Form 10-Q CBS CORP For: Sep 30

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November 3, 2016 4:47 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-09553

CBS CORPORATION

(Exact name of registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)	04-2949533 (I.R.S. Employer Identification No.)

51 W. 52^nd Street, New York, New York (Address of principal executive offices)	10019 (Zip Code)

(212) 975-4321

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Number of shares of common stock outstanding at October 31, 2016:

Class A Common Stock, par value $.001 per share— 37,726,904

Class B Common Stock, par value $.001 per share— 391,975,900

CBS CORPORATION

INDEX TO FORM 10-Q



		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2016 and September 30, 2015	3

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2016 and September 30, 2015	4

	Consolidated Balance Sheets (Unaudited) at September 30, 2016 and December 31, 2015	5

	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2016 and September 30, 2015	6

	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition.	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	55

Item 4.	Controls and Procedures.	55

	PART II – OTHER INFORMATION

Item 1A.	Risk Factors.	56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	56

Item 6.	Exhibits.	57

- 2-

PART I – FINANCIAL INFORMATION



Item 1.	Financial Statements.

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Revenues	$	3,396		$	3,257		$	10,532		$	9,976
Costs and expenses:
Operating	1,897			1,842			6,114			5,891
Selling, general and administrative	640			597			1,887			1,790
Depreciation and amortization	61			65			188			199
Restructuring charges (Note 10)	—			—			—			55
Other operating items, net	—			—			(9		)	(19		)
Total costs and expenses	2,598			2,504			8,180			7,916
Operating income	798			753			2,352			2,060
Interest expense	(104		)	(102		)	(304		)	(289		)
Interest income	7			6			22			18
Other items, net	2			(4		)	(5		)	(23		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	703			653			2,065			1,766
Provision for income taxes	(176		)	(211		)	(612		)	(579		)
Equity in loss of investee companies, net of tax	(13		)	(16		)	(43		)	(35		)
Net earnings from continuing operations	514			426			1,410			1,152
Loss from discontinued operations (Note 1)	(36		)	—			(36		)	—
Net earnings	$	478		$	426		$	1,374		$	1,152

Basic net earnings (loss) per common share:
Net earnings from continuing operations	$	1.16		$	.89		$	3.13		$	2.36
Loss from discontinued operations	$	(.08	)	$	—		$	(.08	)	$	—
Net earnings	$	1.08		$	.89		$	3.05		$	2.36

Diluted net earnings (loss) per common share:
Net earnings from continuing operations	$	1.15		$	.88		$	3.10		$	2.33
Loss from discontinued operations	$	(.08	)	$	—		$	(.08	)	$	—
Net earnings	$	1.07		$	.88		$	3.02		$	2.33

Weighted average number of common shares outstanding:
Basic	442			480			451			489
Diluted	446			484			455			495

Dividends per common share	$	.18		$	.15		$	.48		$	.45

See notes to consolidated financial statements.

-3-

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in millions)



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016		2015			2016		2015
Net earnings	$	478	$	426		$	1,374	$	1,152
Other comprehensive income, net of tax:
Cumulative translation adjustments	1		(5		)	2		(6		)
Amortization of net actuarial loss and prior service cost	10		9			29		27
Total other comprehensive income, net of tax	11		4			31		21
Total comprehensive income	$	489	$	430		$	1,405	$	1,173

See notes to consolidated financial statements.

-4-

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except per share amounts)



	At				At
	September 30, 2016				December 31, 2015
ASSETS
Current Assets:
Cash and cash equivalents		$	179			$	323
Receivables, less allowances of $67 (2016) and $63 (2015)		3,348				3,628
Programming and other inventory (Note 3)		1,459				1,271
Prepaid income taxes		39				101
Prepaid expenses		204				175
Other current assets		228				249
Total current assets		5,457				5,747
Property and equipment		3,263				3,243
Less accumulated depreciation and amortization		1,918				1,838
Net property and equipment		1,345				1,405
Programming and other inventory (Note 3)		2,237				1,957
Goodwill		6,531				6,481
Intangible assets		5,499				5,514
Other assets		2,779				2,661
Total Assets		$	23,848			$	23,765

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	153			$	192
Accrued compensation		282				315
Participants’ share and royalties payable		979				1,013
Program rights		373				374
Deferred revenues		141				295
Commercial paper (Note 5)		33				—
Current portion of long-term debt (Note 5)		22				222
Accrued expenses and other current liabilities		1,115				1,149
Total current liabilities		3,098				3,560
Long-term debt (Note 5)		8,902				8,226
Pension and postretirement benefit obligations		1,526				1,575
Deferred income tax liabilities, net		1,667				1,509
Other liabilities		3,240				3,260
Liabilities of discontinued operations		67				72

Commitments and contingencies (Note 9)

Stockholders’ Equity:
Class A Common Stock, par value $.001 per share; 375 shares authorized; 38 (2016 and 2015) shares issued		—				—
Class B Common Stock, par value $.001 per share; 5,000 shares authorized; 828 (2016) and 826 (2015) shares issued		1				1
Additional paid-in capital		43,935				44,055
Accumulated deficit		(19,144		)		(20,518		)
Accumulated other comprehensive loss (Note 7)		(739		)		(770		)
		24,053				22,768
Less treasury stock, at cost; 429 (2016) and 401 (2015) Class B shares		18,705				17,205
Total Stockholders’ Equity		5,348				5,563
Total Liabilities and Stockholders’ Equity		$	23,848			$	23,765

See notes to consolidated financial statements.

-5-

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)



	Nine Months Ended
	September 30,
	2016			2015
Operating Activities:
Net earnings	$	1,374		$	1,152
Less: Loss from discontinued operations	(36		)	—
Net earnings from continuing operations	1,410			1,152
Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:
Depreciation and amortization	188			199
Stock-based compensation	134			128
Equity in loss of investee companies, net of tax and distributions	48			37
Change in assets and liabilities, net of investing and financing activities	(472		)	(866		)
Net cash flow provided by operating activities from continuing operations	1,308			650
Net cash flow used for operating activities from discontinued operations	(2		)	(27		)
Net cash flow provided by operating activities	1,306			623
Investing Activities:
Acquisitions	(51		)	(7		)
Capital expenditures	(125		)	(104		)
Investments in and advances to investee companies	(44		)	(58		)
Proceeds from dispositions	28			75
Other investing activities	11			(8		)
Net cash flow used for investing activities from continuing operations	(181		)	(102		)
Net cash flow used for investing activities from discontinued operations	—			(4		)
Net cash flow used for investing activities	(181		)	(106		)
Financing Activities:
Proceeds from (repayments of) short-term debt borrowings, net	33			(313		)
Proceeds from issuance of senior notes	685			1,959
Repayment of senior debentures	(199		)	—
Payment of capital lease obligations	(13		)	(13		)
Dividends	(209		)	(228		)
Purchase of Company common stock	(1,534		)	(2,345		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(57		)	(96		)
Proceeds from exercise of stock options	13			137
Excess tax benefit from stock-based compensation	13			87
Other financing activities	(1		)	—
Net cash flow used for financing activities	(1,269		)	(812		)
Net decrease in cash and cash equivalents	(144		)	(295		)
Cash and cash equivalents at beginning of period	323			428
Cash and cash equivalents at end of period	$	179		$	133
Supplemental disclosure of cash flow information
Cash paid for interest	$	358		$	303
Cash paid for income taxes from continuing operations	$	370		$	230

See notes to consolidated financial statements.

-6-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in millions, except per share amounts)

1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business-CBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the “Company” or “CBS Corp.”) is comprised of the following segments: Entertainment (CBS Television, comprised of the CBS Television Network, CBS Television Studios, CBS Studios International, and CBS Television Distribution; CBS Interactive and CBS Films), Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks), Publishing (Simon & Schuster), Local Media (CBS Television Stations) and Radio (CBS Radio).

In connection with the Company’s previously announced plans to separate its radio business, a preliminary registration statement was filed with the Securities and Exchange Commission during the third quarter of 2016 for the proposed initial public offering of the common stock of CBS Radio Inc. (“CBS Radio”). In preparation for the planned separation, the Company changed the manner in which it manages its television and radio operations during the third quarter of 2016. Accordingly, the Company's previously reported operating segment, Local Broadcasting, has been separated into two operating segments, Local Media and Radio. In connection with this new segment presentation, the presentation of intercompany revenues has been revised, including station affiliation fees paid by Local Media to the CBS Television Network. Prior period results have been reclassified to conform to this presentation.

Basis of Presentation-The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules of the Securities and Exchange Commission. These financial statements should be read in conjunction with the more detailed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

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

Use of Estimates-The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Other Operating Items, Net-Other operating items, net for the nine months ended September 30, 2016 and 2015 includes gains from the sales of businesses, and for 2016 also includes a multiyear, retroactive impact of a new operating tax.

Loss from Discontinued Operations-Loss from discontinued operations for the three and nine months ended September 30, 2016 reflects the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.

Net Earnings per Common Share-Basic net earnings per share (“EPS”) is based upon net earnings divided by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the effect of the

-7-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

assumed exercise of stock options and vesting of restricted stock units (“RSUs”) only in the periods in which such effect would have been dilutive. Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, were 5 million stock options for each of the three and nine months ended September 30, 2016. Excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, were 7 million stock options and RSUs for the three months ended September 30, 2015 and 4 million stock options for the nine months ended September 30, 2015.

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2016	2015	2016	2015
Weighted average shares for basic EPS	442	480	451	489
Dilutive effect of shares issuable under stock-based compensation plans	4	4	4	6
Weighted average shares for diluted EPS	446	484	455	495

Other Liabilities-Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, participants’ share and royalties payable, program rights obligations, deferred compensation and other employee benefit accruals.

Additional Paid-In Capital-For the nine months ended September 30, 2016 and 2015, the Company recorded dividends of $218 million and $222 million, respectively, as a reduction to additional paid-in capital as the Company had an accumulated deficit balance.

Adoption of New Accounting Standards

Simplifying the Accounting for Measurement Period Adjustments

During the first quarter of 2016, the Company adopted amended Financial Accounting Standards Board (“FASB”) guidance which eliminates the requirement to retrospectively account for adjustments to provisional amounts recognized in a business combination when new information is obtained during the measurement period about facts and circumstances that existed as of the acquisition date. Under the amended guidance the acquirer is required to recognize such adjustments in the reporting period in which the adjustment amounts are identified. Such adjustments also include the effect on earnings from any changes in depreciation, amortization, or other income effects resulting from the change to provisional amounts, as if the change occurred at the acquisition date. The amendment also requires disclosure or separate presentation on the face of the income statement of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items

During the first quarter of 2016, the Company adopted amended FASB guidance which eliminates the concept of extraordinary items. This guidance removes the requirement to assess whether an event or transaction is both unusual in nature and infrequent in occurrence and to separately present any such items on the statement of operations after income from continuing operations. Rather, such items are required to be presented as a separate component of income from continuing operations or disclosed in the notes to the financial statements. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

-8-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

During the first quarter of 2016, the Company adopted FASB guidance on the accounting for stock-based compensation when the terms of an award provide that a performance target that affects vesting could be achieved after the requisite service period. Under this guidance, such performance target should not be reflected in estimating the grant-date fair value of the award. The Company should begin recognizing compensation cost in the period in which it becomes probable that the performance target will be achieved, for the cumulative amount of compensation cost attributable to the period(s) for which the requisite service has already been rendered. The adoption of this guidance did not have an effect on the Company’s consolidated financial statements.

Recent Pronouncements

Statement of Cash Flows: Classification of Cash Receipts and Cash Payments

In August 2016, the FASB issued amended guidance which clarifies how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new guidance is intended to reduce the existing diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the impact of this guidance on its consolidated statements of cash flows.

Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued amended guidance which simplifies several aspects of the accounting for employee share-based payment transactions. Under this amended guidance, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement in the period in which the awards vest or are exercised. In the statement of cash flows, excess tax benefits will be classified with other income tax cash flows in operating activities. The amended guidance also gives the option to make a policy election to account for forfeitures as they occur and increases the threshold for awards that are partially settled in cash to qualify for equity classification. The Company expects that the adoption of this guidance will introduce volatility into the Company’s income tax provision, which will be impacted by the timing of employee exercises and changes in the Company’s stock price. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted.

Leases

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.

Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

In August 2014, the FASB issued guidance which requires management to evaluate, for each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. If management

-9-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

identifies conditions or events that raise substantial doubt, disclosures are required in the financial statements, including any plans that will alleviate the substantial doubt about the entity’s ability to continue as a going concern. This guidance, which is effective for the first annual period ending after December 15, 2016, is not expected to have an impact on the Company’s consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company anticipates that this guidance will result in changes to its revenue recognition and is currently assessing the impact. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016.

2) STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
RSUs	$	39		$	32		$	112		$	105
Stock options	7			7			22			23
Stock-based compensation expense, before income taxes	46			39			134			128
Related tax benefit	(18		)	(15		)	(52		)	(49		)
Stock-based compensation expense, net of tax benefit	$	28		$	24		$	82		$	79

During the nine months ended September 30, 2016, the Company granted 3 million RSUs for CBS Corp. Class B Common Stock with a weighted average per unit grant-date fair value of $47.26. RSUs granted during the first nine months of 2016 generally vest over a one- to four-year service period. Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant. For certain RSU awards the number of shares an employee earns ranges from 0% to 120% of the target award, based on the outcome of established performance conditions. Compensation expense is recorded based on the probable outcome of the performance conditions. During the nine months ended September 30, 2016, the Company also granted 2 million stock options with a weighted average exercise price of $45.79. Stock options granted during the first nine months of 2016 vest over a four-year service period and expire eight years from the date of grant. Compensation expense for stock options is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model.

Total unrecognized compensation cost related to unvested RSUs at September 30, 2016 was $237 million, which is expected to be recognized over a weighted average period of 2.4 years. Total unrecognized compensation cost related to unvested stock option awards at September 30, 2016 was $50 million, which is expected to be recognized over a weighted average period of 2.4 years.

-10-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

3) PROGRAMMING AND OTHER INVENTORY



	At			At
	September 30, 2016			December 31, 2015
Acquired program rights		$	1,737		$	1,533
Internally produced programming:
Released		1,459			1,261
In process and other		445			392
Publishing, primarily finished goods		55			42
Total programming and other inventory		3,696			3,228
Less current portion		1,459			1,271
Total noncurrent programming and other inventory		$	2,237		$	1,957

4) RELATED PARTIES

National Amusements, Inc. National Amusements, Inc. (“NAI”) is the controlling stockholder of CBS Corp. and Viacom Inc. Mr. Sumner M. Redstone, the controlling stockholder, chairman of the board of directors and chief executive officer of NAI, is the Chairman Emeritus of each of CBS Corp. and Viacom Inc. In addition, Ms. Shari Redstone, Mr. Sumner M. Redstone’s daughter, is the president and a director of NAI and the vice chair of the Board of Directors of each of CBS Corp. and Viacom Inc. Mr. David R. Andelman is a director of CBS Corp. and serves as a director of NAI. At September 30, 2016, NAI directly or indirectly owned approximately 79.5% of CBS Corp.’s voting Class A Common Stock, and owned approximately 9.0% of CBS Corp.’s Class A Common Stock and non-voting Class B Common Stock on a combined basis.

On September 29, 2016, the Company announced that its Board of Directors received a letter from NAI requesting that the Company consider a potential combination of the Company and Viacom Inc. The Company is in the process of evaluating whether to pursue any such potential transaction. No assurance can be given regarding the entry into, consummation or terms of any such potential transaction.

Viacom Inc. As part of its normal course of business, the Company licenses its television content, leases production facilities and sells advertising spots to various subsidiaries of Viacom Inc. Viacom Inc. also distributes certain of the Company’s television programs in the home entertainment market. The Company’s total revenues from these transactions were $16 million and $44 million for the three months ended September 30, 2016 and 2015, respectively, and $85 million and $144 million for the nine months ended September 30, 2016 and 2015, respectively.

The Company places advertisements with and leases production facilities from various subsidiaries of Viacom Inc. The total amounts for these transactions were $6 million for each of the three months ended September 30, 2016 and 2015, and $17 million for each of the nine months ended September 30, 2016 and 2015.

-11-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table presents the amounts due from Viacom Inc. in the normal course of business as reflected on the Company’s Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September 30, 2016 and December 31, 2015.



	At			At
	September 30, 2016			December 31, 2015
Receivables		$	87		$	115
Other assets (Receivables, noncurrent)		47			38
Total amounts due from Viacom Inc.		$	134		$	153

Other Related Parties. The Company has equity interests in two domestic television networks and several international joint ventures for television channels from which the Company earns revenues primarily by selling its television programming. Total revenues earned from sales to these joint ventures were $13 million and $20 million for the three months ended September 30, 2016 and 2015, respectively, and $69 million and $91 million for the nine months ended September 30, 2016 and 2015, respectively. At September 30, 2016 and December 31, 2015, total amounts due from these joint ventures were $41 million and $48 million, respectively.

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

5) BANK FINANCING AND DEBT

The following table sets forth the Company’s debt.



	At			At
	September 30, 2016			December 31, 2015
Commercial paper		$	33		$	—
Senior debt (1.95% - 7.875% due 2016 - 2045) ^(a)		8,849			8,365
Obligations under capital leases		75			83
Total debt		8,957			8,448
Less commercial paper		33			—
Less current portion of long-term debt		22			222
Total long-term debt, net of current portion		$	8,902		$	8,226

(a) At September 30, 2016 and December 31, 2015, the senior debt balances included (i) a net unamortized discount of $53 million and $45 million, respectively, (ii) unamortized deferred financing costs of $45 million and $44 million, respectively, and (iii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $7 million and $14 million, respectively. The face value of the Company’s senior debt was $8.94 billion and $8.44 billion at September 30, 2016 and December 31, 2015, respectively.

During July 2016, the Company issued $700 million of 2.90% senior notes due 2027. The Company used the net proceeds from this issuance for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and the repayment of short-term borrowings, including commercial paper.

During January 2016, the Company repaid its $200 million of outstanding 7.625% senior debentures upon maturity.

At September 30, 2016, the Company classified $400 million of debt maturing in July 2017 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

-12-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Commercial Paper

At September 30, 2016, the Company had $33 million of outstanding commercial paper borrowings under its $2.5 billion commercial paper program at a weighted average interest rate of 0.75% and with maturities of less than 45 days. The Company had no outstanding commercial paper borrowings at December 31, 2015.

Credit Facility

During June 2016, the Company amended and restated its $2.5 billion revolving credit facility (the “Credit Facility”). The amended Credit Facility expires in June 2021 and contains provisions that are substantially similar to the previous Credit Facility, which was due to expire in December 2019. The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At September 30, 2016, the Company’s Consolidated Leverage Ratio was approximately 2.5x.

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

The Credit Facility is used for general corporate purposes. At September 30, 2016, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.

CBS Radio Indebtedness

In October 2016, in connection with the Company’s previously announced plans to separate its radio business, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 (the “Term Loan”) and the issuance of $400 million of 7.25% senior unsecured notes due 2024 through a private placement. The Term Loan bears interest at a rate equal to 3.50% plus the greater of the London Interbank Offered Rate (“LIBOR”) and 1.00%.

The Term Loan is part of a credit agreement which also includes a $250 million senior secured revolving credit facility (the “Radio Revolving Credit Facility”) which expires in 2021. Interest on the Radio Revolving Credit Facility will be based on either LIBOR or a base rate plus a margin based on CBS Radio’s Consolidated Net Secured Leverage Ratio. The Consolidated Net Secured Leverage Ratio reflects the ratio of CBS Radio’s secured debt (less up to $150 million of cash and cash equivalents) to CBS Radio’s consolidated EBITDA (as defined in the credit agreement). The Radio Revolving Credit Facility requires CBS Radio to maintain a maximum Consolidated Net Secured Leverage Ratio of 4.00 to 1.00. As of November 3, 2016, there were no borrowings outstanding under the Radio Revolving Credit Facility.

This debt is guaranteed by certain subsidiaries of CBS Radio. The Company does not guarantee, or otherwise provide credit support for, the senior notes, Term Loan, or Radio Revolving Credit Facility. The net debt proceeds will be primarily used by the Company to repurchase shares of CBS Corp. Class B Common Stock, with the remainder to be used for general corporate purposes and ongoing cash needs.

-13-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

6) PENSION AND OTHER POSTRETIREMENT BENEFITS

The components of net periodic cost for the Company’s pension and postretirement benefit plans were as follows:



	Pension Benefits						Postretirement Benefits
Three Months Ended September 30,	2016			2015			2016			2015
Components of net periodic cost:
Service cost	$	7		$	7		$	—		$	—
Interest cost	54			52			5			6
Expected return on plan assets	(56		)	(65		)	—			—
Amortization of actuarial loss (gain) ^(a)	21			20			(5		)	(6		)
Net periodic cost	$	26		$	14		$	—		$	—



	Pension Benefits						Postretirement Benefits
Nine Months Ended September 30,	2016			2015			2016			2015
Components of net periodic cost:
Service cost	$	22		$	23		$	—		$	—
Interest cost	161			157			15			15
Expected return on plan assets	(170		)	(196		)	—			—
Amortization of actuarial loss (gain) ^(a)	64			60			(16		)	(16		)
Net periodic cost	$	77		$	44		$	(1	)	$	(1	)

(a) Reflects amounts reclassified from accumulated other comprehensive income (loss) to net earnings.

