EXHIBIT 99.1
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet of
Comcast Corporation ("Comcast") as of June 30, 2003 and Unaudited Pro Forma
Condensed Consolidated Statements of Operations of Comcast for the six months
ended June 30, 2003 and the years ended December 31, 2002, 2001 and 2000 give
effect to the sale of Comcast's approximate 57% interest in QVC, Inc. ("QVC").
The Unaudited Pro Forma Condensed Consolidated Balance Sheet assumes the sale of
QVC occurred on June 30, 2003 and the Unaudited Pro Forma Condensed Consolidated
Statements of Operations assume the sale of QVC occurred on January 1, 2000,
with all statements presented subject to the assumptions and adjustments as set
forth in the accompanying notes to the unaudited pro forma condensed
consolidated financial statements. Additionally, the following Unaudited Pro
Forma Condensed Consolidated Statement of Operations for the year ended December
31, 2002 gives effect to our acquisition of AT&T Corp's broadband division
("Broadband") on November 18, 2002, as if the acquisition occurred on January 1,
2002.
On September 17, 2003, Comcast, in accordance with the Amended and Restated
Stock Purchase Agreement dated as of June 30, 2003 and executed on July 3, 2003
(the "Agreement"), among Comcast QVC, Inc. ("Comcast QVC"), Comcast, Liberty
Media Corporation ("Liberty") and QVC, among other things, completed the sale to
Liberty of all shares of QVC common stock held by a number of direct
wholly-owned subsidiaries of Comcast QVC for an aggregate amount of
approximately $4 billion principal amount of Liberty's Floating Rate Senior
Notes due 2006 (the "Liberty Notes"), approximately $1.35 billion in cash and
approximately 218 million shares of Liberty Series A common stock. Pursuant to
the Agreement, the shares of Liberty Series A common stock received by Comcast
QVC were valued at $11.71 per share and represent approximately 7.5% of
Liberty's common stock outstanding. The shares had a market value on the closing
date of $10.73 per share, which was used for valuing such consideration in the
accompanying unaudited pro forma condensed consolidated financial statements.
Resales of the Liberty Notes and shares of Liberty Series A common stock
received in the transaction have been registered with the Securities and
Exchange Commission pursuant to the Agreement. On September 24, 2003, Comcast,
through its wholly-owned indirect subsidiaries, sold an aggregate of $3.0
billion principal amount of the Liberty Notes for net proceeds of approximately
$3.0 billion. Comcast will report QVC as a discontinued operation, in accordance
with Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."
On November 18, 2002, Comcast purchased Broadband in exchange for consideration
aggregating $50.780 billion, consisting of $25.495 billion of Comcast common
stock and options, $24.860 billion of assumed debt and $425 million of
transaction costs directly related to the acquisition. The allocation of the
purchase price for the Broadband acquisition is preliminary and subject to
adjustment as additional information is obtained.
The pro forma adjustments included herein are based on available information and
certain assumptions that management believes are reasonable and are described in
the accompanying notes to the unaudited pro forma condensed consolidated
financial statements. The Unaudited Pro Forma Condensed Consolidated Financial
Statements do not necessarily represent what Comcast's financial position or
results of operations would have been had the sale of QVC or the purchase of
Broadband occurred on such dates or to project Comcast's financial position or
results of operations at or for any future date or period. In the opinion of
management, all adjustments necessary to present fairly the unaudited pro forma
financial information have been made. The Unaudited Pro Forma Condensed
Consolidated Financial Statements should be read in conjunction with the
historical consolidated financial statements of Comcast.
