UNITED STATES

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 3, 2010

Comcast Corporation

(Exact Name of Registrant

as Specified in its 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):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02. Results of Operations and Financial Condition

On February 3, 2010, Comcast Corporation (“Comcast”) issued a press release reporting the results of its operations for the three and twelve months ended December 31, 2009. 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 3, 2010.
99.2		Explanation of Non-GAAP and Other Financial Measures.

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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 3, 2010		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 Jane B. Kearns Michael A. Kelman		(215) 286-7392 (215) 286-4794 (215) 286-3035				D’Arcy Rudnay John Demming		(215) 286-8582 (215) 286-8011

COMCAST REPORTS FOURTH QUARTER AND YEAR END 2009 RESULTS

 

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2009 Consolidated Revenue Increased 3.9%

 

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2009 Consolidated Operating Cash Flow Increased 4.4%

 

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2009 Consolidated Operating Income Increased 7.2%

 

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2009 Earnings per Share of $1.26 Increased 46.5%

 

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2009 Free Cash Flow of $4.4 Billion Increased 20.8%

 

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Repurchased 49.8 Million Common Shares in 2009 for $765 Million; Repurchased $300 Million in the 4th Quarter

Philadelphia, PA – February 3, 2010 …Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter and year ended December 31, 2009.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said “I am pleased to report healthy operating and financial results for 2009. We are particularly proud of our accomplishments this year in light of a difficult economic environment affecting the consumer and our advertising business, as well as intensified competition. These results highlight the strength and resilience of our businesses, as well as effective execution, with a focus on profitable growth, expense control and prudent capital management. In 2009, we continued to invest in our products and services and in growth opportunities like Comcast Business Services. We also made real progress deploying All-Digital and Wideband, and launched innovative products like Comcast High-Speed 2go, our 4G wireless broadband service, and On Demand Online. We believe these initiatives and our focus on delivering the best consumer experience further improves our competitive position now and in the future.

We are also excited about the opportunity to strengthen our position in content through the announced NBC Universal transaction, and to bring those assets together with our already-strong position in cable and broadband distribution. Our technology platform now allows for significant cross platform integration and product innovation that will help us expand the entertainment options we offer our customers.

As we begin 2010, Comcast is well positioned to continue to execute and deliver growth with a continued focus on building value for our shareholders.”

Consolidated Financial Results

Revenue increased 3.9% in 2009 to $35.8 billion, while Operating Cash Flow increased 4.4% to $13.7 billion and Operating Income increased 7.2% to $7.2 billion. This growth is due to solid results at all our operating segments.

For the quarter ended December 31, 2009, Revenue increased 2.9% to $9.1 billion and Operating Cash Flow increased 1.1% to $3.4 billion, reflecting continued growth at Cable, partially offset by higher expenses at Programming and Corporate and Other. Fourth quarter 2009 Operating Income increased 3.4% to $1.8 billion.

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.

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		($ in millions)		4th Quarter								Full Year
				2008			2009			Growth		2008			2009			Growth
		Revenue1
		Cable		$	8,342		$	8,561		2.6%		$	32,610		$	33,857		3.8%
		Programming			350			368		5.2%			1,426			1,496		4.9%
		Corporate & Other			119			138		14.3%			387			403		3.9%
		Total Consolidated Revenue		$	8,811		$	9,067		2.9%		$	34,423		$	35,756		3.9%
		Operating Cash Flow (OCF)
		Cable		$	3,415		$	3,473		1.7%		$	13,170		$	13,694		4.0%
		Programming			55			46		(17.0%)			362			389		7.5%
		Corporate & Other			(100)			(110)		(10.0%)			(400)			(369)		7.5%
		Total Consolidated OCF		$	3,370		$	3,409		1.1%		$	13,132		$	13,714		4.4%

Earnings per Share² (EPS) for 2009 was $1.26, a 46.5% increase from $0.86 in 2008, reflecting growth in Consolidated Operating Cash Flow, lower interest expense from a reduction in total debt and a lower effective tax rate resulting from the recognition of income tax benefits.

 

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EPS for 2009 includes a $180 million one-time pretax financing charge related to the $1.3 billion debt tender in July 2009 ($113 million or $0.04 per share after tax) as well as the recognition of income tax benefits of $566 million or $0.20 per share.

 

•

EPS for 2008 includes a $235 million pretax gain related to the January 2008 dissolution of the Insight Midwest partnership ($144 million or $0.05 per share after tax), a $600 million pretax impairment charge for our Clearwire investment ($378 million or $0.13 per share after tax) and the recognition of income tax benefits of $154 million or $0.05 per share.

 

•

Except for these items, 2009 EPS would have grown 23.6% over 2008.