7) STOCKHOLDERS’ EQUITY

On July 28, 2016, the Company announced that its Board of Directors approved a 20% increase to the quarterly cash dividend on its Class A and Class B Common stock to $.18 from $.15 per share. The total third quarter 2016 dividend was $80 million, which was paid on October 1, 2016.

-14-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the components of accumulated other comprehensive income (loss).



	Cumulative Translation Adjustments		Net Actuarial Gain (Loss) and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2015	$	152	$	(922	)			$	(770	)
Other comprehensive income before reclassifications	2		—					2
Reclassifications to net earnings	—		29			^(a)		29
Net other comprehensive income	2		29					31
At September 30, 2016	$	154	$	(893	)			$	(739	)



	Cumulative Translation Adjustments			Net Actuarial Gain (Loss) and Prior Service Cost				Accumulated Other Comprehensive Loss
At December 31, 2014	$	157		$	(892	)			$	(735	)
Other comprehensive loss before reclassifications	(8		)	—					(8		)
Reclassifications to net earnings	2			27			^(a)		29
Net other comprehensive income (loss)	(6		)	27					21
At September 30, 2015	$	151		$	(865	)			$	(714	)


(a)	Reflects amortization of net actuarial losses. See Note 6.

The net actuarial gain (loss) and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax provision of $19 million and $17 million for the nine months ended September 30, 2016 and 2015, respectively.

8) INCOME TAXES

The provision for income taxes represents federal, state and local, and foreign income taxes on earnings from continuing operations before income taxes and equity in loss of investee companies.

The provision for income taxes was $176 million for the three months ended September 30, 2016 and $211 million for the three months ended September 30, 2015, reflecting an effective income tax rate of 25.0% and 32.3%, respectively. For the nine months ended September 30, 2016, the provision for income taxes was $612 million compared to $579 million for the nine months ended September 30, 2015, reflecting an income tax rate of 29.6% and 32.8%, respectively. The lower tax rate for the three and nine months ended September 30, 2016 includes a one-time benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the Internal Revenue Service during the third quarter of 2016.

9) COMMITMENTS AND CONTINGENCIES

Guarantees

The Company has indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At September 30, 2016, the outstanding letters of credit and surety bonds approximated $111 million and were not recorded on the Consolidated Balance Sheet.

-15-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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

Legal Matters

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

Claims Related to Former Businesses: Asbestos. The Company is a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred principally as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. The Company is typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of the Company’s products is the basis of a claim. Claims against the Company in which a product has been identified principally relate to exposures allegedly caused by asbestos-containing insulating material in turbines sold for power-generation, industrial and marine use.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. The Company does not report as pending those claims on inactive, stayed, deferred or similar dockets which some jurisdictions have established for claimants who allege minimal or no impairment. As of September 30, 2016, the Company had pending approximately 34,400 asbestos claims, as compared with approximately 36,030 as of December 31, 2015 and 37,190 as of September 30, 2015. During the third quarter of 2016, the Company received approximately 930 new claims and closed or moved to an inactive docket approximately 1,320 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. In 2015, as the result of an insurance settlement, insurance recoveries exceeded the Company’s after tax costs for settlement and defense of asbestos claims by approximately $5 million. In 2014, the Company’s costs for settlement and defense of asbestos claims after insurance and taxes were approximately $11 million. The Company’s costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has trended down in the past five to ten years and has remained flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

-16-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Other. The Company from time to time receives claims from federal and state environmental regulatory agencies and other entities asserting that it is or may be liable for environmental cleanup costs and related damages principally relating to historical and predecessor operations of the Company. In addition, the Company from time to time receives personal injury claims including toxic tort and product liability claims (other than asbestos) arising from historical operations of the Company and its predecessors.

10) RESTRUCTURING CHARGES

During the year ended December 31, 2015, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $81 million, of which $55 million was recorded during the nine months ended September 30, 2015. The 2015 restructuring charges reflected $48 million of severance costs and $33 million of costs associated with exiting contractual obligations and other related costs. During the year ended December 31, 2014, the Company recorded restructuring charges of $26 million reflecting $17 million of severance costs and $9 million of costs associated with exiting contractual obligations. As of September 30, 2016, the cumulative settlements for the 2015 and 2014 restructuring charges were $83 million, of which $54 million was for severance costs and $29 million was for costs associated with contractual obligations.



	Balance at			2016				Balance at
	December 31, 2015			Settlements				September 30, 2016
Entertainment		$	19		$	(13	)		$	6
Local Media		11			(5		)		6
Radio		23			(11		)		12
Corporate		1			(1		)		—
Total		$	54		$	(30	)		$	24



	Balance at			2015			2015				Balance at
	December 31, 2014			Charges			Settlements				December 31, 2015
Entertainment		$	6		$	26		$	(13	)		$	19
Local Media		5			19			(13		)		11
Radio		5			36			(18		)		23
Corporate		2			—			(1		)		1
Total		$	18		$	81		$	(45	)		$	54

11) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company’s carrying value of financial instruments approximates fair value, except for notes and debentures, which are not recorded at fair value. At September 30, 2016 and December 31, 2015, the carrying value of the Company’s senior debt was $8.85 billion and $8.37 billion, respectively, and the fair value, which is estimated based on quoted market prices for similar liabilities (Level 2) and includes accrued interest, was $9.90 billion and $8.78 billion, respectively.

The Company uses derivative financial instruments primarily to modify its exposure to market risks from fluctuations in foreign currency exchange rates. The Company does not use derivative instruments unless there is an underlying exposure and, therefore, the Company does not hold or enter into derivative financial instruments for speculative trading purposes.

-17-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Foreign Exchange Contracts

Foreign exchange forward contracts have principally been used to hedge projected cash flows, in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, generally for periods up to 24 months. The Company designates forward contracts used to hedge committed and forecasted foreign currency transactions as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income (“OCI”) and reclassified to the statement of operations when the hedged item is recognized. Additionally, the Company enters into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At September 30, 2016 and December 31, 2015, the notional amount of all foreign exchange contracts was $456 million and $291 million, respectively.

Gains recognized on derivative financial instruments were as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015		Financial Statement Account
Non-designated foreign exchange contracts	$	4	$	10	$	13	$	13	Other items, net

Designated interest rate swaps ^(a)	$	—	$	2	$	—	$	7	Interest expense

(a) The gains during the three and nine months ended September 30, 2015 related to interest rate swaps that were settled during 2015.

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

The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.



At September 30, 2016	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	21	$	—	$	21
Total Assets	$	—	$	21	$	—	$	21
Liabilities:
Deferred compensation	$	—	$	329	$	—	$	329
Foreign currency hedges	—		5		—		5
Total Liabilities	$	—	$	334	$	—	$	334

-18-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



At December 31, 2015	Level 1		Level 2		Level 3		Total
Assets:
Foreign currency hedges	$	—	$	13	$	—	$	13
Total Assets	$	—	$	13	$	—	$	13
Liabilities:
Deferred compensation	$	—	$	312	$	—	$	312
Total Liabilities	$	—	$	312	$	—	$	312

The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.

12) REPORTABLE SEGMENTS

The following tables set forth the Company’s financial performance by reportable segment. The Company’s operating segments, which are the same as its reportable segments, have been determined in accordance with the Company’s internal management structure, which is organized based upon products and services.

In preparation for the planned separation of its radio business, the Company changed the manner in which it manages its television and radio operations during the third quarter of 2016. Accordingly, the Company’s previously reported operating segment, Local Broadcasting, has been separated into two operating segments, Local Media and Radio. In connection with this new segment presentation, the presentation of intercompany revenues has been revised, including station affiliation fees paid by Local Media to the CBS Television Network. Prior period results have been reclassified to conform to this presentation.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Revenues:
Entertainment	$	1,949		$	1,932		$	6,483		$	5,978
Cable Networks	598			526			1,659			1,680
Publishing	226			203			558			547
Local Media	409			376			1,253			1,138
Radio	319			318			898			907
Corporate/Eliminations	(105		)	(98		)	(319		)	(274		)
Total Revenues	$	3,396		$	3,257		$	10,532		$	9,976

Revenues generated between segments primarily reflect advertising sales, television license fees and station affiliation fees. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Intercompany Revenues:
Entertainment	$	102	$	96	$	321	$	270
Local Media	2		3		6		7
Radio	6		2		9		5
Total Intercompany Revenues	$	110	$	101	$	336	$	282

-19-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The Company presents operating income (loss) excluding restructuring charges, impairment charges, and other operating items, net, if any, (“Segment Operating Income”) as the primary measure of profit and loss for its operating segments in accordance with FASB guidance for segment reporting. The Company believes the presentation of Segment Operating Income is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company’s management and enhances their ability to understand the Company’s operating performance.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Segment Operating Income (Loss):
Entertainment	$	348		$	339		$	1,148		$	947
Cable Networks	285			246			740			717
Publishing	44			43			83			80
Local Media	122			101			402			338
Radio	77			73			215			195
Corporate	(78		)	(49		)	(245		)	(181		)
Total Segment Operating Income	798			753			2,343			2,096
Restructuring charges	—			—			—			(55		)
Other operating items, net ^(a)	—			—			9			19
Operating income	798			753			2,352			2,060
Interest expense	(104		)	(102		)	(304		)	(289		)
Interest income	7			6			22			18
Other items, net	2			(4		)	(5		)	(23		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	703			653			2,065			1,766
Provision for income taxes	(176		)	(211		)	(612		)	(579		)
Equity in loss of investee companies, net of tax	(13		)	(16		)	(43		)	(35		)
Net earnings from continuing operations	514			426			1,410			1,152
Loss from discontinued operations	(36		)	—			(36		)	—
Net earnings	$	478		$	426		$	1,374		$	1,152

(a) Other operating items, net includes gains from the sales of internet businesses in China for the nine months ended September 30, 2016 and 2015, and for 2016, also includes a multiyear, retroactive impact of a new operating tax.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Depreciation and Amortization:
Entertainment	$	28	$	31	$	88	$	95
Cable Networks	6		5		17		17
Publishing	1		1		4		4
Local Media	11		12		33		37
Radio	7		8		22		23
Corporate	8		8		24		23
Total Depreciation and Amortization	$	61	$	65	$	188	$	199

-20-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based Compensation:
Entertainment	$	16	$	16	$	47	$	48
Cable Networks	3		3		9		8
Publishing	1		1		3		3
Local Media	3		3		9		9
Radio	4		2		11		12
Corporate	19		14		55		48
Total Stock-based Compensation	$	46	$	39	$	134	$	128



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Capital Expenditures:
Entertainment	$	23	$	33	$	60	$	54
Cable Networks	4		5		8		8
Publishing	1		2		7		4
Local Media	9		10		20		17
Radio	4		5		14		16
Corporate	5		3		16		5
Total Capital Expenditures	$	46	$	58	$	125	$	104



	At			At
	September 30, 2016			December 31, 2015
Assets:
Entertainment		$	11,220		$	10,910
Cable Networks		2,526			2,369
Publishing		835			880
Local Media		3,827			3,881
Radio		5,167			5,224
Corporate/Eliminations		249			476
Discontinued operations		24			25
Total Assets		$	23,848		$	23,765

-21-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

13) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CBS Operations Inc. is a wholly owned subsidiary of the Company. CBS Operations Inc. has fully and unconditionally guaranteed CBS Corp.’s senior debt securities. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of CBS Corp., CBS Operations Inc., the direct and indirect Non-Guarantor Affiliates of CBS Corp. and CBS Operations Inc., and the eliminations necessary to arrive at the information for the Company on a consolidated basis.



	Statement of Operations
	For the Three Months Ended September 30, 2016
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	42		$	3		$	3,351		$	—		$	3,396
Costs and expenses:
Operating	16			1			1,880			—			1,897
Selling, general and administrative	20			63			557			—			640
Depreciation and amortization	2			6			53			—			61
Total costs and expenses	38			70			2,490			—			2,598
Operating income (loss)	4			(67		)	861			—			798
Interest (expense) income, net	(129		)	(109		)	141			—			(97		)
Other items, net	—			—			2			—			2
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(125		)	(176		)	1,004			—			703
Benefit (provision) for income taxes	43			59			(278		)	—			(176		)
Equity in earnings (loss) of investee companies, net of tax	560			327			(13		)	(887		)	(13		)
Net earnings from continuing operations	478			210			713			(887		)	514
Loss from discontinued operations	—			—			(36		)	—			(36		)
Net earnings	$	478		$	210		$	677		$	(887	)	$	478
Total comprehensive income	$	489		$	215		$	675		$	(890	)	$	489

-22-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Statement of Operations
	For the Nine Months Ended September 30, 2016
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	125		$	9		$	10,398		$	—		$	10,532
Cost and expenses:
Operating	48			4			6,062			—			6,114
Selling, general and administrative	62			196			1,629			—			1,887
Depreciation and amortization	4			17			167			—			188
Other operating items, net	—			—			(9		)	—			(9		)
Total costs and expenses	114			217			7,849			—			8,180
Operating income (loss)	11			(208		)	2,549			—			2,352
Interest (expense) income, net	(377		)	(319		)	414			—			(282		)
Other items, net	(2		)	3			(6		)	—			(5		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(368		)	(524		)	2,957			—			2,065
Benefit (provision) for income taxes	120			170			(902		)	—			(612		)
Equity in earnings (loss) of investee companies, net of tax	1,622			876			(43		)	(2,498		)	(43		)
Net earnings from continuing operations	1,374			522			2,012			(2,498		)	1,410
Loss from discontinued operations	—			—			(36		)	—			(36		)
Net earnings	$	1,374		$	522		$	1,976		$	(2,498	)	$	1,374
Total comprehensive income	$	1,405		$	540		$	1,965		$	(2,505	)	$	1,405

-23-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Statement of Operations
	For the Three Months Ended September 30, 2015
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	36		$	2		$	3,219		$	—		$	3,257
Costs and expenses:
Operating	17			1			1,824			—			1,842
Selling, general and administrative	3			49			545			—			597
Depreciation and amortization	1			5			59			—			65
Total costs and expenses	21			55			2,428			—			2,504
Operating income (loss)	15			(53		)	791			—			753
Interest (expense) income, net	(125		)	(103		)	132			—			(96		)
Other items, net	(1		)	6			(9		)	—			(4		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(111		)	(150		)	914			—			653
Benefit (provision) for income taxes	36			48			(295		)	—			(211		)
Equity in earnings (loss) of investee companies, net of tax	501			338			(16		)	(839		)	(16		)
Net earnings	$	426		$	236		$	603		$	(839	)	$	426
Total comprehensive income	$	430		$	240		$	590		$	(830	)	$	430

-24-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Statement of Operations
	For the Nine Months Ended September 30, 2015
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Revenues	$	101		$	8		$	9,867		$	—		$	9,976
Costs and expenses:
Operating	47			4			5,840			—			5,891
Selling, general and administrative	27			165			1,598			—			1,790
Depreciation and amortization	4			15			180			—			199
Restructuring charges	—			—			55			—			55
Other operating items, net	—			—			(19		)	—			(19		)
Total costs and expenses	78			184			7,654			—			7,916
Operating income (loss)	23			(176		)	2,213			—			2,060
Interest (expense) income, net	(358		)	(300		)	387			—			(271		)
Other items, net	(1		)	6			(28		)	—			(23		)
Earnings (loss) before income taxes and equity in earnings (loss) of investee companies	(336		)	(470		)	2,572			—			1,766
Benefit (provision) for income taxes	109			152			(840		)	—			(579		)
Equity in earnings (loss) of investee companies, net of tax	1,379			802			(35		)	(2,181		)	(35		)
Net earnings	$	1,152		$	484		$	1,697		$	(2,181	)	$	1,152
Total comprehensive income	$	1,173		$	487		$	1,705		$	(2,192	)	$	1,173

-25-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Balance Sheet
	At September 30, 2016
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	54		$	1	$	124		$	—		$	179
Receivables, net	20			2		3,326			—			3,348
Programming and other inventory	4			3		1,452			—			1,459
Prepaid expenses and other current assets	93			39		375			(36		)	471
Total current assets	171			45		5,277			(36		)	5,457
Property and equipment	47			184		3,032			—			3,263
Less accumulated depreciation and amortization	23			135		1,760			—			1,918
Net property and equipment	24			49		1,272			—			1,345
Programming and other inventory	6			7		2,224			—			2,237
Goodwill	98			62		6,371			—			6,531
Intangible assets	—			—		5,499			—			5,499
Investments in consolidated subsidiaries	44,372			13,652		—			(58,024		)	—
Other assets	153			11		2,615			—			2,779
Intercompany	—			1,901		25,528			(27,429		)	—
Total Assets	$	44,824		$	15,727	$	48,786		$	(85,489	)	$	23,848
Liabilities and Stockholders’ Equity
Accounts payable	$	1		$	2	$	150		$	—		$	153
Participants’ share and royalties payable	—			—		979			—			979
Program rights	4			4		365			—			373
Commercial paper	33			—		—			—			33
Current portion of long-term debt	6			—		16			—			22
Accrued expenses and other current liabilities	363			228		983			(36		)	1,538
Total current liabilities	407			234		2,493			(36		)	3,098
Long-term debt	8,797			—		105			—			8,902
Other liabilities	2,843			244		3,413			—			6,500
Intercompany	27,429			—		—			(27,429		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	43,935			—		60,894			(60,894		)	43,935
Retained earnings (deficit)	(19,144		)	15,435		(14,105		)	(1,330		)	(19,144		)
Accumulated other comprehensive income (loss)	(739		)	22		70			(92		)	(739		)
	24,053			15,580		47,575			(63,155		)	24,053
Less treasury stock, at cost	18,705			331		4,800			(5,131		)	18,705
Total Stockholders’ Equity	5,348			15,249		42,775			(58,024		)	5,348
Total Liabilities and Stockholders’ Equity	$	44,824		$	15,727	$	48,786		$	(85,489	)	$	23,848

-26-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Balance Sheet
	At December 31, 2015
	CBS Corp.			CBS Operations Inc.		Non- Guarantor Affiliates			Eliminations			CBS Corp. Consolidated
Assets
Cash and cash equivalents	$	267		$	1	$	55		$	—		$	323
Receivables, net	28			2		3,598			—			3,628
Programming and other inventory	3			3		1,265			—			1,271
Prepaid expenses and other current assets	192			26		337			(30		)	525
Total current assets	490			32		5,255			(30		)	5,747
Property and equipment	46			180		3,017			—			3,243
Less accumulated depreciation and amortization	20			118		1,700			—			1,838
Net property and equipment	26			62		1,317			—			1,405
Programming and other inventory	6			9		1,942			—			1,957
Goodwill	98			62		6,321			—			6,481
Intangible assets	—			—		5,514			—			5,514
Investments in consolidated subsidiaries	42,744			12,775		—			(55,519		)	—
Other assets	163			11		2,487			—			2,661
Intercompany	—			2,248		23,988			(26,236		)	—
Total Assets	$	43,527		$	15,199	$	46,824		$	(81,785	)	$	23,765
Liabilities and Stockholders’ Equity
Accounts payable	$	1		$	4	$	187		$	—		$	192
Participants’ share and royalties payable	—			—		1,013			—			1,013
Program rights	4			4		366			—			374
Current portion of long-term debt	206			—		16			—			222
Accrued expenses and other current liabilities	418			230		1,141			(30		)	1,759
Total current liabilities	629			238		2,723			(30		)	3,560
Long-term debt	8,113			—		113			—			8,226
Other liabilities	2,986			252		3,178			—			6,416
Intercompany	26,236			—		—			(26,236		)	—
Stockholders’ Equity:
Preferred stock	—			—		126			(126		)	—
Common stock	1			123		590			(713		)	1
Additional paid-in capital	44,055			—		60,894			(60,894		)	44,055
Retained earnings (deficit)	(20,518		)	14,913		(16,081		)	1,168			(20,518		)
Accumulated other comprehensive income (loss)	(770		)	4		81			(85		)	(770		)
	22,768			15,040		45,610			(60,650		)	22,768
Less treasury stock, at cost	17,205			331		4,800			(5,131		)	17,205
Total Stockholders’ Equity	5,563			14,709		40,810			(55,519		)	5,563
Total Liabilities and Stockholders’ Equity	$	43,527		$	15,199	$	46,824		$	(81,785	)	$	23,765

-27-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Statement of Cash Flows
	For the Nine Months Ended September 30, 2016
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(696	)	$	(146	)	$	2,148		$	—	$	1,306
Investing Activities:
Acquisitions	—			—			(51		)	—		(51		)
Capital expenditures	—			(16		)	(109		)	—		(125		)
Investments in and advances to investee companies	—			—			(44		)	—		(44		)
Proceeds from dispositions	(4		)	—			32			—		28
Other investing activities	7			—			4			—		11
Net cash flow provided by (used for) investing activities	3			(16		)	(168		)	—		(181		)
Financing Activities:
Proceeds from short-term debt borrowings, net	33			—			—			—		33
Proceeds from issuance of senior notes	685			—			—			—		685
Repayment of senior debentures	(199		)	—			—			—		(199		)
Payment of capital lease obligations	—			—			(13		)	—		(13		)
Dividends	(209		)	—			—			—		(209		)
Purchase of Company common stock	(1,534		)	—			—			—		(1,534		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(57		)	—			—			—		(57		)
Proceeds from exercise of stock options	13			—			—			—		13
Excess tax benefit from stock-based compensation	13			—			—			—		13
Other financing activities	(1		)	—			—			—		(1		)
Increase (decrease) in intercompany payables	1,736			162			(1,898		)	—		—
Net cash flow provided by (used for) financing activities	480			162			(1,911		)	—		(1,269		)
Net (decrease) increase in cash and cash equivalents	(213		)	—			69			—		(144		)
Cash and cash equivalents at beginning of period	267			1			55			—		323
Cash and cash equivalents at end of period	$	54		$	1		$	124		$	—	$	179

-28-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



	Statement of Cash Flows
	For the Nine Months Ended September 30, 2015
	CBS Corp.			CBS Operations Inc.			Non- Guarantor Affiliates			Eliminations		CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(557	)	$	(183	)	$	1,363		$	—	$	623
Investing Activities:
Acquisitions	—			—			(7		)	—		(7		)
Capital expenditures	—			(5		)	(99		)	—		(104		)
Investments in and advances to investee companies	—			—			(58		)	—		(58		)
Proceeds from dispositions	—			—			75			—		75
Other investing activities	(8		)	—			—			—		(8		)
Net cash flow used for investing activities from continuing operations	(8		)	(5		)	(89		)	—		(102		)
Net cash flow used for investing activities from discontinued operations	(4		)	—			—			—		(4		)
Net cash flow used for investing activities	(12		)	(5		)	(89		)	—		(106		)
Financing Activities:
Repayments of short-term debt borrowings, net	(313		)	—			—			—		(313		)
Proceeds from issuance of senior notes	1,959			—			—			—		1,959
Payment of capital lease obligations	—			—			(13		)	—		(13		)
Dividends	(228		)	—			—			—		(228		)
Purchase of Company common stock	(2,345		)	—			—			—		(2,345		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(96		)	—			—			—		(96		)
Proceeds from exercise of stock options	137			—			—			—		137
Excess tax benefit from stock-based compensation	87			—			—			—		87
Increase (decrease) in intercompany payables	1,353			188			(1,541		)	—		—
Net cash flow provided by (used for) financing activities	554			188			(1,554		)	—		(812		)
Net decrease in cash and cash equivalents	(15		)	—			(280		)	—		(295		)
Cash and cash equivalents at beginning of period	63			1			364			—		428
Cash and cash equivalents at end of period	$	48		$	1		$	84		$	—	$	133

-29-



Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition.
	(Tabular dollars in millions, except per share amounts)

Management’s discussion and analysis of the results of operations and financial condition of CBS Corporation (the “Company” or “CBS Corp.”) should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2015.

