Comcast Corporation (NASDAQ: CMCSA) today reported results for
the quarter ended September 30, 2020.
“We are nearly eight months into this pandemic – and despite
many harsh realities, I couldn’t be more pleased and proud of how
our team has worked together across the company to find safe and
creative solutions to successfully operate in this environment. We
are executing at the highest level; and perhaps, most importantly,
accelerating innovation, which will drive long-term future growth.
This third quarter, we delivered the best broadband results in our
company’s history. Driven by our industry-leading platform and
strategic focus on broadband, aggregation and streaming, we added a
record 633,000 high-speed internet customers and 556,000 total net
new customer relationships. At the same time, we’re growing our
entertainment platforms with the addition of Flex, which has a
significant positive impact on broadband churn and customer
lifetime value. Our integrated strategy is also driving results in
streaming with nearly 22 million sign-ups for Peacock to date, and
we are exceeding our expectations on all engagement metrics in only
a few months. And Sky continues to add customer relationships at
higher prices while reducing churn to all-time lows in our core UK
business. Going forward, and as we emerge from the pandemic, we
believe we are extremely well positioned to provide seamless and
integrated experiences for our customers and to deliver superior
long-term growth and returns for our shareholders," commented Brian
L. Roberts, Chairman and Chief Executive Officer of Comcast
Corporation.
($ in millions, except per share data)
3rd
Quarter
Year to
Date
Consolidated Results
2020
2019
Change
2020
2019
Change
Revenue
$25,532
$26,827
(4.8
%)
$75,856
$80,544
(5.8
%)
Net Income Attributable to Comcast
$2,019
$3,217
(37.2
%)
$7,154
$9,895
(27.7
%)
Adjusted Net Income1
$3,000
$3,667
(18.2
%)
$9,436
$10,754
(12.3
%)
Adjusted EBITDA2
$7,583
$8,553
(11.3
%)
$23,640
$25,822
(8.5
%)
Earnings per Share3
$0.44
$0.70
(37.1
%)
$1.55
$2.15
(27.9
%)
Adjusted Earnings per Share1
$0.65
$0.79
(17.7
%)
$2.04
$2.33
(12.4
%)
Net Cash Provided by Operating
Activities
$5,228
$5,191
0.7
%
$19,695
$19,462
1.2
%
Free Cash Flow4
$2,289
$2,072
10.5
%
$11,580
$10,910
6.1
%
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.
3rd Quarter 2020 Highlights:
- Generated Consolidated Adjusted EBITDA of $7.6 Billion,
Adjusted EPS of $0.65 and Free Cash Flow of $2.3 Billion
- Cable Communications Total Customer Relationship Net Additions
Were 556,000, the Best Quarterly Result on Record
- Total High-Speed Internet Customer Net Additions Were 633,000,
the Best Quarterly Result on Record
- Cable Communications Adjusted EBITDA Increased 10.5% Driven by
Strength in High-Speed Internet
- Peacock Has Nearly 22 Million Sign-Ups to Date Across the U.S.
and Recently Secured Distribution on the Roku Platform
- NBCUniversal Reorganized Its Television and Streaming
Businesses Under Mark Lazarus and Cesar Conde with a Centralized
Structure Optimizing Content Creation, Distribution and
Monetization
- NBCUniversal Completed a Successful Upfront, with Strong Volume
Commitments and Higher Pricing
- Sky Customer Trends Improved Sequentially, and Included Net
Additions in the U.K.
- Premier League Viewership Reached Record Levels on Sky Sports,
Including the Highest Average Season Viewership on Record for the
2019/20 Season and the Highest Daily U.K. Viewership on Record for
the 2020/21 Season to Date
Consolidated Financial Results
Revenue for the third quarter of 2020 decreased 4.8% to
$25.5 billion. Net Income Attributable to Comcast decreased
37.2% to $2.0 billion. Adjusted Net Income decreased 18.2%
to $3.0 billion. Adjusted EBITDA decreased 11.3% to $7.6
billion.
For the nine months ended September 30, 2020, revenue decreased
5.8% to $75.9 billion compared to 2019. Net income attributable to
Comcast decreased 27.7% to $7.2 billion. Adjusted Net Income
decreased 12.3% to $9.4 billion. Adjusted EBITDA decreased 8.5% to
$23.6 billion.
Earnings per Share (EPS) for the third quarter of 2020
was $0.44, a decrease of 37.1% compared to the third quarter of
2019. Adjusted EPS decreased 17.7% to $0.65.
For the nine months ended September 30, 2020, EPS was $1.55, a
27.9% decrease compared to the prior year. Adjusted EPS decreased
12.4% to $2.04.
Capital Expenditures decreased 4.9% to $2.4 billion in
the third quarter of 2020. Cable Communications’ capital
expenditures decreased 2.5% to $1.8 billion. NBCUniversal’s capital
expenditures decreased 29.3% to $357 million. Sky's capital
expenditures increased 127.3% to $237 million.
