UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 28, 2010

Comcast Corporation

(Exact Name of Registrant

as Specified in its Charter)

Pennsylvania

(State or Other Jurisdiction of Incorporation)

 

001-32871		27-0000798
(Commission File Number)		(IRS Employer Identification No.)
One Comcast Center Philadelphia, PA		19103-2838
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (215) 286-1700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

£

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

£

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

£

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

£

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02. Results of Operations and Financial Condition

On July 28, 2010, Comcast Corporation (“Comcast”) issued a press release reporting the results of its operations for the three and six months ended June 30, 2010. The press release is attached hereto as Exhibit 99.1. Exhibit 99.2 sets forth the reasons Comcast believes that presentation of the non-GAAP financial measures contained in the press release provides useful information to investors regarding Comcast’s financial condition and results of operations. To the extent material, Exhibit 99.2 also discloses the additional purposes, if any, for which Comcast’s management uses these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures is included in the press release itself. Comcast does not intend for this Item 2.02 or Exhibit 99.1 or Exhibit 99.2 to be treated as “filed” under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended.

Item 9.01. Exhibits

 

Exhibit Number		Description
99.1		Comcast Corporation press release dated July 28, 2010.
99.2		Explanation of Non-GAAP and Other Financial Measures.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		COMCAST CORPORATION
Date: July 28, 2010		By:		/s/ Lawrence J. Salva
				Lawrence J. Salva Senior Vice President, Chief Accounting Officer                  and Controller (Principal Accounting Officer)

Exhibit 99.1

 

PRESS RELEASE

 

 

Investor Contacts:						Press Contacts:
Marlene S. Dooner Jane B. Kearns Michael A. Kelman		(215) 286-7392 (215) 286-4794 (215) 286-3035				D’Arcy Rudnay John Demming		(215) 286-8582 (215) 286-8011

COMCAST REPORTS SECOND QUARTER 2010 RESULTS

Revenue Increased 6% and Operating Income Increased 11% Reflecting

Focus on Profitable Growth

Operating Cash Flow up 6% and Free Cash Flow up 16%

Returned $567 Million to Shareholders through Dividends

and Share Repurchases

Philadelphia, PA – July 28, 2010 …Comcast Corporation (NASDAQ: CMCSA, CMCSK) today reported results for the quarter ended June 30, 2010.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, “We delivered healthy operating and financial results in the second quarter, reflecting overall customer growth, double-digit increases in high-speed internet and voice revenue, an improving advertising market and continued momentum in Business Services. We are very focused on profitable growth. At the same time, we continue to make significant progress deploying All-Digital and DOCSIS 3.0 to enhance our superior products, strengthen our competitive position and build long term value for our shareholders.”

Consolidated Financial Results

Revenue increased 6.1% in the second quarter of 2010 to $9.5 billion, while Operating Cash Flow increased 5.7% to $3.7 billion and Operating Income increased 10.9% to $2.1 billion. This growth was due to solid operating results in the Cable and Programming segments, partially offset by $22 million of NBC Universal-related transaction costs. Excluding these costs, Operating Cash Flow grew 6.3%.

For the six months ended June 30, 2010, revenue increased 4.9% to $18.7 billion, Operating Cash Flow increased 4.6% to $7.3 billion, and Operating Income increased 8.9% to $4.0 billion, all compared to the same time period in 2009. Excluding $36 million of NBC Universal-related transaction costs, Operating Cash Flow grew 5.1%.

 

		($ in millions)		2nd Quarter								Year to Date
				2009			2010			Growth		2009			2010			Growth
		Revenue
		Cable		$	8,518		$	8,949		5.1%		$	16,901		$	17,626		4.3%
		Programming			384			454		18.1%			745			839		12.6%
		Corporate & Other			76			122		62.8%			198			262		32.8%
		Total Consolidated Revenue		$	8,978		$	9,525		6.1%		$	17,844		$	18,727		4.9%
		Operating Cash Flow (OCF)
		Cable		$	3,499		$	3,698		5.7%		$	6,903		$	7,240		4.9%
		Programming			113			152		34.4%			225			273		21.5%
		Corporate & Other			(77)			(113)		(47.2%)			(149)			(211)		(42.5%)
		Total Consolidated OCF		$	3,535		$	3,737		5.7%		$	6,979		$	7,302		4.6%

For additional detail on revenue and operating expenses, customer metrics, and capital expenditures, please refer to the trending schedules on Comcast’s Investor Relations website at www.cmcsa.com or www.cmcsk.com.

