EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

PRESS RELEASE   LOGO

 

 

Investor Contacts:       Press Contacts:  

Marlene S. Dooner

Jane B. Kearns

Michael A. Kelman

 

(215) 286-7392

(215) 286-4794

(215) 286-3035

   

D’Arcy Rudnay

John Demming

 

(215) 286-8582

(215) 286-8011

COMCAST REPORTS SECOND QUARTER 2010 RESULTS

Revenue Increased 6% and Operating Income Increased 11% Reflecting

Focus on Profitable Growth

Operating Cash Flow up 6% and Free Cash Flow up 16%

Returned $567 Million to Shareholders through Dividends

and Share Repurchases

Philadelphia, PA – July 28, 2010 …Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter ended June 30, 2010.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, “We delivered healthy operating and financial results in the second quarter, reflecting overall customer growth, double-digit increases in high-speed internet and voice revenue, an improving advertising market and continued momentum in Business Services. We are very focused on profitable growth. At the same time, we continue to make significant progress deploying All-Digital and DOCSIS 3.0 to enhance our superior products, strengthen our competitive position and build long term value for our shareholders.”

Consolidated Financial Results

Revenue increased 6.1% in the second quarter of 2010 to $9.5 billion, while Operating Cash Flow increased 5.7% to $3.7 billion and Operating Income increased 10.9% to $2.1 billion. This growth was due to solid operating results in the Cable and Programming segments, partially offset by $22 million of NBC Universal-related transaction costs. Excluding these costs, Operating Cash Flow grew 6.3%.

For the six months ended June 30, 2010, revenue increased 4.9% to $18.7 billion, Operating Cash Flow increased 4.6% to $7.3 billion, and Operating Income increased 8.9% to $4.0 billion, all compared to the same time period in 2009. Excluding $36 million of NBC Universal-related transaction costs, Operating Cash Flow grew 5.1%.

 

    ($ in millions)   

2nd Quarter

    

Year to Date

 
        

2009

  

2010

  

Growth

    

2009

  

2010

  

Growth

 
 

Revenue

                   
 

Cable

   $ 8,518     $ 8,949     5.1%       $ 16,901     $ 17,626     4.3%    
 

Programming

     384       454     18.1%         745       839     12.6%   
 

Corporate & Other

     76       122     62.8%         198       262     32.8%   
                   
 

Total Consolidated Revenue

   $ 8,978     $ 9,525     6.1%       $ 17,844     $ 18,727     4.9%   
 

Operating Cash Flow (OCF)

                   
 

Cable

   $ 3,499     $ 3,698     5.7%       $ 6,903     $ 7,240     4.9%    
 

Programming

     113       152     34.4%         225       273     21.5%    
 

Corporate & Other

     (77)      (113)    (47.2%)        (149)      (211)    (42.5%)   
                   
 

Total Consolidated OCF

   $ 3,535     $ 3,737     5.7%       $ 6,979     $ 7,302     4.6%    
                     

For additional detail on revenue and operating expenses, customer metrics, and capital expenditures, please refer to the trending schedules on Comcast’s Investor Relations website at www.cmcsa.com or www.cmcsk.com.


Earnings per Share1 (EPS) for the quarter ended June 30, 2010 was $0.31, a 6.1% decrease from the $0.33 reported in the second quarter of 2009, reflecting growth in Consolidated Operating Cash Flow, offset primarily by costs related to the NBC Universal transaction and income tax benefits included in last year’s results. Excluding these items, second quarter 2010 EPS would have grown 13.8% over the comparable period in 2009.

   

NBC Universal transaction costs: In addition to the $22 million of operating expenses, second quarter 2010 EPS includes $37 million of financing and other costs related to the transaction, resulting in total second quarter transaction costs of $59 million, or $36 million net of tax ($0.02 per share).

   

Income tax benefits: Second quarter 2009 EPS includes the recognition of income tax benefits of $137 million ($0.04 per share).

EPS for the six months ended June 30, 2010 was $0.62, an increase of 3.3% compared to the prior year. Excluding transaction-related costs and income tax benefits (see below), EPS for the six months ended June 30, 2010 would have grown 18.5% over the comparable period in 2009.

   

NBC Universal transaction costs: In addition to the $36 million of operating expenses, year-to-date 2010 EPS includes $52 million of financing and other costs related to the transaction, resulting in total year-to-date transaction costs of $88 million, or $53 million net of tax ($0.02 per share).

