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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) of the SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 30, 2003 COMCAST CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Pennsylvania 000-50093 27-0000798 - ---------------- ---------------- ------------- (State or other (Commission file (IRS employer jurisdiction of number) identification no.) incorporation) 1500 Market Street, Philadelphia, PA 19102-2148 -------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 665-1700 --------------Item 7(c). Exhibits Exhibit 99.1 Comcast Corporation press release dated October 30, 2003. Item 9. Regulation FD Disclosure The following information is furnished pursuant to Item 9, "Regulation FD Disclosure," and Item 12, "Results of Operations and Financial Condition." On October 30, 2003, Comcast Corporation ("Comcast") issued a press release reporting the results of its operations for the three and nine months ended September 30, 2003. The press release is attached hereto as Exhibit 99.1. Comcast does not intend for this Item 9 or Exhibit 99.1 to be treated as "filed" under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: October 30, 2003 COMCAST CORPORATION By: /s/ Lawrence J. Salva ------------------------ Lawrence J. Salva Senior Vice President and Controller (Principal Accounting Officer)
Exhibit 99.1 Comcast Reports Third Quarter 2003 Results Consolidated Revenue Increased to $4.546 Billion Consolidated Operating Income Increased to $493 Million Consolidated Operating Cash Flow Increased to $1.632 Billion Comcast Cable Reports Pro Forma Operating Cash Flow Growth of 35.3% to $1.6 Billion Cable Operating Cash Flow Margin Reached 37% Cable Operating Income Increased to $534 Million Comcast Increases Guidance for High-Speed Internet Subscriber Additions for 2003 to 1.7 Million From 1.6 Million High-Speed Internet Subscribers Increased 472,700 to 4.9 Million Digital Cable Subscribers Increased 318,300 to 7.3 Million Exceptional Progress Made In Debt Reduction Debt Reduced by Nearly $5 Billion Year to Date PHILADELPHIA, Oct. 30 /PRNewswire-FirstCall/ -- Comcast Corporation (Nasdaq: CMCSA, CMCSK) today reported results for the quarter ended September 30, 2003. Comcast will discuss third quarter results on a conference call and webcast today at 10:30 AM Eastern Time. A live broadcast of the conference call will be available on the investor relations website at www.cmcsa.com or www.cmcsk.com. Brian L. Roberts, president and CEO of Comcast Corporation said, "As we approach the one year anniversary of our acquisition of AT&T Broadband we cannot be more excited about the progress we have made in integrating the new cable systems and the potential for continued growth from our unparalleled cable footprint. We delivered another quarter of exceptional financial and operational results. Operating cash flow from our cable business exceeded $1.6 billion this quarter, a 35% increase over the prior year and our operating cash flow margin continues its rapid improvement from 30% last year to 37% this quarter. Our business strategy is producing better than expected results. "Demand for our high-speed Internet service is stronger than ever. In the third quarter, we added more than 472,000 new high-speed Internet customers, a terrific result representing an over 39% increase from last year's third quarter. We had more new customer additions during the first nine months of this year than in the entire year of 2002. We are, once again, increasing our guidance for high-speed Internet subscribers for 2003, from 1.6 million to 1.7 million net additions and expect to end 2003 with approximately 5.3 million high speed Internet subscribers." Mr. Roberts continued, "Our video business is also strong as we continue to add basic subscribers and to enhance our video offering with digital services such as video on demand, high-definition television and soon, digital video recorders. We added more than 318,000 Comcast Digital Cable customers in the quarter, nearly doubling the number of new digital customer additions from the second quarter of 2003." Mr. Roberts concluded, "While the performance of our operating team has been impressive, we have also made significant progress in strengthening our balance sheet and accelerating our debt reduction plan, primarily as a result of the sale of our interest in QVC. With the upgrade of our networks almost complete, we have set the stage for continued growth in revenue and operating cash flow and for significant free cash flow generation." Comcast Cable Results Comcast Cable results for the quarter ended September 30, 2003 are presented on a pro forma basis. Pro forma cable results adjust only for acquisitions and are presented as if the acquisition of AT&T Broadband completed in November 2002 was effective on January 1, 2002. Please refer to Table 7-A and B for reconciliation of historical and pro forma data. Pro forma cable revenue for the quarter ended September 30, 2003 was $4.374 billion, representing an 8.4% increase over the $4.035 billion in the third quarter of 2002. This increase reflected a 10.9% increase in Comcast's historical systems and a more modest 6.8% increase in the acquired cable systems. Pro forma operating income before depreciation and amortization (Operating Cash Flow) for the quarter was $1.620 billion, an increase of 35.3% over the $1.198 billion for the same period of 2002. Pro forma results include $107 million of acquisition and employee termination-related costs incurred by AT&T Broadband in the third quarter of 2002. Excluding these costs, pro forma cable operating cash flow grew 24.2%. Pro forma operating cash flow margin reached 37.0% this quarter, up significantly from the 29.7% in the third quarter of 2002. Pro forma cable operating income was $534 million in the third quarter compared to pro forma operating income of $112 million in the third quarter of 2002. Pro forma video revenue increased 5.4% in the third quarter of 2003 compared with the prior year quarter driven by increases in average monthly revenue per basic subscriber and growth in Digital Cable revenue, offset by basic subscriber losses in the acquired systems during 2002. In the third quarter, Comcast Cable added 800 basic cable subscribers, a significant improvement over the combined loss of 133,700 subscribers in the third quarter of 2002. This increase reflects continued gains in the acquired cable systems of 22,700 - a marked turnaround from the third quarter of 2002 when those systems lost 131,100 subscribers. Our Digital Cable customer base grew by 16.6% and average monthly revenue per digital subscriber was $15.09 during the third quarter of 2003 compared to $14.57 in the third quarter of 2002 as a result of re-pricing and repackaging of the digital products in the acquired systems. Pro forma high-speed Internet service revenue for the third quarter of 2003 increased 48.1% over the prior year quarter to $586 million, reflecting a nearly 50% increase in the customer base and average revenue per subscriber of $42.25 in the third quarter, up slightly from $42.22 in the prior-year period. Pro forma cable phone revenue declined 11.5% from the third quarter of 2002 to $189 million, reflecting a decrease in subscribers and average monthly revenue per subscriber as a result of our reduced marketing efforts. At the same time, Comcast has been successful in achieving profitability for this product line. Pro forma advertising revenue increased 7.2% over the prior year quarter to $276 million, reflecting 18.7% growth in regional/national advertising as a result of the continuing success of our regional interconnects, and growth of 1.5% in a soft local advertising market. Comcast Cable added over 318,000 Digital Cable subscribers to end the third quarter with 7.273 million Digital Cable subscribers, a pro forma increase of 16.6% over the same prior year period, representing a subscriber penetration rate of 34.0%. Comcast Cable continued to enhance its Digital Cable offering by expanding availability of video-on-demand (VOD) and high- definition television (HDTV). VOD is now available to 31% of our subscribers including customers in Philadelphia, Boston, Baltimore and Los Angeles. VOD availability is expected to increase to over 50% of our subscribers by the end of this year. Comcast Cable's HDTV deployment is ahead of schedule, having already reached the year-end goal to have HDTV available to 65% of our subscribers. Comcast now plans to have HDTV available to nearly 75% of subscribers by the end of this year. To further enhance Digital Cable, Comcast plans to roll out Digital Video Recorder (DVR) service beginning in the fourth quarter of 2003 and to have DVRs available to all of the Company's subscribers by the end of 2004. In the third quarter, Comcast Cable added 472,700 high-speed Internet customers, a pro forma increase in net additions of 39.4% over the same prior year period and nearly 35% above the second quarter of 2003, to finish the third quarter with 4.861 million subscribers, representing a penetration rate of 14.5%. More than 84% of the homes in Comcast's footprint, or over 33 million homes, now have access to high-speed Internet service. This represents the addition of over 1.3 million homes to the service's footprint during the third quarter. Subscriber growth during the fourth quarter is expected to be driven by continuing increases in penetration, expansion of the service's footprint to 34 million homes, and expanded retail distribution to more than 4,000 retail outlets. In the third quarter, cable capital expenditures totaled $1.045 billion as Comcast Cable completed the rebuild of over 14,800 miles of plant to end the quarter with nearly 92% of its footprint upgraded to provide two-way digital and high-speed Internet services. The acquired systems are now 89% upgraded to deliver two-way digital cable and high-speed Internet service, up from 85% at June 30, 2003. With nearly 43,000 miles upgraded by September 30, 2003, the rebuild is well ahead of schedule and the company now expects to upgrade approximately 53,000 miles of plant this year. By the end of the year, Comcast will have 95% of its network upgraded, 15% ahead of its original goal. This accelerated rebuild will be accomplished while maintaining our original capital expenditure guidance of $4 billion. Comcast expects to complete its network upgrade in 2004. Content and Other Comcast's content businesses include E! Networks (E! Entertainment and Style), Comcast-Spectacor, The Golf Channel, Outdoor Life Network, and G4. In the third quarter, Comcast's content businesses reported revenue of $173 million, a 17.5% increase over the third quarter of 2002 and operating cash flow of $50 million, an increase of 48.8% from the $33 million reported in the third quarter of 2002. Operating cash flow reflected increases in distribution and advertising revenues at each of the cable channels offset by continued funding for expansion of Outdoor Life and G4. Other primarily includes corporate overhead and eliminations between our businesses and reported an operating cash flow loss of $38 million in the third quarter of 2003. Consolidated Results The Company's consolidated results include all acquisitions as of the date of their closing. The Company acquired AT&T Broadband in November 2002 adding over 13 million cable subscribers to our customer base. Comcast sold its 57% ownership interest in QVC in September 2003. QVC's results are presented as discontinued operations for all periods presented. For the three months ended September 30, 2003, the Company reported consolidated