UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
for the Quarterly Period Ended:
JUNE 30, 1996
OR
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the Transition Period from ________ to ________.
Commission File Number 0-6983
COMCAST CORPORATION
[GRAPHIC OMITTED - LOGO]
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1709202
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street, Philadelphia, PA 19102-2148
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (215) 665-1700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days.
Yes __X__ No ____
--------------------------
As of June 30, 1996, there were 190,199,646 shares of Class A Special Common
Stock, 34,388,885 shares of Class A Common Stock and 8,786,250 shares of Class B
Common Stock outstanding.
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance
Sheet as of June 30, 1996 and December 31,
1995 (Unaudited).........................................2
Condensed Consolidated Statement of
Operations and Accumulated Deficit for
the Six and Three Months Ended June 30,
1996 and 1995 (Unaudited)................................3
Condensed Consolidated Statement of Cash
Flows for the Six Months Ended June 30,
1996 and 1995 (Unaudited)................................4
Notes to Condensed Consolidated
Financial Statements (Unaudited)....................5 - 12
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations.........................................13 - 22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ......................................23
Item 4. Submission of Matters to a Vote of Security
Holders............................................23 - 24
Item 6. Exhibits and Reports on Form 8-K ..................24 - 25
-----------------------------------
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Quarterly
Report is forward-looking, such as information relating to future capital
commitments and the effects of competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect
expected results in the future from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These risks and uncertainties
include, but are not limited to, uncertainties relating to economic conditions,
acquisitions and divestitures, government and regulatory policies, the pricing
and availability of equipment, materials, inventories and programming,
technological developments and changes in the competitive environment in which
the Company operates.
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands)
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents .......................................... $ 407,664 $ 539,061
Short-term investments, at cost which approximates fair value ...... 133,926 370,982
Accounts receivable, less allowance for doubtful accounts
of $78,450 and $81,273 ........................................... 340,006 390,698
Inventories, net ................................................... 243,120 243,447
Prepaid charges and other .......................................... 54,441 49,671
Deferred income taxes .............................................. 63,912 59,799
----------- -----------
Total current assets ........................................... 1,243,069 1,653,658
----------- -----------
INVESTMENTS, principally in affiliates ................................ 1,135,104 906,383
----------- -----------
PROPERTY AND EQUIPMENT ................................................ 2,989,329 2,575,633
Accumulated depreciation ........................................... (1,031,743) (932,031)
----------- -----------
Property and equipment, net ........................................ 1,957,586 1,643,602
----------- -----------
DEFERRED CHARGES ...................................................... 6,640,735 6,552,437
Accumulated amortization ........................................... (1,352,921) (1,175,772)
----------- -----------
Deferred charges, net .............................................. 5,287,814 5,376,665
----------- -----------
$ 9,623,573 $ 9,580,308
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses .............................. $ 816,951 $ 963,991
Accrued interest ................................................... 78,731 72,675
Current portion of long-term debt .................................. 143,379 85,403
----------- -----------
Total current liabilities ...................................... 1,039,061 1,122,069
----------- -----------
LONG-TERM DEBT, less current portion .................................. 7,120,289 6,943,766
----------- -----------
DEFERRED INCOME TAXES ................................................. 1,515,538 1,517,995
----------- -----------
MINORITY INTEREST AND OTHER ........................................... 834,337 772,004
----------- -----------
COMMITMENTS AND CONTINGENCIES
COMMON EQUITY PUT OPTIONS ............................................. 69,625 52,125
----------- -----------
STOCKHOLDERS' DEFICIENCY
Class A special common stock, $1 par value - authorized, 500,000,000
shares; issued, 190,199,646 and 192,844,814 ..................... 190,200 192,845
Class A common stock, $1 par value - authorized, 200,000,000
shares; issued, 34,388,885 and 37,706,517 ....................... 34,389 37,707
Class B common stock, $1 par value - authorized, 50,000,000
shares; issued, 8,786,250 ....................................... 8,786 8,786
Additional capital ................................................. 818,046 843,113
Accumulated deficit ................................................ (2,030,633) (1,914,292)
Unrealized gains on marketable securities .......................... 42,080 22,210
Cumulative translation adjustments ................................. (18,145) (18,020)
----------- -----------
Total stockholders' deficiency ................................. (955,277) (827,651)
----------- -----------
$ 9,623,573 $ 9,580,308
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in thousands, except per share data)
Six Months Ended Three Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES
Service income ................................................. $ 1,040,460 $ 902,752 $ 539,794 $ 466,165
Net sales from electronic retailing ............................ 855,846 584,426 405,768 357,407
----------- ----------- ----------- -----------
1,896,306 1,487,178 945,562 823,572
----------- ----------- ----------- -----------
COSTS AND EXPENSES
Operating ...................................................... 453,473 367,357 223,710 195,890
Cost of goods sold from electronic retailing ................... 512,380 350,246 242,234 212,172
Selling, general and administrative ............................ 364,256 289,145 183,544 154,686
Depreciation and amortization .................................. 324,272 387,043 167,399 143,566
----------- ----------- ----------- -----------
1,654,381 1,393,791 816,887 706,314
----------- ----------- ----------- -----------
OPERATING INCOME .................................................. 241,925 93,387 128,675 117,258
INVESTMENT (INCOME) EXPENSE
Interest expense ............................................... 267,993 250,551 133,179 132,964
Investment income .............................................. (47,491) (157,580) (28,846) (4,756)
Equity in net losses of affiliates ............................. 60,321 37,906 25,819 21,489
Gain from equity offering of affiliate ......................... (40,638) (40,638)
Other .......................................................... 22,966 368 11,577 658
----------- ----------- ----------- -----------
263,151 131,245 101,091 150,355
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE INCOME TAX EXPENSE, MINORITY
INTEREST AND EXTRAORDINARY ITEM ................................ (21,226) (37,858) 27,584 (33,097)
INCOME TAX EXPENSE ................................................ 24,612 14,035 23,748 10,100
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE MINORITY INTEREST AND
EXTRAORDINARY ITEM ............................................. (45,838) (51,893) 3,836 (43,197)
MINORITY INTEREST ................................................. (29,094) (21,971) (14,024) (13,903)
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE EXTRAORDINARY ITEM ........................... (16,744) (29,922) 17,860 (29,294)
EXTRAORDINARY ITEM ................................................ 1,013 1,013
----------- ----------- ----------- -----------
NET (LOSS) INCOME ................................................. (17,757) (29,922) 16,847 (29,294)
ACCUMULATED DEFICIT
Beginning of period ............................................ (1,914,292) (1,827,647) (1,997,138) (1,833,858)
Dividends declared - $.0467, $.0467, $.0233 and $.0233 per share (11,054) (11,169) (5,474) (5,586)
Retirement of common stock ..................................... (87,530) (44,868)
----------- ----------- ----------- -----------
End of period .................................................. ($2,030,633) ($1,868,738) ($2,030,633) ($1,868,738)
=========== =========== =========== ===========
(LOSS) INCOME PER SHARE
(Loss) income before extraordinary item ........................ ($ .07) ($ .12) $ .07 ($ .12)
Extraordinary item..............................................
