ViacomCBS Reports Q4 and Full Year 2020 Earnings Results

  • Grew Global Streaming Subscribers to Nearly 30M and Pluto TV Global MAUs to 43M; Domestic Streaming Subscribers Rose to 19.2M, up 71% Year-Over-Year, and Pluto TV Domestic MAUs Increased to 30.1M
  • Accelerated Domestic Streaming & Digital Video Revenue Growth to 72% Year-Over-Year in Q4, Driven by Strong Streaming Subscription and Streaming Advertising Revenue
  • Increased Q4 Affiliate Revenue 13% Year-Over-Year and Advertising Revenue 4% Year-Over-Year, Driving a 3% Year-Over-Year Increase in Total Revenue
  • Delivered Year-Over-Year Improvements in Q4 Operating Income, Adjusted OIBDA, Operating Cash Flow From Continuing Operations and Free Cash Flow
  • Hosting Virtual Investor Event Today, Detailing Paramount+ – a Differentiated Streaming Offering Spanning Live Sports, Breaking News and a Mountain of Entertainment – Ahead of March 4 Launch

NEW YORK--(BUSINESS WIRE)--Feb. 24, 2021-- ViacomCBS Inc. (NASDAQ: VIAC; VIACA) today reported financial results for the quarter ended December 31, 2020.

Statement from Bob Bakish, President & CEO

“We started 2020 with clear goals: unlock the power of our combination, build robust operating momentum and accelerate our streaming strategy – and we delivered. In Q4, despite the ongoing impacts of COVID-19, we finished the year with strong advertising and affiliate results that demonstrate the strength of our core businesses and achieved incredible growth across our linked streaming ecosystem, reaching nearly 30 million global subscribers and over 43 million Pluto TV global MAUs. At today’s streaming investor event, we look forward to showcasing our opportunity to expand our position and bring ViacomCBS content and brands to streaming audiences around the world.”

Q4 & FULL YEAR 2020 RESULTS*

Quarter Ended December 31 Full Year Ended December 31
 
GAAP

2020

2019

B/(W) %

2020

2019

B/(W) %
Revenues $

6,874

$

6,656

3

% $

25,285

$

26,998

(6

)

%
Operating income (loss)

1,083

(44

)

N/M

4,139

4,146

-

Net earnings from continuing operations attributable to ViacomCBS (loss)

783

(302

)

N/M

2,305

3,168

(27

)

Diluted EPS from continuing operations attributable to ViacomCBS

1.26

(0.49

)

N/M

3.73

5.13

(27

)

Operating cash flow from continuing operations

(339

)

(530

)

36

2,215

1,171

89

 
Non-GAAP†
Adjusted OIBDA $

1,183

$

1,131

5

% $

5,132

$

5,393

(5

)

%
Adjusted net earnings from continuing operations attributable to ViacomCBS

645

570

13

2,595

2,983

(13

)

Adjusted diluted EPS from continuing operations attributable to ViacomCBS

1.04

0.92

13

4.20

4.83

(13

)

Free cash flow

(453

)

(629

)

28

1,891

826

129

$ in millions, except per share amounts
† Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this release.
*During the fourth quarter of 2020, ViacomCBS entered into an agreement to sell Simon & Schuster, which was previously reported as the Publishing segment. Simon & Schuster has been presented as a discontinued operation in the company’s consolidated financial statements for all periods.
N/M = Not Meaningful

OVERVIEW OF Q4 REVENUE

REVENUE BY TYPE

  • Affiliate revenue increased 13% year-over-year, driven by strong growth in streaming subscription revenue, higher reverse compensation and retransmission fees, as well as expanded distribution.
  • Advertising revenue grew 4% year-over-year, reflecting higher streaming advertising and political advertising sales, which more than offset the adverse effects of COVID-19.
  • Content licensing revenue decreased 3% year-over-year, reflecting a lower volume of licensing due to COVID-related production delays.
 
