COMCAST CORPORATION
TABLE 1
Condensed Consolidated Statement of Operations (Unaudited)
(dollars in millions, except per share data)
Three Months Six Months
Ended Ended
June 30, June 30,
2006 2005 2006 2005
Revenues $6,228 $5,598 $12,129 $10,961
Operating expenses 2,310 1,944 4,506 3,901
Selling, general and
administrative expenses 1,486 1,445 2,990 2,821
3,796 3,389 7,496 6,722
Operating cash flow 2,432 2,209 4,633 4,239
Depreciation expense 958 891 1,890 1,765
Amortization expense 245 270 464 560
1,203 1,161 2,354 2,325
Operating income 1,229 1,048 2,279 1,914
Other Income (Expense)
Interest expense (496) (467) (972) (911)
Investment income, net 14 176 78 140
Equity in net (losses) of
affiliates (14) (16) (24) (4)
Other income (expense) 85 30 97 (78)
(411) (277) (821) (853)
Income before income taxes
and minority interest 818 771 1,458 1,061
Income tax expense (362) (331) (526) (471)
Income before minority interest 456 440 932 590
Minority interest 4 (10) (6) (17)
Net income $460 $430 $926 $573
Net income per common share $0.22 $0.19 $0.43 $0.26
Basic weighted average number of
common shares 2,112 2,207 2,123 2,211
Diluted weighted average number of
common shares 2,123 2,221 2,132 2,224
COMCAST CORPORATION
TABLE 2
Condensed Consolidated Balance Sheet (Unaudited)
(dollars in millions)
June 30, December 31,
2006 2005
ASSETS
Current Assets
Cash and cash
equivalents $973 $693
Investments 813 148
Accounts receivable, net 1,125 1,060
Other current assets 629 693
Total current assets 3,540 2,594
Investments 11,838 12,682
Property and equipment, net 18,945 18,769
Franchise rights 51,366 51,090
Goodwill 13,794 14,218
Other intangible assets, net 3,090 3,160
Other noncurrent assets, net 515 633
$103,088 $103,146
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts payable and accrued expenses
related to trade creditors $2,068 $2,033
Accrued expenses and
other current liabilities 2,703 2,545
Deferred income taxes 230 2
Current portion of
long-term debt 763 1,689
Total current liabilities 5,764 6,269
Long-term debt, less
current portion 23,360 21,682
Deferred income taxes 26,873 27,370
Other noncurrent liabilities 6,512 6,949
Minority interest 672 657
Stockholders' equity 39,907 40,219
$103,088 $103,146
COMCAST CORPORATION
TABLE 3
Condensed Consolidated Statement of Cash Flows (Unaudited)
(dollars in millions)
Six Months Ended
June 30,
2006 2005
OPERATING ACTIVITIES
Net cash provided by operating
activities $3,243 $2,517
FINANCING ACTIVITIES
Proceeds from borrowings 2,587 1,495
Retirements and repayments of
debt (1,905) (279)
Repurchases of common stock (1,388) (660)
Issuances of common stock 60 59
Other 2 83
Net cash provided by (used in)
financing activities (644) 698
INVESTING ACTIVITIES
Capital expenditures (1,854) (1,842)
Cash paid for intangible
assets (141) (192)
Acquisitions, net of cash
acquired (550) (134)
Proceeds from sales and
restructuring of investments 303 317
Purchases of investments (70) (305)
Proceeds from sales
(purchases) of short-term
investments, net (4) (63)
Other investing activities (3) (113)
Net cash used in investing
activities (2,319) (2,332)
INCREASE IN CASH AND CASH
EQUIVALENTS 280 883
CASH AND CASH EQUIVALENTS,
beginning of period 693 452
CASH AND CASH EQUIVALENTS, end
of period $973 $1,335
COMCAST CORPORATION
TABLE 4
Calculation of Free Cash Flow (Unaudited) (1)
(dollars in millions)
Six Months Ended
June 30,
2006 2005
Net Cash Provided by Operating
Activities $3,243 $2,517
Capital Expenditures (1,854) (1,842)
Cash paid for Intangible
Assets (141) (192)
Non-operating items, net of
tax 80 273
Free Cash Flow $1,328 $756
(1) See Non-GAAP and Other Financial Measures in Table 7 for the
definition of Free Cash Flow.
