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Comcast Reports First Quarter 2008 Results
PHILADELPHIA, May 1 /PRNewswire-FirstCall/ -- Comcast Corporation (Nasdaq: CMCSA, CMCSK) today reported results for the quarter ended March 31, 2008. The following table highlights financial results (dollars in millions, except per share amounts):
1st Quarter Consolidated 2008 2007 Growth Revenue $8,389 $7,388 14% Operating Cash Flow $3,174 $2,763 15% Operating Income $1,555 $1,261 23% Net Income $732 $837 (13%) Earnings per Share $0.24 $0.26 (8%)
Free Cash Flow $702 $442 59%
Adjusted Net Income(1) $588 $537 10% Adjusted Earnings per Share(1) $0.19 $0.17 12%
Pro Forma Revenue(2) $8,389 $7,602 10% Pro Forma Operating Cash Flow(2) $3,174 $2,845 12%
See notes below.
Consolidated Results
Revenue increased 14% in the first quarter of 2008 to
On a pro forma basis(2), Consolidated Revenue increased 10% to
Net Income in the first quarter of 2008 was
Net Cash Provided by Operating Activities increased to
Free Cash Flow (described further on Table 4) totaled
Pro Forma Cable Segment Results(3)
Revenue increased 10% to
Operating Cash Flow (as defined in Table 7) grew 9% to
Video
-- Basic video subscribers declined 57,000 or 0.2% during the first
quarter
-- Added 494,000 digital cable subscribers during the first quarter -- 65%
or 16.0 million video subscribers have digital service compared to 55%
or 13.7 million one year ago
-- 6.9 million or 43% of digital cable subscribers have advanced services
such as digital video recorders (DVR) and/or high-definition
television service (HDTV) compared to 5.2 million or 38% one year ago
Video revenue increased 5% to
Comcast added 494,000 digital cable customers in the first quarter of 2008
including 310,000 full digital cable and 184,000 digital starter subscribers.
During the quarter, 450,000 digital cable customers added advanced services,
like DVR and HDTV, to their digital service either by upgrading or as new
customers. As of
High-Speed Internet
-- Added 492,000 high-speed Internet subscribers during the first quarter
-- penetration reached 28% or 14.1 million customers
High-speed Internet revenue increased 12% to
Phone
-- Added 639,000 Comcast Digital Voice (CDV) customers during the first
quarter - penetration reached 12% or 5.1 million customers
Phone revenue increased 65% to
Advertising revenue increased 6% to
Programming Segment Results
Comcast's Programming segment consists of our national programming networks E! Entertainment Television and Style Network (E! Networks), The Golf Channel, VERSUS, and G4.
The Programming segment reported first quarter 2008 revenue of
Corporate and Other
Corporate and Other includes corporate overhead, Comcast Spectacor,
Comcast Interactive Media (CIM), and other operations and eliminations between
Comcast's businesses. For the first quarter of 2008, Corporate and Other
revenue increased to
Share Repurchases and Dividends
In the first quarter of 2008, Comcast repurchased 53.1 million of its
common shares for
Since the inception of the repurchase program in
On
2008 Financial Outlook
For 2008, Comcast reaffirms the following previously issued guidance:
-- Consolidated Revenue and Operating Cash Flow growth of 8% to 10%(2)
-- Consolidated Capital Expenditures as a percent of revenue expected to
decline to approximately 18%
-- Consolidated Free Cash Flow growth of at least 20% from the $2.3
billion reported in 2007
The outlook above does not reflect the impact of any tax law changes including the U.S. Government economic stimulus package or any future sales or acquisitions of businesses or operating assets (or related tax effects).
Notes:
(1) Net income and earnings per share are adjusted for one-time gains,
net of tax, related to the dissolution of the Texas/Kansas City Cable
Partnership in 2007 and the dissolution of the Insight Midwest
Partnership in 2008. Please refer to Table 7-B for a reconciliation
of adjusted net income and earnings per share. Earnings per share
amounts are presented on a diluted basis.
