Comcast Reports Second Quarter 2008 Results
Comcast Reports Second Quarter 2008 Results
Consolidated Revenue Increased 11%; Pro Forma Growth of 8%
Consolidated Operating Cash Flow Increased 11%; Pro Forma Growth of 8%
Consolidated Operating Income Increased 19%
EPS Increased 11% to $0.21
Free Cash Flow Increased 216% to $1.2 Billion
Repurchased 48 Million Common Shares for $1.0 Billion
PHILADELPHIA, July 30 /PRNewswire-FirstCall/ -- Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) today reported results for the quarter ended June 30, 2008. The following table highlights financial results (dollars in millions, except per share amounts):
2nd Quarter Six Months Consolidated 2008 2007 Growth 2008 2007 Growth Revenue $8,553 $7,712 11% $16,942 $15,100 12% Operating Cash Flow $3,351 $3,012 11% $6,525 $5,775 13% Operating Income $1,750 $1,468 19% $3,305 $2,729 21% Net Cash Provided by Operating Activities $2,669 $1,942 37% $4,928 $3,907 26% Free Cash Flow $1,163 $368 216% $1,865 $810 130% Net Income $632 $588 8% $1,364 $1,425 (4%) Earnings per Share $0.21 $0.19 11% $0.46 $0.45 2% Adjusted Net Income(1) $632 $588 8% $1,220 $1,125 9% Adjusted Earnings per Share(1) $0.21 $0.19 11% $0.41 $0.36 14% Pro Forma Revenue(2) $8,553 $7,939 8% $16,942 $15,541 9% Pro Forma Operating Cash Flow(2) $3,351 $3,106 8% $6,525 $5,951 10% See notes below
Brian L. Roberts, Chairman and CEO of Comcast Corporation, said, "We delivered solid results in the second quarter of 2008, highlighting the strength of our businesses even in a challenging economic environment. We continue to manage the business for profitable growth, resulting in healthy revenue, operating cash flow, earning per share, and free cash flow generation. Importantly, we remain very focused on delivering superior products and services to our customers, and continue to aggressively invest in projects to extend our long-term competitive advantage and to improve the customer experience."
Consolidated Results
Revenue increased 11% in the second quarter of 2008 to $8.6 billion while Operating Cash Flow (as defined in Table 7) increased 11% to $3.4 billion and Operating Income increased 19% to $1.8 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. For the six months ended June 30, 2008, revenue increased 12% to $16.9 billion, Operating Cash Flow increased 13% to $6.5 billion, and Operating Income increased 21% to $3.3 billion, all compared to the same time period in 2007.
On a pro forma basis(2), Consolidated Revenue increased 8% to $8.6 billion in the second quarter of 2008, while Consolidated Operating Cash Flow increased 8% to $3.4 billion. For the six months ended June 30, 2008, pro forma Consolidated Revenue increased 9% and pro forma Consolidated Operating Cash Flow increased 10%.
Net Income in the second quarter of 2008 was $632 million, or $0.21 per share compared to $588 million or $0.19 per share in the prior year. Earnings per Share for the quarter increased 11%. Net income for the six months ended June 30, 2008, decreased 4% from last year to $1.4 billion. Net income in the first half of 2008 and 2007 includes gains from the dissolution of cable partnerships. Excluding these one-time gains in both periods and as reconciled in Table 7-B, Adjusted Earnings per Share for the six months ended June 30, 2008 increased 14% to $0.41 compared to $0.36 in the first six months of 2007.
Net Cash Provided by Operating Activities increased 37% to $2.7 billion in the second quarter of 2008 and increased 26% to $4.9 billion for the six months ended June 30, 2008, due primarily to solid operating results, as well as the positive impact from the Economic Stimulus package in the second quarter.