Overview

Business overview and strategy

The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television and radio stations, internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences and generate both advertising and non-advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company continues to increase its investment in both Company-owned and acquired premium content to enhance its opportunities for revenue growth, which include exhibiting the Company’s content on digital and other platforms through licensing and subscription services, including the Company’s owned digital streaming services; expanding the distribution of its content internationally; securing compensation from multichannel video programming distributors (“MVPDs”) and television stations affiliated with the CBS Television Network; and further monetizing delayed viewing. The Company believes that its increased investment in premium content will also enable it to stay ahead of changes in the media and entertainment industry, including new distribution platforms and changes in programming packages offered to consumers.

Operational highlights - Three Months Ended September 30, 2016 versus Three Months Ended September 30, 2015



Consolidated results of operations					Increase/(Decrease)
Three Months Ended September 30,	2016		2015		$		%
Revenues	$	3,396	$	3,257	$	139	4	%
Operating income	$	798	$	753	$	45	6	%
Net earnings from continuing operations	$	514	$	426	$	88	21	%
Adjusted net earnings from continuing operations ^(a)	$	467	$	426	$	41	10	%
Diluted EPS from continuing operations	$	1.15	$	.88	$	.27	31	%
Adjusted diluted EPS from continuing operations ^(a)	$	1.05	$	.88	$	.17	19	%

(a) See page 33 for reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

For the three months ended September 30, 2016, the Company reported record third quarter results in revenues, operating income and diluted earnings per share from continuing operations (‘‘EPS’’), led by growth in station affiliation fees and retransmission revenues, and higher television licensing sales. Diluted EPS also benefited from lower weighted average shares outstanding in the third quarter of 2016 as a result of the Company’s ongoing share repurchase program.

For the three months ended September 30, 2016, the 4% revenue growth was driven by a 13% increase in affiliate and subscription fee revenues, reflecting 32% growth in station affiliation fees and retransmission revenues, as well as revenues from digital distribution platforms, including CBS All Access and Showtime Networks’ over-the-top digital streaming subscription offering (“Showtime Networks’ over-the-top service”). Revenue growth for the third quarter of 2016 also reflected a 6% increase in content licensing and distribution revenues, driven by higher domestic television licensing sales. Advertising revenues for the quarter were impacted by 10 hours of primetime preemptions for the Democratic and Republican conventions and the first Presidential debate as well as competition from the 2016 Summer Olympics, while advertising benefited from higher political spending.

-30-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Operating income increased 6% and diluted EPS grew 31% from the third quarter of 2015 primarily driven by the revenue growth, which was partially offset by an increased investment in programming. In addition, included in diluted EPS for the third quarter of 2016 was a one-time tax benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the Internal Revenue Service (“IRS”) during the third quarter of 2016. On an adjusted basis, excluding this tax benefit, diluted EPS grew 19%. Diluted EPS also benefited from the Company’s ongoing share repurchase program.

Recent Developments

In connection with the Company’s previously announced plans to separate its radio business, a preliminary registration statement was filed with the Securities and Exchange Commission (‘‘SEC’’) during the third quarter of 2016 for the proposed initial public offering of the common stock of CBS Radio Inc. (‘‘CBS Radio’’). Additionally, in October 2016, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan (the “Term Loan”) and the issuance of $400 million of senior unsecured notes through a private placement. The net debt proceeds will be primarily used by CBS Corp. to repurchase shares of its Class B Common Stock, with the remainder to be used for general corporate purposes and ongoing cash needs. During the fourth quarter of 2016, the Company intends to repurchase $1.5 billion of its Class B Common Stock, including $500 million as part of its ongoing repurchase program and $1.0 billion using the net proceeds from the CBS Radio borrowings. These planned repurchases are subject to market and business conditions, and remain at the discretion of management.

On September 29, 2016, the Company announced that its Board of Directors received a letter from National Amusements, Inc. requesting that the Company consider a potential combination of the Company and Viacom Inc. National Amusements, Inc., directly and indirectly, owns approximately 80% of the voting shares of each of the Company and Viacom Inc. The Company is in the process of evaluating whether to pursue any such potential transaction. No assurance can be given regarding the entry into, consummation or terms of any such potential transaction.

Operational highlights - Nine Months Ended September 30, 2016 versus Nine Months Ended September 30, 2015



Consolidated results of operations					Increase/(Decrease)
Nine Months Ended September 30,	2016		2015		$		%
Revenues	$	10,532	$	9,976	$	556	6	%
Operating income	$	2,352	$	2,060	$	292	14	%
Adjusted operating income ^(a)	$	2,343	$	2,096	$	247	12	%
Net earnings from continuing operations	$	1,410	$	1,152	$	258	22	%
Adjusted net earnings from continuing operations ^(a)	$	1,364	$	1,182	$	182	15	%
Diluted EPS from continuing operations	$	3.10	$	2.33	$	.77	33	%
Adjusted diluted EPS from continuing operations ^(a)	$	3.00	$	2.39	$	.61	26	%

(a) See page 33 for reconciliations of adjusted results to the most directly comparable financial measures in accordance with GAAP.

For the nine months ended September 30, 2016, the 6% increase in revenues was driven by 10% growth in advertising revenues, reflecting CBS’s broadcast of Super Bowl 50 and 6% growth in underlying network advertising. Affiliate and subscription fee revenues increased 8%, driven by 39% growth in station affiliation fees and retransmission revenues, as well as revenues from digital distribution platforms. These increases were partially offset by the benefit to 2015 from Showtime Networks’ distribution of the Floyd Mayweather/Manny Pacquiao boxing event. Content licensing and distribution revenues declined 4%, reflecting lower domestic licensing sales compared with the first nine months of 2015, which included significant licensing sales of NCIS and Elementary,

-31-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

partially offset by growth from international licensing, mainly from the sales of all episodes of five Star Trek series.

Operating income grew 14% and diluted EPS increased 33% for the nine months ended September 30, 2016, primarily driven by the higher revenues. In addition, for the nine months ended September 30, 2015, operating income and diluted EPS included restructuring charges of $55 million and for the three and nine months ended September 30, 2016, diluted EPS included the aforementioned tax benefit of $47 million. The EPS comparison also benefited from lower weighted average shares outstanding as a result of the Company’s ongoing share repurchase program.

The Company generated operating cash flow from continuing operations of $1.31 billion for the nine months ended September 30, 2016 compared with $650 million for the nine months ended September 30, 2015. Free cash flow for the nine months ended September 30, 2016 was $1.18 billion compared with $546 million for the same prior-year period. These increases were primarily driven by growth in affiliate and subscription fees and higher advertising revenues, including from the broadcast of Super Bowl 50 on CBS, partially offset by increased investment in content. Free cash flow is a non-GAAP financial measure. See “Free Cash Flow” on pages 49 - 50 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, to free cash flow.

Share Repurchases and Dividends

On July 28, 2016, the Company announced that its Board of Directors approved a 20% increase to the quarterly cash dividend on its Class A and Class B Common Stock to $.18 from $.15 per share. The total third quarter 2016 dividend was $80 million, which was paid on October 1, 2016.

-32-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Reconciliation of Non-GAAP Measures

Results for the three and nine months ended September 30, 2016 and the nine months ended September 30, 2015 included discrete items that were not part of the normal course of operations. The following tables present adjusted operating income, adjusted net earnings from continuing operations, and adjusted diluted EPS from continuing operations, which exclude the impact of these discrete items. These adjusted results are non-GAAP financial measures, which are reconciled below to the most directly comparable financial measures in accordance with GAAP. The Company believes that presenting its financial results adjusted for the impact of discrete items is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company’s management and provides a clearer perspective on the underlying performance of the Company.



	Nine Months Ended September 30,
	2016			2015
Operating income	$	2,352		$	2,060
Exclude:
Restructuring charges	—			55
Other operating items, net ^(a)	(9		)	(19		)
Adjusted operating income	$	2,343		$	2,096



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Net earnings from continuing operations	$	514		$	426	$	1,410		$	1,152
Exclude:
Restructuring charges (net of tax of $22 million in 2015)	—			—		—			33
Other operating items, net (net of tax of $4 million in 2016 and $16 million in 2015) ^(a)	—			—		(5		)	(3		)
Write-down of an equity investment	—			—		6			—
Discrete tax item ^(b)	(47		)	—		(47		)	—
Adjusted net earnings from continuing operations	$	467		$	426	$	1,364		$	1,182



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Diluted EPS from continuing operations	$	1.15		$	.88	$	3.10		$	2.33
Exclude:
Restructuring charges	—			—		—			.07
Other operating items, net ^(a)	—			—		(.01		)	(.01		)
Write-down of an equity investment	—			—		.01			—
Discrete tax item ^(b)	(.11		)	—		(.10		)	—
Adjusted diluted EPS from continuing operations^(c)	$	1.05		$	.88	$	3.00		$	2.39

(b) Reflects a one-time tax benefit associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.

-33-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Consolidated Results of Operations

Three and Nine Months Ended September 30, 2016 versus Three and Nine Months Ended September 30, 2015

Revenues



	Three Months Ended September 30,
			% of Total Revenues				% of Total Revenues		Increase/(Decrease)
Revenues by Type	2016		% of Total Revenues		2015		% of Total Revenues		$			%
Advertising	$	1,469	43	%	$	1,481	46	%	$	(12	)	(1	)%
Content licensing and distribution	1,108		33		1,046		32		62			6
Affiliate and subscription fees	753		22		664		20		89			13
Other	66		2		66		2		—			—
Total Revenues	$	3,396	100	%	$	3,257	100	%	$	139		4	%



	Nine Months Ended September 30,
			% of Total Revenues				% of Total Revenues		Increase/(Decrease)
Revenues by Type	2016		% of Total Revenues		2015		% of Total Revenues		$			%
Advertising	$	5,363	51	%	$	4,859	49	%	$	504		10	%
Content licensing and distribution	2,780		26		2,889		29		(109		)	(4	)
Affiliate and subscription fees	2,208		21		2,044		20		164			8
Other	181		2		184		2		(3		)	(2	)
Total Revenues	$	10,532	100	%	$	9,976	100	%	$	556		6	%

Advertising

For the three months ended September 30, 2016, advertising revenues decreased 1%. Advertising revenues were impacted by 10 hours of primetime preemptions for the Democratic and Republican conventions and the first Presidential debate, competition from the 2016 Summer Olympics, and sales of internet businesses in China during 2015. Advertising revenues during the third quarter benefited from increased political advertising sales relating to U.S. federal and state elections. For the nine months ended September 30, 2016, the 10% increase in advertising revenues was driven by CBS’s broadcast of the Super Bowl, which is broadcast on the CBS Television Network once every three years through 2022 under the current contract; 6% growth in underlying network advertising; and higher political advertising sales. These increases were partially offset by the impact from the sales of internet businesses in China during 2015.

During the fourth quarter of 2016, local advertising revenues are expected to continue to benefit from political advertising spending associated with U.S. federal and state elections. Additionally, the CBS Television Network’s upfront advertising sales (“Upfront”) for the 2016/2017 television broadcast season, which runs from the middle of September 2016 through the middle of September 2017, resulted in pricing increases compared with the prior broadcast season, which is expected to benefit advertising revenues during the 2016/2017 broadcast season. However, overall advertising revenues for the Company will be dependent on ratings for its programming and market conditions, including demand in the scatter advertising market, which is when advertisers purchase the remaining advertising spots closer to the broadcast of the related programming.

Content Licensing and Distribution

For the three months ended September 30, 2016, the 6% increase in content licensing and distribution revenues was driven by higher domestic television licensing, primarily reflecting the sales of Showtime original series, including Penny Dreadful, as well as various titles from the Company’s television library, partially offset by the

-34-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

initial domestic availability of Elementary in the third quarter of 2015. For the nine months ended September 30, 2016, the 4% decrease in content licensing and distribution revenues reflects lower domestic television licensing revenues, as the first nine months of 2015 included significant sales of NCIS and Elementary. This decrease was partially offset by growth from the international licensing of five Star Trek series and the domestic licensing sale of Penny Dreadful.

For the remainder of 2016, the content and licensing distribution revenue comparison will continue to be impacted by fluctuations resulting from the timing of when Company-owned television series are made available for multiyear licensing agreements. Television license fee revenues are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition.

Affiliate and Subscription Fees

For the three months ended September 30, 2016, the 13% increase in affiliate and subscription fees reflects 32% growth in station affiliation fees and retransmission revenues, and revenues from digital distribution platforms, including CBS All Access and Showtime Networks’ over-the-top service. For the nine months ended September 30, 2016, the 8% increase in affiliate and subscription fees was driven by 39% growth in station affiliation fees and retransmission revenues, and revenues from digital distribution platforms. These increases were partially offset by the benefit to 2015 from Showtime Networks’ distribution of the Floyd Mayweather/Manny Pacquiao pay-per-view boxing event, which was the highest grossing pay-per-view event of all time.

Over the next few years the Company expects to renew a significant portion of its agreements with station affiliates and MVPDs. This, along with the Company’s digital distribution initiatives, are expected to result in continued growth in affiliate and subscription fees.

International Revenues

The Company generated approximately 10% and 12% of its total revenues from international regions for the three months ended September 30, 2016 and 2015, respectively, and generated approximately 13% and 14% of its total revenues from international regions for the nine months ended September 30, 2016 and 2015, respectively.

Operating Expenses



	Three Months Ended September 30,
			% of Operating Expenses				% of Operating Expenses		Increase/(Decrease)
Operating Expenses by Type	2016		% of Operating Expenses		2015		% of Operating Expenses		$		%
Programming	$	526	28	%	$	518	28	%	$	8	2	%
Production	706		37		683		37		23		3
Participation, distribution and royalty	291		15		271		15		20		7
Other	374		20		370		20		4		1
Total Operating Expenses	$	1,897	100	%	$	1,842	100	%	$	55	3	%

-35-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)



	Nine Months Ended September 30,
			% of Operating Expenses				% of Operating Expenses		Increase/(Decrease)
Operating Expenses by Type	2016		% of Operating Expenses		2015		% of Operating Expenses		$			%
Programming	$	2,182	36	%	$	2,033	34	%	$	149		7	%
Production	2,053		33		1,940		33		113			6
Participation, distribution and royalty	788		13		817		14		(29		)	(4	)
Other	1,091		18		1,101		19		(10		)	(1	)
Total Operating Expenses	$	6,114	100	%	$	5,891	100	%	$	223		4	%

For the three months ended September 30, 2016, the 2% increase in programming expenses was driven by higher sports programming costs associated with the broadcast of NFL games partially offset by lower costs for acquired television series. For the nine months ended September 30, 2016, the 7% increase in programming expenses was primarily driven by increased sports programming costs associated with the broadcast of NFL games, including Super Bowl 50 which was broadcast by CBS in 2016. This increase was partially offset by costs in 2015 associated with Showtime Networks’ distribution of the Floyd Mayweather/Manny Pacquiao pay-per-view boxing event and lower costs for acquired television series as a result of a shift to a higher mix of internally developed television series.

For the three months ended September 30, 2016, the 3% increase in production expenses was mainly driven by higher costs associated with the increase in television licensing revenues. For the nine months ended September 30, 2016, the 6% increase in production expenses was the result of increased investment in internally developed series and costs associated with the Super Bowl production in 2016, partially offset by lower costs associated with the decrease in television licensing revenues.

For the three months ended September 30, 2016, the 7% increase in participation, distribution and royalty costs primarily reflects higher participations and residuals resulting from the increase in television licensing revenues. For the nine months ended September 30, 2016, the 4% decrease in participation, distribution and royalty costs primarily reflects lower participations and residuals associated with lower television licensing revenues.

Selling, General and Administrative Expenses



	Three Months Ended September 30,
	2016		% of Revenues			2015		% of Revenues			Increase/(Decrease)
Selling, general and administrative expenses	$	640		19	%	$	597		18	%		7	%



	Nine Months Ended September 30,
	2016		% of Revenues			2015		% of Revenues			Increase/(Decrease)
Selling, general and administrative expenses	$	1,887		18	%	$	1,790		18	%		5	%

Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy and back office support. For the three and nine months ended September 30, 2016, SG&A expenses increased 7% and 5%, respectively, primarily as a result of higher pension and other employee-related costs. For the nine months ended September 30, 2016, the increase also reflects higher advertising costs associated with the timing of series premieres on Showtime.

-36-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Depreciation and Amortization



	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		Increase/(Decrease)			2016		2015		Increase/(Decrease)
Depreciation and amortization	$	61	$	65		(6	)%	$	188	$	199		(6	)%

For each of the three and nine months ended September 30, 2016, the 6% decrease in depreciation and amortization was the result of intangibles and property and equipment that became fully amortized, as well as the sales of internet businesses in China during 2015.

Restructuring Charges

During the nine months ended September 30, 2015, in a continued effort to reduce its cost structure, the Company initiated restructuring plans across several of its businesses, primarily for the reorganization of certain business operations. As a result, the Company recorded restructuring charges of $55 million, reflecting $34 million of severance costs and $21 million of costs associated with exiting contractual obligations and other related costs.

Other Operating Items, Net



	Nine Months Ended September 30,
	2016			2015			Increase/(Decrease)
Other operating items, net	$	(9	)	$	(19	)		(53	)%

For the nine months ended September 30, 2016 and 2015, other operating items, net includes gains from the sales of internet businesses in China, and for 2016, also includes a multiyear, retroactive impact of a new operating tax.

Interest Expense/Income



	Three Months Ended September 30,									Nine Months Ended September 30,
	2016			2015			Increase/(Decrease)			2016			2015			Increase/(Decrease)
Interest expense	$	(104	)	$	(102	)		2	%	$	(304	)	$	(289	)		5	%
Interest income	$	7		$	6			17	%	$	22		$	18			22	%

The following table presents the Company’s outstanding debt balances, excluding capital leases, and the weighted average interest rate as of September 30, 2016 and 2015:



	At September 30,
			Weighted Average					Weighted Average
	2016		Interest Rate			2015		Interest Rate
Total long-term debt	$	8,849		4.47	%	$	8,409		4.68	%
Commercial paper	$	33		0.75	%	$	303		0.46	%

In October 2016, in connection with the Company’s previously announced plans to separate its radio business, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 and the issuance of $400 million of 7.25% senior unsecured notes due 2024 through a private placement. The Term Loan bears interest at a rate equal to 3.50% plus the greater of the London Interbank Offered Rate (“LIBOR”) and 1.00%.

-37-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other Items, Net



	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015			Increase/(Decrease)		2016			2015			Increase/(Decrease)
Other items, net	$	2	$	(4	)		n/m	$	(5	)	$	(23	)		78	%

n/m - not meaningful

Other items, net for all periods primarily consists of foreign exchange gains and losses. For the three and nine months ended September 30, 2016, other items, net also includes a gain on the sale of an investment.

