Good morning, ladies and gentlemen, and welcome to Comcast’s Fourth Quarter 2013 Earnings Conference Call. (Operator Instructions) I’ll now turn the call over to Senior Vice President, Investor Relations Mr. Jason Armstrong. Please go ahead, Mr. Armstrong.

Sure. Thank you, operator, and welcome, everyone. It’s a pleasure to be here and I’m really excited to have recently joined Comcast. 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 be available for Q&A. I know in my prior role, I would have been tempted to ask the question about recent press headlines around the consolidation in the cable sector. But our intension here today is to talk about our fourth quarter and 2013 results and we have no comment on press speculation or potential industry consolidation. 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 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?

Thank you, Jason. And let me officially welcome you to Comcast and to this earnings call. We are all delighted to have you leading Investor Relations. We just celebrated Comcast’s 50th anniversary and it was a wonderful and emotional experience for many of the employees in the Company, and a chance to reflect on the past. But I have to say the best part is really thinking about our future, where the Company is headed, and all the opportunities that lay before us. And as we exit 2013, we really have strong momentum across all our businesses and we’ve achieved some fantastic financial milestones in 2013. And today we’re reporting results for the fourth quarter and a full year 2013, strong results to demonstrate our confidence and optimism in the future of all our businesses, so we are increasing our dividend 15%, increasing our stock repurchase program authorization to $7.5 billion and announcing our plan to repurchase $3 million of stock during 2014. Combined, this represents an increase in capital return to shareholders of over 30% from 2013 levels. We remain committed to returning a significant percentage of our free cash flow to our shareholders every year. Michael will discuss our results in more detail, but I want to provide a few highlights for both the fourth quarter and the full year performance. So let me start with cable, which had a really strong year of revenue and operating cash flow growth. Our focus on innovation and enhancing the customer experience has driven meaningful improvement in our Triple Play subscriber trajectory. In fact, our customer metrics across each category of video, data and voice, improved in the fourth quarter and also improved for the full year. In video, we added 43,000 subscribers in the fourth quarter which was really a…

Good morning. Thank you, Brian. 2013 was a strong year with financial strategic performance for the company and we are very pleased with our fourth quarter and 2013 full year results which reflect consistent execution, profitable growth and the fundamental strength of our businesses. Based on our confidence and the core strengths of the business and our positive operational momentum, as Brian just mentioned, we are increasing our total return of capital to shareholders in 2014 by more than 30%. I will address our 2014 financial strategy a bit later, but now let's discuss our business performance for 2013 in more detail. Let me begin by briefly reviewing our consolidated financial results on Slide 4. For the full year, excluding 1.2 billion of revenue generated by the London Olympics and 259 million of revenue from the Super Bowl in 2012, consolidated revenue increased 5.8% to 64.7 billion. On a reported basis, full year consolidated revenue increased 3.3%. Full year 2013, again excluding the impact of the Olympics in 2012 and costs associated with the termination of a pension plan this year, our operating cash flow increased 8.3% to 21.5 billion. On a reported basis, consolidated operating cash flow increased 7.3%. Free cash flow for 2013 increased 6.9% to 8.5 billion and free cash flow per share increased 9.2% to $3.19 per share. This growth was primarily driven by increases in the consolidated operating cash flow and some timing benefits in working capital related to the performance of our film slate, as well as favorable comparisons to production spending and the rights for 2012's Olympics. These improvements were partially offset by increased capital expenditures and cash taxes. On a reported basis, full year earnings per share increased 12.3% to $2.56 from $2.28 in 2012. However, excluding gains on asset sales, favorable…

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

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question comes from the line of Jessica Reif Cohen with Bank of America Merrill Lynch. Please go ahead.

Thanks. One for NBC and one for cable, if that's okay. For the NBC, your numbers came in above what I think most of us expect from other media companies and it looks like you're really heading your stride at this point, but there still seems to be a lot of untapped potential at basically every division. So just to help me, maybe Steve could address what you see as the biggest areas of upside as we go forward?

