Comcast Corporation (NASDAQ: CMCSA) today reported results for
the quarter and year ended December 31, 2019.
Brian L. Roberts, Chairman and Chief Executive Officer of
Comcast Corporation, said, "We delivered strong operational and
financial results in the fourth quarter, capping another great year
for Comcast, including double-digit growth in full-year adjusted
EPS, record free cash flow and 1.4 million broadband net additions
in the U.S. Our teams at Cable, NBCUniversal and Sky continued to
execute at a high level, strengthening our leadership position in
our markets. Looking ahead, in 2020 we are leaning into exciting
opportunities, including: further differentiating our broadband
product in the U.S. through innovations like Flex and xFi Advanced
Security; accelerating the deployment of Sky Q; launching a new
broadband service in Italy; debuting Super Nintendo World at
Universal Studios Japan; and introducing a world-class streaming
service - Peacock - which leverages capabilities from across
Comcast. Underscoring our confidence in the continued success of
our company, we are pleased to announce a 10% increase in our
dividend, our 12th consecutive annual increase."
($ in millions, except per share data)
4th
Quarter
Full
Year
Consolidated Results
2018
5
2019
Growth
2018
5
2019
Growth
Revenue
$27,846
$28,398
2.0
%
$94,507
$108,942
15.3
%
Net Income Attributable to Comcast
$2,511
$3,162
25.9
%
$11,731
$13,057
11.3
%
Adjusted EBITDA1
$8,191
$8,436
3.0
%
$30,165
$34,258
13.6
%
Earnings per Share2
$0.55
$0.68
23.6
%
$2.53
$2.83
11.9
%
Earnings per Share, Adjusted Basis3 (see
Table 5)
$0.72
$0.79
9.7
%
$2.73
$3.13
14.7
%
Net Cash Provided by Operating
Activities
$5,790
$6,235
7.7
%
$24,297
$25,697
5.8
%
Free Cash Flow4
$2,063
$2,484
20.4
%
$12,588
$13,394
6.4
%
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.
Full Year 2019 Highlights:
- Consolidated Adjusted EBITDA Increased 13.6%; Earnings per
Share Increased 14.7% to $3.13, on an Adjusted Basis; Generated
Free Cash Flow of $13.4 Billion
- Cable Communications Adjusted EBITDA Increased 7.3% and
Adjusted EBITDA per Customer Relationship Increased 3.5%
- Cable Communications Total Customer Relationships Increased by
1.1 Million, the Best Result on Record; Total High-Speed Internet
Customers Increased by 1.4 Million, the Best Result in 12
Years
- NBCUniversal Filmed Entertainment Adjusted EBITDA Increased
13.5%
- Sky Adjusted EBITDA Increased 7.1% on a Pro Forma Basis to $3.1
Billion; Excluding the Impact of Currency, Adjusted EBITDA
Increased 12.2% on a Pro Forma Basis
4th Quarter 2019 Highlights:
- Consolidated Adjusted EBITDA Increased 3.0%; Earnings per Share
Increased 9.7% to $0.79, on an Adjusted Basis; Generated Free Cash
Flow of $2.5 Billion
- Cable Communications Adjusted EBITDA Increased 5.4%
- Cable Communications Total Customer Relationship Net Additions
were 372,000, the Best Quarterly Net Additions on Record; Total
High-Speed Internet Customer Net Additions were 442,000
- NBCUniversal Broadcast Television Adjusted EBITDA Increased
14.2%
- Sky Total Customer Relationships Increased 1.7% Year-Over-Year
to 24.0 Million, Including Net Additions of 77,000 in the
Quarter
Dividends:
- Dividends Paid Totaled $3.7 Billion in 2019; Increased Dividend
by 10% to $0.92 per Share on an Annualized Basis for 2020
Consolidated Financial Results
The comparability of our consolidated results was impacted by
the fourth quarter 2018 Sky transaction. Sky’s results of
operations are included in our consolidated financial statements
following the acquisition date.
Consolidated Revenue for the fourth quarter of 2019
increased 2.0% to $28.4 billion. Consolidated Net Income
Attributable to Comcast increased 25.9% to $3.2 billion.
Consolidated Adjusted EBITDA increased 3.0% to $8.4
billion.
For the twelve months ended December 31, 2019, consolidated
revenue increased 15.3% to $109 billion compared to 2018.
Consolidated net income attributable to Comcast increased 11.3% to
$13.1 billion. Consolidated Adjusted EBITDA increased 13.6% to
$34.3 billion.
Earnings per Share (EPS) for the fourth quarter of 2019
was $0.68, an increase of 23.6% compared to the fourth quarter of
2018. On an adjusted basis, EPS increased 9.7% to $0.79 (see Table
5).
For the twelve months ended December 31, 2019, EPS was $2.83, a
11.9% increase compared to the prior year. On an adjusted basis,
EPS increased 14.7% to $3.13 (see Table 5).
Capital Expenditures decreased 2.5% to $3.1 billion in
the fourth quarter of 2019. Cable Communications’ capital
expenditures decreased 7.8% to $2.1 billion. NBCUniversal’s capital
expenditures increased 7.6% to $641 million. Sky had capital
expenditures of $228 million.
For the twelve months ended December 31, 2019, capital
expenditures increased 1.8% to $10.0 billion compared to 2018.
Cable Communications' capital expenditures decreased 10.5% to $6.9
billion. NBCUniversal's capital expenditures increased 19.7% to
$2.1 billion. Sky had capital expenditures of $768 million.
Net Cash Provided by Operating Activities was $6.2
billion in the fourth quarter of 2019. Free Cash Flow was
$2.5 billion (see Table 4).
For the twelve months ended December 31, 2019, net cash provided
by operating activities was $25.7 billion. Free cash flow was $13.4
billion (see Table 4).
Dividends paid during the fourth quarter of 2019 totaled
$957 million. For the full year, Comcast made four cash dividend
payments totaling $3.7 billion.
