Marty Shea - IR Sumner Redstone - Executive Chairman, Founder Les Moonves - President, CEO Fred Reynolds - CFO

Victor Miller - Bear Stearns Jessica Reif-Cohen - Merrill Lynch Lucas Binder - UBS Investments Kathy Styponias - Prudential John Klim - Credit Suisse Doug Mitchelson - Deutsche Bank Anthony Diclemente - Lehman Brothers Kit Spring - Stifel David Miller - Sanders Morris Harris Benjamin Swinburne - Morgan Stanley

Good day, everyone, and welcome to the CBS Corporation fourth quarter 2006 earnings 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. Marty Shea: Good morning, everyone. Thank you for taking the time to join us for our fourth quarter and full year 2006 earnings call. Joining me for today's call are Sumner Redstone, our Chairman; Leslie Moonves, President and CEO; and Fred Reynolds, our Executive Vice President and CFO. Sumner will have some opening remarks and will then turn the call over to Les and Fred for strategic and financial issues. We will 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 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 fourth quarter and full year 2006 results should have been sent to all of you. If you did not receive the results, please contact Punam Visay at 975-3667 and she will get it to you. A webcast of the call, the earnings release and any other information related to the presentation can be found on CBS Corporation's corporate website at the address CBSCorporation.com. Now I'll turn the call over to Sumner. TRANSCRIPT SPONSOR : What if there was a way to promote your company to a perfectly targeted group of potential customers, partners, acquirers and investors? What if you could tailor your pitch to them at the moment of maximum interest? And what if you could do this for a no-brainer price? :

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IR firm sponsors transcript of micro-cap company: Consulting company sponsors company's transcript in sector of interest: Your company's name and promotion could have been on this transcript! Learn more, or email Zack Miller for details. Sumner Redstone: Thanks, Marty. Good morning, everyone. I really thank you for being with us today. When we look at our terrific fourth quarter and full year 2006 results, one thing is very clear: what a success the new CBS Corporation has become in its very first year. We have done a phenomenal job operating our core business, adjusting our asset portfolio and positioning the company to compete in the interactive space. Our vibrant businesses continue to throw off huge amounts of cash and we have made good on our commitment to return value to investors in the form of dividends. I am really enthusiastic about the future of the CBS Corporation. I have unequivocal full confidence that Les and his team will continue to lead this company with success and indeed, with distinction. We have a couple of really important announcements to make today and for them and more I turn this over to you, Les. Les Moonves: Thank you very much, Sumner, and good morning to everyone. It's good to be here with you, as always. This time last year we told you all the things we were planning to grow and strengthen the CBS Corporation. Well, we've gotten a lot done and we're just getting started. Today the CBS Corporation has a successful profitable platform to build upon. We've got a proven ability to generate cash and the discipline and vision to leverage that cash effectively for the long-term benefit of our shareholders. Nowhere is this more evident than in our fourth quarter and full year 2006 results. By now you've probably seen our press release. As you can tell, the fourth quarter was a terrific cap on a great first year. Strong fourth quarter operating results in television, outdoor and publishing helped us surpass our key financial targets for 2006. In terms of profits, we adjusted fourth quarter results to provide a meaningful comparison with the previous year. Last year we had a $9.5 billion impairment charge in the fourth quarter; we took that out. We've also adjusted for tax benefits and stock-based compensation. Even with all that adjustment, operating income was up 14% to $759 million. Net earnings from continuing operations were up 44% to $464 million. Adjusted fourth quarter EPS from continuing operations was up 43% to $0.60 per diluted share; clearly, way above expectations. This is all on top of a 2% revenue increase for the quarter which shows we continue to have great success leveraging top line growth. For the full year 2006, also adjusted, EPS from continuing operations was up 19% to $1.85 and free cash flow was up 8% to $1.6 billion. These kind of results have been achieved by running our core businesses at the forefront of their respective industries. But there is so much opportunity out there to position these businesses for even better growth and in order to do that we are pursuing a three pillar strategy: The first pillar is something we've been saying we were going to do since day 1: get paid retransmission fees for our content. Late last week we announced that we've reached retransmission consent agreements with nine separate cable operators covering more than 1 million subscribers nationally. Several of these deals are with MSOs from the top 25. Clearly there's a new paradigm in the marketplace, one which bodes very well for us going forward as future retrans deals are renegotiated. The second pillar of our strategy is to reshape our portfolio into better margin, higher growth businesses. We started down this path early in 2006 by divesting Paramount Parks. We then followed up by putting 39 radio stations in slower growth markets on the block. The stations were sold at highly attractive multiples, reflecting the value of our portfolio and the strength of the broadcasting businesses we operate. We've closed on 12 of these properties to date and we expect to close on the rest by the end of next quarter. In keeping with this strategy, earlier this month we announced the sale of seven of our owned and operated television stations for $185 million. A week later we've entered into an agreement with Liberty Media to acquire 7.6 million shares of CBS stock that they own in exchange for our television station in Green Bay, Wisconsin and approximately $170 million in cash. This particular deal gave us the unique opportunity to fine tune our portfolio of assets