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Earnings per Share¹ (EPS) for the quarter ended June 30, 2010 was $0.31, a 6.1% decrease from the $0.33 reported in the second quarter of 2009, reflecting growth in Consolidated Operating Cash Flow, offset primarily by costs related to the NBC Universal transaction and income tax benefits included in last year’s results. Excluding these items, second quarter 2010 EPS would have grown 13.8% over the comparable period in 2009.

•

NBC Universal transaction costs: In addition to the $22 million of operating expenses, second quarter 2010 EPS includes $37 million of financing and other costs related to the transaction, resulting in total second quarter transaction costs of $59 million, or $36 million net of tax ($0.02 per share).

•

Income tax benefits: Second quarter 2009 EPS includes the recognition of income tax benefits of $137 million ($0.04 per share).

EPS for the six months ended June 30, 2010 was $0.62, an increase of 3.3% compared to the prior year. Excluding transaction-related costs and income tax benefits (see below), EPS for the six months ended June 30, 2010 would have grown 18.5% over the comparable period in 2009.

•

NBC Universal transaction costs: In addition to the $36 million of operating expenses, year-to-date 2010 EPS includes $52 million of financing and other costs related to the transaction, resulting in total year-to-date transaction costs of $88 million, or $53 million net of tax ($0.02 per share).

•

Income tax benefits: Year-to-date 2009 EPS includes the recognition of income tax benefits of $185 million ($0.06 per share).

Capital Expenditures for the second quarter of 2010 increased 1.5% to $1.1 billion, or 11.9% of total revenue, reflecting increased investments in Comcast Business Services and product enhancement initiatives. For the six months ended June 30, 2010, capital expenditures decreased 9.6% to $2.1 billion, or 11.0% of total revenue.

Free Cash Flow (excluding any impact from the Economic Stimulus packages) increased 15.8% to $1.4 billion in the second quarter of 2010 from $1.2 billion in the second quarter of 2009. Free Cash Flow (FCF) per Share increased 20.0% to $0.48 per share. The increase in Free Cash Flow reflects growth in Consolidated Operating Cash Flow, partially offset by higher cash taxes and modestly higher capital expenditures. Free Cash Flow for the six months ended June 30, 2010 totaled $3.2 billion, a 27.8% increase as compared to $2.5 billion in 2009.

 

		($ in millions)		2nd Quarter								Year to Date
				2009			2010			Growth		2009			2010			Growth
		Net Cash Provided by Operating Activities		$	2,601		$	2,429		(6.6%)		$	5,113		$	5,332		4.3%
		Capital Expenditures			(1,121)			(1,138)		1.5%			(2,281)			(2,063)		(9.6%)
		Cash Paid for Capitalized Software			(83)			(95)		14.5%			(188)			(175)		(6.9%)
		Cash Paid for Other Intangible Assets			(25)			(25)		0.0%			(53)			(62)		17.0%
		Adjustments for Payment of Tax on Nonoperating Items			3			5		66.7%			150			31		(79.3%)
		FCF (Including Economic Stimulus Packages)		$	1,375		$	1,176		(14.5%)		$	2,741		$	3,063		11.7%
		Impact from Economic Stimulus Packages			(205)			179		NM			(205)			179		NM
		Free Cash Flow		$	1,170		$	1,355		15.8%		$	2,536		$	3,242		27.8%

Note: The definition of Free Cash Flow remains unchanged and specifically excludes any impact from the 2008 or 2009 Economic Stimulus packages.

Cable Segment Results

For the quarter ended June 30, 2010, Cable segment revenue increased 5.1% to $8.9 billion compared to $8.5 billion in the second quarter of 2009. This increase reflects double-digit growth in High-Speed Internet (up 10%), Comcast Digital Voice (up 14%), Comcast Business Services (up 54%) and advertising revenue (up 23%). Reflecting an increasing number of residential customers taking multiple products, rate increases, and a higher contribution from Comcast Business Services, the monthly average total revenue per video customer increased 8.0% to $127.78.

