Good morning, ladies and gentlemen, and welcome to Comcast’s Second Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded. (Operator Instructions) I’ll now turn the call over to Senior Vice President Investor Relations, Ms. Marlene Dooner. Please go ahead, Ms. Dooner.

Thank you, operator, and welcome, everyone. Joining me on this morning’s call are Brian Roberts, Michael Angelakis, Steve Burke, and Neil Smit. As we’ve done in the past, Brian and Michael will make formal remarks, and Steve and Neil will also be available for Q&A. As always, let me now refer you to slide number 2, 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’ll refer to certain non-GAAP financial measures. Please refer to our 8-K for the reconciliation of non-GAAP financial measures to GAAP. With that, let me turn the call to Brian Roberts for his comments. Brian?

Thanks, Marlene, and good morning everyone. I’m really pleased with this quarters results particularly the outstanding growth in high speed internet and a strong performance across NBC Universal’s businesses, leading us to having a very solid second quarter with revenue growth of 7%, cash flow growth of more than 8% and record second quarter free cash flow of nearly $2 billion. Michael will discuss these results in more detail. Let me start by providing some highlights. Cable had another strong quarter with revenue and cash flow growth of nearly 6% and high speed internet business services and video continuing to power our growth. Business services has impressive organic momentum with the highest growth rate of all our businesses at 26%. We once again improved our year-over-year customer performance. We added an 189,000 combined video, voice, internet customers, which is a 37% increase from last year’s second quarter. High speed internet led the way with 20% growth or 187,000 net additions. This was our highest level of high speed internet performance in net ads in the second quarter in the last five years. Our voice business also had another strong quarter with a 161,000 net additions and consistent with our goal of ongoing improvement in video, we reduced video losses by nearly 17,000 year-over-year. So helping to drive these results is our innovation which is delivering increasing differentiated and better services. In the last six months, we substantially increased the speeds of our high speed Internet service for nearly 14 million customers or 70% of our base. And in the last year, we've increased service speeds across our entire footprint. We also continued to expand the availability of Wi-Fi which is at the center of our strategy to offer our customers the fastest online experience across devices both inside and out…

Good morning. Thank you, Brian. Let me begin by briefly reviewing our second quarter consolidated financial results starting on slide 4. Overall, we are very pleased with our second quarter performance which demonstrates consistent execution, profitable growth and the fundamental strength in our businesses. Second quarter consolidated revenue increased 7% to 16.3 billion and operating cash flow increased 8.4% to 5.4 billion reflecting strong organic growth in both our Cable Communications and NBCUniversal businesses. Free cash flow for the second quarter which excludes any impact of the economic stimulus increased 25.4% to 1.9 billion and free cash flow per share increased 28.1% to $0.73 per share in the quarter. This growth was primarily driven by increases in consolidated operating cash flow and improvements in working capital that reflected strong performance of our film slate and timing of production, which was partially offset by increased capital expenditures and cash taxes. Earnings per share for the quarter increased 30% to $0.65 per share compared to $0.50 per share in the second quarter of 2012. On a consolidated basis, these are strong results. Now let's review the results of our businesses in more detail starting with Cable Communications on slide 5. We are pleased with our second quarter performance of healthy revenue growth and improved customer metrics in our Cable Communications business. We continue to focus on executing the appropriate balance between customer and financial growth. In the second quarter, Cable Communications' revenue increased 5.8% to 10.5 billion driven by continued strength in high-speed Internet and business services as well as higher video and voice revenue. As a result, total revenue per video customer increased 7.4% to $160 per month. Contributing to the revenue growth our rate adjustments, growth in our customer base and increase in the number of customers receiving higher levels…

Thanks, Michael. Operator, let’s open up the call for Q&A please.

(Operator instructions). Our first question comes from Jessica Reif Cohen with Bank of America Merrill Lynch. Please go ahead.

Thanks. One Cable and one NBCUniversal. On Cable, I'd love to get your views on M&A. Is there any room for Comcast to grow either domestically or internationally?

