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Comcast Reports 2nd Quarter 2013 Results

Philadelphia, PA.

Consolidated Revenue Increased 7.0%, Operating Cash Flow Increased 8.4% and Operating Income Increased 11.6%. Earnings per Share Increased 30.0% to $0.65 Free Cash Flow Increased 25.4% to $1.9 Billion. Quarterly Dividends and Share Repurchases Totaled $1.0 Billion.

Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter ended June 30, 2013.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, "We are pleased with our results this quarter. Cable had outstanding growth, particularly in high-speed Internet, and NBCUniversal had strong performance across all of its businesses. Our focus on delivering innovative products and a superior customer experience is driving our success, including stronger video, voice and business services results in cable. NBCUniversal has real momentum, with solid growth in revenue and double-digit cash flow growth. We have a fantastic combination of cable and content businesses with many opportunities ahead." 

Consolidated Financial Results

         
   

2nd Quarter

       

Year to Date

($ in millions)

 

2012

 

2013

 

Growth

       

2012

 

2013

 

Growth

Revenue

 

$

15,211

 

$

16,270

 

7.0

%

       

$

30,089

 

$

31,580

 

5.0

%

Operating Cash Flow(OCF)1

 

$

5,004

 

$

5,425

 

8.4

%

       

$

9,692

 

$

10,459

 

7.9

%

Operating Income

 

$

3,079

 

$

3,435

 

11.6

%

       

$

5,837

 

$

6,502

 

11.4

%

Earnings per Share2

 

$

0.50

 

$

0.65

 

30.0

%

       

$

0.94

 

$

1.19

 

26.6

%

Free Cash Flow3

 

$

1,554

 

$

1,948

 

25.4

%

       

$

4,593

 

$

5,086

 

10.7

%

                                           

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.

Revenue for the second quarter of 2013 increased 7.0% to $16.3 billion. Operating Cash Flow increased 8.4% to $5.4 billion and Operating Income increased 11.6% to $3.4 billion.

For the six months ended June 30, 2013, revenue increased 5.0% to $31.6 billion. Excluding $259 million of revenue generated by the NFL’s Super Bowl in the first quarter of 2012, revenue increased 5.9% (see Table 5). Operating cash flow increased 7.9% to $10.5 billion and operating income increased 11.4% to $6.5 billion.

Earnings per Share (EPS) for the second quarter of 2013 was $0.65, a 30.0% increase from the $0.50 reported in the second quarter of 2012.

EPS for the six months ended June 30, 2013 was $1.19, a 26.6% increase from the $0.94 reported in the prior year. Excluding a $0.03 per share gain in the first quarter of 2013 on the sale of wireless spectrum licenses, EPS increased 23.4% (see Table 4).

Capital Expenditures increased 17.1% to $1.5 billion in the second quarter of 2013 compared to the second quarter of 2012. Cable Communications’ capital expenditures increased $116 million, or 10.4%, to

$1.2 billion in the second quarter of 2013, primarily reflecting increased spending on customer premises equipment, such as advanced digital boxes and wireless gateways, our ongoing investment in network infrastructure and the expansion of business services. Cable capital expenditures represented 11.9% of Cable revenue in the second quarter of 2013 compared to 11.4% in last year’s second quarter. NBCUniversal’s capital expenditures increased $104 million to $260 million in the second quarter of 2013, primarily reflecting increased investments in Theme Parks.

For the six months ended June 30, 2013, capital expenditures increased 16.5% to $2.9 billion compared to the prior year. Cable Communications capital expenditures increased $154 million, or 7.1%, to $2.3 billion and represented 11.3% of Cable revenue compared to 11.2% in 2012. NBCUniversal’s capital expenditures increased $256 million to $523 million for the first six months of 2013.

Free Cash Flow (excluding any impact from the Economic Stimulus packages) increased 25.4% to $1.9 billion in the second quarter of 2013 compared to the second quarter of 2012, reflecting growth in consolidated operating cash flow and improvements in working capital, partially offset by higher taxes and capital expenditures. Free cash flow for the six months ended June 30, 2013 increased 10.7% to $5.1 billion compared to $4.6 billion in 2012.

