Form 8-K COMCAST CORP For: Feb 24

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  February 24, 2015

Comcast Corporation

(Exact Name of Registrant
as Specified in its Charter)

Pennsylvania

(State or Other Jurisdiction of Incorporation)

Registrant’s telephone number, including area code: (215) 286-1700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

£               Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£               Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£               Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£               Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On February 24, 2015, Comcast Corporation (“Comcast”) issued a press release reporting the results of its operations for the three and twelve months ended December 31, 2014.  The press release is attached hereto as Exhibit 99.1. Exhibit 99.2 sets forth the reasons Comcast believes that presentation of the non-GAAP financial measures contained in the press release provides useful information to investors regarding Comcast’s financial condition and results of operations. To the extent material, Exhibit 99.2 also discloses the additional purposes, if any, for which Comcast’s management uses these non-GAAP financial measures.  A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures is included in the press release itself.  Comcast does not intend for this Item 2.02 or Exhibit 99.1 or Exhibit 99.2 to be treated as “filed” under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended.

Item 9.01. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

Full Year 2014 Highlights:

·                  Consolidated Revenue Increased 6.4%, Operating Cash Flow Increased 6.9%,
Operating Income Increased 9.9% and Free Cash Flow Exceeded $8 Billion

·                  Earnings per Share Increased 25.0% to $3.20; Excluding Adjustments, EPS Increased 18.6% to $2.93

·                  Cable Communications Revenue Increased 5.5% and Operating Cash Flow Increased 5.3%

·                  Customer Relationships Increased by 358,000, a 67% Improvement Compared to 2013

·                  NBCUniversal Revenue Increased 7.5% and Operating Cash Flow Increased 18.1%

4th Quarter 2014 Highlights:

·                  Consolidated Revenue Increased 4.8%, Operating Cash Flow Increased 4.1% and Operating Income Increased 3.8%

·                  Earnings per Share Increased 2.8% to $0.74; Excluding Adjustments, EPS Increased 16.7%  to $0.77

·                  Cable Communications Revenue Increased 6.1% and Operating Cash Flow Increased 6.3%

·                  Customer Relationships Increased by 178,000, a 47% Increase from the Fourth Quarter of 2013

·                  NBCUniversal Revenue Increased 2.3% and Operating Cash Flow Increased 6.6%

Dividends and Share Repurchase:

·                  Dividends and Share Repurchases Increased 64.1% to $6.5 Billion in 2014

·                  Dividend to Increase 11% to $1.00 per Share on an Annualized Basis; Share Repurchase Authorization to Increase to $10.0 Billion, with $4.25 Billion to be Repurchased in 2015

·                  Additional Share Repurchases Above the $4.25 Billion Plan in 2015 will be Determined by the Closing of the TWC Merger and the Subsequent Divestiture Transactions

PHILADELPHIA – February 24, 2015… Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter and year ended December 31, 2014.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, “2014 was a great year financially, operationally, and strategically for Comcast NBCUniversal. We continued to execute incredibly well as we accelerated our innovation, launched new products, and brought amazing films, shows and theme park attractions to consumers. Cable’s results, driven by High-Speed Internet and Business Services, demonstrate our focus on driving profitable growth and technology innovations, including our transformative X1 platform. This is bearing fruit in our operating performance, as we added 358,000 customer relationships, while video subscriber trends were the best in 7 years and in broadband we added over 1 million subscribers for the ninth year in a row. NBCUniversal also had a standout performance in 2014, with 18% growth in operating cash flow, driven by a successful Sochi Olympics, continued  momentum at NBC Broadcast, the successful opening of The Wizarding World of Harry Potter ™- Diagon Alley ™ in Orlando, and strong box office performance from Universal Pictures. We enter 2015 with great momentum and significant opportunities ahead, and we look forward to receiving regulatory approval for the Time Warner Cable merger.  Underscoring our confidence in the continued success of our company, we are increasing our dividend to $1.00 per share on an annualized basis, marking the seventh consecutive annual increase, and plan to repurchase at least $4.25 billion of our stock this year.”

