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Brand Finance is the world’s leading brand valuation consultancy, with offices in over 20 countries.

Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands.


Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Brand Finance is a chartered accountancy firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).

Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.
Brand Finance, bridging the gap between marketing and finance.


Founded in 1998 in London by David Haigh,

it is present in Spain directed by Teresa de Lemus.

Madrid´s office has participated in brand valuation reports, marketing ROI analysis and strategic decisions, brand changes after an acquisition, brand strategies to increase market share or as an expert witness in legal procedures on loss of reputation. Some of our Spanish clients have been: Santander, Chupa Chups, Telefónica, Cepsa, Canal de Isabel II, LaLiga among others.

We are different from our technical rigor since we use an internationally endorsed methodology.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671. The company is part of ICAEW and is the first brand valuation consultant to join the IVSC International Committee on Valuation Standards.

The Brand Finance methodology used in the preparation of the annual rankings on the most valuable and strong brands in the world, is certified by the North American Marketing Accountability Standards Board (MASB) and complies with the Marketing Metric Audit Protocol (MMAP) audit protocols.).
We are very proud that, since 2020, the UN Global Innovation Index (GII) incorporates our brand value database to create one of the indicators by strengthening the weight of the brand category in its analysis.
We are defined by the slogan, “bridging the gap between marketing and finance” as we study and analyse the impact and role of “brand” in the turnover and value of business. We dedicate all our efforts in valuing the importance of intangible assets, particularly branding, to business results. We help brands study and analyse the benefits of intangible assets as well as the behavior of brand drivers in adding value to marketing and finance teams.

  

Every year, Brand Finance analyses over 5,000 of the world’s most valuable and strongest brands. Our database is one of our strengths and gives us a profound knowledge of the past, present, and future across sectors, allowing us to predict trends.

Using this plethora of information, we publish over 40 sector rankings and reports every year, publicizing the value of brand to businesses. The Brand Finance Global 500 is our yearly study of the 500 most valuable brands in the world. According to the latest report, SantanderZaraMovistarBBVAEl Corte Inglés, Iberdrola and Mercadona stood out as the most internationally recognized Spanish brands.

 

Spanish luxury brand, LOEWE, is among the 50 most valuable luxury and premium brands in the world, according to the Brand Finance Luxury & Premium 50 2020 report.
The sector has been highly impacted by the pandemic in both the fall in consumption as well as international mobility restrictions, but LOEWE has managed to overcome and increase its two main brand indicators: brand value and brand strength. LOWE’s brand value has increased by 21.5% since 2019, rising four places in the ranking to the 32nd spot, Valentino, Salvatore Ferragamo, Versace, and Dolce and Gabana in the apparel sector.

Teresa de Lemus, Managing Director, Brand Finance Spain, commented:“The value of the LOEWE brand represents Spain, contributing 0.7 to the total ranking and positioning our nation in the top 10 (rank 8), being the brand that contributes the most to the total sectoral value. This sector value this year is 232.7 billion euros, 10.4% higher than in 2019. “

Without a doubt, the most awaited report in our country is the Brand Finance Spain 100 which analyses the 100 most valuable Spanish brands. The seven brands included in the Global 500 report are joined by Mapfre, Repsol, and CaixaBank which feature in the top 10 nationally.

THE VALUE OF NATIONS

In addition to corporate brands, we also analyze other intangibles such as the reputation, soft power or influence of nations and country brands, among others. We measure the influence
of countries and the attributes that are most internationally recognized in the Brand Finance Global Soft Power Index report. At the beginning of 2020 we had the presence of Ban Ki Moon, eighth UN Secretary General, at the presentation of the report in London and Oxford. According to the 2020 report, Spain stands out
internationally as the friendliest nation in the world.

The world considers the Spanish to be the nation with the most fun and friendly inhabitants in the world. Those born in the land of quiet lunches, long nights of fun, flamenco, a taste for sharing time together eating or soccer are incredibly popular around the world. This is largely due to the fact that Spain undoubtedly continues to be an international benchmark as a nation of leisure and tourism, a sector that contributed 14.6% to national GDP in 2019.

Overall, Spain ranks 16th out of a total of 60 nations on the Index, with a final score of 47.6 out of 100. Despite the positive results in People & Values, Spain’s performance is not so much in other
areas, such as Governance, International Relations or Education & Science. Recent problems involving Catalonia, problems in building a coalition government, corruption scandals and the persistent effects of the Great Recession are likely to be responsible for these results. Strength and stability at home are obviously a precursor to influence abroad.

Brand Finance Group draws on brand valuation, strategy and knowledge experience to advise brands around the world. Brand Dialogue is the Brand Finance Group company specialized in
building and measuring communication strategies that add greater value to the brand. Supports Brand Finance customers and own customers to effectively design and communicate brand strategies.

“We understand communication as a business lever. We analyze and measure the attributes of the brand strength that act as levers in the communication of each brand and sector. On this analytical basis, we build communication strategies that increase brand value and business sales figure.” Cristina Campos, Managing Director of Brand Dialogue Spain.

Brand Dialogue and Brand Finance are helping clients to solve brand problems using advanced financial assessment techniques and market research analysis to obtain valid information and
recommendations and a solid foundation and basis in values.

Comcast Reports 3rd Quarter 2020 Results

Comcast Reports 3rd Quarter 2020 Results

PHILADELPHIA–(BUSINESS WIRE)–Oct. 29, 2020– Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter ended September 30, 2020.

We are nearly eight months into this pandemic – and despite many harsh realities, I couldn’t be more pleased and proud of how our team has worked together across the company to find safe and creative solutions to successfully operate in this environment. We are executing at the highest level; and perhaps, most importantly, accelerating innovation, which will drive long-term future growth. This third quarter, we delivered the best broadband results in our company’s history.

Driven by our industry-leading platform and strategic focus on broadband, aggregation and streaming, we added a record 633,000 high-speed internet customers and 556,000 total net new customer relationships. At the same time, we’re growing our entertainment platforms with the addition of Flex, which has a significant positive impact on broadband churn and customer lifetime value. Our integrated strategy is also driving results in streaming with nearly 22 million sign-ups for Peacock to date, and we are exceeding our expectations on all engagement metrics in only a few months. And Sky continues to add customer relationships at higher prices while reducing churn to all-time lows in our core UK business. Going forward, and as we emerge from the pandemic, we believe we are extremely well positioned to provide seamless and integrated experiences for our customers and to deliver superior long-term growth and returns for our shareholders,” commented Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation.

 

($ in millions, except per share data)

3rd Quarter

Year to Date

Consolidated Results

2020

2019

Change

2020

2019

Change

Revenue

$25,532

$26,827

(4.8

%)

$75,856

$80,544

(5.8

%)

Net Income Attributable to Comcast

$2,019

$3,217

(37.2

%)

$7,154

$9,895

(27.7

%)

Adjusted Net Income1

$3,000

$3,667

(18.2

%)

$9,436

$10,754

(12.3

%)

Adjusted EBITDA2

$7,583

$8,553

(11.3

%)

$23,640

$25,822

(8.5

%)

Earnings per Share3

$0.44

$0.70

(37.1

%)

$1.55

$2.15

(27.9

%)

Adjusted Earnings per Share1

$0.65

$0.79

(17.7

%)

$2.04

$2.33

(12.4

%)

Net Cash Provided by Operating Activities

$5,228

$5,191

0.7

%

$19,695

$19,462

1.2

%

Free Cash Flow4

$2,289

$2,072

10.5

%

$11,580

$10,910

6.1

%

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

3rd Quarter 2020 Highlights:

  • Generated Consolidated Adjusted EBITDA of $7.6 Billion, Adjusted EPS of $0.65 and Free Cash Flow of $2.3 Billion
  • Cable Communications Total Customer Relationship Net Additions Were 556,000, the Best Quarterly Result on Record
  • Total High-Speed Internet Customer Net Additions Were 633,000, the Best Quarterly Result on Record
  • Cable Communications Adjusted EBITDA Increased 10.5% Driven by Strength in High-Speed Internet
  • Peacock Has Nearly 22 Million Sign-Ups to Date Across the U.S. and Recently Secured Distribution on the Roku Platform
  • NBCUniversal Reorganized Its Television and Streaming Businesses Under Mark Lazarus and Cesar Conde with a Centralized Structure Optimizing Content Creation, Distribution and Monetization
  • NBCUniversal Completed a Successful Upfront, with Strong Volume Commitments and Higher Pricing
  • Sky Customer Trends Improved Sequentially, and Included Net Additions in the U.K.
  • Premier League Viewership Reached Record Levels on Sky Sports, Including the Highest Average Season Viewership on Record for the 2019/20 Season and the Highest Daily U.K. Viewership on Record for the 2020/21 Season to Date

Consolidated Financial Results

Revenue for the third quarter of 2020 decreased 4.8% to $25.5 billion. Net Income Attributable to Comcast decreased 37.2% to $2.0 billion. Adjusted Net Income decreased 18.2% to $3.0 billion. Adjusted EBITDA decreased 11.3% to $7.6 billion.