   

Income tax benefits: Year-to-date 2009 EPS includes the recognition of income tax benefits of $185 million ($0.06 per share).

Capital Expenditures for the second quarter of 2010 increased 1.5% to $1.1 billion, or 11.9% of total revenue, reflecting increased investments in Comcast Business Services and product enhancement initiatives. For the six months ended June 30, 2010, capital expenditures decreased 9.6% to $2.1 billion, or 11.0% of total revenue.

Free Cash Flow (excluding any impact from the Economic Stimulus packages) increased 15.8% to $1.4 billion in the second quarter of 2010 from $1.2 billion in the second quarter of 2009. Free Cash Flow (FCF) per Share increased 20.0% to $0.48 per share. The increase in Free Cash Flow reflects growth in Consolidated Operating Cash Flow, partially offset by higher cash taxes and modestly higher capital expenditures. Free Cash Flow for the six months ended June 30, 2010 totaled $3.2 billion, a 27.8% increase as compared to $2.5 billion in 2009.

 

    ($ in millions)   

2nd Quarter

    

Year to Date

 
        

2009

  

2010

  

Growth

    

2009

  

2010

  

Growth

 
 

Net Cash Provided by Operating Activities

   $ 2,601     $ 2,429     (6.6%)      $ 5,113     $ 5,332     4.3%     
 

Capital Expenditures

     (1,121)      (1,138)    1.5%         (2,281)      (2,063)    (9.6%)   
 

Cash Paid for Capitalized Software

     (83)      (95)    14.5%         (188)      (175)    (6.9%)   
 

Cash Paid for Other Intangible Assets

     (25)      (25)    0.0%         (53)      (62)    17.0%    
 

Adjustments for Payment of Tax on Nonoperating Items

             66.7%         150       31     (79.3%)   
                   
 

FCF (Including Economic Stimulus Packages)

   $ 1,375     $ 1,176     (14.5%)      $ 2,741     $ 3,063     11.7%    
 

Impact from Economic Stimulus Packages

     (205)      179     NM         (205)      179     NM    
                   
 

Free Cash Flow

   $ 1,170     $ 1,355     15.8%       $ 2,536     $ 3,242     27.8%    
                     

Note: The definition of Free Cash Flow remains unchanged and specifically excludes any impact from the 2008 or 2009 Economic Stimulus packages.

Cable Segment Results

For the quarter ended June 30, 2010, Cable segment revenue increased 5.1% to $8.9 billion compared to $8.5 billion in the second quarter of 2009. This increase reflects double-digit growth in High-Speed Internet (up 10%), Comcast Digital Voice (up 14%), Comcast Business Services (up 54%) and advertising revenue (up 23%). Reflecting an increasing number of residential customers taking multiple products, rate increases, and a higher contribution from Comcast Business Services, the monthly average total revenue per video customer increased 8.0% to $127.78.

For the six months ended June 30, 2010, revenue from the Cable segment increased 4.3% to $17.6 billion compared to $16.9 billion in 2009.

 

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Operating Cash Flow for the second quarter of 2010 increased 5.7% to $3.7 billion compared to $3.5 billion in the second quarter of 2009. Operating Cash Flow margin was 41.3% in the second quarter of 2010 compared to 41.1% in the second quarter of 2009. These results reflect lower technical labor and customer service expenses, partially offset by increases in video programming and marketing expenses.

For the six months ended June 30, 2010, Operating Cash Flow from the Cable segment increased 4.9% to $7.2 billion compared to $6.9 billion in 2009. Year-to-date Operating Cash Flow margin was 41.1%, a slight increase from the 40.8% reported in the first six months of 2009.

Customers. As of June 30, 2010, Comcast’s Video, High-Speed Internet and Comcast Digital Voice customers totaled 47.8 million, an increase of 3.4% over the prior year.

 

    (in thousands)   

Customers

      

Net Adds

 
        

2Q09

  

2Q10

  

Growth

      

2Q10

  

YTD

 
 

Video Customers

   23,891    23,212    (2.8%)          (265)    (347)    
 

High-Speed Internet Customers

   15,322    16,448    7.3%          118     517    
 

Voice Customers

   7,004    8,125    16.0%          230     503    
                 
 

Combined Video, HSI and Voice Customers

   46,217    47,785    3.4%          83     673    
 

Digital Video Customers

   17,542    19,237    9.7%          394     821    
                 
 

Total Revenue Generating Units

   63,760    67,022    5.1%          477     1,494    
                  

Programming Segment Results

The Programming segment reported second quarter 2010 revenue of $454 million, an 18.1% increase, while Operating Cash Flow increased 34.4% to $152 million. These results reflect the impact of a strong advertising market across all networks and ratings strength at E!, VERSUS and G4.