Well, Jessica, as Mike said in his introduction and when we looked at the company before we ended up doing a deal with GE, cash flow – since that point cash flow has increased 50% and we feel like we still have a long way to go. And the opportunity exists, I think, pretty much across the board. We're investing a lot more in the theme parks going from 400 million of cash flow to over 1 billion. We think that cash flow in the theme parks can increase significantly with investments like Harry Potter to hotels and other investments in the future. I think broadcast television has a long way to go. We now have ratings. First, you got to get the ratings; then you can sell the ratings if there is sort of a lag variable. So I think broadcast has real upside. We seem to be hitting our stride and being a little bit more strategic with our portfolio when in film. And of course we've got a great group of cable networks. We do feel there's a monetization gap between how we're doing in terms of ratings and box office and everything else and the amount of operating cash flow we're generating, but pretty much everywhere you look we still think there's a lot of opportunity. And as you said, we believe we're off to a good start but there's plenty more to go.

Okay. And then on the cable side, how much of a factor was X1 in terms of positive video subs, is this – I guess what I really wanted, is this looking a reverse course on a full year basis?

I think X1 was not really a material part of the fourth quarter positive sub numbers. It's a great product. We're rolling it out across the country. As of today, we have it across 100% of the footprint. We're seeing great results, cut-through status. Like the guide more than the other guides video. VDO; metrics are up 25% on views and 20% transactions. Churn is down. So we're really pleased with the results. I think it's going to take a while before we go positive for the year, but we're clearly going to be aggressively rolling out X1 based on the strong double-digit returns we're seeing with it.

Thank you.

Operator, next question please.

Your next question will come from the line of Ben Swinburne with Morgan Stanley.

Thank you. Good morning. A couple of cable questions, Mike or Neil. You guys talked about the advanced product penetration. I think its well above 50% now. And a lot of the investments you've been making have taken – it seems like it's taken the customer base to maybe a more premium customer base. I'm wondering if that's been a strategy of yours. Maybe can talk about the sort of B1 or low end of the market that you've got left at this point? And does this equate to greater pricing power, lower churn over time as you sort of deepen the advanced product and as you mentioned, well, we haven't even seen sort of the benefits with X1 yet? And then next, sort of a quick follow-up on commercial?

Well, we are focused on our high value customers and we do feel that our role is to continue to add value to our products and suite of services. The X1 platform is a big step forward because you can launch other products off there. For example, we launched EST, electronic sell-through where you can buy a movie off the platform and there was the top selling Fast & Furious and Despicable Me to retail channel for – with the Thanksgiving holiday. So it's a very powerful platform. I think going forward we're very focused on the high value steps. We've step up a differentiated treatment for those subs in the call centers. And what we did during the quarter is the connect volume overall was up but the disconnect volume or its index down, so that's what resulted in the positive subs.

One thing I'll just chime in on, Ben, is obviously we're really focused on bundling and you can see the percentage of our Triple Play bundle is continuing to increase by about 400 basis points year-over-year. So that is really adding value to our customer base. And as you move up that bundle from single to double, triple, obviously you have lower churn, which is certainly helpful. So the whole customer lifetime value increases on the Triple Play which is something we are very focused on in terms of how you think through advance services and returns and those kinds of things.

Right. And then just quickly on the CapEx increase which looks like about 600 million or 700 million or so on cable. You mentioned commercial, Mike or Neil either one of you, how much of this is now sort of penetrating the medium size? I think you guys have talked a lot about sort of small business being the predominant source of revenue, but I would imagine it's a little more capital intensive as you get into the larger enterprise area.

Well, right now the enterprise, the mid-sized business is about 20% of the overall. It's up from 15% quarter two ago, so it is growing at a faster rate than the small size business. It does require more initial capital per unit per building, if you will, but you get stronger returns over time. We are pleased with the product suite. It’s an accretive business to us and the team, Bill Stamper and team have done a great job just pulling together the organization and focusing on those opportunities. But SME is still the largest percentage of our overall revenue next year.

So when you look at capital for 2014 the increase -- there is some increase in business services which Neil said is really terrific returns and we go through them very frequently. And the SME side is great and majority of it is really around the accelerated deployment of X1 which also as I mentioned has great double-digit returns and also has other strategic advantages which are really important. So, commercial services is part of that increase and X1 is a larger part.

