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: September 17, 2003
COMCAST HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1709202
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street, Philadelphia, PA 19102-2148
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(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (215) 665-1700
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 17, 2003, Comcast Corporation ("Comcast"), in accordance with
the Amended and Restated Stock Purchase Agreement dated as of June 30, 2003
and executed on July 3, 2003 (the "Agreement"), among Comcast QVC, Inc.
("Comcast QVC"), a wholly-owned indirect subsidiary of Comcast Holdings
Corporation ("Comcast Holdings"), Comcast, Liberty Media Corporation
("Liberty") and QVC, Inc. ("QVC"), among other things, completed the sale
to Liberty of all shares of QVC common stock held by a number of direct
wholly-owned subsidiaries of Comcast QVC for an aggregate amount of
approximately $4 billion principal amount of Liberty's Floating Rate Senior
Notes due 2006 (the "Liberty Notes"), approximately $1.35 billion in cash
and approximately 218 million shares of Liberty Series A common stock.
Pursuant to the Agreement, the shares of Liberty Series A common stock
received by Comcast QVC were valued at $11.71 per share and represent
approximately 7.5% of Liberty's common stock outstanding. The shares had a
market value on the closing date of $10.73 per share, which was used for
valuing such consideration in the accompanying unaudited pro forma
condensed consolidated financial statements. Resales of the Liberty Notes
and shares of Liberty Series A common stock received in the transaction
have been registered with the Securities and Exchange Commission pursuant
to the Agreement. On September 24, 2003, Comcast, through wholly-owned
indirect subsidiaries of Comcast Holdings, sold an aggregate of $3.0
billion principal amount of the Liberty Notes for net proceeds of
approximately $3.0 billion.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) PRO FORMA FINANCIAL INFORMATION
Pursuant to paragraph (b) (1) of Item 7 of Form 8-K, Comcast Holdings is
furnishing pro forma financial information in Exhibit 99.1
(c) EXHIBITS
10.1 Amended and Restated Stock Purchase Agreement dated as of June
30, 2003 among Comcast QVC, Inc., Comcast Corporation, Liberty
Media Corporation, and QVC, Inc. (incorporated by reference to
Exhibit 10.1 to Comcast Corporation's Current Report on Form 8-K
filed on October 1, 2003).
99.1 Comcast Holdings Corporation unaudited pro forma condensed
consolidated balance sheet at June 30, 2003 and unaudited pro
forma condensed consolidated statements of operations for the six
months ended June 30, 2003 and the years ended December 31, 2002,
2001 and 2000.
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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 thereunto duly authorized.
COMCAST HOLDINGS CORPORATION
-------------------------------------
/S/ LAWRENCE J. SALVA
-------------------------------------
Lawrence J. Salva
Senior Vice President and Controller
(Principal Accounting Officer)
Date: October 1, 2003
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EXHIBIT 99.1
COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet of
Comcast Holdings Corporation ("Comcast Holdings") as of June 30, 2003 and
Unaudited Pro Forma Condensed Consolidated Statements of Operations of Comcast
Holdings for the six months ended June 30, 2003 and the years ended December 31,
2002, 2001 and 2000 give effect to the sale of Comcast Holdings' approximate 57%
interest in QVC, Inc. ("QVC"). The Unaudited Pro Forma Condensed Consolidated
Balance Sheet assumes the sale of QVC occurred on June 30, 2003 and the
Unaudited Pro Forma Condensed Consolidated Statements of Operations assume the
sale of QVC occurred on January 1, 2000, with all statements presented subject
to the assumptions and adjustments as set forth in the accompanying notes to the
unaudited pro forma condensed consolidated financial statements.