Free Cash Flow (as defined in Table 7) totaled $1.2 billion in the second quarter of 2008 as compared to $368 million in 2007, a 216% increase. Free Cash Flow for the six months ended June 30, 2008 increased 130% to $1.9 billion. The definition of Free Cash Flow remains unchanged and excludes any impact from the Economic Stimulus package (see Table 4). The increase in Free Cash Flow is due primarily to growth in consolidated Operating Cash Flow and lower capital expenditures. During the second quarter of 2008, consolidated capital expenditures decreased 19% from the prior year to $1.3 billion, or 15.2% of total revenue, reflecting lower spending across all residential categories at Comcast Cable.
Pro Forma Cable Segment Results(2)
Revenue increased 7% to $8.1 billion for the second quarter of 2008 as compared to $7.6 billion in the second quarter of 2007 reflecting revenue increases across all product lines, except for advertising and pay per view (PPV). The monthly average total revenue per basic subscriber increased 9% from $101 to $110, reflecting an increase in the number of customers taking multiple products. As of June 30, 2008, 20% of subscribers were three-product customers as compared to 12% at the end of last year's second quarter. For the six months ended June 30, 2008, cable revenue increased 8% to $16.0 billion.
Operating Cash Flow grew 8% to $3.4 billion in the second quarter of 2008 from $3.1 billion in the second quarter of 2007. Operating Cash Flow margin was 41.5%, a slight increase from the 41.3% reported in the second quarter of 2007, reflecting a continued focus on controlling operating expenses, partially offset by investments in marketing and Business Services. Operating Cash Flow increased 8% to $6.5 billion for the six months ended June 30, 2008, reflecting a margin of 40.6%.
Video -- Basic video subscribers declined 138,000 or 0.6% during the second quarter. -- Added 320,000 digital cable subscribers during the second quarter - 67% or 16.3 million video subscribers have digital service.(1) -- 7.0 million or 43% of digital cable subscribers have advanced services such as digital video recorders (DVR) and/or high-definition television service (HDTV).
Video revenue increased 3% to $4.7 billion in the second quarter of 2008 from $4.6 billion in 2007. The revenue increase reflects price increases for video services and growth in digital video customers, offset in part by an increasing number of customers in bundles and promotional offers, as well as a decline in basic video customers.
Basic cable subscribers decreased by 138,000 to 24.6 million during the seasonally-weak second quarter. This compares to a 101,000 subscriber decline in the second quarter of 2007. Year to date through June 30, 2008, basic subscribers decreased 195,000.
Comcast added 320,000 digital cable customers in the second quarter of 2008, below the 823,000 digital cable customers added in the same period one year ago. This deceleration was anticipated and reflects the significant deployment of digital boxes in the second quarter of 2007 in advance of a July 1st regulatory deadline. Year to date through June 30, 2008, Comcast added 814,000 digital cable customers. PPV revenue decreased 3% in the second quarter of 2008 primarily reflecting the absence of 2 major live events that contributed approximately $33 million to last year's second quarter. In the six months ended June 30, 2008, PPV revenue grew 9% compared to the same period in 2007.
High-Speed Internet -- Added 278,000 high-speed Internet subscribers during the second quarter -- penetration reached 29% of homes passed or 14.4 million customers.
High-speed Internet revenue increased 10% to $1.8 billion in the second quarter of 2008 from $1.6 billion in 2007 reflecting a 12% increase in subscribers and a 3% decline in average monthly revenue per subscriber to $42.01, reflecting the impact of additional bundling and the recent introduction of new offers and speed tiers.
Phone -- Added 555,000 Comcast Digital Voice (CDV) customers during the second quarter -- penetration reached 12.5% of homes passed or 5.6 million customers.
Phone revenue increased 50% from $425 million to $640 million in the second quarter of 2008, reflecting significant growth in CDV subscribers and a decrease in average revenue per subscriber to $39.48, resulting from an increase in the number of customers receiving service as part of a promotional offer or in a new product package. The increase in CDV revenue was also partially offset by a $64 million or 96% decline in circuit-switched phone revenue as Comcast exits that product offering.
