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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): February 18,
2009
Comcast
Corporation
(Exact
Name of Registrant
as
Specified in Charter)
|
Pennsylvania
|
||
|
(State
or Other Jurisdiction of Incorporation)
|
||
|
001-32871
|
27-0000798
|
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
|
One
Comcast Center
Philadelphia,
PA
|
19103-2838
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code: (215)
286-1700
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
2.02. Results of Operations and Financial Condition
On
February 18, 2009, Comcast Corporation (“Comcast”) issued a press release
reporting the results of its operations for the three and twelve months ended
December 31, 2008. The press release is attached hereto as Exhibit 99.1. Exhibit
99.2 sets forth the reasons Comcast believes that presentation of the non-GAAP
financial measures contained in the press release provides useful information to
investors regarding Comcast's financial condition and results of
operations. To the extent material, Exhibit 99.2 also discloses the
additional purposes, if any, for which Comcast's management uses these non-GAAP
financial measures. A reconciliation of these non-GAAP financial measures
with the most directly comparable GAAP financial measures is included in the
press release itself. Comcast does not intend for this Item 2.02 or
Exhibit 99.1 or Exhibit 99.2 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.
Item
9.01. Exhibits
|
Exhibit
Number
|
Description
|
|
|
99.1
|
Comcast
Corporation press release dated February 18, 2009.
|
|
|
99.2
|
Explanation
of Non-GAAP and Other Financial
Measures.
|
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 hereunto
duly authorized.
|
COMCAST
CORPORATION
|
||||
|
Date:
|
February
18, 2009
|
By:
|
/s/ Lawrence J. Salva | |
|
Lawrence
J. Salva
Senior
Vice President, Chief Accounting Officer
and
Controller
(Principal
Accounting
Officer)
|
||||
Exhibit
99.1
|
PRESS
RELEASE
|
 |
| Investor Contacts: | Press Contacts: | |||
|
Marlene
S. Dooner
|
(215)
286-7392
|
D’Arcy
Rudnay
|
(215)
286-8582
|
|
|
Jane
B. Kearns
|
(215)
286-4794
|
John
Demming
|
(215)
286-8011
|
|
| Michael A. Kelman | (215) 286-3035 |
COMCAST
REPORTS FOURTH QUARTER AND YEAR END RESULTS
|
§
|
2008 Consolidated Revenue
Increased 11%; Pro Forma Growth of
8%
|
|
§
|
2008 Consolidated Operating
Cash Flow Increased 11%;
Pro Forma Growth of
8%
|
|
§
|
2008 Consolidated Operating
Income Increased 21%;
Pro Forma Growth of
17%
|
|
§
|
2008 EPS of $0.86; 2008
Adjusted EPS of $0.91 Increased
23%
|
|
§
|
2008 Free Cash Flow Increased
56% to $3.7 Billion
|
|
§
|
Comcast Increases Quarterly
Dividend 8% — Planned at $0.27
Annually
|
Philadelphia,
PA – February 18, 2009 …Comcast Corporation (NASDAQ: CMCSA, CMCSK) today
reported results for the quarter and year ended December 31, 2008.
Brian
L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said,
“I am very pleased with our results and how we executed in 2008. Despite a very
difficult economic environment, we met or exceeded all of our financial targets,
demonstrating the strength of our subscription businesses. We also made progress
in our key strategic initiatives, including improving the customer experience,
deploying wideband in approximately 25% of our footprint, and beginning the
process of going ‘All-Digital’.
For
2009, our goal is to continue to deliver growth even in this challenging
environment and we remain focused on Free Cash Flow generation. In fact, as a
result of our confidence in the Free Cash Flow capability of our business, today
we are announcing an 8% increase in our dividend. We will also continue to
invest to support long-term growth and extend our competitive advantage while
strengthening our financial profile. We believe this approach and our focus on
improving the customer experience will continue to drive shareholder
value.”
Consolidated
Financial Results
Revenue increased 11% in 2008 to $34.3
billion, while Operating Cash Flow increased 11% to
$13.1 billion and Operating Income increased 21% to $6.7
billion. This growth was due to solid operating results at Comcast Cable and in
the Programming segment, as well as the positive impact of cable acquisitions
and the dissolution of the Insight Midwest Partnership. On a pro forma
basis1,
Consolidated Revenue increased 8% and Consolidated Operating Cash Flow increased
8%.
For
the quarter ended December 31, 2008, revenue increased 9% to $8.8 billion,
Operating Cash Flow increased 9% to $3.4 billion, and Operating Income increased
20% to $1.8 billion, all compared to the same time period in 2007. On a pro
forma basis, revenue increased 7% and Operating Cash Flow increased
7%.