Provision for Income Taxes



	Three Months Ended September 30,									Nine Months Ended September 30,
	2016			2015			Increase/(Decrease)			2016			2015			Increase/(Decrease)
Tax provision	$	176		$	211			(17	)%	$	612		$	579			6	%
Effective tax rate	25.0		%	32.3		%				29.6		%	32.8		%

The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies. The lower tax rate for the three and nine months ended September 30, 2016 includes a one-time benefit of $47 million associated with a multiyear adjustment to a tax deduction, which was approved by the IRS during the third quarter of 2016.

Equity in Loss of Investee Companies, Net of Tax



	Three Months Ended September 30,									Nine Months Ended September 30,
	2016			2015			Increase/(Decrease)			2016			2015			Increase/(Decrease)
Equity in loss of investee companies, net of tax	$	(13	)	$	(16	)		(19	)%	$	(43	)	$	(35	)		23	%

For the nine months ended September 30, 2016, equity in loss of investee companies, net of tax includes a $6 million write-down of an international television joint venture to its fair value.

Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations



	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		Increase/(Decrease)			2016		2015		Increase/(Decrease)
Net earnings from continuing operations	$	514	$	426		21	%	$	1,410	$	1,152		22	%
Diluted EPS from continuing operations	$	1.15	$	.88		31	%	$	3.10	$	2.33		33	%

For the three and nine months ended September 30, 2016, the increases in net earnings from continuing operations of 21% and 22%, respectively, and the increases in diluted EPS from continuing operations of 31% and 33%, respectively, were each driven by higher operating income and a lower effective tax rate. The increases in diluted EPS also reflect lower weighted average shares outstanding as a result of the Company’s ongoing share repurchase program.

-38-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Loss from Discontinued Operations

Loss from discontinued operations of $36 million for the three and nine months ended September 30, 2016 reflects the resolution of a tax matter in a foreign jurisdiction relating to a previously disposed business that was accounted for as a discontinued operation.

Net Earnings and Diluted EPS



	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		Increase/(Decrease)			2016		2015		Increase/(Decrease)
Net earnings	$	478	$	426		12	%	$	1,374	$	1,152		19	%
Diluted EPS	$	1.07	$	.88		22	%	$	3.02	$	2.33		30	%

Segment Results of Operations

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
				% of Total Revenues						% of Total Revenues			Increase/(Decrease)
	2016			% of Total Revenues			2015			% of Total Revenues			$			%
Revenues:
Entertainment	$	1,949			57	%	$	1,932			59	%	$	17		1	%
Cable Networks	598				18		526				16		72			14
Publishing	226				7		203				6		23			11
Local Media	409				12		376				12		33			9
Radio	319				9		318				10		1			—
Corporate/Eliminations	(105		)		(3	)	(98		)		(3	)	(7		)	(7	)
Total Revenues	$	3,396			100	%	$	3,257			100	%	$	139		4	%

-39-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)



	Three Months Ended September 30,
				% of Total Operating Income						% of Total Operating Income
													Increase/(Decrease)
	2016						2015						$			%
Segment Operating Income (Loss):
Entertainment	$	348			44	%	$	339			45	%	$	9		3	%
Cable Networks	285				36		246				33		39			16
Publishing	44				5		43				6		1			2
Local Media	122				15		101				13		21			21
Radio	77				10		73				10		4			5
Corporate	(78		)		(10	)	(49		)		(7	)	(29		)	(59	)
Total Operating Income	$	798			100	%	$	753			100	%	$	45		6	%



	Three Months Ended September 30,
					Increase/(Decrease)
	2016		2015		$			%
Depreciation and Amortization:
Entertainment	$	28	$	31	$	(3	)	(10	)%
Cable Networks	6		5		1			20
Publishing	1		1		—			—
Local Media	11		12		(1		)	(8	)
Radio	7		8		(1		)	(13	)
Corporate	8		8		—			—
Total Depreciation and Amortization	$	61	$	65	$	(4	)	(6	)%

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
				% of Total Revenues						% of Total Revenues			Increase/(Decrease)
	2016			% of Total Revenues			2015			% of Total Revenues			$			%
Revenues:
Entertainment	$	6,483			62	%	$	5,978			60	%	$	505		8	%
Cable Networks	1,659				16		1,680				17		(21		)	(1	)
Publishing	558				5		547				5		11			2
Local Media	1,253				12		1,138				11		115			10
Radio	898				8		907				9		(9		)	(1	)
Corporate/Eliminations	(319		)		(3	)	(274		)		(2	)	(45		)	(16	)
Total Revenues	$	10,532			100	%	$	9,976			100	%	$	556		6	%

-40-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)



	Nine Months Ended September 30,
				% of Total Segment Operating Income						% of Total Segment Operating Income

													Increase/(Decrease)
	2016						2015						$			%
Segment Operating Income (Loss):
Entertainment	$	1,148			49	%	$	947			45	%	$	201		21	%
Cable Networks	740				32		717				34		23			3
Publishing	83				3		80				4		3			4
Local Media	402				17		338				16		64			19
Radio	215				9		195				9		20			10
Corporate	(245		)		(10	)	(181		)		(8	)	(64		)	(35	)
Total Segment Operating Income	2,343				100	%	2,096				100	%	247			12
Restructuring charges	—						(55		)				55			n/m
Other operating items, net	9						19						(10		)	(53	)
Total Operating Income	$	2,352					$	2,060					$	292		14	%

n/m - not meaningful



	Nine Months Ended September 30,
					Increase/(Decrease)
	2016		2015		$			%
Depreciation and Amortization:
Entertainment	$	88	$	95	$	(7	)	(7	)%
Cable Networks	17		17		—			—
Publishing	4		4		—			—
Local Media	33		37		(4		)	(11	)
Radio	22		23		(1		)	(4	)
Corporate	24		23		1			4
Total Depreciation and Amortization	$	188	$	199	$	(11	)	(6	)%

Entertainment (CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Interactive and CBS Films)

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	1,949		$	1,932		$	17		1	%
Segment Operating Income	$	348		$	339		$	9		3	%
Segment Operating Income as a % of revenues	18		%	18		%
Depreciation and amortization	$	28		$	31		$	(3	)	(10	)%
Capital expenditures	$	23		$	33		$	(10	)	(30	)%

For the three months ended September 30, 2016, the 1% increase in revenues was driven by a 39% increase in affiliate and subscription fees, led by higher station affiliation fees and subscription growth for CBS All Access. This growth was largely offset by 4% lower advertising revenues and 3% lower content licensing and distribution revenues. Advertising revenues were impacted by 10 hours of primetime preemptions for the Democratic and Republican conventions and the first Presidential debate, competition from the 2016 Summer Olympics, and sales of internet businesses in China during 2015. The decrease in content licensing and distribution revenues reflects the initial domestic availability of Elementary in the third quarter of 2015, partially offset by sales of various titles from the Company’s television library during the third quarter of 2016.

-41-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

For the three months ended September 30, 2016, the 3% increase in operating income was primarily driven by the increase in revenues.

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	6,483		$	5,978		$	505		8	%
Segment Operating Income	$	1,148		$	947		$	201		21	%
Segment Operating Income as a % of revenues	18		%	16		%
Restructuring charges	$	—		$	12		$	(12	)	n/m
Depreciation and amortization	$	88		$	95		$	(7	)	(7	)%
Capital expenditures	$	60		$	54		$	6		11	%

n/m - not meaningful

For the nine months ended September 30, 2016, the 8% increase in revenues was driven by 19% growth in network advertising revenues, driven by the broadcast of Super Bowl 50 and 6% growth in underlying network advertising. Additionally, affiliate and subscription fees grew 54% for the nine months ended September 30, 2016 as a result of higher station affiliation fees and subscription growth for CBS All Access. These increases were partially offset by 8% lower content licensing and distribution revenues due to lower domestic television licensing, as 2015 benefited from the significant licensing sales of NCIS and Elementary, partially offset by growth in international licensing revenues mainly from the sales of five Star Trek series. The revenue comparison was also impacted by the sales of internet businesses in China during 2015.

For the nine months ended September 30, 2016, the 21% increase in operating income was primarily a result of the increase in revenues. Restructuring charges for the nine months ended September 30, 2015 primarily reflected severance costs.

Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks)

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	598		$	526		$	72		14	%
Segment Operating Income	$	285		$	246		$	39		16	%
Segment Operating Income as a % of revenues	48		%	47		%
Depreciation and amortization	$	6		$	5		$	1		20	%
Capital expenditures	$	4		$	5		$	(1	)	(20	)%

For the three months ended September 30, 2016, the 14% increase in revenues principally reflects higher revenues from the domestic licensing of Showtime original series, including Penny Dreadful, as well as growth in affiliate and subscription fees driven by Showtime Networks’ over-the-top service. As of September 30, 2016, subscriptions totaled 75 million for Showtime Networks (including Showtime, The Movie Channel and Flix), 55 million for CBS Sports Network and 33 million for Smithsonian Networks.

For the three months ended September 30, 2016, the 16% increase in operating income primarily reflects the revenue growth partially offset by increased investment in original series.

-42-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	1,659		$	1,680		$	(21	)	(1	)%
Segment Operating Income	$	740		$	717		$	23		3	%
Segment Operating Income as a % of revenues	45		%	43		%
Depreciation and amortization	$	17		$	17		$	—		—	%
Capital expenditures	$	8		$	8		$	—		—	%

For the nine months ended September 30, 2016, revenues decreased 1% as the 2015 period benefited from the distribution of the Floyd Mayweather/Manny Pacquiao boxing event, which was the highest grossing pay-per-view event of all time. The decrease in pay-per-view revenues negatively impacted the revenue comparison by nine percentage points. Underlying results reflect higher revenues from the licensing of Showtime original series and Showtime Networks’ over-the-top service.

For the nine months ended September 30, 2016, the 3% increase in operating income was driven by growth from the licensing of Showtime original series and Showtime Networks’ over-the-top service, partially offset by increased investment in programming.

Publishing (Simon & Schuster)

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	226		$	203		$	23		11	%
Segment Operating Income	$	44		$	43		$	1		2	%
Segment Operating Income as a % of revenues	19		%	21		%
Depreciation and amortization	$	1		$	1		$	—		—	%
Capital expenditures	$	1		$	2		$	(1	)	(50	)%

For the three months ended September 30, 2016, the 11% increase in revenues reflects higher print book sales and growth in digital book sales, mainly from digital audio. Digital revenues represented 23% of Publishing’s total revenues for the third quarter of 2016. Best-selling titles in the third quarter of 2016 included Born to Run by Bruce Springsteen and The Girl with the Lower Back Tattoo by Amy Schumer.

For the three months ended September 30, 2016, operating income increased 2% as the increase in revenues was offset by higher production and selling costs.

-43-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$		%
Revenues	$	558		$	547		$	11	2	%
Segment Operating Income	$	83		$	80		$	3	4	%
Segment Operating Income as a % of revenues	15		%	15		%
Depreciation and amortization	$	4		$	4		$	—	—	%
Capital expenditures	$	7		$	4		$	3	75	%

For the nine months ended September 30, 2016, the 2% increase in revenues reflects higher print book sales and growth in digital audio sales, partially offset by lower digital book sales.

For the nine months ended September 30, 2016, the 4% increase in operating income was driven by the revenue growth partially offset by higher production costs.

Local Media (CBS Television Stations)

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	409		$	376		$	33		9	%
Segment Operating Income	$	122		$	101		$	21		21	%
Segment Operating Income as a % of revenues	30		%	27		%
Depreciation and amortization	$	11		$	12		$	(1	)	(8	)%
Capital expenditures	$	9		$	10		$	(1	)	(10	)%

For the three months ended September 30, 2016, the 9% increase in revenues was driven by 7% growth in advertising revenues, which benefited from higher political advertising sales, and 13% growth in retransmission and subscription revenues.

For the three months ended September 30, 2016, the 21% increase in operating income primarily reflects the revenue growth.

During the fourth quarter of 2016, Local Media revenues are expected to continue to benefit from higher political spending associated with U.S. federal and state elections.

-44-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	1,253		$	1,138		$	115		10	%
Segment Operating Income	$	402		$	338		$	64		19	%
Segment Operating Income as a % of revenues	32		%	30		%
Restructuring charges	$	—		$	19		$	(19	)	n/m
Depreciation and amortization	$	33		$	37		$	(4	)	(11	)%
Capital expenditures	$	20		$	17		$	3		18	%

n/m - not meaningful

For the nine months ended September 30, 2016, the 10% increase in revenues was led by the broadcast of Super Bowl 50 on CBS during the first quarter of 2016, higher political advertising sales and 16% growth in retransmission and subscription revenues.

For the nine months ended September 30, 2016, the 19% increase in operating income primarily reflects the revenue growth. Restructuring charges for the nine months ended September 30, 2015 primarily reflected severance costs and costs associated with exiting contractual obligations.

Radio (CBS Radio)

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	319		$	318		$	1		—	%
Segment Operating Income	$	77		$	73		$	4		5	%
Segment Operating Income as a % of revenues	24		%	23		%
Depreciation and amortization	$	7		$	8		$	(1	)	(13	)%
Capital expenditures	$	4		$	5		$	(1	)	(20	)%

For the three months ended September 30, 2016, the increase in revenues was primarily driven by higher national advertising sales, offset by lower local advertising sales.

For the three months ended September 30, 2016, the 5% increase in operating income primarily reflects lower employee compensation and talent costs resulting from restructuring activities put in place in 2015.

During the fourth quarter of 2016, Radio revenues are expected to continue to benefit from higher political spending associated with U.S. federal and state elections.

-45-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Revenues	$	898		$	907		$	(9	)	(1	)%
Segment Operating Income	$	215		$	195		$	20		10	%
Segment Operating Income as a % of revenues	24		%	21		%
Restructuring charges	$	—		$	24		$	(24	)	n/m
Depreciation and amortization	$	22		$	23		$	(1	)	(4	)%
Capital expenditures	$	14		$	16		$	(2	)	(13	)%

n/m - not meaningful

For the nine months ended September 30, 2016, the 1% decrease in revenues was driven by lower local advertising sales, which were partially offset by higher national advertising sales.

For the nine months ended September 30, 2016, the 10% increase in operating income primarily reflects lower employee compensation and talent costs resulting from restructuring charges in 2015, which more than offset the revenue decline. Restructuring charges for the nine months ended September 30, 2015 primarily reflected severance costs.

In connection with the Company’s previously announced plans to separate its radio business, a preliminary registration statement was filed with the SEC during the third quarter of 2016 for the proposed initial public offering of the common stock of CBS Radio.

Corporate

Three Months Ended September 30, 2016 and 2015



	Three Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Segment Operating Loss	$	(78	)	$	(49	)	$	(29	)	(59	)%
Depreciation and amortization	$	8		$	8		$	—		—	%
Capital expenditures	$	5		$	3		$	2		67	%

Corporate expenses include general corporate overhead, unallocated shared company expenses, pension and postretirement benefit costs for plans retained by the Company for previously divested businesses, and intercompany eliminations. For the three months ended September 30, 2016, the 59% increase in corporate expenses primarily reflects higher pension and other employee-related costs.

Nine Months Ended September 30, 2016 and 2015



	Nine Months Ended September 30,
							Increase/(Decrease)
	2016			2015			$			%
Segment Operating Loss	$	(245	)	$	(181	)	$	(64	)	(35	)%
Depreciation and amortization	$	24		$	23		$	1		4	%
Capital expenditures ^(a)	$	16		$	5		$	11		n/m

n/m - not meaningful

(a) Primarily reflects the timing of capital projects.

-46-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

For the nine months ended September 30, 2016, the 35% increase in corporate expenses primarily reflects higher pension and other employee-related costs.

Financial Position



	At			At			Increase/(Decrease)
	September 30, 2016			December 31, 2015			$			%
Current Assets:
Cash and cash equivalents		$	179		$	323	$	(144	)	(45	)%
Receivables, net ^(a)		3,348			3,628		(280		)	(8	)
Programming and other inventory ^(b)		1,459			1,271		188			15
Prepaid income taxes ^(c)		39			101		(62		)	(61	)
All other current assets		432			424		8			2
Total current assets		$	5,457		$	5,747	$	(290	)	(5	)%

(a) The decrease is primarily due to seasonality.

(b) The increase mainly reflects the timing of payments for sports programming.



	At			At			Increase/(Decrease)
	September 30, 2016			December 31, 2015			$		%
Other assets ^(a)		$	2,779		$	2,661	$	118	4	%

(a) The increase primarily reflects higher long-term receivables associated with revenues from television licensing agreements.



	At			At			Increase/(Decrease)
	September 30, 2016			December 31, 2015			$			%
Current Liabilities:
Accounts payable ^(a)		$	153		$	192	$	(39	)	(20	)%
Accrued compensation ^(a)		282			315		(33		)	(10	)
Program rights		373			374		(1		)	—
Deferred revenues ^(b)		141			295		(154		)	(52	)
Commercial paper		33			—		33			n/m
Current portion of long-term debt ^(c)		22			222		(200		)	(90	)
All other current liabilities		2,094			2,162		(68		)	(3	)
Total current liabilities		$	3,098		$	3,560	$	(462	)	(13	)%

n/m - not meaningful

(a) The decrease is due to the timing of payments.

(b) The decrease primarily reflects the timing of advertising revenues.

(c) The decrease is the result of the repayment of $200 million of outstanding senior debentures upon maturity in January 2016.



	At			At			Increase/(Decrease)
	September 30, 2016			December 31, 2015			$		%
Long-term debt ^(a)		$	8,902		$	8,226	$	676	8	%

(a) The increase is primarily the result of the Company’s issuance of $700 million of senior notes during July 2016. (See Note 5 to the consolidated financial statements).

-47-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Cash Flows

The changes in cash and cash equivalents were as follows:



	Nine Months Ended September 30,
	2016			2015			Increase/(Decrease)
Net cash flow provided by (used for) operating activities from:
Continuing operations	$	1,308		$	650			$	658
Discontinued operations	(2		)	(27		)		25
Net cash flow provided by operating activities	1,306			623				683
Net cash flow used for investing activities from:
Continuing operations	(181		)	(102		)		(79		)
Discontinued operations	—			(4		)		4
Net cash flow used for investing activities	(181		)	(106		)		(75		)
Net cash flow used for financing activities	(1,269		)	(812		)		(457		)
Net decrease in cash and cash equivalents	$	(144	)	$	(295	)		$	151

Operating Activities. For the nine months ended September 30, 2016, the increase in cash provided by operating activities was primarily driven by growth in affiliate and subscription fees and higher advertising revenues, including from the broadcast of Super Bowl 50, partially offset by increased investment in content.

Cash paid for income taxes for the nine months ended September 30, 2016 and 2015 was as follows:



	Nine Months Ended September 30,
	2016				2015
Cash taxes included in operating activities from continuing operations		$	383			$	317
Excess tax benefits from the exercise of stock options and vesting of restricted stock units, included in financing activities		(13		)		(87		)
Cash paid for income taxes from continuing operations		$	370			$	230

The increase in cash paid for income taxes was driven by the increase in pretax earnings, as well lower federal tax refunds applied during the nine months ended September 30, 2016.

-48-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Investing Activities



	Nine Months Ended September 30,
	2016				2015
Acquisitions ^(a)		$	(51	)		$	(7	)
Capital expenditures ^(b)		(125		)		(104		)
Investments in and advances to investee companies ^(c)		(44		)		(58		)
Proceeds from dispositions ^(d)		28				75
Other investing activities		11				(8		)
Net cash flow used for investing activities from continuing operations		(181		)		(102		)
Net cash flow used for investing activities from discontinued operations		—				(4		)
Net cash flow used for investing activities		$	(181	)		$	(106	)

(a) 2016 primarily reflects the acquisition of a sports-focused digital media business.

(b) Primarily reflects the timing of capital projects. Capital expenditures for the full year 2016 are expected to be at a similar level as the prior three years, which ranged from $193 million to $212 million.

(c) Mainly includes the Company’s investment in The CW as well as its other domestic and international television joint ventures.

(d) Primarily reflects sales of internet businesses in China.

Financing Activities



	Nine Months Ended September 30,
	2016				2015
Repurchase of CBS Corp. Class B Common Stock		$	(1,534	)		$	(2,345	)
Proceeds from (repayments of) short-term debt borrowings, net		33				(313		)
Proceeds from issuance of senior notes		685				1,959
Repayment of senior debentures		(199		)		—
Dividends		(209		)		(228		)
Proceeds from exercise of stock options		13				137
All other financing activities, net		(58		)		(22		)
Net cash flow used for financing activities		$	(1,269	)		$	(812	)

Free Cash Flow

Free cash flow is a non-GAAP financial measure. Free cash flow reflects the Company’s net cash flow provided by (used for) operating activities before operating cash flow from discontinued operations and less capital expenditures. The Company’s calculation of free cash flow includes capital expenditures because investment in capital expenditures is a use of cash that is directly related to the Company’s operations. The Company’s net cash flow provided by (used for) operating activities is the most directly comparable GAAP financial measure.