COMCAST CORPORATION
TABLE 5
Pro Forma Financial Data by Business Segment (Unaudited) (1)
(dollars in millions)
Corporate
and
Cable Content (2) Other Total
Three Months Ended June 30, 2006
Revenues $5,946 $273 $24 $6,243
Operating Cash Flow $2,462 $60 ($84) $2,438
Operating Income (Loss) $1,315 $19 ($103) $1,231
Operating Cash Flow Margin 41.4% 22.1% NM 39.1%
Capital Expenditures (3) $965 $5 $8 $978
Three Months Ended June 30, 2005,
as adjusted (4)
Revenues $5,380 $234 $34 $5,648
Operating Cash Flow $2,166 $93 ($75) $2,184
Operating Income (Loss) $1,036 $64 ($86) $1,014
Operating Cash Flow Margin 40.3% 39.5% NM 38.7%
Capital Expenditures (3) $941 $3 $12 $956
Six Months Ended June 30, 2006
Revenues $11,584 $512 $98 $12,194
Operating Cash Flow $4,693 $110 ($148) $4,655
Operating Income (Loss) $2,448 $28 ($188) $2,288
Operating Cash Flow Margin 40.5% 21.5% NM 38.2%
Capital Expenditures (3) $1,834 $13 $15 $1,862
Six Months Ended June 30, 2005,
as adjusted (4)
Revenues $10,533 $447 $78 $11,058
Operating Cash Flow $4,151 $169 ($129) $4,191
Operating Income (Loss) $1,908 $95 ($156) $1,847
Operating Cash Flow Margin 39.4% 37.7% NM 37.9%
Capital Expenditures (3) $1,832 $7 $16 $1,855
(1) See Non-GAAP and Other Financial Measures in Table 7. 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. All percentages are calculated based on
actual amounts. Minor differences may exist due to rounding.
(2) Content includes our national networks E! Entertainment Television
and Style Network (E! Networks), The Golf Channel, OLN, G4 and AZN
Television.
(3) Our Cable segment's capital expenditures are comprised of the
following categories:
YTD YTD
2Q06 2Q05 2Q06 2Q05
New Service Offerings
Customer Premise Equipment (CPE) $542 $470 $1,012 $934
Scalable Infrastructure 168 228 341 438
710 698 1,353 1,372
Recurring Capital Projects
Line Extensions 85 82 158 147
Support Capital 97 91 188 141
182 173 346 288
Upgrades 73 70 135 172
Total $965 $941 $1,834 $1,832
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 recurring betterments.
(4) Adjusted as if stock options had been expensed in 2005. See Table
7-A and 7-B for Reconciliation of "As Adjusted" Financial Data.
COMCAST CORPORATION
TABLE 6
Pro Forma Data - Cable Segment Components (Unaudited) (1) (2)
(dollars in millions, except per subscriber and per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenues:
Video (3) $3,741 $3,475 $7,351 $6,870
High-Speed Internet 1,208 991 2,349 1,924
Phone 214 173 406 350
Advertising 394 363 704 660
Other (4) 206 208 414 390
Franchise Fees 183 170 360 339
Total Revenues $5,946 $5,380 $11,584 $10,533
Operating Cash Flow (5) $2,462 $2,166 $4,693 $4,151
Operating Income (5) $1,315 $1,036 $2,448 $1,908
Operating Cash Flow
Margin (5) 41.4% 40.3% 40.5% 39.4%
Capital Expenditures $965 $941 $1,834 $1,832
Annualized Capital
Expenditures per
Basic Subscriber $178 $174 $169 $169
Annualized Capital
Expenditures per
Revenue Generating Unit $89 $94 $85 $92
2Q06 2Q05 1Q06
Video
Homes Passed (000's) 42,400 41,500 42,100
Basic Subscribers (000's) 21,657 21,680 21,723
Basic Penetration 51.1% 52.2% 51.5%
Quarterly Net Basic Subscriber
Additions (000's) (66) (79) 49
Digital Subscribers (000's) 10,549 9,201 10,200
Digital Penetration 48.7% 42.4% 47.0%
Quarterly Net Digital Subscriber
Additions (000's) 350 284 343
Digital Set-Top Boxes 16,334 13,948 15,758
Monthly Average Video Revenue
per Basic Subscriber $57.49 $53.33 $55.45
Monthly Average Total Revenue
per Basic Subscriber $91.38 $82.58 $86.62
High-Speed Internet
"Available" Homes (000's) 41,973 41,103 41,760
Subscribers (000's) 9,344 7,774 9,039
Penetration 22.3% 18.9% 21.6%
Quarterly Net Subscriber
Additions (000's) 305 300 442
Monthly Average Revenue
per Subscriber $43.78 $43.35 $43.15
Phone
Comcast Digital Voice
"Available" Homes (000's) 25,601 1,641 18,883
Subscribers (000's) 721 24 416
Penetration 2.8% 1.5% 2.2%
Quarterly Net Subscriber
Additions (000's) 306 15 211
Circuit Switched Phone
"Available" Homes (000's) 10,692 10,239 10,663
Subscribers (000's) 978 1,215 1,057
Penetration 9.1% 11.9% 9.9%
Quarterly Net Subscriber
Additions (000's) (79) (13) (69)
Monthly Average Total Phone
Revenue per Subscriber $44.83 $46.63 $45.75
Total Revenue Generating Units
(000's) (6) 43,249 39,894 42,435
Quarterly Net Additions 816 507 976
(1) See Non-GAAP and Other Financial Measures in Table 7. All percentages
are calculated based on actual amounts. Minor differences may exist
due to rounding.
