loss) into net periodic benefit costs in 2018.

Estimated net actuarial gains related to the other postretirement benefit plans of approximately $18 million will be amortized from accumulated other comprehensive income (loss) into net periodic benefit costs in 2018.
Pension Postretirement
Benefits BenefitsPension BenefitsPostretirement Benefits
2017 2016 2017 2016202020192018202020192018
Weighted average assumptions used to determine benefit obligations at December 31:       Weighted average assumptions used to determine benefit obligations at December 31:
Discount rate3.9% 4.3% 3.9% 4.1%Discount rate2.9 %3.5 %4.5 %2.6 %3.3 %4.4 %
Rate of compensation increase3.0% 3.0% N/A
 N/A
Rate of compensation increase0 %3.0 %3.0 %N/AN/AN/A
Weighted average assumptions used to determine net periodic costs for the year ended December 31:       Weighted average assumptions used to determine net periodic costs for the year ended December 31:
Discount rate4.3% 4.6% 4.1% 4.2%Discount rate3.4 %4.5 %3.8 %3.3 %4.4 %3.9 %
Expected long-term return on plan assets6.4% 6.4% 2.0% 2.0%Expected long-term return on plan assets6.4 %6.6 %6.6 %N/AN/A2.0 %
Cash balance interest crediting rateCash balance interest crediting rate5.0 %5.0 %5.0 %N/AN/AN/A
Rate of compensation increase3.0% 3.0% N/A
 N/A
Rate of compensation increase3.0 %3.0 %3.0 %N/AN/AN/A
N/A - not applicable


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.
 2017 2016
Projected health care cost trend rate7.0% 6.6%
Ultimate trend rate5.0% 5.0%
Year ultimate trend rate is achieved2023
 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 $6
   $(5) 
CBSViacom
2020201920202019
Projected health care cost trend rate (pre-65)6.6 %7.0 %6.6 %6.3 %
Projected health care cost trend rate (post-65)6.6 %7.0 %6.6 %5.7 %
Ultimate trend rate5.0 %5.0 %5.0 %4.5 %
Year ultimate trend rate is achieved2025202520252026
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.
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

CBS’s domestic pension plan trust, which accounted for 94% of total plan assets at December 31, 2017,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, 2017,2020, this trust was invested approximately 71%73% in long duration fixed income portfolios, 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 6% of total plan

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


assets at December 31, 2017 and are invested approximately 69% in fixed income investments, 17%securities, 25% 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, 2020, the Viacom Pension Plan was invested 78% in return seeking, 21% in liability hedging and 1% in cash and cash equivalents.

The following tables set forth the Company’sour pension plan assets measured at fair value on a recurring basis at December 31, 20172020 and 2016.2019. 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. There are no investments categorized as Level 3.
At December 31, 2020Level 1Level 2Total
Cash and cash equivalents (a)
$8 $0 $8 
Fixed income securities:
U.S. treasury securities78 0 78 
Government-related securities0 167 167 
Corporate bonds (b)
0 1,634 1,634 
Mortgage-backed and asset-backed securities0 56 56 
Equity securities:
U.S. large capitalization82 0 82 
U.S. small capitalization79 0 79 
Other0 30 30 
Total assets in fair value hierarchy$247 $1,887 $2,134 
Common collective funds measured at net asset value (c) (d)
1,149 
Limited partnerships measured at net asset value (c)
18 
Mutual funds measured at net asset value (c)
46 
Investments, at fair value$3,347 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

At December 31, 2017Level 1 Level 2 Level 3 Total
Cash and cash equivalents (a)
$8
 $80
 $—
 $88
Fixed income securities:      

U.S. treasury securities135
 —
 —
 135
Government-related securities12
 238
 —
 250
Corporate bonds (b)
—
 1,657
 —
 1,657
Mortgage-backed and asset-backed securities—
 97
 1
 98
Equity securities:      

U.S. large capitalization175
 3
 —
 178
U.S. small capitalization43
 —
 —
 43
International equity—
 3
 —
 3
Other—
 43
 —
 43
Total assets in fair value hierarchy$373
 $2,121
 $1
 $2,495
Common collective funds measured at net asset value (c) (d)
      519
Limited partnerships measured at net asset value (c)
      32
Investments, at fair value      $3,046
At December 31, 2016Level 1 Level 2 Level 3 Total
At December 31, 2019At December 31, 2019Level 1Level 2Total
Cash and cash equivalents (a)
$11
 $53
 $—
 $64
Cash and cash equivalents (a)
$1 $34 $35 
Fixed income securities:       Fixed income securities:
U.S. treasury securities132
 —
 —
 132
U.S. treasury securities83 0 83 
Government-related securities18
 207
 —
 225
Government-related securities0 171 171 
Corporate bonds (b)
—
 1,895
 —
 1,895
Corporate bonds (b)
0 1,562 1,562 
Mortgage-backed and asset-backed securities—
 135
 2
 137
Mortgage-backed and asset-backed securities0 98 98 
Equity securities:      

Equity securities:
U.S. large capitalization187
 3
 —
 190
U.S. large capitalization113 0 113 
U.S. small capitalization64
 —
 —
 64
U.S. small capitalization40 0 40 
International equity—
 3
 —
 3
Other—
 (18) —
 (18)Other0 25 25 
Total assets in fair value hierarchy$412
 $2,278
 $2
 $2,692
Total assets in fair value hierarchy$237 $1,890 $2,127 
Common collective funds measured at net asset value (c) (d)
      521
Common collective funds measured at net asset value (c) (d)
978 
Limited partnerships measured at net asset value (c)
      31
Limited partnerships measured at net asset value (c)
23 
Mutual funds measured at net asset value (c)
Mutual funds measured at net asset value (c)
48 
Investments, at fair value      $3,244
Investments, at fair value$3,176 
(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.

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


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 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, 2017.
  
Mortgage-backed
Securities
At January 1, 2016  $2
 
Contributions and distributions, net  —
 
At December 31, 2016  2
 
Contributions and distributions, net  (1) 
At December 31, 2017  $1
 
The Company’s other postretirement benefits plan assets of $4 million at December 31, 2016 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:
2018 2019 2020 2021 2022 2023-2027202120222023202420252026-2030
Pension$448
 $266
 $263
 $261
 $258
 $1,229
Pension$464 $311 $305 $305 $305 $1,450 
Postretirement$54
 $52
 $49
 $46
 $43
 $172
Postretirement$39 $36 $34 $31 $28 $106 
Retiree Medicare drug subsidy$(5) $(5) $(5) $(5) $(5) $(22)Retiree Medicare drug subsidy$5 $5 $4 $4 $4 $18 
In 2018, the Company expects2021, we expect to make contributions of approximately $53$15 million to itsour qualified pension plans for minimum funding requirements under ERISA and $86 million to our non-qualified pension plans to satisfy the
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

benefit payments due under these plans. Also in 2018, the Company expects2021, we expect to contribute approximately $49$39 million to itsour other postretirement benefit plans to satisfy the Company’sour portion of benefit payments due under these plans.


