UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2022
OR
o☐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 CORPORATIONParamount Global
(Exact name of registrant as specified in its charter)
Delaware
04-2949533
(State or other jurisdiction of

incorporation or organization)
04-2949533
(I.R.S. Employer Identification No.)
51 W. 52nd Street, 1515 Broadway
New York,New York
10036
(Address of principal executive offices)
10019
(Zip Code)
(212) 975-4321258-6000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolsName of each exchange on which registered
Class A Common Stock, $0.001 par valuePARAAThe Nasdaq Stock Market LLC
Class B Common Stock, $0.001 par valuePARAThe Nasdaq Stock Market LLC
5.75% Series A Mandatory Convertible Preferred Stock, $0.001 par valuePARAPThe Nasdaq Stock Market LLC
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. Yesx☒    No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 the registrant was required to submit and post such files). Yes x☒    No o☐
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 Exchange Act.
Large accelerated filerx
☒
Accelerated filer o
☐
Non-accelerated filero
☐
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o☐    No x☒
Number of shares of common stock outstanding at October 31, 2017:April 28, 2022:
Class A Common Stock, par value $.001 per share— 37,598,60440,705,676
Class B Common Stock, par value $.001 per share— 362,580,107
608,394,842





CBS CORPORATIONPARAMOUNT GLOBAL
INDEX TO FORM 10-Q
Page
PART I – FINANCIAL INFORMATION
Page
PART I – FINANCIAL INFORMATION
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6053
Item 1.
54
Item 1A.
54
6154
6255




PART I – FINANCIAL INFORMATION
Item 1.Financial Statements.
CBS CORPORATIONPARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Three Months Ended Nine Months EndedThree Months Ended
September 30, September 30,March 31,
2017 2016 2017 201620222021
Revenues$3,171
 $3,084
 $9,771
 $9,648
Revenues$7,328 $7,412 
Costs and expenses: 
  
    Costs and expenses:
Operating1,862
 1,788
 5,940
 5,818
Operating4,796 4,363 
Selling, general and administrative547
 521
 1,585
 1,534
Selling, general and administrative1,619 1,422 
Depreciation and amortization55
 54
 166
 168
Depreciation and amortization96 99 
Other operating items, net—
 —
 —
 (9)
Restructuring and other corporate mattersRestructuring and other corporate matters57 — 
Total costs and expenses2,464
 2,363
 7,691
 7,511
Total costs and expenses6,568 5,884 
Gain on salesGain on sales15 — 
Operating income707
 721
 2,080
 2,137
Operating income775 1,528 
Interest expense(116) (104) (336) (304)Interest expense(240)(259)
Interest income17
 7
 45
 22
Interest income21 13 
Loss on early extinguishment of debt (Note 6)(5) —
 (5) —
Loss on extinguishment of debtLoss on extinguishment of debt(73)(128)
Other items, net3
 —
 9
 (7)Other items, net(13)1 
Earnings from continuing operations before income taxes and
equity in loss of investee companies
606
 624
 1,793
 1,848
Earnings from continuing operations before income taxes and equity in loss of
investee companies		470 1,155 
Provision for income taxes(172) (145) (479) (524)Provision for income taxes(34)(226)
Equity in loss of investee companies, net of tax(16) (13) (45) (43)Equity in loss of investee companies, net of tax(37)(18)
Net earnings from continuing operations418
 466
 1,269
 1,281
Net earnings from continuing operations399 911 
Net earnings (loss) from discontinued operations, net of tax (Note 3)174
 12
 (871) 93
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax42 12 
Net earnings (Paramount and noncontrolling interests)Net earnings (Paramount and noncontrolling interests)441 923 
Net earnings attributable to noncontrolling interestsNet earnings attributable to noncontrolling interests(8)(12)
Net earnings attributable to ParamountNet earnings attributable to Paramount$433 $911 
Amounts attributable to Paramount:Amounts attributable to Paramount:
Net earnings from continuing operationsNet earnings from continuing operations$391 $899 
Net earnings from discontinued operations, net of taxNet earnings from discontinued operations, net of tax42 12 
Net earnings attributable to ParamountNet earnings attributable to Paramount$433 $911 
Basic net earnings per common share attributable to Paramount:Basic net earnings per common share attributable to Paramount:
Net earnings from continuing operationsNet earnings from continuing operations$.58 $1.44 
Net earnings from discontinued operationsNet earnings from discontinued operations$.06 $.02 
Net earnings$592
 $478
 $398
 $1,374
Net earnings$.65 $1.46 
       
Basic net earnings (loss) per common share: 
  
    
Diluted net earnings per common share attributable to Paramount:Diluted net earnings per common share attributable to Paramount:
Net earnings from continuing operations$1.04

$1.05

$3.13

$2.84
Net earnings from continuing operations$.58 $1.42 
Net earnings (loss) from discontinued operations$.43

$.03

$(2.15)
$.21
Net earnings$1.48

$1.08

$.98

$3.05
       
Diluted net earnings (loss) per common share: 
  
    
Net earnings from continuing operations$1.03

$1.04

$3.10

$2.82
Net earnings (loss) from discontinued operations$.43

$.03

$(2.12)
$.20
Net earnings from discontinued operationsNet earnings from discontinued operations$.06 $.02 
Net earnings$1.46

$1.07

$.97

$3.02
Net earnings$.64 $1.44 
       
Weighted average number of common shares outstanding: 
  
    Weighted average number of common shares outstanding:
Basic401
 442
 405
 451
Basic649 622 
Diluted406

446

410

455
Diluted651 631 
       
Dividends per common share$.18
 $.18
 $.54
 $.48
See notes to consolidated financial statements.

-3-


CBS CORPORATIONPARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; in millions)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net earnings$592
 $478
 $398
 $1,374
Other comprehensive income, net of tax:       
Cumulative translation adjustments2
 1
 4
 2
Amortization of net actuarial loss and prior service cost13
 10
 37
 29
Total other comprehensive income, net of tax15
 11
 41
 31
Total comprehensive income$607

$489

$439

$1,405
Three Months Ended
March 31,
20222021
Net earnings (Paramount and noncontrolling interests)$441 $923 
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments(40)(66)
Recognition of net actuarial loss and prior service costs16 13 
Other comprehensive loss from continuing operations,
net of tax (Paramount and noncontrolling interests)		(24)(53)
Other comprehensive income from discontinued operations2 2 
Comprehensive income419 872 
Less: Comprehensive income attributable to noncontrolling interests8 11 
Comprehensive income attributable to Paramount$411 $861 
See notes to consolidated financial statements.



-4-
CBS CORPORATION

PARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)
 At At
 September 30, 2017 December 31, 2016
ASSETS       
Current Assets:       
Cash and cash equivalents $144
   $598
 
Receivables, less allowances of $48 (2017) and $60 (2016) 3,598
   3,314
 
Programming and other inventory (Note 4) 1,830
   1,427
 
Prepaid income taxes —
   30
 
Prepaid expenses 182
   185
 
Other current assets 185
   204
 
Current assets of discontinued operations (Note 3) 355
   305
 
Total current assets 6,294
   6,063
 
Property and equipment 3,001
   2,935
 
Less accumulated depreciation and amortization 1,793
   1,694
 
Net property and equipment 1,208
   1,241
 
Programming and other inventory (Note 4) 2,814
   2,439
 
Goodwill 4,891
   4,864
 
Intangible assets 2,617
   2,633
 
Other assets 2,745
   2,707
 
Assets of discontinued operations (Note 3) 3,325
   4,291
 
Total Assets $23,894



$24,238
 
        
LIABILITIES AND STOCKHOLDERS’ EQUITY
 

   

 
Current Liabilities: 

   

 
Accounts payable $233
   $148
 
Accrued compensation 257
   369
 
Participants’ share and royalties payable 997
   1,024
 
Program rights 509
   290
 
Income taxes payable 55
   —
 
Commercial paper (Note 6) 590
   450
 
Current portion of long-term debt (Note 6) 19
   23
 
Accrued expenses and other current liabilities 1,238
   1,249
 
Current liabilities of discontinued operations (Note 3) 154
   155
 
Total current liabilities 4,052
   3,708
 
Long-term debt (Note 6) 9,080
   8,902
 
Pension and postretirement benefit obligations 1,619
   1,769
 
Deferred income tax liabilities, net 645
   590
 
Other liabilities 3,038
   3,129
 
Liabilities of discontinued operations (Note 3) 2,466
   2,451
 
  

   

 
Commitments and contingencies (Note 10) 

   

 
  

   

 
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;
 833 (2017) and 829 (2016) shares issued		 1
   1
 
Additional paid-in capital 43,830
   43,913
 
Accumulated deficit (18,859)   (19,257) 
Accumulated other comprehensive loss (Note 8) (726)   (767) 
  24,246
   23,890
 
Less treasury stock, at cost; 471 (2017) and 455 (2016) Class B shares 21,252
   20,201
 
Total Stockholders’ Equity
 2,994
   3,689
 
Total Liabilities and Stockholders’ Equity
 $23,894
   $24,238
 
AtAt
March 31, 2022December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents$5,302 $6,267 
Receivables, net7,263 6,984 
Programming and other inventory950 1,504 
Prepaid expenses and other current assets1,245 1,176 
Current assets of discontinued operations594 745 
Total current assets15,354 16,676 
Property and equipment, net1,706 1,736 
Programming and other inventory14,180 13,358 
Goodwill16,561 16,584 
Intangible assets, net2,760 2,772 
Operating lease assets1,614 1,630 
Deferred income tax assets, net1,280 1,206 
Other assets3,771 3,824 
Assets held for sale— 19 
Assets of discontinued operations817 815 
Total Assets$58,043 $58,620 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$977 $800 
Accrued expenses1,960 2,323 
Participants’ share and royalties payable2,172 2,159 
Accrued programming and production costs1,687 1,342 
Deferred revenues1,055 1,091 
Debt15 11 
Other current liabilities1,374 1,182 
Current liabilities of discontinued operations483 571 
Total current liabilities9,723 9,479 
Long-term debt16,797 17,698 
Participants’ share and royalties payable1,310 1,244 
Pension and postretirement benefit obligations1,914 1,946 
Deferred income tax liabilities, net1,067 1,063 
Operating lease liabilities1,579 1,598 
Program rights obligations429 404 
Other liabilities1,753 1,898 
Liabilities of discontinued operations209 213 
Redeemable noncontrolling interest105 107 
Commitments and contingencies (Note 14)00
Paramount stockholders’ equity:
5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share;
    25 shares authorized and 10 shares issued (2022 and 2021)
— — 
Class A Common Stock, par value $.001 per share; 55 shares authorized;
41 shares issued (2022 and 2021)
— — 
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
1,111 (2022) and 1,110 (2021) shares issued
1 1 
Additional paid-in capital32,946 32,918 
Treasury stock, at cost; 503 (2022 and 2021) Class B shares(22,958)(22,958)
Retained earnings14,599 14,343 
Accumulated other comprehensive loss(1,924)(1,902)
Total Paramount stockholders’ equity22,664 22,402 
Noncontrolling interests493 568 
Total Equity23,157 22,970 
Total Liabilities and Equity$58,043 $58,620 
See notes to consolidated financial statements.

-5-
CBS CORPORATION

PARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
 Nine Months Ended
 September 30,
 2017 2016
Operating Activities:   
Net earnings$398
 $1,374
Less: Net earnings (loss) from discontinued operations, net of tax(871) 93
Net earnings from continuing operations1,269

1,281
Adjustments to reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing operations:





Depreciation and amortization166

168
Stock-based compensation129

123
Equity in loss of investee companies, net of tax and distributions45

48
Change in assets and liabilities, net of investing and financing activities(674)
(503)
Net cash flow provided by operating activities from continuing operations935

1,117
Net cash flow provided by operating activities from discontinued operations52

189
Net cash flow provided by operating activities987

1,306
Investing Activities:




Acquisitions (including acquired television library)(258) (51)
Capital expenditures(112)
(111)
Investments in and advances to investee companies(67)
(44)
Proceeds from sale of investments10
 —
Proceeds from dispositions11

20
Other investing activities17
 7
Net cash flow used for investing activities from continuing operations(399)
(179)
Net cash flow used for investing activities from discontinued operations(18)
(2)
Net cash flow used for investing activities(417)
(181)
Financing Activities:




Proceeds from short-term debt borrowings, net140

33
Proceeds from issuance of senior notes889
 685
Repayment of senior notes and debentures(701) (199)
Proceeds from debt borrowings of CBS Radio40
 —
Repayment of debt borrowings of CBS Radio(23) —
Payment of capital lease obligations(13)
(13)
Payment of contingent consideration(7) —
Dividends(224)
(209)
Purchase of Company common stock(1,111)
(1,534)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation(89)
(57)
Proceeds from exercise of stock options81

13
Excess tax benefit from stock-based compensation (Note 1)—

13
Other financing activities—
 (1)
Net cash flow used for financing activities(1,018)
(1,269)
Net decrease in cash and cash equivalents(448)
(144)
Cash and cash equivalents at beginning of period
(includes $24 (2017) and $6 (2016) of discontinued operations cash)
622

323
Cash and cash equivalents at end of period
(includes $30 (2017) and $1 (2016) of discontinued operations cash)
$174

$179
Supplemental disclosure of cash flow information




Cash paid for interest:   
Continuing operations$393
 $358
Discontinued operations$52
 $—
    
Cash paid for income taxes:   
Continuing operations$321
 $310
Discontinued operations$58
 $60
Three Months Ended
March 31,
20222021
Operating Activities:
Net earnings (Paramount and noncontrolling interests)$441 $923 
Less: Net earnings from discontinued operations, net of tax42 12 
Net earnings from continuing operations399 911 
Adjustments to reconcile net earnings from continuing operations to net cash flow provided
     by operating activities from continuing operations:
Depreciation and amortization96 99 
Deferred tax (benefit) provision(62)95 
Stock-based compensation36 52 
Gain on sales(15)— 
Loss on extinguishment of debt73 128 
Equity in loss of investee companies, net of tax37 18 
Change in assets and liabilities(269)348 
Net cash flow provided by operating activities from continuing operations295 1,651 
Net cash flow provided by operating activities from discontinued operations102 72 
Net cash flow provided by operating activities397 1,723 
Investing Activities:
Investments(59)(40)
Capital expenditures(52)(62)
Proceeds from dispositions31 213 
Other investing activities— (25)
Net cash flow (used for) provided by investing activities(80)86 
Financing Activities:
Proceeds from issuance of long-term debt1,028 25 
Repayment of long-term debt(2,009)(2,117)
Dividends paid on preferred stock(14)— 
Dividends paid on common stock(158)(151)
Proceeds from issuance of preferred stock— 983 
Proceeds from issuance of common stock— 1,672 
Payment of payroll taxes in lieu of issuing shares for stock-based compensation(9)(35)
Proceeds from exercise of stock options— 408 
Payments to noncontrolling interests(77)(27)
Other financing activities(32)(35)
Net cash flow (used for) provided by financing activities(1,271)723 
Effect of exchange rate changes on cash and cash equivalents(11)(19)
Net (decrease) increase in cash, cash equivalents and restricted cash(965)2,513 
Cash, cash equivalents and restricted cash at beginning of year
(includes $135 (2021) of restricted cash)
6,267 3,119 
Cash, cash equivalents and restricted cash at end of period
(includes $133 (2021) of restricted cash)
$5,302 $5,632 
See notes to consolidated financial statements.

-6-


CBS CORPORATIONPARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in millions)
Three Months Ended March 31, 2022
Preferred StockClass A and B Common StockAdditional Paid-In CapitalTreasury
Stock		Retained EarningsAccumulated Other Comprehensive LossTotal Paramount Stockholders’ EquityNoncontrolling InterestsTotal Equity
(Shares)(Shares)
December 31, 202110 $— 648 $1 $32,918 $(22,958)$14,343 $(1,902)$22,402 $568 $22,970 
Stock-based
compensation
activity		— — 1 — 28 — — — 28 — 28 
Preferred stock
dividends		— — — — — — (14)— (14)— (14)
Common stock
dividends		— — — — — — (159)— (159)— (159)
Noncontrolling
interests		— — — — — — (4)— (4)(83)(87)
Net earnings— — — — — — 433 — 433 8 441 
Other comprehensive
loss
— — — — — — — (22)(22)— (22)
March 31, 202210 $— 649 $1 $32,946 $(22,958)$14,599 $(1,924)$22,664 $493 $23,157 
Three Months Ended March 31, 2021
Preferred StockClass A and B Common StockAdditional Paid-In CapitalTreasury
Stock		Retained EarningsAccumulated Other Comprehensive LossTotal Paramount Stockholders’ EquityNoncontrolling InterestsTotal Equity
(Shares)(Shares)
December 31, 2020— $— 617 $1 $29,785 $(22,958)$10,375 $(1,832)$15,371 $685 $16,056 
Stock-based
compensation
activity
— — 9 — 426 — — — 426 — 426 
Stock issuances10 — 20 — 2,655 — — — 2,655 — 2,655 
Preferred stock
dividends		— — — — — — (1)— (1)— (1)
Common stock
dividends		— — — — — — (152)— (152)— (152)
Noncontrolling
interests		— — — — — — 11 — 11 (24)(13)
Net earnings— — — — — — 911 — 911 12 923 
Other comprehensive
loss		— — — — — — — (50)(50)(1)(51)
March 31, 202110 $— 646 $1 $32,866 $(22,958)$11,144 $(1,882)$19,171 $672 $19,843 
See notes to consolidated financial statements.

-7-


PARAMOUNT GLOBAL 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-CBS Corporation (together withBusiness—Effective February 16, 2022, we changed our name from ViacomCBS Inc. to Paramount Global, and effective at the open of market trading on February 17, 2022, our Class A Common Stock, Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”) ceased trading under the ticker symbols “VIACA,” “VIAC” and “VIACP” and began trading under the ticker symbols “PARAA,” “PARA” and “PARAP,” respectively, on The Nasdaq Stock Market LLC. References to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Global and its consolidated subsidiaries, unless the context otherwise requires,requires.

Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in a change to our operating segments. Our management structure has been reorganized to focus on managing our business as the “Company” or “CBS Corp.”) is comprisedcombination of three parts: a traditional media business, a portfolio of global direct-to-consumer streaming services, and a film studio. Accordingly, beginning in the first quarter of 2022 and for all periods presented we are reporting results based on the following segments: Entertainment (CBS Television, comprised
•TV Media—Our TV Media segment consists of our domestic and international broadcast networks, including the CBS Television Network, Network 10, Channel 5, Telefe, and Chilevisión; our premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, Smithsonian Channel, international extensions of these brands, and CBS Sports Network; our television production operations, including CBS Studios, Paramount Television Studios CBS Studios International, and CBS Television Distribution;Media Ventures, which primarily produces or distributes first-run syndicated programming; and our owned broadcast television stations, CBS InteractiveStations.

•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of pay, free 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).

Pending Acquisition-On August 27, 2017, the Company signed a binding agreement to acquire Ten Networks Holdings Limitedpremium global direct-to-consumer streaming services (“Network Ten”DTC services”), oneincluding Paramount+, Pluto TV, Showtime Networks’ premium subscription streaming service (Showtime OTT), BET+ and Noggin.

•Filmed Entertainment—Our Filmed Entertainment segment consists of three major commercial broadcast networks in Australia, after Network Ten entered into voluntary administration. During the third quarter of 2017, the Company paid $138 million of the purchase price, primarily for the assumption of the secured debt of Network Ten’s lenders,Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, and funding for working capital. The transaction, which is expected to close in the fourth quarter of 2017, will be completed in accordance with Australian applicable laws and procedures and is subject to certain regulatory approvals.Miramax.


Discontinued Operations-On February 2, 2017, the Company entered into an agreement with Entercom Communications Corp. (“Entercom”) to combine the Company’s radio business, CBS Radio Inc. (“CBS Radio”), with Entercom in a merger to be effected through a Reverse Morris Trust transaction, which is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction, on October 19, 2017, the Company commenced an exchange offer through which it will split-off CBS Radio (See Note 3). CBS Radio has been presented as a discontinued operation in the Company’s consolidated financial statements for all periods presented.

Basis of Presentation-ThePresentation—The accompanying unaudited consolidated financial statements of the Company have been prepared on a basis consistent with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission.Commission (“SEC”). These financial statements should be read in conjunction with the more detailed financial statements and notes thereto included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2021.


In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of theour financial position, results of operations and cash flows of the Company for the periods presented. Certain previously reported amounts have been reclassified to conform to the current presentation.


Discontinued Operations—On November 25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, which was previously reported as the Publishing segment, 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 our consolidated financial statements for all periods presented (see Note 2).

-8-


PARAMOUNT GLOBAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Use of Estimates-TheEstimates—The preparation of the Company’sour consolidated financial statements in conformity with accounting principles generally accepted in the United StatesGAAP 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 amountamounts 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.


Other Operating Items, Net-Other operating items, net for the nine months ended September 30, 2016 included a gain from the sale of a business and a multiyear, retroactive impact of a new operating tax.

Net Earnings (Loss) per Common Share-BasicShare—Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss)available to common stockholders divided by the weighted average number of common shares outstanding during the period. DilutedNet earnings available to common stockholders is calculated as net earnings from continuing operations or net earnings, as applicable, adjusted to include dividends on our Mandatory Convertible Preferred Stock.

Weighted average shares for diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) and


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

market-basedor performance sharestock units (“PSUs”) only in the periods in which such effect would have been dilutive. Diluted EPS also reflects the effect of the assumed conversion of preferred stock, if dilutive, which includes the issuance of common shares in the weighted average number of shares and excludes the above-mentioned preferred stock dividend adjustment to net earnings available to common stockholders.

Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive,antidilutive were 4 million stock options and RSUs of 6 million for eachthe three months ended March 31, 2022 and stock options of 3 million for the three months ended March 31, 2021. Also excluded from the calculation of diluted EPS for the three months ended March 31, 2022 was the effect of the three and nine months endedSeptember 30, 2017 and 5assumed conversion of 10 million shares of Mandatory Convertible Preferred Stock into shares of common stock options for each ofbecause the three and nine months endedSeptember 30, 2016.

impact would have been antidilutive. The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.
 Three Months Ended Nine Months Ended
 September 30, September 30,
(in millions)2017 2016 2017 2016
Weighted average shares for basic EPS401
 442
 405
 451
Dilutive effect of shares issuable under stock-based
compensation plans
5
 4
 5
 4
Weighted average shares for diluted EPS406
 446
 410
 455
Other Liabilities-Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, participants’ share and royalties payable, program rights obligations, deferred compensation and other employee benefit accruals.

Additional Paid-In Capital-For the nine months ended September 30, 2017 and 2016, the Company recorded dividends of $221 million and $218 million, respectively, as a reduction to additional paid-in capital as the Company had an accumulated deficit balance.

Adoption of New Accounting Standards
Improvements to Employee Share-Based Payment Accounting
During the first quarter of 2017, the Company adopted amended Financial Accounting Standards Board (“FASB”) guidance which simplifies several aspects of the accounting for employee share-based payment transactions. Under this amended guidance, all excess tax benefits and tax deficiencies 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 of the adoption of this guidance, the Company’s excess tax benefits associated with the exercise of stock options and vesting of RSUs for the three and nine months endedSeptember 30,2017 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.