Okay, why don't I take that question? Morning, Jessica. I mean with regards to M&A, I think you can tell by the results we have just posted, we are really focused on executing our business plan and we really think there is a lot of organic growth opportunities in the business. That being said, we always want to look at everything, we want to be educated, we really want to spend time internationally. We have about $4.5 billion of our roughly $65 billion revenue base in international, so we're bit underweight and every country is very different and certainly relates to NBCUniversal and some of their business. So I would say number one, we're really focused on just running the business and executing our plan. Number two, we remain very disciplined and we have these strategic and financial filters that we utilize for all M&A. And number three, we want to make sure we're very well educated on what the market is in those kinds of items. So I think that sort of summarizes how we view M&A both domestically and internationally.

Just a follow-up on that one but how big are you legally? Is there a limit in terms of how big you can get in the U.S. in Cable?

I don't think there really is. There's been a number of rulemakings that have been knocked down, but obviously that's a gray area.

And then I guess turning to NBCUniversal, you guys in the past have spoken about an entitlement gap and I was just wondering if you could address that in terms of where you are on both affiliate fees and CPMs for the cable networks? And I guess the same question on broadcast in terms of CPMs and retrans?

So just to define it, entitlement gap is what we call a gap between the true performance of our cable channels and broadcast network and what our CPMs are relative to other like channels and what our affiliate fees our. On the affiliate fees side, we've reset about 25% of our affiliate deals in the last year or so and made good progress, but the other 75% will occur in the years to come and we think there's clearly a gap in terms of what we deserve to be paid and what we are paid based on where the marketplace is. On the advertising side, we have the same kind of gap and the same kind of opportunity. In some instances there are cable channels and broadcast channels that get over 20% more than we do on a CPM basis. And I think over time we'll have the opportunity to eliminate that gap or start to chip away at that gap. We just finished the upfront and we made good progress toward eliminating that gap both from the broadcast side and on the cable side. On the broadcast side, net of the Olympics, we sold about 13% more that we sold last year. Our ratings in CPM performance on the NBC side were the best we've had in about nine years and we made up relative performance versus our other competitors. On the cable side, we also had good results. Our cable CPMs were up in the 7% to 8% range. USA and Bravo did very well. And one of the ways that we accomplished this was we sold all of our properties together, which for a company like ours with so many different television properties, allowed us to go into the market with a one-stop shop being sort of the full integrated approach and we think that worked. So, we're chipping away at the entitlement gap. We think it's a big opportunity for the company. It's not something that we're going to get in the quarter or even a year, but I think over the next two, three, four years you'll see real progress there.

Thank you.

Thank you, Jessica. Operator, let's go to the next question please.

Our next question comes from the line of Jason Armstrong with Goldman Sachs. Please go ahead.

Great, thanks. Good morning. A couple of questions both on the Cable side. I guess first video and broadband metrics both better in the quarter and better in the quarter and better year-over-year. Is there any sort of promotional activity you'd call out that maybe contributed to and above current quarter and 2Q or as we think forward about this, should we continue to expect sort of year-over-year improvement in those metrics? And then second, just on the content cost, 8.1% growth this quarter I think. You obviously talked about it accelerating in the back half of the year. Are we supposed to think of this as sort of relative the initial guidance we've sort of pushed out a number of the resets by maybe six months or so to some of this sold into 2014? Thanks.

Hi, Jason. It's Neil. On the video and broadband side, I'd say that there was no unique promotional activity this quarter that would have driven the performance in the sub numbers. I think on the video side, we're putting out a great product and the X1 product is out over half our footprint right now. We reduced losses by 17k, so we're executing well. The channel performance has been strong in the online channel. So I think it's just a combination of execution on the channel side as well as just getting better product out there that's helping on the video front. With HSV we've done speed upgrades in the first half of the year. We have about 14 million customers, that's 70% of our footprint. We did speed upgrades. We're putting out the new fastest gateways to have the fastest Wi-Fi in the household. So I think our product is fundamentally a better product and I think customers are recognizing that. With regards to the programming side, yes our costs were below what we expected. We had an NHL rebate and some delays in channel launches or network launches. However, we do expect double digit increases in the out half of the year and we expect to come in on the year at about 10%. The costs are driven by sports programming, retrans and getting more rights across more platforms which we're able to leverage into more value and a better value proposition for the customer.

