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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 3/16/06  CBS Corp                          10-K       12/31/05   22:287                                    Merrill Corp/New/- FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML  1,361K 
 2: EX-3.(A)    Articles of Incorporation/Organization or By-Laws   HTML     56K 
 3: EX-3.(B)    Articles of Incorporation/Organization or By-Laws   HTML     56K 
 4: EX-10.(E)   Material Contract                                   HTML     83K 
 5: EX-10.(F)   Material Contract                                   HTML     29K 
 6: EX-10.(G)   Material Contract                                   HTML     10K 
 7: EX-10.(I)   Material Contract                                   HTML     19K 
 8: EX-10.(L)   Material Contract                                   HTML     28K 
 9: EX-10.(M)   Material Contract                                   HTML     28K 
10: EX-10.(N)   Material Contract                                   HTML     37K 
11: EX-10.(O)   Material Contract                                   HTML     14K 
12: EX-10.(P)   Material Contract                                   HTML     35K 
13: EX-10.(Q)   Material Contract                                   HTML     32K 
14: EX-10.(W)(X)  Exhibit (W)(X)                                    HTML     69K 
15: EX-12       Statement re: Computation of Ratios                 HTML     24K 
16: EX-21       Subsidiaries of the Registrant                      HTML    161K 
17: EX-23.(A)   Consent of Experts or Counsel                       HTML      7K 
18: EX-24       Power of Attorney                                   HTML     24K 
19: EX-31.(A)   Certification per Sarbanes-Oxley Act (Section 302)  HTML     12K 
20: EX-31.(B)   Certification per Sarbanes-Oxley Act (Section 302)  HTML     12K 
21: EX-32.(A)   Certification per Sarbanes-Oxley Act (Section 906)  HTML     10K 
22: EX-32.(B)   Certification per Sarbanes-Oxley Act (Section 906)  HTML     10K 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission File Number 001-09553

CBS CORPORATION
(Exact name of registrant as specified in its charter)

51 W. 52^nd Street
New York, NY 10019
(212) 975-4321
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Securities Registered Pursuant to Section 12(b) of the Act:

Securities Registered Pursuant to Section 12(g) of the Act:

None

(Title Of Class)

        Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act of 1933).    Yes ý No o

        Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.    Yes o No ý

        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 ý No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (see definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Securities Exchange Act of 1934).

Large accelerated filer    ý            Accelerated filer o             Non-accelerated filer    o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes o No ý

        As of June 30, 2005, which was the last business day of the registrant's (formerly known as Viacom Inc.) ("Former Viacom") most recently completed second fiscal quarter, the aggregate market value of the shares of Former Viacom class A common stock, $0.01 par value, held by non-affiliates was approximately $1,218,768,283 (based upon the closing price of $32.22 per share as reported by the New York Stock Exchange on that date) and the aggregate market value of the shares of Former Viacom class B common stock, $0.01 par value, held by non-affiliates was approximately $43,610,913,332 (based upon the closing price of $32.02 per share as reported by the New York Stock Exchange on that date).

        As of March 1, 2006, 64,962,813 shares of CBS Corporation Class A Common Stock, $0.001 par value ("Class A Common Stock"), and 707,348,555 shares of CBS Corporation Class B Common Stock, $0.001 par value ("Class B Common Stock"), were outstanding.

   
DOCUMENTS INCORPORATED BY REFERENCE

        Portions of CBS Corporation's Notice of 2006 Annual Meeting of Stockholders and Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the "Proxy Statement") (Part III).

   
PART I

Item 1. Business.

        The separation of former Viacom Inc. ("Former Viacom") into two publicly traded entities, CBS Corporation (together with its consolidated subsidiaries unless the context otherwise requires, the "Company" or "CBS Corp.") and new Viacom Inc. ("New Viacom") was completed on December 31, 2005 (the "Separation"). The Separation was accomplished pursuant to a merger in which a subsidiary of Former Viacom was merged with and into Former Viacom, with Former Viacom continuing as the surviving entity. On December 31, 2005, Former Viacom was renamed "CBS Corporation" and each outstanding share of Former Viacom class A common stock was converted into the right to receive .5 of a share of CBS Corp. class A common stock, $0.001 par value ("Class A Common Stock"), and .5 of a share of New Viacom class A common stock and each outstanding share of Former Viacom class B common stock was converted into the right to receive .5 of a share of CBS Corp. class B common stock, $0.001 par value ("Class B Common Stock"), and .5 of a share of New Viacom class B common stock. As a result of the one share for .5 share conversion ("Share Conversion"), all Former Viacom share and per share data have been adjusted for all periods presented, unless otherwise indicated. The Company has accounted for the Separation as a spin-off and, accordingly, the results of New Viacom have been reflected as discontinued operations for all periods presented. The Company's Registration Statement on Form S-4, which was filed with the Securities and Exchange Commission on November 23, 2005 and subsequently declared effective, further describes the Separation.

