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Comcast Corp. (CMCSA)

Analysis of Income Taxes

High level of difficulty

Income Tax Expense (Benefit)

Comcast Corp., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Federal 2,026  2,411  3,190  3,210  2,392 
State 639  277  480  570  174 
Foreign 425  389  194  221  142 
Current expense 3,090  3,077  3,864  4,001  2,708 
Federal 546  (10,659) 1,192  890  1,000 
State (167) 10  154  66  173 
Foreign (89) (6) 98  2  (8)
Deferred expense (benefit) 290  (10,655) 1,444  958  1,165 
Income tax expense (benefit) 3,380  (7,578) 5,308  4,959  3,873 

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
Current expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Comcast Corp.’s current expense declined from 2016 to 2017 but then slightly increased from 2017 to 2018.
Deferred expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Comcast Corp.’s deferred expense (benefit) declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.
Income tax expense (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Comcast Corp.’s income tax expense (benefit) declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Effective Income Tax Rate (EITR)

Comcast Corp., effective income tax rate (EITR) reconciliation

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Federal statutory tax rate 21.00% 35.00% 35.00% 35.00% 35.00%
Effective income tax rate 22.18% -49.46% 36.98% 37.08% 31.10%

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
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Comcast Corp.’s effective income tax rate declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Components of Deferred Tax Assets and Liabilities

Comcast Corp., components of deferred tax assets and liabilities

US$ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net operating loss carryforwards 1,926  481  544  551  448 
Differences between book and tax basis of investments —  —  —  101  — 
Nondeductible accruals and other 2,656  2,026  3,789  3,704  3,499 
Deferred tax assets, gross 4,582  2,507  4,333  4,356  3,947 
Valuation allowance (632) (377) (266) (342) (375)
Deferred tax assets, net 3,950  2,130  4,067  4,014  3,572 
Differences between book and tax basis of property and equipment and intangible assets (29,139) (25,154) (37,401) (36,392) (35,112)
Differences between book and tax basis of investments (491) (466) (144) —  (186)
Differences between book and tax basis of long-term debt (604) (673) (375) (457) (534)
Differences between book and tax basis of foreign subsidiaries and undistributed foreign earnings (85) (39) (960) (731) (504)
Deferred tax liabilities (30,319) (26,332) (38,880) (37,580) (36,336)
Net deferred tax asset (liability) (26,369) (24,202) (34,813) (33,566) (32,764)

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
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Comcast Corp.’s deferred tax assets, gross declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Deferred tax assets, net Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Comcast Corp.’s deferred tax assets, net declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Comcast Corp.’s net deferred tax asset (liability) increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Adjustments to Financial Statements: Removal of Deferred Taxes

Comcast Corp., adjustments to financial statements

US$ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Adjustment to Total Liabilities
Total liabilities (as reported) 177,866  116,143  122,880  111,375  105,205 
Less: Noncurrent deferred tax liabilities, net 27,589  24,256  34,854  33,566  32,959 
Total liabilities (adjusted) 150,277  91,887  88,026  77,809  72,246 
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: Net deferred tax assets (liabilities) (26,369) (24,202) (34,813) (33,566) (32,764)
Total Comcast Corporation shareholders’ equity (adjusted) 97,982  92,808  88,756  85,835  85,475 
Adjustment to Net Income Attributable To Comcast Corporation
Net income attributable to Comcast Corporation (as reported) 11,731  22,714  8,695  8,163  8,380 
Add: Deferred income tax expense (benefit) 290  (10,655) 1,444  958  1,165 
Net income attributable to Comcast Corporation (adjusted) 12,021  12,059  10,139  9,121  9,545 

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 Financial Ratios: Removal of Deferred Taxes (Summary)

Comcast Corp., adjusted financial ratios

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net Profit Margin
Reported net profit margin 12.41% 26.87% 10.81% 10.96% 12.18%
Adjusted net profit margin 12.72% 14.27% 12.61% 12.24% 13.88%
Financial Leverage
Reported financial leverage 3.51 2.72 3.35 3.19 3.02
Adjusted financial leverage 2.57 2.01 2.03 1.94 1.86
Return on Equity (ROE)
Reported ROE 16.38% 33.11% 16.12% 15.62% 15.90%
Adjusted ROE 12.27% 12.99% 11.42% 10.63% 11.17%
Return on Assets (ROA)
Reported ROA 4.66% 12.15% 4.82% 4.90% 5.26%
Adjusted ROA 4.78% 6.45% 5.62% 5.48% 5.99%

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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Comcast Corp.’s adjusted net profit margin ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.
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 ratio declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Comcast Corp.’s adjusted ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Comcast Corp.’s adjusted ROA improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Comcast Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Comcast Corporation 11,731  22,714  8,695  8,163  8,380 
Revenue 94,507  84,526  80,403  74,510  68,775 
Profitability Ratio
Net profit margin1 12.41% 26.87% 10.81% 10.96% 12.18%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Comcast Corporation 12,021  12,059  10,139  9,121  9,545 
Revenue 94,507  84,526  80,403  74,510  68,775 
Profitability Ratio
Adjusted net profit margin2 12.72% 14.27% 12.61% 12.24% 13.88%

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 Net profit margin = 100 × Net income attributable to Comcast Corporation ÷ Revenue
= 100 × 11,731 ÷ 94,507 = 12.41%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Comcast Corporation ÷ Revenue
= 100 × 12,021 ÷ 94,507 = 12.72%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Comcast Corp.’s adjusted net profit margin ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.

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 (US$ 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 
Solvency Ratio
Financial leverage1 3.51 2.72 3.35 3.19 3.02
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Total assets 251,684  186,949  180,500  166,574  159,339 
Adjusted total Comcast Corporation shareholders’ equity 97,982  92,808  88,756  85,835  85,475 
Solvency Ratio
Adjusted financial leverage2 2.57 2.01 2.03 1.94 1.86

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 = Total assets ÷ Adjusted total Comcast Corporation shareholders’ equity
= 251,684 ÷ 97,982 = 2.57

Solvency 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 ratio declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ 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 
Profitability Ratio
ROE1 16.38% 33.11% 16.12% 15.62% 15.90%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Comcast Corporation 12,021  12,059  10,139  9,121  9,545 
Adjusted total Comcast Corporation shareholders’ equity 97,982  92,808  88,756  85,835  85,475 
Profitability Ratio
Adjusted ROE2 12.27% 12.99% 11.42% 10.63% 11.17%

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 × Adjusted net income attributable to Comcast Corporation ÷ Adjusted total Comcast Corporation shareholders’ equity
= 100 × 12,021 ÷ 97,982 = 12.27%

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

Adjusted Return on Assets (ROA)

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ 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 
Profitability Ratio
ROA1 4.66% 12.15% 4.82% 4.90% 5.26%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Comcast Corporation 12,021  12,059  10,139  9,121  9,545 
Total assets 251,684  186,949  180,500  166,574  159,339 
Profitability Ratio
Adjusted ROA2 4.78% 6.45% 5.62% 5.48% 5.99%

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 × Adjusted net income attributable to Comcast Corporation ÷ Total assets
= 100 × 12,021 ÷ 251,684 = 4.78%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Comcast Corp.’s adjusted ROA improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.