Good day, ladies and gentlemen, and welcome to the CBS Corporation’s first quarter 2008 earnings release conference call. Today’s conference is being recorded and to get us started, I am pleased to turn the call over to Executive Vice President of Investor Relations, Mr. Marty Shea. Please go ahead, sir.

Good morning, everyone and thank you for taking the time to join us for our first quarter 2008 earnings call. Joining me for today’s discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, our President and CEO; and Fred Reynolds, Executive Vice President and CFO. Sumner will have opening remarks and we’ll turn the call over to Les and Fred for strategic and financial issues. We will then open the call up to question. Let me note that statements on this conference call relating to matters which are not historical facts are 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 first quarter 2008 results should have been sent to all of you. If you did not receive these results, please contact [Punam Dasai] at 212-975-3667 and she will get it to you. A webcast of the call, the earnings release, and other information related to the presentation may 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 morning, everyone. I thank you for joining us. When we look at our strong first quarter results, one thing is absolutely clear -- the CBS Corporation is doing a fantastic job operating our core businesses, adjusting our asset portfolio, and capitalizing upon the tremendous opportunities offered by the world of new media. And the results of those efforts are clearly evident, from our leading broadcast network to our television production hit factory, to everything we are doing online. And not to mention outdoors, the CBS Corporation is leveraging its reach and its popularity to move forward and drive results. And of course, our businesses continue to throw up healthy amounts of cash, which enables us to return value to all of you who are shareholders. I’m as enthusiastic, and I mean it, as I have ever been about what the future holds for this great company. I continue to believe that we have the wherewithal and the will to deliver for our shareholders and I know that the entire CBS Corporation management team is equally committed to our success. Now, the leader of all this exciting activity is my friend, Les Moonves. Les is as dedicated to winning as he has ever been and I want to make one thing clear -- there is no one, no one that I would rather have at the CBS helm then Les Moonves. So I will now turn it over to you, Les.

Thank you, Sumner for those very nice remarks and good morning and welcome to everybody, and thank you as always for joining us here today. I am very pleased to be here with you to discuss the strong results for the first quarter that demonstrate the strength of the CBS Corporation. It was a very solid quarter and as those of you who follow us closely know, we’ve been turning in these types of performances every single quarter since we launched the new CBS Corporation more than two years ago. Today I am going to walk you through our results, briefly discuss our asset portfolio, and then address some themes across the corporation, and then turn to Fred Reynolds, our terrific CFO, for further financial remarks. I’ll start with the highlights of our financial performance. Despite the fact that the Super Bowl and the semi-finals of the Final Four both aired in the first quarter of 2007, both quite large revenue drivers, CBS delivered revenues on par with last year of $3.7 billion. At the same time, first quarter revenues benefited from a new deal that allows us to be the sole international distributor of our terrific CSI franchise. And our revenue performance is all the more satisfying when you consider that the writers’ strike occurred through much of the quarter. At the same time, adjusted OIBDA and operating income were up 10% and 11% respectively. We were able to turn these solid operating results into significant increases at the bottom line. Net earnings were up 14% to $244 million and diluted EPS was up 29% to $0.36 versus $0.28 for the same period last year. Across the board, our businesses posted operating results that led to very substantial free cash flow of $938 million for the quarter, up 25%…

Thank you, Leslie and good morning to all of you. As was just discussed, our broad base of media businesses produced solid results in the first quarter of 2008, driving very strong earnings per share and free cash flow growth. Let me now provide you with some financial highlights and additional information on our first quarter performance. As Leslie said, diluted earnings per share for the first quarter was $0.36, up from $0.28 last year at this time, a 29% increase. Now, on an adjusted basis excluding stock-based compensation expense, a restructuring charge of $45 million, and the after-tax effect of station divestitures last year, earnings per share was up about 23% over the first quarter of 2007. Free cash flow for the first quarter of 2008 was a very strong $938 million, up 25% over last year’s very strong free cash flow. Free cash flow was driven by higher operating income before depreciation and amortization, plus adding back the non-cash expenses associated with stock-based compensation and restructuring costs of $45 million. These $45 million of restructuring charges, while recognized in the first quarter will not be [spent in] cash until future quarters during 2008. In addition to higher OIBDA, cash flow from operations was up due to a strong improvement in working capital as a source of cash. The first quarter’s working capital improved by approximately $150 million versus the first quarter of 2007, with about half of that improvement due to timing related to the advanced payments we received on our new home entertainment distribution agreement. The balance of the working capital improvement results from the continued focus on managing our balance sheet, including driving down our trade accounts receivables. Turning to revenues, first quarter revenues totaled almost $3.7 billion, essentially flat with last year’s first quarter. In…

(Operator Instructions) We’ll go first to John Blackledge at J.P. Morgan.

