|
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
04-2949533
|
||
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
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|
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|
|
1515 Broadway
|
New York,
|
New York
|
|
10036
|
(Address of principal executive offices)
|
|
(Zip Code)
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Title of each class
|
|
Trading Symbols
|
|
Name of each exchange on which registered
|
||||
Class A Common Stock, $0.001 par value
|
|
|
VIACA
|
|
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The Nasdaq Stock Market LLC
|
|
Class B Common Stock, $0.001 par value
|
|
|
VIAC
|
|
|
|
The Nasdaq Stock Market LLC
|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
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Emerging growth company
|
☐
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Page
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PART I – FINANCIAL INFORMATION
|
|
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||
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Item 1.
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||
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Item 1A.
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Item 1.
|
Financial Statements.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
$
|
6,669
|
|
|
$
|
7,100
|
|
Costs and expenses:
|
|
|
|
|
|
||
Operating
|
4,065
|
|
|
4,248
|
|
||
Selling, general and administrative
|
1,341
|
|
|
1,313
|
|
||
Depreciation and amortization
|
113
|
|
|
106
|
|
||
Restructuring and other corporate matters
|
233
|
|
|
178
|
|
||
Total costs and expenses
|
5,752
|
|
|
5,845
|
|
||
Gain on sale of assets
|
—
|
|
|
549
|
|
||
Operating income
|
917
|
|
|
1,804
|
|
||
Interest expense
|
(241
|
)
|
|
(240
|
)
|
||
Interest income
|
14
|
|
|
19
|
|
||
Gain on marketable securities
|
—
|
|
|
38
|
|
||
Other items, net
|
(33
|
)
|
|
(28
|
)
|
||
Earnings from continuing operations before income taxes and equity in loss of
investee companies
|
657
|
|
|
1,593
|
|
||
(Provision) benefit for income taxes
|
(137
|
)
|
|
376
|
|
||
Equity in loss of investee companies, net of tax
|
(9
|
)
|
|
(18
|
)
|
||
Net earnings from continuing operations
|
511
|
|
|
1,951
|
|
||
Net earnings from discontinued operations, net of tax
|
8
|
|
|
13
|
|
||
Net earnings (ViacomCBS and noncontrolling interests)
|
519
|
|
|
1,964
|
|
||
Net earnings attributable to noncontrolling interests
|
(3
|
)
|
|
(5
|
)
|
||
Net earnings attributable to ViacomCBS
|
$
|
516
|
|
|
$
|
1,959
|
|
|
|
|
|
||||
Amounts attributable to ViacomCBS:
|
|
|
|
||||
Net earnings from continuing operations
|
$
|
508
|
|
|
$
|
1,946
|
|
Net earnings from discontinued operations, net of tax
|
8
|
|
|
13
|
|
||
Net earnings attributable to ViacomCBS
|
$
|
516
|
|
|
$
|
1,959
|
|
|
|
|
|
||||
Basic net earnings per common share attributable to ViacomCBS:
|
|
|
|
||||
Net earnings from continuing operations
|
$
|
.83
|
|
|
$
|
3.17
|
|
Net earnings from discontinued operations
|
$
|
.01
|
|
|
$
|
.02
|
|
Net earnings
|
$
|
.84
|
|
|
$
|
3.20
|
|
|
|
|
|
|
|
||
Diluted net earnings per common share attributable to ViacomCBS:
|
|
|
|
|
|
||
Net earnings from continuing operations
|
$
|
.82
|
|
|
$
|
3.15
|
|
Net earnings from discontinued operations
|
$
|
.01
|
|
|
$
|
.02
|
|
Net earnings
|
$
|
.84
|
|
|
$
|
3.18
|
|
|
|
|
|
|
|
||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||
Basic
|
614
|
|
|
613
|
|
||
Diluted
|
616
|
|
|
617
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net earnings (ViacomCBS and noncontrolling interests)
|
$
|
519
|
|
|
$
|
1,964
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Cumulative translation adjustments
|
(104
|
)
|
|
16
|
|
||
Net actuarial loss and prior service costs
|
17
|
|
|
14
|
|
||
Other comprehensive income (loss), net of tax (ViacomCBS and noncontrolling interests)
|
(87
|
)
|
|
30
|
|
||
Comprehensive income
|
432
|
|
|
1,994
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
8
|
|
||
Comprehensive income attributable to ViacomCBS
|
$
|
432
|
|
|
$
|
1,986
|
|
|
At
|
|
At
|
||||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
589
|
|
|
|
|
$
|
632
|
|
|
Receivables, net
|
|
7,199
|
|
|
|
|
7,206
|
|
|
||
Programming and other inventory
|
|
1,431
|
|
|
|
|
2,876
|
|
|
||
Prepaid and other current assets
|
|
1,187
|
|
|
|
|
1,188
|
|
|
||
Total current assets
|
|
10,406
|
|
|
|
|
11,902
|
|
|
||
Property and equipment, net
|
|
2,028
|
|
|
|
|
2,085
|
|
|
||
Programming and other inventory
|
|
9,983
|
|
|
|
|
8,652
|
|
|
||
Goodwill
|
|
16,950
|
|
|
|
|
16,980
|
|
|
||
Intangible assets, net
|
|
2,968
|
|
|
|
|
2,993
|
|
|
||
Operating lease assets
|
|
1,874
|
|
|
|
|
1,939
|
|
|
||
Deferred income tax assets, net
|
|
931
|
|
|
|
|
939
|
|
|
||
Other assets
|
|
3,882
|
|
|
|
|
4,006
|
|
|
||
Assets held for sale
|
|
23
|
|
|
|
|
23
|
|
|
||
Total Assets
|
|
$
|
49,045
|
|
|
|
|
$
|
49,519
|
|
|
|
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
673
|
|
|
|
|
$
|
667
|
|
|
Accrued expenses
|
|
1,401
|
|
|
|
|
1,760
|
|
|
||
Participants’ share and royalties payable
|
|
2,086
|
