Comcast Corporation (NASDAQ: CMCSA) today reported results for
the quarter ended June 30, 2020.
“Our response to COVID-19 has been extraordinarily fast and
effective, and our products and brands continue to resonate
strongly with our customers across all segments and all
geographies. The solid results that we delivered in the quarter
highlight the resilience of our company. Cable delivered record
second quarter customer relationship net adds, driven by the best
second quarter high-speed internet net adds in 13 years.
NBCUniversal successfully launched Peacock in Cable’s footprint in
April, ahead of the streaming service’s U.S. nationwide launch
earlier this month, with 10 million sign-ups to date. NBCUniversal
also just recently announced a deal with AMC Theatres in the U.S.
that allows Universal to release titles across PVOD platforms after
a 17-day exclusive theatrical window. At Sky, our flexible strategy
helped retain customers until key sports returned in May and June.
Overall, based on our results and the many organic growth
opportunities that we have across our company, I am confident in
our ability to continue to successfully navigate the impact of
COVID-19, and emerge from the crisis even stronger. I could not be
more proud of how our teams across Comcast Cable, NBCUniversal and
Sky are together managing the business," commented Brian L.
Roberts, Chairman and Chief Executive Officer of Comcast
Corporation.
($ in millions, except per share data)
2nd
Quarter
Year to
Date
Consolidated Results
2020
2019
Change
2020
2019
Change
Revenue
$23,715
$26,858
(11.7
%)
$50,324
$53,717
(6.3
%)
Net Income Attributable to Comcast
$2,988
$3,125
(4.4
%)
$5,135
$6,678
(23.1
%)
Adjusted Net Income1
$3,170
$3,610
(12.2
%)
$6,436
$7,087
(9.2
%)
Adjusted EBITDA2
$7,927
$8,716
(9.1
%)
$16,057
$17,269
(7.0
%)
Earnings per Share3
$0.65
$0.68
(4.4
%)
$1.11
$1.45
(23.4
%)
Adjusted Earnings per Share1
$0.69
$0.78
(11.5
%)
$1.40
$1.54
(9.1
%)
Net Cash Provided by Operating
Activities
$8,643
$7,040
22.8
%
$14,467
$14,271
1.4
%
Free Cash Flow4
$5,966
$4,246
40.5
%
$9,291
$8,838
5.1
%
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.
2nd Quarter 2020 Highlights:
- Generated Consolidated Adjusted EBITDA of $7.9 Billion,
Adjusted EPS of $0.69 and Free Cash Flow of $6.0 Billion
- Cable Communications Total Customer Relationships Increased by
217,000 in the Quarter, the Best Second Quarter Result on
Record
- Total High-Speed Internet Customer Net Additions Were 323,000
(Not Including Over 600,000 Additional High-Risk or Free Internet
Essentials Customers That Still Receive Our Service, But Were Not
Included in Reported Results), the Best Second Quarter Result in 13
Years
- Cable Communications Adjusted EBITDA Increased 5.5% Driven by
Strength in High-Speed Internet
- Cable Communications Extended Its Offer of 60 Days of Free
Internet Service to Eligible New Internet Essentials Customers and
Free Access to Public Xfinity WiFi Hotspots Through Year-End
- Successfully Launched Peacock, NBCUniversal's New Highly
Anticipated Streaming Service, Free to Xfinity X1 and Flex
Customers on April 15, Ahead of National Debut on July 15, With 10
Million Sign-Ups to Date
- NBCUniversal Re-Opened Universal Orlando Resort and Universal
Studios Japan After Temporary Closures Due to COVID-19
- Sky Successfully Retained 99% of Total Customers and 95% of
Sports Subscribers Since the Crisis Began
- Sky’s Key Sports Have Returned, Including Bundesliga in May and
the Premier League and Serie A in June
Consolidated Financial Results
Revenue for the second quarter of 2020 decreased 11.7% to
$23.7 billion. Net Income Attributable to Comcast decreased
4.4% to $3.0 billion. Adjusted Net Income decreased 12.2% to
$3.2 billion. Adjusted EBITDA decreased 9.1% to $7.9
billion.
For the six months ended June 30, 2020, revenue decreased 6.3%
to $50.3 billion compared to 2019. Net income attributable to
Comcast decreased 23.1% to $5.1 billion. Adjusted Net Income
decreased 9.2% to $6.4 billion. Adjusted EBITDA decreased 7.0% to
$16.1 billion.
Earnings per Share (EPS) for the second quarter of 2020
was $0.65, a decrease of 4.4% compared to the second quarter of
2019. Adjusted EPS decreased 11.5% to $0.69.
For the six months ended June 30, 2020, EPS was $1.11, a 23.4%
decrease compared to the prior year. Adjusted EPS decreased 9.1% to
$1.40.
Capital Expenditures decreased 8.3% to $2.1 billion in
the second quarter of 2020. Cable Communications’ capital
expenditures decreased 8.9% to $1.5 billion. NBCUniversal’s capital
expenditures decreased 20.9% to $375 million. Sky's capital
expenditures increased 22.1% to $215 million.
For the six months ended June 30, 2020, capital expenditures
decreased 9.2% to $4.0 billion compared to 2019. Cable
Communications' capital expenditures decreased 8.0% to $2.7
billion. NBCUniversal's capital expenditures decreased 18.8% to
$752 million. Sky's capital expenditures decreased 5.4% to $412
million.