----------- ----------- ----------- -----------
Net (loss) income ......................................... ($ .07) ($ .12) $ .07 ($ .12)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DURING THE PERIOD ................................... 237,624 239,541 235,827 239,674
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands)
Six Months Ended June 30,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ................................................ ($ 17,757) ($ 29,922)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization ......................... 324,272 387,043
Non-cash interest expense, net ........................ 32,208 27,360
Equity in net losses of affiliates .................... 60,321 37,906
Gains on long-term investments, net ................... (16,301) (140,968)
Gain from equity offering of affiliate ................ (40,638)
Minority interest ..................................... (29,094) (21,971)
Extraordinary item .................................... 1,013
Deferred income taxes and other ....................... 12,211 675
----------- -----------
326,235 260,123
Decrease in accounts receivable, net .................. 55,198 26,662
Decrease (increase) in inventories, net ............... 327 (10,889)
Decrease (increase) in prepaid charges and other ...... 666 (12,348)
Decrease in accounts payable and accrued expenses ..... (99,293) (69,778)
Increase in accrued interest .......................... 6,038 13,069
----------- -----------
Net cash provided by operating activities ......... 289,171 206,839
----------- -----------
FINANCING ACTIVITIES
Proceeds from borrowings ................................ 558,366 2,018,977
Retirement and repayment of debt ........................ (478,293) (194,378)
(Repurchases) issuances of common stock, net ............ (107,022) 1,413
Equity contribution to a subsidiary ..................... 6,556
Dividends ............................................... (11,054) (11,169)
Other ................................................... (4,809) 1,488
----------- -----------
Net cash (used in) provided by financing activities (42,812) 1,822,887
----------- -----------
INVESTING ACTIVITIES
Acquisitions, net of cash acquired ...................... (46,494) (1,369,073)
Proceeds from sales of short-term investments, net ...... 237,056 48,331
Investments, principally in affiliates .................. (357,421) (431,525)
Proceeds from sales of long-term investments ............ 91,400 188,096
Additions to property and equipment ..................... (278,905) (338,960)
Other ................................................... (23,392) (14,026)
----------- -----------
Net cash used in investing activities ............. (377,756) (1,917,157)
----------- -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ........... (131,397) 112,569
CASH AND CASH EQUIVALENTS, beginning of period ............. 539,061 335,320
----------- -----------
CASH AND CASH EQUIVALENTS, end of period ................... $ 407,664 $ 447,889
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The condensed consolidated balance sheet as of December 31, 1995 has been
condensed from the audited balance sheet as of that date. The condensed
consolidated balance sheet as of June 30, 1996, the condensed consolidated
statement of operations and accumulated deficit for the six and three
months ended June 30, 1996 and 1995 and the condensed consolidated
statement of cash flows for the six months ended June 30, 1996 and 1995
have been prepared by Comcast Corporation (the "Company") and have not been
audited by the Company's independent auditors. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows as of June 30, 1996 and for all periods presented
have been made.
Certain information and note disclosures normally included in the Company's
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's December
31, 1995 Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The results of operations for the periods ended June 30, 1996
are not necessarily indicative of operating results for the full year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
New Accounting Pronouncement
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." The Company has elected to continue to measure such
compensation expense using the method prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees," as
permitted by SFAS No. 123. Accordingly, there was no impact of the adoption
of SFAS No. 123 on the Company's financial position or results of
operations.
Net (Loss) Income Per Share
Net (loss) income per share is based on the weighted average number of
common shares outstanding during the period. For the six months ended June
30, 1996 and for the six and three months ended June 30, 1995, the
Company's common stock equivalents have an antidilutive effect on net loss
per share and, therefore, have not been used in determining the total
weighted average number of common shares outstanding.
For the three months ended June 30, 1996, the Company's shares which are
issuable upon conversion of its convertible debentures and upon exercise of
the its outstanding common equity put options have not been included as
common stock equivalents, since inclusion of these shares would have an
antidilutive effect on net income per share. The Company's dilutive common
stock equivalents, consisting solely of shares issuable under employee
stock programs, did not have any impact on net income per share as
presented in the Company's condensed consolidated statement of operations
and accumulated deficit. Therefore, primary and fully diluted net income
per share have not been presented herein. For the three months ended June
30, 1996, the primary and fully diluted weighted average number of common
shares and common share equivalents outstanding was 241.0 million and 241.3
million, respectively.
Reclassifications
Certain reclassifications have been made to the prior year condensed
consolidated financial statements to conform to those classifications used
in 1996.
5
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
3. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS
Regional Sports Venture
On July 17, 1996, the Company completed its acquisition (the "Sports
Venture Acquisition") of an interest of approximately 66% in the
Philadelphia Flyers Limited Partnership, a Pennsylvania limited partnership
("PFLP"), the assets of which, after giving effect to the Sports Venture
Acquisition, consist of (i) the National Basketball Association ("NBA")
franchise to own and operate the Philadelphia 76ers basketball team and
related assets (the "Sixers"), (ii) the National Hockey League ("NHL")
franchise to own and operate the Philadelphia Flyers hockey team and
related assets, and (iii) two adjacent arenas, leasehold interests in and
development rights related to the land underlying the arenas and other
adjacent parcels of land located in Philadelphia, Pennsylvania
(collectively, the "Arenas"). Concurrent with the completion of the Sports
Venture Acquisition, PFLP was renamed Comcast Spectacor, L.P. ("Comcast
Spectacor").
The Sports Venture Acquisition was completed in two steps. In April 1996,
the Company purchased the Sixers for $125.0 million in cash plus assumed
net liabilities of approximately $11.0 million through a partnership
controlled by the Company. To complete the Sports Venture Acquisition, in
July 1996, the Company contributed its interest in the Sixers, exchanged
approximately 3.5 million shares of the Company's Class A Special Common
Stock (the "Class A Special Common Stock") and 6,370 shares of the
Company's newly issued 5% Series A Convertible Preferred Stock (the
"Preferred Stock"), which is convertible into approximately 1.3 million
shares of Class A Special Common Stock (subject to certain conversion
adjustments) and paid $15.0 million in cash for its current interest in
Comcast Spectacor. The remaining interest of approximately 34% in Comcast
Spectacor is owned by a group, including the former majority owner of PFLP,
who also manages Comcast Spectacor. In connection with the Sports Venture
Acquisition, Comcast Spectacor assumed the outstanding liabilities relating
to the Sixers and the Arenas, including a mortgage obligation of
approximately $155.0 million. The Company will account for its interest in
Comcast Spectacor under the equity method.
Sprint Spectrum
Effective as of January 1996, the Company, Tele-Communications, Inc.
("TCI"), Cox Communications, Inc. ("Cox") and Sprint Corporation
(collectively, the "Parents"), and certain subsidiaries of the Parents,
entered into a series of agreements relating to their previously announced
joint venture (March 1995) to engage in the communications business. Under
an Amended and Restated Agreement of Limited Partnership of MajorCo, L.P.
(known as "Sprint Spectrum"), the business of Sprint Spectrum will be the
provision of wireless telecommunications services and will not include the
previously authorized business of providing local wireline communications
services to residences and businesses. A partnership owned entirely by
subsidiaries of the Company owns 15% of Sprint Spectrum. The Company
accounts for its investment in Sprint Spectrum under the equity method (see
Note 4).
Scripps Cable
In October 1995, the Company announced its agreement to acquire the cable
television operations ("Scripps Cable") of The E.W. Scripps Company ("E.W.
Scripps") in exchange for shares of the Company's Class A Special Common
Stock worth $1.575 billion, subject to certain closing adjustments (the
"Scripps Transaction"). For purposes of determining the number of shares of
Class A Special Common Stock to be delivered in the Scripps Transaction,
such stock will be valued on the basis of the average closing price of the
Class A Special Common Stock on The Nasdaq Stock Market for 15 trading days
randomly selected from the 40 trading day period ending shortly before the
closing date (the "Comcast Share Price"); provided that the Comcast Share
Price will be no greater than $23.09 and, except as provided below, no less
than $17.06. If the Comcast Share Price is below $17.06, E.W. Scripps has
the right to terminate the agreement, subject to the right of the Company
to increase the number of shares of Class A Special Common Stock to be
delivered in the Scripps Transaction to that number of shares that would
have been delivered if the Comcast Share Price were not subject to the
minimum price of $17.06.
6
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Scripps Cable passes more than 1.2 million homes and serves more than
800,000 subscribers, with over 60% of its subscribers located in
Sacramento, California and Chattanooga and Knoxville, Tennessee. The
Scripps Transaction is expected to close in the fourth quarter of 1996,
subject to shareholder and regulatory approval and certain other
conditions.
Share Repurchase Program
Concurrent with the announcement of the Scripps Transaction, the Company
announced that its Board of Directors authorized a market repurchase
program (the "Repurchase Program") pursuant to which the Company may
purchase, at such times and on such terms as it deems appropriate, up to
$500.0 million of its outstanding common stock, subject to certain
restrictions and market conditions. Pursuant to the Repurchase Program, the
Company has repurchased shares of its common stock for aggregate
consideration of $185.8 million through July 31, 1996, including $116.6
million and $59.9 million during the six and three months ended June 30,
1996, respectively.
As part of the Repurchase Program, the Company has sold put options on 4.0
million shares of its Class A Special Common Stock through July 31, 1996,
including put options on 1.0 million of such shares sold during the six
months ended June 30, 1996. The put options give the holder the right to
require the Company to repurchase such shares at specified prices on
specific dates. In May 1996, the Company extended the original May through
July 1996 maturities of the put options to October through December 1996
and received $1.1 million in connection with the extensions. Total proceeds
of $4.6 million from the sale and subsequent extension of these put options
were credited to additional capital. The amount the Company would be
obligated to pay to repurchase such shares if all outstanding put options
were exercised, totaling $69.6 million, has been reclassified to a
temporary equity account in the Company's condensed consolidated balance
sheet as of June 30, 1996.