Okay, thank you.

Thanks, Jason. Operator, let's go to the next question please.

Our next question comes from the line of Doug Mitchelson with Deutsche Bank. Please go ahead.

Doug?

I'm sorry about that. Good morning. For Neil or Brian, with so many major tech companies working towards online video services, do you feel any building pressure to accelerate getting the X1 and X2 versions of your video service into customers homes and is there a way to accelerate the rollout of advanced user interfaces whether it's X1, X2 or for lack of a better phase a dumdum version of X2? And if I could just throw in the question for Neil which is the RBOC posted strong net adds year-over-year but I don't feel the competitive impact in your numbers. Did you see a competitive impact from the RBOC and made it up against satellite or was the market just better in the second quarter? Thanks.

I'll take the questions in a reverse order, Doug. We did see year-over-year about a 200 basis point increase in RBOC mostly by AT&T. That's about 1 million subs, so we think our performance given that is we're very pleased with our performance in reducing video losses and I think it comes out to execution. With regards to X1 and X2, we've got X1 out about – across 53% of our market. We're launching in foreign markets every day, this week seven new markets and the customer response has been very favorable. VOD views are up about 20%. 55% of the people react very favorably to this product over existing guys, premiums are up. It's too early to tell on churn yet but I think there might be some favorable trends there. We'd like to accelerate – we're going to rollout X2 and it kind of shows a benefit of having everything up in the cloud. We're getting X1 across the country of course this year and X2 will already be coming in before the end of the year. So I think that really demonstrates the flexibility and nimbleness of having the platform structured the way it is.

Let me just add, I don't want to be redundant but I think Neil's point on the 1 million extra homes from RBOC competition does make the results even more impressive in my opinion. And we've all seen an overbuild but that first year is the hardest year, and so anytime you have a lot of new homes, so be it and you have to deal with that in certain markets. That's part of the motive for rolling out X1 faster, but the real part of the motive for rolling out X1 faster is it is so well received and the ability to be more flexible. So your question is a great question that we don't have a perfect answer on right this minute which is, is there a way to get a version of it to more customers faster and we're looking at a whole lot of ideas around that question all the time and we'll probably experiment with a few. And so stay tuned, but we’re all in all it’s a high class opportunity that we’re very pleased with the development. Right now the plan is steady as she goes, but it’s a good question.

Thank you very much.

Thanks, Doug. Operator, let’s go to the next question please.

Our next question is from Jason Bazinet with Citigroup. Please go ahead.

I just had a question for Mr. Burke. Given the capital investments that you’re making in the theme park portion of NBCU, I was wondering if there is any sort of heuristic that you will be willing to share in terms of, how much a specific amount of capital you’d expect to translate in the incremental attendance growth? Thank you.

I’m not sure I even know what the words heuristic means, but let me try to answer your question.

Rule of thumb.

Every single one of our projects has a IRR and we’ve a hurdle and we always look at that and analyze that before we spend the money we do believe the theme park business is a great business that we’ve a very talented team both from the operations and the creative side and that investments they’re going to pay off. If you look at just Florida, when we open Harry Potter, the first Harry Potter, our attendance went up over 40% and we’re opening a secondary Potter just as a – by way of example next year fantastic attraction going to be connected to the first one in a very innovative way, very creative and that project like every other project goes through rigorous financial model. I happen to believe that on these projects for the foreseeable future, we’re going to beat our IRR substantially because we’re starting to get some real critical path – critical mass and here is a little bit of an add on effect. But we look at it all, and wouldn’t be making the investments if we didn’t think they clear our hurdle rates.

Let me just pile on a little bit. Obviously, these things go through pretty rigorous analysis, but also the team has done a fabulous job when you look at Harry Potter, King Kong, Transformers, some of the more recent projects, they’ve clearly exceeded our return threshold, both on attendance and on per capita spend. So, the theme parks really have some momentum and we’re going to continue to invest in those project areas where we think the IRRs are really attractive.