For
additional detail on revenue and operating expenses, customer metrics, and
capital expenditures, please refer to the trending schedules on Comcast’s
Investor Relations website at www.cmcsa.com or www.cmcsk.com.
|
($ in
millions)
|
4th Quarter
|
Full Year
|
||||||||||||||||||||||
|
2007
|
2008
|
Growth
|
2007
|
2008
|
Growth
|
|||||||||||||||||||
|
Pro
Forma Revenue
|
||||||||||||||||||||||||
|
Cable
|
$ | 7,758 | $ | 8,296 | 7 | % | $ | 30,120 | $ | 32,443 | 8 | % | ||||||||||||
|
Programming
|
348 | 350 | - | 1,314 | 1,426 | 9 | % | |||||||||||||||||
|
Corporate
& Other
|
89 | 119 | 35 | % | 276 | 387 | 41 | % | ||||||||||||||||
|
Total
Consolidated Revenue
|
$ | 8,195 | $ | 8,765 | 7 | % | $ | 31,710 | $ | 34,256 | 8 | % | ||||||||||||
|
Pro
Forma Operating Cash Flow (OCF)
|
||||||||||||||||||||||||
|
Cable
|
$ | 3,196 | $ | 3,415 | 7 | % | $ | 12,246 | $ | 13,170 | 8 | % | ||||||||||||
|
Programming
|
49 | 55 | 10 | % | 286 | 362 | 26 | % | ||||||||||||||||
|
Corporate
& Other
|
(91 | ) | (100 | ) | (8 | %) | (423 | ) | (400 | ) | 5 | % | ||||||||||||
|
Total
Consolidated OCF
|
$ | 3,154 | $ | 3,370 | 7 | % | $ | 12,109 | $ | 13,132 | 8 | % | ||||||||||||
Earnings per
Share (EPS) for 2008 was $0.86 compared to $0.83 in 2007, which includes
a $600 million pretax impairment of the Clearwire investment in 2008, favorable
income tax adjustments in 2008 and gains from the dissolution of cable
partnerships in 2007 and 2008. Excluding these items, Adjusted Earnings per
Share2
increased 23% to $0.91.
Earnings
per Share for the quarter ended December 31, 2008 was $0.14 compared to $0.20 in
the same time period in 2007; Adjusted Earnings per Share increased 35% to $0.27
in the fourth quarter.
|
4th Quarter
|
Full Year
|
|||||||||||||||||||||||
|
2007
|
2008
|
Growth
|
2007
|
2008
|
Growth
|
|||||||||||||||||||
|
Earnings
per Share
|
$ | 0.20 | $ | 0.14 | (30 | %) | $ | 0.83 | $ | 0.86 | 4 | % | ||||||||||||
|
Adjustments,
net of tax:
|
||||||||||||||||||||||||
|
Gains
from dissolution of cable partnerships
|
- | - | - | $ | (0.09 | ) | $ | (0.05 | ) | - | ||||||||||||||
|
Favorable
income tax adjustments
|
- | - | - | - | $ | (0.03 | ) | - | ||||||||||||||||
|
Impairment
of the Clearwire investment
|
- | $ | 0.13 | - | - | $ | 0.13 | - | ||||||||||||||||
|
Adjusted
Earnings per Share
|
$ | 0.20 | $ | 0.27 | 35 | % | $ | 0.74 | $ | 0.91 | 23 | % | ||||||||||||
Free Cash Flow
(without the tax benefit from the 2008 Economic Stimulus package) totaled
$3.7 billion in 2008 as compared to $2.3 billion in 2007, a 56% increase. The
increase in Free Cash Flow (FCF) was due primarily to growth in Consolidated
Operating Cash Flow and lower capital expenditures. During 2008, consolidated
capital expenditures decreased 7% from the prior year to $5.7 billion, or 16.8%
of total revenue, reflecting lower spending for residential services at Comcast
Cable.
|
($
in millions)
|
4th Quarter
|
Full Year
|
||||||||||||||||||||||
|
2007
|
2008
|
Growth
|
2007
|
2008
|
Growth
|
|||||||||||||||||||
|
Net
Cash Provided by Operating Activities
|
$ | 2,684 | $ | 2,858 | 6 | % | $ | 8,189 | $ | 10,231 | 25 | % | ||||||||||||
|
Capital
Expenditures
|
(1,574 | ) | (1,713 | ) | 9 | % | (6,158 | ) | (5,750 | ) | (7 | %) | ||||||||||||
|
Cash
Paid for Capitalized Software
|
(77 | ) | (123 | ) | 60 | % | (311 | ) | (410 | ) | 32 | % | ||||||||||||
|
Cash
Paid for Other Intangible Assets
|
(16 | ) | (28 | ) | 75 | % | (95 | ) | (117 | ) | 23 | % | ||||||||||||
|
Adjustments
for Payment of Tax on Nonoperating Items
|
(9 | ) | (13 | ) | - | 717 | 303 | - | ||||||||||||||||
|
FCF
(Including 2008 Economic Stimulus Package)
|
$ | 1,008 | $ | 981 | (3 | %) | $ | 2,342 | $ | 4,257 | 82 | % | ||||||||||||
|
2008
Economic Stimulus Package
|
- | (117 | ) | - | - | (600 | ) | - | ||||||||||||||||
|
Free
Cash Flow
|
$ | 1,008 | $ | 864 | (14 | %) | $ | 2,342 | $ | 3,657 | 56 | % | ||||||||||||
Note: The
definition of Free Cash Flow remains unchanged and specifically excludes any
impact from the 2008 Economic Stimulus package.