On September 17, 2003, Comcast Corporation ("Comcast"), in accordance with the
Amended and Restated Stock Purchase Agreement dated as of June 30, 2003 and
executed on July 3, 2003 (the "Agreement"), among Comcast QVC, Inc. ("Comcast
QVC"), a wholly-owned indirect subsidiary of Comcast Holdings, Comcast, Liberty
Media Corporation ("Liberty") and QVC, among other things, completed the sale to
Liberty of all shares of QVC common stock held by a number of direct
wholly-owned subsidiaries of Comcast QVC for an aggregate amount of
approximately $4 billion principal amount of Liberty's Floating Rate Senior
Notes due 2006 (the "Liberty Notes"), approximately $1.35 billion in cash and
approximately 218 million shares of Liberty Series A common stock. Pursuant to
the Agreement, the shares of Liberty Series A common stock received by Comcast
QVC were valued at $11.71 per share and represent approximately 7.5% of
Liberty's common stock outstanding. The shares had a market value on the closing
date of $10.73 per share, which was used for valuing such consideration in the
accompanying unaudited pro forma condensed consolidated financial statements.
Resales of the Liberty Notes and shares of Liberty Series A common stock
received in the transaction have been registered with the Securities and
Exchange Commission pursuant to the Agreement. On September 24, 2003, Comcast,
through wholly-owned indirect subsidiaries of Comcast Holdings, sold an
aggregate of $3.0 billion principal amount of the Liberty Notes for net proceeds
of approximately $3.0 billion. Comcast Holdings will report QVC as a
discontinued operation, in accordance with Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets."
The pro forma adjustments included herein are based on available information and
certain assumptions that management believes are reasonable and are described in
the accompanying notes to the unaudited pro forma condensed consolidated
financial statements. The Unaudited Pro Forma Condensed Consolidated Financial
Statements do not necessarily represent what Comcast Holdings' financial
position or results of operations would have been had the sale of QVC occurred
on such dates or to project Comcast Holdings' financial position or results of
operations at or for any future date or period. In the opinion of management,
all adjustments necessary to present fairly the unaudited pro forma financial
information have been made. The Unaudited Pro Forma Condensed Consolidated
Financial Statements should be read in conjunction with the historical
consolidated financial statements of Comcast Holdings.
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COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT JUNE 30, 2003
(Dollars in millions)
Historical Pro Forma
Comcast Historical Pro Forma Comcast
Holdings QVC (a) Adjustments Holdings
----------- ----------- ----------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents............................................ $1,298 ($508) $1,350(b) $2,140
Investments.......................................................... 179 (17) 162
Accounts receivable, net............................................. 959 (532) 427
Inventories, net..................................................... 506 (506)
Deferred income taxes................................................ 137 (137)
Due from affiliates.................................................. 317 317
Other current assets................................................. 176 (21) 155
----------- ----------- ----------- ----------
Total current assets............................................. 3,572 (1,721) 1,350 3,201
----------- ----------- ----------- ----------
NOTES RECEIVABLE FROM AFFILIATE......................................... 198 198
INVESTMENTS............................................................. 694 (4) 6,336(b)(d) 7,026
PROPERTY AND EQUIPMENT, net............................................. 6,902 (487) 6,415
FRANCHISE RIGHTS........................................................ 16,631 16,631
GOODWILL................................................................ 6,446 (835) 5,611
OTHER INTANGIBLE ASSETS, net............................................ 1,388 (170) 1,218
OTHER NONCURRENT ASSETS, net............................................ 362 (94) 268
----------- ----------- ----------- ----------
$36,193 ($3,311) $7,686 $40,568
=========== =========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable..................................................... 662 (399) $ 263
Accrued expenses and other current liabilities....................... 1,909 (392) 1,980(b) 3,497
Deferred income taxes................................................ 45 45
Current portion of long-term debt.................................... 378 378
----------- ----------- ----------- ----------
Total current liabilities........................................ 2,994 (791) 1,980 4,183
----------- ----------- ----------- ----------
LONG-TERM DEBT, less current portion.................................... 8,108 8,108
----------- ----------- ----------- ----------
NOTES PAYABLE TO AFFILIATES............................................. 565 565
----------- ----------- ----------- ----------
DEFERRED INCOME TAXES................................................... 7,016 (4) 841(b) 7,853
----------- ----------- ----------- ----------