Quarter Ended December 31 Full Year Ended December 31
 
 

2020

2019

$ B/W %

2020

2019

$ B/W %
Advertising $

3,145

$

3,030

$

115

4

% $

9,751

$

11,074

$

(1,323

)

(12

)

%
Domestic

2,700

2,635

65

2

8,567

9,716

(1,149

)

(12

)

International

445

395

50

13

1,184

1,358

(174

)

(13

)

Affiliate

2,410

2,133

277

13

9,166

8,602

564

7

Domestic

2,239

1,975

264

13

8,521

7,937

584

7

International

171

158

13

8

645

665

(20

)

(3

)

Content Licensing

1,246

1,281

(35

)

(3

)

5,963

6,483

(520

)

(8

)

Theatrical

4

129

(125

)

(97

)

180

547

(367

)

(67

)

Other

69

83

(14

)

(17

)

225

292

(67

)

(23

)

Total Revenues $

6,874

$

6,656

$

218

3

% $

25,285

$

26,998

$

(1,713

)

(6

)

%
 
 
$ in millions

SPOTLIGHT ON STREAMING

In Q4, ViacomCBS delivered robust global streaming & digital video revenue and user growth across its premium, pay and free services.

Q4 GLOBAL HIGHLIGHTS*

  • Global streaming & digital video revenue increased 71% year-over-year to $888M, driven by 74% growth in streaming subscription revenue and 69% streaming advertising revenue growth.
    • Domestic streaming & digital video revenue growth accelerated from 56% in Q3 to 72% in Q4, resulting in revenue of $845M.
  • Global streaming subscribers rose to nearly 30M, up 56% year-over-year.
    • Domestic streaming subscribers reached 19.2M, up 71% year-over-year.
      • CBS All Access and SHOWTIME OTT delivered their best quarter ever in sign-ups.
        • CBS All Access’ momentum was driven by demand for sports content, including the NFL, UEFA and SEC, as well as original programming, including Star Trek: Discovery and The Stand, and content from ViacomCBS cable brands.
        • SHOWTIME OTT benefitted from strong demand for original programming, including the premieres of Shameless and the limited series Your Honor, as well as theatricals.
  • Pluto TV grew its global monthly active users (MAUs) to 43M, up 80% year-over-year.
    • Pluto TV’s domestic MAUs increased to 30.1M, up 34% year-over-year, and more than doubled its advertising revenue in the quarter.
      • User engagement increased, with strong growth in total viewing minutes and average monthly watch time per user, including across connected TVs and mobile devices.
    • Internationally, Pluto TV MAUs grew to 12.9M, including expanding in Spain and Brazil during the quarter.
    • Pluto TV also closed new global distribution agreements with Samsung and Google.

*

Beginning Q1 2021, streaming & digital video revenue will be presented as global streaming revenue, including global revenue from advertising on the company’s pay and free streaming services, subscription fees for its pay streaming services, and advertising and subscriptions for its other digital video products. Global subscribers include customers who access the company's domestic or international streaming services, either directly through its owned and operated apps and websites, or through third-party distributors. Streaming metrics are as of December 31, 2020.

STREAMING & DIGITAL VIDEO REVENUE

GLOBAL (Includes Domestic Revenue)

2020

2019

$ B/W %
Quarter Ended December 31 $

888

$

519

$369

71

%

Full Year Ended December 31 $

2,561

$

1,714

$847

49

%

 
DOMESTIC

2020

2019

$ B/W %
Quarter Ended December 31 $

845

$

492

$354

72

%

Full Year Ended December 31 $

2,458

$

1,632

$826

51

%

 
 
$ in millions

REPORTING SEGMENTS

TV ENTERTAINMENT

  • In Q4, CBS was the most-watched network in Daytime and Late Night and claimed the quarter’s top drama, news magazine and 4 of the top 5 comedies, as well as the top new comedy series.
  • Q4 2020 revenue benefitted from strong affiliate revenue growth, which was offset by lower content licensing revenue.
    • Affiliate revenue increased 23% year-over-year, driven by growth in reverse compensation and retransmission fees, as well as robust streaming subscription revenue from CBS All Access.
    • Advertising revenue declined 1% year-over-year, reflecting the impacts from the delayed start of the fall broadcast season and the sale of CNET Media Group, which was offset by record growth in political advertising.
    • Content licensing revenue decreased 20% year-over-year due to a lower volume of licensing from COVID-related production delays.
  • Adjusted OIBDA decreased 12% year-over-year mainly because of increased expenses to support the growth and expansion of CBS All Access.
 