2
Pro
Forma Cable Segment Results
Revenue
from the Cable segment increased 8% to $32.4 billion for 2008 as compared to
$30.1 billion in 2007, reflecting the adoption of digital and advanced video
services, rate increases, continued growth in high-speed Internet (HSI) and
Comcast Digital Voice (CDV) penetration and strong growth in Business Services,
partially offset by video customer losses and lower advertising revenue. The
monthly average total revenue per video customer increased 9% from $101 to $110,
reflecting an increasing number of customers taking multiple products. As of
December 31, 2008, 23% of customers were three-product customers as compared to
16% at the end of 2007.
Operating Cash
Flow grew
8% to $13.2 billion in 2008 from $12.2 billion in 2007. Operating Cash Flow
margin was 40.6% in 2008 compared to 40.7% in 2007, reflecting operating
efficiencies in CDV and HSI, offset by continued increases in video programming
expenses and additional investments in Business Services. Comcast continues to
focus on controlling operating expenses; however, the company incurred expenses
related to a divisional restructuring and employee reductions, as well as the
impact from two major hurricanes on Comcast systems in the southern
U.S. Excluding the impact of the hurricanes, which was $39 million,
and $126 million of severance-related charges, Operating Cash Flow grew 9% in
2008.
For the
quarter ended December 31, 2008, revenue from the Cable segment increased 7% to
$8.3 billion and Operating Cash Flow increased 7% to $3.4 billion, a margin of
41.2%. Excluding the impact of the hurricanes and severance-related charges,
which were $19 million and $63 million, respectively, Operating Cash Flow grew
9% in the fourth quarter of 2008.
Customers. As of December 31,
2008, Comcast’s video, high-speed Internet and voice customers totaled 45.6
million, reflecting 2.6 million net additions during 2008.
|
(in
thousands)
|
Customers
|
Net Adds
|
|||||||||||||||||
|
|
YE2007
|
YE2008
|
Growth
|
4Q2008 |
2008
|
||||||||||||||
|
Video
Customers
|
24,758 | 24,182 |
(2%)
|
|
(233 | ) | (575 | ) | |||||||||||
|
High-Speed
Internet Customers
|
13,593 | 14,929 |
10%
|
|
184 | 1,336 | |||||||||||||
|
Comcast
Digital Voice Customers
|
4,449 | 6,470 |
45%
|
|
344 | 2,021 | |||||||||||||
|
Circuit-Switched
Voice Customers
|
176 | 3 |
(98%)
|
|
(4 | ) | (173 | ) | |||||||||||
|
Combined
Video, HSI and Voice Customers
|
42,976 | 45,584 |
6%
|
|
290 | 2,609 | |||||||||||||
|
Digital
Video Customers
|
15,527 | 17,004 |
10%
|
|
247 | 1,478 | |||||||||||||
|
Total
Revenue Generating Units
|
58,502 | 62,588 |
7%
|
|
537 | 4,086 | |||||||||||||
Programming
Segment Results
Comcast's Programming segment consists of national
programming
networks E! Entertainment
Television, Style Network, Golf Channel,
VERSUS,
and G4.
The
Programming segment reported 2008 revenue of $1.4 billion, a 9% increase from
2007, reflecting higher distribution and advertising revenue, and strong
international revenue growth. Operating Cash Flow increased 26% to $362 million
in 2008, reflecting strong revenue growth and relatively stable production,
programming and marketing expenses.
For the
fourth quarter of 2008, Comcast’s Programming segment reported revenue of $350
million compared to $348 million in the fourth quarter of 2007. Operating Cash
Flow increased to $55 million, an increase of 10% from 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. In 2008, Comcast reported
Corporate and Other revenue of $387 million, a 41% increase over last year,
reflecting strong results at CIM and Comcast-Spectacor. The Operating Cash Flow
loss for the year was $400 million compared to a loss of $423 million in
2007.
For the
quarter ended December 31, 2008, Corporate and Other revenue increased to $119
million from the $89 million reported in 2007. The Operating Cash Flow loss for
the fourth quarter of 2008 was $100 million compared to a loss of $91 million in
the fourth quarter of 2007.
3
Share
Repurchase and Dividend
During
2008, Comcast repurchased 140.9 million of its common shares for $2.8 billion,
reducing the number of total shares outstanding by 4.7%. As of December 31,
2008, Comcast had approximately $4.1 billion of availability remaining under its
share repurchase authorization. As previously disclosed, due to difficult
economic conditions and instability in the capital markets, it is unlikely that
the company will complete its share repurchase authorization by the end of 2009
as previously planned.
During
2008, Comcast paid three cash dividends totaling $547 million. On January 28,
2009, Comcast paid a quarterly cash dividend of $180 million.
Comcast’s
Board of Directors has declared a quarterly cash dividend of $0.0675 a share on
the company’s common stock, payable on April 29, 2009 to shareholders of record
as of the close of business on April 8, 2009. The planned annual dividend
of $0.27 per share is an 8% increase from the company’s previous
dividend.