while at the same time reducing the number of shares outstanding. The third pillar of our strategy has been to take our world-class content and to extend it into new interactive platforms. The end goal, of course, is to reach even larger audiences, to achieve wider margins on our first run content, and to create incremental revenue streams while getting paid for our content through every single means possible. We recently formed a new unit, CBS Interactive, headed by Quincy Smith to lead this charge. Quincy has moved quickly to position all of our businesses to capitalize on numerous interactive opportunities. For example, as you may recall last year we transitioned our March Madness on demand service to a free ad-supported model. Our out of market online game coverage turned out to be a huge hit. So this year, we've sold it much more aggressively and project to double our revenues and increase our profits sixfold. This is a trend that we expect to continue as this medium grows. We have also formed a new unit called CBS Mobile to help us adapt our content to the cell phone; a platform that some experts believe has even greater promise than the Internet. We continue to broker deals with carriers that pay us significant license fees for our content. Beyond the cell phone we continue to extend our hit content to interactive platforms everywhere including iTunes, Comcast, Yahoo!, YouTube and others. We have also set up an investment fund and are investing in a variety of companies that will lead us into this space as well. There has been so much activity on the Internet front already it's hard to believe that this is just the beginning. So before I say much more about the future let me briefly update you on the major headlines coming from each of our businesses. In television the CBS Television Network continues to be America's most-watched television network in primetime. Currently, season to date, we're number 1 in every major category, households adult 25-to-54 and 18-to-49. These numbers were also true before the Super Bowl; we were number 1 in all these categories and obviously all these numbers increased after the game. With more than 93 million viewers, CBS' coverage of Super Bowl 41 gathered the third-biggest audience in broadcast history behind the finale of Mash and Super Bowl 30. According to Nielson, about 140 million people watched all or part of that game -- 140 million people; that's close to half of the U.S. population. It also achieved record advertising pricing as well. Remember, there is simply no other medium that can deliver that many eyeballs in one fell swoop and create that kind of passionate community. We're thrilled with the success of Super Bowl 41. What's more, our broadcast of the Grammies on February 11th delivered the award program's largest audience and highest ratings in adults 18-to-49 and adults 25-to-54 since 2004. While we love having the mega events, our real strength lies in the depth and consistency of our successful shows. We have nine of the top 20 shows, more than any other network. Also in television, our production company, CBS Paramount Network Television, continues to provide top programs to the broadcast and cable markets and now produces seven of the top 20 primetime series on network television. On the distribution side, we combined CBS Paramount Television, King World and CBS Paramount International during the fourth quarter to form CBS Television Distribution, the biggest syndication powerhouse in the business. Rachael Ray was the most successful new series of 2006 and with renewals through 2010, it's a franchise in the making. Most importantly overall our strength in syndication remains solid and on most weeks we have nine of the top 10 shows in syndication. Our cable operations are thriving as well. Showtime had a terrific quarter and year, both in programming and subscriber growth. Dexter quickly became the network's highest-rated show and along with Weeds continues to generate great critical and industry acclaim. In April we're looking forward to the premiere of our next big original series, The Tudors. Over at CSTV we're enjoying the immediate benefit of recent multi-year programming agreements with DirecTV that has put CSTV in nearly 21 million homes. That's a 50% increase since we acquired it last year. Our television station group also had an extremely strong fourth quarter and a great 2006 overall, primarily driven by political dollars and the success of the CBS Television Network. We've seen local news ratings growth in key markets, particularly in New York and L.A. where most of the money is made. There's indication that 2008 political dollars could creep well into 2007, particularly in major states across the country where the primaries are being moved up. Moving to radio, clearly in 2006 for radio it was a challenging year. We're not satisfied with this performance and we continue to aggressively seek ways to engage listeners with the programming that they want to hear in the ways they want to hear it. Certain formats such as JACK and FREE FM have shown positive momentum and we continue to leverage interactive opportunities and capitalize upon HD radio and streaming, plus the use of online video streaming and other technologies are already helping radio become more personalized and community-oriented. Throughout the year, as I noted, we sharpened our major market focus in radio which will now enable us to deploy our resources where they matter most. Let's not forget that we achieved multiples in mid-teens for our slower growing markets. This only underscores the values of the operations we have elected to keep. With the sales of many of our stations at high multiples, with the improvement in many formats and with all the new digital initiatives we are ahead of the curve in our transformation of this important business. In outdoor, our outdoor division continues to show exceptional growth. Revenues were up double-digits for the quarter driven by strong performances in the U.S., Mexico and Canada. In North America and in our international operations, we have continued to acquire multiple display spaces while ramping up our digital media offerings. We love outdoor and expect the strong growth to keep going as digital technologies continue to make out-of-home ads more compelling, targeted, timely and cost effective for advertisers. Over at