EX-99.1 2 a19-8806_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

PRESS RELEASE

 

COMCAST REPORTS 1st QUARTER 2019 RESULTS

 

Consolidated 1st Quarter 2019 Highlights:

 

·      Consolidated Revenue Increased 17.9%; Net Income Attributable to Comcast Increased 14.0%; Adjusted EBITDA Increased 18.1%, Each Reflecting the Inclusion of Sky Results in the First Quarter of 2019

 

·      Net Cash Provided by Operating Activities was $7.2 Billion; Free Cash Flow was $4.6 Billion

 

·      Earnings per Share Increased 16.7% to $0.77; On an Adjusted Basis, Earnings per Share Increased 16.9% to $0.76

 

·      Dividends Paid Totaled $869 Million

 

Cable Communications 1st Quarter 2019 Highlights:

 

·      Cable Communications Revenue Increased 4.2%; Adjusted EBITDA Increased 9.8% and Adjusted EBITDA per Customer Relationship Increased 6.0%

 

·      Total Customer Relationships Increased 3.6% Year-Over-Year to 30.7 Million, Including Net Additions of 300,000 in the Quarter, a 19,000 Improvement from the First Quarter of 2018

 

·      High-Speed Internet Residential Revenue Increased 10.1%; Business Services Revenue Increased 9.5%; Total High-Speed Internet Customers Increased by 375,000

 

NBCUniversal 1st Quarter 2019 Highlights:

 

·      NBCUniversal Revenue Decreased 12.5%; Adjusted EBITDA Increased 2.9%

 

·      Cable Networks and Broadcast Television Revenue Collectively Decreased 19.8%; Excluding $1.6 Billion of Incremental Revenue Generated by Last Year’s Successful Broadcasts of the 2018 PyeongChang Olympics and the NFL’s Super Bowl LII, Revenue Increased 5.0%

 

·      Filmed Entertainment Revenue Increased 7.4%, Including the Successful Theatrical Performances of How to Train Your Dragon: The Hidden World and Us in the Quarter; Adjusted EBITDA Increased 78.7%

 

Sky 1st Quarter 2019 Highlights:

 

·      Sky Revenue Decreased 5.0% and Adjusted EBITDA Decreased 17.0% on a Pro Forma Basis; Excluding the Impact of Currency, Revenue Increased 1.9% and Adjusted EBITDA Decreased 11.3% on a Pro Forma Basis, Reflecting New Contracts for Soccer Rights in Italy and Germany

 

·      Total Customer Relationships Increased 3.5% Year-Over-Year to 23.7 Million, Including Net Additions of 112,000 in the Quarter, a 74,000 Improvement from the First Quarter of 2018

 

PHILADELPHIA - April 25, 2019… Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter ended March 31, 2019.

 

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, “Comcast is off to a terrific start in 2019, financially, operationally and strategically. In the first quarter, we delivered strong EBITDA and earnings per share growth, as well as robust free cash flow. Comcast Cable had the best quarterly EBITDA growth in over a decade, while NBCUniversal again posted favorable results. We also continued to strengthen our leadership position in valuable customer relationships and premium content. Now with the inclusion of Sky, we grew customer relationships by 3.6% year-over-year, including 400,000 net additions in the first quarter, reaching over 54 million relationships in total. Across all parts of the company, our teams are executing at a high level and collaborating to drive growth and innovation. I’m excited about this quarter’s results and the opportunities ahead.”

 


 

Consolidated Financial Results

 

 

 

 

 

1st Quarter

 

 

($ in millions)

 

2018 4

 

2019

 

Growth 

Revenue

 

$22,791

 

$26,859

 

17.9%

Net Income Attributable to Comcast

 

$3,118

 

$3,553

 

14.0%

Adjusted EBITDA1

 

$7,244

 

$8,553

 

18.1%

Earnings per Share2

 

$0.66

 

$0.77

 

16.7%

Excluding Adjustments3 (see Table 5)

 

$0.65

 

$0.76

 

16.9%

 

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

 

The comparability of our consolidated results was impacted by the fourth quarter 2018 Sky transaction. Sky’s results of operations are included in our consolidated financial statements following the acquisition date.

 

Consolidated Revenue for the first quarter of 2019 increased 17.9% to $26.9 billion. Consolidated Net Income Attributable to Comcast increased 14.0% to $3.6 billion. Consolidated Adjusted EBITDA increased 18.1% to $8.6 billion.

 

Earnings per Share (EPS) for the first quarter of 2019 was $0.77, an increase of 16.7% compared to the first quarter of 2018. On an adjusted basis, EPS increased 16.9% to $0.76 (see Table 5).