Quarter Ended December 31 Full Year Ended December 31
 

2020

2019

$ B/W %

2020

2019

$ B/W %
 
Revenue $

3,112

$

3,126

$

(14

)

-

% $

10,700

$

11,924

$

(1,224

)

(10

)

%
Advertising

1,650

1,669

(19

)

(1

)

5,035

6,008

(973

)

(16

)

Affiliate

841

682

159

23

3,129

2,550

579

23

Content Licensing

573

715

(142

)

(20

)

2,369

3,157

(788

)

(25

)

Other

48

60

(12

)

(20

)

167

209

(42

)

(20

)

Expenses

2,563

2,501

(62

)

(2

)

8,843

9,481

638

7

Adjusted OIBDA $

549

$

625

$

(76

)

(12

)

% $

1,857

$

2,443

$

(586

)

(24

)

%
 
$ in millions

CABLE NETWORKS

  • In Q4, ViacomCBS owned the most top 30 cable networks among viewers 18-49 and 9 of the top 10 original series with kids 2-11; Showtime also had 2 of the top 4 scripted shows on premium cable in the quarter.
  • Q4 2020 revenue increased 11% year-over-year, driven by growth in content licensing, affiliate and advertising revenue.
    • Affiliate revenue increased 8% year-over-year, fueled by growth in streaming subscription revenue, including from SHOWTIME OTT, as well as expanded distribution and contractual rate increases, partially offset by linear subscriber declines.
    • Advertising revenue rose 8% year-over-year, reflecting growth in streaming advertising revenue from Pluto TV as well as higher pricing, which more than offset lower linear impressions.
    • Content licensing revenue increased 48% year-over-year, driven by growth from the licensing of library programming.
  • Adjusted OIBDA grew 1% year-over-year as a result of the increase in revenue and savings from restructuring activities, which was mostly offset by increased expenses for programming, participations, advertising and promotions, including to support the growth of the company’s streaming services.
 
Quarter Ended December 31 Full Year Ended December 31
 

2020

2019

$ B/W %

2020

2019

$ B/W %
 
Revenue $

3,438

$

3,088

$

350

11

% $

12,589

$

12,449

$

140

1

%
Advertising

1,499

1,387

112

8

4,743

5,129

(386

)

(8

)

Affiliate

1,569

1,451

118

8

6,037

6,052

(15

)

-

Content Licensing

370

250

120

48

1,809

1,268

541

43

Expenses

2,637

2,296

(341

)

(15

)

8,843

8,934

91

1

Adjusted OIBDA $

801

$

792

$

9

1

% $

3,746

$

3,515

$

231

7

%
 
 
$ in millions

FILMED ENTERTAINMENT

  • Q4 2020 revenue decreased 3% year-over-year, reflecting the decline in theatrical revenue, partially offset by growth in licensing and home entertainment revenue.
    • Theatrical revenue was immaterial in the quarter as a result of the closure or reduction in capacity of movie theaters in response to COVID-19.
    • Home entertainment revenue increased 14% year-over-year, driven by higher sales of catalog and Miramax titles.
    • Licensing revenue grew 39% year-over-year due to higher licensing of catalog titles.
  • Adjusted OIBDA was $18M compared to a loss of $119M in the prior year quarter as lower revenue was more than offset by lower distribution costs from fewer theatrical releases.
 
Quarter Ended December 31 Full Year Ended December 31
 

2020

2019

$ B/W %

2020

2019

$ B/W %
 
Revenue $

514

$

532

$

(18

)

(3

)

% $

2,562

$

2,990

$

(428

)

(14

)

%
Theatrical

4

129

(125

)

(97

)

180

547

(367

)

(67

)

Home Entertainment

176

155

21

14

709

623

86

14

Licensing

304

219

85

39

1,598

1,709

(111

)

(6

)

Other

30

29

1

3

75

111

(36

)

(32

)

Expenses

496

651

155

24

2,347

2,910

563

19

Adjusted OIBDA $

18

$

(119

)

$

137

N/M

$

215

$

80

$

135

169

%
$ in millions
N/M = Not Meaningful

BALANCE SHEET & LIQUIDITY

  • For the full year, ViacomCBS generated $2.2B of operating cash flow from continuing operations and $1.9B of free cash flow†, benefiting from the timing of production spending and cost savings.
    • In Q4, as expected, the ramp up in production spend led to negative operating cash flow from continuing operations of $339 million and negative free cash flow† of $453 million.
  • As of December 31, 2020, the company had $3B of cash on its balance sheet and a committed $3.5B revolving credit facility that remains undrawn.

† Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this release

ABOUT VIACOMCBS

ViacomCBS (NASDAQ: VIAC; VIACA) is a leading global media and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, CBS All Access, Pluto TV and Simon & Schuster, among others. The company delivers the largest share of the US television audience and boasts one of the industry’s most important and extensive libraries of TV and film titles. In addition to offering innovative streaming services and digital video products, ViacomCBS provides powerful capabilities in production, distribution and advertising solutions for partners on five continents.

