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Corporate

Comcast Reports Revenue Up 23.2% and Operating Cash Flow Growth of 24.3%

Philadelphia, PA.

Comcast Digital Cable Adds Over 325,000 Customers In the Last Twelve Months

iQVC Again Scores Among the Top Consumer Web Sites

Financial Statements

Comcast Corporation today reported results for the three and nine months ended September 30, 1999. For the three months ended September 30, 1999, the Company reported consolidated revenues of $1.525 billion, a 23.2% increase from the $1.238 billion reported in the third quarter of 1998. Consolidated operating cash flow, a key indicator of the Company's performance, increased 24.3% to $463.9 million from the $373.3 million reported in the same period in 1998. On a pro forma basis, the Company's revenues and operating cash flow for the quarter ended September 30, 1999 would have increased by 13.7% and 12.5%, respectively, over the prior year quarter.

For the nine months ended September 30, 1999, the Company reported consolidated revenues of $4.378 billion and consolidated operating cash flow of $1.346 billion, as compared to revenues and operating cash flow of $3.698 billion and $1.075 billion, respectively, for the same period in 1998. On a pro forma basis, the Company's revenues and operating cash flow for the nine months ended September 30, 1999 would have increased by 13.8% and 16.3%, respectively, over the same 1998 period.

The Company's results treat Comcast Cellular Corporation as a discontinued operation for all periods presented due to the sale of Comcast Cellular to SBC Communications, Inc. in July 1999. The pro forma results discussed in this press release assume that certain of the Company's acquisitions and divestitures were effective January 1, 1998. The historical results discussed in this press release include the results of the acquired operations from the dates of acquisition and exclude the results of the divested operations from the dates of divestiture.

Brian L. Roberts, president of Comcast, said, "These outstanding results confirm the continuing strength of each of our businesses as well as the growth potential of new initiatives in cable, QVC and our other programming businesses."

Mr. Roberts continued, "Comcast Cable reported another strong quarter with pro forma operating cash flow growth of 10.4%. At the same time, we continued to beat all expectations in the rollout of our new Comcast Digital Cable service. In the last twelve months, we added more than 325,000 digital cable customers, with net additions accelerating to over 10,000 per week in the third quarter. Today, Comcast has over 400,000 digital cable customers and the service is available to more than 60% of our subscribers. Our team leads the industry with the most rapid rollout of advanced digital cable service that rivals any competitive offer."

Mr. Roberts continued, "QVC demonstrated once again its leadership in electronic retailing with 20% growth in operating cash flow. Each of QVC's businesses is contributing to these results, whether in the U.S., the United Kingdom or Germany - and in every medium - on TV and on the Web."

Mr. Roberts added, "We are thrilled that iQVC again scored among the top consumer web sites. This time, Forrester Power Ranking listed iQVC third in the general merchandise category, based on selection, price, customer service, return ease and prompt delivery. iQVC is experiencing tremendous growth, with a 100 percent increase in holiday shopping for October 1999, as compared to the same period last year."

On a pro forma basis, cable division revenues for the three months ended September 30, 1999 were $773.5 million, representing a 9.1% increase from the $708.8 million for the same period in 1998. Pro forma operating cash flow for the quarter was $356.8 million, an increase of 10.4% over the $323.1 million for the same period in 1998. Pro forma cable division revenues and operating cash flow for the nine months ended September 30, 1999 increased by 8.9% and 9.8%, respectively, over the same period in 1998. Excluding the effects of certain one-time adjustments recorded by the Company in the second quarter to the results of Jones Intercable, Inc., pro forma operating cash flow would have increased by 10.5% for the nine month period from 1998 to 1999.

During the third quarter, the cable division continued to expand delivery of its Comcast Digital Cable service, ending the quarter with nearly 355,400 digital cable customers (a 9.4% penetration rate), up more than 129,500 for the quarter. The cable division also expanded delivery of Comcast@Home high speed Internet access service, adding nearly 18,700 customers during the quarter for a total of more than 112,900 customers.