Cellular Rebuild
In 1995, the Company's cellular division purchased approximately $172.0
million of switching and cell site equipment which replaced the existing
switching and cell site equipment (the "Cellular Rebuild"). The Company
substantially completed the Cellular Rebuild during 1995. During the first
quarter of 1995, the Company charged approximately $110.0 million to
depreciation expense which represented the difference between the net book
value of the equipment replaced and the residual value realized upon its
disposal.
QVC
In February 1995, the Company and TCI acquired all of the outstanding stock
of QVC, Inc. and its subsidiaries ("QVC") not previously owned by them
(approximately 65% of such shares on a fully diluted basis) for $46, in
cash, per share (the "QVC Acquisition"), representing a total cost of
approximately $1.4 billion. The QVC Acquisition, including the exercise of
certain warrants held by the Company, was financed with cash contributions
from the Company and TCI of $296.3 million and $6.6 million, respectively,
borrowings of $1.1 billion under a $1.2 billion QVC credit facility and
existing cash and cash equivalents held by QVC. Following the acquisition,
the Company and TCI own, through their respective subsidiaries, 57.45% and
42.55%, respectively, of QVC. The Company has accounted for the QVC
Acquisition under the purchase method and QVC was consolidated with the
Company effective February 1, 1995.
7
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Pro Forma Results
The following pro forma information for the six months ended June 30, 1995
has been presented as if the QVC Acquisition occurred on January 1, 1995.
This unaudited pro forma information is based on historical results of
operations, adjusted for acquisition costs, and is not necessarily
indicative of what the results would have been had the Company operated QVC
since such date.
<TABLE>
<CAPTION>
(Dollars in millions, except per share data)
Six Months Ended
June 30, 1995 (1)
<S> <C>
Revenues....................................... $1,617.6
Net loss....................................... (34.9)
Net loss per share............................. (.15)
<FN>
(1) Effective April 1, 1995, QVC commenced consolidating its United
Kingdom ("UK") operations. Pro forma revenues presented above do not
reflect revenues relating to QVC's UK operations prior to April 1,
1995.
</FN>
</TABLE>
8
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. INVESTMENTS
Investments - Equity Method
Summarized financial information for equity method investments is as
follows (dollars in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996: Sprint Spectrum (a) Other Combined
<S> <C> <C> <C>
Combined Results of Operations
Revenues, net............................... $ $445,773 $445,773
Depreciation and amortization............... 304 91,082 91,386
Operating loss.............................. (75,757) (73,117) (148,874)
Net loss as reported
by affiliates............................ (152,671) (127,142) (279,813)
Company's Equity in Net Loss
Equity in current period net loss........... ($22,901) ($35,200) ($58,101)
Amortization income (expense) (b)........... 636 (2,856) (2,220)
-------- -------- --------
Total equity in net loss.................. ($22,265) ($38,056) ($60,321)
======== ======== ========
Three Months Ended June 30, 1996: Sprint Spectrum (a) Other Combined
Combined Results of Operations
Revenues, net............................... $ $224,654 $224,654
Depreciation and amortization............... 254 44,335 44,589
Operating loss.............................. (30,978) (32,293) (63,271)
Net loss as reported
by affiliates............................ (67,358) (58,872) (126,230)
Company's Equity in Net Loss
Equity in current period net loss........... ($10,104) ($15,250) ($25,354)
Amortization income (expense) (b)........... 636 (1,101) (465)
-------- -------- --------
Total equity in net loss.................. ($9,468) ($16,351) ($25,819)
======= ======== ========
As of June 30, 1996: Sprint Spectrum (a) Other Combined
Combined Financial Position
Current assets.................................. $4,962 $1,839,111 $1,844,073
Noncurrent assets............................... 2,333,692 2,232,785 4,566,477
Current liabilities............................. 96,872 804,703 901,575
Noncurrent liabilities.......................... 4,246 2,136,908 2,141,154
<FN>
- ---------------------
(a) See footnote (1) on page 10.
(b) See footnote (3) on page 10.
</FN>
</TABLE>
9
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months Three Months
Ended Ended Ended
January 31,1995 June 30, 1995 June 30, 1995
QVC (2) Other Combined Combined (2)
<S> <C> <C> <C> <C>
Combined Results of Operations
Revenues, net............................... $425,921 $289,653 $715,574 $149,267
Depreciation and amortization............... 12,992 70,065 83,057 36,272
Operating income (loss)..................... 58,247 (99,549) (41,302) (50,594)
Net income (loss) as reported
by affiliates............................ $28,333 ($145,874) ($117,541) ($78,683)
Company's Equity in Net Income (Loss)
Equity in current period net income (loss).. $4,286 ($39,970) ($35,684) ($19,992)
Amortization income (expense) (3)........... 1,194 (3,416) (2,222) (1,497)
-------- -------- -------- --------
Total equity in net income (loss)......... $5,480 ($43,386) ($37,906) ($21,489)
======== ======== ======== ========
<FN>
(1) The Company's equity interest in Sprint Spectrum's net loss is recorded
three months in arrears. Accordingly, the summarized financial information
presented above includes Sprint Spectrum's results of operations for the
six and three months ended March 31, 1996 and its financial position as of
March 31, 1996.
(2) Through January 31, 1995, QVC's fiscal year end was January 31, and
therefore, the Company recorded its equity interest in QVC's net income two
months in arrears. For the six months ended June 30, 1995, the Company
recorded its equity interest in QVC's net income for the period from
November 1, 1994 through January 31, 1995, which was not previously
recorded by the Company. The effect of this one-time adjustment was not
significant to the Company's results of operations. Effective February 1,
1995, QVC's results of operations were consolidated with the Company.
(3) The differences between the Company's recorded investments and its
proportionate interests in the book value of the investees' net assets are
being amortized to equity in net income or loss, primarily over a period of
twenty years, which is consistent with the estimated lives of the
underlying assets.
</FN>
</TABLE>
Through June 27, 1996, the Company held investments in Teleport
Communications Group Inc. ("TCGI"), TCG Partners and certain local joint
ventures (the "Joint Ventures") managed by TCGI and TCG Partners. On June
27, 1996, TCGI sold approximately 27 million shares of its Class A Common
Stock (the "TCGI Class A Stock") for $16 per share in an initial public
offering (the "IPO"). In connection with the IPO, TCGI, the Company and
subsidiaries of Cox, TCI and Continental Cablevision ("Continental" and
collectively with Cox, TCI and the Company, the "Cable Stockholders")
entered into a reorganization agreement pursuant to which TCGI was
reorganized (the "Reorganization"). The Reorganization consisted of, among
other things: (i) the acquisition by TCGI of TCG Partners; (ii) the
acquisition by TCGI of additional interests in the Joint Ventures
(including 100% of those interests held by the Company); and (iii) the
contribution to TCGI of $269.0 million aggregate principal amount of
indebtedness, plus accrued interest thereon, owed by TCGI to the Cable
Stockholders (including $53.8 million principal amount and $4.1 million of
accrued interest owed to the Company). In connection with the
Reorganization, the Company received 25.6 million shares of TCGI's Class B
Common Stock (the "TCGI Class B Stock"). Each share of TCGI Class B Stock
is entitled to voting power equivalent to ten shares of TCGI Class A Stock
and is convertible, at the option of the holder, into one share of TCGI
Class A Stock. The Company recorded a $40.6 million increase in its
proportionate share of TCGI's net assets as a gain from equity offering of
affiliate in its condensed consolidated statement of operations and
accumulated deficit for the six and three months ended June 30, 1996. After
giving effect to the Reorganization and the IPO, the Company owns 19.5% of
the outstanding TCGI Class B Stock representing a 19.1% voting interest and
a 16.1% equity interest. The Company will continue to account for its
interest in TCGI under the equity method.
10
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Investments - Public Companies
In February 1996, in connection with certain preemptive rights of the
Company under previously existing agreements with Nextel Communications,
Inc. ("Nextel"), the Company purchased approximately 8.16 million shares,
classified as long-term investments available for sale, of Nextel common
stock at $12.25 per share, for a total cost of $99.9 million.
During the three months ended June 30, 1996, the Company sold 4.4 million
shares of Nextel common stock for $85.6 million and recognized a pre-tax
gain of $29.7 million as investment income in its condensed consolidated
statement of operations and accumulated deficit for the six and three
months ended June 30, 1996.