OTHER NONCURRENT LIABILITIES............................................ 1,107 (53) 1,054
----------- ----------- ----------- ----------
MINORITY INTEREST....................................................... 1,267 (981) 286
----------- ----------- ----------- ----------
STOCKHOLDERS' EQUITY.................................................... 15,136 (1,482) 4,865(b) 18,519
----------- ----------- ----------- ----------
$36,193 ($3,311) $7,686 $40,568
=========== =========== =========== ==========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(Dollars in millions)
Historical Pro Forma
Comcast Historical Pro Forma Comcast
Holdings QVC (a) Adjustments Holdings
------------------------- ----------- ---------
REVENUES
Service revenues....................................................... $3,802 $ $10(c) $3,812
Net sales from electronic retailing.................................... 2,163 (2,163)
------------- ----------- ----------- ---------
5,965 (2,163) 10 3,812
------------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation)..................................... 1,637 (263) 10(c) 1,384
Cost of goods sold from electronic retailing (excluding depreciation).. 1,370 (1,370)
Selling, general and administrative.................................... 1,079 (100) 979
Depreciation........................................................... 673 (40) 633
Amortization........................................................... 113 (25) 88
------------- ----------- ----------- ---------
4,872 (1,798) 10 3,084
------------- ----------- ----------- ---------
OPERATING INCOME........................................................... 1,093 (365) 728
OTHER INCOME (EXPENSE)
Interest expense....................................................... (342) 3 (339)
Investment loss, net................................................... (6) (14) (20)
Equity in net losses of affiliates..................................... (34) 4 (30)
Other income (expense)................................................. 2 2
------------- ----------- ----------- ---------
(380) (7) (387)
------------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST.......................................................... 713 (372) 341
INCOME TAX EXPENSE......................................................... (269) 137 (132)
------------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST................. 444 (235) 209
MINORITY INTEREST.......................................................... (126) 106 (20)
------------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS.......................................... $318 ($129) $ $189
============= =========== =========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
(Dollars in millions)
Historical Pro Forma
Comcast Historical Pro Forma Comcast
Holdings QVC (a) Adjustments Holdings
----------- ----------- ----------- ---------
REVENUES
Service revenues............................................................ $6,895 $ $23(c) $6,918
Net sales from electronic retailing......................................... 4,381 (4,381)
----------- ----------- ----------- ---------
11,276 (4,381) 23 6,918
----------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation).......................................... 3,015 (519) 20(c) 2,516
Cost of goods sold from electronic retailing (excluding depreciation)....... 2,793 (2,793)
Selling, general and administrative......................................... 1,918 (211) 1,707
Depreciation................................................................ 1,425 (81) 1,344
Amortization................................................................ 213 (39) 3(c) 177
----------- ----------- ----------- ---------
9,364 (3,643) 23 5,744
----------- ----------- ----------- ---------
OPERATING INCOME (LOSS)........................................................ 1,912 (738) 1,174
OTHER INCOME (EXPENSE)
Interest expense............................................................ (725) 14 (711)
Investment loss............................................................. (658) 92 (566)
Equity in net losses of affiliates.......................................... (103) 8 (95)
Other income................................................................ (4) (4)
----------- ----------- ----------- ---------
(1,490) 114 (1,376)
----------- ----------- ----------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST........................................................... 422 (624) (202)
INCOME TAX (EXPENSE) BENEFIT................................................... (246) 262 16
----------- ----------- ----------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST.............. 176 (362) (186)
MINORITY INTEREST.............................................................. (196) 169 (27)
----------- ----------- ----------- ---------
LOSS FROM CONTINUING OPERATIONS................................................ ($20) ($193) $ ($213)
=========== =========== =========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in millions)
Historical Pro Forma
Comcast Historical Pro Forma Comcast
Holdings QVC (a) Adjustments Holdings
----------- ----------- ----------- ---------
REVENUES
Service revenues............................................................ $5,919 $18(c) $5,937
Net sales from electronic retailing......................................... 3,917 (3,917)
----------- ----------- ----------- ---------