Consolidated Financial Results

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

Consolidated Revenue for the fourth quarter of 2014 increased 4.8% to $17.7 billion.  Consolidated Operating Cash Flow increased 4.1% to $5.9 billion. Excluding $99 million of Time Warner Cable and Charter transaction-related costs in the fourth quarter of 2014, consolidated operating cash flow increased 5.9% (See Table 5).  Consolidated Operating Income increased 3.8% to $3.8 billion.

For the year ended December 31, 2014, consolidated revenue increased 6.4% to $68.8 billion. Excluding $1.1 billion of revenue generated by the Sochi Olympics in the first quarter of 2014, consolidated revenue increased 4.7%.  Consolidated operating cash flow increased 6.9% to $22.9 billion.  Excluding $105 million of operating cash flow generated by the Olympics in the first quarter of 2014, $237 million of transaction-related costs in 2014, and pension termination costs in the third quarter of 2013, consolidated operating cash flow increased 7.2% (See Table 5). Consolidated operating income increased 9.9% to $14.9 billion.

Earnings per Share (EPS) for the fourth quarter of 2014 was $0.74, a 2.8% increase from the $0.72 reported in the fourth quarter of 2013. Excluding transaction-related costs in the fourth quarter of 2014, as well as income tax adjustments in the fourth quarter of 2013, EPS increased 16.7% to $0.77 (see Table 4).

EPS for the year ended December 31, 2014 was $3.20, a 25.0% increase from the $2.56 reported in the prior year. Excluding the impact from income tax adjustments in 2013 and 2014, gains on the sales of investments, a resolution of a prior acquisition contingency and transaction-related costs in 2014, as well as a gain on the sale of wireless spectrum licenses in the first quarter of 2013, EPS increased 18.6% to $2.93 (see Table 4).

Capital Expenditures increased 11.0% to $2.2 billion in the fourth quarter of 2014 compared to the fourth quarter of 2013. Cable Communications’ capital expenditures increased $235 million, or 14.3%, to $1.9 billion in the fourth quarter of 2014, primarily reflecting our ongoing investment in network infrastructure to increase capacity and higher spending on customer premise equipment related to the deployment of the X1 platform. Cable capital expenditures represented 16.5% of Cable revenue in the fourth quarter of 2014 compared to 15.4% in last year’s fourth quarter.  NBCUniversal’s capital expenditures decreased $16 million, or 4.3%, to $337 million in the fourth quarter of 2014, primarily reflecting decreased investments in facilities, partially offset by increased spending at Theme Parks.

For the year ended December 31, 2014, capital expenditures increased 12.5% to $7.4 billion compared to the prior year.  Cable Communications’ capital expenditures increased $751 million, or 13.9%, to $6.2 billion, primarily reflecting increased spending related to the deployment of the X1 platform, as well as continued investment in our network.  For the year, Cable capital expenditures represented 13.9% of Cable revenue compared to 12.9% in 2013.  NBCUniversal’s capital expenditures increased $61 million, or 5.3%, to $1.2 billion in 2014, primarily reflecting increased investments in Theme Parks.

Free Cash Flow increased 18.0% to $1.7 billion in the fourth quarter of 2014 compared to $1.4 billion in the fourth quarter of 2013, reflecting improvements in working capital and growth in consolidated operating cash flow, partially offset by increased capital expenditures and cash taxes on operating items.

Free cash flow for the year ended December 31, 2014 decreased 3.8% to $8.2 billion compared to $8.5 billion in 2013, reflecting increased capital expenditures and cash taxes on operating items, as well as increased working capital, mainly driven by higher film and TV production spend, partially offset by growth in consolidated operating cash flow.