        CBS Corp. is a mass media company with operations in the following segments:

•

TELEVISION: The Television segment consists of the CBS® and UPN® television networks; the Company's 39 owned broadcast television stations; its television production and syndication business, including CBS Paramount Television™ and King World® Productions; and its cable networks Showtime® and CSTV®, among other program services. In January 2006, the Company announced a 50/50 joint venture with Warner Bros. Entertainment to form a new broadcast network, The CW, expected to be launched in Fall 2006. UPN plans to cease broadcasting its network schedule at the conclusion of the 2005/2006 broadcast season in September 2006.



•

RADIO: The Radio segment owns and operates 179 radio stations in 40 United States ("U.S.") markets through CBS Radio®.



•

OUTDOOR: The Outdoor segment displays advertising on media, including billboards, transit shelters, buses, rail systems (in-car, station platforms and terminals), mall kiosks, masts and stadium signage principally through CBS Outdoor®.



•

PARKS/PUBLISHING: The Parks/Publishing category includes Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster®, Pocket Books®, Scribner® and Free Press™; and Paramount Parks®, which is principally engaged in the ownership and operation of five theme parks and a themed attraction in the U.S. and Canada. In January 2006, the Company announced its intention to divest Paramount Parks and to complete the divestiture in the second half of 2006.

        For the year ended December 31, 2005, contributions to the Company's consolidated revenues from its segments were as follows: Television 64%, Radio 15%, Outdoor 13% and Parks/Publishing 8%. The Company generated approximately 12% of its total revenues from international regions in 2005. For the year ended December 31, 2005, approximately 67% and 22% of total international revenues of $1.73 billion were generated in Europe and Canada, respectively.

        In January 2006, the Company completed the acquisition of CSTV Networks, Inc., a leading cable network and online digital sports media company devoted to college athletics, for approximately $325 million comprised of 10.2 million shares of the Company's Class B Common Stock and $49 million in

I-1

cash. In 2005, the Company acquired KOVR-TV, a Sacramento television station, for approximately $285 million and KIFR-FM, a San Fransisco radio station, for approximately $95 million. In July 2005, Famous Players, a Canadian-based theater chain, was sold for approximately $400 million. In December 2004, the Company acquired the remaining outstanding interest that it did not already own in SportsLine.com, Inc., a leading online sports media company. In December 2004, the Company acquired a 10% interest in Spanish Broadcasting System, Inc. ("SBS") and warrants for approximately another 5% interest in SBS, in exchange for one of the Company's radio stations serving the San Francisco market. In 2004, the tax-free split-off of Former Viacom's approximately 81.5% interest in Blockbuster Inc. ("Blockbuster") (NYSE: BBI) through an exchange offer was completed. Blockbuster and Famous Players are presented as discontinued operations for all periods presented herein.

        As new technologies for delivering content and services evolve, the Company is pursuing opportunities to distribute content to consumers through various platforms including the Internet, mobile devices, video-on-demand and interactive television. During the first quarter of 2006, the Company announced various arrangements to extend the reach of its news and program content across a number of products and platforms with leading Internet, cable and mobile wireless companies, among others.

        The Company competes with many different entities and media in various markets worldwide. In addition to competition in each of its businesses, the Company competes for opportunities in the entertainment business with other diversified international entertainment companies such as The Walt Disney Company, NBC Universal, Inc., News Corporation and Clear Channel Communications.

        As of March 1, 2006, National Amusements, Inc. ("NAI"), a closely held corporation that owns and operates approximately 1,540 movie screens in U.S., the United Kingdom ("U.K."), South America and Russia and manages 21 movie screens in the U.S. and the U.K., beneficially owned Class A Common Stock of the Company representing approximately 71% of the voting power of all classes of the Company's Common Stock, and approximately 12% of the Company's Class A Common Stock and Class B Common Stock on a combined basis. Owners of the Company's Class A Common Stock are entitled to one vote per share. The Company's Class B Common Stock does not have voting rights. NAI is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. Sumner M. Redstone, the controlling shareholder of NAI, is the Executive Chairman of the Board of Directors and Founder of the Company.

        The Company was organized in Delaware in 1986. The Company's principal offices are located at 51 W. 52^nd Street, New York, New York 10019 (telephone 212/975-4321).

