Good day everyone and welcome to the CBS Corporation Third Quarter 2007 Earning Release Teleconference. Today's call is being recorded. At this time I would like to turn the call over to the Executive Vice President of Investor Relations, Mr. Marty Shea. Please go ahead sir.

Good afternoon and Thank you for taking time to join us for our third quarter 2007 earnings call. Joining me for today's discussion is Sumner Redstone, our Executive Chairman; Leslie Moonves, the President and CEO of CBS; and Fred Reynolds, our Executive Vice President and CFO. Sumner will have some opening remarks and then turn the call over to Les and Fred for strategic and financial issues. We'll then open up the call to questions. Let me note that statements on this conference call relating to matters which are not historical facts are considered forward-looking statements, which involve risks and uncertainties that could cause actual results to differ. Risks and uncertainties are disclosed in CBS Corporation's news releases and security filings. A summary of CBS Corporation's third quarter 2007 results should have been sent to all of you, if you did not receive the results please call Poonam Desai at 975-3667 and she will get it to you. A web cast of the call, the earnings release, and other information related to the presentation can be found on CBS Corporation's corporate website at the address cbscorporation.com. Now I will turn the call over to Sumner.

Thanks Marty and good afternoon everyone. Thank you for joining us. Now it is really hard to believe two years have passed since the CBS Corporation was formed, a progress that has been made since then equally hard to believe. This company is doing exactly what we set out to do, which is to perform at the top of our respective industries, while generating healthy free cash flow, returning value to shareholders through the increasing, always increasing dividends and buy backs. We are able to do that because CBS makes and distributes some of the best mass appeal content in the world. At the same time our businesses is revolving and change into capitalizer from the remarkable opportunities presented by the new media age. CBS content is available wherever, however, and whenever audiences want to get it and we are getting paid for it in all of these ways too. Making this possible is of course a highly committed, highly creative team of top tier professionals led by my very good friend, the incomparable Leslie. I am clearly exited really about what the future holds for this great company and Les will tell you all about it.

Thank you, very much Sumner for the nice words. Hello everybody, thank you for joining us on the call this afternoon. Today I am going to take you through the highlights of our financial results and then discuss a few of the most significant developments at CBS during the quarter. After my remarks my colleague and our CFO, Fred Reynolds will discuss the financials in greater detail and then we will open up the call to your questions. When we became the CBS Corporation seven quarters ago; we set out to manage all our operations with distinction, to expand our profit margins, and to return value to our shareholders. During this past quarter we delivered on each of these goals. We are achieving these results by continually evaluating and refining our asset portfolio. As we exit slower growth areas, we are better able to manage the assets we have and then utilize our extraordinary cash flow to focus on higher growth opportunities for the future. This refocusing of our assets is well under way. During the quarter we acquired SignStorey, which we renamed CBS Outernet, a video in-store advertising company and we further invested in our online properties to help build our aggregate audience and we significantly built out our digital billboards and transit displays around the world. Each of these actions is complementary to our existing businesses which we are actively moving into the future. As we all know the media industry is changing more rapidly than ever. These changes represent opportunity and we welcome them. I am particularly pleased with the way we are building on our strong core businesses and moving them into the interactive age that clearly lies ahead. Going forward we will continue to position ourselves for faster growth of revenues across all the emerging…

Thank you Leslie and good afternoon. Let me briefly take you through some of the financial highlights for the third quarter of 2007 and provide some additional information on our operating performance for the quarter. As you noted at the outset... as we not at the outset the third quarter net earnings from continuing operations totaled $340 million up 5.1% over the third quarter of 2006. Earnings per share from continuing operation was $0.48 as Leslie just mentioned, an increase of 14%, as fewer shares outstanding due to share repurchases totaling $3.4 billion and our higher net earnings drove earnings per share for the third quarter. Free cash flow for the third quarter totaled $266 million bringing our year-to-date free cash flow to almost $1.590 billion. Our free cash flow for the third quarter was very strong in comparison to the last years third quarter is hampered somewhat due to the previously discussed Federal Income Tax overpayment last year which increased the third quarter of 2006 free cash flow by approximately $60 million. The third quarter of 2007 free cash flow was also below last years year ago quarter due to lower interest income of $25 million as we used our excess cash to buyback our shares and higher CapEx spending of $13 million as we continue to invest and rolling out digital billboards and displays at our outdoor businesses. And finally we used a little more working capital in the third quarter versus last year in part, due to last year benefiting from almost $40 million of third quarter political ad spending in 2006, which as many of you know, we collect on a cash on delivery or COD basis, versus a normal 30 day trade terms. Dripping out these non-comparable items, free cash flow remains strong, as we…

[Operator Instructions]. First is Lucas Binder of UBS.