1
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT JUNE 30, 2003
(Dollars in millions)
Historical Historical Pro Forma Pro Forma
Comcast QVC (a) Adjustments Comcast
------------ ----------- ----------- -----------
ASSETS
- ------
CURRENT ASSETS
Cash and cash equivalents......................................... $1,324 ($508) $1,350(b) $2,166
Investments....................................................... 2,161 (17) 2,144
Accounts receivable, net.......................................... 1,376 (532) 844
Inventories, net.................................................. 506 (506)
Deferred income taxes............................................. 137 (137)
Other current assets.............................................. 389 (21) 368
------------ ----------- ----------- -----------
Total current assets.......................................... 5,893 (1,721) 1,350 5,522
------------ ----------- ----------- -----------
INVESTMENTS.......................................................... 13,386 (4) 6,336(b)(g) 19,718
PROPERTY AND EQUIPMENT, net.......................................... 19,079 (487) 18,592
FRANCHISE RIGHTS..................................................... 48,332 48,332
GOODWILL............................................................. 17,182 (835) 16,347
OTHER INTANGIBLE ASSETS, net......................................... 4,864 (170) 4,694
OTHER NONCURRENT ASSETS, net......................................... 786 (94) 692
------------ ----------- ----------- -----------
$109,522 ($3,311) $7,686 $113,897
============ =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable.................................................. $1,507 ($399) $ $1,108
Accrued expenses and other current liabilities.................... 5,060 (392) 1,980(b) 6,648
Deferred income taxes............................................. 557 557
Current portion of long-term debt................................. 2,416 2,416
------------ ----------- ----------- -----------
Total current liabilities..................................... 9,540 (791) 1,980 10,729
------------ ----------- ----------- -----------
LONG-TERM DEBT, less current portion................................. 29,923 29,923
------------ ----------- ----------- -----------
DEFERRED INCOME TAXES................................................ 23,622 (4) 841(b) 24,459
------------ ----------- ----------- -----------
OTHER NONCURRENT LIABILITIES......................................... 5,542 (53) 5,489
------------ ----------- ----------- -----------
MINORITY INTEREST.................................................... 2,814 (981) 1,833
------------ ----------- ----------- -----------
STOCKHOLDERS' EQUITY................................................. 38,081 (1,482) 4,865(b) 41,464
------------ ----------- ----------- -----------
$109,522 ($3,311) $7,686 $113,897
============ =========== =========== ===========
See notes to unaudited pro forma condensed consolidated financial statements.
2
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(Dollars in millions, except per share data)
Historical Historical Pro Forma Pro Forma
Comcast QVC (a) Adjustments Comcast
------------- ----------- ----------- ---------
REVENUES
Service revenues....................................................... $9,040 $ $10(c) $9,050
Net sales from electronic retailing.................................... 2,163 (2,163)
------------- ----------- ----------- ---------
11,203 (2,163) 10 9,050
------------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation)..................................... 3,808 (263) 10(c) 3,555
Cost of goods sold from electronic retailing (excluding depreciation).. 1,370 (1,370)
Selling, general and administrative.................................... 2,556 (100) 2,456
Depreciation........................................................... 1,636 (40) 1,596
Amortization........................................................... 749 (25) 724
------------- ----------- ----------- ---------
10,119 (1,798) 10 8,331
------------- ----------- ----------- ---------
OPERATING INCOME........................................................... 1,084 (365) 719
OTHER INCOME (EXPENSE)
Interest expense....................................................... (1,017) 3 (1,014)
Investment loss, net .................................................. (221) (14) (235)
Equity in net losses of affiliates..................................... (21) 4 (17)
Other income........................................................... 42 42
------------- ----------- ----------- ---------
(1,217) (7) (1,224)
------------- ----------- ----------- ---------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST...................................................... (133) (372) (505)
INCOME TAX (EXPENSE) BENEFIT............................................... (9) 137 128
------------- ----------- ----------- ---------
LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST................... (142) (235) (377)
MINORITY INTEREST.......................................................... (177) 106 (71)
------------- ----------- ----------- ---------
LOSS FROM CONTINUING OPERATIONS............................................ ($319) ($129) $ ($448)
============= =========== =========== =========
BASIC LOSS FROM CONTINUING OPERATIONS FOR COMMON STOCKHOLDERS
PER COMMON SHARE....................................................... ($0.14) ($0.20)
============= =========
DILUTED LOSS FROM CONTINUING OPERATIONS FOR COMMON STOCKHOLDERS
PER COMMON SHARE....................................................... ($0.14) ($0.20)
============= =========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
(Amounts in millions, except per share data)
Historical Historical Broadband Historical Pro Forma Pro Forma