For the nine months ended September 30, 2020, revenue decreased 5.8% to $75.9 billion compared to 2019. Net income attributable to Comcast decreased 27.7% to $7.2 billion. Adjusted Net Income decreased 12.3% to $9.4 billion. Adjusted EBITDA decreased 8.5% to $23.6 billion.

Earnings per Share (EPS) for the third quarter of 2020 was $0.44, a decrease of 37.1% compared to the third quarter of 2019. Adjusted EPS decreased 17.7% to $0.65.

For the nine months ended September 30, 2020, EPS was $1.55, a 27.9% decrease compared to the prior year. Adjusted EPS decreased 12.4% to $2.04.

Capital Expenditures decreased 4.9% to $2.4 billion in the third quarter of 2020. Cable Communications’ capital expenditures decreased 2.5% to $1.8 billion. NBCUniversal’s capital expenditures decreased 29.3% to $357 million. Sky’s capital expenditures increased 127.3% to $237 million.

For the nine months ended September 30, 2020, capital expenditures decreased 7.6% to $6.3 billion compared to 2019. Cable Communications’ capital expenditures decreased 5.9% to $4.5 billion. NBCUniversal’s capital expenditures decreased 22.5% to $1.1 billion. Sky’s capital expenditures increased 20.2% to $649 million.

Net Cash Provided by Operating Activities was $5.2 billion in the third quarter of 2020. Free Cash Flow was $2.3 billion.

For the nine months ended September 30, 2020, net cash provided by operating activities was $19.7 billion. Free cash flow was $11.6 billion.

Dividends paid during the third quarter of 2020 totaled $1.1 billion. For the nine months ended September 30, 2020, dividends paid totaled $3.1 billion.

Cable Communications

($ in millions)

3rd Quarter

Year to Date

2020

2019

Change

2020

2019

Change

Cable Communications Revenue

High-Speed Internet

$5,198

$4,721

10.1

%

$15,199

$13,961

8.9

%

Video

5,421

5,541

(2.1

%)

16,468

16,763

(1.8

%)

Voice

876

963

(9.0

%)

2,652

2,935

(9.6

%)

Wireless

400

326

22.8

%

1,069

795

34.5

%

Business Services

2,049

1,971

4.0

%

6,096

5,795

5.2

%

Advertising

674

603

11.8

%

1,659

1,766

(6.1

%)

Other

382

459

(17.2

%)

1,203

1,299

(7.5

%)

Cable Communications Revenue

$15,000

$14,584

2.9

%

$44,346

$43,314

2.4

%

Cable Communications Adjusted EBITDA

$6,411

$5,801

10.5

%

$18,663

$17,383

7.4

%

Adjusted EBITDA Margin

42.7%

39.8%

42.1%

40.1%

Cable Communications Capital Expenditures

$1,770

$1,814

(2.5

%)

$4,491

$4,771

(5.9

%)

Percent of Cable Communications Revenue

11.8%

12.4%

10.1%

11.0%

Revenue for Cable Communications increased 2.9% to $15.0 billion in the third quarter of 2020, driven by increases in high-speed internet, business services, wireless and advertising revenue, partially offset by decreases in video, voice and other revenue. These results were negatively impacted by accrued customer regional sports network (RSN) fee adjustments related to canceled sporting events as a result of COVID-19. Excluding these adjustments5, Cable Communications revenue increased 3.9%. High-speed internet revenue increased 10.1%, due to an increase in the number of residential high-speed internet customers and an increase in average rates. Excluding the impact of accrued RSN fee adjustments5 for customers taking bundled services, high-speed internet revenue increased 11.2%. Business services revenue increased 4.0%, reflecting increases in average rates and an increase in the number of customers receiving our services. Wireless revenue increased 22.8%, due to an increase in the number of customer lines. Advertising revenue increased 11.8%, primarily reflecting an increase in political advertising revenue. Excluding political advertising revenue, advertising revenue decreased 6.8%. Video revenue decreased 2.1%, due to a decrease in the number of residential video customers, partially offset by an increase in average rates. Excluding the impact of accrued customer RSN fee adjustments5, video revenue decreased 0.8%. Voice revenue decreased 9.0%, reflecting decreases in average rates and in the number of residential voice customers. Other revenue decreased 17.2%, primarily reflecting lower revenue due to waived late fees and a decline in revenue from our security and automation services.

For the nine months ended September 30, 2020, Cable revenue increased 2.4% to $44.3 billion compared to 2019, driven by growth in high-speed internet, business services and wireless revenue, partially offset by a decrease in video, voice, advertising and other revenue. These results were negatively impacted by COVID-19, including accrued customer RSN fee adjustments, reduced advertising revenue and lower revenue due to our efforts to assist customers during this public health crisis. Excluding the impact of accrued customer RSN fee adjustments5, Cable Communications revenue increased 3.2%.

Total Customer Relationships increased by 556,000 to 32.7 million in the third quarter of 2020. Residential customer relationships increased by 539,000 and business customer relationships increased by 17,000. Total high-speed internet customer net additions were 633,000, total video customer net losses were 273,000 and total voice customer net losses were 3,000. In addition, Cable Communications added 187,000 wireless lines in the quarter.

(in thousands)

Net Additions

3Q20

3Q19

3Q20

3Q19

Customer Relationships

Residential Customer Relationships

30,289

28,797

539

288

Business Services Customer Relationships

2,401

2,377

17

21

Total Customer Relationships

32,690

31,173

556

309

Residential Customer Relationships Mix

One Product Residential Customers

11,957

9,905

625

379

Two Product Residential Customers

8,732

8,915

(9

)

(38

)

Three or More Product Residential Customers

9,600

9,977

(77

)

(53

)

Residential High-Speed Internet Customers

27,837

25,990

617

359

Business Services High-Speed Internet Customers

2,225

2,197

16

20

Total High-Speed Internet Customers

30,062

28,186

633

379

Residential Video Customers

19,220

20,421

(253

)

(222

)

Business Services Video Customers

874

983

(20

)

(16

)

Total Video Customers

20,094

21,403

(273

)

(238

)

Residential Voice Customers

9,684

9,945

(14

)

(63

)

Business Services Voice Customers

1,341

1,334

11

10

Total Voice Customers

11,025

11,278

(3

)

(53

)

Total Wireless Lines

2,580

1,791

187

204

Adjusted EBITDA for Cable Communications increased 10.5% to $6.4 billion in the third quarter of 2020, due to higher revenue as well as a 2.2% decrease in operating expenses. Total operating expenses benefited from adjustments for provisions in our programming distribution agreements with RSNs related to canceled sporting events as a result of COVID-19. Programming costs decreased 0.6%, primarily reflecting the adjustment provisions. Excluding these adjustments5, programming costs increased 4.0% due to higher retransmission consent and sports programming fees, partially offset by a decline in the number of video subscribers. Non-programming expenses decreased 3.2%, while non-programming expenses per customer relationship decreased 7.4%. These declines reflect lower advertising, marketing and promotion expenses, technical and product support expenses and customer service expenses, partially offset by higher other operating expenses and franchise and regulatory fees. Non-programming expenses reflect a reduction in activity in some aspects of our business as a result of COVID-19 as well as benefits from cost saving initiatives. Adjusted EBITDA per customer relationship increased 5.8%, and Adjusted EBITDA margin was 42.7% compared to 39.8% in the third quarter of 2019. While the accrued RSN adjustments did not impact Adjusted EBITDA in the third quarter of 2020, the adjustments resulted in an increase to Adjusted EBITDA margin. Cable Communications results include a loss of $50 million from our wireless business, compared to a loss of $94 million in the prior year period.