 

Capital Expenditures increased 6.0% to $2.1 billion in the first quarter of 2019. Cable Communications’ capital expenditures decreased 19.4% to $1.4 billion in the first quarter of 2019, reflecting a lower level of spending on customer premise equipment and scalable infrastructure. Cable capital expenditures represented 9.5% of Cable revenue in the first quarter of 2019 compared to 12.3% in last year’s first quarter. NBCUniversal’s capital expenditures of $453 million increased 68.2%, reflecting continued investment at Theme Parks. Sky had capital expenditures of $259 million, primarily reflecting investment in customer premise equipment, including continued deployment of Sky Q.

 

Net Cash Provided by Operating Activities was $7.2 billion in the first quarter of 2019. Free Cash Flow5 was $4.6 billion (see Table 4).

 

Dividends. During the first quarter of 2019, Comcast paid dividends totaling $869 million.

 

Consolidated Pro Forma Financial Results

Pro forma results are presented as if the Sky transaction occurred on January 1, 2017. The pro forma amounts are primarily based on historical results of operations, adjusted for the allocation of purchase price and excluding costs directly related to the transaction. These amounts are not necessarily indicative of what our results would have been had we operated Sky since January 1, 2017 (see Table 7 for reconciliations of pro forma financial data).

 

Consolidated Pro Forma Revenue for the first quarter of 2019 decreased 3.3% to $26.9 billion.  Consolidated Pro Forma Adjusted EBITDA increased 6.4% to $8.6 billion.

 

2


 

Cable Communications

 

 

 

1st Quarter

($ in millions)

 

2018 6

2019  

Growth

Cable Communications Revenue

 

 

 

 

 

 

High-Speed Internet

 

$4,157

 

$4,577

 

10.1%

Video

 

5,659

 

5,628

 

(0.5%)

Voice

 

1,006

 

990

 

(1.6%)

Wireless

 

185

 

225

 

21.4%

Business Services

 

1,726

 

1,891

 

9.5%

Advertising

 

582

 

556

 

(4.5%)

Other

 

388

 

413

 

7.0%

Cable Communications Revenue

 

$13,703

 

$14,280

 

4.2%

 

 

 

 

 

 

 

Cable Communications Adjusted EBITDA

 

$5,217

 

$5,728

 

9.8%

Adjusted EBITDA Margin

 

38.1

%

40.1

%

 

 

 

 

 

 

 

 

Cable Communications Capital Expenditures

 

$1,691

 

$1,363

 

(19.4%)

Percent of Cable Communications Revenue

 

12.3

%

9.5

%

 

 

Beginning in the first quarter of 2019, Cable Communications results include our wireless phone service and certain other business development initiatives which were previously presented in Corporate and Other. Prior periods have been adjusted to reflect this presentation.

 

Revenue for Cable Communications increased 4.2% to $14.3 billion in the first quarter of 2019, driven primarily by increases in high-speed internet and business services revenue. High-speed internet revenue increased 10.1%, driven by an increase in the number of residential high-speed internet customers and rate adjustments. Business services revenue increased 9.5%, due to an increase in the number of customers receiving our services and rate adjustments. Wireless revenue increased 21.4%, reflecting an increase in the number of customer lines, partially offset by lower device sales as more customers bring their own device. Other revenue increased 7.0%, primarily driven by increases in revenue from our X1 licensing agreements and our security and automation services. Video revenue decreased 0.5%, due to a decline in the number of residential customers, partially offset by rate adjustments. Advertising revenue decreased 4.5%, primarily due to a decline in political advertising revenue. Voice revenue decreased 1.6%, reflecting a decrease in the number of residential voice customers.

 

Total Customer Relationships increased by 300,000 to 30.7 million in the first quarter of 2019. Residential customer relationships increased by 276,000 and business customer relationships increased by 25,000. At the end of the first quarter, 67.3% of our residential customers received at least two Xfinity products. Total high-speed internet customer net additions were 375,000, total video customer net losses were 121,000, total voice customer net losses were 53,000 and total security and automation customer net additions were 17,000. In addition, Cable Communications added 170,000 wireless lines in the quarter.

 

3


 

 

 

Net Additions

(in thousands)

1Q18 6

1Q19

 

 

1Q18 6

1Q19

Customer Relationships

 

 

 

 

 

 

Residential Customer Relationships

27,436

28,385

 

 

252

276

Business Services Customer Relationships

2,208

2,327

 

 

29

25

Total Customer Relationships

29,645

30,712

 

 

281

300

 

 

 

 

 

 

 

Residential Customer Relationships Mix

 

 

 

 

 

 

One Product Residential Customers

8,390

9,295

 

 

215

280

Two Product Residential Customers

9,060

9,009

 

 

42

17

Three or More Product Residential Customers

9,987

10,081

 

 

(6)

(22)

 

 

 

 

 

 

 

Residential High-Speed Internet Customers

24,214

25,449

 

 

351

352

Business Services High-Speed Internet Customers

2,034

2,148

 

 

29

23

Total High-Speed Internet Customers

26,249

27,598

 

 