QVC revenues increased 18.0% to $677.1 million in the third quarter of 1999, as compared to the $573.9 million reported in the same period in 1998. Operating cash flow for the quarter was $124.8 million, an increase of 20.2% from the $103.8 million reported in the third quarter of 1998. QVC's revenues for the nine months ended September 30, 1999 were $1.959 billion, representing an 18.8% increase from the $1.649 billion reported for the same period in 1998. Operating cash flow for the nine months ended September 30, 1999 was $377.1 million, an increase of 29.3% over the $291.6 million reported for the same period in 1998. QVC's results reflect double-digit revenue and operating cash flow growth in each of its businesses in the United States, the United Kingdom and Germany.

Net income for common stockholders for the 1999 periods is primarily attributable to the effects of the $1.5 billion breakup fee received by the Company in May 1999 as a result of the termination of the MediaOne Merger Agreement and to the effects of the $355.9 million gain on sale of discontinued operations (Comcast Cellular) in July 1999. Net income for common stockholders for the 1998 periods is primarily attributable to the $1.092 billion pre-tax gain related to the AT&T/Teleport merger in July 1998.

On a consolidated basis, the Company reported income from continuing operations before extraordinary items for the three months ended September 30, 1999 of $60.6 million or $0.07 per share, as compared to income from continuing operations of $723.6 million or $0.97 per share for the three months ended September 30, 1998. Net income for common stockholders was $367.8 million or $0.49 per share for the quarter ended September 30, 1999, which includes a gain from discontinued operations of $355.9 million or $0.47 per share and a loss for extraordinary items of $41.4 million or $0.05 per share. The Company reported net income for common stockholders of $706.6 million or $0.96 per share for the prior year period, which includes a loss from discontinued operations of $6.6 million or $0.01 per share.

For the nine months ended September 30, 1999, the Company reported income from continuing operations before extraordinary items of $988.5 million or $1.29 per share, as compared to income from continuing operations of $574.7 million or $0.75 per share for the nine months ended September 30, 1998. Net income for common stockholders for the nine months ended September 30, 1999 was $1.258 billion or $1.68 per share, which includes a gain from discontinued operations of $335.8 million or $0.45 per share and a loss for extraordinary items of $44.4 million or $0.06 per share. The Company reported net income for common stockholders of $528.6 million or $0.72 per share for the comparable 1998 period, which includes a loss from discontinued operations of $21.4 million or $0.03 per share. Excluding the effects of the one-time breakup fee (net of transaction costs) and the effects of the one-time gain on the AT&T/Teleport merger, the Company would have reported net income for common stockholders of $0.41 per share for the nine months ended September 30, 1999, and a net loss for common stockholders of $0.01 per share and $0.50 per share for the three and nine months ended September 30, 1998, respectively.

This press release may contain forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could significantly affect actual results from those expressed in any such forward-looking statements. Readers are directed to the note contained on page one of Comcast's Quarterly Report on Form 10-Q for a description of such risks and uncertainties.

Comcast Corporation (www.comcast.com) is principally involved in the development, management and operation of broadband cable networks and the provision of programming content, through principal ownership of QVC, Comcast-Spectacor and Comcast SportsNet, a controlling interest in E! Entertainment Television and through other programming investments.

Comcast's Class A Special Common Stock and Class A Common Stock are traded on the Nasdaq Stock Market under the symbols CMCSK and CMCSA, respectively.