For the nine months ended September 30, 2020, Cable Adjusted EBITDA increased 7.4% to $18.7 billion compared to 2019, due to higher revenue and a decrease in operating expenses. Programming costs decreased 1.3% primarily reflecting adjustments for provisions in our programming distribution agreements with RSNs related to canceled sporting events as a result of COVID-19. Excluding these adjustments5, programming costs increased 2.4% due to higher retransmission consent and sports programming fees, partially offset by a decline in the number of video subscribers. Non-programming expenses decreased 0.8%, reflecting cost savings initiatives that were partially offset by higher costs as a result of COVID-19. For the nine months ended September 30, 2020, Adjusted EBITDA per customer relationship increased 2.9%, and Adjusted EBITDA margin was 42.1% compared to 40.1% in 2019. While the accrued RSN adjustments did not impact Adjusted EBITDA for the nine months ended September 30, 2020, the adjustments resulted in an increase to Adjusted EBITDA margin. Cable Communications results include a loss of $146 million from our wireless business, compared to a loss of $285 million in the prior year period.

Capital Expenditures for Cable Communications decreased 2.5% to $1.8 billion in the third quarter of 2020, due to decreased investment in customer premise equipment and support capital, partially offset by increased investment in scalable infrastructure and line extensions. Cable capital expenditures represented 11.8% of Cable revenue in the third quarter of 2020 compared to 12.4% in last year’s third quarter.

For the nine months ended September 30, 2020, Cable capital expenditures decreased 5.9% to $4.5 billion, primarily reflecting decreased investment in customer premise equipment, partially offset by increased investment in scalable infrastructure. Cable capital expenditures represented 10.1% of Cable revenue compared to 11.0% in 2019.

NBCUniversal

($ in millions)

3rd Quarter

Year to Date

2020

2019

Change

2020

2019

Change

NBCUniversal Revenue

Cable Networks

$2,736

$2,771

(1.3

%)

$8,110

$8,586

(5.5

%)

Broadcast Television

2,414

2,230

8.3

%

7,462

7,099

5.1

%

Filmed Entertainment

1,280

1,706

(25.0

%)

3,844

4,931

(22.0

%)

Theme Parks

311

1,631

(80.9

%)

1,267

4,371

(71.0

%)

Headquarters, other and eliminations

(17

)

(43

)

NM

(101

)

(173

)

NM

NBCUniversal Revenue

$6,724

$8,295

(18.9

%)

$20,582

$24,814

(17.1

%)

NBCUniversal Adjusted EBITDA

Cable Networks

$870

$955

(8.9

%)

$3,361

$3,418

(1.7

%)

Broadcast Television

436

338

28.7

%

1,578

1,259

25.3

%

Filmed Entertainment

300

195

53.4

%

634

742

(14.6

%)

Theme Parks

(203

)

731

(127.7

%)

(526

)

1,819

(128.9

%)

Headquarters, other and eliminations

(122

)

(128

)

NM

(381

)

(486

)

NM

NBCUniversal Adjusted EBITDA

$1,281

$2,091

(38.7

%)

$4,666

$6,752

(30.9

%)

Revenue for NBCUniversal decreased 18.9% to $6.7 billion in the third quarter of 2020. Adjusted EBITDA decreased 38.7% to $1.3 billion.

For the nine months ended September 30, 2020, NBCUniversal revenue decreased 17.1% to $20.6 billion compared to last year’s results. Adjusted EBITDA decreased 30.9% to $4.7 billion.

Cable Networks
Cable Networks revenue decreased 1.3% to $2.7 billion in the third quarter of 2020, due to lower distribution revenue and advertising revenue, partially offset by higher content licensing and other revenue. Distribution revenue decreased 3.8%, reflecting credits accrued at some of our RSNs resulting from the reduced number of games played by professional sports leagues due to COVID-19 and a decline in subscribers, partially offset by contractual rate increases. Advertising revenue decreased 2.1%, reflecting continued ratings declines at our networks, partially offset by revenue from the broadcasts of rescheduled sporting events that were previously postponed due to COVID-19. Content licensing and other revenue increased 16.6%, due to the timing of content provided under licensing agreements, including transactions with Peacock in the third quarter of 2020. Adjusted EBITDA decreased 8.9% to $870 million in the third quarter of 2020, due to lower revenue and higher programming and production expenses, partially offset by lower advertising, marketing and promotion costs and other operating and administrative costs. The increase in programming and production expenses was primarily driven by an increase in sports programming costs as professional sports leagues resumed seasons following postponements due to COVID-19.

For the nine months ended September 30, 2020, revenue from the Cable Networks segment decreased 5.5% to $8.1 billion compared to 2019, due to lower distribution and advertising revenue, partially offset by higher content licensing and other revenue. Adjusted EBITDA decreased 1.7% to $3.4 billion compared to 2019, due to lower revenue, partially offset by lower operating costs. The decrease in operating costs was driven by lower programming and production expenses, reflecting a decrease in sports programming costs due to the reduced number of sporting events due to COVID-19, partially offset by an increase in studio costs.

Broadcast Television
Broadcast Television revenue increased 8.3% to $2.4 billion in the third quarter of 2020, due to higher content licensing revenue and distribution and other revenue, partially offset by lower advertising revenue. Content licensing revenue increased 65.6%, reflecting the timing of content provided under licensing agreements, including transactions with Peacock in the third quarter of 2020. Distribution and other revenue increased 4.9%, due to higher retransmission consent fees. Advertising revenue decreased 11.5%, reflecting continued ratings declines, partially offset by higher pricing and local political ad sales. Adjusted EBITDA increased 28.7% to $436 million in the third quarter of 2020, due to higher revenue, lower advertising, marketing and promotion costs and lower operating and administrative costs, partially offset by higher programming and production expenses. The increase in programming and production expenses was primarily due to higher content licensing sales.

For the nine months ended September 30, 2020, revenue from the Broadcast Television segment increased 5.1% to $7.5 billion compared to 2019, due to an increase in content licensing and distribution and other revenue, partially offset by lower advertising revenue. Adjusted EBITDA increased 25.3% to $1.6 billion compared to 2019, due to higher revenue, partially offset by a modest increase in operating costs.

Filmed Entertainment
Filmed Entertainment revenue decreased 25.0% to $1.3 billion in the third quarter of 2020, due to lower theatrical and other revenue, partially offset by higher content licensing and home entertainment revenue. Theatrical revenue decreased 94.7%, primarily driven by theater closures as a result of COVID-19. Other revenue decreased 44.8%, primarily due to decreases in revenue from our movie ticketing, entertainment and live stage play businesses, which were impacted by theater and entertainment venue closures as a result of COVID-19. Content licensing revenue increased 14.5%, due to the timing of content provided under licensing agreements, including transactions with Peacock in the third quarter of 2020. Home entertainment revenue increased 49.1%, which included the success of Trolls World Tour. Adjusted EBITDA increased 53.4% to $300 million in the third quarter of 2020, reflecting lower revenue, more than offset by a decline in operating costs due to lower spending on current period releases as a result of COVID-19.

For the nine months ended September 30, 2020, revenue from the Filmed Entertainment segment decreased 22.0% to $3.8 billion compared to 2019, primarily reflecting lower theatrical revenue. Adjusted EBITDA decreased 14.6% to $634 million compared to 2019, due to lower revenue, partially offset by lower operating costs.

Theme Parks
Theme Parks revenue decreased 80.9% to $311 million in the third quarter of 2020, primarily due to Universal Orlando Resort and Universal Studios Japan operating at limited capacity, while Universal Studios Hollywood remains closed as a result of COVID-19. Theme Parks Adjusted EBITDA loss was $203 million in the third quarter of 2020.

For the nine months ended September 30, 2020, revenue from the Theme Parks segment decreased 71.0% to $1.3 billion compared to 2019, primarily due to the temporary closures of Universal Studios Japan in late February and Universal Orlando Resort and Universal Studios Hollywood in mid-March as a result of COVID-19. Theme Parks Adjusted EBITDA loss was $526 million.

Headquarters, Other and Eliminations
NBCUniversal Headquarters, Other and Eliminations include overhead and eliminations among the NBCUniversal businesses. For the quarter ended September 30, 2020, NBCUniversal Headquarters, Other and Eliminations Adjusted EBITDA loss was $122 million, compared to a loss of $128 million in the third quarter of 2019.

For the nine months ended September 30, 2020, NBCUniversal Headquarters, Other and Eliminations Adjusted EBITDA loss was $381 million compared to a loss of $486 million in 2019.