For more information about ViacomCBS, please visit www.viacomcbs.com and follow @ViacomCBS on social platforms.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This communication contains both historical and forward-looking statements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; 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; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging; the impact on our advertising revenues of changes in consumers’ content viewership, deficiencies in audience measurement and advertising market conditions; our ability to maintain attractive brands and our reputation, and to offer popular programming and other content; increased costs for programming, films and other rights; competition for content, audiences, advertising and distribution; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming; the risks and costs associated with the integration of the CBS Corporation and Viacom Inc. businesses and investments in new businesses, products, services and technologies, including our streaming initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; the impact of COVID-19 (and other widespread health emergencies or pandemics) and measures taken in response thereto; domestic and global political, economic and/or regulatory factors affecting our businesses generally; liabilities related to discontinued operations and former businesses; the loss of key talent and strikes and other union activity; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this communication are made only as of the date of this communication, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

 

 

Quarter Ended

 

Year Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Revenues

$

6,874

 

 

$

6,656

 

 

$

25,285

 

 

$

26,998

 

Costs and expenses:

 

 

 

 

 

 

 

Operating

4,213

 

 

4,668

 

 

14,992

 

 

16,713

 

Selling, general and administrative

1,516

 

 

1,446

 

 

5,320

 

 

5,481

 

Depreciation and amortization

99

 

 

119

 

 

430

 

 

438

 

Restructuring and other corporate matters

177

 

 

467

 

 

618

 

 

769

 

Total costs and expenses

6,005

 

 

6,700

 

 

21,360

 

 

23,401

 

Gain on sales

214

 

 

 

 

214

 

 

549

 

Operating income (loss)

1,083

 

 

(44)

 

 

4,139

 

 

4,146

 

Interest expense

(268)

 

 

(239)

 

 

(1,031)

 

 

(962)

 

Interest income

21

 

 

13

 

 

60

 

 

66

 

Net gains (losses) from investments

174

 

 

(4)

 

 

206

 

 

85

 

Loss on extinguishment of debt

 

 

 

 

(126)

 

 

 

Other items, net

(27)

 

 

(25)

 

 

(101)

 

 

(112)

 

Earnings (loss) from continuing operations before income taxes

and equity in earnings (loss) of investee companies

983

 

 

(299)

 

 

3,147

 

 

3,223

 

(Provision) benefit for income taxes

(183)

 

 

1

 

 

(535)

 

 

29

 

Equity in earnings (loss) of investee companies, net of tax

2

 

 

 

 

(28)

 

 

(53)

 

Net earnings (loss) from continuing operations

802

 

 

(298)

 

 

2,584

 

 

3,199

 

Net earnings from discontinued operations, net of tax

27

 

 

44

 

 

117

 

 

140

 

Net earnings (loss) (ViacomCBS and noncontrolling interests)

829

 

 

(254)

 

 

2,701

 

 

3,339

 

Net earnings attributable to noncontrolling interests

(19)

 

 

(4)

 

 

(279)

 

 

(31)

 

Net earnings (loss) attributable to ViacomCBS

$

810

 

 

$

(258)

 

 

$

2,422

 

 

$

3,308

 

 

 

 

 

 

 

 

 

Amounts attributable to ViacomCBS:

 

 

 

 

 

 

 

Net earnings (loss) from continuing operations

$

783

 

 

$

(302)

 

 

$

2,305

 

 

$

3,168

 

Net earnings from discontinued operations

27

 

 

44

 

 

117

 

 

140

 

Net earnings (loss) attributable to ViacomCBS

$

810

 

 

$

(258)

 

 

$

2,422

 

 

$

3,308

 

 

 

 

 

 

 

 

 

Basic net earnings (loss) per common share attributable to ViacomCBS:

 

 

 

 

 

 

 

Net earnings (loss) from continuing operations

$

1.27

 

 

$

(.49)

 

 

$

3.74

 

 

$

5.15

 

Net earnings from discontinued operations

$

.04

 

 

$

.07

 

 

$

.19

 

 

$

.23

 

Net earnings (loss)

$

1.31

 

 

$

(.42)

 

 

$

3.93

 

 

$

5.38

 

 

 

 

 

 

 

 

 

Diluted net earnings (loss) per common share attributable to ViacomCBS:

 

 

 

 

 

 

 

Net earnings (loss) from continuing operations

$

1.26

 

 

$

(.49)

 

 

$

3.73

 