Today Comcast announced that it increased its dividend by 10% to
$0.92 per share on an annualized basis for 2020. In accordance with
the increase, the Board of Directors declared a quarterly cash
dividend of $0.23 a share on the company's stock, payable April 22,
2020 to shareholders of record as of the close of business on April
1, 2020.
Consolidated Pro Forma Financial Results
Pro forma results are presented as if the Sky transaction
occurred on January 1, 2017. The pro forma amounts are based on
historical results of operations and are primarily adjusted for the
allocation of purchase price and excluding costs directly related
to the transaction. These amounts are not necessarily indicative of
what our results would have been had we operated Sky since January
1, 2017 (see Table 7 for reconciliations of pro forma financial
data).
Consolidated Pro Forma Revenue for the fourth quarter of
2019 was consistent with the prior year period at $28.4 billion.
Consolidated Pro Forma Adjusted EBITDA increased 2.1%
to $8.4 billion.
For the twelve months ended December 31, 2019, consolidated pro
forma revenue decreased 0.5% to $109 billion compared to 2018.
Consolidated Pro Forma Adjusted EBITDA increased 5.9% to $34.3
billion.
Cable Communications
($ in millions)
4th
Quarter
Full
Year
2018
6
2019
Growth
2018
6
2019
Growth
Cable Communications Revenue
High-Speed Internet
$4,404
$4,791
8.8
%
$17,144
$18,752
9.4
%
Video
5,577
5,507
(1.2
%)
22,455
22,270
(0.8
%)
Voice
978
944
(3.6
%)
3,960
3,879
(2.1
%)
Wireless
267
372
39.4
%
890
1,167
31.2
%
Business Services
1,839
2,000
8.8
%
7,129
7,795
9.3
%
Advertising
863
699
(19.1
%)
2,795
2,465
(11.8
%)
Other
467
455
(2.3
%)
1,660
1,754
5.7
%
Cable Communications Revenue
$14,395
$14,768
2.6
%
$56,033
$58,082
3.7
%
Cable Communications Adjusted
EBITDA
$5,581
$5,883
5.4
%
$21,681
$23,266
7.3
%
Adjusted EBITDA Margin
38.8%
39.8%
38.7%
40.1%
Cable Communications Capital
Expenditures
$2,320
$2,138
(7.8
%)
$7,723
$6,909
(10.5
%)
Percent of Cable Communications
Revenue
16.1%
14.5%
13.8%
11.9%
Beginning in the first quarter of 2019,
Cable Communications results include our wireless phone service and
certain other business development initiatives which were
previously presented in Corporate and Other. Prior periods have
been adjusted to reflect this presentation.
Revenue for Cable Communications increased 2.6% to $14.8
billion in the fourth quarter of 2019, driven primarily by
increases in high-speed internet, business services and wireless
revenue, partially offset by a decrease in advertising revenue.
High-speed internet revenue increased 8.8%, driven by an increase
in the number of residential high-speed internet customers and rate
adjustments. Business services revenue increased 8.8%, due to an
increase in the number of customers receiving our services and an
increase in average rates. Wireless revenue increased 39.4%,
primarily reflecting an increase in the number of customer lines.
Advertising revenue decreased 19.1%, reflecting a decrease in
political advertising revenue. Excluding political advertising
revenue, advertising revenue was consistent with the prior year
period. Video revenue decreased 1.2%, reflecting a decrease in the
number of residential video customers, partially offset by rate
adjustments. Voice revenue decreased 3.6%, primarily due to a
decrease in the number of residential voice customers. Other
revenue decreased 2.3%, primarily reflecting the timing of X1
licensing revenue, partially offset by higher security and
automation services revenue.
For the twelve months ended December 31, 2019, Cable revenue
increased 3.7% to $58.1 billion compared to 2018, driven by growth
in high-speed internet, business services, wireless and other
revenue, partially offset by a decrease in advertising, video and
voice revenue.
Total Customer Relationships increased by 372,000 to 31.5
million in the fourth quarter of 2019. Residential customer
relationships increased by 352,000 and business customer
relationships increased by 20,000. Total high-speed internet
customer net additions were 442,000, total video customer net
losses were 149,000, total voice customer net losses were 2,000 and
total security and automation customer net additions were 10,000.
In addition, Cable Communications added 261,000 wireless lines in
the quarter.
For the year ended December 31, 2019, total customer
relationships increased by 1.1 million. Residential customer
relationships increased by 1.0 million and business customer
relationships increased by 94,000. Total high-speed internet
customer net additions were 1.4 million, total video customer net
losses were 733,000, total voice customer net losses were 173,000
and total security and automation customer net additions were
59,000. In addition, Cable Communications added 816,000 wireless
lines during the year.
(in thousands)
Net
Additions
YE18
6
YE19
4Q18
6
4Q19
2018
6
2019
Customer Relationships
Residential Customer Relationships
28,109
29,149
240
352
925
1,040
Business Services Customer
Relationships
2,303
2,396
29
20
123
94
Total Customer Relationships
30,412
31,545
269
372
1,048
1,134
Residential Customer Relationships
Mix
One Product Residential Customers
9,015
10,247
151
342
840
1,232
Two Product Residential Customers
8,992
8,923
34
8
(25
)
(69
)
Three or More Product Residential
Customers
10,102
9,979
55
2
110
(123
)
Residential High-Speed Internet
Customers
25,097
26,414
323
424
1,234
1,317
Business Services High-Speed Internet
Customers
2,125
2,215
28
18
120
89
Total High-Speed Internet
Customers
27,222
28,629
351
442
1,353
1,406
Residential Video Customers
20,959
20,288
(19
)
(133
)
(344
)
(671
)
Business Services Video Customers
1,027
966
(10
)
(17
)
(27
)
(61
)
Total Video Customers
21,986
21,254
(29
)
(149
)
(370
)
(733
)
Residential Voice Customers
10,153
9,934
(12
)
(10
)
(163
)
(218
)
Business Services Voice Customers
1,297
1,342
14
9
60
46
Total Voice Customers
11,449
11,276
2
(2
)
(103
)
(173
)
Total Security and Automation
Customers
1,317
1,375
39
10
186
59
Total Wireless Lines
1,236
2,052
227
261
854
816
Adjusted EBITDA for Cable Communications increased 5.4%
to $5.9 billion in the fourth quarter of 2019, reflecting higher
revenue, partially offset by a 0.8% increase in operating expenses.