For the nine months ended September 30, 2020, capital
expenditures decreased 7.6% to $6.3 billion compared to 2019. Cable
Communications' capital expenditures decreased 5.9% to $4.5
billion. NBCUniversal's capital expenditures decreased 22.5% to
$1.1 billion. Sky's capital expenditures increased 20.2% to $649
million.
Net Cash Provided by Operating Activities was $5.2
billion in the third quarter of 2020. Free Cash Flow was
$2.3 billion.
For the nine months ended September 30, 2020, net cash provided
by operating activities was $19.7 billion. Free cash flow was $11.6
billion.
Dividends paid during the third quarter of 2020 totaled
$1.1 billion. For the nine months ended September 30, 2020,
dividends paid totaled $3.1 billion.
Cable Communications
($ in millions)
3rd
Quarter
Year to
Date
2020
2019
Change
2020
2019
Change
Cable Communications Revenue
High-Speed Internet
$5,198
$4,721
10.1
%
$15,199
$13,961
8.9
%
Video
5,421
5,541
(2.1
%)
16,468
16,763
(1.8
%)
Voice
876
963
(9.0
%)
2,652
2,935
(9.6
%)
Wireless
400
326
22.8
%
1,069
795
34.5
%
Business Services
2,049
1,971
4.0
%
6,096
5,795
5.2
%
Advertising
674
603
11.8
%
1,659
1,766
(6.1
%)
Other
382
459
(17.2
%)
1,203
1,299
(7.5
%)
Cable Communications Revenue
$15,000
$14,584
2.9
%
$44,346
$43,314
2.4
%
Cable Communications Adjusted
EBITDA
$6,411
$5,801
10.5
%
$18,663
$17,383
7.4
%
Adjusted EBITDA Margin
42.7%
39.8%
42.1%
40.1%
Cable Communications Capital
Expenditures
$1,770
$1,814
(2.5
%)
$4,491
$4,771
(5.9
%)
Percent of Cable Communications
Revenue
11.8%
12.4%
10.1%
11.0%
Revenue for Cable Communications increased 2.9% to $15.0
billion in the third quarter of 2020, driven by increases in
high-speed internet, business services, wireless and advertising
revenue, partially offset by decreases in video, voice and other
revenue. These results were negatively impacted by accrued customer
regional sports network (RSN) fee adjustments related to canceled
sporting events as a result of COVID-19. Excluding these
adjustments5, Cable Communications revenue increased 3.9%.
High-speed internet revenue increased 10.1%, due to an increase in
the number of residential high-speed internet customers and an
increase in average rates. Excluding the impact of accrued RSN fee
adjustments5 for customers taking bundled services, high-speed
internet revenue increased 11.2%. Business services revenue
increased 4.0%, reflecting increases in average rates and an
increase in the number of customers receiving our services.
Wireless revenue increased 22.8%, due to an increase in the number
of customer lines. Advertising revenue increased 11.8%, primarily
reflecting an increase in political advertising revenue. Excluding
political advertising revenue, advertising revenue decreased 6.8%.
Video revenue decreased 2.1%, due to a decrease in the number of
residential video customers, partially offset by an increase in
average rates. Excluding the impact of accrued customer RSN fee
adjustments5, video revenue decreased 0.8%. Voice revenue decreased
9.0%, reflecting decreases in average rates and in the number of
residential voice customers. Other revenue decreased 17.2%,
primarily reflecting lower revenue due to waived late fees and a
decline in revenue from our security and automation services.
For the nine months ended September 30, 2020, Cable revenue
increased 2.4% to $44.3 billion compared to 2019, driven by growth
in high-speed internet, business services and wireless revenue,
partially offset by a decrease in video, voice, advertising and
other revenue. These results were negatively impacted by COVID-19,
including accrued customer RSN fee adjustments, reduced advertising
revenue and lower revenue due to our efforts to assist customers
during this public health crisis. Excluding the impact of accrued
customer RSN fee adjustments5, Cable Communications revenue
increased 3.2%.
Total Customer Relationships increased by 556,000 to 32.7
million in the third quarter of 2020. Residential customer
relationships increased by 539,000 and business customer
relationships increased by 17,000. Total high-speed internet
customer net additions were 633,000, total video customer net
losses were 273,000 and total voice customer net losses were 3,000.
In addition, Cable Communications added 187,000 wireless lines in
the quarter.