Simplifying the Accounting for Goodwill Impairment
During the first quarter of 2017, the Company early adopted amended FASB guidance which simplifies the accounting for goodwill impairment. This guidance removes Step 2 of the goodwill impairment test, which requires 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.
Three Months Ended
March 31,
(in millions)20222021
Weighted average shares for basic EPS649 622 
Dilutive effect of shares issuable under stock-based
compensation plans
2 8 
Assumed conversion of Mandatory Convertible
    Preferred Stock		— 1 
Weighted average shares for diluted EPS651 631 

-9-



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

Additionally, because the impact of the assumed conversion of the Mandatory Convertible Preferred Stock would have been antidilutive, net earnings from continuing operations and net earnings used in our diluted EPS calculations for the three months ended March 31, 2022 were adjusted to include the preferred stock dividends recorded during the period. The table below presents a reconciliation of net earnings from continuing operations and net earnings to the amounts used in the calculations of basic and diluted EPS.
Recent
Three Months Ended
March 31, 2022
Amounts attributable to Paramount:
Net earnings from continuing operations$391 
Preferred stock dividends(14)
Net earnings from continuing operations for basic and diluted
    EPS calculation		$377 
Amounts attributable to Paramount:
Net earnings$433 
Preferred stock dividends(14)
Net earnings for basic and diluted EPS calculation$419 
Recently Adopted Accounting Pronouncements
Targeted Improvements to Accounting for Hedging ActivitiesConvertible Instruments and Contracts in an Entity’s Own Equity
In August 2017, the FASB issuedOn January 1, 2022, we adopted Financial Accounting Standards Board (“FASB”) amended guidance to reduce complexity associated with the accounting for hedge accounting, which expandsconvertible instruments with characteristics of liabilities and equity. Under this guidance, embedded conversion features associated with convertible instruments no longer need to be separated from the eligibility of hedging strategieshost contracts unless they are required to be accounted for as derivatives or have been issued at a substantial premium. For contracts in an entity’s own equity, this guidance removes certain settlement conditions that are required for equity contracts to qualify for hedge accounting, modifies the recognition and presentationderivative scope exceptions. The adoption of hedges in the financial statements, and changes how companies assess hedge effectiveness. In addition, this guidance amends and expands disclosure requirements. This guidance, which is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, isdid not expected to have a material impact on the Company’sour consolidated financial statements.
Stock Compensation: Scope
2) DISPOSITIONS
During the first quarter of Modification Accounting2022, we recorded gains on sales totaling $15 million, comprised of a gain from the sale of international intangible assets and a working capital adjustment to the gain from the fourth quarter 2021 sale of CBS Studio Center.
In May 2017,During the FASB issued amended guidancefourth quarter of 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House for $2.175 billion in cash. Simon & Schuster is presented as a discontinued operation in our consolidated financial statements for all periods presented. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The purchase agreement contains commitments on the accounting for stock-based compensation which clarifies whenpart of the purchaser to accounttake all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a change$200 million termination fee payable to the terms or conditions 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 classification of the award as equity or liability changes as a result of the changeus in certain circumstances in the terms or conditions of a share-based payment award. This guidance, which is effectiveevent the transaction does not close for interim and annual periods beginning after December 15, 2017, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statements.regulatory reasons (see Note 14).
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 interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted as of the beginning of an annual reporting period. Upon adoption, the Company’s operating income will increase or decrease by an amount equal to the components of net benefit cost other than service cost, which are disclosed in Note 7.
Clarifying the Definition of a Business
In January 2017, the FASB issued amended guidance on the accounting for business combinations which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted.
Intra-Entity Transfers of Assets Other than Inventory
In October 2016, the FASB issued amended guidance on the accounting for income taxes, which eliminates the exception in existing guidance which defers the recognition of the tax effects of intra-entity asset transfers other than inventory until the transferred asset is sold to a third party. Rather, the amended guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer

-10-



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

The following table sets forth details of net earnings from discontinued operations for the three months ended March 31, 2022 and 2021, which primarily reflects the results of Simon & Schuster.
occurs. This guidance, which
Three Months Ended
March 31,
20222021
Revenues$217 $185 
Costs and expenses:
Operating124 120 
Selling, general and administrative38 38 
Total costs and expenses (a)
162 158 
Operating income55 27 
Other items, net(1)(2)
Earnings from discontinued operations54 25 
Income tax provision (b)
(12)(13)
Net earnings from discontinued operations, net of tax$42 $12 
(a) Included in total costs and expenses for the three months ended March 31, 2022 is effective$5 million for interim and annual periods beginning after December 15, 2017, is not expected to have a material impact on the Company’s consolidated financial statements.

Statementrelease of Cash Flows: Classification of Cash Receipts and Cash Payments
In August 2016, the FASB issued amended guidance which clarifies how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new guidance is intended to reduce the existing diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted.

Leases
In February 2016, the FASB issued new guidance on the accountingindemnification obligations for leases which supersedes previous lease guidance. Under this guidance, for all leases with terms in excessrelating to a previously disposed business.
(b) The tax provision includes amounts relating to previously disposed businesses of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability$1 million and a right-of-use asset representing its right to use the underlying asset$7 million for the lease term. three months ended March 31, 2022 and 2021, respectively.
The new guidance retains a distinction between finance leasesfollowing table presents the major classes of assets and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentationliabilities of expenses and cash flows arising from a lease by a lessee have not significantly changed. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.our discontinued operations.

AtAt
March 31, 2022December 31, 2021
Receivables, net$381 $536 
Other current assets213 209 
Goodwill435 435 
Property and equipment, net46 46 
Operating lease assets203 203 
Other assets133 131 
Total Assets$1,411 $1,560 
Royalties payable$126 $155 
Other current liabilities357 416 
Operating lease liabilities191 194 
Other liabilities18 19 
Total Liabilities$692 $784 
Revenue from Contracts with Customers
-11-
In May 2014, the FASB issued guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. This guidance is effective for the Company beginning in the first quarter of 2018. The Company anticipates that it will apply the modified retrospective method of adoption with the cumulative effect of the initial adoption reflected as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. The Company has identified the predominant changes to its accounting policies and is in the process of quantifying the impact on its consolidated financial statements and evaluating the additional disclosures that may be required. 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 content licensing and distribution revenues. First, revenues from certain distribution arrangements of third-party content will be recognized based on the gross amount of consideration received by the Company for such sale, with an associated expense recognized for the fees paid to the third-party producer. 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 producer. This change will not have an 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. This change is not expected to have a material impact on the Company’s results on an annual basis, since revenues from extensions executed each year approximate revenues from extensions for which the license period has begun.




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

2) STOCK-BASED COMPENSATION3) PROGRAMMING AND OTHER INVENTORY
The following table summarizes the Company’s stock-based compensation expense for the threepresents our programming and nine months ended September 30, 2017other inventory at March 31, 2022 and 2016.
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
RSUs and PSUs$38
 $35
 $109
 $102
Stock options6
 7
 20
 21
Stock-based compensation expense, before income taxes44
 42
 129
 123
Related tax benefit(17) (17) (50) (48)
Stock-based compensation expense, net of tax benefit$27
 $25
 $79
 $75
December 31, 2021, grouped by type and predominant monetization strategy. During the nine months ended September 30, 2017,first quarter of 2022, in connection with our increased strategic focus on our direct-to-consumer businesses, we reassessed our predominant monetization strategy for certain of our internally-produced content, and determined that it had shifted from individual to film group as a result of expected increased monetization of the Company granted 2 million RSUs for CBS Corp.content on our DTC services.
AtAt
March 31, 2022December 31, 2021
Film Group Monetization:
Acquired program rights, including prepaid sports rights$3,054 $3,432 
Internally-produced television and film programming:
Released5,132 3,808 
In process and other2,807 2,609 
Individual Monetization:
Acquired libraries427 441 
Film inventory:
Released691 606 
Completed, not yet released322 253 
In process and other1,212 1,303 
Internally-produced television programming:
Released786 1,604 
In process and other663 769 
Home entertainment36 37 
Total programming and other inventory15,130 14,862 
Less current portion950 1,504 
Total noncurrent programming and other inventory$14,180 $13,358 
The following table presents amortization of television and film programming and production costs, which is included within “Operating expenses” on the Consolidated Statements of Operations.
Three Months Ended
March 31,
20222021
Programming costs, acquired programming$1,496 $1,502 
Production costs, internally-produced television and film programming:
Individual monetization$491 $760 
Film group monetization$1,147 $650 
4) RELATED PARTIES
National Amusements, Inc.
National Amusements, Inc. (“NAI”) is the controlling stockholder of the Company. At March 31, 2022, NAI directly or indirectly owned approximately 77.4% of our voting Class A Common Stock and approximately 9.7% of our Class A Common Stock and non-voting Class B Common Stock withon a weighted average per unit grant-date fair value of $66.75. RSUs granted duringcombined basis. NAI is controlled by the first nine months of 2017 generally vest over a one- to four-year service period. Compensation expense for RSUs is determined based upon the market priceSumner M. Redstone National Amusements Part B General Trust (the “General Trust”), which owns 80% of the voting interest of NAI and acts by majority vote of 7 voting trustees (subject to certain exceptions), including with respect to the NAI shares underlyingheld by the awards on the date of grant. For certain RSU awards the number of shares an employee earns ranges from 0% to 120% of the target award, based on the outcome of established performance conditions. Compensation expense is recorded based on the probable outcome of the performance conditions. During the nine months ended September 30, 2017, the Company also granted awards of market-based PSUs. The number of shares that will be issued upon vesting of the PSUs is based on the Company’s stock price performance over a designated measurement period, as well as the achievement of established operating goals. The fair value of the PSUs is determined on the grant date using a Monte Carlo simulation modelGeneral Trust. Shari E. Redstone, Chairperson, CEO and is expensed over the required employee service period. The fair value of the PSU awards granted during the nine months ended September 30, 2017 was $23 million. 

During the nine months ended September 30, 2017, the Company also granted 1 million stock options with a weighted average exercise price of $66.31. Stock options granted during the first nine months of 2017 vest over a four-year service period and expire eight years from the date of grant. 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.

Total unrecognized compensation cost related to unvested RSUs and PSUs at September 30, 2017 was $235 million, which is expected to be recognized over a weighted average period of 2.3 years. Total unrecognized compensation cost related to unvested stock option awards at September 30, 2017 was $45 million, which is expected to be recognized over a weighted average period of 2.5 years.
3) 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 to be effected through a Reverse Morris Trust transaction, which is expected to be tax-free to CBS Corp. and its stockholders. In connection with this transaction, on October 19, 2017, the Company commenced an exchange offer through which it will split-off CBS Radio. In the exchange offer, the Company’s stockholders have the opportunity to exchange their shares of the Company’s Class B Common Stock for shares of CBS Radio common stock, which will be immediately converted into shares of Entercom Class A common stock upon completion of the merger. The exchange ratio is calculated based on the trading prices of CBS Class B Common Stock and Entercom Class A common stock with a 7% discount per-share value, subject to an upper limit of 5.7466 shares of CBS Radio common stock for each share of CBS Class B

-12-



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

Common Stock. Based on the exchange ratio at the commencementPresident of NAI and non-executive Chair of our Board of Directors, is one of the exchange offer,7 voting trustees for the General Trust and assumingis one of 2 voting trustees who are beneficiaries of the exchange offerGeneral Trust. No member of our management or other member of our Board of Directors is fully subscribed,a trustee of the Company would receive approximately 19 million sharesGeneral Trust.

Other Related Parties
In the ordinary course of business, we are involved in transactions with our equity-method investees, primarily for the exchange offer, thereby reducinglicensing of television and film programming. The following tables present the Company’s shares outstanding. However, the exchange ratio will change based on fluctuationsamounts recorded in the trading prices of CBS Class B Common Stock and Entercom Class A common stock. A 10% change to the exchange ratio would change the number of shares the Company receives in the exchange offer by approximately 2 million shares. The exchange offer is scheduled to expire on November 16, 2017, unless the exchange offer is extended or terminated. The transaction is subject to certain customary terms and conditions. CBS Radio has been classified as held for sale and presented as a discontinued operation in the Company’sour consolidated financial statements for allrelated to these transactions.
Three Months Ended
March 31,
20222021
Revenues$54 $65 
Operating expenses$5 $4 
AtAt
March 31, 2022December 31, 2021
Accounts receivable$62 $50 
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.

FASB Accounting Standards Codification (“ASC”) 360 requires that an asset classified as held for sale be measured each reporting period at the lower of its carrying amount or fair value less cost to sell. 5) REVENUES
The ultimate value of the transaction with Entercom will be determinedtable below presents our revenues disaggregated into categories based on Entercom’s stock price at the closingnature of such revenues. See Note 13 for revenues by segment disaggregated into these categories.
Three Months Ended
March 31,
20222021
Revenues by Type:
Advertising$2,864 $3,109 
Affiliate and subscription2,840 2,463 
Theatrical131 1 
Licensing and other1,493 1,839 
Total Revenues$7,328 $7,412 
Receivables
Reserves for accounts receivable reflect our expected credit losses based on historical experience as well as current and expected economic conditions. During the transaction. The Company recorded a noncash gain of $100 million for the three months ended September 30, 2017 and a noncash charge of $980 million for the nine months ended September 30, 2017 associated with a valuation allowance to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom. The Company will record an additional gain or loss upon the closing of the transaction, which is expected to occur in the fourthfirst quarter of 2017. A 10% change to Entercom’s stock price would change the carrying value2022, following Russia’s invasion of CBS Radio by approximately $110 million.

For the nine months ended September 30, 2017, CBS RadioUkraine, we recorded a restructuring charge of $7 million associated with the reorganization of certain business operations, reflecting severance costs and costs associated with exiting contractual obligations.

The following tables set forth details of net earnings (loss) from discontinued operations for the three and nine months ended September 30, 2017 and 2016. Net earnings (loss) from discontinued operations included the operating results of CBS Radio for all periods presented. Net earnings (loss) from discontinued operations also included a tax benefit of $45 million for the three and nine months ended September 30, 2017 and a charge of $36$39 million, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine. The charge was recorded within “Restructuring and other corporate matters” on the Consolidated Statement of Operations. At March 31, 2022 and December 31, 2021, our allowance for credit losses was $113 million and $80 million, respectively.

Included in “Other assets” on the threeConsolidated Balance Sheets are noncurrent receivables of $1.67 billion and nine months ended September 30, 2016, in each case$1.84 billion atMarch 31, 2022and December 31, 2021, respectively. Noncurrent receivables primarily relate to revenues recognized under long-term content licensing arrangements. Revenues from the resolutionlicensing of a tax mattercontent are recognized at the beginning of the license period in a foreign jurisdiction relatingwhich programs are made available to a previously disposed business that was accountedthe licensee for as a discontinued operation.exhibition, while the related cash is generally collected over the term of the license period.
-13-
Three Months Ended September 30, 2017CBS Radio
Other
Total
Revenues$300

$—

$300
Costs and expenses: (a)








Operating113

—

113
Selling, general and administrative121

(1)
120
Benefit from valuation allowance(100)
—

(100)
Total costs and expenses134

(1)
133
Operating income166

1

167
Interest expense(21)
—

(21)
Earnings from discontinued operations145

1

146
Income tax (provision) benefit(17)
45

28
Net earnings from discontinued operations, net of tax$128

$46

$174

(a) CBS Radio has been classified as held for sale beginning in the fourth quarter of 2016. Under ASC 360, assets held for sale are not depreciated or amortized.


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

Contract Liabilities
Contract liabilities are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets and totaled $1.15 billion and $1.20 billion at March 31, 2022and December 31, 2021, respectively. For the three months ended March 31, 2022, we recognized revenues of $446 million that were included in deferred revenues at December 31, 2021. For the three months ended March 31, 2021, we recognized revenues of $465 million that were included in deferred revenues at December 31, 2020.

Unrecognized Revenues Under Contract
At March 31, 2022, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts were $6.8 billion, of which $3.0 billion is expected to be recognized for the remainder of 2022, $2.1 billion in 2023, $0.9 billion in 2024, and $0.8 billion thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts, primarily consisting of television 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 contracts disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of advertising contracts, (ii) contracts for which variable consideration is determined based on the customer’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 the 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 our revenue recognition is determined based on our licensees’ subsequent sale to its end customers. As a result, under such arrangements we often satisfy our performance obligation of delivery of our content in advance of revenue recognition. For the three months ended March 31, 2022 and 2021, we recognized revenues of $151 million and $150 million, respectively, for licensing to distributors of transactional video-on-demand and electronic sell-through services and other arrangements for licensing of our content for which our performance obligation was satisfied in a prior period.
-14-
Three Months Ended September 30, 2016CBS Radio
Other
Total
Revenues$317

$—

$317
Costs and expenses:







Operating110

—

110
Selling, general and administrative123

—

123
Depreciation and amortization7

—

7
Total costs and expenses240

—

240
Operating income77

—

77
Other income2

—

2
Earnings from discontinued operations79

—

79
Income tax provision(31)
(36)
(67)
Net earnings (loss) from discontinued operations, net of tax$48

$(36)
$12


Nine Months Ended September 30, 2017CBS Radio
Other
Total
Revenues$856

$—

$856
Costs and expenses: (a)








Operating307

—

307
Selling, general and administrative372

(1)
371
Restructuring charge7

—

7
Provision for valuation allowance980

—

980
Total costs and expenses1,666

(1)
1,665
Operating income (loss)(810)
1

(809)
Interest expense(60)
—

(60)
Earnings (loss) from discontinued operations(870)
1

(869)
Income tax (provision) benefit(47)
45

(2)
Net earnings (loss) from discontinued operations, net of tax$(917)
$46

$(871)
(a) CBS Radio has been classified as held for sale beginning in the fourth quarter of 2016. Under ASC 360, assets held for sale are not depreciated or amortized.
Nine Months Ended September 30, 2016CBS Radio
Other
Total
Revenues$892

$—

$892
Costs and expenses:







Operating298

—

298
Selling, general and administrative359

—

359
Depreciation and amortization20

—

20
Total costs and expenses677

—

677
Operating income215

—

215
Other income2

—

2
Earnings from discontinued operations217

—

217
Income tax provision(88)
(36)
(124)
Net earnings (loss) from discontinued operations, net of tax$129

$(36)
$93


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

6) DEBT
The following table presents the major classes of assets and liabilitiesOur debt consists of the Company’s discontinued operations.following:
AtAt
March 31, 2022December 31, 2021
7.875% Debentures due 2023$139 $139 
7.125% Senior Notes due 202335 35 
3.875% Senior Notes due 2024— 490 
3.70% Senior Notes due 2024— 599 
3.50% Senior Notes due 2025274 597 
4.75% Senior Notes due 20251,242 1,242 
4.0% Senior Notes due 2026793 793 
3.45% Senior Notes due 2026123 123 
2.90% Senior Notes due 2027693 692 
3.375% Senior Notes due 2028496 496 
3.70% Senior Notes due 2028493 493 
4.20% Senior Notes due 2029494 494 
7.875% Senior Debentures due 2030830 830 
4.95% Senior Notes due 20311,224 1,223 
4.20% Senior Notes due 2032973 972 
5.50% Senior Debentures due 2033427 427 
4.85% Senior Debentures due 203487 87 
6.875% Senior Debentures due 20361,070 1,070 
6.75% Senior Debentures due 203775 75 
5.90% Senior Notes due 2040298 298 
4.50% Senior Debentures due 204245 45 
4.85% Senior Notes due 2042488 488 
4.375% Senior Debentures due 20431,125 1,123 
4.875% Senior Debentures due 204318 18 
5.85% Senior Debentures due 20431,233 1,233 
5.25% Senior Debentures due 2044345 345 
4.90% Senior Notes due 2044540 540 
4.60% Senior Notes due 2045590 590 
4.95% Senior Notes due 2050945 944 
5.875% Junior Subordinated Debentures due 2057— 514 
6.25% Junior Subordinated Debentures due 2057643 643 
6.375% Junior Subordinated Debentures due 2062989 — 
Other bank borrowings65 35 
Obligations under finance leases20 16 
Total debt (a)
16,812 17,709 
Less current portion of long-term debt15 11 
Total long-term debt, net of current portion$16,797 $17,698 
 At At
 September 30, 2017 December 31, 2016
Receivables, net $254
   $244
 
Other current assets 101
   61
 
Goodwill 1,285
   1,285
 
Intangible assets 2,832
   2,832
 
Net property and equipment 157
   145
 
Other assets 31
   29
 
Valuation allowance for carrying value (980)   —
 
Total Assets $3,680
   $4,596
 
Current portion of long-term debt $10
   $10
 
Other current liabilities 144
   145
 
Long-term debt 1,355
   1,335
 
Deferred income tax liabilities 1,013
   998
 
Other liabilities 98
   118
 
Total Liabilities $2,620
   $2,606
 
(a) At March 31, 2022 and December 31, 2021, the senior and junior subordinated debt balances included (i) a net unamortized discount of $459 million and $466 million, respectively, and (ii) unamortized deferred financing costs of $97 million and $95 million, respectively. The face value of our total debt was $17.37 billion and $18.27 billion at March 31, 2022 and December 31, 2021, respectively.
The following table presents CBS Radio’s long-term debt.
 At At
 September 30, 2017 December 31, 2016
Term Loan due October 2023, net of discount $947
   $955
 
7.250% Senior Notes due November 2024 400
   400
 
Revolving Credit Facility 36
   10
 
Deferred financing costs (18)   (20) 
Total long-term debt, including current portion $1,365
   $1,345
 
CBS Radio’s senior secured term loan (“Term Loan”) bears interest at a rate equal to 3.50% plusDuring the greaterthree months ended March 31, 2022, we redeemed all of the London Interbank Offered Rate (“LIBOR”) and 1.00%. The Term Loan is partour notes due in 2024, which were comprised of CBS Radio’s credit agreement which also includes a $250 million senior secured revolving credit facility (the “Revolving Credit Facility”) which expires in 2021. Interest on the Revolving Credit Facility is based on either LIBOR or a base rate plus a margin based on CBS Radio’s Consolidated Net Secured Leverage Ratio. The Consolidated Net Secured Leverage Ratio reflects the ratio of CBS Radio’s secured debt (less up to $150$492 million of cash3.875% senior notes and cash equivalents) to CBS Radio’s consolidated EBITDA (as defined in the credit agreement). The Revolving Credit Facility requires CBS Radio to maintain a maximum Consolidated Net Secured Leverage Ratio$600 million of 4.00 to 1.00.

In connection with financing3.70% senior notes, and also redeemed $325 million of our 3.50% senior notes due 2025, for the transaction with Entercom, on March 3, 2017, CBS Radio entered into Amendment No. 1 to its credit agreement, dated as of October 17, 2016, to, among other things, create a tranche of Term B-1 Loans in an aggregate principal amount not to exceed $500redemption price of $1.48 billion. We also redeemed our $520 million of 5.875% junior subordinated debentures due February 2057 at par. These redemptions resulted in a total pre-tax loss on extinguishment of debt of $73 million. The Term B-1 Loans are expected to be funded substantially concurrently with the closing date of the transaction, subject to customary conditions.


-15-



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

4) PROGRAMMING AND OTHER INVENTORY
 At At
 September 30, 2017 December 31, 2016
Acquired program rights $2,087
   $1,773
 
Acquired television library 99
   —
 
Internally produced programming:       
Released 1,799
   1,746
 
In process and other 601
   298
 
Publishing, primarily finished goods 58
   49
 
Total programming and other inventory 4,644
   3,866
 
Less current portion 1,830
   1,427
 
Total noncurrent programming and other inventory $2,814
   $2,439
 

5) RELATED PARTIES
National Amusements, Inc. National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp. 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 September 30, 2017, NAI directly or indirectly owned approximately 79.5% of CBS Corp.’s voting Class A Common Stock, and owned approximately 9.8% 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. As part of its normal course of business, the Company licenses its television content, leases production facilities and sells advertising spots to various subsidiaries of Viacom Inc. Viacom Inc. also distributes certain of the Company’s television programs in the home entertainment market. The Company’s total revenues from these transactions were $38 million and $16 million forDuring the three months ended SeptemberMarch 31, 2022, we issued $1.00 billion of 6.375% junior subordinated debentures due 2062. The interest rate on these debentures will reset on March 30, 20172027, and 2016, respectively,every five years thereafter to a fixed rate equal to the 5-year Treasury Rate (as defined pursuant to the terms of the debentures) plus a spread of 3.999% from March 30, 2027, 4.249% from March 30, 2032 and $1114.999% from March 30, 2047. These debentures can be called by us at par plus a make whole premium any time before March 30, 2027, or at par on March 30, 2027, or at any interest payment date thereafter.

In April 2022, we redeemed the remaining $275 million of our 3.50% senior notes due 2025, and $83$695 million of our 4.75% senior notes due 2025, for the nine months ended September 30, 2017 and 2016, respectively.an aggregate redemption price of $1.01 billion.


The Company places advertisements with and leases production facilities from various subsidiaries of Viacom Inc. The total amounts for these transactions were $4 million and $6 million forDuring the three months ended September 30, 2017 and 2016, respectively, and $13 million and $17 million for the nine months ended September 30, 2017 and 2016, respectively.