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

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


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.
The financial health of a multiemployer plan is indicated by the zone status, as defined by the Pension Protection Act of 2006. Plans in the red zone are in critical status; those in the yellow zone are in endangered status; and those in the green zone are neither critical nor endangered.


The table below presents information concerning the Company’sour participation in multiemployer defined benefit pension plans.
 Employer Identification Number/Pension Plan Number 
Pension
Protection Act
 Company Contributions Expiration Date of Collective Bargaining AgreementEmployer Identification Number/Pension Plan NumberPension
Protection Act		Company ContributionsExpiration Date of Collective Bargaining Agreement
 
Zone Status (a)
 
Zone Status (a)
Pension Plan 20172016 2017 2016 2015 Pension Plan20202019202020192018
AFTRA Retirement Plan (b)
 13-6414972-001 Green $6
 $6
 $5
 (c)
AFTRA Retirement Plan (b)
13-6414972-001Green$13 $12 $11 (c)
Directors Guild of America - Producer 95-2892780-001 Green 8
 6
 6
 6/30/2020Directors Guild of America - Producer95-2892780-001Green16 19 15 6/30/2020
Producer-Writers Guild of America 95-2216351-001 Green 15
 12
 11
 5/1/2020Producer-Writers Guild of America95-2216351-001Green22 26 25 5/1/2020
Screen Actors Guild - Producers 95-2110997-001 Green 22
 11
 9
 6/30/2020Screen Actors Guild - Producers95-2110997-001Green24 43 36 6/30/2020
Motion Picture Industry 95-1810805-001 Green 14
 11
 10
 (d)Motion Picture Industry95-1810805-001Green35 43 42 (d)
I.A.T.S.E. Local No. 33 Pension Trust Fund (e)
 95-6377503-001 Green 10
 9
 8
 12/31/2019
I.A.T.S.E. Local No. 33 Pension Trust Fund (e)
95-6377503-001Green3 5 10 12/31/2022
Other Plans 5
 5
 1
 Other Plans7 16 12 
 Total contributions $80
 $60
 $50
 Total contributions$120 $164 $151 
(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 20172020 and 2016.2019. 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, 2016.2019.
(c) The expiration dates range from June 30, 20182020 through December 31, 2020.June 30, 2021.
(d) The expiration dates range from May 15, 20182021 through June 30, 2020.March 2, 2022.
(e) 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, 2016.2019.


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 $30$95 million, $28$89 million and $26$74 million for the years ended December 31, 2017, 20162020, 2019 and 2015,2018, respectively.

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The Company recognizesVIACOMCBS 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 $42$91 million, $35$95 million and $39$87 million for the years ended December 31, 2017, 20162020, 2019 and 2015,2018, respectively.
18) REDEEMABLE 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, 2020, 2019 and 2018 is presented below.
Year Ended December 31,202020192018
Beginning balance$254 $239 $249 
Net earnings11 14 18 
Distributions(15)(16)(15)
Translation adjustment7 8 (14)
Redemption value adjustment(60)9 1 
Ending balance$197 $254 $239 
19) SEGMENT AND REVENUE INFORMATION
The following tables set forth our financial performance by reportable segment. Our operating segments, which are the same as our reportable segments, have been determined in accordance with our internal management structure, which is organized based upon products and services.

On November 25, 2020, we entered into an agreement to sell Simon & Schuster to Penguin Random House. As a result, Simon & Schuster, which was previously reported as the Publishing segment, has been presented as a discontinued operation in our consolidated financial statements. Prior periods have been reclassified to conform to this presentation. See Note 3.

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



Year Ended December 31,202020192018
Revenues:
Advertising$5,035 $6,008 $5,751 
Affiliate3,129 2,550 2,082 
Content licensing2,369 3,157 3,006 
Other167 209 222 
TV Entertainment10,700 11,924 11,061 
Advertising4,743 5,129 5,130 
Affiliate6,037 6,052 6,294 
Content licensing1,809 1,268 1,259 
Cable Networks12,589 12,449 12,683 
Theatrical180 547 744 
Home Entertainment709 623 617 
Licensing1,598 1,709 1,493 
Other75 111 102 
Filmed Entertainment2,562 2,990 2,956 
Corporate/Eliminations(566)(365)(275)
Total Revenues$25,285 $26,998 $26,425 
16)Revenues generated between segments primarily reflect advertising and content licensing. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.
Year Ended December 31,202020192018
Intercompany Revenues:
TV Entertainment$285 $226 $164 
Cable Networks79 53 47 
Filmed Entertainment202 117 95 
Total Intercompany Revenues$566 $396 $306 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

We present operating income (loss) excluding depreciation and amortization, stock-based compensation, costs for restructuring and other corporate matters, programming charges and gain on sales, 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 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 31,202020192018
Adjusted OIBDA:
TV Entertainment$1,857 $2,443 $2,466 
Cable Networks3,746 3,515 4,341 
Filmed Entertainment215 80 (33)
Corporate/Eliminations(500)(449)(433)
Stock-based compensation(186)(196)(201)
Depreciation and amortization(430)(438)(427)
Restructuring and other corporate matters(618)(769)(489)
Programming charges(159)(589)(162)
Gain on sales214 549 0 
Operating income4,139 4,146 5,062 
Interest expense(1,031)(962)(1,030)
Interest income60 66 79 
Net gain (losses) from investments206 85 (53)
Gain (loss) on extinguishment of debt(126)0 18 
Other items, net(101)(112)(92)
Earnings from continuing operations before income taxes and
equity in loss of investee companies
3,147 3,223 3,984 
(Provision) benefit for income taxes(535)29 (580)
Equity in loss of investee companies, net of tax(28)(53)(47)
Net earnings from continuing operations2,584 3,199 3,357 
Net earnings from discontinued operations, net of tax117 140 135 
Net earnings (ViacomCBS and noncontrolling interests)2,701 3,339 3,492 
Net earnings attributable to noncontrolling interests(279)(31)(37)
Net earnings attributable to ViacomCBS$2,422 $3,308 $3,455 
Year Ended December 31,202020192018
Depreciation and Amortization:
TV Entertainment$162 $150 $160 
Cable Networks205 219 194 
Filmed Entertainment36 37 38 
Corporate27 32 35 
Total Depreciation and Amortization$430 $438 $427 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Year Ended December 31,202020192018
Capital Expenditures:
TV Entertainment$112 $113 $112 
Cable Networks110 166 156 
Filmed Entertainment37 43 52 
Corporate65 23 25 
Total Capital Expenditures$324 $345 $345 
At December 31,20202019
Assets:
TV Entertainment$19,443 $19,689 
Cable Networks23,139 22,109 
Filmed Entertainment6,440 5,477 
Corporate/Eliminations2,202 969 
Discontinued Operations1,439 1,341 
Total Assets$52,663 $49,585 
Year Ended December 31,202020192018
Revenues: (a)
United States$20,690 $21,449 $20,442 
International4,595 5,549 5,983 
Total Revenues$25,285 $26,998 $26,425 
(a) Revenue classifications are based on customers’ locations.
At December 31,20202019
Long-lived Assets: (a)
United States$13,435 $12,417 
International785 498 
Total Long-lived Assets$14,220 $12,915 
(a) Reflects total assets less current assets, investments, goodwill, intangible assets, noncurrent receivables and noncurrent deferred tax assets.
20) COMMITMENTS AND CONTINGENCIES
The Company’sCommitments
Our commitments not recorded on the balance sheet primarily consist of programming and talent commitments operating lease arrangements and purchase obligations for goods and services resulting from the Company’sour normal course of business.
 