Competitive Strengths

CBS Corp. believes it possesses a number of strengths that will enable it to compete successfully:

Wide reach and distribution in multiple media throughout the U.S. and key international markets.    CBS Corp. is a leading mass media company, with businesses that for many years have consistently held leadership positions as well as newer businesses that operate on the leading-edge of the media industry. CBS Corp., through its many and varied operations, combines broad reach with well-positioned national and local businesses, all of which provide it with an extensive distribution network by which it serves audiences and advertisers in all 50 states, including the largest domestic metropolitan areas, and key international markets.

Popular programming and content that appeals to a broad range of audiences.    CBS Corp. delivers television, radio and publishing content that appeals to audiences across virtually every segment of the population. In network television, CBS Network™ and UPN offer programming watched by millions of viewers, including shows like CSI: Crime Scene Investigation, CSI: Miami, CSI: New York, The Amazing Race, Without a Trace, Two and a Half Men, Everybody Hates Chris, America's Next Top Model, 60 Minutes, the Late Show with David Letterman, The Young and the Restless and a significant selection of important

I-2

sports events, from AFC National Football League games to the Masters golf tournament and the month-long March Madness™ college basketball tournament. CBS Corp. is an industry leader in the production and distribution of syndicated television programming, with long-running and recent successes like Wheel of Fortune, Jeopardy!, The Oprah Winfrey Show, Dr. Phil, Entertainment Tonight and Judge Judy. Showtime Networks Inc.'s ("Showtime Networks") original programming has earned 34 Emmy® Awards and 4 Golden Globe® Awards since 2000. CBS Corp. owns, operates and programs radio stations in nearly every format, including rock, all-news, talk, oldies, adult contemporary, country, sports/talk and urban, many of which now utilize the Internet as an additional way of reaching their audiences with enhanced content. In 2005, Simon & Schuster published 98 titles that were New York Times bestsellers, including 14 titles that were #1 bestsellers.

Extensive and growing content library exploited on multiple platforms.    CBS Corp. has a large television library including a growing collection of high-definition content. This valuable asset includes many popular television programs, including CSI: Crime Scene Investigation, CSI: Miami, CSI: New York, Survivor, The Amazing Race, Cheers, I Love Lucy, The Andy Griffith Show and Frasier. In addition, through CBS Paramount Television and King World, CBS Corp. holds the library rights to current first-run syndicated television programs including Entertainment Tonight, Judge Judy and Inside Edition. Showtime Networks owns or controls various television and other rights to many of its original programs, including movies, specials, series and documentaries. Those titles include The L Word, Queer as Folk, Sleeper Cell, Fat Actress, Dave Chappelle: For What It's Worth, and Liza With a "Z" starring Liza Minnelli. CBS Radio owns local content in many formats from its radio stations and is pursuing new media opportunities including Internet streaming and podcasting. Simon & Schuster publishes approximately 1,800 titles a year and holds the publishing rights to more than 17,000 titles, including perennial classics such as The Joy of Cooking, 7 Habits of Highly Effective People, Dr. Spock's Baby and Child Care and the majority of works by Ernest Hemingway and F. Scott Fitzgerald, among others.

Ability to serve the needs of advertisers.    Many advertisers reach their consumers via CBS Corp.'s programming. Whether an advertiser wishes to launch a new brand across multiple platforms or heighten awareness of an existing product in a particular region of the country, the scope of CBS Corp.'s distribution network gives advertisers access to consumers in all 50 states and key international markets. CBS Corp. is also well-positioned to serve advertisers locally with a combination of television, radio and outdoor properties in the majority of the top 20 domestic markets.

Business Strategy

The principal elements of CBS Corp.'s business strategy are well-established and include:

Focus on high quality, broad-appeal programming and content.    CBS Corp. has longstanding experience identifying, producing and distributing popular, high-quality programming that appeals to many audiences. Broad groups of viewers and listeners enjoy the Super Bowl, the Grammy's® and Survivor on CBS Network, and make 1010 WINS-AM New York "All-News Radio" the most listened-to radio station in the U.S., while targeted demographics watch UPN and listen to radio stations like KROQ-FM in Los Angeles. CBS Corp.'s television, radio, syndication and publishing businesses are dedicated to developing their content to reach both broad and targeted audiences and attract advertisers.

Exploit content on emerging platforms.    CBS Corp. plans to continue to develop content that can be applied to existing, emerging and undeveloped platforms. CBS Corp.'s content-based businesses in television, radio and publishing have established in-house digital media efforts focusing on the Internet, broadband technologies, wireless communications, on-demand programming and interactivity. These new platforms are expected to provide new ways for the various businesses of CBS Corp. to distribute the wealth of content produced by its many operations, and are expected to create new revenue streams from advertising, subscriptions and licensing.