For the six months ended June 30, 2010, revenue from the Cable segment increased 4.3% to $17.6 billion compared to $16.9 billion in 2009.

 

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Operating Cash Flow for the second quarter of 2010 increased 5.7% to $3.7 billion compared to $3.5 billion in the second quarter of 2009. Operating Cash Flow margin was 41.3% in the second quarter of 2010 compared to 41.1% in the second quarter of 2009. These results reflect lower technical labor and customer service expenses, partially offset by increases in video programming and marketing expenses.

For the six months ended June 30, 2010, Operating Cash Flow from the Cable segment increased 4.9% to $7.2 billion compared to $6.9 billion in 2009. Year-to-date Operating Cash Flow margin was 41.1%, a slight increase from the 40.8% reported in the first six months of 2009.

Customers. As of June 30, 2010, Comcast’s Video, High-Speed Internet and Comcast Digital Voice customers totaled 47.8 million, an increase of 3.4% over the prior year.

 

		(in thousands)		Customers							Net Adds
				2Q09		2Q10		Growth			2Q10		YTD
		Video Customers		23,891		23,212		(2.8%)			(265)		(347)
		High-Speed Internet Customers		15,322		16,448		7.3%			118		517
		Voice Customers		7,004		8,125		16.0%			230		503
		Combined Video, HSI and Voice Customers		46,217		47,785		3.4%			83		673
		Digital Video Customers		17,542		19,237		9.7%			394		821
		Total Revenue Generating Units		63,760		67,022		5.1%			477		1,494

Programming Segment Results

The Programming segment reported second quarter 2010 revenue of $454 million, an 18.1% increase, while Operating Cash Flow increased 34.4% to $152 million. These results reflect the impact of a strong advertising market across all networks and ratings strength at E!, VERSUS and G4.

For the six months ended June 30, 2010, Programming segment revenue increased 12.6% to $839 million compared to the same time period in 2009. Operating Cash Flow increased 21.5% to $273 million compared to the same period last year.

Corporate and Other

Corporate and Other includes corporate overhead, Comcast Interactive Media (CIM), Comcast-Spectacor, and other operations and eliminations between Comcast’s businesses. For the quarter ended June 30, 2010, Corporate and Other reported revenue of $122 million, a 62.8% increase over the $76 million reported in the second quarter of 2009, reflecting additional NHL playoff games at Comcast-Spectacor and strong advertising revenue growth at CIM. The Operating Cash Flow loss for the second quarter of 2010 was $113 million compared to a loss of $77 million for the same time period in 2009. This quarter’s Operating Cash Flow loss includes approximately $22 million of expenses related to the NBC Universal transaction.

For the six months ended June 30, 2010, Corporate and Other revenue increased 32.8% to $262 million from the $198 million reported in the first six months of 2009. The Operating Cash Flow loss was $211 million compared to a loss of $149 million for the same time period in 2009. Year-to-date Operating Cash Flow loss includes $36 million of expenses related to the NBC Universal transaction.

Share Repurchase and Dividend

During the second quarter of 2010, Comcast repurchased 17.3 million of its common shares for $300 million. Year-to-date, Comcast has repurchased 36.4 million of its common shares for $600 million. As of June 30, 2010, Comcast had approximately $2.7 billion of availability remaining under its share repurchase authorization.

During the second quarter of 2010, Comcast paid cash dividends totaling $267 million.

 

3

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Notes:

 

1	Earnings per share amounts are presented on a diluted basis.

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

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Conference Call Information

Comcast Corporation will host a conference call with the financial community today, July 28, 2010 at 8:30 a.m. Eastern Time (ET). The conference call will be broadcast live on Comcast’s 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 82686142. A replay of the call will be available starting at 12:30 p.m. ET on July 28, 2010, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Monday, August 2, 2010 at midnight ET, please dial (800) 642-1687 and enter passcode number 82686142. To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to email alerts.

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Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual events or our actual results to differ materially from those expressed in any such forward-looking statements. Readers are directed to Comcast’s periodic and other reports filed with the Securities and Exchange Commission (SEC) for a description of such risks and uncertainties. We undertake no obligation to update any forward-looking statements.

