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): May 2, 2012

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))

 

£

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 May 2, 2012, Comcast Corporation (“Comcast”) issued a press release reporting the results of its operations for the three months ended March 31, 2012. 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 May 2, 2012.
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: May 2, 2012		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		(215) 286-7392 (215) 286-4794				D’Arcy Rudnay John Demming		(215) 286-8582 (215) 286-8011

COMCAST REPORTS 1^st QUARTER 2012 RESULTS

Consolidated Revenue Increased 23%, Operating Cash Flow Increased 15% and Operating Income Increased 24%

Earnings per Share Increased 32% to $0.45

Free Cash Flow Increased 37% to $3.0 Billion, Including $2.2 Billion from Cable

and $851 Million from NBCUniversal

Quarterly Dividends and Share Repurchases Totaled $1.1 Billion

Philadelphia, PA – May 2, 2012…Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter ended March 31, 2012.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, “We are off to a great start in 2012, with strong revenue and cash flow growth and record quarterly free cash flow. Cable’s results show real momentum in High-Speed Internet and Business Services, and continuing improvements in Video results and Voice services. As we continue to drive innovation and bring the XFINITY brand to life, we’re delivering more and better products and transforming the customer experience.

We are also pleased with the performance of NBCUniversal, which posted strong revenue growth, led by the Super Bowl and successful film releases, along with reliable growth in our Theme Parks and Cable Networks, and steady progress in Broadcast. NBCUniversal and Cable Communications are also working well together to launch new programs and offer innovative products. We are looking forward to events like the Olympics that will bring together all of our company’s unique abilities to deliver compelling stories and new digital experiences across every screen, in and out of the home.”

Consolidated Financial Results

 

Consolidated financial results include NBCUniversal as of January 28, 2011 and 100% of Universal Orlando as of July 1, 2011.

 

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

Revenue increased 22.7% in the first quarter of 2012 to $14.9 billion, while Operating Cash Flow increased 15.3% to $4.7 billion and Operating Income increased 24.0% to $2.8 billion.

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Earnings per Share (EPS) for the first quarter of 2012 was $0.45, a 32.4% increase from the $0.34 reported in the first quarter of 2011. Excluding NBCUniversal transaction and related costs of $0.02 per share in the first quarter of 2011, EPS increased 25.0% in the first quarter of 2012 (see Table 4).

Free Cash Flow (excluding any impact from the Economic Stimulus packages) increased 36.8% to $3.0 billion in the first quarter of 2012 compared to $2.2 billion in the first quarter of 2011, reflecting growth in consolidated operating cash flow and improvements in working capital, partially offset by higher capital and intangible asset expenditures.

 

Dividends and Share Repurchases. During the first quarter of 2012, Comcast paid dividends totaling $304 million and repurchased 25.9 million of its common shares for $750 million. As of March 31, 2012, Comcast had approximately $5.8 billion available under its share repurchase authorization.

Pro Forma Financial Results

 

Pro forma results are presented as if the NBCUniversal transaction, which closed on January 28, 2011, and the Universal Orlando transaction, which closed on July 1, 2011, were effective on January 1, 2010. These results are based on historical results of operations, adjusted for the effects of acquisition accounting and eliminating the costs and expenses directly related to the transaction, and are not necessarily indicative of what the results would have been had Comcast operated NBCUniversal and Universal Orlando since January 1, 2010 (see Table 5 for reconciliations of pro forma financial information).

 

Consolidated Pro Forma Revenue increased 9.6% in the first quarter of 2012 to $14.9 billion compared to $13.6 billion in the first quarter of 2011. Consolidated Pro Forma Operating Cash Flow increased 9.6% to $4.7 billion compared to $4.3 billion in last year’s first quarter. Included in consolidated pro forma operating cash flow for the first quarter of 2011 are transaction-related costs totaling $92 million. Excluding these costs, consolidated pro forma operating cash flow increased 7.3% (see Table 6).

 

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Cable Communications

 

 

Revenue. For the first quarter of 2012, Cable revenue increased 5.7% to $9.6 billion compared to $9.1 billion in the first quarter of 2011. This increase was driven by a 10.3% increase in High-Speed Internet revenue, a 37.0% increase in Business Services revenue and a 1.6% increase in Video revenue. Monthly average total revenue per Video customer increased 7.8% to $143.40, reflecting a growing number of residential customers taking multiple products, rate adjustments and a higher contribution from business services.