For the six months ended June 30, 2010, Programming segment revenue increased 12.6% to $839 million compared to the same time period in 2009. Operating Cash Flow increased 21.5% to $273 million compared to the same period last year.

Corporate and Other

Corporate and Other includes corporate overhead, Comcast Interactive Media (CIM), Comcast-Spectacor, and other operations and eliminations between Comcast’s businesses. For the quarter ended June 30, 2010, Corporate and Other reported revenue of $122 million, a 62.8% increase over the $76 million reported in the second quarter of 2009, reflecting additional NHL playoff games at Comcast-Spectacor and strong advertising revenue growth at CIM. The Operating Cash Flow loss for the second quarter of 2010 was $113 million compared to a loss of $77 million for the same time period in 2009. This quarter’s Operating Cash Flow loss includes approximately $22 million of expenses related to the NBC Universal transaction.

For the six months ended June 30, 2010, Corporate and Other revenue increased 32.8% to $262 million from the $198 million reported in the first six months of 2009. The Operating Cash Flow loss was $211 million compared to a loss of $149 million for the same time period in 2009. Year-to-date Operating Cash Flow loss includes $36 million of expenses related to the NBC Universal transaction.

Share Repurchase and Dividend

During the second quarter of 2010, Comcast repurchased 17.3 million of its common shares for $300 million. Year-to-date, Comcast has repurchased 36.4 million of its common shares for $600 million. As of June 30, 2010, Comcast had approximately $2.7 billion of availability remaining under its share repurchase authorization.

During the second quarter of 2010, Comcast paid cash dividends totaling $267 million.

 

3


Notes:

 

1

Earnings per share amounts are presented on a diluted basis.

All percentages are calculated on whole numbers. Minor differences may exist due to rounding.

###

Conference Call Information

Comcast Corporation will host a conference call with the financial community today, July 28, 2010 at 8:30 a.m. Eastern Time (ET). The conference call will be broadcast live on Comcast’s Investor Relations website at www.cmcsa.com or www.cmcsk.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 82686142. A replay of the call will be available starting at 12:30 p.m. ET on July 28, 2010, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Monday, August 2, 2010 at midnight ET, please dial (800) 642-1687 and enter passcode number 82686142. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to email alerts.

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Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual events or our actual results to differ materially from those expressed in any such forward-looking statements. Readers are directed to Comcast’s periodic and other reports filed with the Securities and Exchange Commission (SEC) for a description of such risks and uncertainties. We undertake no obligation to update any forward-looking statements.

###

Non-GAAP Financial Measures

In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP). Certain of these measures are considered “non-GAAP financial measures” under the SEC regulations; those rules require the supplemental explanations and reconciliations that are in Comcast’s Form 8-K (Quarterly Earnings Release) furnished to the SEC.

###

About Comcast Corporation

Comcast Corporation (Nasdaq: CMCSA, CMCSK) (www.comcast.com) is one of the nation’s leading providers of entertainment, information and communication products and services. With 23.2 million video customers, 16.4 million high-speed Internet customers, and 8.1 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content.

Comcast’s content networks and investments include E! Entertainment Television, Style Network, Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV One, 11 regional sports networks operated by Comcast Sports Group and Comcast Interactive Media, which develops and operates Comcast’s Internet businesses, including Comcast.net (www.comcast.net). Comcast also has a majority ownership in Comcast-Spectacor, which owns two professional sports teams, the Philadelphia 76ers NBA basketball team and the Philadelphia Flyers NHL hockey team, and a large, multipurpose arena in Philadelphia, the Wachovia Center, and manages other facilities for sporting events, concerts and other events.