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Dividends and Share Repurchases. During the fourth quarter of 2014, Comcast paid dividends totaling $580 million and repurchased 36.8 million of its common shares for $2.0 billion.  For the full year, Comcast repurchased 80.6 million of its common shares for $4.25 billion and made four cash dividend payments totaling $2.3 billion, resulting in a total return of capital to shareholders of $6.5 billion for 2014.

Today, Comcast announced that its Board of Directors has increased its stock repurchase program authorization to $10.0 billion.  At this time, Comcast plans to repurchase $4.25 billion during 2015, subject to market conditions. Additional stock repurchases will be determined after the closing of the Time Warner Cable merger and the subsequent divestiture transactions.

In addition, Comcast announced that it increased its dividend by 11.1% to $1.00 per share on an annualized basis.  In accordance with the increase, the Board of Directors declared a quarterly cash dividend of $0.25 a share on the company’s common stock, payable on April 22, 2015 to shareholders of record as of the close of business on April 1, 2015.

Cable Communications

Revenue for Cable Communications increased 6.1% to $11.3 billion in the fourth quarter of 2014 compared to $10.7 billion in the fourth quarter of 2013, driven by increases of 9.9% in high-speed Internet and 20.8% in business services. Advertising revenue increased 18.9%, reflecting higher political advertising in the fourth quarter of 2014.  The increase in Cable revenue reflects increased customer relationships (see below), customers receiving higher levels of service, customers taking additional services, as well as rate adjustments.

For the year ended December 31, 2014, Cable revenue increased 5.5% to $44.1 billion compared to $41.8 billion in 2013, driven by growth in high-speed Internet, business services and advertising.

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Customer relationships increased by 178,000 to 27.0 million during the fourth quarter of 2014, a 47% improvement compared to an increase of 121,000 in the fourth quarter of 2013.  At the end of the fourth quarter, our triple product customers increased to 37% of our total customer relationships compared to 35% in the fourth quarter of 2013. In addition, video, high-speed Internet and voice customers increased in the fourth quarter of 2014.

For the year ended December 31, 2014, customer relationships increased by 358,000, a 67% improvement compared to net additions of 215,000 in 2013. Video customer net losses improved year-over-year and were the best result in seven years. High-speed Internet customer net additions of 1.3 million marked the ninth consecutive year of more than one million net additions. Voice net additions slowed, reflecting X1 availability that was more focused on triple play customers last year, making for a difficult comparison.

Operating Cash Flow for Cable Communications increased 6.3% to $4.7 billion in the fourth quarter of 2014 compared to $4.4 billion in the fourth quarter of 2013, reflecting higher revenue, partially offset by a 6.0% increase in operating expenses primarily related to higher video programming costs.  This quarter’s operating cash flow margin was 41.4% compared to 41.3% in the fourth quarter of 2013.

For the year ended December 31, 2014, Cable operating cash flow increased 5.3% to $18.1 billion compared to $17.2 billion in 2013, driven by higher revenue, partially offset by a 5.7% increase in operating expenses primarily related to a 7.8% increase in video programming costs.  For the year, operating cash flow margin was 41.0% compared to 41.1% in the prior year.

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Revenue for NBCUniversal increased 2.3% to $6.6 billion in the fourth quarter of 2014 compared to $6.5 billion in the fourth quarter of 2013, as revenue growth in Theme Parks and Broadcast Television was partially offset by lower Filmed Entertainment revenue driven by a year-over-year decline in home entertainment revenue.  Operating Cash Flow increased 6.6% to $1.4 billion compared to $1.3 billion in the fourth quarter of 2013, driven by strong results at Theme Parks and Broadcast Television.

For the year ended December 31, 2014, NBCUniversal revenue increased 7.5% to $25.4 billion compared to $23.7 billion in 2013. Excluding $1.1 billion of revenue generated by the Sochi Olympics in the first quarter of 2014, revenue increased 2.9%.  Operating cash flow increased 18.1% to $5.6 billion compared to $4.7 billion in 2013. Excluding $130 million of operating cash flow generated by the Olympics, operating cash flow increased 15.3%, reflecting solid results at each business segment (see Table 5).

