Comcast Reports Fourth Quarter 2015 Results

(press release) Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter and year ended December 31, 2015.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said, "I am exceptionally proud of our results this year, which were driven by strong performances in each of our core businesses. At Comcast Cable, our focus on delivering the most innovative products and improving the customer experience led to fantastic operating metrics, including our best video customer results in nine years, and our best high-speed Internet customer results in eight years. NBCUniversal had a remarkable year, with record-breaking results at both Theme Parks and Film, and continued success at NBC, which was number one in primetime for the second consecutive season. As we enter 2016, the momentum we see across our portfolio is truly exciting. We are executing at the highest level, investing prudently, and energized and focused on driving growth and shareholder value. Underscoring our confidence in our company, we are increasing our dividend by 10% to $1.10 per share and we also plan to repurchase $5.0 billion of our stock this year."

Consolidated Revenue for the fourth quarter of 2015 increased 8.5% to $19.2 billion. Consolidated Operating Cash Flow increased 6.7% to $6.3 billion. Consolidated Operating Income increased 5.7% to $4.0 billion. On November 13, 2015, we acquired a 51% interest in the Universal Studios theme park located in Osaka, Japan ("Universal Studios Japan"). Fourth quarter and full-year 2015 results include $169 million of revenue and $80 million of operating cash flow attributable to Universal Studios Japan from its acquisition date. Consolidated revenue for the fourth quarter of 2015 excluding Universal Studios Japan increased 7.6%. Consolidated operating cash flow excluding Universal Studios Japan, as well as $22 million of costs associated with a change in the presentation of amounts payable for a contractual obligation4 in the fourth quarter of 2015 and $99 million of Time Warner Cable and Charter transaction-related costs in the fourth quarter of 2014, increased 4.0% (see Table 5).

For the year ended December 31, 2015, consolidated revenue increased 8.3% to $74.5 billion. Consolidated operating cash flow increased 7.7% to $24.7 billion. Consolidated operating income increased 7.3% to $16.0 billion. Full-year 2015 results include $169 million of revenue and $80 million of operating cash flow attributable to Universal Studios Japan from its acquisition date. Consolidated revenue for the full year 2015 excluding Universal Studios Japan, as well as $376 million of revenue generated by the broadcast of the NFL's Super Bowl in the first quarter of 2015 and $1.1 billion of revenue generated by the Sochi Olympics in the first quarter of 2014, increased 9.3%. Consolidated operating cash flow excluding Universal Studios Japan, as well as $178 million of transaction-related costs in 2015 and $237 million in 2014, and $22 million of costs associated with a change in the presentation of amounts payable for a contractual obligation4 in the fourth quarter of 2015, increased 7.1% (see Table 5).

Earnings per Share (EPS) for the fourth quarter of 2015 was $0.79, a 6.8% increase from the $0.74 reported in the fourth quarter of 2014. Excluding a $0.02 loss on an investment resulting from our proportionate share of an impairment loss recorded at The Weather Channel in the fourth quarter of 2015, as well as $0.03 of transaction-related costs in the fourth quarter of 2014, EPS increased 5.2% to $0.81 (see Table 4).

EPS for the year ended December 31, 2015 was $3.24, a 1.3% increase from the $3.20 reported in the prior year. On an adjusted basis, EPS increased 10.9% to $3.25 (see Table 4).

Capital Expenditures increased 18.6% to $2.6 billion in the fourth quarter of 2015 compared to the fourth quarter of 2014. Cable Communications' capital expenditures increased $190 million, or 10.2%, to $2.1 billion in the fourth quarter of 2015, primarily reflecting our continued spending on customer premise equipment related to the deployment of the X1 platform and wireless gateways and increased investment in network infrastructure to increase network capacity. Cable capital expenditures represented 17.2% of Cable revenue in the fourth quarter of 2015 compared to 16.5% in last year's fourth quarter. NBCUniversal's capital expenditures increased $220 million, or 65.2%, to $557 million in the fourth quarter of 2015, primarily reflecting increased spending at Theme Parks, including a land purchase adjacent to an existing theme park of $130 million and $12 million attributable to Universal Studios Japan.

For the year ended December 31, 2015, capital expenditures increased 14.5% to $8.5 billion compared to the prior year. Cable Communications' capital expenditures increased $880 million, or 14.3%, to $7.0 billion, primarily reflecting increased spending on customer premise equipment related to the deployment of the X1 platform and wireless gateways, as well as increased investment in our network. For the year, Cable capital expenditures represented 15.0% of Cable revenue compared to 13.9% in 2014. NBCUniversal's capital expenditures increased $165 million, or 13.5%, to $1.4 billion in 2015, primarily reflecting increased investments in Theme Parks.