(2) Pro forma financial data includes the results of Susquehanna
Communications acquired on April 30, 2006. Pro forma subscriber data
includes approximately 230,000 basic cable subscribers, 71,000 digital
cable subscribers and 86,000 high-speed Internet subscribers acquired
with the purchase of Susquehanna Communications. Pro forma subscriber
data also includes 13,000 subscribers acquired in various small
acquisitions during 2005. The impact of these acquisitions on our
segment operating results was not material.
(3) Video revenues consist of our basic, expanded basic, premium, pay-per-
view, equipment and digital services.
(4) Other revenues include installation revenues, guide revenues,
commissions from electronic retailing, other product offerings,
commercial data services and revenues of our digital media center and
regional sports programming networks.
(5) Adjusted as if stock options had been expensed in 2005.
(6) The total of all basic video, digital video, high-speed Internet and
net phone subscribers, excluding additional outlets.
COMCAST CORPORATION
TABLE 7
Non-GAAP and Other Financial Measures
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Operating Cash Flow is the primary basis used to measure the operational
strength and performance of our businesses. Free Cash Flow is an additional
performance measure used as an indicator of our ability to repay debt, make
investments and return capital to investors, principally through stock
repurchases. We also adjust certain historical data on a pro forma basis
following significant acquisitions or dispositions to enhance comparability.
Operating Cash Flow is defined as operating income before depreciation and
amortization, excluding impairment charges related to fixed and intangible
assets and gains or losses on sale of assets, if any. As such, it eliminates
the significant level of non-cash depreciation and amortization expense that
results from the capital intensive nature of our businesses and intangible
assets recognized in business combinations, and is unaffected by our capital
structure or investment activities. Our management and Board of Directors use
this measure in evaluating our consolidated operating performance and the
operating performance of all of our operating segments. This metric is used to
allocate resources and capital to our operating segments and is a significant
component of our annual incentive compensation programs. We believe that
Operating Cash Flow is also useful to investors as it is one of the bases for
comparing our operating performance with other companies in our industries,
although our measure of Operating Cash Flow may not be directly comparable to
similar measures used by other companies.
As Operating Cash Flow is the measure of our segment profit or loss, we
reconcile it to operating income, the most directly comparable financial
measure calculated and presented in accordance with Generally Accepted
Accounting Principles (GAAP), in the business segment footnote of our
quarterly and annual financial statements. Therefore, we believe our measure
of Operating Cash Flow for our business segments is not a "non-GAAP financial
measure" as contemplated by Regulation G adopted by the Securities and
Exchange Commission. Consolidated Operating Cash Flow is a non-GAAP financial
measure.