Thanks. A couple of questions -- it seems like North America outdoor revenue growth decelerated in the first quarter, even excluding the non-renewals of Toronto and San Francisco. Just wondering what U.S. billboard revenue growth was in the first quarter and what is it pacing in the second quarter, how national revenue growth was in the first and second quarter. And then costs up 9%, rending flattish EBITDA. I’m wondering if this cost growth trend will persist throughout the rest of the year. Thanks.

I’ll take that, John. One, I think the first quarter traditionally is a little bit slower for us on outdoor and we are seeing more momentum in the second quarter. Some of it was timing of when the orders were placed, because they tend to have two or four week orders. I would say it’s down a tick or so from maybe the fourth quarter, which is I think kind of in the 7% range but it is sort of still in the mid-single digit, maybe slightly higher and building. But as you know, lease costs sort of come in the first of the year and they are paid pro rata, so as we start building it will become less of an increase over the year because we have higher revenue growth. Again, I think these two contracts are really the story, otherwise I think we would have been kind of firmly in the mid-single digit growth rate at outdoor.

Okay, thanks. If I could ask one more, on the TV station pacings, I was just wondering what they were in the first quarter ex the Super Bowl and ex political and what the stations are pacing in the second quarter. Some operators have reported recently and the trends are pretty poor for them. Just wondering how you guys are doing on that end. Thank you.

Again, I am always reluctant to give pace information because that’s what we don’t like to be because it changes all the time. I’d say the first quarter we had great political, record political, but the underlying business was softer than we would like. It is very difficult to strip out the Final Four, the Super Bowl, and all those different aspects. But I would say that clearly some of the actions that we took early on in the year addresses what we saw as some struggles with the local business, but also some of the headcount reductions were largely due to technological advances that we had. So clearly we love that it’s a political year. If we are going to have a little bit of a tougher economy, the political is going to help us a lot but it is not as strong as we would have hoped it would have been three or four months ago.

Thank you.

Michael Nathanson with Sanford Bernstein.

Thanks. I have a couple for Fred. I am trying to understand the drivers in TV profitability this quarter, so I wanted to know -- you talked about the change in CSI from gross to net basis. Did that materially change the profit impact from CSI this quarter?

Not materially, no. I think the biggest factor in television profitability in the segment was really a little bit of that switch that I was trying to articulate about entertainment program is very -- versus paying lots of rights fees for the Super Bowl and the NCAA last year, I think that was one of the biggest drivers. But the CSI was really mostly grossing up the revenues. There was some impact but not significant over the prior year.

Okay, and then the other thing was you guys mentioned about restructuring charges in radio and TV. How large would the savings be from those changes you are making and when will you see the savings from those changes?

Well, I’d say we will see the savings -- they were all largely headcount related, or personnel related. They will all be in the numbers this year. The first quarter takes the hit but we should be able to have a payback of the $45 million charge by the time the year is over, so we should be seeing kind of north of $45 million in actual reduction and costs by -- as a run-rate, this year.

Okay. Thanks.

Our next question will come from Jessica Reif-Cohen at Merrill Lynch.

I have a couple of questions. So just to continue on the thought that Michael had on the cost of severance, is there anything that you guys are thinking of doing more fundamentally to change the cost structure of the business across any of the lines of business?

You know, when we approached the television stations, there was some softness in the market, as Fred referred to, other than the political, which obviously covered a lot of the [spend]. Each one of them was required to take a look at their cost structure, see what they could do about it. Some of it -- a lot of it did involve personnel changes but also some of it affected how we did business. The ability to cut cost in a way that did not affect obviously the news product that we were putting out or the quality of the television that we were putting there. So each station was assigned a task. They accomplished it in a variety of different ways. A lot of it was due to personnel costs and that was taken care of but a lot of it was done in other ways.

I would just add that a lot of it was driven by technology. We put in a lot of robotics, non-linear editing at the TV stations. You are going to see with the digital rollout at outdoor, there is less need for people who are post hangers, or people who go up and put the paste up on the boards and all that stuff. And so that’s the payback from what we think is some pretty good capital investments and I’d say to Leslie’s point, every change was primarily not in front of the camera. I mean, most of it was in the more technical areas of a TV station and a radio station, and we’ve actually added resources and we’ve not touched the broadcast.