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Attract and retain creative talent.    CBS Corp. continues to focus on developing compelling content by attracting, aligning with and retaining high quality creative talent in each of its business operations, recognizing that it is the talent of writers, producers, actors, authors and others that ultimately gives CBS Corp. its strength, its ability to serve its many audiences and customers, and its capability to grow market share in a competitive arena. CBS Corp.'s management team maintains strong relationships with many of the most successful content creators in media and places a high priority on establishing a diverse and creative work environment.

Focus on local presence in large and attractive markets.    The vast majority of U.S. revenue in the local radio, television and outdoor industries is generated in the nation's top 50 markets. CBS Corp. intends to maintain its focus and build its presence in large markets attractive to advertisers, and regularly evaluate its portfolio of television, radio and outdoor assets in each of those markets to ensure that its mix of properties is delivering attractive margins and cash flow.

Deliver an attractive return on investment to stockholders and maintain ongoing cash flow growth.    By focusing on its strengths and other strategies, CBS Corp. intends to deliver attractive returns to its stockholders by continuing to grow its cash flow and returning a significant portion of that cash flow to its stockholders in the form of dividends.

CBS CORP. BUSINESS SEGMENTS

        Television (64%, 65% and 64% of the Company's consolidated revenues in 2005, 2004 and 2003, respectively)

        The Television segment consists of the CBS and UPN television networks, the Company's 39 owned broadcast television stations, the Company's television production and syndication businesses, CBS Paramount Television and King World Productions, and its premium subscription television program services through Showtime Networks. In January 2006, the Company announced a 50/50 joint venture with Warner Bros. Entertainment to form a new broadcast network, The CW, expected to be launched in Fall 2006. UPN plans to cease broadcasting its network schedule at the conclusion of the 2005/2006 broadcast season in September 2006.

        Television Networks.    The CBS Network through CBS Entertainment™, CBS News™ and CBS Sports® distributes a comprehensive schedule of news and public affairs broadcasts, sports and entertainment programming, and feature films to more than 200 domestic affiliates reaching throughout the U.S., including 21 of the Company's owned and operated television stations, and to affiliated stations in certain U.S. territories. The CBS Network primarily derives revenues from the sales of advertising time for its network broadcasts.

        CBS Entertainment is responsible for acquiring or developing and scheduling the entertainment programming presented on the CBS Network, which includes primetime comedy and drama series, reality-based programming, made-for-television movies and miniseries, theatrical films, specials, children's programs, daytime dramas, game shows and late-night programs. CBS News operates a worldwide news organization, providing the CBS Network and the CBS Radio Network™ with regularly scheduled news and public affairs broadcasts, including 60 Minutes and The Early Show, as well as special reports. CBS News Productions, the off-network production company created by CBS News, produces programming for domestic and international outlets, including the CBS and UPN television networks, cable television, home video, audio-book and in-flight markets, as well as schools and libraries. CBS News also provides CBS Newspath, a television news syndication service that offers daily news coverage, sports highlights and news features to CBS Network affiliates and other subscribers worldwide. CBS Sports broadcasts include The NFL Today, certain NCAA championships, including the Final Four, golf, including the Masters Tournament and the PGA Championship, the U.S. Open Tennis Championships, regular-season college football and basketball line-ups on network television, in addition to the NFL's American Football

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Conference regular season schedule, the Postseason Divisional Playoff games and the AFC championship game. In November 2004, CBS Sports entered into a six-year rights extension with the NFL to broadcast the AFC beginning in 2006 and including two Super Bowls. Extending its franchises, CBS Sports has the marketing rights for the 2003-2013 NCAA Championships, including coordination of licensing, merchandising, related multimedia and television, and other related business opportunities. CBS Consumer Products licenses home video and merchandising rights.

        At December 31, 2005, UPN provided to its 180 affiliates 13 hours of programming per week. UPN's programming is provided to its affiliates in U.S. television markets which comprise approximately 96% of all U.S. television households, including secondary affiliates. UPN's programming includes America's Top Model and Everybody Hates Chris. Fifteen of the Company's owned television stations are affiliates of UPN, eleven of which are expected to become affiliates of The CW network, once launched.

        Through the CBS Digital Media Group, established in 2005, the Internet sites associated with CBS Entertainment (CBS.com), CBS News (CBSNews.com), CBS Sports (CBSSportsLine.com) and UPN (UPN.com) are combined to provide key platforms for promotion, as well as a way to expose the brands of these divisions to the broadband Internet audience while creating new revenue streams primarily through advertising, online consumer products such as fantasy sports leagues and video-on-demand. The four sites leverage the content of the CBS and UPN television networks on the Internet and on other emerging media platforms, including wireless, video-on-demand and interactive television. In 2005, these sites and the CBS Sportsline Network sites, collectively received approximately 8.4 billion pageviews and attracted an average audience of approximately 17 million U.S. monthly unique visitors according to Nielsen/NetRatings.

