Feb 12, 2013

Comcast Reports 4th Quarter and Year End 2012 Results

Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter and year ended December 31, 2012. 

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, "I am really pleased to report strong results for the 4th quarter and the full year of 2012 and delighted that we are able to accelerate the acquisition of General Electric's 49% common equity interest in NBCUniversal while also having the financial strength to return capital to shareholders. To underscore our confidence, we are increasing our dividend by 20% and plan to repurchase $2 billion of our stock this year. Our businesses have real momentum and we continue to benefit from our focus on operational excellence and to leverage all of our content and technology platforms to expand the entertainment choices we offer consumers. Cable’s fourth quarter and full year results demonstrate consistent improvement in customer metrics and growth in every product, led by High-Speed Internet. NBCUniversal’s results principally highlight the improving performance of our broadcast businesses. Our ongoing investments in programming, technology and new products are driving innovation and supporting this strong performance. As we begin 2013, our scale in distribution and content, combined with our focus on execution and innovation, provides many opportunities to continue to build value for our shareholders."  

 

Consolidated Financial Results 

 

4th Quarter

 

Full Year

($ in millions)

2011

2012

Growth

 

2011*

2012

Growth

Revenue

$15,042

$15,937

5.9%

 

$55,842

$62,570

12.0%

Operating Cash Flow (OCF)1

$4,916

$5,277

7.3%

 

$18,357

$19,977

8.8%

Operating Income

$2,918

$3,294

12.9%

 

$10,721

$12,179

13.6%

Earnings per Share2

$0.47

$0.56

19.1%

 

$1.50

$2.28

52.0%

Free Cash Flow3

$1,876

$1,832

(2.3%)

 

$7,009

$7,939

13.3%

*Full Year 2011 includes 11 months of NBCUniversal and 6 months of Universal Orlando 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 financial results include NBCUniversal from January 28, 2011 and 100% of Universal Orlando from July 1, 2011. 

Revenue for the fourth quarter of 2012 increased 5.9% to $15.9 billion, while Operating Cash Flow increased 7.3% to $5.3 billion and Operating Income increased 12.9% to $3.3 billion. 

For the year ended December 31, 2012, revenue increased 12.0% to $62.6 billion, while operating cash flow increased 8.8% to $20.0 billion and operating income increased 13.6% to $12.2 billion. 

Earnings per Share (EPS) for the fourth quarter of 2012 was $0.56, a 19.1% increase from the $0.47 reported in the fourth quarter of 2011.  Excluding a favorable tax adjustment due to recent changes in state tax legislation in 2012, EPS increased 10.6% (see Table 4). 

For the year ended December 31, 2012, EPS was $2.28, a 52.0% increase from the $1.50 reported in the prior year. Excluding non-recurring gains on sales, the favorable tax adjustment in 2012, and NBCUniversal transaction and related costs and other non-recurring items in 2011, EPS increased 22.2% (see Table 4). 

Free Cash Flow (excluding any impact from the Economic Stimulus packages) decreased 2.3% to $1.8 billion in the fourth quarter of 2012 compared to the fourth quarter of 2011, reflecting growth in consolidated operating cash flow, offset by higher working capital and capital expenditures. 

For the year ended December 31, 2012, free cash flow increased 13.3% to $7.9 billion compared to $7.0 billion in 2011, reflecting growth in consolidated operating cash flow, partially offset by higher taxes and capital expenditures. 

 

 

4th Quarter

 

Full Year

($ in millions)

2011

2012

Growth

 

2011*

2012

Growth

Operating Cash Flow

$4,916

$5,277

7.3%

 

$18,357

$19,977

8.8%

Capital Expenditures

(1,522)

(1,671)

9.8%

 

(5,307)

(5,714)

7.7%

Cash Paid for Capitalized Software and Other Intangible Assets

(449)

(318)

(29.2%)

 

(954)

(923)

(3.2%)

Cash Interest Expense

(632)

(589)

(6.8%)

 

(2,441)

(2,314)

(5.2%)

Cash Taxes

(460)

(986)

114.3%

 

(1,626)

(2,841)

74.7%

Changes in Operating Assets and Liabilities

118

(164)

NM

 

(603)

(418)

(30.7%)

Other

67

(25)

NM

 

276

120

(56.5%)

Free Cash Flow (Incl. Economic Stimulus Packages) 

$2,038

$1,524

(25.2%)

 

$7,702

$7,887

2.4%

Economic Stimulus Packages

(162)

308

NM

 

(693)

52

NM

Free Cash Flow

$1,876

$1,832

(2.3%)

 

$7,009

$7,939

13.3%

 

*Full year 2011 includes 11 months of NBCUniversal and 6 months of Universal Orlando results. Note: The definition of Free Cash Flow excludes any impact from the 2008-2012 Economic Stimulus packages. These amounts have been excluded from Free Cash Flow to provide an appropriate comparison.  NM=comparison not meaningful. 

