Form 10-Q CBS CORP For: Sep 30

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November 5, 2014 4:08 PM EST

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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, 2014



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, 2014:

Class�A Common Stock, par value $.001 per share37,849,903

Class�B Common Stock, par value $.001 per share480,424,203

�

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, 2014 and September 30, 2013	3
�	�	�
�	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2014 and September 30, 2013	4
�	�	�
�	Consolidated Balance Sheets (Unaudited) at September 30, 2014 and December 31, 2013	5
�	�	�
�	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2014 and September 30, 2013	6
�	�	�
�	Notes to Consolidated Financial Statements (Unaudited)	7
�	�	�
Item�2.	Management's Discussion and Analysis of Results of Operations and Financial Condition.	33
�	�	�
Item�3.	Quantitative and Qualitative Disclosures About Market Risk.	55
�	�	�
Item�4.	Controls and Procedures.	55
�	�	�
�	PART II OTHER INFORMATION	�
�	�	�
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,
�	2014			�	2013			�	2014			�	2013
Revenues	$	3,367		�	$	3,302		�	$	10,125		�	$	10,434
Expenses:	�			�	�			�	�			�	�
Operating	1,936			�	1,801			�	5,855			�	6,002
Selling, general and administrative	617			�	667			�	1,793			�	1,905
Restructuring charges (Note 12)	26			�				�	26			�
Impairment charge (Note 5)	52			�				�	52			�
Depreciation and amortization	68			�	70			�	210			�	217
Total expenses	2,699			�	2,538			�	7,936			�	8,124
Operating income	668			�	764			�	2,189			�	2,310
Interest expense	(89		)	�	(93		)	�	(276		)	�	(281		)
Interest income	4			�	2			�	10			�	6
Loss on early extinguishment of debt (Note 7)	(352		)	�				�	(352		)	�
Other items, net	(21		)	�	6			�	(10		)	�	(2		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	210			�	679			�	1,561			�	2,033
Provision for income taxes	(110		)	�	(226		)	�	(561		)	�	(678		)
Equity in loss of investee companies, net of tax	(28		)	�	(22		)	�	(48		)	�	(39		)
Net earnings from continuing operations	72			�	431			�	952			�	1,316
Net�earnings�from�discontinued�operations, net�of�tax�(Note�3)	1,567			�	63			�	1,594			�	93
Net earnings	$	1,639		�	$	494		�	$	2,546		�	$	1,409
�	�			�	�			�	�			�	�
Basic net earnings per common share:	�			�	�			�	�			�	�
Net earnings from continuing operations	$	.14			$	.71			$	1.69			$	2.15
Net earnings from discontinued operations	$	2.95			$	.10			$	2.84			$	.15
Net earnings	$	3.08			$	.82			$	4.53			$	2.31
�	�			�	�			�	�			�	�
Diluted net earnings per common share:	�			�	�			�	�			�	�
Net earnings from continuing operations	$	.13			$	.70			$	1.66			$	2.10
Net earnings from discontinued operations	$	2.90			$	.10			$	2.78			$	.15
Net earnings	$	3.03			$	.80			$	4.44			$	2.25
�	�			�	�			�	�			�	�
Weighted average number of common shares outstanding:	�			�	�			�	�			�	�
Basic	532			�	603			�	562			�	611
Diluted	541				618				574				627
�	�			�	�			�	�			�	�
Dividends per common share	$	.15		�	$	.12		�	$	.39		�	$	.36

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,
�	2014			�	2013			�	2014			�	2013
Net earnings	$	1,639		�	$	494		�	$	2,546		�	$	1,409
Other comprehensive income from continuing operations, net of tax:	�			�	�			�	�			�	�
Cumulative translation adjustments				�	5			�	(7		)	�	5
Amortization of net actuarial loss	6			�	10			�	20			�	32
Changes in fair value of cash flow hedges				�	1			�				�
Unrealized gains on securities				�				�				�	1
Other comprehensive income from continuing operations, net of tax	6			�	16			�	13			�	38
Other comprehensive income (loss) from discontinued operations, net of tax				�	4			�	15			�	(14		)
Reclassification from accumulated other comprehensive income (loss) from discontinued operations to net earnings	(30		)	�	(178		)	�	(30		)		(178		)
Total other comprehensive loss, net of tax	(24		)	�	(158		)	�	(2		)	�	(154		)
Total comprehensive income	$	1,615			$	336			$	2,544			$	1,255

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, 2014					�	December 31, 2013
ASSETS	�	�			�	�	�	�			�
Current Assets:	�	�			�	�	�	�			�
Cash and cash equivalents	�	$	178		�	�	�	$	368		�
Receivables, less allowances of $54 (2014) and $60 (2013)	�	3,378			�	�	�	3,234			�
Programming and other inventory (Note 4)	�	1,136			�	�	�	772			�
Deferred income tax assets, net	�	155			�	�	�	152			�
Prepaid income taxes	�	83			�	�	�				�
Prepaid expenses	�	146			�	�	�	109			�
Other current assets	�	328			�	�	�	384			�
Current assets of discontinued operations (Note 3)	�				�	�	�	351			�
Total current assets	�	5,404			�	�	�	5,370			�
Property and equipment	�	3,125			�	�	�	3,060			�
Less accumulated depreciation and amortization	�	1,731			�	�	�	1,599			�
Net property and equipment	�	1,394			�	�	�	1,461			�
Programming and other inventory (Note 4)	�	1,621			�	�	�	1,697			�
Goodwill (Note 5)	�	6,609			�	�	�	6,588			�
Intangible assets	�	5,848			�	�	�	5,870			�
Other assets	�	2,262			�	�	�	1,963			�
Assets held for sale (Note 5)	�	262			�	�	�	314			�
Assets of discontinued operations (Note 3)	�	55			�	�	�	3,124			�
Total Assets	�	$	23,455					$	26,387		�
�	�	�			�	�	�	�			�
LIABILITIES AND STOCKHOLDERS' EQUITY	�				�	�	�				�
Current Liabilities:	�				�	�	�				�
Accounts payable	�	$	196		�	�	�	$	286		�
Accrued compensation	�	263			�	�	�	376			�
Participants' share and royalties payable	�	914			�	�	�	1,008			�
Program rights	�	317			�	�	�	398			�
Deferred revenues	�	161			�	�	�	269			�
Income taxes payable	�				�	�	�	54			�
Commercial paper (Note 7)	�	431			�	�	�	475			�
Current portion of long-term debt (Note 7)	�	20			�	�	�	20			�
Accrued expenses and other current liabilities	�	1,058			�	�	�	1,067			�
Current liabilities of discontinued operations (Note 3)	�	37			�	�	�	254			�
Total current liabilities	�	3,397			�	�	�	4,207			�
Long-term debt (Note 7)	�	6,508			�	�	�	5,940			�
Pension and postretirement benefit obligations	�	1,272			�	�	�	1,327			�
Deferred income tax liabilities, net	�	1,489			�	�	�	1,314			�
Other liabilities	�	3,125			�	�	�	3,156			�
Liabilities of discontinued operations (Note 3)	�	138			�	�	�	477			�
�	�				�	�	�				�
Commitments and contingencies (Note 11)	�				�	�	�				�
�	�				�	�	�				�
Stockholders' Equity:	�				�	�	�				�
Class A Common stock, par value $.001 per share; 375 shares authorized; �38 (2014) and 39 (2013) shares issued	�				�	�	�				�
Class B Common stock, par value $.001 per share; 5,000 shares authorized; �816 (2014) and 801 (2013) shares issued	�	1			�	�	�	1			�
Additional paid-in capital	�	44,022			�	�	�	43,474			�
Accumulated deficit	�	(22,344		)	�	�	�	(24,890		)	�
Accumulated other comprehensive loss (Note�9)	�	(547		)	�	�	�	(545		)	�
�	�	21,132			�	�	�	18,040			�
Less treasury stock, at cost; 334 (2014) and 244 (2013) Class B shares	�	13,606			�	�	�	8,074			�
Total Stockholders' Equity	�	7,526			�	�	�	9,966			�
Total Liabilities and Stockholders' Equity	�	$	23,455		�	�	�	$	26,387		�

See notes to consolidated financial statements.

- 5-

CBS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)



�	Nine Months Ended
�	September 30,
�	2014			�	2013
Operating Activities:	�			�	�
Net earnings	$	2,546		�	$	1,409
Less: Net earnings from discontinued operations	1,594			�	93
Net earnings from continuing operations	952				1,316
Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:
Depreciation and amortization	210				217
Impairment charge	52			�
Stock-based compensation	117				163
Equity in loss of investee companies, net of tax and distributions	56				44
Change in assets and liabilities, net of investing and financing activities	(1,151		)		(341		)
Net cash flow provided by operating activities from continuing operations	236				1,399
Net cash flow provided by (used for) operating activities from discontinued operations	52				(79		)
Net cash flow provided by operating activities	288				1,320
Investing Activities:
Acquisitions, net of cash acquired	(27		)		(20		)
Capital expenditures	(112		)		(112		)
Investments in and advances to investee companies	(68		)		(144		)
Proceeds from sale of investments	3				20
Proceeds from dispositions	7				185
Net cash flow used for investing activities from continuing operations	(197		)		(71		)
Net cash flow used for investing activities from discontinued operations	(271		)		(45		)
Net cash flow used for investing activities	(468		)		(116		)
Financing Activities:
(Repayments of) proceeds from short-term debt borrowings, net	(44		)		341
Proceeds from issuance of notes	1,729			�
Repayment of notes and debentures	(1,152		)
Payment of capital lease obligations	(13		)		(13		)
Payment of contingent consideration					(30		)
Dividends	(214		)		(228		)
Purchase of Company common stock	(2,830		)		(1,864		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(146		)		(142		)
Proceeds from exercise of stock options	237				121
Excess tax benefit from stock-based compensation	227				128
Other financing activities					(4		)
Net cash flow used for financing activities from continuing operations	(2,206		)		(1,691		)
Net cash flow provided by financing activities from discontinued operations	2,167				5
Net cash flow used for financing activities	(39		)		(1,686		)
Net decrease in cash and cash equivalents	(219		)		(482		)
Cash and cash equivalents at beginning of period (includes $29 (2014) and $21(2013) of discontinued operations cash)	397				708
Cash and cash equivalents at end of period (includes $24 (2013) of discontinued operations cash)	$	178			$	226
Supplemental disclosure of cash flow information
Cash paid for interest from continuing operations, including early redemption premiums	$	661		�	$	283
Cash paid for income taxes from continuing operations	$	227		�	$	196
Noncash proceeds from split-off (Note 3)	$	2,721		�	$
Equipment acquired under capital leases	$	1		�	$	58

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 and CBS Global Distribution Group; CBS Interactive and CBS Films), Cable Networks (Showtime Networks, CBS Sports Network and Smithsonian Networks), Publishing (Simon�& Schuster) and Local Broadcasting (CBS Television Stations and CBS Radio). On April 2, 2014, CBS Outdoor Americas Inc. (Outdoor Americas), which had been a subsidiary of the Company, completed an initial public offering (IPO) through which it sold 23.0 million shares, or approximately 19%, of its common stock. On July 16, 2014, the Company completed the split-off of Outdoor Americas through which the Company accepted 44.7 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97.0 million shares, or approximately 81%, of Outdoor Americas common stock that it owned (the "Split-Off"). During 2013, the Company completed the sale of its outdoor advertising business in Europe (Outdoor Europe). Outdoor Americas and Outdoor Europe have been presented as discontinued operations in the Companys consolidated financial statements.

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 Companys Form 8-K filed on August 8, 2014, which recasts the financial information in the Company's Annual Report on Form�10-K for the year ended December�31, 2013 to present Outdoor Americas as a discontinued operation.

In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting 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 Companys financial statements in conformity with accounting principles generally accepted in the United States (GAAP) 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.

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 assumed exercise of stock options and vesting of restricted stock units (RSUs) and market-based performance share units (PSUs) only in the periods in which such effect would have been dilutive. For each of the three and nine months ended September 30, 2014 and 2013, stock options to purchase 2 million shares of Class B Common Stock were outstanding but excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive.

- 7-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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)	2014	�	2013	�	2014	�	2013
Weighted average shares for basic EPS	532	�	603	�	562	�	611
Dilutive effect of shares issuable under stock-based compensation�plans	9	�	15	�	12	�	16
Weighted average shares for diluted EPS	541	�	618	�	574	�	627

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, 2014 and 2013, 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

Presentation of Reserves for Uncertain Tax Positions when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists

During the first quarter of 2014, the Company adopted Financial Accounting Standards Board (FASB) guidance on the presentation of the reserve for uncertain tax positions when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires the reserve for uncertain tax positions to be presented in the financial statements as a reduction to the deferred tax asset for a tax loss or other tax carryforward that would be applied in the settlement of the uncertain tax position. The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.

Obligations Resulting from Joint and Several Liability Arrangements

During the first quarter of 2014, the Company adopted FASB guidance on the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. Under this guidance, the Company is required to measure its obligations under such arrangements as the sum of the amount it agreed to pay in the arrangement among its co-obligors and any additional amount the Company expects to pay on behalf of its co-obligors. The Company is also required to disclose the nature and amount of the obligation. The adoption of this guidance did not have an effect on the Company's consolidated financial statements.

Recent Pronouncements

Disclosure of Uncertainties about an Entitys 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 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.

- 8-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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.

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

In June 2014, the FASB issued 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. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This guidance, which is effective for interim and annual periods beginning after December 15, 2015, is not expected to have a material impact on the Companys 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 is currently evaluating the impact of this guidance, which is effective for interim and annual reporting periods beginning after December 15, 2016 with early adoption not permitted.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

In April 2014, the FASB issued amended guidance which changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations and disposals of components of an entity that do not qualify for discontinued operations reporting. Under this guidance, only a disposal of a component of an entity or a group of components of an entity that represent a strategic shift that has (or will have) a major effect on the companys operations and financial results should be reported in discontinued operations. The guidance also expands the definition of a discontinued operation to include a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held for sale and disposals of equity method investments that meet the definition of discontinued operations. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2014. Early adoption is permitted for disposals that have not been reported in financial statements previously issued or available for issuance.