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

The following table presents the amounts due from Viacom Inc. in the normal course of business as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September 30, 2017 and DecemberMarch 31, 2016.
 At At
 September 30, 2017 December 31, 2016
Receivables $112
   $113
 
Other assets (Receivables, noncurrent) 20
   35
 
Total amounts due from Viacom Inc.
 $132
   $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 $5 million and $13 million for the three months ended September 30, 2017 and 2016, respectively, and $54 million and $69 million for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017 and December 31, 2016, total amounts due from these joint ventures were $29 million and $47 million, 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.
6) BANK FINANCING AND DEBT
The following table sets forth the Company’s debt.

At At

September 30, 2017 December 31, 2016
Commercial paper
$590



$450

Senior debt (1.95% - 7.875% due 2017 - 2045) (a)

9,039



8,850

Obligations under capital leases
60



75

Total debt
9,689



9,375

Less commercial paper
590



450

Less current portion of long-term debt
19



23

Total long-term debt, net of current portion
$9,080



$8,902

(a) At September 30, 2017 and December 31, 2016, the senior debt balances included (i) a net unamortized discount of $55 million and $52 million, respectively, (ii) unamortized deferred financing costs of $45 million and $43 million, respectively, and (iii) a $2 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 senior debt was $9.14 billion and $8.94 billion at September 30, 2017 and December 31, 2016, respectively.

In July 2017, the Company issued $400 million of 2.50%2021, we redeemed senior notes due 2023 and $500 milliontotaling $1.99 billion, prior to maturity, for an aggregate redemption price of 3.375% senior notes due 2028. The Company used the net proceeds from these issuances to repay its $400 million outstanding 1.95% senior notes that matured on July 1, 2017 and to redeem all of its $300 million outstanding 4.625% senior notes due May 2018. The remaining proceeds were used for general corporate purposes, including the repayment of short-term borrowings, including commercial paper.

The early redemption of the $300 million 4.625% senior notes due May 2018 resulted$2.11 billion resulting in a pre-tax loss on early extinguishment of debt of $5 million ($3 million, net$128 million.

Our 6.25% junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2027, on which date the rate will switch to a floating rate. Under the terms of tax) for the three and nine months ended September 30, 2017.debentures the floating rate is based on three-month LIBOR plus 3.899%, reset quarterly. These debentures can be called by us at par at any time after the expiration of the fixed-rate period.



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


Commercial Paper
The CompanyAt both March 31, 2022 and December 31, 2021, we had no outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $590 million and $450 million at September 30, 2017 and December 31, 2016, respectively, each with maturities of less than 60 days. The weighted average interest rate for these borrowings was 1.44% at September 30, 2017 and 0.98% at December 31, 2016.borrowings.


Credit Facility
At September 30, 2017, the CompanyMarch 31, 2022, we had a $2.5$3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”) which expires in June 2021. 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 September 30, 2017, the Company’s Consolidated Leverage Ratio was approximately 3.0x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in 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. purposes and to support commercial paper borrowings, 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 the time of each borrowing and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based on our senior unsecured debt rating), depending on the type and tenor of the loans entered. The benchmark rate for loans denominated in euros, sterling and yen is based on EURIBOR, SONIA and TIBOR rates, respectively. 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. On February 14, 2022, we amended our Credit Facility to modify the definition of the Consolidated Total Leverage Ratio in the amended credit agreement to allow unrestricted cash and cash equivalents to be netted against Consolidated Indebtedness through June 2024. We met the covenant as of March 31, 2022.

At September 30, 2017, the CompanyMarch 31, 2022, we had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.$3.50 billion.

7) PENSION AND OTHER POSTRETIREMENT BENEFITSOther Bank Borrowings
The componentsAt March 31, 2022 and December 31, 2021, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of net periodic cost for the Company’s pension$65 million and postretirement benefit plans were as follows:$35 million, respectively, each with a weighted average interest rate of 3.50%.
-16-
 Pension Benefits Postretirement Benefits
Three Months Ended September 30,2017 2016 2017 2016
Components of net periodic cost:       
Service cost$7
 $7
 $—
 $—
Interest cost48
 54
 4
 5
Expected return on plan assets(50) (56) —
 —
Amortization of actuarial loss (gain) (a)
26
 21
 (5) (5)
Net periodic cost$31
 $26
 $(1) $—


 Pension Benefits Postretirement Benefits
Nine Months Ended September 30,2017
2016
2017
2016
Components of net periodic cost:       
Service cost$22
 $22
 $—
 $—
Interest cost143
 161
 13
 15
Expected return on plan assets(151) (170) —
 —
Amortization of actuarial loss (gain) (a)
77
 64
 (16) (16)
Net periodic cost$91
 $77
 $(3) $(1)
(a) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.


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

On November 1, 2017, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company will be required to pay and administer pension payments to certain of the Company’s pension plan participants, or their designated beneficiaries, who have been receiving pension payments. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $800 million, representing approximately 20% of the total obligations of the Company’s qualified pension plans, and will be funded with pension plan assets. In connection with this transaction, the Company will record a one-time settlement charge in the fourth quarter of 2017 currently estimated at $365 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. The actual settlement charge could differ from this estimate due to changes in the Company’s actuarial assumptions. Additionally, during the fourth quarter of 2017, the Company expects to make a discretionary contribution of $500 million to prefund its qualified plans, which is expected to be partially funded by long-term borrowings.
8) STOCKHOLDERS’ EQUITY
During the third quarter of 2017, the Company repurchased 3.9 million shares of its Class B Common Stock under its share repurchase program for $250 million, at an average cost of $63.52 per share. During the nine months ended September 30, 2017, the Company repurchased 16.2 million shares of its Class B Common Stock for $1.05 billion, at an average cost of $64.70 per share, leaving $3.06 billion of authorization at September 30, 2017.

During the third quarter of 2017, the Company declared a quarterly cash dividend of $.18 on its Class A and Class B Common Stock, resulting in total dividends of $73 million, which were paid on October 1, 2017.
Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in the components of accumulated other comprehensive loss.
 
Cumulative
Translation
Adjustments
 
Net Actuarial
Loss and Prior
Service Cost
 
Accumulated
Other
Comprehensive Loss
At December 31, 2016$151
 $(918)  $(767) 
Other comprehensive income before reclassifications4
 —
  4
 
Reclassifications to net earnings—
 37
(a) 
 37
 
Net other comprehensive income4
 37

 41
 
At September 30, 2017$155
 $(881)
 $(726) 
 
Cumulative
Translation
Adjustments
 
Net Actuarial
Loss and Prior
Service Cost
 
Accumulated
Other
Comprehensive Loss
At December 31, 2015$152
 $(922)  $(770) 
Other comprehensive income before reclassifications2
 —
  2
 
Reclassifications to net earnings—
 29
(a) 
 29
 
Net other comprehensive income2
 29
  31
 
At September 30, 2016$154
 $(893)  $(739) 
(a)Reflects amortization of net actuarial losses. See Note 7.

The net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income is net of a tax provision of $24 million and $19 million for the nine months ended September 30, 2017 and 2016, respectively.


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

9) INCOME TAXES
The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.
 Three Months Ended September 30,
Nine Months Ended September 30,
 2017
2016
2017
2016
Provision for income taxes, including interest and before
other discrete items
$(187) $(207) $(548) $(581)
Excess tax benefits from stock-based compensation (a)
10

—

41

—
Other discrete items (b)
5

62

28

57
Provision for income taxes$(172)
$(145)
$(479)
$(524)
Effective income tax rate28.4%
23.2%
26.7%
28.4%
(a) Reflects excess tax benefits associated with the exercise 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 income tax provision on the statement of operations. Previously, such difference was recognized in stockholders’ equity on the balance sheet. This difference occurs because stock-based compensation expense is recorded 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 nine months ended September 30, 2017, primarily reflects tax benefits from the resolution of certain state income tax matters. For the three and nine months ended September 30, 2016, primarily reflects a one-time tax benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.

10) COMMITMENTS AND CONTINGENCIES
Guarantees
The Company has 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 September 30, 2017, the outstanding letters of credit and surety bonds approximated $99 million and were not recorded on the Consolidated Balance Sheet.

In the course of its business, the Company both provides and receives indemnities which are intended to allocate certain risks associated with business transactions. Similarly, the Company 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 records a liability for its indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters
General. On an ongoing basis, the Company vigorously defends itself in numerous lawsuits and proceedings and responds to various investigations and inquiries from federal, state, local and international authorities (collectively, ‘‘litigation’’). Litigation may be brought against the Company without merit, is inherently uncertain and always difficult to predict. However, based on its understanding and evaluation of the relevant facts and circumstances, the Company believes that the below-described legal matters and other litigation to which it is a party are not likely, in the aggregate, to have a material adverse effect on its results of operations, financial position or cash flows. Under the Separation Agreement between the Company and Viacom Inc., the Company and Viacom Inc. have agreed to defend and indemnify the other in certain litigation in which the Company and/or Viacom Inc. is named.


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

Claims Related to Former Businesses: Asbestos. The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred principally as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally 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 September 30, 2017, the Company had pending approximately 32,760 asbestos claims, as compared with approximately 33,610 as of December 31, 2016 and 34,400 as of September 30, 2016. During the third quarter of 2017, the Company received approximately 720 new claims and closed or moved to an inactive docket approximately 1,200 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. In 2016, the Company’s costs for settlement and defense of asbestos claims after insurance and taxes were approximately $48 million. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement and defense of asbestos claims by approximately $5 million. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

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.


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

11) RESTRUCTURING CHARGES
During the year ended December 31, 2016, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $30 million, reflecting $19 million of severance costs and $11 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2015, the Company recorded restructuring charges of $45 million, reflecting $24 million of severance costs and $21 million of costs associated with exiting contractual obligations and other related costs. As of September 30, 2017, the cumulative settlements for the 2016 and 2015 restructuring charges were $57 million, of which $37 million was for severance costs and $20 million was for costs associated with contractual obligations.
 Balance at 2017 Balance at
 December 31, 2016 Settlements September 30, 2017
Entertainment $20
   $(12)   $8
 
Cable Networks 4
   (2)   2
 
Publishing 1
   (1)   —
 
Local Media 12
   (5)   7
 
Corporate 2
   (1)   1
 
Total $39
   $(21)   $18
 
 Balance at 2016 2016 Balance at
 December 31, 2015 Charges Settlements December 31, 2016
Entertainment $16
   $16
   $(12)   $20
 
Cable Networks —
   4
   —
   4
 
Publishing —
   1
   —
   1
 
Local Media 11
   6
   (5)   12
 
Corporate —
   3
   (1)   2
 
Total $27
   $30
   $(18)   $39
 
12)7) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
The Company’s carrying value of our financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value.debentures. At September 30, 2017March 31, 2022 and December 31, 2016,2021, the carrying value of the Company’s senior debtour notes and debentures was $9.04$16.73 billion and $8.85$17.66 billion, respectively, and the fair value, which is estimateddetermined based on quoted market prices for similar liabilitiesin active markets (Level 2) and includes accrued interest,1 in the fair value hierarchy) was $9.85$18.2 billion and $9.51$21.5 billion, respectively.


The Company uses derivative financial instruments primarily to modify its exposure to market risks from fluctuationscarrying value of our investments without a readily determinable fair value for which we have no significant influence was $58 million and $59 million at March 31, 2022 and December 31, 2021, respectively. These investments are included in foreign currency exchange rates. The Company does not use derivative instruments unless there is an underlying exposure and, therefore,“Other assets” on the Company does not hold or enter into derivative financial instruments for speculative trading purposes.Consolidated Balance Sheets.


Foreign Exchange Contracts

We use derivative financial instruments primarily to modify our exposure to market risks from fluctuations in foreign currency exchange rates. We do not use derivative instruments unless there is an underlying exposure and therefore we do not hold or enter into derivative financial instruments for speculative trading purposes.

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. Additionally, we enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At March 31, 2022 and December 31, 2021, the notional amount of all foreign exchange contracts was $2.37 billion and $1.94 billion, respectively. At March 31, 2022, $1.67 billion related to future production costs and $695 millionrelated to our foreign currency balances and other expected foreign currency cash flows. At December 31, 2021, $1.38 billion related to future production costs and $564 millionrelated to our foreign currency balances and other expected foreign currency cash flows.

Gains or lossesrecognized on the effective portionderivative financial instruments were as follows:
Three Months Ended
March 31,
20222021Financial Statement Account
Non-designated foreign exchange contracts$2 $1 Other items, net
The fair value of designated cash flow hedges are initially recorded in other comprehensive income and reclassifiedour derivative instruments was not material to the statementConsolidated Balance Sheets for any of operations when the hedgedperiods presented.


-17-



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

Fair Value Measurements
item is recognized. Additionally, the Company enters into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At September 30, 2017Certain of our assets and December 31, 2016, the notional amount of all foreign exchange contracts was $379 million and $433 million, respectively.
Gains (losses) recognized on derivative financial instruments were as follows:
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
 2017 2016 2017 2016Financial Statement Account
Non-designated foreign exchange contracts$(9) $4
 $(29) $13
Other items, net
Theliabilities are measured at fair value of the Company’s derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.
on a recurring basis. The following tables set forth the Company’stable below presents our assets and liabilities measured at fair value on a recurring basis at September 30, 2017March 31, 2022 and December 31, 2016.2021. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’sour own assumptions about the assumptions that market participants would use in pricing the asset or liability.
At September 30, 2017Level 1 Level 2 Level 3 Total
Assets:       
Foreign currency hedges$—
 $6
 $—
 $6
Total Assets$—
 $6
 $—
 $6
Liabilities:       
Deferred compensation$—
 $347
 $—
 $347
Foreign currency hedges—
 11
 —
 11
Total Liabilities$—
 $358
 $—
 $358
At December 31, 2016Level 1 Level 2 Level 3 Total
Assets:       
Foreign currency hedges$—
 $34
 $—
 $34
Total Assets$—
 $34
 $—
 $34
Liabilities:       
Deferred compensation$—
 $324
 $—
 $324
Foreign currency hedges—
 1
 —
 1
Total Liabilities$—
 $325
 $—
 $325
All of our assets and liabilities that are measured at fair value on a recurring basis use level 2 inputs. 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.
AtAt
March 31, 2022December 31, 2021
Assets:
Foreign currency hedges$27 $23 
Total Assets$27 $23 
Liabilities:
Deferred compensation$383 $435 
Foreign currency hedges27 29 
Total Liabilities$410 $464 
8) 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 variable interest entity (“VIE”). In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE, and have the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The following tables present the amounts recorded in our consolidated financial statements related to our consolidated VIEs.
AtAt
March 31, 2022December 31, 2021
Total assets$1,606 $1,578 
Total liabilities$285 $184 
Three Months Ended
March 31,
20222021
Revenues$103 $71 
Operating income (loss)$(28)$5 

-18-


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

9) STOCKHOLDERS’ EQUITY
13) REPORTABLE SEGMENTSStock Offerings
On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses.

Mandatory Convertible Preferred Stock
Unless earlier converted, each share of Mandatory Convertible Preferred Stock will automatically and mandatorily convert on the mandatory conversion date, expected to be April 1, 2024, into between 1.0013 and 1.1765 shares of our Class B Common Stock, subject to customary antidilution adjustments. The number of shares of Class B Common Stock issuable upon conversion will be determined based on the average of the volume-weighted average price per share of our Class B Common Stock over the 20 consecutive trading day period commencing on, and including, the 21st scheduled trading day immediately preceding April 1, 2024. Holders of the Mandatory Convertible Preferred Stock (“Holders”) have the right to convert all or any portion of their shares of Mandatory Convertible Preferred Stock at any time prior to April 1, 2024 at the minimum conversion rate of 1.0013 shares of our Class B Common Stock. In addition, the conversion rate applicable to such an early conversion may, in certain circumstances, be increased to compensate Holders for certain unpaid accumulated dividends. However, if a fundamental change (as defined in the Certificate of Designations governing the Mandatory Convertible Preferred Stock) occurs on or prior to April 1, 2024, then Holders will, in certain circumstances, be entitled to convert all or a portion of their shares of Mandatory Convertible Preferred Stock at an increased conversion rate for a specified period of time and receive an amount to compensate them for unpaid accumulated dividends and any remaining future scheduled dividend payments.

The Mandatory Convertible Preferred Stock is not redeemable. However, at our option, we may purchase or otherwise acquire (including in an exchange transaction) the Mandatory Convertible Preferred Stock from time to time in the open market, by tender or exchange offer or otherwise, without the consent of, or notice to, Holders. Holders have no voting rights, with certain exceptions.

If declared, dividends on the Mandatory Convertible Preferred Stock are payable quarterly through April 1, 2024. Dividends on the Mandatory Convertible Preferred Stock accumulate from the most recent dividend payment date, and will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee thereof, at an annual rate of 5.75% of the liquidation preference of $100 per share, payable in cash or, subject to certain limitations, by delivery of shares of Class B Common Stock or through any combination of cash and shares of Class B Common Stock, at our election. If we have not declared any portion of the accumulated and unpaid dividends by April 1, 2024, the conversion rate will be adjusted so that Holders receive an additional number of shares of our Class B Common Stock, with certain limitations.

Dividends
We declared cash dividends of $.24 per share on our Class A and Class B Common Stock, during the three months ended March 31, 2022 and 2021, resulting in total dividends of $159 million and $152 million, respectively.

During the first quarter of 2022 we declared a quarterly cash dividend of $1.4375 per share on our Mandatory Convertible Preferred Stock, resulting in total dividends of $14.4 million. During the three months ended
-19-


PARAMOUNT GLOBAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
March 31, 2021, we recorded dividends of $1 million on our Mandatory Convertible Preferred Stock, representing dividends accumulated from the issuance on March 26 through March 31, 2021.

Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in the components of accumulated other comprehensive loss.
Continuing OperationsDiscontinued Operations
Cumulative
Translation
Adjustments		Net Actuarial
Loss and Prior
Service Cost
Other Comprehensive Income (Loss) (a)
Accumulated
Other
Comprehensive Loss
At December 31, 2021$(445)$(1,434)$(23)$(1,902)
Other comprehensive income (loss)
before reclassifications		(40)— 2 (38)
Reclassifications to net earnings— 16 (b)— 16 
Other comprehensive income (loss)(40)16 2 (22)
At March 31, 2022$(485)$(1,418)$(21)$(1,924)
Continuing OperationsDiscontinued Operations
Cumulative
Translation
Adjustments		Net Actuarial
Loss and Prior
Service Cost
Other Comprehensive Income (Loss) (a)
Accumulated
Other
Comprehensive Loss
At December 31, 2020$(303)$(1,509)$(20)$(1,832)
Other comprehensive income (loss)
before reclassifications		(65)— 2 (63)
Reclassifications to net earnings— 13 (b)— 13 
Other comprehensive income (loss)(65)13 2 (50)
At March 31, 2021$(368)$(1,496)$(18)$(1,882)
(a) Reflects cumulative translation adjustments.
(b) Reflects amortization of net actuarial losses (see Note 11).
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 benefit of $5 million for each of the three-month periods ended March 31, 2022 and 2021.
10) 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. For the three months endedMarch 31, 2022, we recorded a provision for income taxes of $34 million, reflecting an effective income tax rate of 7.2%. Included in the provision for income taxes is a net discrete tax benefit of $78 million primarily resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. This item, together with a net tax benefit of $25 million on other items identified as affecting the comparability of our results during the period, which include a loss on extinguishment of debt, restructuring and other corporate matters, and gains on sales, decreased our effective income tax rate by 16.2 percentage points.

For the three months ended March 31, 2021, we recorded a provision for income taxes of $226 million, reflecting an effective income tax rate of 19.6%. Included in the provision for income taxes is a discrete tax benefit of $21 million primarily consisting of tax benefits from the resolution of certain state income tax matters and excess tax
-20-


PARAMOUNT GLOBAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
benefits from the vesting or exercise of stock-based compensation awards. This item, together with a net tax benefit of $25 million on other items identified as affecting the comparability of our results during the period, which include a loss on the extinguishment of debt and a gain from an investment, reduced our effective income tax rate by 1.9 percentage points.
The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and local and foreign jurisdictions. For periods prior to the merger of Viacom Inc. (“Viacom”) with and into CBS Corporation (“CBS”) (the “Merger”), Viacom and CBS filed separate tax returns. For CBS, we are currently under examination by the IRS for the 2017 and 2018 tax years. For Viacom, we are currently under examination by the IRS for the 2016 through 2019 tax years. 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, we currently do not believe that it is reasonably possible that the reserve for uncertain tax positions will significantly change within the next 12 months; however, it is difficult to predict the final outcome or timing of resolution of any particular tax matter and events could cause our current expectation to change in the future.
11) PENSION AND OTHER POSTRETIREMENT BENEFITS
The following table presents the components of net periodic cost for our pension and postretirement benefit plans.
Pension BenefitsPostretirement Benefits
Three Months Ended March 31,2022202120222021
Components of net periodic cost (a):
Interest cost$38 $36 $2 $2 
Expected return on plan assets(43)(47)— — 
Amortization of actuarial loss (gain) (b)
24 24 (3)(3)
Net periodic cost$19 $13 $(1)$(1)
(a) Amounts reflect our domestic plans only.
(b) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.
12) REDEEMABLE NONCONTROLLING INTERESTS
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” on the Consolidated Balance Sheets. The activity reflected within redeemable noncontrolling interest for the three months ended March 31, 2022 and 2021 is presented below.
Three Months Ended
March 31,
20222021
Beginning balance$107 $197 
Net earnings2 2 
Distributions(3)(1)
Translation adjustment(5)2 
Redemption value adjustment4 (11)
Ending balance$105 $189 
-21-


PARAMOUNT GLOBAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
13) SEGMENT INFORMATION
The tables below set forth the Company’sour financial performanceinformation by reportable segment. The Company’sOur operating segments, which are the same as itsour reportable segments, have been determined in accordance with the Company’sour internal management structure, which is organized based upon products and services. Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in the changes described below. Prior period results have been recast to conform to these presentation changes.
Management Structure Change
Our management structure has been reorganized to focus on managing our business as the combination of three parts: a traditional media business, a portfolio of global direct-to-consumer streaming services, and a film studio. As a result, we realigned our operating segments and accordingly, beginning in the first quarter of 2022, and for all periods presented we are reporting results based on the segments in the tables below (see Note 1 for a description of each operating segment). In connection with the management structure change, we also reassessed our reporting units and reallocated goodwill from the reporting units that existed prior to the change, to the new reporting units, using a relative fair value approach. We performed goodwill impairment tests as of January 1, 2022 on both the reporting units in place prior to the change and the new reporting units and concluded that the estimated fair values of each of the reporting units exceeded their respective carrying values and therefore no impairment charge was necessary.
Intercompany License Fees
Concurrent with the change to our operating segments, we changed the way we record intersegment content licensing. Under our previous segment structure, management evaluated the results of our segments including intersegment content licensing at market value as if the sales were to third parties. Therefore, the licensor segment recorded intercompany license fee revenues and profits and the licensee segment recorded production costs in the amount of the license fee charged by the licensor, which generally reflected the cost to the Company plus a margin. The intercompany revenues and the margin embedded in the cost to the licensee were eliminated in consolidation.
Under our new segment structure, management evaluates the results of the segments using an allocation of the total cost of content from the licensor segment to each licensee segment utilizing the content. As a result, content costs are allocated across segments based on the relative value of the distribution windows within each segment. The allocation is recorded by the licensor segment as a reduction of content cost and no intersegment licensing revenues or profits are recorded.

-22-


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

Three Months Ended Nine Months Ended

September 30, September 30,

2017 2016
2017 2016
Revenues:










Entertainment$1,815

$1,949

$6,346

$6,483
Cable Networks840

598

1,954

1,659
Publishing228

226

595

558
Local Media397
 409
 1,218
 1,253
Corporate/Eliminations(109)
(98)
(342)
(305)
Total Revenues$3,171

$3,084

$9,771

$9,648
Three Months Ended
March 31,
20222021
Revenues:
Advertising$2,521 $2,888 
Affiliate and subscription2,098 2,083 
Licensing and other1,026 1,022 
TV Media5,645 5,993 
Advertising347 218 
Subscription742 380 
Direct-to-Consumer1,089 598 
Advertising2 6 
Theatrical131 1 
Licensing and other491 853 
Filmed Entertainment624 860 
Eliminations(30)(39)
Total Revenues$7,328 $7,412 
Revenues generated between segments primarily reflectare principally from intersegment arrangements for the distribution of content, rental of studio space, and advertising, sales, televisionas well as licensing revenues earned from third parties who license fees and station affiliation fees.our content to our internal platforms either through a sub-license or co-production arrangement. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.
Three Months Ended
March 31,
20222021
Intercompany Revenues:
TV Media$11 $14 
Filmed Entertainment19 25 
Total Intercompany Revenues$30 $39 
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Intercompany Revenues:       
Entertainment$111
 $102
 $348
 $316
Local Media4
 2
 10
 6
Total Intercompany Revenues$115
 $104
 $358
 $322
We present operating income excluding depreciation and amortization, stock-based compensation, costs for restructuring and other corporate matters 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 since it is the primary method used by our management. 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.