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Non-GAAP Financial Measures

In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP). Certain of these measures are considered “non-GAAP financial measures” under the SEC regulations; those rules require the supplemental explanations and reconciliations that are in Comcast’s Form 8-K (Quarterly Earnings Release) furnished to the SEC.

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About Comcast Corporation

Comcast Corporation (Nasdaq: CMCSA, CMCSK) (www.comcast.com) is one of the nation’s leading providers of entertainment, information and communication products and services. With 23.2 million video customers, 16.4 million high-speed Internet customers, and 8.1 million Comcast Digital Voice customers, Comcast is principally involved in the development, management and operation of cable systems and in the delivery of programming content.

Comcast’s content networks and investments include E! Entertainment Television, Style Network, Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV One, 11 regional sports networks operated by Comcast Sports Group and Comcast Interactive Media, which develops and operates Comcast’s Internet businesses, including Comcast.net (www.comcast.net). Comcast also has a majority ownership in Comcast-Spectacor, which owns two professional sports teams, the Philadelphia 76ers NBA basketball team and the Philadelphia Flyers NHL hockey team, and a large, multipurpose arena in Philadelphia, the Wachovia Center, and manages other facilities for sporting events, concerts and other events.

 

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TABLE 1 Condensed Consolidated Statement of Operations (Unaudited)

 

 

		(in millions, except per share data)		Three Months Ended June 30,								Six Months Ended June 30,
				2009				2010				2009				2010
		Revenue		$	8,978			$	9,525			$	17,844			$	18,727
		Operating expenses			3,581				3,827				7,173				7,559
		Selling, general and administrative expenses			1,862				1,961				3,692				3,866
					5,443				5,788				10,865				11,425
		Operating cash flow			3,535				3,737				6,979				7,302
		Depreciation expense			1,406				1,411				2,786				2,790
		Amortization expense			254				248				507				499
					1,660				1,659				3,293				3,289
		Operating income			1,875				2,078				3,686				4,013
		Other income (expense)
		Interest expense			(551	)			(543	)			(1,121	)			(1,067	)
		Investment income (loss), net			57				-				70				101
		Equity in net income (losses) of affiliates, net			(13	)			(26	)			(27	)			(58	)
		Other income (expense)			12				(35	)			11				(45	)
					(495	)			(604	)			(1,067	)			(1,069	)
		Income before income taxes			1,380				1,474				2,619				2,944
		Income tax expense			(424	)			(588	)			(885	)			(1,179	)
		Net income from consolidated operations			956				886				1,734				1,765
		Net (income) loss attributable to noncontrolling interests			11				(2	)			5				(15	)
		Net income attributable to Comcast Corporation		$	967			$	884			$	1,739			$	1,750
		Diluted earnings per common share attributable to Comcast Corporation shareholders		$	0.33			$	0.31			$	0.60			$	0.62
		Dividends declared per common share attributable to Comcast Corporation shareholders		$	0.0675			$	0.0945			$	0.1350			$	0.1890
		Diluted weighted-average number of common shares			2,891				2,822				2,893				2,830

 

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TABLE 2 Condensed Consolidated Balance Sheet (Unaudited)

 

 

		(in millions)		December 31,         2009			June 30,         2010
		ASSETS
		Current Assets
		Cash and cash equivalents		$	671		$	4,028
		Investments			50			53
		Accounts receivable, net			1,711			1,845
		Other current assets			791			665
		Total current assets			3,223			6,591
		Investments			5,947			6,098
		Property and equipment, net			23,855			23,217
		Franchise rights			59,452			59,452
		Goodwill			14,933			15,028
		Other intangible assets, net			4,105			3,873
		Other noncurrent assets, net			1,218			1,368
				$	112,733		$	115,627
		LIABILITIES AND EQUITY
		Current Liabilities
		Accounts payable and accrued expenses related to trade creditors		$	3,094		$	3,126
		Accrued expenses and other current liabilities			2,999			3,256
		Current portion of long-term debt			1,156			2,308
		Total current liabilities			7,249			8,690
		Long-term debt, less current portion			27,940			28,684
		Deferred income taxes			27,800			27,575
		Other noncurrent liabilities			6,767			7,009
		Redeemable noncontrolling interests			166			145
		Equity
		Comcast Corporation shareholders’ equity			42,721			43,437
		Noncontrolling interests			90			87
		Total Equity			42,811			43,524
				$	112,733		$	115,627

