Good day, everyone, and welcome to the CBS Corporation Third Quarter 2011 Earnings Release Teleconference. Today's call is being recorded. At this time, I'd like to turn the call over to the Executive Vice President of Investor Relations, Mr. Adam Townsend. Please go ahead, sir.

Thanks, Jay. Good afternoon, everyone, and welcome to our Third Quarter 2011 Earnings Call. Joining me for today's discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, President and CEO; and Joe Ianniello, Executive Vice President and CFO. Sumner will have opening remarks, and we'll turn the call over to Les and Joe, who will then discuss the strategic and financial results. We will then open the call up to questions. Please note that during today's conference call, financial results for the 2011 third quarter and 9-month periods, with the exception of revenue, are compared against adjusted 2010 results. Reconciliations for non-GAAP financial information related to this call can be found on our earnings release or on our website. In addition, 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 results to differ. Risks and uncertainties are disclosed in CBS Corporation's news releases and security filings. A webcast of this call and the earnings release related to today's presentation can be found on the Investors section of our website at cbscorporation.com. And with that, it's now my pleasure to turn the call over to Sumner.

Thank you, Adam, and good afternoon, everyone. I thank you all, for being with us today. As you know, CBS is trailing yet another quarter of very fantastic results. We have consistently delivered growth and profitability, of course, driven by the success of our premium content all over the world. In every area we compete, CBS is thriving. We continue to lead as the #1 network. We're signing more and more online distribution deals. We're launching one Showtime hit after another and Simon & Schuster publishing the bestsellers. We have a stable growth at our Local business. Our content is getting more and more and more valuable everyday. As we close out 2011, we are operating from a clear position of strength. And I tell you, 2012 promises to be even better. But it's not enough, as you know, to have great content. We have to have a great management team as well, and we do. Les and his team continue to make every right move, and CBS has remarkable success quarter after quarter. And now here to tell you all about it, is the man himself. But before I introduce Les, let me say this. I have frequently called Les a genius. The reason he's a genius: He has 20 out of the top 30 shows on television, something actually unheard of. That's why he's a genius. So let me introduce my friend, my colleague, the genius himself, Les Moonves.

Thank you, Sumner. I appreciate those kind words. Good afternoon, everybody, and thank you for joining us again. For many quarters now, we have posted results that speak to the strength, stability and progress of our company. Today's numbers are no exception, and the good news is that due to our performance, the strategic actions we've been taking and our ability to take advantage of the fundamental shifts in our industry, we are positioned for continued success going forward, including in 2012, which promises to be a very, very good year. Our competitive position is as strong as ever. And as one of the world's leading content companies, the ways we are monetizing our programming are growing all the time, from retrans to reverse comp to streaming to our expanding international business. All of these new opportunities mean increased stability to our revenue base and more and more dollars falling to the bottom line. This past third quarter was indicative of the type of performance we have set ourselves up to achieve. We turned top line growth into sharp increases in OIBDA, up 25%, and EPS, which was up 43%. And our OIBDA margin, once again, reached peak levels that we haven't seen since '06 and '07. Plus, as we continue to tap recurring non-advertising revenue streams, we are diversifying our revenue base. In the third quarter, our mix of advertising-related revenue came in at just 59%. So we are clearly tracking ahead of our strategy to diversify and de-risk the company. Across the board, we're delivering on our strategies and priming CBS to take advantage of some very exciting developments down the road. And the fact that we have this kind of confidence in the future is why we're announcing today a plan to buy back another $1.5 billion…

Thanks, Les. Good afternoon, everyone. Next, I'll give you some more detail on our results for the quarter and year-to-date then update you on Q4 trends and opportunities in 2012. Let's start with the total company results for the quarter. Les mentioned how we're steadily turning top line growth into higher and higher profits. The numbers this quarter demonstrate the kind of exceptional flow-through we've been delivering quarter after quarter. Despite significant political advertising from a year ago, overall revenue of $3.4 billion was up 2%, and advertising revenue was even with last year's quarter. Content licensing and distribution revenue was up 5%, led by our recent digital streaming deals and continued growth in international syndication. Affiliate and subscription fees were up 7%, benefiting from further growth in cable and retransmission consent fees. OIBDA of $837 million was up 25% from the prior year, driven by high-growth margin revenue and our continued focus on controlling costs. Our overall OIBDA margin in the third quarter expanded 500 basis points to 25%, which ties a record for us. We're now benefiting from a larger and growing base of long-term committed revenue deals that have very high margin. Operating income of $703 million was up 33%. And as Les said, diluted EPS came in at $0.50 per share, up 43%. We've not adjusted any reported items in this quarter or any quarter this year for that matter. For comparison purposes, 2010 amounts reflect the adjustments we made last year. I also want to point out that our results today do not yet reflect the benefit of the recent announced CW deals. On a year-to-date basis, the story is very consistent. Revenue was up 3% despite the difficult comps of last year's Super Bowl and political advertising, as well as our new NCAA agreement.…

[Operator Instructions] We'll go first to Ben Swinburne with Morgan Stanley.