Notes:
|
1
|
Pro forma results
adjust for certain cable segment acquisitions and dispositions, including
the acquisitions of Comcast SportsNet Bay Area/Comcast SportsNet New
England (June 2007), the cable system acquired from Patriot Media (August
2007), and the dissolution of the Insight Midwest Partnership (January
2008). Consolidated and cable pro forma results are presented as if the
transactions noted above were effective on January 1, 2007. The net
impact of these transactions increased the number of video customers by
765,000. Please refer to Table 4-A for a reconciliation of pro forma
financial data. Pro forma customer data also includes 7,000 video
customers acquired through an acquisition in November 2008. The impact of
this acquisition on segment operating results was not
material.
|
|
2
|
Earnings
per Share are adjusted for gains, net of tax, related to the dissolution
of the Texas/Kansas City Cable Partnership in 2007; and in 2008, the
dissolution of the Insight Midwest Partnership, gains
related to the settlement of an uncertain tax position of an acquired
entity,
certain
state tax law changes,
and the
impairment of the Clearwire investment. Please refer to Table 4-B for a
reconciliation of adjusted net income and earnings per share.
Earnings
per share amounts are presented on a diluted
basis.
Minor
Differences may exist due to
rounding.
|
###
Conference
Call Information
Comcast
Corporation will host a conference call with the financial community today,
February 18, 2009 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. A recording of the call will be available on the
Investor Relations website starting at 12:30 p.m. ET on February 18,
2009. Those parties interested in participating via telephone should
dial (800) 263-8495 with the conference ID number 80065727. A
telephone replay will begin immediately following the call until Thursday,
February 19, 2009 at midnight ET. To access the rebroadcast, please
dial (800) 642-1687 and enter passcode number 80065727. To
automatically receive Comcast financial news by email, please visit
www.cmcsa.com or www.cmcsk.com and subscribe to email alerts.
###
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. All percentages are
calculated based on actual amounts. Minor differences may exist due to
rounding.
###
4
About
Comcast Corporation
Comcast
Corporation (Nasdaq: CMCSA, CMCSK) (http://www.comcast.com)
is the nation's leading provider of entertainment, information and
communications products and services. With 24.2 million cable customers, 14.9
million high-speed Internet customers, and 6.5 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, ten Comcast
SportsNet networks and Comcast Interactive Media, which develops and operates
Comcast's Internet business. Comcast also has a majority ownership in
Comcast-Spectacor, whose major holdings include the Philadelphia Flyers NHL
hockey team, the Philadelphia 76ers NBA basketball team and two large
multipurpose arenas in Philadelphia.
5
|
TABLE
1
Condensed
Consolidated Statement of Operations (Unaudited)
|
|
|
Three Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
|
(in
millions, except per share data)
|
December
31,
|
December
31,
|
||||||||||||||
|
2007
|
2008
|
2007
|
2008
|
|||||||||||||
|
Revenue
|
$ | 8,014 | $ | 8,765 | $ | 30,895 | $ | 34,256 | ||||||||
|
Operating expenses
|
3,158 | 3,431 | 12,169 | 13,472 | ||||||||||||
|
Selling, general and administrative expenses
|
1,774 | 1,964 | 6,940 | 7,652 | ||||||||||||
| 4,932 | 5,395 | 19,109 | 21,124 | |||||||||||||
|
Operating cash flow
|
3,082 | 3,370 | 11,786 | 13,132 | ||||||||||||
|
Depreciation expense
|
1,339 | 1,364 | 5,107 | 5,457 | ||||||||||||
|
Amortization expense
|
285 | 249 | 1,101 | 943 | ||||||||||||
| 1,624 | 1,613 | 6,208 | 6,400 | |||||||||||||
|
Operating income
|
1,458 | 1,757 | 5,578 | 6,732 | ||||||||||||
|
Other income (expense)
|
||||||||||||||||
|
Interest expense
|
(600 | ) | (599 | ) | (2,289 | ) | (2,439 | ) | ||||||||
|
Investment income
(loss), net
|
143 | 6 | 601 | 89 | ||||||||||||
|
Equity in
net (losses) income of affiliates, net
|
(14 | ) | (3 | ) | (63 | ) | (39 | ) | ||||||||
|
Other income (expense)
|
9 | (580 | ) | 522 | (285 | ) | ||||||||||
| (462 | ) | (1,176 | ) | (1,229 | ) | (2,674 | ) | |||||||||
|
Income
before income taxes and
|
||||||||||||||||
|
minority interest
|
996 | 581 | 4,349 | 4,058 | ||||||||||||
|
Income tax expense
|
(400 | ) | (169 | ) | (1,800 | ) | (1,533 | ) | ||||||||
|
Income
before minority interest
|
596 | 412 | 2,549 | 2,525 | ||||||||||||
|
Minority interest
|
6 | - | 38 | 22 | ||||||||||||
|
Net income
|
$ | 602 | $ | 412 | $ | 2,587 | $ | 2,547 | ||||||||
|
Diluted
earnings per common share
|
$ | 0.20 | $ | 0.14 | $ | 0.83 | $ | 0.86 | ||||||||
|
Adjusted
earnings per common share
(1)
|
$ | 0.20 | $ | 0.27 | $ | 0.74 | $ | 0.91 | ||||||||
|
Dividends
declared per common share
|
$ | - | $ | 0.0625 | $ | - | $ | 0.2500 | ||||||||
|
Diluted weighted-average number of common shares
|
3,078 | 2,888 | 3,129 | 2,952 | ||||||||||||
|
(1) Please
refer to Table 4-B for a reconciliation of adjusted net income and
earnings per
share.