our publishing business, Simon & Schuster finished 2006 with 111 New York Times bestsellers, the most in company history. Fourth quarter sales were very strong and have carried over well into the first quarter. So that's a brief look at where CBS is today. We had a great first year and our fourth quarter was our strongest quarter of the year, giving us great momentum going into 2007. We continue to produce strong free cash flow quarter in and quarter out, maintaining a healthy balance sheet. We have substantially repositioned our portfolio from parks to significant broadcasting properties, which will put us in a strong financial position for 2007 and beyond. When comparing 2007 to 2006 on an as-reported basis, several factors including higher expense for stock-based compensation, the sale of those 39 radio stations and nine television stations as well as the shutdown of UPN, will result in revenue and operating income that will be comparable to that of '06. For the long term, the company is poised to deliver rates of growth as follows: low single-digit growth in revenues, mid single-digit growth in operating income and high single-digit growth in earnings per share. This future outlook underlies our strong fundamentals across the company. It is this solid base and our belief in the future of these businesses that enables us to make two important announcements today. First, I am pleased to announce this morning that our board of directors has approved an increase of 10% in our quarterly dividend raising it from $0.20 to $0.22. We continue to believe that a healthy dividend is the best way to return value to our shareholders. This is now the fourth increase in the last 14 months from $0.14 to $0.16, from $0.16 to $0.18, $0.18 to $0.20 and now from $0.20 to $0.22. This represents a total increase of nearly 60% since we became a standalone company last year. A second shareholder initiative is one we discussed on our last earnings call: a potential share repurchase program. I'm pleased to tell you that in addition to the dividend increase, our board has approved a $1.5 billion share repurchase program. We plan to buy back up to 6% of the company's outstanding common stock, or roughly 47 million shares at current values. If you include the shares we acquired in the Liberty swap it is actually 7%. Fred will discuss the particulars a little bit later. The approval of the dividend increase and share buyback program is a direct reflection of our complete confidence in our ongoing ability to generate strong, healthy free cash flow. We strongly believe in our businesses and have a proven ability to deliver on our commitments. We are doing everything we can to ensure this principle will continue for many years to come. We have demonstrated once again how important our shareholders are to us. As you can tell, we've made great strides in 2006 and have positioned the company for future success in '07 and beyond. Once again we are positively determined to continue to receive compensation for our content through retransmission, reshape our portfolio into better margin, higher growth businesses, take our world-class content and to extend it to new interactive platforms and, as underscored by our two announcements this morning, return value to our investors. Thank you and now let's hear from our CFO Fred Reynolds. Fred Reynolds: Thank you, Leslie and good morning to all of you. As Leslie just discussed our fourth quarter and full year 2006 highlights, let me add some additional information on our fourth quarter operating performance, cash flow and balance sheet. Then I'll brief you on our $1.5 billion share buyback plan and finally provide you with some comments on our expectations for 2007. Revenues for the fourth quarter of 2006 totaled $3.9 billion. That was up 2% over the fourth quarter of last year. Now as we have mentioned in previous quarters, two items reduced our reported revenue growth when compared to 2005: first was the absence of the UPN network in the fourth quarter of 2006 due to its shutdown at the end of September. Second, we now record our DVD revenues net of cost as we now use a third-party distributor. These two items reduced our total revenue growth in the fourth quarter by 3.6 percentage points. Television, outdoor and Simon & Schuster led our fourth quarter revenue growth with television up 3% versus year ago fourth quarter. Again, the absence of UPN and recording DVD's net reduced the television segment's revenue growth by 5.5 percentage points. TV stations lead the segment's revenue growth with revenues up 14.6%, driven by very strong political ad spending in the fourth quarter of 2006. Turning to OIBDA, as you will note, in our earnings release we report profits with and without the non-cash impairment charges which had a very, very significant negative impact on earnings in the fourth quarter of 2005. So OIBDA, excluding the impairment charges for the fourth quarter of 2006, was $860 million, up 11% over last year's fourth quarter. Included in the fourth quarter's OIBDA was $13 million of stock-based compensation expense versus only $5 million in the previous year's quarter. Again, the television segment led our OIBDA growth in the fourth quarter, up 20% over the fourth quarter of last year. Outdoors' OIBDA was up 13% versus year ago. We are very pleased, very pleased to report that all of our segments improved their profit margins in the fourth quarter. Overall our adjusted OIBDA margin for the company was 22.5% in the fourth quarter of 2006, up almost 2 percentage points over the fourth quarter of 2005. As you can tell, with the portfolio moves that we have made that margins are going up as we get rid of businesses that were not as profitable as the total company. Subsequent to the year end 2006 we made a couple announcements on the sale of nine television stations. These stations were sold at an after-tax multiple of about 15X cash flow. However, due to high allocated goodwill and intangibles associated with this transaction we did recognize a $65 million non-cash impairment charge in the fourth quarter of 2006. We expect to close on the sale of these TV stations early in the second half of 2007, at which time the gain on the sale will be recognized. Operating income for the fourth quarter totaled $759 million on an adjusted basis, up 14% over the fourth quarter year ago. In other items