379

375

Residential Video Customers

21,210

20,852

 

 

(93)

(107)

Business Services Video Customers

1,051

1,014

 

 

(3)

(14)

Total Video Customers

22,261

21,865

 

 

(96)

(121)

Residential Voice Customers

10,245

10,089

 

 

(70)

(63)

Business Services Voice Customers

1,253

1,307

 

 

16

10

Total Voice Customers

11,498

11,396

 

 

(54)

(53)

Total Security and Automation Customers

1,176

1,333

 

 

46

17

Total Wireless Lines

577

1,405

 

 

196

170

 

Adjusted EBITDA for Cable Communications increased 9.8% to $5.7 billion in the first quarter of 2019, reflecting higher revenue, partially offset by a 0.8% increase in operating expenses. Video programming costs increased 2.8%, primarily reflecting higher sports programming costs and retransmission consent fees. Non-programming expenses decreased 0.5%, reflecting decreases in other operating costs, customer service expenses, franchise and regulatory fees and advertising, marketing and promotion costs, partially offset by an increase in technical and product support expenses. This quarter’s Adjusted EBITDA per customer relationship increased 6.0%, and Adjusted EBITDA margin was 40.1%, compared to 38.1% in the first quarter of 2018. Cable Communications results include a loss of $103 million from our wireless business, compared to a loss of $189 million in the prior period.

 

NBCUniversal

 

 

1st Quarter

 

($ in millions)

2018 6

2019

Growth

 

NBCUniversal Revenue

 

 

 

 

Cable Networks

$3,157

$2,868

(9.2%

)

Excluding Olympics (see Table 6)

2,779

2,868

3.2%

 

Broadcast Television

3,497

2,467

(29.4%

)

Excluding Olympics and Super Bowl (see Table 6)

2,304

2,467

7.1%

 

Filmed Entertainment

1,647

1,768

7.4%

 

Theme Parks

1,281

1,276

(0.4%

)

Headquarters, other and eliminations

(85)

(66)

NM

 

NBCUniversal Revenue

$9,497

$8,313

(12.5%

)

 

 

 

 

 

NBCUniversal Adjusted EBITDA

 

 

 

 

Cable Networks

$1,254

$1,262

0.7%

 

Broadcast Television

507

387

(23.7%

)

Filmed Entertainment

203

364

78.7%

 

Theme Parks

495

498

0.5%

 

Headquarters, other and eliminations

(188)

(174)

NM

 

NBCUniversal Adjusted EBITDA

$2,271

$2,337

2.9%

 

NM=comparison not meaningful.

 

 

 

 

 

Revenue for NBCUniversal in the first quarter of 2019 decreased 12.5% to $8.3 billion, compared to last year’s results, which included an incremental $1.6 billion of revenue generated by the broadcasts of the 2018 PyeongChang Olympics and the NFL’s Super Bowl LII at our TV businesses. Adjusted EBITDA increased

 

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2.9% to $2.3 billion, primarily reflecting an increase at Filmed Entertainment, partially offset by a decline at Broadcast Television due the broadcasts of the PyeongChang Olympics and the NFL’s Super Bowl LII in the first quarter of 2018.

 

Cable Networks

Cable Networks revenue decreased 9.2% to $2.9 billion in the first quarter of 2019, primarily reflecting decreases in distribution and advertising revenue. Excluding $378 million of revenue generated by the broadcast of the PyeongChang Olympics in the first quarter of 2018, revenue increased 3.2% (see Table 6). Distribution revenue decreased 6.8%, due to the broadcast of the PyeongChang Olympics in the first quarter of 2018, partially offset by contractual rate increases and the timing of contract renewals. Advertising revenue decreased 12.8%, due to revenue associated with the broadcast of the PyeongChang Olympics in the first quarter of 2018 and audience ratings declines, partially offset by higher pricing. Content licensing and other revenue decreased 12.0% due to the timing of content provided under licensing agreements. Adjusted EBITDA increased 0.7% to $1.3 billion in the first quarter of 2019, reflecting lower revenue, more than offset by a decrease in operating costs and expenses, including programming and production costs, due to the broadcast of the PyeongChang Olympics in the first quarter of 2018.

 

Broadcast Television

Broadcast Television revenue decreased 29.4% to $2.5 billion in the first quarter of 2019, primarily reflecting lower advertising revenue. Excluding $770 million of revenue generated by the broadcast of the PyeongChang Olympics and $423 million of revenue generated by the broadcast of the NFL’s Super Bowl LII in the first quarter of 2018, revenue increased 7.1% (see Table 6). Advertising revenue decreased 44.3%, due to revenue associated with the broadcasts of the PyeongChang Olympics and the NFL’s Super Bowl LII in the first quarter of 2018 and audience ratings declines, partially offset by higher pricing. Distribution and other revenue decreased 3.2%, due to the broadcast of the PyeongChang Olympics in the first quarter of 2018, partially offset by higher retransmission consent fees. Content licensing revenue increased 7.2% due to the timing of content provided under licensing agreements. Adjusted EBITDA decreased 23.7% to $387 million in the first quarter of 2019, reflecting lower revenue, partially offset by a decrease in programming and production costs, due to the broadcasts of the PyeongChang Olympics and the NFL’s Super Bowl LII in the first quarter of 2018.