 

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TABLE 3 Consolidated Statement of Cash Flows (Unaudited)

 

 

		(in millions)			Six Months Ended June 30,
					2009				2010
		OPERATING ACTIVITIES
		Net income from consolidated operations		$	1,734			$	1,765
		Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:
		Depreciation			2,786				2,790
		Amortization			507				499
		Share-based compensation			121				153
		Noncash interest expense (income), net			81				69
		Equity in net (income) losses of affiliates, net			27				58
		(Gains) losses on investments and noncash other (income) expense, net			(23	)			(11	)
		Deferred income taxes			394				(25	)
		Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
		Change in accounts receivable, net			(49	)			(121	)
		Change in accounts payable and accrued expenses related to trade creditors			(112	)			2
		Change in other operating assets and liabilities			(353	)			153
		Net cash provided by operating activities			5,113				5,332
		INVESTING ACTIVITIES
		Capital expenditures			(2,281	)			(2,063	)
		Cash paid for software and other intangible assets			(241	)			(237	)
		Acquisitions, net of cash acquired			(27	)			(183	)
		Proceeds from sales of investments			16				15
		Purchases of investments			(67	)			(32	)
		Other			30				(55	)
		Net cash provided by (used in) investing activities			(2,570	)			(2,555	)
		FINANCING ACTIVITIES
		Proceeds from borrowings			2,522				2,421
		Repurchases and repayments of debt			(1,767	)			(638	)
		Repurchases of common stock			(108	)			(600	)
		Dividends paid			(375	)			(535	)
		Other			(21	)			(68	)
		Net cash provided by (used in) financing activities			251				580
		Increase (decrease) in cash and cash equivalents			2,794				3,357
		Cash and cash equivalents, beginning of period			1,195				671
		Cash and cash equivalents, end of period		$	3,989			$	4,028

 

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TABLE 4 Supplemental Information Alternate Presentation of Net Cash Provided by Operating Activities (Unaudited)

 

 

		(in millions)		Three Months Ended June 30,								Six Months Ended June 30,
				2009				2010				2009				2010
		Operating income		$	1,875			$	2,078			$	3,686			$	4,013
		Depreciation and amortization			1,660				1,659				3,293				3,289
		Operating income before depreciation and amortization			3,535				3,737				6,979				7,302
		Noncash share-based compensation expense			67				71				121				153
		Changes in operating assets and liabilities			(48	)			37				(236	)			(70	)
		Cash basis operating income			3,554				3,845				6,864				7,385
		Payments of interest			(399	)			(354	)			(1,063	)			(969	)
		Payments of income taxes			(585	)			(1,080	)			(746	)			(1,126	)
		Proceeds from interest, dividends and other nonoperating items			31				21				58				45
		Excess tax benefit under share-based compensation presented in financing activities			-				(3	)			-				(3	)
		Net Cash Provided by Operating Activities		$	2,601			$	2,429			$	5,113			$	5,332

Reconciliation of Operating Cash Flow excluding Operating Expenses related to the NBC Universal Transaction (Unaudited)

 

 

		(in millions)		Three Months Ended June 30,										Six Months Ended June 30,
				2009			2010			Growth %		Margin %		2009			2010			Growth %		Margin %
		Operating Cash Flow			3,535			3,737		5.7%		39.2%			6,979			7,302		4.6%		39.0%
		Operating Expenses related to the NBC Universal Transaction			-			22							-			36
		Operating Cash Flow excluding Operating Expenses related to the NBC Universal Transaction		$	3,535		$	3,759		6.3%		39.5%		$	6,979		$	7,338		5.1%		39.2%

Reconciliation of EPS Excluding Favorable Income Tax Benefits and the Costs of the NBC Universal Transaction (Unaudited)

 

 