net you'll notice that there's a profit of $13 million in the fourth quarter. Recorded in other items net is the gain on the sale of the five Buffalo radio stations which closed in December of 2006. As we have noted in the earnings release, subsequent to year end ten radio stations in three markets -- Kansas City, Columbus and Greensboro -- have closed. Those gains on those sales will be recorded in the first quarter of 2007. The remaining 24 radio stations in six markets will close during the balance of the first and second quarters. Our provision for income tax, including the impact of impairment charges for the fourth quarter, came in at a 33% rate, quite a bit lower than the fourth quarter 2005's rate of 45%. The drop in the tax rate is due largely to truing up the tax provision for the federal, state and local returns which were filed at the end of 2006. Going forward, we expect our tax provision to be at a rate of approximately 14%. Also during the fourth quarter 2006 we took a non-cash charge to reduce the carrying value of one of our equity investments due to the fact that, in our opinion, the investment's stock price decline in 2006 was other than temporary. This non-cash charge of $156 million pre-tax and $94 million after-tax is reflected in equity losses in affiliated companies. As Leslie noted, net earnings for the fourth quarter was at $335 million, or $0.43 a share on an as-reported basis. On an adjusted basis, excluding the impairment charges, stock-based compensation asset sales and the one-time tax benefit that was referred to, earnings per share was $0.60 for the fourth quarter of '06, up 43% over year ago. Free cash flow for the fourth quarter was a use of cash of about $14.7 million. However, included in free cash flow in the fourth quarter was our discretionary pre-funding of our qualified pension plan of $200 million. As we have mentioned previously, we believe the mid-teens after-tax internal rate of return on funding the pension plan, in essence reducing debt and getting a tax deduction for it, was a real good use of our excess cash. Taking into account this pension pre-funding we produced very strong free cash flow in the fourth quarter 2006. Strong earnings coupled with high accounts receivable collections drove cash flow in the fourth quarter offset somewhat by a $66 million increase in capital spending. The jump in capital spending was driven by a $49 million increase in the television segment relating to new TV station facilities in Los Angeles and Chicago. As you'll recall, we previously sold the L.A. and Chicago buildings and these are their replacement facilities. CapEx was also up about $30 million at outdoor, driven by spending for new and additional displays for our London Underground contract which has been extended for another eight years and new boards including digital in the U.S. Turning to the balance sheet. At 12/31/06 cash totaled $3.1 billion and gross debt was $7 billion. Sale of assets such as Paramount Parks plus full year free cash flow of over $1.6 billion, which you should note includes $250 million of the discretionary pension pre-funding for the full year, greatly improved our already very strong balance sheet. Our leverage ratio using gross debt of the $7 billion was 2.2:1 for the year ended 2006. Now let's turn to 2007. As Leslie mentioned, several factors will affect our revenue and profit growth on an as-reported basis in 2007 versus 2006. Most of these factors which affect 2007 involve actions we had taken to reshape our portfolio, to improve our growth prospects, increase margins and along the way, as Leslie said, get terrific exit values. Here are the key items which will affect revenue and profit comparisons in 2007 versus 2006: First, as you'll recall, we signed agreements in 2006 to sell 39 radio stations for $669 million, or over 14X their 2006 OIBDA. These stations have either closed or will close shortly and their absence will affect the comparability with 2006. Next, we also announced the sale of the nine TV stations for about $250 million or 15X their 2006 OIBDA. The sale of these stations will affect comparability again in 2007 versus 2006 when these transactions close later this year. Third, for the nine months UPN was still broadcasting in 2006, it produced revenues of over $175 million which will affect our 2007 revenue growth comparisons as now UPN has been shut down. Next, off-network syndication in 2007 will largely consist of the syndication of NCIS which will likely occur in the fourth quarter of 2007. In 2006, as we reported on, we syndicated the second cycles of Frasier, Star Trek Voyager and the first cycles of CSI Miami and Without a Trace. As we look to 2008 and 2009 the number of programs we have available for syndication increases dramatically. Finally, stock-based compensation expense will likely increase by $40 million to $50 million in 2007 versus 2006, assuming the same level of equity grants are issued in 2007 as were issued last year. As you know, we vest the equity grants pro rata over four years, so the 2006 grants will have roughly 25% of their expense reflected in 2007 thereby driving up our incremental stock-based compensation expense in 2007. Taking all these items into account, revenues and operating income on an as reported basis would be comparable to 2006. However, on an underlying growth basis, stripping out all these non-comparable items we expect our businesses in 2007 will deliver another solid operating performance and strong cash flow. Finally, as Leslie announced at the start of today's call, we'll raise our dividend by $0.02 to $0.22 a quarter and that's payable April 1st to shareholders of record as of March 7th. Also we will initiate a one-time $1.5 billion share buyback program utilizing an accelerated share repurchase program or ASR. Our ASR program will involve us buying $1.5 billion of CBS shares, or roughly 47 million shares, from a financial institution immediately reducing the number of shares outstanding. We believe an ASR program will efficiently and effectively utilize our excess cash and ensure the share buyback is accomplished at a very attractive cost to us. We expect to complete the share buyback program by the end of this first quarter. With that I thank you and we'd like to open the telephone lines for your questions. Connie, if you could open the lines that would be great.