And Jess, one of the things that it’s important to realize is we are aware of what the marketplace is and we adjust our businesses accordingly, and we continue to run our businesses very effectively. So when things become necessary to do, we do them.

And I have a couple more questions -- what is your view of the potential of a strike by the actors?

Conversations are going on as we speak, or in a couple of hours from now. They are resuming negotiations with the Screen Actors Guild. I think the community realizes that the writer’s strike was not a good thing for a lot of people. The tone of these negotiations seems to be in a much more cordial, positive fashion without reporting anything, because nobody is talking about particulars on the deal. We are optimistic that before this contract runs out, June 30th, that there will be no strike and that everybody will get back to work and that is what we are hoping for.

And then just a really quick one for Fred -- just two more questions -- the multiple for IOA, what was that?

It was an attractive multiple for us. It’s a nice business. It has enough scale and it was -- you would find the multiple -- I don’t think we’ve disclosed this. It’s a private company but it was a very attractive multiple, kind of a very low double-digit kind of multiple, maybe just high single digits.

Okay, and then I know Sumner is on the call, I don’t know if he’s willing to take a question but if you are, I was just wondering if you could comment on your view of what is going on in the pay TV market. What are you seeing fundamentally that is changing that is allowing each of your companies to have their own pay TV service?

I’ll be glad to answer that, Jessica. As you know, from the very beginning my position was that each of these companies had an obligation to follow their own strategic objectives and to compete. So competition was nothing that I didn’t foresee. As a matter of fact, as you know I believe competition is healthy. It certainly didn’t hurt me. Now as to what is going on, I think the street to a certain extent and a large part of the press has missed the point. I think that now obviously Les talks to me every day about his strategies and Philippe talks to me every day about his strategies and I supported both. The fact is that some [inaudible] think there has to be a winner and a loser. The fact of the matter is I think that Les’ strategy, Showtime’s strategy will work for CBS and I think that Philippe’s strategy will work for Viacom. It is not true that success between these two companies is mutually exclusive and I think a lot of people fail to see that. I think you will see the strategy of CBS working and the strategy of Viacom working and that’s what I believe and I think as that develops, as events develop, some in the near-term, you will see [inaudible] of that point of view.

Thank you.

Our next question will come from Lucas Binder at UBS.

Thank you. A couple of quick questions for you; one, Fred, Les, obviously you’ve increased the dividend a percent from here. Free cash flow is up materially. Where do you see other uses of cash and how should we look at free cash flow for the rest of the year going forward? Were there any specific benefits that we should realize for the first quarter relative to the rest of the year? And then a follow-up with regard to the Showtime relationships with Viacom, MGM, and Lionsgate -- what are your opportunities to add content away from your own developed content by 2010, 11, 12, that timeframe?

Okay, Lucas -- number one, since we started out we have said our primary focus is to be a dividend paying company. We’ve increased the dividend as we said six times in 2.5 years. We continue to do that. We have faith in our company. We like returning money to shareholders. At the same time, when an IOA becomes available, we have the cash and the balance sheet available to jump on it and make a very smart acquisition when it becomes available, and we are in the position to continue doing that and that is part of our strategy. We are looking for opportunities. We’re not going to be stupid about it. We haven’t been stupid about it in anything we’ve acquired. Everything fits with what we do and we will continue to do that. Regarding question number two, look, Showtime has very solid original programming. The deals we have with the current studios, extend some of them to have their pictures through the end of 2010, so we are very strong. We have already spoken to major suppliers, movie companies, as well as TV companies. There is a large amount of product that is out there, top quality product. We are confident that we can make these deals and that Showtime won’t miss a beat in terms of the product that they are putting on the air and we feel very good about that. So it’s an exciting time. It gives CBS Films the opportunity to add films to the Showtime lineup, as well as some other companies that are out there.

All right and just on the free cash flow side, if you look at -- the beginning of the year was obviously very strong and it usually is your best quarter during the year. How do you look at the rest of the year? Was anything pushed forward or is it just going to be sort of continuing on from here?

As I articulated, of the working capital improvement of about $150 million, about half of that is timing. It will come back in -- in other words, we’ve got an advanced payment on our DVD home video that will be worked -- we would have earned it over the balance of the year but we got it early in the first quarter. The other half is just again, good old fashioned working the balance sheet. So you are right -- the first quarter is usually the strongest but we expect to have again free cash flow. We are very confident in it but some of it is timing.