Dividends and Share Repurchases. During the fourth quarter of 2012, Comcast paid dividends totaling $432 million and repurchased 21.1 million of its common shares for $750 million. For the full year, Comcast repurchased 95.7 million or 3.5% of its common shares for $3.0 billion and made four cash dividend payments totaling $1.6 billion, resulting in a total return of capital to shareholders of $4.6 billion for 2012. 

Today, Comcast announced that it increased its dividend by 20% to $0.78 per share on an annualized basis. In accordance with the increase, the Board of Directors declared a quarterly cash dividend of $0.195 a share on the company’s common stock, payable on April 24, 2013 to shareholders of record as of the close of business on April 3, 2013. 

In addition, Comcast announced that it plans to repurchase $2.0 billion of its stock during 2013, subject to market conditions.  

 

Pro Forma Financial Results 

Pro forma results are presented as if the NBCUniversal transaction, which closed on January 28, 2011, and the Universal Orlando transaction, which closed on July 1, 2011, were effective on January 1, 2010. These results are based on historical results of operations, adjusted for the effects of acquisition accounting and eliminating the costs and expenses directly related to the transaction, and are not necessarily indicative of what the results would have been had Comcast operated NBCUniversal and Universal Orlando since January 1, 2010 (see Table 5 for reconciliations of pro forma financial information). 

 

 

4th Quarter

 

Full Year

($ in millions)

2011

2012

Growth

 

2011

2012

Growth

Revenue

$15,042

$15,937

5.9%

 

$57,661

$62,570

8.5%

Operating Cash Flow (OCF)

$4,916

$5,277

7.3%

 

$18,726

$19,977

6.7%

 

Consolidated Revenue increased 5.9% in the fourth quarter of 2012 to $15.9 billion compared to $15.0 billion in the fourth quarter of 2011. Consolidated Operating Cash Flow increased 7.3% to $5.3 billion compared to $4.9 billion in the fourth quarter of 2011. 

For the year ended December 31, 2012, consolidated pro forma revenue increased 8.5% to $62.6 billion compared to $57.7 billion in 2011.  Excluding the Super Bowl in the first quarter and the Olympics in the third quarter of 2012, consolidated pro forma revenue increased 6.0%. Consolidated pro forma operating cash flow increased 6.7% to $20.0 billion compared to $18.7 billion in 2011. Excluding the Olympics, consolidated pro forma operating cash flow increased 6.0% (see Table 6).  

 

Cable Communications 

 

4th Quarter

 

Full Year

($ in millions)

2011

2012

Growth

 

2011

2012

Growth

Cable Communications Revenue

             

Video

$4,901

$5,043

2.9%

 

$19,625

$20,112

2.5%

High-Speed Internet

2,242

2,438

8.7%

 

8,743

9,544

9.2%

Voice

882

895

1.4%

 

3,503

3,557

1.5%

Business Services

498

660

32.4%

 

1,791

2,404

34.2%

Advertising

546

652

19.4%

 

2,005

2,287

14.1%

Other

401

444

11.1%

 

1,559

1,700

9.1%

Cable Communications Revenue

$9,470

$10,132

7.0%

 

$37,226

$39,604

6.4%

               

Cable Communications OCF

$3,939

$4,201

6.7%

 

$15,288

$16,255

6.3%

OCF Margin

41.6%

41.5%

 

 

41.1%

41.0%

 
               

Cable Communications Capital Expenditures

$1,318

$1,377

4.5%

 

$4,806

$4,921

2.4%

Percent of Cable Communications Revenue

13.9%

13.6%

  

 

12.9%

12.4%

  

 

Revenue for Cable Communications increased 7.0% to $10.1 billion in the fourth quarter of 2012 compared to $9.5 billion in the fourth quarter of 2011, driven by growth in High-Speed Internet, Business Services and Video. Advertising revenue increased 19.4%, reflecting higher political advertising in the fourth quarter of 2012. Monthly average total revenue per Video customer increased 8.7% to $153.54, reflecting an increasing number of residential customers taking multiple products, rate adjustments and a higher contribution from Business Services. 

For the year ended December 31, 2012, Cable revenue increased 6.4% to $39.6 billion compared to $37.2 billion in 2011, driven by growth in High-Speed Internet, Business Services, Video and Advertising.

Operating Cash Flow for Cable Communications increased 6.7% to $4.2 billion in the fourth quarter of 2012 compared to $3.9 billion in the fourth quarter of 2011, reflecting higher revenue, partially offset by increases in video programming and higher sales and marketing expenses to support growth and enhance our competitive position in both the residential and commercial markets. This quarter’s operating cash flow margin was 41.5% compared to 41.6% in the fourth quarter of 2011.