Joe or Les, you guys talked about all the deals you've done in the streaming online world. It sounds like you think that revenue base grows next year. Is that a fair characterization of your comments?

Yes. Ben, this is Joe. Just by the deals we've done signed today, the revenue will grow next year year-over-year in terms of dollars.

Terrific. And if I could just ask one follow-up. If you look at the Entertainment segment, expenses declined year-over-year $160-odd million and even $180 million sequentially. I know, Joe, you mentioned your costs were down in the programming line. Anything else you'd call out in the quarter that might be unusual? And I think you had talked in the past about programming growing kind of low singles for this season versus last year. Is that still the right way to think about it?

Yes, I think longer term, that's probably the right way to think about it. I think, again, we're demonstrating we can control costs. Sports programming and primetime programming are clearly down. But clearly, again, we're not daunted by that magnitude, so there is a little bit of timing. But I think we've proven year-to-date we've been able to manage that line very well.

And the significant thing is because with our results, by overspending, it doesn't necessarily mean you'll get ratings. And it's really good to be able to manage our costs and still do quality programming as well. And I think that, that improves our margins. When you look at our ratings and you see that our programming costs are down, I think that's a pretty amazing statistic.

And Les, are you able to pick up any make good so far this year from, let's just say, NBC or anybody else who's weak so far this season?

Well, I don't know the particulars about what's happening. But clearly, as I said in my opening remarks, we have the strongest place in terms of scatter. And when you look across the landscape, we are first in line when you look at the ratings across the board. And some of the other places are struggling a bit, and I would think they're in a far worse position than we are.

. We'll go next to Jessica Reif-Cohen with Bank of America Merrill Lynch.

I was wondering if you guys seem pretty confident about 2012, if you could give us an early peek into what you're seeing on the advertising side? Have advertisers done anything regarding their options yet?

Jess, the -- looking at the first quarter there, it is business as usual. Nobody -- very few people are canceling us because they know they'll have to pay more. So we're -- obviously, with the share buyback, we're very confident of how the year is going to go in advertising for the rest of the season.

Right. So the upfront is going to be 3 quarters that we know what that pricing is and political for the local segment, so we've got very nice tailwinds helping 2012.

And Les, you just mentioned the buyback, that you felt confident enough to announce the buyback. I'm just curious about the timing. You still have $650 million left on the existing buyback. What prompted a renewed -- or what prompted a new buyback?

Jess, it's Joe. Look, the visibility into the non-advertising cash flows are so strong. As you said, there's only $650 million left, and that clearly just will run out by Q2 of next year. So we just look at this and just saying is we're so confident in our cash flows, we're going to continue to return capital to shareholders and we like our stock at these levels a whole lot.

Just one thing on that confidence. You said publicly in the past that retrans and reverse comp will be at least $250 million. And given that you signed more deals, can you give us any kind of update on expectations for that line?

You know what, we're not going to go much beyond that. We are confident we're going to hit the $250 million, and it will probably be more than that.

We'll go next to Michael Nathanson with Nomura.

I have just 3 quick housekeeping ones. In the first paragraph, you talked about the challenging of -- challenge by the timing of syndication sales. Are you referring to timing of last year's syndication or do you have more syndication to come in the fourth quarter -- pushing into the fourth quarter?

Yes, it's when we make the shows available. So as the next season, Michael, airs, so there's more to come later. So we made more episodes available in Q3 of 2010 than Q3 of 2011.

Okay. There wasn't anything about a sale push into the fourth quarter that's going to come of...

No.

Okay. And then, the comment about the programming mix driving savings, can you give us a sense taking out the timing benefits? In this quarter, what do you think your programming savings were like-for-like in Q3?

Well, let me answer -- it's Joe, Michael. Let me answer the question this way. I think you look at the Entertainment segment margin on a year-to-date basis, you see it's 20%, which is an 800 basis point improvement year-over-year. We clearly think that's sustainable.

Okay, okay. And third would be, you mentioned that primetime was up 4% in the third quarter. I wonder if you think do you sequentially improve with the new upfront base in Q4 from the 4% level in third quarter?

Yes, judging from the fact, obviously, we all know how strong the upfront was. And frankly, the scatter is above that. So we anticipate that it will grow significantly from there.

