Resource item

Discussion and analysis by management of operating results and financial item 2. Status. (Table in millions of dollars, except per share amounts)

Management's discussion and analysis of the results of operations and financial
condition of ViacomCBS Inc. should be read in conjunction with the consolidated
financial statements and related notes in ViacomCBS Inc.'s Annual Report on Form
10-K for the year ended December 31, 2020. References in this document to
"ViacomCBS," the "Company," "we," "us" and "our" refer to ViacomCBS Inc.

Significant components of management's discussion and analysis of results of
operations and financial condition include:
•Overview-Summary of ViacomCBS and our business and operational highlights.
•Consolidated Results of Operations-Analysis of our results on a consolidated
basis for the three and nine months ended September 30, 2021 compared with the
three and nine months ended September 30, 2020.
•Segment Results of Operations-Analysis of our results on a reportable segment
basis for the three and nine months ended September 30, 2021 compared with the
three and nine months ended September 30, 2020.
•Liquidity and Capital Resources-Discussion of our sources and uses of cash;
cash flows for the nine months ended September 30, 2021 and September 30, 2020;
and of our outstanding debt, commitments and contingencies as of September 30,
2021.
•Legal Matters-Discussion of legal matters in which we are involved.

Overview

ViacomCBS is a leading global media and entertainment company that creates content and experiences for audiences around the world.

Stock Offerings
On March 26, 2021, we completed offerings of 20 million shares of our Class B
Common Stock at a price to the public of $85 per share and 10 million shares of
5.75% Series A Mandatory Convertible Preferred Stock ("Mandatory Convertible
Preferred Stock") at a price to the public and liquidation preference of $100
per share. The net proceeds from the Class B Common Stock offering and the
Mandatory Convertible Preferred Stock offering were approximately $1.67 billion
and $983 million, respectively, in each case after deducting underwriting
discounts, commissions and estimated offering expenses. We have used and intend
to continue to use the net proceeds for general corporate purposes, including
investments in streaming.

Streaming Revenues
Beginning in the first quarter of 2021, we changed the categories we use to
disaggregate revenues to include streaming revenues, in order to align with
management's increased focus on this revenue stream. Streaming revenues are
comprised of streaming advertising and streaming subscription revenues.
Streaming advertising revenues are earned from advertisements on our pay and
free streaming services, including Paramount+ and Pluto TV, and from digital
video advertisements on our websites and in our video content on third-party
platforms ("other digital video platforms"). Streaming subscription revenues
include fees for our pay streaming services, including Paramount+, Showtime
Networks' premium subscription streaming service ("Showtime OTT"), BET+ and
Noggin, as well as premium subscriptions to access certain video content on our
websites. Accordingly, our advertising and affiliate revenue categories exclude
revenues earned by our streaming services and on other digital video platforms.
The prior year has been reclassified to conform to this presentation.
                                      -34-
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                    Management's Discussion and Analysis of
           Results of Operations and Financial Condition (Continued)
            (Tabular dollars in millions, except per share amounts)

Operational Highlights – Three Months Ended September 30, 2021 against three months ended September 30, 2020
Consolidated operating results

                                                              Increase/(Decrease)
Three Months Ended September 30,                   2021             2020                         $                          %
GAAP:
Revenues                                        $ 6,610          $ 5,837          $             773                          13  %
Operating income                                $   879          $   903          $             (24)                         (3) %

Net income from continuing operations

  attributable to ViacomCBS                     $   465          $   568          $            (103)                        (18) %

Diluted EPS from continuing operations

  attributable to ViacomCBS                     $   .69          $   .92          $            (.23)                        (25) %

Non-GAAP: (a)
Adjusted OIBDA                                  $ 1,020          $ 1,052          $             (32)                         (3) %
Adjusted net earnings from continuing
operations
  attributable to ViacomCBS                     $   510          $   516          $              (6)                         (1) %

Adjusted diluted EPS from continuing operations

  attributable to ViacomCBS                     $   .76          $   .83          $            (.07)                         (8) %


(a) Certain items identified as affecting comparability are excluded in non-GAAP
results. See "Reconciliation of Non-GAAP Measures" for details of these items
and reconciliations of non-GAAP results to the most directly comparable
financial measures in accordance with accounting principles generally accepted
in the United States ("GAAP").
For the three months ended September 30, 2021, revenues increased 13% to $6.61
billion, reflecting growth across all revenue streams. The increase was led by
62% growth in streaming revenues, reflecting increased subscribers for our
subscription streaming services and higher streaming advertising revenues,
driven by Pluto TV and Paramount+. The revenue comparison also benefited from
18% growth in licensing and other revenues, mainly reflecting the timing of
program availabilities, and revenues from theatrical releases including, the
third quarter 2021 releases of Paw Patrol: The Movie and Snake Eyes: G.I. Joe
Origins.

