Good morning and welcome to the CBS Corporation’s third quarter 2008 earnings release teleconference. Today’s conference is being recorded. At this time I would like to turn the call over to the Executive Vice President of Investor Relations, Mr. Adam Townsend. Mr. Townsend please go ahead.

Thank you. Good morning everyone and thank you joining us for our third quarter 2008 earnings call. Joining me for today's discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, President and CEO and Fred Reynolds our Executive Vice President and CFO. Sumner will have opening remarks and we will turn the call over to Les and Fred who will discuss the strategic and financial results. We will then open the call up to questions. 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 third quarter 2008 results should have been sent to all of you. If you did not receive the results, please contact Poonam Desai at 212-975-3367 and she will get it to you. A web cast of the call and the earnings release and any other information related to the presentation can be found on our website at www.cbscorporation.com. Now I'll turn the call over to Sumner.

Thank you. Good morning everyone. Thank you for joining us today. CBS is clearly operating in the middle of one of the most difficult environments in our recent memory. One thing that is certain to me is that Leslie and his team are managing our businesses prudently and are positioning CBS for a very successful future. At the same time I am pleased that CBS continues to pay a truly attractive dividend while investing for growth. Now these are things many companies were not able to do this quarter and accomplishments to be proud of. CBS continues to be in a strong position and I have no doubt that we will be even stronger on the other side of the challenges we face today. Now I want to briefly discuss another topic that I am sure is on all of your minds. As you know, the financial condition of National Amusements, that is the private company that I control and that holds my controlling interest in CBS and Viacom, has been much in the news in recent days and understandably there has been some concern expressed particularly with respect to any potential impact on CBS and Viacom. So let me give you some facts. First, NAI’s theater operations are substantial. We have more than 1,500 screens in the United States, Latin America, the United Kingdom and in Russia. The company is in the forefront of delivering great entertainment experiences to its audiences. However, NAI like a number of companies was pulled into the wake of unforeseen and unprecedented market activity that caused a precipitous drop in the value of the overall market and of course in the value of CBS and Viacom shares. This in turn triggered a covenant issue under NAI’s debt agreement. Second, NAI moved quickly to address…

Thank you Sumner. Good morning everybody and thank you all for joining us today to discuss our third quarter. Before I walk you through our results I want to make a few key points that are crucial to understanding our company and our future. Clearly this is a difficult marketplace for all companies in every sector. The challenge is to recognize the reality of the situation and effectively manage through it and be ready to thrive when the economy turns, which we are doing. First, I want to stress that we are committed to paying a healthy dividend to our shareholders. Our free cash flow remains strong, $1.4 billion for the first nine months of this year. Going forward we are confident that our businesses will continue to produce the kind of cash that will enable us to pay our attractive dividend. Fred will talk some more about this in a minute but the dividend is front and center in our strategy to return value to our shareholders. Second, in any economy producing premium content is at the core of what we do. The CBS television network, the CW and Showtime are the engines that create our content and they are firing on all cylinders. These three networks create content for many other parts of the company from local stations to domestic and international syndication, to DVD sales to online streaming and emerging media platforms like iTunes and mobile. Creating winning content now is the best way to drive future financial results when the economy improves and we are doing that. Third, our long-term strategy continues to be the shift from slower growth assets to higher growth ones. No step has been more significant for us in executing this strategy than our acquisition of CNET networks, the greatest collection of…

Thank you Leslie and good morning to all of you. I’d like to first discuss the significant items in the third quarter and then give you some further information on the underlying performance of our businesses and finally discuss our balance of year expectations. So let’s start with our very healthy free cash flow which through the third quarter totaled nearly $1.4 billion. During the third quarter free cash flow was a $38 million use of cash compared to the third quarter 2007 when free cash flow provided over $265 million in cash. The drop in free cash flow of $304 million was due to $120 million lower adjusted operating income before depreciation and amortization and higher use of working capital during the third quarter. Also, higher capital spending of $34 million, largely due to higher spending at TV stations to complete replacement station facilities as the old facilities in Chicago and Los Angeles were sold in prior years and capital spending was also higher due to the United Kingdom’s roll out of displays in the London Underground. During the third quarter $35 million was spent for the London Underground roll out and we expect the London Underground capital spending project will be largely completed in the next 90 days. On working capital in the third quarter of 2008 we used about $185 million more working capital than the third quarter 2007. The biggest portion of this increase was from the growth in our syndication net receivables of about $100 million, which were revenues we recognized in the third quarter from the off-network syndication of CSI: New York along with a significant increase in receivables from international syndication led by our CSI franchise versus a much lower level of syndication activity in the third quarter 2007. As we have discussed…