Thank you.

Thanks, Jason. Operator, let’s go to the next question please.

Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please go ahead.

Thanks. Good morning. Michael, I want to come back to the AT&T build out, I think a lot of their targets seems to be around commercial. So just curious if you guys are taking about how you invest in that business or run that business differently if you’re seeing them more aggressive in the market. They certainly spend a lot of time on their call on trying to defend the small business side of the business, their business. And then, Steve just on the NBC upfront which clearly looks like a big success, given the rating strength last year. How much of that 13% increase were you selling more inventory versus just stronger audience guarantees versus last year to clearly got a lot of momentum with the voice in some other shows heading into the fall? Thanks.

I will take the business services question Ben. The business had a great quarter growing at 26.5%. Its still about 85% small business and 15% mid size, but the mid size is growing at a faster rate more really pleased with the growth there. In terms of CapEx investment, we continue to invest behind the business. It’s a high growth business, our highest growth business. The absolute dollars are growing in the nice way and we’re – primarily our CapEx is invested in extending the network and in CPE. Bill Stemper has done a great job organizing the team and so I think we’ll continue with the investment behind it. Michael anything you would add?

I would just add also, I think we made this point in the last quarter that last year and this year we reclassified about a $165 million -- $160 million of revenue, which was really sort of hotels and bars and some commercial. That’s not growing very fast. So, if you really at the core business services, which is the one Neil is talking about you’ve to add about 200 basis points in growth. So, really for the quarter grew about 28% plus, which listen the business is doing well comparatively to executing and we’re investing behind it. So, on an apples-to-apples basis, I’d say that we’re looking at high 20s in terms of comparisons.

And on the competition front, we’re seeing AT&T and Verizon advertise more their services. We feel we’re only about 10% penetrated and we’ve got lot of room for growth there.

Thanks.

So back in NBC in terms of the upfront, the CPM increase is for prime time we’re in the 7% to 8% range and we sold a little bit more, because we have more demand. I think we – overall we feel like we had on a relative basis a good year in terms of ratings and then we were able to get a little bit more of the what we call the entitlement gap.

Thank you.

Thanks, Ben. Operator, let’s go to the next question please.

Our next question comes from the line of Phil Cusick with JPMorgan. Please go ahead.

Hey guys, I guess two one broadband. The follow-up a little bit from an earlier one, is there still a lot of penetration potential in broadband? Other people seem to be slowing down, doesn’t seem like that’s happening for you and despite again as you pointed out he telco competition. Is there still potential to continue at this pace for another year or two? And then second on the Wi-Fi side, how big can you remind us, are you going to get here and how do you think of the business model? What’s really the customer proposition? Thanks.

I think 37% penetration in broadband we still see a lot of room for growth. There is still significant DSL market out there and we feel we’ve got fundamentally a better product. We continue to invest – behind the network and in both capacity and speed as well as in the Wi-Fi gateways that we’re putting out now that have a just better throughput and better capacity. On the Wi-Fi side, we look at in two forms. One is the household Wi-Fi. I mean, people are hanging more devices off their Wi-Fi, routers everyday and our new Wi-Fi gateways will put through 250 megabit versus the previous versions at 80. So we can use lot more capacity for more devices and we see that as a fundamental proposition to the customer. We are also building out Wi-Fi on the metro side and we’ve about 250,000 access points, both our own as well as with the cable alliance. And people are using it more and more with the usage going up, unique usage going up, and it’s a real value proposition on the data side that the customers will continue investing behind Wi-Fi growth.

I just want to add maybe a perspective to that question. I don’t think any of us can perfectly see the future and therefore that I don’t know the answer how far and how long it goes. But one of the things that I think the team here has done incredibly well is we redefined the product from connecting a wire to a PC to bringing your home to be the most enabled way to get that, which is important to you. So for instance, the momentum in tablets, the momentum in content being distributed, the momentum in apps and the innovation around the entire sector and mobile devices, the best way to enjoy all of that is to start by getting our high-speed data product, and that’s because it connects to our home gateways and to Wi-Fi and all the things Neil just talked about. And that’s why I think we want to – as we set our site to just be the best platform for a consumer and starts with getting one of or products for taking our bundle. And I think that’s why we’re seeing better growth each year and as you say 37% in that regard doesn’t sound like a number we can’t continue to grow off of.