|
|
|
|
1,977
|
|
|
||
Accrued programming and production costs
|
|
1,493
|
|
|
|
|
1,500
|
|
|
||
Deferred revenues
|
|
691
|
|
|
|
|
739
|
|
|
||
Debt
|
|
532
|
|
|
|
|
717
|
|
|
||
Other current liabilities
|
|
1,655
|
|
|
|
|
1,688
|
|
|
||
Total current liabilities
|
|
8,531
|
|
|
|
|
9,048
|
|
|
||
Long-term debt
|
|
18,005
|
|
|
|
|
18,002
|
|
|
||
Participants’ share and royalties payable
|
|
1,556
|
|
|
|
|
1,546
|
|
|
||
Pension and postretirement benefit obligations
|
|
2,092
|
|
|
|
|
2,121
|
|
|
||
Deferred income tax liabilities, net
|
|
639
|
|
|
|
|
500
|
|
|
||
Operating lease liabilities
|
|
1,841
|
|
|
|
|
1,909
|
|
|
||
Program rights obligations
|
|
316
|
|
|
|
|
356
|
|
|
||
Other liabilities
|
|
2,274
|
|
|
|
|
2,494
|
|
|
||
Redeemable noncontrolling interest
|
|
270
|
|
|
|
|
254
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
ViacomCBS stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
||
Class A Common Stock, par value $.001 per share; 55 shares authorized;
52 (2020 and 2019) shares issued
|
|
—
|
|
|
|
|
—
|
|
|
||
Class B Common Stock, par value $.001 per share; 5,000 shares authorized;
1,065 (2020) and 1,064 (2019) shares issued
|
|
1
|
|
|
|
|
1
|
|
|
||
Additional paid-in capital
|
|
29,633
|
|
|
|
|
29,590
|
|
|
||
Treasury stock, at cost; 502 (2020) and 501 (2019) Class B shares
|
|
(22,958
|
)
|
|
|
|
(22,908
|
)
|
|
||
Retained earnings
|
|
8,827
|
|
|
|
|
8,494
|
|
|
||
Accumulated other comprehensive loss
|
|
(2,054
|
)
|
|
|
|
(1,970
|
)
|
|
||
Total ViacomCBS stockholders’ equity
|
|
13,449
|
|
|
|
|
13,207
|
|
|
||
Noncontrolling interests
|
|
72
|
|
|
|
|
82
|
|
|
||
Total Equity
|
|
13,521
|
|
|
|
|
13,289
|
|
|
||
Total Liabilities and Equity
|
|
$
|
49,045
|
|
|
|
|
$
|
49,519
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating Activities:
|
|
|
|
||||
Net earnings (ViacomCBS and noncontrolling interests)
|
$
|
519
|
|
|
$
|
1,964
|
|
Less: Net earnings from discontinued operations, net of tax
|
8
|
|
|
13
|
|
||
Net earnings from continuing operations
|
511
|
|
|
1,951
|
|
||
Adjustments to reconcile net earnings from continuing operations to net cash flow provided
by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
113
|
|
|
106
|
|
||
Deferred tax provision (benefit)
|
149
|
|
|
(571
|
)
|
||
Stock-based compensation
|
88
|
|
|
56
|
|
||
Gain on sale of assets
|
—
|
|
|
(549
|
)
|
||
Gain on marketable securities
|
—
|
|
|
(38
|
)
|
||
Equity in loss of investee companies, net of tax and distributions
|
9
|
|
|
17
|
|
||
Change in assets and liabilities
|
(514
|
)
|
|
(43
|
)
|
||
Net cash flow provided by operating activities
|
356
|
|
|
929
|
|
||
Investing Activities:
|
|
|
|
|
|
||
Investments
|
(46
|
)
|
|
(99
|
)
|
||
Capital expenditures
|
(51
|
)
|
|
(67
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(359
|
)
|
||
Proceeds from dispositions
|
146
|
|
|
741
|
|
||
Other investing activities
|
—
|
|
|
3
|
|
||
Net cash flow provided by investing activities
|
49
|
|
|
219
|
|
||
Financing Activities:
|
|
|
|
|
|
||
Repayments of short-term debt borrowings, net
|
(186
|
)
|
|
(674
|
)
|
||
Proceeds from issuance of senior notes
|
—
|
|
|
493
|
|
||
Repayment of notes and debentures
|
—
|
|
|
(600
|
)
|
||
Dividends
|
(152
|
)
|
|
(150
|
)
|
||
Purchase of Company common stock
|
(58
|
)
|
|
(14
|
)
|
||
Payment of payroll taxes in lieu of issuing shares for stock-based compensation
|
(50
|
)
|
|
(41
|
)
|
||
Other financing activities
|
(33
|
)
|
|
(32
|
)
|
||
Net cash flow used for financing activities
|
(479
|
)
|
|
(1,018
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(29
|
)
|
|
1
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(103
|
)
|
|
131
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
(includes $202 (2020) and $120 (2019) of restricted cash)
|
834
|
|
|
976
|
|
||
Cash, cash equivalents and restricted cash at end of period
(includes $142 (2020) and $121 (2019) of restricted cash)
|
$
|
731
|
|
|
$
|
1,107
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||||||||||||||||||
|
Class A and B Common Stock
|
Additional Paid-In Capital
|
Treasury
Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total ViacomCBS Stockholders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
|||||||||||||||||||||||||||||
|
(Shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
December 31, 2019
|
615
|
|
|
$
|
1
|
|
|
$
|
29,590
|
|
|
$
|
(22,908
|
)
|
|
|
$
|
8,494
|
|
|
|
|
$
|
(1,970
|
)
|
|
|
|
$
|
13,207
|
|
|
|
|
$
|
82
|
|
|
|
$
|
13,289
|
|
Stock-based compensation
activity and other
|
1
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
43
|
|
|
|
|
—
|
|
|
|
43
|
|
||||||||
Class B Common Stock
purchased
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(50
|
)
|
|
|
|
—
|
|
|
|
(50
|
)
|
||||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(150
|
)
|
|
|
|
—
|
|
|
|
|
(150
|
)
|
|
|
|
—
|
|
|
|
(150
|
)
|
||||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(33
|
)
|
|
|
|
—
|
|
|
|
|
(33
|
)
|
|
|
|
(10
|
)
|
|
|
(43
|
)
|
|||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
516
|
|
|
|
|
—
|
|
|
|
|
516
|
|
|
|
|
3
|
|
|
|
519
|
|
||||||||
Other comprehensive
loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(84
|
)
|
|
|
|
(84
|
)
|
|
|
|
(3
|
)
|
|
|
(87
|
)
|
||||||||
March 31, 2020
|
615
|
|
|
$
|
1
|
|
|
$
|
29,633
|
|
|
$
|
(22,958
|
)
|
|
|
$
|
8,827
|
|
|
|
|
$
|
(2,054
|
)
|
|
|
|
$
|
13,449
|
|
|
|
|
$
|
72
|
|
|
|
$
|
13,521
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||||||||||||||||||||||
|
Class A and B Common Stock
|
Additional Paid-In Capital
|
Treasury
Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total ViacomCBS Stockholders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
|||||||||||||||||||||||||||||
|
(Shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
December 31, 2018
|
613
|
|
|
$
|
1
|
|
|
$
|
49,907
|
|
|
$
|
(43,420
|
)
|
|
|
$
|
5,569
|
|
|
|
|
$
|
(1,608
|
)
|
|
|
|
$
|
10,449
|
|
|
|
|
$
|
54
|
|
|
|
$
|
10,503
|
|
Stock-based compensation
activity and other
|
2
|
|
|
—
|
|
|
20
|
|
|
8
|
|
|
|
(4
|
)
|
|
|
|
—
|
|
|
|
|
24
|
|
|
|
|
—
|
|
|
|
24
|
|
||||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(150
|
)
|
|
|
|
—
|
|
|
|
|
(150
|
)
|
|
|
|
—
|
|
|
|
(150
|
)
|
||||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
|
—
|
|
|
|
|
(10
|
)
|
|
|
|
(13
|
)
|
|
|
(23
|
)
|
||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,959
|
|
|
|
|
—
|
|
|
|
|
1,959
|
|
|
|
|
5
|
|
|
|
1,964
|
|
||||||||
Reclassification of income
tax effect of the Tax
Reform Act
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
230
|
|
|
|
|
(230
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
||||||||
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
27
|
|
|
|
|
27
|
|
|
|
|
3
|
|
|
|
30
|
|
||||||||
March 31, 2019
|
615
|
|
|
$
|
1
|
|
|
$
|
49,927
|
|
|
$
|
(43,412
|
)
|
|
|
$
|
7,594
|
|
|
|
|
$
|
(1,811
|
)
|
|
|
|
$
|
12,299
|
|
|
|
|
$
|
49
|
|
|
|
$
|
12,348
|
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
(in millions)
|
2020
|
|
2019
|
||
Weighted average shares for basic EPS
|
614
|
|
|
613
|
|
Dilutive effect of shares issuable under stock-based
compensation plans
|
2
|
|
|
4
|
|
Weighted average shares for diluted EPS
|
616
|
|
|
617
|
|
|
At
|
||||
|
March 31, 2020
|
||||
Film Group Monetization:
|
|
|
|
||
Acquired television program rights, including prepaid sports rights
|
|
$
|
3,110
|
|
|
Internally produced television programming:
|
|
|
|
||
Released
|
|
2,702
|
|
|
|
In process and other
|
|
1,464
|
|
|
|
|
|
|
|
||
Individual Monetization:
|
|
|
|
||
Acquired television library
|
|
99
|
|
|
|
Film inventory:
|
|
|
|
||
Released
|
|
487
|
|
|
|
Completed, not yet released
|
|
73
|
|
|
|
In process and other
|
|
1,070
|
|
|
|
Internally produced television programming:
|
|
|
|
||
Released
|
|
1,273
|
|
|
|
In process and other
|
|
1,033
|
|
|
|
Home entertainment and Publishing, primarily finished goods
|
|
103
|
|
|
|
Total programming and other inventory
|
|
11,414
|
|
|
|
Less current portion
|
|
1,431
|
|
|
|
Total noncurrent programming and other inventory
|
|
$
|
9,983
|
|
|
|
At
|
||||
|
December 31, 2019
|
||||
Acquired television program rights, including prepaid sports rights
|
|
$
|
3,477
|
|
|
Acquired television library
|
|
99
|
|
|
|
Internally produced television programming:
|
|
|
|
||
Released
|
|
3,627
|
|
|
|
In process and other
|
|
2,626
|
|
|
|
Film inventory:
|
|
|
|
||
Released
|
|
502
|
|
|
|
Completed, not yet released
|
|
55
|
|
|
|
In process and other
|
|
1,037
|
|
|
|
Home entertainment and Publishing, primarily finished goods
|
|
105
|
|
|
|
Total programming and other inventory
|
|
11,528
|
|
|
|
Less current portion
|
|
2,876
|
|
|
|
Total noncurrent programming and other inventory
|
|
$
|
8,652
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Severance
|
$
|
176
|
|
|
$
|
98
|
|
Exit costs
|
26
|
|
|
30
|
|
||
Restructuring charges
|
202
|
|
|
128
|
|
||
Merger-related costs
|
31
|
|
|
—
|
|
||
Other corporate matters
|
—
|
|
|
50
|
|
||
Restructuring and other corporate matters
|
$
|
233
|
|
|
$
|
178
|
|
|
|
|
|
||||
Depreciation of abandoned technology
|
$
|
12
|
|
|
$
|
—
|
|
|
Balance at
|
|
2020 Activity
|
|
Balance at
|
||||||||||||||||||||
|
December 31, 2019
|
|
Charges (a)
|
|
Payments
|
|
Other
|
|
March 31, 2020
|
||||||||||||||||
TV Entertainment
|
|
$
|
99
|
|
|
|
$
|
28
|
|
|
|
$
|
(21
|
)
|
|
|
$
|
(1
|
)
|
|
|
$
|
105
|
|
|
Cable Networks
|
|
137
|
|
|
|
96
|
|
|
|
(16
|
)
|
|
|
(1
|
)
|
|
|
216
|
|
|
|||||
Filmed Entertainment
|
|
17
|
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
16
|
|
|
|||||
Publishing
|
|
4
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
4
|
|
|
|||||
Corporate
|
|
143
|
|
|
|
42
|
|
|
|
(58
|
)
|
|
|
(3
|
)
|
|
|
124
|
|
|
|||||
Total
|
|
$
|
400
|
|
|
|
$
|
168
|
|
|
|
$
|
(99
|
)
|
|
|
$
|
(4
|
)
|
|
|
$
|
465
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
$
|
52
|
|
|
$
|
55
|
|
Operating expenses
|
$
|
2
|
|
|
$
|
1
|
|
|
At
|
|
At
|
||||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Amounts due to/from other related parties
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
$
|
39
|
|
|
|
|
$
|
45
|
|
|
Accounts payable
|
|
$
|
1
|
|
|
|
|
$
|
3
|
|
|
|
At
|
|
At
|
||||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Commercial paper
|
|
$