The Company holds unrestricted equity investments in certain publicly
traded companies with an historical cost of $163.3 million and $115.9
million as of June 30, 1996 and December 31, 1995, respectively. The
Company has recorded these investments, which are classified as available
for sale, at their estimated fair values of $228.0 million and $150.1
million as of June 30, 1996 and December 31, 1995, respectively. The
unrealized pre-tax gains as of June 30, 1996 and December 31, 1995 of $64.7
million and $34.2 million, respectively, have been reported in the
Company's condensed consolidated balance sheet as decreases in
stockholders' deficiency, net of related deferred income taxes of $22.6
million and $12.0 million, respectively.
Investments - Privately Held Companies
In January 1995, the Company exchanged its investments in Heritage
Communications, Inc. with TCI for approximately 13.3 million
publicly-traded Class A common shares of TCI with a fair market value of
approximately $290.0 million. Shortly thereafter, the Company sold
approximately 9.1 million unrestricted TCI shares for total proceeds of
$188.1 million. As a result of these transactions, the Company recognized a
pre-tax gain of $141.0 million in the first quarter of 1995.
5. LONG-TERM DEBT
In May 1995, the Company issued $250.0 million principal amount of its
9-3/8% senior subordinated debentures due 2005.
6. STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
The Company made interest payments of $229.7 million, $210.1 million,
$127.7 million, and $115.3 million during the six and three months ended
June 30, 1996 and 1995, respectively.
The Company made cash payments for income taxes of $62.2 million, $19.1
million, $46.9 million, and $16.0 million during the six and three months
ended June 30, 1996 and 1995, respectively.
7. CONTINGENCIES
The Company is subject to claims which arise in the ordinary course of its
business and other legal proceedings. In the opinion of management, the
amount of ultimate liability with respect to these actions will not
materially affect the financial position or results of operations of the
Company.
11
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(Unaudited)
8. FINANCIAL DATA BY BUSINESS SEGMENT
(Dollars in thousands)
<TABLE>
<CAPTION>
Domestic
Cable Electronic Cellular Corporate
Communications Retailing Communications and Other (1) Total
<S> <C> <C> <C> <C> <C>
Six Months Ended June 30, 1996
Revenues, net............................... $778,332 $855,846 $207,096 $55,032 $1,896,306
Depreciation and amortization............... 190,685 51,881 56,773 24,933 324,272
Operating income (loss)..................... 194,320 87,527 14,314 (54,236) 241,925
Interest expense............................ 110,654 35,053 43,973 78,313 267,993
Capital expenditures........................ 136,816 19,547 36,551 85,991 278,905
Equity in net (losses) income of
affiliates.............................. (8,444) 84 (51,961) (60,321)
Three Months Ended June 30, 1996
Revenues, net............................... $395,984 $405,768 $108,904 $34,906 $945,562
Depreciation and amortization............... 96,313 25,731 30,428 14,927 167,399
Operating income (loss)..................... 103,714 41,263 12,201 (28,503) 128,675
Interest expense............................ 53,969 16,884 23,187 39,139 133,179
Capital expenditures........................ 83,180 13,443 21,648 49,233 167,504
Equity in net (losses) income of
affiliates.............................. (2,890) 27 (22,956) (25,819)
As of June 30, 1996
Assets...................................... $4,645,902 $2,037,653 $1,341,965 $1,598,053 $9,623,573
Long-term debt, less current portion........ 3,049,417 887,979 1,091,035 2,091,858 7,120,289
Six Months Ended June 30, 1995
Revenues, net............................... $709,580 $584,426 $176,413 $16,759 $1,487,178
Depreciation and amortization............... 183,666 37,006 155,224 11,147 387,043
Operating income (loss)..................... 164,034 58,365 (84,443) (44,569) 93,387
Interest expense............................ 123,904 34,816 35,577 56,254 250,551
Capital expenditures........................ 111,042 8,472 167,963 51,483 338,960
Equity in net (losses) income of
affiliates.............................. (6,921) 608 (31,593) (37,906)
Three Months Ended June 30, 1995
Revenues, net............................... $362,458 $357,407 $94,260 $9,447 $823,572
Depreciation and amortization............... 94,168 22,734 20,742 5,922 143,566
Operating income (loss)..................... 88,398 33,965 18,853 (23,958) 117,258
Interest expense............................ 62,321 22,171 18,107 30,365 132,964
Capital expenditures........................ 68,825 7,237 117,710 35,570 229,342
Equity in net losses of affiliates.......... (3,952) (450) (17,087) (21,489)
- ---------------
<FN>
(1) Corporate and other includes certain operating businesses and elimination
entries related to the segments presented.
</FN>
</TABLE>
12
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The Company has experienced significant growth in recent years both through
strategic acquisitions and growth in its existing businesses. The Company has
historically met its cash needs for operations through its cash flows from
operating activities. Cash requirements for acquisitions and capital
expenditures have been provided through the Company's financing activities as
well as its existing cash, cash equivalents and short-term investments.
General Developments of Business
Regional Sports Venture
On July 17, 1996, the Company completed its acquisition (the "Sports Venture
Acquisition") of an interest of approximately 66% in the Philadelphia Flyers
Limited Partnership, a Pennsylvania limited partnership ("PFLP"), the assets of
which, after giving effect to the Sports Venture Acquisition, consist of (i) the
National Basketball Association ("NBA") franchise to own and operate the
Philadelphia 76ers basketball team and related assets (the "Sixers"), (ii) the
National Hockey League ("NHL") franchise to own and operate the Philadelphia
Flyers hockey team and related assets, and (iii) two adjacent arenas, leasehold
interests in and development rights related to the land underlying the arenas
and other adjacent parcels of land located in Philadelphia, Pennsylvania
(collectively, the "Arenas"). Concurrent with the completion of the Sports
Venture Acquisition, PFLP was renamed Comcast Spectacor, L.P. ("Comcast
Spectacor").
The Sports Venture Acquisition was completed in two steps. In April 1996, the
Company purchased the Sixers for $125.0 million in cash plus assumed net
liabilities of approximately $11.0 million through a partnership controlled by
the Company. To complete the Sports Venture Acquisition, in July 1996, the
Company contributed its interest in the Sixers, exchanged approximately 3.5
million shares of the Company's Class A Special Common Stock (the "Class A
Special Common Stock") and 6,370 shares of the Company's newly issued 5% Series
A Convertible Preferred Stock (the "Preferred Stock"), which is convertible into
approximately 1.3 million shares of Class A Special Common Stock (subject to
certain conversion adjustments) and paid $15.0 million in cash for its current
interest in Comcast Spectacor. The remaining interest of approximately 34% in
Comcast Spectacor is owned by a group, including the former majority owner of
PFLP, who also manages Comcast Spectacor. In connection with the Sports Venture
Acquisition, Comcast Spectacor assumed the outstanding liabilities relating to
the Sixers and the Arenas, including a mortgage obligation of approximately
$155.0 million. The Company will account for its interest in Comcast Spectacor
under the equity method.
Sprint Spectrum
Effective as of January 1996, the Company, Tele-Communications, Inc. ("TCI"),
Cox Communications, Inc. ("Cox") and Sprint Corporation (collectively, the
"Parents"), and certain subsidiaries of the Parents (the "Partner
Subsidiaries"), entered into a series of agreements relating to their previously
announced joint venture (March 1995) to engage in the communications business.
Under an Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") of MajorCo, L.P. (known as "Sprint Spectrum"), the business of
Sprint Spectrum will be the provision of wireless telecommunications services
and will not include the previously authorized business of providing local
wireline communications services to residences and businesses. A partnership
owned entirely by subsidiaries of the Company owns 15% of Sprint Spectrum. The
Company accounts for its investment in Sprint Spectrum under the equity method.
13
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
Scripps Cable
In October 1995, the Company announced its agreement to acquire the cable
television operations ("Scripps Cable") of The E.W. Scripps Company ("E.W.
Scripps") in exchange for shares of the Company's Class A Special Common Stock
worth $1.575 billion, subject to certain closing adjustments (the "Scripps
Transaction"). For purposes of determining the number of shares of Class A
Special Common Stock to be delivered in the Scripps Transaction, such stock will
be valued on the basis of the average closing price of the Class A Special
Common Stock on The Nasdaq Stock Market for 15 trading days randomly selected
from the 40 trading day period ending shortly before the closing date (the
"Comcast Share Price"); provided that the Comcast Share Price will be no greater
than $23.09 and, except as provided below, no less than $17.06. If the Comcast
Share Price is below $17.06, E.W. Scripps has the right to terminate the
agreement, subject to the right of the Company to increase the number of shares
of Class A Special Common Stock to be delivered in the Scripps Transaction to
that number of shares that would have been delivered if the Comcast Share Price
were not subject to the minimum price of $17.06.