 

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TABLE 1

Condensed Consolidated Statement of Operations (Unaudited)

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     (in millions, except per share data)    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
              2009             2010             2009             2010      
  

Revenue

   $ 8,978      $ 9,525      $ 17,844      $ 18,727   
  

Operating expenses

     3,581        3,827        7,173        7,559   
  

Selling, general and administrative expenses

     1,862        1,961        3,692        3,866   
                                   
        5,443        5,788        10,865        11,425   
                                   
  

Operating cash flow

     3,535        3,737        6,979        7,302   
  

Depreciation expense

     1,406        1,411        2,786        2,790   
  

Amortization expense

     254        248        507        499   
                                   
        1,660        1,659        3,293        3,289   
                                   
  

Operating income

     1,875        2,078        3,686        4,013   
  

Other income (expense)

        
  

Interest expense

     (551     (543     (1,121     (1,067
  

Investment income (loss), net

     57        -        70        101   
  

Equity in net income (losses) of affiliates, net

     (13     (26     (27     (58
  

Other income (expense)

     12        (35     11        (45
                                   
        (495     (604     (1,067     (1,069
                                   
  

Income before income taxes

     1,380        1,474        2,619        2,944   
  

Income tax expense

     (424     (588     (885     (1,179
                                   
  

Net income from consolidated operations

     956        886        1,734        1,765   
  

Net (income) loss attributable to noncontrolling interests

     11        (2     5        (15
                                   
   Net income attributable to Comcast Corporation    $ 967      $ 884      $ 1,739      $ 1,750   
                                   
           
   Diluted earnings per common share attributable to Comcast Corporation shareholders    $ 0.33      $ 0.31      $ 0.60      $ 0.62   
                                   
           
   Dividends declared per common share attributable to Comcast Corporation shareholders    $ 0.0675      $ 0.0945      $ 0.1350      $ 0.1890   
                                   
           
  

Diluted weighted-average number of common shares

     2,891        2,822        2,893        2,830   
                                   
           

 

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TABLE 2

Condensed Consolidated Balance Sheet (Unaudited)

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    (in millions)    December 31,
        2009        
   June 30,
        2010        
 

ASSETS

     
 

  Current Assets

     
 

  Cash and cash equivalents

   $ 671    $ 4,028
 

  Investments

     50      53
 

  Accounts receivable, net

     1,711      1,845
 

  Other current assets

     791      665
               
 

  Total current assets

     3,223      6,591
               
 

  Investments

     5,947      6,098
 

  Property and equipment, net

     23,855      23,217
 

  Franchise rights

     59,452      59,452
 

  Goodwill

     14,933      15,028
 

  Other intangible assets, net

     4,105      3,873
 

  Other noncurrent assets, net

     1,218      1,368
               
     $ 112,733    $ 115,627
               
 

LIABILITIES AND EQUITY

     
 

  Current Liabilities

     
 

  Accounts payable and accrued expenses related to trade creditors

   $ 3,094    $ 3,126
 

  Accrued expenses and other current liabilities

     2,999      3,256
 

  Current portion of long-term debt

     1,156      2,308
               
 

  Total current liabilities

     7,249      8,690
               
 

  Long-term debt, less current portion

     27,940      28,684
 

  Deferred income taxes

     27,800      27,575
 

  Other noncurrent liabilities

     6,767      7,009
 

  Redeemable noncontrolling interests

     166      145
 

Equity

     
 

Comcast Corporation shareholders’ equity

     42,721      43,437
 

Noncontrolling interests

     90      87
               
 

Total Equity

     42,811      43,524
               
     $ 112,733    $ 115,627
               
       

 

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TABLE 3

Consolidated Statement of Cash Flows (Unaudited)

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  (in millions)     
 
Six Months Ended
June 30,
  
  
           2009                2010       
 

OPERATING ACTIVITIES

    
 

  Net income from consolidated operations

   $ 1,734      $ 1,765   
 

  Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:

    
 

  Depreciation

     2,786        2,790   
 

  Amortization

     507        499   
 

  Share-based compensation

     121        153   
 

  Noncash interest expense (income), net

     81        69   
 

  Equity in net (income) losses of affiliates, net

     27        58   
 

  (Gains) losses on investments and noncash other (income) expense, net

     (23     (11
 

  Deferred income taxes

     394        (25
 

  Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

    
 

  Change in accounts receivable, net

     (49     (121
 

  Change in accounts payable and accrued expenses related to trade creditors

     (112     2   
 

  Change in other operating assets and liabilities

     (353     153   
                  
 

  Net cash provided by operating activities

     5,113        5,332   
                  
      
 

INVESTING ACTIVITIES

    
 

  Capital expenditures

     (2,281     (2,063
 

  Cash paid for software and other intangible assets

     (241     (237
 

  Acquisitions, net of cash acquired

     (27     (183
 

  Proceeds from sales of investments

     16        15   
 

  Purchases of investments

     (67     (32
 

  Other

     30        (55
                  
 

  Net cash provided by (used in) investing activities

     (2,570     (2,555
                  
 