(Operator Instructions) Your first question comes from Victor Miller - Bear Stearns. Victor Miller - Bear Stearns: Fred, I have a question for you and one for Leslie. In terms of the 39 radio stations and nine TV stations at UPN, the net political dollars that you had last year versus what you anticipate this year, syndication revenues you talked about, can you give us a sense when you wrap that all together, Fred, what does that mean in terms of the revenue drag potentially for this year versus last year and in the sense of the EBITDA associated with that bucket of pieces? Leslie, in terms of the radio business you have been able to sell your radio stations at about a 14.1X multiple overall. I'm wondering two things philosophically. One, is there any more to do in terms of paring back that portfolio? Secondly, if you look at a lot of the radio growth that Clear Channel just reported, one could argue that it comes from Premier, which is its network business. As you know, Citadel is now buying ABC's network business along with its station so there's, again, an integrated radio network presence. There are two of those in the marketplace, Westwood is kind of a separate entity and you own an 18% stake in it. Does it make any sense to have in your case those two together? Thanks. Les Moonves: In terms of paring it down, right now we're pretty satisfied. We did an analysis at the beginning of the year of what we felt were the smaller markets least likely to grow stations. When you're able to get the multiples that we got, we did that. It's not to say that we won't look at it and potentially pare down further, but at the moment we're pretty happy with the hand that we're dealt. We do have a relationship obviously with Westwood One where we own a decent percentage of the company. There are no plans right now to bring that in-house. One could argue about the value of the networks. We still think Westwood is a very valuable asset, but we have no plans to bring it in-house and combines it with our radio stations. Fred Reynolds: Victor, on the radio stations, their sales for '06 were about $125 million,$130 million. I give you a little bit of a range because some of them when into an LMA in the fourth quarter. But their run rate for that probably is about $125 million. The nine TV stations are probably around $75 million to $80 million in revenue. So that's what will come out and as we've committed before, we'll do the reports on a same-station basis so you can see the comparability, but that is going to be a drag. Finally, I think your question was about political. Clearly '06 was a great political year, it set all records. As Leslie alluded to, every year, even on odd years we have political but nowhere at the level that you have an election year. The question is will some of the '08 political dollars come into this year? That is hard to tell at this point. But political was very strong in '06. Obviously we had the Super Bowl this year, so on a revenue standpoint the revenue won't change that much except the profitability is clearly different from selling a normal ad versus a sports ad. Les Moonves: Clearly the political race is heating up a lot faster than everybody thought it would. I think there's more attention, considering that we are almost two years away from the next election the fireworks that are out there bodes well for us. Obviously a lot of people are raising a lot of money and so I think it bodes well. I think, as Fred said, there's a real possibility there could be more leakage from '08 into '07 of political dollars.

Your next question comes from Jessica Reif-Cohen – Merrill Lynch. Jessica Reif-Cohen - Merrill Lynch: Les, as you reshape your assets over the next three to five years, how different will the revenue and cash flow mix be? Do you need to make acquisitions? Where do you stop with the dispositions? Could you just give us a little guidance on how much you plan on spending for digital boards in outdoor in '07 and '08? Les Moonves: Jessica, the first question is a tough one. Obviously we are investing in a rather small way in a variety of new media assets. We do believe in their long-term growth and that that's where a lot of our revenue is going to come from in the future. It's really hard to assess where that is. As it stands now we still believe in the blocking and tackling of our basic assets which are television, radio and outdoor and they're still great businesses. There will be obviously revenue and profit migrating into new media assets and we intend to be there in quite a large way. We didn't have any great intention to sell our television stations, these nine stations, but at the multiples that we were offered they were very, very high prices and we had to look at that. The same thing with our radio stations. On one hand people say, gee, radio is slowing down. At these multiples it certainly doesn't look that way. So we're pretty pleased with the way we ended up and we would always listen to a reasonable offer. Fred Reynolds: Jessica, on the outdoor, one of the big jumps in the fourth quarter of '06 was in outdoor, about $29 million to $30 million. Most of that was with the London Underground and a lot of that is digital. We were looking to expand our capital spending in '07 in outdoor by about $40 million to $50 million, and I would say a good share of that, the lion's share of that, is probably for digital outdoor in the UK. Just to give you a perspective on where we are. At the end of '07 we expect to have in the U.S. about 300 digital boards installed. That is up from about 160 where we are now. In Europe because of the London Underground, we are going to have thousands of boards, but they're going to be more the display boards. We could end '07 with about 3,000 display boards with the lion's share in the London Underground. So I think you can kind of plan on $30 million to $40 million a year in the expansion of our boards. Most of it will be in the digital area.