Non-programming expenses increased 1.6%, primarily reflecting
higher technical and product support expenses, partially offset by
lower other operating costs and advertising, marketing and
promotional costs. Non-programming expenses per customer
relationship decreased 1.9%. Programming costs decreased 0.6% due
to the timing of programming contract renewals and video subscriber
declines. This quarter's Adjusted EBITDA per customer relationship
increased 1.8%, and Adjusted EBITDA margin was 39.8% compared to
38.8% in the fourth quarter of 2018. Cable Communications results
include a loss of $116 million from our wireless business, compared
to a loss of $191 million in the prior period.
For the twelve months ended December 31, 2019, Cable Adjusted
EBITDA increased 7.3% to $23.3 billion compared to 2018, driven by
higher revenue, partially offset by a 1.4% increase in operating
expenses. The higher expenses were due to a 1.5% increase in
non-programming expenses and a 1.1% increase in programming costs.
For the twelve months ended December 31, 2019, Adjusted EBITDA per
customer relationship increased 3.5%, and Adjusted EBITDA margin
was 40.1% compared to 38.7% in 2018. Cable Communications results
include a loss of $401 million from our wireless business, compared
to a loss of $743 million in the prior period.
Capital Expenditures for Cable Communications decreased
7.8% to $2.1 billion in the fourth quarter of 2019. Cable capital
expenditures represented 14.5% of Cable revenue in the fourth
quarter of 2019 compared to 16.1% in last year's fourth
quarter.
For the twelve months ended December 31, 2019, Cable capital
expenditures decreased 10.5% to $6.9 billion. Cable capital
expenditures represented 11.9% of Cable revenue compared to 13.8%
in 2018.
NBCUniversal
($ in millions)
4th
Quarter
Full
Year
2018
6
2019
Growth
2018
6
2019
Growth
NBCUniversal Revenue
Cable Networks
$2,892
$2,927
1.2
%
$11,773
$11,513
(2.2
%)
Excluding Olympics (see Table 6)
11,395
11,513
1.0
%
Broadcast Television
3,099
3,162
2.1
%
11,439
10,261
(10.3
%)
Excluding Olympics and Super Bowl (see
Table 6)
10,246
10,261
0.1
%
Filmed Entertainment
1,976
1,562
(21.0
%)
7,152
6,493
(9.2
%)
Theme Parks
1,513
1,562
3.2
%
5,683
5,933
4.4
%
Headquarters, other and eliminations
(85
)
(60
)
NM
(286
)
(233
)
NM
NBCUniversal Revenue
$9,395
$9,153
(2.6
%)
$35,761
$33,967
(5.0
%)
NBCUniversal Adjusted EBITDA
Cable Networks
$1,039
$1,026
(1.4
%)
$4,428
$4,444
0.4
%
Broadcast Television
412
471
14.2
%
1,657
1,730
4.4
%
Filmed Entertainment
179
91
(48.9
%)
734
833
13.5
%
Theme Parks
666
636
(4.5
%)
2,455
2,455
—
%
Headquarters, other and eliminations
(176
)
(204
)
NM
(676
)
(690
)
NM
NBCUniversal Adjusted EBITDA
$2,120
$2,020
(4.7
%)
$8,598
$8,772
2.0
%
NM=comparison not meaningful.
Revenue for NBCUniversal decreased 2.6% to $9.2 billion
in the fourth quarter of 2019. Adjusted EBITDA decreased
4.7% to $2.0 billion.
For the twelve months ended December 31, 2019, NBCUniversal
revenue decreased 5.0% to $34.0 billion compared to last year's
results, which included an incremental $1.6 billion of revenue
generated by the broadcasts of the 2018 PyeongChang Olympics and
the NFL's Super Bowl LII at our TV Businesses. Adjusted EBITDA
increased 2.0% to $8.8 billion.
Cable Networks
Cable Networks revenue increased 1.2% to $2.9 billion in the
fourth quarter of 2019, primarily reflecting higher advertising and
content licensing and other revenue. Advertising revenue increased
2.0%, reflecting higher rates, partially offset by audience ratings
declines. Content licensing and other revenue increased 3.4%, due
to higher revenue from our digital businesses. Distribution revenue
was consistent with the prior year period, reflecting contractual
rate increases and the timing of contract renewals, offset by a
decline in subscribers. Adjusted EBITDA decreased 1.4% to $1.0
billion in the fourth quarter of 2019, reflecting higher revenue,
more than offset by an increase in operating costs and
expenses.
For the twelve months ended December 31, 2019, revenue from the
Cable Networks segment decreased 2.2% to $11.5 billion compared to
2018, primarily reflecting lower content licensing and other and
advertising revenue. Excluding $378 million of revenue generated by
the broadcast of the 2018 PyeongChang Olympics in the first quarter
of 2018, Cable Networks revenue increased 1.0% (see Table 6).
Adjusted EBITDA of $4.4 billion was consistent with the prior year
period, reflecting lower revenue, offset by a decrease in operating
costs and expenses, including programming and production costs, due
to the broadcast of the 2018 PyeongChang Olympics in the first
quarter of 2018.
Broadcast Television
Broadcast Television revenue increased 2.1% to $3.2 billion in
the fourth quarter of 2019, reflecting higher distribution and
other and content licensing revenue, partially offset by a decrease
in advertising revenue. Distribution and other revenue increased
9.9%, primarily due to higher retransmission consent fees. Content
licensing revenue increased 5.8%, primarily due to the timing of
content provided under licensing agreements. Advertising revenue
decreased 1.5%, due to a decrease in political advertising revenue.