-23-



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

Three Months Ended
March 31,
20222021
Adjusted OIBDA:
TV Media$1,544 $1,765 
Direct-to-Consumer(456)(149)
Filmed Entertainment(37)179 
Corporate/Eliminations(104)(116)
Stock-based compensation(34)(52)
Depreciation and amortization(96)(99)
Restructuring and other corporate matters(57)— 
Gain on sales15 — 
Operating income775 1,528 
Interest expense(240)(259)
Interest income21 13 
Loss on extinguishment of debt(73)(128)
Other items, net(13)1 
Earnings from continuing operations before income taxes and
    equity in loss of investee companies		470 1,155 
Provision for income taxes(34)(226)
Equity in loss of investee companies, net of tax(37)(18)
Net earnings from continuing operations399 911 
Net earnings from discontinued operations, net of tax42 12 
Net earnings (Paramount and noncontrolling interests)441 923 
Net earnings attributable to noncontrolling interests(8)(12)
Net earnings attributable to Paramount$433 $911 
The Company presents operating income (loss) excluding restructuring charges
AtAt
March 31, 2022December 31, 2021
Assets:
TV Media$38,471 $38,491 
Direct-to-Consumer6,008 5,545 
Filmed Entertainment
7,586 7,472 
Corporate/Eliminations4,567 5,552 
Discontinued Operations1,411 1,560 
Total Assets$58,043 $58,620 
14) COMMITMENTS AND CONTINGENCIES
Guarantees
Letters of Credit and other operating items, net, each where applicable, (“Segment Operating Income”)Surety Bonds
We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the primary measurenormal course of profitbusiness. At March 31, 2022, the outstanding letters of credit and loss for its operating segments in accordance with FASB guidance for segment reporting. The Company believessurety bonds approximated $177 million and were not recorded on the presentation of Segment Operating Income is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company’s management and enhances their ability to understand the Company’s operating performance.Consolidated Balance Sheet.

-24-
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Segment Operating Income (Loss):       
Entertainment$345
 $348
 $1,089
 $1,148
Cable Networks294
 285
 795
 740
Publishing46
 44
 88
 83
Local Media105
 122
 355
 402
Corporate(83) (78) (247) (245)
Total Segment Operating Income707
 721
 2,080
 2,128
Other operating items, net (a)
—
 —
 —
 9
Operating income707

721

2,080

2,137
Interest expense(116) (104) (336) (304)
Interest income17
 7
 45
 22
Loss on early extinguishment of debt(5) —
 (5) —
Other items, net3
 —
 9
 (7)
Earnings from continuing operations before income taxes
and equity in loss of investee companies
606
 624
 1,793
 1,848
Provision for income taxes(172) (145) (479) (524)
Equity in loss of investee companies, net of tax(16) (13) (45) (43)
Net earnings from continuing operations418
 466
 1,269
 1,281
Net earnings (loss) from discontinued operations, net of tax174
 12
 (871) 93
Net earnings$592
 $478
 $398
 $1,374

(a) Other operating items, net includes a gain from the sale of an internet business in China and a multiyear, retroactive impact of a new operating tax.
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Depreciation and Amortization:       
Entertainment$29

$28

$85

$88
Cable Networks5

6

17

17
Publishing2

1

5

4
Local Media11
 11
 34
 33
Corporate8

8

25

26
Total Depreciation and Amortization$55

$54

$166

$168


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

CBS Television City
In connection with the sale of the CBS Television City property and sound stage operation (“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 March 31, 2022 is a liability totaling $50 million, reflecting the present value of the estimated amount remaining under the guarantee obligation.

Lease Guarantees
We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc. These lease commitments totaled $46 million at March 31, 2022 and are presented within “Other liabilities” on the Consolidated Balance Sheet. The amount of lease commitments varies over time depending on the 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.

Other
In the course of our business, we both provide and receive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, we may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters
General
On an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation”). Litigation may be brought against us without merit, is inherently uncertain and always difficult to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the 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 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 the Company as nominal defendant. The Complaint alleges breaches of fiduciary duties to CBS stockholders in
-25-
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Stock-based Compensation:       
Entertainment$16
 $16
 $48
 $47
Cable Networks3
 3
 9
 9
Publishing1
 1
 3
 3
Local Media3
 3
 9
 9
Corporate21
 19
 60
 55
Total Stock-based Compensation$44
 $42
 $129
 $123


 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Capital Expenditures:       
Entertainment$25

$23

$63

$60
Cable Networks5

4

12

8
Publishing1

1

2

7
Local Media8
 9
 20
 20
Corporate5
 5
 15
 16
Total Capital Expenditures$44
 $42
 $112
 $111
 At At
 September 30, 2017 December 31, 2016
Assets:       
Entertainment $12,149
   $11,262
 
Cable Networks 3,015
   2,618
 
Publishing 895
   880
 
Local Media 4,006
   4,065
 
Corporate/Eliminations 149
   817
 
Discontinued operations 3,680
   4,596
 
Total Assets $23,894
   $24,238
 



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

14) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
CBS Operations Inc. is a wholly owned subsidiaryconnection with the negotiation and approval of the Company.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 1 disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

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 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 is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters
As announced on August 1, 2018, the CBS Operations Inc. has fullyBoard 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 unconditionally guaranteedChief Executive Officer, Leslie Moonves, CBS Corp.’sNews 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, with respect to the termination of Mr. Moonves’ employment. We have received subpoenas or requests for information from the New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related 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 debt securities.executives and members of the CBS Board of Directors. The following condensed consolidating financial statements present the resultsconsolidated action is stated to be on behalf of operations, financial position and cash flowspurchasers of CBS Corp., CBS Operations Inc.,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 directdefendants’ purported violations of the federal securities laws, including by allegedly making materially false and indirect Non-Guarantor Affiliatesmisleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of CBS Corp.the Securities Exchange Act of 1934 and CBS Operations Inc., andRule 10b-5 promulgated thereunder. On April 12, 2019, the eliminations necessarydefendants filed motions to arrive at the information for the Company on a consolidated basis.dismiss this
-26-
 Statement of Operations
 For the Three Months Ended September 30, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$40
 $3
 $3,128
 $—
 $3,171
Costs and expenses:         
Operating23
 1
 1,838
 —
 1,862
Selling, general and administrative22
 62
 463
 —
 547
Depreciation and amortization1
 6
 48
 —
 55
Total costs and expenses46
 69
 2,349
 —
 2,464
Operating income (loss)(6) (66) 779
 —
 707
Interest (expense) income, net(129) (123) 153
 —
 (99)
Loss on early extinguishment of debt(5) —
 —
 —
 (5)
Other items, net—
 (8) 11
 —
 3
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(140) (197) 943
 —
 606
Benefit (provision) for income taxes43
 62
 (277) —
 (172)
Equity in earnings (loss) of investee companies, net of tax689
 369
 (16) (1,058) (16)
Net earnings from continuing operations592
 234
 650
 (1,058) 418
Net earnings from discontinued operations, net of tax—
 —
 174
 —
 174
Net earnings$592
 $234
 $824
 $(1,058) $592
Total comprehensive income$607

$229

$830

$(1,059) $607




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

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 have reached an agreement with the plaintiffs to settle the lawsuit. The settlement, which includes no admission of liability or wrongdoing by the Company, is subject to court approval. All amounts payable by the Company under the settlement will be paid by the Company’s insurers.

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 other defendants filed a motion to dismiss the matter, which was denied by the court on November 6, 2020. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of liability or wrongdoing by the Company, will be subject to court approval.

Litigation Related to Stock Offerings
On August 13, 2021, Camelot Event Driven Fund filed a putative securities class action lawsuit in New York Supreme Court, County of New York, and on November 5, 2021, an amended complaint was filed that, among other changes, added an additional named plaintiff (the “Complaint”). The Complaint is purportedly on behalf of investors who purchased shares of the Company’s Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock pursuant to public securities offerings completed in March 2021, and was filed against the Company, certain senior executives, members of our Board of Directors, and the underwriters involved in the offerings. The Complaint asserts violations of federal securities law and alleges that the offering documents contained material misstatements and omissions, including through an alleged failure to adequately disclose certain total return swap transactions involving Archegos Capital Management referenced to our securities and related alleged risks to the Company’s stock price. On December 22, 2021, the plaintiffs filed a stipulation seeking the voluntary dismissal without prejudice of the outside director defendants from the lawsuit, which the Court subsequently ordered. On the same date, the defendants filed motions to dismiss the lawsuit, which are pending. The complaint seeks unspecified compensatory damages, as well as other relief. We believe that the claims are without merit and intend to defend against them vigorously.

-27-
 Statement of Operations
 For the Nine Months Ended September 30, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$124
 $8
 $9,639
 $—
 $9,771
Costs and expenses:         
Operating69
 4
 5,867
 —
 5,940
Selling, general and administrative65
 194
 1,326
 —
 1,585
Depreciation and amortization3
 18
 145
 —
 166
Total costs and expenses137
 216
 7,338
 —
 7,691
Operating income (loss)(13) (208) 2,301
 —
 2,080
Interest (expense) income, net(378) (360) 447
 —
 (291)
Loss on early extinguishment of debt(5) —
 —
 —
 (5)
Other items, net1
 (33) 41
 —
 9
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(395) (601) 2,789
 —
 1,793
Benefit (provision) for income taxes120
 184
 (783) —
 (479)
Equity in earnings (loss) of investee companies, net of tax673
 1,062
 (45) (1,735) (45)
Net earnings from continuing operations398
 645
 1,961
 (1,735) 1,269
Net loss from discontinued operations, net of tax—
 —
 (871) —
 (871)
Net earnings$398
 $645
 $1,090
 $(1,735) $398
Total comprehensive income$439

$633

$1,111

$(1,744) $439





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

Litigation Related to the Proposed Sale of Simon & Schuster
On November 2, 2021, the U.S. Department of Justice (the “DOJ”) filed suit in the United States District Court for the District of Columbia to block our sale of the Simon & Schuster business to Penguin Random House (the “Transaction”) pursuant to a Share Purchase Agreement (“Purchase Agreement”), dated November 24, 2020, between the Company, certain of its subsidiaries, Penguin Random House and Bertelsmann SE & Co. KGaA. The DOJ asserts that the sale of Simon & Schuster would reduce competition for the acquisition of titles. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the part of Penguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a $200 million termination fee payable to the Company in certain circumstances in the event the Transaction does not close for regulatory reasons. We and the other defendants believe the DOJ’s claims are without merit, and we intend to defend against them vigorously.

Claims Related to Former Businesses: Asbestos
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. We 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 our products is the basis of a claim. Claims against us in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines and 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. We do not report as pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of March 31, 2022, we had pending approximately 26,760 asbestos claims, as compared with approximately 27,770 as of December 31, 2021. During the first quarter of 2022, we received approximately 750 new claims and closed or moved to an inactive docket approximately 1,760 claims. We report claims as closed when we become aware that a dismissal order has been entered by a court or when we 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. Our total costs for the years 2021 and 2020 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $63 million and $35 million, respectively. Our costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against 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 a liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are sufficient to cover our asbestos liabilities. Our liability estimate is based upon many factors, 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
-28-
 Statement of Operations
 For the Three Months Ended September 30, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$42
 $3
 $3,039
 $—
 $3,084
Costs and expenses:         
Operating16
 1
 1,771
 —
 1,788
Selling, general and administrative20
 62
 439
 —
 521
Depreciation and amortization2
 6
 46
 —
 54
Total costs and expenses38
 69
 2,256
 —
 2,363
Operating income (loss)4
 (66) 783
 —
 721
Interest (expense) income, net(129) (109) 141
 —
 (97)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(125) (175) 924
 —
 624
Benefit (provision) for income taxes43
 60
 (248) —
 (145)
Equity in earnings (loss) of investee companies, net of tax560
 327
 (13) (887) (13)
Net earnings from continuing operations478
 212
 663
 (887) 466
Net earnings (loss) from discontinued operations, net of tax—
 (1) 13
 —
 12
Net earnings$478
 $211
 $676
 $(887) $478
Total comprehensive income$489
 $215
 $675
 $(890) $489




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

filing of new claims, as well as consultation with a third party firm on trends that may impact our future asbestos liability.

Other
From time to time we receive claims from federal and state environmental regulatory agencies and other entities asserting that we are or may be liable for environmental cleanup costs and related damages principally relating to our historical and predecessor operations. In addition, from time to time we receive personal injury claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations and predecessors.
15) SUPPLEMENTAL FINANCIAL INFORMATION
Supplemental Cash Flow Information
Three Months Ended
March 31,
20222021
Cash paid for interest$292 $316 
Cash paid (received) for income taxes:
Continuing operations$45 $(23)
Discontinued operations$5 $— 
Noncash additions to operating lease assets$68 $5 
Lease Income
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, including both fixed and variable amounts, of $15 million and $36 million for the three months ended March 31, 2022 and 2021, respectively. The decrease reflects the sales of a production facility and an office building during the fourth quarter of 2021.

Restructuring
During the three months ended March 31, 2022, we recorded restructuring charges of $18 million within the Filmed Entertainment segment, consisting of severance costs primarily associated with changes in management.

At March 31, 2022 and December 31, 2021, our restructuring liability was $156 million and $190 million, respectively, and was recorded in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets. During the three months ended March 31, 2022, we made payments for restructuring of $44 million. The liability at March 31, 2022, which principally relates to severance payments, is expected to be substantially paid by the end of 2023.
-29-
 Statement of Operations
 For the Nine Months Ended September 30, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Revenues$125
 $9
 $9,514
 $—
 $9,648
Costs and expenses:         
Operating48
 4
 5,766
 —
 5,818
Selling, general and administrative62
 194
 1,278
 —
 1,534
Depreciation and amortization4
 17
 147
 —
 168
Other operating items, net—
 —
 (9) —
 (9)
Total costs and expenses114
 215
 7,182
 —
 7,511
Operating income (loss)11
 (206) 2,332
 —
 2,137
Interest (expense) income, net(377) (319) 414
 —
 (282)
Other items, net(2) 3
 (8) —
 (7)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies(368) (522) 2,738
 —
 1,848
Benefit (provision) for income taxes120
 170
 (814) —
 (524)
Equity in earnings (loss) of investee companies, net of tax1,622
 876
 (43) (2,498) (43)
Net earnings from continuing operations1,374
 524
 1,881
 (2,498) 1,281
Net earnings (loss) from discontinued operations, net of tax—
 (1) 94
 —
 93
Net earnings$1,374
 $523
 $1,975
 $(2,498) $1,374
Total comprehensive income$1,405
 $540
 $1,965
 $(2,505) $1,405



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

 Balance Sheet
 At September 30, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Assets         
Cash and cash equivalents$18
 $—
 $126
 $—
 $144
Receivables, net24
 1
 3,573
 —
 3,598
Programming and other inventory3
 3
 1,824
 —
 1,830
Prepaid expenses and other current assets8
 25
 370
 (36) 367
Current assets of discontinued operations—
 —
 355
 —
 355
Total current assets53
 29
 6,248
 (36) 6,294
Property and equipment48
 207
 2,746
 —
 3,001
Less accumulated depreciation and amortization27
 158
 1,608
 —
 1,793
Net property and equipment21
 49
 1,138
 —
 1,208
Programming and other inventory3
 5
 2,806
 —
 2,814
Goodwill98
 62
 4,731
 —
 4,891
Intangible assets—
 —
 2,617
 —
 2,617
Investments in consolidated subsidiaries45,155
 14,915
 —
 (60,070) —
Other assets154
 8
 2,583
 —
 2,745
Intercompany—
 1,331
 28,353
 (29,684) —
Assets of discontinued operations—
 —
 3,325
 —
 3,325
Total Assets$45,484
 $16,399
 $51,801
 $(89,790) $23,894
Liabilities and Stockholders’ Equity         
Accounts payable$1
 $3
 $229
 $—
 $233
Participants’ share and royalties payable—
 —
 997
 —
 997
Program rights4
 3
 502
 —
 509
Commercial paper590
 —
 —
 —
 590
Current portion of long-term debt2
 —
 17
 —
 19
Accrued expenses and other current liabilities374
 219
 993
 (36) 1,550
Current liabilities of discontinued operations—
 —
 154
 —
 154
Total current liabilities971
 225
 2,892
 (36) 4,052
Long-term debt8,991
 —
 89
 —
 9,080
Other liabilities2,844
 237
 2,221
 —
 5,302
Liabilities of discontinued operations—
 —
 2,466
 —
 2,466
Intercompany29,684
 —
 —
 (29,684) —
Stockholders’ Equity:         
Preferred stock—
 —
 126
 (126) —
Common stock1
 123
 590
 (713) 1
Additional paid-in capital43,830
 —
 60,894
 (60,894) 43,830
Retained earnings (accumulated deficit)(18,859) 16,128
 (12,748) (3,380) (18,859)
Accumulated other comprehensive income (loss)(726) 17

71

(88) (726)
 24,246
 16,268
 48,933
 (65,201) 24,246
Less treasury stock, at cost21,252
 331
 4,800
 (5,131) 21,252
Total Stockholders’ Equity2,994
 15,937
 44,133
 (60,070) 2,994
Total Liabilities and Stockholders’ Equity$45,484
 $16,399
 $51,801
 $(89,790) $23,894


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 (accumulated 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 Nine Months Ended September 30, 2017
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(851) $(180) $2,018
 $—
 $987
Investing Activities:         
Acquisitions (including acquired television library)—
 —
 (258) —
 (258)
Capital expenditures—
 (15) (97) —
 (112)
Investments in and advances to investee companies—
 —
 (67) —
 (67)
Proceeds from sale of investments—
 —
 10
 —
 10
Proceeds from dispositions—
 —
 11
 —
 11
Other investing activities17
 —
 —
 —
 17
Net cash flow provided by (used for) investing activities from continuing operations17
 (15) (401) —
 (399)
Net cash flow provided by (used for) investing activities from discontinued operations1
 (4) (15) —
 (18)
Net cash flow provided by (used for) investing activities18
 (19) (416) —
 (417)
Financing Activities:         
Proceeds from short-term debt borrowings, net140
 —
 —
 —
 140
Proceeds from issuance of senior notes889
 —
 —
 —
 889
Repayment of senior notes(701) —
 —
 —
 (701)
Proceeds from debt borrowings of CBS Radio—
 —
 40
 —
 40
Repayment of debt borrowings of CBS Radio—
 —
 (23) —
 (23)
Payment of capital lease obligations—
 —
 (13) —
 (13)
Payment of contingent consideration—
 —
 (7) ���
 (7)
Dividends(224) —
 —
 —
 (224)
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 options81
 —
 —
 —
 81
Increase (decrease) in intercompany payables1,545
 199
 (1,744) —
 —
Net cash flow provided by (used for) financing activities530
 199
 (1,747) —
 (1,018)
Net decrease in cash and cash equivalents(303) —
 (145) —
 (448)
Cash and cash equivalents at beginning of period
(includes $24 million of discontinued operations cash)
321
 —
 301
 —
 622
Cash and cash equivalents at end of period
(includes $30 million of discontinued operations cash)
$18
 $—
 $156
 $—
 $174


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

 Statement of Cash Flows
 For the Nine Months Ended September 30, 2016
 CBS Corp. 
CBS
Operations
Inc.
 
Non-
Guarantor
Affiliates
 Eliminations 
CBS Corp.
Consolidated
Net cash flow (used for) provided by operating activities$(696) $(146) $2,148
 $—
 $1,306
Investing Activities:        

Acquisitions—
 —
 (51) —
 (51)
Capital expenditures—
 (16) (95) —
 (111)
Investments in and advances to investee companies—
 —
 (44) —
 (44)
Proceeds from dispositions(4) —
 24
 —
 20
Other investing activities7
 —
 —
 —
 7
Net cash flow provided by (used for) investing activities from continuing operations3

(16)
(166)
—
 (179)
Net cash flow used for investing activities from discontinued operations—
 —
 (2) —
 (2)
Net cash flow provided by (used for) investing activities3

(16)
(168)
—
 (181)
Financing Activities:        

Proceeds from short-term borrowings, net33
 —
 —
 —
 33
Proceeds from issuance of senior notes685
 —
 —
 —
 685
Repayment of senior debentures(199) —
 —
 —
 (199)
Payment of capital lease obligations—
 —
 (13) —
 (13)
Dividends(209) —
 —
 —
 (209)
Purchase of Company common stock(1,534) —
 —
 —
 (1,534)
Payment of payroll taxes in lieu of issuing
shares for stock-based compensation
(57) —
 —
 —
 (57)
Proceeds from exercise of stock options13
 —
 —
 —
 13
Excess tax benefit from stock-based compensation13
 —
 —
 —
 13
Other financing activities(1) —
 —
 —
 (1)
Increase (decrease) in intercompany payables1,736
 162
 (1,898) —
 —
Net cash flow provided by (used for) financing activities480
 162
 (1,911) —
 (1,269)
Net (decrease) increase in cash and cash equivalents(213)
—

69

—
 (144)
Cash and cash equivalents at beginning of period
(includes $6 million of discontinued operations cash)
267
 1
 55
 —
 323
Cash and cash equivalents at end of period
(includes $1 million of discontinued operations cash)
$54

$1

$124

$—
 $179



Item 2.Management’s Discussion and Analysis of Results of Operations and Financial Condition.
(Tabular dollars in millions, except per share amounts)
Effective February 16, 2022, we changed our name from ViacomCBS Inc. to Paramount Global. Management’s discussion and analysis of the results of operations and financial condition of CBS Corporation (the “Company” or “CBS Corp.”)Paramount Global should be read in conjunction with the consolidated financial statements and related notes in the Company’sour Annual Report filed on Form 10-K for the fiscal year ended December 31, 2016.

Overview

Business overview and strategy
The Company operates businesses2021, which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television stations, internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences and generate both advertising and non-advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company continues to increase its investment in both Company-owned and acquired premium content to enhance its opportunities for revenue growth, which include exhibiting the Company’s content on multiple digital platforms, including the Company’s owned digital streaming services as well as third-party live television streaming offerings; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”) and television stations 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 - Three Months Ended September 30, 2017 versusThree Months Ended September 30, 2016
Consolidated results of operations    Increase/(Decrease) 
Three Months Ended September 30,2017
2016 $ % 
GAAP:        
Revenues$3,171
 $3,084
 $87
 3 % 
Operating income$707
 $721
 $(14) (2)% 
Net earnings from continuing operations$418
 $466
 $(48) (10)% 
Net earnings$592
 $478
 $114
 24 % 
Diluted EPS from continuing operations$1.03
 $1.04
 $(.01) (1)% 
Diluted EPS$1.46
 $1.07
 $.39
 36 % 
         
Non-GAAP: (a)
        
Adjusted net earnings from continuing operations$421
 $419
 $2
 — % 
Adjusted net earnings$450
 $467
 $(17) (4)% 
Adjusted diluted EPS from continuing operations$1.04
 $.94
 $.10
 11 % 
Adjusted diluted EPS$1.11
 $1.05
 $.06
 6 % 
(a) See pages 37 - 38 for reconciliations of adjusted resultswas filed prior to the most directly comparableabove-mentioned name change. References in this document to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Global.