9,836 (3,917) 18 5,937
----------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation).......................................... 2,906 (478) 18(c) 2,446
Cost of goods sold from electronic retailing (excluding depreciation)....... 2,514 (2,514)
Selling, general and administrative......................................... 1,746 (203) 1,543
Depreciation................................................................ 1,211 (81) 1,130
Amortization................................................................ 2,205 (62) 2,143
----------- ----------- ----------- ---------
10,582 (3,338) 18 7,262
----------- ----------- ----------- ---------
OPERATING INCOME (LOSS)........................................................ (746) (579) (1,325)
OTHER INCOME (EXPENSE)
Interest expense............................................................ (734) 26 (708)
Investment income........................................................... 1,062 (91) 971
Equity in net losses of affiliates.......................................... (29) 13 (16)
Other income................................................................ 1,301 4 1,305
----------- ----------- ----------- ---------
1,600 (48) 1,552
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES,
MINORITY INTEREST AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE................ 854 (627) 227
INCOME TAX EXPENSE............................................................. (470) 254 (216)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE.................................. 384 (373) 11
MINORITY INTEREST.............................................................. (160) 153 (7)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE................................................. $224 ($220) $ $4
=========== =========== =========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST HOLDINGS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(Dollars in millions)
Historical Pro Forma
Comcast Historical Pro Forma Comcast
Holdings QVC (a) Adjustments Holdings
----------- ----------- ----------- ---------
REVENUES
Service revenues............................................................ $4,821 $15 (c) $4,836
Net sales from electronic retailing......................................... 3,536 (3,536)
----------- ----------- ----------- ---------
8,357 (3,536) 15 $4,836
----------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation).......................................... 2,210 (439) 15 (c) 1,786
Cost of goods sold from electronic retailing (excluding depreciation)....... 2,285 (2,285)
Selling, general and administrative......................................... 1,404 (193) 1,211
Depreciation................................................................ 837 (58) 779
Amortization................................................................ 1,782 (68) 1,714
----------- ----------- ----------- ---------
8,518 (3,043) 15 5,490
----------- ----------- ----------- ---------
OPERATING INCOME (LOSS)........................................................ (161) (493) (654)
OTHER INCOME (EXPENSE)
Interest expense............................................................ (728) 35 (693)
Investment income........................................................... 984 (24) 960
Income related to indexed debt.............................................. 666 666
Equity in net losses of affiliates.......................................... (22) 5 (17)
Other income................................................................ 2,826 2,826
----------- ----------- ----------- ---------
3,726 16 3,742
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST........................................................... 3,565 (477) 3,088
INCOME TAX EXPENSE............................................................. (1,429) 217 (1,212)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST..................... 2,136 (260) 1,876
MINORITY INTEREST.............................................................. (115) 112 (3)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS.............................................. $2,021 ($148) $ $1,873
=========== =========== =========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST HOLDINGS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) This column deducts the historical balances and results of operations of QVC
to reflect the sale of QVC.
(b) To reflect the consideration received from Liberty in the form of $1.350
billion in cash, approximately 218 million shares of Liberty's Series A common
stock with a fair value of $2.336 billion at September 17, 2003 and $4.0 billion
in three-year senior unsecured notes. The consideration received, net of $46
million in transaction costs, over Comcast Holdings' carrying value of the net
assets of QVC is expected to result in an estimated gain of approximately $3.3
billion, net of tax.
(c) Adjustment reflects the reversal of the elimination of intercompany
transactions between Comcast Holdings and QVC.
(d) On September 24, 2003, Comcast, through wholly-owned indirect subsidiaries
of Comcast Holdings, sold an aggregate of $3.0 billion principal amount of the
Liberty Notes for net proceeds of approximately $3.0 billion. The unaudited pro
forma condensed consolidated balance sheet does not reflect the sale of such
Liberty Notes.
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