Comcast Reports Third Quarter 2009 Results

November 4, 2009 7:00 AM EST

    --  Consolidated Revenue Increased 3.0%
    --  Consolidated Operating Cash Flow Increased 2.7%
    --  Consolidated Operating Income Increased 2.4%
    --  Earnings per Share of $0.33 Increased 26.9%
    --  Free Cash Flow Increased 19.8% to $1.1 Billion
    --  Repurchased 16.1 Million Common Shares for $250 Million

PHILADELPHIA--(BUSINESS WIRE)-- Comcast Corporation (NASDAQ:CMCSA, CMCSK) today reported results for the quarter ended September 30, 2009.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, "The strength and resilience of our businesses combined with our continued emphasis on expenses and prudent capital management helped us achieve healthy operating and financial results in the third quarter. We continued to execute well, maintaining our focus on balancing revenue, cash flow and customer growth while at the same time investing in attractive businesses like Comcast Business Services. We also made real progress on initiatives like Wideband and All-Digital that strengthen our competitive position now and in the future. Our goal is to deliver the best consumer experience in the marketplace and we remain focused on driving meaningful innovation in all of our products and services."

Consolidated Financial Results

Revenue increased 3.0% in the third quarter of 2009 to $8.8 billion, while Operating Cash Flow increased 2.7% to $3.3 billion and Operating Income increased 2.4% to $1.7 billion. This growth was due to solid results at all our operating segments.

For the nine months ended September 30, 2009, revenue increased 4.3% to $26.6 billion, Operating Cash Flow increased 5.6% to $10.3 billion, and Operating Income increased 8.5% to $5.4 billion, all compared to the same time period in 2008.

($ in           3rdQuarter                       Year to Date
millions)

                2008       2009       Growth     2008        2009        Growth

Revenue

Cable           $ 8,131    $ 8,356    2.8   %    $ 24,147    $ 25,181    4.3  %

Programming       347        383      10.3  %      1,076       1,128     4.8  %

Corporate &       71         63       (10.7 %)     268         266       (0.8 %)
Other

Total
Consolidated    $ 8,549    $ 8,802    3.0   %    $ 25,491    $ 26,575    4.3  %
Revenue

Operating Cash
Flow (OCF)

Cable           $ 3,251    $ 3,314    2.0   %    $ 9,755     $ 10,221    4.8  %

Programming       105        118      12.5  %      307         343       11.9 %

Corporate &       (119  )    (106  )  10.0  %      (300   )    (259   )  13.4 %
Other

Total
Consolidated    $ 3,237    $ 3,326    2.7   %    $ 9,762     $ 10,305    5.6  %
OCF

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

Earnings per Share(1) (EPS) for the quarter ended September 30, 2009 was $0.33, an increase of 26.9% compared to the $0.26 reported in the third quarter of 2008. Third quarter 2009 EPS includes the recognition of income tax benefits of $251 million or $0.09 per share, partially offset by $113 million or $0.04 per share in one-time financing expenses. Third quarter 2008 EPS included income tax benefits of $80 million or $0.03 per share. Except for these items, third quarter 2009 EPS would have grown 21.7% over the comparable 2008 period.

Earnings per Share for the nine months ended September 30, 2009 was $0.93, an increase of 29.2% compared to $0.72 reported in the prior year. Our 2009 EPS includes favorable settlements and the recognition of income tax benefits of $436 million or $0.16 per share, partially offset by $113 million or $0.04 per share in one-time financing expenses. Our 2008 EPS included a gain related to the January 2008 dissolution of the Insight Midwest partnership of $144 million or $0.05 per share and income tax benefits of $80 million or $0.03 per share. Except for these items, year-to-date EPS would have grown 26.6% over the comparable period in 2008.

Capital Expenditures in the third quarter declined 6.1% from the prior year to $1.2 billion, or 13.9% of total revenue, reflecting a decreased level of capital intensity at our Cable segment. For the nine months ended September 30, 2009, capital expenditures decreased 13.1% to $3.5 billion, or 13.2% of total revenue.