revenues of $4.546 billion, as compared to $1.698 billion reported in the third quarter of 2002. Consolidated operating cash flow increased to $1.632 billion from the $642 million reported in the third quarter of 2002. Increases in revenue, operating cash flow, depreciation and amortization and interest expense primarily reflect the acquisition of AT&T Broadband in November 2002. For the three months ended September 30, 2003, the Company reported operating income of $493 million compared to operating income of $271 million in the third quarter of 2002. The Company reported a consolidated net loss from continuing operations of $153 million or $0.07 per share as compared to net income from continuing operations of $24 million or $0.03 per share in the third quarter of 2002. Contributing to the net loss in 2003 was the impact of the acquisition of AT&T Broadband and $182 million in investment losses primarily related to the Company's position in Liberty Media. Please refer to Table 7-A, B and C of this release for a reconciliation of historical and pro forma data and for details regarding non-operating items. For the three months ended September 30, 2003, the Company reported net income of $3.176 billion or $1.41 per share, driven by the gain on the sale of our 57% stake in QVC. Pro forma consolidated results are presented as if the acquisition of AT&T Broadband was effective on January 1, 2002. For the third quarter of 2003, the Company reported pro forma consolidated revenues of $4.546 billion, an 8.8% increase from the $4.177 billion in the third quarter of 2002. Pro forma consolidated operating cash flow for the third quarter of 2003 was $1.632 billion, a 36.9% increase from the $1.192 billion in the prior year quarter. Included in the third quarter of 2002 is $107 million of acquisition and employee termination related costs incurred by AT&T Broadband in the third quarter of 2002. Excluding these costs, pro forma consolidated operating cash flow grew 25.7%. Pro forma consolidated operating income was $493 million, as compared to operating income of $44 million in the third quarter of 2002. Balance Sheet and Liquidity During the third quarter, Comcast continued to make significant progress to strengthen its balance sheet and liquidity position. At September 30, 2003, Comcast's total debt was $30.4 billion, including $5.4 billion of exchangeable notes collateralized by equity securities that the Company owns, resulting in debt excluding exchangeables reaching $25.0 billion at September 30, 2003. The Company reduced total debt by $1.7 billion during the quarter primarily through the use of cash proceeds from the sale of QVC. On September 17, 2003 Comcast completed the sale of QVC, receiving 217.7 million shares of Liberty Media common stock and, after a series of transactions, $4.35 billion in cash and $1 billion of Liberty Media notes. The remaining cash proceeds from the sale of QVC will be used to pay income taxes and to further reduce the amount of debt outstanding. Financial Guidance 2003 The Company is increasing its guidance for high-speed Internet subscriber net additions to 1.7 million from 1.6 million net additions to finish 2003 with approximately 5.3 million high-speed Internet subscribers. As a result of the Company's reduced marketing efforts and focus on telephone service profitability Comcast now expects to lose approximately 175,000 Comcast Cable phone customers this year, a modest adjustment from the original expectation of up to a 150,000 telephone customer decline. The Company reaffirms all other guidance for 2003 for its cable and content businesses. This press release contains forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could significantly affect actual results from those expressed in any such forward-looking statements. Readers are directed to Comcast's Annual Report on Form 10-K for a description of such risks and uncertainties. Comcast Corporation will host a conference call with the financial community today, October 30, 2003 at 10:30 a.m. Eastern Time (ET). The conference call will be broadcast live on the Company's Investor Relations website at www.cmcsa.com or www.cmcsk.com. A recording of the call will be available on the Investor Relations websites starting at 12:30 p.m. ET on October 30, 2003. Those parties interested in participating via telephone should dial (847) 619-6818. A telephone replay will begin immediately following the call until October 31, 2003 at midnight ET. To access the rebroadcast, please dial (630) 652-3000 and enter passcode number 7746406. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to e-mail Alerts. Comcast Corporation (www.comcast.com) is principally involved in the development, management and operation of broadband cable networks and in the provision of programming content. The Company is the largest cable company in the United States, serving more than 21 million cable subscribers. The Company's content businesses include majority ownership of Comcast Spectacor, Comcast SportsNet, E! Entertainment Television, Style, The Golf Channel, Outdoor Life Network and G4. Comcast Class A common stock and Class A Special common stock trade on The NASDAQ Stock Market under the symbols CMCSA and CMCSK, respectively. Comcast Corporation TABLE 1 Condensed Consolidated Statement of Operations (Unaudited) (amounts in millions, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Service revenues $4,546 $1,698 $13,606 $5,102 Operating, selling, general and administrative expenses 2,914 1,056 8,934 3,171 Operating cash flow 1,632 642 4,672 1,931 Depreciation and amortization 1,139 371 3,460 1,091 Operating Income 493 271 1,212 840 Interest expense (565) (172) (1,579) (535) Investment loss, net (182) (47) (418) (702) Other income (expense), net 12 (4) 38 (67) (735) (223) (1,959) (1,304) Income (Loss) from Continuing Operations before Income (242) 48 (747) (464) Taxes and Minority Interest Income tax benefit (expense) 103 (27) 231 123 Minority interest (14) 3 (85) (23) Income (Loss) from Continuing Operations (153) 24 (601) (364) Income from discontinued operations, net of tax (1) 39 52 168 141 Gain on discontinued operations, net of tax (1) 3,290 - 3,290 - Net Income (Loss) $3,176 $76 $2,857 ($223) Basic and Diluted earnings (loss) per common share Income (loss) from continuing operations ($0.07) $0.03 ($0.27) ($0.38) Income from discontinued operations 0.02 0.05 0.08 0.15 Gain on discontinued operations 1.46 - 1.46 - Net income (loss) per common share $1.41 $0.08 $1.27 ($0.23) Basic weighted average number of common shares outstanding 2,257 953 2,256 952 Diluted weighted average number of common shares outstanding 2,257 959 2,256 952 (1) On September 17, 2003 the Company completed the sale of its approximate 57% interest in QVC, Inc. Accordingly, the results have been presented as discontinued operations. Comcast Corporation TABLE 2 Condensed Consolidated Balance Sheet (Unaudited) (dollars in millions) September 30, December 31, 2003 2002 ASSETS CURRENT ASSETS Cash and cash equivalents $3,245 $505 Investments 2,982 3,258 Accounts receivable, net 850 862 Other current assets 537 380 Current assets of discontinued operations and assets held for sale - 2,094 Total current assets 7,614 7,099 INVESTMENTS 15,463 15,174 PROPERTY AND EQUIPMENT, net 18,194 18,381 FRANCHISE RIGHTS AND GOODWILL 63,586 64,784 OTHER NONCURRENT ASSETS - including other intangible assets, net 4,959 6,095 NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS - 1,595 $109,816 $113,128 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable, accrued expenses and other current liabilities $7,050 $7,637 Short-term debt and current portion of long-term debt 1,221 5,398 Current portion of exchangeable debt 1,844 1,555 Current liabilities of discontinued operations - 816 Total current liabilities 10,115 15,406 LONG-TERM DEBT, less current portion 23,754 24,052 LONG-TERM EXCHANGEABLE DEBT, less current portion 3,562 3,904 OTHER NONCURRENT LIABILITIES & MINORITY INTEREST 31,147 30,514 NON-CURRENT LIABILITIES & MINORITY INTEREST OF DISCONTINUED OPERATIONS - 923 STOCKHOLDERS' EQUITY 41,238 38,329 $109,816 $113,128 Note: The value of certain assets and liabilities in the November 2002 AT&T Broadband acquisition are based on preliminary valuations and are subject to adjustment as additional information is obtained, including reports from valuation specialists and information related to the cost of terminating or meeting contractual obligations. Comcast Corporation TABLE 3 Condensed Consolidated Statement of Cash Flows (Unaudited) (dollars in millions) Nine Months Ended September 30, 2003 2002 OPERATING ACTIVITIES Net cash provided by operating activities from continuing operations $2,519 $1,643 FINANCING ACTIVITIES Proceeds from borrowings 9,377 876 Retirements and repayments of debt (13,675) (1,801) Other, net (3) 70 Net cash used in financing activities from continuing operations (4,301) (855) INVESTING ACTIVITIES Capital expenditures (3,093) (1,035) Proceeds from restructuring of TWE investment 2,100 - Proceeds from sales of investments 977 734 Proceeds from sale of Liberty Notes 3,000 - Proceeds from sale of discontinued operations and assets held for sale 1,875 - Other, net (337) (291) Net cash provided by (used in) investing activities from continuing operations 4,522 (592) INCREASE IN CASH AND CASH EQUIVALENTS 2,740 196 CASH AND CASH EQUIVALENTS, beginning of period 505 214 CASH AND CASH EQUIVALENTS, end of period $3,245 $410 Comcast Corporation TABLE 4 Pro Forma Financial Data by Business Segment (Unaudited) (1) (dollars in millions) (2) Cable Content Other Total Three Months Ended September 30, 2003 Revenues $4,374 $173 ($1) $4,546 Operating Cash Flow $1,620 $50 ($38) $1,632 Operating Income (Loss) $534 $14 ($55) $493 Operating Cash Flow Margin 37.0% 28.9% NM 35.9% Capital Expenditures (6) $1,045 $4 $32 $1,081 Three Months Ended September 30, 2002 Revenues $4,035 $148 ($6) $4,177 Operating Cash Flow (3) $1,198 $33 ($39) $1,192 Operating Income (Loss) $112 ($7) ($61) $44 Operating Cash Flow Margin (3) 29.7% 22.8% NM 28.5% Capital Expenditures (5) $1,411 $2 $5 $1,418 Nine Months Ended September 30, 2003 Revenues $12,984 $635 ($14) $13,605 Operating Cash Flow $4,638 $169 ($135) $4,672 Operating Income (Loss) $1,339 $61 ($188) $1,212 Operating Cash Flow Margin 35.7% 26.6% NM 34.3% Capital Expenditures (6) $3,045 $14 $34 $3,093 Nine Months Ended September 30, 2002 Revenues $11,888 $547 ($25) $12,410 Operating Cash Flow (3) $3,421 $145 ($115) $3,451 Operating Income (Loss) (4) ($16,325) $37 ($198) ($16,486) Operating Cash Flow Margin (3) 28.8% 26.6% NM 27.8% Capital Expenditures (5) $3,789 $13 $11 $3,813 (1) See Non-GAAP and Other Financial Measures in Table 7. Historical financial data by business segment, as required under generally accepted accounting principles, is available in the Company's quarterly report on Form 10-Q. Financial data has been adjusted to reflect QVC as discontinued operations. (2) Pro forma financial data includes the results of AT&T Broadband acquired in November 2002 (acquired systems). Pro forma financial data excludes the results of the 314,000 cable subscribers sold to Bresnan Communications in March 2003 and excludes the results of the net reduction of 16,000 subscribers associated with the cable system exchange with Insight Communications in February 2003. (3) Included for the three and nine months ended September 30, 2002 are acquisition & employee termination related costs of $107 and $295 million, respectively, incurred by AT&T Broadband prior to the acquisition of AT&T Broadband by Comcast. (4) Includes $16.525 billion impairment charge