We'll go next to Michael Morris with Davenport. Michael C. Morris - Davenport & Company, LLC, Research Division: Two questions. First, on Showtime, the growth there continues to be very strong and ahead of HBO, which I would consider your closest peer. You seem to still be growing your subscriber base. I'm just trying to think of when you look at a competitor like HBO, did they sort of represent what you see as the cap in the traditional model for that type of network? Or do you think that there's demand or you could have a structure that would allow you to grow beyond that? And then I have a follow-up.

You know what, that's a very good question. We're currently over 21 million subs, and they're over 28. We are Avis, but I think, clearly, we are growing. Our programming mix, we think our original programming is stronger than it was even a couple of years ago. And there's a reason for that growth. I think subscribers want Showtime. More people want Showtime. Most households that have Showtime also have HBO. So the fact that we're growing, can we go beyond 28 million? One day, I hope so. Michael C. Morris - Davenport & Company, LLC, Research Division: Great. Appreciate it. And one other thing, Les. You mentioned that I thought was interesting, your incremental was that when you -- the new reverse compensation deal that you struck not only will start to provide revenue starting in mid-2012, but also take some costs out. I assume take costs out of the Entertainment segment. I'm trying to gauge how big that is. Does that extend to your other affiliated stations that you may also have...

You know, Michael, there were only a few station groups left that we will pay in compensation to. These last couple of deals will wipe that out entirely. By the middle of '12, we will not be paying out anybody and it all comes in. So this will be a cost savings, as well as a total reversal. As we said, instead of paying, we're getting paid. So that's a good way to be.

We'll go next to Laura Martin with Needham & Company. Laura Martin - Needham & Company, LLC, Research Division: Let's talk about Hulu. So Les, you guys just signed a really wide-ranging deal for The CW. Could you talk about the similarities and differences as you think about the CBS Network and CW and specifically on Hulu Prime? Should we expect the deal announced near term on Hulu Prime and CBS? And then, boy, margins, wow, Joe, cost control hitting record margins. You told us a year ago you're going to do this and I think you delivered it faster. Can you tell us about margins next year? Because a lot of what you just went over looks like it's got 70% or 80% margin. So as a company, where do you think margins can go in 2012 and 2013?

Thanks, Laura. I'll do the Hulu question, and then Joe can talk about margins. Yes, obviously, CBS has been the lone holdout with Hulu and Hulu Plus. The CW is a different animal. It appeals to a much younger demographic. In addition, frankly, a lot more of the viewers of CW are watching online. So the majority of this deal deals with a -- it will go on Hulu Plus at first. And then 8 days later, it will go on Hulu. The significance of this deal is that we did get paid a chunk of money. There is no advertising split on this, which is something that we absolutely refuse to do. Were we considerably more liberal with making a deal with Hulu for CW? Absolutely. But as I said before, The CW went from being a money loser for CBS to a profitable venture for us overall. So these 2 deals made a lot of sense for us.

And Laura, on the margin, I think -- again, I think you're right. I mean, we said this was coming. It's clear why it's coming. Retrans, reverse compensation, these streaming deals, these are very high-margin deals. So I think, again, as we continue, we have a way to go on them. Advertising, also very high margins. So I think the combination of managing your costs and having these incremental revenue streams, we're not just saying the words, you're seeing the results in our numbers.

We'll go next to Doug Mitchelson with Deutsche Bank.

Just a few quick questions, a couple for Joe. Have you shifted amortization accounting for production of new TV shows now that the online window has been firmly established for you so you expense less upfront as you allocate costs against that online window?

No -- let's talk about The CW deal that we just announced. For the CBS studio shows, we've not adjusted the amortization for that. We -- obviously, we will look at the ultimate accounting in the fourth quarter for that. Obviously, the bigger benefit, Doug, is when you make those shows available to the syndicator is when you recognize the revenue. But clearly, as we get more and more data points and as the value of these properties increase, that will get reflected in our amortization.

So that onetime reset is probably more of a 2012 event than a 2011 event, right?

I think that's fair.

And then, can you give us any sense of how Oprah might have influenced revenue and margin comparisons in Entertainment year-over-year?

Yes, look, we distributed Oprah, as you know. And during the last years, the amount of our distribution fee went down significantly, so I won't say it's terrific to lose Oprah. But a couple of positive things happened for the CBS Corporation. Number one, Judge Judy became the #1 show in syndication. Dr. Phil became the #1 talk show in syndication, 2 shows that we own. Number three, obviously, Oprah had been on the ABC television stations by and large. So as a result, that time period where we became much stronger helped our station group a great deal. So as I said, no knock on Oprah. Oprah was an institution, and we were very happy to distribute her. But because of these factors, I think we are going to be in very good shape as a result.