|
||||||||||||||||
6
|
TABLE
2
Condensed
Consolidated Balance Sheet (Unaudited)
|
|
|
(in
millions)
|
December
31,
|
December
31,
|
||||||
|
2007
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 963 | $ | 1,195 | ||||
|
Investments
|
98 | 59 | ||||||
|
Accounts receivable, net
|
1,645 | 1,626 | ||||||
|
Other current assets
|
961 | 836 | ||||||
|
Total current assets
|
3,667 | 3,716 | ||||||
|
|
||||||||
|
Investments
|
7,963 | 4,783 | ||||||
|
|
||||||||
|
Property
and equipment, net
|
23,624 | 24,444 | ||||||
|
|
||||||||
|
Franchise
rights
|
58,077 | 59,449 | ||||||
|
|
||||||||
|
Goodwill
|
14,705 | 14,889 | ||||||
|
|
||||||||
|
Other
intangible assets, net
|
4,739 | 4,558 | ||||||
|
|
||||||||
|
Other
noncurrent assets, net
|
642 | 1,178 | ||||||
| $ | 113,417 | $ | 113,017 | |||||
|
|
||||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts payable and accrued expenses related to trade creditors
|
$ | 3,336 | $ | 3,393 | ||||
|
Accrued expenses and other current liabilities
|
3,121 | 3,268 | ||||||
|
Current portion of long-term debt
|
1,495 | 2,278 | ||||||
|
Total current liabilities
|
7,952 | 8,939 | ||||||
|
|
||||||||
|
Long-term
debt, less current portion
|
29,828 | 30,178 | ||||||
|
|
||||||||
|
Deferred
income taxes
|
26,880 | 26,982 | ||||||
|
|
||||||||
|
Other
noncurrent liabilities
|
7,167 | 6,171 | ||||||
|
|
||||||||
|
Minority
interest
|
250 | 297 | ||||||
|
|
||||||||
|
Stockholders'
equity
|
41,340 | 40,450 | ||||||
| $ | 113,417 | $ | 113,017 | |||||
7
|
TABLE
3
Consolidated
Statement of Cash Flows (Unaudited)
|
|
|
(in
millions)
|
Twelve
Months Ended
|
|||||||
|
December
31,
|
||||||||
|
2007
|
2008
|
|||||||
|
OPERATING
ACTIVITIES
|
||||||||
|
Net
Income
|
$ | 2,587 | $ | 2,547 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation
|
5,107 | 5,457 | ||||||
|
Amortization
|
1,101 | 943 | ||||||
|
Share-based
compensation
|
212 | 258 | ||||||
|
Noncash
interest expense (income), net
|
114 | 209 | ||||||
|
Equity
in net losses (income) of affiliates, net
|
63 | 39 | ||||||
|
(Gains)
losses on investments and noncash other (income) expense,
net
|
(938 |
)
|
321 | |||||
|
Noncash
contribution expense
|
11 | - | ||||||
|
Minority
interest
|
(38 |
)
|
(22 |
)
|
||||
|
Deferred
income taxes
|
247 | 495 | ||||||
|
Changes
in operating assets and liabilities, net of effects of acquisitions and
divestitures:
|
||||||||
|
Change
in accounts receivable, net
|
(100 |
)
|
39 | |||||
|
Change
in accounts payable and accrued expenses related to trade
creditors
|
175 | (38 |
)
|
|||||
|
Change
in other operating assets and liabilities
|
(352 |
)
|
(17 |
)
|
||||
|
|
||||||||
|
Net
cash provided by operating activities
|
8,189 | 10,231 | ||||||
|
FINANCING
ACTIVITIES
|
||||||||
|
Proceeds
from borrowings
|
3,713 | 3,535 | ||||||
|
Retirements
and repayments of debt
|
(1,401 |
)
|
(2,610 |
)
|
||||
|
Repurchases
of common stock
|
(3,102 |
)
|
(2,800 |
)
|
||||
|
Dividends
paid
|
- | (547 |
)
|
|||||
|
Issuances
of common stock
|
412 | 53 | ||||||
|
Other
|
62 | (153 |
)
|
|||||
|
|
||||||||
|
Net
cash provided by (used in) financing activities
|
(316 |
)
|
(2,522 |
)
|
||||
|
INVESTING
ACTIVITIES
|
||||||||
|
Capital
expenditures
|
(6,158 |
)
|
(5,750 |
)
|
||||
|
Cash
paid for software and other intangible assets
|
(406 |
)
|
(527 |
)
|
||||
|
Acquisitions,
net of cash acquired
|
(1,319 |
)
|
(738 |
)
|
||||
|
Proceeds