Thank you very much.

Anthony DiClemente at Lehman Brothers, your line is open.

Good morning. Thanks for taking the questions. Fred, what portion of the incremental -- I get $280 million of license fees at TV was related to Everybody Loves Raymond and how much of it the new self-distribution deal for CSI? And then Les, you mentioned in your opening comments, I guess you guys are looking at presentations as opposed to pilots. If you could just give us a little bit of background on how much money you save on greenlighting shows when you just look at a presentation as opposed to a pilot. And then finally, Les, also if you could update us on your thoughts on the potential for acquiring cable TV network assets. People have talked about the weather channel, the scripts networks, the rainbow networks, perhaps as a way for you to achieve proxy value for CBS retransmission consent through higher affiliate fees or carriage for those potential target networks. Thank you.

I’ll go first because it was the last question -- the presentations, basically what we were able to do and obviously we had a shortened season because of the strike in the amount of time we had to do the pilots and get them ready to see what we had, so as a result of that in a number of the cases, and I don’t want to mention how many but it’s over 50% of the pilots that we did cost approximately 50% of what the normal pilot would do. Instead of doing a 10-day shoot or a 12-day shoot, we would generally take half that amount of time and shoot key scenes that would sort of give us an indication of what the show was that we had, by seeing the key relationships that characters have and whether an actor is working and whether the set-up works, you don’t necessarily need to see a full completed pilot until you are ready to put it on the air. So having done this as long as I have, you are able to see half a pilot and have a general idea of whether you have something worth working on or not. So to say we’ve saved tens of millions of dollars in development cost would be an accurate presumption. In terms of your last question regarding cable television assets, we like to say, and it’s absolutely true, we look at everything. We look at everything. There are lots of media deals out there. When they become presented, we look at it. We are happy to look at it. We have a terrific team with Fred and Joe [Ainello] that are able to assess the value of certain things and whether they are worthwhile for us to acquire. There is nothing we need to acquire. CBS can stand alone regarding retrans. Some of the cable operators would rather pay it through some cable channels. Having said that, we’ve approached a number of them and we already have 20 deals in retrans without any cable participation whatsoever, directly paid in cash to CBS. If it should come in another way, we are fine with that as well but at the moment, there’s no plans to announce anything major but we do look at everything.

Anthony, on the question on the increase in the license fees, I’d say the vast majority of it, the vast majority as due to the accounting treatment of the CSI franchise. In other words, showing it gross versus net. While Raymond is very valuable and is very important to us, the vast majority was really the accounting treatment.

And that’s -- the accounting treatment, Fred, is something that will continue to the order of magnitude that it showed itself in the first quarter, it will continue?

Well, it’s just now we reported there was -- obviously when you become the distributor, we report what was previously on the net basis growth, but no, it won’t be that kind of number going forward. It will just be instead of recording just our profit from the distribution will show both the gross revenue, the participants cost or share of it, and then our net profits. So the net profit sort of stays the same but the revenues get grossed up.

And we will continue to distribute CSI internationally for the rest of time.

Understood. Thank you so much.

Next we’ll hear from Marci Ryvicker at Wachovia.

Thanks. Last quarter you said you weren’t seeing the impact of a recession on your business. It sounds like this may have changed by some of the comments that Fred had made. And then the second question is in outdoor -- in general, what is the attractiveness of international assets? I know there is top line growth but the margins are typically pretty low. Why not aim to buy domestic outdoor group, like a Lemar, who has significantly higher margins?

One, I’m not sure, Marci, we see a recession because we are still seeing growth and I think to Leslie’s comments at the outset, when advertisers are trying to reach the biggest number of their potential customers or consumers, they are going to the big networks, the network that are going to broadcast broader media plays. So I would say it’s slower. I don’t know -- to me, the word recession means it’s actually declining and I think maybe your comments are around outdoor. I think outdoor will end up being fine. It will show growth. It did show growth in the first quarter domestically. Out international is doing really well and we think the quarter should build but from what we see today, the domestic billboard business should get stronger as a growth rate over the first quarter. Obviously if something happens in the economy that changes from what is slow growth to something very more severe, than we may have to reassess that but I don’t think we would say that we are seeing a recession. I think we see things slower. As we said, TV stations might be a little bit slower but in the same markets, we just cited a number of really positive signs at radio and outdoor continues to do well also.