(Operator Instructions) The first question comes from Jessica Reif-Cohen - Merrill Lynch.

I was just wondering can you talk about the tone of the scatter market in the fourth quarter and is there any benefit to the ratings growth you have enjoyed in the new season? Second, on Showtime are you scaling back at all on the films or can you comment on what is going on there? Then I wanted to ask Sumner since I know he is on the call, I know you don’t want to talk about anything but if Viacom stock continues to go down how can we be sure you won’t have to sell?

Let me answer the first two questions that you talked about. The scatter market once again is not booming like in past years. There is some of it. The good news is because of the rating situation we feel like we are going to be the beneficiary of it. There is some, but as I said it is not what it has been in previous years. The great news is in the up front we sold a major large percentage of our inventory so we had a lot of volume. The good news is obviously no make-good’s for us. With the scatters coming in they are targeting for CBS and the CW. Showtime, as you know we made a deal with the Weinstein Company. We will have some movies from CBS film. Remember our deals with MGM and Lionsgate continue through the end of this year. We have all of those movies including the James Bond movie that is opening this week belongs to us. There are plenty of movies available. Once again our main focus for Showtime and our growth is in original programming. You will see an increase in original programming and probably somewhat of a decrease in the number of movies that we need to fill out what we are doing. There are plenty of available movies and we are going to be fine in our movie production. Adam?

With respect to the NAI situation if you can just appreciate the sensitivity of that and we will steer away from that for now if we can.

On the scatter market, right now we are selling slightly above where we were up front and I think we are getting to Leslie’s point the credit that we are the place to be if you want to advertise. So far scatter pricing is hanging in there.

The next question comes from Michael Nathanson - Sanford Bernstein.

Is Sumner still available to answer questions if you get one?

No, if we can just keep the questions focused here on the business.

Fred, a question for you. I wonder if your dividend strategy is [higher pair] ratio on EPS versus based on the overall dividend for previous years.

As we have said in the past I have always targeted a pay out ratio of around 50%. I view sort of earnings and free cash flow and I think free cash flow is a better measure because as you know now earnings has a lot of non-cash items in it like stock based compensation. Between the two we are focusing on kind of a 50% pay out ratio which is kind of where we have been and will be. We have always said that is kind of where we feel comfortable particularly in this environment. We feel comfortable with that.

On outdoor, for the year you have seen double digit cost growth in outdoor which is alarming given the rate of declining revenues. I wonder why is that. I know you had some layoffs and some builds but why is cost growing so fast and what does it look like on the cost side of 2009 for outdoor?

I think the biggest drivers were really the London Underground if you look at international. That’s where we have had the biggest growth and these new contracts, as we said, has higher cost and there is a little bit of a timing lag between as we roll out the digital displays which are some 3,000 or 3,500 and as we are really encouraged with the kind of revenue we are getting from them but there has been…unfortunately we had to pay the higher fees from the start and that is where we saw accelerated spending. Domestically we have lost a lot of contracts because we won’t bid higher such as San Francisco and Toronto where we bid as the incumbent would be a fair deal and someone bid higher so we are trying to manage those costs. Absent the sort of billboard lease costs or London Underground franchise costs, the rest of the costs are down and they will continue to be managed down. In the quarter we did have a lot of severance costs in there, probably some $10 million in severance costs and we did have hurricane Gustav and Ike knock a few boards down so that was another several million dollars that is hopefully won’t be recurring.

