ViacomCBS Annual Report 2021 Form 10-K (NASDAQ:VIACA) Published: February 24th, 2021 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended December 31, 2020 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ☐ OF 1934 For the transition period from to Commission File Number 001-09553 ViacomCBS Inc. (Exact name of registrant as specified in its charter) Delaware 04-2949533 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) No.) 1515 Broadway New York, New York 10036 (212) 258-6000 (Address, including zip code, and telephone numbers, including area code, of registrant’s principal executive offices) Securities Registered Pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Trading Symbols Which Registered Class A Common Stock, $0.001 par value VIACA The Nasdaq Stock Market LLC Class B Common Stock, $0.001 par value VIAC The Nasdaq Stock Market LLC Securities Registered Pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act of 1933). Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒ As of June 30, 2020, which was the last business day of the registrant’s most recently completed second fiscal quarter, the market value of the shares of the registrant’s Class A Common Stock, $0.001 par value (“Class A Common Stock”), held by non-affiliates was approximately $275,618,509 (based upon the closing price of $25.60 per share as reported by The Nasdaq Stock Market LLC on that date) and the market value of the shares of the registrant’s Class B Common Stock, $0.001 par value (“Class B Common Stock”), held by non-affiliates was approximately $12,618,241,490 (based upon the closing price of $23.32 per share as reported by The Nasdaq Stock Market LLC on that date); and the aggregate market value of the shares of both Class A Common Stock and Class B Common Stock held by non-affiliates was $12,893,859,999. As of February 19, 2021, 52,066,317 shares of Class A Common Stock and 567,539,816 shares of Class B Common Stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of ViacomCBS Inc.’s Notice of 2021 Annual Meeting of Stockholders and Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934 (Part III). VIACOMCBS INC. TABLE OF CONTENTS Page PART I Item 1. Business. I-1 Item 1A. Risk Factors. I-19 Item 1B. Unresolved Staff Comments. I-31 Item 2. Properties. I-31 Item 3. Legal Proceedings. I-32 Item 4. Mine Safety Disclosures. I-32 PART II Item 5. Market for ViacomCBS Inc.’s Common Equity, Related Stockholder Matters and Purchases of II-1 Equity Securities. Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition. II-3 Item 8. Financial Statements and Supplementary Data. II-51 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. II-118 Item 9A. Controls and Procedures. II-118 Item 9B. Other Information. II-118 PART III Item 10. Directors, Executive Officers and Corporate Governance. III-1 Item 11. Executive Compensation. III-1 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder III-1 Matters. Item 13. Certain Relationships and Related Transactions, and Director Independence. III-1 Item 14. Principal Accounting Fees and Services. III-1 PART IV Item 15. Exhibits, Financial Statement Schedules. IV-1 Item 16. Form 10-K Summary. IV-1 Signatures. PART I Item 1. Business. OVERVIEW ViacomCBS Inc. is a leading global media and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, our portfolio includes CBS, SHOWTIME, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Smithsonian Channel, CBS All Access (soon to be rebranded Paramount+) and Pluto TV, among others. We deliver the largest share of television audience in the United States (“U.S.”) and one of the industry’s most extensive libraries of television and film titles. In addition to offering innovative streaming services and digital video products, we provide powerful capabilities in production, distribution and advertising solutions. Through the synergistic combination of our studios, networks and streaming businesses, we strategically focus on creating value in three ways. First, we maximize the power of our content by leveraging our extensive intellectual property portfolio across our Company and by focusing on areas with growth potential. Second, we maximize value from our biggest lines of revenue: advertising, affiliate and content licensing. Third, we are accelerating our momentum in streaming by expanding our differentiated ecosystem of free, pay and premium streaming services to capitalize on the global opportunity in streaming. Ahead of the rebranding of CBS All Access as Paramount+, which is scheduled for March 4, 2021, we recently announced an integrated global streaming organization under new leadership to ensure a more holistic approach across our streaming services, more closely align our streaming initiatives globally and enhance our ability to leverage our content portfolio. As part of our ongoing integration strategy since the Merger (as defined below), in early 2020 we conducted a strategic review of our assets to identify and ultimately divest assets that do not fit within our focus on studios, networks and streaming. In connection with that review, in October 2020 we sold CNET Media Group and in November 2020 announced that we entered into an agreement to sell Simon & Schuster, which is expected to close in 2021, subject to customary closing conditions, including regulatory approvals. As a result, Simon & Schuster, which previously comprised our Publishing segment (“Publishing”), is presented as a discontinued operation in our consolidated financial statements for all periods presented in this Annual Report on Form 10-K. We operate through the following segments: • TV Entertainment. Our TV Entertainment segment (“TV Entertainment”) operates the CBS Television Network, our domestic broadcast network; CBS Studios and CBS Media Ventures, our television production and syndication operations; our CBS- branded streaming services, including CBS All Access/Paramount+; CBS Sports Network, our cable network focused on college athletics and other sports; and CBS Television Stations, our owned broadcast television stations. TV Entertainment accounted for approximately 42% of our consolidated revenues in 2020. • Cable Networks. Our Cable Networks segment (“Cable Networks”) operates a portfolio of streaming services, including Pluto TV, a leading free advertising-supported streaming television (“FAST”) service in the U.S., and Showtime Networks’ premium subscription streaming service (“SHOWTIME OTT”); premium subscription cable networks, including SHOWTIME; basic cable networks, including BET, Nickelodeon, MTV, Comedy Central, Paramount Network and Smithsonian Channel; international extensions of these brands; and our international free-to-air broadcast networks such as Network 10, Channel 5 and Telefe. Cable Networks accounted for approximately 50% of our consolidated revenues in 2020. • Filmed Entertainment. Our Filmed Entertainment segment (“Filmed Entertainment”) operates Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television Studios, and also includes Miramax, a consolidated joint venture. Filmed Entertainment accounted for approximately 10% of our consolidated revenues in 2020. We were organized as a Delaware corporation in 1986. On December 4, 2019, Viacom Inc. (“Viacom”) merged with and into CBS Corporation (“CBS”), with CBS continuing as the surviving company (the “Merger”), pursuant to an Agreement and Plan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”).