Operating result for the three months ended September 30, 2021 decreased by 3% compared to the same period of the previous year. This comparison includes items identified as affecting comparability, including restructuring costs for each period. Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) decreased by 3%, mainly due to increased investments in our streaming services.

For the three months ended September 30, 2021, net earnings from continuing
operations attributable to ViacomCBS and diluted earnings per share ("EPS") from
continuing operations decreased 18% and 25%, respectively, from the same
prior-year period. These comparisons were impacted by items identified as
affecting comparability, including the aforementioned items impacting operating
income, as well as a loss from investments and a pension settlement charge in
2021, a loss on extinguishment of debt in 2020, and discrete tax items in each
period. Adjusted net earnings from continuing operations attributable to
ViacomCBS and adjusted diluted EPS decreased 1% and 8%, respectively, primarily
reflecting lower Adjusted OIBDA. The lower adjusted diluted EPS also reflects
the effect of the above-mentioned stock issuances, which negatively impacted the
EPS comparison by 5-percentage points.

                                      -35-
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                    Management's Discussion and Analysis of
           Results of Operations and Financial Condition (Continued)
            (Tabular dollars in millions, except per share amounts)
Operational Highlights - Nine Months Ended September 30, 2021 versus Nine Months
Ended September 30, 2020
Consolidated results of operations                                                          Increase/(Decrease)
Nine Months Ended September 30,                   2021              2020                     $                     %
GAAP:
Revenues                                       $ 20,586          $ 18,411          $            2,175               12  %
Operating income                               $  3,633          $  3,056          $              577               19  %
Net earnings from continuing operations
attributable to ViacomCBS                      $  2,359          $  1,522          $              837               55  %
Diluted EPS from continuing operations
attributable to ViacomCBS                      $   3.62          $   2.47          $             1.15               47  %

Non-GAAP: (a)
Adjusted OIBDA                                 $  3,887          $  3,949          $              (62)              (2) %
Adjusted net earnings from continuing
operations
attributable to ViacomCBS                      $  2,111          $  1,950          $              161                8  %
Adjusted diluted EPS from continuing
operations
attributable to ViacomCBS                      $   3.23          $   3.16          $              .07                2  %


(a) Certain items identified as affecting comparability are excluded in non-GAAP
results. See "Reconciliation of Non-GAAP Measures" for details of these items
and reconciliations of non-GAAP results to the most directly comparable
financial measures in accordance with GAAP.
For the nine months ended September 30, 2021, revenues grew 12% to $20.59
billion, led by 72% growth in streaming revenues, reflecting growth across our
streaming services, and a 16% increase in advertising revenues. The advertising
revenue increase is principally the result of CBS' broadcasts of Super Bowl LV
and NCAA Division I Men's Basketball Championship (the "NCAA Tournament") games,
for which there were no comparable broadcasts on CBS in 2020. We have the rights
to broadcast the Super Bowl on a rotational basis with other networks, and the
2020 NCAA Tournament was cancelled as a result of the coronavirus pandemic
("COVID-19"). Revenue growth also reflects a 6% increase in affiliate revenues.
These increases were partially offset by a 6% decline in licensing and other
revenue, reflecting the benefit to the prior year from the licensing of the
domestic streaming rights to South Park, partially offset by the timing of
program availabilities.

Operating income for the nine months ended September 30, 2021 increased 19% from
the same prior-year period. This comparison was impacted by items identified as
affecting comparability, including costs for restructuring in each period, net
gain on sales in 2021 and costs for other corporate matters, programming charges
and impairment charges in 2020. Adjusted OIBDA decreased 2%, as the revenue
growth was more than offset by higher costs, principally from an increased
investment in our streaming services and higher programming costs associated
with noncomparable sporting events and a higher level of production in 2021.