2) STOCK-BASED COMPENSATION

The following table summarizes the Company's stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013.



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
RSUs and PSUs	$	33		�	$	34		�	$	102		�	$	97
Stock options and equivalents				�	23			�	15			�	66
Stock-based�compensation�expense,�before�income�taxes	33			�	57			�	117			�	163
Related tax benefit	(12		)	�	(22		)	�	(45		)	�	(63		)
Stock-based compensation expense, net of tax benefit	$	21		�	$	35		�	$	72		�	$	100

- 9-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Included in net earnings from discontinued operations is stock-based compensation expense of $5 million for the nine months ended September�30, 2014, and $10 million and $14 million for the three and nine months ended September�30, 2013, respectively.

During the nine months ended September�30, 2014, the Company granted 2 million RSUs for CBS Corp. Class B common stock with a weighted average per unit grant date fair value of $65.13. RSU grants during the first nine months of 2014 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 goals. Compensation expense is recorded based on the probable outcome of the performance conditions. During the nine months ended September�30, 2014, the Company also granted 2 million stock options with a weighted average exercise price of $65.91. Stock option grants during the first nine months of 2014 generally 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, 2014 was $221 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, 2014 was $64 million, which is expected to be recognized over a weighted average period of 2.5 years.

3) DISCONTINUED OPERATIONS

In connection with the Company's plan to dispose of Outdoor Americas, in January 2014 Outdoor Americas borrowed $1.60 billion. On April 2, 2014, Outdoor Americas completed an IPO through which it sold 23.0 million shares, or approximately 19%, of its common stock for $28.00 per share. Proceeds from the IPO aggregated $615 million, net of underwriting discounts and commissions. The Company received $2.04 billion of the combined IPO and debt proceeds from Outdoor Americas.

Upon completion of the IPO, the Company owned 97.0 million shares, or approximately 81% of Outdoor Americas. On July 16, 2014, the Company completed the disposition of its 81% ownership of Outdoor Americas common stock through the tax-free Split-Off. In connection with the Split-Off, the Company accepted 44.7 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97.0 million shares of Outdoor Americas common stock that it owned. As a result, Outdoor Americas has been presented as a discontinued operation in the Companys consolidated financial statements for all periods presented. This transaction resulted in a gain of $1.56 billion for the three and nine months ended September�30, 2014 which is calculated as follows:



Fair value of CBS Corp. Class B Common Stock accepted	�	$	2,721
(44,723,131 shares at $60.85 per share on July 16, 2014)	�	�
Carrying value of Outdoor Americas	�	(1,162		)
Accumulated other comprehensive income	�	30
Transaction costs	�	(32		)
Net gain on split-off of Outdoor Americas	�	$	1,557

- 10-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The Split-Off is accounted for as a tax-free transaction and therefore, there is no tax impact on the gain. In aggregate, the Company received $4.76 billion from the disposition of Outdoor Americas, including proceeds from Outdoor Americas' IPO and debt borrowings and shares received in the Split-Off.

The following table sets forth details of the net earnings from discontinued operations. For 2013, net earnings from discontinued operations also included the operating results and gain on the disposal of Outdoor Europe during September 2013. Included in the loss from discontinued operations for the three and nine months ended September�30, 2013 is an after-tax charge of $110 million related to Outdoor Europe. This charge was associated with exiting an unprofitable contractual arrangement and the estimated fair value of guarantees, which historically were intercompany but upon the closing of the transaction became third-party guarantees (See Note 11).



	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2014			2013				2014				2013
Revenues from discontinued operations	$	55		$	477			$	677			$	1,351
Earnings (loss) from discontinued operations	$	5		$	(128	)		$	59			$	(83	)
Income tax benefit (provision)	5			44				(17		)		29
Earnings (loss) from discontinued operations, net of tax	10			(84		)		42				(54		)
Gain on disposal	1,557		�	149			�	1,557			�	149
Income tax provision			�	(2		)	�				�	(2		)
Gain on disposal, net of tax	1,557		�	147			�	1,557			�	147
Less: Net earnings from discontinued operations attributable to noncontrolling interest, net of tax								5
Net earnings from discontinued operations attributable to CBS Corp.	$	1,567		$	63			$	1,594			$	93

The following table presents the major classes of assets and liabilities of the Company's discontinued operations.



�	At				�	At
�	September 30, 2014				�	December�31, 2013
Current assets	�	$		�	�	�	$	351	�
Goodwill	�			�	�	�	1,866		�
Intangible assets	�			�	�	�	366		�
Net property and equipment	�			�	�	�	763		�
Other assets	�	55		�	�	�	129		�
Total Assets	�	$	55	�	�	�	$	3,475	�
Current liabilities	�	$	37	�	�	�	$	254	�
Other liabilities	�	138		�	�	�	477		�
Total Liabilities	�	$	175	�	�	�	$	731	�

Other liabilities of discontinued operations of $138 million and $477 million at September�30, 2014 and December�31, 2013, respectively, primarily include tax reserves related to previously disposed businesses and the estimated fair value of guarantee liabilities of approximately $40 million associated with the disposition of Outdoor Europe. At December�31, 2013, other liabilities of discontinued operations also included deferred tax liabilities related to Outdoor Americas.

- 11-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

4) PROGRAMMING AND OTHER INVENTORY



�	At				�	At
�	September 30, 2014				�	December 31, 2013
Program rights	�	$	1,648	�	�	�	$	1,331	�
Television programming:	�	�		�	�	�	�		�
Released (including acquired libraries)	�	700		�	�	�	878		�
In process and other	�	293		�	�	�	139		�
Theatrical programming:	�	�		�	�	�	�		�
Released	�	27		�	�	�	38		�
In process and other	�	31		�	�	�	32		�
Publishing, primarily finished goods	�	58		�	�	�	51		�
Total programming and other inventory	�	2,757		�	�	�	2,469		�
Less current portion	�	1,136		�	�	�	772		�
Total�noncurrent�programming�and�other�inventory	�	$	1,621	�	�	�	$	1,697	�

5) IMPAIRMENT CHARGE

On October 2, 2014, the Company announced that it entered into an agreement with Beasley Broadcast Group, Inc. to swap 13 of the Company's mid-size market radio stations in Tampa and Charlotte, as well as one radio station in Philadelphia, for two radio stations in Philadelphia, and three radio stations in Miami. This transaction is subject to customary closing conditions. The assets associated with these radio stations, primarily consisting of goodwill and other intangible assets, have been classified as held for sale on the Company's Consolidated Balance Sheets. During the third quarter of 2014, in connection with the swap, the Company recorded a pre-tax noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill.

6) 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 Executive Chairman of the Board of Directors and founder of both CBS Corp. and Viacom�Inc. In addition, Ms.�Shari Redstone, Mr.�Sumner M. Redstones daughter, is the president and a director of NAI and the vice chair of the Board of Directors of both CBS Corp. and Viacom�Inc. Mr.�David R. Andelman is a director of CBS Corp. and serves as a director of NAI. Mr.�Frederic V. Salerno is a director of CBS Corp. and serves as a director of Viacom�Inc. At September�30, 2014, NAI directly or indirectly owned approximately 79.6% of CBS Corp.s voting Class A Common Stock, and owned approximately 7.6% of CBS Corp.s Class�A Common Stock and non-voting Class�B Common Stock on a combined basis.

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 Companys television programs in the home entertainment market. The Companys total revenues from these transactions were $54 million and $42 million for the three months ended September 30, 2014 and 2013, respectively, and $150 million and $168 million for the nine months ended September 30, 2014 and 2013, 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 and $7 million for the three months ended September 30, 2014 and 2013, and $14 million and $17 million for the nine months ended September 30, 2014 and 2013, respectively.

- 12-

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 Companys Consolidated Balance Sheets. Amounts due to Viacom Inc. were minimal at September�30, 2014 and December�31, 2013.



�	At				�	At
�	September�30, 2014				�	December�31, 2013
Receivables	�	$	95	�	�	�	$	84	�
Other assets (Receivables, noncurrent)	�	88		�	�	�	115		�
Total amounts due from Viacom Inc.	�	$	183	�	�	�	$	199	�

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 $18 million for each of the three months ended September 30, 2014 and 2013 and $81 million and $79 million for the nine months ended September 30, 2014 and 2013, 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.

7) BANK FINANCING AND DEBT

The following table sets forth the Companys debt.



	At			�	At
	September�30, 2014			�	December�31, 2013
Commercial paper		$	431			$	475
Senior debt (1.95% - 8.875% due 2014 - 2044) ^(a)		6,427				5,848
Obligations under capital leases		101				112
Total debt		6,959				6,435
Less commercial paper		431				475
Less current portion of long-term debt		20				20
Total long-term debt, net of current portion		$	6,508			$	5,940

(a) At September�30, 2014 and December�31, 2013, the senior debt balances included (i) a net unamortized discount of $22 million and $13 million, respectively, and (ii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $15 million and $18 million, respectively. The balance at September�30, 2014, also included a decrease in the carrying value of the debt relating to outstanding fair value hedges of $6 million. The face value of the Companys senior debt was $6.44 billion and $5.84 billion at September�30, 2014 and December�31, 2013, respectively.

- 13-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

For the nine months ended September�30, 2014, debt issuances, redemptions and repurchases were as follows:



Debt Issuances
�	August 2014, $600 million 2.30% senior notes due 2019
�	August 2014, $600 million 3.70% senior notes due 2024
�	August 2014, $550 million 4.90% senior notes due 2044
�	�
Debt Redemptions
�	$99 million 8.875% notes due 2014
�	$264 million 8.875% senior notes due 2019
�	�
Debt Repurchases
�	$336 million 8.875% senior notes due 2019, through a tender offer
�	$37 million 7.875% debentures due 2023, through a tender offer
�	$6 million 7.125% senior notes due 2023, through a tender offer
�	$423 million 7.875% senior debentures due 2030, through a tender offer

The debt repurchases and early debt redemption resulted in a pre-tax loss on early extinguishment of debt of $352 million ($219 million, net of tax) for the three and nine months ended September�30, 2014.

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.0 billion commercial paper program of $431 million at September�30, 2014 and $475 million at December�31, 2013, each at a weighted average interest rate of 0.3% and with maturities of less than thirty days.

Credit Facility

At September�30, 2014, the Company had a $2.0 billion revolving credit facility (the Credit Facility) which expires in March 2018. 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, 2014, the Companys Consolidated Leverage Ratio was approximately 2.0x.

The Consolidated Leverage Ratio is the ratio of the Companys indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Companys 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, 2014, 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 $1.99 billion.

- 14-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

8) 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,	2014			�	2013			�	2014		�	2013
Components of net periodic cost:	�			�	�			�	�		�	�
Service cost	$	8		�	$	8		�	$		�	$
Interest cost	60			�	54			�	6		�	6
Expected return on plan assets	(65		)	�	(69		)	�			�
Amortization of actuarial loss (gain)�^(a)	16			�	21			�	(6	)	�	(4		)
Net periodic cost	$	19		�	$	14		�	$		�	$	2



�	Pension Benefits							�	Postretirement Benefits
Nine Months Ended September 30,	2014			�	2013			�	2014			�	2013
Components of net periodic cost:	�			�	�			�	�			�	�
Service cost	$	24		�	$	28		�	$			�	$
Interest cost	178			�	158			�	18			�	18
Expected return on plan assets	(197		)	�	(203		)	�				�
Amortization of actuarial loss (gain)�^(a)	48			�	65			�	(16		)	�	(12		)
Net periodic cost	$	53		�	$	48		�	$	2		�	$	6

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

9) STOCKHOLDERS' EQUITY

During the third quarter of 2014, the Company repurchased 6.9 million shares of its Class B Common Stock for $400 million, at an average cost of $57.91 per share. During the nine months ended September�30, 2014, the Company repurchased 45.4 million shares of its Class B Common Stock for $2.81 billion, at an average cost of $61.94 per share, leaving $5.60 billion of authorization remaining under its share repurchase program at September�30, 2014. Share repurchases during 2014 were partly funded by proceeds of $2.04 billion received from Outdoor Americas' IPO and debt borrowings (See Note 3).

On July 16, 2014, the Company completed the Split-Off through which it received 44.7 million shares of CBS Corp. Class B Common Stock in exchange for the 97.0 million shares of Outdoor Americas common stock that it owned (See Note 3).

On August 7, 2014, the Company announced a 25% increase in the quarterly cash dividend on its Class A and Class B Common Stock to $.15 per share from $.12 per share. The total third quarter dividend was $79 million of which $78 million was paid on October�1, 2014 and $1 million was accrued to be paid upon vesting of RSUs. Total dividends for the nine months ended September�30, 2014 were $218 million.

During the second quarter of 2014, in connection with the IPO of Outdoor Americas (See Note 3), the Company recorded an increase to additional paid-in capital of $313 million for the excess of the proceeds received from the IPO over the carrying value of the 19% noncontrolling interest.

- 15-

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).



