Comcast Corporation

Good morning, ladies and gentlemen, and welcome to Comcast's first quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded. I will now turn the call over to Senior Vice President, Investor Relations and Finance, Mr. Jason Armstrong. Please go ahead, Mr. Armstrong.

Thank you, Operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanaugh, Steve Burke, Dave Watson, and Jeremy Derrick. Brian and Mike will make formal remarks, and Steve, Dave, and Jeremy will also be available for Q&A. As always, let me now refer you to slide number two, which contains our Safe Harbor disclaimer, and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, in this call, we will refer to certain non-GAAP financial measures, please refer to our 8K and trending schedules for the reconciliations of non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Thank you, Jason, and good morning, everyone. This was a great first quarter and an exciting, fast start to the new year. Overall, we delivered strong EBITDA and earnings per share growth, as well as robust free cash flow. As you'll hear, this includes the best quarterly EBITDA growth in over 10 years at Cable, favorable results at NBCUniversal, and exceptional growth in customer relationships at both Cable and Sky. These results, combined with the continued strategic evolution of our company, bring into focus why we are so well positioned to successfully compete and grow for the long term. We have the leading scaled platforms in the key and most attractive markets in the world. The US, UK, Germany, and Italy are four of the top 10 markets globally in terms of high value households, representing 15% of the world's broadband and video customers, but with about 50% of the world's associated revenues. Collectively, we are number one by a wide margin in these markets. with 54 million customer relationships that generate ARPUs of over $110 with substantial margin and incredible stickiness. We are intensely focused on being the leaders in the markets in which we compete, and we achieve this by continuously improving our best-in-class products and experiences. This gives us a sustainable path to growing and deepening our customer relationships for years to come and our over 400,000 net additions in the first quarter continues our company-wide momentum. Secondly, we also have leading scale in premium content. We purchase and produce $24 billion of content annually and monetize it through our entertainment, news, and sports networks, and across other third-party platforms. The first quarter was highlighted by NBCUniversal's fantastic theatrical releases, and Sky's differentiated content continues to attract strong viewership with Sky Originals representing all of the top five rated shows across its owned and partner entertainment channels. As content creation has many recent entrants, our industry-leading scale is a defining asset. So let's turn to some more details of the first quarter and the opportunities that lie ahead. Cable Communications delivered an outstanding quarter, including the highest quarterly EBITDA growth in over a decade, even better net cash flow growth, and healthy customer relationship growth. Our efforts to improve the customer experience are driving higher customer satisfaction and taking unnecessary activity out of the business. Nearly 80% of customer interactions are now completed digitally. And in the first quarter, we reached our lowest service call rate, highest first call resolution rate, and shortest repair times on record. These operational achievements are a huge part of the roadmap. As we previously described, we've pivoted the business towards our most important and differentiated product, our industry-leading broadband service which forms the foundation of our valuable relationships with residential and business customers. Our customers' demand for speed and data usage keeps increasing. Our median broadband home now uses over 200 gigabytes of data per month, an increase of 34% year over year, which accelerated from the fourth quarter. With our consistent investment in our network, including a capital-efficient path to 10 gig speeds in the coming years. We believe we will continue to exceed customer expectations. Along with X1, mobile, voice, and home security, we continue to develop complementary products and services to deepen these data-centric relationships. Most recently, we launched Flex, which adds value for broadband-only customers by integrating a wide variety of favorite streaming apps and leveraging some of the best features of the X1 platform, like our voice remote and the ability to manage connected devices on the big screen. Overall, with lots of runway ahead in our connectivity businesses, we are confident in our outlook for continued healthy customer and net cash flow growth at cable. At NBC Universal, our first quarter performance demonstrates the power of our premier content portfolio. Adjusting for the profitable broadcast of the Super Bowl and Winter Olympics during last year's first quarter, NBCUniversal EBITDA increased by double digits. Film had a tremendous quarter, including the theatrical releases of DreamWorks' How to Train Your Dragon, The Hidden World, and the thriller Us. We are looking forward to the second, Secret Life of Pets, as well as Hobbs and Shaw from the Fast and Furious franchise later this year. At television, underlying trends remain healthy, reflecting demand for our must-see entertainment, sports, and news content. NBC is on track to finish in first place among adults 18 to 49 for the 52-week season for the sixth consecutive year, and has four out of the top ten entertainment shows on broadcast this season, more than any other network. MSNBC also continues its impressive success, leading CNN by more than 50%, with the narrowest gap to Fox News in over 15 years in total viewership. These highlights throughout our content portfolio bode well for NBCUniversal's direct-to-consumer launch. Each company seems to be pursuing different opportunities as the streaming ecosystem evolves. And we really like our plan, which naturally leans towards the wonderful strengths across all of Comcast. Together, NBC and our cable networks have leading viewership share, and consumers love Universal's films, library, and many content franchises. Advertisers are eager for targeted digital advertising opportunities in the kinds of top quality shows we produce and our ad sales capabilities and organization are the best in the industry. So our DTC service will be positioned to gain scale quickly as it will leverage the current pay TV ecosystem, including our own tens of millions of valuable customer relationships. We also have scaled IP video capabilities and infrastructure, including the Now TV OTT platform developed by Sky, which will greatly accelerate our efforts. The entire company is energized by this new initiative. Turning to Sky, we remain confident in our strategy of differentiation through unique content leading to a sustained, attractive, competitive position. With a wide range of innovative products and packages, Sky is in a great position to continue to expand its addressable market, leveraging the strength of its brand. In the quarter, we had robust subscriber growth, adding over 100,000 net new customers. While it's expected, new proprietary sports rights deals impacted our profitability. As we begin this new chapter of our combined company, it's early days, but we are finding significant areas for collaboration. A couple of notable examples this quarter included the expansion of AdSmart, bringing together NBC Universal's advanced targeting solutions and Sky's addressable advertising tools in a first step towards creating a global premium video offering for advertisers. We also announced plans to combine key NBC Universal and Sky assets, including some European TV channels and global content distribution businesses, which will provide better scale to accelerate growth and innovation. And we're also exploring launching a global NBC sky news channel later this year. So in summary, we're off to a terrific start in 2019 highlighted in particular by momentum and broadband and business services, which drove cable to its fastest level of quarterly EBITDA growth in years. I'm really pleased with both our execution, the first quarter and our strategic positioning of the company for the future. We have world-class global content creation capabilities, and our growing base of over 54 million recurring customer relationships is built around highly differentiated products and capabilities, our powerful broadband network at Comcast Cable, and Sky's unique market position. Over to you, Mike.