Microsoft Excel LibreOffice Calc

Comcast Corp. (CMCSA)


Analysis of Goodwill and Intangible Assets

Difficulty: Advanced


Goodwill and Intangible Assets Disclosure

Comcast Corp., Statement of Financial Position, Goodwill and Intangible Assets

USD $ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Customer relationships 25,046  13,612  13,478  13,396  15,129 
Software 11,395  8,258  7,017  6,008  5,040 
Cable franchise renewal costs and contractual operating rights —  1,492  1,460  1,499  1,418 
Patents and other technology rights 260  259  257  409  373 
Other agreements and rights 3,885  2,724  2,443  1,994  1,456 
Finite-lived intangible assets, gross carrying amount 40,586  26,345  24,655  23,306  23,416 
Accumulated amortization (14,194) (12,785) (11,013) (9,868) (10,170)
Finite-lived intangible assets, net 26,392  13,560  13,642  13,438  13,246 
Franchise rights 59,365  59,364  59,364  59,364  59,364 
Trade names 9,633  2,981  2,981  2,857  3,083 
FCC licenses 2,333  2,238  651  651  651 
Indefinite-lived intangible assets 71,331  64,583  62,996  62,872  63,098 
Intangible assets 97,723  78,143  76,638  76,310  76,344 
Goodwill 66,154  36,780  35,980  32,945  27,316 
Goodwill and intangible assets 163,877  114,923  112,618  109,255  103,660 

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

Item Description The company
Intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Comcast Corp.’s intangible assets increased from 2016 to 2017 and from 2017 to 2018.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Comcast Corp.’s goodwill increased from 2016 to 2017 and from 2017 to 2018.
Goodwill and intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Comcast Corp.’s goodwill and intangible assets increased from 2016 to 2017 and from 2017 to 2018.

Analyst Adjustments: Removal of Goodwill

Comcast Corp., adjustments to financial data

USD $ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Adjustment to Total Assets
Total assets (as reported) 251,684  186,949  180,500  166,574  159,339 
Less: Goodwill 66,154  36,780  35,980  32,945  27,316 
Total assets (adjusted) 185,530  150,169  144,520  133,629  132,023 
Adjustment to Total Comcast Corporation Shareholders’ Equity
Total Comcast Corporation shareholders’ equity (as reported) 71,613  68,606  53,943  52,269  52,711 
Less: Goodwill 66,154  36,780  35,980  32,945  27,316 
Total Comcast Corporation shareholders’ equity (adjusted) 5,459  31,826  17,963  19,324  25,395 

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).


Comcast Corp., Financial Data: Reported vs. Adjusted


Adjusted Ratios: Removal of Goodwill (Summary)

Comcast Corp., adjusted ratios

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Total Asset Turnover
Reported total asset turnover 0.38 0.45 0.45 0.45 0.43
Adjusted total asset turnover 0.51 0.56 0.56 0.56 0.52
Financial Leverage
Reported financial leverage 3.51 2.72 3.35 3.19 3.02
Adjusted financial leverage 33.99 4.72 8.05 6.92 5.20
Return on Equity (ROE)
Reported ROE 16.38% 33.11% 16.12% 15.62% 15.90%
Adjusted ROE 214.89% 71.37% 48.41% 42.24% 33.00%
Return on Assets (ROA)
Reported ROA 4.66% 12.15% 4.82% 4.90% 5.26%
Adjusted ROA 6.32% 15.13% 6.02% 6.11% 6.35%

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Comcast Corp.’s adjusted total asset turnover improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Comcast Corp.’s adjusted financial leverage declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Comcast Corp.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Comcast Corp.’s adjusted ROA improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.

Comcast Corp., Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (USD $ in millions)
Revenue 94,507  84,526  80,403  74,510  68,775 
Total assets 251,684  186,949  180,500  166,574  159,339 
Ratio
Total asset turnover1 0.38 0.45 0.45 0.45 0.43
Adjusted for Goodwill
Selected Financial Data (USD $ in millions)
Revenue 94,507  84,526  80,403  74,510  68,775 
Adjusted total assets 185,530  150,169  144,520  133,629  132,023 
Ratio
Adjusted total asset turnover2 0.51 0.56 0.56 0.56 0.52

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

2018 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 94,507 ÷ 251,684 = 0.38

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 94,507 ÷ 185,530 = 0.51

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Comcast Corp.’s adjusted total asset turnover improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Adjusted Financial Leverage

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (USD $ in millions)
Total assets 251,684  186,949  180,500  166,574  159,339 
Total Comcast Corporation shareholders’ equity 71,613  68,606  53,943  52,269  52,711 
Ratio
Financial leverage1 3.51 2.72 3.35 3.19 3.02
Adjusted for Goodwill
Selected Financial Data (USD $ in millions)
Adjusted total assets 185,530  150,169  144,520  133,629  132,023 
Adjusted total Comcast Corporation shareholders’ equity 5,459  31,826  17,963  19,324  25,395 
Ratio
Adjusted financial leverage2 33.99 4.72 8.05 6.92 5.20

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

2018 Calculations

1 Financial leverage = Total assets ÷ Total Comcast Corporation shareholders’ equity
= 251,684 ÷ 71,613 = 3.51

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Comcast Corporation shareholders’ equity
= 185,530 ÷ 5,459 = 33.99

Ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Comcast Corp.’s adjusted financial leverage declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Adjusted Return on Equity (ROE)

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (USD $ in millions)
Net income attributable to Comcast Corporation 11,731  22,714  8,695  8,163  8,380 
Total Comcast Corporation shareholders’ equity 71,613  68,606  53,943  52,269  52,711 
Ratio
ROE1 16.38% 33.11% 16.12% 15.62% 15.90%
Adjusted for Goodwill
Selected Financial Data (USD $ in millions)
Net income attributable to Comcast Corporation 11,731  22,714  8,695  8,163  8,380 
Adjusted total Comcast Corporation shareholders’ equity 5,459  31,826  17,963  19,324  25,395 
Ratio
Adjusted ROE2 214.89% 71.37% 48.41% 42.24% 33.00%

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

2018 Calculations

1 ROE = 100 × Net income attributable to Comcast Corporation ÷ Total Comcast Corporation shareholders’ equity
= 100 × 11,731 ÷ 71,613 = 16.38%

2 Adjusted ROE = 100 × Net income attributable to Comcast Corporation ÷ Adjusted total Comcast Corporation shareholders’ equity
= 100 × 11,731 ÷ 5,459 = 214.89%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Comcast Corp.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (USD $ in millions)
Net income attributable to Comcast Corporation 11,731  22,714  8,695  8,163  8,380 
Total assets 251,684  186,949  180,500  166,574  159,339 
Ratio
ROA1 4.66% 12.15% 4.82% 4.90% 5.26%
Adjusted for Goodwill
Selected Financial Data (USD $ in millions)
Net income attributable to Comcast Corporation 11,731  22,714  8,695  8,163  8,380 
Adjusted total assets 185,530  150,169  144,520  133,629  132,023 
Ratio
Adjusted ROA2 6.32% 15.13% 6.02% 6.11% 6.35%

Based on: 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05), 10-K (filing date: 2015-02-27).

2018 Calculations

1 ROA = 100 × Net income attributable to Comcast Corporation ÷ Total assets
= 100 × 11,731 ÷ 251,684 = 4.66%

2 Adjusted ROA = 100 × Net income attributable to Comcast Corporation ÷ Adjusted total assets
= 100 × 11,731 ÷ 185,530 = 6.32%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Comcast Corp.’s adjusted ROA improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.