For the year ended December 31, 2012, Cable operating cash flow increased 6.3% to $16.3 billion compared to $15.3 billion in 2011, reflecting higher revenue, partially offset by increases in video programming, marketing expenses and investment in new growth initiatives. For the year, operating cash flow margin was 41.0%, compared to 41.1% in 2011.

Capital Expenditures for Cable Communications increased $59 million or 4.5% to $1.4 billion in the fourth quarter of 2012, primarily reflecting increased spending on consumer premise equipment, such as advanced digital boxes and wireless gateways, and the expansion of Business Services and Xfinity Home. 

For the year ended December 31, 2012, Cable capital expenditures increased $115 million or 2.4% to $4.9 billion, primarily reflecting the expansion of Business Services and the continued investment in our network.  For the year, Cable capital expenditures represented 12.4% of Cable revenue compared to 12.9% in 2011.

Combined Video, High-Speed Internet and Voice Customers increased by 503,000 in the fourth quarter of 2012, an 8.0% increase compared to fourth quarter 2011 net additions.  As of December 31, 2012, Video, High-Speed Internet and Voice customers totaled 51.3 million, a net increase of 1.5 million or 3.0% over the prior year, reflecting increased High-Speed Internet customer additions and reduced Video customer losses. 

 

 

Customers

 

Net Adds

(in thousands)

YE11

YE12

 

4Q11

4Q12

2011

2012

Video Customers

22,331

21,995

 

(17)

(7)

(459)

(336)

High-Speed Internet Customers

18,144

19,367

 

336

341

1,159

1,223

Voice Customers

9,342

9,955

 

146

168

732

613

Combined Video, HSI and Voice Customers

49,817

51,317

 

465

503

1,432

1,500

 

NBCUniversal 

Pro forma NBCUniversal results are presented as if the NBCUniversal transaction, which closed on January 28, 2011, and the Universal Orlando transaction, which closed on July 1, 2011, were effective on January 1, 2010. 

 

 

4th Quarter

 

Full Year

($ in millions) (pro forma)

2011

2012

Growth

 

2011

2012

Growth

NBCUniversal Revenue

             

Cable Networks

$2,206

$2,218

0.6%

 

$8,496

$8,773

3.3%

Broadcast Television

1,841

1,986

7.9%

 

6,399

8,154

27.4%

Filmed Entertainment

1,267

1,381

9.0%

 

4,592

5,159

12.4%

Theme Parks

498

520

4.5%

 

1,989

2,085

4.8%

Headquarters, Other and Eliminations

(74)

(91)

(24.7%)

 

(352)

(359)

(2.1%)

NBCUniversal Revenue

$5,738

$6,014

4.8%

 

$21,124

$23,812

12.7%

               

NBCUniversal OCF

             

Cable Networks

$923

$890

(3.5%)

 

$3,337

$3,292

(1.3%)

Broadcast Television

(80)

95

NM

 

123

369

199.2%

Filmed Entertainment

89

84

(4.7%)

 

24

79

234.2%

Theme Parks

223

245

9.7%

 

867

953

9.9%

Headquarters, Other and Eliminations

(103)

(142)

(38.7%)

 

(582)

(586)

(0.6%)

NBCUniversal OCF

$1,052

$1,172

11.4%

 

$3,769

$4,107

9.0%

 

Revenue for NBCUniversal increased 4.8% to $6.0 billion in the fourth quarter of 2012 compared to $5.7 billion in the fourth quarter of 2011. Operating Cash Flow increased 11.4% to $1.2 billion compared to $1.1 billion in the fourth quarter of 2011, driven by strong results at Broadcast Television. 

For the year ended December 31, 2012, NBCUniversal pro forma revenue increased 12.7% to $23.8 billion.  Excluding $259 million of revenue related to the Super Bowl in the first quarter and $1.2 billion of revenue generated by the Olympics in the third quarter of 2012, pro forma revenue increased 5.9% for 2012. Pro forma operating cash flow increased 9.0% to $4.1 billion compared to 2011. Excluding the Olympics, pro forma operating cash flow increased 5.8% (see Table 6), driven by strong results at Broadcast Television and Theme Parks, and reflecting solid results at Filmed Entertainment and Cable Networks. 

Cable Networks

For the fourth quarter of 2012, revenue from the Cable Networks segment increased 0.6% to $2.2 billion compared to the fourth quarter of 2011, reflecting a 2.5% increase in distribution revenue that was negatively impacted by the NHL lockout, and a 1.5% decrease in advertising revenue reflecting the impact of lower ratings, mostly offset by price increases. Operating cash flow decreased 3.5% to $890 million compared to $923 million in the fourth quarter of 2011, reflecting higher programming and production costs, due to our ongoing investment in original programming and higher NBA programming costs compared to last year’s fourth quarter. 