(in thousands)
Net
Additions
3Q20
3Q19
3Q20
3Q19
Customer Relationships
Residential Customer Relationships
30,289
28,797
539
288
Business Services Customer
Relationships
2,401
2,377
17
21
Total Customer Relationships
32,690
31,173
556
309
Residential Customer Relationships
Mix
One Product Residential Customers
11,957
9,905
625
379
Two Product Residential Customers
8,732
8,915
(9
)
(38
)
Three or More Product Residential
Customers
9,600
9,977
(77
)
(53
)
Residential High-Speed Internet
Customers
27,837
25,990
617
359
Business Services High-Speed Internet
Customers
2,225
2,197
16
20
Total High-Speed Internet
Customers
30,062
28,186
633
379
Residential Video Customers
19,220
20,421
(253
)
(222
)
Business Services Video Customers
874
983
(20
)
(16
)
Total Video Customers
20,094
21,403
(273
)
(238
)
Residential Voice Customers
9,684
9,945
(14
)
(63
)
Business Services Voice Customers
1,341
1,334
11
10
Total Voice Customers
11,025
11,278
(3
)
(53
)
Total Wireless Lines
2,580
1,791
187
204
Adjusted EBITDA for Cable Communications increased 10.5%
to $6.4 billion in the third quarter of 2020, due to higher revenue
as well as a 2.2% decrease in operating expenses. Total operating
expenses benefited from adjustments for provisions in our
programming distribution agreements with RSNs related to canceled
sporting events as a result of COVID-19. Programming costs
decreased 0.6%, primarily reflecting the adjustment provisions.
Excluding these adjustments5, programming costs increased 4.0% due
to higher retransmission consent and sports programming fees,
partially offset by a decline in the number of video subscribers.
Non-programming expenses decreased 3.2%, while non-programming
expenses per customer relationship decreased 7.4%. These declines
reflect lower advertising, marketing and promotion expenses,
technical and product support expenses and customer service
expenses, partially offset by higher other operating expenses and
franchise and regulatory fees. Non-programming expenses reflect a
reduction in activity in some aspects of our business as a result
of COVID-19 as well as benefits from cost saving initiatives.
Adjusted EBITDA per customer relationship increased 5.8%, and
Adjusted EBITDA margin was 42.7% compared to 39.8% in the third
quarter of 2019. While the accrued RSN adjustments did not impact
Adjusted EBITDA in the third quarter of 2020, the adjustments
resulted in an increase to Adjusted EBITDA margin. Cable
Communications results include a loss of $50 million from our
wireless business, compared to a loss of $94 million in the prior
year period.
For the nine months ended September 30, 2020, Cable Adjusted
EBITDA increased 7.4% to $18.7 billion compared to 2019, due to
higher revenue and a decrease in operating expenses. Programming
costs decreased 1.3% primarily reflecting adjustments for
provisions in our programming distribution agreements with RSNs
related to canceled sporting events as a result of COVID-19.
Excluding these adjustments5, programming costs increased 2.4% due
to higher retransmission consent and sports programming fees,
partially offset by a decline in the number of video subscribers.
Non-programming expenses decreased 0.8%, reflecting cost savings
initiatives that were partially offset by higher costs as a result
of COVID-19. For the nine months ended September 30, 2020, Adjusted
EBITDA per customer relationship increased 2.9%, and Adjusted
EBITDA margin was 42.1% compared to 40.1% in 2019. While the
accrued RSN adjustments did not impact Adjusted EBITDA for the nine
months ended September 30, 2020, the adjustments resulted in an
increase to Adjusted EBITDA margin. Cable Communications results
include a loss of $146 million from our wireless business, compared
to a loss of $285 million in the prior year period.
Capital Expenditures for Cable Communications decreased
2.5% to $1.8 billion in the third quarter of 2020, due to decreased
investment in customer premise equipment and support capital,
partially offset by increased investment in scalable infrastructure
and line extensions. Cable capital expenditures represented 11.8%
of Cable revenue in the third quarter of 2020 compared to 12.4% in
last year's third quarter.
For the nine months ended September 30, 2020, Cable capital
expenditures decreased 5.9% to $4.5 billion, primarily reflecting
decreased investment in customer premise equipment, partially
offset by increased investment in scalable infrastructure. Cable
capital expenditures represented 10.1% of Cable revenue compared to
11.0% in 2019.
NBCUniversal
($ in millions)
3rd
Quarter
Year to
Date
2020
2019
Change
2020
2019
Change
NBCUniversal Revenue
Cable Networks
$2,736
$2,771
(1.3
%)
$8,110
$8,586
(5.5
%)
Broadcast Television
2,414
2,230
8.3
%
7,462
7,099
5.1
%
Filmed Entertainment
1,280
1,706
(25.0
%)
3,844
4,931
(22.0
%)
Theme Parks
311
1,631
(80.9
%)
1,267
4,371
(71.0
%)
Headquarters, other and eliminations
(17
)
(43
)
NM
(101
)
(173
)
NM
NBCUniversal Revenue
$6,724
$8,295
(18.9
%)
$20,582
$24,814
(17.1
%)
NBCUniversal Adjusted EBITDA
Cable Networks
$870
$955
(8.9
%)
$3,361
$3,418
(1.7
%)
Broadcast Television
436
338
28.7
%
1,578
1,259
25.3
%
Filmed Entertainment
300
195
53.4
%
634
742
(14.6
%)
Theme Parks
(203
)
731
(127.7
%)
(526
)
1,819
(128.9
%)
Headquarters, other and eliminations
(122
)
(128
)
NM
(381
)
(486
)
NM
NBCUniversal Adjusted EBITDA
$1,281
$2,091
(38.7
%)
$4,666
$6,752
(30.9
%)
Revenue for NBCUniversal decreased 18.9% to $6.7 billion
in the third quarter of 2020. Adjusted EBITDA decreased
38.7% to $1.3 billion.