 

$

5.13

 

Net earnings from discontinued operations

$

.04

 

 

$

.07

 

 

$

.19

 

 

$

.23

 

Net earnings (loss)

$

1.31

 

 

$

(.42)

 

 

$

3.92

 

 

$

5.36

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

617

 

 

615

 

 

616

 

 

615

 

Diluted

620

 

 

615

 

 

618

 

 

617

 

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)

 

 

 

At December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

2,984

 

 

$

632

Receivables, net

 

7,017

 

 

6,837

Programming and other inventory

 

1,757

 

 

2,813

Prepaid expenses

 

622

 

 

399

Other current assets

 

769

 

 

677

Current assets of discontinued operations

 

630

 

 

544

Total current assets

 

13,779

 

 

11,902

Property and equipment, net

 

1,994

 

 

2,045

Programming and other inventory

 

10,363

 

 

8,652

Goodwill

 

16,612

 

 

16,545

Intangible assets, net

 

2,826

 

 

2,990

Operating lease assets

 

1,602

 

 

1,738

Deferred income tax assets, net

 

993

 

 

938

Other assets

 

3,657

 

 

3,955

Assets held for sale

 

28

 

 

23

Assets of discontinued operations

 

809

 

 

797

Total Assets

 

$

52,663

 

 

$

49,585

LIABILITIES AND STOCKHOLDERS EQUITY

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

 

$

571

 

 

$

632

Accrued expenses

 

1,714

 

 

1,729

Participants’ share and royalties payable

 

2,005

 

 

1,861

Accrued programming and production costs

 

1,141

 

 

1,500

Deferred revenues

 

978

 

 

737

Debt

 

16

 

 

717

Other current liabilities

 

1,391

 

 

1,439

Current liabilities of discontinued operations

 

480

 

 

433

Total current liabilities

 

8,296

 

 

9,048

Long-term debt

 

19,717

 

 

18,002

Participants’ share and royalties payable

 

1,317

 

 

1,546

Pension and postretirement benefit obligations

 

2,098

 

 

2,121

Deferred income tax liabilities, net

 

778

 

 

565

Operating lease liabilities

 

1,583

 

 

1,705

Program rights obligations

 

243

 

 

356

Other liabilities

 

2,158

 

 

2,436

Liabilities of discontinued operations

 

220

 

 

263

Redeemable noncontrolling interest

 

197

 

 

254

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

ViacomCBS stockholders’ equity:

 

 

 

 

Class A Common Stock, par value $.001 per share; 375 shares authorized;

52 (2020 and 2019) shares issued

 

 

 

Class B Common Stock, par value $.001 per share; 5,000 shares authorized;

1,068 (2020) and 1,064 (2019) shares issued

 

1

 

 

1

Additional paid-in capital

 

29,785

 

 

29,590

Treasury stock, at cost; 503 (2020) and 501 (2019) Class B Shares

 

(22,958)

 

 

(22,908)

Retained earnings

 

10,375

 

 

8,494

Accumulated other comprehensive loss

 

(1,832)

 

 

(1,970)

Total ViacomCBS stockholders’ equity

 

15,371

 

 

13,207

Noncontrolling interests

 

685

 

 

82

Total Equity

 

16,056

 

 

13,289

Total Liabilities and Equity

 

$

52,663

 

 

$

49,585

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

 

 

Year Ended December 31,

 

 

2020

 

2019

Operating Activities:

 

 

 

 

Net earnings (ViacomCBS and noncontrolling interests)

 

$

2,701

 

$

3,339

Less: Net earnings from discontinued operations, net of tax

 

117

 

140

Net earnings from continuing operations

 

2,584

 

3,199

Adjustments to reconcile net earnings from continuing operations to net cash flow

provided by operating activities from continuing operations:

 

 

 

 

Depreciation and amortization

 

430

 

438

Television programming and feature film cost amortization

 

11,045

 

12,554

Deferred tax provision (benefit)

 

122

 

(765)

Stock-based compensation

 

274

 

286

Gain on sales

 

(214)

 

(549)

Net gains from investments

 

(206)

 

(85)

Loss on extinguishment of debt

 

126

 

Equity in loss of investee companies, net of tax and distributions

 

34

 

58

Change in assets and liabilities

 

 

 

 

Increase in receivables

 

(68)

 

(247)

Increase in inventory and related program and participation liabilities, net

 

(12,170)

 

(14,215)

Increase in accounts payable and other liabilities

 

188

 