Beginning in 2006, we changed our definition of Free Cash Flow, which is a
non-GAAP financial measure, to mean "Net Cash Provided by Operating Activities
From Continuing Operations" (as stated in our Consolidated Statement of Cash
Flows) reduced by capital expenditures and cash paid for intangible assets;
and increased by any payments related to certain non-operating items, net of
estimated tax benefits (such as income taxes on investment sales, and non-
recurring payments related to income tax and litigation contingencies of
acquired companies). We believe that Free Cash Flow is also useful to
investors as it is one of the bases for comparing our performance with other
companies in our industries, although our measure of Free Cash Flow may not be
comparable to similar measures used by other companies
Pro forma data is used by management to evaluate performance when
significant acquisitions or dispositions occur. Historical data reflects
results of acquired businesses only after the acquisition dates while pro
forma data enhances comparability of financial information between periods by
adjusting the data as if the acquisitions (or dispositions) occurred at the
beginning of the prior year. Our pro forma data is only adjusted for the
timing of acquisitions and does not include adjustments for costs related to
integration activities, cost savings or synergies that have been or may be
achieved by the combined businesses. We believe our pro forma data is not a
non-GAAP financial measure as contemplated by Regulation G
In certain circumstances we also present data, as adjusted, in order to
enhance comparability between periods. In connection with the adoption of FAS
123R, we have adjusted 2005 data as if stock options had been expensed
Operating Cash Flow and Free Cash Flow should not be considered as
substitutes for operating income (loss), net income (loss), net cash provided
by operating activities or other measures of performance or liquidity reported
in accordance with GAAP. Additionally, in the opinion of management, our pro
forma data is not necessarily indicative of future results or what results
would have been had the acquired businesses been operated by us after the
assumed earlier date.
We provide reconciliations of Consolidated Operating Cash Flow in Table 1,
Free Cash Flow in Table 4 and "as adjusted" in Table 7-A and 7-B
COMCAST CORPORATION
TABLE 7-A
Reconciliation of Pro Forma, "As Adjusted" Financial Data by Business Segment
(Unaudited)
(dollars in millions)
Corporate
Three Months Ended June 30, 2006 Cable Content and Other Total
Revenue $5,931 $273 $24 $6,228
Operating Expenses (excluding
depreciation and amortization) 3,475 213 108 3,796
Operating Cash Flow $2,456 $60 ($84) $2,432
Depreciation and Amortization 1,143 41 19 1,203
Operating Income (Loss) $1,313 $19 ($103) $1,229
Capital Expenditures $962 $5 $9 $976
Three Months Ended June 30, 2005
Revenue $5,328 $234 $36 $5,598
Segment reclassifications (2) 2 - (2) -
Revenue $5,330 $234 $34 $5,598
Operating Expenses (excluding
depreciation and amortization) 3,153 137 99 3,389
Segment reclassifications (2) (5) 3 2 -
Stock option adjustment (3) 30 1 (31) -
Operating Cash Flow $2,152 $93 ($36) $2,209
Depreciation and Amortization 1,121 29 11 1,161
Operating Income (Loss) $1,031 $64 ($47) $1,048
Capital Expenditures $936 $3 $11 $950
Pro Forma
Adjustments (1)
Total Cable
Three Months Ended June 30, 2006 Cable Pro Forma
Revenue $15 $5,946
Operating Expenses (excluding
depreciation and amortization) 9 3,484
Operating Cash Flow $6 $2,462
Depreciation and Amortization 4 1,147
Operating Income (Loss) $2 $1,315
Capital Expenditures $3 $965
Three Months Ended June 30, 2005
Revenue $50 $5,378
Segment reclassifications (2) - 2
Revenue $50 $5,380
Operating Expenses (excluding
depreciation and amortization) 36 3,189
Segment reclassifications (2) - (5)
Stock option adjustment (3) - 30
Operating Cash Flow $14 $2,166
Depreciation and Amortization 9 1,130
Operating Income (Loss) $5 $1,036
Capital Expenditures $5 $941
Reconciliation of "As Adjusted" Financial Data
(dollars in millions)
Three Months Ended
June 30,
2005 2006
Historical
Total Adjustment(3) As Adjusted Total
Revenue $5,598 - $5,598 $6,228
Operating Expenses
(excluding depreciation
and amortization) 3,389 39 3,428 3,796
Operating Cash Flow $2,209 ($39) $2,170 $2,432
Depreciation and
Amortization 1,161 - 1,161 1,203
Operating Income (Loss) $1,048 ($39) $1,009 $1,229
Operating Cash Flow Margin 39.4% NM 38.8% 39.0%
Earnings Per Share $0.19 ($0.01) $0.18 $0.22
% Growth
As Adjusted % Growth
Revenue 11% 11%
Operating Expenses (excluding
depreciation and amortization)
Operating Cash Flow 12% 10%
Depreciation and Amortization
Operating Income (Loss) 22% 17%
Operating Cash Flow Margin
Earnings Per Share 22% 16%
(1) Pro Forma data is only adjusted for timing of acquisitions (or
dispositions) and does not include adjustments for costs related to
integration activities, cost savings, or synergies that have been or
may be achieved by the combined businesses.