Excluding political advertising revenue, advertising revenue
increased in the low-single-digits, reflecting higher pricing,
partially offset by audience ratings declines. Adjusted EBITDA
increased 14.2% to $471 million in the fourth quarter of 2019,
primarily reflecting higher revenue and consistent operating costs
and expenses.
For the twelve months ended December 31, 2019, revenue from the
Broadcast Television segment decreased 10.3% to $10.3 billion
compared to 2018, primarily reflecting a decrease in advertising
revenue. Excluding $770 million of revenue generated by the
broadcast of the 2018 PyeongChang Olympics in the first quarter of
2018 and $423 million of revenue generated by the broadcast of the
NFL's Super Bowl LII in the first quarter of 2018, Broadcast
Television revenue of $10.3 billion was consistent with the prior
year period (see Table 6). Adjusted EBITDA increased 4.4% to $1.7
billion compared to 2018, with lower revenue more than offset by a
decrease in programming and production costs, primarily due to
decreased sports programming costs associated with the broadcasts
of the 2018 PyeongChang Olympics and the NFL's Super Bowl LII in
the first quarter of 2018.
Filmed Entertainment
Filmed Entertainment revenue decreased 21.0% to $1.6 billion in
the fourth quarter of 2019, primarily reflecting lower theatrical
revenue. Theatrical revenue decreased 59.1%, reflecting the volume
and strength of releases in last year's fourth quarter, including
Dr. Seuss' The Grinch and Halloween. Adjusted EBITDA decreased
48.9% to $91 million in the fourth quarter of 2019, reflecting
lower revenue, partially offset by lower programming and production
costs.
For the twelve months ended December 31, 2019, revenue from the
Filmed Entertainment segment decreased 9.2% to $6.5 billion
compared to 2018, primarily reflecting lower theatrical revenue,
partially offset by higher content licensing revenue. Adjusted
EBITDA increased 13.5% to $833 million compared to 2018, reflecting
lower revenue, more than offset by lower operating expenses.
Theme Parks
Theme Parks revenue increased 3.2% to $1.6 billion in the fourth
quarter of 2019, due to increases in guest spending. Adjusted
EBITDA decreased 4.5% to $636 million in the fourth quarter of
2019, reflecting higher revenue, more than offset by higher
operating expenses.
For the twelve months ended December 31, 2019, revenue from the
Theme Parks segment increased 4.4% to $5.9 billion compared to
2018, due to increases in guest spending and higher attendance.
Adjusted EBITDA of $2.5 billion was consistent with the prior year
period, reflecting an increase in revenue, offset by higher
operating expenses.
Headquarters, Other and Eliminations
NBCUniversal Headquarters, Other and Eliminations include
overhead and eliminations among the NBCUniversal businesses. For
the quarter ended December 31, 2019, NBCUniversal Headquarters,
Other and Eliminations Adjusted EBITDA loss was $204 million,
compared to a loss of $176 million in the fourth quarter of
2018.
For the twelve months ended December 31, 2019, NBCUniversal
Headquarters, Other and Eliminations Adjusted EBITDA loss was $690
million compared to a loss of $676 million in 2018.
Sky
Pro forma results are presented as if the Sky transaction
occurred on January 1, 2017. The pro forma amounts are based on
historical results of operations and are primarily adjusted for the
allocation of purchase price and excluding costs directly related
to the transaction. These amounts are not necessarily indicative of
what our results would have been had we operated Sky since January
1, 2017, (see Table 7 for reconciliations of pro forma financial
data).
($ in millions) (pro forma)
4th
Quarter
Full
Year
2018
2019
Growth
Constant Currency Growth7
2018
2019
Growth
Constant Currency Growth7
Sky Revenue
Direct-to-Consumer
$3,976
$4,022
1.1
%
2.3
%
$16,077
$15,538
(3.4
%)
1.4
%
Content
363
371
2.1
%
2.7
%
1,248
1,432
14.7
%
19.7
%
Advertising
682
647
(5.1
%)
(4.1
%)
2,489
2,249
(9.6
%)
(5.4
%)
Sky Revenue
$5,021
$5,040
0.4
%
1.4
%
$19,814
$19,219
(3.0
%)
1.7
%
Sky Operating Costs and
Expenses
$4,256
$4,275
0.4
%
1.6
%
$16,920
$16,120
(4.7
%)
(0.1
%)
Sky Adjusted EBITDA
$765
$765
—
%
0.4
%
$2,894
$3,099
7.1
%
12.2
%
Adjusted EBITDA Margin
15.2
%
15.2
%
14.6
%
16.1
%
Pro Forma Revenue for Sky of $5.0 billion was consistent
with the prior year period. Excluding the impact of currency,
revenue increased 1.4%, driven by higher direct-to-consumer and
content revenue, partially offset by lower advertising revenue.
Direct-to-consumer revenue increased 2.3% to $4.0 billion, driven
by an increase in customer relationships. Content revenue increased
2.7% to $371 million, reflecting higher rates for wholesaling of
our programming. Advertising revenue decreased 4.1% to $647
million, reflecting an unfavorable impact from a change in
legislation related to gambling advertisements in the UK and Italy,
as well as overall market weakness.
For the twelve months ended December 31, 2019, pro forma Sky
revenue decreased 3.0% to $19.2 billion compared to 2018. Excluding
the impact of currency, revenue increased 1.7%, reflecting growth
in content and direct-to-consumer revenue, partially offset by
lower advertising revenue.
Pro Forma Total Customer Relationships increased by
77,000 to 24.0 million in the fourth quarter of 2019. For the
twelve months ended December 31, 2019, total customer relationships
increased by 394,000.
(in thousands) (pro forma)
Customers
Net
Additions
YE18
YE19
4Q18
4Q19
2018
2019
Total Customer Relationships
23,600
23,994
164
77
735
394
Pro Forma Adjusted EBITDA for Sky of $765 million was
consistent with the prior year period. Excluding the impact of
currency, Adjusted EBITDA increased 0.4%, reflecting higher
revenue, partially offset by higher operating expenses.
For the twelve months ended December 31, 2019, pro forma Sky
Adjusted EBITDA increased 7.1% to $3.1 billion compared to 2018.