Sky

($ in millions)

3rd Quarter

Year to Date

2020

2019

Change

Constant
Currency
Change6

2020

2019

Change

Constant
Currency
Change6

Sky Revenue

Direct-to-Consumer

$3,943

$3,793

3.9

%

(1.0

%)

$11,146

$11,516

(3.2

%)

(3.1

%)

Content

388

315

23.3

%

17.5

%

947

1,061

(10.7

%)

(10.4

%)

Advertising

462

446

3.7

%

(1.2

%)

1,296

1,602

(19.1

%)

(18.7

%)

Sky Revenue

$4,793

$4,554

5.2

%

0.3

%

$13,389

$14,179

(5.6

%)

(5.4

%)

Sky Operating Costs and Expenses

$4,278

$3,655

17.0

%

11.5

%

$11,574

$11,845

(2.3

%)

(2.0

%)

Sky Adjusted EBITDA

$515

$899

(42.8

%)

(45.4

%)

$1,815

$2,334

(22.3

%)

(22.5

%)

Adjusted EBITDA Margin

10.7%

19.7%

13.6%

16.5%

Revenue for Sky increased 5.2% to $4.8 billion in the third quarter of 2020. Excluding the impact of currency, revenue was consistent with the prior year period, due to higher content revenue, offset by lower direct-to-consumer revenue and advertising revenue. Content revenue increased 17.5% to $388 million, driven by higher wholesale revenue from sports programming as European football leagues resumed sporting events that were previously postponed due to COVID-19. Direct-to-consumer revenue decreased 1.0% to $3.9 billion, reflecting a decrease in customer relationships and average revenue per customer relationship that was consistent with the prior year period, and included growth in both customer relationships and average revenue per customer relationship in the U.K. Advertising revenue decreased 1.2% to $462 million, reflecting overall market weakness, partially offset by revenue from the broadcasts of rescheduled sporting events that were previously postponed due to COVID-19.

For the nine months ended September 30, 2020, Sky revenue decreased 5.6% to $13.4 billion compared to 2019. Excluding the impact of currency, revenue decreased 5.4%, due to lower direct-to-consumer, advertising and content revenue.

Total Customer Relationships decreased by 21,000 to 23.7 million in the third quarter of 2020, an improvement compared to the second quarter of 2020, and included net additions in the U.K.

(in thousands)

Customers

Net Additions

3Q20

3Q19

3Q20

3Q19

Total Customer Relationships

23,695

23,918

(21)

(99)

Adjusted EBITDA for Sky decreased 42.8% to $515 million in the third quarter of 2020. Excluding the impact of currency, Adjusted EBITDA decreased 45.4%, reflecting revenue that was consistent with the prior year period, offset by higher operating costs. The increase in operating costs was primarily driven by higher programming and production expenses, primarily due to an increase in sports programming costs as professional sports leagues resumed seasons following postponements due to COVID-19.

For the nine months ended September 30, 2020, Sky Adjusted EBITDA decreased 22.3% to $1.8 billion compared to 2019. Excluding the impact of currency, Adjusted EBITDA decreased 22.5%.

Corporate, Other and Eliminations

__________________________________________________________________________________________________________________________________________

Corporate and Other
Corporate and Other primarily relates to corporate operations, Comcast Spectacor and Peacock. Revenue for the quarter ended September 30, 2020 was $84 million, an increase of $42 million compared to 2019. Corporate and Other Adjusted EBITDA loss was $496 million, an increase of $259 million compared to 2019, primarily due to costs associated with Peacock.

For the nine months ended September 30, 2020, Corporate and Other revenue was $250 million, an increase of $44 million compared to 2019. Corporate and Other Adjusted EBITDA loss was $1.3 billion, an increase of $617 million compared to 2019, due to costs associated with Peacock and costs incurred in response to COVID-19, including severance and restructuring charges related to our NBCUniversal segments, which are presented in Corporate and Other.

Eliminations
Eliminations reflects the accounting for transactions between Cable Communications, NBCUniversal, Sky and Corporate and Other. Revenue eliminations for the quarter ended September 30, 2020 were $1.1 billion compared to $648 million in 2019, and Adjusted EBITDA eliminations were $128 million compared to $1 million in 2019. The increases were primarily driven by the licensing of content between our NBCUniversal segments and Peacock.

For the nine months ended September 30, 2020, revenue eliminations were $2.7 billion compared to $2.0 billion in 2019, and Adjusted EBITDA eliminations were $250 million compared to $10 million in 2019. The increases were primarily driven by the licensing of content between our NBCUniversal segments and Peacock.

__________________________________________________________________________________________________________________________________________

Notes:

1.

We define Adjusted Net Income and Adjusted EPS as net income attributable to Comcast Corporation and diluted earnings per common share attributable to Comcast Corporation shareholders, respectively, adjusted to exclude the effects of the amortization of acquisition-related intangible assets, investments that investors may want to evaluate separately (such as based on fair value) and the impact of certain events, gains, losses or other charges that affect period-over-period comparisons. See Table 5 for reconciliations of non-GAAP financial measures.

2.

We define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. See Table 4 for reconciliation of non-GAAP financial measure.

3.

All earnings per share amounts are presented on a diluted basis.

4.

We define Free Cash Flow as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures and cash paid for intangible assets. From time to time, we may exclude from Free Cash Flow the impact of certain cash receipts or payments (such as significant legal settlements) that affect period-to-period comparability. Cash payments for acquisitions and construction of real estate properties and the construction of Universal Beijing Resort are presented separately in our Consolidated Statement of Cash Flows and are therefore excluded from capital expenditures for Free Cash Flow. See Table 4 for reconciliation of non-GAAP financial measure.

5.

Cable Communications reported results for 2020 include the impacts of RSN related adjustments, affecting period-to-period comparability of our operating performance. We also present adjusted information, excluding the impacts of the RSN related adjustments. See Table 7 for reconciliation of non-GAAP financial measures.

6.

Sky constant currency growth rates are calculated by comparing the current period results to the comparative period results in the prior year adjusted to reflect the average exchange rates from the current year period rather than the actual exchange rates in effect during the respective prior year periods. See Table 6 for reconciliation of Sky’s constant currency growth.

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

Conference Call and Other Information
Comcast Corporation will host a conference call with the financial community today, October 29, 2020 at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on its Investor Relations website at www.cmcsa.com. Those parties interested in participating via telephone should dial (800) 263-8495 with the conference ID number 3090648. A replay of the call will be available starting at 12:00 p.m. ET on October 29, 2020, on the Investor Relations website or by telephone. To access the telephone replay, which will be available until Thursday, November 5, 2020 at midnight ET, please dial (855) 859-2056 and enter the conference ID number 3090648.

From time to time, we post information that may be of interest to investors on our website at www.cmcsa.com and on our corporate website, www.comcastcorporation.com. To automatically receive Comcast financial news by email, please visit www.cmcsa.com and subscribe to email alerts.

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

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

About Comcast Corporation
Comcast Corporation (Nasdaq: CMCSA) is a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal, and Sky. Comcast Cable is one of the United States’ largest high-speed internet, video, and phone providers to residential customers under the Xfinity brand, and also provides these services to businesses. It also provides wireless and security and automation services to residential customers under the Xfinity brand. NBCUniversal is global and operates news, entertainment and sports cable networks, the NBC and Telemundo broadcast networks, television production operations, television station groups, Universal Pictures, and Universal Parks and Resorts. Sky is one of Europe’s leading media and entertainment companies, connecting customers to a broad range of video content through its pay television services. It also provides communications services, including residential high-speed internet, phone, and wireless services. Sky operates the Sky News broadcast network and sports and entertainment networks, produces original content, and has exclusive content rights. Visit www.comcastcorporation.com for more information.