302

(Decrease) increase in pension and postretirement benefit obligations

 

(20)

 

16

Increase in income taxes

 

2

 

176

Other, net

 

88

 

3

Net cash flow provided by operating activities from continuing operations

 

2,215

 

1,171

Net cash flow provided by operating activities from discontinued operations

 

79

 

59

Net cash flow provided by operating activities

 

2,294

 

1,230

Investing Activities:

 

 

 

 

Investments

 

(59)

 

(171)

Capital expenditures

 

(324)

 

(345)

Acquisitions, net of cash acquired

 

(147)

 

(399)

Proceeds from dispositions

 

593

 

756

Other investing activities

 

 

14

Net cash flow provided by (used for) investing activities from continuing operations

 

63

 

(145)

Net cash flow used for investing activities from discontinued operations

 

(7)

 

(10)

Net cash flow provided by (used for) investing activities

 

56

 

(155)

Financing Activities:

 

 

 

 

(Repayments of) proceeds from short-term debt borrowings, net

 

(706)

 

25

Proceeds from issuance of senior notes

 

4,375

 

492

Repayment of long-term debt

 

(2,901)

 

(910)

Dividends

 

(600)

 

(595)

Purchase of Company common stock

 

(58)

 

(57)

Payment of payroll taxes in lieu of issuing shares for stock-based compensation

 

(93)

 

(56)

Proceeds from exercise of stock options

 

5

 

15

Other financing activities

 

(112)

 

(130)

Net cash flow used for financing activities

 

(90)

 

(1,216)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

25

 

(1)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

2,285

 

(142)

Cash, cash equivalents and restricted cash at beginning of year

(includes $202 (2020) and $120 (2019) of restricted cash)

 

834

 

976

Cash, cash equivalents and restricted cash at end of year

(includes $135 (2020) and $202 (2019) of restricted cash)

 

$

3,119

 

$

834

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES

(Unaudited; in millions, except per share amounts)

Results for the quarters and years ended December 31, 2020 and 2019 included certain items identified as affecting comparability. Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”), adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to ViacomCBS, and adjusted diluted EPS from continuing operations (together, the “adjusted measures”) exclude the impact of these items and are measures of performance not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

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

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

 

Quarter Ended December 31,

 

Year Ended December 31,

 

 

2020

 

2019

 

2020

 

2019

Operating Income (Loss) (GAAP)

 

$

1,083

 

$

(44)

 

$

4,139

 

$

4,146

Depreciation and amortization (a)

 

99

 

119

 

430

 

438

Restructuring and other corporate matters (b)

 

177

 

467

 

618

 

769

Programming charges (b)

 

38

 

589

 

159

 

589

Gain on sales (b)

 

(214)

 

 

(214)

 

(549)

Adjusted OIBDA (Non-GAAP)

 

$

1,183

 

$

1,131

 

$

5,132

 

$

5,393

(a)

The year ended December 31, 2020 includes an impairment charge of $25 million to reduce the carrying value of intangible assets to fair value and accelerated depreciation of $12 million for technology that was abandoned in connection with synergy plans related to the merger of Viacom Inc. with and into CBS Corporation (the “Merger”). The quarter and year ended December 31, 2019 include an impairment charge of $20 million to reduce the carrying value of intangible assets to fair value.

(b)

See notes on the following tables for additional information on items affecting comparability.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

(Unaudited; in millions, except per share amounts)

 

 

Quarter Ended December 31, 2020

 

Earnings from
Continuing
Operations
Before Income
Taxes

 

Provision for
Income Taxes

 

Net Earnings
from
Continuing
Operations
Attributable to
ViacomCBS

 

Diluted EPS
from
Continuing
Operations

Reported (GAAP)

 

$

983

 

 

$

(183)

 

 

$

783

 

 

$

1.26

Items affecting comparability:

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other corporate matters (a)

 

177

 

 

(40)

 

 

137

 

 

.22

Programming charges (b)

 

38

 

 

(10)

 

 

28

 

 

.05

Gain on sales (c)

 

(214)

 

 

31

 

 

(183)

 

 

(.30)

Net gain from investments (d)

 

(174)

 

 

42

 

 

(132)

 

 

(.21)

Discrete tax items

 

 

 

12

 

 

12

 

 

.02

Adjusted (Non-GAAP)

 

$

810

 

 

$

(148)

 

 

$

645

 

 

$

1.04

(a)

Reflects severance, exit costs and other costs related to the Merger.

(b)

Programming charges primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.