Excluding the impact of currency, Adjusted EBITDA increased
12.2%.
Corporate, Other and Eliminations
Corporate, Other and Eliminations primarily relate to corporate
operations and Comcast Spectacor, as well as eliminations among
Comcast's businesses. For the quarter ended December 31, 2019, the
Corporate, Other and Eliminations Adjusted EBITDA6 loss was $232
million, an increase of $30 million compared to 2018, primarily
driven by start up costs associated with Peacock.
For the twelve months ended December 31, 2019, the Corporate,
Other and Eliminations Adjusted EBITDA6 loss was $879 million, an
increase of $73 million compared to 2018, primarily driven by start
up costs associated with Peacock.
Notes:
1
We define Adjusted EBITDA as net income
attributable to Comcast Corporation before net income (loss)
attributable to noncontrolling interests and redeemable subsidiary
preferred stock, income tax expense, investment and other income
(loss), net, interest expense, depreciation and amortization
expense, and other operating gains and losses (such as impairment
charges related to fixed and intangible assets and gains or losses
on the sale of long-lived assets), if any. From time to time, we
may exclude from Adjusted EBITDA the impact of certain events,
gains, losses or other charges (such as significant legal
settlements) that affect the period-to-period comparability of our
operating performance. See Table 4 for reconciliation of non-GAAP
financial measures.
2
All earnings per share amounts are
presented on a diluted basis.
3
In first quarter 2019, we changed our
presentation of Adjusted EPS to also exclude amortization expense
for acquisition-related intangible assets. Adjusted EPS is a
non-GAAP financial measure that is defined as our diluted earnings
per common share attributable to Comcast Corporation shareholders
adjusted to exclude the effects of the amortization of
acquisition-related intangible assets, investments that investors
may want to evaluate separately (such as based on fair value) and
the impact of certain events, gains, losses or other charges that
affect period-over-period comparisons. See Table 5 for
reconciliation of non-GAAP financial measures.
4
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 and cash
paid for intangible assets. From time to time, we may exclude from
Free Cash Flow the impact of certain cash receipts or payments
(such as significant legal settlements) that affect
period-to-period comparability. Cash payments for acquisitions and
construction of real estate properties and the construction of
Universal Beijing Resort are presented separately in our
Consolidated Statement of Cash Flows and are therefore excluded
from capital expenditures for Free Cash Flow. See Table 4 for
reconciliation of non-GAAP financial measures.
5
Consolidated financial results include Sky
results for periods following the acquisition on October 9,
2018.
6
Beginning in the first quarter of 2019,
Comcast Cable's wireless phone service and certain other
Cable-related business development initiatives are now presented in
the Cable Communications segment. Results were previously presented
in Corporate and Other. Prior periods have been adjusted to reflect
this presentation. To be consistent with our current management
reporting presentation, certain 2018 operating results were
reclassified related to certain NBCUniversal businesses now
presented in the Sky segment.
7
Sky constant currency growth rates are
calculated by comparing the current period results to the
comparative period results in the prior year adjusted to reflect
the average exchange rates from the current year period rather than
the actual exchange rates in effect during the respective prior
year periods. See Table 8 for reconciliation of Sky's constant
currency growth.
All percentages are calculated on whole
numbers. Minor differences may exist due to rounding.
Conference Call and Other Information
Comcast Corporation will host a conference call with the
financial community today, January 23, 2020 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. Those parties interested in participating via
telephone should dial (800) 263-8495 with the conference ID number
3469916. A replay of the call will be available starting at 12:00
p.m. ET on January 23, 2020, on the Investor Relations website or
by telephone. To access the telephone replay, which will be
available until Thursday, January 30, 2020 at midnight ET, please
dial (855) 859-2056 and enter the conference ID number 3469916.
From time to time, we post information that may be of interest
to investors on our website at www.cmcsa.com and on our corporate
website, www.comcastcorporation.com. To automatically receive
Comcast financial news by email, please visit www.cmcsa.com and
subscribe to email alerts.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements. Readers
are cautioned that such forward-looking statements involve risks
and uncertainties that could cause actual events or our actual
results to differ materially from those expressed in any such
forward-looking statements. Readers are directed to Comcast’s
periodic and other reports filed with the Securities and Exchange
Commission (SEC) for a description of such risks and uncertainties.
We undertake no obligation to update any forward-looking
statements.
Non-GAAP Financial Measures
In this discussion, we sometimes refer to financial measures
that are not presented according to generally accepted accounting
principles in the U.S. (GAAP). Certain of these measures are
considered “non-GAAP financial measures” under the SEC regulations;
those rules require the supplemental explanations and
reconciliations that are in Comcast’s Form 8-K (Quarterly Earnings
Release) furnished to the SEC.
About Comcast Corporation
Comcast Corporation (Nasdaq: CMCSA) is a global media and
technology company with three primary businesses: Comcast Cable,
NBCUniversal, and Sky. Comcast Cable is one of the United States’
largest high-speed internet, video, and phone providers to
residential customers under the Xfinity brand, and also provides
these services to businesses. It also provides wireless and
security and automation services to residential customers under the
Xfinity brand. NBCUniversal is global and operates news,
entertainment and sports cable networks, the NBC and Telemundo
broadcast networks, television production operations, television
station groups, Universal Pictures, and Universal Parks and
Resorts. Sky is one of Europe's leading media and entertainment
companies, connecting customers to a broad range of video content
through its pay television services. It also provides
communications services, including residential high-speed internet,
phone, and wireless services. Sky operates the Sky News broadcast
network and sports and entertainment networks, produces original
content, and has exclusive content rights.
Visit www.comcastcorporation.com for more information.