related to the write down of AT&T Broadband goodwill and cable franchise rights. (5) For acquired systems, includes capital expenditures made since January 1, 2002. (6) Our Cable segment's capital expenditures are comprised of the following categories: Recurring YTD Capital 3Q03 09/30/03 Percentage* Customer Premise Equipment (CPE) $381 $1,148 15%-25% Scalable Infrastructure 92 227 2%-10% Line Extensions 62 173 - Upgrade/Rebuild 376 1,135 20%-30% Support Capital 134 362 100% Total $1,045 $3,045 CPE includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues (e.g. digital converters). Scalable infrastructure includes costs, not CPE or network related, to secure growth of new customers, revenue units and additional bandwidth revenues or provide service enhancements (e.g. headend equipment). Line extensions include network costs associated with entering new service areas (e.g. fiber/coaxial cable). Upgrade/rebuild includes costs to enhance or replace existing fiber/coaxial cable networks, including recurring betterments. Support capital includes costs associated with the replacement or enhancement of non-network assets due to obsolescence and wear out (e.g. non-network equipment, land, buildings and vehicles). * Represents an estimate of the recurring capital expenditures for each of the above components. Comcast Corporation TABLE 5 Pro Forma Data - Cable Segment Components (Unaudited) (1)(2) (dollars in millions, except average revenue per basic subscriber data) Historical Acquired Systems (3) Systems (3) Total Three Months Ended September 30 2003 2002 2003 2002 2003 2002 Revenues: Video (4) $1,249 $1,180 $1,771 $1,685 $3,020 $2,865 High-Speed Internet 244 156 342 235 586 391 Phone 6 6 183 205 189 211 Advertising 102 93 174 165 276 258 Other (5) 65 63 87 106 152 169 Franchise Fees 52 50 99 91 151 141 Total Revenues $1,718 $1,548 $2,656 $2,487 $4,374 $4,035 Average Total Revenue per Basic Subscriber $67.16 $60.72 $68.80 $64.43 $68.14 $62.74 Average Video Revenue per Basic Subscriber $48.83 $46.31 $45.87 $43.67 $47.05 $44.71 Operating Cash Flow (6) $742 $647 $878 $551 $1,620 $1,198 Operating Income (Loss) $409 $338 $125 ($226) $534 $112 Operating Cash Flow Margin (6) 43.2% 41.7% 33.0% 22.2% 37.0% 29.7% Capital Expenditures (8) $324 $322 $721 $1,089 $1,045 $1,411 Operating Cash Flow (Deficit), Net of Capital Expenditures $418 $325 $157 ($538) $575 ($213) Historical Acquired Systems (3) Systems (3) Total Nine Months Ended September 30 2003 2002 2003 2002 2003 2002 Revenues: Video (4) $3,735 $3,515 $5,303 $5,065 $9,038 $8,580 High-Speed Internet 677 415 949 637 1,626 1,052 Phone 17 18 601 576 618 594 Advertising 304 274 493 465 797 739 Other (5) 189 184 263 311 452 495 Franchise Fees 157 152 296 276 453 428 Total Revenues $5,079 $4,558 $7,905 $7,330 $12,984 $11,888 Average Total Revenue per Basic Subscriber $66.08 $59.58 $68.54 $62.67 $67.55 $61.24 Average Video Revenue per Basic Subscriber $48.60 $45.98 $45.97 $43.29 $47.02 $44.35 Operating Cash Flow (6) $2,155 $1,897 $2,483 $1,524 $4,638 $3,421 Operating Income (Loss) (7) $1,198 $997 $141 ($17,322) $1,339 ($16,325) Operating Cash Flow Margin (6) 42.4% 41.6% 31.4% 20.8% 35.7% 28.8% Capital Expenditures (8) $1,009 $1,011 $2,036 $2,778 $3,045 $3,789 Operating Cash Flow (Deficit), Net of Capital Expenditures $1,146 $886 $447 ($1,254) $1,593 ($368) (1) See Non-GAAP and Other Financial Measures in Table 7. (2) Pro forma financial data includes the results of AT&T Broadband acquired in November 2002 (acquired systems). Pro forma financial data excludes the results of the 314,000 cable subscribers sold to Bresnan Communications in March 2003 and excludes the results of the net reduction of 16,000 subscribers associated with the cable system exchange with Insight Communications in February 2003. (3) Historical systems represent those cable businesses operated by the Company prior to the acquisition of AT&T Broadband. The acquired systems represent those cable businesses acquired from AT&T. (4) Video revenues consist of our basic, expanded basic, premium, pay- per-view, equipment and digital services. (5) Other revenues include installation revenues, guide revenues, commissions from electronic retailing, regional sports programming networks, revenues from our digital media center and other product offerings of AT&T Broadband in 2002. (6) Included for the three and nine months ended September 30, 2002 are acquisition & employee termination related costs of $107 and $295 million, respectively, incurred by AT&T Broadband prior to the acquisition of AT&T Broadband by Comcast. (7) Includes $16.525 billion impairment charge related to the write down of AT&T Broadband goodwill and cable franchise rights. (8) For acquired systems, includes capital expenditures made since January 1, 2002. Comcast Corporation TABLE 6 Pro Forma Data - Cable Segment (Unaudited) (1)(2) Historical Systems (3) 3Q03 2Q03 3Q02 Cable Homes Passed (000's) 14,447.2 14,364.2 14,139.3 Subscribers (000's) 8,514.6 8,536.5 8,504.9 Penetration 58.9% 59.4% 60.2% Quarterly Net Subscriber Additions (000's) (21.9) (23.1) (2.6) Digital Cable "Digital Ready" Subscribers (000's) 8,514.6 8,536.5 8,478.4 Subscribers (000's) 2,550.2 2,417.6 2,113.5 Penetration 30.0% 28.3% 24.9% Quarterly Net Subscriber Additions (000's) 132.6 94.9 131.3 Monthly Average Revenue per Subscriber $15.08 $15.47 $15.52 High-Speed Internet "Available" Homes (000's) 13,631.1 13,424.7 12,061.1 Subscribers (000's) 2,072.0 1,881.8 1,338.8 Penetration 15.2% 14.0% 11.1% Quarterly Net Subscriber Additions (000's) 190.2 163.6 169.7 Monthly Average Revenue per Subscriber $41.22 $42.31 $41.34 Phone "Available" Homes (000's) 453.7 355.5 274.6 Subscribers (000's) 39.4 38.5 38.7 Penetration 8.7% 10.8% 14.1% Quarterly Net Subscriber Additions (000's) 0.9 0.5 (1.9) Monthly Average Revenue per Subscriber $51.19 $49.58 $50.03 Total Revenue Generating Units (000's) (4) 13,176.2 12,874.4 11,995.9 Comcast Corporation TABLE 6 Pro Forma Data - Cable Segment (Unaudited) (1)(2) Acquired Systems (3) 3Q03 2Q03 3Q02 Cable Homes Passed (000's) 25,299.6 25,224.7 24,640.8 Subscribers (000's) 12,883.4 12,860.7 12,831.9 Penetration 50.9% 51.0% 52.1% Quarterly Net Subscriber Additions (000's) 22.7 36.2 (131.1) Digital Cable "Digital Ready" Subscribers (000's) 12,883.4 12,860.7 12,831.9 Subscribers (000's) 4,723.2 4,537.5 4,123.6 Penetration 36.7% 35.3% 32.1% Quarterly Net Subscriber Additions (000's) 185.7 67.4 277.8 Monthly Average Revenue per Subscriber $15.10 $15.18 $14.08 High-Speed Internet "Available" Homes (000's) 19,803.7 18,698.9 16,830.0 Subscribers (000's) 2,789.0 2,506.5 1,914.6 Penetration 14.1% 13.4% 11.4% Quarterly Net Subscriber Additions (000's) 282.5 187.3 169.3 Monthly Average Revenue per Subscriber $43.02 $44.11 $42.83 Phone "Available" Homes (000's) 8,928.7 8,808.4 8,039.0 Subscribers (000's) 1,272.4 1,328.0 1,322.9 Penetration 14.3% 15.1% 16.5% Quarterly Net Subscriber Additions (000's) (55.6) (52.8) 102.7 Monthly Average Revenue per Subscriber $46.87 $49.16 $53.75 Total Revenue Generating Units (000's) (4) 21,668.0 21,232.7 20,193.0 Comcast Corporation TABLE 6 Pro Forma Data - Cable Segment (Unaudited) (1)(2) Total 3Q03 2Q03 3Q02 Cable Homes Passed (000's) 39,746.8 39,588.9 38,780.1 Subscribers (000's) 21,398.0 21,397.2 21,336.8 Penetration 53.8% 54.0% 55.0% Quarterly Net Subscriber Additions (000's) 0.8 13.1 (133.7) Digital Cable "Digital Ready" Subscribers (000's) 21,398.0 21,397.2 21,310.3 Subscribers (000's) 7,273.4 6,955.1 6,237.1 Penetration 34.0% 32.5% 29.3% Quarterly Net Subscriber Additions (000's) 318.3 162.3 409.1 Monthly Average Revenue per Subscriber $15.09 $15.28 $14.57 High-Speed Internet "Available" Homes (000's) 33,434.8 32,123.6 28,891.1 Subscribers (000's) 4,861.0 4,388.3 3,253.4 Penetration 14.5% 13.7% 11.3% Quarterly Net Subscriber Additions (000's) 472.7 350.9 339.0 Monthly Average Revenue per Subscriber $42.25 $43.34 $42.22 Phone "Available" Homes (000's) 9,382.4 9,163.9 8,313.6 Subscribers (000's) 1,311.8 1,366.5 1,361.6 Penetration 14.0% 14.9% 16.4% Quarterly Net Subscriber Additions (000's) (54.7) (52.3) 100.8 Monthly Average Revenue per Subscriber $46.99 $49.17 $53.63 Total Revenue Generating Units (000's) (4) 34,844.2 34,107.1 32,188.9 (1) See Non-GAAP and Other Financial Measures in Table 7. (2) Pro forma financial data includes the results of AT&T Broadband acquired in November 2002 (acquired systems). Pro forma financial data excludes the results of the 314,000 cable subscribers sold to Bresnan Communications in March 2003 and excludes the results of the net reduction of 16,000 subscribers associated with the cable system exchange with Insight Communications in February 2003. Pro forma subscriber data includes 6,100 subscribers acquired from Telemedia, Inc. in June 2003, 16,600 subscribers acquired from ATM in July 2003 and 16,000 subscribers acquired from Millennium Inc. in September 2003. (3) Historical systems represent those cable businesses operated by the Company prior to the acquisition of AT&T Broadband. The acquired systems represent those cable businesses acquired from AT&T. (4) The sum total of all primary analog video, digital video, high-speed Internet and phone customers, but excluding additional outlets. Comcast Corporation TABLE 7 Non-GAAP and Other Financial Measures Prior to the first quarter of 2003, we described the performance measure, operating income before depreciation and amortization, as Operating Cash Flow. In the first quarter of 2003, we referred to the same measure as EBITDA (earnings before interest, taxes, depreciation and amortization) in response to new guidance on Non-GAAP measures provided by the SEC in Regulation G and amendments to Item 10 of Regulation S-K. In the second quarter, we reverted back to describing this measure as Operating Cash Flow based on additional guidance provided by the SEC staff. This is only a change in terminology. We have not changed the calculation of this measure. Operating Cash Flow is the primary basis used to measure the operational strength and performance of our businesses. Free Cash Flow is an additional performance measure used as an indicator of our ability to service debt and make strategic investments. We use Debt Excluding Exchangeables as a measure of debt that will require cash from future operations or financings. We also adjust certain historical data on a pro forma basis following significant acquisitions or dispositions to enhance comparability. Operating Cash Flow is defined as operating income before depreciation and amortization and impairment charges, if any, related to fixed and intangible assets. As such, it eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of our businesses and intangible assets recognized in business combinations, and is unaffected by our capital structure or investment activities. Our management and Board of Directors use this measure in evaluating our consolidated operating performance and the operating performance of all of our operating segments. This metric is used to allocate resources and capital to our operating segments and is a significant component of our annual incentive compensation programs. We believe that Operating Cash Flow is also useful to investors as it is one of the bases for comparing our operating performance with other companies in our industries, although our measure of Operating Cash Flow may not be directly comparable to similar measures used by other companies. As Operating Cash Flow is the measure of our segment profit or loss, we reconcile it to operating income, the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP), in the business segment footnote of our quarterly and