�	Continuing Operations										�	Discontinued Operations			�	�
�	Cumulative Translation Adjustments			�	Net Actuarial Gain (Loss) and Prior Service Cost			�	Unrealized Gains on Securities		�	Other Comprehensive Income (Loss)			�	Accumulated Other Comprehensive Loss
At December�31, 2013	$	166		�	$	(729	)	�	$	3	�	$	15		�	$	(545	)
Other comprehensive income (loss) before reclassifications	(7		)	�				�			�	15			�	8
Reclassifications to net earnings				�	20			^(a)�			�	(30		)	^(b)�	(10		)
Net other comprehensive income (loss)	(7		)	�	20						�	(15		)	�	(2		)
At September�30, 2014	$	159		�	$	(709	)		$	3	�	$			�	$	(547	)



�	Continuing Operations									�	Discontinued Operations			�	�
�	Cumulative Translation Adjustments		�	Net Actuarial Gain (Loss) and Prior Service Cost			�	Unrealized Gains on Securities		�	Other Comprehensive Income (Loss)			�	Accumulated Other Comprehensive Loss
At December�31, 2012	$	168	�	$	(936	)	�	$	2	�	$	197		�	$	(569	)
Other comprehensive income (loss) before reclassifications	5		�				�	1		�	(14		)	�	(8		)
Reclassifications to net earnings			�	32			^(a)�			�	(178		)	^(b)�	(146		)
Net other comprehensive income (loss)	5		�	32			�	1		�	(192		)	�	(154		)
At September�30, 2013	$	173	�	$	(904	)	�	$	3	�	$	5		�	$	(723	)


(a)	Reflects amortization of net actuarial losses. See Note�8.


(b)	Reclassified in connection with the disposal of Outdoor Americas in 2014 and Outdoor Europe in 2013. See Note 3.

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 $12 million and $21 million for the nine months ended September 30, 2014 and 2013, respectively.

- 16-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

10) 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 $110 million for the three months ended September�30, 2014 and $226 million for the three months ended September�30, 2013, reflecting an effective income tax rate of 52.4% and 33.3%, respectively. For the nine months ended September�30, 2014, the provision for income taxes was $561 million compared to $678 million for the nine months ended September�30, 2013, reflecting an effective income tax rate of 35.9% and 33.3%, respectively. The Company's income tax provision for the three and nine months ended September�30, 2014 included a tax benefit of $133 million associated with the loss on early extinguishment of debt of $352 million; a tax provision of $22 million associated with the noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill in connection with a radio station swap; and the establishment of a tax reserve of $19 million for the retroactive impact of an uncertain tax position in a foreign jurisdiction.

The Company is currently under examination by the IRS for the years 2011 and 2012 and expects to settle the audit in the first quarter of 2015. In addition, during the next six months, the Company expects a decrease to its reserve for uncertain tax positions related to an audit in a foreign jurisdiction of a previously disposed business that is accounted for as a discontinued operation. Various tax years are also currently under examination by state and local and other foreign tax authorities. With respect to open tax years in all jurisdictions, the Company currently believes that it is reasonably possible that the reserve for uncertain tax positions will decrease within the next twelve months; however, as it is difficult to predict the final outcome of any particular tax matter, an estimate of any related impact to the reserve for uncertain tax positions cannot currently be determined.

11) COMMITMENTS AND CONTINGENCIES

Guarantees

During 2013, the Company completed the sale of Outdoor Europe to an affiliate of Platinum Equity. The Company continues to be the guarantor of Outdoor Europes franchise payment obligations under certain transit franchise agreements. Generally, the Company would be required to perform under the guarantees in the event of non-performance by the buyer. These agreements have varying terms, with the majority of the obligations guaranteed under these agreements expiring by September 2016. At September�30, 2014, the total franchise payment obligations under these agreements are estimated to be approximately $200 million, which will decrease on a monthly basis thereafter. The estimated fair value of the guarantee liability of approximately $40 million is included in Liabilities of discontinued operations on the Consolidated Balance Sheet at September�30, 2014.

The Company also 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, 2014, the outstanding letters of credit and surety bonds approximated $252 million and were not recorded on the Consolidated Balance Sheet.

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

- 17-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Legal Matters

E-books Matters.��Commencing in 2012, as previously disclosed, a number of antitrust suits were filed and/or consolidated in the United States District Court for the Southern District of New York against Simon & Schuster, other book publishers and Apple Inc. (Apple) in connection with these book publishers agency arrangements regarding the distribution of e-books to e-book retailers. Simon & Schuster has settled all of these actions without any admission of wrongdoing or liability and has adopted certain business and compliance practices as part of certain settlements. On April 10, 2012, Simon & Schuster and two other book publisher parties entered into a settlement stipulation and proposed final judgment (the Stipulation) with the United States Department of Justice (the DOJ) in connection with an antitrust action filed by the DOJ, which was approved by the court on September 7, 2012. The Stipulation requires the adoption of certain business practices for a 24 month period (the 24 Month Period) and certain compliance practices for a five year period. In addition, as previously disclosed, in connection with Simon & Schusters settlement of an antitrust suit filed with the court on April 11, 2012 by the U.S. states and territories and the District of Columbia (the States Settlement), Simon & Schuster adopted certain business and compliance practices substantially similar to those described in the Stipulation. The Company believes that continuing to comply with these business and compliance practices pursuant to the Stipulation and States Settlement, which are the only outstanding obligations under these settlements, will not have a material adverse effect on its results of operations, financial position or cash flows.

Following a ruling in favor of the DOJ and a judgment against Apple that was entered by the court on September 6, 2013 in one of the antitrust suits described above, Apple filed an appeal, which will be heard by the United States Court of Appeals for the Second Circuit. On October 4, 2013, Simon & Schuster filed an appeal with the court relating to an aspect of the Apple judgment involving the 24 Month Period.

Similar antitrust suits have been filed against the Publishing parties by private litigants in Canada, purportedly as class actions, under Canadian law, commencing on February�24, 2012 (Canada Actions); and by an Australian e-book retailer on September�16, 2013, and two former U.S. e-book retailers in March 2014, each in the United States Court for the Southern District of New York (U.S. Actions). Simon�& Schuster executed an agreement settling the Canada Actions as of May 8, 2014, which is subject to Canadian court approval. Simon & Schuster intends to defend itself in the U.S. Actions.

In addition, the European Commission (the EC) and Canadian Competition Bureau (the CCB) conducted separate competition investigations of agency distribution arrangements of e-books in this industry. On December 12, 2012, following the close of a comment period, the EC entered into settlement agreements with Simon & Schuster and certain Publishing parties. The CCB also entered into a settlement agreement with Simon & Schuster and certain Publishing parties, which was effective on February 7, 2014 but was subsequently stayed by the Canadian Competition Tribunal on March 18, 2014 pending the resolution of an application to rescind or vary the settlement agreement filed by a large Canadian e-book retailer. These settlements require the adoption of certain business and compliance practices similar to those described in the Stipulation with the DOJ.

- 18-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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, or by asbestos-containing grades of decorative micarta, a laminate used in commercial ships.

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, 2014, the Company had pending approximately 42,560 asbestos claims, as compared with approximately 45,150 as of December�31, 2013 and 45,480 as of September�30, 2013. During the third quarter of 2014, the Company received approximately 1,030 new claims and closed or moved to an inactive docket approximately 2,200 claims. The Company reports claims as closed when it becomes aware that a dismissal order has been entered by a court or when the Company has reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claim, the quality of evidence supporting the claims and other factors. The Companys total costs for the years 2013 and 2012 for settlement and defense of asbestos claims after insurance recoveries and net of tax benefits were approximately $29 million and $21 million, respectively. The Companys 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 Companys estimate of its asbestos liabilities.

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

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 and local 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 above-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.

- 19-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

12) RESTRUCTURING CHARGES

During the third quarter of 2014, 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 $26 million, reflecting $17 million of severance costs and $9 million of costs associated with exiting contractual obligations. During the year ended December 31, 2013, the Company recorded restructuring charges of $20 million, reflecting $14 million of severance costs and $6 million of costs associated with exiting contractual obligations. As of September�30, 2014, the cumulative amount paid for the restructuring charges was $18 million, of which $13 million was for the severance costs and $5 million was related to costs associated with contractual obligations. The Company expects to substantially utilize its restructuring reserves by the end of 2015.

�

Balance at

�

2014

�

2014

�

Balance at

�

December�31, 2013

�

Charges

�

Payments

�

September�30, 2014

Entertainment

�

)

�

Cable Networks

�

)

�

Publishing

�

)

�

Local Broadcasting

�

)

�

Corporate

�

)

�

Total

�

(13

)

�

13) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company uses derivative financial instruments primarily to modify its exposure to market risks from fluctuations in interest rates and 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.

All of the Company's long-term debt has been issued under fixed interest rate agreements. During the third quarter of 2014, the Company entered into $600 million notional amount of fixed-to-floating rate swap agreements to hedge the Company's 2.30% senior notes that were issued in the third quarter of 2014. These interest rate swaps are designated as fair value hedges. The fair value of interest rate swaps is recorded in other liabilities on the Consolidated Balance Sheet with an offsetting change in the carrying value of the debt attributable to the risk being hedged. Gains or losses on interest rate swaps are recognized within interest expense. The fair value of the Companys derivative instruments and the related activity was not material to the Consolidated Balance Sheets and Consolidated Statements of Operations for any of the periods presented.

The following tables set forth the Companys assets and liabilities measured at fair value on a recurring basis at September�30, 2014 and December�31, 2013. These assets and liabilities have been categorized according to the threelevel 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 Companys own assumptions about the assumptions that market participants would use in pricing the asset or liability.

- 20-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

At September�30, 2014

Level�1

�

Level�2

�

Level�3

�

Total

Assets:

�

Investments

�

Foreign currency hedges

�

Total Assets

�

Liabilities:

�

Deferred compensation

�

278

�

278

Guarantees

�

Interest rate swaps

�

Foreign currency hedges

�

Total Liabilities

�

285

�

325

At December�31, 2013

Level�1

�

Level�2

�

Level�3

�

Total

Assets:

�

Investments

�

Foreign currency hedges

�

Total Assets

�

Liabilities:

�

Deferred compensation

�

268

�

268

Guarantees

�

Foreign currency hedges

�

Total Liabilities

�

272

�

312

The fair value of investments is determined based on publicly quoted market prices in active markets. The fair value of interest rate swaps and foreign currency hedges is determined based on the present value of future cash flows using observable inputs including interest rates, yield curves and foreign currency exchange rates. The fair value of deferred compensation is determined based on the fair value of the investments elected by employees. The fair value of the guarantee liabilities reflects the premium that would be required to issue such guarantee in a standalone arms length transaction and is calculated based on an assessment of the probability of the primary obligors default under the obligation, discounted to its present value. During the nine months ended September�30, 2014, changes to the fair value of the guarantee liability were minimal.

During the third quarter of 2014, in connection with a radio station swap, the Company recorded a pre-tax noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill to its fair value using other nonobservable inputs (Level�3). The fair value was determined based on a valuation of comparable assets in the same geographic markets.

The Companys carrying value of financial instruments approximates fair value, except for differences with respect to its long-term debt. At September�30, 2014 and December�31, 2013, the carrying value of the Companys senior debt was $6.43 billion and $5.85 billion, respectively, and the fair value, which is estimated based on quoted market prices for similar liabilities (Level 2) and includes accrued interest, was $7.05 billion and $6.68 billion, respectively.

- 21-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

14) REPORTABLE SEGMENTS

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

On July 16, 2014, the Company completed the disposition of Outdoor Americas through the Split-Off. As a result, Outdoor Americas has been presented as a discontinued operation in the Companys consolidated financial statements. Prior periods have been reclassified to conform to this presentation.



	Three Months Ended							�	Nine Months Ended
	September 30,							�	September 30,
	2014			�	2013				2014			�	2013
Revenues:
Entertainment	$	1,911			$	1,884			$	6,049			$	6,431
Cable Networks	624				596				1,677				1,592
Publishing	199				224				563				584
Local Broadcasting	680				641				1,971				1,977
Corporate/Eliminations	(47		)		(43		)		(135		)		(150		)
Total Revenues	$	3,367			$	3,302			$	10,125			$	10,434

Revenues generated between segments primarily reflect advertising sales and television and feature film license 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,
�	2014		�	2013		�	2014		�	2013
Intercompany Revenues:	�		�	�		�	�		�	�
Entertainment	$	45	�	$	41	�	$	130	�	$	145
Local Broadcasting	5		�	4		�	13		�	11
Total Intercompany Revenues	$	50	�	$	45	�	$	143	�	$	156

- 22-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The Company presents segment operating income (loss) before depreciation and amortization (OIBDA), restructuring charges and impairment charges (Segment OIBDA) 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 OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Companys management and enhances their ability to understand the Companys operating performance.