For the nine months ended September 30, 2020, NBCUniversal
revenue decreased 17.1% to $20.6 billion compared to last year's
results. Adjusted EBITDA decreased 30.9% to $4.7 billion.
Cable Networks Cable Networks revenue decreased 1.3% to
$2.7 billion in the third quarter of 2020, due to lower
distribution revenue and advertising revenue, partially offset by
higher content licensing and other revenue. Distribution revenue
decreased 3.8%, reflecting credits accrued at some of our RSNs
resulting from the reduced number of games played by professional
sports leagues due to COVID-19 and a decline in subscribers,
partially offset by contractual rate increases. Advertising revenue
decreased 2.1%, reflecting continued ratings declines at our
networks, partially offset by revenue from the broadcasts of
rescheduled sporting events that were previously postponed due to
COVID-19. Content licensing and other revenue increased 16.6%, due
to the timing of content provided under licensing agreements,
including transactions with Peacock in the third quarter of 2020.
Adjusted EBITDA decreased 8.9% to $870 million in the third quarter
of 2020, due to lower revenue and higher programming and production
expenses, partially offset by lower advertising, marketing and
promotion costs and other operating and administrative costs. The
increase in programming and production expenses was primarily
driven by an increase in sports programming costs as professional
sports leagues resumed seasons following postponements due to
COVID-19.
For the nine months ended September 30, 2020, revenue from the
Cable Networks segment decreased 5.5% to $8.1 billion compared to
2019, due to lower distribution and advertising revenue, partially
offset by higher content licensing and other revenue. Adjusted
EBITDA decreased 1.7% to $3.4 billion compared to 2019, due to
lower revenue, partially offset by lower operating costs. The
decrease in operating costs was driven by lower programming and
production expenses, reflecting a decrease in sports programming
costs due to the reduced number of sporting events due to COVID-19,
partially offset by an increase in studio costs.
Broadcast Television Broadcast Television revenue
increased 8.3% to $2.4 billion in the third quarter of 2020, due to
higher content licensing revenue and distribution and other
revenue, partially offset by lower advertising revenue. Content
licensing revenue increased 65.6%, reflecting the timing of content
provided under licensing agreements, including transactions with
Peacock in the third quarter of 2020. Distribution and other
revenue increased 4.9%, due to higher retransmission consent fees.
Advertising revenue decreased 11.5%, reflecting continued ratings
declines, partially offset by higher pricing and local political ad
sales. Adjusted EBITDA increased 28.7% to $436 million in the third
quarter of 2020, due to higher revenue, lower advertising,
marketing and promotion costs and lower operating and
administrative costs, partially offset by higher programming and
production expenses. The increase in programming and production
expenses was primarily due to higher content licensing sales.
For the nine months ended September 30, 2020, revenue from the
Broadcast Television segment increased 5.1% to $7.5 billion
compared to 2019, due to an increase in content licensing and
distribution and other revenue, partially offset by lower
advertising revenue. Adjusted EBITDA increased 25.3% to $1.6
billion compared to 2019, due to higher revenue, partially offset
by a modest increase in operating costs.
Filmed Entertainment Filmed Entertainment revenue
decreased 25.0% to $1.3 billion in the third quarter of 2020, due
to lower theatrical and other revenue, partially offset by higher
content licensing and home entertainment revenue. Theatrical
revenue decreased 94.7%, primarily driven by theater closures as a
result of COVID-19. Other revenue decreased 44.8%, primarily due to
decreases in revenue from our movie ticketing, entertainment and
live stage play businesses, which were impacted by theater and
entertainment venue closures as a result of COVID-19. Content
licensing revenue increased 14.5%, due to the timing of content
provided under licensing agreements, including transactions with
Peacock in the third quarter of 2020. Home entertainment revenue
increased 49.1%, which included the success of Trolls World Tour.
Adjusted EBITDA increased 53.4% to $300 million in the third
quarter of 2020, reflecting lower revenue, more than offset by a
decline in operating costs due to lower spending on current period
releases as a result of COVID-19.
For the nine months ended September 30, 2020, revenue from the
Filmed Entertainment segment decreased 22.0% to $3.8 billion
compared to 2019, primarily reflecting lower theatrical revenue.
Adjusted EBITDA decreased 14.6% to $634 million compared to 2019,
due to lower revenue, partially offset by lower operating
costs.
Theme Parks Theme Parks revenue decreased 80.9% to $311
million in the third quarter of 2020, primarily due to Universal
Orlando Resort and Universal Studios Japan operating at limited
capacity, while Universal Studios Hollywood remains closed as a
result of COVID-19. Theme Parks Adjusted EBITDA loss was $203
million in the third quarter of 2020.