 

Filmed Entertainment

Filmed Entertainment revenue increased 7.4% to $1.8 billion in the first quarter of 2019, reflecting higher content licensing, theatrical and home entertainment revenue. Content licensing revenue increased 11.5%, driven by the timing of when content was made available under licensing agreements. Theatrical revenue increased 5.1%, due to the performance of films in this year’s first quarter, including How to Train Your Dragon: The Hidden World and Us, partially offset by the performance of Fifty Shades Freed in the first quarter of 2018. Home Entertainment revenue increased 7.4%, primarily reflecting the success of Dr. Seuss’ The Grinch. Adjusted EBITDA increased by 78.7% to $364 million in the first quarter of 2019, reflecting higher revenue as well as lower operating costs.

 

Theme Parks

Theme Parks revenue of $1.3 billion in the first quarter of 2019 was relatively consistent with the prior year period and, in part, reflects the timing of spring holidays, which benefited the same period last year. Adjusted EBITDA of $498 million was consistent with the prior year period.

 

Headquarters, Other and Eliminations

NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations among the NBCUniversal businesses. For the quarter ended March 31, 2019, NBCUniversal Headquarters, Other and Eliminations Adjusted EBITDA loss was $174 million, compared to a loss of $188 million in the first quarter of 2018.

 

5


 

Sky

Pro forma results are presented as if the Sky transaction occurred on January 1, 2017. The pro forma amounts are primarily based on historical results of operations, adjusted for the allocation of purchase price and excluding costs directly related to the transaction. These amounts are not necessarily indicative of what our results would have been had we operated Sky since January 1, 2017 (see Table 7 for reconciliations of pro forma financial data).

 

 

 

1st Quarter

 

 

 

 

 

($ in millions) (pro forma)

 

2018

 

2019

 

Growth

 

Constant
Currency
Growth
7

 

Sky Revenue

 

 

 

 

 

 

 

 

 

Direct-to-Consumer

 

$4,132

 

$3,834

 

(7.2%

)

(0.4%

)

Content

 

286

 

370

 

29.5%

 

38.0%

 

Advertising

 

631

 

593

 

(6.0%

)

0.7%

 

Sky Revenue

 

$5,049

 

$4,797

 

(5.0%

)

1.9%

 

 

 

 

 

 

 

 

 

 

 

Sky Operating Costs and Expenses

 

$4,250

 

$4,134

 

(2.7%

)

4.4%

 

 

 

 

 

 

 

 

 

 

 

Sky Adjusted EBITDA

 

$799

 

$663

 

(17.0%

)

(11.3%

)

Adjusted EBITDA Margin

 

15.8%

 

13.8%

 

 

 

 

 

 

Pro Forma Revenue for Sky decreased 5.0% to $4.8 billion in the first quarter of 2019. Excluding the impact of currency, revenue increased 1.9%, primarily driven by higher content revenue, while advertising and direct-to-consumer revenues were relatively consistent with the prior year period. Content revenue increased 38.0% to $370 million, reflecting the wholesaling of sports programming, including exclusive sports rights recently acquired in Italy and Germany, increased penetration of premium sports and movie channels on third party pay TV networks in the UK and monetization of our slate of original programming.

 

Pro Forma Total Customer Relationships increased by 112,000 to 23.7 million in the first quarter of 2019.

 

 

 

Customers

 

Net Additions

 

(in thousands) (pro forma)

 

1Q18

 

1Q19

 

1Q18

 

1Q19

 

Total Customer Relationships

 

22,903

 

23,712

 

38

 

112

 

 

Pro Forma Adjusted EBITDA for Sky decreased 17.0% to $663 million in the first quarter of 2019. Excluding the impact of currency, Adjusted EBITDA decreased 11.3%, reflecting a 4.4% increase in operating expenses, partially offset by higher revenues. The higher expenses were primarily driven by new contracts for Serie A and UEFA Champions League soccer rights in Italy and Germany, partially offset by lower other operating costs.

 

Corporate, Other and Eliminations

 

 

 

 

 

Corporate, Other and Eliminations primarily relate to corporate operations and Comcast Spectacor, as well as eliminations among Comcast’s businesses. For the quarter ended March 31, 2019, the Corporate, Other and Eliminations Adjusted EBITDA6 loss was $175 million, compared to a loss of $244 million in the first quarter of 2018, which reflected an increase in eliminations associated with the 2018 PyeongChang Olympics.