Operating Cash Flow. For the first quarter of 2012, Cable operating cash flow increased 5.5% to $4.0 billion compared to $3.7 billion in the first quarter of 2011, reflecting higher revenue offset primarily by increases in programming, sales and marketing and other expenses to support new business areas. This quarter’s operating cash flow margin was 41.2% compared to 41.3% in the first quarter of 2011.

Capital Expenditures. For the first quarter of 2012, Cable capital expenditures were flat to the prior year at $1.1 billion and represented 11.0% of Cable revenue in the first quarter of 2012 compared to 11.6% in last year’s first quarter.

Customers. In the first quarter, combined Video, High-Speed Internet and Voice customers increased by 565,000, driven by High-Speed Internet customer net additions, up 5% over the prior year. As of March 31, 2012, Video, High-Speed Internet and Voice customers totaled 50.4 million, an increase of 2.8% over last year’s first quarter.

 

NBCUniversal

 

Pro forma NBCUniversal results are presented as if the NBCUniversal transaction, which closed on January 28, 2011, and the Universal Orlando transaction, which closed on July 1, 2011, were effective on January 1, 2010.

Revenue for NBCUniversal increased 18.0% to $5.5 billion in the first quarter of 2012, reflecting strong revenue growth in every segment, including Super Bowl revenue of $259 million in the Broadcast Television segment. Excluding the Super Bowl in the first quarter of 2012, revenue increased 12.4%. Operating Cash Flow increased 34.3% to $813 million compared to last year’s first quarter. Excluding transaction-related costs totaling $92 million in the first quarter of 2011, operating cash flow increased 16.6% (see Table 6).

 

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Cable Networks

For the first quarter of 2012, revenue from the Cable Networks segment increased 5.8% to $2.1 billion compared to $2.0 billion in the first quarter of 2011, primarily driven by a 5.9% increase in advertising revenue, a 3.8% increase in distribution revenue and a 20.5% increase in other revenue. Operating cash flow decreased 1.4% to $805 million compared to $817 million in the first quarter of 2011, reflecting higher programming and production costs, primarily due to a shift in the number of NBA games to the first quarter of 2012.

Broadcast Television

For the first quarter of 2012, revenue from the Broadcast Television segment increased 36.9% to $1.9 billion compared to $1.4 billion in the first quarter of 2011 and included $259 million of revenue generated by the Super Bowl. Excluding the impact of the Super Bowl in the first quarter of 2012, revenue increased 17.7%, reflecting higher primetime ratings and higher revenue from a content licensing agreement. In the first quarter of 2012, the Broadcast Television segment generated an operating cash flow loss of $10 million compared to operating cash flow of $20 million in the first quarter of 2011, reflecting higher programming and marketing costs to support the mid-season primetime schedule (see Table 6).

Filmed Entertainment

For the first quarter of 2012, revenue from the Filmed Entertainment segment increased 22.3% to $1.2 billion compared to $975 million in the first quarter of 2011, primarily reflecting higher theatrical revenue driven by the release of Dr. Suess’ The Lorax and Safe House, and increased home entertainment revenue due to a higher volume of new titles, including Hop and Tower Heist. In the first quarter of 2012, the Filmed Entertainment segment generated operating cash flow of $6 million compared to an operating cash flow loss of $146 million in the first quarter of 2011, primarily reflecting higher theatrical revenue and the corresponding increase in the amortization of film costs.

Theme Parks

Theme Parks results are presented as if the Universal Orlando transaction, which closed on July 1, 2011, was effective on January 1, 2010. As a result, Theme Parks segment revenue and operating cash flow includes the results of Universal Orlando, Universal Hollywood and international licensing fees.

For the first quarter of 2012, revenue from the Theme Parks segment increased 5.7% to $412 million compared to $390 million in the first quarter of 2011, driven by higher per capita spending at the Orlando and Hollywood parks. First quarter operating cash flow increased 17.1% to $157 million compared to $134 million in the same period last year.

Headquarters, Other and Eliminations

NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations between the NBCUniversal businesses. Included in these expenses are non-recurring transaction-related costs during the first quarter of 2011 that totaled $92 million.

 

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Corporate, Other and Eliminations

 

Pro forma Corporate, Other and Eliminations include corporate operations, Comcast-Spectacor and eliminations between Comcast’s businesses. For the quarter ended March 31, 2012, Corporate, Other and Eliminations revenue was ($193) million compared to ($143) million in 2011, reflecting reduced revenue due to the sale of the Philadelphia 76ers in 2011. The operating cash flow loss was $80 million compared to a loss of $78 million in the first quarter of 2011.

 

 

Notes:

1	We define Operating Cash Flow as operating income (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on the sale of assets, if any.