Significant components of management’s discussion and analysis of results of operations and financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).condition include:
For•Overview—Summary of our business and operational highlights.
•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the three months ended September 30, 2017,March 31, 2022 compared with the 3% increasethree months ended March 31, 2021.
•Segment Results of Operations—Analysis of our results on a reportable segment basis for the three months ended March 31, 2022 compared with the three months ended March 31, 2021.
•Liquidity and Capital Resources—Discussion of our cash flows, including sources and uses of cash, for the three months ended March 31, 2022 and March 31, 2021; and our outstanding debt as of March 31, 2022.
•Legal Matters—Discussion of legal matters in revenues reflects 52% higher affiliate and subscription fee revenues, which was driven by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, 27% growth in station affiliation fees and retransmission revenues, and growth from new digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime digital streaming subscription offering, and third-party live television streaming services. Content licensing and distribution revenues decreased 22%, as a result of the timing of domestic licensing sales, partially offset by growth in international television licensing. Advertising revenues decreased 5% driven by lower political advertising sales and lower ratings, partially offset by higher pricing.we are involved.





-30-



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


Overview
Operating income for the three months ended September 30, 2017 decreased 2% and the operating income margin decreased one point to 22% for the third quarterOperational Highlights - Three Months Ended March 31, 2022 versusThree Months Ended March 31, 2021
Consolidated results of operationsIncrease/(Decrease)
Three Months Ended March 31,20222021$%
GAAP:
Revenues$7,328 $7,412 $(84)(1)%
Operating income$775 $1,528 $(753)(49)%
Net earnings from continuing operations
attributable to Paramount
$391 $899 $(508)(57)%
Diluted EPS from continuing operations
attributable to Paramount
$.58 $1.42 $(.84)(59)%
Non-GAAP: (a)
Adjusted OIBDA$913 $1,627 $(714)(44)%
Adjusted net earnings from continuing operations
attributable to Paramount
$403 $961 $(558)(58)%
Adjusted diluted EPS from continuing operations
attributable to Paramount
$.60 $1.52 $(.92)(61)%
(a) Certain items identified as affecting comparability are excluded in non-GAAP results. See “Reconciliation of 2017 from 23% for the third quarter of 2016, mainly as a result of the mix of revenues. Results for 2017 included lower-margin revenues from the pay-per-view boxing event and 2016 included a larger volume of higher-margin political advertising and television licensing revenues.

Net earnings from continuing operations decreased 10% and diluted earnings per share (“EPS”) from continuing operations decreased 1%, reflecting lower operating income as well as a one-time tax benefit of $47 million in the third quarter of 2016 associated with a multiyear adjustment to a tax deduction. Adjusted net earnings from continuing operations for the third quarter of 2017 were comparable with the same prior-year period. Adjusted diluted EPS from continuing operations increased 11%, benefiting from lower weighted average shares outstanding in the third quarter of 2017 as a result of the Company’s ongoing share repurchase program. Net earnings for the three months ended September 30, 2017 of $592 million included, in discontinued operations, a noncash gain of $100 million, or $.25 per diluted share, to adjust the carrying value of CBS Radio Inc. (“CBS Radio”) to the value indicated by the stock valuation of Entercom Communications Corp. (“Entercom”). CBS Radio is classified as held for sale and therefore, in accordance with Financial Accounting Standards Board (“FASB”) guidance, its carrying value is adjusted based on the trading price of Entercom’s stock, which will result in an additional gain or loss at the time of the closing of the transaction with Entercom. Adjusted net earnings from continuing operations and Adjusted diluted EPS from continuing operations are non-GAAP financial measures. See pages 37 - 38Non-GAAP Measures” for details of the discretethese items excluded from financial results, and reconciliations of adjustednon-GAAP results to the most directly comparable financial measures in accordance with GAAP.accounting principles generally accepted in the United States (“GAAP”).

Operational highlights - Nine Months Ended September 30, 2017 versusNine Months Ended September 30, 2016
Consolidated results of operations    Increase/(Decrease) 
Nine Months Ended September 30,2017 2016 $ % 
GAAP:        
Revenues$9,771
 $9,648
 $123
 1 % 
Operating income$2,080
 $2,137
 $(57) (3)% 
Net earnings from continuing operations$1,269
 $1,281
 $(12) (1)% 
Net earnings$398
 $1,374
 $(976) (71)% 
Diluted EPS from continuing operations$3.10
 $2.82
 $.28
 10 % 
Diluted EPS$.97
 $3.02
 $(2.05) (68)% 
         
Non-GAAP: (a)
        
Adjusted operating income$2,080
 $2,128
 $(48) (2)% 
Adjusted net earnings from continuing operations$1,250
 $1,235
 $15
 1 % 
Adjusted net earnings$1,318
 $1,364
 $(46) (3)% 
Adjusted diluted EPS from continuing operations$3.05
 $2.71
 $.34
 13 % 
Adjusted diluted EPS$3.21
 $3.00
 $.21
 7 % 
(a) See pages 38 - 39 for reconciliationsFor the three months ended March 31, 2022, revenues decreased 1% to $7.33 billion as significant increases in revenues from our direct-to-consumer streaming services (“DTC services”) and revenue from theatrical releases were more than offset by the benefits in 2021 from CBS’ broadcast of adjusted resultsthe Super Bowl, reflecting the rotational nature of the rights to air this event, and the licensing of Coming 2 America and Tom Clancy’s Without Remorse. The absence of the Super Bowl negatively impacted the total revenue comparison by 6-percentage points. The above-mentioned growth from our DTC services was led by Paramount+ and Pluto TV, and theatrical revenues in the first quarter of 2022 benefited from the releases of Scream, Jackass Forever,and The Lost City, while there were no releases in the prior-year quarter as a result of the closure or reduced capacity of movie theaters in response to the most directly comparable financial measures in accordance with GAAP.coronavirus pandemic (“COVID-19”).
For
Operating income for the ninethree months endedSeptember 30, 2017, revenues increased 1% March 31, 2022 decreased 49% from the same prior-year period. The operating income comparison was impacted by items identified as affecting comparability, including restructuring and other corporate matters and gains on sales for the three months ended March 31, 2022. Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) decreased 44%, driven by 28% higher affiliate and subscription fee revenues, led by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, a 27% increase in station affiliation fees and retransmission revenues, and growth from new digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime digital streaming subscription service, and third-party live television streaming services. This growth was offset by the benefit to 2016the 2021 period from CBS’sthe broadcast of the Super Bowl, 50.increased investment in our DTC services, and higher costs in 2022 associated with theatrical releases and the mix of programming on our linear networks.

For the three months ended March 31, 2022, net earnings from continuing operations attributable to Paramount and diluted EPS from continuing operations decreased 57% and 59%, respectively, from the same prior-year period. These comparisons were impacted by items identified as affecting comparability, including the aforementioned items impacting operating income, and a loss on extinguishment of debt and discrete tax items in both periods. Adjusted net earnings from continuing operations attributable to Paramount and adjusted diluted EPS decreased 58% and 61%, respectively, reflecting the lower adjusted OIBDA. Additionally, adjusted diluted EPS was impacted by the March 2021 issuance of 20 million shares of our Class B Common Stock and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”), which negatively impacted the EPS comparison by $.03.

-31-



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


Operating income decreased 3% for the nine months endedSeptember 30, 2017, primarily as a result of a mix of lower-margin revenues in 2017 compared to 2016. Net earnings from continuing operations decreased 1% mainly as a result of the lower operating income. Diluted EPS from continuing operations increased 10% due to lower weighted average shares outstanding in 2017 as a result of the Company’s ongoing share repurchase program. Adjusted net earnings from continuing operations and adjusted diluted EPS from continuing operations increased 1% and 13%, respectively. Net earnings for the nine months ended September 30, 2017of$398 million included a noncash charge of $980 million, or $2.39 per diluted share, in discontinued operations to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom. CBS Radio is classified as held for sale and therefore, in accordance with FASB guidance, its carrying value is adjusted based on the trading price of Entercom’s stock, which will result in an additional gain or loss at the time of the closing of the transaction with Entercom. See pages 38 - 39 for details of the discrete items excluded from financial results, and reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.
The Company generated operating cash flow from continuing operations of $935 million for the nine months endedSeptember 30, 2017 compared with $1.12 billion for the nine months ended September 30, 2016. Free cash flow for the nine months endedSeptember 30, 2017 was $823 million compared with $1.01 billion for the same prior-year period. These decreases were driven by the decline in advertising revenues including from the benefit in 2016 from CBS’s broadcast of Super Bowl 50, and discretionary pension contributions of $100 million made during the first quarter of 2017 to prefund the Company’s qualified plans. Free cash flow for the three and nine months ended September 30, 2017 benefited from higher affiliate and subscription fee revenues. Free cash flow is a non-GAAP financial measure. See “Free Cash Flow” on pages 54 - 55 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, to free cash flow.

Recent Developments
On October 19, 2017, the Company commenced an exchange offer for the split-off of its radio business, CBS Radio, as part of its previously announced agreement to combine CBS Radio with Entercom in a merger. In the exchange offer, the Company’s stockholders will have the opportunity to exchange their shares of the Company’s Class B Common Stock for shares of CBS Radio common stock, which will be immediately converted into shares of Entercom Class A common stock upon completion of the merger, which is subject to certain customary terms and conditions. The exchange offer is scheduled to expire on November 16, 2017, unless the exchange offer is extended or terminated.
Share Repurchases and Dividends

During the third quarter of 2017, the Company repurchased 3.9 million shares of its Class B Common Stock under its share repurchase program for $250 million, at an average cost of $63.52 per share. During the nine months ended September 30, 2017, the Company repurchased 16.2 million shares of its Class B Common Stock for $1.05 billion, at an average cost of $64.70 per share, leaving $3.06 billion of authorization at September 30, 2017.

During the third quarter of 2017, the Company declared a quarterly cash dividend of $.18 on its Class A and Class B Common Stock, resulting in total dividends of $73 million, which were paid on October 1, 2017.

Planned Pension Settlement
On November 1, 2017, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company will be required to pay and administer pension payments to certain of the Company’s pension plan participants, or their designated beneficiaries, who have been receiving pension


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


payments. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $800 million, representing approximately 20% of the total obligations of the Company’s qualified pension plans, and will be funded with pension plan assets. In connection with this transaction, the Company will record a one-time settlement charge in the fourth quarter of 2017 currently estimated at $365 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. The actual settlement charge could differ from this estimate due to changes in the Company’s actuarial assumptions. Additionally, during the fourth quarter of 2017, the Company expects to make a discretionary contribution of $500 million to prefund its qualified plans, which is expected to be partially funded by long-term borrowings.
Reconciliation of Non-GAAP Measures
Results for the three and nine months ended September 30, 2017March 31, 2022 and 20162021 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 Paramount, 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, or as a substitute for, operating income, earnings from continuing operations before income taxes, provision/benefit for income taxes, net earnings from continuing operations attributable to Paramount or diluted EPS from continuing operations, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.

The following tables reconcile the Company.adjusted measures to their most directly comparable financial measures in accordance with GAAP.
 Three Months Ended September 30, 2017
 Reported Extinguishment of Debt 
Discrete Tax Item (a)
 
CBS Radio Adjustments (b)
 Adjusted 
Operating income$707
  $—
   $—
   $—
  $707
 
Interest expense(116)  —
   —
   —
  (116) 
Interest income17
  —
   —
   —
  17
 
Loss on early extinguishment of debt(5)  5
   —
   —
  —
 
Other items, net3
  —
   —
   —
  3
 
Earnings from continuing operations
before income taxes
606
  5
   —
   —
  611
 
Provision for income taxes(172)  (2)   —
   —
  (174) 
Equity in loss of investee companies,
net of tax
(16)  —
   —
   —
  (16) 
Net earnings from continuing operations418
  3
   —
   —
  421
 
Net earnings from discontinued
operations, net of tax
174
  —
   (45)   (100)  29
 
Net earnings$592
  $3
   $(45)   $(100)  $450
 
Diluted EPS from continuing operations$1.03
  $.01
   $—
   $—
  $1.04
 
Diluted EPS$1.46
  $.01
   $(.11)   $(.25)  $1.11
 
Three Months Ended
March 31,
20222021
Operating income (GAAP)$775 $1,528 
Depreciation and amortization96 99 
Restructuring and other corporate matters (a)
57 — 
Gain on sales (a)
(15)— 
Adjusted OIBDA (Non-GAAP)$913 $1,627 
(a) Reflects a tax benefit fromSee notes on the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.following table for additional information on items affecting comparability.
(b) Reflects a noncash gain associated with a valuation allowance for the carrying value of CBS Radio.


-32-



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


 Three Months Ended September 30, 2016
 Reported 
Discrete Tax Items (a)
 Adjusted 
Earnings from continuing operations before income taxes$624
  $—
  $624
 
Provision for income taxes(145)  (47)  (192) 
Equity in loss of investee companies, net of tax(13)  —
  (13) 
Net earnings from continuing operations466
  (47)  419
 
Net earnings from discontinued operations, net of tax12
  36
  48
 
Net earnings$478
  $(11)  $467
 
Diluted EPS from continuing operations$1.04
  $(.11)  $.94
 
Diluted EPS$1.07
  $(.02)  $1.05
 
Three Months Ended March 31, 2022
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ParamountDiluted EPS from Continuing Operations
Reported (GAAP)$470 $(34)$391 $.58 
Items affecting comparability:
Restructuring and other corporate matters (a)
57 (12)45 .07 
Gain on sales (b)
(15)4 (11)(.02)
Loss on extinguishment of debt73 (17)56 .09 
Discrete tax items (c)
— (78)(78)(.12)
Adjusted (Non-GAAP)$585 $(137)$403 $.60 
(a) Reflects a one-time tax benefitrestructuring charges of $47$18 million, associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarterconsisting of 2016,severance costs, and a charge of $36$39 million, principally to reserve against amounts due from counterparties in discontinued operationsRussia, Belarus and Ukraine, following Russia’s invasion of Ukraine.
(b) Reflects a gain from the resolutionsale of international intangible assets and a working capital adjustment to the gain from the fourth quarter 2021 sale of CBS Studio Center.
(c) Primarily reflects a deferred tax matterbenefit resulting from the transfer of intangible assets between our subsidiaries in connection with a foreign jurisdiction relating to a previously disposed business.reorganization of our international operations.
 Nine Months Ended September 30, 2017
 Reported Extinguishment of Debt 
Discrete Tax Items (a)
 
CBS Radio Adjustments (b)
  Adjusted 
Operating income$2,080
  $—
   $—
   $—
   $2,080
 
Interest expense(336)  —
   —
   —
   (336) 
Interest income45
  —
   —
   —
   45
 
Loss on early extinguishment of debt(5)  5
   —
   —
   —
 
Other items, net9
  —
   —
   —
   9
 
Earnings from continuing operations before income taxes1,793
  5
   —
   —
   1,798
 
Provision for income taxes(479)  (2)   (22)   —
   (503) 
Equity in loss of investee companies, net of tax(45)  —
   —
   —
   (45) 
Net earnings from continuing operations1,269
  3
   (22)   —
   1,250
 
Net earnings (loss) from discontinued
operations, net of tax
(871)  —
   (45)   984
   68
 
Net earnings$398
  $3
   $(67)   $984
   $1,318
 
Diluted EPS from continuing operations$3.10
  $.01
   $(.05)   $—
   $3.05
 
Diluted EPS$.97
  $.01
   $(.16)   $2.40
   $3.21
 
Three Months Ended March 31, 2021
Earnings from Continuing Operations Before Income TaxesProvision for Income TaxesNet Earnings from Continuing Operations Attributable to ParamountDiluted EPS from Continuing Operations
Reported (GAAP)$1,155 $(226)$899 $1.42 
Items affecting comparability:
Loss on extinguishment of debt128 (30)98 .16 
Gain from investments (a)
(20)5 (15)(.03)
Discrete tax items (b)
— (21)(21)(.03)
Adjusted (Non-GAAP)$1,263 $(272)$961 $1.52 
(a) Reflects an unrealized gain from an increase in the fair value of a marketable security.
(b) Primarily reflects tax benefit of $22 millionbenefits from the resolution of certain state income tax matters and aexcess tax benefit of $45 million in discontinued operationsbenefits from the resolutionvesting or exercise of a tax matter in a foreign jurisdiction relating to a previously disposed business.
(b) Reflects a noncash charge of $980 million associated with a valuation allowance for the carrying value of CBS Radio, and a restructuring charge of $7 million ($4 million, net of tax) at CBS Radio.stock-based compensation awards.

-33-



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


 Nine Months Ended September 30, 2016
 Reported 
Other Operating Items (a)
 
Discrete Tax Items (b)
 
Write-down of Investment (c)
 Adjusted 
Operating income$2,137
  $(9)  $—
  $—
  $2,128
 
Interest expense(304)  —
  —
  —
  (304) 
Interest income22
  —
  —
  —
  22
 
Other items, net(7)  —
  —
  —
  (7) 
Earnings from continuing operations before
income taxes
1,848
  (9)  —
  —
  1,839
 
Provision for income taxes(524)  4
  (47)  —
  (567) 
Equity in loss of investee companies, net of tax(43)  —
  —
  6
  (37) 
Net earnings from continuing operations1,281
  (5)  (47)  6
  1,235
 
Net earnings from discontinued operations,
net of tax
93
  —
  36
  —
  129
 
Net earnings$1,374
  $(5)  $(11)  $6
  $1,364
 
Diluted EPS from continuing operations$2.82
  $(.01)  $(.10)  $.01
  $2.71
 
Diluted EPS$3.02
  $(.01)  $(.02)  $.01
  $3.00
 
(a) Reflects a gain on the sale of an internet business in China and a multiyear, retroactive impact of a new operating tax.
(b) Reflects a one-time tax benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016, and a charge of $36 million in discontinued operations from the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business.
(c) Reflects the write-down of an international television joint venture to its fair value.

Consolidated Results of Operations
Three and Nine Months Ended September 30, 2017March 31, 2022versusThree and Nine Months Ended September 30, 2016March 31, 2021
Revenues
Three Months Ended March 31,
% of Total
Revenues		% of Total
Revenues		Increase/(Decrease)
Revenues by Type20222021$%
Advertising
$2,864 39 %$3,109 42 %$(245)(8)%
Affiliate and subscription2,840 39 2,463 33 377 15 
Theatrical131 2 1 — 130 n/m
Licensing and other1,493 20 1,839 25 (346)(19)
Total Revenues$7,328 100 %$7,412 100 %$(84)(1)%
 Three Months Ended September 30, 
   
% of Total
Revenues
   
% of Total
Revenues
 Increase/(Decrease) 
Revenues by Type2017  2016  $ % 
Advertising$1,106
 35% $1,162
 38% $(56) (5)% 
Content licensing and distribution860
 27
 1,108
 36
 (248) (22) 
Affiliate and subscription fees1,145
 36
 753
 24
 392
 52
 
Other60
 2
 61
 2
 (1) (2) 
Total Revenues$3,171
 100% $3,084
 100% $87
 3 % 
n/m - not meaningful
Advertising
For the three months ended March 31, 2022, the 8% decrease in advertising revenues is due to the rotational nature of the rights to broadcast the Super Bowl, which aired on CBS in 2021 and another network in 2022, resulting in a negative impact on the advertising comparison of 16 percentage points. This impact was partially offset by significant increases in advertising from Pluto TV, which grew 51%, and Paramount+. Additionally, advertising revenues for our broadcast and cable networks benefited from an increase in pricing globally, which was largely offset by the impact from lower linear impressions for our domestic networks.

The advertising revenue comparison in the second half of 2022 is expected to benefit from increased political advertising spending associated with mid-term elections in the United States.

Affiliate and Subscription
For the three months ended March 31, 2022, affiliate and subscription revenues increased 15%, driven by growth in subscribers for our DTC services of 74% to 62.4 million at March 31, 2022 from 35.9 million at March 31, 2021, led by an increase of 23.1 million for Paramount+ to 39.6 million at March 31, 2022.

Theatrical
For the three months ended March 31, 2022, the increase in theatrical revenues reflects the theatrical releases of Scream, Jackass Forever, and The Lost City, while the prior-year quarter was impacted by the closure or reduced capacity of movie theaters in response to COVID-19.

Licensing and Other
Licensing and other revenues are principally comprised of fees from the licensing of the rights to exhibit our internally-produced television and film programming on various platforms in the secondary market after its initial exhibition on our owned or third party platforms; license fees from content produced for third parties; home entertainment revenues, which includes the viewing of our content on a transactional basis through transactional video-on-demand (TVOD) and electronic sell-through services and the sale and distribution of our content through DVDs and Blu-ray discs to wholesale and retail partners; fees from the use of our trademarks and brands for consumer products, recreation and live events; fees from the distribution of third-party programming; and revenues from the rental of production facilities. For the three months ended March 31, 2022, the 19% decrease in licensing and other revenues primarily reflects the benefit from the licensing of Coming 2 America and Tom Clancy’s
-34-
 Nine Months Ended September 30, 
   
% of Total
Revenues
   
% of Total
Revenues
 Increase/(Decrease) 
Revenues by Type2017  2016  $ % 
Advertising$4,008
 41% $4,492
 46% $(484) (11)% 
Content licensing and distribution2,761
 28
 2,780
 29
 (19) (1) 
Affiliate and subscription fees2,835
 29
 2,208
 23
 627
 28
 
Other167
 2
 168
 2
 (1) (1) 
Total Revenues$9,771
 100% $9,648
 100% $123
 1 % 




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


Without Remorse in the prior-year quarter, as well as lower licensing of film library titles driven by the timing of availabilities and a lower volume of licensing of television programming in 2022.
Advertising
Operating Expenses
Three Months Ended March 31,
% of Operating Expenses% of Operating ExpensesIncrease/(Decrease)
Operating Expenses by Type20222021$%
Content costs$3,831 80 %$3,724 85 %$107 3 %
Distribution and other965 20 639 15 326 51 
Total Operating Expenses$4,796 100 %$4,363 100 %$433 10 %
Content Costs
Content costs include the amortization of costs of internally-produced television and theatrical film content; amortization of acquired program rights; other television production costs, including on-air talent; and participation and residuals expenses, which reflect amounts owed to talent and other participants in our content pursuant to contractual and collective bargaining arrangements. For the three months ended September 30, 2017, the 5% decreaseMarch 31, 2022, content costs increased 3% primarily driven by an increased investment in advertising revenues primarily reflects lower political advertising salescontent for our DTC services and lower ratings,more original programming on our broadcast and cable networks, partially offset by higher pricing. The comparison was also impactedlower costs for films, driven by one less Thursday Night Football game broadcast onthe decrease in licensing revenues, and sports programming.
Distribution and Other
Distribution and other operating expenses primarily include costs relating to the distribution of our content, including print and advertising for theatrical releases and costs for amounts paid to third-party distributors; compensation; revenue-sharing costs to television stations affiliated with the CBS Television Network in the third quarter of 2017. For the nine months ended September 30, 2017, the 11% decrease in advertising revenues primarily reflects the benefit to 2016 from the broadcast of Super Bowl 50 as well as lower political advertising sales.

During the fourth quarter of 2017, the advertising revenue comparisonNetwork; and other ancillary and overhead costs associated with the prior year will continue to be negatively affected by the benefit in 2016 from strong political advertising. Additionally, the CBS Television Network’s upfront advertising sales 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, and a majority of the Company’s deals are based on a live-plus-seven day viewing window, which are expected to benefit advertising revenues during the 2017/2018 broadcast season. However, overall advertising revenues for the Company will be dependent on ratings for its programming and market conditions, including demand in the scatter advertising market, which is when advertisers purchase the remaining advertising spots closer to the broadcast of the related programming. During the first nine months of 2017, compared to the same period in 2016, the Company has experienced lower ratings, which was largely offset by higher pricing.

Content Licensing and Distribution
our operations. For the three months ended September 30, 2017,March 31, 2022, distribution and other expenses increased 51%, primarily reflecting costs to support first quarter theatrical releases, including The Lost City, Jackass Forever, and Scream as well as second quarter releases, including Sonic the 22% decrease in content licensingHedgehog 2. The increasealso reflects higher costs associated with the growth of our DTC services, mainly for amounts paid to third-party distributors.

Selling, General and distribution revenues primarily reflects the timing of domestic television licensing salesAdministrative Expenses
Three Months Ended March 31,
20222021Increase/(Decrease)
Selling, general and administrative expenses$1,619 $1,422 14 %
Selling, general and the benefit in the third quarter of 2016 from the licensing of Penny Dreadfuladministrative (“SG&A”) expenses include expenses incurred for selling and various titles from the Company’s television library. These decreases were partially offset by growth in international licensing. For the nine months ended September 30, 2017, the 1% decrease in content licensingmarketing costs, occupancy, professional service fees and distribution revenues primarily reflects the timing of domestic television licensing and the benefit to 2016 from the international licensing sales of five Star Trek library series, partially offset by strong demand for the Company’s content internationally, reflecting additional titles available for sale as a result of the Company’s recent increased investment in internally-produced series.

