Comcast Corp. (CMCSA)

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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread
Economic Profit Margin

Comcast Corp., economic profit calculation

USD $ in millions

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net operating profit after taxes (NOPAT)¹	14,650	12,227	11,580	11,341	8,591
Cost of capital²	9.87%	9.90%	9.80%	10.03%	10.04%
Invested capital³	162,011	155,853	145,651	137,591	130,059

Economic profit⁴	(1,336)	(3,210)	(2,688)	(2,466)	(4,469)

Source: Based on data from Comcast Corp. Annual Reports

2017 Calculations

¹ NOPAT. See Details »

² Cost of capital. See Details »

³ Invested capital. See Details »

⁴ Economic profit = NOPAT – Cost of capital × Invested capital
= 14,650 – 9.87% × 162,011 = -1,336

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Comcast Corp.'s economic profit declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Comcast Corp., NOPAT calculation

USD $ in millions

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net income attributable to Comcast Corporation	22,714	8,695	8,163	8,380	6,816
Deferred income tax expense (benefit)¹	(10,655)	1,444	958	1,165	16
Increase (decrease) in allowance for doubtful accounts²	38	24	21	(16)	23
Increase (decrease) in deferred revenue³	420	(170)	387	17	47
Increase (decrease) in equity equivalents⁴	(10,197)	1,298	1,366	1,166	86
Interest expense	3,086	2,942	2,702	2,617	2,574
Interest expense, operating lease obligations⁵	162	169	150	115	110
Adjusted interest expense	3,248	3,111	2,852	2,732	2,684
Tax benefit of interest expense⁶	(1,137)	(1,089)	(998)	(956)	(939)
Adjusted interest expense, after taxes⁷	2,111	2,022	1,854	1,776	1,744
(Gain) loss on marketable securities	(253)	(213)	(81)	(296)	(576)
Investment income, before taxes	(253)	(213)	(81)	(296)	(576)
Tax expense (benefit) of investment income⁸	89	75	28	104	202
Investment income, after taxes⁹	(164)	(138)	(53)	(192)	(374)
Net income (loss) attributable to noncontrolling interest	186	350	250	212	319
Net operating profit after taxes (NOPAT)	14,650	12,227	11,580	11,341	8,591

Source: Based on data from Comcast Corp. Annual Reports

2017 Calculations

¹ Elimination of deferred tax expense. See Details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net income attributable to Comcast Corporation.

⁵ Addition of interest expense on capitalized operating leases. See Details »

⁶ Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 3,248 × 35% = 1,137

⁷ Addition of after taxes interest expense to net income attributable to Comcast Corporation.

⁸ Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 253 × 35% = 89

⁹ Elimination of after taxes investment income.

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Comcast Corp.'s NOPAT increased from 2015 to 2016 and from 2016 to 2017.

Comcast Corp., cash operating taxes calculation

USD $ in millions

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Income tax expense (benefit)	(7,578)	5,308	4,959	3,873	3,980
Less: Deferred income tax expense (benefit)	(10,655)	1,444	958	1,165	16
Add: Tax savings from interest expense	1,137	1,089	998	956	939
Less: Tax imposed on investment income	89	75	28	104	202
Cash operating taxes	4,125	4,878	4,971	3,561	4,702

Source: Based on data from Comcast Corp. Annual Reports

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Comcast Corp.'s cash operating taxes declined from 2015 to 2016 and from 2016 to 2017.

Comcast Corp., invested capital calculation (financing approach)

USD $ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Current portion of long-term debt	5,134	5,480	3,627	4,217	3,280
Long-term debt, less current portion	59,422	55,566	48,994	44,017	44,567
PV of operating lease payments¹	3,335	3,189	2,730	1,855	1,780
Total reported debt & leases	67,891	64,235	55,351	50,089	49,627
Total Comcast Corporation shareholders' equity	68,606	53,943	52,269	52,711	50,694
Net deferred tax (assets) liabilities²	24,202	34,813	33,566	32,764	31,699
Allowance for doubtful accounts³	288	250	226	205	221
Deferred revenue⁴	1,552	1,132	1,302	915	898
Equity equivalents⁵	26,042	36,195	35,094	33,884	32,818
Accumulated other comprehensive (income) loss, net of tax⁶	(379)	(98)	174	146	(56)
Redeemable noncontrolling interests and redeemable subsidiary preferred stock	1,357	1,446	1,221	1,066	957
Noncontrolling interests	843	2,231	1,709	357	364
Adjusted total Comcast Corporation shareholders' equity	96,469	93,717	90,467	88,164	84,777
Construction in process⁷	(1,752)	(1,901)	–	–	–
Investments, fair value method⁸	(597)	(198)	(167)	(662)	(4,345)
Invested capital	162,011	155,853	145,651	137,591	130,059

Source: Based on data from Comcast Corp. Annual Reports

¹ Addition of capitalized operating leases. See Details »

² Elimination of deferred taxes from assets and liabilities. See Details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenue.

⁵ Addition of equity equivalents to total Comcast Corporation shareholders' equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of construction in process.