ProgrammingOur programming and talent commitments, of the Company, estimated to aggregate $10.41$9.85 billion as of December 31, 2017, primarily2020, include $7.30$5.98 billion for sports programming rights $2.44and $3.87 billion relating to the production and licensing of television and film programming, and $672 million forincluding talent contracts. The CompanyWe also hashave committed purchase obligations which include agreements to purchase goods or services in the future that totaled $790 million$1.38 billion as of December 31, 2017.2020.


Other long-term contractual obligations recorded on the Company’s Consolidated Balance Sheet include program liabilities;liabilities, participations, due to producers; residuals;residuals, and a tax liability resulting from the enactment of the Tax Reform Act in December 2017. This tax liability reflects the estimatedremaining tax on the Company’s historical accumulated foreign earnings and profits, which is payable to the IRS over eight years.in 2024 and 2025.
 
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VIACOMCBS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

At December 31, 2017,2020, 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
2026 and
Total20212022202320242025Thereafter
Off-Balance Sheet Arrangements
Programming and talent commitments$9,852 $2,625 $3,005 $1,264 $731 $493 $1,734 
Purchase obligations$1,377 $501 $396 $218 $131 $70 $61 
On-Balance Sheet Arrangements
Other long-term contractual obligations$1,734 $0 $879 $382 $250 $190 $33 
 Programming and Talent Purchase Obligations Other Long-Term Contractual Obligations
2018$2,281
 $218
  $—
 
20192,310
 226
  661
 
20201,753
 197
  420
 
20211,692
 56
  256
 
20221,584
 22
  169
 
2023 and thereafter794
 71
  328
 
Total$10,414
 $790
  $1,834
 
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, 2017, future minimum rental payments under noncancellable2020. See Note 11 for details 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
2018$19
 $155
201914
 129
202013
 111
202111
 104
20225
 96
2023 and thereafter—
 527
Total minimum payments$62
 $1,122
Less amounts representing interest5
  
Present value of minimum payments$57
  
Future minimum operating lease payments have been reduced by future minimum sublease income of $47 million. Rent expense was $181 million in 2017, $167 million in 2016 and $174 million in 2015. Included in net earnings (loss) from discontinued operations was rent expense of $32 million in 2017, $36 million in 2016 and $37 million in 2015.

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



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, 2017,2020, the outstanding letters of credit and surety bonds approximated $99$144 million and were not recorded on the Consolidated Balance Sheet.
CBS Television City. In connection with the sale of CBS Television City in 2019, we 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, 2020 is a liability of $100 million, reflecting the present value of the remaining 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. These lease commitments amounted to $67 million as of December 31, 2020, and are presented within “Other liabilities” on the Consolidated Balance Sheet. The amount of lease commitments varies over time depending on expiration or termination of 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. The Company recordsWe record a liability for itsour indemnification obligations and other contingent liabilities when probable and reasonably estimable.

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

Legal Matters
General.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 legalfollowing matters and other litigation to which it is a party are not likely, in the aggregate, to haveresult in a material adverse effect on itsour business, financial condition and results of operations,operations.

Litigation Relating to the Merger
Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or putative class action lawsuits in the Court of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the 3 lawsuits and appointed Bucks County Employees’ Retirement Fund and International Union of Operating Engineers of Eastern Pennsylvania and Delaware as co-lead plaintiffs for the consolidated action. On April 14, 2020, the lead plaintiffs filed a Verified Consolidated Class Action and Derivative Complaint (as used in this paragraph, the “Complaint”) against Shari E. Redstone, NAI, Sumner M. Redstone National Amusements Trust, members of 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 nominal defendant ViacomCBS Inc. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and approval of the Agreement and Plan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the surviving claims will now proceed. 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 positionstatements.

Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the 4 lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) 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. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims will now proceed. 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.

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

Investigation-Related Matters
As announced on August 1, 2018, the CBS Board of Directors retained 2 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 of Directors announced the completion of its investigation, certain findings of the investigation and the CBS Board of Directors’ 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.

On August 27, 2018 and on October 1, 2018, Gene Samit and John Lantz, respectively, filed putative class action lawsuits 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 of Directors. 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 cash flows. Underfailing 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 CBS Board of Directors 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 of Directors’ 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 the related CBS Board of Directors 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 the amount, if any, that may be awarded thereunder. Accordingly, no accrual for this matter has been made in our consolidated financial statements.

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

Litigation Related to Television Station Owners
On September 9, 2019, the Company was added as a defendant in a multi-district putative class action lawsuit filed in the United States District Court for the Northern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on or about January 1, 2014 on television stations owned by one or more of the defendant television station owners and alleges the sharing of allegedly competitively sensitive information among such television stations in alleged violation of the Sherman Antitrust Act. The action, which names the Company among 14 total defendants, seeks monetary damages, attorneys’ fees, costs and interest as well as injunctions against the allegedly unlawful conduct. On October 8, 2019, the Company and Viacom Inc.,other defendants filed a motion to dismiss the Companymatter, which was denied by the court on November 6, 2020. We believe that the claims are without merit and Viacom Inc. have agreedwe intend to defend and indemnify the otheragainst 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 certain litigation in which the Company and/or Viacom Inc. is named.our consolidated financial statements.