For the nine months ended September 30, 2020, revenue from the
Theme Parks segment decreased 71.0% to $1.3 billion compared to
2019, primarily due to the temporary closures of Universal Studios
Japan in late February and Universal Orlando Resort and Universal
Studios Hollywood in mid-March as a result of COVID-19. Theme Parks
Adjusted EBITDA loss was $526 million.
Headquarters, Other and Eliminations NBCUniversal
Headquarters, Other and Eliminations include overhead and
eliminations among the NBCUniversal businesses. For the quarter
ended September 30, 2020, NBCUniversal Headquarters, Other and
Eliminations Adjusted EBITDA loss was $122 million, compared to a
loss of $128 million in the third quarter of 2019.
For the nine months ended September 30, 2020, NBCUniversal
Headquarters, Other and Eliminations Adjusted EBITDA loss was $381
million compared to a loss of $486 million in 2019.
Sky
($ in millions)
3rd
Quarter
Year to
Date
2020
2019
Change
Constant Currency Change6
2020
2019
Change
Constant Currency Change6
Sky Revenue
Direct-to-Consumer
$3,943
$3,793
3.9
%
(1.0
%)
$11,146
$11,516
(3.2
%)
(3.1
%)
Content
388
315
23.3
%
17.5
%
947
1,061
(10.7
%)
(10.4
%)
Advertising
462
446
3.7
%
(1.2
%)
1,296
1,602
(19.1
%)
(18.7
%)
Sky Revenue
$4,793
$4,554
5.2
%
0.3
%
$13,389
$14,179
(5.6
%)
(5.4
%)
Sky Operating Costs and
Expenses
$4,278
$3,655
17.0
%
11.5
%
$11,574
$11,845
(2.3
%)
(2.0
%)
Sky Adjusted EBITDA
$515
$899
(42.8
%)
(45.4
%)
$1,815
$2,334
(22.3
%)
(22.5
%)
Adjusted EBITDA Margin
10.7%
19.7%
13.6%
16.5%
Revenue for Sky increased 5.2% to $4.8 billion in the
third quarter of 2020. Excluding the impact of currency, revenue
was consistent with the prior year period, due to higher content
revenue, offset by lower direct-to-consumer revenue and advertising
revenue. Content revenue increased 17.5% to $388 million, driven by
higher wholesale revenue from sports programming as European
football leagues resumed sporting events that were previously
postponed due to COVID-19. Direct-to-consumer revenue decreased
1.0% to $3.9 billion, reflecting a decrease in customer
relationships and average revenue per customer relationship that
was consistent with the prior year period, and included growth in
both customer relationships and average revenue per customer
relationship in the U.K. Advertising revenue decreased 1.2% to $462
million, reflecting overall market weakness, partially offset by
revenue from the broadcasts of rescheduled sporting events that
were previously postponed due to COVID-19.
For the nine months ended September 30, 2020, Sky revenue
decreased 5.6% to $13.4 billion compared to 2019. Excluding the
impact of currency, revenue decreased 5.4%, due to lower
direct-to-consumer, advertising and content revenue.
Total Customer Relationships decreased by 21,000 to 23.7
million in the third quarter of 2020, an improvement compared to
the second quarter of 2020, and included net additions in the
U.K.
(in thousands)
Customers
Net
Additions
3Q20
3Q19
3Q20
3Q19
Total Customer Relationships
23,695
23,918
(21)
(99)
Adjusted EBITDA for Sky decreased 42.8% to $515 million
in the third quarter of 2020. Excluding the impact of currency,
Adjusted EBITDA decreased 45.4%, reflecting revenue that was
consistent with the prior year period, offset by higher operating
costs. The increase in operating costs was primarily driven by
higher programming and production expenses, primarily due to an
increase in sports programming costs as professional sports leagues
resumed seasons following postponements due to COVID-19.
For the nine months ended September 30, 2020, Sky Adjusted
EBITDA decreased 22.3% to $1.8 billion compared to 2019. Excluding
the impact of currency, Adjusted EBITDA decreased 22.5%.
Corporate, Other and Eliminations
__________________________________________________________________________________________________________________________________________
Corporate and Other Corporate and Other primarily relates
to corporate operations, Comcast Spectacor and Peacock. Revenue for
the quarter ended September 30, 2020 was $84 million, an increase
of $42 million compared to 2019. Corporate and Other Adjusted
EBITDA loss was $496 million, an increase of $259 million compared
to 2019, primarily due to costs associated with Peacock.
For the nine months ended September 30, 2020, Corporate and
Other revenue was $250 million, an increase of $44 million compared
to 2019. Corporate and Other Adjusted EBITDA loss was $1.3 billion,
an increase of $617 million compared to 2019, due to costs
associated with Peacock and costs incurred in response to COVID-19,
including severance and restructuring charges related to our
NBCUniversal segments, which are presented in Corporate and
Other.
Eliminations Eliminations reflects the accounting for
transactions between Cable Communications, NBCUniversal, Sky and
Corporate and Other. Revenue eliminations for the quarter ended
September 30, 2020 were $1.1 billion compared to $648 million in
2019, and Adjusted EBITDA eliminations were $128 million compared
to $1 million in 2019. The increases were primarily driven by the
licensing of content between our NBCUniversal segments and
Peacock.