COMCAST CORPORATION
Condensed Consolidated Statement of Operations (Unaudited)
(in millions, except per share data)
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
  1999

1998

  1999

1998

 
Service income $848.0 $664.3   $2,418.4 $2,049.8
Net sales from electronic retailing 677.1

573.9

  1,959.2

1,648.5

  1,525.1 1,238.2   4,377.6 3,698.3
 
Cost of goods sold from electronic retailing 411.8 345.2   1,181.1 997.6
Operating, selling, general and
administrative expenses
649.4

519.7

  1,850.2

1,625.5

 
Operating cash flow 463.9 373.3   1,346.3 1,075.2
 
Depreciation expense 148.6 117.1   402.7 344.8
Amortization expense 164.1 123.2   456.2 364.1
Interest expense 138.1 117.7   392.8 354.9
Investment income (101.1) (1,022.9)   (229.1) (1,021.0)
Equity in net (income) losses of affiliates (2.5) 108.6   (0.9) 345.4
Gain from equity offering of affiliate   (98.1)     (157.8)
Other income (2.7)

(3.9)

  (1,433.6)

(8.1)

  344.5

658.3

  (411.9)

222.3

 
Income from continuing operations
before income tax expense,
minority interest and extraordinary items
119.4 1,031.6   1,758.2 852.9
 
Income tax expense 104.2 313.2   827.9 322.6
Minority interest income (45.4)

(5.2)

  (58.2)

(44.4)

 
Income from continuing operations
before extraordinary items
60.6 723.6   988.5 574.7
 
Discontinued operations (355.9)

6.6

  (335.8)

21.4

 
Income before extraordinary items 416.5 717.0   1,324.3 553.3
 
Extraordinary items (41.4)

(3.0)

  (44.4)

(3.0)

 
Net income 375.1 714.0   1,279.9 550.3
 
Preferred dividends (7.3)

(7.4)

  (22.4)

(21.7)

 
Net income for common stockholders $367.8

$706.6

  $1,257.5

$528.6

 
Basic earnings for common stockholders
per common share
         
Income from continuing operations
before extraordinary items
$0.07 $0.97   $1.29 $0.75
Discontinued operations 0.47 (0.01)   0.45 (0.03)
Extraordinary items (0.05)


  (0.06)


  $0.49

$0.96

  $1.68

$0.72)

 
Basic weighted average number of common
shares outstanding during the period
755.2

738.6

  747.0

731.0

 
Diluted earnings for common stockholders
per common share
         
Income from continuing operations
before extraordinary items
$0.07 $0.89   $1.21 $0.72
Discontinued operations 0.43 (0.01)   0.41 (0.03)
Extraordinary items (0.05)


  (0.05)


  $0.45

$0.88

  $1.57

$0.69

 
Diluted weighted average number of common
shares outstanding during the period
823.9

808.6

  815.4

804.2

 
Common cash dividends per common share

$0.012

  $0.012

$0.035

COMCAST CORPORATION
Condensed Consolidated Balance Sheet (Unaudited)
(in millions)
 
  September 30,   December 31,
  1999

  1998

ASSETS      
CURRENT ASSETS      
Cash and cash equivalents $881.9   $870.7
Investments 5,354.1   3,653.4
Accounts receivable, net 541.6   549.3
Inventories, net 468.4   343.8
Other current assets 95.3

  100.2

Total current assets 7,341.3

  5,517.4

       
INVESTMENTS 2,683.2

  602.4

 
PROPERTY AND EQUIPMENT 4,832.3   3,886.7
Accumulated depreciation (1,622.5)

  (1,362.3)

Property and equipment, net 3,209.8

  2,524.4

 
DEFERRED CHARGES 11,496.6   8,214.5
Accumulated amortization (2,466.0)

  (2,148.2)

Deferred charges, net 9,030.6

  6,066.3

 
  $22,264.9

  $14,710.5

 
LIABILITIES AND STOCKHOLDERS' EQUITY      
CURRENT LIABILITIES      
Accounts payable and accrued expenses $2,197.3   $1,600.3
Accrued

interest

140.9   73.5
Net liabilities of discontinued operations     165.2
Deferred income taxes 1,575.3   1,033.2
Current portion of long-term debt 178.4