Net Cash Provided by Operating Activities was $8.6
billion in the second quarter of 2020. Free Cash Flow was
$6.0 billion. These results reflect reduced tax payments in the
second quarter of 2020 due to the extension of due dates for
federal estimated tax payments to the third quarter of 2020.
For the six months ended June 30, 2020, net cash provided by
operating activities was $14.5 billion. Free cash flow was $9.3
billion. These results reflect reduced tax payments in the second
quarter of 2020 due to the extension of due dates for federal
estimated tax payments to the third quarter of 2020.
Dividends paid during the second quarter of 2020 totaled
$1.1 billion. For the six months ended June 30, 2020, dividends
paid totaled $2.0 billion.
Cable Communications
($ in millions)
2nd
Quarter
Year to
Date
2020
2019
Change
2020
2019
Change
Cable Communications Revenue
High-Speed Internet
$5,000
$4,663
7.2
%
$10,001
$9,240
8.2
%
Video
5,415
5,594
(3.2
%)
11,047
11,222
(1.6
%)
Voice
877
982
(10.7
%)
1,776
1,972
(9.9
%)
Wireless
326
244
33.9
%
669
469
42.6
%
Business Services
2,004
1,933
3.6
%
4,047
3,824
5.8
%
Advertising
428
607
(29.6
%)
985
1,163
(15.3
%)
Other
378
427
(11.0
%)
821
840
(2.1
%)
Cable Communications Revenue
$14,428
$14,450
(0.2
%)
$29,346
$28,730
2.1
%
Cable Communications Adjusted
EBITDA
$6,176
$5,854
5.5
%
$12,252
$11,582
5.8
%
Adjusted EBITDA Margin
42.8%
40.5%
41.7%
40.3%
Cable Communications Capital
Expenditures
$1,452
$1,594
(8.9
%)
$2,721
$2,957
(8.0
%)
Percent of Cable Communications
Revenue
10.1%
11.0%
9.3%
10.3%
Revenue for Cable Communications of $14.4 billion was
consistent with the prior year period, reflecting increases in
high-speed internet, wireless and business services revenue, offset
by decreases in video, advertising, voice and other revenue. These
results were negatively impacted by COVID-19, including accrued
customer regional sports network (RSN) fee adjustments, reduced
advertising revenue, lower revenue due to Xfinity's commitment to
the FCC's Keep Americans Connected Pledge and our efforts to assist
our customers during this crisis. High-speed internet revenue
increased 7.2%, reflecting an increase in the number of residential
high-speed internet customers and an increase in average rates.
Average rates would have been higher if it were not for waived fees
due to COVID-19 and the impacts of the customer RSN fee
adjustments. Wireless revenue increased 33.9%, primarily reflecting
an increase in the number of customer lines. Business services
revenue increased 3.6%, reflecting an increase in the number of
customers receiving our services compared to the prior year period
and increases in average rates. The rates of growth were reduced
due to the negative impacts of COVID-19 on small businesses. Video
revenue decreased 3.2%, reflecting a decrease in the number of
residential video customers, partially offset by an increase in
average rates. Average rates were negatively impacted by the
impacts of the customer RSN fee adjustments, partially offset by
higher pay-per-view revenue. Advertising revenue decreased 29.6%,
primarily reflecting reduced advertiser spending due to COVID-19,
partially offset by an increase in political advertising revenue.
Voice revenue decreased 10.7%, due to decreases in average rates
and in the number of residential voice customers. Other revenue
decreased 11.0%, reflecting lower revenue due to waived late fees
and a decline in revenue associated with our security and
automation services, partially offset by an increase in revenue
from licensing our X1 and technology platforms.
For the six months ended June 30, 2020, Cable revenue increased
2.1% to $29.3 billion compared to 2019, driven by growth in
high-speed internet, business services and wireless revenue,
partially offset by a decrease in voice, advertising, video and
other revenue. These results were negatively impacted by COVID-19,
including accrued customer RSN fee adjustments, reduced advertising
revenue, lower revenue due to Xfinity's commitment to the FCC's
Keep Americans Connected Pledge and our efforts to assist our
customers during this crisis.
Total Customer Relationships increased by 217,000 to 32.1
million in the second quarter of 2020. Residential customer
relationships increased by 241,000 and business customer
relationships decreased by 24,000. Total high-speed internet
customer net additions were 323,000, which does not include over
600,000 additional high-risk or free Internet Essentials customers
that still receive our service, but were not included in reported
results. Total video customer net losses were 477,000 and total
voice customer net losses were 158,000. In addition, Cable
Communications added 126,000 wireless lines in the quarter.