Claims Related to Former Businesses: Asbestos. The Company isAsbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred 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, 2017, the Company2020, we had pending approximately 31,66030,710 asbestos claims, as compared with approximately 33,61030,950 as of December 31, 20162019 and 36,03031,570 as of December 31, 2015.2018. During 2017, the Company2020, we received approximately 3,5302,910 new claims and closed or moved to an inactive docket approximately 5,4803,150 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. The Company’sOur total costs for the years 20172020 and 20162019 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $57$35 million and $48$58 million, respectively. The Company’sOur 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 adequatesufficient 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

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



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
Other
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.
17) REPORTABLE SEGMENTS21) SUPPLEMENTAL FINANCIAL INFORMATION
The following tables set forthtable presents the Company’s financial performance by reportable segment. The Company’s operating segments,components of Other items, net on the Consolidated Statements of Operations.
Year Ended December 31,202020192018
Pension and postretirement benefit costs$(69)$(99)$(65)
Foreign exchange losses(35)(18)(19)
Other3 5 (8)
Other items, net$(101)$(112)$(92)
Supplemental Cash Flow Information
Year Ended December 31,202020192018
Cash paid for interest$965 $922 $1,012 
Cash paid for income taxes:
Continuing operations$411 $560 $153 
Discontinued operations55 38 4 
Total cash paid for income taxes$466 $598 $157 
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 same as its reportable segments,primary beneficiary of a VIE, we assess whether we have been determinedthe 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 include assets and liabilities related to consolidated VIEs totaling $1.39 billion and $197 million, respectively, at December 31, 2020, and $141 million and $22 million, respectively, at December 31, 2019. Revenues and operating income from our consolidated VIEs were $705 million and $498 million, respectively, for the year ended December 31, 2020. Revenues and operating income from our consolidated VIEs were not significant for the year ended December 31, 2019. The increase in accordance withamounts related to our consolidated VIEs reflects the Company’s internal management structure, which is organized based upon productsacquisition of Miramax (see Note 2) and services.the licensing of the streaming rights to South Park by a consolidated 51%-owned VIE in the second quarter of 2020.
II-115
Year Ended December 31,2017
2016
2015
Revenues:     
Entertainment$9,164
 $8,877
 $8,438
Cable Networks2,501
 2,160
 2,242
Publishing830
 767
 780
Local Media1,668
 1,779
 1,592
Corporate/Eliminations(471) (417) (381)
Total Revenues$13,692
 $13,166
 $12,671

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 31,2017
2016
2015
Intercompany Revenues:     
Entertainment$480
 $434
 $384
Cable Networks1
 1
 —
Local Media13
 8
 9
Total Intercompany Revenues$494
 $443
 $393

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



22) QUARTERLY FINANCIAL DATA (unaudited):
The Company presents operating income (loss) excluding pension settlement charges,
FirstSecondThirdFourth
2020 (a) (b)
Quarter
Quarter (c)
Quarter (d)
Quarter (e)
Total Year
Revenues$6,499 $6,075 $5,837 $6,874 $25,285 
Operating income$902 $1,251 $903 $1,083 $4,139 
Net earnings from continuing operations
(ViacomCBS and noncontrolling interests)
$504 $698 $580 $802 $2,584 
Net earnings
(ViacomCBS and noncontrolling interests)
$519 $726 $627 $829 $2,701 
Net earnings from continuing operations
attributable to ViacomCBS
$501 $453 $568 $783 $2,305 
Net earnings attributable to ViacomCBS$516 $481 $615 $810 $2,422 
Basic net earnings per common shares
Net earnings from continuing operations
attributable to ViacomCBS
$.82 $.74 $.92 $1.27 $3.74 
Net earnings attributable to ViacomCBS$.84 $.78 $1.00 $1.31 $3.93 
Diluted net earnings per common share:
Net earnings from continuing operations
attributable to ViacomCBS
$.81 $.73 $.92 $1.26 $3.73 
Net earnings attributable to ViacomCBS$.84 $.78 $1.00 $1.31 $3.92 
Weighted average number of common shares
outstanding:
Basic614 615 616 617 616 
Diluted616 617 618 620 618 
(a) Publishing has been presented as a discontinued operation for all periods presented.
(b) Includes costs for restructuring charges, merger and acquisition-related costs, and other operating items, net, each where applicable, (“Segment Operating Income”) ascorporate matters of $231 million in the primary measurefirst quarter, $158 million in the second quarter, $52 million in the third quarter and $177 million in the fourth quarter.
(c) The second quarter includes programming charges 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$121 million primarily related to the primary method used byabandonment of certain incomplete programs resulting from production shutdowns related to COVID-19; a loss on extinguishment of debt of $103 million; and an increase of $32 million to the Company’s managementcarrying value of our investment in fuboTV.
(d) The third quarter includes a loss on extinguishment of debt of $23 million and enhances their abilitydiscrete tax benefits of $117 million, primarily from the remeasurement of our U.K. net deferred income tax asset as a result of an increase in the U.K. corporate income tax rate from 17% to understand19% enacted during the Company’s operating performance.quarter.
(e) The fourth quarter includes a gain of $214 million ($183 million, net of tax) on the sale of CMG; programming charges of $38 million primarily related to the abandonment of certain incomplete programs resulting from COVID-19 related production shutdowns; and net gains from investments of $174 million, which primarily includes an increase in the fair value of our investment in fuboTV, which was sold during the quarter.
II-116
Year Ended December 31,2017 2016 2015
Segment Operating Income (Loss):     
Entertainment$1,554
 $1,519
 $1,294
Cable Networks996
 959
 945
Publishing132
 119
 114
Local Media492
 618
 487
Corporate(355) (354) (276)
Total Segment Operating Income2,819
 2,861
 2,564
Pension settlement charges(352) (211) —
Restructuring and merger and acquisition-related costs(63) (38) (45)
Other operating items, net19
 9
 139
Operating income2,423
 2,621
 2,658
Interest expense(457) (411) (392)
Interest income64
 32
 24
Loss on early extinguishment of debt(49) —
 —
Other items, net(2) (12) (26)
Earnings from continuing operations before income taxes and
equity in loss of investee companies
1,979
 2,230
 2,264
Provision for income taxes(633) (628) (676)
Equity in loss of investee companies, net of tax(37) (50) (34)
Net earnings from continuing operations1,309
 1,552
 1,554
Net loss from discontinued operations, net of tax(952) (291) (141)
Net earnings$357
 $1,261
 $1,413

Year Ended December 31,2017 2016 2015
Depreciation and Amortization:

 

 

Entertainment$115
 $117
 $126
Cable Networks23
 23
 23
Publishing6
 6
 6
Local Media45
 44
 48
Corporate34
 35
 32
Total Depreciation and Amortization$223
 $225
 $235
Year Ended December 31,2017 2016 2015
Stock-based Compensation:     
Entertainment$66
 $61
 $61
Cable Networks12
 12
 11
Publishing5
 4
 4
Local Media12
 12
 11
Corporate84
 76
 70
Total Stock-based Compensation$179
 $165
 $157

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



Year Ended December 31,2017 2016 2015
Capital Expenditures:     
Entertainment$98
 $98
 $99
Cable Networks20
 19
 18
Publishing5
 9
 10
Local Media32
 37
 28
Corporate30
 33
 16
Total Capital Expenditures$185
 $196
 $171
At December 31,2017 2016
Assets:   
Entertainment$12,626
 $11,262
Cable Networks2,878
 2,618
Publishing906
 880
Local Media4,042
 4,065
Corporate/Eliminations378
 817
Discontinued operations13
 4,596
Total Assets$20,843
 $24,238
Year Ended December 31,2017
2016
2015
Revenues by Type:     
Advertising$5,753
 $6,288
 $5,824
Content licensing and distribution3,952
 3,673
 3,903
Affiliate and subscription fees3,758
 2,978
 2,724
Other229
 227
 220
Total Revenues$13,692
 $13,166
 $12,671
Year Ended December 31,2017 2016 2015
Revenues: (a)
     