⁸ Subtraction of investments, fair value method.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Comcast Corp.'s invested capital increased from 2015 to 2016 and from 2016 to 2017.

Comcast Corp., cost of capital calculations

	Fair Value¹	Weights					Cost of Capital
Equity²	197,531	197,531	÷	272,566	=	0.72	0.72	×	12.62%	=	9.14%
Debt³	71,700	71,700	÷	272,566	=	0.26	0.26	×	4.04% × (1 – 35%)	=	0.69%
PV of operating lease payments⁴	3,335	3,335	÷	272,566	=	0.01	0.01	×	4.04% × (1 – 35%)	=	0.03%
Total:	272,566					1.00					9.87%

Source: Based on data from Comcast Corp. Annual Reports

¹ USD $ in millions

² Equity. See Details »

³ Debt. See Details »

⁴ PV of operating lease payments. See Details »

	Fair Value¹	Weights					Cost of Capital
Equity²	178,803	178,803	÷	248,292	=	0.72	0.72	×	12.62%	=	9.09%
Debt³	66,300	66,300	÷	248,292	=	0.27	0.27	×	4.50% × (1 – 35%)	=	0.78%
PV of operating lease payments⁴	3,189	3,189	÷	248,292	=	0.01	0.01	×	4.50% × (1 – 35%)	=	0.04%
Total:	248,292					1.00					9.90%

Source: Based on data from Comcast Corp. Annual Reports

¹ USD $ in millions

² Equity. See Details »

³ Debt. See Details »

⁴ PV of operating lease payments. See Details »

	Fair Value¹	Weights					Cost of Capital
Equity²	145,127	145,127	÷	205,857	=	0.70	0.70	×	12.62%	=	8.90%
Debt³	58,000	58,000	÷	205,857	=	0.28	0.28	×	4.70% × (1 – 35%)	=	0.86%
PV of operating lease payments⁴	2,730	2,730	÷	205,857	=	0.01	0.01	×	4.70% × (1 – 35%)	=	0.04%
Total:	205,857					1.00					9.80%

Source: Based on data from Comcast Corp. Annual Reports

¹ USD $ in millions

² Equity. See Details »

³ Debt. See Details »

⁴ PV of operating lease payments. See Details »

	Fair Value¹	Weights					Cost of Capital
Equity²	150,889	150,889	÷	208,044	=	0.73	0.73	×	12.62%	=	9.15%
Debt³	55,300	55,300	÷	208,044	=	0.27	0.27	×	4.95% × (1 – 35%)	=	0.86%
PV of operating lease payments⁴	1,855	1,855	÷	208,044	=	0.01	0.01	×	4.95% × (1 – 35%)	=	0.03%
Total:	208,044					1.00					10.03%

Source: Based on data from Comcast Corp. Annual Reports

¹ USD $ in millions

² Equity. See Details »

³ Debt. See Details »

⁴ PV of operating lease payments. See Details »

	Fair Value¹	Weights					Cost of Capital
Equity²	143,986	143,986	÷	197,566	=	0.73	0.73	×	12.62%	=	9.20%
Debt³	51,800	51,800	÷	197,566	=	0.26	0.26	×	4.80% × (1 – 35%)	=	0.82%
PV of operating lease payments⁴	1,780	1,780	÷	197,566	=	0.01	0.01	×	4.80% × (1 – 35%)	=	0.03%
Total:	197,566					1.00					10.04%

Source: Based on data from Comcast Corp. Annual Reports

¹ USD $ in millions

² Equity. See Details »

³ Debt. See Details »

⁴ PV of operating lease payments. See Details »

Comcast Corp., economic spread calculation

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Economic profit¹	(1,336)	(3,210)	(2,688)	(2,466)	(4,469)
Invested capital²	162,011	155,853	145,651	137,591	130,059
Ratio
Economic spread³	-0.82%	-2.06%	-1.85%	-1.79%	-3.44%

Source: Based on data from Comcast Corp. Annual Reports

2017 Calculations

¹ Economic profit. See Details »

² Invested capital. See Details »

³ Economic spread = 100 × Economic profit ÷ Invested capital
= 100 × -1,336 ÷ 162,011 = -0.82%

Ratio	Description	The company
Economic spread	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Comcast Corp.'s economic spread deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Comcast Corp., economic profit margin calculation

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Economic profit¹	(1,336)	(3,210)	(2,688)	(2,466)	(4,469)
Revenue	84,526	80,403	74,510	68,775	64,657
Increase (decrease) in deferred revenue	420	(170)	387	17	47
Ratio
Economic profit margin²	-1.57%	-4.00%	-3.59%	-3.58%	-6.91%

Source: Based on data from Comcast Corp. Annual Reports

2017 Calculations

¹ Economic profit. See Details »

² Economic profit margin = 100 × Economic profit ÷ (Revenue + Change in deferred revenue)
= 100 × -1,336 ÷ (84,526 + 420) = -1.57%

Ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company's profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Comcast Corp.'s economic profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Dec 31, 2017

Dec 31, 2016

Dec 31, 2015

Dec 31, 2014

Dec 31, 2013

Economic Spread

Economic Profit Margin