(in thousands)
Net
Additions
2Q20
2Q19
2Q20
2Q19
Customer Relationships
Residential Customer Relationships
29,750
28,508
241
123
Business Services Customer
Relationships
2,384
2,356
(24
)
29
Total Customer Relationships
32,134
30,864
217
152
Residential Customer Relationships
Mix
One Product Residential Customers
11,332
9,526
531
231
Two Product Residential Customers
8,742
8,952
(107
)
(57
)
Three or More Product Residential
Customers
9,676
10,030
(184
)
(50
)
Residential High-Speed Internet
Customers
27,220
25,631
340
182
Business Services High-Speed Internet
Customers
2,209
2,176
(17
)
28
Total High-Speed Internet
Customers
29,429
27,807
323
209
Residential Video Customers
19,473
20,642
(427
)
(209
)
Business Services Video Customers
894
999
(51
)
(15
)
Total Video Customers
20,367
21,641
(477
)
(224
)
Residential Voice Customers
9,698
10,008
(142
)
(82
)
Business Services Voice Customers
1,331
1,324
(16
)
17
Total Voice Customers
11,029
11,331
(158
)
(65
)
Total Wireless Lines
2,393
1,586
126
181
Adjusted EBITDA for Cable Communications increased 5.5%
to $6.2 billion in the second quarter of 2020, reflecting revenue
that was consistent with the prior year period as well as a 4.0%
decrease in operating expenses. Total operating expenses benefited
from adjustments for provisions in our programming distribution
agreements with RSNs related to canceled sporting events as a
result of COVID-19. Programming costs decreased 5.0%, primarily due
to the adjustment provisions. Excluding these adjustments,
programming costs increased due to higher retransmission consent
and sports programming fees, partially offset by a decline in the
number of video subscribers. Non-programming expenses decreased
3.4%, primarily reflecting lower advertising, marketing and
promotion expenses, other operating expenses and customer service
expenses, partially offset by higher technical and product support
expenses. Non-programming expenses per customer relationship
decreased 7.1%. Non-programming expenses included additional
compensation costs for certain personnel and increases in
administrative and bad debt expenses as a result of COVID-19, that
were more than offset by cost saving initiatives and a reduction in
activity in some aspects of our business. Adjusted EBITDA per
customer relationship increased 1.4%, and Adjusted EBITDA margin
was 42.8% compared to 40.5% in the second quarter of 2019. While
the accrued RSN adjustments did not impact Adjusted EBITDA in the
second quarter of 2020, they resulted in an increase to Adjusted
EBITDA margin. Cable Communications results include a loss of $37
million from our wireless business, compared to a loss of $88
million in the prior year period.
For the six months ended June 30, 2020, Cable Adjusted EBITDA
increased 5.8% to $12.3 billion compared to 2019, reflecting higher
revenue and flat expenses. Programming costs decreased 1.6%
primarily due to adjustments for provisions in our programming
distribution agreements with RSNs related to canceled sporting
events as a result of COVID-19. Excluding these adjustments,
programming costs increased due to an increase in retransmission
consent and sports programming fees, partially offset by a decline
in the number of video subscribers. Non-programming expenses
increased 0.5%, reflecting higher costs as a result of COVID-19,
partially offset by cost savings initiatives. For the six months
ended June 30, 2020, Adjusted EBITDA per customer relationship
increased 1.8%, and Adjusted EBITDA margin was 41.7% compared to
40.3% in 2019. While the accrued RSN adjustments did not impact
Adjusted EBITDA for the six months ended June 30, 2020, they
resulted in an increase to Adjusted EBITDA margin. Cable
Communications results include a loss of $96 million from our
wireless business, compared to a loss of $191 million in the prior
year period.
Capital Expenditures for Cable Communications decreased
8.9% to $1.5 billion in the second quarter of 2020, primarily
reflecting decreased investment in customer premise equipment,
partially offset by increased investment in scalable
infrastructure. Cable capital expenditures represented 10.1% of
Cable revenue in the second quarter of 2020 compared to 11.0% in
last year's second quarter.
For the six months ended June 30, 2020, Cable capital
expenditures decreased 8.0% to $2.7 billion, primarily reflecting
decreased investment in customer premise equipment, partially
offset by increased investment in scalable infrastructure. Cable
capital expenditures represented 9.3% of Cable revenue compared to
10.3% in 2019.
NBCUniversal
($ in millions)
2nd
Quarter
Year to
Date
2020
2019
Change
2020
2019
Change
NBCUniversal Revenue
Cable Networks
$2,515
$2,947
(14.7
%)
$5,374
$5,815
(7.6
%)
Broadcast Television
2,364
2,402
(1.6
%)
5,048
4,869
3.7
%
Filmed Entertainment
1,194
1,457
(18.1
%)
2,564
3,225
(20.5
%)
Theme Parks
87
1,464
(94.1
%)
956
2,740
(65.1
%)
Headquarters, other and eliminations
(36
)
(64
)
NM
(84
)
(130
)
NM
NBCUniversal Revenue
$6,124
$8,206
(25.4
%)
$13,858
$16,519
(16.1
%)
NBCUniversal Adjusted EBITDA
Cable Networks
$1,243
$1,201
3.5
%
$2,491
$2,463
1.1
%
Broadcast Television
641
534
20.0
%
1,142
921
24.0
%
Filmed Entertainment
228
183
24.8
%
334
547
(38.8
%)
Theme Parks
(399
)
590
(167.7
%)
(323
)
1,088
(129.7
%)
Headquarters, other and eliminations
(75
)
(184
)
NM
(259
)
(358
)
NM
NBCUniversal Adjusted EBITDA
$1,638
$2,324
(29.5
%)
$3,385
$4,661
(27.4
%)
Revenue for NBCUniversal decreased 25.4% to $6.1 billion
in the second quarter of 2020. Adjusted EBITDA decreased
29.5% to $1.6 billion.