For the remainder of 2017, the content licensing and distribution revenues comparison will be impacted by fluctuations resulting from the timing of when Company-owned television series are made available 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.

Affiliate and Subscription Fees
back office support, including employee compensation. For the three and nine months ended September 30, 2017, theMarch 31, 2022, SG&A expenses increased 14% driven by advertising, marketing and other cost increases in affiliate and subscription fees of 52% and 28%, respectively, primarily reflect revenues from Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, which contributed 36 points and 12 points ofto support the growth for the three and nine-month periods, respectively. Underlying affiliate and subscription fee revenues for eachexpansion of the three and nine months ended September 30, 2017 increased 16%, led by growth in station affiliation fees and retransmission revenues, and higher revenues from new digital initiatives, including the Company’s owned streaming subscription services, CBS All Access and the Showtime digital streaming subscription offering, and third-party live television streaming offerings.our DTC services.

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

-35-



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


increases. Together, these factors are expected to result in continued growth in affiliate and subscription fees over the next several years.

International Revenues
The Company generated approximately 12% and 11% of its total revenues from international regions for the three months ended September 30, 2017 and 2016, respectively, and generated approximately 14% of its total revenues from international regions for each of the nine months ended September 30, 2017 and 2016.

Operating Expenses
 Three Months Ended September 30, 
   % of Operating Expenses   % of Operating Expenses Increase/(Decrease) 
Operating Expenses by Type2017  2016  $ % 
Programming$749
 40% $500
 28% $249
 50 % 
Production572
 31
 666
 37
 (94) (14) 
Participation, distribution and royalty199
 11
 291
 16
 (92) (32) 
Other342
 18
 331
 19
 11
 3
 
Total Operating Expenses$1,862
 100% $1,788
 100% $74
 4 % 
 Nine Months Ended September 30, 
   % of Operating Expenses   % of Operating Expenses Increase/(Decrease) 
Operating Expenses by Type2017  2016  $ % 
Programming$2,258
 38% $2,133
 37% $125
 6 % 
Production1,955
 33
 1,933
 33
 22
 1
 
Participation, distribution and royalty725
 12
 788
 13
 (63) (8) 
Other1,002
 17
 964
 17
 38
 4
 
Total Operating Expenses$5,940
 100% $5,818
 100% $122
 2 % 

Programming
For the three and nine months ended September 30, 2017, the increases in programming expenses of 50% and 6%, respectively, were driven by costs associated with Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, and for the nine months ended September 30, 2017, the increase also reflects costs in 2017 associated with CBS’s broadcast of the semifinals and finals of the NCAA Division I Men’s Basketball Championship. The increases for the nine-month period were partially offset by costs in the first quarter of 2016 associated with the broadcast of Super Bowl 50.

Production
For the three months ended September 30, 2017, the 14% decrease in production expenses primarily reflects lower costs associated with the decrease in television licensing revenues. For the nine months ended September 30, 2017, the 1% increase in production expenses mainly reflects an increased investment in internally-produced television series and higher costs associated with the mix of titles sold under television licensing arrangements. These increases were partially offset by production costs in the first quarter of 2016 associated with CBS’s broadcast of Super Bowl 50.


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


Participation, distribution and royalty
For the three and nine months ended September 30, 2017, the decreases in participation, distribution and royalty costs of 32% and 8%, respectively, were driven by lower television licensing revenues and the mix of titles sold under licensing arrangements.

Selling, General and Administrative Expenses
 Three Months Ended September 30,
 2017 % of Revenues 2016 % of Revenues Increase/(Decrease) 
Selling, general and administrative expenses$547
  17%  $521
  17%   5%  
 Nine Months Ended September 30,
 2017 % of Revenues 2016 % of Revenues Increase/(Decrease) 
Selling, general and administrative expenses$1,585
  16%  $1,534
  16%   3%  

Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy and back office support. For the three and nine months endedSeptember 30, 2017, the increases in SG&A expenses of 5% and 3%, respectively, primarily reflect higher advertising and marketing costs, mainly to support the Company’s growth initiatives.

Depreciation and Amortization
Three Months Ended March 31,
20222021Increase/(Decrease)
Depreciation and amortization$96 $99 (3)%
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017
2016 Increase/(Decrease) 2017
2016 Increase/(Decrease) 
Depreciation and amortization$55
 $54
  2%  $166
 $168
  (1)%  
Restructuring and Other Corporate Matters

Three Months Ended
March 31, 2022
Restructuring charges$18 
Other corporate matters39 
Restructuring and other corporate matters$57 
Other Operating Items, NetDuring the three months ended March 31, 2022, we recorded restructuring charges of $18 million within the Filmed Entertainment segment, consisting of severance costs primarily associated with changes in management. In addition, following Russia’s invasion of Ukraine, we recorded a charge of $39 million during the three months ended March 31, 2022, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine.

Gain on Sales
For the ninethree months ended September 30, 2016, other operating items, net includedMarch 31, 2022, we recorded gains on sales totaling $15 million, comprised of a gain from the sale of an internet business in Chinainternational intangible assets and a multiyear, retroactive impactworking capital adjustment to the gain from the fourth quarter 2021 sale of a new operating tax.CBS Studio Center.


Interest Expense/Income
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended March 31,
2017
2016
Increase/(Decrease) 2017
2016 Increase/(Decrease) 20222021Increase/(Decrease)
Interest expense$(116) $(104) 12% $(336) $(304)  11%  Interest expense$(240)$(259)(7)%
Interest income$17
 $7
 143% $45
 $22
 105% Interest income$21 $13 62 %
The following table presents the Company’sour outstanding debt balances, excluding capitalfinance leases, and the weighted average interest rate as of September 30, 2017March 31, 2022 and 2016:2021.
At March 31,
Weighted AverageWeighted Average
2022Interest Rate2021Interest Rate
Total long-term debt$16,727 5.09 %$17,636 4.93 %
Other bank borrowings$65 3.50 %$115 3.50 %
Loss on Extinguishment of Debt
For the three months ended March 31, 2022 and 2021, we recorded losses on extinguishment of debt of $73 million and $128 million, respectively, associated with the early redemption of long-term debt of $1.94 billion and $1.99 billion, respectively.
-36-
 At September 30,
   Weighted Average   Weighted Average 
 2017 Interest Rate 2016 Interest Rate 
Total long-term debt$9,039
  4.43%  $8,849
  4.47%  
Commercial paper$590
  1.44%  $33
  0.75%  




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


Loss on Early Extinguishment of Debt
For the three and nine months ended September 30, 2017, the loss on early extinguishment of debt of $5 million
reflected a pre-tax loss associated with the redemption of the Company’s $300 million outstanding 4.625% senior notes due May 2018.

Other Items, Net
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017
2016 Increase/(Decrease) 2017 2016 Increase/(Decrease) 
Other items, net$3
 $—
  n/m  $9
 $(7)  n/m  
n/m - not meaningful
The following table presents the components of Other items, net for all periods primarily consists of foreign exchange gains and losses.net.
Three Months Ended March 31,
20222021
Pension and postretirement benefit costs$(17)$(12)
Foreign exchange gain (loss)1 (8)
Gain from investments— 20 
Other3 1 
Other items, net$(13)$1 
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.
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Increase/(Decrease) 2017 2016 Increase/(Decrease)
Provision for income taxes, including
interest and before other discrete items

$(187) $(207)  (10)%  $(548) $(581)  (6)% 
Excess tax benefits from stock-based
compensation (a)
10
 —
     41
 —
    
Other discrete items (b)
5
 62
     28
 57
    
Provision for income taxes$(172) $(145)  19 %  $(479) $(524)  (9)% 
Effective income tax rate28.4% 23.2%     26.7% 28.4%    
(a) Reflects excess For the three months endedMarch 31, 2022, we recorded a provision for income taxes of $34 million, reflecting an effective income tax benefits associated withrate of 7.2%. Included in the exercise of stock options and vesting of RSUs. During the first quarter of 2017, the Company adopted FASB guidance which requires that the difference between theprovision for income taxes is a net discrete tax benefit of $78 million primarily resulting from stock-based compensation expensethe transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. This item, together with a net tax benefit of $25 million on other items identified as affecting the comparability of our results during the period, which include a loss on extinguishment of debt, restructuring and the deductionother corporate matters, and gains on the tax return be recognized within thesales, decreased our effective income tax provision on the statement of operations. Previously, such difference was recognized in stockholders’ equity on the balance sheet. This difference occurs because stock-based compensation expense is recorded 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.rate by 16.2 percentage points.
(b)
For the ninethree months ended September 30, 2017,March 31, 2021, we recorded a provision for income taxes of $226 million, reflecting an effective income tax rate of 19.6%. Included in the provision for income taxes is a discrete tax benefit of $21 million primarily reflectsconsisting of tax benefits from the resolution of certain state income tax matters. Formatters and excess tax benefits from the three and nine months ended September 30, 2016, primarily reflectsvesting or exercise of stock-based compensation awards. This item, together with a one-timenet tax benefit of $47$25 million associated with a multiyear adjustment to a tax deduction, which was approved byon other items identified as affecting the IRScomparability of our results during the third quarterperiod, which include a loss on the extinguishment of 2016.debt and a gain from an investment, reduced our effective income tax rate by 1.9 percentage points.


Equity in Loss of Investee Companies, Net of Tax
The following table presents equity in loss of investee companies for our equity-method investments.
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017
2016
Increase/(Decrease) 2017 2016 Increase/(Decrease) 
Equity in loss of investee companies,
net of tax
$(16) $(13)  23%  $(45) $(43)  5%  
Three Months Ended March 31,
20222021Increase/(Decrease)
Equity in loss of investee companies$(52)$(32)(63)%
Tax benefit15 14 7 
Equity in loss of investee companies, net of tax$(37)$(18)(106)%

Net Earnings from Discontinued Operations
During the fourth quarter of 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 (see Legal Matters). Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented.


-37-



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 and Diluted EPS from Continuing Operations
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017 2016 Increase/(Decrease) 2017 2016 Increase/(Decrease) 
Net earnings from continuing operations$418
 $466
  (10)%  $1,269
 $1,281
  (1)%  
Diluted EPS from continuing operations$1.03
 $1.04
  (1)%  $3.10
 $2.82
  10 %  
For the three months ended September 30, 2017, the decreases in net earnings from continuing operations and diluted EPS from continuing operations of 10% and 1%, respectively, were primarily the result of lower operating income and the impact of the previously mentioned tax benefit of $47 million in the third quarter of 2016. Diluted EPS from continuing operations benefited from lower weighted average shares outstanding as a result of the Company’s ongoing share repurchase program, which partially offset the lower earnings. For the nine months ended September 30, 2017, the 1% decrease in net earnings from continuing operations primarily reflects lower operating income. The 10% increase in diluted EPS from continuing operations for the nine-month period reflects lower weighted average shares outstanding as a result of the Company’s ongoing share repurchase program, which more than offset the lower earnings.

Net Earnings (Loss) from Discontinued Operations
The following table sets forth details of net earnings (loss) from discontinued operations for the three and nine months ended September 30, 2017March 31, 2022 and 2016. Net earnings (loss) from discontinued operations included2021, which primarily reflects the operating results of CBS RadioSimon & Schuster.
Three Months Ended
March 31,
20222021
Revenues$217 $185 
Costs and expenses:
Operating124 120 
Selling, general and administrative38 38 
Total costs and expenses (a)
162 158 
Operating income55 27 
Other items, net(1)(2)
Earnings from discontinued operations54 25 
Income tax provision (b)
(12)(13)
Net earnings from discontinued operations, net of tax$42 $12 
(a) Included in total costs and expenses for all periods presented. Net earnings (loss) from discontinued operations also included a tax benefit of $45the three months ended March 31, 2022 is $5 million for the three and nine months ended September 30, 2017 and a chargerelease of $36 millionindemnification obligations for the three and nine months ended September 30, 2016, in each case from the resolution of a tax matter in a foreign jurisdictionleases relating to a previously disposed business thatbusiness.
(b) The tax provision includes amounts relating to previously disposed businesses of $1 million and $7 million for the three months ended March 31, 2022 and 2021, respectively.
Net Earnings from Continuing Operations Attributable to Paramount and Diluted EPS from Continuing Operations Attributable to Paramount
Three Months Ended March 31,
20222021Increase/(Decrease)
Net earnings from continuing operations
   attributable to Paramount		$391 $899 (57)%
Diluted EPS from continuing operations
   attributable to Paramount		$.58 $1.42 (59)%
For the three months ended March 31, 2022, net earnings from continuing operations attributable to Paramount and diluted EPS from continuing operations decreased 57% and 59%, respectively, driven by the decrease in operating income, partially offset by higher discrete tax benefits. Additionally, diluted EPS was accounted for as a discontinued operation.impacted by the March 2021 issuance of 20 million shares of our Class B Common Stock and 10 million shares of Mandatory Convertible Preferred Stock, which negatively impacted the EPS comparison by $.03.
.
-38-
Three Months Ended September 30, 2017CBS Radio Other Total
Revenues$300
 $—
 $300
Costs and expenses: (a)


 

 

Operating113
 —
 113
Selling, general and administrative121
 (1) 120
Benefit from valuation allowance(100) —
 (100)
Total costs and expenses134
 (1) 133
Operating income166
 1
 167
Interest expense(21) —
 (21)
Earnings from discontinued operations145
 1
 146
Income tax (provision) benefit(17) 45
 28
Net earnings from discontinued operations, net of tax$128
 $46
 $174

(a) CBS Radio has been classified as held for sale beginning in the fourth quarter of 2016. Under ASC 360, assets held for sale are not depreciated or amortized.



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


Three Months Ended September 30, 2016CBS Radio Other Total
Revenues$317
 $—
 $317
Costs and expenses:

 

 

Operating110
 —
 110
Selling, general and administrative123
 —
 123
Depreciation and amortization7
 —
 7
Total costs and expenses240
 —
 240
Operating income77
 —
 77
Other income2
 —
 2
Earnings from discontinued operations79
 —
 79
Income tax provision(31) (36) (67)
Net earnings (loss) from discontinued operations, net of tax$48
 $(36) $12
Nine Months Ended September 30, 2017CBS Radio Other Total
Revenues$856
 $—
 $856
Costs and expenses: (a)


 

 

Operating307
 —
 307
Selling, general and administrative372
 (1) 371
Restructuring charge7
 —
 7
Provision for valuation allowance980
 —
 980
Total costs and expenses1,666
 (1) 1,665
Operating income (loss)(810) 1
 (809)
Interest expense(60) —
 (60)
Earnings (loss) from discontinued operations(870) 1
 (869)
Income tax (provision) benefit(47) 45
 (2)
Net earnings (loss) from discontinued operations, net of tax$(917) $46
 $(871)
(a) CBS Radio has been classified as held for sale beginning in the fourth quarter of 2016. Under ASC 360, assets held for sale are not depreciated or amortized.
Nine Months Ended September 30, 2016CBS Radio Other Total
Revenues$892
 $—
 $892
Costs and expenses:

 

 

Operating298
 —
 298
Selling, general and administrative359
 —
 359
Depreciation and amortization20
 —
 20
Total costs and expenses677
 —
 677
Operating income215
 —
 215
Other income2
 —
 2
Earnings from discontinued operations217
 —
 217
Income tax provision(88) (36) (124)
Net earnings (loss) from discontinued operations, net of tax$129
 $(36) $93

FASB Accounting Standards Codification (“ASC”) 360 requires that an asset classified as held for sale be measured each reporting period at the lower of its carrying amount or fair value less cost to sell. The ultimate value of the transaction with Entercom will be determined based on Entercom’s stock price at the closing of the transaction. The Company recorded a noncash gain of $100 million for the three months ended September 30, 2017 and a noncash charge of $980 million for the nine months ended September 30, 2017 associated with a valuation allowance to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom. The


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


Company will record an additional gain or loss upon the closing of the transaction, which is expected to occur in the fourth quarter of 2017. A 10% change to Entercom’s stock price would change the carrying value of CBS Radio by approximately $110 million.

For the nine months ended September 30, 2017, CBS Radio recorded a restructuring charge of $7 million associated with the reorganization of certain business operations, reflecting severance costs and costs associated with exiting contractual obligations.

Net Earnings and Diluted EPS
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017
2016
Increase/(Decrease) 2017 2016 Increase/(Decrease) 
Net earnings$592
 $478
  24%  $398
 $1,374
  (71)%  
Diluted EPS$1.46
 $1.07
  36%  $.97
 $3.02
  (68)%  
Segment Results of Operations
The Company presentsWe present operating income (loss) excluding depreciation and amortization, stock-based compensation, costs for restructuring charges and other operating items, net,corporate matters and gain on sales, each where applicable (“Segment Operating Income”Adjusted OIBDA”), as the primary measure of profit and loss for itsour operating segments in accordance with FASBFinancial Accounting Standards Board 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 (loss) is presented in Note 13 (Reportable Segments) to the consolidated financial statements.
Three Months Ended September 30, 2017
Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and 2016allocate resources that resulted in a change to our operating segments. Our management structure has been reorganized to focus on managing our business as the combination of three parts: a traditional media business, a portfolio of global direct-to-consumer streaming services, and a film studio. Accordingly, beginning in the first quarter of 2022, and for all periods presented we are reporting results based on the following segments:
•TV Media—Our TV Media segment consists of our domestic and international broadcast networks, including the CBS Television Network, Network 10, Channel 5, Telefe and Chilevisión; our premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, Smithsonian Channel, international extensions of these brands, and CBS Sports Network; our television production operations, including CBS Studios, Paramount Television Studios and CBS Media Ventures, which primarily produces or distributes first-run syndicated programming; and our owned broadcast television stations, CBS Stations.
•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of pay, free and premium global DTC services, including Paramount+, Pluto TV, Showtime Networks’ premium subscription streaming service (“Showtime OTT”), BET+ and Noggin.
•Filmed Entertainment—Our Filmed Entertainment segment consists of Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, and Miramax.
-39-
 Three Months Ended September 30,
  
% of Total
Revenues
  
% of Total
Revenues
Increase/(Decrease) 
 2017
2016$ % 
Revenues:             
Entertainment$1,815
 57 %  $1,949
 63 % $(134) (7)% 
Cable Networks840
 26
  598
 20
 242
 40
 
Publishing228
 7
  226
 7
 2
 1
 
Local Media397
 13
  409
 13
 (12) (3) 
Corporate/Eliminations(109) (3)  (98) (3) (11) (11) 
Total Revenues$3,171
 100 %  $3,084
 100 % $87
 3 % 

 Three Months Ended September 30,
  
% of Total
Operating
Income
  
% of Total
Operating
Income
  
    Increase/(Decrease) 
 2017 2016$ % 
Segment Operating Income (Loss):             
Entertainment$345
 49 %  $348
 48 % $(3) (1)% 
Cable Networks294
 42
  285
 40
 9
 3
 
Publishing46
 6
  44
 6
 2
 5
 
Local Media105
 15
  122
 17
 (17) (14) 
Corporate(83) (12)  (78) (11) (5) (6) 
Total Operating Income$707
 100 %  $721
 100 % $(14) (2)% 



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


Three Months Ended March 31,
% of Total
Revenues		% of Total
Revenues		Increase/(Decrease)
20222021$%
Revenues:
TV Media$5,645 77 %$5,993 81 %$(348)(6)%
Direct-to-Consumer1,089 15 598 8 491 82 
Filmed Entertainment624 8 860 12 (236)(27)
Eliminations(30)— (39)(1)9 23 
Total Revenues$7,328 100 %$7,412 100 %$(84)(1)%
 Three Months Ended September 30,
   Increase/(Decrease) 
 2017 2016 $ % 
Depreciation and Amortization:        
Entertainment$29
 $28
 $1
 4 % 
Cable Networks5
 6
 (1) (17) 
Publishing2
 1
 1
 100
 
Local Media11
 11
 —
 —
 
Corporate8
 8
 —
 —
 
Total Depreciation and Amortization$55
 $54
 $1
 2 % 
Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended September 30, 
  
% of Total
Revenues
  
% of Total
Revenues
Increase/(Decrease) 
 2017 2016$ % 
Revenues:             
Entertainment$6,346
 65 %  $6,483
 67 % $(137) (2)% 
Cable Networks1,954
 20
  1,659
 17
 295
 18
 
Publishing595
 6
  558
 6
 37
 7
 
Local Media1,218
 13
  1,253
 13
 (35) (3) 
Corporate/Eliminations(342) (4)  (305) (3) (37) (12) 
Total Revenues$9,771
 100 %  $9,648
 100 % $123
 1 % 
 Nine Months Ended September 30, 
  
% of Total
Segment
Operating
Income
  
% of Total
Segment
Operating
Income
  
    Increase/(Decrease) 
 2017 2016$ % 
Segment Operating Income (Loss):             
Entertainment$1,089
 53 %  $1,148
 54 % $(59) (5)% 
Cable Networks795
 38
  740
 35
 55
 7
 
Publishing88
 4
  83
 4
 5
 6
 
Local Media355
 17
  402
 19
 (47) (12) 
Corporate(247) (12)  (245) (12) (2) (1) 
Total Segment Operating Income2,080
 100 %  2,128
 100 % (48) (2) 
Other operating items, net—
    9
   (9) n/m
 
Total Operating Income$2,080
    $2,137
   $(57) (3)% 
Three Months Ended March 31,
Increase/(Decrease)
20222021$%
Adjusted OIBDA:
TV Media$1,544 $1,765 $(221)(13)%
Direct-to-Consumer(456)(149)(307)(206)
Filmed Entertainment(37)179 (216)n/m
Corporate/Eliminations(104)(116)12 10 
Stock-based compensation(34)(52)18 35 
Total Adjusted OIBDA913 1,627 (714)(44)
Depreciation and amortization(96)(99)3 3 
Restructuring and other corporate matters(57)— (57)n/m
Gain on sales15 — 15 n/m
Total Operating Income$775 $1,528 $(753)(49)%
n/m - not meaningful
TV Media
Three Months Ended March 31,
Increase/(Decrease)
TV Media20222021$%
Advertising
$2,521 $2,888 $(367)(13)%
Affiliate and subscription2,098 2,083 15 1 
Licensing and other1,026 1,022 4 — 
Revenues$5,645 $5,993 $(348)(6)%
Adjusted OIBDA$1,544 $1,765 $(221)(13)%

Revenues
For the three months ended March 31, 2022, revenues decreased 6%, driven by an 8-percentage point unfavorable impact from the comparison against CBS’ broadcast of the Super Bowl in the first quarter of 2021.

Advertising
The 13% decrease in advertising revenues was driven by the rotational nature of the rights to broadcast the Super Bowl, which aired on CBS in 2021 and another network in 2022, resulting in a negative impact on the advertising comparison of 17-percentage points. Additionally, advertising revenues benefited from an increase in pricing globally, which was largely offset by the impact from lower linear impressions for our domestic networks.
-40-
 Nine Months Ended September 30,
   Increase/(Decrease) 
 2017 2016 $ % 
Depreciation and Amortization:        
Entertainment$85
 $88
 $(3) (3)% 
Cable Networks17
 17
 —
 —
 
Publishing5
 4
 1
 25
 
Local Media34
 33
 1
 3
 
Corporate25
 26
 (1) (4) 
Total Depreciation and Amortization$166
 $168
 $(2) (1)% 




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


Affiliate and Subscription
Entertainment (CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS InteractiveAffiliate and CBS Films)
Three Months Ended September 30, 2017subscription revenues grew 1%, as the benefits from rate increases from multichannel video programming distributors (“MVPDs”) and 2016
 Three Months Ended September 30,
   Increase/(Decrease) 
Entertainment2017
2016 $ % 
Revenues$1,815
 $1,949
 $(134) (7)% 
Segment Operating Income$345
 $348
 $(3) (1)% 
Segment Operating Income as a % of revenues19% 18%     
Depreciation and amortization$29
 $28
 $1
 4 % 
Capital expenditures$25
 $23
 $2
 9 % 
For the three months ended September 30, 2017, the 7%decrease in revenues was driven by a 26% decline in content licensing and distribution revenues, mainly as a result of the timing of domesticthird-party live television licensing salesstreaming services (“virtual MVPDs” or “vMVPDs”), growth from station affiliates, and the benefit to 2016 from saleslaunch of various titles from the Company’s television library, whichour basic cable networks on a vMVPD in April 2021, were partiallysubstantially offset by growth in international licensing sales. Advertisingthe impact from MVPD subscriber declines.