TABLE 1
Condensed Consolidated Statement of
Income (Unaudited)
Three Months Ended
Twelve Months Ended
(in millions, except per share data)
December 31,
December 31,
2018
2019
2018
2019
Revenue
$27,846
$28,398
$94,507
$108,942
Programming and production
9,252
9,300
29,692
34,440
Other operating and administrative
8,782
8,731
28,094
32,807
Advertising, marketing and promotion
2,101
1,943
7,036
7,617
Adjustments(1)
(480
)
(12
)
(480
)
(180
)
19,655
19,962
64,342
74,684
Adjusted EBITDA(1)
8,191
8,436
30,165
34,258
Adjustments(1)
480
12
480
180
Depreciation expense
2,211
2,102
8,281
8,663
Amortization expense
986
1,075
2,736
4,290
Other operating gains
—
—
(341
)
—
3,677
3,189
11,156
13,133
Operating income
4,514
5,247
19,009
21,125
Interest expense
(1,129
)
(1,113
)
(3,542
)
(4,567
)
Investment and other income (loss),
net
Equity in net income (losses) of
investees, net
(308
)
(210
)
(364
)
(505
)
Realized and unrealized gains (losses) on
equity securities, net
(137
)
74
(187
)
656
Other income (loss), net
128
63
326
287
(317
)
(73
)
(225
)
438
Income before income taxes
3,068
4,061
15,242
16,996
Income tax expense
(486
)
(861
)
(3,380
)
(3,673
)
Net income
2,582
3,200
11,862
13,323
Less: Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
71
38
131
266
Net income attributable to Comcast
Corporation
$2,511
$3,162
$11,731
$13,057
Diluted earnings per common share
attributable to Comcast Corporation shareholders
$0.55
$0.68
$2.53
$2.83
Diluted weighted-average number of common
shares
4,596
4,623
4,640
4,610
(1) See Table 4 for a reconciliation of
non-GAAP financial measures.
TABLE 2
Consolidated Statement of Cash Flows
(Unaudited)
Twelve Months Ended
(in millions)
December 31,
2018
2019
OPERATING ACTIVITIES
Net income
$11,862
$13,323
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and other
operating gains
10,676
12,953
Share-based compensation
826
1,021
Noncash interest expense (income), net
364
417
Net (gain) loss on investment activity and
other
576
(20
)
Deferred income taxes
290
563
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Current and noncurrent receivables,
net
(802
)
(57
)
Film and television costs, net
(395
)
(929
)
Accounts payable and accrued expenses
related to trade creditors
(394
)
(347
)
Other operating assets and liabilities
1,294
(1,227
)
Net cash provided by operating
activities
24,297
25,697
INVESTING ACTIVITIES
Capital expenditures
(9,774
)
(9,953
)
Cash paid for intangible assets
(1,935
)
(2,475
)
Acquisitions and construction of real
estate properties
(143
)
(54
)
Construction of Universal Beijing
Resort
(460
)
(1,116
)
Acquisitions, net of cash acquired
(38,219
)
(370
)
Proceeds from sales of businesses and
investments
141
886
Purchases of investments
(1,257
)
(1,899
)
Other
793
140
Net cash provided by (used in) investing
activities
(50,854
)
(14,841
)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term
borrowings, net
379
(1,288
)
Proceeds from borrowings
44,781
5,479
Proceeds from collateralized
obligation
—
5,175
Repurchases and repayments of debt
(8,798
)
(14,354
)
Repurchases of common stock under
repurchase program and employee plans
(5,320
)
(504
)
Dividends paid
(3,352
)
(3,735
)
Distributions to noncontrolling interests
and dividends for redeemable subsidiary preferred stock
(277
)
(311
)
Other
(273
)
357
Net cash provided by (used in) financing
activities
27,140
(9,181
)
Impact of foreign currency on cash, cash
equivalents and restricted cash
(245
)
5
Increase (decrease) in cash, cash
equivalents and restricted cash
338
1,680
Cash, cash equivalents and restricted
cash, beginning of period
3,571
3,909
Cash, cash equivalents and restricted
cash, end of period
$3,909
$5,589
TABLE 3
Condensed Consolidated Balance Sheet
(Unaudited)
(in millions)
December 31,
December 31,
2018
2019
ASSETS
Current Assets
Cash and cash equivalents
$3,814
$5,500
Receivables, net
11,104
11,292
Programming rights
3,746
3,877
Other current assets
3,184
4,723
Total current assets
21,848
25,392
Film and television costs
7,837
8,933
Investments
7,883
6,989
Investment securing collateralized
obligation
—
694
Property and equipment, net
44,437
48,322
Goodwill
66,154
68,725
Franchise rights
59,365
59,365
Other intangible assets, net
38,358
36,128
Other noncurrent assets, net
5,802
8,866
$251,684
$263,414
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses
related to trade creditors
$8,494
$10,826
Accrued participations and residuals
1,808
1,730
Deferred revenue
2,182
2,768
Accrued expenses and other current
liabilities
10,721
10,516
Current portion of long-term debt
4,398
4,452
Total current liabilities
27,603
30,292
Long-term debt, less current portion
107,345
97,765
Collateralized obligation
—
5,166
Deferred income taxes
27,589
28,180
Other noncurrent liabilities
15,329
16,765
Redeemable noncontrolling interests and
redeemable subsidiary preferred stock
1,316
1,372
Equity
Comcast Corporation shareholders'
equity
71,613
82,726
Noncontrolling interests
889
1,148
Total equity
72,502
83,874
$251,684
$263,414
TABLE 4
Reconciliation from Net Income
Attributable to Comcast Corporation to Adjusted EBITDA
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018
2019
2018
2019
Net income attributable to Comcast
Corporation
$2,511
$3,162
$11,731
$13,057
Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
71
38
131
266
Income tax expense
486
861
3,380
3,673
Interest expense
1,129
1,113
3,542
4,567
Investment and other (income) loss,
net
317
73
225
(438
)
Depreciation, amortization and other
operating gains
3,197
3,177
10,676
12,953
Adjustments (1)
480
12
480
180
Adjusted EBITDA
$8,191
$8,436
$30,165
$34,258
Reconciliation from Net Cash Provided
by Operating Activities to Free Cash Flow (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018
2019
2018
2019
Net cash provided by operating
activities
$5,790
$6,235
$24,297
$25,697
Capital expenditures
(3,167
)
(3,087
)
(9,774
)
(9,953
)
Cash paid for capitalized software and
other intangible assets
(560
)
(789
)
(1,935
)
(2,475
)
Adjustments (2)
—
125
—
125
Total Free Cash Flow
$2,063
$2,484
$12,588
$13,394
Alternate Presentation of Free Cash
Flow (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018
2019
2018
2019
Adjusted EBITDA
$8,191
$8,436
$30,165
$34,258
Capital expenditures
(3,167
)
(3,087
)
(9,774
)
(9,953
)
Cash paid for capitalized software and
other intangible assets
(560
)
(789
)
(1,935
)
(2,475
)
Cash interest expense
(657
)
(1,087
)
(2,897
)
(4,254
)
Cash taxes
(822
)
(741
)
(2,355
)
(3,231
)
Changes in operating assets and
liabilities
(802
)
(665
)
(1,313
)
(2,335
)
Noncash share-based compensation
219
231
826
1,021
Other (3)
(339
)
61
(129
)
238
Adjustments (2)
—
125
—
125
Total Free Cash Flow
$2,063
$2,484
$12,588
$13,394
(1)
4th quarter and year to date 2019 Adjusted
EBITDA excludes $12 million and $180 million of other operating and
administrative expense, respectively, related to the Sky
transaction. 4th quarter and year to date 2018 Adjusted EBITDA
excludes $355 million of other operating and administrative expense
related to the Sky transaction and $125 million of other operating
and administrative expense related to a legal settlement.
