Why is Comcast changing how it reports EPS?

Comcast is not fundamentally changing its GAAP reporting, but it is introducing an "Adjusted EPS" metric to provide investors with greater transparency. This adjusted metric excludes amortization expense from acquisition-related intangible assets, which the company believes can obscure the performance of its ongoing core operations and make period-over-period comparisons more difficult.

What is the financial impact of excluding acquisition-related amortization expense?

For the twelve months ended December 31, 2018, this amortization expense amounted to $1.1 billion. Excluding this, along with related tax impacts and other adjustments, increased the EPS from $2.53 to $2.73 on an adjusted basis, representing a significant adjustment.

Where can I find more details on these adjusted financial metrics?

Comcast has provided a reconciliation of its non-GAAP financial measures (including Adjusted EPS) to the most directly comparable GAAP financial measures in Exhibit 99.1 of this Form 8-K filing. This exhibit explains the adjustments made and why Comcast believes they are useful for investors.

Does this change mean Comcast's reported EPS will always be higher?

The reported EPS on a GAAP basis will remain unchanged. The "Adjusted EPS" metric is presented as a supplemental measure to highlight operational performance by excluding specific, non-cash charges related to past acquisitions. While it increased EPS in this specific reporting period, its effect will vary depending on the magnitude of amortization expenses in future periods.

CMCSA/CCZ 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 4, 2019. Cited figures are marked; the original filing is the authoritative source.

Comcast Corporation (CMCSA) filed an 8-K on February 4, 2019, to provide additional context regarding its previously released fourth quarter and full-year 2018 financial results, specifically concerning the presentation of earnings per share (EPS).

The company is enhancing transparency by adjusting its EPS metric to exclude amortization expense related to acquisition-intangible assets. This change aims to offer investors a clearer view of ongoing core operations and facilitate more accurate period-over-period comparisons. For the twelve months ended December 31, 2018, Comcast reported a significant amortization expense of $1.1 billion^a related to these intangible assets.

The reported EPS for the period was $2.53^b. By excluding this expense (along with related tax effects and other adjustments), the company's "Adjusted EPS" was presented at $2.73. Comcast believes this non-GAAP measure, detailed in an accompanying reconciliation, provides valuable insights for investors evaluating the company's operational performance and competitive positioning.

02—Key points

Key Highlights

Comcast is enhancing financial reporting transparency by adjusting its EPS calculation to exclude amortization expense from acquisition-related intangible assets.
This change is intended to provide investors with a clearer view of ongoing core operational performance.
For the full year 2018, amortization expense from acquisition-related intangible assets was $1.1 billion.
Reported EPS for the twelve months ended December 31, 2018, was $2.53.
Adjusted EPS, excluding the aforementioned amortization expense and other adjustments, was presented at $2.73 for the full year 2018.
The company is providing a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in Exhibit 99.1.
Comcast believes these adjusted metrics offer useful information for investors in evaluating performance and making peer comparisons.

03—Questions

Frequently Asked Questions

Why is Comcast changing how it reports EPS?
Comcast is not fundamentally changing its GAAP reporting, but it is introducing an "Adjusted EPS" metric to provide investors with greater transparency. This adjusted metric excludes amortization expense from acquisition-related intangible assets, which the company believes can obscure the performance of its ongoing core operations and make period-over-period comparisons more difficult.
What is the financial impact of excluding acquisition-related amortization expense?
For the twelve months ended December 31, 2018, this amortization expense amounted to $1.1 billion. Excluding this, along with related tax impacts and other adjustments, increased the EPS from $2.53 to $2.73 on an adjusted basis, representing a significant adjustment.
Where can I find more details on these adjusted financial metrics?
Comcast has provided a reconciliation of its non-GAAP financial measures (including Adjusted EPS) to the most directly comparable GAAP financial measures in Exhibit 99.1 of this Form 8-K filing. This exhibit explains the adjustments made and why Comcast believes they are useful for investors.
Does this change mean Comcast's reported EPS will always be higher?
The reported EPS on a GAAP basis will remain unchanged. The "Adjusted EPS" metric is presented as a supplemental measure to highlight operational performance by excluding specific, non-cash charges related to past acquisitions. While it increased EPS in this specific reporting period, its effect will vary depending on the magnitude of amortization expenses in future periods.

04—Continue

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