|
312
|
|
|
|
|
$
|
699
|
|
|
Short-term bank borrowings
|
|
200
|
|
|
|
|
—
|
|
|
||
4.30% Senior Notes due 2021
|
|
300
|
|
|
|
|
300
|
|
|
||
4.50% Senior Notes due 2021
|
|
499
|
|
|
|
|
499
|
|
|
||
3.875% Senior Notes due 2021
|
|
598
|
|
|
|
|
597
|
|
|
||
2.250% Senior Notes due 2022
|
|
49
|
|
|
|
|
49
|
|
|
||
3.375% Senior Notes due 2022
|
|
698
|
|
|
|
|
698
|
|
|
||
3.125% Senior Notes due 2022
|
|
194
|
|
|
|
|
194
|
|
|
||
2.50% Senior Notes due 2023
|
|
398
|
|
|
|
|
398
|
|
|
||
3.25% Senior Notes due 2023
|
|
181
|
|
|
|
|
181
|
|
|
||
2.90% Senior Notes due 2023
|
|
397
|
|
|
|
|
396
|
|
|
||
4.25% Senior Notes due 2023
|
|
1,242
|
|
|
|
|
1,242
|
|
|
||
7.875% Debentures due 2023
|
|
187
|
|
|
|
|
187
|
|
|
||
7.125% Senior Notes due 2023
|
|
46
|
|
|
|
|
46
|
|
|
||
3.875% Senior Notes due 2024
|
|
489
|
|
|
|
|
489
|
|
|
||
3.70% Senior Notes due 2024
|
|
598
|
|
|
|
|
598
|
|
|
||
3.50% Senior Notes due 2025
|
|
592
|
|
|
|
|
592
|
|
|
||
4.00% Senior Notes due 2026
|
|
789
|
|
|
|
|
789
|
|
|
||
3.45% Senior Notes due 2026
|
|
123
|
|
|
|
|
123
|
|
|
||
2.90% Senior Notes due 2027
|
|
688
|
|
|
|
|
688
|
|
|
||
3.375% Senior Notes due 2028
|
|
494
|
|
|
|
|
494
|
|
|
||
3.70% Senior Notes due 2028
|
|
491
|
|
|
|
|
491
|
|
|
||
4.20% Senior Notes due 2029
|
|
493
|
|
|
|
|
493
|
|
|
||
7.875% Senior Debentures due 2030
|
|
831
|
|
|
|
|
831
|
|
|
||
5.50% Senior Debentures due 2033
|
|
426
|
|
|
|
|
426
|
|
|
||
4.85% Senior Debentures due 2034
|
|
87
|
|
|
|
|
87
|
|
|
||
6.875% Senior Debentures due 2036
|
|
1,069
|
|
|
|
|
1,068
|
|
|
||
6.75% Senior Debentures due 2037
|
|
75
|
|
|
|
|
75
|
|
|
||
5.90% Senior Notes due 2040
|
|
297
|
|
|
|
|
297
|
|
|
||
4.50% Senior Debentures due 2042
|
|
45
|
|
|
|
|
45
|
|
|
||
4.85% Senior Notes due 2042
|
|
487
|
|
|
|
|
486
|
|
|
||
4.375% Senior Debentures due 2043
|
|
1,111
|
|
|
|
|
1,109
|
|
|
||
4.875% Senior Debentures due 2043
|
|
18
|
|
|
|
|
18
|
|
|
||
5.850% Senior Debentures due 2043
|
|
1,231
|
|
|
|
|
1,231
|
|
|
||
5.25% Senior Debentures due 2044
|
|
345
|
|
|
|
|
345
|
|
|
||
4.90% Senior Notes due 2044
|
|
539
|
|
|
|
|
539
|
|
|
||
4.60% Senior Notes due 2045
|
|
589
|
|
|
|
|
589
|
|
|
||
5.875% Junior Subordinated Debentures due 2057
|
|
643
|
|
|
|
|
643
|
|
|
||
6.25% Junior Subordinated Debentures due 2057
|
|
643
|
|
|
|
|
643
|
|
|
||
Obligations under finance leases
|
|
43
|
|
|
|
|
44
|
|
|
||
Total debt (a)
|
|
18,537
|
|
|
|
|
18,719
|
|
|
||
Less commercial paper
|
|
312
|
|
|
|
|
699
|
|
|
||
Less short-term bank borrowings
|
|
200
|
|
|
|
|
—
|
|
|
||
Less current portion of long-term debt
|
|
20
|
|
|
|
|
18
|
|
|
||
Total long-term debt, net of current portion
|
|
$
|
18,005
|
|
|
|
|
$
|
18,002
|
|
|
|
Three Months Ended
|
|
||||||
|
March 31,
|
|
||||||
|
2020
|
|
2019
|
Financial Statement Account
|
||||
Non-designated foreign exchange contracts
|
$
|
29
|
|
|
$
|
(3
|
)
|
Other items, net
|
At March 31, 2020
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
36
|
|
Total Assets
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
36
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
$
|
—
|
|
|
$
|
403
|
|
|
$
|
—
|
|
|
$
|
403
|
|
Foreign currency hedges
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
449
|
|
|
$
|
—
|
|
|
$
|
449
|
|
At December 31, 2019
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
146
|
|
Foreign currency hedges
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||
Total Assets
|
$
|
146
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
159
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
$
|
—
|
|
|
$
|
490
|
|
|
$
|
—
|
|
|
$
|
490
|
|
Foreign currency hedges
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
504
|
|
|
$
|
—
|
|
|
$
|
504
|
|
|
Cumulative
Translation
Adjustments
|
|
Net Actuarial
Loss and Prior
Service Cost
|
|
Accumulated
Other
Comprehensive Loss
|
||||||||||||
At December 31, 2019
|
|
$
|
(463
|
)
|
|
|
|
$
|
(1,507
|
)
|
|
|
|
$
|
(1,970
|
)
|
|
Other comprehensive loss before reclassifications
|
|
(101
|
)
|
|
|
|
—
|
|
|
|
|
(101
|
)
|
|
|||
Reclassifications to net earnings
|
|
—
|
|
|
|
|
17
|
|
(a)
|
|
|
17
|
|
|
|||
Other comprehensive income (loss)
|
|
(101
|
)
|
|
|
|
17
|
|
|
|
|
(84
|
)
|
|
|||
At March 31, 2020
|
|
$
|
(564
|
)
|
|
|
|
$
|
(1,490
|
)
|
|
|
|
$
|
(2,054
|
)
|
|
|
Cumulative
Translation
Adjustments
|
|
Net Actuarial
Loss and Prior
Service Cost
|
|
Accumulated
Other
Comprehensive Loss
|
||||||||||||
At December 31, 2018
|
|
$
|
(476
|
)
|
|
|
|
$
|
(1,132
|
)
|
|
|
|
$
|
(1,608
|
)
|
|
Other comprehensive income before reclassifications
|
|
13
|
|
|
|
|
—
|
|
|
|
|
13
|
|
|
|||
Reclassifications to net earnings
|
|
—
|
|
|
|
|
14
|
|
(a)
|
|
|
14
|
|
|
|||
Other comprehensive income
|
|
13
|
|
|
|
|
14
|
|
|
|
|
27
|
|
|
|||
Tax effects reclassified to retained earnings
|
|
—
|
|
|
|
|
(230
|
)
|
(b)
|
|
|
(230
|
)
|
|
|||
At March 31, 2019
|
|
$
|
(463
|
)
|
|
|
|
$
|
(1,348
|
)
|
|
|
|
$
|
(1,811
|
)
|
|
(a)
|
Reflects amortization of net actuarial losses (see Note 11). Amounts are net of tax benefits of $5 million for each of the three months ended March 31, 2020 and 2019.