Free Cash Flow decreased 6.3% to $1.6 billion in the fourth quarter of 2015 compared to $1.7 billion in the fourth quarter of 2014, reflecting growth in consolidated operating cash flow and lower cash taxes, offset by higher capital expenditures and increased working capital.

Free cash flow for the year ended December 31, 2015 increased 9.4% to $8.9 billion compared to $8.2 billion in 2014, reflecting growth in consolidated operating cash flow and improvement in working capital, partially offset by increased capital expenditures.

Revenue for Cable Communications increased 5.9% to $12.0 billion in the fourth quarter of 2015 compared to $11.3 billion in the fourth quarter of 2014, driven by increases of 9.8% in high-speed Internet, 4.4% in video and 18.9% in business services, partially offset by a 9.3% decline in advertising due to lower political advertising revenue. The increase in Cable revenue reflects increased customer relationships (see below), customers receiving higher levels of service, customers taking additional services, as well as rate adjustments.

Revenue for NBCUniversal increased 13.0% to $7.5 billion in the fourth quarter of 2015 compared to $6.6 billion in the fourth quarter of 2014. Operating Cash Flow increased 8.7% to $1.6 billion compared to $1.4 billion in the fourth quarter of 2014. Fourth quarter results include $169 million of revenue and $80 million of operating cash flow attributable to Universal Studios Japan from its acquisition date. Revenue for NBCUniversal excluding Universal Studios Japan increased 10.5%. Operating Cash flow excluding Universal Studios Japan and $22 million of costs associated with a change in the presentation of amounts payable for a contractual obligation4 in the fourth quarter of 2015, increased 4.7%, driven by strong results at Filmed Entertainment and Theme Parks (see Table 5).

Cable Networks

For the fourth quarter of 2015, Cable Networks segment revenue increased 3.4% to $2.4 billion and operating cash flow decreased 1.9% to $894 million. These results reflect a 6.8% increase in distribution revenue, partially reflecting NASCAR on our sports network, NBCSN, which was more than offset by a modest 0.3% decline in advertising revenue and an increase in sports programming costs, reflecting the impact of NASCAR and higher programming costs for the English Premier League.

For the year ended December 31, 2015, revenue from the Cable Networks segment increased 0.7% to $9.6 billion. Excluding $257 million of revenue generated by the 2014 Sochi Olympics, revenue increased 3.5% (see Table 5), reflecting a 6.5% increase in distribution revenue and a 0.6% increase in advertising, partially offset by lower content licensing and other revenue. Operating cash flow decreased 2.5% to $3.5 billion compared to $3.6 billion in 2014, reflecting a modest increase in reported revenue and higher programming costs.

Broadcast Television

For the fourth quarter of 2015, revenue from the Broadcast Television segment increased 7.0% to $2.5 billion compared to $2.3 billion in the fourth quarter of 2014, reflecting a 7.0% increase in advertising revenue, primarily driven by higher rates, a 34.9% increase in content licensing revenue, and higher retransmission consent fees. Operating cash flow decreased 5.6% to $217 million compared to $230 million in the fourth quarter of 2014, reflecting higher revenue, more than offset by higher operating costs and expenses.

For the year ended December 31, 2015, revenue from the Broadcast Television segment was stable at $8.5 billion. Excluding $376 million of revenue generated by the NFL's Super Bowl in the first quarter of 2015, as well as $846 million of revenue generated by the 2014 Sochi Olympics, revenue increased 6.0% (see Table 5), reflecting a 13.7% increase in content licensing revenue, a 4.1% increase in advertising revenue, and higher retransmission consent fees. Operating cash flow increased 6.3% to $780 million compared to $734 million in 2014.

Filmed Entertainment

For the fourth quarter of 2015, revenue from the Filmed Entertainment segment increased 25.8% to $1.6 billion compared to $1.3 billion in the fourth quarter of 2014, reflecting a 74.9% increase in home entertainment revenue driven by the strong performances of Minions and Jurassic World, as well as a 22.7% increase in content licensing revenue, partially offset by a 37.5% decline in theatrical revenue. Operating cash flow increased 84.6% to $143 million compared to $77 million in the fourth quarter of 2014, reflecting higher revenue, partially offset by a 22.1% increase in operating costs, primarily driven by an increase in the amortization of film costs.

For the year ended December 31, 2015, revenue from the Filmed Entertainment segment increased 45.5% to $7.3 billion compared to $5.0 billion in 2014, driven by higher theatrical revenue from the record performances of Minions, Jurassic World, and Furious 7. Operating cash flow increased 73.5% to $1.2 billion compared to $711 million in 2014, reflecting higher revenue, partially offset by a 40.9% increase in operating expenses, primarily driven by an increase in the amortization of film costs and higher advertising, marketing and promotion expense due to a larger film slate.