United States$11,675
 $11,317
 $10,667
International2,017
 1,849
 2,004
Total Revenues$13,692
 $13,166
 $12,671
FirstSecondThirdFourth
2019 (a) (b)
Quarter (c)
QuarterQuarter
Quarter (d)
Total Year
Revenues$6,936 $6,925 $6,481 $6,656 $26,998 
Operating income (loss)$1,792 $1,414 $984 $(44)$4,146 
Net earnings (loss) from continuing operations
(ViacomCBS and noncontrolling interests)
$1,944 $953 $600 $(298)$3,199 
Net earnings (loss)
(ViacomCBS and noncontrolling interests)
$1,964 $983 $646 $(254)$3,339 
Net earnings (loss) from continuing operations
attributable to ViacomCBS
$1,939 $947 $584 $(302)$3,168 
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
$3.16 $1.54 $.95 $(.49)$5.15 
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
$3.14 $1.53 $.95 $(.49)$5.13 
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) Revenue classifications are based on customers’ locations.
At December 31,2017
2016
Long-lived Assets: (a)
   
United States$13,699
 $17,476
International495
 407
Total Long-lived Assets$14,194
 $17,883
(a) Reflects total assets from both continuing and discontinued operations less current assets, investments and noncurrent deferred tax assets.

Transactions within the Company between 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 31,2017 2016 2015
Cash paid for interest:     
Continuing operations$448
 $407
 $349
Discontinued operations70
 8
 —
Total$518
 $415
 $349
Year Ended December 31,2017
2016
2015
Cash paid for income taxes:     
Continuing operations$365

$373

$199
Discontinued operations26
 119
 84
Total$391
 $492
 $283
Year Ended December 31,2017 2016 2015
Noncash investing and financing activities:     
Shares received in split-off of CBS Radio (Note 4)$1,007
 $—
 $—
Noncash additions to property and equipment$31
 $—
 $—
Equipment acquired under capitalized leases$5
 $10
 $3


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  
2017Quarter Quarter Quarter 
Quarter (b) (c)
 Total Year
Revenues:         
Entertainment$2,347
 $2,184
 $1,815
 $2,818
 $9,164
Cable Networks543
 571
 840
 547
 2,501
Publishing161
 206
 228
 235
 830
Local Media409
 412
 397
 450
 1,668
Corporate/Eliminations(117) (116) (109) (129) (471)
Total Revenues$3,343
 $3,257
 $3,171
 $3,921
 $13,692
Segment Operating Income (Loss):

        
Entertainment$398
 $346
 $345
 $465
 $1,554
Cable Networks248
 253
 294
 201
 996
Publishing14
 28
 46
 44
 132
Local Media123
 127
 105
 137
 492
Corporate(79) (85) (83) (108) (355)
Total Segment Operating Income704
 669
 707
 739
 2,819
Pension settlement charge—
 —
 —
 (352) (352)
Restructuring charges—
 —
 —
 (63) (63)
Other operating items, net—
 —
 —
 19
 19
Total Operating Income$704
 $669
 $707
 $343
 $2,423
Net earnings from continuing operations$454
 $397
 $418
 $40
 $1,309
Net earnings (loss) (a)
$(252) $58
 $592
 $(41) $357
          
Basic net earnings per common share:         
Net earnings from continuing operations$1.11
 $.98
 $1.04
 $.10
 $3.26
Net earnings (loss)$(.61) $.14
 $1.48
 $(.10) $.89
Diluted net earnings per common share:         
Net earnings from continuing operations$1.09
 $.97
 $1.03
 $.10
 $3.22
Net earnings (loss)$(.61) $.14
 $1.46
 $(.10) $.88
          
Weighted average number of common shares         
outstanding:         
Basic410
 405
 401
 391
 401
Diluted416
 410
 406
 395
 407
          
Dividends per common share$.18
 $.18
 $.18
 $.18
 $.72
(a) CBS Radio has been presented as a discontinued operation for all periods presented. In the fourth quarter of 2017, the Company recorded a loss on the split-off of CBS Radio of $105 million. During 2017, prior to the split-off, the Company recorded a market value adjustment of $980 million, including a charge of $715 million, a charge of $365 million and a gain of $100 million in the first, second and third quarter, respectively, to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom (See Note 4).
(b) In the fourth quarter of 2017, the Company recorded a pension settlement charge of $352 million for the settlement of pension obligations resulting from the transfer of pension obligations to an insurance company through the purchase of a group annuity contract (See Note 15).
(c) In the fourth quarter of 2017, the Company recorded a provisional charge of $129 million, or $.32 per diluted share, resulting from the enactment of the Tax Reform Act.

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


 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 RadioPublishing has been presented as a discontinued operation for all periods presented.
(b) InIncludes costs for restructuring and other corporate matters of $173 million in the first quarter, $7 million in the second quarter, $122 million in the third quarter and $467 million in the fourth quarter.
(c) The first quarter includes a gain of 2016,$549 million ($386 million, net of tax) on the Company recorded a noncash impairment charge of $444 million to reduce the carrying valuesale of CBS Radio’s goodwillTelevision City and FCC licenses to their fair value. This charge has been presented in discontinued operations (See Note 4).
(c) In the fourth quartera discrete tax benefit of 2016, the Company recorded a pension settlement charge of $211$768 million for the settlement of pension obligations resulting from the completiontransfer of the Company’s offer to eligible former employees to receive lump-sum distributionsintangible assets between our subsidiaries in connection with a reorganization of their pension benefits (See Note 15).our international operations.
(d) The fourth quarter includes programming charges of $589 million.