-49-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

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

As free cash flow is not a measure calculated in accordance with GAAP, free cash flow should not be considered in isolation of, or as a substitute for, either net cash flow provided by (used for) operating activities as a measure of liquidity or net earnings as a measure of operating performance. Free cash flow, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow as a measure of liquidity has certain limitations, does not necessarily represent funds available for discretionary use and is not necessarily a measure of the Company’s ability to fund its cash needs. When comparing free cash flow to net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions that are not reflected in free cash flow.

The following table presents a reconciliation of the Company’s net cash flow provided by operating activities to free cash flow.



	Nine Months Ended
	September 30,
	2016			2015
Net cash flow provided by operating activities	$	1,306		$	623
Capital expenditures	(125		)	(104		)
Exclude operating cash flow from discontinued operations	(2		)	(27		)
Free cash flow	$	1,183		$	546

Repurchase of Company Stock and Cash Dividends

On July 28, 2016, the Company announced that its Board of Directors approved an increase to the Company’s share repurchase program to a total availability of $6.0 billion. During the third quarter of 2016, the Company repurchased 9.5 million shares of its Class B Common Stock under its share repurchase program for $500 million, at an average cost of $52.77 per share. During the nine months ended September 30, 2016, the Company repurchased 29.0 million shares of its Class B Common Stock for $1.50 billion, at an average cost of $51.76 per share, leaving $5.60 billion of authorization at September 30, 2016. Repurchases are expected to be funded by cash flows from operations, and, as appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt. During the fourth quarter of 2016, the Company intends to repurchase $1.5 billion of its Class B Common Stock, including $500 million as part of its ongoing repurchase program and $1.0 billion using the net proceeds from the CBS Radio borrowings. These planned repurchases are subject to market and business conditions, and remain at the discretion of management.

-50-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Capital Structure

The following table sets forth the Company’s debt.



	At			At
	September 30, 2016			December 31, 2015
Commercial paper		$	33		$	—
Senior debt (1.95% – 7.875% due 2016 – 2045) ^(a)		8,849			8,365
Obligations under capital leases		75			83
Total debt		8,957			8,448
Less commercial paper		33			—
Less current portion of long-term debt		22			222
Total long-term debt, net of current portion		$	8,902		$	8,226

During July 2016, the Company issued $700 million of 2.90% senior notes due 2027. The Company used the net proceeds from this issuance for general corporate purposes, including the repurchase of CBS Corp. Class B Common Stock and repayment of short-term borrowings, including commercial paper.

During January 2016, the Company repaid its $200 million of outstanding 7.625% senior debentures upon maturity.

Commercial Paper

Credit Facility

-51-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

CBS Radio Indebtedness

In October 2016, in connection with the Company’s previously announced plans to separate its radio business, CBS Radio borrowed $1.46 billion through a $1.06 billion senior secured term loan due 2023 and the issuance of $400 million of 7.25% senior unsecured notes due 2024 through a private placement. The Term Loan bears interest at a rate equal to 3.50% plus the greater of LIBOR and 1.00%.

Liquidity and Capital Resources

The Company continually projects anticipated cash requirements for its operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. The Company’s operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, operating leases, interest payments, and pension funding obligations. The Company’s investing and financing spending includes capital expenditures, share repurchases, dividends and principal payments on its outstanding indebtedness. The Company believes that its operating cash flows; cash and cash equivalents; borrowing capacity under the Credit Facility, which had $2.49 billion of remaining availability at September 30, 2016; and access to capital markets are sufficient to fund its operating, investing and financing requirements for the next twelve months.

The Company’s funding for short-term and long-term obligations will come primarily from cash flows from operating activities. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to the Company, the existing Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. The Company routinely assesses its capital structure and opportunistically enters into transactions to lower its interest expense, which could result in a charge from the early extinguishment of debt.

Funding for the Company’s long-term debt obligations due over the next five years of $2.10 billion is expected to come from the Company’s ability to refinance its debt and cash generated from operating activities.

-52-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

During the fourth quarter of 2016, the Company intends to repurchase $1.5 billion of its Class B Common Stock, including $500 million as part of its ongoing repurchase program and $1.0 billion using the net proceeds from the CBS Radio borrowings. These planned repurchases are subject to market and business conditions, and remain at the discretion of management.

Legal Matters

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of claims against the Company are non-cancer claims. The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities. This belief is based upon many factors and assumptions, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease

-53-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

type, historic claim filings, costs per claim of resolution and the filing of new claims. While the number of asbestos claims filed against the Company has trended down in the past five to ten years and has remained flat in recent years, it is difficult to predict future asbestos liabilities, as events and circumstances may occur including, among others, the number and types of claims and average cost to resolve such claims, which could affect the Company’s estimate of its asbestos liabilities.

Related Parties

See Note 4 to the consolidated financial statements.

Recent Pronouncements and Adoption of New Accounting Standards

See Note 1 to the consolidated financial statements.

Critical Accounting Policies

See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for a discussion of the Company’s critical accounting policies.

Beginning in the third quarter of 2016, in connection with its new segment presentation, the Company allocated the goodwill for its Radio segment into three reporting units. The estimated fair value of each of these three reporting units exceeded their respective carrying value by less than 1%, which is consistent with the results of the Company’s 2015 annual impairment test for its CBS Radio reporting unit. The assumptions used in the calculation of the estimated fair values of the three Radio reporting units were similar to those used in the Company’s 2015 annual impairment test for its CBS Radio reporting unit, as disclosed in the discussion of critical accounting policies in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Cautionary Statement Concerning Forward-Looking Statements

This quarterly report on Form 10-Q, including “Item 2 - Management’s Discussion and Analysis of Results of Operations and Financial Condition,” contains both historical and forward‑looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward‑looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward‑looking statements are not based on historical facts, but rather reflect the Company’s current expectations concerning future results and events. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” or other similar words or phrases. Similarly, statements that describe the Company’s objectives, plans or goals are or may be forward‑looking statements. These forward‑looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause the actual results, performance or achievements of the Company to be different from any future results, performance and achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: advertising market conditions generally; changes in the public acceptance of the Company’s content; changes in technology and its effect on competition in the Company’s markets; changes in the

-54-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

federal communications laws and regulations; the impact of piracy on the Company’s products; the impact of consolidation in the market for the Company’s content; the impact of negotiations or the loss of affiliation agreements or retransmission agreements; effects relating to the Company exploring, entering into, and/or consummating any potential transaction with Viacom Inc.; the ability to achieve the separation of the Company’s radio business on terms that the Company finds acceptable; the impact of union activity, including possible strikes or work stoppages or the Company’s inability to negotiate favorable terms for contract renewals; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s filings made under the securities laws, including, among others, those set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015 and in our Quarterly Reports on Form 10-Q. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not necessarily known. The forward‑looking statements included in this document are made as of the date of this document and the Company does not have any obligation to publicly update any forward‑looking statements to reflect subsequent events or circumstances.



Item 3.	Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes to market risk since reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.



Item 4.	Controls and Procedures.

The Company’s chief executive officer and chief operating officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.

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

-55-

PART II – OTHER INFORMATION



Item 1A.	Risk Factors.

The following updates the corresponding risk factor included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

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

In connection with the Company’s new segment presentation, the Company allocated the goodwill for its Radio segment into three reporting units. The estimated fair value of each of these three reporting units exceeded their respective carrying value by less than 1%, which is consistent with the results of the Company’s 2015 annual impairment test for its CBS Radio reporting unit. In addition, as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, based on the Company’s annual impairment test for FCC licenses performed during the fourth quarter of 2015, the carrying value of FCC licenses in eighteen radio markets was equal to their respective fair values, and the carrying value of FCC licenses in four radio markets was within 10% of their respective estimated fair values. Any downward revisions to the estimated fair value of the three Radio reporting units and/or these FCC licenses could cause the estimated fair values to fall below their respective carrying values, which could result in a noncash impairment charge. Any impairment charge for goodwill and/or FCC licenses could have a material adverse effect on the Company’s reported net earnings.



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

Company Purchases of Equity Securities

In November 2010, the Company announced that its Board of Directors approved a program to repurchase $1.5 billion of the Company’s common stock in open market purchases or other types of transactions (including accelerated stock repurchases or privately negotiated transactions). Since then, various increases to such amount have been approved and announced, including most recently, an increase to the share repurchase program to a total availability of $6.0 billion on July 28, 2016. Below is a summary of CBS Corp.’s purchases of its Class B Common Stock during the three months ended September 30, 2016.



(in millions, except per share amounts)	Total Number of Shares Purchased		Average Price Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Remaining Authorization
July 1, 2016 - July 31, 2016		2.2	$	55.39		2.2		$	5,982
August 1, 2016 - August 31, 2016		3.5	$	52.05		3.5		$	5,798
September 1, 2016 - September 30, 2016		3.8	$	51.91		3.8		$	5,603
Total		9.5	$	52.77		9.5		$	5,603

-56-



Item 6.	Exhibits.



Exhibit No.			Description of Document
(4	)		Instruments defining the rights of security holders, including indentures.
		(a)	Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) between CBS Corporation, CBS Operations Inc., and The Bank of New York Mellon, as senior trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 filed by CBS Corporation on November 3, 2008 (Registration No. 333-154962) (File No. 001-09553)).
		(b)	First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 between CBS Corporation, CBS Operations Inc., and Deutsche Bank Trust Company Americas, as senior trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by CBS Corporation on April 5, 2010 (File No. 001-09553)).
			The other instruments defining the rights of holders of the long-term debt securities of CBS Corporation and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. CBS Corporation hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
(10)			Material Contracts
		(a)	Employment Agreement dated as of September 29, 2016 between CBS Corporation and Anthony G. Ambrosio (filed herewith).
(12	)		Statement Regarding Computation of Ratios (filed herewith)
(31	)		Rule 13a-14(a)/15d-14(a) Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
		(b)	Certification of the Chief Operating Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
(32	)		Section 1350 Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation 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 Operating Officer of CBS Corporation 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.
			101. SCH XBRL Taxonomy Extension Schema.
			101. CAL XBRL Taxonomy Extension Calculation Linkbase.
			101. DEF XBRL Taxonomy Extension Definition Linkbase.
			101. LAB XBRL Taxonomy Extension Label Linkbase.
			101. PRE XBRL Taxonomy Extension Presentation Linkbase.

-57-

SIGNATURES

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



	CBS CORPORATION (Registrant)

Date: November 3, 2016	/s/ Joseph R. Ianniello
	Joseph R. Ianniello Chief Operating Officer

Date: November 3, 2016	/s/ Lawrence Liding
	Lawrence Liding Executive Vice President, Controller and Chief Accounting Officer

-58-

EXHIBIT INDEX



Exhibit No.			Description of Document
(4	)		Instruments defining the rights of security holders, including indentures.
		(a)	Amended and Restated Senior Indenture dated as of November 3, 2008 (“2008 Indenture”) between CBS Corporation, CBS Operations Inc., and The Bank of New York Mellon, as senior trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 filed by CBS Corporation on November 3, 2008 (Registration No. 333-154962) (File No. 001-09553)).
		(b)	First Supplemental Indenture to 2008 Indenture dated as of April 5, 2010 between CBS Corporation, CBS Operations Inc., and Deutsche Bank Trust Company Americas, as senior trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by CBS Corporation on April 5, 2010 (File No. 001-09553)).
			The other instruments defining the rights of holders of the long-term debt securities of CBS Corporation and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. CBS Corporation hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
(10	)		Material Contracts
		(a)	Employment Agreement dated as of September 29, 2016 between CBS Corporation and Anthony G. Ambrosio (filed herewith).
(12	)		Statement Regarding Computation of Ratios (filed herewith)
(31	)		Rule 13a-14(a)/15d-14(a) Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
		(b)	Certification of the Chief Operating Officer of CBS Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
(32	)		Section 1350 Certifications
		(a)	Certification of the Chief Executive Officer of CBS Corporation 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 Operating Officer of CBS Corporation 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.
			101. SCH XBRL Taxonomy Extension Schema.
			101. CAL XBRL Taxonomy Extension Calculation Linkbase.
			101. DEF XBRL Taxonomy Extension Definition Linkbase.
			101. LAB XBRL Taxonomy Extension Label Linkbase.
			101. PRE XBRL Taxonomy Extension Presentation Linkbase.

-59-

Exhibit 10(a)

EXECUTION COPY

51 West 52^nd Street

New York, NY 10019

Anthony G. Ambrosio

c/o CBS Corporation

51 W. 52^nd Street

New York, NY 10019



Dear Tony:	as of September 29, 2016

CBS Corporation (“CBS”), having an address at 51 West 52^nd Street, New York, New York 10019, agrees to employ you and you agree to accept such employment upon the following terms and conditions (the “Agreement”):

1. Term. The term of your employment under this Agreement shall commence on September 29, 2016 (the “Effective Date”) and, unless earlier terminated under this Agreement, shall expire on September 28, 2020 (the “Expiration Date”). The period from the Effective Date through the Expiration Date is referred to herein as the “Term” notwithstanding any earlier termination of your employment for any reason.

2. Duties. You will serve as the Senior Executive Vice President, Chief Administrative Officer and Chief Human Resources Officer and agree to perform all duties reasonable and consistent with that office. You will report to the Chairman of the Board, President and Chief Executive Officer of CBS (the “CEO”) and you will be the most senior executive responsible for Human Resources and for Administration. Your Human Resources responsibilities shall encompass all elements of global Human Resources including administrative oversight of the Labor Relations function. Your Administration responsibilities shall include, without limitation, Corporate Real Estate, Facilities Management and Corporate Services, Corporate Security, Strategic Sourcing (including Travel), Corporate Planning activities, Corporate Philanthropy (including CBS Cares PSA inventory) and corporate social responsibility activities. Your responsibilities will also include the management oversight of EcoMedia, a division of CBS Corporation. Your principal place of employment will be CBS’s executive offices in the New York and Los Angeles metropolitan areas; provided, however, that you will be required to render services elsewhere upon request for business reasons.

Anthony G. Ambrosio

as of September 29, 2016

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3. Base Compensation.

(a) Salary. For all the services rendered by you in any capacity under this Agreement, CBS agrees to pay you base salary (“Salary”) at the rate of One Million Two Hundred Fifty Thousand Dollars ($1,250,000) per annum, less applicable deductions and withholding taxes, in accordance with CBS’s payroll practices as they may exist from time to time. During the term of this Agreement, your salary may be increased, and such increase, if any, shall be made at a time, and in an amount, that CBS shall determine in its sole discretion.

(b) Bonus Compensation. You also shall be eligible to receive annual bonus compensation (“Bonus”) during your employment with CBS under this Agreement, determined and payable as follows:

(i) Your Bonus for each calendar year during your employment with CBS under this Agreement will be determined in accordance with the guidelines of the CBS short-term incentive program (the “STIP”), as such guidelines may be amended from time to time without notice in the discretion of CBS.

(ii) Your target bonus (“Target Bonus”) for each calendar year during your employment with CBS under this Agreement shall be 125% of your Salary in effect on November 1^st of the calendar year or the last day of your employment, if earlier.

(iii) Your Bonus for any calendar year shall be payable, less applicable deductions and withholding taxes, between January 1^st and March 15^th of the following calendar year.

(iv) If, prior to the last day of a calendar year and during the Employment Term, your employment with CBS terminates under circumstances described in paragraph 7(b)(i) or 7(c)(i), you shall be eligible to receive a prorated Bonus, in which case such prorated Bonus will be determined in accordance with the guidelines of the STIP and payable in accordance with paragraph 3(b)(iii). Any prorated Bonus shall be payable, less any applicable deductions and withholding taxes, between January 1^st and March 15^th of the following calendar year.

(v) In the event that your employment with CBS and its subsidiaries terminates (other than for Cause) following the expiration of the Term, you will receive a Bonus for the calendar year in which the employment Term ends, such Bonus to be determined based on actual performance and consistent with senior executive officers who remain employed with CBS, and then prorated based on the number of calendar days of such year elapsed through

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the date on which the Term ends. Any prorated Bonus shall be payable, less any applicable deductions and withholding taxes, between January 1^st and March 15^th of the following calendar year.

(c) Long-Term Incentive Compensation. Beginning with calendar year 2017, you shall be eligible to receive annual grants of long-term incentive compensation under the CBS Corporation 2009 Long-Term Incentive Plan (or any successor plan thereto) (the “LTIP”), as may be amended from time to time without notice in the discretion of CBS. You shall have a target long-term incentive value equal to One Hundred Eighty-Five percent (185%) of your Base Salary. The precise amount, form (including equity and equity-based awards, which for purposes of this Agreement are collectively referred to as “equity awards”) and timing of any such long-term incentive award, if any, shall be determined in the discretion of the Compensation Committee of the CBS Board of Directors (the “Committee”).

4. Benefits. You shall participate in all CBS vacation, medical, dental, life insurance, long-term disability insurance, retirement, long-term incentive and other benefit plans and programs applicable generally to other senior executives of CBS and its subsidiaries as CBS may have or establish from time to time and in which you would be entitled to participate under the terms of the plans. This provision shall not be construed to either require CBS to establish any welfare, compensation or long-term incentive plans, or to prevent the modification or termination of any plan once established, and no action or inaction with respect to any plan shall affect this Agreement.

5. Business Expenses. During your employment under this Agreement, CBS shall reimburse you for such reasonable travel and other expenses incurred in the performance of your duties as are customarily reimbursed to CBS executives at comparable levels. Such travel and other expenses shall be reimbursed by CBS as soon as practicable in accordance with CBS’s established guidelines, as may be amended from time to time, but in no event later than December 31^st of the calendar year following the calendar year in which you incur the related expenses.

6. Non-Competition, Confidential Information, Etc.

(a) Non-Competition. You agree that your employment with CBS is on an exclusive basis and that, while you are employed by CBS or any of its subsidiaries, you will not engage in any other business activity which is in conflict with your duties and obligations (including your commitment of time) under this Agreement. You further agree that, during the Non-Compete Period (as defined below), you shall not directly or indirectly engage in or participate in (or negotiate or sign any agreement to engage in or participate in), whether as an owner, partner, stockholder, officer, employee, director, agent of or consultant for, any business which at such time is competitive with any business of CBS, or any of its subsidiaries, without the written

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consent of CBS; provided, however, that this provision shall not prevent you from investing as less than a one (1%) percent stockholder in the securities of any company listed on a national securities exchange or quoted on an automated quotation system. The Non-Compete Period shall cover the period during your employment with CBS and shall continue following the termination of your employment for any reason, other than the expiration of the Term, for the greater of: (i) twelve (12) months; or (ii) for so long as (A) any payments are due to you pursuant to paragraph 7(b), 7(c), 7(f) or 7(k) of this Agreement or (B) Outstanding Awards continue to vest during the Extended Vesting Period pursuant to paragraph 7(g), unless you request and CBS accepts a written request pursuant to paragraph 6(j) of this Agreement.

(b) Confidential Information. You agree that, during the Term and at any time thereafter, (i) you shall not use for any purpose other than the duly authorized business of CBS, or disclose to any third party, any information relating to CBS, or any of CBS’s affiliated companies which is non-public, confidential or proprietary to CBS or any of CBS’s affiliated companies (“Confidential Information”), including any trade secret or any written (including in any electronic form) or oral communication incorporating Confidential Information in any way (except as may be required by law or in the performance of your duties under this Agreement consistent with CBS’s policies); and (ii) you will comply with any and all confidentiality obligations of CBS to a third party, whether arising under a written agreement or otherwise. Information shall not be deemed Confidential Information which (x) is or becomes generally available to the public other than as a result of a disclosure by you or at your direction or by any other person who directly or indirectly receives such information from you, or (y) is or becomes available to you on a non-confidential basis from a source which is entitled to disclose it to you. For purposes of this paragraph 6(b), the term “third party” shall be defined to mean any person other than CBS and its subsidiaries or any of their respective directors and senior officers.

Notwithstanding the foregoing, your obligation to protect confidential and proprietary information shall not prohibit you from disclosing matters that are protected under any applicable whistleblower laws, including reporting possible violations of laws or regulations, or responding to inquiries from, or testifying before, any governmental agency or self-regulating authority, all without notice to or consent from CBS. Additionally, you hereby are notified that the immunity provisions in Section 1833 of title 18 of the United States Code provide that an individual cannot be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made (i) in confidence to federal, state or local government officials, either directly or indirectly, or to an attorney, and is solely for the purpose of reporting or investigating a suspected violation of the law, (ii) under seal in a complaint or other document filed in a lawsuit or other proceeding, or (iii) to your attorney in connection with a lawsuit for retaliation for reporting a suspected violation of law (and the trade secret may be used in the court proceedings for such lawsuit) as

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long as any document containing the trade secret is filed under seal and the trade secret is not disclosed except pursuant to court order.

(c) No Solicitation, Etc. You agree that, while employed by CBS and for the greater of twelve (12) months thereafter or for so long as payments are due to you pursuant to paragraph 7(b), 7(c), 7(f) or 7(k) of this Agreement, you shall not, directly or indirectly:

(i) employ or solicit the employment of any person who is then or has been within twelve (12) months prior thereto, an employee of CBS or any of CBS’s affiliated companies; or

(ii) do any act or thing to cause, bring about, or induce any interference with, disturbance to, or interruption of any of the then-existing relationships (whether or not such relationships have been reduced to formal contracts) of CBS or any of CBS’s affiliated companies with any customer, employee, consultant or supplier.

