City of Pontiac General Employees' Retirement System, Et Al. V. CBS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

x CITY OF PONTIAC GENERAL : Civil Action No. 08-CV-10816 (LBS) EMPLOYEES’ RETIREMENT SYSTEM, : Individually and On Behalf Of All Others : AMENDED COMPLAINT Similarly Situated, : : JURY TRIAL DEMANDED Plaintiff, : : vs. : : CBS CORPORATION, LESLIE MOONVES, : FREDRIC G. REYNOLDS and SUSAN C. : GORDON, : : Defendants. : x Lead Plaintiffs, the City of Omaha, Nebraska Civilian Employees’ Retirement System and

the City of Omaha Police and Fire Retirement System (the “Omaha Funds”), by and through their

attorneys, on behalf of themselves and the Class they seek to represent, and for their Class Action

Complaint, make the following allegations against Defendants based upon the investigation

conducted by and under the supervision of Lead Plaintiffs’ counsel, which included, inter alia,

reviewing and analyzing information and financial data relating to the relevant time period obtained

from numerous public and non-public sources, including, among others, United States Securities and

Exchange Commission (the “SEC”) filings for CBS Corporation (“CBS” or the “Company”), annual

reports, press releases, published interviews, news articles, securities analysts’ reports and advisories

about the Company, media reports (such as Bloomberg, Dow Jones, and LEXIS-NEXIS), interviews

with former employees of the Company, and discussions with accounting and damages experts.

Consistent with the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), 15 U.S.C. §

78u-4, no formal discovery has been conducted at this time. Lead Plaintiffs believe that substantial

additional evidentiary support will exist for the allegations set forth herein after a reasonable

opportunity for discovery.

NATURE OF THE ACTION

1. This is a federal class action on behalf of purchasers of the common stock 1 of CBS between February 26, 2008 and October 10, 2008, inclusive (the “Class Period”), pursuing remedies

under the Securities Exchange Act of 1934 (the “Exchange Act”).

1 CBS has issued and outstanding both Class A (voting shares, traded under the symbol CBS/A) and Class B (nonvoting shares, traded under the symbol CBS). Class A and Class B shares are collectively referred to as “Common Stock” herein. Lead Plaintiffs bring claims on behalf of the shareholders of both classes. 2. This lawsuit concerns Defendant CBS and the artificial inflation of the value of its

assets and income – and, in turn, its stock price -- in service of the personal financial interests of

Defendant Sumner M. Redstone (“Redstone”), CBS’s majority shareholder and the Chairman of its

Board of Directors and the other Defendants named herein. Unfortunately, as is so often the case, it

was the unwitting investors in the Company who ultimately bore the brunt of this scheme when the plot finally unraveled, causing CBS stock to drop precipitously -- 20% in one day -- from the

unsupportable levels at which it had been trading.

3. Defendant Redstone’s control of both CBS and another company, National

Amusements, Inc. (“National Amusements”), is critical to understanding the motivation behind this

securities fraud. Throughout the Class Period – and to the present day – Defendant Redstone was

chairman of the board of directors for both CBS and Viacom, Inc. (“Viacom”), a related entity. At

the same time, Defendant Redstone owned 80% of the shares of National Amusements, with his

daughter, Shari Redstone (another board member of CBS and Viacom), owning the remaining 20%

of the shares. National Amusements, in turn, owned 79.8 percent of the Class A voting shares of

CBS as well as 81.6 percent of the Class A voting shares of Viacom. National Amusements also

owned significant amounts of those same companies’ nonvoting shares.

4. In short, as Chairman of the Board and majority owner through his control of

National Amusements, Defendant Redstone has “called the shots” at CBS and related entities for

many years.

5. Prior to the Class Period, Defendant Redstone, acting on behalf of his alter-ego

National Amusements, borrowed a total of $1.6 billion from various lenders. This $1.6 billion loan

included a critical covenant requiring significant principal payments on the loans if the value of the

CBS and Viacom stock under National Amusement’s control fell below certain levels (the “Principal

2 Payment Covenant”). Unfortunately, neither Defendant Redstone nor CBS disclosed the $1.6 billion

debt or the Principal Payment Covenant to the market or CBS shareholders at any time prior to or

during the Class Period. Instead, CBS belatedly informed the market, and its shareholders, for the

first time of the existence of the debt and the Principal Payment Covenant of an enormous amount of

CBS shares on or about the end of the Class Period.

6. It can hardly be viewed as a coincidence that upon National Amusement’s incurrence

of this $1.6 billion debt, with its Principal Payment Covenant concerning CBS’s stock value,

Defendant Redstone and CBS embarked on a campaign to artificially inflate the value of CBS stock

so that Defendant Redstone would not have to make mandatory principal payments to the lenders. A

central aspect of this campaign was the failure of CBS to timely write down goodwill and another

intangible asset, Federal Communication Commission licenses, to their fair values.

7. Generally Accepted Accounting Practices (“GAAP”) require that “the excess of the

cost of an acquired entity over the amounts assigned to the net of the amounts assigned to assets

acquired and liabilities assumed shall be recognized as an asset referred to as goodwill.” (Statement

of Financial Accounting Standards Board Statement No. 141, pg. 43). 2 With the adoption of the

Statement of Financial Accounting Standards Board Statement No. 142, Goodwill and Other

Intangible Assets (“SFAS 142”), goodwill and other intangible assets determined to have an

indefinite useful life were no longer subject to amortization, but were subject to an annual test for

impairment. GAAP requires a company to immediately perform an impairment test and, if needed,

write down its reported goodwill to its actual value. Such write-downs indicate a decline in the

2 SFAS 141(R), Business Combinations, which superseded SFAS 141, defines goodwill as “an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.” (SFAS 141(R) ¶3).

3 expected economic benefits from previous acquisitions. This GAAP principle insures that neither assets nor income are overstated, and further, it allows readers of financial statements to make informed decisions with knowledge that intangible assets have been stated at their actual value.

8. The absolute and percentage amounts of goodwill intangibles and FCC licenses on the books of CBS had prompted some analysts to speculate, as early as May 2008, that CBS was overstating these assets by as much as six billion dollars. What no one could have anticipated, however, was the staggering lengths to which CBS had carried this artifice. When CBS finally announced, on October 10, 2008, that it would be recognizing an impairment to its goodwill and other intangible assets, the market was stunned to learn that this write-down would be to the tune of

$14 billion.

9. Against this backdrop, as noted herein, during the Class Period, Defendants repeatedly and misleadingly highlighted the “strong” and “pristine” nature of CBS’s balance sheet throughout the Class Period. In truth, CBS materially overstated its actual income, goodwill and intangible assets. In fact, the magnitude of CBS’s announced impairment charge at the end of the

Class Period – $14 billion – was equal to more than one-third of CBS’s total assets and almost two- thirds of the Company’s equity at June 30, 2008.

10. This disclosure of a $14 billion write-down came only 70 days after CBS’s issuance on July 31, 2008, of a press release summarizing its financial results for the second quarter of 2008, which without hesitation reported goodwill at approximately $29.2 billion. When the market learned of this $14 billion write-down in goodwill -- a decrease of over 48 percent -- the price of

CBS stock plummeted by 20% in one day. Specifically, the stock price fell from $10.14 to $8. 10 per share, and this latter figure represents less than one-third of the high it reached during the Class

Period.

4 11. As detailed by accounting experts below ( See ¶¶74 to 87), adherence to basic principles of GAAP required CBS to write down goodwill assets at the time they originally declined

in value. Nonetheless, Defendant Redstone – the Chairman and majority shareholder of CBS –

would not allow the write-down at the appropriate time. Again, Defendant Redstone adopted this

approach because he was aware that a proper and timely disclosure of the impairment of goodwill

would cause a decrease in the value of CBS stock; this development, in turn, would trigger the

Principal Payment Covenant under the $1.6 billion loans to National Amusements. To at all costs

avoid this potentiality, Mr. Redstone and CBS chose to intentionally mislead the market and

National Amusements’ lenders.

12. There is also little doubt why Defendant Redstone and CBS chose October of 2008 to

disclose that the Company had been overstating goodwill in jaw-dropping amounts, when only 70

days earlier it had issued a Form 10-Q that failed to adequately address the risk. As detailed by

accounting experts below, after an exhaustive review of CBS’s publicly available financial

information, no event occurred during the intervening 70 days that might pass as a legitimate reason

for CBS to take a $14 billion (48 percent) write-down in goodwill. ( See ¶¶74 to 87).

13. Instead, Defendants’ motivation for belatedly reporting the $14 billion dollar write-

down on October 10, 2008 is clear. The general market collapse during the same timeframe caused

the value of Defendant Redstone’s (through National Amusements) stock in CBS and Viacom to fall below the levels specified in the Principal Payment Covenants for the $1.6 billion loan. With the

Covenant already triggered, Defendant Redstone had no choice but to sell $233 million of CBS and

Viacom shares held by National Amusements to pay creditors. The game was up. Because

avoidance of this eventuality was the purpose of the goodwill scam at CBS, Defendant Redstone and

5 the Company seized this moment to finally come clean, tidy up the books at CBS, and belatedly

disclose the $14 billion dollar (48 percent) write-down in goodwill.

14. Individual Defendants Leslie Moonves, Fredric Reynolds, and Susan Gordon were

equally incentivized to improperly delay the goodwill write-down, as their outsized compensation packages, which included significant performance bonuses, motivated them to overstate corporate performance.

15. The preceding summary makes evident what the ensuing sections of this Complaint

show convincingly: Defendant CBS and the Individual Defendants knowingly and/or recklessly

issued false and misleading financial statements during the Class Period that were not prepared in

accordance with GAAP and thus, as a matter of law, violated the Exchange Act by committing

securities fraud. Such failure to accurately report was the result of intentional and reckless conduct by the Defendants.

16. During the Class Period, Defendants made materially false and misleading statements

about the Company’s financial condition and operating results. Specifically, Defendants failed to

disclose that adverse market conditions materially impaired CBS’s operations and the value of its

intangible assets. The value of CBS’s overstated assets, which included CBS’s indefinite lived

intangible assets, were highly material, representing more than 70% of the Company’s total assets

and 130% of CBS’s total equity at the start of the Class Period. CBS’s failure to timely write down

the value of its overstated assets caused the Company’s reported operating results during the Class

Period to be materially inflated.

JURISDICTION AND VENUE

17. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the

Exchange Act [15 U.S.C. §§78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC

[17 C.F.R. §240.10b-5]. 6 18. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C.

§ 1331 and Section 27 of the Exchange Act.

19. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28

U. S.C. § 1391(b). Many of the acts charged herein, including the preparation and dissemination of materially false and misleading information, occurred in substantial part in this District.

20. In connection with the acts alleged in this Complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the mails, interstate telephone communications and the facilities of the national securities markets.

PARTIES

21. Lead Plaintiffs the City of Omaha, Nebraska Civilian Employees’ Retirement System and the City of Omaha Police and Fire Retirement System, purchased CBS common stock during the

Class Period, as described in the certifications previously filed with the Court, and incorporated herein by reference, and were damaged thereby.

22. Defendant CBS is a leading television broadcasting and production company that operates in the United States and internationally and was once a part of Viacom. In 2005, CBS and

Viacom became separate corporate entities. CBS is headquartered in New York, New York and operates in four media segments: Television, Radio, Outdoor, and Publishing. The Company’s class of voting common stock trades under the symbol CBS/A on the New York Stock Exchange

(“NYSE”). The Company’s nonvoting common stock trades under the symbol CBS on the NYSE.

23. (a) Defendant Sumner Redstone is, and was at all relevant times, Chairman of

CBS and through National Amusements, Inc. owned over 50% of the voting stock of CBS as well as non-voting stock. In 2007 and 2008, Redstone was paid $9.7 million and $11.9 million, respectively, by CBS.

