Comcast Class A Earnings Call Nuggets: Cash Taxes and Big Three Drivers for Divisions

Comcast Corp Class A (NASDAQ:CMCSA) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Cash Taxes

Jason Bazinet – Citigroup: I just had two questions first (indiscernible). I’m sure there are a lot of moving parts to the economic stimulus and I don’t know if there are any changes with the full redemption of the NBCU stake, but would you mind just outlining anything that you can on cash taxes for the next few years in a percentage basis? Then secondly, if you had to quantify what sort of assets there are on an NPV basis, are there any guidepost you can give us in terms of what folks should be thinking about for their evaluation?

Michael J. Angelakis – CFO and Vice Chairman: Is your second question, Jason, regarding to the tax benefits we’re receiving as a part of the transaction on an NPV basis? I just want to make sure I clarify the question.

Jason Bazinet – Citigroup: Correct.

Michael J. Angelakis – CFO and Vice Chairman: So, when we announced the transaction, the first part of the transaction back in December of ’09, we articulated that we thought the NPV benefit of the taxes was approximately $1.5 billion. We’ve been fortunate in terms of how we structured it and other benefits where now we estimate that the NPV of those tax benefits is approximately $2.2 billion. So, they’ve gone up nicely over the last several years. We expect to receive those benefits over really the next 10 to 15 years which is several hundred million dollars a year of benefits to Comcast. So, we’re really pleased with how this has been structured. With regards to cash taxes, they do move around a little bit related to gains and other kinds of things. We don’t anticipate any meaningful changes, and I think you’ll see that our effective tax rate on our P&L will probably hover around 38%, 39% as we go forward.

Big Three Drivers for Divisions

Jessica Reif-Cohen – Bank of America Merrill Lynch: I had a question for Neil and Steve, if each of you could just talk about kind of the big three drivers for your divisions for the year ahead.

Neil Smit – President and CEO, Comcast Cable and EVP, Comcast Corporation: I think – hi, Jessica, it’s Neil. I think the big drivers for our business are; number one, executing the growth of our businesses; our High-Speed business in Business Services. Those are drivers of our profitability and revenue and I think we’re very focused on those. Number two is growing – continuing the improvement on our Video business. We’ve seen now about nine quarters of improving results in Video and I’d like to continue that trend. And number three is just executing well on some of the efficiencies we’re finding in the business, reducing truck rolls, improving the call center performance, and just overall improvement on the execution side of the business.

Stephen B. Burke – CEO, NBCUniversal and EVP, Comcast Corporation: And Jessica, on the NBCUniversal side, I would say if I had to pick three, the first would be what I call the monetization gap or the entitlement gap. I think our affiliate fees are not what they should be both in terms of the cable channels and retransmission consent, and on the advertising side, our CPMs are lower than some of the other people in the business who have lower ratings than we do. Secondly, I’d say the Broadcast business continues to seem like a big opportunity to us, whether it’s the NBC network, our local stations or Telemundo. I think all three of those represent a big opportunity. And finally, Theme Parks, which is a business that we have come to really appreciate over time; we’re doing quite well in the Theme Park business and I think that growth will continue.

A Closer Look: Comcast Class A Earnings Cheat Sheet>>