(d) CBS Ownership. The results and proceeds of your services under this Agreement, including, without limitation, any works of authorship resulting from your services during your employment with CBS and/or any of CBS’s affiliated companies and any works in progress resulting from such services, shall be works-made-for-hire and CBS shall be deemed the sole owner throughout the universe of any and all rights of every nature in such works, whether such rights are now known or hereafter defined or discovered, with the right to use the works in perpetuity in any manner CBS determines, in its discretion, without any further payment to you. If, for any reason, any of such results and proceeds are not legally deemed a work-made-for-hire and/or there are any rights in such results and proceeds which do not accrue to CBS under the preceding sentence, then you hereby irrevocably assign and agree to assign any and all of your right, title and interest thereto, including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of every nature in the work, whether now known or hereafter defined or discovered, and CBS shall have the right to use the work in perpetuity throughout the universe in any manner CBS determines, in its discretion, without any further payment to you. You shall, as may be requested by CBS from time to time, do any and all things which CBS may deem useful or desirable to establish or document CBS’s rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright, trademark and/or patent applications, assignments or similar documents and, if you are unavailable or unwilling to execute such documents, you hereby irrevocably designate the Executive Vice President, General Counsel, CBS Corporation or his designee as your attorney-in-fact with the power to execute such documents on your behalf. To the extent you have any rights in the results and proceeds of your services under this Agreement that cannot be assigned as described above, you unconditionally and irrevocably waive the enforcement of such rights. This paragraph 6(d) is subject to, and does not limit, restrict, or constitute a waiver by CBS of

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any ownership rights to which CBS may be entitled by operation of law by virtue of being your employer.

(e) Litigation.

(i) You agree that during the Term and for twelve (12) months thereafter or, if later, during the pendency of any litigation or other proceeding, (x) you shall not communicate with anyone (other than your own attorneys and tax advisors), except to the extent necessary in the performance of your duties under this Agreement, with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving CBS, or any of CBS’s affiliated companies, other than any litigation or other proceeding in which you are a party-in-opposition, without giving prior notice to CBS or its counsel; and (y) in the event that any other party attempts to obtain information or documents from you with respect to such matters, either through formal legal process such as a subpoena or by informal means such as interviews, you shall promptly notify CBS’s counsel before providing any information or documents.

(ii) You agree to cooperate with CBS and its attorneys, both during and after the termination of your employment, in connection with any litigation or other proceeding arising out of or relating to matters in which you were involved or had knowledge of prior to the termination of your employment. Your cooperation shall include, without limitation, providing assistance to CBS’s counsel, experts or consultants, providing truthful testimony in pretrial and trial or hearing proceedings. In the event that your cooperation is requested after the termination of your employment, CBS will (x) seek to minimize interruptions to your schedule to the extent consistent with its interests in the matter; and (y) reimburse you for all reasonable and appropriate out-of-pocket expenses actually incurred by you in connection with such cooperation upon reasonable substantiation of such expenses. Reimbursement shall be made within 60 calendar days following the date on which CBS receives appropriate documentation with respect to such expenses, but in no event will payment be made later than December 31 of the calendar year following the calendar year in which you incur the related expenses.

(iii) You agree that during the Term and at any time thereafter, to the fullest extent permitted by law, you will not testify voluntarily in any lawsuit or other proceeding which directly or indirectly involves CBS, or any of CBS’s affiliated companies, or which may create the impression that such testimony is endorsed or approved by CBS, or any of CBS’s affiliated companies, without advance notice (including the general nature of the testimony) to and, if such testimony is without subpoena or other compulsory

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legal process the approval of the Executive Vice President and General Counsel, CBS Corporation.

(f) No Right to Give Interviews or Write Books, Articles, Etc. During the Term, except as authorized by CBS, you shall not (i) give any interviews or speeches, or (ii) prepare or assist any person or entity in the preparation of any books, articles, television or motion picture productions or other creations, in either case, concerning CBS, or any of CBS’s affiliated companies or any of their respective officers, directors, agents, employees, suppliers or customers.

(g) Return of Property. All documents, data, recordings, or other property, whether tangible or intangible, including all information stored in electronic form, obtained or prepared by or for you and utilized by you in the course of your employment with CBS shall remain the exclusive property of CBS. In the event of the termination of your employment for any reason, CBS reserves the right, to the extent permitted by law and in addition to any other remedy CBS may have, to deduct from any monies otherwise payable to you the following: (i) all amounts you may owe to CBS, or any of CBS’s affiliated companies at the time of or subsequent to the termination of your employment with CBS; and (ii) the value of the CBS property which you retain in your possession after the termination of your employment with CBS. In the event that the law of any state or other jurisdiction requires the consent of an employee for such deductions, this Agreement shall serve as such consent. Notwithstanding anything in this Section 6(g) to the contrary, CBS will not exercise such right to deduct from any monies otherwise payable to you that constitute “deferred compensation” within the meaning of Internal Revenue Code Section 409A (“Code Section 409A”).

(h) Non-Disparagement. Both parties agree that, during the Term and for a period of one year thereafter, that neither you nor CBS shall, in any communications with the press or other media or any customer, client or supplier of CBS or any of CBS’s affiliated companies, criticize, ridicule or make any statement which disparages or is derogatory of you or CBS or any of CBS’s affiliated companies, or any of their respective directors or senior officers.

(i) Injunctive Relief. CBS has entered into this Agreement in order to obtain the benefit of your unique skills, talent, and experience. You acknowledge and agree that any violation of paragraphs 6(a) through (h) of this Agreement will result in irreparable damage to CBS and, accordingly, CBS may obtain injunctive and other equitable relief for any breach or threatened breach of such paragraphs, in addition to any other remedies available to CBS.

(j) Survival; Modification of Terms. Your obligations under paragraphs 6(a) through (i) shall remain in full force and effect for the entire period provided therein notwithstanding the termination of your employment under this

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Agreement for any reason or the expiration of the Term; provided, however, that your obligations under paragraph 6(a) (but not under any other provision of this Agreement) shall cease if: (x) CBS terminates your employment without Cause or you resign with Good Reason; (y) you provide CBS a written notice indicating your desire to waive your right to receive, or to continue to receive, termination payments and benefits under paragraphs 7(b)(ii)(A) through (D), paragraphs 7(c)(ii)(A) through (D), paragraphs 7(f)(ii) through 7(f)(iii)(A) or paragraphs 7(k)(ii)(A), (B), (C), (D) through (F), or continued vesting of Outstanding Awards during the Extended Vesting Period under paragraph 7(g), as applicable; and (z) CBS notifies you that it has, in its discretion, accepted your request. You and CBS agree that the restrictions and remedies contained in paragraphs 6(a) through (i) are reasonable and that it is your intention and the intention of CBS that such restrictions and remedies shall be enforceable to the fullest extent permissible by law. If a court of competent jurisdiction shall find that any such restriction or remedy is unenforceable but would be enforceable if some part were deleted or the period or area of application reduced, then such restriction or remedy shall apply with the modification necessary to make it enforceable. You acknowledge that CBS conducts its business operations around the world and has invested considerable time and effort to develop the international brand and goodwill associated with the “CBS” name. To that end, you further acknowledge that the obligations set forth in this paragraph 6 are by necessity international in scope and necessary to protect the international operations and goodwill of CBS and its affiliated companies.

7. Termination of Employment.

(a) Termination for Cause.

(i) CBS may, at its option, terminate your employment under this Agreement for Cause. For purposes of this Agreement, “Cause” shall mean: (A) embezzlement, fraud or other conduct which would constitute a felony or a misdemeanor involving fraud or perjury; (B) willful unauthorized disclosure of material Confidential Information; (C) your failure to obey a material lawful directive that is appropriate to your position from the CEO; (D) your failure to comply with the written policies of CBS, including the CBS Business Conduct Statement or successor conduct statement as they apply from time to time; (E) your material breach of this Agreement (including any representations herein); (F) your failure (except in the event of your Disability) or refusal to substantially perform your material obligations under this Agreement; (G) your terminating your employment without Good Reason (as defined below) other than for death or Disability pursuant to paragraph 7(e) (it being understood that your terminating your employment during the Term without Good Reason prior to the end of the Term shall constitute Cause); (H) willful failure to cooperate with a bona fide internal investigation or investigation by regulatory or law enforcement authorities or the destruction or failure to preserve documents or other material reasonably likely to be relevant to such an investigation, or the

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inducement of others to fail to cooperate or to destroy or fail to produce documents or other material; or (I) conduct which is considered an offense involving moral turpitude under federal, state or local laws, or which might bring you to public disrepute, scandal or ridicule or reflect unfavorably upon any of CBS’s businesses or those who conduct business with CBS and its affiliated entities.

Prior to terminating your employment for Cause, CBS will give you written notice of termination regarding any alleged act, failure or breach in reasonable detail and, except in the case of clause (A) or (B) or any other conduct, failure, breach or refusal which, by its nature, CBS determines cannot reasonably be expected to be cured, the conduct required to cure. Except for conduct described in clause (A) or (B) or any other conduct, failure, breach or refusal which, by its nature, CBS determines cannot reasonably be expected to be cured, you shall have ten (10) business days from the giving of such notice within which to cure any failure, breach or refusal under clause (C), (D), (E), (F), (H) or (I) of this paragraph 7(a)(i); provided, however, that if CBS reasonably expects irreparable injury from a delay of ten (10) business days, CBS may give you notice of such shorter period within which to cure as is reasonable under the circumstances.

(ii) In the event that your employment terminates under paragraph 7(a)(i) during the Term, CBS shall have no further obligations under this Agreement, including, without limitation, any obligation to pay Salary or Bonus or provide benefits, except to the extent required by applicable law.

(b) Termination without Cause.

(i) CBS may terminate your employment under this Agreement without Cause at any time during the Term by providing written notice of termination to you.

(ii) In the event that your employment terminates under paragraph 7(b)(i) during the Term hereof, you shall thereafter receive, less applicable withholding taxes, (x) any unpaid Salary through and including the date of termination, any unpaid Bonus earned for the calendar year prior to the calendar year in which you are terminated, any business expense reimbursements incurred but not yet approved and/or paid and such other amounts as are required to be paid or provided by law (the “Accrued Obligations”), payable within thirty (30) days following your termination date, and (y) subject to your compliance with paragraph 7(j) hereunder, the following payments and benefits:

(A) Salary: a severance amount equal to eighteen (18) months of your then current base Salary described in paragraph

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3(a), payable in accordance with CBS’s then effective payroll practices (your “Regular Payroll Amount”) as follows:

(I) beginning on the regular payroll date (“Regular Payroll Dates”) next following your termination date, you will receive your Regular Payroll Amount on the Regular Payroll Dates that occur on or before March 15^th of the calendar year following the calendar year in which your employment terminates;

(II) beginning with the first Regular Payroll Date after March 15^th of the calendar year following the calendar year in which your employment terminates, you will receive your Regular Payroll Amount, if any remains due, until you have received an amount equal to the maximum amount permitted to be paid pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) (i.e., the lesser of (x) two times your “annualized compensation” within the meaning of Code Section 409A or (y) two times the limit under Section 401(a)(17) of the Internal Revenue Code (the “Code”) for the calendar year in which your termination occurs, which is $510,000 for 2013); provided, however, that in no event shall payment be made to you pursuant to this paragraph 7(b)(ii)(A)(II) later than December 31st of the second calendar year following your termination of employment; and

(III) the balance of your Regular Payroll Amount, if any remains due, will be paid to you by payment of your Regular Payroll Amount on your Regular Payroll Dates beginning with the regular payroll date that follows the date of the last payment pursuant to paragraph 7(b)(ii)(A)(II);

provided, however, that to the extent that you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination and any portion of your Regular Payroll Amount that would be paid to you during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall be paid to you in a lump sum on the earlier of (x) the first business day of the seventh calendar month following the calendar month in which your termination of employment occurs or (y) your death (the applicable date, the “Permissible Payment Date”) rather than as described in paragraph 7(b)(ii)(A)(I), (II) or

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(III), as applicable, and any remaining Salary, if any, shall be paid to you or your estate, as applicable, by payment of your Regular Payroll Amount on your Regular Payroll Dates commencing with the Regular Payroll Date that follows the Permissible Payment Date. Each payment pursuant to this paragraph 7(b)(ii)(A) shall be regarded as a separate payment and not one of a series of payments for purposes of Code Section 409A.

(B) Bonus: an additional severance amount equal to 1.5 times your “Severance Bonus”, which for purposes of this Agreement is defined as your Target Bonus in effect on the date of your termination (ignoring any reduction in your Target Bonus prior to such date that constituted Good Reason), determined and paid as follows:

(I) an amount equal to your Severance Bonus, prorated for the number of calendar days remaining in the calendar year in which your employment terminates, and payable between January 1^st and March 15^th of the calendar year following the calendar year in which your employment terminates; provided, however, that to the extent (x) you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination, (y) your date of termination pursuant to paragraph 7(b)(i) occurs after June 30th of the calendar year, and (z) the prorated bonus described in this paragraph 7(b)(ii)(B)(I) is determined to constitute “deferred compensation” within the meaning of Code Section 409A, then such prorated bonus shall not be paid to you until the earlier of (a) the first business day of the seventh calendar month following the calendar month in which your termination of employment occurs or (b) your death. Each payment pursuant to this paragraph 7(b)(ii)(B)(I) shall be regarded as a separate payment and not one of a series of payments for purposes of Code Section 409A;

(II) an amount equal to your Severance Bonus, and payable between January 1^st and March 15^th of the second calendar year following the calendar year in which your employment terminates; provided, however, that if the 18^th month anniversary of the date of your termination of employment (the “18^th Month Anniversary”) occurs in the calendar year following the calendar year in which your employment terminates, then the Severance Bonus shall be prorated for the number of calendar days in the calendar year following the calendar year in which

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your employment terminates that occur on or before the 18^th Month Anniversary; and

(III) if the 18^th Month Anniversary occurs in the second calendar year following the calendar year in which your employment terminates, an amount equal to your Severance Bonus, prorated for the number of calendar days in the second calendar year following the calendar year in which your employment terminates that occur on or before the 18^th Month Anniversary, and payable between January 1^st and March 15^th of the third calendar year following the calendar year in which your employment terminates.

(C) Health Benefits: medical and dental insurance coverage for you and your eligible dependents at no cost to you (except as hereafter described) pursuant to the CBS benefit plans in which you participated in at the time of your termination of employment (or, if different, other benefit plans generally available to senior level executives) for a period of eighteen (18) months following the termination date, or if earlier, the date on which you become eligible for medical or dental coverage as the case may be from a third party, which period of coverage shall be considered to run concurrently with the COBRA continuation period; provided, however, that during the period that CBS provides you with this coverage, the cost of such coverage will be treated as taxable income to you and CBS may withhold taxes from your compensation for this purpose; provided, further, that you may elect to continue your medical and dental insurance coverage under COBRA at your own expense for the balance, if any, of the period required by law; provided, further that to the extent CBS is unable to continue such benefits because of underwriting on the plan term or if such continuation would violate Code Section 105(h), CBS shall provide you with economically equivalent benefits determined on an after-tax basis (to the extent such benefit was non-taxable).

(D) Life Insurance: life insurance coverage until the end of the Term under CBS’s policy in effect on the date of termination in the amount then furnished to CBS employees at no cost (the amount of which coverage will be reduced to the amount of life insurance coverage furnished to you at no cost by a third party employer); provided, however that to the extent CBS is unable to continue such benefits because of underwriting on the plan term, CBS shall provide you with economically equivalent

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benefits determined on an after-tax basis (to the extent such benefit was non-taxable).

(E) Equity: the following with respect to awards granted to you under the LTIP (or any predecessor plan to the LTIP):

(I) All stock option awards (or portions thereof) that have not vested and become exercisable on the date of such termination, but which would otherwise vest on or before the end of an eighteen (18) month period thereafter, shall accelerate and vest immediately on the Release Effective Date, and will continue to be exercisable until the greater of eighteen (18) months following the termination date or the period provided in accordance with the terms of the grant; provided, however, that in no event shall the exercise period extend beyond their expiration date.

(II) All stock options awards (or portions thereof) that have previously vested and become exercisable by the date of such termination shall remain exercisable until the greater of eighteen (18) months following the termination date or the period provided in accordance with the terms of the grant; provided, however, that in no event shall the exercise period extend beyond their expiration date.

(III) All stock option awards (or portions thereof) that have not vested and become exercisable on the date of such termination, but which would otherwise vest after the eighteen-month period following your termination date and on or before the third anniversary of the termination date, shall continue to vest in accordance with their established vesting schedule until all such stock options are fully vested and exercisable, and such stock options shall continue to be exercisable until their expiration date.

(IV) All restricted share unit (“RSU”) awards and other equity awards (or portions thereof) that would otherwise vest on or before the end of an eighteen (18) month period following the termination date (the “Accelerated Share Awards”) shall accelerate and vest immediately on the Release Effective Date and be settled within ten (10) business days thereafter; provided, however, that with respect to Accelerated Share Awards that remain subject to performance-based vesting

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conditions on your termination date, in the event and limited to the extent that compliance with the performance-based compensation exception is required in order to ensure the deductibility of any such Accelerated Share Award under Internal Revenue Code Section 162(m) (“Code Section 162(m)”), such Accelerated Share Award shall vest if and to the extent the Committee certifies that a level of the performance goal relating to such Accelerated Share Award has been met, or, if later, the Release Effective Date, and shall be settled within ten (10) business days thereafter; provided, further, that with respect to Accelerated Share Awards that remain subject to performance-based vesting conditions on your termination date, in the event and to the extent that compliance with the performance-based compensation exception under Code Section 162(m) is not required in order to ensure the deductibility of any such Accelerated Share Award, such Accelerated Share Award shall immediately vest (with an assumption that the performance goal(s) were achieved at target level, if and to the extent applicable) on the Release Effective Date and be settled within ten (10) business days thereafter; provided, further, that to the extent any RSU awards and other equity awards other than stock options and stock appreciation rights (or portions thereof) granted prior to the Effective Date constitute “deferred compensation” within the meaning of Code Section 409A, then, subject to the requirement that settlement of such awards be delayed until the Permissible Payment Date, such awards shall immediately vest on the Release Effective Date, but settlement of such awards shall occur in accordance with the established vesting and settlement schedule for such awards as though their vesting were not accelerated pursuant to this clause (E)(IV).

Notwithstanding the foregoing, to the extent that you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination and any portion of your Accelerated Share Awards that would otherwise be settled during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall instead be settled on the Permissible Payment Date.

(iii) You shall be required to mitigate the amount of any payment provided for in paragraph 7(b)(ii) by seeking other employment, and the amount of such payments shall be reduced by any compensation earned by

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you from any source other than as a result of your self-employment, including, without limitation, salary, sign-on or annual bonus compensation, consulting fees, and commission payments; provided, however, that mitigation shall not be required, and no reduction for other compensation shall be made, for earnings for services provided during the first twelve (12) months after the termination of your employment. You agree to advise CBS immediately and in writing of any employment for which you are receiving such payments and to provide documentation as requested by CBS with respect to such employment. The payments provided for in paragraph 7(b)(ii) are in lieu of any other severance or income continuation or protection under any CBS plan, program or agreement that may now or hereafter exist (unless the terms of such plan, program or agreement expressly state that the payments and benefits payable thereunder are intended to be in addition to the type of payments and benefits described in paragraph 7(b)(ii) of this Agreement).

(i) You may resign your employment under this Agreement with Good Reason at any time during the Term by written notice of termination to CBS given no more than thirty (30) days after the occurrence of the event constituting Good Reason. Such notice shall state an effective resignation date that is not earlier than thirty (30) business days and not later than sixty (60) days after the date it is given to CBS, provided that CBS may set an earlier effective date for your resignation at any time after receipt of your notice. For purposes of this Agreement (and any other agreement that expressly incorporates the definition of Good Reason hereunder), “Good Reason” shall mean the occurrence of any of the following without your consent (other than in connection with the termination or suspension of your employment or duties for Cause or in connection with physical and mental incapacity): (A) a material reduction in (1) your position, titles, offices, reporting relationships, authorities, duties or responsibilities from those in effect immediately prior to such reduction, including any such reduction effected through any arrangement involving the sharing of your position, titles, offices, reporting relationships, authorities, duties or responsibilities, or any such reduction which would remove positions, titles, offices, reporting relationships, authorities, duties or responsibilities which are customarily given to an executive of a public company comparable to CBS or (2) your base Salary or target compensation in effect immediately prior to such reduction, including your annual Target Bonus or long term incentive targets (for the avoidance of doubt, a material reduction shall include and be deemed to have occurred with respect to clause (A)(1) above if either (x) you cease to be the most senior executive responsible for human resources and administration of CBS (provided that no cessation will be deemed to have occurred if CBS has an ultimate parent company that is a public company and you are the most senior executive responsible for human resources

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and administration of the ultimate public parent company) or (y) neither CBS nor its ultimate parent company (if any) is a public company); (B) the assignment to you of duties or responsibilities that are materially inconsistent with your position, titles, offices or reporting relationships as they exist on the Effective Date or that materially impair your ability to function as Senior Executive Vice President, Chief Administrative Officer and Chief Human Resources Officer of CBS; or (C) the material breach by CBS of any of its obligations under this Agreement; or (D) the requirement that you relocate outside of the metropolitan area in which you currently are employed to any metropolitan area other than Los Angeles. CBS shall have thirty (30) days from the receipt of your notice within which to cure and, in the event of such cure, your notice shall be of no further force or effect. If no cure is effected, your resignation will be effective as of the date specified in your written notice to CBS or such earlier effective date set by CBS following receipt of your notice.