Thanks, Michael.

Thank you, Phil. Operator, lets go to the next question please.

Our next question is from the line of Marci Ryvicker with Wells Fargo. Please go ahead.

Thanks, I have two questions, one for cable one NBCU, so first for Michael and Neil, in cable is there anything that you can say about the long-term CapEx trends in cable with the roll out of X1 and X2, I mean is there any reason to think that at some point CapEx would show a more significant year-over-year increase than the 10% you’re guiding to for ’13. And then on the NBCU side, Steve any thoughts on how the launch of Fox Sports 1 might impact NBCU and the desire for more sports programming down the line?

Hi, it's Michael Marci, how are you? Why don’t I take the long-term CapEx question; really we don’t – I think you know – provide any guidance beyond sort of the first year. I would say with regards to this year we increased capital a bit more than last year. The majority of that additional capital was for, what I would think is really exciting projects whether it's the launch of X1 in sort of further deployment of that of XFINITY Home or business services or the wireless gateways we just talked about. All of those projects have really attractive returns for our Company. So we’re delighted to invest in them, we think that they’re sort of adding customer lifetime value to our customer base. As we look at ’14 I think it's a bit too early but we still have some of the same opportunities ahead of us and one of the other folks asked earlier about X1 and X2 and we’re going to continue to push broadband and continue to push wireless gateways. So I don’t have a crystal ball of '14 in future years but we have a number of organic opportunities ahead of us that we think are very attractive.

Regarding Fox Sports 1, I don't think it changes the playing field for NBC Sports too much one way or the other. We've always had a lot of competition for rights between ESPN and Fox and Turner and others. A lot of people have been in the sports business competing with rights with us for a long time. I do think things look very good for both NBC Sports on the network and the NBC Sports network, partly because we recently won the rights to NASCAR. And we look at NASCAR as being a very, very important thing for the NBC Sports network and the network itself, because it basically gives us 20 weekends a year at a time when the NHL was not playing. So now we have year round professional sports very highly rated and that was a big win for the NBC Sports network. But I don't really think Fox Sports 1 plays into that too much. It's always been competitive, it always will be, and we think we have a unique way of looking at sports and a real place in the marketplace.

Thank you.

Thanks, Marci. Operator, let's go to the next question please.

Our next question is from the line of Craig Moffett with Moffett Research. Please go ahead.

Good morning. Two quick questions if I may. One, with John Malone having spoken so much about the balance sheet capacity in the M&A story and willingness to take leverage levels up to four times or so, Michael, has any of that conversation led you to reevaluate your own comfort levels with different leverage and would you consider adding any more leverage to the balance sheet? And then a question for Neil, as you roll out the Wi-Fi gateways that you're doing, have you changed your thinking at all on the prospect of offering a sort of wireless service that is Wi-Fi based using that as a platform?

Why don't I obviously take the balance sheet question? I think the answer, Craig, is no. I think we've obviously given substantial thought and consideration to our balance sheet. Given the total amount of debt that we have which is approximately $48 billion, we feel that we're very comfortable in the range that we've set which is 1.5 to 2 times. I think that we really prefer to have a bit of conservatism in our balance that provides appropriate flexibility and obviously we've given this a tremendous amount of thought and are pleased with where we're going right now.

With regards to the Wi-Fi question, as I mentioned we continued to build up the network. All these gateways we're putting in the households now are holding hotspots as well, they have dual SSIDs and we're doing that with small business as well, so the network is getting denser as we continue to build out the gateway and the wireless gateways. With regards to wireless service, as you know we have an MVNO agreement with Verizon Wireless but we have at this point no plans to build out a wireless network.

Thank you.

Thanks, Craig. Operator, let's have the next question please.

Our next question comes from the line of Mike McCormack with Nomura. Please go ahead.