II-117
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, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$172
 $10
 $13,510
 $—
 $13,692
Costs and expenses:         
Operating95
 6
 8,337
 —
 8,438
Selling, general and administrative87
 286
 1,839
 —
 2,212
Depreciation and amortization5
 23
 195
 —
 223
Pension settlement charge352
 —
 —
 —
 352
Restructuring charges—
 2
 61
 —
 63
Other operating items, net—
 —
 (19) —
 (19)
Total costs and expenses539
 317
 10,413
 —
 11,269
Operating income (loss)(367) (307) 3,097
 —
 2,423
Interest (expense) income, net(509) (486) 602
 —
 (393)
Loss on early extinguishment of debt(49) —
 —
 —
 (49)
Other items, net1
 (42) 39
 —
 (2)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(924) (835) 3,738
 —
 1,979
Benefit (provision) for income taxes266
 240
 (1,139) —
 (633)
Equity in earnings (loss) of investee companies,
net of tax
1,014
 1,374
 (37) (2,388) (37)
Net earnings from continuing operations356
 779
 2,562
 (2,388) 1,309
Net earnings (loss) from discontinued operations, net of tax1
 (5) (948) —
 (952)
Net earnings$357
 $774
 $1,614
 $(2,388) $357
Total comprehensive income$462
 $763
 $1,640
 $(2,403) $462

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, 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)


 Balance Sheet
 At December 31, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$173
 $—
 $112
 $—
 $285
Receivables, net29
 2
 3,666
 —
 3,697
Programming and other inventory3
 3
 1,822
 —
 1,828
Prepaid expenses and other current assets130
 28
 340
 (36) 462
Current assets of discontinued operations—
 —
 1
 —
 1
Total current assets335
 33
 5,941
 (36) 6,273
Property and equipment49
 217
 2,785
 —
 3,051
Less accumulated depreciation and amortization27
 163
 1,581
 —
 1,771
Net property and equipment22
 54
 1,204
 —
 1,280
Programming and other inventory3
 4
 2,874
 —
 2,881
Goodwill98
 62
 4,731
 —
 4,891
Intangible assets—
 —
 2,666
 —
 2,666
Investments in consolidated subsidiaries45,504
 15,225
 —
 (60,729) —
Other assets162
 5
 2,673
 —
 2,840
Intercompany—
 1,221
 29,562
 (30,783) —
Assets of discontinued operations—
 —
 12
 —
 12
Total Assets$46,124
 $16,604
 $49,663
 $(91,548) $20,843
Liabilities and Stockholders’ Equity
         
Accounts payable$1
 $30
 $200
 $—
 $231
Participants’ share and royalties payable
—
 —
 986
 —
 986
Program rights4
 4
 365
 —
 373
Commercial paper679
 —
 —
 —
 679
Current portion of long-term debt2
 —
 17
 —
 19
Accrued expenses and other current liabilities352
 264
 1,072
 (36) 1,652
Current liabilities of discontinued operations—
 5
 27
 —
 32
Total current liabilities1,038
 303
 2,667
 (36) 3,972
Long-term debt9,378
 —
 86
 —
 9,464
Other liabilities2,947
 234
 2,206
 —
 5,387
Liabilities of discontinued operations—
 —
 42
 —
 42
Intercompany30,783
 —
 —
 (30,783) —
Stockholders’ Equity:         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital43,797
 —
 60,894
 (60,894) 43,797
Retained earnings (deficit)(18,900) 16,257
 (12,224) (4,033) (18,900)
Accumulated other comprehensive income (loss)(662) 18
 76
 (94) (662)
 24,236
 16,398
 49,462
 (65,860) 24,236
Less treasury stock, at cost22,258
 331
 4,800
 (5,131) 22,258
Total Stockholders’ Equity
1,978
 16,067
 44,662
 (60,729) 1,978
Total Liabilities and Stockholders’ Equity
$46,124
 $16,604
 $49,663
 $(91,548) $20,843

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’ Equity3,689
 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)


 Statement of Cash Flows
 For the Year Ended December 31, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(1,491) $(203) $2,581
 $—
 $887
Investing Activities:         
Acquisitions (including acquired television library),
net of cash acquired
—
 —
 (270) —
 (270)
Capital expenditures—
 (30) (155) —
 (185)
Investments in and advances to investee companies—
 —
 (110) —
 (110)
Proceeds from sale of investments—
 —
 10
 —
 10
Proceeds from dispositions—
 —
 11
 —
 11
Other investing activities22
 (1) —
 —
 21
Net cash flow provided by (used for) investing activities from continuing operations22
 (31) (514) —
 (523)
Net cash flow provided by (used for) investing activities from discontinued operations1
 (5) (20) —
 (24)
Net cash flow provided by (used for) investing activities23
 (36) (534) —
 (547)
Financing Activities:         
Proceeds from short-term debt borrowings, net229
 —
 —
 —
 229
Proceeds from issuance of senior notes1,773
 —
 —
 —
 1,773
Repayment of senior notes(1,244) —
 —
 —
 (1,244)
Proceeds from debt borrowings of CBS Radio—
 —
 40
 —
 40
Repayment of debt borrowings of CBS Radio—
 —
 (43) —
 (43)
Payment of capital lease obligations—
 —
 (18) —
 (18)
Dividends(296) —
 —
 —
 (296)
Purchase of Company common stock(1,111) —
 —
 —
 (1,111)
Payment of payroll taxes in lieu of issuing shares
for stock-based compensation
(89) —
 —
 —
 (89)
Proceeds from exercise of stock options91
 —
 —
 —
 91
Other financing activities(1) —
 (8) —
 (9)
Increase (decrease) in intercompany payables1,968
 239
 (2,207) —
 —
Net cash flow provided by (used for) financing activities1,320
 239
 (2,236) —
 (677)
Net decrease in cash and cash equivalents(148) —
 (189) —
 (337)
Cash and cash equivalents at beginning of year
(includes $24 of discontinued operations cash)		321
 —
 301
 —
 622
Cash and cash equivalents at end of year$173
 $—
 $112
 $—
 $285

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



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’sour 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- 46II-52 and II - 47,II-53, of this report.
Item 9B.Other Information.
None.

AMENDED AND RESTATED BYLAWS

On February 22, 2021, our Board of Directors approved an amendment and restatement of our bylaws to eliminate a provision in Section 16 of Article III that provided that any director could be removed from office by the affirmative vote of a majority of the Board of Directors, at any time prior to the expiration of his or her term of office, as provided by law, in the event the director was in breach of any agreement between such director and the Company relating to such director’s service as a director or employee of the Company.
The foregoing description of the change is qualified in its entirety by reference to the full text of our Amended and Restated Bylaws, a copy of which is attached as Exhibit (3)(b) to this Annual Report on Form 10-K and incorporated by reference herein.
II-118
PART III

Item 10.Directors, Executive Officers and Corporate Governance.

The information required by this item with respect to the Company’s directors iswill be contained in the CBS CorporationViacomCBS Inc. Proxy Statement for the Company’s 20182021 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 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 the Company,“Information About Our Executive Officers.” 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.



III-1
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-45.II-51.

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-45.II-51.

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 begins on page E-1.
(b)Exhibits.

(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 begins on page E-1.

Item 16.16Form 10-K Summary.

None.