Just to underline what Fred was saying when you do a deal like the London Underground it is a long-term deal. Obviously the beginning of the deal is more capital intensive. That will slow down as the revenues increase as the installations are completed there. So that is why it may look somewhat deceiving right now.

On the network, which you said was down 12; I have covered the company for awhile. My estimate 12 is not a normal number. So if you look apples-to-apples and take away your prime time conventions and prime time debates can you give us a better sense of what you think the true organic change was for network?

It was probably similar to the previous quarters. It was probably down mid to low single digits if you strip out all the one-time things. As you know the third quarter is the lowest ebbing quarter. Obviously going into year-ago, but we had because of the strike there was probably fewer originals that were being repeated for the first time. Some of them might be repeated for the third time. I would say we looked at kind of mid single digits to lower than that.

And it was up against the Olympics. So by definition the ratings are going to be lower in the third quarter. The good news is we are going to be up in the fourth quarter.

The next question comes from Doug Mitchelson - Deutsche Bank.

Can you guys give us a sense of how sold out the CBS network is at this point for the fourth quarter? How much visibility do you have Fred when you say that you might be able to beat sort of the guidance you gave a few weeks ago? Is there any kind of color you can give us by ad categories or what you are hearing directly from advertisers that would be interesting because obviously people are still concerned that national might fall off a cliff here? Fred, do you have a sense for what percentage outdoor revenue was down for transit or municipal contracts?

At the up front, we sold probably in the high 70’s and cancellations were rather minimal, sort of a normal amount so we probably have the usual amount of scatter left, somewhere a little over 20%. As Fred said the numbers are up slightly in terms of scatter pricing to the up front and as I said it is all coming in to us. We are by far outperforming our peers so the scatter revenue we are confident we will get taken care of. In terms of the advertising categories we have not seen a great slow down in national advertising. While obviously we have been affected by local our major categories are still hanging in there quite a bit. As each year gets and this is not very different, certain categories are up and certain categories are down but we are not seeing the effect nationally we are locally and we do not have that fear of that falling off the cliff.

On the outdoor, largely…I don’t have the precise numbers, probably 65-70% of our revenues from outdoor in North America come from billboards and that is growing as we get out some of these other contracts. That, as you know, is a high margin business and where the bulk of our revenues, at least 2/3 of our revenues, is.

When you are talking about national categories with some ups and some downs but mostly hanging in there, are you worried that structurally the auto category is just going to be quite a bit lighter from this point on in Detroit?

The auto category obviously has hurt our local television stations quite a bit and that is reflected in some of the numbers that we see. I can’t imagine the auto category getting much worse than it is right now. I really can’t.

You have to remember that the world is now foreign manufacturers too like Toyota, Honda, BMW, Mercedes, they are actually picking up spending because they are gaining market share. Again, I don’t think we can be myopic and just look at Detroit. We love Detroit and we want it to do well but I can tell you today our biggest advertiser is probably Toyota today than it is General Motors.

The next question comes from Michael Morris – UBS. Michael Morris – UBS : Just going into the categories again a little bit on the local side. We are very aware that autos are weak and it seems like we are pretty far into that cycle. I’m trying to get a feel for where we are in the segment for other important categories, retail…any other color you can provide on where you think we are in that cycle on the local side. Secondly, on the cost side it looks like costs of television were still up pretty healthy in the third quarter about 7%. Can you talk about what drove those costs up in particular given that revenue was up much less than that? Also, how should we think about variability and ad costs going forward? How much opportunity is there to control costs in the television segment?