|
(b)
|
Reflects the reclassification of certain income tax effects of the Tax Reform Act on items within accumulated other comprehensive loss to retained earnings upon the adoption of FASB guidance.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
RSUs and PSUs
|
$
|
48
|
|
|
$
|
43
|
|
Stock options
|
6
|
|
|
8
|
|
||
Compensation cost included in operating and SG&A expense
|
54
|
|
|
51
|
|
||
Compensation cost included in restructuring and other
corporate matters (a)
|
34
|
|
|
5
|
|
||
Stock-based compensation expense, before income taxes
|
88
|
|
|
56
|
|
||
Related tax benefit
|
(16
|
)
|
|
(12
|
)
|
||
Stock-based compensation expense, net of tax benefit
|
$
|
72
|
|
|
$
|
44
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
Three Months Ended March 31,
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Components of net periodic cost (a):
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost
|
41
|
|
|
48
|
|
|
3
|
|
|
4
|
|
||||
Expected return on plan assets
|
(48
|
)
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial loss (gain) (b)
|
26
|
|
|
24
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
Net periodic cost
|
$
|
26
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning balance
|
$
|
254
|
|
|
$
|
239
|
|
Net earnings
|
1
|
|
|
3
|
|
||
Distributions
|
(4
|
)
|
|
(6
|
)
|
||
Translation adjustment
|
(14
|
)
|
|
7
|
|
||
Redemption value adjustment
|
33
|
|
|
10
|
|
||
Ending balance
|
$
|
270
|
|
|
$
|
253
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
|
|
||
Advertising
|
$
|
1,381
|
|
|
$
|
1,967
|
|
Affiliate
|
734
|
|
|
611
|
|
||
Content licensing
|
797
|
|
|
781
|
|
||
Other
|
35
|
|
|
47
|
|
||
TV Entertainment
|
2,947
|
|
|
3,406
|
|
||
Advertising
|
1,117
|
|
|
1,115
|
|
||
Affiliate
|
1,463
|
|
|
1,554
|
|
||
Content licensing
|
278
|
|
|
233
|
|
||
Cable Networks
|
2,858
|
|
|
2,902
|
|
||
Theatrical
|
167
|
|
|
172
|
|
||
Home entertainment
|
174
|
|
|
154
|
|
||
Licensing
|
442
|
|
|
375
|
|
||
Other
|
28
|
|
|
29
|
|
||
Filmed Entertainment
|
811
|
|
|
730
|
|
||
Publishing
|
170
|
|
|
164
|
|
||
Corporate/Eliminations
|
(117
|
)
|
|
(102
|
)
|
||
Total Revenues
|
$
|
6,669
|
|
|
$
|
7,100
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Intercompany Revenues:
|
|
|
|
||||
TV Entertainment
|
$
|
75
|
|
|
$
|
56
|
|
Cable Networks
|
16
|
|
|
18
|
|
||
Filmed Entertainment
|
26
|
|
|
35
|
|
||
Total Intercompany Revenues
|
$
|
117
|
|
|
$
|
109
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Adjusted OIBDA:
|
|
|
|
||||
TV Entertainment
|
$
|
573
|
|
|
$
|
742
|
|
Cable Networks
|
794
|
|
|
893
|
|
||
Filmed Entertainment
|
27
|
|
|
38
|
|
||
Publishing
|
19
|
|
|
19
|
|
||
Corporate/Eliminations
|
(96
|
)
|
|
(102
|
)
|
||
Stock-based compensation
|
(54
|
)
|
|
(51
|
)
|
||
Depreciation and amortization
|
(113
|
)
|
|
(106
|
)
|
||
Restructuring and other corporate matters
|
(233
|
)
|
|
(178
|
)
|
||
Gain on sale of assets
|
—
|
|
|
549
|
|
||
Operating income
|
917
|
|
|
1,804
|
|
||
Interest expense
|
(241
|
)
|
|
(240
|
)
|
||
Interest income
|
14
|
|
|
19
|
|
||
Gain on marketable securities
|
—
|
|
|
38
|
|
||
Other items, net
|
(33
|
)
|
|
(28
|
)
|
||
Earnings from continuing operations before income taxes and equity in
loss of investee companies
|
657
|
|
|
1,593
|
|
||
(Provision) benefit for income taxes
|
(137
|
)
|
|
376
|
|
||
Equity in loss of investee companies, net of tax
|
(9
|
)
|
|
(18
|
)
|
||
Net earnings from continuing operations
|
511
|
|
|
1,951
|
|
||
Net earnings from discontinued operations, net of tax
|
8
|
|
|
13
|
|
||
Net earnings (ViacomCBS and noncontrolling interests)
|
519
|
|
|
1,964
|
|
||
Net earnings attributable to noncontrolling interests
|
(3
|
)
|
|
(5
|
)
|
||
Net earnings attributable to ViacomCBS
|
$
|
516
|
|
|
$
|
1,959
|
|
|
At
|
|
At
|
||||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||
TV Entertainment
|
|
$
|
19,260
|
|
|
|
|
$
|
19,689
|
|
|
Cable Networks (a)
|
|
22,220
|
|
|
|
|
22,109
|
|
|
||
Filmed Entertainment
|
|
5,724
|
|
|
|
|
5,477
|
|
|
||
Publishing
|
|
1,187
|
|
|
|
|
1,262
|
|
|
||
Corporate/Eliminations
|
|
643
|
|
|
|
|
967
|
|
|
||
Discontinued Operations
|
|
11
|
|
|
|
|
15
|
|
|
||
Total Assets
|
|
$
|
49,045
|
|
|
|
|
$
|
49,519
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash paid for interest
|
$
|
322
|
|
|
$
|
340
|
|
|
|
|
|
||||
Cash paid for income taxes
|
$
|
55
|
|
|
$
|
197
|
|
|
|
|
|
||||
Noncash additions to operating lease assets
|
$
|
55
|
|
|
$
|
179
|
|
Item 2.
|
Management’s Discussion and Analysis of Results of Operations and Financial Condition.
|
|
(Tabular dollars in millions, except per share amounts)
|
•
|
Overview—The overview section provides a summary of ViacomCBS and our business and operational highlights.
|
•
|
Consolidated Results of Operations—The consolidated results of operations section provides an analysis of our results on a consolidated basis for the three months ended March 31, 2020 compared with the three months ended March 31, 2019.
|
•
|
Segment Results of Operations—The segment results of operations section provides an analysis of our results on a reportable segment basis for the three months ended March 31, 2020 compared with the three months ended March 31, 2019.
|
•
|
Liquidity and Capital Resources—The liquidity and capital resources section provides a discussion of our cash flows for the three months ended March 31, 2020 compared with the three months ended March 31, 2019 and of our outstanding debt, commitments and contingencies existing as of March 31, 2020.
|
•
|
Legal Matters—The legal matters section discusses our legal matters and other litigation to which we are a party.