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Segment OIBDA:	�			�	�			�	�			�	�
Entertainment	$	335			$	431			$	1,168			$	1,340
Cable Networks	272				261				750				699
Publishing	43				43				80				76
Local Broadcasting	214				181				652				635
Corporate	(50		)		(82		)		(173		)		(223		)
Total Segment OIBDA	814				834				2,477				2,527
Restructuring charges	(26		)	�				�	(26		)	�
Impairment charge	(52		)	�				�	(52		)	�
Depreciation and amortization	(68		)		(70		)		(210		)		(217		)
Operating income	668				764				2,189				2,310
Interest expense	(89		)	�	(93		)	�	(276		)	�	(281		)
Interest income	4			�	2			�	10			�	6
Loss on early extinguishment of debt	(352		)	�				�	(352		)	�
Other items, net	(21		)	�	6			�	(10		)	�	(2		)
Earnings from continuing operations before income taxes and equity in loss of investee companies	210			�	679			�	1,561			�	2,033
Provision for income taxes	(110		)	�	(226		)	�	(561		)	�	(678		)
Equity in loss of investee companies, net of tax	(28		)	�	(22		)	�	(48		)	�	(39		)
Net earnings from continuing operations	72			�	431			�	952			�	1,316
Net earnings from discontinued operations, net of tax	1,567			�	63			�	1,594			�	93
Net earnings	$	1,639		�	$	494		�	$	2,546		�	$	1,409



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Operating Income (Loss):	�			�	�			�	�			�	�
Entertainment	$	294			$	394			$	1,055			$	1,225
Cable Networks	266				255				733				684
Publishing	41				41				75				71
Local Broadcasting	126				161				520				571
Corporate	(59		)		(87		)		(194		)		(241		)
Total Operating Income	$	668			$	764			$	2,189			$	2,310

- 23-

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,
�	2014		�	2013		�	2014		�	2013
Depreciation and Amortization:	�		�	�		�	�		�	�
Entertainment	$	33		$	37		$	105		$	115
Cable Networks	6			6			17			15
Publishing	1			2			4			5
Local Broadcasting	22			20			66			64
Corporate	6			5			18			18
Total Depreciation and Amortization	$	68		$	70		$	210		$	217



�	Three Months Ended					�	Nine Months Ended
�	September 30,					�	September 30,
�	2014		�	2013		�	2014		�	2013
Stock-based Compensation:	�		�	�		�	�		�	�
Entertainment	$	16	�	$	14	�	$	45	�	$	44
Cable Networks	2		�	2		�	7		�	6
Publishing	1		�	1		�	3		�	3
Local Broadcasting	7		�	7		�	22		�	21
Corporate	7		�	33		�	40		�	89
Total Stock-based Compensation	$	33	�	$	57	�	$	117	�	$	163



�	Three Months Ended					�	Nine Months Ended
�	September 30,					�	September 30,
�	2014		�	2013		�	2014		�	2013
Capital Expenditures:	�		�	�		�	�		�	�
Entertainment	$	21		$	24		$	58		$	67
Cable Networks	2			2			7			6
Publishing				1			1			2
Local Broadcasting	15			15			35			33
Corporate	5		�	2		�	11		�	4
Total Capital Expenditures	$	43	�	$	44	�	$	112	�	$	112



�	At				�	At
�	September�30, 2014				�	December�31, 2013
Assets:	�	�		�	�	�	�		�
Entertainment	�	$	10,248	�	�	�	$	9,657	�
Cable Networks	�	2,108		�	�	�	1,968		�
Publishing	�	962		�	�	�	1,026		�
Local Broadcasting	�	9,541		�	�	�	9,600		�
Corporate	�	541		�	�	�	661		�
Discontinued operations	�	55		�	�	�	3,475		�
Total Assets	�	$	23,455	�	�	�	$	26,387	�

- 24-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

15) 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, 2014
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Revenues	$	40		�	$	2		�	$	3,325		�	$			�	$	3,367
Expenses:	�			�	�			�	�			�	�			�	�
Operating	18			�	1			�	1,917			�				�	1,936
Selling, general and administrative	11			�	51			�	555			�				�	617
Restructuring charges				�	3			�	23			�				�	26
Impairment charge				�				�	52			�				�	52
Depreciation and amortization	2			�	4			�	62			�				�	68
Total expenses	31			�	59			�	2,609			�				�	2,699
Operating income (loss)	9			�	(57		)	�	716			�				�	668
Interest (expense) income, net	(109		)	�	(97		)	�	121			�				�	(85		)
Loss on early extinguishment of debt	(351		)	�				�	(1		)	�				�	(352		)
Other items, net	(1		)	�	4			�	(24		)	�				�	(21		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(452		)	�	(150		)	�	812			�				�	210
Benefit (provision) for income taxes	167			�	52			�	(329		)	�				�	(110		)
Equity in earnings (loss) of investee companies, net of tax	1,924			�	314			�	(28		)	�	(2,238		)	�	(28		)
Net earnings from continuing operations	1,639			�	216			�	455			�	(2,238		)	�	72
Net earnings from discontinued operations, net of tax				�				�	1,567			�				�	1,567
Net earnings	$	1,639		�	$	216		�	$	2,022		�	$	(2,238	)	�	$	1,639
Total comprehensive income	$	1,615		�	$	222		�	$	1,987		�	$	(2,209	)	�	$	1,615

- 25-

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, 2014
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Revenues	$	108		�	$	8		�	$	10,009		�	$			�	$	10,125
Expenses:	�			�	�			�	�			�	�			�	�
Operating	49			�	4			�	5,802			�				�	5,855
Selling, general and administrative	43			�	165			�	1,585			�				�	1,793
Restructuring charges				�	3			�	23			�				�	26
Impairment charge				�				�	52			�				�	52
Depreciation and amortization	5			�	11			�	194			�				�	210
Total expenses	97			�	183			�	7,656			�				�	7,936
Operating income (loss)	11			�	(175		)	�	2,353			�				�	2,189
Interest (expense) income, net	(338		)	�	(285		)	�	357			�				�	(266		)
Loss on early extinguishment of debt	(351		)	�				�	(1		)	�				�	(352		)
Other items, net				�	2			�	(12		)	�				�	(10		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(678		)	�	(458		)	�	2,697			�				�	1,561
Benefit (provision) for income taxes	244			�	157			�	(962		)	�				�	(561		)
Equity in earnings (loss) of investee companies, net of tax	2,980			�	978			�	(48		)	�	(3,958		)	�	(48		)
Net earnings from continuing operations	2,546			�	677			�	1,687			�	(3,958		)	�	952
Net earnings (loss) from discontinued operations, net of tax				�	(1		)	�	1,595			�				�	1,594
Net earnings	$	2,546		�	$	676		�	$	3,282		�	$	(3,958	)	�	$	2,546
Total comprehensive income	$	2,544		�	$	678		�	$	3,242		�	$	(3,920	)	�	$	2,544

- 26-

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, 2013
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Revenues	$	31		�	$	2		�	$	3,269		�	$			�	$	3,302
Expenses:	�			�	�			�	�			�	�			�	�
Operating	16			�	2			�	1,783			�				�	1,801
Selling, general and administrative	17			�	78			�	572			�				�	667
Depreciation and amortization	2			�	4			�	64			�				�	70
Total expenses	35			�	84			�	2,419			�				�	2,538
Operating income (loss)	(4		)	�	(82		)	�	850			�				�	764
Interest (expense) income, net	(113		)	�	(96		)	�	118			�				�	(91		)
Other items, net	1			�	(4		)	�	9			�				�	6
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(116		)	�	(182		)	�	977			�				�	679
Benefit (provision) for income taxes	40			�	62			�	(328		)	�				�	(226		)
Equity in earnings (loss) of investee companies, net of tax	567			�	484			�	(22		)	�	(1,051		)	�	(22		)
Net earnings from continuing operations	491			�	364			�	627			�	(1,051		)	�	431
Net earnings (loss) from discontinued operations, net of tax	3			�	(1		)	�	61			�				�	63
Net earnings	$	494		�	$	363		�	$	688		�	$	(1,051	)	�	$	494
Total comprehensive income	$	336		�	$	356		�	$	527		�	$	(883	)	�	$	336

- 27-

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, 2013
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Revenues	$	103		�	$	8		�	$	10,323		�	$			�	$	10,434
Expenses:	�			�	�			�	�			�	�			�	�
Operating	50			�	6			�	5,946			�				�	6,002
Selling, general and administrative	48			�	219			�	1,638			�				�	1,905
Depreciation and amortization	5			�	11			�	201			�				�	217
Total expenses	103			�	236			�	7,785			�				�	8,124
Operating income (loss)				�	(228		)	�	2,538			�				�	2,310
Interest (expense) income, net	(342		)	�	(276		)	�	343			�				�	(275		)
Other items, net				�	4			�	(6		)	�				�	(2		)
Earnings (loss) from continuing operations before income taxes and equity in earnings (loss) of investee companies	(342		)	�	(500		)	�	2,875			�				�	2,033
Benefit (provision) for income taxes	117			�	171			�	(966		)	�				�	(678		)
Equity in earnings (loss) of investee companies, net of tax	1,631			�	1,061			�	(39		)	�	(2,692		)	�	(39		)
Net earnings from continuing operations	1,406			�	732			�	1,870			�	(2,692		)	�	1,316
Net earnings (loss) from discontinued operations, net of tax	3			�	(5		)	�	95			�				�	93
Net earnings	$	1,409		�	$	727		�	$	1,965		�	$	(2,692	)	�	$	1,409
Total comprehensive income	$	1,255		�	$	726		�	$	1,780		�	$	(2,506	)	�	$	1,255

- 28-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



�	Balance Sheet
�	At September�30, 2014
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Assets	�			�	�			�	�			�	�			�	�
Cash and cash equivalents	$	20		�	$	1		�	$	157		�	$			�	$	178
Receivables, net	23			�	2			�	3,353			�				�	3,378
Programming and other inventory	4			�	3			�	1,129			�				�	1,136
Prepaid expenses and other current assets	202			�	45			�	497			�	(32		)	�	712
Total current assets	249			�	51			�	5,136			�	(32		)	�	5,404
Property and equipment	39			�	148			�	2,938			�				�	3,125
Less accumulated depreciation and amortization	13			�	93			�	1,625			�				�	1,731
Net property and equipment	26			�	55			�	1,313			�				�	1,394
Programming and other inventory	8			�	9			�	1,604			�				�	1,621
Goodwill	98			�	62			�	6,449			�				�	6,609
Intangible assets				�				�	5,848			�				�	5,848
Investments in consolidated subsidiaries	40,409			�	11,389			�				�	(51,798		)	�
Other assets	85			�	50			�	2,127			�				�	2,262
Assets held for sale				�				�	262			�				�	262
Intercompany				�	2,725			�	20,919			�	(23,644		)	�
Assets of discontinued operations				�				�	55			�				�	55
Total Assets	$	40,875		�	$	14,341		�	$	43,713		�	$	(75,474	)	�	$	23,455
Liabilities and Stockholders' Equity	�			�	�			�	�			�	�			�	�
Accounts payable	$	1		�	$	4		�	$	191		�	$			�	$	196
Participants' share and royalties payable				�				�	914			�				�	914
Program rights	5			�	3			�	309			�				�	317
Commercial paper	431			�				�				�				�	431
Current portion of long-term debt	4			�				�	16			�				�	20
Accrued expenses and other current liabilities	330			�	219			�	965			�	(32		)	�	1,482
Current liabilities of discontinued operations				�				�	37			�				�	37
Total current liabilities	771			�	226			�	2,432			�	(32		)	�	3,397
Long-term debt	6,377			�				�	131			�				�	6,508
Other liabilities	2,557			�	245			�	3,084			�				�	5,886
Liabilities of discontinued operations				�				�	138			�				�	138
Intercompany	23,644			�				�				�	(23,644		)	�
Stockholders' Equity:	�			�	�			�	�			�	�			�	�
Preferred stock				�				�	126			�	(126		)	�
Common stock	1			�	123			�	590			�	(713		)	�	1
Additional paid-in capital	44,022			�				�	60,619			�	(60,619		)	�	44,022
Retained earnings (deficit)	(22,344		)	�	14,086			�	(18,693		)	�	4,607			�	(22,344		)
Accumulated other comprehensive income (loss)	(547		)	�	(8		)	�	86			�	(78		)	�	(547		)
�	21,132			�	14,201			�	42,728			�	(56,929		)	�	21,132
Less treasury stock, at cost	13,606			�	331			�	4,800			�	(5,131		)	�	13,606
Total Stockholders' Equity	7,526			�	13,870			�	37,928			�	(51,798		)	�	7,526
Total Liabilities and Stockholders' Equity	$	40,875		�	$	14,341		�	$	43,713		�	$	(75,474	)	�	$	23,455

- 29-

CBS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)



�	Balance Sheet
�	At December�31, 2013
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations			�	CBS Corp. Consolidated
Assets	�			�	�			�	�			�	�			�	�
Cash and cash equivalents	$	80		�	$	1		�	$	287		�	$			�	$	368
Receivables, net	30			�	2			�	3,202			�				�	3,234
Programming and other inventory	4			�	2			�	766			�				�	772
Prepaid expenses and other current assets	179			�	18			�	474			�	(26		)	�	645
Current assets of discontinued operations				�				�	351			�				�	351
Total current assets	293				23				5,080				(26		)		5,370
Property and equipment	37			�	137			�	2,886			�				�	3,060
Less accumulated depreciation and amortization	9			�	83			�	1,507			�				�	1,599
Net property and equipment	28				54				1,379							�	1,461
Programming and other inventory	5			�				�	1,692			�				�	1,697
Goodwill	98			�	62			�	6,428			�				�	6,588
Intangible assets				�				�	5,870			�				�	5,870
Investments in consolidated subsidiaries	40,454			�	10,415			�				�	(50,869		)	�
Other assets	89			�	18			�	1,856			�				�	1,963
Assets held for sale				�				�	314			�				�	314
Intercompany				�	3,240			�	18,409			�	(21,649		)	�
Assets of discontinued operations				�				�	3,124			�				�	3,124
Total Assets	$	40,967			$	13,812			$	44,152			$	(72,544	)	�	$	26,387
Liabilities and Stockholders' Equity	�			�	�			�	�			�	�			�	�
Accounts payable	$	1		�	$	8		�	$	277		�	$			�	$	286
Participants' share and royalties payable				�				�	1,008			�				�	1,008
Program rights	5			�	2			�	391			�				�	398
Commercial paper	475			�				�				�				�	475
Current portion of long-term debt	5			�				�	15			�				�	20
Accrued expenses and other current liabilities	361			�	293			�	1,138			�	(26		)	�	1,766
Current liabilities of discontinued operations				�				�	254			�				�	254
Total current liabilities	847				303				3,083				(26		)	�	4,207
Long-term debt	5,791			�				�	149			�				�	5,940
Other liabilities	2,714			�	317			�	2,766			�				�	5,797
Liabilities of discontinued operations				�				�	477			�				�	477
Intercompany	21,649			�				�				�	(21,649		)	�
Stockholders' Equity:	�			�	�			�	�			�	�			�
Preferred stock				�				�	126			�	(126		)	�
Common stock	1			�	123			�	953			�	(1,076		)	�	1
Additional paid-in capital	43,474			�				�	61,678			�	(61,678		)	�	43,474
Retained earnings (deficit)	(24,890		)	�	13,410			�	(20,406		)	�	6,996			�	(24,890		)
Accumulated other comprehensive income (loss)	(545		)	�	(10		)	�	126			�	(116		)	�	(545		)
�	18,040				13,523				42,477				(56,000		)	�	18,040
Less treasury stock, at cost	8,074			�	331			�	4,800			�	(5,131		)	�	8,074
Total Stockholders' Equity	9,966			�	13,192			�	37,677			�	(50,869		)	�	9,966
Total Liabilities and Stockholders' Equity	$	40,967			$	13,812			$	44,152			$	(72,544	)	�	$	26,387