For the six months ended June 30, 2020, NBCUniversal revenue
decreased 16.1% to $13.9 billion compared to last year's results.
Adjusted EBITDA decreased 27.4% to $3.4 billion.
Cable Networks Cable Networks revenue decreased 14.7% to
$2.5 billion in the second quarter of 2020, reflecting lower
distribution revenue and advertising revenue, partially offset by
higher content licensing and other revenue. Distribution revenue
decreased 14.8%, reflecting credits accrued at some of our RSNs
resulting from the reduced number of games planned by professional
sports leagues due to COVID-19 and a decline in subscribers,
partially offset by contractual rate increases. Advertising revenue
decreased 27.0%, due to reduced spending from advertisers as a
result of COVID-19, including from the postponement or cancellation
of sporting events, and continued ratings declines at our networks.
Content licensing and other revenue increased 23.1%, due to the
timing of content provided under licensing agreements, including
transactions with Peacock in the second quarter of 2020. Adjusted
EBITDA increased 3.5% to $1.2 billion in the second quarter of
2020, reflecting lower revenue that was more than offset by lower
operating costs. The decrease in operating costs was driven by
lower programming and production expenses, primarily reflecting the
postponement or cancellation of sporting events due to
COVID-19.
For the six months ended June 30, 2020, revenue from the Cable
Networks segment decreased 7.6% to $5.4 billion compared to 2019,
reflecting lower distribution and advertising revenue, partially
offset by higher content licensing and other revenue. Adjusted
EBITDA increased 1.1% to $2.5 billion compared to 2019, reflecting
lower revenue, more than offset by lower operating costs. The
decrease in operating costs was driven by lower programming and
production costs, primarily reflecting the postponement or
cancellation of sporting events due to COVID-19.
Broadcast Television Broadcast Television revenue
decreased 1.6% to $2.4 billion in the second quarter of 2020,
reflecting lower advertising revenue, partially offset by higher
content licensing revenue and distribution and other revenue.
Advertising revenue decreased 27.9%, due to reduced spending from
advertisers as a result of COVID-19, including from the
postponement or cancellation of sporting events, and continued
ratings declines. Content licensing revenue increased 58.5%,
primarily due to the timing of content provided under licensing
agreements, including transactions with Peacock in the second
quarter of 2020. Distribution and other revenue increased 9.2%,
primarily due to higher retransmission consent fees. Adjusted
EBITDA increased 20.0% to $641 million in the second quarter of
2020, reflecting lower revenue more than offset by lower operating
costs.
For the six months ended June 30, 2020, revenue from the
Broadcast Television segment increased 3.7% to $5.0 billion
compared to 2019, reflecting an increase in content licensing and
distribution and other revenue, partially offset by a decrease in
advertising revenue. Adjusted EBITDA increased 24.0% to $1.1
billion compared to 2019, reflecting higher revenue and lower
operating costs.
Filmed Entertainment Filmed Entertainment revenue
decreased 18.1% to $1.2 billion in the second quarter of 2020,
primarily reflecting lower theatrical revenue and other revenue,
partially offset by higher content licensing revenue. Theatrical
revenue decreased 96.8%, reflecting theater closures as a result of
COVID-19 and the strong performances of films in the prior year
period, including The Secret Life of Pets 2. Other revenue
decreased 59.6%, primarily due to decreases in revenue from our
movie ticketing, entertainment and live stage play businesses,
which were impacted by theater and entertainment venue closures as
a result of COVID-19. Content licensing revenue increased 19.5%,
driven by the performance of certain 2020 releases that were made
available on premium video on demand, including Trolls World Tour
and The King of Staten Island, as well as the timing of when
content was made available under licensing agreements, including
transactions with Peacock in the second quarter of 2020. Adjusted
EBITDA increased 24.8% to $228 million in the second quarter of
2020, reflecting lower revenue that was more than offset by lower
operating costs. The decrease in operating costs was primarily
driven by lower advertising, marketing and promotion expenses due
to lower spending on current period releases as a result of
COVID-19.
For the six months ended June 30, 2020, revenue from the Filmed
Entertainment segment decreased 20.5% to $2.6 billion compared to
2019, primarily reflecting lower theatrical revenue and other
revenue. Adjusted EBITDA decreased 38.8% to $334 million compared
to 2019, reflecting lower revenue, partially offset by lower
operating costs.
Theme Parks Theme Parks revenue decreased 94.1% to $87
million in the second quarter of 2020, primarily due to the
temporary closures of our theme parks as a result of COVID-19.
Universal Orlando Resort and Universal Studios Japan reopened with
limited capacity in June, while Universal Studios Hollywood remains
closed. Theme Parks Adjusted EBITDA loss was $399 million in the
second quarter of 2020, reflecting lower revenue, partially offset
by lower operating costs.
For the six months ended June 30, 2020, revenue from the Theme
Parks segment decreased 65.1% to $956 million compared to 2019,
primarily due to the temporary closures of Universal Studios Japan
in late February and Universal Orlando Resort and Universal Studios
Hollywood in mid-March as a result of COVID-19. Theme Parks
Adjusted EBITDA loss was $323 million, reflecting lower revenue,
partially offset by lower operating costs.