Year to date through June 30, 2008, phone revenue increased 57% from $781 million to $1.2 billion, reflecting significant growth in CDV customers, partially offset by a $133 million decline in circuit-switched phone revenue.
Advertising
Advertising revenue decreased 2% to $399 million in the second quarter of 2008 from $410 million in 2007, reflecting continued softness in the advertising marketplace, particularly in auto and housing-related categories, partially offset by an increase in political advertising. Year to date through June 30, 2008, ad sales increased 2% to $743 million from $732 million, which includes one additional week in the broadcast advertising calendar compared to the first six months of 2007.
Programming Segment Results
Comcast's Programming segment consists of national programming networks E! Entertainment Television, Style Network, The Golf Channel, VERSUS, and G4.
The Programming segment reported second quarter 2008 revenue of $366 million, a 10% increase from $334 million in 2007, reflecting higher viewership, higher advertising and distribution revenue, as well as strong international revenue growth. Operating Cash Flow increased to $89 million, an increase of 17% from the same period last year.
Year to date through June 30, 2008, Programming segment revenue increased 15% to $729 million from $636 million in the six months ended June 30, 2007. During the same period, Operating Cash Flow increased 44% to $202 million in 2008, reflecting strong revenue growth, as well as the favorable impact of the timing of certain marketing and programming expenses which are expected to be incurred in the second half of the year.
Corporate and Other
Corporate and Other includes corporate overhead, Comcast-Spectacor, Comcast Interactive Media (CIM), and other operations and eliminations between Comcast's businesses. For the second quarter of 2008, Corporate and Other revenue increased to $87 million from $48 million in the second quarter of 2007 due to the strong post-season performance by Comcast-Spectacor's professional sports teams as well as strong results at CIM from internet advertising, search revenue and the inclusion of Fandango. The Operating Cash Flow loss for the second quarter of 2008 increased to $100 million compared to a loss of $94 million for the same period in 2007.
Year to date through June 30, 2008, Corporate and Other revenue increased 45% to $197 million from $136 million in the same period of 2007. Operating Cash Flow loss for Corporate and Other decreased 4% to $181 million for the six months ended June 30, 2008 compared to a loss of $189 million in 2007.
Share Repurchases and Dividends
In the second quarter of 2008, Comcast repurchased 48.1 million of its common shares for $1.0 billion, reducing the number of total shares outstanding by 1.6%. Year to date, Comcast repurchased 101.2 million of its common shares for $2.0 billion. As of June 30, 2008, Comcast had approximately $4.9 billion of availability remaining under its share repurchase authorization, which the company intends to fully utilize by the end of 2009.
Comcast paid a quarterly cash dividend of $185 million on April 30, 2008 and $182 million on July 30, 2008.
2008 Financial Outlook For 2008, Comcast reaffirms the following previously issued guidance: -- Consolidated Revenue and Operating Cash Flow growth of 8% to 10%(2) -- Consolidated Capital Expenditures as a percent of revenue expected to decline to approximately 18% -- Consolidated Free Cash Flow growth of at least 20% from the $2.3 billion reported in 2007
The outlook above does not reflect the impact of any tax law changes, including the U.S. Government Economic Stimulus package or any future sales or acquisitions of businesses or operating assets (or related tax effects).
Notes: (1) Net income and earnings per share are adjusted for one-time gains, net of tax, related to the dissolution of the Texas/Kansas City Cable Partnership in 2007 and the dissolution of the Insight Midwest Partnership in 2008. Please refer to Table 7-B for a reconciliation of adjusted net income and earnings per share. Earnings per share amounts are presented on a diluted basis. (2) Pro forma results adjust only 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 basic cable subscribers by 765,000. Please refer to Table 7-A for a reconciliation of pro forma financial data. Conference Call Information
Comcast Corporation will host a conference call with the financial community today, July 30, 2008 at 8:30 a.m. Eastern Time (ET). The conference call will be broadcast live on Comcast's Investor Relations website at http://www.cmcsa.com/ or http://www.cmcsk.com/. A recording of the call will be available on the Investor Relations website starting at 12:30 p.m. ET on July 30, 2008. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 39992756. A telephone replay will begin immediately following the call until Friday, August 1, 2008 at midnight ET. To access the rebroadcast, please dial (800) 642-1687 and enter passcode number 39992756. To automatically receive Comcast financial news by email, please visit http://www.cmcsa.com/ or http://www.cmcsk.com/ and subscribe to email alerts.