7 (b) Defendant Leslie Moonves (“Moonves”) is, and was at all relevant times,

President, Chief Executive Officer (“CEO”) and Director of CBS. In 2007 and 2008, Moonves was paid $36.8 million and $32 million, respectively, by CBS.

Executive Vice President and Chief Financial Officer (“CFO”) of CBS. In 2007 and 2008, Reynolds

was paid $8.5 million and $8.7 million, respectively, by CBS.

(d) Defendant Susan C. Gordon (“Gordon”) is, and was at all relevant times,

Senior Vice President, Controller and Chief Accounting Officer of CBS.

(e) Defendants Redstone, Moonves, Reynolds and Gordon are collectively

referred to herein as the “Individual Defendants.”

24. During the Class Period, the Individual Defendants, as senior officers and/or directors

of CBS, were privy to confidential and proprietary information concerning CBS, its operations,

finances, financial condition and present and future business prospects. The Individual Defendants

also had access to material adverse non-public information concerning CBS, as discussed in detail below. Because of their positions with CBS, the Individual Defendants had access to non-public

information about its business, finances, products, markets and present and future business prospects

via internal corporate documents, conversations and connections with other corporate officers and

employees, attendance at management and/or board of directors meetings and committees thereof,

and via reports and other information provided to them in connection therewith. Because of their possession of such information, the Individual Defendants knew or recklessly disregarded that the

adverse facts specified herein had not been disclosed to, and were being concealed from, the

investing public.

8 25. The Individual Defendants are liable as direct participants in the wrongs complained

of herein. In addition, the Individual Defendants, by reason of their status as senior officers and/or

directors, were “controlling persons” within the meaning of Section 20(a) of the Exchange Act and

had the power and influence to cause the Company to engage in the unlawful conduct complained of

herein. Because of their positions of control, the Individual Defendants were able to and did,

directly or indirectly, control the conduct of CBS’s business.

26. The Individual Defendants, because of their positions with the Company, controlled

and/or possessed the authority to control the contents of its reports, press releases and presentations

to securities analysts and through them, to the investing public. The Individual Defendants were provided with copies of the Company’s reports and press releases, alleged herein to be misleading, prior to or shortly after their issuance and had the ability and opportunity to prevent their issuance or

cause them to be corrected. Thus, the Individual Defendants had the opportunity to commit the

fraudulent acts alleged herein.

27. As senior officers and/or directors and as controlling persons of a publicly traded

company whose common stock was, and is, registered with the SEC pursuant to the Exchange Act,

and was, and is, traded on the NYSE and governed by the federal securities laws, the Individual

Defendants had a duty to promptly disseminate accurate and truthful information with respect to

CBS’s financial condition and performance, growth, operations, financial statements, business, products, markets, management, earnings and present and future business prospects, and to correct

any previously issued statements that had become materially misleading or untrue, so that the market price of CBS common stock would be based upon truthful and accurate information. The Individual

Defendants’ misrepresentations and omissions during the Class Period violated these specific

requirements and obligations.

9 28. The Individual Defendants are liable as participants in a fraudulent scheme and course of conduct, which operated as a fraud or deceit on purchasers of CBS common stock by disseminating materially false and misleading statements and/or concealing material adverse facts.

The scheme: (i) deceived the investing public regarding CBS’s business, operations, management and the intrinsic value of CBS securities; and (ii) caused Plaintiffs and members of the Class

(defined below) to purchase CBS common stock at artificially inflated prices.

PLAINTIFFS’ CLASS ACTION ALLEGATIONS

29. Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class consisting of all those who purchased the common stock of CBS between February 26, 2008 and October 10, 2008, inclusive, and who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and directors of the

Company, and, at all relevant times, the members of their immediate families, their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest.

30. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, CBS common stock was actively traded on the NYSE.

As of February 15, 2009, CBS reported 57.707 million shares of Class A common stock and 621.385 million shares of Class B common stock outstanding. While the exact number of Class members is unknown to Plaintiffs at this time and can only be ascertained through appropriate discovery,

Plaintiffs believe that there are thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by CBS or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. Moreover, Plaintiffs’ claims are typical of the claims of

10 the members of the Class as all members of the Class are similarly affected by Defendants’ wrongful

conduct in violation of federal law complained of herein.

31. Plaintiffs will fairly and adequately protect the interests of the members of the Class

and have retained counsel competent and experienced in class action and securities litigation.

Common questions of law and fact exist as to all members of the Class and predominate over any

questions solely affecting individual members of the Class. Among the questions of law and fact

common to the Class are:

(a) whether the federal securities laws were violated by Defendants’ acts as alleged

herein;

(b) whether statements made by Defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and reported results of CBS;

Class Period; and

(d) to what extent the members of the Class have sustained damages and the proper

measure of damages.

32. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

33. On December 31, 2005, the entity formerly known as Viacom Inc. (the “former

Viacom”) was separated (the “Separation”) into two publicly traded entities, the former Viacom,

11 which was renamed CBS and which continues as the surviving entity, and the new Viacom Inc. The

Separation has been accounted for by CBS as a spin-off.

34. CBS operates via the following major business segments: Television, Radio, Outdoor,

and Publishing. The Television segment consists of: CBS Television comprising CBS Television

Networks, the 30 owned broadcast television stations; CBS Paramount Network Television and CBS

Television Distribution, the television production and syndication operations; Showtime Network, a premium subscription television program service; and CBS College Sports Network, the cable

network and online digital media business to college athletics. The Radio segment owns and

operates 140 radio stations in the United States. It provides a range of programming formats, such as

rock, oldies, all-news, talk, adult contemporary, sports/talk, and country through CBS Radio. The

Outdoor segment displays advertising on media, including billboards, transit shelters, buses, rail

systems, mall kiosks, and stadium signage through CBS Outdoor and in retail stores through CBS

Outernet. The Publishing segment publishes and distributes consumer books under imprints, such as

Simon & Schuster, Pocket Books, Scribner, and Free Press.

Materially False and Misleading Statements Made During the Class Period

35. The Class Period begins on February 26, 2008. On that date, CBS issued a press

release announcing its financial results for the fourth quarter and year end of 2007, the period ended

December 31, 2007:

CBS CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2007 RESULTS

Fourth Quarter OIBDA Up 4% to $824 Million Full Year OIBDA Up 1% to $3.08 Billion

Fourth Quarter Operating Income Up 3% to $705 Million Full Year Operating Income Up 1% to $2.62 Billion

12 Fourth Quarter Adjusted Diluted EPS Up 2% to $.54 Full Year Adjusted Diluted EPS Up 9% to $1.88

Fourth Quarter Free Cash Flow Up $137 Million to $122 Million Full Year Free Cash Flow Up 6% to $1.71 Billion

36. Defendant Moonves commented on the results stating in pertinent part as follows:

We finished 2007 with our businesses well poised to increase revenues and profits in 2008 and beyond. In Television, I’m particularly pleased with the recent resolution of the WGA strike, which has restored stability to the network season. Meanwhile, Outdoor and Publishing had exceptionally strong performances for the year, with Outdoor picking up momentum to deliver a strong double-digit OIBDA gain in the fourth quarter.

Our businesses produced a significant amount of free cash flow and, during the year, we returned $4 billion of cash to shareholders through a combination of dividends and share repurchases. At the same time, we used a prudent portion of our cash to invest in higher-growth properties like the online social networking community Last.fm and digital outdoor displays both domestically and overseas.

37. Following the issuance of the press release, CBS held a conference call with analysts and investors to discuss the earnings release and the Company’s operations. During the call,

Defendant Moonves spoke positively about the Company’s financial results stating in pertinent part as follows:

I’m very pleased with our solid results in the fourth quarter and our entire second year as the new CBS Corporation. This morning I’m going to talk a little about our financial performance and briefly walk through some key issues regarding our business and then my colleague Fred Reynolds will cover our financials in greater depth.

First, I want to highlight our results OBIDA, operating income, EPS and in free cash flow which we believe is one of the most significant measures of our success. OBIDA was up 4% to $824 million in the fourth quarter as well as being up 1% to $3.08 billion for the year. Operating income was also up 3% to $705 million for the quarter and also up 1 % for the year to $2.62 billion. 2007 adjusted diluted EPS from continuing operations increased 9% to $1.88 for the year. Fourth quarter was up 2% to $0.54 due to the impact of our 2007 share repurchase program and limited by a higher effective tax rate. At the same time 2007 free cash flow was up 6% to $1.71 billion dollars and in the fourth quarter free cash flow increased $137 million from a -$15 million last year to come in at $122 million. Year after year we continue to produce excellent pre-cash flow. It is this cash that will enable us to invest in our

13 asset portfolio for future growth, continue to return dividends to our investors and maintain an extremely healthy balance sheet.

Through a number of transactions in 07 we ended the year with a portfolio that is well positioned to grow in 08 and beyond. We are truly excited about the prospects of each one of our businesses. At our heart we remain a content company across all our operations. It is the content that is the engine driving us forward into the digital interactive future. The center of the content engine remains the CBS Television Network. The network business remains the greatest mass media option available to audiences and advertisers and what is not really recognized yet is that the content on network TV is also defining success online and on all the emerging platforms now available to consumers. As a matter of fact, content from across the entire company is pushing us forward into the interactive marketplace. CBS Paramount Network Television and CBS Television Distribution continue to supply industry leading programming on our network, stations across America and our growing list of online outlets and Showtime which is having its best run ever both creatively, financially and obviously with a great increase in subscribers began the year with six of the top 10 selling shows on iTunes. In short, the new media business now taking shape is being built on the foundation of our established ones to the benefit of both.

* * *

Next, I’d like to talk about the recently concluded writer’s strike. It lasted longer than any of us would have liked but the good news is the network business is back. We’ve got a full slate of new programming starting in the spring and once again we’ll be presenting to advertisers at Carnegie Hall in May. As we predicted CBS sustained itself very well during the strike in fact, in the short term we were able to manage operating costs at the network very effectively. This was primarily achieved by significantly reducing our programming expenses and the termination of costly writing and producing contracts. Our financial picture was not affected negatively by the strike in any shape or form. Perhaps most importantly many of the economic benefits we were able to achieve during the strike has changed the way we do business and will allow us to operate more efficiently going forward.

* * *

Second, we are in the beginning of an unprecedented election year. We’re already seeing record spending with the expectation it will continue all year long.

* * *

Those are just some of the highlights from our businesses. Across the board you can see that we begin 08 in great shape. We’ve pruned our asset mix to shed some of our lower growth businesses like certain small market TV and radio stations. We’ve used a portion of the proceeds to invest in other higher growth areas like Last.fm which in January announced deals with all four major record labels to stream music online for free and has posted a 92% increase in US listening since that time and

14 we’re beginning to monetize those results now. As well, we’ve invested in more than a dozen interactive properties. We’ve maintained a pristine balance sheet with a sizeable cash balance allowing us to pay out a very strong dividend that now stands at $1.00 per share annually and enables us to be very nimble so that we can take advantage of any content or Internet opportunity that may present itself. Few companies in our space have the resources at their fingertips in this marketplace to be able to act as we can on opportunities in these areas. We are using our established businesses as content engines that fuel the Internet and all of the new platforms afforded by technology as well as continuing to run our core businesses at the very top levels. As a result, we are well positioned to grow revenues and profits in 08 and beyond.

(Emphasis added.)

38. Defendant Reynolds added:

So, to wrap up the fourth quarter and all of 2007, we successfully strengthened our portfolio by divesting the, for very attractive values, lower margin slower growth businesses. We returned over $4 billion of cash to our shareholders, delivered on our profit growth expectations and we leave 2007 with, as Leslie just said, with a very strong balance sheet which has the capacity to both fund investments and initiatives to increase our profit growth going forward and to return cash to shareholders.