         
   

2nd Quarter

 

Year to Date

($ in millions)

 

2012

 

2013

 

Growth

 

2012

 

2013

 

Growth

OperatingCash Flow

 

$

5,004

   

$

5,425

   

8.4

%

 

$

9,692

   

$

10,459

   

7.9

%

Capital Expenditures

   

(1,287

)

   

(1,506

)

 

17.1

%

   

(2,461

)

   

(2,867

)

 

16.5

%

Cash Paid forCapitalized Softwareand Other Intangible Assets

   

(230

)

   

(262

)

 

13.9

%

   

(414

)

   

(444

)

 

7.2

%

Cash Interest Expense

   

(544

)

   

(515

)

 

(5.3

%)

   

(1,158

)

   

(1,132

)

 

(2.2

%)

Cash Taxes

   

(904

)

   

(1,761

)

 

94.8

%

   

(1,022

)

   

(2,222

)

 

117.4

%

Changes in Operating Assets and Liabilities

   

(305

)

   

49

   

NM

     

41

     

418

   

NM

 

Other

   

(13

)

   

530

   

NM

     

82

     

886

   

NM

 

FreeCash Flow (Incl. Economic Stimulus Packages)

 

$

1,721

   

$

1,960

   

13.9

%

 

$

4,760

   

$

5,098

   

7.1

%

Economic Stimulus Packages

   

(167

)

   

(12

)

 

NM

     

(167

)

   

(12

)

 

NM

 

FreeCash Flow

 

$

1,554

   

$

1,948

   

25.4

%

 

$

4,593

   

$

5,086

   

10.7

%

 

Note: 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. "Other" in 2013 is substantially comprised of adjustments for cash taxes paid related to certain nonoperating transactions, as well as cash taxes paid in 2013 related to 2012 taxable income that were reflected as a reduction of 2012 Free Cash Flow.

NM=comparison not meaningful.

Dividends and Share Repurchases. During the second quarter of 2013, Comcast paid dividends totaling $514 million and repurchased 12.6 million of its common shares for $500 million. In the first six months of 2013, Comcast has repurchased 25.9 million of its common shares for $1.0 billion. As of June 30, 2013, Comcast had approximately $2.5 billion available under its share repurchase authorization.

Cable Communications

             
   

2nd Quarter

       

Year to Date

($ in millions)

 

2012

 

2013

 

Growth

       

2012

 

2013

 

Growth

Cable Communications Revenue

                             

Video

 

$

5,039

   

$

5,175

   

2.7

%

       

$

9,968

   

$

10,288

   

3.2

%

High-Speed Internet

   

2,380

     

2,569

   

8.0

%

         

4,703

     

5,092

   

8.3

%

Voice

   

889

     

910

   

2.4

%

         

1,767

     

1,810

   

2.5

%

Business Services

   

623

     

788

   

26.4

%

         

1,204

     

1,529

   

26.9

%

Advertising

   

551

     

558

   

1.2

%

         

1,026

     

1,046

   

1.9

%

Other

   

415

     

467

   

12.3

%

         

828

     

919

   

10.9

%

Cable Communications Revenue

 

$

9,897

   

$

10,467

   

5.8

%

       

$

19,496

   

$

20,684

   

6.1

%

                               

Cable Communications OCF

 

$

4,101

   

$

4,335

   

5.7

%

       

$

8,056

   

$

8,554

   

6.2

%

OCF Margin

   

41.4

%

   

41.4

%

             

41.3

%

   

41.4

%

   
                               

Cable Communications Capital Expenditures

 

$

1,124

   

$

1,240

   

10.4

%

       

$

2,180

   

$

2,334

   

7.1

%

Percent of Cable Communications Revenue

   

11.4

%

   

11.9

%

             

11.2

%

   

11.3

%

   
                                               

Revenue for Cable Communications increased 5.8% to $10.5 billion in the second quarter of 2013 compared to $9.9 billion in the second quarter of 2012, driven by increases of 8.0% in high-speed Internet, 26.4% in business services and 2.7% in video. The increase in revenue reflects rate adjustments, customers receiving higher levels of services and customer growth (see below).