CBS CORPORATION
IV-1
VIACOMCBS INC. AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(Tabular dollars in millions)
Col. ACol. BCol. CCol. DCol. E
DescriptionBalance at Beginning of PeriodCharged to Expenses and Other AccountsDeductionsBalance at End of Period
Allowance for doubtful accounts:
Year ended December 31, 2020$80 $32 $27 $85 
Year ended December 31, 2019$81 $25 $26 $80 
Year ended December 31, 2018$97 $24 $40 $81 
Valuation allowance on deferred tax assets:
Year ended December 31, 2020$547 $67 $21 $593 
Year ended December 31, 2019$838 $76 $367 $547 
Year ended December 31, 2018$1,120 $37 $319 $838 
Reserves for inventory obsolescence:
Year ended December 31, 2020$57 $3 $2 $58 
Year ended December 31, 2019$54 $5 $2 $57 
Year ended December 31, 2018$66 $0 $12 $54 



F-1
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, 2017  $60
   $1
   $5
   $—
   $17
   $49
 
Year ended December 31, 2016  $59
   $1
   $12
   $—
   $12
   $60
 
Year ended December 31, 2015  $47
   $—
   $9
   $15
(a) 
  $12
   $59
 
                       

 
Valuation allowance on deferred tax assets:                      

 
Year ended December 31, 2017  $928
   $218
   $143
   $—
   $315
   $974
 
Year ended December 31, 2016  $914
   $—
   $41
   $—
   $27
   $928
 
Year ended December 31, 2015  $574
   $—
   $394
(b) 
  $—
   $54
   $914
 
                       

 
Reserves for inventory obsolescence:                      

 
Year ended December 31, 2017  $19
   $1
   $6
   $—
   $7
   $19
 
Year ended December 31, 2016  $23
   $1
   $2
   $—
   $7
   $19
 
Year ended December 31, 2015  $30
   $—
   $10
   $—
   $17
   $23
 
(a) Reclassification from long-term to current.
(b) Primarily relates to a valuation allowance for a U.S. capital loss carryforward deferred tax asset that arose from the sale of internet businesses in China.





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 2.2 to the Current Report on Form 8‑K of CBS Corporation filed February 2, 2017), as amended by Amendment No. 1 dated as of July 10, 2017 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of CBS Corporation filed July 10, 2017) and August 19, 2019) (File No. 001-09553).
(b)
Amendment No. 21 to the Agreement and Plan of Merger, dated as of September 13, 2017October 16, 2019, by and between CBS Corporation and Viacom Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of CBS Corporation, filed September 13, 2017)October 17, 2019) (File No. 001‑09553)001-09553).
(3)(b)
Master Separation Agreement, dated February 2, 2017, between CBS Corporation and CBS Radio Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8‑K of CBS Corporation filed February 2, 2017) (File No. 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)3.1 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) to the Current Report on Form 8‑K of CBS Corporation filed December 17, 2014)4, 2019) (File No. 001‑09553).
(4)(b)
Amended and Restated Bylaws of ViacomCBS Inc., effective as of February 22, 2021 (filed herewith).
(4)Instruments defining the rights of security holders, including indentures
(a)
Description of Class A Common Stock and Class B Common Stock (incorporated by reference to Exhibit 4(a) to the Annual Report on Form 10‑K of ViacomCBS Inc. for the fiscal year ended December 31, 2019) (File No. 001‑09553).
(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, 20082008) (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, 20102010) (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).
(f)
Indenture, dated as of March 27, 2020, between ViacomCBS Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-3 of ViacomCBS Inc. filed March 27, 2020) (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 paragraph (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:under CBS Corporation 2009 Long‑Term Incentive Plan:
(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).*

*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)
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).

E-1
Exhibit No.Description of Document
(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)(iv)
CBS Corporation Senior Executive Short‑Term Incentive Plan (as amended and restated as of December 31, 2005) (incorporated by reference to Performance Share Units (Exhibit 10(f)filed herewith 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)(v)
Restricted Share Units (filed herewith).*
(c)
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) (as Part B was amended by Amendment No. 1, effective as of December 31, 2020) (filed herewith).*
(e)(d)
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 as 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) (filed herewith)(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) (as Part B was amended by Amendment No. 8, effective as of December 31, 2020) (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
(f)(e)
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 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, 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

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-2
Exhibit No.Description of Document
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) (as Part A was amended by Amendment No. 3 as of October 2, 2017) (filed herewith)(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, 2019) (as Part B was amended by Amendment No. 6 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, 2019) (File No. 001-09553).*
(f)
Viacom Inc. 2016 Long-Term Management Incentive Plan (incorporated by reference to Exhibit A to the Definitive Proxy Statement of Viacom Inc. filed January 23, 2015) (File No. 001-32686).*
(g)Forms of Terms and Conditions to the Certificates for equity awards under the Viacom Inc. 2016 Long-Term Management Incentive Plan:
(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, 2018) (File No. 001-32686).*
(iv)
Performance Share Units (filed herewith).*
(g)(v)
Restricted Share Units (filed herewith).*
(h)
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), as amended by Amendment, effective as of March 31, 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).*
(i)
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), as amended by Amendments, effective as of April 1, 2009 and December 31, 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).*
(j)
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), as amended by Amendment, effective as of December 31, 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).*
(k)
Summary of CBS CorporationViacomCBS Inc. Compensation for Outside Directors (as of January 28, 2016)31, 2019) (incorporated by reference to Exhibit 10(h)10(g) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2015)2018) (File No. 001-09553).*
(h)(l)
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)(m)
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)(n)
CBS Corporation 2000 Stock Option Plan for Outside Directors (as amended and restated through December 14, 2016) (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, 2016) (File No. 001-09553).*
(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)(o)
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).*
(p)
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).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).



E-3
Exhibit No.Description of Document
(n)(q)
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).*
(r)
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).*
(s)
Employment Agreement, dated May 19, 2017as 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).*
(t)
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).*
(u)
Employment Agreement dated October 18, 2018, between CBS Corporation and Leslie MoonvesChristina Spade (incorporated by reference to Exhibit 10(a)10 to the Current Report on Form 8-K of CBS Corporation filed October 19, 2018) (File No. 001-09553).*
(v)
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), as amended by Letter Agreement dated July 23, 2020 (incorporated by reference to
Exhibit 10(c) to the Quarterly Report on Form 10-Q of CBS CorporationViacomCBS Inc. for the quarter ended September 30, 2020) (Registration No. 333-234238) (File No. 001-09553).*
(w)
Employment Agreement, dated as of June 30, 2020, between Viacom Inc. and Naveen Chopra (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended June 30, 2017)2020) (File No. 001-09553)333-234238).*