The reason the costs are up is really the syndication costs related to CSI: New York. Any time we have a syndication in a quarter you get a ballooning of revenues, you get a nice big chunk of profits but you also have the costs associated with it because it is not as high a margin as our ad revenue business which is largely an 85% margin business on the increment. So that’s it. If you look at our programming costs they are down in absolute terms at the network. Our programming costs at the TV stations in the segment are down. The only blip in the quarter had to do with the CSI syndication. So that will be an anomaly that is only in this quarter. Back to the other categories, auto is down at radio and TV but interesting auto is flat to slightly up at outdoor and auto is only about 8% in their category. Retail it depends on the region. Now we are in the biggest markets and like California is a very important market. They had retail like Mervyn’s go into chapter 11 and liquidation but Kohl’s came along and has heavy enough spending and guess what, spending more on our stations than Mervyn’s ever did. You have the have’s and the have not’s. The Wal-Mart’s of the world, the Target’s of the world, the regional strong chains are spending more to gain market share as they see some vulnerable competitors. I would say retail is sort of mixed but I would say generally we are doing okay in that category. Telecom continues to be strong. Believe it or not the theatrical entertainment is doing well. Financial services is actually starting to pick up a bit because people are just changing their messages and of course we expect to have a big boom on that as there will be a lot of name changes as some of you well know. We think the Wachovia’s of the world will be changing their names and the Countrywide’s and others will be changing names as we go forward and that is always the local assets that will drive that. Again, kind of mixed. Auto is down in most of our businesses and we expect it though to come back again. We think it is at the bottom. Michael Morris – UBS : Back on the cost side, if I were to take out the syndication costs where is the underlying growth trend? Is it still kind of low single digits? How much could we take out of that underlying core expense growth going forward?

In the television segment you will see absolute costs grow zero to slightly negative in 2009 as it was in 2008 versus 2007 and actually 2007 was down versus 2006. We have had three years of lower costs. The only time it balloons and next year just to let you know we are going to have four major syndication items coming out so those quarters they hit those will go up but again so will the profits because they are very profitable undertakings. Our underlying business at the television network is television stations, Showtime costs are flat to down.

The next question comes from Doug Creutz – Cowen & Co. Doug Creutz – Cowen & Co. : Could you talk about the current funding of your pension plan and whether you think there is going to be any need for a capital injection to that given the current status of the markets?

As you know if you follow us for awhile we have put in 2006 and 2007 we pre-funded over $400 million in the pension plan so our pension plan is still under funded in the qualified plan and at the end of last year, 2007, the qualified plan was a little under $350 million of under-funding. Now we have got over $3.4 billion of assets in the pension plan. About 70+% is in fixed income because as you know the plan comes from a historical from Westinghouse and other things because there are a lot of retirees, so those are largely 80+% in those plans in fixed income. So we don’t have the vagaries of the equity market. Clearly we watch this closely. I guess we look at the end of the year to see how we are doing. I guess at any one point in time I think through about two days ago year-to-date our pension assets were down 11%. Again, I’m not as worried about that from a mark to market because again a lot of that is fixed income which is a mark to market. We have AA or AAA rated credits. None of the financial services business were part of our business. They were less than 2% of the assets in our pension plan so we had no real defaults. No real write downs. It is just mark to market. So we’ll see how the market rebounds. We didn’t redo it for yesterday’s jump or two days ago jump. Obviously it is something we look at all the time. I have been managing this for 15 years and I feel we are in really good shape and the funding ahead of when we needed to but we measure at the end of the year.

The next question comes from Mark Wienkes - Goldman Sachs.

Does your strong ratings performance at CBS and combined with the softer economy allow you to leverage in managing the programming talent costs at the network? How much flexibility do you think the studios will have in 2009 on that front? Secondly, can you just update us for your expectations for political revenue? How is it coming in Q3 and what do you expect for Q4?

In terms of the talent costs obviously we have done a terrific job I think of managing our costs and managing our talent where nothing is out of hand. We are not in danger of losing anybody. Our ratings are terrific and we don’t expect our costs to go up at all in terms of programming or talent costs and we have been managing it. Political remains very strong. We expect overall and Fred you can break out the quarter but overall it will be somewhere in the neighborhood of $180 million. Obviously we benefited from last night with…I won’t get into the specifics but the Obama purchase of ½ hour did a very good job for us economically and I don’t know how it is broken out by quarter.

Leslie is right on. On a gross basis we are around $180 million. The third quarter came in around, which isn’t as big because it only starts at Labor Day on. It is really October and the first four days of November. The third quarter was kind of about $90 million and we will book in the 35 days from October 1 until November 4 probably another $80 million or so. That is kind of where we will be for the year. Again that is on a gross basis.