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.
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 provided in Table 7 of this release. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.
About Comcast Corporation
Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) (http://www.comcast.com/) is the nation's leading provider of entertainment, information and communications products and services. With 24.6 million cable customers, 14.4 million high-speed Internet customers, and 5.6 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of broadband cable systems and in the delivery of programming content.
Comcast's content networks and investments include E! Entertainment Television, Style Network, The 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.
COMCAST CORPORATION TABLE 1 Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Six Months Ended (in millions, except per share data) June 30, June 30, 2008 2007 2008 2007 Revenues $8,553 $7,712 $16,942 $15,100 Operating expenses 3,091 2,754 6,198 5,513 Selling, general and administrative expenses 2,111 1,946 4,219 3,812 5,202 4,700 10,417 9,325 Operating cash flow 3,351 3,012 6,525 5,775 Depreciation expense 1,371 1,252 2,761 2,477 Amortization expense 230 292 459 569 1,601 1,544 3,220 3,046 Operating income 1,750 1,468 3,305 2,729 Other income (expense) Interest expense (618) (550) (1,239) (1,118) Investment income (loss), net (70) 126 9 300 Equity in net (losses) income of affiliates, net (13) (16) (48) (37) Other income (expense) 25 1 293 514 (676) (439) (985) (341) Income before income taxes and minority interest 1,074 1,029 2,320 2,388 Income tax expense (455) (453) (963) (979) Income before minority interest 619 576 1,357 1,409 Minority interest 13 12 7 16 Net income $632 $588 $1,364 $1,425 Diluted earnings per common share $0.21 $0.19 $0.46 $0.45 Adjusted earnings per common share(1) $0.21 $0.19 $0.41 $0.36 Dividends declared per common share $0.0625 $ - $0.1250 $ - Diluted weighted-average number of common shares 2,970 3,147 2,995 3,155 (1) Please refer to Table 7-B for a reconciliation of adjusted net income and earnings per share. COMCAST CORPORATION TABLE 2 Condensed Consolidated Balance Sheet (Unaudited) (in millions) June 30, December 31, 2008 2007 ASSETS Current Assets Cash and cash equivalents $1,767 $963 Investments 295 98 Accounts receivable, net 1,665 1,645 Other current assets 920 961 Total current assets 4,647 3,667 Investments 5,366 7,963 Property and equipment, net 23,833 23,624 Franchise rights 59,449 58,077 Goodwill 15,074 14,705 Other intangible assets, net 4,614 4,739 Other noncurrent assets, net 914 642 $113,897 $113,417 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses related to trade creditors $3,027 $3,336 Accrued expenses and other current liabilities 3,173 3,121 Current portion of long-term debt 1,889 1,495 Total current liabilities 8,089 7,952 Long-term debt, less current portion 30,624 29,828 Deferred income taxes 27,292 26,880 Other noncurrent liabilities 7,207 7,167 Minority interest 348 250 Stockholders' equity 40,337 41,340 $113,897 $113,417 COMCAST CORPORATION TABLE 3 Condensed Consolidated Statement of Cash Flows (Unaudited) (in millions) Six Months Ended June 30, 2008 2007 OPERATING ACTIVITIES Net cash provided by operating activities $4,928 $3,907 FINANCING ACTIVITIES Proceeds from borrowings 2,009 590 Retirements and repayments of debt (831) (1,320) Repurchases of common stock (1,979) (1,252) Dividends