Your next question comes from Lucas Binder - UBS Investments. Lucas Binder - UBS Investments : On retransmission, obviously it is good direction, the announcement last week with regard to the nine cable companies, MSOs. What is the timeline for the next step and what can we look out for as far as additional negotiations ahead of the big MSOs in 2009? Fred, you mentioned on a gross basis you are about 2.2X leverage. Do you see opportunity to increase that, and potentially following on how the share buyback goes you'll look to do additional buybacks in the future? Les Moonves: On the retrans, obviously we are extremely pleased by the nine MSOs that have jumped on board. You're going to see more and more of these smaller operators and some of the not so small operators coming around. And as I said, there's a shift, there's a new paradigm. As I've said before, MSOs are already paying for networks. You can disguise it under other things as everybody has done. I've said this before, if you're paying $3 for ESPN, you're really paying $2.50 for ESPN and $0.50 for ABC. We are now a stand-alone. We see more and more of the MSOs getting on board. As you noticed, these nine MSO deals were done without a whole a lot of noise. There weren't big newspaper ads, there weren't big fights, there wasn't anything pulled off the air. So I think the MSOs are realizing that it's better to get along than to fight. Yes, the big ones are up in '09 and '10, but you'll see us do a number of deals before then. Fred Reynolds: The leverage ratio, as we said before, is really at the low end of what we targeted. We have some debt maturities that come due in '07, about $700 million in May, we plan to extend those out with ten and 30-year money depending on how the market looks. So there's no desire to reduce our debt or leverage. Listen, we think paying dividends and increasing it is the best way. If you look at where we are, we'll spend about $675 million on dividend payouts at the $0.22 a quarter. That's before the share buyback. So we buyback 47 million shares so that drops to maybe $640 million. That's a very significant call on cash. As you know, it's far greater than our interest cost. So I think we have to weigh that. I think the inclination of Sumner and Leslie and myself is that dividends would be the preferred method. But hopefully we've proven to you that when we have a windfall on some of these asset sales that we're going to return to shareholders if we can't redeploy it effectively at greater than our cost of capital in our existing business. That is our goal thought, we would love to keep redeploying this cash in our businesses and accelerate both the revenue, profit and returns growth. But absent that we'll return it to you. The preference really is dividends because we think it is a little bit stickier, if I could use that term.

Your next question comes from Kathy Styponias - Prudential. Kathy Styponias - Prudential: Les, I was wondering if you can reconcile for us in light of your retransmission consent deal, your decision to sell TV stations albeit in smaller markets, in light of the fact that it's at the TV station level that you're actually capturing the cash for retrans consent, why are you selling stations and what should we expect from you with respect to further TV station sales? Fred, I was wondering if you can give us any sort of color on what the value that you're extracting for retransmission consent for the CBS signal? Thanks. Les Moonves: Kathy, in terms of that, obviously we weighed that. These are really small market stations that we sold. We weren't going out there looking for them, but when you get the opportunity to sell them at those phenomenal multiples, you figure in what retrans potentially could be and the economics still made much, much better sense to do a sale. Having said that, there would be little chance that any major station would be sold because the future is extremely bright for what they will get per sub. So we factored that in and it all worked out in our favor. I'm not going to let Fred tell you what we're getting per sub. Fred Reynolds: Kathy, obviously Leslie has stated that the value of our content and I guess you can be assured that we're going to be fairly compensated for that in these deals. I would echo what Leslie says about these businesses. When you get a 15X after-tax multiple, Kathy, as you know, on businesses like Austin we could have baked in almost ESPN kind of retrans and not gotten those multiples.