For the year ended December 31, 2012, pro forma revenue from the Cable Networks segment increased 3.3% to $8.8 billion compared to $8.5 billion in 2011, reflecting a 4.7% increase in distribution revenue and a 2.2% increase in advertising revenue. Pro forma operating cash flow decreased 1.3% to $3.3 billion compared to 2011, reflecting higher programming and production costs, due to our ongoing investment in original programming and higher sports programming costs. 

Broadcast Television

For the fourth quarter of 2012, revenue from the Broadcast Television segment increased 7.9% to $2.0 billion compared to $1.8 billion in the fourth quarter of 2011, driven by strong primetime ratings at the NBC broadcast network, as well as higher political advertising at the owned local stations. Operating cash flow increased $175 million to $95 million compared to a loss of $80 million in the fourth quarter of 2011, primarily reflecting higher revenue and a slight reduction in programming and production costs. 

For the year ended December 31, 2012, pro forma revenue from the Broadcast Television segment increased 27.4% to $8.2 billion compared to $6.4 billion in 2011, driven by the success of the Super Bowl and the London Olympics. Excluding the Super Bowl and the Olympics, pro forma revenue increased 4.8%, reflecting strong primetime ratings at the NBC broadcast network and higher political advertising at the owned local stations, partially offset by lower content licensing revenue reflecting a library content agreement signed in 2011. Pro forma operating cash flow increased $246 million to $369 million in 2012 compared to $123 million in 2011. Excluding the Olympics, pro forma operating cash flow increased $126 million to $249 million compared to $123 million in 2011 (see Table 6), reflecting higher revenue and a slight increase in programming and production costs. 

Filmed Entertainment

For the fourth quarter of 2012, revenue from the Filmed Entertainment segment increased 9.0% to $1.4 billion compared to $1.3 billion in the fourth quarter of 2011, driven by higher theatrical revenue from the strong box office performance of Les Miserables, as well as the releases of Pitch Perfect and This is 40, higher home entertainment revenue from the strong sales of Ted and Bourne Legacy, and higher content licensing revenue from a larger slate and improved digital sales. Operating cash flow decreased 4.7% to $84 million compared to $89 million in the fourth quarter of 2011, reflecting increased amortization of film costs and higher marketing expenses ahead of the releases of Les Miserables and This is 40 late in the quarter. 

For the year ended December 31, 2012, pro forma revenue from the Filmed Entertainment segment increased 12.4% to $5.2 billion compared to $4.6 billion in 2011, driven by higher theatrical revenue from strong box office performances of Ted, Dr. Seuss’ The Lorax and Les Miserables. Pro forma operating cash flow increased to $79 million compared to $24 million in 2011, primarily reflecting higher revenue from the 2012 film slate, partially offset by increased amortization of film costs. 

Theme Parks

For the fourth quarter of 2012, revenue from the Theme Parks segment increased 4.5% to $520 million compared to $498 million in the fourth quarter of 2011, driven by higher attendance and per capita spending at the Orlando and Hollywood parks. Fourth quarter operating cash flow increased 9.7% to $245 million compared to $223 million in the same period last year. 

For the year ended December 31, 2012, pro forma revenue from the Theme Parks segment increased 4.8% to $2.1 billion compared to $2.0 billion in 2011. Pro forma operating cash flow increased 9.9% to $953 million compared to $867 million in 2011, driven by the continued success of The Wizarding World of Harry PotterTM attraction in Orlando and the new TransformersTM attraction in Hollywood. 

Headquarters, Other and Eliminations

NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations among the NBCUniversal businesses. For the quarter ended December 31, 2012, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $142 million compared to a loss of $103 million in the fourth quarter of 2011. 

For the year ended December 31, 2012, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $586 million compared to a loss of $582 million in 2011.

Corporate, Other and Eliminations

Corporate, Other and Eliminations include corporate operations, Comcast-Spectacor and eliminations among Comcast's businesses. For the quarter ended December 31, 2012, Corporate, Other and Eliminations revenue was ($209) million compared to ($166) million in 2011. The operating cash flow loss was $96 million compared to a loss of $75 million in the fourth quarter of 2011. 

For the year ended December 31, 2012, Corporate and Other pro forma revenue and eliminations were ($846) million compared to ($689) million in 2011. The pro forma operating cash flow loss was $385 million compared to a loss of $331 million in 2011.      

Notes:

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 benefits. We do not present Free Cash Flow on a pro forma basis. 

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

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Conference Call Information

Comcast Corporation will host a conference call with the financial community tomorrow, February 13, 2013 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 85751942.  A replay of the call will be available starting at 12:30 p.m. ET on February 13, 2013, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Wednesday, February 20, 2013 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 85751942. 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 and entertainment 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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