 

Notes:

 

1     We define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax benefit (expense), investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. See Table 4 for reconciliation of non-GAAP financial measures.

 

2     All earnings per share amounts are presented on a diluted basis.

 

6


 

3     In first quarter 2019, we changed our presentation of Adjusted EPS to also exclude amortization expense for acquisition-related intangible assets. Adjusted EPS is a non-GAAP financial measure that presents the earnings generated by our ongoing core operations on a per share basis. Our presentation of Adjusted EPS is our diluted earnings per common share attributable to Comcast Corporation shareholders adjusted to exclude the effects of fair value investments and amortization of acquisition-related intangible assets, as well as the impact of certain events, gains, losses or other charges (such as from the sales of investments). For Adjusted EPS, the effects of fair value investments include realized and unrealized gains and losses, net, including impairments, on equity securities not accounted for under the equity method, as well as the equity in net income (losses), net, for our investment in Atairos Group, Inc. (Atairos follows investment company accounting and records its investments at their fair values each reporting period). Acquisition-related intangible assets include those recognized as a result of the application of Accounting Standards Codification Topic 805, Business Combinations (such as customer relationships). Amortization of acquisition-related intangible assets is significantly affected by the timing and size of our acquisitions and may have no correlation to our current operating results, as the acquisitions occurred in prior periods. Amortization of intangible assets not resulting from business combinations (such as software and acquired intellectual property rights used in our theme parks) is not excluded from Adjusted EPS.

 

4     Consolidated financial results include Sky results for periods following the acquisition on October 9, 2018.

 

5     We define Free Cash Flow as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures and cash paid for intangible assets. From time to time, we may exclude from Free Cash Flow the impact of certain cash receipts or payments (such as significant legal settlements) that affect period-to-period comparability. Cash payments for acquisitions and construction of real estate properties and the construction of Universal Beijing Resort are presented separately in our Consolidated Statement of Cash Flows and are therefore excluded from capital expenditures for Free Cash Flow. See Table 4 for reconciliation of non-GAAP financial measures.

 

6     Beginning in the first quarter of 2019, Comcast Cable’s wireless phone service and certain other Cable-related business development initiatives are now presented in the Cable Communications segment. Results were previously presented in Corporate and Other. Prior periods have been adjusted to reflect this presentation. To be consistent with our current management reporting presentation, certain 2018 operating results were reclassified related to certain NBCUniversal businesses now presented in the Sky segment.

 

7     Sky constant currency growth rates are calculated by comparing the current period results to the comparative period results in the prior year adjusted to reflect the average exchange rates from the current year period rather than the actual exchange rates in effect during the respective prior year periods. See Table 8 for reconciliation of Sky’s constant currency growth.

 

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

 

###

 

Conference Call and Other Information

 

Comcast Corporation will host a conference call with the financial community today, April 25, 2019 at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on its Investor Relations website at www.cmcsa.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 8973128.  A replay of the call will be available starting at 12:00 p.m. ET on April 25, 2019, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Thursday, May 2, 2019 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 8973128.

 

From time to time, we post information that may be of interest to investors on our website at www.cmcsa.com and on our corporate blog, www.corporate.comcast.com/comcast-voices. To automatically receive Comcast financial news by email, please visit www.cmcsa.com and subscribe to email alerts.

 

Visit Comcast Corporation’s Investor Relations website at www.cmcsa.com to access a copy of this press release.

 

###

 

Investor Contacts:

 

Press Contacts:

 

Jason Armstrong

(215) 286-7972

D’Arcy Rudnay

(215) 286-8582

Jane Kearns

(215) 286-4794

John Demming

(215) 286-8011

 

###

 

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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) is a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal, and Sky. Comcast Cable is one of the United States’ largest high-speed internet, video, and phone providers to residential customers under the Xfinity brand, and also provides these services to businesses. It also provides wireless and security and automation services to residential customers under the Xfinity brand. NBCUniversal is global and operates news, entertainment and sports cable networks, the NBC and Telemundo broadcast networks, television production operations, television station groups, Universal Pictures, and Universal Parks and Resorts. Sky is one of Europe’s leading media and entertainment companies, connecting customers to a broad range of video content through its pay television services. It also provides communications services, including residential high-speed internet, phone, and wireless services. Sky operates the Sky News broadcast network and sports and entertainment networks, produces original content, and has exclusive content rights.

Visit www.comcastcorporation.com for more information.