We'll go next to John Janedis with UBS.

Guys, just going back to streaming. I think for the most part, the deals you've written have been guaranteed or upfront payment. So I'm wondering, looking ahead, I think the newer players that are going to be out there are going to have a harder time aggregating to subscribers. So can you talk about your appetite for deals that are success-based or non-guaranteed?

We -- frankly, we don't believe in them. We're not going to go out and we've sort of -- we've even been against joining Apple TV, which was an advertiser split. And these deals are significant in that we are getting guaranteed cash payment. We like operating on that basis. And as you said, we've been able to do deals worth hundreds and hundreds of millions of dollars on that basis. That is our position right now. Will we ever make a statement that that never could happen? I wouldn't right now because we don't know how the world evolves, but I like the way we played our hand and getting this guaranteed revenue stream is a good way to go.

We'll go next to David Miller with Caris & Company. David W. Miller - Caris & Company, Inc., Research Division: Les, correct me if I'm wrong, you guys actually have 4 separate television libraries in a sense, correct? You've got CBS, Paramount, King World and Aaron Spelling. How penetrated would you say you are within each of those 4 libraries with regard to over the top deals? What inning are we in right now with regard to further exploitation of that content?

Yes, we do have those 4 libraries. We actually have a couple of others. We have Rysher is in there as well and a couple of other smaller independent companies that go way back. Desilu, we have all theirs going considerably back. I would venture to say, in terms of library -- and right now, the good news is we don't distinguish. I couldn't tell you, frankly, what was a Paramount show or a CBS show. We're probably in the third inning. If that -- well, between the second and third inning, and we got Albert Pujols coming to bat. So we're feeling very good about what the future is, and there's a lot more room to grow. Obviously, these initial deals did include a lot of the primo titles. But there's still plenty more, and these deals are short term. And there are other people going into the marketplace, that's why this content is forever.

We'll go next to David Bank with RBC Capital Markets.

Almost as a follow-up to that question, Les, you pointed you have 20 of the top 30 shows right now. And one of the things you've taught us really well is the value of these shows is far greater often than in the ancillary kind of secondary markets. And so the question is, if you look at that mix of shows today that you're having such success with, the only pipeline for syndication that's announced, Rules of Engagement, NCIS: L.A., Hawaii Five-0. What are the next big shows to kind of come out into syndication given the success you've had so far? And how -- can you talk about order of magnitude of contribution over the next couple of years?

Yes. I mean, obviously, Hawaii Five-0 and NCIS: L.A. were the last 2 big deals that we announced for domestic syndication. We still have Blue Bloods. We still have The Good Wife. This year, we have a new show called Unforgettable, which is substantial. And we have a couple of mid-season shows that are coming on, one starring Rob Schneider and another drama from the De Niro company that is coming on mid-season that we own. So the pipeline will continue. Our only problem looking down the road is our schedule is so strong, I got to find places to find new shows that we own, but we will find them. In addition, there will be Showtime programming. That's produced internally by Showtime and by CBS. So we have a lot of different avenues to produce these new programs, and we even have a couple of shows on other cable networks. So the pipeline will continue.

We'll go next to Michael Meltz with JPMorgan. Michael A. Meltz - JP Morgan Chase & Co, Research Division: Can you just clarify and perhaps quantify, where is scatter actually pacing for Q4, please, at the network?

It's mid-teens right now.

Our last question comes from Marci Ryvicker with Wells Fargo.

I have just a couple. Joe, you said local was up 2% x political. So focusing on TV, does this number include retrans or is it a core advertising number?

It actually doesn't swing the percentage, Marci. Either way, it's up the same, 2%, with or without retrans.

Okay. And then, in Outdoor, can you just...

Marci, I want to point out that the way we record our retrans, it's split. Other TV stations record 100% of it. As you know, we record 50% in the Entertainment segment and 50% in Local Broadcasting.

Right. Okay. And then, in Outdoor, what was the foreign exchange impact in the third quarter?

Almost 3 points.

Okay. And then my last one, there's been a lot of M&A in the broadcast base. So any thoughts about revisiting a sale of Radio assets or even at some point, TV assets?

Highly doubtful, highly doubtful. We like the way they're performing. And if somebody came along and made us a phenomenal offer for some radio stations, we would always look at it. But we're pretty pleased with what we have right now.

Great. Thanks, Marci, and thanks, everyone, for joining us this afternoon. Have a great evening.

That does conclude today's conference. We thank you for your participation.