For the nine months ended September 30, 2021, net earnings from continuing
operations attributable to ViacomCBS and diluted EPS from continuing operations
increased 55% and 47%, respectively, from the same prior-year period. These
comparisons were impacted by items identified as affecting comparability,
including the aforementioned items impacting operating income, a pension
settlement charge in 2021, and in each period, a loss on extinguishment of debt,
gains from investments, and discrete tax items. Adjusted net earnings from
continuing operations attributable to ViacomCBS and adjusted diluted EPS
increased 8% and 2%, respectively, as the lower Adjusted OIBDA was more than
offset by the impact in the prior year from the noncontrolling interest's share
of profit from the licensing of South Park. The impact on adjusted diluted EPS
was partially offset by the effect of the above-mentioned stock issuances, which
negatively impacted the EPS comparison by 4-percentage points.
                                      -36-
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                    Management's Discussion and Analysis of
           Results of Operations and Financial Condition (Continued)
            (Tabular dollars in millions, except per share amounts)
Reconciliation of Non-GAAP Measures
Results for the three and nine months ended September 30, 2021 and 2020 included
certain items identified as affecting comparability. Adjusted OIBDA, adjusted
earnings from continuing operations before income taxes, adjusted provision for
income taxes, adjusted net earnings from continuing operations attributable to
ViacomCBS, and adjusted diluted EPS from continuing operations (together, the
"adjusted measures") exclude the impact of these items and are measures of
performance not calculated in accordance with GAAP. We use these measures to,
among other things, evaluate our operating performance. These measures are among
the primary measures used by management for planning and forecasting of future
periods, and they are important indicators of our operational strength and
business performance. In addition, we use Adjusted OIBDA to, among other things,
value prospective acquisitions. We believe these measures are relevant and
useful for investors because they allow investors to view performance in a
manner similar to the method used by our management; provide a clearer
perspective on our underlying performance; and make it easier for investors,
analysts and peers to compare our operating performance to other companies in
our industry and to compare our year-over-year results.

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

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

                                                            Three Months Ended                     Nine Months Ended
                                                               September 30,                         September 30,
                                                           2021                2020              2021               2020
Operating income (GAAP)                              $      879             $   903          $    3,633          $ 3,056
Depreciation and amortization (a)                            95                  97                 289              331
Restructuring and other corporate matters (b)                46                  52                  81              441
Programming charges (b)                                       -                   -                   -              121
Net gain on sales (b)                                         -                   -                (116)               -
Adjusted OIBDA (Non-GAAP)                            $    1,020             $ 1,052          $    3,887          $ 3,949


(a) The nine months ended September 30, 2020 include an impairment charge for
FCC licenses of $25 million and accelerated depreciation of $12 million for
technology that was abandoned in connection with synergy plans related to the
merger of Viacom Inc. ("Viacom") with and into CBS Corporation (the "Merger").
(b) See notes on the following tables for additional information on items
affecting comparability.
                                      -37-
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                    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, 2021
                                      Earnings from Continuing                                           Net Earnings from
                                      Operations Before Income         Provision for Income            Continuing Operations              Diluted EPS from
                                                Taxes                          Taxes                 Attributable to ViacomCBS          Continuing Operations
Reported (GAAP)                                 $  616                        $ (120)                           $  465                          $  .69
Items affecting comparability:
Restructuring and other corporate
matters (a)                                         46                           (12)                               34                             .05

Loss from investments (b)                            5                            (1)                                4                             .01
Pension settlement charge (c)                       10                            (2)                                8                             .01
Discrete tax items                                   -                            (1)                               (1)                              -

Adjusted (Non-GAAP)                             $  677                        $ (136)                           $  510                          $  .76


(a) Reflects severance costs associated with changes in management at certain of
our businesses.
(b) Reflects the change in fair value of an investment which was sold during the
quarter.
(c) Reflects the accelerated recognition of a portion of the unamortized
actuarial losses due to the volume of lump sum benefit payments in one of our
pension plans.
                                                                                Three Months Ended September 30, 2020
                                      Earnings from Continuing                                           Net Earnings from
                                      Operations Before Income         Provision for Income            Continuing Operations              Diluted EPS from
                                                Taxes                          Taxes                 Attributable to ViacomCBS          Continuing Operations
Reported (GAAP)                                 $  615                        $  (26)                           $  568                          $  .92
Items affecting comparability:
Restructuring and other corporate
matters (a)                                         52                           (12)                               40                             .06
Loss on extinguishment of debt                      23                            (5)                               18                             .03
Discrete tax items (b)                               -                          (119)                             (119)                           (.19)
Impairment of an equity-method
investment                                           -                             -                                 9                             .01
Adjusted (Non-GAAP)                             $  690                        $ (162)                           $  516                          $  .83