TABLE 1

Condensed Consolidated Statement of Income (Unaudited)

Three Months Ended

Nine Months Ended

(in millions, except per share data)

September 30,

September 30,

2020

2019

2020

2019

Revenue

$25,532

$26,827

$75,856

$

80,544

Costs and expenses

Programming and production

8,565

8,316

23,683

25,140

Other operating and administrative

8,059

8,090

23,959

24,076

Advertising, marketing and promotion

1,512

1,901

4,791

5,674

Depreciation

2,122

2,124

6,328

6,561

Amortization

1,198

1,056

3,520

3,215

21,456

21,487

62,281

64,666

Operating income

4,076

5,340

13,575

15,878

Interest expense

(1,220

)

(1,167

)

(3,544

)

(3,454

)

Investment and other income (loss), net

Equity in net income (losses) of investees, net

(266

)

(355

)

(634

)

(295

)

Realized and unrealized gains (losses) on equity securities, net

118

174

65

582

Other income (loss), net

62

71

187

224

(86

)

(110

)

(382

)

511

Income before income taxes

2,770

4,063

9,649

12,935

Income tax expense

(739

)

(775

)

(2,385

)

(2,812

)

Net income

2,031

3,288

7,264

10,123

Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock

12

71

110

228

Net income attributable to Comcast Corporation

$2,019

$3,217

$7,154

$

9,895

Diluted earnings per common share attributable to Comcast Corporation shareholders

$0.44

$0.70

$1.55

$

2.15

Diluted weighted-average number of common shares

4,628

4,619

4,616

4,606

TABLE 2

Consolidated Statement of Cash Flows (Unaudited)

Nine Months Ended

(in millions)

September 30,

2020

2019

OPERATING ACTIVITIES

Net income

$7,264

$10,123

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

9,848

9,776

Share-based compensation

922

790

Noncash interest expense (income), net

606

310

Net (gain) loss on investment activity and other

514

(166

)

Deferred income taxes

(224

)

468

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

Current and noncurrent receivables, net

982

360

Film and television costs, net

163

(321

)

Accounts payable and accrued expenses related to trade creditors

(545

)

(1,149

)

Other operating assets and liabilities

165

(729

)

Net cash provided by operating activities

19,695

19,462

INVESTING ACTIVITIES

Capital expenditures

(6,344

)

(6,866

)

Cash paid for intangible assets

(1,771

)

(1,686

)

Construction of Universal Beijing Resort

(1,118

)

(736

)

Acquisitions, net of cash acquired

(225

)

(181

)

Proceeds from sales of businesses and investments

2,131

208

Purchases of investments

(545

)

(1,697

)

Other

(101

)

46

Net cash provided by (used in) investing activities

(7,973

)

(10,912

)

FINANCING ACTIVITIES

Proceeds from (repayments of) short-term borrowings, net

(1,288

)

Proceeds from borrowings

18,339

516

Proceeds from collateralized obligation

5,175

Repurchases and repayments of debt

(16,771

)

(9,975

)

Repurchases of common stock under employee plans

(429

)

(432

)

Dividends paid

(3,086

)

(2,778

)

Other

(1,644

)

(44

)

Net cash provided by (used in) financing activities

(3,591

)

(8,826

)

Impact of foreign currency on cash, cash equivalents and restricted cash

17

(31

)

Increase (decrease) in cash, cash equivalents and restricted cash

8,148

(307

)

Cash, cash equivalents and restricted cash, beginning of period

5,589

3,909

Cash, cash equivalents and restricted cash, end of period

$13,737

$3,602

TABLE 3

Condensed Consolidated Balance Sheet (Unaudited)

(in millions)

September 30,

December 31,

2020

2019

ASSETS

Current Assets

Cash and cash equivalents

$13,707

$5,500

Receivables, net

10,310

11,292

Programming rights

3,877

Other current assets

3,352

4,723

Total current assets

27,369

25,392

Film and television costs

12,741

8,933

Investments

6,702

6,989

Investment securing collateralized obligation

429

694

Property and equipment, net

50,466

48,322

Goodwill

68,898

68,725

Franchise rights

59,365

59,365

Other intangible assets, net

34,485

36,128

Other noncurrent assets, net

8,485

8,866

$268,940

$263,414

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable and accrued expenses related to trade creditors

$10,979

$10,826

Accrued participations and residuals

1,794

1,730

Deferred revenue

2,888

2,768

Accrued expenses and other current liabilities

9,421

10,516

Current portion of long-term debt

4,429

4,452

Total current liabilities

29,511

30,292

Long-term debt, less current portion

99,995

97,765

Collateralized obligation

5,167

5,166

Deferred income taxes

27,905

28,180

Other noncurrent liabilities

17,537

16,765

Redeemable noncontrolling interests and redeemable subsidiary preferred stock

1,254

1,372

Equity

Comcast Corporation shareholders’ equity

86,176

82,726

Noncontrolling interests

1,395

1,148

Total equity

87,571

83,874

$268,940

$263,414

TABLE 4
Reconciliation from Net Income Attributable to Comcast Corporation to Adjusted EBITDA (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in millions)

2020

2019

2020

2019

Net income attributable to Comcast Corporation

$2,019

$3,217

$7,154

$9,895

Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock

12

71

110

228

Income tax expense

739

775

2,385

2,812

Interest expense

1,220

1,167

3,544

3,454

Investment and other (income) loss, net

86

110

382

(511

)

Depreciation and amortization

3,320

3,180

9,848

9,776

Adjustments (1)

187

33

217

168

Adjusted EBITDA

$7,583

$8,553

$23,640

$25,822

Reconciliation from Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in millions)

2020

2019

2020

2019

Net cash provided by operating activities

$5,228

$5,191

$19,695

$19,462

Capital expenditures

(2,387

)

(2,511

)

(6,344

)

(6,866

)

Cash paid for capitalized software and other intangible assets

(552

)

(608

)

(1,771

)

(1,686

)

Total Free Cash Flow

$2,289

$2,072

$11,580

$10,910

Alternate Presentation of Free Cash Flow (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in millions)

2020

2019

2020

2019

Adjusted EBITDA

$7,583

$8,553

$23,640

$25,822

Capital expenditures

(2,387

)

(2,511

)

(6,344

)

(6,866

)

Cash paid for capitalized software and other intangible assets

(552

)

(608

)

(1,771

)

(1,686

)

Cash interest expense

(909

)

(1,056

)

(2,845

)

(3,167

)

Cash taxes

(1,965

)

(856

)

(2,298

)

(2,490

)

Changes in operating assets and liabilities

376

(1,765

)

361

(1,670

)

Noncash share-based compensation

301

257

922

790

Other (2)

(158

)

58

(85

)

177

Total Free Cash Flow

$2,289

$2,072

$11,580

$10,910

(1)

3rd quarter and year to date 2020 Adjusted EBITDA exclude $177 million of other operating and administrative expense related to a potential legal settlement, and $10 million and $40 million of other operating and administrative expense, respectively, related to the Sky transaction. 3rd quarter and year to date 2019 Adjusted EBITDA exclude $33 million and $168 million of other operating and administrative expense, respectively, related to the Sky transaction.

(2)

3rd quarter and year to date 2020 include decreases of $177 million related to a potential legal settlement, and $10 million and $40 million of costs related to the Sky transaction, respectively, as these amounts are excluded from Adjusted EBITDA. 3rd quarter and year to date 2019 include decreases of $33 million and $168 million of costs related to the Sky transaction, respectively, as these amounts are excluded from Adjusted EBITDA.

Note: Minor differences may exist due to rounding.

TABLE 5

Reconciliations of Adjusted Net Income and Adjusted EPS (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

(in millions, except per share data)

$

EPS

$

EPS

$

EPS

$

EPS

Net income attributable to Comcast Corporation and diluted earnings per share attributable to Comcast Corporation shareholders

$2,019

$0.44

$3,217

$0.70

$7,154

$1.55

$9,895

$2.15

Change

(37.2

%)

(37.1

%)

(27.7

%)

(27.9

%)

Amortization of acquisition-related intangible assets (1)

458

0.10

385

0.08

1,365

0.30

1,180

0.25

Investments (2)

70

0.01

141

0.03

334

0.07

(317)

(0.07)

Items affecting period-over-period comparability:

Loss on early redemption of debt (3)

166

0.04

42

0.01

272

0.06

42

0.01

Income tax adjustments (4)

145

0.03

(125)

(0.03)

145

0.03

(125)

(0.03)

Potential legal settlement (5)

134

0.03

134

0.03

Costs related to Sky transaction (6)

8

27

32

136

0.03

Gains and losses related to businesses and investments (7)

(20)

(96)

(0.02)

Purchase accounting adjustments (8)

39

0.01

Adjusted Net income and Adjusted EPS

$3,000

$0.65

$3,667

$0.79

$9,436

$2.04

$10,754

$2.33

Change

(18.2

%)

(17.7

%)

(12.3

%)

(12.4

%)

(1) Acquisition-related intangible assets are recognized as a result of the application of Accounting Standards Codification Topic 805, Business Combinations (such as customer relationships), and their amortization is significantly affected by the size and timing of our acquisitions. Amortization of intangible assets not resulting from business combinations (such as software and acquired intellectual property rights used in our theme parks) is included in Adjusted Net Income and Adjusted EPS.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

Amortization of acquisition-related intangible assets
before income taxes

$574

$486

$1,714

$1,489

Amortization of acquisition-related intangible assets,
net of tax

$458

$385

$1,365

$1,180

(2) Adjustments for investments include realized and unrealized (gains) losses on equity securities, net (as stated in Table 1), as well as the equity in net (income) losses of investees, net, for our investments in Atairos and Hulu (following May 2019 transaction).