For 2008 we expect as we said in the earnings release today that our operating income before depreciation and amortization and operating income to grow between 3 and 5% over 2007 results excluding stock-based compensation expense. We are forecasting 2007 stock-based compensation expense to amount to $155 million to $165 million this year. We expect our effective income tax rate should be between 38% and 38.5% excluding any potential gains or losses on the sale of assets. We expect capital spending to be between $500 million and $550 million in 2008.

(Emphasis added).

39. On or about February 28, 2008, CBS filed its Form 10-K for the year ended

December 31, 2007 with the SEC, which was signed by Defendants Redstone, Moonves, Reynolds

and Gordon, confirming the financial results for the 2007 fourth quarter and year end previously

announced in the press release. Additionally, the 2007 Form 10-K reported goodwill of $18.452 billion, intangible assets of $10.081 billion, total assets of $40.43 billion, stockholders’ equity of

$21.477 billion, noncurrent deferred income taxes of $1.947 billion and net earnings of $1.247 billion. 15 40. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, CBS’s Form 10-K for the fiscal year 2007 contained sworn certifications, signed by Defendants Moonves and Reynolds, that attested to the effectiveness and accuracy of the Company’s internal controls over financial reporting. In relevant part, Defendants Moonves and Reynolds each certified that:

1. I have reviewed this annual report on Form 10-K of CBS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such

16 evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

41. Furthermore, as part of CBS’s 2007 10-K, Defendants Moonves, Reynolds and

Gordon executed a report on Internal Control Over Financial Reporting, which provides in relevant part:

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the effectiveness of internal control over financial reporting, as such term is defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act. Our internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (c) provide reasonable assurance

17 regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 based on the framework set forth in Internal Control —Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2007.

42. The statements referenced in ¶¶35 to 41 above were each materially false and

misleading because they failed to disclose and misrepresented the following material adverse facts

which were known to Defendants or recklessly disregarded by them:

(a) that the Company’s reported goodwill and intangible assets, which ranged between 69% - 73% of CBS’s total assets and 131% - 137% of CBS’s total equity during the Class

Period, were materially overstated;

(b) that the Company reported equity capital during the Class Period that was materially overstated;

(c) that, as a result of its failure to timely write-down impaired intangible and goodwill assets, the Company’s financial results during the Class Period were materially overstated;

18 (d) that the Company’s financial statements were not prepared in accordance with

GAAP and, therefore, were materially false and misleading as detailed further herein;

(e) that the impairment charges were understated, and goodwill, intangible assets, total assets, stockholders equity, net income and deferred income and taxes were overstated;

(f) that the Company failed to develop and implement adequate internal accounting controls sufficient to insure that the Company’s financial results were accurately reported;

(g) that the Company’s balance sheet was not “pristine,” “extremely strong” or

“extremely healthy;” and

(h) that the Defendants failed to provide a disclosure of the fact that Defendant

Redstone’s controlling interest of CBS common stock (via National Amusements) was the subject of the Principal Payment Covenant or the associated risks related thereto.

43. On April 29, 2008, CBS issued a press release announcing its financial results for the

first quarter of 2008, the period ended March 31, 2008:

CBS CORPORATION REPORTS FIRST QUARTER 2008 RESULTS

Net Earnings Up 14% to $244 Million

Diluted EPS Up 29% to $.36

Free Cash Flow Up 25% to $938 Million

Adjusted OIBDA and Operating Income Up 10% and 11%

Company Raises Quarterly Dividend by 8% to $.27 Per Share

44. Defendant Moonves, commenting on the results, stated:

I’m very pleased with the operating performance of the Company, which produced terrific first quarter free cash flow of $938 million and diluted EPS of $.36. As a result of our continued confidence in our businesses, we are increasing our quarterly dividend by 8% to $.27 per share, paying among the highest dividends in the industry. Driving the Company’s performance this quarter was significant profit improvement at Television, led by a new distribution arrangement for our valuable CSI franchise in international markets.

19 We also continued to drive digital operations forward, nearly doubling our online revenues for March Madness on Demand. At Radio, we are seeing positive signs early in the second quarter with sales pacing up over last year in some of our larger markets. And our recent acquisition of the largest outdoor company in South America adds to CBS Outdoor’s portfolio of fast-growing attractive billboard markets.

(Emphasis added.)

45. Following the issuance of the press release, CBS held a conference call with analysts and investors to discuss the earnings release and the Company’s operations. Defendant Moonves spoke positively about the Company’s business stating in pertinent part as follows:

Across the board, our businesses posted operating results that led to very substantial free cash flow of $938 million for the quarter, up 25% versus the prior year period. This is the highest quarterly free cash flow since the separation. Going forward, we are as confident as ever about our ability to produce strong free cash flow. As a result, we are increasing our dividend again today by $0.02 to $0.27 per share. This is the sixth time in nine quarters that we’ve raised the quarterly dividend, bringing it to an annualized $1.08 per share.

In the midst of challenging economic times, this move is a clear signal that we believe in the breadth of our businesses and their ability to perform in any climate now and in the future. CBS pays amongst the highest dividends in the industry and this increase is a strong reminder that we are fully committed to returning value to our shareholders.

As we continue to increase the dividend, we also continue to maintain a very, very strong balance sheet. We have plenty of cash to invest in our businesses and to make smart, opportunistic acquisitions. As you know, we are looking to create and acquire higher growth, higher margin businesses in three key areas. The first area is content, which of course is the core of what we do. The second is interactive and the third is outdoor, particularly digital and international outdoor, both of which continue to grow.

* * *

Now I would like to take a few minutes to address our business portfolio and several key themes that speak to our solid performance in the quarter and some of what we are seeing in Q2 as well. Let’s begin with the television segment, which not only grew its revenues during the quarter but also posted a 13% increase in OIBDA and a 15% increase in operating income. Of course, the engine that drives so much of our success from the station to syndication to DVD sales to online is the CBS Television Network. The key question during the strike was how will CBS rebound when

original programming returns to the air? Would the viewers come back and the answer for us is clearly yes.

* * *

In conclusion, I am very pleased indeed with the results we are reporting today and with CBS’ prospects going forward. We have once again delivered our promises while positioning the company for future growth and margin expansion. In the face of the current headwinds, we will continue to closely monitor the way in which we operate each of our businesses.

We know how to run our businesses effectively regardless of the economic climate. We believe that in a tight market, advertisers will continue to be drawn to our world-class assets. From television’s mass reach to radio’s targeted cost- effectiveness to outdoor’s increasingly attractive possibilities, we are a must-buy across the board and our ability to serve advertisers with each of these media improves every day with the advent of digital technology. The CBS Corporation clearly has the right broad range of assets to produce outstanding free cash flow quarter after quarter, year after year. We will continue to use that cash to grow our businesses, to make opportunistic investments both internally and externally, and return value to our shareholders.

(Emphasis added.)

46. Defendant Reynolds added:

. . . [O]ur broad base of media businesses produced solid results in the first quarter of 2008, driving very strong earnings per share and free cash flow growth. Let me now provide you with some financial highlights and additional information on our first quarter performance.

As Leslie said, diluted earnings per share for the first quarter was $0.36, up from $0.28 last year at this time, a 29% increase. Now, on an adjusted basis excluding stock-based compensation expense, a restructuring charge of $45 million, and the after-tax effect of station divestitures last year, earnings per share was up about 23% over the first quarter of 2007. Free cash flow for the first quarter of 2008 was a very strong $938 million, up 25% over last year’s very strong free cash flow.

* * *

So to wrap up 2008’s first quarter, our balance sheet remains very strong with over $2.3 billion of cash on the balance sheet, and with our debt to EBITDA leverage at 2.1 times, we remain at the conservative end of leverage. Today’s announcement to raise our dividend by $0.02 to $0.27 a quarter signals our continued confidence in the strength of our cash flows. We also as you noted today in the earnings announcement reaffirmed our business outlook for 2008, which is for our OIBDA and operating income to grow between 3% and 5% over 2007.

21 (Emphasis added.)

47. On or about May 2, 2008, CBS filed its Form 10-Q for the quarter ended March 31,

2008 with the SEC, which was signed by Defendants Reynolds and Gordon and confirmed the previously announced financial results for the 2008 first quarter. Additionally, the Form 10-Q

reported goodwill of $18.481 billion, intangible assets of $9.961 billion, total assets of $41.031 billion, stockholders’ equity of $21.677 billion, noncurrent deferred income taxes of $2.012 billion

and net earnings of $244 million.

48. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, CBS’s Form 10-Q for

first quarter 2008 contained sworn certifications, signed by Defendants Moonves and Reynolds, that

attested to the effectiveness and accuracy of the Company’s internal controls over financial

reporting. In relevant part, Defendants Moonves and Reynolds each certified that:

1. I have reviewed this quarterly report on Form 10-Q of CBS Corporation;

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known 22 to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

49. The statements referenced in ¶¶43 to 48 above were each materially false and misleading for the reasons enumerated in ¶42 above.

50. On July 31, 2008, CBS issued a press release announcing its financial results for the second quarter of 2008, the period ended June 30, 2008:

23 CBS CORPORATION REPORTS SECOND QUARTER 2008 RESULTS

Revenues Up 1% to $3.4 Billion

Net Earnings Up 1% to $408 Million

Diluted EPS Up 11% to $.61 Per Share

First Half Free Cash Flow of $1.4 Billion Up 6%

Free Cash Flow of $464 Million For the Quarter

Company to Divest 50 Mid-size Market Radio Stations

51. In the press release, Defendant Moonves commented on the results stating in pertinent part as follows:

We’ve taken key steps to position our asset portfolio for superior long-term growth. During the quarter, we completed our acquisition of CNET Networks, which we believe will add at least two percentage points to our revenue and profit growth rates going forward, in addition to being accretive to earnings and free cash flow in 2008. We also closed on our acquisition of IOA, the largest outdoor business in the vibrant South American market. Both of these growing businesses exemplify our strategy to increase our presence in the areas of highest potential. At the same time, we have taken this opportunity to change our portfolio by initiating a plan to divest 50 mid- size market radio stations. By selling selected stations in these markets we can focus on the larger market stations, many of which are showing growth.

In a more difficult economic environment, with our local businesses affected by an advertising slowdown, we have taken aggressive cost reduction actions to manage expenses. Since the beginning of the year, well before the current softness in the marketplace, we have been working to rationalize the cost structure in our Television, Radio and Outdoor businesses. When the marketplace comes back, we will be well prepared to capitalize on that upturn.

Finally, I’m pleased that we have maintained our ability to grow revenues and generate strong free cash flow of more than $1.4 billion in the first half of 2008, up 6% over the first half of 2007. Free cash flow is an extremely important way that we measure our success. It has enabled us to raise our dividend again during the quarter - the sixth time since the start of 2006. This is our way of demonstrating confidence in our ability to keep generating healthy free cash flow, and our commitment to returning value to shareholders.

(Emphasis added.)

24 52. Following the issuance of the press release, CBS held a conference call with analysts and investors to discuss the earnings release and the Company’s operations. Defendant Moonves spoke positively about the Company’s business stating in pertinent part as follows:

The company delivered revenues of $3.4 billion in the second quarter, up 1% from the same quarter last year, which we consider quite an achievement in today’s economy. Top-line highlights from the quarter include strong performances from our international syndication businesses and our Outdoor businesses where we had revenue growth both in North America and abroad. At the same time, we are clearly challenged by the economic conditions affecting many industries, particularly as it pertains to our local businesses. This is affecting sales as well as OIBDA and operating income, both which were down from last year on the quarter.

We posted an increase, however, in net income, helped by the sale of our stake in the Sundance Channel. And because of our stock buy back in the past year, our diluted EPS was up 11% to $0.61 versus $0.55 for the same period last year. What I’m most proud of is the fact that, even as we deal with the current environment and invest for growth, we continue to throw off very healthy levels of cash.