Comcast Broadband (d) Adjustments (e) QVC (a) Adjustments Comcast
----------- -------------- ------------- ----------- ----------- ----------
REVENUES
Service revenues.................................. $8,079 $8,693 ($41) $ $38(c) $16,769
Net sales from electronic retailing............... 4,381 (4,381)
----------- -------------- ------------- ----------- ----------- ----------
12,460 8,693 (41) (4,381) 38 16,769
----------- -------------- ------------- ----------- ----------- ----------
COSTS AND EXPENSES
Operating (excluding depreciation)................ 3,511 4,612 (27) (519) 35(c) 7,612
Cost of goods sold from electronic retailing
(excluding depreciation)........................ 2,793 (2,793)
Selling, general and administrative............... 2,465 2,411 (10) (211) 4,655
Depreciation...................................... 1,775 2,414 (814) (81) 3,294
Amortization...................................... 257 188 954 (39) 3(c) 1,363
Goodwill and franchise impairment charges......... 16,525 16,525(f)
Asset impairment, restructuring and other charges. 56 56
----------- -------------- ------------- ----------- ----------- ----------
10,801 26,206 103 (3,643) 38 33,505
----------- -------------- ------------- ----------- ----------- ----------
OPERATING INCOME (LOSS).............................. 1,659 (17,513) (144) (738) (16,736)
OTHER INCOME (EXPENSE)
Interest expense.................................. (884) (1,306) (5) 14 (2,181)
Investment loss, net ............................. (605) (1,263) 92 (1,776)
Equity in net losses of affiliates................ (103) (1,005) 8 (1,100)
Other income...................................... 3 439 442
----------- -------------- ------------- ----------- ----------- ----------
(1,589) (2,130) (1,010) 114 (4,615)
----------- -------------- ------------- ----------- ----------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES, MINORITY INTEREST,
EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE.............................. 70 (19,643) (1,154) (624) (21,351)
INCOME TAX (EXPENSE) BENEFIT......................... (134) 5,776 443 262 6,347
----------- -------------- ------------- ----------- ----------- ----------
LOSS FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST, EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE............ (64) (13,867) (711) (362) (15,004)
NET LOSS RELATED TO EQUITY INVESTMENTS............... (619) 619
MINORITY INTEREST.................................... (212) (256) 155 169 (144)
----------- -------------- ------------- ----------- ----------- ----------
LOSS FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEMS AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE....................... ($276) ($14,742) $63 ($193) $ ($15,148)
=========== ============== ============= =========== =========== ==========
BASIC LOSS FROM CONTINUING OPERATIONS FOR
COMMON STOCKHOLDERS PER COMMON SHARE.............. ($0.25) ($6.59)
=========== ==========
DILUTED LOSS FROM CONTINUING OPERATIONS FOR
COMMON STOCKHOLDERS PER COMMON SHARE.............. ($0.25) ($6.59)
=========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC........................ 1,110 1,189 2,299
=========== ============= ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - ASSUMING DILUTION............ 1,110 1,189 2,299
=========== ============= ==========
See notes to unaudited pro forma condensed consolidated financial statements.
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COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in millions, except per share data)
Historical Historical Pro Forma Pro Forma
Comcast QVC (a) Adjustments Comcast
----------- ----------- ----------- ---------
REVENUES
Service revenues............................................................. $5,919 $ $18 (c) $5,937
Net sales from electronic retailing.......................................... 3,917 (3,917)
----------- ----------- ----------- ---------
9,836 (3,917) 18 5,937
----------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation)........................................... 2,906 (478) 18 (c) 2,446
Cost of goods sold from electronic retailing (excluding depreciation)........ 2,514 (2,514)
Selling, general and administrative.......................................... 1,746 (203) 1,543
Depreciation................................................................. 1,211 (81) 1,130
Amortization................................................................. 2,205 (62) 2,143
----------- ----------- ----------- ---------
10,582 (3,338) 18 7,262
----------- ----------- ----------- ---------
OPERATING LOSS ................................................................. (746) (579) (1,325)
OTHER INCOME (EXPENSE)
Interest expense............................................................. (734) 26 (708)
Investment income, net ...................................................... 1,062 (91) 971
Equity in net losses of affiliates........................................... (29) 13 (16)
Other income................................................................. 1,301 4 1,305
----------- ----------- ----------- ---------
1,600 (48) 1,552
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES,
MINORITY INTEREST AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE................. 854 (627) 227
INCOME TAX EXPENSE.............................................................. (470) 254 (216)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE................................... 384 (373) 11
MINORITY INTEREST............................................................... (160) 153 (7)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE.................................................. $224 ($220) $ $4
=========== =========== =========== =========