(ii) In the event that your employment terminates under paragraph 7(c)(i) during the Term, you shall thereafter receive, less applicable withholding taxes, (x) the Accrued Obligations, payable within thirty (30) days following your termination date, and (y), subject to your compliance with paragraph 7(j) hereunder, the following payments and benefits:

(A) Salary: a severance amount equal to eighteen (18) months of your Regular Payroll Amount, payable as follows:

(I) beginning on the Regular Payroll Date following your termination date, you will receive your Regular Payroll Amount on the Regular Payroll Dates that occur on or before March 15^th of the calendar year following the calendar year in which your employment terminates;

(II) beginning with the first Regular Payroll Date after March 15^th of the calendar year following the calendar year in which your employment terminates, you will receive your Regular Payroll Amount, if any remains due, until you have received an amount equal to the maximum amount permitted to be paid pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) (i.e., the lesser of (x) two times your “annualized compensation” within the meaning of Code Section 409A or (y) two times the limit under Code Section 401(a)(17) for the calendar year in which your termination occurs, which is $510,000 for 2013); provided, however, that in no event shall payment be made to you pursuant to this paragraph 7(c)(ii)(A)(II) later than December 31st of the second calendar year following your termination of employment; and

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provided, however, that to the extent that you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination and any portion of your Regular Payroll Amount that would be paid to you during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall be paid to on the Permissible Payment Date rather than as described in paragraph 7(c)(ii)(A)(I), (II) or (III), as applicable, and any remaining Salary, if any, shall be paid to you or your estate, as applicable, by payment of your Regular Payroll Amount on your Regular Payroll Dates commencing with the Regular Payroll Date that follows the Permissible Payment Date. Each payment pursuant to this paragraph 7(c)(ii)(A) shall be regarded as a separate payment and not one of a series of payments for purposes of Code Section 409A.

(B) Bonus: an additional severance amount equal to 1.5 times your Severance Bonus, determined and paid as follows:

(I) an amount equal to your Severance Bonus, prorated for the number of calendar days remaining in the calendar year in which your employment terminates, and payable between January 1^st and March 15^th of the calendar year following the calendar year in which your employment terminates; provided, however, that to the extent (x) you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination, (y) your date of termination pursuant to paragraph 7(c)(i) occurs after June 30th of the calendar year, and (z) the prorated bonus described in this paragraph 7(c)(ii)(B)(I) is determined to constitute “deferred compensation” within the meaning of Code Section 409A, then such prorated bonus shall not be paid to you until the earlier of (a) the first business day of the seventh calendar month following the calendar month in which your termination of employment occurs or (b) your death. Each payment pursuant to this paragraph 7(c)(ii)(B)(I) shall be

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regarded as a separate payment and not one of a series of payments for purposes of Code Section 409A;

(II) an amount equal to your Severance Bonus, and payable between January 1^st and March 15^th of the second calendar year following the calendar year in which your employment terminates; provided, however, that if the 18^th Month Anniversary occurs in the calendar year following the calendar year in which your employment terminates, then the Severance Bonus shall be prorated for the number of calendar days in the calendar year following the calendar year in which your employment terminates that occur on or before the 18^th Month Anniversary; and

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economically equivalent benefits determined on an after-tax basis (to the extent such benefit was non-taxable).

(E) Equity: the following with respect to awards granted to you under the LTIP (or any predecessor plan to the LTIP):

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stock options shall continue to be exercisable until their expiration date.

(IV) All Accelerated Share Awards shall accelerate and vest immediately on the Release Effective Date and be settled within ten (10) business days thereafter; provided, however, that with respect to Accelerated Share Awards that remain subject to performance-based vesting conditions on your termination date, in the event and limited to the extent that compliance with the performance-based compensation exception is required in order to ensure the deductibility of any such Accelerated Share Award under Code Section 162(m), such Accelerated Share Award shall vest to the extent the Committee certifies that the performance goal relating to such Accelerated Share Award has been met, or, if later, the Release Effective Date, and shall be settled within ten (10) business days thereafter; provided, further, that with respect to Accelerated Share Awards that remain subject to performance-based vesting conditions on your termination date, in the event and to the extent that compliance with the performance-based compensation exception under Code Section 162(m) is not required in order to ensure the deductibility of any such Accelerated Share Award, such Accelerated Share Award shall immediately vest (with an assumption that the performance goal(s) were achieved at target level, if and to the extent applicable) on the Release Effective Date and be settled within ten (10) business days thereafter; provided, further, that to the extent any RSU awards and other equity awards other than stock options and stock appreciation rights (or portions thereof) granted prior to the Effective Date constitute “deferred compensation” within the meaning of Code Section 409A, then, subject to the requirement that settlement of such awards be delayed until the Permissible Payment Date, such awards shall immediately vest on the Release Effective Date, but settlement of such awards shall occur in accordance with the established vesting and settlement schedule for such awards as though their vesting were not accelerated pursuant to this clause (E)(IV).

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constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall instead be settled on the Permissible Payment Date.

(iii) You shall be required to mitigate the amount of any payment provided for in paragraph 7(c)(ii) by seeking other employment, and the amount of such payments shall be reduced by any compensation earned by you from any source other than as a result of your self-employment, including, without limitation, salary, sign-on or annual bonus compensation, consulting fees, and commission payments; provided, however, that mitigation shall not be required, and no reduction for other compensation shall be made, for earnings for services provided during the first twelve (12) months after the termination of your employment. You agree to advise CBS immediately and in writing of any employment for which you are receiving such payments and to provide documentation as requested by CBS with respect to such employment. The payments provided for in paragraph 7(c)(ii) are in lieu of any other severance or income continuation or protection under any CBS plan, program or agreement that may now or hereafter exist (unless the terms of such plan, program or agreement expressly state that the payments and benefits payable thereunder are intended to be in addition to the type of payments and benefits described in paragraph 7(c)(ii) of this Agreement).

(d) Death.

(i) Your employment with CBS shall terminate automatically upon your death.

(ii) In the event of your death prior to the end of the Term while you are actively employed, your beneficiary or estate shall receive (x) the Accrued Obligations, payable, less applicable withholding taxes, within 30 days following your date of death; and (y) bonus compensation for the calendar year in which your death occurs, determined in accordance with the STIP (i.e., based upon CBS’s achievement of its goals and CBS’s good faith estimate of your achievement of your personal goals) and prorated for the portion of the calendar year through and including your date of death, payable, less applicable withholding taxes, between January 1^st and March 15^th of the following calendar year. In addition, (A) all awards of stock options and stock appreciation rights that have not vested and become exercisable on the date of such termination shall accelerate and vest immediately, and shall continue to be exercisable by your beneficiary or estate until the greater of two years following your date of

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death or the period provided in accordance with the terms of the grant, provided that in no event shall the exercise period of such awards extend beyond their expiration date; (B) all awards of stock options and stock appreciation rights that have previously vested and become exercisable by the date of your death shall remain exercisable by your beneficiary or estate until the greater of two years following your date of death or the period provided in accordance with the terms of the grant, provided that in no event shall the exercise period of such awards extend beyond their expiration date; (C) all awards of RSUs and other equity awards that remain subject only to time-based vesting conditions on the date of your death shall immediately vest and be settled within ten (10) business days thereafter; and (D) all awards of RSUs and other equity awards that remain subject to performance-based vesting conditions on the date of your death shall vest if and to the extent the Committee certifies that a level of the performance goal(s) relating to such RSU or other equity award has been met following the end of the applicable performance period, and shall be settled within ten (10) business days thereafter; provided, further, that to the extent any RSU awards and other equity awards other than stock options and stock appreciation rights (or portions thereof) granted prior to the Effective Date constitute “deferred compensation” within the meaning of Code Section 409A, then, subject to the requirement that settlement of such awards be delayed until the Permissible Payment Date), such awards shall immediately vest but settlement of such awards shall occur in accordance with the established vesting and settlement schedule for such awards as though their vesting were not accelerated pursuant to this paragraph 7(d)(ii).

(iii) In the event of your death after the termination of your employment (which termination occurred during the Term under circumstances described in paragraph 7(b)(i) or 7(c)(i), but prior to payment of any amounts or benefits described in paragraphs 7(b)(ii)(A), (B), (C) and (E) or paragraphs 7(c)(ii)(A), (B), (C) and (E), as applicable, that you would have received had you continued to live, all such amounts and benefits shall be paid, less applicable deductions and withholding taxes to your beneficiary (or, if no beneficiary has been designated, to your estate) in accordance with the applicable payment schedule set forth in paragraphs 7(b)(ii)(A), (B), (C) and (E) or paragraphs 7(c)(ii)(A), (B), (C) and (E), as applicable.

(e) Disability.

(i) If, while employed during the Term, you become “disabled” within the meaning of such term under CBS’s Short-Term Disability (“STD”) program (such condition is referred to as a “Disability” or being “Disabled”), you will be considered to have experienced a termination of employment with CBS and its subsidiaries as of the date you first become eligible to receive benefits under CBS’s Long-Term Disability (“LTD”) program

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or, if you do not become eligible to receive benefits under CBS’s LTD program, you have not returned to work by the six (6) month anniversary of your Disability onset date.

(ii) Except as provided in this paragraph 7(e)(ii), if you become Disabled while employed full-time during the Term, you will exclusively receive compensation under the STD program in accordance with its terms and, thereafter, under the LTD program in accordance with its terms, provided you are eligible to receive LTD program benefits. Notwithstanding the foregoing, if you have not returned to work by December 31^st of a calendar year during the Term, you will receive bonus compensation for the calendar year(s) during the Term in which you receive compensation under the STD program, determined as follows:

(A) for the portion of the calendar year from January 1^st until the date on which you first receive compensation under the STD program, bonus compensation shall be determined in accordance with the STIP (i.e., based upon CBS’s achievement of its goals and CBS’s good faith estimate of your achievement of your personal goals) and prorated for such period; and

(B) for any subsequent portion of that calendar year and any portion of the following calendar year in which you receive compensation under the STD program, bonus compensation shall be in an amount equal to your Target Bonus and prorated for such period(s).

(iii) Bonus compensation under paragraph 7(e)(ii) shall be paid, less applicable deductions and withholding taxes, between January 1^st and March 15^th of the calendar year following the calendar year to which such bonus compensation relates. You will not receive bonus compensation for any portion of the calendar year(s) during the Term while you receive benefits under the LTD program. For the periods that you receive compensation and benefits under the STD and LTD programs, such compensation and benefits and the bonus compensation provided under paragraph 7(e)(ii) are in lieu of Salary and Bonus under paragraphs 3(a) and (b).

(iv) In addition, if your employment terminates due to your “Permanent Disability” (as defined in the LTIP or, if applicable, a predecessor plan to the LTIP), (i) all awards of stock options and stock appreciation rights that have not vested and become exercisable on your termination date shall accelerate and vest immediately, and shall continue to be exercisable until the greater of three years following the termination date or the period provided in accordance with the terms of the grant, provided that in no event shall the

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exercise period of such awards extend beyond their expiration date; (ii) all awards of stock options and stock appreciation rights that have previously vested and become exercisable by your termination date shall remain exercisable until the greater of three years following the termination date or the period provided in accordance with the terms of the grant, provided that in no event shall the exercise period of such awards extend beyond their expiration date; (iii) all awards of RSUs and other equity awards that remain subject only to time-based vesting conditions on your termination date shall immediately vest and be settled within ten (10) business days thereafter; and (iv) all awards of RSUs and other equity awards that remain subject to performance-based vesting conditions on your termination date shall vest if and to the extent the Committee certifies that a level of the performance goal(s) relating to such RSU or other equity award has been met following the end of the applicable performance period, and shall be settled within ten (10) business days thereafter. Notwithstanding the foregoing if you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination due to Permanent Disability and any portion of your RSUs or other equity awards that would otherwise be settled during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall instead be settled on the Permissible Payment Date; provided, further, that to the extent any RSU awards and other equity awards other than stock options and stock appreciation rights (or portions thereof) granted prior to the Effective Date constitute “deferred compensation” within the meaning of Code Section 409A, then, subject to the requirement that settlement of such awards be delayed until the Permissible Payment Date), such awards shall immediately vest but settlement of such awards shall occur in accordance with the established vesting and settlement schedule for such awards as though their vesting were not accelerated pursuant to this paragraph 7(e)(iv).

(f) Renewal Notice / Non-Renewal.

(i) CBS shall notify you six (6) months prior to the expiration of the Term in writing if it intends to continue your employment beyond the expiration of the Term. If you are notified that CBS does intend to continue your employment, then you agree that you shall negotiate exclusively with CBS for the first 90 days following such notification. Nothing contained herein shall obligate CBS to provide an increase to your compensation hereunder upon such renewal.

(ii) If you remain employed on the Expiration Date, but have not entered into a new written contractual relationship with CBS (or any of CBS’s subsidiaries), and CBS advises you on or before the Expiration Date that it does not wish to continue your employment on an “at will” basis beyond

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expiration of the Term, your employment shall automatically terminate on the day next following the Expiration Date, and, except as set forth in paragraph 7(k)(v) of this Agreement, you shall be eligible to receive, less applicable withholding taxes, (x) the Accrued Obligations, payable within thirty (30) days following your termination date, and (y), subject to your compliance with paragraph 7(j) hereunder, the severance payments due under paragraphs 7(b)(ii)(A), (B) and (C).

(iii) If you remain in the employ of CBS beyond the end of the Term but have not entered into a new written contractual relationship with CBS, or any of CBS’s affiliated companies, your continued employment shall be “at will” and on such terms and conditions as CBS in its sole discretion may at the time establish; provided, that either party, during such period, may terminate your “at will” employment at any time, provided that:

(A) if CBS terminates your employment during the eighteen (18) month period following the Expiration Date without Cause (as that term is defined in paragraph 7(a)(i)), then, except as set forth in paragraph 7(k)(v) of the Agreement, you shall be eligible to receive, less applicable withholding taxes, (x) the Accrued Obligations, payable within thirty (30) days following your termination date, and (y), subject to your compliance with paragraph 7(j) hereunder, the severance payments due under paragraphs 7(b)(ii)(A), (B) and (C); and

(B) if CBS terminates your employment beyond the eighteen (18) month period following the Expiration Date as an “at will” employee without Cause (as that term is defined in paragraph 7(a)(i)), then, except as set forth in paragraph 7(k)(v) of the Agreement, you shall become eligible to receive severance under the then current CBS severance policy applicable to executives at your level, subject to the terms of such severance policy (including your execution of a release in favor of CBS pursuant to such policy to the extent required).

(iv) Nothing in this paragraph 7(f) shall (x) create a right to continued employment with CBS or be interpreted as forming an employment contract with CBS, or interfere with the ability of CBS to terminate your employment or (y) obligate you to continue your employment with CBS.

(v) You shall be required to mitigate the amount of any payment provided for in paragraph 7(f) by seeking other employment, and the amount of such payments shall be reduced by any compensation earned by you from any source other than as a result of your self-employment, including, without limitation, salary, sign-on or annual bonus compensation, consulting fees, and commission payments; provided, however, that mitigation shall not be

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required, and no reduction for other compensation shall be made, for earnings for services provided during the first twelve (12) months after the termination of your employment. You agree to advise CBS immediately and in writing of any employment for which you are receiving such payments and to provide documentation as requested by CBS with respect to such employment. The payments provided for in paragraph 7(f) are in lieu of any other severance or income continuation or protection under any CBS plan, program or agreement that may now or hereafter exist (unless the terms of such plan, program or agreement expressly state that the payments and benefits payable thereunder are intended to be in addition to the type of payments and benefits described in paragraph 7(f) of this Agreement).

(g) Retirement.

(i) Notwithstanding any provision herein to the contrary, if (A) you remain employed with CBS or one of its subsidiaries through the Expiration Date, and (B) your employment with CBS or any of its subsidiaries either (x) is terminated by you or by CBS effective as of the calendar day next following the Expiration Date or (y) continues beyond the Expiration Date on an “at will” basis but is subsequently terminated by you or by CBS, in either case for reasons other than for Cause (but including death or Disability as defined in this Agreement) (“Retirement”), any then outstanding and unvested equity or equity-based awards (“Outstanding Awards”) shall continue vesting in accordance with their established vesting schedule through the third anniversary of your termination date (the “Extended Vesting Period”) so long as you comply with the obligations set forth in paragraphs 6(a) and 6(b) during the Extended Vesting Period; provided, however, that vesting of Outstanding Awards shall be accelerated (rather than continued) to the extent necessary to comply with the requirements of Code Section 409A, unless compliance with the performance-based compensation exception is required in order to ensure the deductibility of any Outstanding Award under Code Section 162(m), in which case such Outstanding Award shall vest if and when the Committee certifies that the performance goal relating to such award has been met. Outstanding Awards in the form of stock options and stock appreciation rights (“Outstanding Stock Rights”), once vested, shall remain exercisable until their expiration date. The exercisability of stock options and stock appreciation rights that are outstanding and vested on the date of your Retirement shall be governed by the terms and conditions otherwise applicable to those grants.

(ii) If you breach the obligations set forth in paragraph 6(a) or 6(b) at any time during the Extended Vesting Period (which for the avoidance of doubt shall apply to the Extended Vesting Period), CBS may (A) immediately cancel any Outstanding Stock Rights that remain outstanding (whether or not vested), (B) immediately cancel any Outstanding Awards other than Outstanding

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Stock Rights that remain unvested and (C) recover from you any shares of CBS Class B Common Stock, par value $0.001 per share, or other securities delivered upon exercise of any Outstanding Stock Rights or settlement of any other Outstanding Awards (the “Shares”), or, to the extent any such Shares are sold, any proceeds realized on the sale of the Shares, and the cash payment of related accrued dividends.

(iii) In the event of your death during the Extended Vesting Period, any Outstanding Awards that remain unvested as of the date of your death shall continue to vest in accordance with their established vesting schedules for the remainder of the Extended Vesting Period, and your designated beneficiary (or, if no beneficiary has been designated, your estate) shall be permitted to exercise any Outstanding Stock Rights that have vested and remain outstanding until their expiration date.

(h) Resignation from Official Positions. If your employment with CBS terminates for any reason, you shall automatically be deemed to have resigned at that time from any and all officer or director positions that you may have held with CBS, or any of CBS’s affiliated companies and all board seats or other positions in other entities you held on behalf of CBS, including any fiduciary positions (including as a trustee) you hold with respect to any employee benefit plans or trusts established by CBS. You agree that this Agreement shall serve as written notice of resignation in this circumstance. If, however, for any reason this paragraph 7(h) is deemed insufficient to effectuate such resignation, you agree to execute, upon the request of CBS or any of its affiliated companies, any documents or instruments which CBS may deem necessary or desirable to effectuate such resignation or resignations, and you hereby authorize the Secretary and any Assistant Secretary of CBS or any of CBS’s affiliated companies to execute any such documents or instruments as your attorney-in-fact.

(i) Termination of Benefits. Notwithstanding anything in this Agreement to the contrary (except as otherwise provided in paragraph 7(b)(ii)(C), 7(c)(ii)(C), 7(f)(ii), 7(f)(iii)(A), or 7(k)(ii)(C), as applicable, with respect to medical and dental benefits), participation in all CBS benefit plans and programs (including, without limitation, vacation accrual, all retirement and related excess plans and LTD) will terminate upon the termination of your employment except to the extent otherwise expressly provided in such plans or programs, and subject to any vested rights you may have under the terms of such plans or programs. The foregoing shall not apply to the LTIP and, after the termination of your employment, your rights under the LTIP shall be governed by the terms of the LTIP award agreements, certificates, the applicable LTIP plan(s) and this Agreement.

(j) Release; Compliance with Paragraph 6.

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(i) Notwithstanding any provision in this Agreement to the contrary, prior to payment by CBS of any amount or provision of any benefit pursuant to paragraph 7(b)(ii), 7(c)(ii), 7(f)(ii), 7(f)(iii)(A) or 7(k)(ii), or vesting of Outstanding Awards during the Extended Vesting Period under paragraph 7(g), as applicable, within sixty (60) days following your termination of employment, (x) you shall have executed and delivered to CBS a general release in a form satisfactory to CBS and (y) such general release shall have become effective and irrevocable in its entirety (such date, the “Release Effective Date”); provided, however, that if, at the time any cash severance payments are scheduled to be paid to you pursuant to paragraph 7(b)(ii), 7(c)(ii), 7(f)(ii), 7(f)(iii)(A) or 7(k)(ii), or any Outstanding Awards are scheduled to vest pursuant to paragraph 7(g), as applicable, you have not executed a general release that has become effective and irrevocable in its entirety, then any such cash severance payments shall be held and accumulated without interest, and shall be paid to you on the first Regular Payroll Date following the Release Effective Date and the vesting of any Outstanding Awards shall be suspended until the Release Effective Date. Your failure or refusal to sign and deliver the release or your revocation of an executed and delivered release in accordance with applicable laws, whether intentionally or unintentionally, will result in the forfeiture of the payments and benefits under paragraph 7(b)(ii), 7(c)(ii), 7(f)(ii), 7(f)(iii)(A) or 7(k)(ii), or vesting of Outstanding Awards under paragraph 7(g), as applicable. Notwithstanding the foregoing, if the sixty (60) day period does not begin and end in the same calendar year, then the Release Effective Date shall occur no earlier than January 1^st of the calendar year following the calendar year in which your termination occurs.