Headquarters, Other and Eliminations NBCUniversal
Headquarters, Other and Eliminations include overhead and
eliminations among the NBCUniversal businesses. For the quarter
ended June 30, 2020, NBCUniversal Headquarters, Other and
Eliminations Adjusted EBITDA loss was $75 million, compared to a
loss of $184 million in the second quarter of 2019.
For the six months ended June 30, 2020, NBCUniversal
Headquarters, Other and Eliminations Adjusted EBITDA loss was $259
million compared to a loss of $358 million in 2019.
Sky
($ in millions)
2nd
Quarter
Year to
Date
2020
2019
Change
Constant Currency Change5
2020
2019
Change
Constant Currency Change5
Sky Revenue
Direct-to-Consumer
$3,524
$3,889
(9.4
%)
(6.7
%)
$7,203
$7,723
(6.7
%)
(4.3
%)
Content
234
376
(37.7
%)
(35.7
%)
559
746
(25.1
%)
(23.3
%)
Advertising
321
563
(43.0
%)
(41.2
%)
834
1,156
(27.9
%)
(26.1
%)
Sky Revenue
$4,079
$4,828
(15.5
%)
(12.9
%)
$8,596
$9,625
(10.7
%)
(8.4
%)
Sky Operating Costs and
Expenses
$3,330
$4,056
(17.9
%)
(15.5
%)
$7,296
$8,190
(10.9
%)
(8.6
%)
Sky Adjusted EBITDA
$749
$772
(2.9
%)
0.2
%
$1,300
$1,435
(9.4
%)
(7.2
%)
Adjusted EBITDA Margin
18.4%
16.0%
15.1%
14.9%
Revenue for Sky decreased 15.5% to $4.1 billion in the
second quarter of 2020. Excluding the impact of currency, revenue
decreased 12.9%, driven by lower direct-to-consumer revenue,
advertising revenue and content revenue. Direct-to-consumer revenue
decreased 6.7% to $3.5 billion, primarily reflecting a decrease in
average revenue per customer relationship, driven by the impacts of
COVID-19, which resulted in lower sports subscription revenues, as
well as decreases in customers receiving our services. Advertising
revenue decreased 41.2% to $321 million, primarily due to overall
market weakness, which was worsened by COVID-19, as well as an
unfavorable impact from a change in legislation related to gambling
advertisements in the UK and Italy. Content revenue decreased 35.7%
to $234 million, due to lower revenue from sports programming as a
result of the postponement of sporting events due to COVID-19.
For the six months ended June 30, 2020, Sky revenue decreased
10.7% to $8.6 billion compared to 2019. Excluding the impact of
currency, revenue decreased 8.4%, reflecting lower
direct-to-consumer, advertising and content revenue.
Total Customer Relationships decreased by 214,000 to 23.7
million in the second quarter of 2020, reflecting the postponement
of sporting events and the suspension of certain sales channels due
to COVID-19.
(in thousands)
Customers
Net
Additions
2Q20
2Q19
2Q20
2Q19
Total Customer Relationships
23,716
24,016
(214
)
304
Adjusted EBITDA for Sky decreased 2.9% to $749 million in
the second quarter of 2020. Excluding the impact of currency,
Adjusted EBITDA was consistent with the prior year period,
reflecting lower revenue, offset by lower operating costs. The
decrease in operating costs was primarily driven by lower
programming and production costs reflecting the postponement of
sporting events due to COVID-19.
For the six months ended June 30, 2020, Sky Adjusted EBITDA
decreased 9.4% to $1.3 billion compared to 2019. Excluding the
impact of currency, Adjusted EBITDA decreased 7.2%.
Corporate, Other and Eliminations
Corporate and Other Corporate and Other primarily relates
to corporate operations, Comcast Spectacor and Peacock. Revenue for
the quarter ended June 30, 2020 was $46 million, a decrease of $10
million compared to 2019. Corporate and Other Adjusted EBITDA loss
was $506 million, an increase of $293 million compared to 2019, due
to certain costs incurred in the second quarter of 2020 in response
to COVID-19, including severance and restructuring charges related
to our NBCUniversal segments, which are presented in Corporate and
Other, and costs associated with Peacock.
For the six months ended June 30, 2020, Corporate and Other
revenue was $166 million, relatively flat compared to 2019.
Corporate and Other Adjusted EBITDA loss was $758 million, an
increase of $358 million compared to 2019, primarily driven by
severance and restructuring costs, and costs associated with
Peacock.
Eliminations Eliminations reflects the accounting for
transactions between Cable Communications, NBCUniversal, Sky and
Corporate and Other. Revenue eliminations for the quarter ended
June 30, 2020 were $962 million compared to $682 million in 2019,
and Adjusted EBITDA eliminations were $130 million compared to $21
million in 2019. The increases were primarily driven by the
licensing of content between our NBCUniversal segments and
Peacock.
For the six months ended June 30, 2020, revenue eliminations
were $1.6 billion compared to $1.3 billion in 2019, and Adjusted
EBITDA eliminations were $122 million compared to $9 million in
2019. The increases were primarily driven by the licensing of
content between our NBCUniversal segments and Peacock.
