CBS Radio Revenue Off 18% In 4Q, 12% In '08

Has To Cut Dividends

It wasn't as bad as some analysts pegged it, but CBS RADIO reported very soft revenues for the fourth quarter and full year of 2008. Radio revenues for 4Q '08 fell 18% to $366.7 million from $447.1 million, reflecting weakness in the advertising market and the impact of radio station divestitures.

Radio OIBDA (Operating Income Before Depreciation and Amortization) and operating income for 4Q declined 53% to $79.1 million and 56% to $70.5 million, respectively. Lower advertising sales, restructuring charges of $43.7 million and the absence of profits from divested stations were partially offset by lower talent and employee-related expenses and decreased marketing and promotion costs resulting from restructuring and cost-saving initiatives.

We are clearly in the midst of one of the most difficult financial environments in history, with very little visibility on how long these economic conditions will continue or if there is worse to come

For the full year of '08, radio revenues decreased 12% to $1.54 billion from $1.75 billion for 2007, reflecting weakness in the advertising market and the impact of radio station divestitures. Radio OIBDA and operating income decreased 27% to $499.4 million and 29% to $466.8 million, respectively, due to lower advertising sales, restructuring charges of $53.9 million and the absence of profits from divested stations.

For CBS CORP. overall, 4Q revenues of $3.53 billion were below the $3.76 billion for the same prior-year period due to lower advertising revenues in a weak economic environment, partially offset by the acquisition of CNET NETWORKS and higher affiliate revenues. On an adjusted basis, OIBDA for the fourth quarter of 2008 was $590.7 million vs. $849.8 million for the same quarter last year and adjusted operating income was $458.1 million vs. $730.6 million for last year's 4Q. These decreases reflected the decline in advertising revenues partially offset by lower entertainment programming costs and lower expenses resulting from cost-saving initiatives.

Revenues were $13.95 billion for the full year 2008 versus $14.07 billion for the prior year. Adjusted OIBDA was $2.78 billion for 2008 compared to $3.18 billion for 2007 and adjusted operating income was $2.28 billion for 2008 compared to $2.73 billion for 2007.

The numbers prompted CBS reduce the quarterly dividend from $.27 to $.05 per share. The dividend is payable on APRIL 1st, 2009 to stockholders of record as of MARCH 11th, 2009.

"We are clearly in the midst of one of the most difficult financial environments in history, with very little visibility on how long these economic conditions will continue or if there is worse to come," CBS CORP Exec. Chairman SUMNER REDSTONE said. "But one thing that is clear to me is that Leslie and his team are managing our businesses superbly with an eye toward future growth. CBS' strength as a content provider will continue to position it for success."

"The marketplace was under increasing pressure throughout 2008, yet we were still able to deliver annual revenues of nearly $14 billion, adjusted operating profits of almost $2.8 billion and free cash flow of just under $1.7 billion - results that reflect the quality of our content and the enduring strength of our operations," Pres./CEO LESLIE MOONVES added.

"As the contraction of the economy accelerated in the fourth quarter, our businesses were affected - in particular our local businesses -- but we did not deviate from our ongoing strategy: to create winning content, regardless of the marketplace. At the same time, we continue to exercise a very disciplined approach to capital investment, and have taken substantial costs out of all of our businesses, in order to help margins going forward. We are confident that our considerable operational accomplishments will help position us to capitalize on growth opportunities as soon as the economy improves."

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