Got it. Thanks a lot.

Operator, next question please?

Your next question will come from the line of Doug Mitchelson with Deutsche Bank.

Thanks so much. Michael gave the strong double-digit returns for X1. Neil, are you willing to walk through the economics of X1 in any more detail given the big ramp in investment this year and I’ve got a couple of follow-ups on that.

Sure. Let me run through a few of the stats. One is we’ve rolled it across the entire footprint. We’ve opened the gate, it used to be just available for Triple Play customers, it’s available for some Double Play customers as well. So we’re rolling it out more aggressively. We’ve already in -- as of the end of the month everyone will be getting the new what we code named X2 guide. So it shows you how quickly you can change a software platform from X1 to X2 is a better user experience and I think if you lay that great improved user experience on top of all the content rights that we have, that Michael refer to and our TV Everywhere rights in and out of Home rights, it’s a very powerful combination. About 65% of the X1 subs rate the excellent guide of superior to their other guide experiences. VOD viewing goes up 25%, VOD transactions were up 20%. More X1 customers want DVR -- and X1 there is a larger percentage of X1 customers who are Triple Play customers. So as you think about it, you're getting a higher ARPU per X1 sub. The rollout is going well, the platform is stable and as a -- another side of momentum building around the X1 platform, Cox recently agreed to partner with us to better understand what elements that the X1 platform might be useful to support their next gen video services across the various platforms. So we'll be working together to explore the opportunity to identify where X1 may be useful in their business.

Right.

To add Doug, one more data point is churn is actually down voluntary churn in our X1 base too. So you plug in all the variables that Neil just mentioned and literally our CLV increases and our IRS well into double-digits.

But let me just way in also that the -- there is some good trends happening as we look into multi-year strategy, the cost per home with Whole Home DVR, Cloud DVR and Second Devices as we’ve shown little smaller boxes that can attach to this platform that then allow in home experiences as well as second, third devices for much lower cost than the original X1 box plus the cost of the box itself. All those things are coming down in price and so there is -- we think that the ability to get this to many, many people is going to keep getting more and more economically better, the returns, are only going to improve as we go and so at some point you cross that line that we’re so excited about the initial feedback that they just began to roll out and we are pretty excited.

So I think out of the 20 follow-up potential questions, I will limit myself to one. Just curious Michael how much is cable OpEx been impacted in 2014 for the roll out and is that a potential future tailwind as the investment spending winds down?

To be honest in 2013, in 2014 we did absorb OpEx related to X1 in the roll out, but obviously we’ve managed through that. No different than us absorbing OpEx related to XFINITY home or business services expansion in SME. So its us, its part of the business and we’re able to power through that. We kept margin stable in 2013 and our expectation is we will power through that in ’14 and keep margin stable in ’14 as well. So, yes there is some of that.

I'll also add, Michael, that we have rolled out the DOCSIS 3 platform, we gone all digital, we’ve rolled out business services and we kept margins during that period relatively stable.

Thanks so much.

Thanks, Doug. Operator, let's move to the next question.

Your next question will come from the line of Phil Cusick with JPMorgan.

Hi, guys. Thanks. First, a bit of a follow-up on Doug’s question. As a think about the typical price increases you’ve quantified after the first quarter each year. Can you help us think about what you're planning on in the first quarter or what you’ve already rolled as we think about year-over-year video subs? And then second Brian, conference a few weeks ago, you outlined 2014 as an investment year in film. Can you help us think about what the working capital drive for that business might be as we think of that free cash flow? Thanks.

So I will take the rate increases question. Our rate increases are going to similar to previous years, in the 3% range. We’re rolling amount across the wider footprints than we did last year in the first quarter. So there will more people affected by rate increases. However, we feel good about the overall environment and we’re carrying some good momentum from Q4. So we got our head down and trying to improve. At the end of the day we’re trying to improve the results year-over-year, every quarter and we’ve done it ’11 about -- out in the last 13 quarters.