BASIC EARNINGS FROM CONTINUING OPERATIONS FOR COMMON STOCKHOLDERS
PER COMMON SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE............... $0.24 $0.00
=========== =========
DILUTED EARNINGS FROM CONTINUING OPERATIONS FOR COMMON STOCKHOLDERS
PER COMMON SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE............... $0.23 $0.00
=========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
5
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(Dollars in millions, except per share data)
Historical Historical Pro Forma Pro Forma
Comcast QVC (a) Adjustments Comcast
----------- ----------- ----------- ---------
REVENUES
Service revenues............................................................. $4,821 $ $15(c) $4,836
Net sales from electronic retailing.......................................... 3,536 (3,536)
----------- ----------- ----------- ---------
8,357 (3,536) 15 4,836
----------- ----------- ----------- ---------
COSTS AND EXPENSES
Operating (excluding depreciation)........................................... 2,210 (439) 15(c) 1,786
Cost of goods sold from electronic retailing (excluding depreciation)........ 2,285 (2,285)
Selling, general and administrative.......................................... 1,404 (193) 1,211
Depreciation................................................................. 837 (58) 779
Amortization................................................................. 1,782 (68) 1,714
----------- ----------- ----------- ---------
8,518 (3,043) 15 5,490
----------- ----------- ----------- ---------
OPERATING LOSS.................................................................. (161) (493) (654)
OTHER INCOME (EXPENSE)
Interest expense............................................................. (728) 35 (693)
Investment income............................................................ 984 (24) 960
Income related to indexed debt............................................... 666 666
Equity in net losses of affiliates........................................... (22) 5 (17)
Other income................................................................. 2,826 2,826
----------- ----------- ----------- ---------
3,726 16 3,742
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST............................................................ 3,565 (477) 3,088
INCOME TAX EXPENSE.............................................................. (1,429) 217 (1,212)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST...................... 2,136 (260) 1,876
MINORITY INTEREST............................................................... (115) 112 (3)
----------- ----------- ----------- ---------
INCOME FROM CONTINUING OPERATIONS............................................... $2,021 ($148) $ $1,873
=========== =========== =========== =========
BASIC EARNINGS FROM CONTINUING OPERATIONS FOR COMMON
STOCKHOLDERS PER COMMON SHARE................................................ $2.24 $2.08
=========== =========
DILUTED EARNINGS FROM CONTINUING OPERATIONS FOR COMMON
STOCKHOLDERS PER COMMON SHARE................................................ $2.13 $1.97
=========== =========
See notes to unaudited pro forma condensed consolidated financial statements.
6
COMCAST CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) This column deducts the historical balances and results of operations of
QVC to reflect the sale of QVC.
(b) To reflect the consideration received from Liberty in the form of $1.350
billion in cash, approximately 218 million shares of Liberty's Series A
common stock with a fair value of $2.336 billion at September 17, 2003 and
$4.0 billion in three-year senior unsecured notes. The consideration
received, net of $46 million in transaction costs, over Comcast's carrying
value of the net assets of QVC is expected to result in an estimated gain
of approximately $3.3 billion, net of tax.
(c) Adjustment reflects the reversal of the elimination of intercompany
transactions between Comcast's cable operations, including Broadband, and
QVC.
(d) Comcast's results include the results of Broadband for the period from
November 19, 2002 through December 31, 2002. Historical Broadband's results
represent Broadband's results for the period from January 1, 2002 through
November 18, 2002. Both the Comcast results and the Historical Broadband
results exclude the cable systems serving approximately 317,000 subscribers
that have been sold to Bresnan Broadband Holdings and treated as
discontinued operations as of the Broadband acquisition date.
(e) Broadband adjustments reflect the elimination of intercompany transactions
between Comcast and Broadband, the change in depreciation and amortization
expense as a result of recording the related balance sheet amounts at their
fair value, the change in interest expense to reflect the effective
interest rates for the new borrowing and the fair value of assumed debt,
the reclassification of equity in net losses in affiliates to conform to
Comcast's presentation, the related tax effects of the above adjustments,
and the shares issued in the transaction.
(f) The Broadband historical amounts include a $16.5 billion charge incurred in
the second quarter of 2002 related to the impairment of franchise rights
and goodwill. This charge was directly related to Comcast's acquisition of
Broadband and was based upon the value of Comcast's shares to be exchanged
in the acquisition as compared to the net book value of Broadband at the
time of the impairment test.
(g) On September 24, 2003, Comcast, through its wholly-owned indirect
subsidiaries, sold an aggregate of $3.0 billion principal amount of the
Liberty Notes for net proceeds of approximately $3.0 billion. The unaudited
pro forma condensed consolidated balance sheet does not reflect the sale of
such Liberty Notes.
7