FINANCING ACTIVITIES

    
 

  Proceeds from borrowings

     2,522        2,421   
 

  Repurchases and repayments of debt

     (1,767     (638
 

  Repurchases of common stock

     (108     (600
 

  Dividends paid

     (375     (535
 

  Other

     (21     (68
                  
 

  Net cash provided by (used in) financing activities

     251        580   
                  
 

Increase (decrease) in cash and cash equivalents

     2,794        3,357   
      
 

Cash and cash equivalents, beginning of period

     1,195        671   
                  
 

Cash and cash equivalents, end of period

   $ 3,989      $ 4,028   
                  
      

 

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TABLE 4

Supplemental Information

Alternate Presentation of Net Cash Provided by Operating Activities (Unaudited)

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     (in millions)    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
              2009             2010             2009             2010      
  

Operating income

   $ 1,875      $ 2,078      $ 3,686      $ 4,013   
  

Depreciation and amortization

     1,660        1,659        3,293        3,289   
                                   
  

Operating income before depreciation and amortization

     3,535        3,737        6,979        7,302   
  

Noncash share-based compensation expense

     67        71        121        153   
  

Changes in operating assets and liabilities

     (48     37        (236     (70
                                   
  

Cash basis operating income

     3,554        3,845        6,864        7,385   
  

Payments of interest

     (399     (354     (1,063     (969
  

Payments of income taxes

     (585     (1,080     (746     (1,126
  

Proceeds from interest, dividends and other nonoperating items

     31        21        58        45   
  

Excess tax benefit under share-based compensation presented in financing activities

     -        (3     -        (3
                                   
  

Net Cash Provided by Operating Activities

   $ 2,601      $ 2,429      $ 5,113      $ 5,332   
                                   

Reconciliation of Operating Cash Flow excluding Operating Expenses related to the NBC Universal Transaction (Unaudited)

 

 

    (in millions)    Three Months Ended
June 30,
   Six Months Ended
June 30,
           2009    2010    Growth %    Margin %    2009    2010    Growth %    Margin %
 

Operating Cash Flow

     3,535      3,737    5.7%    39.2%      6,979      7,302    4.6%    39.0%
 

Operating Expenses related to the NBC Universal Transaction

     -      22            -      36      
                                         
 

Operating Cash Flow excluding Operating Expenses related to the NBC Universal Transaction

   $ 3,535    $ 3,759    6.3%    39.5%    $ 6,979    $ 7,338    5.1%    39.2%
                                         

Reconciliation of EPS Excluding Favorable Income Tax Benefits and the Costs of the NBC Universal Transaction (Unaudited)

 

 

        Three Months Ended
June 30,
         Six Months Ended
June 30,
    (in millions, except per share data)   2009     2010          2009     2010
        $     EPS (1)     $     EPS (1)          $     EPS (1)     $   EPS (1)
                                   
 

Net Income attributable to Comcast Corporation

  $ 967      $ 0.33      $ 884      $ 0.31          $ 1,739      $ 0.60      $ 1,750   $ 0.62
 

Growth %

        (8.6%     (6.1%             0.6%     3.3%
 

Favorable income tax benefits (2)

    (137     (0.04     -        -            (185     (0.06     -     -
 

Costs related to the NBC Universal Transaction, net of tax (3)

    -        -        36        0.02            -        -        53     0.02
                                                                 
 

Net Income attributable to Comcast Corporation (excluding favorable tax adjustments and costs related to the NBC Universal Transaction)

  $ 830      $ 0.29      $ 920      $ 0.33          $ 1,554      $ 0.54      $ 1,803   $ 0.64
                                                                 
 

Growth %

        10.8%        13.8%              16.0%     18.5%

 

(1)

Based on diluted weighted-average number of common shares for the respective periods as presented in Table 1.

 

(2)

2009 Net Income attributable to Comcast Corporation includes favorable income tax adjustments related to the settlement of uncertain tax positions and related interest.

 

(3)

2nd quarter 2010 Net Income attributable to Comcast Corporation includes $22 million of operating expense, $2 million of interest expense and $35 million of other expense ($59 million in total, $36 million net of tax) related to the NBC Universal Transaction. 2010 year to date Net Income attributable to Comcast Corporation includes $36 million of operating expense, $4 million of interest expense and $48 million of other expense ($88 million in total, $53 million net of tax) related to the NBC Universal Transaction.

Note: Minor differences may exist due to rounding.

 

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