Hi, good afternoon guys. I had a couple of quick questions for you, Les you mentioned that scatter was up probably 35%, well in excess of the out front, can you talk a little bit about why do you think that is... I know you have been using up some inventory for makers and as a result it's a tighter inventory situation, can you talk a little bit about that and then also on radio when do you think we will start to see growth in that business. You talked about you are assuring to see the transition there, but when do you think that we will actually start to see some positive results in that business?

Right, Lucas as we started this year we actually did not have a lot of makers, we had a little bit of that. Scatter pricing is very interesting, a lot of people, the C3 has sort of changed the market place a bit. We ended up selling more inventory in May than we had the year before. So there was a scarcity in terms of the numbers of spots that was available and once again I think the C3 became more self evident, I think broadcasting became a better buy and people are realizing that and there is huge demand. In addition categories are very strong, automotive is strong, pharmacology is strong, we are... financial services are good. I mean we are seeing strength across the board and as I mentioned before what is great about it is non guarantees and we are doing very well. In radio we anticipate that '08 is going to be a year of growth we do. We are anticipating we will see the changes that they have made in New York and that is beginning to do in LA and we are very pleased with how it is restructured and we are starting to see the beginning of that and we are still very confident about the radio business.

All right thank you very much.

Thank you. We will go next to Jessica Reif-Cohen of Merrill Lynch.

Thank you. I have a two questions as well. First on the TV station could you discuss what the third quarter performance was and what you are seeing the fourth quarter and maybe as part of that when do you expect political advertising to start to come in? And the second question is that the guidance, it looks like revenue guidance is down, I mean given your new guidance... revenue guidance is in place fourth quarter revenue should be down at least 4%. I was just wondering where is that coming from and since operating performance is not impacted, where are you cutting cost?

I will talk about political Fred, and then I will turn the other one and half questions over to you. Political story is coming right now in Boston where we are actually seeing some... lot of activity towards the New Hampshire primaries, so we are very excited about that and we don't have any TV stations at Iowa so we couldn't take advantage of that. But we are starting to see and knowing that the primaries are going to be in February, January and February we see the beginning of the next year to be very strong and a certain amount of money. It's hard to say which will be in the fourth quarter. But we are very excited about what was bought in this past week. Fred.

Yes, I think Jessica on the guidance where we did modify the revenue guidance is I think is just recognizing in the third quarter that revenues were down largely again because of the same station drop as radio. And so I think that was what we felt comfortable. Will we do better than that, could be if the political continues to come in. As roughly at this stage we are seeing it our of Boston and Florida is starting now. We have got those two primaries in the end of January with the Florida at January 29th and week before that is New Hampshire. But as you know versus last year we are rolling over London... this is the biggest amount, we have booked almost a $100 million in political in October in the first eight days and November last year at this time. So we are rolling over a big part of it. But as far as the margins, you know, UPN will no longer be a comparable item which I just said. But getting rid of those transit contracts, well they gave us a lot of revenue last year, gave us very little profit, and matter of fact virtually no profit in the fourth quarter. So its really no broad brush cost restructuring, just the margin that we have now on existing revenue is going to be stronger.

Thank you.

Thank you. We'll go next to Victor Miller, Bear Stearns.

Good afternoon and thanks for taking the question. Obviously this year's currency for advertisers is my first three commercial ratings last year is my programming ratings. The first couple of weeks CBS saw double digit to first week down low single digit, the second week in this comparison of these two numbers, at what percent decline does it actually concern you and what percentage of the network dollars is actually done without ratings guarantees as part of the upfront process?

Number Victor is live versus C plus 3 its not live plus versus live plus 3. As what's normally after the TV season, the first couple of weeks you see people sampling along the new shows that were in competitive time periods for us and we've seen a slow growth every single week in our relative position because of people coming back to their returning shows. So, this is an entirely new measurement system. Though we're not seeing any demand from advertising and as I said earlier and advertisers would much rather have 9 million people watching their commercial than 10 million people watching a program. So its going to be a transition year, we are not at all concerned. We have some of our more shows that working, some of them haven't just like everybody else. But what's great is the stability of our schedule which people are now returning to and may I add the repeatability of our schedule which is far better than anybody else and we haven't entered into that yet which we will in early December in terms of that. In terms of how much we're selling scatter, it's probably about 30% right now of our network inventory I would say is going to scatter.