(a) Reflects severance, exit costs and other costs related to the Merger.
(b) Primarily reflects a benefit from the remeasurement of our UK net deferred
income tax asset as a result of an increase in the UK corporate income tax rate
from 17% to 19% enacted during the third quarter of 2020.
                                      -38-
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                    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, 2021
                                      Earnings from Continuing                                         Net Earnings from
                                      Operations Before Income        Provision for Income           Continuing Operations              Diluted EPS from
                                               Taxes                          Taxes                Attributable to ViacomCBS         Continuing Operations
Reported (GAAP)                               $ 2,789                        $ (312)                         $ 2,359                         $ 3.62
Items affecting comparability:
Restructuring and other corporate
matters (a)                                        81                           (20)                              61                            .10
Net gain on sales (b)                            (116)                           27                              (89)                          (.14)
Gains from investments (c)                        (47)                           11                              (36)                          (.06)
Loss on extinguishment of debt                    128                           (30)                              98                            .15
Pension settlement charge (d)                      10                            (2)                               8                            .01
Discrete tax items (e)                              -                          (290)                            (290)                          (.45)
Adjusted (Non-GAAP)                           $ 2,845                        $ (616)                         $ 2,111                         $ 3.23


(a) Reflects severance costs associated with changes in management at certain of
our businesses and the impairment of lease assets in connection with cost
transformation initiatives related to the Merger.
(b) Primarily reflects a gain on the sale of a noncore trademark licensing
operation.
(c) Reflects a gain of $37 million on the sale of an investment and an increase
in the fair value of an investment which was sold during the third quarter.
(d) Reflects the accelerated recognition of a portion of the unamortized
actuarial losses due to the volume of lump sum benefit payments in one of our
pension plans.
(e) Primarily reflects a benefit of $260 million to remeasure our UK net
deferred income tax asset as a result of the enactment during the quarter of an
increase in the UK corporate income tax rate from 19% to 25% beginning April 1,
2023, as well as a net tax benefit in connection with the settlement of income
tax audits.
                                                                               Nine Months Ended September 30, 2020
                                      Earnings from Continuing                                         Net Earnings from
                                      Operations Before Income        Provision for Income           Continuing Operations              Diluted EPS from
                                               Taxes                          Taxes                Attributable to ViacomCBS         Continuing Operations
Reported (GAAP)                               $ 2,164                        $ (352)                         $ 1,522                         $ 2.47
Items affecting comparability:
Restructuring and other corporate
matters (a)                                       441                           (93)                             348                            .57
Impairment charge (b)                              25                            (6)                              19                            .03
Depreciation of abandoned technology
(c)                                                12                            (3)                               9                            .01
Programming charges (d)                           121                           (29)                              92                            .15
Gains from investments (e)                        (32)                            8                              (24)                          (.04)
Loss on extinguishment of debt                    126                           (29)                              97                            .16
Discrete tax items (f)                              -                          (122)                            (122)                          (.20)
Impairment of an equity-method
investment                                          -                             -                                9                            .01
Adjusted (Non-GAAP)                           $ 2,857                        $ (626)                         $ 1,950                         $ 3.16


(a) Reflects severance, exit and other costs related to the Merger and a charge
to write down property and equipment to its fair value less costs to sell.
(b) Reflects a charge to reduce the carrying values of FCC licenses in two
markets to their fair values.
(c) Reflects accelerated depreciation for technology that was abandoned in
connection with synergy plans related to the Merger.
(d) Primarily related to the abandonment of certain incomplete programs
resulting from production shutdowns related to COVID-19.
(e) Reflects an increase to the carrying value of an investment based on the
market price of a similar investment.
(f) Primarily reflects a benefit from the remeasurement of our UK net deferred
income tax asset as a result of an increase in the UK corporate income tax rate
from 17% to 19% enacted during the third quarter of 2020.
                                      -39-

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