(c)

Reflects a gain on the sale of CNET Media Group (“CMG”).

(d)

Primarily reflects an increase in the value of our investment in fuboTV, Inc. (“fuboTV”), which was sold in the fourth quarter of 2020.

 

Quarter Ended December 31, 2019

 

Earnings
(Loss) from
Continuing
Operations
Before Income
Taxes

 

(Provision)
Benefit for
Income Taxes

 

Net Earnings
(Loss) from
Continuing
Operations
Attributable to
ViacomCBS

 

Diluted EPS
from
Continuing
Operations (a)

Reported (GAAP)

 

$

(299)

 

 

$

1

 

 

$

(302)

 

 

$

(.49)

Items affecting comparability:

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other corporate matters (b)

 

467

 

 

(88)

 

 

379

 

 

.61

Impairment charge (c)

 

20

 

 

(6)

 

 

14

 

 

.02

Programming charges (d)

 

589

 

 

(142)

 

 

447

 

 

.73

Net loss from investments (e)

 

4

 

 

(3)

 

 

1

 

 

Discrete tax items

 

 

 

31

 

 

31

 

 

.05

Adjusted (Non-GAAP)

 

$

781

 

 

$

(207)

 

 

$

570

 

 

$

.92

(a)

Reported EPS excludes the dilutive impact to shares since we reported a net loss. Adjusted EPS is calculated based on diluted weighted average shares outstanding of 618 million.

(b)

Reflects severance and exit costs relating to restructuring activities and costs incurred in connection with the Merger.

(c)

Reflects a charge to reduce the carrying value of our international broadcast licenses in Australia to their fair value.

(d)

Programming charges principally reflect accelerated amortization associated with changes in the expected monetization of certain programs, and decisions to cease airing, alter future airing patterns or not renew certain programs, in connection with management changes implemented as a result of the Merger.

(e)

Includes an impairment charge of $50 million to write down an investment to its fair value; a gain on marketable securities of $35 million and gains on the sale and acquisition of joint ventures of $11 million.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

(Unaudited; in millions, except per share amounts)

 

 

Year Ended December 31, 2020

 

Earnings from
Continuing Operations
Before Income
Taxes

 

Provision for
Income Taxes

 

Net Earnings
from
Continuing
Operations
Attributable to
ViacomCBS

 

Diluted EPS
from
Continuing
Operations

Reported (GAAP)

 

$

3,147

 

 

$

(535)

 

 

$

2,305

 

 

$

3.73

Items affecting comparability:

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other corporate matters (a)

 

618

 

 

(133)

 

 

485

 

 

.79

Impairment charge (b)

 

25

 

 

(6)

 

 

19

 

 

.03

Depreciation of abandoned technology (c)

 

12

 

 

(3)

 

 

9

 

 

.01

Programming charges (d)

 

159

 

 

(39)

 

 

120

 

 

.20

Gain on sales (e)

 

(214)

 

 

31

 

 

(183)

 

 

(.30)

Net gains from investments (f)

 

(206)

 

 

50

 

 

(156)

 

 

(.25)

Loss on extinguishment of debt

 

126

 

 

(29)

 

 

97

 

 

.16

Discrete tax items (g)

 

 

 

(110)

 

 

(110)

 

 

(.18)

Impairment of equity-method investment

 

 

 

 

 

9

 

 

.01

Adjusted (Non-GAAP)

 

$

3,667

 

 

$

(774)

 

 

$

2,595

 

 

$

4.20

(a)

Reflects severance, exit costs and other costs related to the Merger and a charge to write down property and equipment classified as held for sale.

(b)

Reflects a charge to reduce the carrying values of FCC licenses in two markets to their fair values.

(c)

Reflects accelerated depreciation for technology that was abandoned in connection with synergy plans related to the Merger.

(d)

Programming charges primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.

(e)

Reflects a gain on the sale of CMG.

(f)

Primarily reflects an increase in the value of our investment in fuboTV, which was sold in the fourth quarter of 2020.