Scripps Cable passes more than 1.2 million homes and serves more than 800,000
subscribers, with over 60% of its subscribers located in Sacramento, California
and Chattanooga and Knoxville, Tennessee. The Scripps Transaction is expected to
close in the fourth quarter of 1996, subject to shareholder and regulatory
approval and certain other conditions.
Share Repurchase Program
Concurrent with the announcement of the Scripps Transaction, the Company
announced that its Board of Directors authorized a market repurchase program
(the "Repurchase Program") pursuant to which the Company may purchase, at such
times and on such terms as it deems appropriate, up to $500.0 million of its
outstanding common stock, subject to certain restrictions and market conditions.
Pursuant to the Repurchase Program, the Company has repurchased shares of its
common stock for aggregate consideration of $185.8 million through July 31,
1996, including $116.6 million and $59.9 million during the six and three months
ended June 30, 1996, respectively.
QVC
In February 1995, the Company and TCI acquired all of the outstanding stock of
QVC, Inc. and its subsidiaries ("QVC") not previously owned by them
(approximately 65% of such shares on a fully diluted basis) for $46, in cash,
per share (the "QVC Acquisition"), representing a total cost of approximately
$1.4 billion. The QVC Acquisition, including the exercise of certain warrants
held by the Company, was financed with cash contributions from the Company and
TCI of $296.3 million and $6.6 million, respectively, borrowings of $1.1 billion
under a $1.2 billion QVC credit facility and existing cash and cash equivalents
held by QVC. Following the acquisition, the Company and TCI own, through their
respective subsidiaries, 57.45% and 42.55%, respectively, of QVC. The Company
has accounted for the QVC Acquisition under the purchase method and QVC was
consolidated with the Company effective February 1, 1995.
Liquidity and Capital Resources
Cash, Cash Equivalents and Short-term Investments
The Company has traditionally maintained significant levels of cash, cash
equivalents and short-term investments to meet its short-term liquidity
requirements. Cash, cash equivalents and short-term investments as of June 30,
1996 were $541.6 million. As of June 30, 1996, approximately $369.4 million of
the Company's cash, cash equivalents and short-term investments was restricted
to use by subsidiaries of the Company under contractual or other arrangements,
including approximately $262.9 million which is restricted to use by Comcast UK
Cable Partners Limited ("Comcast UK Cable").
The Company's cash, cash equivalents and short-term investments are recorded at
cost which approximates their fair value. As of June 30, 1996, the Company's
short-term investments of $133.9 million had a weighted average maturity of
approximately 16 months. However, due to the high degree of liquidity and the
intent of management to use these investments as needed to fund its commitments,
the Company considers these as current assets.
14
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
Investments
In connection with the Sports Venture Acquisition, the Company has agreed to
lend up to $50.0 million to Comcast Spectacor, on a subordinated basis, in the
event that Comcast Spectacor is unable to obtain financing from other sources.
Under the provisions of the Partnership Agreement, the Partner Subsidiaries have
committed to contribute $4.2 billion in cash to Sprint Spectrum through 1997, of
which the Company's share is $630.0 million. Of this funding requirement, the
Company has made total cash contributions to Sprint Spectrum of $415.3 million
through June 30, 1996. The Company anticipates that Sprint Spectrum's capital
requirements over the next several years will be significant. Requirements in
excess of committed capital are planned to be funded by Sprint Spectrum through
external financing, including, but not limited to, vendor financing, bank
financing and securities offered to the public. Although it is anticipated that
external financing will be available to Sprint Spectrum on acceptable terms and
conditions, no assurances can be given as to such availability. In June 1996,
Sprint Spectrum filed a preliminary registration statement on Form S-1 with the
Securities and Exchange Commission to offer up to $650.0 million of Senior Notes
and Senior Discount Notes due in 2006 in a public offering. The timing of the
Company's remaining capital contributions to Sprint Spectrum is dependent upon a
number of factors, including Sprint Spectrum's ability to obtain external
financing as well as its working capital requirements. The Company anticipates
funding its remaining capital commitments to Sprint Spectrum through its cash
flows from operating activities, its existing cash, cash equivalents, short-term
investments and lines of credit or other external financing, or by a combination
of these sources.
In February 1996, in connection with certain preemptive rights of the Company
under previously existing agreements with Nextel Communications, Inc.
("Nextel"), the Company purchased approximately 8.16 million shares, classified
as long-term investments available for sale, of Nextel common stock at $12.25
per share, for a total cost of $99.9 million. The Company continues to hold
options, which expire in 1997, to acquire an additional 25 million shares of
Nextel common stock at $16 per share.
During the three months ended June 30, 1996, the Company sold 4.4 million shares
of Nextel common stock for $85.6 million and recognized a pre-tax gain of $29.7
million as investment income in its condensed consolidated statement of
operations and accumulated deficit for the six and three months ended June 30,
1996 (the "Nextel Gain").
The Company does not have any additional significant contractual commitments
with respect to any of its investments. However, to the extent the Company does
not fund its investees' capital calls, it exposes itself to dilution of its
ownership interests.
Financing
As part of the Repurchase Program, through July 31, 1996, the Company has sold
put options on 4.0 million shares of its Class A Special Common Stock, including
put options on 1.0 million of such shares sold during the six months ended June
30, 1996. The put options give the holder the right to require the Company to
repurchase such shares at specified prices on specific dates. In May 1996, the
Company extended the original May through July 1996 maturities of the put
options to October through December 1996 and received $1.1 million in connection
with the extensions. Total proceeds of $4.6 million from the sale and subsequent
extension of these put options were credited to additional capital. The amount
the Company would be obligated to pay to repurchase such shares if all
outstanding put options were exercised, totaling $69.6 million, has been
reclassified to a temporary equity account in the Company's condensed
consolidated balance sheet as of June 30, 1996.
-------------------------
The Company expects to recognize significant losses and to continue to pay
dividends; therefore, it anticipates that it will continue to have a deficiency
in stockholders' equity that will increase through the date of consummation of
the Scripps Transaction. If the Scripps Transaction is consummated, the Company
will no longer have a deficiency in stockholders' equity; however, the Company
expects to recognize losses for the foreseeable
15
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
future, resulting in decreases in stockholders' equity. The telecommunications
industry, including cable and cellular communications, and the electronic
retailing industry are experiencing increasing competition and rapid
technological changes. The Company's future results of operations will be
affected by its ability to react to changes in the competitive environment and
by its ability to implement new technologies. However, management believes that
competition, technological changes and its significant losses and deficiency in
stockholders' equity will not significantly affect its ability to obtain
financing.
The Company believes that it will be able to meet its current and long-term
liquidity and capital requirements, including fixed charges, through its cash
flows from operating activities, existing cash, cash equivalents, short-term
investments and lines of credit and other external financing.
Statement of Cash Flows
Cash and cash equivalents decreased $131.4 million as of June 30, 1996 from
December 31, 1995 and increased $112.6 million as of June 30, 1995 from December
31, 1994. Changes in cash and cash equivalents resulted from cash flows from
operating, financing and investing activities which are explained below.
Net cash provided by operating activities amounted to $289.2 million and $206.8
million for the six months ended June 30, 1996 and 1995, respectively. The
increase of $82.4 million is primarily due to the effects of the QVC
Acquisition, changes in working capital as a result of the timing of receipts
and disbursements and the increase in the Company's operating income before
depreciation and amortization (see "Results of Operations").
Net cash (used in) provided by financing activities was ($42.8) million and $1.8
billion for the six months ended June 30, 1996 and 1995, respectively. During
the six months ended June 30, 1996, the Company borrowed $558.4 million under
its existing lines of credit and repaid $478.3 million, including the effects of
refinancings and $88.9 million of repayments under a vendor financing
arrangement. In addition, the Company repurchased $116.6 million of its common
stock during the six months ended June 30, 1996. During the six months ended
June 30, 1995, the Company borrowed $2.0 billion consisting primarily of $1.1
billion in connection with the QVC Acquisition, $300.9 million for the funding
of Sprint Spectrum and the Company's $250.0 million principal amount of its
9-3/8% senior subordinated debentures due 2005, issued in May 1995. In addition,
the Company redeemed and retired $194.4 million of its long-term debt.