Notes:
- We define Adjusted Net Income and Adjusted EPS as net income
attributable to Comcast Corporation and diluted earnings per common
share attributable to Comcast Corporation shareholders,
respectively, adjusted to exclude the effects of the amortization
of acquisition-related intangible assets, investments that
investors may want to evaluate separately (such as based on fair
value) and the impact of certain events, gains, losses or other
charges that affect period-over-period comparisons. See Table 5 for
reconciliations of non-GAAP financial measures.
- We define Adjusted EBITDA as net income attributable to Comcast
Corporation before net income (loss) attributable to noncontrolling
interests and redeemable subsidiary preferred stock, income tax
expense, investment and other income (loss), net, interest expense,
depreciation and amortization expense, and other operating gains
and losses (such as impairment charges related to fixed and
intangible assets and gains or losses on the sale of long-lived
assets), if any. From time to time, we may exclude from Adjusted
EBITDA the impact of certain events, gains, losses or other charges
(such as significant legal settlements) that affect the
period-to-period comparability of our operating performance. See
Table 4 for reconciliation of non-GAAP financial measure.
- All earnings per share amounts are presented on a diluted
basis.
- 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 and cash paid for intangible
assets. From time to time, we may exclude from Free Cash Flow the
impact of certain cash receipts or payments (such as significant
legal settlements) that affect period-to-period comparability. Cash
payments for acquisitions and construction of real estate
properties and the construction of Universal Beijing Resort are
presented separately in our Consolidated Statement of Cash Flows
and are therefore excluded from capital expenditures for Free Cash
Flow. See Table 4 for reconciliation of non-GAAP financial
measure.
- Sky constant currency growth rates are calculated by comparing
the current period results to the comparative period results in the
prior year adjusted to reflect the average exchange rates from the
current year period rather than the actual exchange rates in effect
during the respective prior year periods. See Table 6 for
reconciliation of Sky's constant currency growth. 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 30, 2020 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. Those parties
interested in participating via telephone should dial (800)
263-8495 with the conference ID number 5765399. A replay of the
call will be available starting at 12:00 p.m. ET on July 30, 2020,
on the Investor Relations website or by telephone. To access the
telephone replay, which will be available until Thursday, August 6,
2020 at midnight ET, please dial (855) 859-2056 and enter the
conference ID number 5765399.
From time to time, we post information that may be of interest
to investors on our website at www.cmcsa.com and on our corporate
website, www.comcastcorporation.com. To automatically receive
Comcast financial news by email, please visit www.cmcsa.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) is a global media and technology company with three primary
businesses: Comcast Cable, NBCUniversal, and Sky. Comcast Cable is
one of the United States’ largest high-speed internet, video, and
phone providers to residential customers under the Xfinity brand,
and also provides these services to businesses. It also provides
wireless and security and automation services to residential
customers under the Xfinity brand. NBCUniversal is global and
operates 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. Sky is one of Europe's leading media and entertainment
companies, connecting customers to a broad range of video content
through its pay television services. It also provides
communications services, including residential high-speed internet,
phone, and wireless services. Sky operates the Sky News broadcast
network and sports and entertainment networks, produces original
content, and has exclusive content rights. Visit
www.comcastcorporation.com for more information.
TABLE 1Condensed Consolidated Statement of Income
(Unaudited)
Three Months Ended
Six Months Ended
(in millions, except per share data)
June 30,
June 30,
2020
2019
2020
2019
Revenue
$23,715
$26,858
$50,324
$53,717
Costs and expenses
Programming and production
6,817
8,255
15,118
16,824
Other operating and administrative
7,646
8,086
15,900
15,986
Advertising, marketing and promotion
1,341
1,885
3,279
3,773
Depreciation
2,099
2,197
4,206
4,437
Amortization
1,165
1,079
2,322
2,159
19,068
21,502
40,825
43,179
Operating income
4,647
5,356
9,499
10,538
Interest expense
(1,112
)
(1,137
)
(2,324
)
(2,287
)
Investment and other income (loss),
net
Equity in net income (losses) of
investees, net
300
(202
)
(368
)
60
Realized and unrealized gains (losses) on
equity securities, net
5
194
(53
)
408
Other income (loss), net
115
(47
)
125
153
420
(55
)
(296
)
621
Income before income taxes
3,955
4,164
6,879
8,872
Income tax expense
(946
)
(961
)
(1,646
)
(2,037
)
Net income
3,009
3,203
5,233
6,835
Less: Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
21
78
98
157
Net income attributable to Comcast
Corporation
$2,988
$3,125