Free cash flow of $464 million in the second quarter, and $1.4 billion in the first half, up 6% from first half of 2007. This enables us to pay our very attractive dividend of $0.27 per share, and we have a strong balance sheet and sufficient cash on hand to not only continue to pay and grow our dividend, but also to manage our businesses effectively and keep investing for future growth.

* * *

And finally, we raised our dividend again in the quarter, our sixth increase in 2.5 years. We were able to take this action because of our strong free cash flow. Free cash flow is one of the most important ways that we measure our success and at a time, when other companies are cutting or suspending their dividends, as they try to shore up their balance sheet, we will continue paying and increasing our dividends.

We feel very good about our ability to keep generating healthy cash flow and return value to shareholders. These key strategic actions, shedding slower growth businesses to focus on higher growth areas, greatly reducing expenses and returning value to shareholders with attractive dividends, are the ways we can continue to deliver on our promise and position CBS for superior long term performance. Our company is in good shape today, even with this economy and through these actions we will be in even better shape going forward.

* * *

In conclusion, from TV, to radio, to Outdoor, to Publishing, to Interactive, I believe we are taking the right steps to perform well in the current environment, and position our company for impressive long-term growth. We are adjusting our asset portfolio, shedding slower-growth assets like mid-market radio stations, and acquiring businesses in higher growth areas like CNET and IOA. At the same time we are being very disciplined in cutting costs, continuing and in certain cases, accelerating efforts begun early this year, long before market conditions became evident.

Finally we are staying focused on our shareholders, our businesses continue to generate strong free cash flow, and we are committed to paying very attractive dividends and looking at the potential of a share buy back. Yes, the economy is tough right now. But we are managing our businesses effectively, focusing on improving both efficiency and growth. And as soon as the marketplace improves, we are going to be ready and in a position that capitalizes on the upturn.

(Emphasis added.)

53. Defendant Reynolds added:

Our balance sheet remains very, very strong. Our leverage is at the low end of the conservative range, which we believe is prudent given the overall US economic environment and the somewhat fragile state of the credit markets. As Leslie mentioned, we are committed to returning value to shareholders. Since the second quarter 2007, we have raised our dividend 23% from $0.22 a share per quarter to the current $0.27. We believe dividend increases best signaled our confidence in our ability to produce strong free cash flow in the future, coupled with maintaining a very strong balance sheet.

* * *

Finally, as you’ll note in today’s earnings release we have updated our business outlook for 2008. We expect to grow adjusted operating income before depreciation and amortization low single digit over 2007, with operating income comparable to a year ago. Our outlook excludes the growth and operating income before depreciation amortization that we expect from the acquisition of CNET to provide, and excludes the impact of the additional station divestitures, which we just mentioned. While the US economy has slowed since the first quarter, largely affecting our local businesses, we have taken numerous actions to lower our operating cost and we will continue to look for opportunities to reduce cost, but also invest in businesses we believe will add to profit growth both today and into the future. We are very focused on managing our businesses through this economy and we believe the various actions that we’ve taken will produce even stronger profit margins and higher growth in the future.

(Emphasis added.)

26 54. On or about August 1, 2008, CBS filed its Form 10-Q for the quarter ended June 30,

2008 with the SEC, which was signed by Defendants Reynolds and Gordon and confirmed the previously announced financial results for the 2008 second quarter. Additionally, the Form 10-Q

reported goodwill of $20.134 billion, intangible assets of $9.943 billion, total assets of $41.248 billion, stockholders’ equity of $21.927 billion, noncurrent deferred income taxes of $1.885 billion

and net earnings of $408 million.

55. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, CBS’s Form 10-Q for the

second quarter of 2008 contained sworn certifications, signed by Defendants Moonves and

Reynolds, that attested to the effectiveness and accuracy of the Company’s internal controls over

financial reporting. In relevant part, Defendants Moonves and Reynolds each certified that:

1. I have reviewed this quarterly report on Form 10-Q of CBS Corporation;

in which this report is being prepared;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

56. The statements referenced in 1150 to 55 above were each materially false and

misleading for the reasons enumerated in 142 above.

28 CBS REPORTS A $14 BILLION IMPAIRMENT

57. On October 10, 2008, just 70 days after its previous glowing report, CBS issued a press release announcing that it “expects to incur a non-cash impairment charge of approximately

$14 Billion, in the third quarter of 2008.” (Emphasis added.) According to the press release;

The continued economic slowdown in the United States has adversely affected advertising revenues across the Company’s businesses, primarily at the local level and the effects of the current financial crisis are likely to cause further declines in advertising spending. As a result of these market conditions, the Company is revising its 2008 full year business outlook for both adjusted operating income before depreciation and amortization (“OIBDA”) and adjusted operating income to a decline of mid-teens versus 2007.

The Company said that, based on preliminary information, its third quarter performance is expected to reflect revenue growth of approximately 3% over the comparable period last year, led by higher syndication revenue and recent acquisitions. Further, the Company now expects to report adjusted diluted earning per share of approximately $.42 to $.44 for the third quarter of 2008, compared to $.51 for the third quarter of 2007.

In addition, as a result of these recent adverse market conditions, the Company is currently performing an interim impairment test on its existing goodwill, other indefinite lived intangible asset balances and investments. Based on preliminary results, the Company expects to incur a non-cash impairment charge of approximately $14 Billion, in the third quarter of 2008 to reduce the carrying value of goodwill intangible assets related to FCC licenses and investments.

The Company’s business outlook excludes stock-based compensation expense restructuring charges, impairment charges and the impact of acquisitions and dispositions.

The Company continues to generate significant free cash flow and expects to maintain its current dividend policy.

58. In response to this announcement, the price of CBS stock declined over 20% from

$10.14 per share to $8.10 per share, on very heavy trading volume.

POST CLASS PERIOD STATEMENTS

59. On or about February 25, 2009, CBS filed its Consolidated Statement of Operating

for 2008 in a Form 10-K reporting revenues of $13.95 billion, which was only $122 million less than

29 2007 (a decline of less than 1%). Cash flow from continuing operations for 2008 was $2.147 billion compared to net cash flow from continuing operations of $2.18 billion for 2007 and $2.003 billion for 2006.

60. On April 24, 2009, CBS filed its Form 14A and for the first time in a public filing disclosed the fact that the CBS common stock owned by National Amusements (for the benefit of

Redstone) was related in any manner to the National Amusements Principal Payment Covenant.

Mr. Redstone is the beneficial owner of the controlling interest in National Amusements and, accordingly, beneficially owns all such shares. NAIRI is a wholly owned subsidiary of National Amusements. Based on information received from National Amusements, the Company expects that all or substantially all of the Company shares owned by NAIRI will be pledged to National Amusement’s lenders in connection with the agreement to restructure National Amusement’s indebtedness.

CBS Common Stock Trades In An Efficient Market

61. The market for CBS common stock was open, well-developed and efficient at all relevant times. As a result of these materially false and misleading statements and failures to disclose, CBS common stock traded at artificially inflated prices during the Class Period. Plaintiffs and other members of the Class purchased or otherwise acquired CBS common stock relying upon the integrity of the market price of CBS common stock and market information relating to CBS, and were damaged when the October 10, 2008 announcement caused the stock’s value to plunge.

62. During the Class Period, Defendants materially misled the investing public, thereby inflating the price of CBS common stock, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make Defendants’ statements, as set forth herein, not false and misleading. Said statements and omissions were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about the Company, its business and operations, as alleged herein.

30 63. At all relevant times, the material misrepresentations and omissions particularized in this Complaint directly or proximately caused or were a substantial contributing cause of the damages sustained by Plaintiffs and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false or misleading statements about CBS’s business, prospects and operations. These material misstatements and omissions had the cause and effect of creating in the market an unrealistically positive assessment of

CBS and its business, prospects and operations, thus causing the Company’s common stock to be overvalued and artificially inflated at all relevant times. Defendants’ materially false and misleading statements during the Class Period resulted in Plaintiffs and other members of the Class purchasing the Company’s common stock at artificially inflated prices, and Plaintiffs were damaged when the stock price fell after the market became aware of the true state of affairs at CBS.

ADDITIONAL FALSE STATEMENTS AND DESCRIPTION OF DEFENDANTS’ SCIENTER.

A. CBS Violated Generally Accepted Accounting Principles

64. During the Class Period, Defendants represented repeatedly that the Company’s financial statements were prepared in conformity with GAAP. These representations were materially false and misleading when made because Defendants, in violation of GAAP, knowingly or recklessly employed improper accounting practices which falsely inflated the Company’s income and assets during the Class Period. The knowing and/or reckless violations of GAAP are direct evidence of Defendants’ scienter.

65. GAAP are those principles recognized by the accounting profession as the conventions, rules, and procedures necessary to define accepted accounting practices at a particular time. As set forth in Financial Accounting Standards Board (“FASB”) Statements of Concepts

(“Concepts Statement”) No. 1, one of the fundamental objectives of financial reporting is that it

31 provide accurate and reliable information concerning an entity’s financial performance during the period being presented. Concepts Statement No. 1, paragraph 42, states:

Financial reporting should provide information about an enterprise’s financial performance during a period. Investors and creditors often use information about the past to help in assessing the prospects of an enterprise. Thus, although investment and credit decisions reflect investors’ and creditors’ expectations about future enterprise performance, those expectations are commonly based at least partly on evaluations of past enterprise performance.

66. Indeed, compliance with GAAP is a basic fundamental obligation of publicly traded

companies. As set forth in SEC Rule 4-01(a) of SEC Regulation S-X, “[f]inancial statements filed

with the [SEC] which are not prepared in accordance with [GAAP] will be presumed to be

misleading or inaccurate.” 17 C.F.R. § 210.4-01(a)(1).

67. Management is responsible for preparing financial statements that conform with

GAAP. As noted in the U.S. Auditing Standards (“AU”) Section 110.03:

The financial statements are management’s responsibility. The auditor’s responsibility is to express an opinion on the financial statements. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. The entity’s transactions and the related assets, liabilities and equity are within the direct knowledge and control of management. The auditor’s knowledge of these matters and internal control is limited to that acquired through the audit. Thus, the fair presentation of financial statements in conformity with generally accepted accounting principles is an implicit and integral part of management’s responsibility. The independent auditor may make suggestions about the form or content of the financial statements of draft, in whole or in part, based on information from management during the performance of the audit. However, the auditor’s responsibility for the financial statements he or she has audited is confined to the expression of his or her opinion on them.

68. Pursuant to GAAP, specifically Financial Accounting Standards Board’s Statement of

Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”)

goodwill and indefinite lived assets are to be tested for impairment at least annually and “more

frequently if events and circumstances indicate that the assets might be impaired.”

32 69. Accordingly, in its 2007 Form 10-K, CBS’s financial statements for the year ended

December 31, 2007 disclosed:

In accordance with Statement of Financial Accounting Standards (‘‘SFAS’’) 142 ‘‘Goodwill and Other Intangible Assets’’ (‘‘SFAS 142’’), the Company’s intangible assets are considered to have finite or indefinite lives and are allocated to various reporting units, which are generally consistent with or one level below the Company’s operating segments. Intangible assets with finite lives, which primarily consist of leasehold and franchise agreements, are generally amortized by the straight-line method over their estimated useful lives, which range from 3 to 40 years. Intangible assets with indefinite lives, which consist primarily of FCC licenses and goodwill, are not amortized but are tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. If the carrying value of goodwill or the intangible asset exceeds its fair value, an impairment loss is recognized as a non-cash charge.

(Emphasis added.)

70. Pursuant to SFAS No. 142, the present value of cash flow estimates is generally the best technique to measure an impairment loss when quoted market prices for the relevant assets are

unavailable. In addition, SFAS No. 142 mandates that cash flow estimates in measuring any

impairment loss be based on reasonable and supportable assumptions. 3

71. As noted herein, during the Class Period, Defendants repeatedly and misleadingly

highlighted the “strong” and “pristine” nature of CBS’s balance sheet throughout the Class Period.