Hi, guys. Thanks. Just thinking about the increased usage in the home, obviously we're hearing a lot about and you guys have people moving up in the various tiers, but is there at some point where you need to think more about the network infrastructure. I know you're investing there, but do we hit a wall on capital at some point or we need to do something more dramatic, maybe you can just walk through some of the stuff you're doing there? And then secondly, you mentioned medium-sized business as being a decent driver in commercial services. How is the product set comparing against some of your competitors there? Is there something you need to add to that? Thanks.

With regard to usage and capacity, we feel the network is flexible and has plenty of opportunity to grow in capacity whether it's through extending fiber deeper into the network which we do with our business services product, the Metro E product or whether it's splitting nodes or new technologies such as DOCSIS 3.1 which will be coming in over the next few years. So we feel very good about the future growth capacity of the network. With regards to midsized business, we have great products out there. We have Metro E. We have a hosted voice solution. We have a video product. We just upped our speeds and they were received very well by the customers. So we feel like our product set is very strong and we keep innovating on that front. And I think there's a lot of upside room for growth in the midsized business.

Just on the pricing side and then…

…which is that the more the consumer desires speed, the better that is for our company in my opinion and that that we have myriad solutions as Neil just outlined. We can take more of the video bandwidth and apply it to digital and apply it to broadband. There's a lot of ways to go. That's what makes DOCSIS 3.1 a promising technology. At the cable convention, we demonstrated 3 gigabits of speed with over an existing plan. There's a lot of good things. So really that innovation will power more applications which will power more demand and I think that that will create more differentiation between us and any competitor. So it's where we'd like to see the world go.

Great, thanks guys.

Thank you, Mike. Operator, let's go to the next question please.

Our next question comes from the line of Bryan Kraft with Evercore. Please go ahead.

Thanks. On NBCUniversal, how do you anticipate the Legendary Entertainment partnership impacting NBCU's division from a revenue and cost perspective? Then also just on the affiliate and retrans renewals, is your objective to secure really long-term deals, say, 7 to 10 years in duration or are you trying to achieve more traditional three to five-year contract periods? Thank you.

So the way the Legendary deal will work and it will take a while to get moving is, Legendary is going to make some of their own films. They love large films dedicated to what they call the fanboy audience but very large films. And no, they will contribute capital and production resources and creative expertise into making those films. We will co-finance some of those films. And then in addition, Legendary will co-finance some of our films. When we look at our overall film strategy, we think it's a very important element of our strategy going forward. We have Illumination for animated films, couldn't be happier with that, Despicable Me 2 is going to end up being the single most profitable film in the 100-year history of Universal Studios, so we love Illumination. And then on the big film side, the riskiest and in some ways hardest part of the business right now we'll have a partner in Legendary that has a real passion for that. And then Universal will concentrate on everything else. So we think we now have a very coherent strategy. We're really excited it was a competitive auction to see who would end up with the Legendary film relationship and we won that auction. And we're pleased to have that business on a going forward basis.

Thank you, Bryan. Operator, let's go to the last question now. Thanks.

Our final question comes from the line of Frank Louthan with Raymond James. Please go ahead, sir.

Great, thank you. Within the SME business, are you seeing any change in your rate of growth coming from increasing revenue from existing customers, or I guess in other words what percentage of your growth is coming from existing customers versus getting traction with some new logos?

Most of the growth is coming from new customer acquisitions. However, we are introducing products to get up-sell products to our existing customers, such as for example we go out and buy – resell arrangements with software providers for services like financial management to our payroll and whatnot and these small businesses who aren't accustomed to going out and finding those solutions can get an entire package from us and we can offer them those at a discounted rate. So we are now beginning to focus on up-selling existing customers but the growth to-date has been from new customers.

Okay, great.

Thank you, Frank. Thank you all for joining us this morning.

Thank you. There will be a replay available of today's call starting at 12.30 pm Eastern Time. It will run through Wednesday, August 7th at Midnight Eastern Time. The dial-in number is 855-859-2056 and the conference ID number is 97883674. A recording of the conference call will also be available on the company's website beginning at 12.30 pm today. This concludes today's teleconference. Thank you for participating. You may all disconnect.