|
Consolidated results of operations
|
|
|
|
|
Increase/(Decrease)
|
|
|||||||||
Three Months Ended March 31,
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
GAAP:
|
|
|
|
|
|
|
|
|
|||||||
Revenues
|
$
|
6,669
|
|
|
$
|
7,100
|
|
|
$
|
(431
|
)
|
|
(6
|
)%
|
|
Operating income
|
$
|
917
|
|
|
$
|
1,804
|
|
|
$
|
(887
|
)
|
|
(49
|
)%
|
|
Net earnings from continuing operations
attributable to ViacomCBS
|
$
|
508
|
|
|
$
|
1,946
|
|
|
$
|
(1,438
|
)
|
|
(74
|
)%
|
|
Diluted EPS from continuing operations
attributable to ViacomCBS
|
$
|
.82
|
|
|
$
|
3.15
|
|
|
$
|
(2.33
|
)
|
|
(74
|
)%
|
|
Net cash flow provided by operating activities
|
$
|
356
|
|
|
$
|
929
|
|
|
$
|
(573
|
)
|
|
(62
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP: (a)
|
|
|
|
|
|
|
|
|
|||||||
Adjusted OIBDA
|
$
|
1,263
|
|
|
$
|
1,539
|
|
|
$
|
(276
|
)
|
|
(18
|
)%
|
|
Adjusted net earnings from continuing operations
attributable to ViacomCBS
|
$
|
699
|
|
|
$
|
898
|
|
|
$
|
(199
|
)
|
|
(22
|
)%
|
|
Adjusted diluted EPS from continuing operations
attributable to ViacomCBS
|
$
|
1.13
|
|
|
$
|
1.46
|
|
|
$
|
(.33
|
)
|
|
(23
|
)%
|
|
Free cash flow
|
$
|
305
|
|
|
$
|
862
|
|
|
$
|
(557
|
)
|
|
(65
|
)%
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating income (GAAP)
|
$
|
917
|
|
|
$
|
1,804
|
|
Depreciation and amortization (a)
|
113
|
|
|
106
|
|
||
Restructuring and other corporate matters (b)
|
233
|
|
|
178
|
|
||
Gain on sale of assets (b)
|
—
|
|
|
(549
|
)
|
||
Adjusted OIBDA (Non-GAAP)
|
$
|
1,263
|
|
|
$
|
1,539
|
|
|
Three Months Ended March 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)
|
|
$
|
657
|
|
|
|
|
$
|
(137
|
)
|
|
|
|
$
|
508
|
|
|
|
|
$
|
.82
|
|
|
Items affecting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring and other corporate matters (a)
|
|
233
|
|
|
|
|
(47
|
)
|
|
|
|
186
|
|
|
|
|
.30
|
|
|
||||
Depreciation of abandoned technology (b)
|
|
12
|
|
|
|
|
(3
|
)
|
|
|
|
9
|
|
|
|
|
.02
|
|
|
||||
Discrete tax items
|
|
—
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
|
|
|
(.01
|
)
|
|
||||
Adjusted (Non-GAAP)
|
|
$
|
902
|
|
|
|
|
$
|
(191
|
)
|
|
|
|
$
|
699
|
|
|
|
|
$
|
1.13
|
|
|
|
Three Months Ended March 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)
|
|
$
|
1,593
|
|
|
|
|
$
|
376
|
|
|
|
|
$
|
1,946
|
|
|
|
|
$
|
3.15
|
|
|
Items affecting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring and other corporate matters (a)
|
|
178
|
|
|
|
|
(43
|
)
|
|
|
|
135
|
|
|
|
|
.22
|
|
|
||||
Gain on sale of assets (b)
|
|
(549
|
)
|
|
|
|
163
|
|
|
|
|
(386
|
)
|
|
|
|
(.63
|
)
|
|
||||
Gain on marketable securities
|
|
(38
|
)
|
|
|
|
9
|
|
|
|
|
(29
|
)
|
|
|
|
(.04
|
)
|
|
||||
Discrete tax items (c)
|
|
—
|
|
|
|
|
(768
|
)
|
|
|
|
(768
|
)
|
|
|
|
(1.24
|
)
|
|
||||
Adjusted (Non-GAAP)
|
|
$
|
1,184
|
|
|
|
|
$
|
(263
|
)
|
|
|
|
$
|
898
|
|
|
|
|
$
|
1.46
|
|
|
|
Three Months Ended March 31,
|
|
|||||||||||||||||||
|
|
|
% of Total
Revenues
|
|
|
|
% of Total
Revenues
|
|
Increase/(Decrease)
|
|
|||||||||||
Revenues by Type
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
|||||||||||
Advertising
|
$
|
2,484
|
|
|
37
|
%
|
|
$
|
3,066
|
|
|
43
|
%
|
|
$
|
(582
|
)
|
|
(19
|
)%
|
|
Affiliate
|
2,197
|
|
|
33
|
|
|
2,165
|
|
|
31
|
|
|
32
|
|
|
1
|
|
|
|||
Content licensing
|
1,594
|
|
|
24
|
|
|
1,465
|
|
|
21
|
|
|
129
|
|
|
9
|
|
|
|||
Theatrical
|
167
|
|
|
2
|
|
|
172
|
|
|
2
|
|
|
(5
|
)
|
|
(3
|
)
|
|
|||
Publishing
|
170
|
|
|
3
|
|
|
164
|
|
|
2
|
|
|
6
|
|
|
4
|
|
|
|||
Other
|
57
|
|
|
1
|
|
|
68
|
|
|
1
|
|
|
(11
|
)
|
|
(16
|
)
|
|
|||
Total Revenues
|
$
|
6,669
|
|
|
100
|
%
|
|
$
|
7,100
|
|
|
100
|
%
|
|
$
|
(431
|
)
|
|
(6
|
)%
|
|
|
Three Months Ended March 31,
|
|
|||||||||||||||||||
|
|
|
% of Operating Expenses
|
|
|
|
% of Operating Expenses
|
|
Increase/(Decrease)
|
|
|||||||||||
Operating Expenses by Type
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
|||||||||||
Production
|
$
|
1,654
|
|
|
41
|
%
|
|
$
|
1,496
|
|
|
35
|
%
|
|
$
|
158
|
|
|
11
|
%
|
|
Programming
|
973
|
|
|
24
|
|
|
1,450
|
|
|
34
|
|
|
(477
|
)
|
|
(33
|
)
|
|
|||
Participation, distribution and royalty
|
878
|
|
|
21
|
|
|
789
|
|
|
19
|
|
|
89
|
|
|
11
|
|
|
|||
Other
|
560
|
|
|
14
|
|
|
513
|
|
|
12
|
|
|
47
|
|
|
9
|
|
|
|||
Total Operating Expenses
|
$
|
4,065
|
|
|
100
|
%
|
|
$
|
4,248
|
|
|
100
|
%
|
|
$
|
(183
|
)
|
|
(4
|
)%
|
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
|
|||||||
Selling, general and administrative expenses
|
$
|
1,341
|
|
|
$
|
1,313
|
|
|
|
2
|
%
|
|
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
|
|||||||
Depreciation and amortization
|
$
|
113
|
|
|
$
|
106
|
|
|
|
7
|
%
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Severance
|
$
|
176
|
|
|
$
|
98
|
|
Exit costs
|
26
|
|
|
30
|
|
||
Restructuring charges
|
202
|
|
|
128
|
|
||
Merger-related costs
|
31
|
|
|
—
|
|
||
Other corporate matters
|
—
|
|
|
50
|
|
||
Restructuring and other corporate matters
|
$
|
233
|
|
|
$
|
178
|
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
|
|||||||
Interest expense
|
$
|
(241
|
)
|
|
$
|
(240
|
)
|
|
|
—
|
%
|
|
|
Interest income
|
$
|
14
|
|
|
$
|
19
|
|
|
|
(26
|
)%
|
|
|
|
At March 31,
|
||||||||||||||||
|
|
|
Weighted Average
|
|
|
|
Weighted Average
|
||||||||||
|
2020
|
|
Interest Rate
|
|
2019
|
|
Interest Rate