from sales of investments
|
1,761 | 737 | ||||||
|
Purchases
of investments
|
(2,089 |
)
|
(1,167 |
)
|
||||
|
Other
|
62 | (32 |
)
|
|||||
|
Net
cash provided by (used in) investing activities
|
(8,149 |
)
|
(7,477 |
)
|
||||
|
Increase
(decrease) in cash and cash equivalents
|
(276 |
)
|
232 | |||||
|
Cash
and cash equivalents, beginning of period
|
1,239 | 963 | ||||||
|
Cash
and cash equivalents, end of period
|
$ | 963 | $ | 1,195 | ||||
8
|
TABLE
4-A
Reconciliation
of GAAP to Pro Forma(1)
Financial Data by Business Segment (Unaudited)
|
|
|
GAAP
|
Cable
|
Total
|
||||||||||||||||||||||||||||||
|
(in
millions)
|
Cable
|
Programming
|
Corporate, Other and
Eliminations
|
Total
|
Pro Forma
Adjustments
(1)(2)
|
Pro Forma
Cable
|
Pro Forma
Adjustments
(1)(2)
|
Total
Pro Forma
|
||||||||||||||||||||||||
|
Three Months Ended December 31,
2008
|
||||||||||||||||||||||||||||||||
|
Revenue
|
$ | 8,296 | $ | 350 | $ | 119 | $ | 8,765 | $ | - | $ | 8,296 | $ | - | $ | 8,765 | ||||||||||||||||
|
Operating
Expenses (excluding
|
||||||||||||||||||||||||||||||||
|
depreciation
and amortization)
|
4,881 | 295 | 219 | 5,395 | - | 4,881 | - | 5,395 | ||||||||||||||||||||||||
|
Operating
Cash Flow
|
$ | 3,415 | $ | 55 | $ | (100 |
)
|
$ | 3,370 | $ | - | $ | 3,415 | $ | - | $ | 3,370 | |||||||||||||||
|
Depreciation
and Amortization
|
1,538 | 54 | 21 | 1,613 | - | 1,538 | - | 1,613 | ||||||||||||||||||||||||
|
Operating
Income (Loss)
|
$ | 1,877 | $ | 1 | $ | (121 |
)
|
$ | 1,757 | $ | - | $ | 1,877 | $ | - | $ | 1,757 | |||||||||||||||
|
Capital
Expenditures
|
$ | 1,668 | $ | 22 | $ | 23 | $ | 1,713 | $ | - | $ | 1,668 | $ | - | $ | 1,713 | ||||||||||||||||
|
Three Months Ended December 31,
2007
|
||||||||||||||||||||||||||||||||
|
Revenue
|
$ | 7,577 | $ | 348 | $ | 89 | $ | 8,014 | $ | 181 | $ | 7,758 | $ | 181 | $ | 8,195 | ||||||||||||||||
|
Operating
Expenses (excluding
|
||||||||||||||||||||||||||||||||
|
depreciation
and amortization)
|
4,454 | 299 | 179 | 4,932 | 108 | 4,562 | 109 | 5,041 | ||||||||||||||||||||||||
|
Operating
Cash Flow
|
$ | 3,123 | $ | 49 | $ | (90 |
)
|
$ | 3,082 | $ | 73 | $ | 3,196 | $ | 72 | $ | 3,154 | |||||||||||||||
|
Depreciation
and Amortization
|
1,540 | 84 | - | 1,624 | 29 | 1,569 | 29 | 1,653 | ||||||||||||||||||||||||
|
Operating
Income (Loss)
|
$ | 1,583 | $ | (35 |
)
|
$ | (90 |
)
|
$ | 1,458 | $ | 44 | $ | 1,627 | $ | 43 | $ | 1,501 | ||||||||||||||
|
Capital
Expenditures
|
$ | 1,472 | $ | 13 | $ | 89 | $ | 1,574 | $ | 21 | $ | 1,493 | $ | 21 | $ | 1,595 | ||||||||||||||||
|
Twelve Months Ended December 31,
2008
|
||||||||||||||||||||||||||||||||
|
Revenue
|
$ | 32,443 | $ | 1,426 | $ | 387 | $ | 34,256 | $ | - | $ | 32,443 | $ | - | $ | 34,256 | ||||||||||||||||
|
Operating
Expenses (excluding
|
||||||||||||||||||||||||||||||||
|
depreciation
and amortization)
|
19,273 | 1,064 | 787 | 21,124 | - | 19,273 | - | 21,124 | ||||||||||||||||||||||||
|
Operating
Cash Flow
|
$ | 13,170 | $ | 362 | $ | (400 |
)
|
$ | 13,132 | $ | - | $ | 13,170 | $ | - | $ | 13,132 | |||||||||||||||
|
Depreciation
and Amortization
|
6,125 | 199 | 76 | 6,400 | - | 6,125 | - | 6,400 | ||||||||||||||||||||||||
|
Operating
Income (Loss)
|
$ | 7,045 | $ | 163 | $ | (476 |
)
|
$ | 6,732 | $ | - | $ | 7,045 | $ | - | $ | 6,732 | |||||||||||||||
|
Capital
Expenditures
|
$ | 5,545 | $ | 44 | $ | 161 | $ | 5,750 | $ | - | $ | 5,545 | $ | - | $ | 5,750 | ||||||||||||||||