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

Realized and unrealized (gains) losses on equity
securities, net

($118

)

($174

)

($65

)

($582

)

Equity in net (income) losses of investees, net

210

363

506

155

Investments before income taxes

92

189

441

(427

)

Investments, net of tax

$70

$141

$334

($317

)

(3)

3rd quarter and year to date 2020 net income attributable to Comcast Corporation includes $220 million and $360 million of interest expense, $166 million and $272 million net of tax, respectively, resulting from the early redemption of debt. 3rd quarter and year to date 2019 net income attributable to Comcast Corporation includes $56 million of interest expense, $42 million net of tax, resulting from the early redemption of debt.

(4)

3rd quarter and year to date 2020 net income attributable to Comcast Corporation includes $145 million of income tax expense adjustments related to certain tax law changes. 3rd quarter and year to date 2019 net income attributable to Comcast Corporation includes $125 million of income tax benefits related to the impact of certain state tax adjustments.

(5)

3rd quarter and year to date 2020 net income attributable to Comcast Corporation includes $177 million of other operating and administrative expense, $134 million net of tax, related to a potential legal settlement.

(6)

3rd quarter and year to date 2020 net income attributable to Comcast Corporation includes $10 million and $40 million of operating costs and expenses, $8 million and $32 million net of tax, respectively, related to the Sky transaction, primarily relating to the replacement of share-based compensation awards and costs related to integration activities. 3rd quarter and year to date 2019 net income attributable to Comcast Corporation includes $33 million and $168 million of operating costs and expenses, $27 million and $136 million net of tax, respectively, related to the Sky transaction, primarily relating to the replacement of share-based compensation awards and costs related to integration activities.

(7)

3rd quarter 2019 net income attributable to Comcast Corporation includes a gain of $60 million in other income, $45 million net of tax, related to our investment in Hulu and $34 million of other losses, $25 million net of tax, related to an impairment of an equity method investment. 2019 year to date net income attributable to Comcast Corporation also includes a gain of $159 million in other income, $118 million net of tax, related to our investment in Hulu and $56 million of other losses, $42 million net of tax, related to an impairment of an equity method investment.

(8)

2019 year to date net income attributable to Comcast Corporation includes $53 million of depreciation and amortization expense, $39 million net of tax, related to the 4th quarter 2018, as a result of adjustments to the purchase price allocation of Sky, primarily related to intangible assets and property and equipment.
Note: Minor differences may exist due to rounding.

TABLE 6

Reconciliation of Sky Constant Currency Growth (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in millions)

2020

2019(1)

Change

2020

2019(1)

Change

Direct-to-Consumer

$3,943

$3,981

(1.0

%)

$11,146

$11,504

(3.1

%)

Content

388

330

17.5

%

947

1,057

(10.4

%)

Advertising

462

468

(1.2

%)

1,296

1,595

(18.7

%)

Revenue

$4,793

$4,779

0.3

%

$13,389

$14,156

(5.4

%)

Operating costs and expenses

$4,278

$3,836

11.5

%

$11,574

$11,815

(2.0

%)

Adjusted EBITDA

$515

$943

(45.4

%)

$1,815

$2,341

(22.5

%)

(1)

2019 results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the current period rather than the actual exchange rates in effect during the respective periods.

Note: Minor differences may exist due to rounding.

TABLE 7

Reconciliation of Cable Communications RSN Adjustments (Unaudited)

Three Months Ended
September 30, 2020

Nine Months Ended
September 30, 2020

Reported
Change

RSN
Adjustments

Adjusted
Change

Reported
Change

RSN
Adjustments

Adjusted
Change

Revenue

High-Speed Internet

10.1

%

(1.1

%)

11.2

%

8.9

%

(0.9

%)

9.8

%

Video

(2.1

%)

(1.3

%)

(0.8

%)

(1.8

%)

(1.2

%)

(0.6

%)

Total Revenue

2.9

%

(1.0

%)

3.9

%

2.4

%

(0.8

%)

3.2

%

Expenses

Programming and production

(0.6

%)

(4.6

%)

4.0

%

(1.3

%)

(3.7

%)

2.4

%

Adjusted EBITDA

10.5

%

%

10.5

%

7.4

%

%

7.4

%

Adjusted EBITDA margin

290 bps

40 bps

250 bps

200 bps

40 bps

160 bps

Note: Minor differences may exist due to rounding. Percentages represent year/year growth rates and Adjusted EBITDA margin is presented as year/year basis point change

Coca-Cola Reports Third Quarter 2020 Results, Provides Update on Strategic Actions to Emerge Stronger from the Pandemic

Global Unit Case Volume Declined 4%

Net Revenues Declined 9%;
Organic Revenues (Non-GAAP) Declined 6%

Operating Income Declined 8%; Comparable Currency
Neutral Operating Income (Non-GAAP) Grew 7%

Operating Margin Was 26.6% Versus 26.3% in the Prior Year;
Comparable Operating Margin (Non-GAAP) Was 30.4% Versus 28.1% in the Prior Year

EPS Declined 33% to $0.40; Comparable EPS (Non-GAAP) Declined 2% to $0.55

ATLANTA- The Coca-Cola Company today reported third quarter 2020 results and updated its progress on several strategic initiatives that are designed to accelerate a return to growth. The Coca-Cola system continues to focus on emerging stronger from the pandemic with a portfolio of the right brands, high-impact marketing, effective innovation and a highly networked organizational structure.

“Throughout this year’s crisis, our system has remained focused on its beverages for life strategy. We are accelerating our transformation that was already underway, shaping our company to recover faster than the broader economic recovery,” said James Quincey, chairman and CEO of The Coca-Cola Company. “While many challenges still lie ahead, our progress in the quarter gives me confidence we are on the right path.”

Highlights

Quarterly Performance

  • Revenues: Net revenues declined 9% to $8.7 billion. Organic revenues (non-GAAP) declined 6%. Revenue performance included a 4% decline in concentrate sales and a 3% decline in price/mix. The company reported improvement in trends versus the prior quarter, with revenue declines versus the prior year driven by ongoing pressure in away-from-home channels partially offset by sustained growth in at-home channels.
  • Margin: Operating margin, which included items impacting comparability, was 26.6% versus 26.3% in the prior year, while comparable operating margin (non-GAAP) was 30.4% versus 28.1% in the prior year. Operating margin expansion was primarily driven by effective cost management, partially offset by top-line pressure and currency headwinds.
  • Earnings per share: EPS declined 33% to $0.40, and comparable EPS (non-GAAP) declined 2% to $0.55.
  • Market share: The company lost value share in total nonalcoholic ready-to-drink (NARTD) beverages as an underlying share gain was more than offset by negative channel mix due to continued pressure in away-from-home channels, where the company has a strong share position.
  • Cash flow: Year-to-date cash from operations was $6.2 billion, down 20%. Free cash flow (non-GAAP) was $5.5 billion, down 17%.

Business Environment and Strategic Actions Update

Since the company’s last earnings update in July, global unit case volume trends have continued to improve. The pace in the third quarter was more gradual than the second quarter, and the percentage decline in global unit case volume for October month-to-date was low single digits. The company is seeing an elevated level of sales in at-home channels being more than offset by ongoing pressure in away-from-home channels, which are affected by the level of lockdown in a particular market.

While the company is pleased with the sequential improvement, given the uncertainty remaining surrounding the coronavirus pandemic including a resurgence in various markets, the ultimate impact on its near-term results is unknown. Importantly, the company’s balance sheet remains strong, and the company is confident in its liquidity position as it continues to navigate through the crisis.

The recent strategic actions of portfolio optimization, disciplined innovation, increased marketing effectiveness and efficiency, enhanced system collaboration and evolving the organizational structure have given the company increased confidence in emerging stronger.