- 30-

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, 2014
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations	�	CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(843	)	�	$	(199	)	�	$	1,330		�	$	�	$	288
Investing Activities:	�			�	�			�	�			�	�	�	�
Acquisitions, net of cash acquired				�				�	(27		)	�		�	(27		)
Capital expenditures				�	(11		)	�	(101		)	�		�	(112		)
Investments�in�and�advances�to�investee�companies				�				�	(68		)	�		�	(68		)
Proceeds from sale of investments				�	2			�	1			�		�	3
Proceeds from dispositions				�				�	7			�		�	7
Net cash flow used for investing activities from continuing operations				�	(9		)	�	(188		)	�		�	(197		)
Net cash flow used for investing activities from discontinued operations				�				�	(271		)	�		�	(271		)
Net cash flow used for investing activities				�	(9		)	�	(459		)	�		�	(468		)
Financing Activities:	�			�	�			�	�			�	�	�	�
Repayments of short-term debt borrowings, net	(44		)	�				�				�		�	(44		)
Proceeds from issuance of notes	1,729			�				�				�		�	1,729
Repayment of notes and debentures	(1,146		)	�				�	(6		)	�		�	(1,152		)
Payment of capital lease obligations				�				�	(13		)	�		�	(13		)
Dividends	(214		)	�				�				�		�	(214		)
Purchase of Company common stock	(2,830		)	�				�				�		�	(2,830		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(146		)	�				�				�		�	(146		)
Proceeds from exercise of stock options	237			�				�				�		�	237
Excess�tax�benefit�from�stock-based�compensation	227			�				�				�		�	227
Increase (decrease) in intercompany payables	2,970			�	208			�	(3,178		)	�		�
Net cash flow provided by (used for) financing activities from continuing operations	783			�	208			�	(3,197		)	�		�	(2,206		)
Net cash flow provided by financing activities from discontinued operations				�				�	2,167			�		�	2,167
Net cash flow provided by (used for) financing activities	783			�	208			�	(1,030		)	�		�	(39		)
Net decrease in cash and cash equivalents	(60		)	�				�	(159		)	�		�	(219		)
Cash and cash equivalents at beginning of period (includes $29 of discontinued operations cash)	80			�	1			�	316			�		�	397
Cash and cash equivalents at end of period	$	20		�	$	1		�	$	157		�	$	�	$	178

- 31-

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, 2013
�	CBS Corp.			�	CBS Operations Inc.			�	Non- Guarantor Affiliates			�	Eliminations	�	CBS Corp. Consolidated
Net cash flow (used for) provided by operating activities	$	(858	)	�	$	(174	)	�	$	2,352		�	$	�	$	1,320
Investing Activities:	�			�	�			�	�			�	�	�
Acquisitions, net of cash acquired				�				�	(20		)	�		�	(20		)
Capital expenditures				�	(4		)	�	(108		)	�		�	(112		)
Investments�in�and�advances�to�investee�companies				�				�	(144		)	�		�	(144		)
Proceeds from sale of investments	15			�	1			�	4			�		�	20
Proceeds from dispositions				�				�	185			�		�	185
Net cash flow provided by (used for) investing activities from continuing operations	15				(3		)		(83		)			�	(71		)
Net cash flow used for investing activities from discontinued operations				�				�	(45		)	�		�	(45		)
Net cash flow provided by (used for) investing activities	15				(3		)		(128		)			�	(116		)
Financing Activities:	�			�	�			�	�			�	�	�
Proceeds from short-term debt borrowings, net	341			�				�				�		�	341
Payment of capital lease obligations				�				�	(13		)	�		�	(13		)
Payment of contingent consideration				�				�	(30		)	�		�	(30		)
Dividends	(228		)	�				�				�		�	(228		)
Purchase of Company common stock	(1,864		)	�				�				�		�	(1,864		)
Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(142		)	�				�				�		�	(142		)
Proceeds from exercise of stock options	121			�				�				�		�	121
Excess�tax�benefit�from�stock-based�compensation	128			�				�				�		�	128
Other financing activities	(4		)	�				�				�		�	(4		)
Increase (decrease) in intercompany payables	2,271			�	177			�	(2,448		)	�		�
Net cash flow provided by (used for) financing activities from continuing operations	623				177				(2,491		)			�	(1,691		)
Net cash flow provided by financing activities from discontinued operations	5			�				�				�		�	5
Net cash flow provided by (used for) financing activities	628			�	177			�	(2,491		)	�		�	(1,686		)
Net decrease in cash and cash equivalents	(215		)						(267		)			�	(482		)
Cash and cash equivalents at beginning of period (includes $21 of discontinued operations cash)	254			�	1			�	453			�		�	708
Cash and cash equivalents at end of period (includes $24 of discontinued operations cash)	$	39			$	1			$	186			$	�	$	226

- 32-

Item�2.��Management's Discussion and Analysis of Results of Operations and Financial Condition.

(Tabular dollars in millions, except per share amounts)

Managements 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 included in the Companys Form 8-K filed on August 8, 2014, which recasts the financial information in the Company's Annual Report on Form�10-K for the year ended December�31, 2013 to present CBS Outdoor Americas Inc. ("Outdoor Americas") as a discontinued operation.

Overview

The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, cable program services, television content production and distribution, motion pictures, consumer publishing, television and radio stations and interactive businesses. The Companys principal strategy is to create and acquire 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 also continues to pursue opportunities to grow its revenue streams, including licensing and distributing its content for exhibition on digital and other platforms; expanding the distribution of its content internationally; securing compensation from multichannel video programming distributors and television stations affiliated with the CBS Television Network; and increasingly monetizing content viewership and ratings as industry measurements evolve to reflect changing viewership habits. The Companys continued ability to capitalize on these and other emerging opportunities will provide it with incremental advertising and non-advertising revenues and serves to de-risk and diversify the Companys business model.

Revenues of $3.37 billion for the three months ended September�30, 2014, increased $65 million, or 2%, compared to $3.30 billion for the same prior-year period. Revenue growth was led by a 4% increase in content licensing and distribution revenues, driven by growth in domestic and international licensing of programming. Advertising revenues increased 2% reflecting the broadcast of Thursday Night Football on CBS in 2014 and political revenues associated with midterm elections, partially offset by softness in the advertising marketplace. Affiliate and subscription fees remained flat as underlying growth in cable affiliate fees, retransmission revenues and fees from CBS Television Network affiliated stations (station affiliation fees) was offset by the benefit to the third quarter of 2013 from a significant pay-per-view boxing event.

For the nine months ended September�30, 2014, revenues of $10.13 billion decreased 3% compared to $10.43 billion for the same prior-year period, principally driven by the Super Bowl broadcast on the CBS Television Network in 2013 and four fewer NCAA Division I Men's Basketball Championship ("NCAA Tournament") games broadcast on CBS during 2014. These declines were partially offset by the broadcast of Thursday Night Football on CBS in 2014 and 5% growth from affiliate and subscription fee revenues.

Operating income of $668 million for the third quarter of 2014 decreased 13% from $764 million for the same prior-year period, reflecting increased investment in programming, mainly for National Football League (NFL) games. Such investment contributed to the Company's successful launch of three new Company-owned television series for the 2014/2015 television broadcast season, which all generated higher ratings in their respective time periods compared to the prior year. Operating income of $2.19 billion for the nine months ended September�30, 2014 decreased 5% from $2.31 billion for the same prior-year period, reflecting the revenue decline, partially offset by lower sports programing costs. Comparability of operating income for both the three and nine months ended September 30, 2014 was also impacted by 2014 restructuring charges of $26 million and a noncash impairment charge of $52 million recorded during the third quarter of 2014 in connection with the Company's agreement with Beasley Broadcast Group, Inc. to swap certain radio stations.

- 33-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Net earnings from continuing operations was $72 million for the third quarter of 2014 compared to $431 million for the third quarter of 2014 and diluted net earnings per share (EPS) from continuing operations was $.13 for the third quarter of 2014 compared to $.70 for the same prior-year period. For the nine months ended September 30, 2014, net earnings from continuing operations was $952 million compared to $1.32 billion for the same prior-year period and diluted EPS from continuing operations was $1.66 compared to $2.10 for the same prior-year period. Comparability of 2014 results was impacted by several discrete items that were not part of the normal course of operations. The following tables present adjusted net earnings from continuing operations and adjusted diluted EPS from continuing operations, which exclude the impact of the discrete items. These adjusted results are non-GAAP financial measures, which are reconciled below to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company believes that presenting its financial results adjusted for the impact of these 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 current underlying performance of the Company.

�

Three Months Ended

�

Nine Months Ended

�

September 30,

�

September 30,

�

2014

�

2013

�

2014

�

2013

Net earnings from continuing operations

�

431

�

952

�

1,316

Exclude:

�

Loss on early extinguishment of debt

(net of tax benefit of $133 million)

219

�

219

�

Impairment charge (including tax provision of $22 million)

�

Discrete tax item

(See Note 10 to the consolidated financial statements)

�

Restructuring charges (net of tax provision of $10 million)

�

Adjusted net earnings from continuing operations

400

�

431

�

1,280

�

1,316

�

Three Months Ended

�

Nine Months Ended

�

September 30,

�

September 30,

�

2014

�

2013

�

2014

�

2013

Diluted EPS from continuing operations

.13

�

.70

�

1.66

�

2.10

Exclude:

�

Loss on early extinguishment of debt

(net of tax benefit of $133 million)

.40

�

.38

�

Impairment charge (including tax provision of $22 million)

.14

�

.13

�

Discrete tax item
(See Note 10 to the consolidated financial statements)

.04

�

.03

�

Restructuring charges (net of tax provision of $10 million)

.03

�

.03

�

Adjusted diluted EPS from continuing operations

.74

�

.70

�

2.23

�

2.10

On April 2, 2014, Outdoor Americas completed an initial public offering (IPO) through which it sold 23.0 million shares, or approximately 19%, of its common stock for $28.00 per share. On July 16, 2014, the Company completed the disposition of its approximately 81% ownership of Outdoor Americas common stock through a tax-free split-off (the "Split-Off"). In connection with the Split-Off, the Company accepted 44.7 million shares of CBS Corp. Class B Common Stock from its stockholders in exchange for the 97.0 million shares of Outdoor Americas common stock that it owned. As a result, Outdoor Americas has been presented as a discontinued operation in the Companys consolidated financial statements for all periods presented. This transaction resulted in a gain of $1.56 billion which is included in net earnings from discontinued operations for the three and nine months ended September�30, 2014.

- 34-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

During the third quarter of 2014, the Company also repurchased 6.9 million shares of its Class B Common Stock for $400 million, at an average cost of $57.91 per share. During the nine months ended September�30, 2014, the Company repurchased 45.4 million shares of its Class B Common Stock for $2.81 billion, at an average cost of $61.94 per share, leaving $5.60 billion of authorization remaining under its share repurchase program at September�30, 2014.

During the third quarter of 2014, the Company issued $600 million of 2.30% senior notes due 2019, $600 million of 3.70% senior notes due 2024, and $550 million of 4.90% senior notes due 2044 and used the net proceeds primarily to redeem $1.07 billion of its debt which was at significantly higher interest rates. The debt repayment resulted in a pre-tax loss on early extinguishment of debt of $352 million ($219 million, net of tax). These actions, along with the second quarter redemption of $99 million of 8.875% notes upon maturity, are expected to result in annualized interest expense savings of approximately $35 million.

Free cash flow for the nine months ended September�30, 2014 was $124 million compared to $1.29 billion for the same prior-year period. The Company generated operating cash flow from continuing operations of $236 million for the nine months ended September�30, 2014 versus $1.40 billion for the comparable prior-year period. Included in operating cash flow for 2014 are payments of $360 million associated with the early extinguishment of debt, primarily for early redemption premiums.� The decrease in operating cash flow also reflects higher payments for sports programming resulting from the timing of payments under the Companys new agreement with the NFL for Sunday football and the addition of Thursday Night Football on CBS in September 2014, as well as the benefit to 2013 from CBSs Super Bowl broadcast. Free cash flow is a non-GAAP financial measure. See Reconciliation of Non-GAAP Financial Information on page 41 for a reconciliation of net cash flow provided by (used for) operating activities, the most directly comparable GAAP financial measure, to free cash flow.

Consolidated Results of Operations

Three and Nine Months Ended September�30, 2014 versus Three and Nine Months Ended September�30, 2013

Revenues

The following tables present the Company's consolidated revenues by type for the three and nine months ended September 30, 2014 and 2013.