  113.5

Total current liabilities 4,091.9

  2,985.7

 
LONG-TERM DEBT, less current portion 6,778.0

  5,464.2

 
DEFERRED INCOME TAXES 2,883.7

  1,500.1

 
MINORITY INTEREST & OTHER 835.4

  834.0

 
COMMON EQUITY PUT OPTIONS

  111.2

 
STOCKHOLDERS' EQUITY      
5% series A convertible preferred stock     31.9
5.25% series B convertible preferred stock 562.3   540.7
Class A special common stock 715.1   698.4
Class A common stock 27.2   31.7
Class B common stock 9.4   9.4
Additional capital 3,448.2   2,941.7
Accumulated deficit (331.9)   (1,488.2)
Accumulated other comprehensive income 3,245.6

  1,049.7

Total stockholders' equity 7,675.9

  3,815.3

 
  $22,264.9

  $14,710.5

 

 

 

         
COMCAST CORPORATION
Pro Forma Financial Data by Business Segment (Unaudited) (1)
(in millions, except margin data)
 
         
  Cable

Electronic
Retailing


(2)
Other
Total

         

Three Months Ended September 30, 1999


       

Revenues

$773.5 $677.1 $74.5 $1,525.1

Operating Cash Flow (Deficit)

$356.8 $124.8 ($17.7) $463.9

Operating Cash Flow Margin

46.1% 18.4% -23.8% 30.4%

Capital Expenditures

$184.4 $23.5 $11.0 $218.9

Total Debt (3) (4)

$5,108.2 $601.9 $1,246.3 $6,956.4
         

Three Months Ended September 30, 1998


       

Revenues

$708.8 $573.9 $58.7 $1,341.4

Operating Cash Flow (Deficit)

$323.1 $103.8 ($14.6) $412.3

Operating Cash Flow Margin

45.6% 18.1% -24.9% 30.7%

Capital Expenditures

$227.6 $15.6 $4.6 $247.8

Total Debt (3) (4)

$3,983.0 $769.5 $1,419.6 $6,172.1
         

Nine Months Ended September 30, 1999


       

Revenues

$2,283.1 $1,959.2 $290.7 $4,533.0

Operating Cash Flow (Deficit) (5)

$1,036.8 $377.1 ($11.6) $1,402.3

Operating Cash Flow Margin

45.4% 19.2% -4.0% 30.9%

Capital Expenditures

$508.6

$48.6

$22.4 $579.6
         

Nine Months Ended September 30, 1998


       

Revenues

$2,096.2 $1,648.5 $238.9 $3,983.6

Operating Cash Flow (Deficit)

$944.6 $291.6 ($30.0) $1,206.2

Operating Cash Flow Margin

45.1% 17.7% -12.6% 30.3%

Capital Expenditures

$584.6 $57.3 $14.7 $656.6
         
(1) The Company acquired cable systems in Calvert County, Maryland and Philadelphia, Pennsylvania in July 1999 and June 1999, respectively. The Company acquired a controlling interest in Jones Intercable, Inc. in April 1999. The Company acquired cable systems in Roseville, California, Delaware/Maryland and Broward County, Florida in December 1998, April 1998 and March 1998, respectively. The Company sold its domestic cellular communications operations (Comcast Cellular) in July 1999. The Company deconsolidated its Primestar operations in April 1998. The Company sold its United Kingdom cable and telecommunications operations (Comcast UK) in October 1998.

Pro forma financial data by business segment is presented as if these acquisitions occurred at the beginning of 1998, and exclude the results of the Company's Primestar, Comcast UK and Comcast Cellular operations for all periods presented. The information presented above is not necessarily indicative of what the results would have been had the Company operated these cable systems since the beginning of 1998. Historical financial data by business segment, as required under generally accepted accounting principles, is available in the Company's Quarterly Report on Form 10-Q.

   
(2) Other includes Corporate and certain operating businesses, including E! Entertainment and Comcast-Spectacor, and elimination entries related to the segments presented. Other excludes the results of Comcast Cellular, Comcast UK, and the Company's Primestar operations for all periods presented.
   
(3) Total debt includes both current and long-term portions as reported in the Company's unaudited condensed consolidated balance sheet, excluding Comcast Cellular and Comcast UK debt as of September 30, 1998.
   