Free Cash Flow (FCF) (excluding any impact from the Economic Stimulus packages) of $1.1 billion in the third quarter of 2009 increased 19.8% compared to $928 million in the third quarter of 2008, reflecting growth in Consolidated Operating Cash Flow and lower capital expenditures. Free Cash Flow for the nine months ended September 30, 2009 totaled $3.6 billion, a 30.6% increase as compared to $2.8 billion in the same time period in 2008.

($ in         3rdQuarter                        Year to Date
millions)

              2008        2009        Growth    2008        2009        Growth

Net Cash
Provided by   $ 2,445     $ 2,612     6.8  %    $ 7,373     $ 7,725     4.8   %
Operating
Activities

Capital         (1,306 )    (1,227 )  (6.1 %)     (4,037 )    (3,508 )  (13.1 %)
Expenditures

Cash Paid
for
Capitalized     (131   )    (142   )  8.4  %      (376   )    (383   )  1.9   %
Software and
Intangibles

Adjustments
for Payment
of Tax on       88          (84    )  NM          316         66        NM
Nonoperating
Items

FCF
(Including
Economic      $ 1,096     $ 1,159     5.7  %    $ 3,276     $ 3,900     19.0  %
Stimulus
Packages)

Impact from
Economic        (168   )    (47    )  NM          (483   )    (252   )  NM
Stimulus
Packages

Free Cash     $ 928       $ 1,112     19.8 %    $ 2,793     $ 3,648     30.6  %
Flow

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

Cable Segment Results

Revenue from the Cable segment increased 2.8% to $8.4 billion for the third quarter of 2009 as compared to $8.1 billion in the third quarter of 2008. This increase reflects continued growth in high-speed Internet (HSI), Comcast Digital Voice (CDV) and Comcast Business Services, partially offset by lower advertising revenue. The monthly average total revenue per video customer increased 5.6% to $116.91 from $110.67 in the third quarter of 2008, reflecting an increasing number of customers taking multiple products and a higher contribution from Comcast Business Services.

For the nine months ended September 30, 2009, revenue from the Cable segment increased 4.3% to $25.2 billion compared to $24.1 billion in 2008.

Operating Cash Flow from the Cable segment grew 2.0% to $3.3 billion in the third quarter of 2009 compared to the same period last year. Operating Cash Flow margin was 39.7%, a slight decrease from the 40.0% achieved in the third quarter of 2008. These results reflect increases in video programming, customer service and marketing expenses, partially offset by improved operating efficiencies in Comcast Digital Voice and High-Speed Internet.

For the nine months ended September 30, 2009, Operating Cash Flow from the Cable segment increased 4.8% to $10.2 billion compared to $9.8 billion in 2008. Year-to-date Operating Cash Flow margin was 40.6%, a slight increase from the 40.4% reported in the first nine months of 2008.

Customers2. As of September 30, 2009, Comcast's video, high-speed Internet and voice customers totaled 46.8 million, an increase of 3.4% compared to the third quarter of 2008.

(in thousands)                  Customers                 Net Adds

                                3Q08    3Q09    Growth    3Q09     YTD

Video Customers                 24,415  23,759  (2.7 %)   (132  )  (424  )

High-Speed Internet Customers   14,745  15,684  6.4  %    361      755

Voice Customers                 6,133   7,379   20.3 %    375      906

Combined Video, HSI and Voice   45,294  46,821  3.4  %    604      1,237
Customers

Digital Video Customers         16,758  18,005  7.4  %    463      1,001

Total Revenue Generating Units  62,051  64,826  4.5  %    1,067    2,238

Programming Segment Results

The Programming segment reported third quarter 2009 revenue of $383 million, a 10.3% increase from 2008, reflecting higher affiliate and advertising revenue. Operating Cash Flow increased 12.5% to $118 million in the third quarter of 2009, reflecting the impact of timing of certain marketing and programming expenses which are expected to be incurred in the fourth quarter.

For the nine months ended September 30, 2009, the Programming segment revenue increased 4.8% to $1.1 billion compared to the same time period in 2008. Operating Cash Flow increased to $343 million, an increase of 11.9% from the same period last year.