(2) Consolidated pro forma results adjust only for certain acquisitions
and dispositions, including the acquisitions of Comcast SportsNet Bay
Area/Comcast SportsNet New England (June 2007), the cable system
acquired from Patriot Media (August 2007), and the dissolution of the
Insight Midwest Partnership (January 2008). Consolidated pro forma
results are presented as if the transactions noted above were
effective on January 1, 2007. The net impact of these transactions
was to increase the number of basic cable subscribers by 765,000.
Please refer to Table 7-A for a reconciliation of pro forma financial
data.
(3) Cable results are presented on a pro forma basis as described in note
2.
Conference Call Information
Comcast Corporation will host a conference call with the financial
community today,
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.
In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP). Certain of these measures are considered "non-GAAP financial measures" under the SEC regulations; those rules require the supplemental explanations and reconciliations provided in Table 7 of this release. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.
About Comcast Corporation
Comcast Corporation (Nasdaq: CMCSA, CMCSK) (http://www.comcast.com) is the nation's leading provider of entertainment, information and communications products and services. With 24.7 million cable customers, 14.1 million high-speed Internet customers, and 5.2 million voice customers, Comcast is principally involved in the development, management and operation of broadband cable systems and in the delivery of programming content.
Comcast's content networks and investments include E! Entertainment
Television, Style Network, The Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV
One, ten Comcast SportsNet networks and Comcast Interactive Media, which
develops and operates Comcast's Internet business. Comcast also has a majority
ownership in Comcast-Spectacor, whose major holdings include the Philadelphia
Flyers NHL hockey team, the
COMCAST CORPORATION TABLE 1 Condensed Consolidated Statement of Operations (Unaudited)
Three Months Ended (in millions, except per share data) March 31, 2008 2007
Revenues $8,389 $7,388
Operating expenses 3,107 2,759 Selling, general and administrative expenses 2,108 1,866 5,215 4,625 Operating cash flow 3,174 2,763
Depreciation expense 1,390 1,225 Amortization expense 229 277 1,619 1,502 Operating income 1,555 1,261
Other income (expense) Interest expense (621) (568) Investment income (loss), net 79 174 Equity in net (losses) income of affiliates, net (35) (21) Other income (expense) 268 513 (309) 98 Income before income taxes and minority interest 1,246 1,359
Income tax expense (508) (526)
Income before minority interest 738 833
Minority interest (6) 4
Net income $732 $837
Diluted earnings per common share $0.24 $0.26
Adjusted earnings per common share (1) $0.19 $0.17
Diluted weighted-average number of common shares 3,017 3,161
(1) Please refer to Table 7-B for a reconciliation of adjusted net income and earnings per share.
COMCAST CORPORATION TABLE 2 Condensed Consolidated Balance Sheet (Unaudited)
(in millions) March 31, December 31, 2008 2007 ASSETS
Current Assets Cash and cash equivalents $635 $963 Investments 86 98 Accounts receivable, net 1,497 1,645 Other current assets 886 961 Total current assets 3,104 3,667
Investments 5,800 7,963
Property and equipment, net 23,949 23,624
Franchise rights 59,447 58,077
Goodwill 14,867 14,705
Other intangible assets, net 4,690 4,739
Other noncurrent assets, net 967 642
$112,824 $113,417
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities Accounts payable and accrued expenses related to trade creditors $2,982 $3,336 Accrued expenses and other current liabilities 3,071 3,121 Current portion of long-term debt 1,350 1,495 Total current liabilities 7,403 7,952
Long-term debt, less current portion 30,009 29,828
Deferred income taxes 27,116 26,880
Other noncurrent liabilities 7,110 7,167
Minority interest 388 250
Stockholders' equity 40,798 41,340 $112,824 $113,417
COMCAST CORPORATION TABLE 3 Condensed Consolidated Statement of Cash Flows (Unaudited)
(in millions) Three Months Ended March 31, 2008 2007
OPERATING ACTIVITIES Net cash provided by operating activities $2,259 $1,965
FINANCING ACTIVITIES Proceeds from borrowings 192 3 Retirements and repayments of debt (218) (704) Repurchases of common stock (1,000) (500) Issuances of common stock 10 218 Other (28) 4
Net cash provided by (used in) financing activities (1,044) (979)
INVESTING ACTIVITIES Capital expenditures (1,431) (1,454) Cash paid for software and other intangible assets (126) (118) Acquisitions, net of cash acquired (29) (9) Proceeds from sales of investments 49 392 Purchases of investments (26) (21) Other 20 22
Net cash provided by (used in) investing activities (1,543) (1,188)
Increase (decrease) in cash and cash equivalents (328) (202)
Cash and cash equivalents, beginning of period 963 1,239
Cash and cash equivalents, end of period $635 $1,037
TABLE 4 Calculation of Free Cash Flow, and Unlevered Free Cash Flow (Unaudited) (1)
(in millions) Three Months Ended March 31, 2008 2007
Net Cash Provided by Operating Activities $2,259 $1,965 Capital Expenditures (1,431) (1,454) Cash Paid for Capitalized Software (99) (88) Cash Paid for Other Intangible Assets (27) (30) Nonoperating and Nonrecurring items, net of tax: Payment of Tax on Nonoperating Items - 49 Free Cash Flow 702 442 Cash paid Interest 708 662 Unlevered Free Cash Flow $1,410 $1,104
(1) See Non-GAAP and Other Financial Measures in Table 7 for the definition of Free Cash Flow and Unlevered Free Cash Flow.