In truth, CBS materially overstated its actual income, goodwill and intangible assets. In fact, the

magnitude of CBS’s announced impairment charge at the end of the Class Period – $14 billion – was

equal to more than one-third of CBS’s total assets and almost two-thirds of the Company’s equity at

June 30, 2008.

3 The relevant paragraph of SFAS 142 was superseded with SFAS 157, Fair Value Measurements. However, as disclosed in its pubic filings, CBS deferred the adoption of these superseding provisions for its non-financial assets until 2009, in accordance with FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157.

33 72. As a result of Defendants’ failure to timely record an impairment in the value of its

goodwill and intangible assets, the financial statements CBS issued during the Class Period were

materially false and misleading and presented in violation of GAAP.

73. In addition, the financial statements CBS issued during the Class Period were

materially false and misleading and presented in violation of at least the following provisions of

GAAP and its underlying framework:

(a) The principle that an impairment of goodwill and other intangible assets should be recognized in financial statements in the period in which it occurs. (SFAS No. 142);

(b) The concept that financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit and similar decisions. (Statement of Financial Accounting Concepts (“Concepts Statement”) No. 1, ¶34);

(c) The concept that financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and the effects of transactions, events and circumstances that change resources and claims to those resources. (Concepts Statement

No. 1, ¶40);

(d) The concept that financial reporting should provide information about how management of an enterprise has discharged its stewardship responsibility to owners (stockholders) for the use of enterprise resources entrusted to it. To the extent that management offers securities of the enterprise to the public, it voluntarily accepts wider responsibilities for accountability to prospective investors and to the public in general. (Concepts Statement No. 1, ¶50);

(e) The concept that financial reporting should provide information about an enterprise’s financial performance during a period. Investors and creditors often use information about the past to help in assessing the prospects of an enterprise. Thus, although investment and

34 credit decisions reflect investors’ expectations about future enterprise performance, those expectations are commonly based at least partly on evaluations of past enterprise performance.

(Concepts Statement No. 1, ¶42);

(f) The concept of completeness, which means that nothing is left out of the information that may be necessary to ensure that it validly represents underlying events and conditions. (Concepts Statement No. 2, ¶79); and

(g) The concept that conservatism be used as a prudent reaction to uncertainty to try to ensure that uncertainties and risks inherent in business situations are adequately considered.

The best way to avoid injury to investors is to try to ensure that what is reported represents what it purports to represent. (Concepts Statement No. 2, ¶¶95, 97).

There is No Reasonable Dispute that the Timing of the Company’s Third Quarter 2008 Impairment Charge was Improper and Violated GAAP

74. In support of their Amended Complaint, Plaintiffs have retained Dr. Steven L.

Henning, CPA to prepare an analysis of CBS’s financial statements during the Class Period. Dr.

Henning has more than 20 years of experience in public accounting, securities litigation and

consulting relating to GAAP as well as teaching at the University of Colorado and Southern

Methodist University. Dr. Henning served as an Academic Fellow in the Office of the Chief

Accountant at the SEC where he consulted with companies on registrant issues and provided

guidance on rule making. Dr. Henning is a member of the Listing Qualifications Panel of the

National Association of Securities Dealers Automated Quotation System (NASDAQ), a group of

independent experts that makes the final determination of listing status on appeal after a company

has been delisted by NASDAQ. Further, Dr. Henning is a past member of the SEC Regulations

Committee, which acts as the primary liaison between the accounting profession and the SEC on

35 technical matters relating to SEC rules and regulations. Dr. Henning has reviewed the publicly

available documents filed by CBS, and his analysis follows in ¶¶75-87.

75. Intangible assets are those assets that lack physical substance. Goodwill is an

intangible asset arising from a business combination and represents future economic benefits to the purchaser. Initially, goodwill is valued as the excess of the purchase price over the fair value of all

other identifiable net assets. GAAP recognizes that “the fair value of goodwill can be measured only

as a residual and cannot be measured directly.” (SFAS 142, fn 13). As such, GAAP requires that

goodwill be allocated to individual reporting units within a company for which fair value can be

determined, thereby linking goodwill to the fair value of the reporting units. (SFAS 142, ¶¶18, 21).

76. As discussed herein, SFAS 142 requires that goodwill be tested for impairment at

least annually, or more frequently upon occurrence of events or changes in circumstances that

indicate that it is more likely than not that the book value of a reporting unit4 exceeds its fair value. 5

(SFAS 142 ¶¶26, 28). SFAS 142 likewise requires that other intangible assets not subject to

amortization (i.e., indefinitely lived intangible assets) be tested for impairment annually or more

frequently if events or changes in circumstances indicate that an intangible asset might be impaired.

(SFAS 142 ¶7).

77. CBS stated that it performed its annual impairment testing in the fourth quarter 2007

and reported that its goodwill and indefinite lived intangible assets were not impaired. As of

December 31, 2007, CBS’s book value was $3.2 billion greater than its market capitalization of

4 As stated in its SEC filings, CBS’s reporting units are generally one level below or at the operating segment level for purposes of applying SFAS 142.

5 The book value of a reporting unit includes its allocated goodwill.

36 $18.3 billion.6 Throughout 2008, CBS’s market capitalization7 (which represents the market’s

valuation of a company’s net worth) continued to decline, primarily as a result of the decline in the

Company’s stock price. During the first quarter 2008, the amount by which CBS’s book value (i.e.,

its net worth or stockholders’ equity) exceeded its market capitalization more than doubled to $6.9 billion.8 At the end of the second quarter 2008, the amount by which CBS’s book value exceeded its

market capitalization increased even further to $8.8 billion. 9 Despite such a widening gap

throughout 2008 between the market’s valuation of the Company and its book value, which

substantially increased the likelihood of an impairment, CBS failed to perform an impairment test of

its goodwill or its indefinite lived intangibles during the first or second quarter 2008, as required by

GAAP.

78. On October 10, 2008, just over two months after filing its second quarter 2008 Form

10-Q, CBS issued a press release announcing that it was in the process of performing an interim

impairment test of its goodwill, indefinite lived intangible assets, and investments. In its third

6 Calculated as the difference between total stockholders equity of $21.5 billion and market capitalization of $18.3 billion based on 59,500,000 shares of class A and 612,400,000 shares of class B common stock outstanding at December 31, 2007 at closing price of $26.75 and $27.25 per share, respectively.

7 Market capitalization is measured by multiplying the number of a company’s outstanding shares by the share price.

8 Calculated as the difference between total stockholders equity of $21.7 billion and market capitalization of $14.8 billion based on 58,600,000 shares of class A and 610,000,000 shares of class B common stock outstanding at March 31, 2008 at closing price of $22.10 and $22.08 per share, respectively.

9 Calculated as the difference between total stockholders equity of $21.9 billion and market capitalization of $13.1 billion based on 58,400,000 shares of class A and 612,600,000 shares of class B common stock outstanding at March 31, 2008 at closing price of $29.48 and $19.49 per share, respectively.

37 quarter 2008 Form 10-Q, CBS cited the effect of “the continuation of adverse market conditions [on] the Company’s market value and trading multiples for entities within the Company’s industry” as one of the factors that triggered its impairment testing during Q3’08. (Pages 9-10) This interim impairment test was the justification CBS then used for the $14.1 billion impairment charge for goodwill and indefinitely lived intangible assets ($12.7 billion after taxes). (Third Quarter 2008

Form 10-Q, pages 10, 15)

79. As a result of this significant write-down of goodwill and indefinitely lived intangibles, CBS’s book value as of September 30, 2008 fell $611 million below its market capitalization. 10 Absent this impairment charge, CBS’s book value would have continued to exceed its market capitalization and such excess would have been approximately $12.1 billion. 11

80. According to the aforementioned October 10, 2008 press release, the impairment testing was triggered by “recent adverse market conditions,” namely the “continued economic slowdown in the United States [which had] adversely affected advertising revenues across the

Company’s businesses ... and the effects of the current financial crisis [which were] likely to cause further declines in advertising spending.”

81. However, CBS’s 2008 public filings do not disclose any such “recent adverse market conditions” affecting its advertising revenues. In its first quarter 2008 Form 10-Q, CBS attributed most of the decline in its advertising revenues during that quarter to the loss of the Super Bowl

10 Calculated as the difference between total stockholders equity of $9.2 billion and market capitalization of $9.8 billion based on 57, 800,000 shares of class A and 613,100,000 shares of class B common stock outstanding at September 20, 2008 at closing price of $14.63 and $14.58 per share, respectively.

11 Calculated as the difference between total reported stockholders equity of $9.2 billion, adjusted for $12.7 billion the after-tax impact of the third quarter 2008 impairment charge, and market capitalization of $9.8 billion.

38 telecast, the timing of NCAA Men’s Basketball Tournament, and the impact of television and radio

station divestitures. The 7% decline in CBS’s advertising revenues for the first six months of 2008

was equivalent to the 7% decline in advertising revenues for the first nine months of 2008 and was

attributable to substantially the same causes: “the absence of the 2007 telecast of Super Bowl XLI on

CBS Television Network, weakness in the television and radio station advertising markets, lower primetime ratings and the impact of television and radio station divestitures, partially offset by the

impact of the June 30, 2008 acquisition of CNET, growth at Outdoor during the first half of 2008,

and higher political advertising sales during Third Quarter 2008.” (Second Quarter 2008 Form 10-

Q, page 29; Third Quarter 2008 Form 10-Q, page 31). Even though the decline in advertising

revenues occurred throughout 2008, CBS did not perform an impairment test until the third quarter

of 2008.

82. CBS’s third quarter 2008 Form 10-Q makes it clear that a discounted cash flow

analysis is a key measure in testing both CBS’s goodwill and its intangible assets for impairment:

The first step of the goodwill impairment test examines whether the book value of each of the Company’s reporting units exceeds its fair value. If the book value of a reporting unit exceeds its fair value, the second step of the test requires the Company to then compare the implied fair value of that reporting unit’s goodwill with the book value of its goodwill. ...

The estimated fair value of each reporting unit was computed principally based upon the present value of future cash flows (Discounted Cash Flow Method) and both the traded and transaction values of comparable businesses (Market Comparable Method). The Discounted Cash Flow Method and Market Comparable Method resulted in substantially equal fair values.

For the impairment test of intangible assets with indefinite lives, the fair value of the intangible asset is compared with its book value. The estimated fair value of intangible assets was computed using the Discounted Cash Flow Method.” (Page 10)

83. The discounted cash flow method of estimating fair value of a company, a segment,

or an asset is based on the concept of time value of money. Future cash flows are estimated based on

39 assumptions about future events and results of operations and are discounted to the present value.

These assumptions are used to estimate free cash flow, which represents cash flow available for

distribution to debt and equity holders. A standard approach to valuing discounted cash flows is to

estimate free cash flows for two periods: the near term (usually five years) and thereafter in perpetuity. Detailed projections for periods longer than five years are generally not reliable and bear

too much uncertainty to be useful in a valuation. For this reason, the near term cash flow projections

are generally limited to five years. Free cash flows after the near term generally assume a constant

growth rate and are projected to continue in perpetuity. Because of the compounding effect, the present value of these perpetual cash flows (the terminal value), typically comprises over 50% of the

value of a company and is highly sensitive to changes in the terminal value growth rate.

84. The $14.1 billion impairment charge recorded by CBS in third quarter 2008

represented approximately a 50% reduction in its book value of intangible assets not subject to

amortization and goodwill. The impairment charge also represents a charge of in excess of 33% of

the total consolidated assets as of June 30, 2008. The declines in projected revenue, profitability,

and cash flow growth rates that would yield a $14.1 billion impairment are so far below what CBS

disclosed or experienced prior to October 10, 2008 that the explanation of the timing of the

impairment charge is not believable.