For the nine months ended September 30, 2020, revenue
eliminations were $2.7 billion compared to $2.0 billion in 2019,
and Adjusted EBITDA eliminations were $250 million compared to $10
million in 2019. The increases were primarily driven by the
licensing of content between our NBCUniversal segments and
Peacock.
__________________________________________________________________________________________________________________________________________
Notes:
1.
We define Adjusted Net Income and Adjusted
EPS as net income attributable to Comcast Corporation and diluted
earnings per common share attributable to Comcast Corporation
shareholders, respectively, 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 reconciliations of non-GAAP financial measures.
2.
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 measure.
3.
All earnings per share amounts are
presented on a diluted basis.
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 measure.
5.
Cable Communications reported results for
2020 include the impacts of RSN related adjustments, affecting
period-to-period comparability of our operating performance. We
also present adjusted information, excluding the impacts of the RSN
related adjustments. See Table 7 for reconciliation of non-GAAP
financial measures.
6.
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 6 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,
October 29, 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 3090648. A replay of the call will be
available starting at 12:00 p.m. ET on October 29, 2020, on the
Investor Relations website or by telephone. To access the telephone
replay, which will be available until Thursday, November 5, 2020 at
midnight ET, please dial (855) 859-2056 and enter the conference ID
number 3090648.
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
Nine Months Ended
(in millions, except per share data)
September 30,
September 30,
2020
2019
2020
2019
Revenue
$25,532
$26,827
$75,856
$
80,544
Costs and expenses
Programming and production
8,565
8,316
23,683
25,140
Other operating and administrative
8,059
8,090
23,959
24,076
Advertising, marketing and promotion
1,512
1,901
4,791
5,674
Depreciation
2,122
2,124
6,328
6,561
Amortization
1,198
1,056
3,520
3,215
21,456
21,487
62,281
64,666
Operating income
4,076
5,340
13,575
15,878
Interest expense
(1,220
)
(1,167
)
(3,544
)
(3,454
)
Investment and other income (loss),
net
Equity in net income (losses) of
investees, net
(266
)
(355
)
(634
)
(295
)
Realized and unrealized gains (losses) on
equity securities, net
118
174
65
582
Other income (loss), net
62
71
187
224
(86
)
(110
)
(382
)
511
Income before income taxes
2,770
4,063
9,649
12,935
Income tax expense
(739
)
(775
)
(2,385
)
(2,812
)
Net income
2,031
3,288
7,264
10,123
Less: Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
12
71
110
228
Net income attributable to Comcast
Corporation
$2,019
$3,217
$7,154
$
9,895
Diluted earnings per common share
attributable to Comcast Corporation shareholders
$0.44
$0.70
$1.55
$
2.15
Diluted weighted-average number of common
shares
4,628
4,619
4,616
4,606
TABLE 2
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
(in millions)
September 30,
2020
2019
OPERATING ACTIVITIES
Net income
$7,264
$10,123
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
9,848
9,776
Share-based compensation
922
790
Noncash interest expense (income), net
606
310
Net (gain) loss on investment activity and
other
514
(166
)
Deferred income taxes
(224
)
468
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Current and noncurrent receivables,
net
982
360
Film and television costs, net
163
(321
)
Accounts payable and accrued expenses
related to trade creditors
(545
)
(1,149
)
Other operating assets and liabilities
165
(729
)
Net cash provided by operating
activities
19,695
19,462
INVESTING ACTIVITIES
Capital expenditures
(6,344
)
(6,866
)
Cash paid for intangible assets
(1,771
)
(1,686
)
Construction of Universal Beijing
Resort
(1,118
)
(736
)
Acquisitions, net of cash acquired
(225
)
(181
)
Proceeds from sales of businesses and
investments
2,131
208
Purchases of investments
(545
)
(1,697
)
Other
(101
)
46
Net cash provided by (used in) investing
activities
(7,973
)
(10,912
)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term
borrowings, net
—
(1,288
)
Proceeds from borrowings
18,339
516
Proceeds from collateralized
obligation
—
5,175
Repurchases and repayments of debt
(16,771
)
(9,975
)
Repurchases of common stock under employee
plans
(429
)
(432
)
Dividends paid
(3,086
)
(2,778
)
Other
(1,644
)
(44
)
Net cash provided by (used in) financing
activities
(3,591
)
(8,826
)
Impact of foreign currency on cash, cash
equivalents and restricted cash
17
(31
)
Increase (decrease) in cash, cash
equivalents and restricted cash
8,148
(307
)
Cash, cash equivalents and restricted
cash, beginning of period
5,589
3,909
Cash, cash equivalents and restricted
cash, end of period
$13,737
$3,602
TABLE 3
Condensed Consolidated Balance Sheet
(Unaudited)
(in millions)
September 30,
December 31,