annual financial statements. Therefore, we believe our measure of Operating Cash Flow for our business segments is not a "non-GAAP financial measure" as contemplated by Regulation G adopted by the Securities and Exchange Commission. Consolidated Operating Cash Flow is a non-GAAP financial measure. Free Cash Flow, which is a non-GAAP financial measure, is defined as Operating Cash Flow less net interest, cash paid for taxes, and capital expenditures. As such, it is unaffected by fluctuations in working capital levels from period to period. It can also be computed as cash provided by operating activities less capital expenditures adjusted for the change in operating assets and liabilities, net of acquisitions. Debt Excluding Exchangeables, which is a non-GAAP financial measure, refers to the aggregate amount of our consolidated debt and capital lease obligations less the amount of notes that are collateralized by securities that we own. Pro forma data is used by management to evaluate performance when significant acquisitions or dispositions occur. Historical data reflects results of acquired businesses only after the acquisition dates while pro forma data enhances comparability of financial information between periods by adjusting the data as if the acquisitions (or dispositions) occurred at the beginning of the prior year. Our pro forma data is only adjusted for the timing of acquisitions and 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. We believe our pro forma data is not a non-GAAP financial measure as contemplated by Regulation G. Operating Cash Flow and Free Cash Flow should not be considered as substitutes for operating income (loss), net income (loss), net cash provided by operating activities or other measures of performance or liquidity reported in accordance with GAAP. Debt Excluding Exchangeables should not be considered as a substitute for Total Debt. Additionally, in the opinion of management, our pro forma data is not necessarily indicative of future results or what results would have been had the acquired businesses been operated by us after the assumed earlier date. Following are quantitative reconciliations of Free Cash Flow, Debt Excluding Exchangeables, Consolidated Operating Cash Flow, and, although not required by Regulation G, reconciliations of business segment Operating Cash Flow and pro forma data. Comcast Corporation TABLE 7-A continued Reconciliations of Historical and Pro Forma Data by Business Segment (Unaudited) (dollars in millions) Historical (1) Three Months Ended September 30, 2003 Cable Content Other Total Revenues $4,374 $173 ($1) $4,546 Operating expenses (excluding depreciation & amortization) 2,754 123 37 2,914 Operating Cash Flow $1,620 $50 ($38) $1,632 Depreciation and amortization 1,086 36 17 1,139 Operating income (loss) $534 $14 ($55) $493 Capital expenditures $1,045 $4 $32 $1,081 Three Months Ended September 30, 2002 Cable Content Other Total Revenues $1,548 $148 $2 $1,698 Operating expenses (excluding depreciation & amortization) 903 115 38 1,056 Operating Cash Flow $645 $33 ($36) $642 Depreciation and amortization 309 40 22 371 Operating income (loss) $336 ($7) ($58) $271 Capital expenditures $322 $2 $5 $329 Nine Months Ended September 30, 2003 Cable Content Other Total Revenues $12,985 $635 ($14) $13,606 Operating expenses (excluding depreciation & amortization) 8,347 466 121 8,934 Operating Cash Flow $4,638 $169 ($135) $4,672 Depreciation and amortization 3,299 108 53 3,460 Operating income (loss) $1,339 $61 ($188) $1,212 Capital expenditures $3,045 $14 $34 $3,093 Nine Months Ended September 30, 2002 Cable Content Other Total Revenues $4,558 $547 ($3) $5,102 Operating expenses (excluding depreciation & amortization) 2,662 402 107 3,171 Operating Cash Flow $1,896 $145 ($110) $1,931 Depreciation and amortization 900 108 83 1,091 Impairment charge - - - - Operating income (loss) $996 $37 ($193) $840 Capital expenditures $1,011 $13 $11 $1,035 Comcast Corporation TABLE 7-A continued Reconciliations of Historical and Pro Forma Data by Business Segment (Unaudited) (dollars in millions) Adjustments (2) Three Months Ended September 30, 2003 Cable Other Pro forma Revenues - - $4,546 Operating expenses (excluding depreciation & amortization) - - 2,914 Operating Cash Flow - - $1,632 Depreciation and amortization - - 1,139 Operating income (loss) - - $493 Capital expenditures - - $1,081 Adjustments (2) Three Months Ended September 30, 2002 Cable Other Pro forma Revenues $2,487 ($8) $4,177 Operating expenses (excluding depreciation & amortization) 1,934 (5) 2,985 Operating Cash Flow $553 ($3) $1,192 Depreciation and amortization 777 - 1,148 Operating income (loss) ($224) ($3) $44 Capital expenditures $1,089 - $1,418 Adjustments (2) Nine Months Ended September 30, 2003 Cable Other Pro forma Revenues (1) - $13,605 Operating expenses (excluding depreciation & amortization) (1) - 8,933 Operating Cash Flow - - $4,672 Depreciation and amortization - - 3,460 Operating income (loss) - - $1,212 Capital expenditures - - $3,093 Adjustments (2) Nine Months Ended September 30, 2002 Cable Other Pro forma Revenues $7,330 ($22) $12,410 Operating expenses (excluding depreciation & amortization) 5,805 (17) 8,959 Operating Cash Flow $1,525 ($5) $3,451 Depreciation and amortization 2,321 - 3,412 Impairment charge 16,525 - 16,525 Operating income (loss) ($17,321) ($5) ($16,486) Capital expenditures $2,778 - $3,813 Reconciliation of Total Debt to Debt Excluding Exchangeables (Unaudited) (dollars in millions) As of September 30, 2003 Current portion of long-term debt $3,065 Long-term debt 27,316 Total Debt $30,381 Exchangeable debt 5,406 Debt excluding exchangeables $24,975 (1) Historical amounts have been adjusted to reflect QVC as discontinued operations. (2) Pro forma data is only adjusted for timing of the acquisitions (or