85. In truth, as detailed above, the real reason CBS did not take the impairment to

intangible assets until October 10, 2008 was so Defendant Redstone’s company, National

Amusements, could avoid making payments under the Principal Payment Covenant.

86. A discounted cash flow analysis performed at the enterprise level reveals that, even

for valuations performed at reporting unit levels or for individual intangible assets, CBS would have

had to assume catastrophic and unthinkable declines in expected free cash flows in the near term or

40 an equally dramatic decline in the terminal growth rate (or some combination of the two). For instance, at the enterprise level the free cash flow for the first five years would have to decline by

33% each year or the terminal value growth rate would have to decline by 75%. 12 Such declines would be inconsistent with the statements made by CBS’s Chairman, CEO, and CFO during CBS’s third quarter 2008 earnings call:

Our free cash flow remains strong, $1.4 billion for the first nine months of this year. Going forward, we’re confident that our business will continue to produce the kind of cash that will enable us to pay our attractive dividend.

* * *

One thing that is certain to me is that Leslie [Moonves] and his team are managing our business prudently and they’re positioning CBS for a very successful future.

* * *

I have no doubt that we’ll be even stronger on the other side of the challenges we face today. Summer Redstone, Executive Chairman and Founder

Let’s start with our very healthy free cash flow ... .

* * *

The challenge is to recognize the reality of the situation and effectively manage through it and to be ready to thrive when the economy turns, which we are doing. Leslie Moonves, President and CEO

We believe our business will be even stronger once the U.S. economy starts to rebound some time in 2009.

* * *

12 A decline in the terminal value growth rate of this magnitude could indicate that CBS expected to lose market share at an alarming rate and had no expectation of long-term profitability.

41 [Advertisers will] be back in local [advertising]. I firmly believe that with Outdoor, Radio and TV, they’ll be back. Frederic Reynolds, Executive VP and CFO

87. Such dramatic changes in the assumptions included in CBS’s valuations could not

have arisen between August 1, 2008 (the filing date for CBS’s second quarter 2008 Form 10-Q) and

October 10, 2008 (the date of CBS’s press release announcing an impairment). CBS’s public filings

indeed do not identify any such events or new conditions. The non-existence of such events was

confirmed during CBS’s third quarter 2008 earnings call by Mr. Moonves who stated that CBS had

“anticipated the slowdown for some time ... going back to last year.” Consequently, while CBS had been anticipating a “slowdown for some time,” it failed to perform the appropriate analyses required by SFAS 142 analyses, or failed to incorporate such expectations in any impairment analyses performed prior to third quarter 2008. To be sure, CBS was required to take impairment charges;

however it was required to take such charges in steps beginning no later than the first quarter of 2008

and probably sooner. What is absolutely clear is that nothing happened in the 70-day period

following the issuance of the second quarter 2008 Form 10-Q that could justify the $14.1 billion

impairment charge and the assumptions used by CBS to justify the impairment charge.

The Individual Defendants Sold Large Volumes of Shares During the Class Period

88. Notwithstanding their duty to refrain from trading CBS stock under these

circumstances, or to disclose the insider information prior to selling such stock, each Defendant sold

shares of CBS stock at prices that had been artificially inflated by Defendants’ materially false

representations detailed above.

89. Defendants were motivated to participate in the wrongful conduct alleged herein so

that CBS insiders could sell their personally held shares of the Company’s stock at artificially

inflated prices. While Defendants were making false and misleading statements about CBS, which

artificially inflated CBS common stock, CBS’s top insiders were engaged in an insider bailout.

Collectively, Defendants sold 17,326,648 shares of CBS common stock, resulting in insider proceeds

of $127,764,573.12.

CBS, Inc. Insider Trading Summary from 02/08/2008 through 10/10/2008

Shareholder Shares Proceeds Redstone, Sumner M. 13 17,069,885 $122,208,118.30 Moonves, Leslie 198,897 $4,292,197.26 Reynolds, Fredric G. 41,531 $908,660.42 Gordon, Susan C. 16,335 $355,597.14

17,326,648 $127,764,573.12

90. In addition to the proceeds achieved through insider sales, the Individual Defendants

were motivated to perpetuate the unlawful conduct complained of herein to inflate their

compensation packages. Both the base salaries and the bonuses of the Individual Defendants were

dependent upon the financial performance of the Company. As set forth herein, the Individual

Defendants received aggregate annual compensation in excess of $50 million in 2007 and 2008. The

fact that their individual compensation packages were dependent upon performance levels

incentivized the Individual Defendants to artificially overstate the Company’s financial performance.

Statements of Confidential Witnesses

91. In addition to the false statements detailed above, and the indicia of scienter created

thereby, Plaintiffs’ counsel interviewed a number of former employees regarding the Company’s

misconduct. As detailed herein, these Confidential Witnesses corroborate that the timing of the

13 Includes sales by Nairi, Inc., a wholly-owned subsidiary of National Amusements.

43 goodwill write-down was improper. The import of these statements is to leave no reasonable dispute that Defendants acted with the requisite scienter.

Confidential Witness No. 1

92. Confidential Witness No. 1 (“CW 1 ”) worked at CBS Television Stations as the Vice

President of Sales for the Digital Media Group from October 2007 until December 2008. CW 1 reported to Senior Vice President of Business Development Aaron Radin who in turn reported to the

President of the Digital Media Group Jonathan Leess. CW1 also worked with Vice President of

Business Development Steven Sharp. The Digital Media Group was a division of CBS Television

Stations.

93. The Group produced content, managed, and sold national advertising for all of the websites affiliated with the 29 CBS-owned television stations nationwide. Some of these include www.cbs2.com, which is affiliated with CBS Channel 2 in Los Angeles, and www.kpix.com , which is affiliated with CBS Channel 5 in the San Francisco Bay Area. The Digital Media Group included

Leess, Radin, CW 1, and Sharp as well as approximately eight Account Executives, three marketing employees, two researchers, technology personnel, and digital content editors. The Group also worked with sales, technology and editorial personnel at each station. In addition to pursuing national advertisers who might purchase ads across all station websites, the Group coordinated an effort to sell ads to local advertisers at the station level. CW 1 or a member of his team took on the role of “Local Sales Manager” and designated people at every station to conduct tutorials on digital media marketing to the local CBS Account Executives. The Local Sales Manager also strategized and assembled promotional packages, contests, and other coordinated marketing efforts for all 29 stations.

44 94. There are two Digital Media Groups, and the members of the two Digital Media

Groups often worked together to sell cross-platform ad campaigns. In these cross-platform deals,

Television received the portion of revenues for the Television ads, and Radio received the revenue

for the Radio ads, regardless of which Digital Media Group orchestrated the deal. During CW1’s

tenure, there were approximately 175 radio station/music websites. Most of the music websites were

affiliated with local CBS radio stations, and some were separate “internet only” stations, unaffiliated

with a traditional radio station. There were approximately 20 websites affiliated with the local CBS

television stations. The television-affiliated websites are more substantial and contain more content

than the radio station websites.

95. CW1 said that the Digital Media Group was a growth group, with revenues that

increased in 2007 and 2008, but was trapped inside the “sinking ship” of CBS Television Stations.

CW1 and Senior Vice President of Business Development Radin had strategic conversations

throughout 2008 about how “we wanted to get out from underneath the TV umbrella – we were

inside the Titanic.” CW 1 said that in 2007, total Television Station revenue was approximately $2 billion; in 2008, it was $1.6 billion; and in 2009, it “is going to be significantly less.” This revenue

was from advertising, and advertising revenue continually decreased throughout 2008. When asked

if any specific stations were struggling more than others, CW 1 said, “They were all struggling.” In

the first quarter of 2008, CW 1 estimated that revenue for all or most of the television stations was

down between 15% and 20%; this percentage steadily increased, such that by the end of the third

quarter, every station’s revenues were down between 20% and 30%.

96. When asked when CBS’s corporate office became aware of the financial issues that

the television stations faced, CW 1 said, “They knew all along – they knew throughout 2008.” CW 1

explained that by “they” he meant the top executives in the Television Stations division and above,

45 including President of Sales for Television Stations Jim Sullivan, President of Television Stations

Tom Kane , Chief Financial Officer of Television Stations Rick Baran and CBS Corporation Chief

Financial Officer Fredric Reynolds. When asked how Sullivan, Kane, Baran, and Reynolds knew

this information, CW 1 said, “They get numbers on a weekly basis – they get numbers on a daily basis.”

97. The following people participated in weekly sales calls where numbers were

discussed in detail: CW1 and Radin, each of whom participated from their respective offices in the

Ed Sullivan Theater building, President of Sales for Television Stations Julio Marenghi14, Sullivan,

and the approximately 20 Sales Managers from the 29 CBS-owned stations. CW1 further stated,

“They have weekly calls, I was on every one of those sales calls, when [Sullivan or Merenghi] were

asking, ‘Why are you moving backwards? Why are you not making your numbers?’” These

questions were directed at the Sales Managers of the television stations. The calls were conference

calls that took place each Tuesday at 11 a.m. Eastern Standard Time. Kane did not participate, but

was present and listening “much of the time.” If CW 1 was traveling, he participated in the calls

remotely.

98. Sullivan was responsible for reporting the stations’ numbers to Chief Financial

Officer Reynolds. Further, the numbers “had to be reported” so they could be included in quarterly

reports to the SEC. When asked how the executives accessed numbers daily, CW1 explained that

any top executive in the Television Stations division could access the sales numbers for any local

station through the Television Stations’ software system, as could Reynolds. An Account Executive

14 The current President of Sales for Television Stations, Jim Sullivan, was elevated from his role as President of National Sales when Merenghi left in June 2008. After Merenghi’s departure, Sullivan ran the weekly conference calls.

46 or Sales Manager entered price, time slot, station, date, number of spots, and related sales data into

the computer system upon completion of a sale. Through the scheduling software, an executive in

New York “could log on anytime and see what [ad] was airing at the 8 o’clock hour in Sacramento.”

99. When asked if CBS lowered advertising prices during 2008, CW1 said, “Yes, they

had to. They were giving it away. Revenues were down. . .they had to do something.” There was

“significant” unsold inventory.

100. In a good time, there is no unsold inventory at all. CW 1 believed that there was very

low or no unsold inventory during 2006 and 2007. Unsold inventory during 2008 was significant because “I knew we had free spots to give away ... I was selling it.” CW1 sold television spots as part of the cross-platform campaigns he marketed. “It was supply and demand...the agencies were

demanding it.” The price for some spots dropped by as much as 50%. “If you bought one

commercial, you could get one free.”

101. Throughout 2008, CW 1 heard various members of Sullivan’s team, who sold

traditional television advertising, bemoaning their falling revenue. On various occasions CW 1 heard

Vice President of Sales for the Eastern Region Kevin Dorsey, Senior Vice President Bob Kaplan and

Digital Sales Manager Ryan McCarthy all state that their revenues were decreasing. CW 1 also heard

Vice President for the Midwest Region Josh Soebel, who was based in Chicago, “complaining all the

time” about the falling revenues. CW 1 did not recall hearing numbers or percentages of the revenue

decrease from these employees, but reiterated that he believed it was between 20% and 30%, based

on what he recalled from the weekly sales calls.

102. CW1 also stated, “CBS had grossly overvalued how much a TV station was worth,

how much a radio station was worth.” CW1 explained that the broadcast industry standard for

valuing properties fluctuates with industry profitability, the health of the economy, and other factors.