I am sorry, how much of your inventories is sold in that market place without rating guarantees or there is very little of that?

By the way I don't believe there's any scatter that sells with rating guarantee. There is... it's very little, I don't think there's any. I don't think there's any whatsoever. So all this is without any ratings guarantees so we are not concerned.

I am sorry the upfront process is not the scatter process.

The upfront, Victor this is Fred, is sold with ratings guarantee, the question is what are we guaranteeing ratings as. I think we mentioned at the end of the second quarter we had a terrific increase in CPM's which has obviously that's is pricing. So, we... of our upfront performance, the lion share of it was CPM increases, we weren't promising big particularly in light of the change in the measurement system. We weren't promising, big jumps in ratings because it was uncharted territories. So most of it and you don't give back CPM's, as long as the... are there, we are fine.

Thank you.

Thank you. We'll go next to John Blackledge of JP Morgan.

Yes, thank you two questions. The first one is on Showtime, with the Paramount opportunity coming up at the end of '07 and the MGM Lionsgate deals coming up at the end of '08 there is roughly $300 million to $400 million to be reinvested or routine by Showtime. Assuming Showtime reops for the studios in some form and invest some of the funds in future films, do you expect any cost savings for the network that could fall right to the EBITDA line starting in the back half of '08 and then an outdoor, given that underlying of billboard growth was about 7% in the third quarter which seems to be a deceleration from the first half of '07, can you just talk about the billboard environment in the U.S. and can we expect decelerating growth in fourth quarter of 2008? Thank you.

John, I'll take the Showtime questions and I'll let Fred give the answer of question. The answer to the question in simple word is yes. We are going to be spending less on feature film. We do expect to make some to these deals but the amount of money that we spent this year will be not be as much next year and we will go down even further in '09. So the Showtime is definitely, we don't obviously break it out as part our television segment. But it's proving to be more and more profitable every single year and it's a very exciting story. Fred.

Hey, John on the billboard business, the third quarter was a little bit slow at plus 7% but I think it's a little misleading because as you know billboards come in, they may slip over quarter ends. If you look at October and I cannot give outpace information but if you look at our October of U.S. billboard business it's up into the high teens. Now billboards is still quite sold in, I wouldn't want you to take that and say November-December are going to be the same way, but October which is concluded is some of its flipped over. So if you average it to 2 months or if you average that to 4 months of the quarter it will be up more where we were early part of the year. I know there is a concern out there about the mortgage mark and all that, its not a significant part. Well some of our competitors had a significant part of their revenue coming from mortgage or home building, ours was not material for the outdoor group. So I think it was more timing, we will see how November-December shape up.

Thank you.

We'll go to John Klim, Credit Suisse.

Hi, good afternoon. Could you update us on your digital roll out at the outdoor segment here in the United States and then if you could talk a bit about what you are seeing in terms of economics on the digital boards if you could?

As I mentioned we will have almost 6000 boards by the end of this year. The economical digital boards obviously the margins are far superior to what they are in our static boards and as I mentioned we are getting all sorts of new advertisers in, Fred you can give the...

Yes, Leslie. In the U.S. market we will break it down in a couple of ways. We have about 800 and some things displays of which about 50 or so are large day bridge kind of displays you add in to that like the Q3 in New York at 42nd. Then we have Mall Of America but the smaller format displays, so we will kind of be around 800 to 900 and at the end of the year we will be little bit north of that. What's amazing is the amount of revenue we are getting much more than we had planned on when we did the CapEx. We really thought if we got 3x that gave us a high teens kind of internal rate of return, they are doing better than that. And again the x that we are multiplying by is big as we are in the biggest market so it's not like a small market outdoor where you only may get $50 spot and they go up to 400. These are pretty expensive spots and they are going up three, four, five times that. So we love what we are seeing as far as the revenue side. I think the advertisers are loving it and we are actually reaching more advertises, that never used the medium before because of the digital.

And they do work better in this. The digital boards do work better in the big markets where we are very, very strong and the list of advertisers of people you never would have thought would consider doing outdoors, so it pretty exciting, movie companies, the Microsoft's in the world, we are getting a whole new advertiser base and its great.