|
Twelve Months Ended December 31,
2007
|
||||||||||||||||||||||||||||||||
|
Revenue
|
$ | 29,305 | $ | 1,314 | $ | 276 | $ | 30,895 | $ | 815 | $ | 30,120 | $ | 815 | $ | 31,710 | ||||||||||||||||
|
Operating
Expenses (excluding
|
||||||||||||||||||||||||||||||||
|
depreciation
and amortization)
|
17,383 | 1,028 | 698 | 19,109 | 491 | 17,874 | 492 | 19,601 | ||||||||||||||||||||||||
|
Operating
Cash Flow
|
$ | 11,922 | $ | 286 | $ | (422 |
)
|
$ | 11,786 | $ | 324 | $ | 12,246 | $ | 323 | $ | 12,109 | |||||||||||||||
|
Depreciation
and Amortization
|
5,924 | 223 | 61 | 6,208 | 141 | 6,065 | 140 | 6,348 | ||||||||||||||||||||||||
|
Operating
Income (Loss)
|
$ | 5,998 | $ | 63 | $ | (483 |
)
|
$ | 5,578 | $ | 183 | $ | 6,181 | $ | 183 | $ | 5,761 | |||||||||||||||
|
Capital
Expenditures
|
$ | 5,993 | $ | 35 | $ | 130 | $ | 6,158 | $ | 123 | $ | 6,116 | $ | 123 | $ | 6,281 | ||||||||||||||||
|
|
(1)
|
Pro
forma data is adjusted only for timing of acquisitions or dispositions 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. Pro forma results are presented as
if the acquisitions and dispositions were effective on January 1,
2007. Minor differences may exist due to
rounding.
|
|||||||||||||||||||
|
(2)
|
Total
Pro Forma adjustments and Cable Pro Forma adjustments for 2007 include the
results of Comcast SportsNet Bay Area and Comcast SportsNet New England,
the cable system acquired from
|
||||||||||||||||||
|
Patriot
Media Holdings, LLC and the cable systems resulting from the dissolution
of the Insight Midwest Partnership.
|
|||||||||||||||||||
9
|
TABLE
4-B
Reconciliation
of Net Income to Adjusted Net Income (Unaudited)
|
|
|
Three
Months Ended
|
|||||||||||||||||||||||||
|
December
31,
|
|||||||||||||||||||||||||
|
2008
vs. 2007
|
|||||||||||||||||||||||||
|
2007
|
2008
|
Growth
(%)
|
|||||||||||||||||||||||
|
(in
millions, except per share data)
|
|||||||||||||||||||||||||
|
$
|
EPS | (1) |
$
|
EPS | (1) |
$
|
EPS | (1) | |||||||||||||||||
|
Net
Income
|
$ | 602 | $ | 0.20 | $ | 412 | $ | 0.14 | (32 | %) | (30 | %) | |||||||||||||
|
Adjustments:
|
|||||||||||||||||||||||||
|
Impairment
of the Clearwire investment (2)
|
- | - | 378 | 0.13 |
NM
|
NM
|
|||||||||||||||||||
|
Adjusted
Net Income
|
$ | 602 | $ | 0.20 | $ | 790 | $ | 0.27 | 31 | % | 35 | % | |||||||||||||
|
Twelve
Months Ended
|
|||||||||||||||||||||||||
|
December
31,
|
|||||||||||||||||||||||||
|
2008
vs. 2007
|
|||||||||||||||||||||||||
|
2007
|
2008
|
Growth
(%)
|
|||||||||||||||||||||||
|
$
|
EPS
|
(1) |
$
|
EPS | (1) |
$
|
EPS | (1) | |||||||||||||||||
|
Net
Income
|
$ | 2,587 | $ | 0.83 | $ | 2,547 | $ | 0.86 | (2 | %) | 4 | % | |||||||||||||
|
Adjustments:
|
|||||||||||||||||||||||||
|
Gain
related to the dissolution of the Texas/Kansas City
Cable Partnership,
net of
tax
(3)
|
(300 | ) | (0.09 | ) | - | - |
NM
|
NM
|
|||||||||||||||||
|
Gain
related to the dissolution of
the Insight
Midwest
Partnership,
net of
tax
(4)
|
- | - | (144 | ) | (0.05 | ) |
NM
|
NM
|
|||||||||||||||||
|
Favorable
income tax adjustments (5)
|
- | - | (80 | ) | (0.03 | ) |
NM
|
NM
|
|||||||||||||||||
|
Impairment
of the Clearwire investment (2)
|
- | - | 378 | 0.13 |
NM
|
NM
|
|||||||||||||||||||
|
Adjusted
Net Income
|
$ | 2,287 | $ | 0.74 | $ | 2,701 | $ | 0.91 | 18 | % | 23 | % | |||||||||||||
|
(1)
|
Based
on diluted average number of common shares for the respective periods as
presented in Table 1.