Licensing and Other
Licensing and other revenues decreased 3%were substantially flat at $1.03 billion for the three months ended September 30, 2017,March 31, 2022.

Adjusted OIBDA
Adjusted OIBDA decreased13%, reflecting lower ratings, partially offset bythe benefit to the prior-year period from the broadcast of the Super Bowl, and higher pricing.costs associated with more original programming and other sports broadcasts in 2022.
Direct-to-Consumer
Three Months Ended March 31,
Direct-to-Consumer20222021Increase/(Decrease)
Advertising$347 $218 $129 59 %
Subscription742 380 362 95 
Revenues$1,089 $598 $491 82 %
Adjusted OIBDA$(456)$(149)$(307)(206)%
Global DTC Subscribers (a)
62.4 35.9 26.5 74 %
Three Months Ended March 31,
20222021Increase/(Decrease)
Paramount+ (Global)
Subscribers (a)
39.6 16.5 23.1 140 %
Revenues$585 $236 $349 148 %
Pluto TV (Global)
MAUs (b)
67.5 49.5 18.0 36 %
Revenues$253 $167 $86 51 %
(a) Direct-to-consumer streaming subscribers (“DTC subscribers”) include customers with access to our domestic or international DTC services, either directly through our owned and operated apps and websites, or through third-party distributors. Our subscribers include paid subscriptions and those customers registered in a free trial, and subscribers are considered unique to each of our services, whether offered individually or as part of a bundle. Global DTC subscribers include subscribers for Paramount+, Showtime OTT and all other DTC subscription streaming services.
(b) The advertising comparison was also impacted by one less Thursday Night Football game broadcast onMonthly Active Users (“MAUs”) count reflects the CBS Television Networknumber of unique devices interacting with the Pluto TV service in a calendar month, and for the third quarterperiods above reflects the MAU count for the last month of 2017. These decreases were partially offset by 35% growth in affiliate and subscription fees, reflecting higher station affiliation fees and growth from new digital initiatives, including CBS All Access and third-party live television streaming services.the applicable period.

Revenues
For the three months ended September 30, 2017, operating income decreased 1%, whileMarch 31, 2022, the operating income margin expanded one percentage point reflecting a mix of higher-margin revenues in 2017.

Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended September 30,
   Increase/(Decrease) 
Entertainment2017 2016 $ % 
Revenues$6,346
 $6,483
 $(137) (2)% 
Segment Operating Income$1,089
 $1,148
 $(59) (5)% 
Segment Operating Income as a % of revenues17% 18%     
Depreciation and amortization$85
 $88
 $(3) (3)% 
Capital expenditures$63
 $60
 $3
 5 % 
For the nine months ended September 30, 2017, the 2% decrease82% increase in revenues mainly reflects the benefit in 2016 from the broadcast of Super Bowl 50, whichfor our DTC services was partially offset by a 34% increase in affiliate and subscription fees, reflecting higher station affiliation fees and growth from new digital initiatives, including CBS All Access and third-party live television streaming services. Content licensing and distribution revenues were comparable with the prior-year period, as strong demand for the Company’s content internationally, due in part to increased investment in internally-produced series, was partially offset by the benefit to 2016 from the international licensing sales of five Star Trek library series and the timing of domestic television licensing sales.

For the nine months ended September 30, 2017, the 5% decrease in operating income was primarily driven by the revenue decline.growth for Paramount+ and Pluto TV.

-41-



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


Advertising
Cable Networks (The 59% increase in advertising revenues reflects growth from Pluto TV and Paramount+, which was driven by increases in pricing and impressions, including from the benefit of MAU growth for Pluto TV and subscriber growth for Paramount+. Pluto TV global MAUs were 67.5 million for March 2022, reflecting growth of 18.0 million, or 36%, from 49.5 million for March 2021, and 3.1 million, or 5%, from 64.4 million for December 2021.

Subscription
The 95% increase in subscription revenues was driven by growth from Paramount+ and Showtime Networks, CBS Sports NetworkOTT. Global DTC subscribers grew 26.5 million, or 74%, compared with March 31, 2021, led by an increase of 23.1 million, or 140% for Paramount+, including the impact from launches in international markets. During the quarter, Paramount+ subscribers grew 6.8 million, or 21%, to 39.6 million at March 31, 2022 from 32.8 million at December 31, 2021, driven by new original scripted dramas, including 1883 and Smithsonian Networks)Halo; film releases, including Scream and Jackass Forever; NFL playoff games; and launches in international markets in the quarter.
Three Months Ended September 30, 2017
Adjusted OIBDA
Adjusted OIBDA decreased $307 million, as the revenue growth was more than offset by higher costs to support growth in our DTC services including content, marketing, distribution, employee and 2016technology costs.
 Three Months Ended September 30,
   Increase/(Decrease) 
Cable Networks2017
2016 $ % 
Revenues$840
 $598
 $242
 40 % 
Segment Operating Income$294
 $285
 $9
 3 % 
Segment Operating Income as a % of revenues35% 48%     
Depreciation and amortization$5
 $6
 $(1) (17)% 
Capital expenditures$5
 $4
 $1
 25 % 
Filmed Entertainment
Three Months Ended March 31,
Increase/(Decrease)
Filmed Entertainment20222021$%
Advertising (a)
$2 $6 $(4)(67)%
Theatrical131 1 130 n/m
Licensing and other491 853 (362)(42)
Revenues$624 $860 $(236)(27)%
Adjusted OIBDA$(37)$179 $(216)n/m
(a) Reflects advertising revenues earned from the use of Filmed Entertainment content on third party digital platforms.
n/m - not meaningful
Revenues
For the three months ended September 30, 2017,March 31, 2022, the 40% increase27% decrease in revenues was driven by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, growth from the Showtime digital streaming subscription offering and higher international televisionlower licensing sales. These increases wererevenues, partially offset by lower domestic television licensing sales, largely due torevenues from current quarter theatrical releases.

Theatrical
The increase in theatrical revenues reflects the salereleases of Penny DreadfulScream, Jackass Forever,and The Lost City in the thirdcurrent year, while the prior-year quarter of 2016. As of September 30, 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.

For the three months ended September 30, 2017, the 3%increase in operating income primarily reflects the revenue growth, which was significantly offset by costs associated with the aforementioned pay-per-view boxing event.

Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended September 30,
   Increase/(Decrease) 
Cable Networks2017 2016 $ % 
Revenues$1,954
 $1,659
 $295
 18% 
Segment Operating Income$795
 $740
 $55
 7% 
Segment Operating Income as a % of revenues41% 45%     
Depreciation and amortization$17
 $17
 $—
 —% 
Capital expenditures$12
 $8
 $4
 50% 
For the nine months ended September 30, 2017, the 18% increase in revenues was drivenimpacted by the aforementioned pay-per-view boxing event, growth from the Showtime digital streaming subscription offering and higher international television licensing sales. These increases were partially offset by lower domestic television licensing sales, largely dueclosure or reduced capacity of movie theaters in response to the sale of Penny Dreadful in 2016.COVID-19.
For the nine months ended September 30, 2017, the 7% increase in operating income was driven by the revenue growth, which was significantly offset by higher costs associated with the pay-per-view boxing event.

-42-



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


Licensing and Other
Publishing (Simon & Schuster)
Three Months Ended September 30, 2017The 42% decrease in licensing and 2016
 Three Months Ended September 30,
   Increase/(Decrease) 
Publishing2017
2016 $ % 
Revenues$228
 $226
 $2
 1% 
Segment Operating Income$46
 $44
 $2
 5% 
Segment Operating Income as a % of revenues20% 19%     
Depreciation and amortization$2
 $1
 $1
 100% 
Capital expenditures$1
 $1
 $—
 —% 
Forother revenues primarily reflects the three months ended September 30, 2017,benefit from the 1% increaselicensing of Coming 2 America and Tom Clancy’s Without Remorse in revenues wasthe prior-year quarter, as well as lower licensing of film library titles driven by higher print book salesthe timing of availabilities and growtha lower volume of licensing of television programming in digital audio sales. Bestselling titles in the third quarter of 2017 included What Happened by Hillary Rodham Clinton and Sleeping Beauties by Stephen King and Owen King.

For the three months ended September 30, 2017, the 5% increase in operating income mainly reflects revenue growth.

Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended September 30,
   Increase/(Decrease) 
Publishing2017 2016 $ % 
Revenues$595
 $558
 $37
 7 % 
Segment Operating Income$88
 $83
 $5
 6 % 
Segment Operating Income as a % of revenues15% 15%     
Depreciation and amortization$5
 $4
 $1
 25 % 
Capital expenditures$2
 $7
 $(5) (71)% 
For the nine months ended September 30, 2017, the 7% increase in revenues was driven by higher print book sales and growth in digital audio sales.

For the nine months ended September 30, 2017, the 6% increase in operating income reflects the revenue growth, which was2022. These declines were partially offset by higher production costs.revenues in the current year from the licensing of our 2021 theatrical slate, including Clifford the Big Red Dog and Snake Eyes: GI Joe Origins.


Adjusted OIBDA
Adjusted OIBDA decreased $216 million, mainly reflecting lower revenues of $236 million with costs only decreasing by $20 million, as lower content costs resulting from the decline in revenues were substantially offset by distribution costs in 2022 associated with theatrical releases. Fluctuations in results for the Filmed Entertainment segment may occur as a result of the timing of the recognition of 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 distribution to other platforms.
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 expected to be generated and available to meet these needs. Our operating needs include, among other items, expenditures for content for our broadcast and cable networks and streaming services, including television and film programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content and platforms; payments for leases, interest, and income taxes; and pension funding obligations. Our investing and financing spending includes capital expenditures; acquisitions; funding relating to new and existing investments, including future funding of our streaming joint venture with Comcast, SkyShowtime, under which both parent companies have committed to support initial operations, beginning in 2022; 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 described below, as well as 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, including our long-term debt obligations due over the next five years, which were $3.39 billion as of March 31, 2022, and $2.42 billion after the redemption of $970 million of senior notes in April 2022, as well as our other long term commitments, will come primarily from cash flows from operating activities, proceeds from non-core asset sales, including the planned sale of Simon & Schuster described below, and our ability to refinance our debt. 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 manage our outstanding maturities, which could result in a charge from the early extinguishment of debt.

During 2020, we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, and expect to use proceeds from the sale to invest in our strategic growth priorities, including in streaming, as well as to fund dividends and pay down debt. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also

-43-



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


provides for a $200 million termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory reasons (see Legal Matters).
Local Media (CBSTelevision Stations
On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and CBS Local Digital Media)10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the net proceeds for general corporate purposes, including investments in streaming.
Three Months Ended September 30, 2017
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 2016balance 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.
 Three Months Ended September 30,
   Increase/(Decrease) 
Local Media2017 2016 $ % 
Revenues$397
 $409
 $(12) (3)% 
Segment Operating Income$105
 $122
 $(17) (14)% 
Segment Operating Income as a % of revenues26% 30%     
Depreciation and amortization$11
 $11
 $—
 — % 
Capital expenditures$8
 $9
 $(1) (11)% 
Cash Flows
The changes in cash, cash equivalents and restricted cash were as follows:
Three Months Ended March 31,
20222021Increase/(Decrease)
Net cash flow provided by operating activities from:
Continuing operations$295 $1,651 $(1,356)
Discontinued operations102 72 30 
Net cash flow provided by operating activities397 1,723 (1,326)
Net cash flow (used for) provided by investing activities(80)86 (166)
Net cash flow (used for) provided by financing activities(1,271)723 (1,994)
Effect of exchange rate changes on cash and cash equivalents(11)(19)8 
Net (decrease) increase in cash, cash equivalents and restricted cash$(965)$2,513 $(3,478)
Operating Activities. For the three months ended September 30, 2017,March 31, 2022, the 3% decrease in revenuescash flow provided by operating activities from continuing operations was mainly driven by lower political advertising sales, which was partially offset by growthan increased investment in retransmission revenues.

Forour DTC services, including spending for content, marketing and distribution costs, as well as the timing of incentive compensation payments and content spending for our broadcast and cable networks. In addition, payments for restructuring activities were $44 million and $84 million for the three months ended September 30, 2017,March 31, 2022 and 2021, respectively.
Cash flow provided by operating activities from discontinued operations reflects the 14% decrease in operating income primarily reflects a decline in high-margin political advertising sales.

During the fourth quarteractivities of 2017, the revenue comparison will continue to be negatively impacted by the benefit in 2016 from strong political advertising associated with U.S. federal and state elections.

Nine Months Ended September 30, 2017 and 2016Simon & Schuster.
-44-
 Nine Months Ended September 30,
   Increase/(Decrease) 
Local Media2017 2016 $ % 
Revenues$1,218
 $1,253
 $(35) (3)% 
Segment Operating Income$355
 $402
 $(47) (12)% 
Segment Operating Income as a % of revenues29% 32%     
Depreciation and amortization$34
 $33
 $1
 3 % 
Capital expenditures$20
 $20
 $—
 — % 

For the nine months ended September 30, 2017, the 3% decrease in revenues was driven by lower advertising revenues, reflecting the benefit in 2016 from CBS’s broadcast of Super Bowl 50 and a decline in political advertising sales. This decrease was partially offset by growth in retransmission revenues.
For the nine months ended September 30, 2017, the 12% decrease in operating income primarily reflects lower revenues, as well as the mix of revenues compared to the same prior-year period. Retransmission revenues have associated network affiliation costs paid to the CBS Television Network, whereas political advertising sales have a high operating income margin.



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


Investing Activities
Corporate
Three Months Ended September 30, 2017 and 2016
 Three Months Ended September 30,
   Increase/(Decrease) 
Corporate2017
2016 $ % 
Segment Operating Loss$(83) $(78) $(5) (6)% 
Depreciation and amortization$8
 $8
 $—
 — % 
Capital expenditures$5
 $5
 $—
 — % 
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. For the three months ended September 30, 2017, corporate expenses increased 6%, driven primarily by higher employee-related costs.
Nine Months Ended September 30, 2017 and 2016
 Nine Months Ended September 30,
   Increase/(Decrease) 
Corporate2017 2016 $ % 
Segment Operating Loss$(247) $(245) $(2) (1)% 
Depreciation and amortization$25
 $26
 $(1) (4)% 
Capital expenditures$15
 $16
 $(1) (6)% 
Financial Position
 At At Increase/(Decrease) 
 September 30, 2017
December 31, 2016 $ % 
Current Assets:            
Cash and cash equivalents $144
   $598
  $(454) (76)% 
Receivables, net (a)
 3,598
   3,314
  284
 9
 
Programming and other inventory (b)
 1,830
   1,427
  403
 28
 
Prepaid expenses 182
   185
  (3) (2) 
All other current assets 540
   539
  1
 —
 
Total current assets $6,294
   $6,063
  $231
 4 % 
Three Months Ended March 31,
20222021
Investments (a)
$(59)$(40)
Capital expenditures(52)(62)
Proceeds from dispositions (b)
31 213 
Other investing activities— (25)
Net cash flow (used for) provided by investing activities$(80)$86 
(a) Primarily includes our investment in The increase primarily relates to Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event.CW.
(b) The increase primarily2022 reflects the timingdisposition of payments for sports programming.
 At At Increase/(Decrease) 
 September 30, 2017 December 31, 2016 $ % 
Assets of discontinued operations (a)
 $3,325
   $4,291
  $(966) (23)% 
(a) The decrease primarilyinternational intangible assets. 2021 reflects a noncash charge of $980 million associated with a valuation allowance to reduce the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom. (See Note 3 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)


 At At Increase/(Decrease) 
 September 30, 2017 December 31, 2016 $ % 
Current Liabilities:            
Accounts payable (a)
 $233
   $148
  $85
 57 % 
Accrued compensation (a)
 257
   369
  (112) (30) 
Participants’ share and royalties
payable
 997
   1,024
  (27) (3) 
Program rights (b)
 509
   290
  219
 76
 
Commercial paper 590
   450
  140
 31
 
All other current liabilities 1,466
   1,427
  39
 3
 
Total current liabilities $4,052
   $3,708
  $344
 9 % 
(a) The increase (decrease) 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.
 At At Increase/(Decrease) 
 September 30, 2017 December 31, 2016 $ % 
Pension and postretirement
benefit obligations (a)
 $1,619
   $1,769
  $(150) (8)% 
(a) The decrease primarily reflects discretionary pension contributions of $100 million made during the first quarter of 2017 to prefund the Company’s qualified plans.
Cash Flows
The changes in cash and cash equivalents were as follows:
 Nine Months Ended September 30,
 2017 2016 Increase/(Decrease)
Net cash flow provided by operating activities from:       
Continuing operations$935
 $1,117
  $(182) 
Discontinued operations52
 189
  (137) 
Net cash flow provided by operating activities987
 1,306
  (319) 
Net cash flow used for investing activities from:       
Continuing operations(399) (179)  (220) 
Discontinued operations(18) (2)  (16) 
Net cash flow used for investing activities(417) (181)  (236) 
Net cash flow used for financing activities(1,018) (1,269)  251
 
Net decrease in cash and cash equivalents$(448) $(144)  $(304) 
Operating Activities. For the nine months ended September 30, 2017, the decrease in cash provided by operating activities from continuing operations was driven by the decline in advertising revenues includingproceeds received from the benefitsale of our investment in 2016 from CBS’s broadcast of Super Bowl 50, and discretionary pension contributions of $100 million madefuboTV Inc. during the first quarter of 2017 to prefund the Company’s qualified plans. 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)


Investing Activities
 Nine Months Ended September 30,
 2017
2016
Acquisitions (including acquired television library) (a)
 $(258)   $(51) 
Capital expenditures (112)   (111) 
Investments in and advances to investee companies (b)
 (67)   (44) 
Proceeds from dispositions (c)
 11
   20
 
All other investing activities, net 27
   7
 
Net cash flow used for investing activities from continuing operations (399)   (179) 
Net cash flow used for investing activities from discontinued operations (18)   (2) 
Net cash flow used for investing activities $(417)   $(181) 
(a) On August 27, 2017, CBS signed a binding agreement to acquire Ten Networks Holdings Limited (“Network Ten”), one of three major commercial broadcast networks in Australia, after Network Ten entered into voluntary administration. During the third quarter of 2017, the Company paid $138 million of the purchase price, primarily for the assumption of the secured debt of Network Ten’s lenders, and funding for working capital. The transaction, which is expected to close in the fourth quarter will be completed in accordance with Australian applicable laws and procedures and is subject to certain regulatory approvals. 2017 also includes the acquisition of a television library and 2016 reflects the acquisition of a sports-focused digital media business.2020.
(b) Mainly includes the Company’s investment in The CW as well as its other domestic and international television joint ventures.
(c) 2016 primarily reflects sales of internet businesses in China.

Financing ActivitiesLiquidity and Capital Resources
Sources and Uses of Cash
 Nine Months Ended September 30,
 2017 2016
Repurchase of CBS Corp. Class B Common Stock $(1,111)   $(1,534) 
Proceeds from short-term debt borrowings, net 140
   33
 
Proceeds from issuance of senior notes 889
   685
 
Repayment of senior notes and debentures (701)   (199) 
Dividends (224)   (209) 
Payment of payroll taxes in lieu of issuing shares for stock-based compensation (89)   (57) 
Proceeds from exercise of stock options 81
   13
 
All other financing activities, net (3)   (1) 
Net cash flow used for financing activities $(1,018)   $(1,269) 
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows expected to be generated and available to meet these needs. Our operating needs include, among other items, expenditures for content for our broadcast and cable networks and streaming services, including television and film programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content and platforms; payments for leases, interest, and income taxes; and pension funding obligations. Our investing and financing spending includes capital expenditures; acquisitions; funding relating to new and existing investments, including future funding of our streaming joint venture with Comcast, SkyShowtime, under which both parent companies have committed to support initial operations, beginning in 2022; 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 described below, as well as access to capital markets are sufficient to fund our operating, investing and financing requirements for the next twelve months.


Free Cash Flow
FreeOur funding for short-term and long-term obligations, including our long-term debt obligations due over the next five years, which were $3.39 billion as of March 31, 2022, and $2.42 billion after the redemption of $970 million of senior notes in April 2022, as well as our other long term commitments, will come primarily from cash flow is a non-GAAP financial measure. Free cash flow reflects the Company’s net cash flow provided by (used for)flows from operating activities, before operatingproceeds from non-core asset sales, including the planned sale of Simon & Schuster described below, and our ability to refinance our debt. Any additional cash flowfunding 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 manage our outstanding maturities, which could result in a charge from discontinued operationsthe early extinguishment of debt.

During 2020, we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, and less capital expenditures.expect to use proceeds from the sale to invest in our strategic growth priorities, including in streaming, as well as to fund dividends and pay down debt. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The Company’s calculationpurchase agreement contains commitments on the part of free cash flow includes capital expenditures because investment in capital expenditures is a use of cashthe purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that is directly related to the Company’s operations. The Company’s net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.

would delay or prevent consummation, and also

-43-



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


provides for a $200 million termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory reasons (see Legal Matters).
Management believes free cash flow provides investors with an important perspective on the cash available
On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the Companypublic of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to service debt, make strategic acquisitionsthe public and investments, maintain its capital assets, satisfy its tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow is a significant measureliquidation preference of the Company’s 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’s operating performance.$100 per share. The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generatednet proceeds from the Company’s underlying operationsClass B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in a manner similareach case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the method usednet proceeds for general corporate purposes, including investments in streaming.
Our access to capital markets can be impacted by management. Freefactors outside our control, including economic conditions; however, we believe that our strong cash flow is one of several components of incentive compensation targetsflows and balance sheet, our credit facility and our credit rating will provide us with adequate access to funding for certain management personnel. In addition, free cash flow is a primary measure used externally by the Company’s investors, analysts and industry peers for purposes of valuation and comparison of the Company’s operating performance to other companies in its industry.

As free cash flow is not a measure calculated in accordance with GAAP, free cash flow should not be considered in isolation of, or as a substitute for, either net cash flow provided by (used for) operating activities as a measure of liquidity or net earnings (loss) as a measure of operating performance. Free cash flow, as the Company calculates 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’s ability to fund itsour expected cash needs. When comparing free cash flowThe 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 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 eventsaccess capital markets on terms and transactionsconditions that are not reflected in free cash flow.will be favorable to us.

Cash Flows
The following table presents a reconciliation ofchanges in cash, cash equivalents and restricted cash were as follows:
Three Months Ended March 31,
20222021Increase/(Decrease)
Net cash flow provided by operating activities from:
Continuing operations$295 $1,651 $(1,356)
Discontinued operations102 72 30 
Net cash flow provided by operating activities397 1,723 (1,326)
Net cash flow (used for) provided by investing activities(80)86 (166)
Net cash flow (used for) provided by financing activities(1,271)723 (1,994)
Effect of exchange rate changes on cash and cash equivalents(11)(19)8 
Net (decrease) increase in cash, cash equivalents and restricted cash$(965)$2,513 $(3,478)
Operating Activities. For the Company’s netthree months ended March 31, 2022, the decrease in cash flow provided by operating activities to free cash flow.
 Nine Months Ended
 September 30,
 2017 2016
Net cash flow provided by operating activities$987
 $1,306
Capital expenditures(112) (111)
Exclude operating cash flow from discontinued operations52
 189
Free cash flow$823
 $1,006

Repurchasefrom continuing operations was mainly driven by an increased investment in our DTC services, including spending for content, marketing and distribution costs, as well as the timing of Company Stockincentive compensation payments and Cash Dividends
Duringcontent spending for our broadcast and cable networks. In addition, payments for restructuring activities were $44 million and $84 million for the third quarter of 2017, the Company repurchased 3.9 million shares of its Class B Common Stock under its share repurchase program for $250 million, at an average cost of $63.52 per share. During the ninethree months ended September 30, 2017,March 31, 2022 and 2021, respectively.
Cash flow provided by operating activities from discontinued operations reflects the Company repurchased 16.2 million sharesoperating activities of its Class B Common Stock for $1.05 billion, at an average cost of $64.70 per share, leaving $3.06 billion of authorization at September 30, 2017.Simon & Schuster.