$5,135
$6,678
Diluted earnings per common share
attributable to Comcast Corporation shareholders
$0.65
$0.68
$1.11
$1.45
Diluted weighted-average number of common
shares
4,607
4,607
4,611
4,600
TABLE 2Consolidated Statement of Cash Flows (Unaudited)
Six Months Ended
(in millions)
June 30,
2020
2019
OPERATING ACTIVITIES
Net income
$5,233
$6,835
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
6,528
6,596
Share-based compensation
621
533
Noncash interest expense (income), net
352
168
Net (gain) loss on investment activity and
other
399
(367
)
Deferred income taxes
(84
)
466
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Current and noncurrent receivables,
net
900
295
Film and television costs, net
573
970
Accounts payable and accrued expenses
related to trade creditors
(879
)
(815
)
Other operating assets and liabilities
824
(410
)
Net cash provided by operating
activities
14,467
14,271
INVESTING ACTIVITIES
Capital expenditures
(3,957
)
(4,355
)
Cash paid for intangible assets
(1,219
)
(1,078
)
Construction of Universal Beijing
Resort
(708
)
(450
)
Acquisitions, net of cash acquired
(198
)
(114
)
Proceeds from sales of businesses and
investments
2,042
150
Purchases of investments
(471
)
(1,605
)
Other
33
38
Net cash provided by (used in) investing
activities
(4,478
)
(7,414
)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term
borrowings, net
—
(801
)
Proceeds from borrowings
13,612
363
Repurchases and repayments of debt
(10,712
)
(4,156
)
Repurchases of common stock under employee
plans
(269
)
(350
)
Dividends paid
(2,028
)
(1,823
)
Other
(2,128
)
35
Net cash provided by (used in) financing
activities
(1,525
)
(6,732
)
Impact of foreign currency on cash, cash
equivalents and restricted cash
(77
)
(15
)
Increase (decrease) in cash, cash
equivalents and restricted cash
8,387
110
Cash, cash equivalents and restricted
cash, beginning of period
5,589
3,909
Cash, cash equivalents and restricted
cash, end of period
$13,976
$4,019
TABLE 3Condensed Consolidated Balance Sheet (Unaudited)
(in millions)
June 30, 2020
December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents
$13,935
$5,500
Receivables, net
10,227
11,292
Programming rights
—
3,877
Other current assets
3,323
4,723
Total current assets
27,485
25,392
Film and television costs
12,213
8,933
Investments
6,845
6,989
Investment securing collateralized
obligation
533
694
Property and equipment, net
48,985
48,322
Goodwill
67,354
68,725
Franchise rights
59,365
59,365
Other intangible assets, net
34,186
36,128
Other noncurrent assets, net
9,012
8,866
$265,978
$263,414
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses
related to trade creditors
$10,426
$10,826
Accrued participations and residuals
1,800
1,730
Deferred revenue
2,403
2,768
Accrued expenses and other current
liabilities
9,770
10,516
Current portion of long-term debt
4,046
4,452
Total current liabilities
28,445
30,292
Long-term debt, less current portion
100,764
97,765
Collateralized obligation
5,167
5,166
Deferred income taxes
27,947
28,180
Other noncurrent liabilities
17,608
16,765
Redeemable noncontrolling interests and
redeemable subsidiary preferred stock
1,256
1,372
Equity
Comcast Corporation shareholders'
equity
83,614
82,726
Noncontrolling interests
1,177
1,148
Total equity
84,791
83,874
$265,978
$263,414
TABLE 4 Reconciliation from Net Income
Attributable to Comcast Corporation to Adjusted EBITDA
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions)
2020
2019
2020
2019
Net income attributable to Comcast
Corporation
$2,988
$3,125
$5,135
$6,678
Net income (loss) attributable to
noncontrolling interests and redeemable subsidiary preferred
stock
21
78
98
157
Income tax expense
946
961
1,646
2,037
Interest expense
1,112
1,137
2,324
2,287
Investment and other (income) loss,
net
(420
)
55
296
(621
)
Depreciation and amortization
3,264
3,276
6,528
6,596
Adjustments (1)
16
84
30
135
Adjusted EBITDA
$7,927
$8,716
$16,057
$17,269
Reconciliation from Net Cash Provided
by Operating Activities to Free Cash Flow (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions)
2020
2019
2020
2019
Net cash provided by operating
activities
$8,643
$7,040
$14,467
$14,271
Capital expenditures
(2,076
)
(2,263
)
(3,957
)
(4,355
)
Cash paid for capitalized software and
other intangible assets
(601
)
(531
)
(1,219
)
(1,078
)
Total Free Cash Flow
$5,966
$4,246
$9,291
$8,838
Alternate Presentation of Free Cash
Flow (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions)
2020
2019
2020
2019
Adjusted EBITDA
$7,927
$8,716
$16,057
$17,269
Capital expenditures
(2,076
)
(2,263
)
(3,957
)
(4,355
)
Cash paid for capitalized software and
other intangible assets
(601
)
(531
)
(1,219
)
(1,078
)
Cash interest expense
(945
)
(1,141
)
(1,936
)
(2,111
)
Cash taxes
(52
)
(1,445
)
(333
)
(1,634
)
Changes in operating assets and
liabilities
1,378
630
(15
)
95
Noncash share-based compensation
323
288
621
533
Other (2)
12
(8
)
73
119
Total Free Cash Flow
$5,966
$4,246
$9,291
$8,838
(1)
2nd quarter and year to date 2020 Adjusted
EBITDA exclude $16 million and $30 million of other operating and
administrative expense, respectively, related to the Sky
transaction. 2nd quarter and year to date 2019 Adjusted EBITDA
exclude $84 million and $135 million of other operating and
administrative expense, respectively, related to the Sky
transaction.