(2) Reclassifications related to technology development ventures,
programming headquarters and other.
(3) To be consistent with our management reporting presentation, the 2005
segment amounts have been adjusted as if stock options had been
expensed as of January 1, 2005. For the three months ended June 30,
2005, the adjustments reducing operating income before depreciation
and amortization by segment were $30 million for Cable, $1 million for
Content and $8 million for Corporate and Other. For the three months
ended June 30, 2005, the total adjustment of $39 million is reversed
in the Corporate and Other column to reconcile to our consolidated
2005 amounts.
COMCAST CORPORATION
TABLE 7-B
Reconciliation of Pro Forma, "As Adjusted" Financial Data by Business Segment
(Unaudited)
(dollars in millions)
Corporate
Six Months Ended June 30, 2006 Cable Content and Other Total
Revenue $11,519 $512 $98 $12,129
Operating Expenses (excluding
depreciation and amortization) 6,848 402 246 7,496
Operating Cash Flow 4,671 110 (148) 4,633
Depreciation and Amortization 2,232 82 40 2,354
Operating Income (Loss) $2,439 $28 ($188) $2,279
Capital Expenditures $1,826 $13 $15 $1,854
Six Months Ended June 30, 2005
Revenue $10,432 $447 $82 $10,961
Segment reclassifications (2) 4 - (4) -
Revenue $10,436 $447 $78 $10,961
Operating Expenses (excluding
depreciation and amortization) 6,261 273 188 6,722
Segment reclassifications (2) (3) 3 - -
Stock option adjustment (3) 56 2 (58) -
Operating Cash Flow $4,122 $169 ($52) $4,239
Depreciation and Amortization 2,225 74 26 2,325
Operating Income (Loss) $1,897 $95 ($78) $1,914
Capital Expenditures $1,819 $7 $16 $1,842
Pro Forma
Adjustments (1)
Total Cable
Six Months Ended June 30, 2006 Cable Pro Forma
Revenue $65 $11,584
Operating Expenses (excluding
depreciation and amortization) 43 6,891
Operating Cash Flow 22 4,693
Depreciation and Amortization 13 2,245
Operating Income (Loss) $9 $2,448
Capital Expenditures $8 $1,834
Six Months Ended June 30, 2005
Revenue $97 $10,529
Segment reclassifications (2) - 4
Revenue $97 $10,533
Operating Expenses (excluding
depreciation and amortization) 68 6,329
Segment reclassifications (2) - (3)
Stock option adjustment (3) - 56
Operating Cash Flow $29 $4,151
Depreciation and Amortization 18 2,243
Operating Income (Loss) $11 $1,908
Capital Expenditures $13 $1,832
Reconciliation of "As Adjusted" Financial Data
(dollars in millions)
Six Months Ended
June 30,
2005 2006
Historical
Total Adjustment(3) As Adjusted Total
Revenue $10,961 - $10,961 $12,129
Operating Expenses
(excluding depreciation
and amortization) 6,722 78 6,800 7,496
Operating Cash Flow $4,239 ($78) $4,161 $4,633
Depreciation and
Amortization 2,325 - 2,325 2,354
Operating Income (Loss) $1,914 ($78) $1,836 $2,279
Operating Cash Flow Margin 38.7% NM 38.0% 38.2%
Earnings Per Share $0.26 ($0.02) $0.24 $0.43
% Growth
As Adjusted % Growth
Revenue 11% 11%
Operating Expenses (excluding
depreciation and amortization)
Operating Cash Flow 11% 9%
Depreciation and Amortization
Operating Income (Loss) 24% 19%
Operating Cash Flow Margin
Earnings Per Share 79% 65%
(1) Pro Forma data is only adjusted for timing of acquisitions (or
dispositions) and does not include adjustments for costs related to
integration activities, cost savings, or synergies that have been
or may be achieved by the combined businesses.
(2) Reclassifications related to technology development ventures,
programming headquarters and other.
(3) To be consistent with our management reporting presentation, the 2005
segment amounts have been adjusted as if stock options had been
expensed as of January 1, 2005. For the six months ended June 30,
2005, the adjustments reducing operating income before depreciation
and amortization by segment were $56 million for Cable, $2 million
for Content and $20 million for Corporate and Other. For the six
months ended June 30, 2005, the total adjustment of $78 million is
reversed in the Corporate and Other column to reconcile to our
consolidated 2005 amounts.
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