        CSTV Networks, Inc., a leading cable network and online digital media business devoted to college athletics, was acquired by the Company in January 2006. CSTV includes a full-time program service featuring events from approximately 30 men's and women's college sports, with approximately 12 million subscribers as of December 31, 2005, as well as CSTV Online, Inc., with approximately 240 affiliated college athletic Web sites. In addition, CSTV.com, which supports the related cable program service and online properties, reached approximately 7.4 million U.S. monthly unique visitors in November 2005, according to Nielsen NetRatings. The Company's Internet sites for the Television segment, including CSTV.com, generally derive revenue from a combination of advertising and sponsorships, subscription services and e-commerce.

        The Company's news and program content is also available through various media owned by the Company as well as third parties. In January 2006, the Company announced that certain of its primetime and classic television programs will be available in the Google Video Store, an open video marketplace on the Internet enabling consumers to buy and rent a wide range of video content. Also, in January 2006, four of the Company's top-rated primetime series became available on Comcast's On Demand video-on-demand service. In February 2006, the Company's reality series Survivor became available for download on CBS.com for a fee. The Company's arrangements to distribute its content also include agreements for the distribution of certain video news segments and program clips for Verizon Wireless V CAST mobile phones and other mobile phone subscribers; broadband video and text news programming from CBSNews.com to the AOL News channel; and streaming of certain games of the 2006 NCAA® Division I Men's Basketball Championship as they are broadcast by CBS Sports on NCAA® March Madness™ On Demand, an online video player.

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        Television Stations.    The Company owns 39 broadcast television stations through its CBS Television Stations group, all of which operate under licenses granted by the Federal Communications Commission ("FCC") pursuant to the Communications Act of 1934, as amended (the "Communications Act"). The licenses are renewable every eight years. The Company's television stations are located in the 7 largest, and 15 of the top 20, television markets in the U.S. The Company owns multiple television stations within the same designated market area ("DMA") in 10 major markets. These multiple station markets are: Los Angeles (market #2), Philadelphia (market #4), Boston (market #5), San Francisco-Oakland-San Jose (market #6), Dallas-Fort Worth (market #7), Detroit (market #11), Miami-Ft. Lauderdale (market #17), Sacramento-Stockton-Modesto (market #19), Pittsburgh (market #22) and West Palm Beach (market #38). This network of television stations enables the Company to reach a wide audience within and across geographically diverse markets in the U.S. The stations produce news and broadcast public affairs, sports and other programming to serve their local markets and offer CBS, UPN or WB Network programming and syndicated programming. Eleven of the fifteen UPN affiliates are expected to become affiliates of The CW. Substantially all of the Company's television stations currently operate Web sites, which promote the stations' programming, and provide news, information and entertainment, as well as other services.

        The Company's owned and operated television stations reach approximately 43% of all U.S. television households and approximately 38% of U.S. television households as measured by the FCC's television national audience reach limitation under which a VHF television station is deemed to reach 100% of the television households in its market and a UHF television station is deemed to reach 50% of the television households in its market. The FCC's ownership rules limit the Company's national audience reach to 39% of all U.S. television households. (See "CBS Corp. Business Segments—Regulation—Broadcasting—Ownership Regulation").

   
Television Stations

        The table below sets forth the broadcast television stations owned by the Company as of March 1, 2006.

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(1)

Metropolitan Area Served is Nielsen Media Research's DMA.

(2)

Market Rankings based on Nielsen Station Index—DMA Market and Demographic Rank, September 2005.

(3)

KCCO-TV is operated as a satellite station of WCCO-TV.

(4)

KCCW-TV is operated as a satellite station of WCCO-TV.

(5)

KUSG-TV is operated as a satellite station of KUTV-TV.

(6)

WWHB-CA is a Class A television station. Class A television stations do not implicate the FCC's ownership rules.

(7)

WTCN-CA is a Class A television station. Class A television stations do not implicate the FCC's ownership rules.

(8)

The Company has entered into an agreement to sell WUPL-TV which is subject to litigation as to enforceability due to Hurricane Katrina.

(9)

WLWC-TV's primary affiliation is with UPN. The station has a secondary affiliation with the WB network.

(10)

WJMN-TV is operated as a satellite station of WFRV-TV.

        Television Production and Syndication.    The Company, through CBS Paramount Television (including Spelling Television®) and King World Productions, produces, acquires and/or distributes programming worldwide, including series, specials, news, public affairs and made-for-television movies. Such programming is produced primarily for broadcast on network television, exhibition on basic cable and premium subscription services or for first-run syndication. First-run syndication is programming exhibited on television stations without prior exhibition on a network or cable service. The Company also distributes off-network syndicated programming which is programming exhibited on television stations or cable networks following its exhibition on a network, basic cable network or premium subscription service.