				Three Months Ended June 30,																		Six Months Ended June 30,
		(in millions, except per share data)		2009								2010										2009								2010
				$				EPS (1)				$				EPS (1)						$				EPS (1)				$			EPS (1)
		Net Income attributable to Comcast Corporation		$	967			$	0.33			$	884			$	0.31					$	1,739			$	0.60			$	1,750		$	0.62
		Growth %											(8.6%	)			(6.1%	)													0.6%			3.3%
		Favorable income tax benefits (2)			(137	)			(0.04	)			-				-						(185	)			(0.06	)			-			-
		Costs related to the NBC Universal Transaction, net of tax (3)			-				-				36				0.02						-				-				53			0.02
		Net Income attributable to Comcast Corporation (excluding favorable tax adjustments and costs related to the NBC Universal Transaction)		$	830			$	0.29			$	920			$	0.33					$	1,554			$	0.54			$	1,803		$	0.64
		Growth %											10.8%				13.8%														16.0%			18.5%

 

(1)	Based on diluted weighted-average number of common shares for the respective periods as presented in Table 1.

 

(2)	2009 Net Income attributable to Comcast Corporation includes favorable income tax adjustments related to the settlement of uncertain tax positions and related interest.

 

(3)

2nd quarter 2010 Net Income attributable to Comcast Corporation includes $22 million of operating expense, $2 million of interest expense and $35 million of other expense ($59 million in total, $36 million net of tax) related to the NBC Universal Transaction. 2010 year to date Net Income attributable to Comcast Corporation includes $36 million of operating expense, $4 million of interest expense and $48 million of other expense ($88 million in total, $53 million net of tax) related to the NBC Universal Transaction.

Note: Minor differences may exist due to rounding.

 

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Exhibit 99.2 – Explanation of Non-GAAP and Other Financial Measures

This Exhibit 99.2 to the accompanying Current Report on Form 8-K for Comcast Corporation (the “Company”, “we”, “us” or “our”) sets forth the reasons we believe that presentation of financial measures not in accordance with generally accepted accounting principles in the United States (GAAP) contained in the earnings press release filed as Exhibit 99.1 to the Current Report on Form 8-K provides useful information to investors regarding Comcast’s financial condition and results of operations. To the extent material, this Exhibit also discloses the additional purposes, if any, for which Comcast’s management uses these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures is included in the earnings press release itself.

Operating Cash Flow is the primary basis used to measure the operational strength and performance of our businesses. Free Cash Flow and Unlevered Free Cash Flow are additional performance measures used as indicators of our ability to service and repay debt, make investments and return capital to investors, through stock repurchases and dividends. We also adjust certain historical data on a pro forma basis following certain 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. This measure eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of our businesses and from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital structure or investment activities. Our management and Board of Directors use this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that Operating Cash Flow is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Operating Cash Flow may not be directly comparable to similar measures used by other companies.

Because we use Operating Cash Flow to measure our segment profit or loss, we reconcile it to operating income, the most directly comparable financial measure calculated and presented in accordance with GAAP, in the business segment footnote to our quarterly and annual consolidated financial statements. Therefore, we believe our measure of Operating Cash Flow for our 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.

Free Cash Flow, which is a non-GAAP financial measure, is defined 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; and adjusted for any payments related to certain nonoperating items, net of estimated tax benefits (such as income taxes on investment sales and nonrecurring payments related to income tax and litigation contingencies of acquired companies). Unlevered Free Cash Flow is Free Cash Flow before cash paid interest. We believe that Free Cash Flow and Unlevered Free Cash Flow are also useful to investors as the basis for comparing our performance and coverage ratios with other companies in our industries, although our measure of Free Cash Flow and Unlevered 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 certain 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 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. We believe our pro forma data is not a non-GAAP financial measure as contemplated by Regulation G.

In certain circumstances we also present “adjusted” data, to exclude certain gains, losses or other charges, net of tax (such as from the sales of investments or dispositions of businesses). This “adjusted” data is a non-GAAP financial measure. We believe, among other things, that the “adjusted” data may help investors evaluate our ongoing operations and can assist in making meaningful period-over-period comparisons.

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Exhibit 99.2 – Explanation of Non-GAAP and Other Financial Measures, cont’d

Non-GAAP financial measures should not be considered as substitutes for operating income (loss), net income (loss) attributable to Comcast Corporation, 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 Free Cash Flow in Exhibit 99.1 to this current report on Form 8-K and of Consolidated Operating Cash Flow in Table 1 set forth in Exhibit 99.1 to this Current Report on Form 8-K.