Company Updates

  • Building a networked organization designed for growth: The company is establishing a networked structure that is comprised of operating units, category teams, Platform Services and the center. Operating units will be highly interconnected and will sit under the four existing geographic segments, with a focus on local execution. Category teams will drive innovation, marketing efficiency and effectiveness in partnership with operating units. Platform Services will focus on world-class services and capabilities globally to the system, while the center will provide strategy, governance and scale for global initiatives. The company’s new, networked organization will combine the power of scale with local execution. The changes to the company’s structure will result in a reallocation of some associates along with a reduction in the number of associates, which is underway through a combination of voluntary separation programs and involuntary reductions.
  • Shaping a winning growth portfolio: The company continues to pursue its beverages for life ambition by calibrating a portfolio with an optimal set of global, regional and local brands with the strongest potential to grow their consumer bases, increase frequency and drive system margins. The company expects to offer a portfolio of approximately 200 master brands, an approximate 50% reduction from the current number, and phase out some products, such as ZICO® and TaB®.
  • Expanding consumer-centric innovation: The company is committed to exploring new products in dynamic beverage categories. In the third quarter, the company launched Topo Chico™ Hard Seltzer, which blends purified sparkling water, a gluten-free alcohol base and natural flavors, with minerals added for taste. Topo Chico™ Hard Seltzer is inspired by Topo Chico® sparkling mineral water, a 125-year-old brand with a rich heritage. The new product is currently available in select cities in Latin America. In the United States, the company entered into an agreement with Molson Coors Beverage Company to manufacture, market and distribute the product. This relationship will allow Topo Chico™ Hard Seltzer to launch with scale in the U.S., which we anticipate will occur in the first half of 2021. 

Operating Review – Three Months Ended September 25, 2020

Revenues and Volume

Percent Change

Concentrate
Sales1

Price/Mix

Currency
Impact

Acquisitions,
Divestitures
and Structural
Changes, Net

Reported
Net
Revenues

Organic
Revenues2

Unit Case
Volume

Consolidated

(4)

(3)

(3)

0

(9)

(6)

(4)

Europe, Middle East & Africa

0

(6)

(1)

0

(7)

(6)

(3)

Latin America

(2)

(1)

(19)

0

(23)

(4)

(4)

North America

(7)

4

0

1

(2)

(3)

(6)

Asia Pacific

(4)

(4)

(1)

0

(9)

(8)

(4)

Global Ventures3

(14)

(7)

2

0

(19)

(20)

(11)

Bottling Investments

(9)

2

(5)

(1)

(12)

(6)

(10)

Operating Income and EPS

Percent Change

Reported
Operating
Income

Items
Impacting
Comparability

Currency
Impact

Comparable
Currency
Neutral2

Consolidated

(8)

(7)

(8)

7

Europe, Middle East & Africa

2

(4)

(3)

9

Latin America

(20)

(4)

(28)

12

North America

14

(5)

0

18

Asia Pacific

(5)

1

(2)

(4)

Global Ventures

4

Bottling Investments

662

617

(25)

69

Percent Change

Reported
EPS

Items
Impacting
Comparability

Currency

Impact

Comparable

Currency

Neutral2

Consolidated EPS

(33)

(31)

(7)

5

Note: Certain rows may not add due to rounding.

1

For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume computed based on total sales (rather than average daily sales) in each of the corresponding periods after considering the impact of structural changes.

2

Organic revenues, comparable currency neutral operating income and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section.

3

Due to the combination of multiple business models in the Global Ventures segment, the composition of concentrate sales and price/mix may fluctuate materially on a periodic basis. Therefore, the company places greater focus on revenue growth as the best indicator of underlying performance of the segment.

4

Reported operating loss for Global Ventures for the three months ended September 25, 2020 was $31 million. Reported operating income for Global Ventures for the three months ended September 27, 2019 was $77 million. Therefore, the percent change is not meaningful.

In addition to the data in the preceding tables, third quarter operating results included the following:

Consolidated

  • Price/mix declined 3% for the quarter driven by negative channel and package mix due to the impact of the coronavirus pandemic. Price/mix was also impacted by negative segment mix from Global Ventures and Bottling Investments. Concentrate sales were in line with unit case volume. Year-to-date concentrate sales were 2 points behind unit case volume, impacted by one less day and cycling the timing of certain shipments from the prior year related to the Brexit bottler inventory build.
  • Unit case volume declined 4%, as continued strength in at-home channels was more than offset by coronavirus-related pressure in away-from-home channels. Category cluster performance was as follows:
    • Sparkling soft drinks declined 1%, led by a decline in the fountain business in North America and in Mexico due to pressure in away-from-home channels. Trademark Coca-Cola grew 1%. Coca-Cola® Zero Sugar grew 7% in the quarter and 4% year-to-date.
    • Juice, dairy and plant-based beverages declined 6% as solid performance by Simply® and fairlife® in North America was more than offset by pressure in the Asia Pacific and Latin America operating groups.
    • Water, enhanced water and sports drinks declined 11%, led by a broad-based decline across operating groups, primarily due to a decline in lower-margin water brands.
    • Tea and coffee declined 15%, primarily driven by coronavirus-related pressure on Costa® retail stores, along with some pressure on the doğadan® tea business in Turkey.
  • Operating income declined 8%, which included a headwind from items impacting comparability in addition to a currency headwind. Comparable currency neutral operating income (non-GAAP) grew 7%, driven by effective cost management across operating groups, partially offset by top-line pressure due to the coronavirus.

Europe, Middle East & Africa

  • Price/mix declined 6% for the quarter, driven by negative channel and package mix in Europe. Price/mix was also impacted by negative geographic mix due to better performance in emerging and developing markets versus developed markets. Concentrate sales ran 3 points ahead of unit case volume, largely due to the timing of shipments in the Middle East, North Africa and Turkey.
  • Unit case volume declined 3%, primarily related to coronavirus-related pressure in away-from-home channels in Western Europe and South Africa, partially offset by growth in Western Africa.
  • Operating income grew 2%, impacted by a headwind from comparability items and a 3-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 9% driven by effective cost management.
  • The company gained value share in total NARTD beverages, driven by a share gain in sparkling soft drinks.

Latin America

  • Price/mix declined 1% as pricing in the market was more than offset by the timing of deductions from revenue. Concentrate sales ran 2 points ahead of unit case volume, largely due to cycling the timing of shipments from the prior year in Brazil.
  • Unit case volume declined 4%, led by declines in Mexico and Argentina primarily due to the impact of the coronavirus, partially offset by solid performance in Brazil.
  • Operating income declined 20%, which included a headwind from items impacting comparability and a 28-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 12%, primarily due to effective cost management across all business units.
  • The company gained value share in total NARTD beverages, driven by share gains in sparkling soft drinks and the water, enhanced water and sports drinks category cluster.

North America

  • Price/mix grew 4% for the quarter, as solid growth in premium offerings and pricing in the marketplace was partially offset by pressure in the fountain business and away-from-home channels.
  • Unit case volume declined 6%, as strong growth in sparkling soft drinks in at-home channels along with continued strength in AHA®, fairlife® and Topo Chico® was more than offset by pressure in the fountain business.
  • Operating income grew 14%, which included a headwind from items impacting comparability. Comparable currency neutral operating income (non-GAAP) grew 18%, driven by pricing and effective cost management.
  • The company lost value share in total NARTD beverages due to coronavirus-related restrictions in away-from-home channels, where the company has a strong share position.

Asia Pacific

  • Price/mix declined 4%, due to negative channel mix in key markets, partially offset by positive geographic mix. Concentrate sales were in line with unit case volume.
  • Unit case volume declined 4%, primarily due to coronavirus-related restrictions in India and Japan. The unit case volume performance included solid growth in sparkling soft drinks in China.
  • Operating income declined 5%, which included a tailwind from items impacting comparability and a 2-point currency headwind. Comparable currency neutral operating income (non-GAAP) declined 4%, driven by top-line pressure due to the coronavirus across most markets, partially offset by effective cost management.
  • The company lost value share in total NARTD beverages, primarily driven by a share loss in sparkling soft drinks.

Global Ventures

  • Net revenues declined 19%, which included a 2-point currency tailwind. Organic revenues (non-GAAP) declined 20%. The revenue declines were primarily driven by the coronavirus-related pressure on the Costa® retail stores, partially offset by strong performance in Costa® Express machines in the United Kingdom.
  • The operating loss was primarily driven by the coronavirus-related pressure on the Costa® retail stores.