|
|
|
(2)
|
2008
Net Income includes a $600 million ($378 million net of tax) impairment of
the Clearwire investment.
|
|
|
(3)
|
2007
Net Income includes a $500 million ($300 million net of tax) gain related
to the dissolution of the Texas/Kansas City Cable
Partnership.
|
|
|
(4)
|
2008
Net Income includes a $235 million ($144 million net of tax) gain related
to the dissolution of the Insight Midwest Partnership.
|
|
|
(5)
|
2008
Net Income includes favorable income tax adjustments related to the
settlement of an uncertain tax position of an acquired entity and the
effect, principally on deferred
|
|
|
taxes,
of certain state tax law changes.
|
|
Reconciliation
of Pro Forma Cable Operating Cash Flow excluding Hurricane Impact and
Severance Charges (Unaudited)
|
|
Three
Months Ended
|
||||||||||||||||
|
December
31,
|
||||||||||||||||
|
(in
millions)
|
||||||||||||||||
|
2007
|
2008
|
Growth
%
|
Margin
%
|
|||||||||||||
|
Cable
Operating Cash Flow
|
$ | 3,196 | $ | 3,415 | 6.9 | % | 41.2 | % | ||||||||
|
Hurricane
Impact
|
- | 19 |
NM
|
NM
|
||||||||||||
|
Severance
Charges
|
- | 63 |
NM
|
NM
|
||||||||||||
|
Cable
Operating Cash Flow excluding Hurricane Impact
|
||||||||||||||||
|
and
Severance Charges
|
$ | 3,196 | $ | 3,497 | 9.4 | % | 42.2 | % | ||||||||
|
Twelve
Months Ended
|
||||||||||||||||
|
December
31,
|
||||||||||||||||
|
2007
|
2008
|
Growth
%
|
Margin
%
|
|||||||||||||
|
Cable
Operating Cash Flow
|
$ | 12,246 | $ | 13,170 | 7.6 | % | 40.6 | % | ||||||||
|
Hurricane
Impact
|
- | 39 |
NM
|
NM
|
||||||||||||
|
Severance
Charges
|
- | 126 |
NM
|
NM
|
||||||||||||
|
Cable
Operating Cash Flow excluding Hurricane Impact
|
||||||||||||||||
|
and
Severance Charges
|
$ | 12,246 | $ | 13,335 | 8.9 | % | 41.1 | % | ||||||||
|
Note: Minor
differences may exist due to rounding.
|
||||||||||||||||
10
Exhibit
99.2 – Explanation of Non-GAAP and Other Financial Measures
This
Exhibit 99.2 to the accompanying Current Report on Form 8-K for Comcast
Corporation (the "Company", "we", "us" or "our") sets forth the reasons we
believe that presentation of financial measures not in accordance with generally
accepted accounting principles in the United States (GAAP) contained in the
earnings press release filed as Exhibit 99.1 to the Form 8-K provides useful
information to investors regarding Comcast's financial condition and results of
operations. To the extent material, this Exhibit also discloses the
additional purposes, if any, for which Comcast's management uses these non-GAAP
financial measures. A reconciliation of these non-GAAP financial measures
with the most directly comparable GAAP financial measures is included in the
press release itself.
Operating
Cash Flow is the primary basis used to measure the operational strength and
performance of our businesses. Free Cash Flow and Unlevered Free Cash Flow are
additional performance measures used as indicators of our ability to service and
repay debt, make investments and return capital to investors, through stock
repurchases and dividends. We also adjust certain historical data on a pro forma
basis following certain acquisitions or dispositions to enhance
comparability.
Operating
Cash Flow is defined as operating income before depreciation and amortization,
excluding impairment charges related to fixed and intangible assets and gains or
losses on sale of assets, if any. 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 financial 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 performance measure in
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 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 “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; and
adjusted for any payments related to certain nonoperating items, net of
estimated tax benefits (such as income taxes on investment sales, and
nonrecurring payments related to income tax and litigation contingencies of
acquired companies). Unlevered Free Cash Flow is Free Cash Flow
before cash paid interest. We believe that Free Cash Flow and
Unlevered Free Cash Flow are also useful to investors as the basis for comparing
our performance and coverage ratios with other companies in our industries,
although our measure of Free Cash Flow and Unlevered Free Cash Flow may not be
comparable to similar measures used by other companies.
Pro forma
data is used by management to evaluate performance when certain 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 or dispositions 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.
In certain
circumstances we also present “adjusted” data, to exclude certain gains, losses
or other charges, net of tax (such as from the sales of investments or
dispositions of businesses). This “adjusted” data is a non-GAAP financial
measure. We believe, among other things, that the “adjusted” data may help
investors evaluate our ongoing operations and can assist in making meaningful
period-over-period comparisons.
Exhibit
99.2 – Explanation of Non-GAAP and Other Financial Measures, cont’d
Non-GAAP
financial measures 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.
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.
We provide
reconciliations of Consolidated Operating Cash Flow in Table 1, Pro Forma in
Table 4-A and Adjusted Data in Table 4-B set forth in Exhibit 99.1 to this
Current Report on Form 8-K.