(2)
4th quarter and year to date 2019
adjustments for this presentation include a $125 million payment
related to a legal settlement.
(3)
4th quarter and year to date 2019 include
decreases of $12 million and $180 million of costs related to the
Sky transaction, respectively, as these amounts are excluded from
Adjusted EBITDA. 4th quarter 2018 includes decreases of $355
million and $125 million related to the Sky transaction and a legal
settlement, respectively, as these amounts are excluded from
Adjusted EBITDA.
Note: Minor differences may exist due to
rounding.
TABLE 5
Reconciliation of EPS Excluding
Adjustments (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2018
2019
2018
2019
(in millions, except per share data)
$
EPS
$
EPS
$
EPS
$
EPS
Net income attributable to Comcast
Corporation
$2,511
$0.55
$3,162
$0.68
$11,731
$2.53
$13,057
$2.83
Growth %
25.9
%
23.6
%
11.3
%
11.9
%
Amortization of acquisition-related
intangible assets (1)
361
0.08
401
0.09
836
0.18
1,581
0.35
Investments (2)
291
0.06
90
0.02
162
0.03
(227)
(0.05)
Items affecting period-over-period
comparability:
Income tax adjustments (3)
(244
)
(0.05
)
—
—
(224
)
(0.05
)
(125)
(0.03)
Gains and losses related to businesses and
investments (4)
—
—
—
—
(301
)
(0.06
)
(96)
(0.02)
Loss on early redemption of debt (5)
—
—
—
—
—
—
42
0.01
Costs related to Sky transaction and
Twenty-First Century Fox offer (6)
280
0.06
10
—
383
0.08
146
0.03
Purchase accounting adjustments (7)
—
—
—
—
—
—
39
0.01
Legal settlement (8)
93
0.02
—
—
93
0.02
—
—
Net income attributable to Comcast
Corporation (excluding adjustments)
$3,292
$0.72
$3,663
$0.79
$12,680
$2.73
$14,417
$3.13
Growth %
11.3
%
9.7
%
13.7
%
14.7
%
(1)
Acquisition-related intangible assets are
recognized as a result of the application of Accounting Standards
Codification Topic 805, Business Combinations (such as customer
relationships), and their amortization is significantly affected by
the size and timing of our acquisitions. Amortization of intangible
assets not resulting from business combinations (such as software
and acquired intellectual property rights used in our theme parks)
is included in Adjusted EPS.
Three Months Ended December
31,
Twelve Months Ended December
31,
2018
2019
2018
2019
Amortization of acquisition-related
intangible assets before income taxes
$465
$503
$1,104
$1,992
Amortization of acquisition-related
intangible assets, net of tax
$361
$401
$836
$1,581
(2)
Adjustments for investments
include realized and unrealized (gains) losses on equity
securities, net (as stated in Table 1), as well as the equity in
net (income) losses of investees, net, for our investments in
Atairos and Hulu (following May 2019 transaction).
Three Months Ended December
31,
Twelve Months Ended December
31,
2018
2019
2018
2019
Realized and unrealized (gains) losses on
equity securities, net
$137
($74
)
$187
($656
)
Equity in net (income) losses of
investees, net
255
192
31
347
Investments before income taxes
392
118
218
(309
)
Investments, net of tax
$291
$90
$162
($227
)
(3)
2019 year to date net income attributable
to Comcast Corporation includes $125 million of income tax benefits
recorded in the 3rd quarter 2019 related to the impact of certain
state tax law adjustments. 4th quarter 2018 net income attributable
to Comcast Corporation includes a $244 million income tax benefit
related to a reduction of our net deferred tax liabilities as a
result of the Sky transaction. 2018 year to date net income
attributable to Comcast Corporation includes a $148 million income
tax expense adjustment recorded in the 3rd quarter 2018 related to
the impact of certain state tax law changes and federal tax reform
and a $128 million net income tax benefit recorded in the 1st
quarter 2018 as a result of federal tax legislation enacted in
2018.
(4)
2019 year to date net income attributable
to Comcast Corporation includes a gain of $219 million in other
income, $163 million net of tax, related to our investment in Hulu
and $90 million of other losses, $67 million net of tax, related to
an impairment of an equity method investment. 2018 year to date net
income attributable to Comcast Corporation includes $141 million of
other operating gains, $105 million net of tax, related to the sale
of a business in our Filmed Entertainment segment, $200 million of
other operating gains, $148 million net of tax, resulting from the
sale of a controlling interest in our arena management-related
businesses and $64 million of other income, $48 million net of tax,
resulting from a gain on the sale of our investment in The Weather
Channel.