Earnings per Share for the quarter ended December 31, 2009 was $0.33, a 136% increase from the $0.14 reported in the fourth quarter of 2008, reflecting growth in Consolidated Operating Cash Flow and lower interest expense from a reduction in total debt.

 

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Fourth quarter 2009 EPS includes the recognition of income tax benefits of $130 million or $0.04 per share.

 

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Fourth quarter 2008 EPS includes a $600 million pretax impairment charge for our Clearwire investment ($378 million or $0.13 per share after tax) and the recognition of income tax benefits of $74 million or $0.02 per share.

 

•

Except for these items, fourth quarter 2009 EPS would have grown 16.0% over the comparable period in 2008.

Capital Expenditures for 2009 declined 11.0% to $5.1 billion, or 14.3% of total revenue, reflecting lower residential unit additions and improved equipment pricing, partially offset by an increased investment in Comcast Business Services and strategic initiatives like All-Digital and Wideband. For the quarter ended December 31, 2009, Capital Expenditures decreased 6.0% from the prior year to $1.6 billion.

Free Cash Flow (excluding any impact from the Economic Stimulus packages) increased 20.8% to $4.4 billion in 2009 from $3.7 billion in 2008. The increase in Free Cash Flow was driven by lower capital expenditures and modestly higher Net Cash Provided by Operating Activities reflecting growth in Consolidated Operating Cash Flow, primarily offset by higher cash taxes. Free Cash Flow for the fourth quarter of 2009 totaled $768 million, a 11.1% decline from $864 million in the fourth quarter of 2008, reflecting lower Net Cash Provided by Operating Activities as a result of changes in operating assets and liabilities and higher cash taxes, partially offset by lower capital expenditures.

 

		($ in millions)		4th Quarter								Full Year
				2008			2009			Growth		2008			2009			Growth
		Net Cash Provided by Operating Activities		$	2,858		$	2,556		(10.6%)		$	10,231		$	10,281		0.5%
		Capital Expenditures			(1,713)			(1,609)		(6.0%)			(5,750)			(5,117)		(11.0%)
		Cash Paid for Capitalized Software and Intangibles			(151)			(139)		(7.9%)			(527)			(522)		(0.9%)
		Adjustments for Payment of Tax on Nonoperating Items			(13)			49		NM			303			115		NM
		FCF (Including Economic Stimulus Packages)		$	981		$	857		(12.6%)		$	4,257		$	4,757		11.7%
		Impact from Economic Stimulus Packages			(117)			(89)		NM			(600)			(341)		NM
		Free Cash Flow		$	864		$	768		(11.1%)		$	3,657		$	4,416		20.8%

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

 

2

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Cable Segment Results

For 2009, Cable segment revenue increased 3.8% to $33.9 billion from $32.6 billion in 2008. This increase reflects continued growth in high-speed Internet (HSI), Comcast Digital Voice (CDV) and Comcast Business Services, partially offset by lower growth in video revenue principally due to video customer losses and lower advertising revenue. The monthly average total revenue per video customer increased 6.4% from $111.05 to $118.20, reflecting an increasing number of customers taking multiple products and a higher contribution from Comcast Business Services.

For 2009, Operating Cash Flow grew 4.0% to $13.7 billion from $13.2 billion in 2008, equal to an Operating Cash Flow margin of 40.4% in both 2009 and 2008. These results reflect a continued focus on expense management and improved operational efficiencies in CDV and HSI, offset by increases in video programming, technical labor and customer service expenses.

For the quarter ended December 31, 2009, Cable segment revenue increased 2.6% to $8.6 billion compared to $8.3 billion reported in the fourth quarter of 2008. This increase reflects higher HSI, CDV and Comcast Business Services revenue, partially offset by lower advertising revenue as well as lower video revenue due to video customer losses and more moderate rate increases compared to the fourth quarter of 2008.

Operating Cash Flow for the fourth quarter of 2009 increased 1.7% to $3.5 billion compared to $3.4 billion in the prior period. This quarter’s results include $81 million of severance-related charges as compared to $63 million in last year’s fourth quarter. Operating Cash Flow margin was 40.6% in the fourth quarter of 2009 compared to 40.9% in the fourth quarter of 2008.

Customers³. As of December 31, 2009, Comcast’s video, high-speed Internet and voice customers totaled 47.1 million, reflecting 1.5 million net additions during 2009.