For the six months ended June 30, 2013, Cable revenue increased 6.1% to $20.7 billion compared to $19.5 billion in 2012.

Combined Video, High-Speed Internet and Voice Customers increased by 189,000 in the second quarter of 2013, a 36.8% increase in net additions compared to second quarter 2012, reflecting growth in high-speed Internet and voice customers and reduced losses in video customers. As of June 30, 2013, video, high-speed Internet and voice customers totaled 52.1 million, an increase of 1.6 million or 3.1% over last year’s second quarter.

   

Customers

       

Net Adds

(in thousands)

 

2Q12

 

2Q13

       

2Q12

2Q13

Video Customers

 

22,118

 

21,776

       

(176

)

(159

)

High-Speed Internet Customers

 

18,738

 

19,986

       

156

 

187

 

Voice Customers

 

9,664

 

10,327

       

158

 

161

 

Combined Video, HSI and Voice Customers

 

50,521

 

52,089

       

138

 

189

 

Operating Cash Flow for Cable Communications increased 5.7% to $4.3 billion in the second quarter of 2013 compared to $4.1 billion in the second quarter of 2012, reflecting higher revenue, partially offset by increased costs related to video programming and higher advertising, marketing and promotion expense to support growth and enhance our competitive position in both residential and commercial markets. This quarter’s operating cash flow margin was 41.4%, consistent with the prior year period.

For the six months ended June 30, 2013, Cable operating cash flow increased 6.2% to $8.6 billion compared to $8.1 billion in 2012. Year-to-date operating cash flow margin was 41.4% compared to 41.3% in 2012.

NBCUniversal

 
   

2nd Quarter

     

Year to Date

 

($ in millions)

2012

2013

Growth

 

2012

2013

Growth

NBCUniversal Revenue

     

.

     

Cable Networks

$2,240

$2,413

7.7%

 

$4,368

$4,638

6.2%

Broadcast Television

1,552

1,732

11.6%

 

3,413

3,249

(4.8%)

Filmed Entertainment

1,231

1,388

12.8%

 

2,423

2,604

7.5%

Theme Parks

539

546

1.1%

 

951

1,008

5.9%

Headquarters, Other and Eliminations

(58)

(84)

NM

 

(179)

(164)

NM

NBCUniversal Revenue

$5,504

$5,995

8.9%

 

$10,976

$11,335

3.3%

(% growth excluding 2012 Super Bowl)

           

5.8%

NBCUniversal OCF

             

Cable Networks

$790

$860

8.9%

 

$1,599

$1,719

7.5%

Broadcast Television

194

206

6.4%

 

180

171

(5.1%)

Filmed Entertainment

(83)

33

NM

 

(77)

102

NM

Theme Parks

235

231

(1.6%)

 

392

404

3.2%

Headquarters, Other and Eliminations

(154)

(139)

NM

 

(299)

(252)

NM

NBCUniversal OCF

$982

$1,191

21.3%

 

$1,795

$2,144

19.5%

 Revenue for NBCUniversal increased 8.9% to $6.0 billion in the second quarter of 2013 compared to $5.5 billion in the second quarter of 2012. Operating Cash Flow increased 21.3% to $1.2 billion compared to $982 million in the second quarter of 2012, driven by Filmed Entertainment and Cable Networks.

For the six months ended June 30, 2013, NBCUniversal revenue increased 3.3% to $11.3 billion compared to $11.0 billion in 2012. Excluding $259 million of revenue generated by the broadcast of the NFL’s Super Bowl in the first quarter of 2012, revenue increased 5.8% (see Table 5). Operating cash flow increased 19.5% to $2.1 billion compared to $1.8 billion in the first six months of 2012.