(g)

Primarily reflects a benefit from the remeasurement of our U.K. net deferred income tax asset as a result of an increase in the U.K. corporate income tax rate from 17% to 19% enacted during the third quarter of 2020.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

(Unaudited; in millions, except per share amounts)

 

 

Year Ended December 31, 2019

 

Earnings from
Continuing
Operations
Before Income
Taxes

 

Benefit
(Provision) for
Income Taxes

 

Net Earnings
from
Continuing
Operations
Attributable to
ViacomCBS

 

Diluted EPS
from
Continuing
Operations

Reported (GAAP)

 

$

3,223

 

 

$

29

 

 

$

3,168

 

 

$

5.13

Items affecting comparability:

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other corporate matters (a)

 

769

 

 

(133)

 

 

636

 

 

1.03

Impairment charge (b)

 

20

 

 

(6)

 

 

14

 

 

.02

Programming charges (c)

 

589

 

 

(142)

 

 

447

 

 

.73

Gain on sales (d)

 

(549)

 

 

163

 

 

(386)

 

 

(.63)

Net gains from investments (e)

 

(85)

 

 

16

 

 

(69)

 

 

(.11)

Discrete tax items (f)

 

 

 

(827)

 

 

(827)

 

 

(1.34)

Adjusted (Non-GAAP)

 

$

3,967

 

 

$

(900)

 

 

$

2,983

 

 

$

4.83

(a)

Reflects severance and exit costs relating to restructuring activities, costs incurred in connection with the Merger, legal proceedings involving the Company and other corporate matters.

(b)

Reflects a charge to reduce the carrying value of our international broadcast licenses in Australia to their fair value.

(c)

Programming charges principally reflect accelerated amortization associated with changes in the expected monetization of certain programs, and decisions to cease airing, alter future airing patterns or not renew certain programs, in connection with management changes implemented as a result of the Merger.

(d)

Reflects a gain on the sale of CBS Television City property and sound stage operation.

(e)

Reflects a gain on marketable securities of $113 million; gains of $22 million on the sale and acquisition of joint ventures; and an impairment charge of $50 million to write down an investment to its fair value.

(f)

Primarily reflects a deferred tax benefit of $768 million resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations; a tax benefit of $44 million realized in connection with the preparation of the 2018 federal tax return, based on further clarity provided by the United States government on tax positions relating to federal tax legislation enacted in December 2017; and a tax benefit of $39 million triggered by the bankruptcy of an investee.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)
(Unaudited; in millions, except per share amounts)

Free Cash Flow

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

Management believes free cash flow provides investors with an important perspective on the cash available to us to service debt, make strategic acquisitions and investments, maintain our capital assets, satisfy our tax obligations, and fund ongoing operations and working capital needs. As a result, free cash flow is a significant measure of our ability to generate long-term value. It is useful for investors to know whether this ability is being enhanced or degraded as a result of our operating performance. We believe the presentation of free cash flow is relevant and useful for investors because it allows investors to evaluate the cash generated from our underlying operations in a manner similar to the method used by management. Free cash flow is among several components of incentive compensation targets for certain management personnel. In addition, free cash flow is a primary measure used externally by our investors, analysts and industry peers for purposes of valuation and comparison of our operating performance to other companies in our industry.

As free cash flow is not a measure calculated in accordance with GAAP, free cash flow should not be considered in isolation of, or as a substitute for, either net cash flow provided by (used for) operating activities from continuing operations as a measure of liquidity or net earnings (loss) as a measure of operating performance. Free cash flow, as we calculate it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow as a measure of liquidity has certain limitations, does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs.

The following table presents a reconciliation of our net cash flow provided by (used for) operating activities from continuing operations to free cash flow:

 

Quarter Ended

 

Year Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Net cash flow provided by (used for) operating activities from
continuing operations (GAAP)

(339)

 

(530)

 

2,215

 

1,171

 

Capital expenditures

(114)

 

(99)

 

(324)

 

(345)

 

Free cash flow (Non-GAAP)

$

(453)

 

$

(629)

 

$

1,891

 

$

826

 

 

VIAC-IR

Press:
Justin Dini
Executive Vice President, Corporate Communications
(212) 846-2724
justin.dini@viacomcbs.com

Peter Collins
Vice President, Corporate Communications
(917) 826-4182
peter.collins@viacomcbs.com

Justin Blaber
Senior Director, Corporate Communications
(646) 823-6616
justin.blaber@viacomcbs.com

Pranita Sookai
Director, Corporate Communications
(718) 316-2182
pranita.sookai@viacomcbs.com

Investors:
Anthony DiClemente
Executive Vice President, Investor Relations
(917) 796-4647
anthony.diclemente@viacom.com

Jaime Morris
Vice President, Investor Relations
(646) 824-5450
jaime.morris@viacomcbs.com

Robert Amparo
Manager, Investor Relations
(347) 223-1682
robert.amparo@viacom.com

Source: VIACOMCBS INC.