Corporate and Other

Corporate and Other includes corporate overhead, Comcast Interactive Media (CIM), Comcast-Spectacor, and other operations and eliminations between Comcast's businesses. For the quarter ended September 30, 2009, Corporate and Other reported a 10.7% decrease in revenue to $63 million, driven by an increase in corporate eliminations. The Operating Cash Flow loss for the third quarter of 2009 was $106 million compared to a loss of $119 million in the third quarter of 2008.

For the nine months ended September 30, 2009, Corporate and Other revenue reported a 0.8% decrease in revenue to $266 million from the $268 million reported in the first nine months of 2008. The Operating Cash Flow loss was $259 million compared to a loss of $300 million in the same time period in 2008.

Share Repurchase

In the third quarter of 2009, Comcast repurchased 16.1 million of its common shares for $250 million. Year-to-date, Comcast has repurchased 31.6 million of its common shares for $465 million. As of September 30, 2009, Comcast had approximately $3.6 billion of availability remaining under its share repurchase authorization, and may repurchase stock from time to time subject to market conditions.

Dividend

During the first ten months of 2009, Comcast paid four cash dividends totaling $761 million. Comcast paid quarterly cash dividends of $180 million on January 28, 2009, $195 million on April 29, 2009, $194 million on July 29, 2009 and $193 million on October 28, 2009.

Notes:

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

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

   Minor differences may exist due to rounding.

Conference Call Information

Comcast Corporation will host a conference call with the financial community today, November 4, 2009 at 8:30 a.m. Eastern Time (ET). The conference call will be broadcast live on Comcast's Investor Relations website at www.cmcsa.com or www.cmcsk.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 31876445. A replay of the call will be available on the Investor Relations website starting at 12:30 p.m. Eastern Time (ET) on Wednesday, November 4, 2009 and will be available until Monday, November 9, 2009 at midnight Eastern Time (ET). To access the rebroadcast, please dial (800) 642-1687 and enter conference ID number 31876445. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.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. All percentages are calculated on whole numbers. Minor differences may exist due to rounding.

About Comcast Corporation

Comcast Corporation (Nasdaq:CMCSA, CMCSK) (www.comcast.com) is the nation's leading provider of entertainment, information and communication products and services. With 23.8 million video customers, 15.7 million high-speed Internet customers, and 7.4 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content.

Comcast's content networks and investments include E! Entertainment Television, Style Network, Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV One, ten sports networks operated by Comcast Sports Group and Comcast Interactive Media, which develops and operates Comcast's Internet businesses, including Comcast.net (www.comcast.net). Comcast also has a majority ownership in Comcast-Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia.

Comcast Corporation

TABLE 1

Condensed Consolidated Statement of Operations (Unaudited)

                                    Three Months Ended    Nine Months Ended

(in millions, except per share      September 30,         September 30,
data)

                                    2008       2009       2008        2009

Revenue                             $ 8,549    $ 8,802    $ 25,491    $ 26,575

Operating expenses                    3,345      3,490      10,040      10,600

Selling, general and                  1,967      1,986      5,689       5,670
administrative expenses

                                      5,312      5,476      15,729      16,270

Operating cash flow                   3,237      3,326      9,762       10,305

Depreciation expense                  1,332      1,362      4,093       4,148

Amortization expense                  235        253        694         760

                                      1,567      1,615      4,787       4,908

Operating income                      1,670      1,711      4,975       5,397

Other income (expense)

Interest expense                      (601  )    (707  )    (1,840 )    (1,828 )

Investment income (loss), net         74         148        83          218

Equity in net income (losses) of      3          (17   )    (36    )    (44    )
affiliates, net

Other income (expense)                11         2          295         13

                                      (513  )    (574  )    (1,498 )    (1,641 )

Income before income taxes            1,157      1,137      3,477       3,756

Income tax expense                    (401  )    (203  )    (1,364 )    (1,088 )

Net income from consolidated          756        934        2,113       2,668
operations