Net cash used in investing activities was $377.8 million and $1.9 billion for
the six months ended June 30, 1996 and 1995, respectively. During the six months
ended June 30, 1996, net cash used in investing activities includes investments
in affiliates of $357.4 million, including $125.0 million for the purchase of
the Sixers and capital contributions to Sprint Spectrum of $69.3 million, and
additions to property and equipment of $278.9 million, offset by proceeds from
the sales of short-term and long-term investments of $328.5 million. During the
six months ended June 30, 1995, net cash used in investing activities includes
the QVC Acquisition, net of cash acquired, of $1.3 billion, investments in
affiliates of $431.5 million, including capital contributions to Sprint Spectrum
of $315.9 million, and additions to property and equipment of $339.0 million.
Such amounts were offset by proceeds from sales of short-term and long-term
investments of $236.4 million.
Results of Operations
The effects of the Company's recent acquisitions has been to increase
significantly the Company's revenues and expenses resulting in substantial
increases in its operating income before depreciation and amortization,
depreciation and amortization expense and interest expense (see "Operating
Results by Business Segment" following). As a result of the increases in
depreciation and amortization expense and interest expense associated with these
acquisitions and their financing, it is expected that the Company will recognize
significant losses for the foreseeable future.
16
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
Summarized consolidated financial information for the Company for the six and
three months ended June 30, 1996 and 1995 is as follows (dollars in millions,
"NM" denotes percentage is not meaningful):
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase / (Decrease)
1996 1995 $ %
<S> <C> <C> <C> <C>
Revenues, net ......................................... $ 1,896.3 $ 1,487.1 $ 409.2 27.5%
Cost of goods sold from electronic retailing .......... 512.4 350.2 162.2 46.3
Operating, selling, general and administrative expenses 817.7 656.5 161.2 24.6
---------- ----------
Operating income before depreciation and
amortization (1) ................................... 566.2 480.4 85.8 17.9
Depreciation and amortization ......................... 324.3 387.0 (62.7) (16.2)
---------- ----------
Operating income ...................................... 241.9 93.4 148.5 NM
---------- ----------
Interest expense ...................................... 268.0 250.6 17.4 6.9
Investment income ..................................... (47.5) (157.6) (110.1) (69.9)
Equity in net losses of affiliates .................... 60.3 37.9 22.4 59.1
Gain from equity offering of affiliate ................ (40.6) 40.6 NM
Other ................................................. 23.0 0.4 22.6 NM
Income tax expense .................................... 24.6 14.0 10.6 75.7
Minority interest ..................................... (29.1) (22.0) 7.1 32.3
Extraordinary item .................................... 1.0 1.0 NM
---------- ----------
Net loss .............................................. ($ 17.8) ($ 29.9) ($ 12.1) (40.5%)
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
June 30, Increase
1996 1995 $ %
<S> <C> <C> <C> <C>
Revenues, net ......................................... $ 945.6 $ 823.6 $ 122.0 14.8%
Cost of goods sold from electronic retailing .......... 242.2 212.2 30.0 14.1
Operating, selling, general and administrative expenses 407.3 350.6 56.7 16.2
-------- --------
Operating income before depreciation and
amortization (1) ................................... 296.1 260.8 35.3 13.5
Depreciation and amortization ......................... 167.4 143.5 23.9 16.7
-------- --------
Operating income ...................................... 128.7 117.3 11.4 9.7
-------- --------
Interest expense ...................................... 133.2 133.0 0.2 0.2
Investment income ..................................... (28.8) (4.8) 24.0 NM
Equity in net losses of affiliates .................... 25.8 21.5 4.3 20.0
Gain from equity offering of affiliate ................ (40.6) 40.6 NM
Other ................................................. 11.6 0.7 10.9 NM
Income tax expense .................................... 23.7 10.1 13.6 NM
Minority interest ..................................... (14.0) (13.9) 0.1 0.7
Extraordinary item .................................... 1.0 1.0 NM
-------- --------
Net income (loss) ..................................... $ 16.8 ($ 29.3) $ 46.1 NM
======== ========
- ------------
<FN>
(1) Operating income before depreciation and amortization is commonly referred
to in the Company's businesses as "operating cash flow." Operating cash
flow is a measure of a company's ability to generate cash to service its
obligations, including debt service obligations, and to finance capital and
other expenditures. In part due to the capital intensive nature of the
Company's businesses and the resulting significant level of non-cash
depreciation and amortization expense, operating cash flow is frequently
used as one of the bases for evaluating the Company's businesses. Operating
cash flow does not purport to represent net income or net cash provided
17
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
by operating activities, as those terms are defined under generally
accepted accounting principles, and should not be considered as an
alternative to such measurements as an indicator of the Company's
performance. See "Statement of Cash Flows" above for a discussion of net
cash provided by operating activities.
</FN>
</TABLE>
Operating Results by Business Segment
Domestic Cable Communications
The following table sets forth operating results for the Company's domestic
cable communications segment (dollars in millions).
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase
1996 1995 $ %
<S> <C> <C> <C> <C>
Service income ..................... $ 778.3 $ 709.6 $ 68.7 9.7%
Operating, selling, general and
administrative expenses ....... 393.3 361.9 31.4 8.7
-------- -------- -------
Operating income before depreciation
and amortization (a) .......... $ 385.0 $ 347.7 $ 37.3 10.7%
======== ======== =======
Three Months Ended
June 30, Increase
1996 1995 $ %
Service income ..................... $ 396.0 $ 362.5 $ 33.5 9.2%
Operating, selling, general and
administrative expenses ....... 196.0 179.9 16.1 8.9
-------- -------- -------
Operating income before depreciation
and amortization (a) .......... $ 200.0 $ 182.6 $ 17.4 9.5%
======== ======== =======
<FN>
- ---------------
(a) See footnote (1) on page 17.
</FN>
</TABLE>
Of the increases in service income of $68.7 million and $33.5 million for the
six and three month periods from 1995 to 1996, $17.3 million and $8.1 million
are attributable to subscriber growth, $41.3 million and $21.4 million relate to
changes in rates, $4.4 million and $3.6 million are attributable to growth in
advertising sales and $5.7 million and $400,000 relate to growth in other
product offerings.
Of the $31.4 million and $16.1 million increases in operating, selling, general
and administrative expenses for the six and three month periods from 1995 to
1996, $15.1 million and $6.5 million are attributable to increases in the costs
of cable programming as a result of subscriber growth, additional programming
offerings and changes in rates and $16.3 million and $9.6 million result from
increases in the cost of labor and other volume related expenses. It is
anticipated that the Company's cost of cable programming will increase in the
future as cable programming rates increase and additional sources of cable
programming become available.
18
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
Electronic Retailing
As a result of the QVC Acquisition, the Company commenced consolidating the
financial results of QVC effective February 1, 1995. The following table
presents comparative financial information for the six and three months ended
June 30, 1996 and for the three months ended June 30, 1995 and pro forma
financial information for the six months ended June 30, 1995. Pro forma
financial information is presented herein for purposes of analysis and may not
reflect what actual operating results would have been had the Company owned QVC
since January 1, 1995 (dollars in millions).
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase
1996 1995 $ %
<S> <C> <C> <C> <C>
Net sales from electronic retailing .......... $ 855.8 $ 715.9 $ 139.9 19.5%
Cost of goods sold from electronic retailing . 512.4 428.3 84.1 19.6
Operating, selling, general and administrative
expenses ................................ 204.0 168.8 35.2 20.9
-------- -------- --------
Operating income before depreciation
and amortization (a) .................... $ 139.4 $ 118.8 $ 20.6 17.3%
======== ======== ========
Gross margin ................................. 40.1% 40.2%
Three Months Ended
June 30, Increase
1996 1995 $ %
Net sales from electronic retailing .......... $ 405.8 $ 357.4 $ 48.4 13.5%
Cost of goods sold from electronic retailing . 242.2 212.2 30.0 14.1
Operating, selling, general and administrative
expenses ................................ 96.6 88.5 8.1 9.2
-------- -------- --------
Operating income before depreciation
and amortization (a) .................... $ 67.0 $ 56.7 $ 10.3 18.2%
======== ======== =======
Gross margin ................................. 40.3% 40.6%
<FN>
- ----
(a) See footnote (1) on page 17.
</FN>
</TABLE>
The consolidation of QVC's United Kingdom operations, effective April 1, 1995,
resulted in increases in net sales from electronic retailing of $29.9 million
and $8.6 million for the six and three month periods from 1995 to 1996. The
remaining increases of $110.0 million and $39.8 million are primarily
attributable to the effects of an approximate 9.0% increase in the average
number of QVC homes receiving QVC services in the United States for these
comparative periods.