 

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TABLE 1

Condensed Consolidated Statement of Income (Unaudited)

 

 

 

 

Three Months Ended

(in millions, except per share data)

 

March 31,

 

 

2018

 

2019

Revenue

 

$22,791

 

$26,859

 

 

 

 

 

Programming and production

 

7,429

 

8,569

Other operating and administrative

 

6,514

 

7,900

Advertising, marketing and promotion

 

1,604

 

1,888

Adjustments(1)

 

 

(51)

 

 

15,547

 

18,306

 

 

 

 

 

Adjusted EBITDA(1)

 

7,244

 

8,553

 

 

 

 

 

Adjustments(1)

 

 

51

Depreciation expense

 

2,011

 

2,240

Amortization expense

 

588

 

1,080

 

 

2,599

 

3,371

 

 

 

 

 

Operating income

 

4,645

 

5,182

 

 

 

 

 

Interest expense

 

(777)

 

(1,150)

 

 

 

 

 

Investment and other income (loss), net

 

 

 

 

Equity in net income (losses) of investees, net

 

(49)

 

262

Realized and unrealized gains (losses) on equity securities, net

 

28

 

214

Other income (loss), net

 

147

 

200

 

 

126

 

676

 

 

 

 

 

Income before income taxes

 

3,994

 

4,708

 

 

 

 

 

Income tax expense

 

(818)

 

(1,076)

 

 

 

 

 

Net income

 

3,176

 

3,632

 

 

 

 

 

Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock

 

58

 

79

 

 

 

 

 

Net income attributable to Comcast Corporation

 

$3,118

 

$3,553

 

 

 

 

 

Diluted earnings per common share attributable to Comcast Corporation shareholders

 

$0.66

 

$0.77

 

 

 

 

 

Diluted weighted-average number of common shares

 

4,705

 

4,594

 

(1) See Table 4 for a reconciliation of non-GAAP financial measures.

 

9


 

TABLE 2

Consolidated Statement of Cash Flows (Unaudited)

 

 

 

 

Three Months Ended

 

(in millions)

 

March 31,

 

 

 

2018

 

2019

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

Net income

 

$3,176

 

$3,632

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

2,599

 

3,320

 

Share-based compensation

 

199

 

245

 

Noncash interest expense (income), net

 

75

 

77

 

Net (gain) loss on investment activity and other

 

(74)

 

(498)

 

Deferred income taxes

 

389

 

271

 

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

 

 

 

 

 

Current and noncurrent receivables, net

 

85

 

449

 

Film and television costs, net

 

(45)

 

559

 

Accounts payable and accrued expenses related to trade creditors

 

200

 

(574)

 

Other operating assets and liabilities

 

(1,130)

 

(250)

 

 

 

 

 

 

 

Net cash provided by operating activities

 

5,474

 

7,231

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Capital expenditures

 

(1,973)

 

(2,092)

 

Cash paid for intangible assets

 

(419)

 

(547)

 

Acquisitions and construction of real estate properties

 

(59)

 

(16)

 

Construction of Universal Beijing Resort

 

(42)

 

(220)

 

Acquisitions, net of cash acquired

 

(89)

 

(48)

 

Proceeds from sales of investments

 

81

 

37

 

Purchases of investments

 

(220)

 

(439)

 

Other

 

429

 

99

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

(2,292)

 

(3,226)

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Proceeds from (repayments of) short-term borrowings, net

 

(902)

 

(1,288)

 

Proceeds from borrowings

 

4,043

 

222

 

Repurchases and repayments of debt

 

(1,265)

 

(2,084)

 

Repurchases of common stock under repurchase program and employee plans

 

(1,729)

 

(247)

 

Dividends paid

 

(738)

 

(869)

 

Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock

 

(79)

 

(85)

 

Other

 

94

 

26

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

(576)

 

(4,325)

 

 

 

 

 

 

 

Impact of foreign currency on cash, cash equivalents and restricted cash

 

 

8

 

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

2,606

 

(312)

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, beginning of period

 

3,571

 

3,909

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, end of period

 

$6,177

 

$3,597

 

 

10


 

TABLE 3

Condensed Consolidated Balance Sheet (Unaudited)

 

 

(in millions)

 

December 31,

 

March 31,

 

 

 

 

 

 

 

 

 

2018

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$3,814

 

$3,498

 

Receivables, net

 

11,104

 

10,736

 

Programming rights

 

3,746

 

2,942

 

Other current assets

 

3,184

 

3,097

 

Total current assets

 

21,848

 

20,273

 

 

 

 

 

 

 

Film and television costs

 

7,837

 

8,051

 

 

 

 

 

 

 

Investments

 

7,883

 

9,159

 

 

 

 

 

 

 

Property and equipment, net

 

44,437

 

45,721

 

 

 

 

 

 

 

Franchise rights

 

59,365

 

59,365

 

 

 

 

 

 

 

Goodwill

 

66,154

 

68,073

 

 

 

 

 

 

 

Other intangible assets, net

 

38,358

 

36,902

 

 

 

 

 

 

 

Other noncurrent assets, net

 

5,802

 

8,645

 

 

 

 

 

 

 

 

 

$251,684

 

$256,189

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable and accrued expenses related to trade creditors

 

$8,494

 

$10,232

 

Accrued participations and residuals

 

1,808

 

1,739

 