 

		(in thousands)		Customers									Net Adds
				YE 08			YE 09			Growth			4Q09		2009
		Video Customers		24,182			23,559			(2.6%)			(199)		(623)
		High-Speed Internet Customers		14,929			15,930			6.7%			247		1,002
		Voice Customers		6,473			7,622			17.8%			243		1,149
		Combined Video, HSI and Voice Customers		45,584			47,112			3.4%			290		1,528
		Digital Video Customers		17,004			18,415			8.3%			410		1,411
		Total Revenue Generating Units		62,588			65,527			4.7%			701		2,939

Programming Segment Results

The Programming segment reported 2009 revenue of $1.5 billion, a 4.9% increase from the $1.4 billion reported in 2008, reflecting higher affiliate revenue, partially offset by a weak advertising environment. Operating Cash Flow increased 7.5% to $389 million in 2009 compared to $362 million reported in 2008.

For the fourth quarter of 2009, Comcast’s Programming segment reported revenue of $368 million, an increase of 5.2% compared to $350 million reported in the fourth quarter of 2008, reflecting higher advertising and affiliate revenue. Operating Cash Flow decreased 17.0% from $55 million to $46 million in the fourth quarter of 2009, reflecting an expected increase in marketing to launch new shows and the recognition of higher programming expenses in the fourth quarter.

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 2009, Comcast reported Corporate and Other revenue of $403 million, a 3.9% increase over the $387 million reported in 2008. The Operating Cash Flow loss for the year was $369 million compared to a loss of $400 million in 2008.

For the quarter ended December 31, 2009, Corporate and Other revenue increased 14.3% to $138 million from the $119 million reported in the fourth quarter of 2008, reflecting strong results at CIM and Comcast-Spectacor, partially offset by an increase in corporate eliminations. The Operating Cash Flow loss for the fourth quarter of 2009 was $110 million compared to a loss of $100 million for the same time period in 2008. This quarter’s results include approximately $20 million of expenses related to the NBC Universal transaction.

 

3

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Share Repurchase

During the fourth quarter of 2009, Comcast repurchased 18.1 million of its common shares for $300 million. In 2009, Comcast repurchased 49.8 million of its common shares for $765 million, reducing the number of total shares outstanding by 1.7%.

As of December 31, 2009, Comcast had approximately $3.3 billion of availability remaining under its share repurchase authorization. As previously announced, Comcast intends to complete its current share repurchase program by the end of 2012, subject to market conditions.

Dividend

During 2009, Comcast paid four cash dividends totaling $761 million. On December 3, 2009, Comcast announced a 40% increase to its planned annual dividend to $0.378 a share. In accordance with the increase, Comcast paid a quarterly cash dividend of $268 million on January 27, 2010.

Notes:

 

1

In 4Q09, reclassifications were made to prior period results to reflect a change in certain advertising commission and representation fees as operating expenses rather than a reduction of revenue. Although there is no change to prior period OCF, the reclassifications had a minor impact on prior year OCF margins, capital expenditures as a percent of revenue and average monthly total revenue per video customer.

 

2	Earnings per share amounts are presented on a diluted basis.

 

3	Customer data is presented on a pro forma basis. Pro forma customer data includes 7,000 video customers acquired through an acquisition in November 2008. The impact of this acquisition on segment operating results was not material.

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

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Conference Call Information

Comcast Corporation will host a conference call with the financial community today, February 3, 2010 at 8:30 a.m. Eastern Time (ET). The conference call will be broadcast live on Comcast’s Investor Relations website at www.cmcsa.com or www.cmcsk.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 47186371. A replay of the call will be available on the Investor Relations website starting at 12:30 p.m. Eastern Time (ET) on Wednesday, February 3, 2010 and will be available until Monday, February 8, 2010 at midnight Eastern Time (ET). To access the rebroadcast, please dial (800) 642-1687 and enter conference ID number 47186371. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to email alerts.

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Caution Concerning Forward-Looking Statements

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

Non-GAAP Financial Measures

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

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About Comcast Corporation

Comcast Corporation (Nasdaq: CMCSA, CMCSK) (www.comcast.com) is one of the nation’s leading providers of entertainment, information and communication products and services. With 23.6 million video customers, 15.9 million high-speed Internet customers, and 7.6 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content.

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

 

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TABLE 1 Condensed Consolidated Statement of Operations (Unaudited)

 

 