        Programming that was produced or co-produced by the Company's production group and is broadcast on network television includes, among others, CSI: Crime Scene Investigation (CBS), Medium (NBC) and Without a Trace (CBS). Generally, a network will license a specified number of episodes for broadcast on the network in the U.S. during a license period. Remaining distribution rights, including foreign and/or off-network syndication rights, are typically retained by the Company. The network license fee for a series episode is normally lower than the costs of producing each series episode; however, the Company's objective is to recoup its costs and earn a profit through domestic syndication of episodes after their network runs and/or by licensing international exhibitions of the episodes. International sales are generally made within one year of U.S. network runs. Generally, a series must have a network run of at least three or four years to be successfully sold in domestic syndication. In off-network syndication, the Company distributes series such as Everybody Loves Raymond and CSI as well as a library of older television programs. The Company also produces and/or distributes first-run syndicated series such as Jeopardy!, Entertainment Tonight, The Oprah Winfrey Show, Dr. Phil and Judge Judy. The Company also distributes syndicated programming internationally.

        License fees for completed television programming in syndication and cable are recorded as revenue in the period that programming is available for exhibition which, among other reasons, may cause substantial fluctuation in the Television segment's operating results. Unrecognized revenues attributable to such license agreements were approximately $788.1 million and $728.9 million at December 31, 2005 and December 31, 2004, respectively.

        Showtime Networks.    Showtime Networks owns and operates three commercial-free, premium subscription television program services in the U.S.: Showtime offering recently released theatrical feature

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films, original series, original motion pictures, documentaries, boxing, concerts and other special events; The Movie Channel™, offering recently released theatrical feature films and related programming; and Flix®, offering theatrical feature films primarily from the 70s, 80s and 90s, as well as selected other titles. At December 31, 2005, Showtime, The Movie Channel and Flix, in the aggregate, had approximately 45.8 million subscriptions in the U.S., certain U.S. territories and Bermuda. Showtime Networks is also a manager and 37% owner of Sundance Channel®, a venture among Showtime Networks, an affiliate of Robert Redford and NBC Universal, Inc. Sundance Channel is a commercial-free premium subscription television program service in the U.S., dedicated to independent film, featuring original programming, American independent films, documentaries, foreign and classic art films, shorts and animation, with an emphasis on recently released titles. Showtime Networks also owns 90% of and manages SNI/SI Networks L.L.C., a venture with Smithsonian Institution. This venture, an on-demand program service branded with the Smithsonian name, featuring programs of a cultural, historical, scientific and educational nature, is expected to launch during the 2006-2007 time frame.

        Showtime Networks also owns and operates several different channels of Showtime and The Movie Channel in the U.S. which offer additional and varied programming choices. For example, Showtime Networks transmits high definition television feeds of Showtime and The Movie Channel and also makes versions of Showtime, The Movie Channel and Flix available "on demand", enabling subscribers to watch selected individual programs at their convenience. Showtime Networks also provides special events, such as high-profile boxing matches, to licensees on a pay-per-view basis through Showtime PPV®. Showtime Networks also operates the Web site SHO.com which promotes Showtime, The Movie Channel, and Flix programming, and provides information and entertainment and other services.

        Showtime Networks derives revenue principally from the license of its program services to cable television operators, direct-to-home ("DTH") satellite operators, telephone companies and other distributors. The costs of acquiring premium television rights to programming and producing original series are the principal expenses of Showtime Networks. Showtime Networks enters into commitments to acquire rights, with an emphasis on acquiring exclusive rights for Showtime and The Movie Channel, from major or independent motion picture producers and other distributors typically covering the U.S. and Bermuda for varying durations. For example, Showtime Networks has the exclusive U.S. premium subscription television rights for certain exhibition windows relating to Paramount Pictures' feature films initially theatrically released in the U.S. through December 2007. Showtime Networks also arranges for the development, production and acquisition of original programs, series, documentaries and motion pictures. Showtime Networks' original series include Huff, The L Word, Sleeper Cell and Weeds, among others. Showtime Networks has entered into and may from time to time enter into co-financing, co-production and/or co-distribution arrangements with other parties to reduce the net cost to Showtime Networks for its original programming. In addition, Showtime Networks derives distribution revenue from the rights it retains in certain of its original programming. For example, in January 2006, Showtime Networks entered into an arrangement to distribute certain of its programming through the iTunes Music Store.