The increase in cost of goods sold from electronic retailing is directly related
to the growth in net sales. Gross margin has remained relatively constant from
1995 to the same periods in 1996.
The consolidation of QVC's United Kingdom operations, effective April 1, 1995,
resulted in an increase in operating, selling, general and administrative
expenses of $12.3 million and $2.1 million for the six and three month periods
from 1995 to 1996. The remaining increases of $22.9 million and $6.0 million are
attributable to higher sales volume and increases in advertising and
administrative costs.
19
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
Cellular Communications
The following table sets forth the operating results for the Company's cellular
communications segment (dollars in millions).
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase
1996 1995 $ %
<S> <C> <C> <C> <C>
Service income ............................... $ 207.1 $ 176.4 $ 30.7 17.4%
Operating, selling, general and administrative
expenses ................................ 136.0 105.6 30.4 28.8
-------- -------- -------
Operating income before depreciation
and amortization (a) .................... $ 71.1 $ 70.8 $ 0.3 0.4%
======== ======== =======
Three Months Ended
June 30, Increase
1996 1995 $ %
Service income ............................... $ 108.9 $ 94.3 $ 14.6 15.5%
Operating, selling, general and administrative
expenses ................................ 66.3 54.7 11.6 21.2
-------- -------- -------
Operating income before depreciation
and amortization (a) .................... $ 42.6 $ 39.6 $ 3.0 7.6%
======== ======= =======
<FN>
- ---------------
(a) See footnote (1) on page 17.
</FN>
</TABLE>
Of the $30.7 million and $14.6 million increases in service income for the six
and three month periods from 1995 to 1996, $40.1 million and $19.4 million are
attributable to the Company's subscriber growth. Offsetting these increases are
decreases of $9.4 million and $4.8 million resulting primarily from a reduction
in the average rate per minute of use from 1995 to the same periods in 1996.
Of the $30.4 million and $11.6 million increases in operating, selling, general
and administrative expenses for the six and three month periods from 1995 to
1996, $18.0 million and $5.3 million are related to subscriber growth, including
the costs to acquire and service subscribers. The remaining increases of $12.4
million and $6.3 million are due to increases in other expenses, including
subscriber retention costs, administrative costs and theft of service in 1996.
Consolidated Analysis
The $62.7 million decrease in depreciation and amortization expense for the six
month period from 1995 to 1996 is attributable to the effects of the rebuild of
certain of the Company's cellular equipment in 1995, as described below,
partially offset by the effects of the QVC Acquisition and capital expenditures.
The $23.9 million increase in depreciation and amortization expense for the
three month period from 1995 to 1996 is primarily attributable to the effects of
capital expenditures.
In 1995, the Company's cellular division purchased approximately $172.0 million
of switching and cell site equipment which replaced the existing switching and
cell site equipment (the "Cellular Rebuild"). The Company substantially
completed the Cellular Rebuild during 1995. During the first quarter of 1995,
the Company charged approximately $110.0 million to depreciation expense which
represented the difference between the net book value of the equipment replaced
and the residual value realized upon its disposal.
20
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
The $17.4 million and $200,000 increases in interest expense for the six and
three month periods from 1995 to 1996 are due to increased levels of debt,
including the debt related to the QVC Acquisition, offset by interest
capitalized in 1996 and decreases in rates. The Company anticipates that, for
the foreseeable future, interest expense will be a significant cost to the
Company and will have a significant adverse effect on the Company's ability to
realize net earnings. The Company believes it will continue to be able to meet
its obligations through its ability both to generate operating income before
depreciation and amortization and to obtain external financing.
The $110.1 million decrease in investment income for the six month period from
1995 to 1996 is primarily attributable to the effects of the Heritage
Transaction (as defined below) in 1995, partially offset by gains recognized on
sales of long-term investments, including the Nextel Gain. The $24.0 million
increase in investment income for the three month period from 1995 to 1996 is
primarily attributable to the Nextel Gain.
In January 1995, the Company exchanged its investments in Heritage
Communications, Inc. with TCI for approximately 13.3 million publicly-traded
Class A common shares of TCI with a fair market value of approximately $290.0
million. Shortly thereafter, the Company sold approximately 9.1 million
unrestricted TCI shares for total proceeds of $188.1 million (collectively, the
"Heritage Transaction"). As a result of these transactions, the Company
recognized a pre-tax gain of $141.0 million in the first quarter of 1995.
The $22.4 million and $4.3 million increases in equity in net losses of
affiliates for the six and three month periods from 1995 to 1996 are primarily
due to the effects of increased losses incurred by Sprint Spectrum.
Through June 27, 1996, the Company held investments in Teleport Communications
Group Inc. ("TCGI"), TCG Partners and certain local joint ventures (the "Joint
Ventures") managed by TCGI and TCG Partners. On June 27, 1996, TCGI sold
approximately 27 million shares of its Class A Common Stock (the "TCGI Class A
Stock") for $16 per share in an initial public offering (the "IPO"). In
connection with the IPO, TCGI, the Company and subsidiaries of Cox, TCI and
Continental Cablevision ("Continental" and collectively with Cox, TCI and the
Company, the "Cable Stockholders") entered into a reorganization agreement
pursuant to which TCGI was reorganized (the "Reorganization"). The
Reorganization consisted of, among other things: (i) the acquisition by TCGI of
TCG Partners; (ii) the acquisition by TCGI of additional interests in the Joint
Ventures (including 100% of those interests held by the Company); and (iii) the
contribution to TCGI of $269.0 million aggregate principal amount of
indebtedness, plus accrued interest thereon, owed by TCGI to the Cable
Stockholders (including $53.8 million principal amount and $4.1 million of
accrued interest owed to the Company). In connection with the Reorganization,
the Company received 25.6 million shares of TCGI's Class B Common Stock (the
"TCGI Class B Stock"). Each share of TCGI Class B Stock is entitled to voting
power equivalent to ten shares of TCGI Class A Stock and is convertible, at the
option of the holder, into one share of TCGI Class A Stock. The Company recorded
a $40.6 million increase in its proportionate share of TCGI's net assets as a
gain from equity offering of affiliate in its condensed consolidated statement
of operations and accumulated deficit for the six and three months ended June
30, 1996 (the "TCGI Gain"). After giving effect to the Reorganization and the
IPO, the Company owns 19.5% of the outstanding TCGI Class B Stock representing a
19.1% voting interest and a 16.1% equity interest. The Company will continue to
account for its interest in TCGI under the equity method.
The increases in other expenses are primarily attributable to the settlement of
certain litigation during the six months ended June 30, 1996.
The increases in income tax expense are primarily attributable to the tax effect
of the TCGI Gain recorded during the three months ended June 30, 1996.
For the six and three months ended June 30, 1996 and 1995, the Company's
earnings before extraordinary items, minority interest, income tax expense,
equity in net losses of affiliates and fixed charges (interest expense) were
$307.1 million, $250.6 million, $186.6 million and $121.4 million, respectively.
Excluding the TCGI Gain and the Nextel Gain, totaling $70.3 million, recognized
in the second quarter of 1996 and the $141.0 million gain recognized
21
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
in the first quarter of 1995 in connection with the Heritage Transaction, such
earnings were not adequate to cover the Company's fixed charges, including
capitalized interest of $14.7 million and $7.6 million for the six and three
months ended June 30, 1996, respectively, of $282.7 million, $250.6 million,
$140.8 million and $133.0 million for the six and three months ended June 30,
1996 and 1995, respectively. Fixed charges include non-cash interest, net of
interest capitalized, of $32.2 million, $27.4 million, $16.1 million and $13.9
million for the six and three months ended June 30, 1996 and 1995, respectively.
The inadequacy of these earnings to cover fixed charges is primarily due to the
substantial non-cash charges for depreciation and amortization expense,
including the first quarter 1995 charge associated with the Cellular Rebuild.
The Company believes that its losses and inadequacy of earnings to cover fixed
charges will not significantly affect the performance of its normal business
activities because of its existing cash, cash equivalents and short-term
investments, its ability to generate operating income before depreciation and
amortization and its ability to obtain external financing.
The Company believes that its operations are not materially affected by
inflation.
22
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not party to litigation which, in the opinion of the Company's
management, will have a material adverse effect on the Company's financial
position or results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting on June 19, 1996, the shareholders approved the following
proposals:
To elect ten directors to serve for the ensuing year and until their
respective successors shall have been duly elected and qualified.