paid (185) - Issuances of common stock 42 334 Other (135) 52 Net cash provided by (used in) financing activities (1,079) (1,596) INVESTING ACTIVITIES Capital expenditures (2,731) (3,058) Cash paid for software and other intangible assets (245) (229) Acquisitions, net of cash acquired (331) (770) Proceeds from sales of investments 320 1,288 Purchases of investments (41) (52) Proceeds from sales (purchases) of short-term investments - 56 Other (17) 43 Net cash provided by (used in) investing activities (3,045) (2,722) Increase (decrease) in cash and cash equivalents 804 (411) Cash and cash equivalents, beginning of period 963 1,239 Cash and cash equivalents, end of period $1,767 $828 TABLE 4 Calculation of Free Cash Flow and Unlevered Free Cash Flow (Unaudited)(1) (in millions) Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Net Cash Provided by Operating Activities $2,669 $1,942 $4,928 $3,907 Capital Expenditures (1,300) (1,604) (2,731) (3,058) Cash Paid for Capitalized Software (88) (86) (187) (174) Cash Paid for Other Intangible Assets (31) (25) (58) (55) Nonoperating and Nonrecurring items, net of tax: Payment of Tax on Nonoperating Items 228 141 228 190 Impact of Economic Stimulus package(2) (315) - (315) - Free Cash Flow 1,163 368 1,865 810 Cash Paid Interest 408 416 1,116 1,078 Unlevered Free Cash Flow $1,571 $784 $2,981 $1,888 (1) See Non-GAAP and Other Financial Measures in Table 7 for the definition of Free Cash Flow and Unlevered Free Cash Flow. (2) Our definition of Free Cash Flow remains unchanged and specifically eliminates any impact from the Economic Stimulus package. For the 2nd quarter 2008, Net Cash Provided by Operating Activities included a $315 million benefit from the Economic Stimulus package. This amount has been excluded from Free Cash Flow to provide an appropriate comparison. COMCAST CORPORATION TABLE 5 Pro Forma Financial Data by Business Segment (Unaudited)(1) (dollars in millions) Corporate and Cable Programming(2) Other Total Three Months Ended June 30, 2008 Revenues $8,100 $366 $87 $8,553 Operating Cash Flow $3,362 $89 ($100) $3,351 Operating Income (Loss) $1,825 $44 ($119) $1,750 Operating Cash Flow Margin 41.5% 24.2% NM 39.2% Capital Expenditures (3) $1,254 $6 $40 $1,300 Three Months Ended June 30, 2007 Revenues $7,557 $334 $48 $7,939 Operating Cash Flow $3,124 $75 ($93) $3,106 Operating Income (Loss) $1,614 $29 ($119) $1,524 Operating Cash Flow Margin 41.3% 22.7% NM 39.1% Capital Expenditures (3) $1,615 $10 $8 $1,633 Six Months Ended June 30, 2008 Revenues $16,016 $729 $197 $16,942 Operating Cash Flow $6,504 $202 ($181) $6,525 Operating Income (Loss) $3,419 $103 ($217) $3,305 Operating Cash Flow Margin 40.6% 27.7% NM 38.5% Capital Expenditures (3) $2,609 $10 $112 $2,731 Six Months Ended June 30, 2007 Revenues $14,769 $636 $136 $15,541 Operating Cash Flow $6,000 $140 ($189) $5,951 Operating Income (Loss) $3,013 $47 ($230) $2,830 Operating Cash Flow Margin 40.6% 22.0% NM 38.3% Capital Expenditures (3) $3,095 $14 $15 $3,124 (1) See Non-GAAP and Other Financial Measures in Table 7. Historical financial data by business segment, in accordance with generally accepted accounting principles in the United States (GAAP), is available in the Company's Quarterly Report on Form 10-Q. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding. (2) Programming includes our national networks E! Entertainment Television and Style Network (E! Networks), The Golf Channel, VERSUS and G4. (3) Our Cable segment's capital expenditures are comprised of the following categories: 2Q08 2Q07 YTD 2Q08 YTD 2Q07 Growth Customer Premise Equipment (CPE) $687 $804 $1,506 $1,555 Scalable Infrastructure 55 113 114 221 Line Extensions 52 100 100 188 Support Capital 57 110 111 180 Upgrades (Capacity Expansion) 25 27 45 49 Business Services 48 21 99 38 924 1,175 1,975 2,231 Maintenance CPE (Drop Replacements) 73 77 132 144 Scalable Infrastructure 115 151 217 326 Support Capital 58 99 101 162 Upgrades 58 90 118 199 304 417 568 831 Discretionary 26 23 66 33 Total $1,254 $1,615 $2,609 $3,095 CPE includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues (e.g. digital converters). Scalable infrastructure includes costs, not CPE or network related, to secure growth of new customers, revenue units and additional bandwidth revenues or provide service enhancements (e.g. headend equipment). Line extensions include network costs associated with entering new service areas (e.g. fiber/coaxial cable). Support capital includes costs associated with the replacement or enhancement of non-network assets due to obsolescence and wear out (e.g. non-network equipment, land, buildings and vehicles). Upgrades include costs to enhance or replace existing fiber/coaxial cable networks, including network improvements. Business Services includes fiber/coax extension, electronics, CPE and costs to secure new customers. Management evaluates capital expenditures by categorizing investments into three groups: Growth, Maintenance and Discretionary. Growth is directly tied to revenue generation and represents the costs required to secure new customers, revenue units or additional bandwidth revenues. Maintenance includes investments that allow the company to maintain its competitive position and provide a foundation for growth. Discretionary includes investments that lay the groundwork for future products and services, such as our investments in interactive advertising, cross-platform product development or switched digital video. COMCAST CORPORATION TABLE 6 Pro Forma Data - Cable Segment Components (Unaudited) (1)(2) (dollars in millions, except per Three Months Ended Six Months Ended subscriber data) June 30, June 30, 2008 2007 2008 2007 Revenues: Video (3) $4,726 $4,597 $9,432 $9,088 High-speed Internet 1,792 1,632 3,542 3,201 Phone 640 425 1,227 781 Advertising 399 410 743 732 Other (4) 316 281 621 549 Franchise fees 227 212 451 418 Total Revenues * $8,100 $7,557 $16,016 $14,769 Operating Cash Flow $3,362 $3,124 $6,504 $6,000 Operating Income $1,825 $1,614 $3,419 $3,013 Operating Cash Flow Margin 41.5% 41.3% 40.6% 40.6% Capital Expenditures $1,254 $1,615 $2,609 $3,095 * Total Revenues include revenue from Business Services of $131 million in 2Q08 and $95 million in 2Q07, and $251 million in YTD 2008 and $182 million in YTD 2007. 2Q08 1Q08 2Q07 Video Homes Passed (000's) 50,096 49,902 49,232 Basic Subscribers (000's) 24,553 24,691 24,904 Basic Penetration 49.0% 49.5% 50.6% Quarterly Net Basic Subscriber Additions (000's) (138) (57) (101) Digital Subscribers (000's) 16,335 16,015 14,489 Digital Penetration 66.5% 64.9% 58.2% Quarterly Net Digital Subscriber Additions (000's) 320 494 823 Digital Set-Top Boxes 26,345 25,856 23,185 Monthly Average Video Revenue per Basic Subscriber $63.98 $63.46 $61.40 High-Speed Internet "Available" Homes (000's) 49,548 49,548 48,767 Subscribers (000's) 14,357 14,078 12,771 Penetration of "Available" Homes 28.9% 