(5)
2019 year to date net income attributable
to Comcast Corporation includes $56 million of interest expense,
$42 million net of tax, resulting from the early redemption of
debt.
(6)
4th quarter and year to date 2019 net
income attributable to Comcast Corporation includes $12 million and
$180 million of operating costs and expenses, $10 million and $146
million net of tax, respectively, related to the Sky transaction,
primarily relating to the replacement of share-based compensation
awards and costs related to integration activities. 4th quarter
2018 net income attributable to Comcast Corporation includes $355
million of operating costs and expenses, $18 million of interest
expense and $64 million of income in other (income) loss, net,
($309 million in total, $280 million net of tax) related to the Sky
transaction. 2018 year to date net income attributable to Comcast
Corporation includes $389 million of operating costs and expenses,
$63 million of interest expense and $4 million of income in other
(income) loss, net, ($448 million in total, $383 million net of
tax) related to the Sky transaction and the Twenty-First Century
Fox offer.
(7)
2019 year to date net income attributable
to Comcast Corporation includes $53 million of depreciation and
amortization expense, $39 million net of tax, related to the 4th
quarter 2018, as a result of adjustments to the purchase price
allocation of Sky, primarily related to intangible assets and
property and equipment.
(8)
4th quarter 2018 net income attributable
to Comcast Corporation includes $125 million of other operating and
administrative expense, $93 million net of tax, related to a legal
settlement.
Note: Minor differences may exist due to rounding.
TABLE
6
Reconciliation of Cable Networks
Revenue Excluding 2018 Olympics (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018
2019
Growth %
2018
2019
Growth %
Revenue
$2,892
$2,927
1.2%
$11,773
$11,513
(2.2%)
2018 Olympics
—
—
(378
)
—
Revenue excluding 2018 Olympics
$2,892
$2,927
1.2%
$11,395
$11,513
1.0%
Reconciliation of Broadcast Television
Revenue Excluding 2018 Olympics and 2018 Super Bowl
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018
2019
Growth %
2018
2019
Growth %
Revenue
$3,099
$3,162
2.1%
$11,439
$10,261
(10.3%)
2018 Olympics
—
—
(770
)
—
2018 Super Bowl
—
—
(423
)
—
Revenue excluding 2018 Olympics and 2018
Super Bowl
$3,099
$3,162
2.1%
$10,246
$10,261
0.1%
Note: Minor differences may exist due to
rounding.
TABLE 7
Reconciliation of As Reported to Pro
Forma(1) Financial Information (Unaudited)
Sky
Comcast
(in millions)
Pro Forma
Pro Forma
Pro Forma
Pro Forma
As Reported
Adjustments(1)
Sky
As Reported
Adjustments(1)
Comcast
Three Months
Ended December 31, 2018
Revenue
$4,587
$434
$5,021
$27,846
$433
$28,279
Operating costs and expenses and other
3,895
361
4,256
19,655
361
20,016
Adjusted EBITDA
$692
$73
$765
$8,191
$72
$8,263
Three Months
Ended December 31, 2019
Revenue
$5,040
$—
$5,040
$28,398
$—
$28,398
Operating costs and expenses and other
4,275
—
4,275
19,962
—
19,962
Adjusted EBITDA
$765
$—
$765
$8,436
$—
$8,436
Growth
Rates
Revenue
9.9%
0.4%
2.0%
0.4%
Operating costs and expenses and other
9.7%
0.4%
1.6%
(0.3%)
Adjusted EBITDA
10.6%
—%
3.0%
2.1%
Twelve Months
Ended December 31, 2018
Revenue
$4,587
$15,227
$19,814
$94,507
$15,011
$109,518
Operating costs and expenses and other
3,895
13,025
16,920
64,342
12,814
77,156
Adjusted EBITDA
$692
$2,202
$2,894
$30,165
$2,197
$32,362
Twelve Months
Ended December 31, 2019
Revenue
$19,219
$—
$19,219
$108,942
$—
$108,942
Operating costs and expenses and other
16,120
—
16,120
74,684
—
74,684
Adjusted EBITDA
$3,099
$—
$3,099
$34,258
$—
$34,258
Growth
Rates
Revenue
NM
(3.0%)
15.3%
(0.5%)
Operating costs and expenses and other
NM
(4.7%)
16.1%
(3.2%)
Adjusted EBITDA
NM
7.1%
13.6%
5.9%
NM=comparison not meaningful.
(1)
Pro forma information is presented as if
the Sky transaction occurred January 1, 2017. Our pro forma
information is based on historical results of operations and are
primarily adjusted for the effects of acquisition accounting and
the elimination of costs and expenses directly attributable 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. Our pro forma
information is not necessarily indicative of future results or what
our results would have been had we operated Sky since January 1,
2017.
Note: Minor differences may exist due to
rounding.
TABLE 8
Reconciliation of Sky Constant Currency
Growth (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2018(1)
2019
Growth %
2018(1)
2019
Growth %
Direct-to-Consumer
$3,932
$4,022
2.3%
$15,326
$15,538
1.4%
Content
361
371
2.7%
1,196
1,432
19.7%
Advertising
675
647
(4.1%)
2,376
2,249
(5.4%)
Revenue
$4,968
$5,040
1.4%
$18,898
$19,219
1.7%
Operating costs and expenses
$4,206
$4,275
1.6%
$16,134
$16,120
(0.1%)
Adjusted EBITDA
$762
$765
0.4%
$2,764
$3,099
12.2%
(1)
2018 results for entities reporting in
currencies other than United States dollars are converted into
United States dollars using the average exchange rates from the
current period rather than the actual exchange rates in effect
during the respective periods.
Note: Minor differences may exist due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200123005366/en/
Investor Contacts: Jason Armstrong (215) 286-7972 Jane
Kearns (215) 286-4794
Press Contacts: D’Arcy Rudnay (215) 286-8582 John Demming
(215) 286-8011
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