Deferred revenue

 

2,182

 

2,485

 

Accrued expenses and other current liabilities

 

10,721

 

8,832

 

Current portion of long-term debt

 

4,398

 

4,629

 

Total current liabilities

 

27,603

 

27,917

 

 

 

 

 

 

 

Long-term debt, less current portion

 

107,345

 

104,464

 

 

 

 

 

 

 

Deferred income taxes

 

27,589

 

27,819

 

 

 

 

 

 

 

Other noncurrent liabilities

 

15,329

 

18,811

 

 

 

 

 

 

 

Redeemable noncontrolling interests and redeemable subsidiary preferred stock

 

1,316

 

1,316

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Comcast Corporation shareholders’ equity

 

71,613

 

74,959

 

Noncontrolling interests

 

889

 

903

 

Total equity

 

72,502

 

75,862

 

 

 

 

 

 

 

 

 

$251,684

 

$256,189

 

 

11


 

TABLE 4

 

 

Reconciliation from Net Income Attributable to Comcast Corporation to Adjusted EBITDA (Unaudited)

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018

 

2019

 

Net income attributable to Comcast Corporation

 

$3,118

 

$3,553

 

Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock

 

58

 

79

 

Income tax expense

 

818

 

1,076

 

Interest expense

 

777

 

1,150

 

Investment and other (income) loss, net (1)

 

(126)

 

(676)

 

Depreciation and amortization expense

 

2,599

 

3,320

 

Adjustments (2)

 

 

51

 

Adjusted EBITDA

 

$7,244

 

$8,553

 

 

Reconciliation from Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018

 

2019

 

Net cash provided by operating activities

 

$5,474

 

$7,231

 

Capital expenditures

 

(1,973)

 

(2,092)

 

Cash paid for capitalized software and other intangible assets

 

(419)

 

(547)

 

Total Free Cash Flow

 

$3,082

 

$4,592

 

 

Alternate Presentation of Free Cash Flow (Unaudited)

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018

 

2019

 

Adjusted EBITDA

 

$7,244

 

$8,553

 

Capital expenditures

 

(1,973)

 

(2,092)

 

Cash paid for capitalized software and other intangible assets

 

(419)

 

(547)

 

Cash interest expense

 

(854)

 

(970)

 

Cash taxes

 

(162)

 

(189)

 

Changes in operating assets and liabilities

 

(1,005)

 

(535)

 

Noncash share-based compensation

 

199

 

245

 

Other (3)

 

52

 

127

 

Total Free Cash Flow

 

$3,082

 

$4,592

 

 

(1)     Investment and other (income) loss, net, includes equity in net (income) losses of investees, net, realized and unrealized (gains) losses on equity securities, net, and other (income) loss, net.

 

(2)     First quarter 2019 Adjusted EBITDA excludes $51 million of other operating and administrative expense related to the Sky transaction.

 

(3)     Other for this presentation includes a decrease of $51 million of costs related to the Sky transaction in first quarter 2019, as these are not included in Adjusted EBITDA.

 

Note: Minor differences may exist due to rounding.

 

12


 

TABLE 5

 

 

Reconciliation of EPS Excluding Adjustments (Unaudited)

 

 

 

 

Three Months Ended
March 31,

 

 

 

2018

 

2019

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

$

 

EPS

 

$

 

EPS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Comcast Corporation

 

$3,118

 

$0.66

 

$3,553

 

$0.77

 

Growth %

 

 

 

 

 

14.0%

 

16.7%

 

 

 

 

 

 

 

 

 

 

 

Fair value investments (1)

 

(47)

 

(0.01)

 

(438)

 

(0.09)

 

Amortization of acquisition-related intangible assets (2)

 

152

 

0.03

 

400

 

0.09

 

Income tax adjustments (3)

 

(128)

 

(0.02)

 

 

 

Gains related to businesses and investments(4)

 

(48)

 

(0.01)

 

(118)

 

(0.03)

 

Costs related to Sky transaction (5)

 

 

 

41

 

0.01

 

Purchase accounting adjustments (6)

 

 

 

39

 

0.01

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Comcast Corporation (excluding adjustments)

 

$3,047

 

$0.65

 

$3,477

 

$0.76

 

Growth %

 

 

 

 

 

14.1%

 

16.9%

 

 

(1)     Fair value investments include realized and unrealized (gains) losses on equity securities, net (as stated in Table 1), as well as the equity in net (income) losses, net, for our investment in Atairos.

 

 

 

Three Months Ended
March 31,

 

 

 

2018

 

2019

 

Realized and unrealized (gains) losses on equity securities, net

 

($28)

 

($214)

 

Equity in net (income) losses, net for investment in Atairos

 

(35)

 

(374)

 

Fair value investments before income taxes

 

(63)

 

(588)

 

Fair value investments, net of tax

 

($47)

 

($438)

 

 

(2)     Acquisition-related intangible assets include those recognized as a result of the application of Accounting Standards Codification Topic 805, Business Combinations (such as customer relationships).