dispositions) and for acquisitions 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. Comcast Corporation TABLE 7-B continued Reconciliations of Cable Segment Historical and Pro Forma Data (Unaudited) (dollars in millions) Three Months Ended December 31, 2002 Historical Adjustments (1) Pro forma Revenues $2,792 $1,357 $4,149 Operating expenses (excluding depreciation & amortization) 1,890 1,211 3,101 Operating Cash Flow 902 146 1,048 Depreciation and amortization 770 421 1,191 Operating income (loss) $132 ($275) ($143) Three Months Ended September 30, 2002 Historical Adjustments (1) Pro forma Revenues $1,548 $2,487 $4,035 Operating expenses (excluding depreciation & amortization) 901 1,936 2,837 Operating Cash Flow 647 551 1,198 Depreciation and amortization 309 777 1,086 Operating income (loss) $338 ($226) $112 Three Months Ended June 30, 2002 Historical Adjustments (1) Pro forma Revenues $1,541 $2,468 $4,009 Operating expenses (excluding depreciation & amortization) 888 1,944 2,832 Operating Cash Flow 653 524 1,177 Depreciation and amortization 298 785 1,083 Impairment charge - 16,525 16,525 Operating income (loss) $355 ($16,786) ($16,431) Three Months Ended March 31, 2002 Historical Adjustments (1) Pro forma Revenues $1,469 $2,375 $3,844 Operating expenses (excluding depreciation & amortization) 872 1,926 2,798 Operating Cash Flow 597 449 1,046 Depreciation and amortization 293 759 1,052 Operating income (loss) $304 ($310) ($6) (1) Pro forma data is only adjusted for timing of the acquisitions (or dispositions) and for acquisitions 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. Comcast Corporation TABLE 7-C continued Reconciliation of Net Income (Loss) to Free Cash Flow (Unaudited) (dollars in millions, except per share data) Three Months Ended September 30, 2003 2002 $ per $ per share (3) share (3) Net Income (Loss) as reported $3,176 $1.41 $76 $0.08 Discontinued Operations, net of tax (3,329) (1.47) (52) (0.05) Non-operating items, net of tax (1) 120 0.05 30 0.03 Net Income (Loss) as adjusted ($33) ($0.01) $54 $0.06 Items to reconcile net income (loss) as adjusted to Operating Cash Flow: Depreciation & amortization 1,139 0.50 371 0.39 Interest expense 565 0.25 172 0.18 Income tax expense (39) (0.02) 45 0.04 Operating Cash Flow $1,632 $0.72 $642 $0.67 2003 2002 Operating Cash Flow $1,632 $1,632 $642 $642 Less: Interest, net (2) (556) (556) (155) (155) Cash Paid for Income Taxes (14) (14) (1) (1) Change in Operating Assets & Liabilities, net of acquisitions (254) 329 Net Cash Provided by Operating Activities $808 $815 Less: Capital Expenditures (1,081) (329) Free Cash Flow ($19) $157 Nine Months Ended September 30, 2003 2002 $ per $ per share (3) share (3) Net Income (Loss) as reported $2,857 $1.27 ($223) ($0.23) Discontinued Operations, net of tax (3,458) (1.53) (141) (0.15) Non-operating items, net of tax (1) 302 0.13 515 0.54 Net Income (Loss) as adjusted ($299) ($0.13) $151 $0.16 Items to reconcile net income (loss) as adjusted to Operating Cash Flow: Depreciation & amortization 3,460 1.53 1,091 1.15 Interest expense 1,579 0.70 535 0.56 Income tax expense (68) (0.03) 154 0.16 Operating Cash Flow $4,672 $2.07 $1,931 $2.03 2003 2002 Operating Cash Flow $4,672 $4,672 $1,931 $1,931 Less: Interest, net (2) (1,624) (1,624) (489) (489) Cash Paid for Income Taxes (67) (67) (11) (11) Change in Operating Assets & Liabilities, net of acquisitions (462) 212 Net Cash Provided by Operating Activities $2,519 $1,643 Less: Capital Expenditures (3,093) (1,035) Free Cash Flow ($112) $396 Three Months Ended September 30, (1) Detail of non-operating 2003 2002 items: $ per share (3) $ per share (3) Investment (income) expense - mark to market adjustments on trading securities, derivatives and hedged items, net $213 $0.09 $47 $0.05 Investment (income) expense - (gain) loss on sales and exchanges of investments (4) - - - Investment expense - investment impairment losses (4) - - 6 0.01 All other, net (5) (25) (0.01) (5) (0.01) Total non-operating items 184 0.08 48 0.05 Tax effect (64) (0.03) (18) (0.02) Non-operating items, net of tax $120 $0.05 $30 $0.03 Nine Months Ended September 30, (1) Detail of non-operating 2003 2002 items: $ per share (3) $ per share (3) Investment (income) expense - mark to market adjustments on trading securities, derivatives and hedged items, net $477 $0.21 $393 $0.41 Investment (income) expense - (gain) loss on sales and exchanges of investments (26) (0.01) 101 0.11 Investment expense - investment impairment losses (4) 70 0.03 227 0.24 All other, net (5) (56) (0.02) 71 0.07 Total non-operating items 465 0.21 792 0.83 Tax effect (163) (0.08) (277) (0.29) Non-operating items, net of tax $302 $0.13 $515 $0.54 (2) Includes interest expense net of interest income and excludes non- cash interest and subsidiary preferred dividends. (3) Diluted weighted average shares outstanding for the three and nine months ended September 30, 2003 were 2,257 billion and 2,256 billion, respectively. Diluted weighted average shares outstanding for the three and nine months ended September 30, 2002 were 959 million and 952 million, respectively. (4) We record losses on our investments for which we have determined that a decline in value of the investment was considered other than temporary. (5) Includes investment, interest and dividend income, equity in net (income) losses of affiliates, other income (expense) and minority interest. SOURCE Comcast Corporation -0- 10/30/2003 /CONTACT: Marlene S. Dooner, Vice President, Investor Relations, +1-215-981-7392; Leslie A. Arena, Director, Investor Relations, +1-215-981-8511; or Daniel J. Goodwin, Director, Investor Relations, +1-215-981-7518, all of Comcast Corporation/ /Web site: http://www.cmcsa.com http://www.cmcsk.com / (CMCSK CMCSA) CO: Comcast Corporation ST: Pennsylvania IN: ENT TVN CPR ITE SU: ERN CCA MAV