Your next question comes from John Klim - Credit Suisse. John Klim - Credit Suisse: Have you seen any material impact or could you talk about any impact on the ratings of the shows that you've highlighted on YouTube? Could you update us on how you feel about further developing your relationship with YouTube or its parent company, Google? Thanks. Les Moonves: Sure. Our deal with YouTube where we supply certain entertainment news and sports content is primarily promotional at this point in time. Certainly with the entertainment stuff we have seen certain cause and effect from some of our research. It's rather early to say, but in terms of the number of hits that our promos get on YouTube, arguably our content is promoted so heavily because of the number of people. In addition, it's bringing in a younger demographic. We think it is fairly significant. It's hard to do an absolute cause and effect, but we know it absolutely is helping. We are looking at every single outlet there is for our content. We are talking to everybody. As you've seen, we've done deals with just about everybody and it's something that all the companies are looking at and how do we maximize our content in the future either through advertising sales or through promotion.

Your next question comes from Doug Mitchelson - Deutsche Bank. Doug Mitchelson - Deutsche Bank: Les, one of your most under-monetized assets when you look across your company remains your TV library, maybe even current TV production. So cable operators are sitting there with plenty of servers at their head ends, waiting for the green light to offer as much TV content and demand as you will give them. What's holding you back right now from offering more or all of your content on demand? I know that you're doing some, but it's tiny relative to the totality of your TV library and current production. Maybe along a similar vein, what happened in the Google negotiations that made you uncomfortable that you didn't want to give them broad distribution of your TV content at this time? Was it monetization, was it rights? What was it? Les Moonves: No, it's a very valid point. Our TV library is unbelievably valuable and it is relatively undermined. We have not put a lot of properties out there. The main reason -- this sort of ties into your second question -- is we want to get paid appropriately for it. We will eventually have our library out there, it will be on demand either through advertising, subscription or pay per view, some way shape or form, we just value it very highly and very dearly. We obviously get paid through syndication and DVDs. It is inevitable that our library is going to be out on the Internet and downloaded and we will be making deals for this content. The good news for us as we go forward is, you're right, it is undermined and there's a great future ahead with this library and with our current production. So look for more things in the fairly near future. Doug Mitchelson - Deutsche Bank: I'm not sure if there's a specific answer you can give, but as you think about the things that are holding you back right now, is it the size of Google's audience, is it the cable operators, are they not able to monetize through advertising the content to the level you'd like to see? What's stopping it from happening? Les Moonves: In general terms without getting into the specifics, we want to make sure that, look, there is a cause and effect. Obviously putting it out there, we want our content and I genuinely believe everybody is going to be able to get our content whenever they want it, wherever they want it, it's just getting the right price at the right time for it. There are a lot of factors that weigh in. Obviously we have an important DVD library that might be affected, we have the syndication thing that might be affected and that will all be well and good and we think that the Internet will be additive to that, it's just that we just have to be appropriately paid for it. We discuss this all the time and it's one of the things that we deal with greatly but we have to get the right deal.

Your next question comes from Anthony Diclemente - Lehman Brothers. Anthony Diclemente - Lehman Brothers: Fred, if you take the free cash flow that you reported in this release for '06 and you add back the $250 million in pension contribution, which I think most people would agree is discretionary, you get to about $2.40 a share of free cash flow. My question is, as we move forward into '07 you're looking for comparable EBITDA. Is there any reason that the free cash flow number shouldn't move in somewhat lockstep with EBITDA? Is there any change in working capital or change in CapEx that's dramatic that we should know about? Is there any chance that the retransmission deals that you have in place with the larger cable operators, that being Comcast and Time Warner Cable, are renegotiated prior to the '08/'09 time period when those contracts are up? Given the shift that you discuss in the balance is there any chance that you would preempt the existing time horizon on those existing contracts? Thank you. Fred Reynolds: As you know, we don't forecast or give guidance on cash flow. But let me give you a couple comments because I think it might be helpful. In '06 we spent a little under $400 million, $394 million in capital spending. Our expectations, which you'll see in our K that gets filed probably tomorrow or the next day, we are going to give a range of estimates of $450 million to $475 million in capital spending. I personally think we'll be at the low end of that at the $450 million. So we are going to step up capital spending again. The lion's share of it is going to go into outdoor, so that is going to be a change. The one thing I think, as we noted I think it was in the second and third quarter, that we had the settlement of a number of previous audits of taxes with the IRS from 2000 to 2003. We also had a fairly large overpayment in 2005 that we applied to 2006. So our cash taxes will go up. Everything else you say, working capital probably will be the same; we won't use a lot of working capital. As you know, with only one major syndication versus four that we will have no use of net assets, you guys call it working capital, it's really changed to net assets because the receivable won't get ballooned as much. Anthony Diclemente - Lehman Brothers: And then presumably your interest expense comes down I would think? Fred Reynolds: Sure, interest on $1.5 billion, we earn a measly 5.25% on that. So on $1.5 billion that's going to come down by $75 million or so. Again, I don't want to give a forecast. I would point out that capital spending will go up, everything else should stay the same except cash taxes will go up in '07 because we won't enjoy the roughly $150 million overpayment that we got to enjoy in '06. Les Moonves: Anthony, on your second question, certainly it's possible that we would enter into early discussions with these people. Our relationships with Comcast are terrific. We do a lot of business with them. We have a VOD deal with them and we talk to them all the time. The same thing with Time Warner obviously. We have a lot of business with Time Warner, we co-own the CW with them, they have a lot of programming on CBS so we are open to dialogue, Showtime is negotiating with them all the time as is CSTV. We are certainly open and willing to talk with them at any point in time. I guess it's very possible that negotiations could begin much earlier than when the contracts are up.