 

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

 

3

We define Free Cash Flow as Net Cash Provided by Operating Activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures, cash paid for intangible assets and cash distributions to noncontrolling interests; and adjusted for any payments and receipts related to certain nonoperating items, net of estimated tax benefits. We do not present Free Cash Flow on a pro forma basis.

All percentages are calculated on whole numbers. 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, May 2, 2012 at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on its Investor Relations website at www.cmcsa.com or www.cmcsk.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 64891388. A replay of the call will be available starting at 12:30 p.m. ET on May 2, 2012, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Wednesday, May 9, 2012 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 64891388. 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.

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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 world’s leading media, entertainment and communications companies. Comcast is principally involved in the operation of cable systems through Comcast Cable Communications and in the development, production and distribution of entertainment, news, sports and other content for global audiences through NBCUniversal. Comcast Cable Communications is one of the nation’s largest video, high-speed Internet and phone providers to residential and business customers. Comcast is the majority owner and manager of NBCUniversal, which owns and operates entertainment and news cable networks, the NBC and Telemundo broadcast networks, local television station groups, television production operations, a major motion picture company and theme parks.

 

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TABLE 1 Condensed Consolidated Statement of Income (Unaudited)

 

 

 

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TABLE 2 Condensed Consolidated Balance Sheet (Unaudited)

 

 

 

 

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TABLE 3 Consolidated Statement of Cash Flows (Unaudited)

 

 

 

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TABLE 4 Supplemental Information   Alternate Presentation of Net Cash Provided by Operating Activities and Free Cash Flow (Unaudited)

 

 

Reconciliation of EPS Excluding Costs of the NBCUniversal Transaction (Unaudited)

 

 

 

(1)

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

 

(2)

2011 Net income attributable to Comcast Corporation includes $63 million of operating costs and expenses and $16 million of other expense ($80 million in total, $51 million net of tax) related to the NBCUniversal transaction.

 

(3)

2011 Net income attributable to Comcast Corporation includes $44 million in transaction-related costs, $14 million net of tax and noncontrolling interest.

 

Note:

Consolidated financial results include NBCUniversal as of January 28, 2011 and 100% of Universal Orlando as of July 1, 2011. Minor differences may exist due to rounding.

 

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TABLE 5 Reconciliation of GAAP to Pro Forma(1) Financial Information (Unaudited)

 

 

 

(1)

Pro Forma information is presented as if the NBCUniversal transaction and the acquisition of the remaining 50% interest of Universal Orlando occurred January 1, 2010. Pro forma data 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 amounts are not necessarily indicative of what our results would have been had we operated the NBCUniversal contributed businesses or Universal Orlando since January 1, 2010, nor of our future results.

 

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TABLE 6   Reconciliation of Consolidated Pro Forma Operating Cash Flow Excluding NBCUniversal Transaction-Related Costs (Unaudited)

 

 

Reconciliation of Consolidated Pro Forma NBCUniversal Revenue Excluding Super Bowl (Unaudited)

 

 

Reconciliation of Consolidated Pro Forma NBCUniversal Operating Cash Flow Excluding NBCUniversal Transaction-Related Costs (Unaudited)

 

 

Reconciliation of Pro Forma Broadcast Television Revenue Excluding Super Bowl (Unaudited)

 

 

 

(1)

NBCUniversal transaction-related costs are associated with severance and other related compensation charges, $44 million of which was incurred after the close of the transaction.

Note: Minor differences may exist due to rounding.

 

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Exhibit 99.2

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 (“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 our financial condition and results of operations. To the extent material, this Exhibit also discloses the additional purposes, if any, for which our 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 (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on sale of assets, if any. This measure eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of certain of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital structure or investment activities. Our management and Board of Directors use this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that Operating Cash Flow is useful to investors because 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.

Because we use Operating Cash Flow to measure 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 to our quarterly and annual consolidated financial statements. Therefore, we believe our measure of Operating Cash Flow for our 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, cash paid for intangible assets and cash distributions to noncontrolling interests; and adjusted for any payments and receipts 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 directly 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 preceding year. Our pro forma data is adjusted for the timing of acquisitions or dispositions, the effects of acquisition accounting, eliminating the costs and expenses directly related to the transaction, but does not include adjustments for costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined businesses. We do not believe our pro forma data is 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 our 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 Table 4 set forth in Exhibit 99.1 to this Current Report on Form 8-K, Consolidated Operating Cash Flow in Table 1 set forth in Exhibit 99.1 to this Current Report on Form 8-K and “adjusted” data in Tables 4 and 6 set forth in Exhibit 99.1 to this Current Report on Form 8-K.