Net (income) loss attributable to     15         10         22          15
noncontrolling interests

Net income attributable to Comcast  $ 771      $ 944      $ 2,135     $ 2,683
Corporation

Diluted earnings per common share
attributable to Comcast             $ 0.26     $ 0.33     $ 0.72      $ 0.93
Corporation stockholders

Dividends declared per common
share attributable to Comcast       $ 0.06     $ 0.07     $ 0.19      $ 0.20
Corporation stockholders

Diluted weighted-average number of    2,920      2,877      2,973       2,890
common shares

Comcast Corporation

TABLE 2

Condensed Consolidated Balance Sheet (Unaudited)

(in millions)                                     December 31,  September 30,

                                                  2008          2009

ASSETS

Current Assets

Cash and cash equivalents                         $ 1,195       $ 862

Investments                                         59            56

Accounts receivable, net                            1,626         1,639

Other current assets                                836           849

Total current assets                                3,716         3,406

Investments                                         4,783         5,699

Property and equipment, net                         24,444        23,605

Franchise rights                                    59,449        59,442

Goodwill                                            14,889        14,934

Other intangible assets, net                        4,558         4,209

Other noncurrent assets, net                        1,178         1,168

                                                  $ 113,017     $ 112,463

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable and accrued expenses related to  $ 3,393       $ 3,133
trade creditors

Accrued expenses and other current liabilities      3,268         3,005

Current portion of long-term debt                   2,278         954

Total current liabilities                           8,939         7,092

Long-term debt, less current portion                30,178        28,493

Deferred income taxes                               26,982        27,566

Other noncurrent liabilities                        6,171         6,763

Redeemable noncontrolling interests                 171           168

Equity

Comcast Corporation stockholders' equity            40,450        42,311

Noncontrolling interests                            126           70

Total Equity                                        40,576        42,381

                                                  $ 113,017     $ 112,463

Comcast Corporation

TABLE 3

Consolidated Statement of Cash Flows (Unaudited)

(in millions)                                             Nine Months Ended

                                                          September 30,

                                                          2008        2009

OPERATING ACTIVITIES

Net income from consolidated operations                   $ 2,113     $ 2,668

Adjustments to reconcile net income from consolidated
operations to net cash provided by operating activities:

Depreciation                                                4,093       4,148

Amortization                                                694         760

Share-based compensation                                    195         192

Noncash interest expense (income), net                      164         125

Equity in net (income) losses of affiliates, net            36          44

(Gains) losses on investments and noncash other (income)    (287   )    (146   )
expense, net

Deferred income taxes                                       609         572

Changes in operating assets and liabilities, net of
effects of acquisitions and divestitures:

Change in accounts receivable, net                          4           (11    )

Change in accounts payable and accrued expenses related     (21    )    (73    )
to trade creditors

Change in other operating assets and liabilities            (227   )    (554   )

Net cash provided by operating activities                   7,373       7,725

FINANCING ACTIVITIES

Proceeds from borrowings                                    3,513       1,843

Repurchases and repayments of debt                          (1,143 )    (4,709 )

Repurchases of common stock                                 (2,800 )    (438   )

Dividends paid                                              (367   )    (568   )

Issuances of common stock                                   53          1

Other                                                       (148   )    (186   )

Net cash provided by (used in) financing activities         (892   )    (4,057 )

INVESTING ACTIVITIES

Capital expenditures                                        (4,037 )    (3,508 )

Cash paid for software and other intangible assets          (376   )    (383   )

Acquisitions, net of cash acquired                          (700   )    (36    )

Proceeds from sales of investments                          452         31

Purchases of investments                                    (67    )    (142   )

Other                                                       (2     )    37

Net cash provided by (used in) investing activities         (4,730 )    (4,001 )

Increase (decrease) in cash and cash equivalents            1,751       (333   )

Cash and cash equivalents, beginning of period              963         1,195

Cash and cash equivalents, end of period                  $ 2,714     $ 862

    Source: Comcast Corporation

Related Categories

Press Releases

Stocks Mentioned

Related Entities

• Dividend
• Stock Buyback

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?