|
||||||||||
Total long-term debt
|
$
|
17,982
|
|
|
|
4.70
|
%
|
|
|
$
|
18,287
|
|
|
|
4.70
|
%
|
|
Commercial paper
|
$
|
312
|
|
|
|
2.18
|
%
|
|
|
$
|
—
|
|
|
|
n/a
|
|
|
Short-term bank borrowings
|
$
|
200
|
|
|
|
2.45
|
%
|
|
|
$
|
—
|
|
|
|
n/a
|
|
|
|
Three Months Ended March 31,
|
|||||||
|
2020
|
|
2019
|
|
||||
Pension and postretirement benefit costs
|
$
|
(18
|
)
|
|
$
|
(27
|
)
|
|
Foreign exchange losses
|
(16
|
)
|
|
(5
|
)
|
|
||
Other
|
1
|
|
|
4
|
|
|
||
Other items, net
|
$
|
(33
|
)
|
|
$
|
(28
|
)
|
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
|
|||||||
Equity in loss of investee companies
|
$
|
(16
|
)
|
|
$
|
(23
|
)
|
|
|
30
|
%
|
|
|
Tax benefit
|
7
|
|
|
5
|
|
|
|
40
|
|
|
|
||
Equity in loss of investee companies, net of tax
|
$
|
(9
|
)
|
|
$
|
(18
|
)
|
|
|
(50
|
)%
|
|
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
|
|||||||
Net earnings from continuing operations attributable to
ViacomCBS
|
$
|
508
|
|
|
$
|
1,946
|
|
|
|
(74
|
)%
|
|
|
Diluted EPS from continuing operations attributable to
ViacomCBS
|
$
|
.82
|
|
|
$
|
3.15
|
|
|
|
(74
|
)%
|
|
|
|
Three Months Ended March 31,
|
|
||||||||||||||||||||
|
|
% of Total
Revenues
|
|
|
% of Total
Revenues
|
Increase/(Decrease)
|
|
|||||||||||||||
|
2020
|
|
2019
|
$
|
|
%
|
|
|||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TV Entertainment
|
$
|
2,947
|
|
|
44
|
%
|
|
|
$
|
3,406
|
|
|
48
|
%
|
|
$
|
(459
|
)
|
|
(13
|
)%
|
|
Cable Networks
|
2,858
|
|
|
43
|
|
|
|
2,902
|
|
|
41
|
|
|
(44
|
)
|
|
(2
|
)
|
|
|||
Filmed Entertainment
|
811
|
|
|
12
|
|
|
|
730
|
|
|
10
|
|
|
81
|
|
|
11
|
|
|
|||
Publishing
|
170
|
|
|
3
|
|
|
|
164
|
|
|
2
|
|
|
6
|
|
|
4
|
|
|
|||
Corporate/Eliminations
|
(117
|
)
|
|
(2
|
)
|
|
|
(102
|
)
|
|
(1
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
|||
Total Revenues
|
$
|
6,669
|
|
|
100
|
%
|
|
|
$
|
7,100
|
|
|
100
|
%
|
|
$
|
(431
|
)
|
|
(6
|
)%
|
|
|
Three Months Ended March 31,
|
|
|||||||||||||
|
|
|
|
|
Increase/(Decrease)
|
|
|||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
Adjusted OIBDA:
|
|
|
|
|
|
|
|
|
|||||||
TV Entertainment
|
$
|
573
|
|
|
$
|
742
|
|
|
$
|
(169
|
)
|
|
(23
|
)%
|
|
Cable Networks
|
794
|
|
|
893
|
|
|
(99
|
)
|
|
(11
|
)
|
|
|||
Filmed Entertainment
|
27
|
|
|
38
|
|
|
(11
|
)
|
|
(29
|
)
|
|
|||
Publishing
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
|||
Corporate/Eliminations
|
(96
|
)
|
|
(102
|
)
|
|
6
|
|
|
6
|
|
|
|||
Stock-based compensation
|
(54
|
)
|
|
(51
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
|||
Total Adjusted OIBDA
|
1,263
|
|
|
1,539
|
|
|
(276
|
)
|
|
(18
|
)
|
|
|||
Depreciation and amortization
|
(113
|
)
|
|
(106
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
|||
Restructuring and other corporate matters
|
(233
|
)
|
|
(178
|
)
|
|
(55
|
)
|
|
n/m
|
|
|
|||
Gain on sale of assets
|
—
|
|
|
549
|
|
|
(549
|
)
|
|
n/m
|
|
|
|||
Total Operating Income
|
$
|
917
|
|
|
$
|
1,804
|
|
|
$
|
(887
|
)
|
|
(49
|
)%
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
|
Increase/(Decrease)
|
|
|||||||||||
TV Entertainment
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
Advertising
|
$
|
1,381
|
|
|
$
|
1,967
|
|
|
$
|
(586
|
)
|
|
(30
|
)%
|
|
Affiliate
|
734
|
|
|
611
|
|
|
123
|
|
|
20
|
|
|
|||
Content licensing
|
797
|
|
|
781
|
|
|
16
|
|
|
2
|
|
|
|||
Other
|
35
|
|
|
47
|
|
|
(12
|
)
|
|
(26
|
)
|
|
|||
Revenues
|
$
|
2,947
|
|
|
$
|
3,406
|
|
|
$
|
(459
|
)
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted OIBDA
|
$
|
573
|
|
|
$
|
742
|
|
|
$
|
(169
|
)
|
|
(23
|
)%
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
|
Increase/(Decrease)
|
|
|||||||||||
Cable Networks
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
Advertising
|
$
|
1,117
|
|
|
$
|
1,115
|
|
|
$
|
2
|
|
|
—
|
%
|
|
Affiliate
|
1,463
|
|
|
1,554
|
|
|
(91
|
)
|
|
(6
|
)
|
|
|||
Content licensing
|
278
|
|
|
233
|
|
|
45
|
|
|
19
|
|
|
|||
Revenues
|
$
|
2,858
|
|
|
$
|
2,902
|
|
|
$
|
(44
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted OIBDA
|
$
|
794
|
|
|
$
|
893
|
|
|
$
|
(99
|
)
|
|
(11
|
)%
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
|
Increase/(Decrease)
|
|
|||||||||||
Filmed Entertainment
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
Theatrical
|
$
|
167
|
|
|
$
|
172
|
|
|
$
|
(5
|
)
|
|
(3
|
)%
|
|
Home entertainment
|
174
|
|
|
154
|
|
|
20
|
|
|
13
|
|
|
|||
Licensing
|
442
|
|
|
375
|
|
|
67
|
|
|
18
|
|
|
|||
Other
|
28
|
|
|
29
|
|
|
(1
|
)
|
|
(3
|
)
|
|
|||
Revenues
|
$
|
811
|
|
|
$
|
730
|
|
|
$
|
81
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted OIBDA
|
$
|
27
|
|
|
$
|
38
|
|
|
$
|
(11
|
)
|
|
(29
|
)%
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
|
Increase/(Decrease)
|
|
|||||||||||
Publishing
|
2020
|
|
2019
|
|
$
|
|
%
|
|
|||||||
Revenues
|
$
|
170
|
|
|
$
|
164
|
|
|
$
|
6
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted OIBDA
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2020
|
|
2019
|
|
Increase/(Decrease)
|
||||||||
Cash flow provided by operating activities
|
$
|
356
|
|
|
$
|
929
|
|
|
|
$
|
(573
|
)
|
|
Cash flow provided by investing activities
|
49
|
|
|
219
|
|
|
|
(170
|
)
|
|
|||
Cash flow used for financing activities
|
(479
|
)
|
|
(1,018
|
)
|
|
|
539
|
|
|
|||
Effect of exchange rate changes on cash, cash equivalents