(ii) Notwithstanding any provision in this Agreement to the contrary, the payments and benefits described in paragraphs 7(b)(ii), 7(c)(ii), 7(f)(ii), 7(f)(iii)(A) and 7(k)(ii), and the continued vesting of Outstanding Awards described in paragraph 7(g), as applicable, shall immediately cease, and CBS shall have no further obligations to you with respect thereto, in the event that you materially breach any provision of paragraph 6 hereof.

(k) Payments in Connection with Certain Corporate Events.

(i) Definition. For purposes of this Agreement, a “Corporate Event” shall be deemed to occur upon the occurrence of any of the following events:

(A) consummation of a merger, consolidation or reorganization of CBS or any of its subsidiaries unless, immediately following such transaction, (I) all or substantially all the beneficial owners of CBS stock having general voting power immediately prior to such transaction directly or indirectly own

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more than fifty percent (50%) of the general voting power of the entity resulting from such transaction (the “Combined Company”) in substantially the same proportions as their beneficial ownership of such CBS stock immediately prior to the transaction (excluding any general voting power of the Combined Company that such beneficial owners directly or indirectly received as a result of their beneficial ownership of the other entity involved in the transaction), (II) no person or group directly or indirectly beneficially owns stock representing more than twenty percent (20%) of the general voting power of the Combined Company and (III) a majority of the independent directors of the Combined Company and a majority of the directors of the Combined Company, in each case, consist of individuals who were Original Independent Directors (as defined in clause (D) below) immediately prior to such transaction; or

(B) consummation of the sale or disposition of all or substantially all of the assets of CBS; or

(C) at any time after January 1, 2011, any “person” or “group” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder), directly or indirectly acquires or then beneficially owns (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) stock representing more than twenty percent (20%) of the general voting power of CBS at a time when the person who, on January 1, 2011, is the ultimate beneficial owner (within the meaning of Rule 13d-3(a)(1) under the Exchange Act) (the “Ultimate Voting Beneficial Owner”) of a majority of the general voting power of CBS no longer is the Ultimate Voting Beneficial Owner of a majority thereof; or

(D) a majority of the independent directors of the CBS Board of Directors (the “Board”) ceases to consist of Original Independent Directors. “Original Independent Directors” shall mean those individuals who, as of January 1, 2011, constitute the independent directors of the Board and those successor independent directors who are elected or appointed to the Board, either by a vote of the Board or by action of the shareholders of CBS pursuant to a recommendation by the Board, as a result of the death, voluntary retirement or resignation of an Original Independent Director (or any successor thereto pursuant to this proviso), including a voluntary determination by such Original

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Independent Director (or such successor) not to stand for re-election.

(ii) Termination Payments. In the event that (x) CBS terminates your employment without Cause (as defined in paragraph 7(a)(i)), whether during or after the Term; (y) you resign your employment with Good Reason (as defined in paragraph 7(c)(i)), whether during or after the Term; or (z) your employment ceases under circumstances described in paragraph 7(f)(ii) or 7(f)(iii), in each case during the twenty-four (24) month period following the date of a Corporate Event, you shall thereafter receive, less applicable withholding taxes, the Accrued Obligations, payable within thirty (30) days following your termination date, and subject to your compliance with paragraph 7(j) hereunder, the following payments and benefits:

(A) Pro-Rata Bonus: a Bonus for the calendar year in which your employment is terminated, such Bonus to be determined based on actual performance and consistent with senior executives who remain employed with CBS, and then prorated based on the number of calendar days of such year elapsed through the date your employment is terminated (the “Pro-Rata Bonus”), payable, less applicable deductions and withholding taxes, between January 1^st and March 15^th of the following calendar year;

(B) Enhanced Severance Amount: an amount equal to three (3) times the sum of (i) your Salary in effect at the time of your termination (or, if your Salary has been reduced in violation of this Agreement, your highest Salary during the Term) and (ii) the average of your actual annual Bonus awards for the three years immediately preceding the year in which your employment is terminated (the “Enhanced Severance Amount”). To the extent the Enhanced Severance Amount exceeds the sum of (x) the amount determined pursuant to paragraph 7(b)(ii)(A) or 7(c)(ii)(A), as applicable, and (y) the amount determined pursuant to paragraph 7(b)(ii)(B) or 7(c)(ii)(B), as applicable, such excess portion shall be paid in a lump sum within thirty (30) days following your termination date. The remaining portion of the Enhanced Severance Amount that is equal to the amount determined pursuant to paragraph 7(b)(ii)(A) or 7(c)(ii)(A), as applicable, shall be paid in accordance with the schedule described in paragraph 7(b)(ii)(A) and 7(c)(ii)(A), as applicable; and the remaining portion of the Enhanced Severance Amount that is equal to the amount determined pursuant to paragraph 7(b)(ii)(B) or 7(c)(ii)(B), as applicable, shall be paid in

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accordance with the schedule described in paragraph 7(b)(ii)(B) or 7(c)(ii)(B), as applicable; provided, however, that to the extent such remaining portions of the Enhanced Severance Amount do not constitute “deferred compensation” within the meaning of Code Section 409A, such portions shall also be paid in a lump sum within thirty (30) days following your termination date, with any remainder to be paid in accordance with the schedule described in paragraph 7(b)(ii)(A) or 7(b)(ii)(B), as applicable; provided, further, that if you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination and any portion of the Enhanced Severance Amount that would be paid to you during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall be paid to you in a lump sum on the Permissible Payment Date rather than as described above, and any remaining Enhanced Severance Amount shall be paid to you or your estate, as applicable, in accordance with the installment payment schedule set forth above on your Regular Payroll Dates commencing with the Regular Payroll Date that follows the Permissible Payment Date. Each payment pursuant to this paragraph 7(k)(ii)(B) shall be regarded as a separate payment and not one of a series of payments for purposes of Code Section 409A;

(C) Health Benefits: medical and dental insurance coverage for you and your eligible dependents at no cost to you (except as hereafter described) pursuant to the CBS benefit plans in which you participated in at the time of your termination of employment (or, if different, other benefit plans generally available to senior level executives) for a period of thirty-six (36) months following the termination date, or if earlier, the date on which you become eligible for medical or dental coverage as the case may be from a third party, which period of coverage shall be considered to run concurrently with the COBRA continuation period; provided, however, that during the period that CBS provides you with this coverage, the cost of such coverage will be treated as taxable income to you and CBS may withhold taxes from your compensation for this purpose; provided, further, that you may elect to continue your medical and dental insurance coverage under COBRA at your own expense for the balance, if any, of the period required by law;

(D) Life Insurance: life insurance coverage for thirty-

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six (36) months under CBS’s policy in effect on the date of termination in the amount then furnished to CBS employees at no cost (the amount of which coverage will be reduced to the amount of life insurance coverage furnished to you at no cost by a third party employer);

(E) Equity: the following with respect to awards granted to you under the LTIP (or any predecessor plan to the LTIP):

(I) All stock option awards (or portions thereof) that have not vested and become exercisable on the date of such termination shall accelerate and vest immediately on the Release Effective Date (as defined in paragraph 7(j) above), and will continue to be exercisable until their expiration date;

(II) All stock option awards (or portions thereof) that have previously vested and become exercisable by the date of such termination shall remain exercisable until their expiration date; and

(III) With respect to all awards of RSUs and other equity awards (or portions thereof) that have not vested on the date your employment is terminated, such awards shall accelerate and vest immediately on the Release Effective Date and be settled within ten (10) business days thereafter; provided, however, that with respect to any RSU and other equity awards that remain subject to performance-based vesting conditions on your termination date, in the event and limited to the extent that compliance with the performance-based compensation exception is required in order to ensure the deductibility of any such RSU or other equity award under Code Section 162(m), such award shall vest if and to the extent the Committee certifies that the performance goal relating to such award has been met, or, if later, the Release Effective Date, and shall be settled within ten (10) business days thereafter; provided, further, that with respect to any RSU and other equity awards that remain subject to performance-based vesting conditions on your termination date, in the event and to the extent that compliance with the performance-based compensation exception under Code Section 162(m) is not required in order to ensure the deductibility of any award, such award shall immediately vest (with an assumption that the performance goal was achieved at target level, if and to the extent applicable) on the Release Effective Date and be settled

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within ten (10) business days thereafter; provided, further, that to the extent any RSU awards and other equity awards other than stock options and stock appreciation rights (or portions thereof) granted prior to the Effective Date constitute “deferred compensation” within the meaning of Code Section 409A, then, subject to the requirement that settlement of such awards be delayed until the Permissible Payment Date, such awards shall immediately vest on the Release Effective Date, but settlement of such awards shall occur in accordance with the established vesting and settlement schedule for such awards as though their vesting were not accelerated pursuant to this clause (E)(III).

Notwithstanding the foregoing, to the extent that you are a “specified employee” (within the meaning of Code Section 409A and determined pursuant to procedures adopted by CBS) at the time of your termination and any portion of your RSU and other equity awards that would otherwise be settled during the six-month period following your termination of employment constitutes “deferred compensation” within the meaning of Code Section 409A, such portion shall instead be settled on the Permissible Payment Date; and

(F) Outplacement Services: CBS will make available to you, at its expense, executive level outplacement services with a leading national outplacement firm, with such outplacement services to be provided for a period of up to twelve (12) months following the date on which your employment is terminated. The outplacement program shall be designed and the outplacement firm selected by CBS. CBS will pay all expenses related to the provision of outplacement services directly to the outplacement firm by the end of the calendar year following the calendar year in which the outplacement services are provided.

(iii) No Mitigation. You shall not be required to mitigate the amount of any payment provided for in paragraph 7(k)(ii) by seeking other employment. The payments provided for in paragraph 7(k)(ii) are in lieu of any other severance or income continuation or protection in this Agreement or in any CBS plan, program or agreement that may now or hereafter exist.

(iv) Death. If you die prior to payment of any amount or benefit described in paragraph 7(k)(ii)(A), (B), (C) or (E) that would have been paid to you had you continued to live, all such amounts and benefits shall be paid, less applicable deductions and withholding taxes, to your beneficiary (or, if no beneficiary has been designated, your estate) in accordance with the

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applicable payment schedule.

(v) Survival of Provisions. The provisions of this paragraph 7(k) (and any other provision in this Agreement which relates to or is necessary for the enforcement of the parties’ rights under this paragraph 7(k)) shall survive the expiration of the Term of this Agreement. For avoidance of doubt, the provisions of paragraphs 6(a) and 6(c) shall apply so long as any payments are due to you pursuant to this paragraph 7(k), even if your termination date occurs following expiration of the Term of this Agreement.

8. No Acceptance of Payments. You represent that you have not accepted or given nor will you accept or give, directly or indirectly, any money, services or other valuable consideration from or to anyone other than CBS for the inclusion of any matter as part of any film, television program or other production produced, distributed and/or developed by CBS, or any of CBS’s affiliated companies.

9. Equal Opportunity Employer; Employee Statement of Business Conduct. You recognize that CBS is an equal opportunity employer. You agree that you will comply with CBS policies regarding employment practices and with applicable federal, state and local laws prohibiting discrimination on the basis of race, color, sex, religion, national origin, citizenship, age, marital status, sexual orientation, disability or veteran status. In addition, you agree that you will comply with the CBS Business Conduct Statement.

10. Notices. All notices under this Agreement must be given in writing, by personal delivery or by registered mail, at the parties’ respective addresses shown on this Agreement (or any other address designated in writing by either party), with a copy, in the case of CBS, to the attention of the Executive Vice President, General Counsel, CBS. Any notice given by registered mail shall be deemed to have been given three days following such mailing.

11. Assignment. This is an Agreement for the performance of personal services by you and may not be assigned by you or CBS except that CBS may assign this Agreement to any affiliated company of or any successor in interest to CBS.

12. New York Law, Etc. You acknowledge that this Agreement has been executed, in whole or in part, in New York, and your employment duties are primarily performed in New York. Accordingly, you agree that this Agreement and all matters or issues arising out of or relating to your CBS employment shall be governed by the laws of the State of New York applicable to contracts entered into and performed entirely therein.

13. No Implied Contract. Nothing contained in this Agreement shall be construed to impose any obligation on CBS or you to renew this Agreement or any

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portion thereof. The parties intend to be bound only upon execution of a written agreement and no negotiation, exchange of draft or partial performance shall be deemed to imply an agreement. Neither the continuation of employment nor any other conduct shall be deemed to imply a continuing agreement upon the expiration of the Term.

14. Void Provisions. If any provision of this Agreement, as applied to either party or to any circumstances, shall be found by a court of competent jurisdiction to be unenforceable but would be enforceable if some part were deleted or the period or area of application were reduced, then such provision shall apply with the modification necessary to make it enforceable, and shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement.

15. Entire Understanding; Supersedes Prior Agreements. This Agreement contains the entire understanding of the parties hereto as of the time on the Effective Date that the Agreement is signed by both parties relating to the subject matter contained in this Agreement, and can be changed only by a writing signed by both parties. This Agreement supersedes all prior agreements relating to your employment by CBS or any of CBS’s affiliated companies relating to the subject matter herein, including, without limitation, your prior employment agreement with CBS dated as of June 7, 2013 and subsequently amended as of February 6, 2015 (the “Prior Agreement”); provided, however, that no provision in this Agreement shall be construed to adversely affect any of your rights accrued under the Prior Agreement.

16. Payment of Deferred Compensation – Section 409A.

(a) To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with Code Section 409A. This Agreement shall be construed in a manner to give effect to such intention. In no event whatsoever (including, but not limited to as a result of this paragraph 16 or otherwise) shall CBS or any of its affiliates be liable for any tax, interest or penalties that may be imposed on you under Code Section 409A. Neither CBS nor any of its affiliates have any obligation to indemnify or otherwise hold you harmless from any or all such taxes, interest or penalties, or liability for any damages related thereto. You acknowledge that you have been advised to obtain independent legal, tax or other counsel in connection with Code Section 409A.

(b) Your right to any in-kind benefit or reimbursement benefits pursuant to any provisions of this Agreement or pursuant to any plan or arrangement of CBS covered by this Agreement shall not be subject to liquidation or exchange for cash or another benefit.

17. Arbitration. If any disagreement or dispute whatsoever shall arise between the parties concerning, arising out of or relating to this Agreement (including the documents referenced herein) or your employment with CBS, the parties hereto

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agree that such disagreement or dispute shall be submitted to binding arbitration before the American Arbitration Association (the “AAA”), and that a neutral arbitrator will be selected in a manner consistent with its Employment Arbitration Rules and Mediation Procedures (the “Rules”). Such arbitration shall be confidential and private and conducted in accordance with the Rules. Any such arbitration proceeding shall take place in New York City before a single arbitrator (rather than a panel of arbitrators). The parties agree that the arbitrator shall have no authority to award any punitive or exemplary damages and waive, to the full extent permitted by law, any right to recover such damages in such arbitration. Each party shall bear its respective costs (including attorney’s fees, and there shall be no award of attorney’s fees), provided that if you are the prevailing party (as determined by the arbitrator in his or her sole discretion) in a dispute concerning the enforcement of the provisions of this Agreement in relation to paragraph 7(k), you shall be entitled to recover all of your costs (including attorney’s fees) reasonably incurred in connection with such dispute. Following the arbitrator’s issuance of a final non-appealable award setting forth that you are the prevailing party, CBS shall reimburse you for such costs within thirty (30) days following its receipt of reasonable written evidence substantiating such costs, provided that in no event will payment be made to you later than the last day of the calendar year next following the calendar year in which the award is issued. If there is a dispute regarding the reasonableness of the costs you incur, the same arbitrator shall determine, in his or her sole discretion, the costs that shall be reimbursed to you by CBS. Judgment upon the final award(s) rendered by such arbitrator, after giving effect to the AAA internal appeals process, may be entered in any court having jurisdiction thereof. Notwithstanding anything herein to the contrary, CBS shall be entitled to seek injunctive, provisional and equitable relief in a court proceeding as a result of your alleged violation of the terms of Section 6 of this Agreement, and you hereby consent and agree to exclusive personal jurisdiction in any state or federal court located in the City of New York, Borough of Manhattan.

18. Limitation on Payments.

(a) In the event that the payments and benefits provided for in this Agreement or other payments and benefits payable or provided to you (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this paragraph 18, would be subject to the excise tax imposed by Section 4999 of the Code, then your payments and benefits under this Agreement or other payments or benefits (the “280G Amounts”) will be either:

(i) delivered in full; or

(ii) delivered as to such lesser extent that would result in no portion of the 280G Amounts being subject to the excise tax under Section 4999 of the Code;

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whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by you on an after-tax basis of the greatest amount of 280G Amounts, notwithstanding that all or some portion of the 280G Amounts may be taxable under Section 4999 of the Code.

(b) In the event that a reduction of 280G Amounts is made in accordance with this paragraph 18, the reduction will occur, with respect to the 280G Amounts considered parachute payments within the meaning of Section 280G of the Code, in the following order:

(i) reduction of the accelerated vesting of any stock options for which the exercise price exceeds the then current fair market value;

(ii) reduction of cash payments in reverse chronological order (i.e., the cash payment owed on the latest date following the occurrence of the event triggering the excise tax will be the first cash payment to be reduced);

(iii) cancellation of equity awards other than those described in clause (i) above that were granted “contingent on a change in ownership or control” within the meaning of Code Section 280G, in the reverse order of date of grant of the awards (i.e., the most recently granted equity awards will be cancelled first);

(iv) reduction of the accelerated vesting of equity awards other than those described in clause (i) above in the reverse order of date of grant of the awards (i.e., the vesting of the most recently granted equity awards will be cancelled first); and

(v) reduction of employee benefits in reverse chronological order (i.e., the benefit owed on the latest date following the occurrence of the event triggering the excise tax will be the first benefit to be reduced).

In no event will you have any discretion with respect to the ordering of payment reductions.

(c) Unless you and CBS otherwise agree in writing, any determination required under this paragraph 18 will be made in writing by a nationally recognized accounting or valuation firm (the “Firm”) selected by CBS, whose

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determination will be conclusive and binding upon you and CBS for all purposes. For purposes of making the calculations required by this paragraph 18, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. CBS and you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this paragraph 18. CBS will bear all costs for payment of the Firm’s services in connection with any calculations contemplated by this paragraph 18.

19. Counterparts. This Agreement may be executed in one or more counterparts, including by facsimile, and all of the counterparts shall constitute one fully executed agreement. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

[signature page to follow]

If the foregoing correctly sets forth our understanding, please sign, date and return all four (4) copies of this Agreement to the undersigned for execution on behalf of CBS; after this Agreement has been executed by CBS and a fully-executed copy returned to you, it shall constitute a binding agreement between us.



	Very truly yours,

	CBS CORPORATION



	By:	/s/ Leslie Moonves
		Name:	Leslie Moonves
		Title:	Chairman of the Board, President and
			Chief Executive Officer



ACCEPTED AND AGREED:


/s/ Anthony G. Ambrosio
Anthony G. Ambrosio

Dated: 5 October 2016

Exhibit 12

CBS CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Tabular dollars in millions, except ratios)



	Nine Months Ended						Twelve Months Ended
	September 30,						December 31,
	2016			2015			2015			2014			2013			2012			2011
Earnings from continuing operations before income taxes and equity in loss of investee companies	$	2,065		$	1,766		$	2,023		$	2,164		$	2,665		$	2,357		$	1,983
Add:
Distributions from investee companies	5			2			3			9			8			11			6
Interest expense, net of capitalized interest	304			289			392			363			375			401			433
1/3 of rental expense	51			53			70			69			70			68			68
Total earnings from continuing operations	$	2,425		$	2,110		$	2,488		$	2,605		$	3,118		$	2,837		$	2,490

Fixed charges:
Interest expense, net of capitalized interest	$	304		$	289		$	392		$	363		$	375		$	401		$	433
1/3 of rental expense	51			53			70			69			70			68			68
Total fixed charges	$	355		$	342		$	462		$	432		$	445		$	469		$	501
Ratio of earnings to fixed charges	6.8		x	6.2		x	5.4		x	6.0		x	7.0		x	6.0		x	5.0		x

Exhibit 31(a)

CERTIFICATION

I, Leslie Moonves, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of CBS Corporation;


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 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.

Date: November 3, 2016



	/s/ Leslie Moonves
	Leslie Moonves
	Chairman of the Board, President and Chief Executive Officer

Exhibit 31(b)

CERTIFICATION

I, Joseph R. Ianniello, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of CBS Corporation;


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 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.

Date: November 3, 2016



	/s/ Joseph R. Ianniello
	Joseph R. Ianniello
	Chief Operating Officer

Exhibit 32(a)

Certification Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of CBS Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Leslie Moonves, Chairman of the Board, President and Chief Executive Officer of the Company, certify that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Leslie Moonves
Leslie Moonves
November 3, 2016

Exhibit 32(b)

Certification Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of CBS Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission (the ”Report”), I, Joseph R. Ianniello, Chief Operating Officer of the Company, certify that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Joseph R. Ianniello
Joseph R. Ianniello
November 3, 2016

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