2020
2019
ASSETS
Current Assets
Cash and cash equivalents
$13,707
$5,500
Receivables, net
10,310
11,292
Programming rights
—
3,877
Other current assets
3,352
4,723
Total current assets
27,369
25,392
Film and television costs
12,741
8,933
Investments
6,702
6,989
Investment securing collateralized
obligation
429
694
Property and equipment, net
50,466
48,322
Goodwill
68,898
68,725
Franchise rights
59,365
59,365
Other intangible assets, net
34,485
36,128
Other noncurrent assets, net
8,485
8,866
$268,940
$263,414
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses
related to trade creditors
$10,979
$10,826
Accrued participations and residuals
1,794
1,730
Deferred revenue
2,888
2,768
Accrued expenses and other current
liabilities
9,421
10,516
Current portion of long-term debt
4,429
4,452
Total current liabilities
29,511
30,292
Long-term debt, less current portion
99,995
97,765
Collateralized obligation
5,167
5,166
Deferred income taxes
27,905
28,180
Other noncurrent liabilities
17,537
16,765
Redeemable noncontrolling interests and
redeemable subsidiary preferred stock
1,254
1,372
Equity
Comcast Corporation shareholders'
equity
86,176
82,726
Noncontrolling interests
1,395
1,148
Total equity
87,571
83,874
$268,940
$263,414
TABLE 4 Reconciliation from Net Income Attributable to
Comcast Corporation to Adjusted EBITDA (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2020
2019
2020
2019
Net income attributable to Comcast
Corporation
$2,019
$3,217
$7,154
$9,895
Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
12
71
110
228
Income tax expense
739
775
2,385
2,812
Interest expense
1,220
1,167
3,544
3,454
Investment and other (income) loss,
net
86
110
382
(511
)
Depreciation and amortization
3,320
3,180
9,848
9,776
Adjustments (1)
187
33
217
168
Adjusted EBITDA
$7,583
$8,553
$23,640
$25,822
Reconciliation from Net Cash Provided
by Operating Activities to Free Cash Flow (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2020
2019
2020
2019
Net cash provided by operating
activities
$5,228
$5,191
$19,695
$19,462
Capital expenditures
(2,387
)
(2,511
)
(6,344
)
(6,866
)
Cash paid for capitalized software and
other intangible assets
(552
)
(608
)
(1,771
)
(1,686
)
Total Free Cash Flow
$2,289
$2,072
$11,580
$10,910
Alternate Presentation of Free Cash
Flow (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2020
2019
2020
2019
Adjusted EBITDA
$7,583
$8,553
$23,640
$25,822
Capital expenditures
(2,387
)
(2,511
)
(6,344
)
(6,866
)
Cash paid for capitalized software and
other intangible assets
(552
)
(608
)
(1,771
)
(1,686
)
Cash interest expense
(909
)
(1,056
)
(2,845
)
(3,167
)
Cash taxes
(1,965
)
(856
)
(2,298
)
(2,490
)
Changes in operating assets and
liabilities
376
(1,765
)
361
(1,670
)
Noncash share-based compensation
301
257
922
790
Other (2)
(158
)
58
(85
)
177
Total Free Cash Flow
$2,289
$2,072
$11,580
$10,910
(1)
3rd quarter and year to date 2020 Adjusted
EBITDA exclude $177 million of other operating and administrative
expense related to a potential legal settlement, and $10 million
and $40 million of other operating and administrative expense,
respectively, related to the Sky transaction. 3rd quarter and year
to date 2019 Adjusted EBITDA exclude $33 million and $168 million
of other operating and administrative expense, respectively,
related to the Sky transaction.
(2)
3rd quarter and year to date 2020 include
decreases of $177 million related to a potential legal settlement,
and $10 million and $40 million of costs related to the Sky
transaction, respectively, as these amounts are excluded from
Adjusted EBITDA. 3rd quarter and year to date 2019 include
decreases of $33 million and $168 million of costs related to the
Sky transaction, respectively, as these amounts are excluded from
Adjusted EBITDA.
Note: Minor differences may exist due to
rounding.
TABLE 5
Reconciliations of Adjusted Net Income
and Adjusted EPS (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
(in millions, except per share data)
$
EPS
$
EPS
$
EPS
$
EPS
Net income attributable to Comcast
Corporation and diluted earnings per share attributable to Comcast
Corporation shareholders
$2,019
$0.44
$3,217
$0.70
$7,154
$1.55
$9,895
$2.15
Change
(37.2
%)
(37.1
%)
(27.7
%)
(27.9
%)
Amortization of acquisition-related
intangible assets (1)
458
0.10
385
0.08
1,365
0.30
1,180
0.25
Investments (2)
70
0.01
141
0.03
334
0.07
(317)
(0.07)
Items affecting period-over-period
comparability:
Loss on early redemption of debt (3)
166
0.04
42
0.01
272
0.06
42
0.01
Income tax adjustments (4)
145
0.03
(125)
(0.03)
145
0.03
(125)
(0.03)
Potential legal settlement (5)
134
0.03
—
—
134
0.03
—
—
Costs related to Sky transaction (6)
8
—
27
—
32
—
136
0.03
Gains and losses related to businesses and
investments (7)
—
—
(20)
—
—
—
(96)
(0.02)
Purchase accounting adjustments (8)
—
—
—
—
—
—
39
0.01
Adjusted Net income and Adjusted
EPS
$3,000
$0.65
$3,667
$0.79
$9,436
$2.04
$10,754
$2.33
Change
(18.2
%)
(17.7
%)
(12.3
%)
(12.4
%)
(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 Net Income and Adjusted EPS.