47 Between ten and fifteen years ago, the accepted standard was to value a property at ten times its

yearly cash flow. CW 1 knew this because of years of experience in the broadcast industry. As the

economy grows, and as the profitability of a company grows, the multiple itself increases. CW 1

estimated that by the end of the 1990’s the multiple had increased to fifteen to nineteen times cash

flow. It fell after September 11, 2001. CW 1 estimated that a few years later, the multiple increased

again, up to 18 or 19 times cash flow. When asked how he knew this information, CW 1 said that the

“the whole industry does this.” At CBS, CW 1 said the multiple increased for several reasons: 1) the

CBS network was growing and “was number one in a lot of categories”; 2) advertising rates were

increasing, and when revenues increase, the multiple itself increases; and 3) “you know what it was

like – there was free money, cheap money – everything was good, business was good.”

103. CW 1 was not surprised that CBS had to write down goodwill because of the above-

mentioned over-valuation. However, CW 1 said that $14 billion “seemed like a lot.” As for the fact

that the write-down occurred so soon after a positive press conference in August 2008, CW 1 said,

“That’s a big number. You don’t [write down goodwill] overnight.”

104. Auto industry advertising accounted for approximately one third of all revenue for the

Television Stations division. General Motors (“GM”) supplied 40% of that third. Automotive

spending started falling off during the first quarter of 2008. One of the first changes that CW1

noticed during the first and second quarters was that GM pulled its sponsorships. For example,

Pontiac might sponsor the March Madness NCAA Basketball Tournament. Its logo would display periodically and the announcers would mention GM as a sponsor of the tournament. In quarters

three and four, GM spending was “way down.”

105. GM executed a major strategy shift in spending in 2008. Ordinarily, a few dollars

from every automobile sale is contributed to a marketing fund. The GM dealers, who form dealer

48 groups according to region, pool this marketing money within their dealer groups. GM’s corporate

office also matches a percentage of this funding with its own contributions. The dealer groups use

this pooled money to purchase national advertising. Traditionally they have used the large media buying service Starcom MediaVest. GM’s commitment to Starcom MediaVest has been so large

that Starcom formed a separate division in 2000, called GM Planworks, just to handle GM business.

Until recently, this consolidation of purchasing power has been GM’s strategy. CW 1 knew of this

strategy because CBS has contracts with Planworks and CW 1 worked with the Planworks executives

to do various promotional deals.

Confidential Witness No. 2

106. Confidential Witness No. 2 (“CW2”) worked for CBS Outdoor in Los Angeles from

December 2006 to January 2008. As a regional Vice President for Business Development, CW2

reported to Senior Vice President for Business Development Brigg Hyland. Hyland reported to

Executive Vice President Lou Formisano and Executive Vice President Phil Stimpson. Formisano

managed the team responsible for traditional outdoor properties such as billboards and “tall walls”

(building exteriors), and Stimpson handled the team for “display” properties, such as buses,

subways, trams, transit shelters, phone kiosks, and mall kiosks. Hyland, Formisano, and Stimpson

were based in New York. There were three other regional Vice Presidents for Business

Development, one in San Francisco, one in Chicago, and one in New York. Each regional Vice

President reported to Hyland. The regional Vice Presidents were responsible for developing new

relationships with national advertisers and handing them off to the Account Executives in their

respective regions.

107. CW2 had three direct reports, Account Executive Lorena Hernandez, Account

Executive Matt Gomez, and Account Executive Rafael Cardona.

49 108. CW2 received his 2007 sales target of $6.8 million from Senior Vice President

Hyland. CW2 believed that Hyland received this number from the two Executive Vice Presidents

she reported to, Formisano and Stimpson. The sales target was divided into quarterly amounts.

CW2 met his quarterly targets in the first and second quarters of 2007, but he did not hit his targets

in the third and fourth quarters. CW2 did not recall specific amounts or percentages, but stated that

each quarter was worse than the last. The fourth quarter is usually his best quarter, and it was his

worst quarter. “You know you’re in trouble when what is supposed to be your best quarter is your

worst quarter.” For all of 2007, CW2 said he was off his target by 12%. CW2 also said he brought

in $6.2 million for the year.

109. Outdoor revenues decreased continually throughout 2007 for what CW2 believed

were two reasons. One, there was a decrease in overall spending because the economy was beginning to slow and advertisers were spending less. Two, many advertisers have ended their

relationships with smaller media buying services and have given their business to large media buying services.

110. CW2, Brigg, and the other regional Vice Presidents for Business Development had

weekly calls or even semi-weekly calls to discuss the status of their current accounts and to report

their numbers. Brigg, Stimpson, and Formisano also had access through CBS Outdoor’s proprietary

software system to all current sales data, revenue, and available inventory.

111. Because each quarter in 2007 was worse than the last, CW2 said that the “writing was

on the wall” by the end of 2007 regarding Outdoor’s financial troubles. CW2 was laid off in January

2008.

50 Confidential Witness No. 3

112. Confidential Witness No. 3 (“CW3”) worked at CBS from March 2003 to February

2007. CW3 started as an Assistant Controller for three CBS radio stations in the Chicago metropolitan area. CW3 initially reported to Controller Pacita Lopez. In December 2003, Lopez retired and CW3 was promoted to Controller.

113. CBS owned six radio stations in the Chicago area. The three stations that CW3 worked on were WCKG, WUSN, and WJMK. As Controller, CW3 reported to the Market

Controller, who oversaw all the stations in the Chicago market. Initially, the Market Controller was

Ron Suber. In 2006, Suber stepped down to the role of Controller 15, and Paul McGovern became the

Market Controller. The Market Controller reported to the corporate Controller, Stacey Benson.

CW3 did not recall the names of any corporate accounting employees other than Benson. CW3 also worked closely with the General Managers for the stations she worked on. General Manager for

WCKG was Terry Harten and General Manager for WUSN and WJMK was Dave Robbins. The

General Managers reported to Market Manager Rod Zimmerman. McClaurin occasionally communicated with Controller Judy Tarmino who worked on several other CBS stations in the

Chicago market.

114. During CW3’s tenure, revenues for each station decreased each year. CW3’s last full year, 2006, was the worst year. CW3 recalled the following budget figures: of the three stations

CW3 worked on, WCKG experienced the worst decline. In 2005, WCKG had approximately $5 million net revenue. In 2006, WCKG had negative net revenue. Of the three stations CW3 worked on, WUSN performed best, and its 2006 net revenues were 20% and 30% down from 2005. In 2006,

15 Suber was the Controller of several CBS radio stations in the Chicago market and had moved up to the role of Market Controller. In 2006, Suber assumed the role of Controller again.

51 “everybody was scrambling to make budget” because “the economy was tanking.” CW3 also believed that satellite radio had a “big impact,” as many listeners migrated from traditional radio to

satellite radio services such as XM and Sirius.

115. Between October 2006 and February 2007, CW3 estimated that between twenty and

thirty percent of the employees of the five stations were laid off. One such employee was Controller

Tarmino. The layoffs occurred because the stations were not making their budgets and they had to

cut expenses. In 2006, CW3 recalled that some, and possibly all, of the five stations did not make

their budgets. In 2007, CW3 believed that none of the three stations made their budgets. If the

stations did not make their budgets, they had to cut expenses. This could include layoffs or other

cuts.

Confidential Witness No. 4

116. Confidential Witness No. 4 (“CW4”) began at CBS Outdoor in 2003 and was laid off

in June 2008. CW4 started the Latino Division for the Outdoor segment. CW4 focused specifically

on Latino sales throughout the United States, and for a time, Puerto Rico. CW4 reported to

President of CBS Outdoor Dana Wells. Wells reported to CBS Outdoor Chief Executive Officer

Wally Kelly. CW4 had two direct reports, Account Executive Rafael Cardona, who was based in

Los Angeles, and Account Executive Alvin Hysong. Cardona, based in Los Angeles, and Hysong, based in New York, both focused exclusively on Latino sales. Any salesperson could also make

sales focused on the Latino market. In addition to making his own sales to advertisers and

advertising agencies, CW4 worked with Account Executives, Sales Managers, Business

Development executives, Vice Presidents, and other salespersons across the country to assist them

with strategy and information for the Latino market. In these capacities, CW4 frequently traveled to

the various markets, including Los Angeles, Chicago, Houston, Miami, and New York.

52 117. As early as late 2007, there was “a lot of concern about the revenue outlook for

Outdoor” during weekly sales meetings. CW4 attended any weekly sales meetings that coincided with his visits to different markets, so he had the opportunity to be in sales meetings across the country. Based on his visits to the various markets, CW4 stated that there was a “slowing of momentum” at the end of 2007.

118. At least every other month, and sometimes more frequently, there was a conference call between Chief Executive Officer Kelly, President Wells, CW6, Regional Vice Presidents

George Gross, Tom Carroll, Art Martinez, Dave Wood, and Ron Ipjian, the General Managers, and the Sales Managers. There was no regularly-set time of day or day of the week for the calls.

Occasionally members of management from Operations and Real Estate were also on the calls, but usually the calls were limited to management-level sales personnel. Approximately 40 people were on these calls.

119. In late 2007 or early 2008, Kelly began to express serious concern about Outdoor revenues during these conference calls. Kelly expressed this concern by “ranting and raving” about the decreasing revenue numbers. By mid-2008, CW6 estimated that the Outdoor segment in general was off its targets by approximately ten percent. CW6 based this estimate on his recall of the discussions between Kelly and the General Managers during the conference calls. CW6 acknowledged that “Kelly has always been a ranter and a raver,” but stated that Kelly’s expressed concern about the numbers increased over the first six months of 2008, as “by and large it was a much more challenging year,” and revenues were decreasing. “[Kelly] was definitely frustrated with the trending,” and he would call out the markets that were struggling. CW6 recalled the following markets that Kelly named that were struggling: Dallas, New York, Phoenix, Detroit, Chicago, and

Los Angeles.

53 120. Sometime between January and June 2008, Kelly stated on one of these conference calls that he “had to go see Defendants Les Moonves and Fred Reynolds” to report the revenue numbers to them, and that Moonves and Reynolds would not be pleased about the numbers. Over the course of these conference calls during late 2007 and 2008, Kelly mentioned several times that he had to report the revenue numbers to CBS Corporation Chief Financial Officer/Defendant Fredric

Reynolds. On one of these calls before June 2008, Kelly also mentioned that he had reported revenue numbers to Reynolds and corporate was not pleased with the numbers.

Loss Causation

121. A disclosure of the impairment of certain assets is an indication to investors that the originally stated values for those assets are unlikely to be recovered in the future. As such an impairment charge signals a permanent loss in value. Additionally, the disclosure of an impairment of assets can lead to concerns with respect to the credit-worthiness of the company. Thus, disclosures of the impairment of assets, to the extent that they are unanticipated or substantially greater than expected, will result in shareholder losses.

122. While some portion of the impairment charges may have been anticipated by news of declining advertising revenues, the magnitude of the impairment charges first disclosed preliminarily on October 10, 2008 and then confirmed in the later disclosure on October 30, 2008 and in the Form

10-Q filed subsequently for the quarter was substantially greater than expected. In total, CBS disclosed a goodwill impairment charge of $10.990 billion in the Third Quarter of 2008. [CBS Form

10-Q for the Quarter Ended September 30, 2008, pp. 10 and 35] This represented a 55.3% reduction in the remaining goodwill and a pre-tax per share charge of $16.3 8 per share on approximately 670.9 million weighted average shares in the Third Quarter of 2008. [CBS Form 10-Q for the Quarter

Ended September 30, 2008, p. 7] CBS, furthermore, disclosed the impairment of the values of

54 certain FCC licenses of approximately $3.12 billion, or approximately $4.65 pre-tax per weighted

average share. [CBS Form 10-Q for the Quarter Ended September 30, 2008, pp. 7, 10 and 35].