COMCAST CORPORATION TABLE 5 Pro Forma Financial Data by Business Segment (Unaudited)(1)
(in millions) Corporate and Cable Programming(2) Other Total Three Months Ended March 31, 2008 Revenues $7,916 $363 $110 $8,389 Operating Cash Flow $3,142 $113 ($81) $3,174 Operating Income (Loss) $1,594 $59 ($98) $1,555 Operating Cash Flow Margin 39.7% 31.2% NM 37.8% Capital Expenditures (3) $1,355 $4 $72 $1,431
Three Months Ended March 31, 2007 Revenues $7,212 $302 $88 $7,602 Operating Cash Flow $2,876 $65 ($96) $2,845 Operating Income (Loss) $1,399 $18 ($111) $1,306 Operating Cash Flow Margin 39.9% 21.3% NM 37.4% Capital Expenditures (3) $1,480 $4 $7 $1,491
(1) See Non-GAAP and Other Financial Measures in Table 7. Historical financial data by business segment, in accordance with generally accepted accounting principles in the United States (GAAP), is available in the Company's Annual Report on Form 10-K. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.
(2) Programming includes our national networks E! Entertainment Television and Style Network (E! Networks), The Golf Channel, VERSUS and G4.
(3) Our Cable segment's capital expenditures are comprised of the following categories:
1Q08 1Q07 Growth Customer Premise Equipment (CPE) $819 $764 Scalable Infrastructure 59 103 Line Extensions 47 88 Support Capital 54 69 Upgrades (Capacity Expansion) 21 36 Business Services 51 24 1,051 1,084 Maintenance CPE (Drop Replacements) 58 65 Scalable Infrastructure 103 160 Support Capital 42 60 Upgrades 61 96 264 381
Discretionary 40 15
Total $1,355 $1,480
CPE includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues (e.g. digital converters). Scalable infrastructure includes costs, not CPE or network related, to secure growth of new customers, revenue units and additional bandwidth revenues or provide service enhancements (e.g. headend equipment). Line extensions include network costs associated with entering new service areas (e.g. fiber/coaxial cable). Support capital includes costs associated with the replacement or enhancement of non-network assets due to obsolescence and wear out (e.g. non-network equipment, land, buildings and vehicles). Upgrades include costs to enhance or replace existing fiber/coaxial cable networks, including network improvements. Business Services includes fiber/coax extension, electronics, CPE and costs to secure new customers.
Management evaluates capital expenditures by categorizing investments into three groups: Growth, Maintenance and Discretionary. Growth is directly tied to revenue generation and represents the costs required to secure new customers, revenue units or additional bandwidth revenues. Maintenance includes investments that allow the company to maintain its competitive position and provide a foundation for growth. Discretionary includes investments that lay the groundwork for future products and services, such as our investments in interactive advertising, cross-platform product development or switched digital video.
COMCAST CORPORATION TABLE 6 Pro Forma Data - Cable Segment Components (Unaudited)(1) (2)
(in millions, except per subscriber Three Months Ended and per unit data) March 31,