(o)(x)
Letter Agreement, dated December 11, 2014as of June 30, 2020, between ViacomCBS Inc. and Naveen Chopra (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of ViacomCBS Inc. for the quarter ended June 30, 2020) (File No. 333-234238).*
(y)
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).*
(z)
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).*
(aa)
Employment Agreement, dated as of October 2, 2019, between Viacom Inc. and DeDe Lea (incorporated by reference to Exhibit 10.13 to CBS Corporation’s Registration Statement No. 333-234238 on Form S-4 filed October 17, 2019) (File No. 333-234238).*
(bb)
Employment Agreement, dated as of January 1, 2019, between CBS Corporation and Leslie Moonves amending and restating the Letter Agreement dated May 2, 2012 between CBS Corporation and Leslie MoonvesRichard M. Jones (incorporated by reference to Exhibit 10(p)10(r) to the Annual Report on Form 10-K of CBS Corporation for the fiscal year ended December 31, 2014)2018) (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.
(p)(cc)
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).*
(dd)
Employment Agreement, dated as of December 2, 2019, between Viacom Inc. and Nancy Phillips (incorporated by reference to Exhibit 10(bb) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2019) (File No. 001-09553).*
(ee)
Letter Agreement, dated as of December 2, 2019, between Viacom Inc. and Nancy Phillips (incorporated by reference to Exhibit 10(cc) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2019) (File No. 001-09553).*
(ff)
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).*

(q)
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), as amended by Letter Agreement dated August 4, 2017 (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended September 30, 2017) (File No. 001-09553).*
(r)
Employment Agreement dated 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), as amended by Letter Agreement dated August 4, 2017 (incorporated by reference to Exhibit 10(d) 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 January 11,as of September 9, 2018 ((incorporated by reference to Exhibit 10(a) to the Current Report on Form 8-K of CBS Corporation filed herewith)September 27, 2018) (File No. 001-09553).*
(s)(gg)
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).*

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

E-4
Exhibit No.Description of Document
(hh)
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)).*
(ii)
Employment Agreement, dated as of June 1, 2017December 4, 2019, between CBS CorporationViacomCBS Inc. and Lawrence P. TuJoseph R. Ianniello (incorporated by reference to Exhibit 10(b)10(gg) to the QuarterlyAnnual Report on Form 10-Q10-K of CBS CorporationViacomCBS Inc. for the quarterfiscal year ended September 30, 2017)December 31, 2019) (File No. 001-09553).*
(t)(jj)CBS Corporation plans
Letter Agreement, dated as of January 31, 2020, between ViacomCBS Inc. and Joseph R. Ianniello (incorporated by reference to Exhibit 10(hh) to the Annual Report on Form 10-K of ViacomCBS Inc. for the fiscal year ended December 31, 2019) (File No. 001-09553).*
(kk)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) (as Part B was amended, effective as of December 31, 2020) (filed herewith).*
(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) (as Part B was amended, effective as of December 31, 2020) (filed herewith).*
(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).*
(u)(ll)
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).*
(mm)
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 Exhibit10.1 to the Current Report on Form 8-K of ViacomCBS Inc. filed January 23, 2020) (File No. 001-09553).
(nn)
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).
(oo)
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).
(pp)
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).
(qq)
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).
(21)
Subsidiaries of ViacomCBS Inc. (filed herewith).
(23)Consents of Experts and Counsel
(a)
Consent of PricewaterhouseCoopers LLP (filed herewith).
(24)
Powers of Attorney (filed herewith).
(31)Rule 13a‑14(a)/15d‑14(a) Certifications
(a)
Certification of the Chief Executive Officer of ViacomCBS 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).
(b)
Certification of the Chief Financial Officer of ViacomCBS 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).

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).



E-5
Exhibit No.Description of Document
(32)(v)
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).
Section 1350 Certifications
(w)(a)
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), as amended by Amendment No. 1, dated as of March 3, 2017 (incorporated by reference to Exhibit 10(a) to the Quarterly Report on Form 10-Q of CBS Corporation for the quarter ended March 31, 2017) (File No. 001-09553).
(x)
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).
(y)
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).
(23)Consents of Experts and Counsel
(a)
Consent of PricewaterhouseCoopers LLP (filed herewith).
(24)
Powers of Attorney (filed herewith).
(31)Rule 13a‑14(a)/15d‑14(a) Certifications
(a)
Certification of the Chief Executive Officer of CBS Corporation 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).
(b)
Certification of the Chief Financial Officer of CBS Corporation 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).
(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).
(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).
(101)Interactive Data File
101. INS XBRL Instance Document.
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101. SCH XBRL Taxonomy Extension Schema.

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(104)Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).




E-6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, CBS CorporationViacomCBS Inc. has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
VIACOMCBS INC.
CBS CORPORATIONBy:/s/ Robert M. Bakish
By:/s/ Leslie Moonves
Leslie MoonvesRobert M. Bakish
Chairman of the Board, President and
Chief Executive Officer
Date: February 16, 201824, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of CBS CorporationViacomCBS Inc. and in the capacities and on the dates indicated:
SignatureTitleDate
/s/ Robert M. BakishPresident and Chief
Executive Officer; Director
(Principal Executive Officer)		February 24, 2021
Robert M. Bakish
SignatureTitleDate
/s/ Leslie MoonvesNaveen Chopra
Chairman of the Board,Executive Vice President, and
Chief ExecutiveFinancial Officer
(Principal Executive Officer)
(Chairman of the Board of Directors)
February 16, 2018
Leslie Moonves
/s/ Joseph R. Ianniello
Chief Operating Officer

(Principal Financial Officer)
February 16, 201824, 2021
Joseph R. IannielloNaveen Chopra
/s/ Lawrence Liding
Executive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)
February 16, 2018
Lawrence Liding
*DirectorFebruary 16, 2018
David R. Andelman
*DirectorFebruary 16, 2018
Joseph A. Califano, Jr.
*DirectorFebruary 16, 2018
William S. Cohen
*DirectorFebruary 16, 2018
Gary L. Countryman



/s/ Katherine Gill-CharestExecutive Vice President,
Controller and
Chief Accounting Officer
(Principal Accounting Officer)		February 24, 2021
SignatureKatherine Gill-CharestTitleDate
*DirectorFebruary 16, 201824, 2021
CharlesCandace K. GiffordBeinecke
*DirectorFebruary 16, 201824, 2021
Leonard GoldbergBarbara M. Byrne
*DirectorFebruary 16, 201824, 2021
Bruce S. GordonBrian Goldner
*DirectorFebruary 16, 201824, 2021
Linda M. Griego

*DirectorFebruary 16, 2018
SignatureTitleDate
*DirectorFebruary 24, 2021
Robert N. Klieger
*DirectorFebruary 16, 201824, 2021
Arnold KopelsonJudith A. McHale
*DirectorFebruary 16, 201824, 2021
MarthaRonald L. MinowNelson
*DirectorFebruary 16, 201824, 2021
Doug MorrisCharles E. Phillips, Jr.
*DirectorChairFebruary 16, 201824, 2021
Shari E. Redstone
*By:/s/ Lawrence P. TuDirectorFebruary 16, 201824, 2021
Susan Schuman
*Director
February 24, 2021
Nicole Seligman
*Director
February 24, 2021
Frederick O. Terrell
*By:/s/ Christa A. D’AlimonteFebruary 24, 2021
Lawrence P. TuChrista A. D’Alimonte
Attorney-in-Fact
for Directors