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Amortization of acquisition-related
intangible assets before income taxes
$574
$486
$1,714
$1,489
Amortization of acquisition-related
intangible assets, net of tax
$458
$385
$1,365
$1,180
(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 September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Realized and unrealized (gains) losses on
equity securities, net
($118
)
($174
)
($65
)
($582
)
Equity in net (income) losses of
investees, net
210
363
506
155
Investments before income taxes
92
189
441
(427
)
Investments, net of tax
$70
$141
$334
($317
)
(3)
3rd quarter and year to date 2020 net income attributable to
Comcast Corporation includes $220 million and $360 million of
interest expense, $166 million and $272 million net of tax,
respectively, resulting from the early redemption of debt. 3rd
quarter and year to date 2019 net income attributable to Comcast
Corporation includes $56 million of interest expense, $42 million
net of tax, resulting from the early redemption of debt.
(4)
3rd quarter and year to date 2020 net income attributable to
Comcast Corporation includes $145 million of income tax expense
adjustments related to certain tax law changes. 3rd quarter and
year to date 2019 net income attributable to Comcast Corporation
includes $125 million of income tax benefits related to the impact
of certain state tax adjustments.
(5)
3rd quarter and year to date 2020 net income attributable to
Comcast Corporation includes $177 million of other operating and
administrative expense, $134 million net of tax, related to a
potential legal settlement.
(6)
3rd quarter and year to date 2020 net income attributable to
Comcast Corporation includes $10 million and $40 million of
operating costs and expenses, $8 million and $32 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. 3rd quarter and year to
date 2019 net income attributable to Comcast Corporation includes
$33 million and $168 million of operating costs and expenses, $27
million and $136 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.
(7)
3rd quarter 2019 net income attributable to Comcast Corporation
includes a gain of $60 million in other income, $45 million net of
tax, related to our investment in Hulu and $34 million of other
losses, $25 million net of tax, related to an impairment of an
equity method investment. 2019 year to date net income attributable
to Comcast Corporation also includes a gain of $159 million in
other income, $118 million net of tax, related to our investment in
Hulu and $56 million of other losses, $42 million net of tax,
related to an impairment of an equity method investment.
(8)
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.
Note: Minor differences may exist due to rounding.
TABLE 6
Reconciliation of Sky Constant Currency
Growth (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2020
2019(1)
Change
2020
2019(1)
Change
Direct-to-Consumer
$3,943
$3,981
(1.0
%)
$11,146
$11,504
(3.1
%)
Content
388
330
17.5
%
947
1,057
(10.4
%)
Advertising
462
468
(1.2
%)
1,296
1,595
(18.7
%)
Revenue
$4,793
$4,779
0.3
%
$13,389
$14,156
(5.4
%)
Operating costs and expenses
$4,278
$3,836
11.5
%
$11,574
$11,815
(2.0
%)
Adjusted EBITDA
$515
$943
(45.4
%)
$1,815
$2,341
(22.5
%)
(1)
2019 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.
TABLE 7
Reconciliation of Cable Communications
RSN Adjustments (Unaudited)
Three Months Ended
September 30, 2020
Nine Months Ended
September 30, 2020
Reported Change
RSN Adjustments
Adjusted Change
Reported Change
RSN Adjustments
Adjusted Change
Revenue
High-Speed Internet
10.1
%
(1.1
%)
11.2
%
8.9
%
(0.9
%)
9.8
%
Video
(2.1
%)
(1.3
%)
(0.8
%)
(1.8
%)
(1.2
%)
(0.6
%)
Total Revenue
2.9
%
(1.0
%)
3.9
%
2.4
%
(0.8
%)
3.2
%
Expenses
Programming and production
(0.6
%)
(4.6
%)
4.0
%
(1.3
%)
(3.7
%)
2.4
%
Adjusted EBITDA
10.5
%
—
%
10.5
%
7.4
%
—
%
7.4
%
Adjusted EBITDA margin
290 bps
40 bps
250 bps
200 bps
40 bps
160 bps
Note: Minor differences may exist due to rounding. Percentages
represent year/year growth rates and Adjusted EBITDA margin is
presented as year/year basis point change
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005587/en/
Investor Contacts: Marci Ryvicker (215) 286-4781 Jane
Kearns (215) 286-4794 Marc Kaplan (215) 286-6527
Press Contacts: Jennifer Khoury (215) 286-7408 John
Demming (215) 286-8011
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