    Television Competition

        Network Television.    The television broadcast environment is highly competitive. The principal methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming and promotion, in order to sell advertising at profitable rates. Broadcast networks like CBS and UPN compete for audience, advertising revenues and programming with other broadcast networks such as ABC, FOX, NBC and WB, independent television stations, cable program services as well as other media, including DVDs, print and the Internet. In addition, the CBS and UPN television networks compete with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country, which are necessary to ensure the effective distribution of network programming to a nationwide audience. According to

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Nielsen Media Research, for the broadcast television primetime daypart for the period September 19, 2005 to March 5, 2006, the CBS Network secured the #1 position for total viewers and for key adult viewers ages 25-54 (with respect to 25-54, tied with ABC).

        Television Stations.    Television stations compete for programming, on-air talent, audiences and advertising revenues with other stations and cable networks in their respective coverage areas and, in some cases, with respect to programming, with other station groups, and, in the case of advertising revenues, with other local and national media. The owned and operated television stations' competitive position is largely influenced by the quality of the syndicated programs and local news programs in time periods not programmed by the network; the strength of the CBS and UPN television networks and, in particular, with respect to those that are CBS affiliated television stations, the viewership of the CBS Network in the time period immediately prior to the late evening news; and in some cases, by the quality of the broadcast signal.

        In connection with the conversion to digital television broadcasting, current and future technological and regulatory developments may affect competition within the television marketplace (see "CBS Corp. Business Segments-Regulation-Broadcasting").

        Television Production and Syndication.    As a producer and distributor of programming, the Company competes with studios, television production groups, and independent producers and syndicators such as Disney, Sony, NBC Universal, Warner Bros. and Fox to sell programming both domestically and overseas. The Company also competes to obtain creative talent and story properties which are essential to the success of all of the Company's entertainment businesses.

        Showtime Networks.    Showtime Networks primarily competes with other providers of premium subscription television program services in the U.S.: Home Box Office, Inc. and Starz Entertainment Group, L.L.C. Competition among premium subscription television program services in the U.S. is primarily dependent on: (i) the acquisition and packaging of an adequate number of recently released theatrical motion pictures and the production, acquisition and packaging of original series, original motion pictures and other original programs; and (ii) the offering of prices, marketing and advertising support and other incentives to cable operators, DTH satellite operators and other distributors for carriage so as to favorably position and package Showtime Networks' premium subscription television program services to subscribers. Home Box Office, Inc. is the dominant company in the U.S. premium subscription television category, offering two premium subscription television program services, HBO and Cinemax. Showtime Networks competes with Home Box Office, Inc. but has a significantly smaller share of the premium subscription television category. Starz Entertainment Group, L.L.C. owns Starz!, another premium subscription television program service, which features recently released theatrical motion pictures and competes with Showtime Networks' and Home Box Office, Inc.'s premium program services. Showtime Networks also competes for programming, distribution and/or audiences with broadcast television, basic cable program services and other media, including DVDs, portable devices and the Internet.

        The terms and favorable renewal of agreements with distributors for the distribution of the Company's premium subscription television program services are important to the Company. Consolidation among multichannel video programming distributors makes it more difficult to reach favorable terms and could have an adverse effect on revenues.

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        Radio    (15%, 14% and 15% of the Company's consolidated revenues in 2005, 2004 and 2003, respectively)

        The Company's radio broadcasting business operates through CBS Radio, which owns and operates 179 radio stations serving 40 U.S. markets. Prior to the Separation, CBS Radio was known as Infinity Radio. CBS Radio is one of the largest operators of radio stations in the U.S.  Approximately 91% of the Company's radio stations are located in the 50 largest U.S. radio markets and approximately 58% in the 25 largest U.S. radio markets. The Company's strategy generally is to operate radio stations in the largest markets, acquire radio stations in the most attractive growth markets and take advantage of the Company's ability to sell advertising across multiple markets and formats. The Company believes that it is favorably impacted by offering radio, television and outdoor advertising platforms in large markets. The "Radio Stations, Television Stations and Outdoor Advertising Displays" table below includes information with respect to the Company's radio stations in the top 25 U.S. radio markets.

        Radio seeks to maintain substantial diversity among its radio stations. The geographically wide-ranging stations serve diverse target demographics through a broad range of programming formats, such as rock, oldies, all-news, talk, adult contemporary, sports/talk and country, and CBS Radio has established leading franchises in news, sports, and personality programming. This diversity provides advertisers with the convenience of selecting stations to reach a targeted demographic group or of selecting groups of stations to reach broad groups of consumers within and across markets. This diversity also reduces the Company's dependence on any single station, local economy, format or advertiser. Radio's general programming strategies include employing popular on-air talent, syndicating shows of some of these talent nationally and acquiring the rights to broadcast sports franchises and news content for its radio stations. These strategies, in addition to developing loyal audiences for its radio stations, create the opportunity to obtain additional revenues from syndicating such programming elements to other radio stations.