�	Three Months Ended September 30,
�	�		�	Percentage of Total		�	�		�	Percentage of Total		�	Increase/(Decrease)
Revenues by Type	2014		�	Percentage of Total		�	2013		�	Percentage of Total		�	$			�	%
Advertising	$	1,548	�	46	%	�	$	1,524	�	46	%	�	$	24		�	2	�%
Content�licensing�and�distribution	1,141		�	34	%	�	1,094		�	33	%	�	47			�	4	�%
Affiliate�and�subscription�fees	608		�	18	%	�	611		�	19	%	�	(3		)	�		�%
Other	70		�	2	%	�	73		�	2	%	�	(3		)	�	(4	)%
Total Revenues	$	3,367	�	100	%	�	$	3,302	�	100	%	�	$	65		�	2	�%

- 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,
�	�		�	Percentage of Total		�	�		�	Percentage of Total		�	Increase/(Decrease)
Revenues by Type	2014		�	Percentage of Total		�	2013		�	Percentage of Total		�	$			�	%
Advertising	$	5,057	�	50	%	�	$	5,463	�	52	%	�	$	(406	)	�	(7	)%
Content�licensing�and�distribution	3,117		�	31	%	�	3,099		�	30	%	�	18			�	1	�%
Affiliate�and�subscription�fees	1,761		�	17	%	�	1,679		�	16	%	�	82			�	5	�%
Other	190		�	2	%	�	193		�	2	%	�	(3		)	�	(2	)%
Total Revenues	$	10,125	�	100	%	�	$	10,434	�	100	%	�	$	(309	)	�	(3	)%

Advertising revenues for the three months ended September�30, 2014 increased $24 million, or 2%, to $1.55 billion principally driven by the broadcast of Thursday Night Football on CBS in 2014 as well as increased political advertising spending for midterm elections. These increases were partially offset by softness in the advertising marketplace. For the nine months ended September�30, 2014, advertising revenues decreased $406 million, or 7%, to $5.06 billion. This decrease was driven by the CBS Television Networks 2013 broadcast of the Super Bowl, which is broadcast on the CBS Television Network once every three years, the broadcast of four fewer NCAA Tournament games on CBS during 2014, as well as softness in the advertising market. These decreases were partially offset by higher political advertising spending and the addition of Thursday Night Football on CBS in 2014.

During the fourth quarter of 2014, advertising revenues are expected to continue to benefit from increased political advertising spending for midterm elections and the broadcast of Thursday Night Football on CBS. In addition, compared to the prior season, upfront advertising sales for the 2014/2015 television broadcast season, which runs from the middle of September 2014 through the middle of September 2015, resulted in pricing increases with lower overall volume. As a result, more advertising spots are available in the scatter advertising market, when advertisers purchase the remaining advertising spots closer to the broadcast of the related programming. Overall advertising revenues for the Company will be dependent on ratings for its programming and demand in the overall advertising marketplace.

Content licensing and distribution revenues for the three months ended September�30, 2014 increased $47 million, or 4%, to $1.14 billion principally due to higher revenues from international and domestic licensing of the Company's television programming, partially offset by a decline in publishing revenues. For the nine months ended September�30, 2014, content licensing and distribution revenues increased $18 million, or 1%, to $3.12 billion from $3.10 billion for the same prior-year period.

Affiliate and subscription fees for the three months ended September�30, 2014 decreased slightly to $608 million as the third quarter of 2013 benefited from Showtime Networks' distribution of a significant pay-per-view boxing event. The decrease in pay-per-view revenues negatively impacted the revenue comparison by six percentage points. Underlying results reflect growth in retransmission revenues, station affiliation fees and Cable Networks affiliate fees. For the nine months ended September�30, 2014, affiliate and subscription fees increased $82 million, or 5%, to $1.76 billion, reflecting growth in retransmission revenues, station affiliation fees and Cable Networks affiliate fees, partially offset by lower revenues from the distribution of pay-per-view boxing events. The increase in Cable Networks affiliate fees for both the three and nine months ended September�30, 2014 reflects rate increases at Showtime Networks, CBS Sports Network and Smithsonian Networks as well as growth in telecommunications (Telco) subscriptions. For the remainder of 2014, the Company expects continued growth in affiliate and subscription fee revenues.

- 36-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

International Revenues

The Company generated approximately 12% and 10% of its total revenues from international regions for the three months ended September 30, 2014 and 2013, respectively, and generated approximately 13% of its total revenues from international regions for both the nine months ended September 30, 2014 and 2013.

Operating Expenses

The following tables present the Company's consolidated operating expenses by type for the three and nine months ended September 30, 2014 and 2013.



�	Three Months Ended September 30,
�	�		�	Percentage of Total		�	�		�	Percentage of Total		�	Increase/(Decrease)
Operating Expenses by Type	2014		�	Percentage of Total		�	2013		�	Percentage of Total		�	$			�	%
Programming	$	660	�	34	%	�	$	552	�	31	%	�	$	108		�	20	�%
Production	647		�	34	%	�	601		�	33	%	�	46			�	8	�%
Participation, distribution and royalty	258		�	13	%	�	259		�	14	%	�	(1		)	�		�%
Other	371		�	19	%	�	389		�	22	%	�	(18		)	�	(5	)%
Total Operating Expenses	$	1,936	�	100	%	�	$	1,801	�	100	%	�	$	135		�	7	�%



�	Nine Months Ended September 30,
�	�		�	Percentage of Total		�	�		�	Percentage of Total		�	Increase/(Decrease)
Operating Expenses by Type	2014		�	Percentage of Total		�	2013		�	Percentage of Total		�	$			�	%
Programming	$	2,065	�	35	%	�	$	2,198	�	37	%	�	$	(133	)	�	(6	)%
Production	1,834		�	31	%	�	1,837		�	30	%	�	(3		)	�		�%
Participation, distribution and royalty	864		�	15	%	�	842		�	14	%	�	22			�	3	�%
Other	1,092		�	19	%	�	1,125		�	19	%	�	(33		)	�	(3	)%
Total Operating Expenses	$	5,855	�	100	%	�	$	6,002	�	100	%	�	$	(147	)	�	(2	)%

Programming expenses for the three months ended September�30, 2014 increased $108 million, or 20%, to $660 million from $552 million for the same prior-year period, driven by higher sports programming costs associated with the broadcast of Thursday Night Football on CBS during 2014 and the Company's new agreement with the NFL for Sunday football games. For the nine months ended September�30, 2014, programming expenses decreased $133 million, or 6%, to $2.07 billion from $2.20 billion for the same prior-year period, as the aforementioned investment in NFL programming was more than offset by the CBS Television Networks 2013 broadcast of the Super Bowl. The Company expects higher sports programming expenses for the remainder of 2014.

Production expenses for the three months ended September�30, 2014 increased $46 million, or 8%, to $647 million from $601 million for the same prior-year period, primarily reflecting higher costs associated with the increase in revenues from the licensing of television programming. For the nine months ended September�30, 2014, production expenses decreased slightly to $1.83 billion, mainly as a result of the mix of titles licensed under television licensing arrangements.

Participation, distribution and royalty expenses for the three months ended September�30, 2014 remained relatively flat at $258 million compared to the same prior-year period. For the nine months ended September�30, 2014, participation, distribution and royalty expenses increased $22 million, or 3%, to $864 million from $842 million for the same prior-year period, principally due to higher participations associated with the mix of titles licensed under television licensing arrangements.

- 37-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses, which include expenses incurred for selling and marketing costs, occupancy and back office support, decreased $50 million, or 7%, to $617 million for the three months ended September�30, 2014, and decreased $112 million, or 6%, to $1.79 billion for the nine months ended September�30, 2014. These decreases primarily reflected lower compensation expense, including lower stock-based compensation driven by changes in the Companys stock price. SG&A expenses as a percentage of revenues were 18% for each of the three and nine months ended September�30, 2014 versus 20% and 18% for the three and nine months ended September 30, 2013, respectively.

Impairment Charge

On October 2, 2014, the Company announced that it entered into an agreement with Beasley Broadcast Group, Inc. to swap 13 of the Company's radio stations in Tampa and Charlotte as well as one radio station in Philadelphia, for two radio stations in Philadelphia and three radio stations in Miami. During the third quarter of 2014, in connection with the radio station swap, the Company recorded a pre-tax noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill.

Depreciation and Amortization

For the three months ended September�30, 2014, depreciation and amortization decreased $2 million, or 3%, to $68 million and for the nine months ended September�30, 2014, depreciation and amortization decreased $7 million, or 3%, to $210 million.

Interest Expense

For the three months ended September�30, 2014, interest expense decreased $4 million, or 4%, to $89 million and for the nine months ended September�30, 2014, interest expense decreased $5 million, or 2%, to $276 million compared to the same prior-year periods. These decreases were driven by the Company's debt refinancing during 2014. During the third quarter of 2014, the Company issued $1.75 billion of senior notes and used the net proceeds principally to redeem $1.07 billion of its outstanding debt which was at significantly higher rates (See "Capital Structure"). In addition, during the second quarter of 2014, the Company redeemed $99 million of outstanding 8.875% notes upon maturity. These transactions are expected to result in annualized interest expense savings of approximately $35 million.

The Company had $6.53 billion of long-term debt outstanding at September�30, 2014 and $5.97 billion of long-term debt outstanding at September�30, 2013 at weighted average interest rates of 4.9% and 6.0%, respectively. At September�30, 2014 and 2013, the Company also had outstanding commercial paper of $431 million and $341 million, respectively, both at weighted average interest rates of 0.3%.

Interest Income

For the three months ended September�30, 2014, interest income increased $2 million to $4 million and for the nine months ended September�30, 2014, interest income increased $4 million to $10 million.

- 38-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Loss on Early Extinguishment of Debt

For the three and nine months ended September�30, 2014, the loss on early extinguishment of debt of $352 million reflected a pre-tax loss associated with the redemption of the Company's $600 million of 8.875% senior notes due 2019, $423 million of its 7.875% senior debentures due 2030, $37 million of its 7.875% debentures due 2023 and $6 million of its 7.125% senior notes due 2023.

Other Items, Net

For all periods presented, Other items, net primarily consisted of foreign exchange gains and losses.

Provision for Income Taxes

Equity in Loss of Investee Companies, Net of Tax

Equity in loss of investee companies, net of tax, reflects the Companys share of the operating results of its equity investments. For the three months ended September�30, 2014, equity in loss of investee companies, net of tax, increased $6 million to a loss of $28 million and for the nine months ended September�30, 2014, increased $9 million to a loss of $48 million compared to the same prior-year periods.

Net Earnings from Continuing Operations and Diluted EPS from Continuing Operations

Net earnings from continuing operations of $72 million for the three months ended September�30, 2014 decreased $359 million, or 83%, versus $431 million for the same prior-year period and net earnings from continuing operations of $952 million for the nine months ended September�30, 2014 decreased $364 million, or 28%, versus $1.32 billion for the same prior-year period. Diluted EPS from continuing operations decreased $.57 to $.13 for the third quarter of 2014 and decreased $.44 to $1.66 for the nine months ended September�30, 2014 compared to the same prior-year periods. These decreases were primarily driven by the decline in operating income and the loss on early extinguishment of debt, partially offset by lower weighted average shares outstanding resulting from the split-off of Outdoor Americas on July 16, 2014 and the Company's share repurchase program.

Net Earnings from Discontinued Operations

- 39-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)



Fair value of CBS Corp. Class B Common Stock accepted	�	$	2,721
(44,723,131 shares at $60.85 per share on July 16, 2014)	�	�
Carrying value of Outdoor Americas	�	(1,162		)
Accumulated other comprehensive income	�	30
Transaction costs	�	(32		)
Net gain on split-off of Outdoor Americas	�	$	1,557



�	Three Months Ended						�	Nine Months Ended
�	September 30,						�	September 30,
�	2014		�	2013			�	2014			�	2013
Revenues from discontinued operations	$	55	�	$	477		�	$	677		�	$	1,351
Earnings (loss) from discontinued operations	$	5	�	$	(128	)	�	$	59		�	$	(83	)
Income tax benefit (provision)	5		�	44			�	(17		)	�	29
Earnings (loss) from discontinued operations, net of tax	10		�	(84		)	�	42			�	(54		)
Gain on disposal	1,557		�	149			�	1,557			�	149
Income tax provision			�	(2		)	�				�	(2		)
Gain on disposal, net of tax	1,557		�	147			�	1,557			�	147
Less: Net earnings from discontinued operations attributable to noncontrolling interest, net of tax			�				�	5			�
Net earnings from discontinued operations attributable to CBS Corp.	$	1,567	�	$	63		�	$	1,594		�	$	93

Net Earnings and Diluted EPS

For the three months ended September�30, 2014, net earnings were $1.64 billion compared to $494 million for the same prior-year period and diluted EPS was $3.03 per diluted share compared to $.80 per diluted share for the same prior-year period. For the nine months ended September�30, 2014, net earnings were $2.55 billion compared to $1.41 billion for the same prior-year period and diluted EPS was $4.44 per diluted share compared to $2.25 per diluted share for the same prior-year period. Included in net earnings for the three and nine months ended September�30, 2014 is a pre-tax gain of $1.56 billion from the Split-Off of Outdoor Americas.

- 40-

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 Financial Information

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

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 Companys 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 Companys 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 Companys 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 Companys investors, analysts and industry peers for purposes of valuation and comparison of the Companys 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 Companys 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 Companys net cash flow provided by operating activities to free cash flow.



�	Nine Months Ended
�	September 30,
�	2014			�	2013
Net cash flow provided by operating activities	$	288		�	$	1,320
Capital expenditures	(112		)	�	(112		)
Exclude operating cash flow from discontinued operations	52			�	(79		)
Free cash flow	$	124		�	$	1,287

- 41-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Segment Results of Operations

The following tables present the Companys revenues, segment operating income (loss) before depreciation and amortization (OIBDA), restructuring charges and impairment charges (Segment OIBDA), operating income (loss), and depreciation and amortization by segment, for the three and nine months ended September 30, 2014 and 2013. The Company presents Segment OIBDA as the primary measure of profit and loss for its operating segments in accordance with Financial Accounting Standards Board (FASB) guidance for segment reporting. The Company believes the presentation of Segment OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Companys management and enhances their ability to understand the Companys operating performance. The reconciliation of Segment OIBDA to the Companys consolidated Net earnings is presented in Note 14 (Reportable Segments) to the consolidated financial statements.