The next question comes from Marci Ryvicker - Wachovia Securities.

We have heard chatter that some network advertisers have talked about pulling as much as 50% of their up front commitments in 2009. I just wanted to know what you are hearing from your advertisers regarding 2009. Secondly, can you give us the impact of foreign exchange on the international outdoor revenue and expenses?

Whoever you heard that from about network advertising we haven’t heard anything remotely like that at all. As a matter of fact, cancellations from their up front purchases have been minimal. Actually above and I would say as good if not better than the last couple of years and every indication we have is they won’t be up front. They are excited about 2009 and it should all break. That is not something…I spent a lot of nights up thinking about a lot of things. That is certainly not one of them.

On the foreign exchange it was very minimal in the third quarter on FX. Cost was about $1.7 million and that increased our cost but as you know the dollar strengthened against many currencies and it was minimal on revenue. So the net effect on OBITDA was less than $2 million. Pretty minor.

The next question comes from Jason Bazinet – Citigroup. Jason Bazinet – Citigroup: The effective tax rate after you feel all the adjustments in your reconciliation table for the quarter I think was just a touch above 30%. I was wondering if you could give us any color on what tax rate you see in the fourth quarter or for 2009 based on your initiatives?

It is hard for me to predict 2009 at this point. I think as we gave sort of guidance I think we will kind of be in the year-to-date 35% versus last year’s 35.8% and I think that is kind of where we will be, in the 35% go forward. The only problem I have in the fourth quarter is we have to look at the mix between international which has a very low tax rate and I don’t have that visibility now. I think 35% is kind of a good rate but again I really don’t have a crystal ball on 2009.

The next question comes from Anthony DeClemente – Barclays Capital. Anthony DeClemente – Barclays Capital : Back to this local versus national theme it does seem that national rather than getting dragged down in sympathy with the local weakness on the economy is actually widening its gap in that performance over and above local. If you could remind us of the top two or three reasons for that disparity in this recession that would be really helpful. I guess there are two schools going forward; that disparity could continue to widen or they can kind of revert back to local versus national performing more in sympathy with each other. Then one final question, I understand it is very difficult for you to comment on specific negotiations you are having with the larger MSO’s but is there anything you can give us in terms of color on your expectations for retransmission consent fees or at least help us with the timing of when you will have something to report on that front?

Let me deal with the second question first. Then Fred and I will both discuss the first question. In terms of the MSO’s I don’t want to go into details. We are obviously having ongoing discussions. They have been going on quite a while. Most of them are fairly positive. I think we were very encouraged by the recent [Lind] Time Warner deal that was made. Once again an acknowledgement by one of the largest MSO’s it is important to pay that. So there are very fruitful discussions going on. I think you should hear more by the end of the year on some of these and we hope to have some of them concluded by then. In terms of the local versus national, number one I don’t necessarily subscribe to the gap necessarily will widen. I think national advertising on a network level certainly underlines the importance of network. It is the big tenth advertising that advertisers realize they cannot do without. The Olympics did very well. Our shows are doing very well, extremely well in the beginning. There is no place else you can reach 25 million at a pop and local is subject to much more competition between cable and certainly the internet which we are now benefiting on and that is certainly one of the reasons.

I agree with Leslie. I just think that right now advertisers have pulled back on their total spending and they go where they are going to get their biggest pop for their dollar and that is the broadcast network and that is CBS. I do think that is going to continue in the short-term. Again, every competitor and every company has their strengths and weaknesses and that is where local has unbelievable value. You see that with political. It is another endorsement of why local works. Yes the network for the first time in a long time got some political, but it is very unusual and it hasn’t happened in 30 years or whatever it is. Local works very well. I think this is a short-term reaction to advertisers saying I want to cut some spending but I want to drive market share. I will use the network and CBS network is getting the benefit of that but they will be back in local. I firmly believe with outdoor, radio and TV they will be back. That is the only way to win. Market by market, corner by corner and that is where people advertise. Thank you very much. We’ll be around the rest of the day to answer any questions.

That does conclude today’s conference. We’d like to thank you all for your participation and have a wonderful day.