        CBS Radio has changed morning show programming at 27 of its radio stations. Certain of those stations have been rebranded as "Free FM,™" a talk radio format that features new on-air talent. In addition, CBS Radio features the "Jack" format on 12 of its stations. "Jack" is a highly music-intensive format with an expansive playlist. In March 2006, a one-hour radio show, Jim Cramer's Real Money, began live broadcasts on eight CBS Radio stations.

        The majority of Radio's revenues are generated from the sale of local, regional and national advertising. The major categories of radio advertisers include: automotive, retail, healthcare, telecommunications, fast food, beverage, movies, entertainment and services.  CBS Radio is able to use the reach, diversity and branding of its radio stations to create unique division-wide marketing and promotional initiatives for major national advertisers of products and services.  The success and reputation of CBS Radio and its stations allow the Company to attract the participation of major artists in these national campaigns.  Advertising expenditures by local advertisers fluctuate, which has an effect on Radio's revenues.

        The Company also owns the CBS Radio Network, which is managed by Westwood One, Inc. At December 31, 2005, the Company owned approximately 18% of the common stock of Westwood One, Inc., which it manages pursuant to a management agreement. Westwood One is a leading producer and distributor of syndicated and network radio programming in the U.S. and distributes syndicated and network radio programming, including traffic and weather information, to many of the Company's radio stations as well as to the Company's competitors. Westwood One does not own or operate radio stations. In December 2004, CBS Radio acquired a 10% interest in Spanish Broadcasting System, Inc., a company publicly traded on the NASDAQ, expanding the Company's commitment to Hispanic consumers.

        CBS Radio is extending its station brands online, through efforts that include streaming, podcasting and developing radio station Web sites. For example, approximately 70 CBS Radio stations throughout the

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U.S. are streamed online, including such top brands as 1010 WINS in New York and KROQ-FM in Los Angeles.

        Radio Competition.    The Company's radio stations directly compete within their respective markets for audience, advertising revenues and programming with other radio stations including those owned by other group owners such as ABC Radio, Clear Channel Communications, Cox Radio, Emmis Communications, Entercom and Radio One. The Company's radio stations also compete with other media, such as broadcast, cable and DTH satellite television, radio, newspapers, magazines, the Internet and direct mail.

        The radio industry is also subject to competition from two satellite-delivered audio programming services, Sirius Satellite Radio and XM Satellite Radio, each providing over 100 channels of pay digital audio services. Sirius and XM sell advertising time on some of their channels and compete with the radio industry for programming.

        The Company's radio stations face increasing competition from audio programming delivered via the Internet and from consumer products such as portable digital audio players. These new technologies create new ways for individuals to listen to music and other content of their choosing while avoiding traditional commercial advertisements. An increasingly broad adoption by consumers of portable digital audio players could affect the ability of the Company's radio stations to attract listeners and advertisers.

        The radio broadcast industry has begun the process of converting from analog to digital broadcasts. Currently, approximately 700 radio stations are broadcasting in the U.S. using digital technology. The Company has joined other broadcast radio groups to form the HD Digital Alliance Association (the "Digital Alliance") which is committed to accelerate the conversion of over 2,000 additional AM and FM stations to digital radio technology over the next several years, including the conversion of approximately 131 of the Company's radio stations, 63 of which had been converted at December 31, 2005. Members of the Digital Alliance have also agreed to provide two digital audio broadcasts on each of their radio stations. One will be a digital rebroadcast of the station's analog signal and the other will be used to offer a broad range of unique commercial-free programming. The Digital Alliance plans to market digital radio technology to receiver manufacturers, electronics retailers and automobile manufacturers, and will publicize the availability of digital radio with promotional messages to be aired on its members' stations. Implementing its agreement with the Digital Alliance, CBS Radio recently announced a line-up of multicast programming for over 60 of its radio stations in 17 markets. The Company believes that digital transmissions will provide listeners with improved sound quality and should facilitate the convergence of radio with other digital media. It is too early to predict the full effect that the conversion to digital will have on the Company's radio businesses or on competition generally.

        Aggregate spot advertising sales revenues for the Company's radio stations for 2005 in each of the top five U.S. markets by metro area population were ranked either #1 or #2, according to the 2005 Market Total Spot Performance Summary of Miller, Kaplan, Arase & Co., LLP (for the New York, Los Angeles, Chicago, San Francisco and Dallas-Fort Worth markets).

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Radio Stations, Television Stations and Outdoor Advertising Displays

        The following table sets forth information with regard to the Company's radio stations, television stations and outdoor advertising displays as of March 1, 2006 in the top 25 U.S. radio markets:

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