Cable Networks

For the fourth quarter of 2014, revenue from the Cable Networks segment was stable at $2.3 billion and operating cash flow decreased 1.8% to $912 million compared to the fourth quarter of 2013. These results reflect a 5.6% decline in advertising revenue along with a slight increase in operating costs driven by investment in programming, which more than offset a 4.6% increase in distribution revenue.

For the year ended December 31, 2014, revenue from the Cable Networks segment increased 3.9% to $9.6 billion compared to $9.2 billion in 2013. Excluding $257 million of revenue generated by the 2014 Sochi Olympics, revenue increased 1.1%, reflecting a 4.6% increase in distribution revenue, partially offset by a 3.5% decrease in advertising revenue.  Operating cash flow increased 2.5% to $3.6 billion compared to $3.5 billion in 2013.  Excluding the Olympics, operating cash flow increased 2.2%, reflecting higher revenue and flat operating costs, even as we continue to invest in programming (see Table 5).

Broadcast Television

For the fourth quarter of 2014, revenue from the Broadcast Television segment increased 4.8% to $2.3 billion compared to $2.2 billion in the fourth quarter of 2013, driven by a 3.1% increase in advertising revenue, as well as higher retransmission consent fees. Operating cash flow increased 64.0% to $230 million compared to $140 million in the fourth quarter of 2013, reflecting higher revenue, which more than offset a slight increase in operating costs and expenses.

For the year ended December 31, 2014, revenue from the Broadcast Television segment increased 20.0% to $8.5 billion compared to $7.1 billion in 2013.  Excluding $846 million of revenue generated by the 2014 Sochi Olympics, revenue increased 8.1%, reflecting higher advertising revenue and retransmission consent fees. Operating cash flow increased $389 million to $734 million compared to $345 million in 2013. Excluding the Olympics, operating cash flow increased $272 million, or 78.6%, reflecting higher revenue and a modest increase in operating costs and expenses (see Table 5).

Filmed Entertainment

For the fourth quarter of 2014, revenue from the Filmed Entertainment segment decreased 10.6% to $1.3 billion compared to $1.4 billion in the fourth quarter of 2013, reflecting a decline in home entertainment revenue primarily due to the strong performance of Despicable Me 2 in the fourth quarter of 2013. Operating cash flow decreased $115 million to $77 million compared to $192 million in the fourth quarter of 2013, reflecting lower revenue, partially offset by a decrease in the amortization of film costs.

For the year ended December 31, 2014, revenue from the Filmed Entertainment segment decreased 8.2% to $5.0 billion compared to $5.5 billion in 2013, reflecting lower theatrical and home entertainment revenue, primarily due to the strong performances of Despicable Me 2 and Fast and Furious 6 in 2013.  Operating cash flow increased $228 million to $711 million compared to $483 million in 2013, as lower revenues were more than offset by a decrease in the amortization of film costs and reduced advertising, marketing and promotion expense due to a reduced film slate.

Theme Parks

For the fourth quarter of 2014, revenue from the Theme Parks segment increased 29.9% to $735 million compared to $566 million in the fourth quarter of 2013, reflecting higher guest attendance and per capita spending, driven by the continued success of Orlando’s The Wizarding World of Harry Potter™ – Diagon Alley™, as well as Halloween Horror Nights at the Orlando and Hollywood parks. Fourth quarter operating cash flow increased 37.6% to $352 million compared to $257 million in the same period last year, reflecting higher revenue, partially offset by an increase in operating costs to support the new attractions.

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For the year ended December 31, 2014, revenue from the Theme Parks segment increased 17.3% to $2.6 billion compared to $2.2 billion in 2013.  Operating cash flow increased 16.4% to $1.2 billion compared to $1.0 billion in 2013, driven by The Wizarding World of Harry Potter™ – Diagon Alley™  and Despicable Me attractions.