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Revenues:	�			�	�			�	�			�	�
Entertainment	$	1,911		�	$	1,884		�	$	6,049		�	$	6,431
Cable Networks	624			�	596			�	1,677			�	1,592
Publishing	199			�	224			�	563			�	584
Local Broadcasting	680			�	641			�	1,971			�	1,977
Corporate/Eliminations	(47		)	�	(43		)	�	(135		)	�	(150		)
Total Revenues	$	3,367		�	$	3,302		�	$	10,125		�	$	10,434

- 42-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Segment OIBDA:	�			�	�			�	�			�	�
Entertainment	$	335		�	$	431		�	$	1,168		�	$	1,340
Cable Networks	272			�	261			�	750			�	699
Publishing	43			�	43			�	80			�	76
Local Broadcasting	214			�	181			�	652			�	635
Corporate	(50		)	�	(82		)	�	(173		)	�	(223		)
Total Segment OIBDA	814			�	834			�	2,477			�	2,527
Restructuring charges	(26		)	�				�	(26		)	�
Impairment charge	(52		)	�				�	(52		)	�
Depreciation and amortization	(68		)	�	(70		)	�	(210		)	�	(217		)
Total Operating Income	$	668		�	$	764		�	$	2,189		�	$	2,310
Operating Income (Loss):	�			�	�			�	�			�	�
Entertainment	$	294		�	$	394		�	$	1,055		�	$	1,225
Cable Networks	266			�	255			�	733			�	684
Publishing	41			�	41			�	75			�	71
Local Broadcasting	126			�	161			�	520			�	571
Corporate	(59		)	�	(87		)	�	(194		)	�	(241		)
Total Operating Income	$	668		�	$	764		�	$	2,189		�	$	2,310
Depreciation and Amortization:	�			�	�			�	�			�	�
Entertainment	$	33		�	$	37		�	$	105		�	$	115
Cable Networks	6			�	6			�	17			�	15
Publishing	1			�	2			�	4			�	5
Local Broadcasting	22			�	20			�	66			�	64
Corporate	6			�	5			�	18			�	18
Total Depreciation and Amortization	$	68		�	$	70		�	$	210		�	$	217

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

(Contributed 57% and 60% to consolidated revenues for the three and nine months ended September�30, 2014, respectively, versus 57% and 62% for the comparable prior-year periods and 44% and 48% to consolidated operating income for the three and nine months ended September�30, 2014, respectively, versus 52% and 53% for the comparable prior-year periods.)



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Revenues	$	1,911		�	$	1,884		�	$	6,049		�	$	6,431
Segment OIBDA	$	335		�	$	431		�	$	1,168		�	$	1,340
Restructuring charges	(8		)	�				�	(8		)	�
Depreciation and amortization	(33		)	�	(37		)	�	(105		)	�	(115		)
Operating income	$	294		�	$	394		�	$	1,055		�	$	1,225
Segment OIBDA as a % of revenues	18		%		23		%		19		%		21		%
Operating income as a % of revenues	15		%		21		%		17		%		19		%
Capital expenditures	$	21		�	$	24		�	$	58		�	$	67

- 43-

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, 2014 and 2013

For the three months ended September�30, 2014, Entertainment revenues increased $27 million, or 1%, to $1.91 billion from $1.88 billion for the same prior-year period driven by 2% higher content licensing and distribution revenues, and growth in affiliate and subscription fees. Advertising revenues decreased 1% as the benefit from the broadcast of Thursday Night Football on CBS was offset by softness in the advertising marketplace.

For the three months ended September�30, 2014, Entertainment OIBDA decreased $96 million, or 22%, to $335 million from $431 million for the same prior-year period, driven by an increased investment in television programming, primarily relating to NFL broadcasts on the CBS Television Network. For the three months ended September�30, 2014, restructuring charges of $8 million principally reflected severance costs and costs associated with exiting operating facilities.

Nine Months Ended September 30, 2014 and 2013

For the nine months ended September�30, 2014, Entertainment revenues decreased $382 million, or 6%, to $6.05 billion from $6.43 billion for the same prior-year period reflecting lower advertising revenues and content licensing and distribution revenues, partially offset by growth in affiliate and subscription fee revenues. Advertising revenues decreased 10%, mainly driven by the CBS Television Networks 2013 broadcast of the Super Bowl, which is broadcast on CBS once every three years; four fewer NCAA Tournament games broadcast on CBS in 2014; and softness in the advertising marketplace. These decreases were partially offset by advertising revenues from the broadcast of Thursday Night Football on CBS. Content licensing and distribution revenues decreased 2%, reflecting the timing of television licensing revenues, which resulted in lower syndication revenues, partially offset by an increase from the licensing of television programming for digital streaming.

For the nine months ended September�30, 2014, Entertainment OIBDA decreased $172 million, or 13%, to $1.17 billion from $1.34 billion for the same prior-year period, primarily reflecting the absence of profits associated with the 2013 broadcast of the Super Bowl, softness in the advertising marketplace and an increased investment in programming.

For the remainder of 2014, results are expected to benefit from incremental affiliate and subscription fees. In addition, comparability will continue to be impacted by revenue growth and cost increases associated with the broadcast of Thursday Night Football on CBS.

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

(Contributed 19% and 17% to consolidated revenues for three and nine months ended September�30, 2014, respectively, versus 18% and 15% for the comparable prior-year periods and 40% and 33% to consolidated operating income for the three and nine months ended September�30, 2014, respectively, versus 33% and 30% for the comparable prior-year periods.)



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Revenues	$	624		�	$	596		�	$	1,677		�	$	1,592
Segment OIBDA	$	272		�	$	261		�	$	750		�	$	699
Depreciation and amortization	(6		)	�	(6		)	�	(17		)	�	(15		)
Operating income	$	266		�	$	255		�	$	733		�	$	684
Segment OIBDA as a % of revenues	44		%	�	44		%	�	45		%	�	44		%
Operating income as a % of revenues	43		%	�	43		%	�	44		%	�	43		%
Capital expenditures	$	2		�	$	2		�	$	7		�	$	6

- 44-

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, 2014 and 2013

For the three months ended September�30, 2014, Cable Networks revenues increased $28 million, or 5%, to $624 million from $596 million for the same prior-year period, primarily driven by higher revenues from the licensing of Showtime original series, as well as growth in affiliate revenues. The increased affiliate revenues was the result of higher rates at Showtime Networks, CBS Sports Network, and Smithsonian Networks, as well as growth in Telco subscriptions. As of September�30, 2014 subscriptions totaled 75 million for Showtime Networks (including Showtime, The Movie Channel and Flix), 54 million for CBS Sports Network and 30 million for Smithsonian Networks. The revenue growth was partially offset by lower pay-per-view revenues as the third quarter of 2013 benefited from the Floyd Mayweather/Canelo Alvarez boxing match, the highest-grossing pay-per-view event of all time.

For the three months ended September�30, 2014, Cable Networks OIBDA increased $11 million, or 4%, to $272 million from $261 million for the same prior-year period primarily as a result of the revenue growth.

Nine Months Ended September 30, 2014 and 2013

For the nine months ended September�30, 2014, Cable Networks revenues increased $85 million, or 5%, to $1.68 billion from $1.59 billion for the same prior-year period primarily driven by higher revenues from the licensing of Showtime original series for digital streaming, mainly Dexter and Californication. Revenue growth also reflects higher affiliate revenues reflecting rate increases and growth in Telco subscriptions. These increases were partially offset by lower revenues from pay-per-view boxing events.

For the nine months ended September�30, 2014, Cable Networks OIBDA increased $51 million, or 7%, to $750 million from $699 million for the same prior-year period, primarily as a result of increases in higher margin revenues.

Publishing (Simon & Schuster)

(Contributed 6% to consolidated revenues for both the three and nine months ended September�30, 2014, versus 7% and 6% for the comparable prior-year periods and 6% and 3% to consolidated operating income for the three and nine months ended September�30, 2014, versus 5% and 3% for the comparable prior-year periods.)



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Revenues	$	199		�	$	224		�	$	563		�	$	584
Segment OIBDA	$	43		�	$	43		�	$	80		�	$	76
Restructuring charges	(1		)	�				�	(1		)	�
Depreciation and amortization	(1		)	�	(2		)	�	(4		)	�	(5		)
Operating income	$	41		�	$	41		�	$	75		�	$	71
Segment OIBDA as a % of revenues	22		%	�	19		%	�	14		%	�	13		%
Operating income as a % of revenues	21		%	�	18		%	�	13		%	�	12		%
Capital expenditures	$			�	$	1		�	$	1		�	$	2

Three Months Ended September 30, 2014 and 2013

For the three months ended September�30, 2014, Publishing revenues decreased $25 million, or 11%, to $199 million from $224 million for the same prior-year period, as last years third quarter benefited from the popularity of Doctor Sleep by Stephen King and Si-Cology by Si Robertson. Digital book sales represented 28% of Publishings total revenues for the third quarter of 2014. Best-selling titles in the third quarter of 2014 included unPHILtered by Phil Robertson and Dork Diaries 8 by Rachel Ren�e Russell.

- 45-

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, 2014, Publishing OIBDA remained flat at $43 million compared with the same prior-year period as lower inventory and selling costs offset the revenue decline.

Nine Months Ended September 30, 2014 and 2013

For the nine months ended September�30, 2014, Publishing revenues decreased $21 million, or 4%, to $563 million from $584 million for the same prior-year period reflecting lower print and digital book sales, partially offset by higher revenues from distribution services.

For the nine months ended September�30, 2014, Publishing OIBDA increased $4 million, or 5%, to $80 million from $76 million for the same prior-year period reflecting the growth in revenues from distribution services, as well as lower inventory, selling and overhead costs.

Local Broadcasting (CBS Television Stations and CBS Radio)

(Contributed 20% and 19% to consolidated revenues for the three and nine months ended September�30, 2014, respectively, versus 19% for both the three and nine months ended September�30, 2013, and 19% and 24% to consolidated operating income for the three and nine months ended September�30, 2014, respectively, versus 21% and 25% for the comparable prior-year periods.)



�	Three Months Ended							�	Nine Months Ended
�	September 30,							�	September 30,
�	2014			�	2013			�	2014			�	2013
Revenues	$	680		�	$	641		�	$	1,971		�	$	1,977
Segment OIBDA	$	214		�	$	181		�	$	652		�	$	635
Restructuring charges	(14		)	�				�	(14		)	�
Impairment charge	(52		)	�				�	(52		)	�
Depreciation and amortization	(22		)	�	(20		)	�	(66		)	�	(64		)
Operating income	$	126		�	$	161		�	$	520		�	$	571
Segment OIBDA as a % of revenues	31		%	�	28		%	�	33		%	�	32		%
Operating income as a % of revenues	19		%	�	25		%	�	26		%	�	29		%
Capital expenditures	$	15		�	$	15		�	$	35		�	$	33

Three Months Ended September 30, 2014 and 2013

For the three months ended September�30, 2014, Local Broadcasting revenues increased $39 million, or 6%, to $680 million from $641 million for the same prior-year period, primarily reflecting increased political advertising revenues as a result of midterm elections, the broadcast of Thursday Night Football on CBS in 2014, and higher affiliate and subscription fee revenues. CBS Television Stations revenues increased 10% and CBS Radio revenues grew 2%.

For the three months ended September�30, 2014, Local Broadcasting OIBDA increased $33 million, or 18%, to $214 million from $181 million for the same prior-year period, primarily reflecting the increase in revenues as well as lower programming costs, mainly for sports. For the three months ended September�30, 2014, restructuring charges of $14 million primarily reflected severance costs and costs associated with exiting contractual obligations.

Nine Months Ended September 30, 2014 and 2013

For the nine months ended September�30, 2014, Local Broadcasting revenues decreased slightly to $1.97 billion from $1.98 billion for the same prior-year period. CBS Television Stations revenues decreased 1% as a result of the benefit to 2013 from the Super Bowl broadcast on CBS and softness in the advertising marketplace, which were substantially offset by higher political advertising and affiliate and subscription fee revenues. CBS Radio revenues were comparable with the same prior-year period.

- 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, 2014, Local Broadcasting OIBDA increased $17 million, or 3%, to $652 million from $635 million for the same prior-year period, as the revenue decline was more than offset by lower programming costs, mainly for sports.

Radio Station Swap

On October 2, 2014, the Company announced that it entered into an agreement with Beasley Broadcast Group, Inc. to swap 13 of the Company's mid-size market radio stations in Tampa and Charlotte as well as one radio station in Philadelphia, for two radio stations in Philadelphia and three radio stations in Miami. This transaction is subject to customary closing conditions. During the third quarter of 2014, in connection with the swap, the Company recorded a pre-tax noncash impairment charge of $52 million to reduce the carrying value of the allocated goodwill.

Corporate

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, 2014, corporate expenses decreased $28 million, or 32%, to $59 million from $87 million for the same prior-year period, and for the nine months ended September�30, 2014, corporate expenses decreased $47 million, or 20%, to $194 million from $241 million for the same prior-year period. These decreases principally reflected lower stock-based compensation associated with changes in the Companys stock price.

Financial Position

Current assets increased by $34 million to $5.40 billion at September�30, 2014 from $5.37 billion at December�31, 2013, primarily due to an increase in prepaid program rights from the timing of payments for sports programming, an increase in receivables associated with television licensing agreements and an increase in prepaid income taxes. These increases were partially offset by a decrease in cash of $190 million and a $351 million decrease in current assets of discontinued operations resulting from the Split-Off of Outdoor Americas in the third quarter of 2014. The allowance for doubtful accounts as a percentage of receivables was 1.6% and 1.8% at September�30, 2014 and December�31, 2013, respectively.

Net property and equipment of $1.39 billion at September�30, 2014 decreased $67 million from $1.46 billion at December�31, 2013, primarily reflecting depreciation expense of $185 million, partially offset by capital expenditures of $112 million.

Other assets increased by $299 million to $2.26 billion at September�30, 2014 from $1.96 billion at December�31, 2013, primarily reflecting an increase in long-term receivables associated with revenues from television licensing agreements.

Current liabilities decreased by $810 million to $3.40 billion at September�30, 2014 from $4.21 billion at December�31, 2013, primarily driven by lower television programming liabilities from the seasonality of the Companys business, decreases in accounts payable and accrued compensation from the timing of payments, and a decline in current liabilities of discontinued operations resulting from the Split-Off of Outdoor Americas.