(4) As of September 30, 1999 and 1998, total cable debt includes $772.0 million and $807.0 million, respectively, of third party indebtedness attributable to the Company's indirect 55% owned subsidiary, Comcast MH Holdings, Inc. (Maclean Hunter) and $1,645.6 million and $1,276.5 million, respectively, of third party indebtedness attributable to Jones, the Company's 39% owned consolidated subsidiary.
   
(5) Excluding the effects of certain one-time adjustments recorded by the Company in the second quarter of 1999 to the results of Jones, consolidated and cable operating cash flow would have been $1,409.7 million and $1,044.2 million, respectively for the nine months ended September 30, 1999, representing increases of 16.9% and 10.5% over the prior year periods, respectively.

 

 
COMCAST CORPORATION
Pro Forma Other Data by Business Segment (Unaudited)
         
    3Q99

3Q98

Growth

Cable (1)

       

Homes Passed (000's)

  9,428.3 9,196.4 2.5%

Basic Cable Customers (000's)

  5,670.3 5,593.4 1.4%

Basic Cable Penetration

  60.1% 60.8% -0.7 pts

Net Subscriber Additions (000's)

  7.7 3.8 NM

Customer Revenues (in millions)

       

Recurring (2)

  $670.0 $627.1 6.8%

PPV

  $17.2 $14.3 20.3%

Advertising

  $47.8 $41.4 15.5%

Other (3)

  $38.5 $26.0 48.1%

Total Recurring Revenue per Customer

  $39.46 $37.41 5.5%

Total Monthly Revenue per Customer

  $45.56 $42.29 7.7%
         

Comcast @Home

       

"Modem Ready" Homes Passed (000's)

  2,552.0 1,656.6 54.1%

Customers (000's)

  112.9 38.1 NM

"Modem Ready" Penetration

  4.4% 2.3% 2.1 pts

Net Subscriber Additions (000's)

  18.7 10.3 81.6%
         

Digital Cable

       

Cable Customers (000's)

  355.4 27.7 NM

Net Subscriber Additions (000's)

  129.5 24.1 NM

Digital Cable

Penetration

  9.4% 2.0% 7.4 pts
 

QVC

       

Revenues (in millions)

       

Base Business (4)

  $579.2 $502.3 15.3%

UK

  $67.4 $57.1 18.0%

Germany

  $22.1 $9.2 NM

Other

  $8.4 $5.3 58.5%

Gross Margin

       

Base Business (4)

  39.1% 39.6% -0.5 pts

UK

  39.5% 42.2% -2.7 pts

Germany

  32.8% 29.6% 3.2 pts

Other

  57.0% 54.0% 3.0 pts

Operating Cash Flow (Deficit) (in millions)

       

Base Business (4)

  $119.4 $102.2 16.8%

UK

  $8.2 $7.1 15.5%

Germany

  ($3.3) ($5.7) 42.1%

Other

  $0.5 $0.2 NM

 

(1) The Company acquired cable systems in Calvert County, Maryland and Philadelphia, Pennsylvania in July 1999 and June 1999, respectively. The Company acquired a controlling interest in Jones Intercable, Inc. in April 1999. The Company acquired cable systems in Roseville, California, Delaware/Maryland and Broward County, Florida in December 1998, April 1998 and March 1998, respectively. Pro forma other data by business segment is presented as if these acquisitions occurred at the beginning of 1998. The information presented above is not necessarily indicative of what the results would have been had the Company operated these cable systems since the beginning of 1998.
   
(2) Recurring Cable customer revenues include basic, pay, digital, converter and guide revenues.
   
(3) Other Cable customer revenues include installation revenues, commissions from electronic retailing, revenues from Comcast@Home and other product revenues.
   
(4) Base Business includes domestic channel and iQVC.

 

 

 

SOURCE: Comcast Corporation  
CONTACT: John R. Alchin, Senior Vice President and Treasurer (215) 981-7503
  William E. Dordelman, Vice President, Finance (215) 981-7550
  Marlene S. Dooner, Senior Director, Investor Relations (215) 981-7392

 

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