And Marci, in terms of the operations of international outdoor, once again the margins are better for billboards and that’s an area we are investing in, obviously by our IOA acquisition. The more we can invest in billboards, there is a much better margin business in that and you will see more increase in that from us in our international acquisitions and -- as opposed to some of the transit contracts which don’t have as attractive a margin.

So is it safe to say you are not looking to buy domestic, like a Lemar?

We look at everything. There is no announcement coming on Lemar in the near future. That you can be assured of.

Marci, as Leslie’s point is we love the billboard business more so than the street furniture or the transit because the margins in billboards are really attractive. IOA was I think over two-thirds or so of their revenue came from billboards and so -- or something, 80% of profit, so that’s why that was really attractive and there is a huge opportunity in South America. There’s lots of mom-and-pop’s billboard companies out there that we can roll up with this strong platform that we have.

And the rest of the world as well.

Thank you.

Heath Terry at Credit Suisse, your line is open, sir.

Thank you. You mentioned that you are targeting $50 million in Internet revenues this year. I am assuming that doesn’t include any acquisitions. Can you give us an idea of what your appetite is --

The $50 million was just radio. It was just radio. Acquisitions, no, there’s no plans for any additional radio acquisition. You know, the combination with AOL Online increased our revenue stream in terms of online advertising and if you see some of the new exciting things our radio group is doing online, such as being able to sit at your desk in New York City and get a radio station in Los Angeles, or being a country fan and being able to punch up the seven country radio stations that we own throughout the country, that’s very exciting. So the amount of revenue increase online for radio is becoming a significant number but I would not foresee any acquisition of an online radio site. You will see more and more also cross-promotion with Last.fm in our radio group, which is the music online service as well.

And is the appetite different in your non-radio online asset areas?

Well, we are always looking for online assets and once again we have stated that content online and outdoor are our main focus for acquisition, so if there was an attractive opportunity that fit with what we do online, we would do it.

You also mentioned that you have new shows ready for the up-front. How would you compare the position that you are in from a content development standpoint this year versus a normal non-strike year?

You know what? I’ve only had the opportunity to see two of our pilots so far, one of which I absolutely adore. I don’t want to oversell but I’m very excited about one. You know, it is ironic but there are some who think, and I may be one of them, that the forced compressed nature of it may have forced better work or more intense work on the part of people. Obviously casting became a bit more difficult because everybody was running in a very limited period of time. I would say we probably will have more original product done before the announcement of our schedule than anybody else -- not to say that anybody else won’t be prepared but their pilots are going to come a bit later, so I think we are going to have a more organized idea of what is going to be on in the fall this May than some other people because our pilots are in decent shape and we’ll have a fairly great idea of what to select. In addition, there remains a great deal of stability in the CBS schedule without looking for a whole slew of new programming.

Thank you.

We have time for one more question.

Our next question will come from Victor Miller at Bear Stearns.

Is CBS' appetite for repurchases through -- I mean, I’m just struck by the fact that your debt fell by $873 million in the quarter. You are probably leveraged below two times. If you are unsuccessful in adding M&A, would you return to that given the 6.7 times multiple? And then I have a follow-up.

Victor, as Leslie said we’ve been fairly consistent that we really believe returning cash to shareholders via dividend is the right strategy. Obviously we bought back 3.5 or $3.4 billion of stock last year. We kind of associate that with the windfall from the asset sales of the parks business, radio and TV stations. But we think the commitment to return capital and cash to shareholders is there. We think dividends is the right way of doing it and again, but obviously we will always look at what’s in the best interest of shareholders. We would love to invest, as Leslie said, we would love to invest this cash in growing our digital business faster, both outdoor and interactive, and looking for attractive acquisitions like an IOA or any others that are out there that give a good return to shareholders. Absent that, then hopefully we’ll do the right thing by returning value to the shareholders via dividends or other methods.

Victor, as a final statement, as this is the last question, I think many companies are very envious of our balance sheet. This is a very good time to be sitting in the position that we are, with our ability to increase our dividend and our ability to have cash ready to leap on the right opportunity. So as I said, we are feeling very good about where we are and a lot of companies would like to be sitting in our position here.

Thank you very much for joining us and Deborah and I will be around for questions further today.

Thank you.

Ladies and gentlemen, this does conclude the CBS Corporation first quarter 2008 earnings release conference call. We thank you all for your participation today. You may now disconnect your lines and have a great day.