(2)
2nd quarter and year to date 2020 include
decreases of $16 million and $30 million of costs related to the
Sky transaction, respectively, as these amounts are excluded from
Adjusted EBITDA. 2nd quarter and year to date 2019 include
decreases of $84 million and $135 million of costs related to the
Sky transaction, respectively, as these amounts are excluded from
Adjusted EBITDA.
Note: Minor differences may exist due to
rounding.
TABLE 5 Reconciliations of Adjusted Net
Income and Adjusted EPS (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(in millions, except per share data)
$
EPS
$
EPS
$
EPS
$
EPS
Net income attributable to Comcast
Corporation and diluted earnings per share attributable to Comcast
Corporation shareholders
$2,988
$0.65
$3,125
$0.68
$5,135
$1.11
$6,678
$1.45
Change
(4.4
%)
(4.4
%)
(23.1
%)
(23.4
%)
Amortization of acquisition-related
intangible assets (1)
449
0.10
395
0.08
907
0.20
795
0.17
Investments (2)
(280)
(0.06)
(20)
—
264
0.06
(458)
(0.09
)
Items affecting period-over-period
comparability:
Loss on early redemption of debt (3)
—
—
—
—
106
0.02
—
—
Costs related to Sky transaction (4)
13
—
68
0.01
24
0.01
109
0.02
Purchase accounting adjustments (5)
—
—
—
—
—
—
39
0.01
Gains and losses related to businesses and
investments (6)
—
—
42
0.01
—
—
(76)
(0.02
)
Adjusted Net income and Adjusted
EPS
$3,170
$0.69
$3,610
$0.78
$6,436
$1.40
$7,087
$1.54
Change
(12.2
%)
(11.5
%)
(9.2
%)
(9.1
%)
(1)
Acquisition-related intangible assets are
recognized as a result of the application of Accounting Standards
Codification Topic 805, Business Combinations (such as customer
relationships), and their amortization is significantly affected by
the size and timing of our acquisitions. Amortization of intangible
assets not resulting from business combinations (such as software
and acquired intellectual property rights used in our theme parks)
is included in Adjusted Net Income and Adjusted EPS.
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Amortization of acquisition-related
intangible assets before income taxes
$565
$499
$1,140
$1,003
Amortization of acquisition-related
intangible assets, net of tax
$449
$395
$907
$795
(2)
Adjustments for investments include
realized and unrealized (gains) losses on equity securities, net
(as stated in Table 1), as well as the equity in net (income)
losses of investees, net, for our investments in Atairos and Hulu
(following May 2019 transaction).
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Realized and unrealized (gains) losses on equity
securities, net
($5
)
($194
)
$53
($408
)
Equity in net (income) losses of investees, net
(367
)
166
296
(208
)
Investments before income taxes
(372
)
(28
)
349
(616
)
Investments, net of tax
($280
)
($20
)
$264
($458
)
(3)
2020 year to date net income attributable
to Comcast Corporation includes $140 million of interest expense,
$106 million net of tax, resulting from the early redemption of
debt.
(4)
2nd quarter and year to date 2020 net
income attributable to Comcast Corporation includes $16 million and
$30 million of operating costs and expenses, $13 million and $24
million net of tax, respectively, related to the Sky transaction,
primarily relating to the replacement of share-based compensation
awards and costs related to integration activities. 2nd quarter and
year to date 2019 net income attributable to Comcast Corporation
includes $84 million and $135 million of operating costs and
expenses, $68 million and $109 million net of tax, respectively,
related to the Sky transaction, primarily relating to the
replacement of share-based compensation awards and costs related to
integration activities.
(5)
2019 year to date net income attributable
to Comcast Corporation includes $53 million of depreciation and
amortization expense, $39 million net of tax, related to the 4th
quarter 2018, as a result of adjustments to the purchase price
allocation of Sky, primarily related to intangible assets and
property and equipment.
(6)
2nd quarter 2019 net income attributable
to Comcast Corporation includes $56 million of other losses, $42
million net of tax, related to an impairment of an equity method
investment. 2019 year to date net income attributable to Comcast
Corporation also includes $159 million of other income, $118
million net of tax, related to our investment in Hulu.
Note: Minor differences may exist due to
rounding.
TABLE 6Reconciliation of Sky Constant Currency Growth
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions)
2020
2019(1)
Change
2020
2019(1)
Change
Direct-to-Consumer
$3,524
$3,774
(6.7
%)
$7,203
$7,525
(4.3
%)
Content
234
364
(35.7
%)
559
727
(23.3
%)
Advertising
321
547
(41.2
%)
834
1,127
(26.1
%)
Revenue
$4,079
$4,685
(12.9
%)
$8,596
$9,379
(8.4
%)
Operating costs and expenses
$3,330
$3,938
(15.5
%)
$7,296
$7,980
(8.6
%)
Adjusted EBITDA
$749
$747
0.2
%
$1,300
$1,399
(7.2
%)
(1)
2019 results for entities reporting in
currencies other than United States dollars are converted into
United States dollars using the average exchange rates from the
current period rather than the actual exchange rates in effect
during the respective periods.
Note: Minor differences may exist due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005461/en/
Investor Contacts: Marci Ryvicker (215) 286-4781 Jane
Kearns (215) 286-4794 Marc Kaplan (215) 286-6527 Press
Contacts: Jennifer Khoury (215) 286-7408 John Demming (215)
286-8011
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