Cable Networks

For the second quarter of 2013, revenue from the Cable Networks segment increased 7.7% to $2.4 billion compared to $2.2 billion in the second quarter of 2012, reflecting a new content licensing agreement, a 4.4% increase in distribution revenue and a 5.7% increase in advertising revenue. Operating cash flow increased 8.9% to $860 million compared to $790 million in the second quarter of 2012, reflecting higher revenue and more moderate expense growth, even as we continue to invest in programming.

For the six months ended June 30, 2013, revenue from the Cable Networks segment increased 6.2% to $4.6 billion compared to $4.4 billion in 2012. Operating cash flow increased 7.5% to $1.7 billion compared to $1.6 billion in the first six months of 2012.

Broadcast Television

For the second quarter of 2013, revenue from the Broadcast Television segment increased 11.6% to $1.7 billion compared to $1.6 billion in the second quarter of 2012, driven by a 13.0% increase in advertising revenue, primarily reflecting higher primetime ratings at the NBC broadcast network, and higher retransmission consent fees, partially offset by lower content licensing revenue due to the timing of content availability. Operating cash flow increased 6.4% to $206 million compared to $194 million in the second quarter of 2012, reflecting higher revenue, partially offset by an increase in programming and production costs associated with the timing of the airing of certain shows in our primetime schedule.

For the six months ended June 30, 2013, revenue from the Broadcast Television segment decreased 4.8% to $3.2 billion compared to $3.4 billion in 2012. Excluding $259 million of revenue generated by the NFL’s Super Bowl in the first quarter of 2012, revenue increased 3.0% (see Table 5). Operating cash flow decreased 5.1% to $171 million compared to $180 million in the first six months of 2012.

Filmed Entertainment

For the second quarter of 2013, revenue from the Filmed Entertainment segment increased 12.8% to $1.4 billion compared to $1.2 billion in the second quarter of 2012, driven by higher theatrical revenue from the strong box office performance of Fast and Furious 6, as well as higher content licensing revenue from the availability of certain films in international television markets. Operating cash flow increased $116 million to $33 million compared to a loss of $83 million in the second quarter of 2012, reflecting the strong performance of the film slate.

For the six months ended June 30, 2013, revenue from the Filmed Entertainment segment increased 7.5% to $2.6 billion compared to $2.4 billion in 2012. Operating cash flow increased $179 million to $102 million compared to a loss of $77 million in the first six months of 2012.

Theme Parks

For the second quarter of 2013, revenue from the Theme Parks segment increased 1.1% to $546 million compared to the second quarter of 2012, reflecting the shift of holidays to the first quarter this year. Second quarter operating cash flow decreased 1.6% to $231 million compared to the same period last year, primarily reflecting increased operating costs to support new attractions.

For the six months ended June 30, 2013, revenue from the Theme Parks segment increased 5.9% to $1.0 billion compared to $951 million in 2012. Operating cash flow increased 3.2% to $404 million compared to $392 million in the first six months of 2012.

Headquarters, Other and Eliminations

NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations among the NBCUniversal businesses. For the quarter ended June 30, 2013, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $139 million compared to a loss of $154 million in the second quarter of 2012, reflecting lower facilities and integration costs.

For the six months ended June 30, 2013, NBCUniversal Headquarters, Other and Eliminations operating cash flow loss was $252 million compared to a loss of $299 million in 2012.

Corporate, Other and Eliminations

Corporate, Other and Eliminations include corporate operations, Comcast-Spectacor and eliminations among Comcast's businesses. For the quarter ended June 30, 2013, Corporate, Other and Eliminations revenue was ($192) million compared to ($190) million in 2012. The operating cash flow loss was $101 million compared to a loss of $79 million in the second quarter of 2012.

For the six months ended June 30, 2013, Corporate, Other and Eliminations revenue was ($439) million compared to ($383) million in 2012. The operating cash flow loss was $239 million compared to a loss of $159 million in the first six months of 2012.

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 ofassets, 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.

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, July 31, 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 97883674. A replay of the call will be available starting at 12:30 p.m. ET on July 31, 2013, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Wednesday, August 7, 2013 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 97883674.

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.

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, 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.

Supplementary tables available on Comcast's Investor Relations Portal