<TABLE>
<CAPTION>
Director Class of Stock For Withheld
<S> <C> <C> <C>
Ralph J. Roberts Class A 29,547,034 149,492
Class B 131,793,750
Julian A. Brodsky Class A 29,584,638 111,888
Class B 131,793,750
Brian L. Roberts Class A 29,600,438 96,088
Class B 131,793,750
Daniel Aaron Class A 28,872,658 823,868
Class B 131,793,750
Gustave G. Amsterdam Class A 29,582,540 113,986
Class B 131,793,750
Sheldon M. Bonovitz Class A 28,874,811 821,715
Class B 131,793,750
Joseph L. Castle II Class A 29,598,588 97,938
Class B 131,793,750
Bernard C. Watson Class A 29,596,888 99,638
Class B 131,793,750
Irving A. Wechsler Class A 28,878,215 818,311
Class B 131,793,750
Anne Wexler Class A 29,580,506 116,020
Class B 131,793,750
</TABLE>
To approve the Comcast Corporation 1996 Stock Option Plan.
<TABLE>
<CAPTION>
Broker
Class of Stock For Against Abstain Nonvote
<S> <C> <C> <C> <C>
Class A 17,032,087 4,996,914 146,474 7,521,051
Class B 131,793,750
</TABLE>
23
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
To amend the Company's Articles of Incorporation to conform the
requirements for class voting with those of the Pennsylvania Business
Corporation Law of 1988.
<TABLE>
<CAPTION>
Broker
Class of Stock For Against Abstain Nonvote
<S> <C> <C> <C> <C>
Class A 20,242,047 2,117,823 71,878 7,264,778
Class B 131,793,750
Class A Special 131,777,911 5,048,537 346,024
</TABLE>
To amend the Company's Articles of Incorporation to provide for mirror
spin-offs, mergers and other similar transactions.
<TABLE>
<CAPTION>
Broker
Class of Stock For Against Abstain Nonvote
<S> <C> <C> <C> <C>
Class A 20,230,396 2,103,749 97,603 7,264,778
Class B 131,793,750
Class A Special 131,051,853 5,731,711 388,908
</TABLE>
To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 1996 fiscal year.
<TABLE>
<CAPTION>
Class of Stock For Against Abstain
<S> <C> <C> <C>
Class A 29,564,098 91,578 40,850
Class B 131,793,750
</TABLE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
10.1/*/ Amendment, dated as of July 19, 1996, to the Credit
Agreement, dated as of February 15, 1995, among QVC, Inc.
and the Banks listed therein.
11.1 Computation of Net (Loss) Income Per Share.
27.1 Financial Data Schedule.
27.2 Restated Financial Data Schedule.
- --------------
/*/ Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant
agrees to furnish a copy of the referenced agreement to the Commission
upon request.
24
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
(b) Reports on Form 8-K:
(i) The Company filed a Current Report on Form 8-K under Item 5 on April
10, 1996 relating to its agreement to purchase the cable television
operations of The E.W. Scripps Company, which included the Company's
Unaudited Pro Forma Condensed Consolidated Financial Statements as
of and for the year ended December 31, 1995.
(ii) The Company filed a Current Report on Form 8-K under Item 5 on May
9, 1996 relating to its purchase of the National Basketball
Association ("NBA") franchise to own and operate the Philadelphia
76ers basketball team, and related assets.
(iii) The Company filed a Current Report on Form 8-K under Item 5 on May
28, 1996, as amended by a Current Report on Form 8-K/A filed on July
22, 1996, relating to its agreement to purchase the cable television
operations of The E.W. Scripps Company, which included the Company's
Unaudited Pro Forma Condensed Consolidated Financial Statements as
of and for the three months ended March 31, 1996 and for the year
ended December 31, 1995.
25
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
COMCAST CORPORATION
---------------------------------------
/s/ LAWRENCE S. SMITH
---------------------------------------
Lawrence S. Smith
Executive Vice President
(Chief Accounting Officer)
Date: August 14, 1996
26
Exhibit 11.1
COMPUTATION OF NET (LOSS) INCOME PER SHARE
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
(Loss) income before extraordinary item ($16,744) ($29,922) $17,860 ($29,294)
Extraordinary item 1,013 1,013
--------- --------- --------- ---------
Net (loss) income ($17,757) ($29,922) $16,847 ($29,294)
========= ========= ========= =========
NO DILUTION
Weighted average number of common shares
outstanding during the period 237,624 239,541 235,827 239,674
========= ========= ========= =========
(Loss) income before extraordinary item per share ($.07) ($.12) $.07 ($.12)
Extraordinary item per share
--------- --------- --------- ---------
Net (loss) income per share ($.07) ($.12) $.07 ($.12)
========= ========= ========= =========
PRIMARY
Weighted average number of common shares
outstanding during the period 237,624 239,541 235,827 239,674
--------- --------- --------- ---------
Common share equivalents
Stock options (b) (a) (a) 5,150 (a)
Put options (a) (a) (a) (a)
--------- --------- --------- ---------
Weighted average number of common shares
and common share equivalents outstanding
during the period 237,624 239,541 240,977 239,674
========= ========= ========= =========
(Loss) income before extraordinary item per share ($.07) ($.12) $.07 ($.12)
Extraordinary item per share
--------- --------- --------- ---------
Net (loss) income per share ($.07) ($.12) $.07 ($.12)
========= ========= ========= =========
FULLY DILUTED
Weighted average number of common shares
outstanding during the period 237,624 239,541 235,827 239,674
--------- --------- --------- ---------
Common share equivalents
Stock options (b) (a) (a) 5,454 (a)
Put options (a) (a) (a) (a)
Convertible debentures (a) (a) (a) (a)
--------- --------- --------- ---------
Weighted average number of common shares
and common share equivalents outstanding
during the period 237,624 239,541 241,281 239,674
========= ========= ========= =========
(Loss) income before extraordinary item per share ($.07) ($.12) $.07 ($.12)
Extraordinary item per share
--------- --------- --------- ---------
Net (loss) income per share ($.07) ($.12) $.07 ($.12)
========= ========= ========= =========
<FN>
- ---------------
(a) Not applicable, as inclusion would be antidilutive.
(b) Computed using the treasury stock method, where applicable.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of operations and consolidated balance sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000022301
<NAME> COMCAST CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 407,664
<SECURITIES> 133,926
<RECEIVABLES> 418,456
<ALLOWANCES> (78,450)
<INVENTORY> 243,120
<CURRENT-ASSETS> 1,243,069
<PP&E> 2,989,329
<DEPRECIATION> (1,031,743)
<TOTAL-ASSETS> 9,623,573
<CURRENT-LIABILITIES> 1,039,061
<BONDS> 7,120,289
0
0
<COMMON> 233,375
<OTHER-SE> (1,188,652)
<TOTAL-LIABILITY-AND-EQUITY> 9,623,573
<SALES> 1,896,306
<TOTAL-REVENUES> 1,896,306
<CGS> (512,380)
<TOTAL-COSTS> (1,654,381)
<OTHER-EXPENSES> (60,321)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (267,993)
<INCOME-PRETAX> (21,226)<F1>
<INCOME-TAX> (24,612)
<INCOME-CONTINUING> (16,744)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,013)
<CHANGES> 0
<NET-INCOME> (17,757)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
<FN>
<F1>loss before income tax expense and other items excludes the effect of
minority interests, net of tax, of $29,094.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This restated schedule contains summary financial information extracted from the
consolidated statement of operations and consolidated balance sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000022301
<NAME> COMCAST CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 510,150
<SECURITIES> 199,575
<RECEIVABLES> 453,922
<ALLOWANCES> (86,133)
<INVENTORY> 240,753
<CURRENT-ASSETS> 1,426,325
<PP&E> 2,839,028
<DEPRECIATION> (982,195)
<TOTAL-ASSETS> 9,657,930
<CURRENT-LIABILITIES> 1,009,572
<BONDS> 7,101,045
0
0
<COMMON> 236,563
<OTHER-SE> (1,128,133)
<TOTAL-LIABILITY-AND-EQUITY> 9,657,930
<SALES> 950,744
<TOTAL-REVENUES> 950,744
<CGS> (270,146)
<TOTAL-COSTS> (837,494)
<OTHER-EXPENSES> (34,502)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (134,814)
<INCOME-PRETAX> (48,810)<F1>
<INCOME-TAX> (864)
<INCOME-CONTINUING> (34,604)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,604)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
<FN>
<F1>Loss before income tax expense and other items excludes the effect of
minority interests, net of tax, of $15,070.
</FN>
</TABLE>