Headquarters, Other and Eliminations

NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations among the NBCUniversal businesses. For the quarter ended December 31, 2014, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $144 million compared to a loss of $180 million in the fourth quarter of 2013, reflecting lower employee-related costs.

For the year ended December 31, 2014, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $614 million compared to a loss of $601 million in 2013.

Corporate, Other and Eliminations primarily include corporate operations, Comcast-Spectacor and eliminations among Comcast’s businesses. For the quarter ended December 31, 2014, Corporate, Other and Eliminations revenue was ($196) million compared to ($199) million in 2013. The operating cash flow loss was $234 million, including $99 million of costs related to the Time Warner Cable and Charter transactions, compared to a loss of $98 million in the fourth quarter of 2013.

For the year ended December 31, 2014, Corporate, Other and Eliminations revenue was ($793) million compared to ($829) million in 2013.  The operating cash flow loss was $777 million, including $25 million of costs associated with the Olympics and $237 million of transaction-related costs, compared to a loss of $503 million in 2013, which included $74 million of costs associated with the termination of a pension plan.

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

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

3     We define Free Cash Flow as Net Cash Provided by Operating Activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures, cash paid for intangible assets and cash distributions to noncontrolling interests; and adjusted for any payments and receipts related to certain nonoperating items, net of estimated tax effects.  The definition of Free Cash Flow excludes any impact from Economic Stimulus packages.  These amounts have been excluded from Free Cash Flow to provide an appropriate comparison.

4     Beginning in 2014, our Cable Communications segment revised its methodology for counting customers related to how we count and report customers who reside in multiple dwelling units (“MDUs”) that are billed under bulk contracts (the “Billable Customers Method”). For MDUs whose residents have the ability to receive additional cable services, such as additional programming choices or our HD or DVR services, we now count and report customers based on the number of potential billable relationships within each MDU. For MDUs whose residents are not able to receive additional cable services, the MDU is now counted as a single customer. Previously, we had counted and reported these customers on an equivalent billing unit basis by dividing monthly revenue received under an MDU’s bulk contract by the standard monthly residential rate where the MDU was located (the “EBU Method”). Video customer metrics for 2013 are now presented on the Billable Customers Method to provide an appropriate comparison.  For high-speed Internet and voice customers, the differences in the customer metrics using the Billable Customers Method and the EBU Method were not material and 2013 data has not been adjusted.

All percentages are calculated on whole numbers. Minor differences may exist due to rounding.

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Conference Call and Other Information

Comcast Corporation will host a conference call with the financial community today, February 24, 2015 at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on its Investor Relations website at www.cmcsa.com or www.cmcsk.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 61829285.  A replay of the call will be available starting at 12:30 p.m. ET on February 24, 2015, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Tuesday, March 3, 2015 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 61829285.

From time to time, we post information that may be of interest to investors on our website at www.cmcsa.com or www.cmcsk.com and on our corporate blog, www.corporate.comcast.com/comcast-voices. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to email alerts.

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Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual events or our actual results to differ materially from those expressed in any such forward-looking statements.  Readers are directed to Comcast’s periodic and other reports filed with the Securities and Exchange Commission (SEC) for a description of such risks and uncertainties. We undertake no obligation to update any forward-looking statements.

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Non-GAAP Financial Measures

In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP).  Certain of these measures are considered “non-GAAP financial measures” under the SEC regulations; those rules require the supplemental explanations and reconciliations that are in Comcast’s Form 8-K (Quarterly Earnings Release) furnished to the SEC.

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About Comcast Corporation

Comcast Corporation (Nasdaq: CMCSA, CMCSK) is a global media and technology company with two primary businesses, Comcast Cable and NBCUniversal.  Comcast Cable is the nation’s largest video, high-speed Internet and phone provider to residential customers under the XFINITY brand and also provides these services to businesses.  NBCUniversal operates 30 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.  Visit www.comcastcorporation.com for more information.

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