28.4% 26.2% Quarterly Net Subscriber Additions (000's) 278 492 339 Monthly Average Revenue per Subscriber $42.01 $42.18 $43.19 Phone Comcast Digital Voice "Available" Homes (000's) 45,143 44,082 38,873 Subscribers (000's) 5,643 5,088 3,150 Penetration of "Available" Homes 12.5% 11.5% 8.1% Quarterly Net Subscriber Additions (000's) 555 639 692 Monthly Average Revenue per Subscriber $39.48 $40.24 $42.66 Circuit Switched Phone "Available" Homes (000's) 2,000 5,029 8,995 Subscribers (000's) 10 66 443 Penetration of "Available" Homes 0.5% 1.3% 4.9% Quarterly Net Subscriber Additions (000's) (56) (110) (117) Monthly Average Revenue per Subscriber $36.64 $40.61 $44.38 Total Revenue Generating Units (000's) (5) 60,899 59,939 55,756 Total Quarterly Net Additions (000's) 960 1,458 1,636 Total Monthly Average Revenue per Basic Subscriber $109.66 $106.74 $100.94 (1) See Non-GAAP and Other Financial Measures in Table 7. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding. (2) Pro forma financial data includes the results of Comcast SportsNet Bay Area and Comcast SportsNet New England acquired on June 30, 2007, the cable system acquired from Patriot Media Holdings, LLC on August 31, 2007, and the cable systems resulting from the dissolution of the Insight Midwest Partnership on January 1, 2008. Pro forma results are presented as if the acquisitions and dispositions were effective on January 1, 2007. The net impact of these transactions was an increase of 765,000 basic cable subscribers. (3) Video revenues consist of our basic, expanded basic, digital, premium, pay-per-view and equipment services. (4) Other revenues include regional sports programming networks, residential video installation revenues, guide revenues, commissions from electronic retailing, other product offerings and revenues of our digital media center. (5) Represents the sum of basic and digital video, high-speed Internet and net phone subscribers, excluding additional outlets. Subscriptions to DVR and/or HDTV services do not result in additional RGUs. COMCAST CORPORATION TABLE 7 Non-GAAP and Other Financial Measures
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 generally accepted accounting principles in the United States (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.
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, Free Cash Flow and Unlevered Free Cash Flow in Table 4, Pro Forma in Table 7-A and Adjusted Data in Table 7-B.
COMCAST CORPORATION TABLE 7-A Reconciliation of GAAP to Pro Forma(1) Financial Data by Business Segment (Unaudited) GAAP (in millions) Corporate, Other and Cable Programming Eliminations Total Three Months Ended June 30, 2008 Revenue $8,100 $366 $87 $8,553 Operating Expenses (excluding depreciation and amortization) 4,738 277 187 5,202 Operating Cash Flow $3,362 $89 ($100) $3,351 Depreciation and Amortization 1,537 45 19 1,601 Operating Income (Loss) $1,825 $44 ($119) $1,750 Capital Expenditures $1,254 $6 $40 $1,300 Three Months Ended June 30, 2007 Revenue $7,330 $334 $48 $7,712 Operating Expenses (excluding depreciation and amortization) 4,299 259 142 4,700 Operating Cash Flow $3,031 $75 ($94) $3,012 Depreciation and Amortization 1,471 46 27 1,544 Operating Income (Loss) $1,560 $29 ($121) $1,468 Capital Expenditures $1,586 $10 $8 $1,604 Six Months Ended June 30, 2008 Revenue $16,016 $729 $197 $16,942 Operating Expenses (excluding depreciation and amortization) 9,512 527 378 10,417 Operating Cash Flow $6,504 $202 ($181) $6,525 Depreciation and Amortization 3,085 99 36 3,220 Operating Income (Loss) $3,419 $103 ($217) $3,305 Capital Expenditures $2,609 $10 $112 $2,731 Six Months Ended June 30, 2007 Revenue $14,328 $636 $136 $15,100 Operating Expenses (excluding depreciation and amortization) 8,504 496 325 9,325 Operating Cash Flow $5,824 $140 ($189) $5,775 Depreciation and Amortization 2,911 93 42 3,046 Operating Income (Loss) $2,913 $47 ($231) $2,729 Capital Expenditures $3,029 $14 $15 $3,058 Cable Total (in millions) Pro Forma Pro Forma Total Adjustments Pro Forma Adjustments Pro (1) (2) Cable (1) (2) Forma Three Months Ended June 30, 2008 Revenue $- $8,100 $- $8,553 Operating Expenses (excluding depreciation and amortization) - 4,738 - 5,202 Operating Cash Flow $- $3,362 $- $3,351 Depreciation and Amortization - 1,537 - 1,601 Operating Income (Loss) $- $1,825 $- $1,750 Capital Expenditures $- $1,254 $- $1,300 Three Months Ended June 30, 2007 Revenue $227 $7,557 $227 $7,939 Operating Expenses (excluding depreciation and amortization) 134 4,433 133 4,833 Operating Cash Flow $93 $3,124 $94 $3,106 Depreciation and Amortization 39 1,510 38 1,582 Operating Income (Loss) $54 $1,614 $56 $1,524 Capital Expenditures $29 $1,615 $29 $1,633 Six Months Ended June 30, 2008 Revenue $0 $16,016 $0 $16,942 Operating Expenses (excluding depreciation and amortization) - 9,512 - 10,417 Operating Cash Flow $0 $6,504 $0 $6,525 Depreciation and Amortization - 3,085 - 3,220 Operating Income (Loss) $0 $3,419 $0 $3,305 Capital Expenditures $0 $2,609 $0 $2,731 Six Months Ended June 30, 2007 Revenue $441 $14,769 $441 $15,541 Operating Expenses (excluding depreciation and amortization) 265 8,769 265 9,590 Operating Cash Flow $176 $6,000 $176 $5,951 Depreciation and Amortization 76 2,987 75 3,121 Operating Income (Loss) $100 $3,013 $101 $2,830 Capital Expenditures $66 $3,095 $66 $3,124 (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. COMCAST CORPORATION TABLE 7-B Reconciliation of Net Income to Adjusted Net Income (Unaudited) Three Months Ended June 30, 2008 vs. 2007 2008 2007 Growth(%) (in millions, except per share data) $ EPS(1) $ EPS(1) $ EPS(1) Net Income $632 $0.21 $588 $0.19 8% 11% Adjustments - - - - - - Adjusted Net Income $632 $0.21 $588 $0.19 8% 11% Six Months Ended June 30, 2008 vs. 2007 2008 2007 Growth(%) $ EPS(1) $ EPS(1) $ EPS(1) Net Income $1,364 $0.46 $1,425 $0.45 (4%) 2% Adjustments: Gain related to the dissolution of the Texas/Kansas City Cable Partnership, net of tax(2) - - (300) (0.09) NM NM Gain related to the dissolution of the Insight Midwest partnership, net of tax(3) (144) (0.05) - - NM NM Adjusted Net Income $1,220 $0.41 $1,125 $0.36 9% 14% (1) Based on diluted average number of common shares for the respective periods as presented in Table 1. (2) 2007 Net Income includes a one-time gain, net of tax, related to the dissolution of the Texas/Kansas City Cable Partnership. (3) 2008 Net Income includes a one-time gain, net of tax, related to the dissolution of the Insight Midwest Partnership.
First Call Analyst:
FCMN Contact:
Source: Comcast Corporation
CONTACT: Investors: Marlene S. Dooner, +1-215-286-7392, or Michael A.
Kelman, +1-215-286-3035; Press: D'Arcy Rudnay, +1-215-286-8582, or John
Demming, +1-215-286-8011, all of Comcast Corporation
Web site: http://www.cmcsa.com/
http://www.cmcsk.com/
Profile: International Entertainment
posted by EntertainmentNews @ 4:04 AM
0 comments
0 Comments:
Post a Comment
<< Home