Your next question comes from Kit Spring - Stifel. Kit Spring - Stifel: A number of your affiliates are being successful with retrans fees. Do you expect to change the relationships with your affiliate so that you garner some of those economics? I think that's been changing over the past five or ten years. Do you see affiliate comp turning to reverse comp and how big of an opportunity is that? Les Moonves: You know, Kit, our relationship with our affiliates has evolved over a period of time. When I first got here we were paying out hundreds of millions of dollars which is virtually down to zero right now. There are a lot of deals that we do with them. Our relationships with our affiliates are great. They like the idea getting paid for retrans as do we. So it's an ongoing dialogue in terms of the content we supply them as well as our relationship with them. So without getting specific it will be an ongoing dialogue and, once again, it continues to evolve.

Your next question comes from David Miller - Sanders Morris Harris. David Miller - Sanders Morris Harris: Outdoor revenue growth plus 10%, that's obviously model growth in the quarter generally comparable to your competitors. I would think, however, that that would be leverageable into at least mid-teens to high teens EBITDA growth. You came in with plus 13% growth. It looks like you got hit by foreign exchange a little bit. Was there something else going on in the quarter expense wise that you could flesh out for us? Also, at your analyst day about a year ago today or a year ago this week or so you had mentioned that the publishing business was also non-core to operations, very similar to the Paramount Parks. What is the status of the sale of that asset? Thanks very much. Les Moonves: David, thank you. I'll deal with the publishing question and I'll flip it to Fred to give you the color on the outdoor business. In terms of publishing, yes, I mean arguably Simon & Schuster is not a core business; however, they are showing a tremendous ability to generate terrific revenues and profits and we love having them with us. We think it's a great asset. As I said, they not only had their best year last year creatively, but financially they're doing far better than people expected. So we love having it and we find no need to sell it, it's going to be a part of our businesses for a long time to come. Fred Reynolds: On outdoor, a couple things in the fourth quarter. Again, I would cite that in U.S. the billboard business was up 12%, and some of it had to do with the revenue growth. As you may know, some of the contracts that were sort of marginal for us we're no longer participating in, which plays into what we booked as far as expenses in the fourth quarter. We did have severance costs to lay off 110 people that related to the New York MTA and also the New York street furniture businesses that we no longer have. Again, those were marginal at best contracts for us, so the revenue will come down in all of '07, but the profits will not be that affected. But we did recognize the exit cost to get out of that including, again, layoffs of 110 people. We did renew the New York subway and we did renew the London Underground, both of which had significant increases in fees in the fourth quarter because both of those new contracts started in the fourth quarter. What I would tell you, there's a little bit of a lag. Obviously the municipalities want their fees early. They have with the increased license fees came increased availability of inventory, a lot of it, as we discussed earlier on the call, going to digital. So we're building out, we're adding the new display, that's why we're spending more on capital there, but the revenue, we haven't monetized all the displays yet. I would expect to '07 us being able to hike off and more than offset the increase in the transit franchise fees or license fees in the New York subway and London Underground. We had some other renewals, but I think those are the big items that sort of were a drag on the fourth quarter and why I've said I think we can go 2X revenues up at 1% in the U.S. and profits should be up 2%. Those were the drags that pulled us down, but again, I think almost all of them are just transitional and that we will have more inventory to sell even though the franchise fee went up.

Your final question comes from Benjamin Swinburne - Morgan Stanley. Benjamin Swinburne - Morgan Stanley: Let me ask you a question on the DVR side. Can you give us an update on your thoughts on Live Plus, what the ad buyers are saying along those lines and any expectation for monetization of recorded viewing in 2007 in your guidance? Les Moonves: Yes, the advertisers got away with just getting Live last May. That won't happen this year. Number one, there are much more sophisticated ways of measurement through the commercial ratings, more Live Plus Same Day, Live Plus Three. It's now going to become a significant number and we need to get paid for that, we will get paid for that. I think all the networks feel like that is a necessity and that it's going to happen which bodes very well for this upfront period. So we're very excited about it. Marty Shea: Thank you, everyone for joining us. I will be available for the rest of the day. Have a great day. TRANSCRIPT SPONSOR :

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