and restricted cash
|
(29
|
)
|
|
1
|
|
|
|
(30
|
)
|
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
$
|
(103
|
)
|
|
$
|
131
|
|
|
|
$
|
(234
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
||||||||
Investments (a)
|
|
$
|
(46
|
)
|
|
|
|
$
|
(99
|
)
|
|
Capital expenditures
|
|
(51
|
)
|
|
|
|
(67
|
)
|
|
||
Acquisitions, net of cash acquired (b)
|
|
—
|
|
|
|
|
(359
|
)
|
|
||
Proceeds from dispositions (c)
|
|
146
|
|
|
|
|
741
|
|
|
||
Other investing activities
|
|
—
|
|
|
|
|
3
|
|
|
||
Cash flow provided by investing activities
|
|
$
|
49
|
|
|
|
|
$
|
219
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
||||||||
Repayments of short-term debt borrowings, net
|
|
$
|
(186
|
)
|
|
|
|
$
|
(674
|
)
|
|
Proceeds from issuance of senior notes
|
|
—
|
|
|
|
|
493
|
|
|
||
Repayment of notes and debentures
|
|
—
|
|
|
|
|
(600
|
)
|
|
||
Dividends
|
|
(152
|
)
|
|
|
|
(150
|
)
|
|
||
Repurchase of the Company’s Class B Common Stock
|
|
(58
|
)
|
|
|
|
(14
|
)
|
|
||
Payment of payroll taxes in lieu of issuing shares for stock-based compensation
|
|
(50
|
)
|
|
|
|
(41
|
)
|
|
||
Other financing activities
|
|
(33
|
)
|
|
|
|
(32
|
)
|
|
||
Cash flow used for financing activities
|
|
$
|
(479
|
)
|
|
|
|
$
|
(1,018
|
)
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash flow provided by operating activities (GAAP)
|
$
|
356
|
|
|
$
|
929
|
|
Capital expenditures
|
(51
|
)
|
|
(67
|
)
|
||
Free cash flow (Non-GAAP)
|
$
|
305
|
|
|
$
|
862
|
|
|
At
|
|
At
|
||||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Commercial paper
|
|
$
|
312
|
|
|
|
|
$
|
699
|
|
|
Short-term bank borrowings
|
|
200
|
|
|
|
|
—
|
|
|
||
Senior debt (2.250%-7.875% due 2021-2045)
|
|
16,696
|
|
|
|
|
16,690
|
|
|
||
Junior debt (5.875%-6.250% due 2057)
|
|
1,286
|
|
|
|
|
1,286
|
|
|
||
Obligations under finance leases
|
|
43
|
|
|
|
|
44
|
|
|
||
Total debt (a)
|
|
18,537
|
|
|
|
|
18,719
|
|
|
||
Less commercial paper
|
|
312
|
|
|
|
|
699
|
|
|
||
Less short-term bank borrowings
|
|
200
|
|
|
|
|
—
|
|
|
||
Less current portion of long-term debt
|
|
20
|
|
|
|
|
18
|
|
|
||
Total long-term debt, net of current portion
|
|
$
|
18,005
|
|
|
|
|
$
|
18,002
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
negative impact on our affiliate revenues, as consumers may seek to reduce discretionary spending by cutting back or foregoing subscriptions to cable television or other multichannel video programming distributors (“MVPDs”) and virtual MVPDs, and our content licensing revenues, as our customers implement austerity measures;
|
•
|
negative impact on our financial condition or our ability to fund operations or future investment opportunities due to an increase in the cost or difficulty in obtaining debt or equity financing, or refinancing our debt in the future, or our ability to comply with the leverage covenant in our Credit Facility;
|
•
|
impairments of our programming and other inventory, goodwill and other indefinite-lived intangible assets, and other long-lived assets; and
|
•
|
increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online activity.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
(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
|
||||||||||||
January 1, 2020 - January 31, 2020
|
|
1.3
|
|
|
|
$
|
38.63
|
|
|
|
1.3
|
|
|
|
|
$
|
2,357
|
|
|
February 1, 2020 - February 29, 2020
|
|
—
|
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
|
$
|
2,357
|
|
|
March 1, 2020 - March 31, 2020
|
|
—
|
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
|
$
|
2,357
|
|
|
Total
|
|
1.3
|
|
|
|
$
|
38.63
|
|
|
|
1.3
|
|
|
|
|
$
|
2,357
|
|
|
Item 6.
|
Exhibits.
|
Exhibit No.
|
Description of Document
|
||
(31
|
)
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
(a)
|
Certification of the Chief Executive Officer of ViacomCBS Inc. pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
|
|
|
(b)
|
Certification of the Chief Financial Officer of ViacomCBS Inc. pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
|
|
(32
|
)
|
|
Section 1350 Certifications
|
|
(a)
|
Certification of the Chief Executive Officer of ViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
|
|
|
(b)
|
Certification of the Chief Financial Officer of ViacomCBS Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
|
|
(101
|
)
|
|
Interactive Data File
|
|
|
101. INS XBRL Instance Document - 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.
|
|
|
|
101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
(104
|
)
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
VIACOMCBS INC.
(Registrant)
|
|
|
Date: May 7, 2020
|
/s/ Christina Spade
|
|
Christina Spade
Executive Vice President,
Chief Financial Officer
|
|
|
Date: May 7, 2020
|
/s/ Katherine Gill-Charest
|
|
Katherine Gill-Charest
Executive Vice President, Controller and
Chief Accounting Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ViacomCBS Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Robert M. Bakish
|
|
Robert M. Bakish
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ViacomCBS Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Christina Spade
|
|
Christina Spade
|
|
Executive Vice President, Chief Financial Officer
|
/s/ Robert M. Bakish
|
|
Robert M. Bakish
|
|
May 7, 2020
|
|
/s/ Christina Spade
|
|
Christina Spade
|
|
May 7, 2020
|
|