Bottling Investments

  • Price/mix grew 2% in the quarter due to trade promotion optimization in most markets.
  • Unit case volume declined 10%, driven by India and South Africa due to the impact of the coronavirus.
  • Operating income growth included a tailwind from items impacting comparability and a headwind from currency. Comparable currency neutral operating income (non-GAAP) grew 69%, driven by effective operating expense management.

Operating Review  Nine Months Ended September 25, 2020

Revenues and Volume

Percent Change

Concentrate
Sales1

Price/Mix

Currency
Impact

Acquisitions,
Divestitures
and Structural
Changes, Net

Reported
Net
Revenues

Organic
Revenues2

Unit Case
Volume

Consolidated

(9)

(2)

(3)

0

(13)

(11)

(7)

Europe, Middle East & Africa

(10)

(5)

(2)

0

(16)

(15)

(7)

Latin America

(6)

4

(13)

0

(15)

(2)

(4)

North America

(8)

2

0

2

(4)

(6)

(7)

Asia Pacific

(10)

(3)

(1)

1

(13)

(13)

(10)

Global Ventures3

(17)

(8)

0

0

(25)

(25)

(15)

Bottling Investments

(16)

1

(4)

(2)

(20)

(15)

(19)

Operating Income and EPS

Percent Change

Reported
Operating
Income

Items
Impacting
Comparability

Currency
Impact

Comparable
Currency
Neutral2

Consolidated

(16)

(7)

(5)

(4)

Europe, Middle East & Africa

(11)

(1)

(3)

(7)

Latin America

(10)

(2)

(20)

12

North America

(17)

(17)

0

0

Asia Pacific

(7)

0

(1)

(6)

Global Ventures

4

Bottling Investments

(43)

(42)

15

(16)

Percent Change

Reported
EPS

Items
Impacting
Comparability

Currency
Impact

Comparable
Currency
Neutral2

Consolidated EPS

(9)

2

(5)

(6)

Note: Certain rows may not add due to rounding.

1

For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume computed based on total sales (rather than average daily sales) in each of the corresponding periods after considering the impact of structural changes.

2

Organic revenues, comparable currency neutral operating income and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section.

3

Due to the combination of multiple business models in the Global Ventures segment, the composition of concentrate sales and price/mix may fluctuate materially on a periodic basis. Therefore, the company places greater focus on revenue growth as the best indicator of underlying performance of the segment.

4

Reported operating loss for Global Ventures for the nine months ended September 25, 2020 was $114 million. Reported operating income for Global Ventures for the nine months ended September 27, 2019 was $216 million. Therefore, the percent change is not meaningful.

Outlook

Full Year 2020 Considerations

As the coronavirus pandemic continues to evolve, there is uncertainty around its ultimate impact; therefore, the company’s full year financial and operating results cannot be reasonably estimated at this time.

For comparable net revenues (non-GAAP), the company expects an approximate 3% currency headwind based on the current rates and including the impact of hedged positions.

For comparable operating income (non-GAAP), the company expects an approximate 6% currency headwind based on the current rates and including the impact of hedged positions.

The company’s underlying effective tax rate (non-GAAP) is estimated to be 19.5%.

Fourth Quarter 2020 Considerations

Comparable net revenues (non-GAAP) are expected to include an approximate 3% currency headwind based on the current rates and including the impact of hedged positions.

Comparable operating income (non-GAAP) is expected to include an approximate 9% currency headwind based on the current rates and including the impact of hedged positions.

Full Year 2021 Considerations

For comparable net revenues (non-GAAP) and comparable operating income (non-GAAP), the company expects minimal currency impact based on the current rates and including the impact of hedged positions.

Notes

  • All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.
  • All references to volume and volume percentage changes indicate unit case volume, unless otherwise noted. All volume percentage changes are computed based on average daily sales, unless otherwise noted. “Unit case” means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings), with the exception of unit case equivalents for Costa® non-ready-to-drink beverage products which are primarily measured in number of transactions. “Unit case volume” means the number of unit cases (or unit case equivalents) of company beverages directly or indirectly sold by the company and its bottling partners to customers or consumers.
  • “Concentrate sales” represents the amount of concentrates, syrups, beverage bases, source waters and powders/minerals (in all instances expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the company to its bottling partners or other customers. For Costa® non-ready-to-drink beverage products, “concentrate sales” represents the amount of coffee beans and finished beverages (in all instances expressed in equivalent unit cases) sold by the company to customers or consumers. In the reconciliation of reported net revenues, “concentrate sales” represents the percent change in net revenues attributable to the increase (decrease) in concentrate sales volume for the geographic operating segments and the Global Ventures operating segment after considering the impact of structural changes. For the Bottling Investments operating segment, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume computed based on total sales (rather than average daily sales) in each of the corresponding periods after considering the impact of structural changes. The Bottling Investments operating segment reflects unit case volume growth for consolidated bottlers only.
  • “Price/mix” represents the change in net operating revenues caused by factors such as price changes, the mix of products and packages sold, and the mix of channels and geographic territories where the sales occurred.
  • First quarter 2020 financial results were impacted by one less day as compared to the same period in 2019, and fourth quarter 2020 financial results will be impacted by two additional days as compared to the same period in 2019. Unit case volume results for the quarters are not impacted by the variances in days due to the average daily sales computation referenced above.

Conference Call

 

The company is hosting a conference call with investors and analysts to discuss third quarter 2020 operating results today, October 22, 2020, at 8:30 a.m. ET. The company invites participants to listen to a live webcast of the conference call on the company’s website, http://www.coca-colacompany.com, in the “Investors” section. An audio replay in downloadable digital format and a transcript of the call will be available on the website within 24 hours following the call. Further, the “Investors” section of the website includes certain supplemental information and a reconciliation of non-GAAP financial measures to the company’s results as reported under GAAP, which may be used during the call when discussing financial results.

eBay Inc. To Report Classifieds Business as Discontinued Operations and Releases Updated Historical Financials

During the third quarter of 2020, eBay Inc. announced that it had entered into a definitive agreement to transfer its Classifieds business to Adevinta and determined that it met the criteria for the classification of held-for-sale accounting and discontinued operations.

SAN JOSE, Calif., Oct. 1, 2020 — During the third quarter of 2020, eBay Inc. (Nasdaq: EBAY) announced that it had entered into a definitive agreement to transfer its Classifieds business to Adevinta and determined that it met the criteria for the classification of held-for-sale accounting and discontinued operations. Accordingly, Classifieds’ financial results will be reflected in eBay’s condensed consolidated financial statements as discontinued operations beginning in the third quarter of 2020. Please refer to the 8-K filed today for a restatement of historical financial results.

Cautions Regarding Forward Looking Statements

Certain statements herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Such forward-looking statements are often identified by words such as “anticipate,” “approximate,” “believe,” “commit,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “outlook,” “plan,” “project,” “potential,” “should,” “would,” “will” and other similar words or expressions. Such forward-looking statements reflect eBay’s current expectations or beliefs concerning future events and actual events may differ materially from historical results or current expectations. The reader is cautioned not to place undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties, risks, assumptions and other factors, many of which are outside the control of eBay. The forward-looking statements in this document address a variety of subjects including, for example, the closing of the transaction pursuant to which eBay will transfer certain subsidiaries which operate its Classifieds business (the “Transaction”) and the potential benefits of the Transaction. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the possibility that regulatory and other approvals and conditions to the Transaction are not received or satisfied on a timely basis or at all; the possibility that eBay may not fully realize the projected benefits of the Transaction; changes in the anticipated timing for closing the Transaction; business disruption during the pendency of or following the Transaction; diversion of management time on Transaction-related issues; the reaction of customers and other persons to the Transaction; and other events that could adversely impact the completion of the Transaction, including the ongoing COVID-19 pandemic and other industry or economic conditions outside of our control. In addition, actual results are subject to other risks and uncertainties that relate more broadly to eBay’s overall business, including those more fully described in eBay’s filings with the Securities and Exchange Commission (“SEC”), including its annual report on Form 10-K for the fiscal year ended December 31, 2019 and subsequent quarterly reports on Form 10-Q. The forward-looking statements in this document speak only as of this date. We undertake no obligation to revise or update publicly any forward-looking statement, except as required by law.