		(in millions, except per share data)		Three Months Ended December 31,								Twelve Months Ended December 31,
				2008				2009				2008				2009
		Revenue		$	8,811			$	9,067			$	34,423			$	35,756
		Operating expenses			3,477				3,682				13,639				14,396
		Selling, general and administrative expenses			1,964				1,976				7,652				7,646
					5,441				5,658				21,291				22,042
		Operating cash flow			3,370				3,409				13,132				13,714
		Depreciation expense			1,364				1,335				5,457				5,483
		Amortization expense			249				257				943				1,017
					1,613				1,592				6,400				6,500
		Operating income			1,757				1,817				6,732				7,214
		Other income (expense)
		Interest expense			(599	)			(520	)			(2,439	)			(2,348	)
		Investment income (loss), net			6				64				89				282
		Equity in net income (losses) of affiliates, net			(3	)			(20	)			(39	)			(64	)
		Other income (expense)			(580	)			9				(285	)			22
					(1,176	)			(467	)			(2,674	)			(2,108	)
		Income before income taxes			581				1,350				4,058				5,106
		Income tax expense			(169	)			(390	)			(1,533	)			(1,478	)
		Net income from consolidated operations			412				960				2,525				3,628
		Net (income) loss attributable to noncontrolling interests			-				(5	)			22				10
		Net income attributable to Comcast Corporation		$	412			$	955			$	2,547			$	3,638
		Diluted earnings per common share attributable to Comcast Corporation stockholders		$	0.14			$	0.33			$	0.86			$	1.26
		Dividends declared per common share attributable to Comcast Corporation stockholders		$	0.06			$	0.09			$	0.25			$	0.30
		Diluted weighted-average number of common shares			2,888				2,862				2,952				2,885

 

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TABLE 2 Condensed Consolidated Balance Sheet (Unaudited)

 

 

		(in millions)		December 31,         2008			December 31,         2009
		ASSETS
		Current Assets
		Cash and cash equivalents		$	1,195		$	671
		Investments			59			50
		Accounts receivable, net			1,626			1,711
		Other current assets			836			791
		Total current assets			3,716			3,223
		Investments			4,783			5,947
		Property and equipment, net			24,444			23,855
		Franchise rights			59,449			59,452
		Goodwill			14,889			14,933
		Other intangible assets, net			4,558			4,105
		Other noncurrent assets, net			1,178			1,218
				$	113,017		$	112,733
		LIABILITIES AND EQUITY
		Current Liabilities
		Accounts payable and accrued expenses related to trade creditors		$	3,393		$	3,094
		Accrued expenses and other current liabilities			3,268			2,999
		Current portion of long-term debt			2,278			1,156
		Total current liabilities			8,939			7,249
		Long-term debt, less current portion			30,178			27,940
		Deferred income taxes			26,982			27,800
		Other noncurrent liabilities			6,171			6,767
		Redeemable noncontrolling interests			171			166
		Equity
		Comcast Corporation stockholders’ equity			40,450			42,721
		Noncontrolling interests			126			90
		Total Equity			40,576			42,811
				$	113,017		$	112,733

 

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TABLE 3 Consolidated Statement of Cash Flows (Unaudited)

 

 

		(in millions)			Twelve Months Ended December 31,
					2008				2009
		OPERATING ACTIVITIES
		Net income from consolidated operations		$	2,525			$	3,628
		Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:
		Depreciation			5,457				5,483
		Amortization			943				1,017
		Share-based compensation			258				257
		Noncash interest expense (income), net			209				160
		Equity in net (income) losses of affiliates, net			39				64
		(Gains) losses on investments and noncash other (income) expense, net			321				(201	)
		Deferred income taxes			495				832
		Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
		Change in accounts receivable, net			39				(84	)
		Change in accounts payable and accrued expenses related to trade creditors			(38	)			(136	)
		Change in other operating assets and liabilities			(17	)			(739	)
		Net cash provided by operating activities			10,231				10,281
		INVESTING ACTIVITIES
		Capital expenditures			(5,750	)			(5,117	)
		Cash paid for software and other intangible assets			(527	)			(522	)
		Acquisitions, net of cash acquired			(738	)			(88	)
		Proceeds from sales of investments			737				102
		Purchases of investments			(1,167	)			(346	)
		Other			(32	)			74
		Net cash provided by (used in) investing activities			(7,477	)			(5,897	)
		FINANCING ACTIVITIES
		Proceeds from borrowings			3,535				1,564
		Repurchases and repayments of debt			(2,610	)			(4,738	)
		Repurchases of common stock			(2,800	)			(765	)
		Dividends paid			(547	)			(761	)
		Issuances of common stock			53				1
		Other			(153	)			(209	)
		Net cash provided by (used in) financing activities			(2,522	)			(4,908	)
		Increase (decrease) in cash and cash equivalents			232				(524	)
		Cash and cash equivalents, beginning of period			963				1,195
		Cash and cash equivalents, end of period		$	1,195			$	671

 

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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 Current Report on 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 earnings 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 business 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.

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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) attributable to Comcast Corporation, 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 Free Cash Flow in Exhibit 99.1 to this current report on Form 8-K and of Consolidated Operating Cash Flow in Table 1 set forth in Exhibit 99.1 to this Current Report on Form 8-K.