Long-term debt increased $568 million to $6.51 billion at September�30, 2014 from $5.94 billion at December�31, 2013 reflecting the issuance of $1.75 billion of senior notes, partially offset by the redemption of $1.17 billion of the Companys outstanding debt.

- 47-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

The decreases in long-term assets and liabilities of discontinued operations of $3.07 billion and $339 million, respectively, reflect the Split-Off of Outdoor Americas in the third quarter of 2014.

Cash Flows

Cash and cash equivalents, including discontinued operations, decreased by $219 million and $482 million for the nine months ended September�30, 2014 and 2013, respectively. The changes in cash and cash equivalents were as follows:



�	Nine Months Ended
�	September 30,
�	2014			�	2013
Cash provided by (used for) operating activities from:	�			�	�
Continuing operations	$	236		�	$	1,399
Discontinued operations	52			�	(79		)
Cash provided by operating activities	288			�	1,320
Cash used for investing activities from:	�			�	�
Continuing operations	(197		)	�	(71		)
Discontinued operations	(271		)	�	(45		)
Cash used for investing activities	(468		)	�	(116		)
Cash (used for) provided by financing activities from:	�			�	�
Continuing operations	(2,206		)	�	(1,691		)
Discontinued operations	2,167			�	5
Cash used for financing activities	(39		)	�	(1,686		)
Net decrease in cash and cash equivalents	$	(219	)	�	$	(482	)

Operating Activities. For the nine months ended September�30, 2014 cash provided by operating activities from continuing operations decreased $1.16 billion to $236 million from $1.40 billion for the same prior-year period. The decrease reflects higher payments for sports programming resulting from the timing of payments under the Companys new agreement with the NFL for Sunday football and the broadcast of Thursday Night Football on CBS beginning in September 2014; payments in 2014 of $360 million associated with the Company's third quarter debt refinancing, primarily for early redemption premiums; and the benefit to 2013 from CBSs Super Bowl broadcast. Included in operating cash flows for 2013 is a pension contribution of $150 million to pre-fund the Companys qualified pension plans.

Cash used for operating activities from discontinued operations of $79 million for the nine months ended September 30, 2013 includes payments associated with the exiting of an unprofitable contractual arrangement in connection with the sale of Outdoor Europe in 2013.

Investing Activities. Cash used for investing activities from continuing operations of $197 million for the nine months ended September�30, 2014 principally reflected capital expenditures of $112 million and investments in investee companies of $68 million, primarily in domestic and international television joint ventures. Cash used for investing activities from continuing operations of $71 million for the nine months ended September�30, 2013 principally reflected capital expenditures of $112 million and investments in investee companies of $144 million, mainly for the Companys investment in TVGN (TV Guide Network) as well as its other domestic and international television joint ventures, partially offset by proceeds from dispositions of $185 million, principally from the sale of Outdoor Europe.

- 48-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Cash used for investing activities from discontinued operations of $271 million for the nine months ended September�30, 2014 principally reflects the disposition of Outdoor Americas' cash as well as the capital expenditures of Outdoor Americas. Cash used for investing activities from discontinued operations of $45 million for the nine months ended September�30, 2013 principally reflects capital expenditures of Outdoor Americas and Outdoor Europe.

Financing Activities. Cash used for financing activities from continuing operations of $2.21 billion for the nine months ended September�30, 2014 principally reflected the repurchase of CBS Corp. Class B Common Stock for $2.83 billion and the repayment of notes and debentures of $1.15 billion, partially offset by proceeds from the issuance of senior notes of $1.73 billion. Cash used for financing activities from continuing operations of $1.69 billion for the nine months ended September�30, 2013 principally reflected the repurchase of CBS Corp. Class B Common Stock for $1.86 billion and dividend payments of $228 million, partially offset by proceeds from short-term borrowings of $341 million.

Cash provided by financing activities from discontinued operations of $2.17 billion for the nine months ended September�30, 2014 principally reflected the net proceeds from Outdoor Americas' long-term debt borrowings and IPO.

Repurchase of Company Stock and Cash Dividends

During the third quarter of 2014, the Company repurchased 6.9 million shares of its Class B Common Stock for $400 million, at an average cost of $57.91 per share. During the nine months ended September�30, 2014, the Company repurchased 45.4 million shares of its Class B Common Stock for $2.81 billion, at an average cost of $61.94 per share, leaving $5.60 billion of authorization remaining under its share repurchase program at September�30, 2014. Share repurchases during 2014 were partly funded by proceeds of $2.04 billion received by the Company from Outdoor Americas' IPO and debt borrowings (See Note 3 to the consolidated financial statements).

On August 7, 2014, the Company announced an increase in the amount available under its share repurchase program from $3.0 billion to $6.0 billion.

On August 7, 2014, the Company announced a 25% increase in the quarterly cash dividend on its Class A and Class B Common Stock to $.15 per share from $.12 per share. The total third quarter dividend was $79 million of which $78 million was paid on October 1, 2014 and $1 million was accrued to be paid upon vesting of RSUs. Total dividends for the nine months ended September�30, 2014 were $218 million.

- 49-

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 Companys debt.



�	At				�	At
�	September�30, 2014				�	December�31, 2013
Commercial paper	�	$	431	�	�	�	$	475	�
Senior debt (1.95%��8.875% due 2014��2044)�^(a)	�	6,427		�	�	�	5,848		�
Obligations under capital leases	�	101		�	�	�	112		�
Total debt	�	6,959		�	�	�	6,435		�
Less commercial paper	�	431		�	�	�	475		�
Less current portion of long-term debt	�	20		�	�	�	20		�
Total long-term debt, net of current portion	�	$	6,508	�	�	�	$	5,940	�

(a) At September�30, 2014 and December�31, 2013, the senior debt balances included (i) a net unamortized discount of $22 million and $13 million, respectively and (ii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $15 million and $18 million, respectively. The balance at September�30, 2014, also included a decrease in the carrying value of the debt relating to outstanding fair value hedges of $6 million. The face value of the Companys senior debt was $6.44 billion and $5.84 billion at September�30, 2014 and December�31, 2013, respectively.

For the nine months ended September�30, 2014, debt issuances, redemptions and repurchases were as follows:



Debt Issuances
�	August 2014, $600 million 2.30% senior notes due 2019
�	August 2014, $600 million 3.70% senior notes due 2024
�	August 2014, $550 million 4.90% senior notes due 2044
�	�
Debt Redemptions
�	$99 million 8.875% notes due 2014
�	$264 million 8.875% senior notes due 2019
�	�
Debt Repurchases
�	$336 million 8.875% senior notes due 2019, through a tender offer
�	$37 million 7.875% debentures due 2023, through a tender offer
�	$6 million 7.125% senior notes due 2023, through a tender offer
�	$423 million 7.875% senior debentures due 2030, through a tender offer

The Company's debt activities during 2014 are expected to result in annualized interest expense savings of approximately $35 million.

All of the Company's long-term debt has been issued under fixed interest rate agreements. During the third quarter of 2014, the Company entered into $600 million notional amount of fixed-to-floating rate swap agreements to hedge the Company's 2.30% senior notes that were issued in the third quarter of 2014. These interest rate swaps are designated as fair value hedges. The swaps expose the Company to movements in short-term interest rates. Based on the amount of fixed-to-floating rate swaps at September�30, 2014, a 100 basis point change in interest rates would cause a $6 million change to pre-tax earnings.

- 50-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.0 billion commercial paper program of $431 million at September�30, 2014 and $475 million at December 31, 2013, each at a weighted average interest rate of 0.3% and with maturities of less than thirty days.

Credit Facility

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 Companys operating needs include, among other items, commitments for sports programming rights, television and film programming, talent contracts, interest payments, and pension funding obligations. The Companys 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 $1.99 billion of remaining availability at September�30, 2014; and access to capital markets are sufficient to fund its operating, investing and financing requirements for the next twelve months.

The Companys 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 Companys long-term debt obligations due over the next five years of $1.50 billion is expected to come from cash generated from operating activities and the Companys ability to access capital markets.

On August 7, 2014, the Company announced an increase to the amount available under its share repurchase program from $3.0 billion to $6.0 billion. Share repurchases under the program are expected to be funded over time by cash flows from operations and, as appropriate, with short-term borrowings, including commercial paper, and/or the issuance of long-term debt.

- 51-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Guarantees

Legal Matters

- 52-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

States Court for the Southern District of New York (U.S. Actions). Simon�& Schuster executed an agreement settling the Canada Actions as of May 8, 2014, which is subject to Canadian court approval. Simon & Schuster intends to defend itself in the U.S. Actions.

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 Companys 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, or by asbestos-containing grades of decorative micarta, a laminate used in commercial ships.

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. In a substantial number of the pending claims, the plaintiff has not yet identified the claimed injury. 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

- 53-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

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

For a discussion of related parties, see Note 6 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, Managements Discussion and Analysis of Results of Operations and Financial Condition in the Companys Annual Report on Form 10-K for the fiscal year ended December�31, 2013, for a discussion of the Companys critical accounting policies.

Cautionary Statement Concerning Forward-Looking Statements

This quarterly report on Form�10-Q, including Item�2�-�Managements Discussion and Analysis of Results of Operations and Financial Condition, contains both historical and forwardlooking statements. All statements other than statements of historical fact are, or may be deemed to be, forwardlooking statements within the meaning of section�27A of the Securities Act of 1933 and section�21E of the Securities Exchange Act of 1934. These forwardlooking statements are not based on historical facts, but rather reflect the Companys current expectations concerning future results and events. These forwardlooking 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 Companys objectives, plans or goals are or may be forwardlooking statements. These forwardlooking 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 Companys programming; changes in technology and its effect on competition in the Companys markets; changes in the federal communications laws and regulations; the impact of piracy on the Companys products; the impact of

- 54-

Management's Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

consolidation in the market for the Companys programming; the impact of negotiations or the loss of affiliation agreements or retransmission agreements; the impact of union activity, including possible strikes or work stoppages or the Companys inability to negotiate favorable terms for contract renewals; other domestic and global economic, business, competitive and/or regulatory factors affecting the Companys businesses generally; and other factors described in the Companys news releases and 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, 2013 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 forwardlooking 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 forwardlooking 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, 2013.

Item 4. Controls and Procedures.

The Companys chief executive officer and chief operating officer have concluded that, as of the end of the period covered by this report, the Companys 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 Companys internal control over financial reporting occurred during the Companys last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

- 55-

PART II� OTHER INFORMATION

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 Companys common stock. Since then, various increases to such amount have been approved and announced, including most recently a $3.0 billion increase to the amount available under such program on August 7, 2014. Below is a summary of CBS Corp.s purchases of its Class B Common Stock during the three months ended September�30, 2014.

(in millions, except per share amounts)

Total

Number of

Purchased

�

Average

Price Per

�

Total Number of

Shares Purchased

as Part of Publicly

Announced Programs

�

Remaining

Authorization

July 1, 2014 - July 31, 2014

�

44.7

�

$60.85

�

(a)

�

3,020

�

August 1, 2014 - August 31, 2014

�

2.6

�

$60.01

�

2.6

�

5,846

�

September 1, 2014 - September 30, 2014

�

4.3

�

$56.66

�

4.3

�

5,600

�

Total

�

51.6

�

$60.46

�

(b)

�

5,600

�

(a) During July 2014, the Company completed the split-off of CBS Outdoor Americas Inc. and in connection with this transaction, received 44.7 million shares of CBS Corp. Class B Common Stock in exchange for the 97.0 million shares of CBS Outdoor Americas Inc. common stock that it owned. The exchange offer was not part of this publicly announced share repurchase program and did not have an effect on the remaining authorization under such program.

(b) During the third quarter of 2014, the Company repurchased 6.9 million shares of CBS Corp. Class B Common Stock under the Company's publicly announced share repurchase program at an average price of $57.91 per share.

- 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.
(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�5, 2014	/s/ Joseph R. Ianniello
�	Joseph R. Ianniello Chief Operating Officer
�	�
Date: November�5, 2014	/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.
(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 12

CBS CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIO AND EARNINGS TO FIXED CHARGES

(Tabular dollars in millions, except ratios)



�	Nine Months Ended						�	�
�	September 30,						�	December 31,
�	2014			2013			�	2013			2012			2011			2010			2009
Earnings from continuing operations before income taxes and equity in loss of investee companies	$	1,561		$	2,033		�	$	2,665		$	2,357		$	1,983		$	1,209		$	533
Add:	�			�			�	�			�			�			�			�
Distributions from investee companies	8			5			�	8			11			6						2
Interest expense, net of capitalized interest	276			281			�	375			401			433			526			538
1/3 of rental expense	51			48			�	70			68			68			68			71
Total earnings from continuing operations	$	1,896		$	2,367			$	3,118		$	2,837		$	2,490		$	1,803		$	1,144
�	�			�			�	�			�			�			�			�
Fixed charges:	�			�			�	�			�			�			�			�
Interest expense, net of capitalized interest	$	276		$	281		�	$	375		$	401		$	433		$	526		$	538
1/3 of rental expense	51			48			�	70			68			68			68			71
Total fixed charges	$	327		$	329			$	445		$	469		$	501		$	594		$	609
Ratio of earnings to fixed charges	5.8		x	7.2		x		7.0		x	6.0		x	5.0		x	3.0		x	1.9		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�5, 2014



�	/s/ Leslie Moonves
�	Leslie Moonves
�	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�5, 2014



�	/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, 2014 as filed with the Securities and Exchange Commission (the "Report"), I, Leslie Moonves, 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�5, 2014	�

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, 2014 as filed with the Securities and Exchange Commission (the "Report"), I, Joseph R. Ianniello, Chief Financial 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�5, 2014	�

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Form 10-Q CBS CORP For: Sep 30

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