-44-

During the third quarter of 2017, the Company declared a quarterly cash dividend of $.18 on its Class A and Class B Common Stock, resulting in total dividends of $73 million, which were paid on October 1, 2017.



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


Investing Activities
Capital Structure
The following table sets forth the Company’s debt.
 At At
 September 30, 2017 December 31, 2016
Commercial paper $590
   $450
 
Senior debt (1.95% – 7.875% due 2017 – 2045) (a)
 9,039
   8,850
 
Obligations under capital leases 60
   75
 
Total debt 9,689
   9,375
 
Less commercial paper 590
   450
 
Less current portion of long-term debt 19
   23
 
Total long-term debt, net of current portion $9,080
   $8,902
 
Three Months Ended March 31,
20222021
Investments (a)
$(59)$(40)
Capital expenditures(52)(62)
Proceeds from dispositions (b)
31 213 
Other investing activities— (25)
Net cash flow (used for) provided by investing activities$(80)$86 
(a) At September 30, 2017 and December 31, 2016,Primarily includes our investment in The CW.
(b) 2022 reflects the senior debt balances included (i) a net unamortized discountdisposition of $55 million and $52 million, respectively, (ii) unamortized deferred financing costsinternational intangible assets. 2021 reflects proceeds received from the sale of $45 million and $43 million, respectively, and (iii) a $2 million decrease and a $5 million increase, respectively,our investment in fuboTV Inc. during the carrying valuefourth quarter of the debt relating to previously settled fair value hedges. The face value of the Company’s senior debt was $9.14 billion and $8.94 billion at September 30, 2017 and December 31, 2016, respectively.2020.

In July 2017, the Company issued $400 million of 2.50% senior notes due 2023 and $500 million of 3.375% senior notes due 2028. The Company used the net proceeds from these issuances to repay its $400 million outstanding 1.95% senior notes that matured on July 1, 2017 and to redeem all of its $300 million outstanding 4.625% senior notes due May 2018. The remaining proceeds were used for general corporate purposes, including the repayment of short-term borrowings, including commercial paper.

The early redemption of the $300 million 4.625% senior notes due May 2018 resulted in a pre-tax loss on early extinguishment of debt of $5 million ($3 million, net of tax) for the three and nine months ended September 30, 2017.

Commercial Paper
The Company had outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $590 million and $450 million at September 30, 2017 and December 31, 2016, respectively, each with maturities of less than 60 days. The weighted average interest rate for these borrowings was 1.44% at September 30, 2017 and 0.98% at December 31, 2016.

Credit Facility
At September 30, 2017, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. 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 September 30, 2017, the Company’s Consolidated Leverage Ratio was approximately 3.0x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.



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


The Credit Facility is used for general corporate purposes. At September 30, 2017, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.

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 expected to be generated from operating activitiesand available to meet these needs. The Company’sOur operating needs include, among other items, commitmentsexpenditures for sports programming rights,content for our broadcast and cable networks and streaming services, including television and film programming, sports rights, and talent contracts, operatingas well as advertising and marketing costs to promote our content and platforms; payments for leases, interest, payments,and income taxes; and pension funding obligations. The Company’sOur investing and financing spending includes capital expenditures,expenditures; acquisitions; funding relating to new and existing investments, including future funding of our streaming joint venture with Comcast, SkyShowtime, under which both parent companies have committed to support initial operations, beginning in 2022; share repurchases,repurchases; dividends and principal payments on itsour outstanding indebtedness. The Company believesWe believe that itsour operating cash flows;flows, cash and cash equivalents;equivalents, borrowing capacity under theour $3.50 billion Credit Facility which had $2.49 billion of remaining availability at September 30, 2017; anddescribed below, as well as 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, including our long-term debt obligations due over the next five years, which were $3.39 billion as of March 31, 2022, and $2.42 billion after the redemption of $970 million of senior notes in April 2022, as well as our other long term commitments, will come primarily from cash flows from operating activities.activities, proceeds from non-core asset sales, including the planned sale of Simon & Schuster described below, and our ability to refinance our debt. 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 Company We routinely assesses itsassess our capital structure and opportunistically entersenter into transactions to lower its interest expense,manage our outstanding maturities, which could result in a charge from the early extinguishment of debt.


During 2020, we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, and expect to use proceeds from the sale to invest in our strategic growth priorities, including in streaming, as well as to fund dividends and pay down debt. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also
-43-


Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
provides for a $200 million termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory reasons (see Legal Matters).

On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses. We have used and intend to continue to use the net proceeds for general corporate purposes, including investments in streaming.
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.
Cash Flows
The Company’s long-term debt obligations due overchanges in cash, cash equivalents and restricted cash were as follows:
Three Months Ended March 31,
20222021Increase/(Decrease)
Net cash flow provided by operating activities from:
Continuing operations$295 $1,651 $(1,356)
Discontinued operations102 72 30 
Net cash flow provided by operating activities397 1,723 (1,326)
Net cash flow (used for) provided by investing activities(80)86 (166)
Net cash flow (used for) provided by financing activities(1,271)723 (1,994)
Effect of exchange rate changes on cash and cash equivalents(11)(19)8 
Net (decrease) increase in cash, cash equivalents and restricted cash$(965)$2,513 $(3,478)
Operating Activities. For the next five years of $2.10 billion are expected to be fundedthree months ended March 31, 2022, the decrease in cash flow provided by cash generated from operating activities from continuing operations was mainly driven by an increased investment in our DTC services, including spending for content, marketing and distribution costs, as well as the Company’s ability to refinance its debt.timing of incentive compensation payments and content spending for our broadcast and cable networks. In addition, payments for restructuring activities were $44 million and $84 million for the three months ended March 31, 2022 and 2021, respectively.

Cash flow provided by operating activities from discontinued operations reflects the operating activities of Simon & Schuster.
-44-


Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Investing Activities
Three Months Ended March 31,
20222021
Investments (a)
$(59)$(40)
Capital expenditures(52)(62)
Proceeds from dispositions (b)
31 213 
Other investing activities— (25)
Net cash flow (used for) provided by investing activities$(80)$86 
(a) Primarily includes our investment in The Company expects to make a pension contributionCW.
(b) 2022 reflects the disposition of $500 millioninternational intangible assets. 2021 reflects proceeds received from the sale of our investment in fuboTV Inc. during the fourth quarter of 2017,2020.
Financing Activities
Three Months Ended March 31,
20222021
Proceeds from issuance of long-term debt$1,028 $25 
Repayment of long-term debt(2,009)(2,117)
Dividends paid on preferred stock(14)— 
Dividends paid on common stock(158)(151)
Proceeds from issuance of preferred stock— 983 
Proceeds from issuance of common stock— 1,672 
Payment of payroll taxes in lieu of issuing shares for stock-based compensation(9)(35)
Proceeds from exercise of stock options— 408 
Payments to noncontrolling interests(77)(27)
Other financing activities(32)(35)
Net cash flow (used for) provided by financing activities$(1,271)$723 
Dividends
We declared cash dividends of $.24 per share on our Class A and Class B Common Stock, during the three months ended March 31, 2022 and 2021, resulting in total dividends of $159 million and $152 million, respectively.
During the first quarter of 2022 we declared a quarterly cash dividend of $1.4375 per share on our Mandatory Convertible Preferred Stock, resulting in total dividends of $14.4 million. During the three months ended March 31, 2021, we recorded dividends of $1 million on our Mandatory Convertible Preferred Stock, representing dividends accumulated from the issuance on March 26 through March 31, 2021.
-45-


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.
AtAt
March 31, 2022December 31, 2021
Senior debt (2.90%-7.875% due 2023-2050)$15,095 $16,501 
Junior debt (5.875%-6.375% due 2057 and 2062)1,632 1,157 
Other bank borrowings65 35 
Obligations under finance leases20 16 
Total debt (a)
16,812 17,709 
Less current portion of long-term debt15 11 
Total long-term debt, net of current portion$16,797 $17,698 
(a) At March 31, 2022 and December 31, 2021, the senior and junior subordinated debt balances included (i) a net unamortized discount of $459 million and $466 million, respectively, and (ii) unamortized deferred financing costs of $97 million and $95 million, respectively. The face value of our total debt was $17.37 billion and $18.27 billion at March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we redeemed all of our notes due in 2024, which were comprised of $492 million of 3.875% senior notes and $600 million of 3.70% senior notes, and also redeemed $325 million of our 3.50% senior notes due 2025, for an aggregate redemption price of $1.48 billion. We also redeemed our $520 million of 5.875% junior subordinated debentures due February 2057 at par. These redemptions resulted in a total pre-tax loss on extinguishment of debt of $73 million.

During the three months ended March 31, 2022, we issued $1.00 billion of 6.375% junior subordinated debentures due 2062. The interest rate on these debentures will reset on March 30, 2027, and every five years thereafter to a fixed rate equal to the 5-year Treasury Rate (as defined pursuant to the terms of the debentures) plus a spread of 3.999% from March 30, 2027, 4.249% from March 30, 2032 and 4.999% from March 30, 2047. These debentures can be called by us at par plus a make whole premium any time before March 30, 2027, or at par on March 30, 2027, or at any interest payment date thereafter.

In April 2022, we redeemed the remaining $275 million of our 3.50% senior notes due 2025, and $695 million of our 4.75% senior notes due 2025, for an aggregate redemption price of $1.01 billion.

During the three months ended March 31, 2021, we redeemed senior notes totaling $1.99 billion, prior to maturity, for an aggregate redemption price of $2.11 billion resulting in a pre-tax loss on extinguishment of debt of $128 million.

Our 6.25% junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2027, on which date the rate will switch to a floating rate. Under the terms of the debentures the floating rate is expectedbased on three-month LIBOR plus 3.899%, reset quarterly. These debentures can be called by us at par at any time after the expiration of the fixed-rate period.

The subordination, interest deferral option and extended term of our 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.

-46-


Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Commercial Paper
At both March 31, 2022 and December 31, 2021, we had no outstanding commercial paper borrowings.

Credit Facility
At March 31, 2022, we had 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 borrowings, 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 the time of each borrowing and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based on our senior unsecured debt rating), depending on the type and tenor of the loans entered. The benchmark rate for loans denominated in euros, sterling and yen is based on EURIBOR, SONIA and TIBOR rates, respectively. The Credit Facility has one principal financial covenant that requires our Consolidated Total Leverage Ratio to be partially fundedless 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. On February 14, 2022, we amended our Credit Facility to modify the definition of the Consolidated Total Leverage Ratio in the amended credit agreement to allow unrestricted cash and cash equivalents to be netted against Consolidated Indebtedness through June 2024. We met the covenant as of March 31, 2022.

At March 31, 2022, 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 March 31, 2022 and December 31, 2021, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of $65 million and $35 million, respectively, each with a weighted average interest rate of 3.50%.
Guarantees
Letters 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 March 31, 2022, the outstanding letters of credit and surety bonds approximated $177 million and were not recorded on the Consolidated Balance Sheet.

CBS Television City
In connection with the sale of the CBS Television City property and sound stage operation (“CBS Television City”) in 2019, we guaranteed a specified level of cash flows to be generated by long-term borrowings.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 March 31, 2022 is a liability totaling $50 million, reflecting the present value of the estimated amount remaining under the guarantee obligation.


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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)
Lease Guarantees
We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc. These lease commitments totaled $46 million at March 31, 2022 and are presented within “Other liabilities” on the Consolidated Balance Sheet. The amount of lease commitments varies over time depending on the 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.

Other
In the course of our business, we both provide and receive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, we may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities when probable and reasonably estimable.
Legal Matters
General.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, financial position operations.

Litigation Relating to the Merger
Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or cash flows. Underputative class action lawsuits in the SeparationCourt of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the three 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 the Company as nominal defendant. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and approval of the Agreement and Plan of merger of Viacom Inc. (“Viacom”) with and into CBS Corporation (“CBS”) (the “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 is
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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)
proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

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 Entertainment Holdings LLC, Shari E. Redstone, the members of the 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 is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters
As announced on August 1, 2018, the CBS Board of Directors retained two law firms to conduct a full investigation of the allegations in press reports about CBS’ former Chairman of the Board, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board of Directors announced the completion of its investigation, certain findings of the investigation and the CBS Board of Directors’ determination, with respect to the termination of Mr. Moonves’ employment. We have received subpoenas or requests for information from the New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related 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 have reached an agreement with the plaintiffs to settle the lawsuit. The settlement, which includes no admission of liability or
-49-


Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
wrongdoing by the Company, is subject to court approval. All amounts payable by the Company under the settlement will be paid by the Company’s insurers.

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 fourteen 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 other defendants filed a motion to dismiss the matter, which was denied by the court on November 6, 2020. We have reached an agreement in principle with the plaintiffs to settle the lawsuit. The settlement, which will include no admission of liability or wrongdoing by the Company, will be subject to court approval.

Litigation Related to Stock Offerings
On August 13, 2021, Camelot Event Driven Fund filed a putative securities class action lawsuit in New York Supreme Court, County of New York, and on November 5, 2021, an amended complaint was filed that, among other changes, added an additional named plaintiff (the “Complaint”). The Complaint is purportedly on behalf of investors who purchased shares of the Company’s Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock pursuant to public securities offerings completed in March 2021, and was filed against the Company, certain senior executives, members of our Board of Directors, and the underwriters involved in the offerings. The Complaint asserts violations of federal securities law and alleges that the offering documents contained material misstatements and omissions, including through an alleged failure to adequately disclose certain total return swap transactions involving Archegos Capital Management referenced to our securities and related alleged risks to the Company’s stock price. On December 22, 2021, the plaintiffs filed a stipulation seeking the voluntary dismissal without prejudice of the outside director defendants from the lawsuit, which the Court subsequently ordered. On the same date, the defendants filed motions to dismiss the lawsuit, which are pending. The complaint seeks unspecified compensatory damages, as well as other relief. We believe that the claims are without merit and intend to defend against them vigorously.

Litigation Related to the Proposed Sale of Simon & Schuster
On November 2, 2021, the U.S. Department of Justice (the “DOJ”) filed suit in the United States District Court for the District of Columbia to block our sale of the Simon & Schuster business to Penguin Random House (the “Transaction”) pursuant to a Share Purchase Agreement (“Purchase Agreement”), dated November 24, 2020, between the Company, certain of its subsidiaries, Penguin Random House and Viacom Inc.,Bertelsmann SE & Co. KGaA. The DOJ asserts that the sale of Simon & Schuster would reduce competition for the acquisition of titles. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the part of Penguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a $200 million termination fee payable to the Company in certain circumstances in the event the Transaction does not close for regulatory reasons. We and Viacom Inc. have agreedthe other defendants believe the DOJ’s claims are without merit, and we intend to defend against them vigorously.

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Management’s Discussion and indemnify the otherAnalysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in certain litigation in which the Company and/or Viacom Inc. is named.millions, except per share amounts)

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 principally as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company isWe are typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’sour products is the basis of a claim. Claims against the Companyus in which a product has been identified principallymost commonly relate to exposures allegedly caused byallegations of exposure to asbestos-containing insulating material used in conjunction with turbines sold for power-generation, industrial and marine use.electrical equipment.



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



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 September 30, 2017, the CompanyMarch 31, 2022, we had pending approximately 32,76026,760 asbestos claims, as compared with approximately 33,61027,770 as of December 31, 2016 and 34,400 as of September 30, 2016.2021. During the thirdfirst quarter of 2017, the Company2022, we received approximately 720750 new claims and closed or moved to an inactive docket approximately 1,2001,760 claims. The Company reportsWe report claims as closed when it becomeswe become aware that a dismissal order has been entered by a court or when the Company haswe have reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. In 2016,Our total costs for the Company’s costsyears 2021 and 2020 for settlement and defense of asbestos claims after insurance recoveries and taxesnet of tax were approximately $48 million. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement$63 million and defense of asbestos claims by approximately $5 million. The Company’s$35 million, respectively. Our costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.


Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against the Companyus are non-cancer claims. The Company believesIt is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that its reservesa liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are 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.

Related Parties
See Note 5 to the consolidated financial statements.
Recent Pronouncements and Adoption of New Accounting Standards
See Note 1 to the consolidated financial statements.

Critical Accounting Policies
See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, for a discussion of the Company’s critical accounting policies.


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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)


Related Parties
Cautionary Statement Concerning Forward-Looking StatementsSee Note 4 to the consolidated financial statements.
This quarterly report on Form 10-Q, including “Item 2 -Recently Adopted Accounting Pronouncements
See Note 1 to the consolidated financial statements.

Critical Accounting Policies
See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of our critical accounting policies.

Cautionary Note Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains both historical and forward‑looking statements.statements, including statements related to our future results and performance. All statements other thanthat are not statements of historical fact are, or may be deemed to be, forward‑lookingforward-looking statements within the meaning of section 27A of the Private Securities Litigation Reform Act of 1933 and section 21E of the Securities Exchange Act of 1934.1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward‑lookingforward-looking statements are not based on historical facts, but rather reflect the Company’sour current expectations concerning future results and events. These forward-looking statementsevents; 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 or goals are or may be forward‑looking statements. These forward‑looking statementsphrases; and 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. These risks, uncertainties and other factors include, among others: risks related to our streaming initiatives; changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging; the impact on our advertising revenues as a result of changes in consumer viewership, advertising market conditions generally; changesand deficiencies in audience measurement; our ability to maintain attractive brands and our reputation, and to offer popular programming and other content; increased costs for content and other rights; competition for talent, content, audiences, subscribers, advertising and distribution; the public acceptancepotential for loss of the Company’s content; changescarriage or other reduction in technology and its effect on competition in the Company’s markets; changes in the federal communications laws and regulations; the impact of piracy on the Company’s products; the impact of consolidation in the market for the Company’s content;or the impact of negotiations orfor the distribution of our content; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming; risks related to our ongoing investments in new businesses, products, services and technologies, through acquisitions and other strategic initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; the impact of COVID-19 and other pandemics and measures taken in response thereto; domestic and global political, economic and regulatory factors affecting our businesses generally; liabilities related to discontinued operations and former businesses; the loss of affiliation agreementsexisting or retransmission agreements; the impact of union activity, including possible strikes or work stoppages or the Company’s inability to negotiate favorable terms for contract renewals; the ability to achieve the separationhire new key employees or secure creative talent; strikes and other union activity; potential conflicts of the Company’s radio business through a merger of CBS Radio Inc.interest arising from our ownership structure with a subsidiary of Entercom Communications Corp. (“Entercom”) on the anticipated terms, which are subject to regulatory and Entercom stockholder approvals, an exchange offer and other customary closing conditions, and fluctuations in the market values of Entercom’s Class A common stock and the Company’s Class B Common Stock; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company’s businesses generally;controlling stockholder; and other factors described in our news releases and filings with the Company’s filings made under the securities laws,Securities and Exchange Commission, including among others, those set forth under “Item 1A. Risk Factors” inbut not limited to our most recent Annual Report on Form 10-K for the year ended December 31, 2016 and in our Quarterly Reportsreports on Form 10-Q and in the Company’s recent Current Reports on Form 8-K. There may be additional risks, uncertainties and factors that the Company doeswe do not currently view as material or that are not necessarily known. The forward‑looking statements included in this documentQuarterly Report on Form 10-Q are made only as of the date of this documentreport, and the Company doeswe do not haveundertake any obligation to publicly update any forward‑looking statements to reflect subsequent events or circumstances.

Important Notice
This document is provided for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to sell or the solicitation of an offer to buy any securities. In connection with the separation of CBS Radio Inc. and combination of CBS Radio Inc. with Entercom (the “Transaction”), CBS Corporation filed with the U.S. Securities and Exchange Commission (the “SEC”) a Schedule TO, and CBS Radio Inc. filed with the SEC a registration statement on Form S-4 and Form S-1 containing a prospectus of CBS Radio Inc., in each case, relating to the exchange offer.  Entercom has filed with the SEC a registration statement on Form S-4 relating to the Transaction, containing a prospectus of Entercom, and has also filed a proxy statement. Investors and security holders are urged to read these filings and any amendments or supplements thereto when they become available, as well as any other relevant documents, because they contain important information about CBS Corporation, CBS Radio Inc. and Entercom and the Transaction.  These materials and other documents filed with the SEC may be obtained free of charge at the SEC’s website, www.sec.gov, and at CBS Corporation's corporate website, www.cbscorporation.com.
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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)


Item 3.Quantitative and Qualitative Disclosures About Market Risk.
There have been no significant changes to market risk since reported in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2021.
Item 4.Controls and Procedures.
The Company’sOur chief executive officer and chief operatingfinancial 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 Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.


No change in the Company’sour internal control over financial reporting occurred during the Company’sour last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’sour internal control over financial reporting.

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PART II – OTHER INFORMATION
Item 1.Legal Proceedings.
The information set forth in Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q under the caption “Legal Matters” is incorporated by reference herein.
Item 1A.Risk Factors.
There have been no material changes to risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Company Purchases of Equity Securities
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 first quarter of CBS Corp.’s purchases of its Class B Common Stock during the three months ended September 30, 20172022, we did not purchase any shares under thisour publicly announced share repurchase program.program, which had remaining authorization of $2.36 billion at March 31, 2022.
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(in millions, except per share amounts)
Total
Number of
Shares
Purchased
 
Average
Price Per
Share
 
Total Number of
Shares Purchased
as Part of Publicly
Announced Programs
 
Remaining
Authorization
July 1, 2017 - July 31, 2017 1.4
  $64.80
  1.4
   $3,214
 
August 1, 2017 - August 31, 2017 1.6
  $65.10
  1.6
   $3,107
 
September 1, 2017 - September 30, 2017 .9
  $58.36
  .9
   $3,057
 
Total 3.9
  $63.52
  3.9
   $3,057
 




Item 6.Exhibits.
Exhibit No.Description of Document
(2(10))Plan of acquisition, reorganization, arrangement, liquidation or succession.Material Contracts
(a)


(4)Instruments defining the rights of security holders, including indentures.
(a)
Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) between CBS Corporation, CBS Operations Inc., and The Bank of New York Mellon, as senior trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 of CBS Corporation filed November 3, 2008 (Registration No. 333-154962) (File No. 001-09553)).

(b)
First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 between CBS Corporation, CBS Operations Inc., and Deutsche Bank Trust Company Americas, as senior trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of CBS Corporation filed April 5, 2010 (File No. 001-09553)).

The other instruments defining the rights of holders of the long-term debt securities of CBS Corporation and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. CBS Corporation hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.

(10)
Material Contracts
(a)
Employment Agreement dated July 20, 2017 between CBS Corporation and Joseph R. Ianniello (filed herewith).
(b)
Employment Agreement dated July 20, 2017 between CBS Corporation and Lawrence P. Tu (filed herewith).
(c)
Letter Agreement dated August 4, 2017 amending the Employment Agreement, dated as of September 29, 2016March 11, 2022, between CBS CorporationParamount Global and Anthony G. Ambrosio (filed herewith)Christa A. D’Alimonte (filed herewith).*
(d)(b)
(12)(c)
(31(31))Rule 13a-14(a)/15d-14(a) Certifications
(a)
(b)
(32(32))Section 1350 Certifications
(a)
(b)


(101)Interactive Data File
101. INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101. SCH Inline XBRL Taxonomy Extension Schema.
101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase.
101. DEF Inline XBRL Taxonomy Extension Definition Linkbase.
101. LAB Inline XBRL Taxonomy Extension Label Linkbase.
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(101(104))
Cover Page Interactive Data File
101. INS(formatted as Inline XBRL Instance Document.
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*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).
-55-

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


PARAMOUNT GLOBAL
(Registrant)
Date: May , 2022
CBS CORPORATION
(Registrant)
/s/ Naveen Chopra
Date: November 3, 2017/s/ Joseph R. Ianniello
Joseph R. IannielloNaveen Chopra
Executive Vice President,
Chief OperatingFinancial Officer
Date: November 3, 2017May , 2022/s/ Lawrence LidingKatherine Gill-Charest
Lawrence LidingKatherine Gill-Charest
Executive Vice President, Controller and
Chief Accounting Officer

-64--56-