Thank you we will go next to Michael Nathanson, Sanford Bernstein.

Hey thanks, I have two. One Fred, one for Les. The question I have for Fred, I don't think you answered Jessica's question about the same station ad growth this quarter for TV, was it skewed by region at all?

Michael could you repeat, and I mean your first part got...

Okay, I didn't know if you answered Jessica's question about what was the same station ad growth this quarter for the TV stations?

Well we don't typically break out TV stations same growth, same station growth, but I will tell you overall, third quarter '07 versus third quarter '06 we had a significant amount of political and we are not able to cover. So the stations were down versus last year's third quarter, because of the significant amount of political.

Okay, that's not on same station that's...

Same station.

Okay, so same station is down lets say mid single-digits or something. And then for Les, you talked, helpful about the differences in this upfront versus lat upfront, I wonder if you can talk a bit about, how much inventory, for what percentage was sold in this year's upfront and higher prices versus the year before, was there change in what inventories are?

Without getting specific, there was probably by 10% more sold at this year' upfront because the CPM growth was so high, in high single-digit CPM growth, so we said okay, we will sell more of it and we did.

Okay, that could tie in scatter also for the rest of the year?

That's correct.

Thanks.

Thank you.

Thank you, we will go next to Anthony DiClemente of Lehman Brothers.

Hi, thanks for taking the question. I just have one question for Les and that is with your spot down about 6 bucks here since the summer, I think I can kind of sympathize with the dilemma in that, we know that content is king and you've invested in content, you have done that. You know that the Street wants return of capital in the form of either big accelerated share repurchase or in terms of dividend and you have done that. So as we head into '08, I am just curious Les, as to what your thought process is around allocation of capital, whether it be investing in content, acquisitions, or return of capital to shareholders, if you can share your thoughts? Thanks.

It is a very good question and you know what you meet with three analysts, one says pay higher dividend, one says buyback more stock, and the other says acquire something. I think there is a part of me that wants to do all three. Obviously, returning money to shareholders is a very important thing to us, but by the same token, we would love to invest in higher margin businesses and that's we are looking for. There I don't know what will available out there, but we are trying to do that and we have said before we are shedding some of the assets and getting at the higher margin businesses. That is what I would love to do. That will be my first priority, but it's got to be the investment and I think our investors should feel secure that we don't make dumb investments and we are very careful about what we do and failing that we return money to shareholders and we have done that in two different ways this year. So I think we have been successful in all three flanks of our strategy.

Operator we will have time for one more question.

Thank you sir. We will take our last question from Marci Ryvicker of Wachovia Securities.

Thanks. Just focusing back on outdoors, since digital outdoor is such a huge focus at CBS, but I was having out of home conference there was talk of you investing up to $1 billion in digital out of home, first of all is this accurate and secondly if so, over what time period would you look to spend this kind of money.?

$1 billion, that's a big number Marci. I don't know who you overheard saying that. We are... our strategy obviously is to build outdoor digitally, whenever it is advantageous to us, and you know what, we went in, we put ourselves in the water and guess what, our whole foot is now in the water and we are expanding it as we go along. I don't think we have put that number on anything. We are obviously going to invest it and we are going to continue to invest it. Fred.

Marci this is Fred, let me just to add, one it's a great investment. It's sort of the high teens after tax internal rate of return. Two, I think you can expect to see a continuation of '07 into '08 and '09 and out of that. We are going put more of our capital spending into these high return displays. The other thing that is going to happen is the displays, the digital displays are coming, are dropping like a rock from the manufacturers. The price of them are dropping, so we will be able to get it at a more normalized, probably closer to a static board not today, not tomorrow, but certainly in the five to seven year timeframe. So... and we don't know, listen with time story which is now CBS Outernet, we don't know, we think that could explode, that could be the next biggest thing in outdoor, but all I would say to you, trust me between Sumner and Leslie and the team here, we are going to get a great internal rate of return on any capital we put into displays, digital displays, and we are excited about the Outernet, we think it is pretty cool. So I don't know where the $1 billion came from. It maybe here over the next 50 years, it maybe over the next 5 or 10 years, it depends on opportunities and the returns.

Thank you everyone and we will talk to you soon.

Thank you for your participation. That does conclude today's conference, you may disconnect at this time.