This represented a reduction in the value of FCC licenses of approximately 34%. In terms of

shareholders’ equity, shareholders’ equity was reduced by 58% from $21.927 billion as of June 30,

2008 to $9.174 billion as of September 30, 2008 entirely as a result of the impairment charges

reported in the Third Quarter of 2008. [CBS Form 10-Q for the Quarter Ended June 30, 2008, p. 4

and CBS Form 10-Q for the Quarter Ended September 30, 2008, pp. 3-4, 10 and 35].

123. Given the magnitude of the impairment charges recognized by CBS in the Third

Quarter of 2008 it is simply not plausible that those impairments arose within the 70 days following

the filing of CBS’s Form 10-Q for the Quarter Ended June 30, 2008. Indeed, a significant portion of

those assets had to have become impaired by the beginning of the Class Period and further impaired by June 30, 2008. A Wachovia analyst report issued on October 13, 2008 entitled “CBS Reducing

Ests – Valuation is starting to look interesting CBS IS Cheap But Does The Market Care?” stated in

this regard,

“Interim Impairment Test Leads To $14B Writedown”

CBS also announced on Friday that it is currently performing an interim impairment test on its existing goodwill, other indefinite lived intangible asset balances and investments. Based on preliminary results, CBS expects to incur a non-cash impairment charge of roughly $14 billion in Q3. We believe that the write-down is comprised primarily of radio and television assets, with a small portion allocated to outdoor.”

This $14 billion is by no means insignificant. To put this number in perspective, as of June 30th, CBS recorded $20 billion of goodwill, $9 billion of FCC licenses and another $2 billion of gross intangible assets.

The $14 billion write-down represented 45% of CBS’ gross intangible assets and 34% of CBS’ total assets ($41 billion) as of June 30th.

55 124. Similarly, a Deutsche Bank analyst report (“CBS – 4Q falls Apart’) on October 13,

2008 stated that CBS recognized a “$14b impairment charge as a result of ‘recent adverse market conditions’, out of $30b of goodwill/intangibles, implying prior deal values have been cut in half,” and a Natixis Bleichroeder analyst report entitled “CBS: 4Q Advertising Falls out of Bed; Lowering

Estimates and Target” stated in this regard that “CBS is also booking a $14 billion impairment charge (almost half of the company’s goodwill and intangibles at June 30), which we believe is related to its Broadcast stations, knocking an estimated $21 per share off of the company’s book value to $12 per share.”

125. The reaction of investors to the announcement on Friday October 10, 2008 was swift.

CBS’s share price fell from $10.14 on October 9 to $8.10 on October 10, 2008, a decline of approximately 20.1 %. The three companies-News Corporation (NWSA), Time Warner Inc. (TWX) and The Walt Disney Company (DIS)-had the closest correlations between their share price movements and the movements of CBS and were considered to be most comparable. Those three companies experienced an average decline in the respective share prices of 6.6% on October 10,

2008, partly in sympathy with CBS’s disclosure. Thus, CBS’s share price fell 14.5% relative to, or in excess of, the declines reported by the three peers. Similarly, CBS was a member of the Standard

& Poor’s 500 Consumer Discretionary Index (SP500 COND) and its stock price returns were significantly correlated with and explained by that index. On October 10, 2008, the SP 500 COND index lost only 1.67%. Therefore, relative to the SP 500 COND index, CBS’s shares lost 18.8% more than would have been expected by that index.

126. Furthermore, relative losses were realized subsequent to October 10, 2008. Even though CBS’s share price increased on Monday March 13, 2008 relative to the three peer companies

CBS’s shares lost 7.5% of their value. Similarly, CBS’s shares fell 10.5% on October 22, 2008 from

56 $9.04 on October 21 to $8.09 on October 22, 2008 (8.1% decline relative to the three peers) on

concerns that the share price decline may have implications for Sumner Redstone’s beneficial

holdings of CBS shares, Additional significant CBS share price declines related to the financial

implications of the impairment charges were observed on November 12 ($7.66 to $6.07 per share or

20.8% absolute decline, 13.1 % decline relative to the three peers) and November 19 and 20 ($6.07

to $4.51 per share or cumulative absolute decline of 25.7%., 13.0% decline relative to the three peers) in 2008. Later, on March 3 and March 30, 2009, the effect of the impairments in reducing the

credit-worthiness of CBS reduced CBS’s financial flexibility and prompted fears of a credit rating

downgrade. CBS’s share price fell from $3.99 on March 2 to $3.60 on March 3, 2009, an absolute

decline of 9.8% and a decline relative to the three peer companies of 10.2%. CBS’s share price fell

from $4.61 on March 29 to $3.79 on March 30, 2009, an absolute decline of 17.8% and a decline

relative to the three peer companies of 14.0%.

127. While there were a number of positive and negative events following the first

corrective disclosure on October 10, 2008, the relative decline in CBS’s share price and the resulting

investor losses remained and even increased over time as a result of news directly related to and a

foreseeable consequence of the disclosed asset impairments. The chart below illustrates both the

close relationship between the movements in the selected market and peer companies index and the

movements on CBS’s share price over time and the significant and permanent gap that developed on between the returns generated by CBS’s share relative to market and peer shares from October 10,

2008 onward.

CBS Share Return Relative to Market Index and Primary Peers (NWSA, DIS and TWX) September to December 2008

18.00 17.00 16.00 ' " L, ^► _^ ;!, 15.00 r ^^ 9^ CBS 14.00 '^^► e 13.00 SP 500 eCD 12.00 1 —^ COND W v., 11.00 .^_.. Alm. AA m 10.00 NWSA 1 8.00 - ^ 8.00 _ PEERS 7.00 70110108 (NWSA, DIS, I° 6.00 TWX) W y 5.00 4.00 3.00 2.00 1.00 - 9\^oe ^\ryoo^ ryoo^ \ry°o^ e 0 \e \,p ryoo^ ryoo^ 0o^ ryoo^ ,p e e 0o^ e 0 1P ^off 1S, 1ZP -1\^^1^ 4 4 a a 1 oZp 11* -V 0 4 e\,r a, 10 11P Date

128. The above chart illustrates the substantial and significant losses relative from the

corrective disclosure on October 10, 2008 and demonstrates that those losses were permanent

relative to the returns on the shares of CBS’s closest peers and returns realized by a market index

appropriate for CBS’s shares.

Applicability of Presumption of Reliance: Fraud On the Market Doctrine

129. At all relevant times, the market for CBS common stock was an efficient market for

the following reasons, among others:

(a) CBS stock met the requirements for listing, and was listed and actively traded

on the NYSE, a highly efficient and automated market;

(b) As a regulated issuer, CBS filed periodic public reports with the SEC and the

NYSE;

58 (c) CBS regularly communicated with public investors via established market communication mechanisms, including through regular disseminations of press releases on the national circuits of major newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services; and

(d) CBS was followed by several securities analysts employed by major brokerage firms who wrote reports which were distributed to the sales force and certain customers of their respective brokerage firms. Each of these reports was publicly available and entered the public marketplace.

130. As a result of the foregoing, the market for CBS common stock promptly digested

current information regarding CBS from all publicly available sources and reflected such

information in CBS’s stock price. Under these circumstances, all purchasers of CBS common stock

during the Class Period suffered similar injury through their purchase of CBS common stock at

artificially inflated prices and a presumption of reliance applies.

No Safe Harbor

131. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as “forward-looking statements”

when made. To the extent there were any forward-looking statements, there were no meaningful

cautionary statements identifying important factors that could cause actual results to differ materially

from those in the purportedly forward-looking statements. Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are

liable for those false forward-looking statements because at the time each of those forward-looking

statements was made, the particular speaker knew that the particular forward-looking statement was

59 false, and/or the forward-looking statement was authorized and/or approved by an executive officer of CBS who knew that those statements were false when made.

COUNT I

Violation of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder Against All Defendants

132. Plaintiffs repeat and reallege each and every allegation contained above as if fully set forth herein.

133. During the Class Period, Defendants disseminated or approved the materially false and misleading statements specified above, which they knew or deliberately disregarded were misleading in that they contained misrepresentations and failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

134. Defendants: (a) employed devices, schemes, and artifices to defraud; (b) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and (c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company’s common stock during the Class Period.

135. Plaintiffs and the Class have suffered damages in that, in reliance on the integrity of the market, they paid artificially inflated prices for CBS common stock. Plaintiffs and the Class would not have purchased CBS common stock at the prices they paid, or at all, if they had been aware that the market prices had been artificially and falsely inflated by Defendants’ misleading statements.

136. As a direct and proximate result of these Defendants’ wrongful conduct, Plaintiffs and the other members of the Class suffered damages in connection with their purchases of CBS common stock during the Class Period. 60 COUNT II

Violation of Section 20(a) of the Exchange Act Against the Individual Defendants

137. Plaintiffs repeat and reallege each and every allegation contained above as if fully set

forth herein.

138. The Individual Defendants acted as controlling persons of CBS within the meaning of

Section 20(a) of the Exchange Act as alleged herein. By reason of their positions as officers and/or

directors of CBS, and their ownership of CBS common stock, the Individual Defendants had the power and authority to cause CBS to engage in the wrongful conduct complained of herein. By

reason of such conduct, the Individual Defendants are liable pursuant to Section 20(a) of the

Exchange Act.

WHEREFORE, Plaintiffs pray for relief and judgment, as follows:

A. Determining that this action is a proper class action, designating Plaintiffs as Lead

Plaintiffs and certifying Plaintiffs as Class representatives under Rule 23 of the Federal Rules of

Civil Procedure and Plaintiffs’ counsel as Lead Counsel;

B. Awarding compensatory damages in favor of Plaintiffs and the other Class members

against all Defendants, jointly and severally, for all damages sustained as a result of Defendants’

wrongdoing, in an amount to be proven at trial, including interest thereon;

C. Awarding Plaintiffs and the Class their reasonable costs and expenses incurred in this

action, including counsel fees and expert fees; and

D. Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiffs hereby demand a trial by jury.

61 DATED: May 4, 2009 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP SAMUEL H. RUDMAN DAVID A. ROSENFELD MARIO ALBA, JR.

/(4 SAMUEL H. RUDMAN

58 South Service Road, Suite 200 Melville, NY 11747 Telephone: 631/367-7100 631/367-1173 (fax)

Liaison Counsel for Plaintiff

CARNEY WILLIAMS BATES BOZEMAN & PULLIAM, PLLC J. ALLEN CARNEY CURTIS L. BOWMAN MARCUS N. BOZEMAN NDALL K. PULLIAM P.O. Box 25438 Little Rock, AR 72221-5438 Telephone: 501/312-8500 501/312-8505 (fax)

Lead Counsel for Plaintiff

KIRBY McINERNEY, LLP 825 Third Avenue New York, NY 10022 Telephone: 212/371-6600 212/751-2540 (fax)

Additional Plaintiffs' Counsel

62 CERTIFICATE OF SERVICE

I, Samuel H. Rudman, hereby certify that on May 4, 2009, I caused a true and

correct copy of the attached:

Amended Complaint for Violations of The Federal Securities Laws to be: (i) filed by hand with the Clerk of the Court; and (ii) served by first-class mail to all counsel on the attached service list.

_ SAMUEL H. RUDMAN CBS CORP. Service List - 5/4/2009 (08-0248) Page 1 of 1 Counsel For Defendant(s) James W. Quinn Greg A. Danilow Yehudah L. Buchweitz Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119 212/310-8000 212/310-8007(Fax)

Counsel For Plaintiff(s) J. Allen Carney Samuel H. Rudman Curtis L. Bowman David A. Rosenfeld Marcus N. Bozeman Mario A!.oa, Carney Williams Bates Bozeman & Pulliam, Coughlin Stoia Geller Rudman & Robbins LLP PLLC 58 South Service Road, Suite 200 P.O. Box 25438 Melville, NY 11747 Little Rock, AR 72221-5438 631/367-7100 501/312-8500 631/367-1173(Fax) 501/312-8505(Fax)