 

 

 

Three Months Ended
March 31,

 

 

 

2018

 

2019

 

Amortization of acquisition-related intangible assets before income taxes

 

$

205

 

$

504

 

Amortization of acquisition-related intangible assets, net of tax

 

$

152

 

$

400

 

 

(3)     1st quarter 2018 net income attributable to Comcast Corporation includes a $128 million net income tax benefit as a result of federal tax legislation enacted in 2018.

 

(4)     1st quarter 2019 net income attributable to Comcast Corporation includes $159 million of other income, $118 million net of tax, resulting from the recognition of a previously deferred gain related to our investment in Hulu. 1st quarter 2018 net income attributable to Comcast Corporation includes $64 million of other income, $48 million net of tax, resulting from a gain on the sale of our investment in The Weather Channel.

 

(5)     1st quarter 2019 net income attributable to Comcast Corporation includes $51 million of operating costs and expenses, $41 million net of tax, related to the Sky transaction, primarily relating to the replacement of share-based compensation awards.

 

(6)     1st quarter 2019 net income attributable to Comcast Corporation includes $53 million of depreciation and amortization expense, $39 million net of tax, related to the 4th quarter 2018 as a result of adjustments to the purchase price allocation of Sky, primarily related to intangible assets and property and equipment.

 

 

Note: Minor differences may exist due to rounding.

 

13


 

TABLE 6

 

 

Reconciliation of Cable Networks Revenue Excluding 2018 Olympics (Unaudited)

 

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018

 

2019

 

Growth%

 

Revenue

 

$3,157

 

$2,868

 

(9.2%)

 

2018 Olympics

 

(378)

 

 

 

 

Revenue excluding 2018 Olympics

 

$2,779

 

$2,868

 

3.2 %

 

 

Reconciliation of Broadcast Television Revenue Excluding 2018 Olympics and 2018 Super Bowl (Unaudited)

 

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018

 

2019

 

Growth%

 

Revenue

 

$3,497

 

$2,467

 

(29.4%)

 

2018 Olympics

 

(770)

 

 

 

 

2018 Super Bowl

 

(423)

 

 

 

 

Revenue excluding 2018 Olympics and 2018 Super Bowl

 

$2,304

 

$2,467

 

7.1 %

 

 

 

Note: Minor differences may exist due to rounding.

 

14


 

TABLE 7

 

 

Reconciliation of As Reported to Pro Forma(1) Financial Information (Unaudited)

 

 

 

 

 

 

Sky

 

 

 

 

 

Comcast

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma

 

Pro Forma

 

 

 

Pro Forma

 

Pro Forma

 

 

 

As Reported

 

Adjustments(1)

 

Sky

 

As Reported

 

Adjustments(1)

 

Comcast

 

Three Months Ended March 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$—

 

$5,049

 

$5,049

 

$22,791

 

$4,971

 

$27,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses and other

 

 

4,250

 

4,250

 

15,547

 

4,176

 

19,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$—

 

$799

 

$799

 

$7,244

 

$795

 

$8,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$4,797

 

$—

 

$4,797

 

$26,859

 

$—

 

$26,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses and other

 

4,134

 

 

4,134

 

18,306

 

 

18,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$663

 

$—

 

$663

 

$8,553

 

$—

 

$8,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

NM

 

 

 

(5.0)%

 

17.9%

 

 

 

(3.3)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses and other

 

NM

 

 

 

(2.7)%

 

17.7%

 

 

 

(7.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

NM

 

 

 

(17.0)%

 

18.1%

 

 

 

6.4 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM=comparison not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)        Pro forma information is presented as if the Sky transaction occurred January 1, 2017. Our pro forma information is primarily based on historical results of operations, adjusted for the effects of acquisition accounting and the elimination of costs and expenses directly attributable to the transaction, but does not include adjustments for costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined businesses. Our pro forma information is not necessarily indicative of future results or what our results would have been had we operated Sky since January 1, 2017.

 

15


 

TABLE 8

 

 

Reconciliation of Sky Constant Currency Growth (Unaudited)

 

 

 

 

 

Three Months Ended
March 31,

 

(in millions)

 

2018(1)

 

2019

 

Growth%

 

Direct-to-Consumer

 

$3,851

 

$3,834

 

(0.4%)

 

Content

 

268

 

370

 

38.0%

 

Advertising

 

589

 

593

 

0.7%

 

Revenue

 

$4,708

 

$4,797

 

1.9%

 

Operating costs and expenses

 

$3,961

 

$4,134

 

4.4%

 

Adjusted EBITDA

 

$747

 

$663

 

(11.3)%

 

 

(1)        2018 results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the current period rather than the actual exchange rates in effect during the respective periods.

 

16