Well, I think that the -- just to finish that question, I think that’s the way to be judging us myself which is over these old periods of time are we making headway year-over-year, not positive or negative in any one quarter. But it's a great achievement and thank you Neil for the fourth quarter. As I think about 2015, I think Michael is better to talk about free cash. So I just think that Jeff Shell is now at Universal, very excited about the new opportunity and 2015 there the slate appears to be fantastically exciting. There is an investment that you can make in the year before. So it's a little bit of an up-and-down business in terms of the free cash flow way to judge it. We had a nice 2013, but Michael why don't you go through the detail?

Yes. Let me just -- 2013 obviously film had a terrific year in terms of performance, in terms of operating cash flow. But there is a little bit later on the production spent in 2013 for the ’14 slate. As we -- and that’s obviously working capital benefit that we had in ’13 related to free cash flow. As we enter ’14, we have a great slate for 2015 that we’re going to more normalize our spend in ’14 and that's going to absorb some cash in ’14, which helps build that ’15 slate. So I think that’s what Brian meant at the conference and I try to articulate on my prepared remarks.

Excellent.

So just to put some specificity around 2015 Steve, why don’t you just run through couple of movies?

Well in 2015, we have Jurassic Park 4, Fast & Furious 7, Minions, which is kind of a sequel of Despicable Me -- the Despicable Me franchise, we have 50 Shades of Grey, we have a very, very strong year potentially Ted 2. So that investment is we’re incurring that investment right now as we gear up to what should be a very strong year for Universal in ’15.

And so, just to clarify, I really look at this as a little bit of a normalization because ’13 was a little bit lower than one would have expected. And I think ’14 is going to be a little bit of a catch year in preparation for ’15.

Great. That’s helpful. Thank you.

Operator, next question please.

Your next question will come from the line of Craig Moffett with Moffett Research.

Hi. Thank you. First congratulations Jason. I’ve got to say, I’m happy not to have to compete with you anymore. So a question about the Enterprise segment. I know you can’t talk specifically about what was reported last night, but I think -- I wonder as you think about what we might do down the road in the large Enterprise segment, whether Neil may be you could talk about what is that you need to put in place first and how do we think about the timeline over the next few years for you to make a real run at the large enterprise multinational corporation segment?

Well as you know Craig we’ve been focused on small and mid size and we’re still only 10% to 15% penetrated there and see a lot of opportunity for growth there. On the enterprise side, we’ve been -- we are aware of the space, we are aware of the competition there. I think there will be network implication, there will be organizational implications. But right now we’re focused on small and mid for the time being.

The only thing I would just add is that one of the great things about this business for so many years is we find new products to sell using our existing base. Who would have thought of Wi-Fi being as great an add on to your in-home broadband and if we can get to larger businesses who will think of it very differently than they would have five years ago and in whatever cooperative manner than we can do that, it should be a business opportunity down the road right now going from small to medium. It's not even a logical thing to say someday, but it's not on the focus right at this moment.

Thank you. And if I could add the follow-up, you mentioned Wi-Fi. Has your view of Wi-Fi as a real business separate and apart from this value-added to your existing broadband subscribers changed at all in the last six months or a year?

Well, I think we're paying careful attention to the technological innovation and the potential opportunity that it creates. We're hopeful that in the government thoughtfulness as to what to do with spectrum allocation for the country that Wi-Fi is very much top of mind because as I just said, who would have placed a tablet having this kind of explosive growth. Without Wi-Fi I don't think it would have happened. And so it's hard to completely predict it, but we are well positioned and we've added Wi-Fi – I mean I don't want it to be lost into every modem that we now put into people's homes and last year that was…

7 million…

7 million times that we've installed this capability in people's houses and we intend to do that again this year. So, that may be in some ways the most important thing we've done. So is it an opportunity someday to add Wi-Fi to our network outside of the home? Well, we're doing that in some cities. We're testing different technologies. There are other companies who are also doing that for their own business purposes. And we just, for example, this week announced with the San Francisco 49ers that we're going to do their entire stadium and have new capabilities that they very well expand into your neighborhood and into your commute and patterns and into restaurants as we've already seen in a lot of cities. It's a very interesting area and I think it's synergistic for us and we're keeping tabs of it.

I think that we should – we have almost 1 million hot spots right now that people are utilizing both in-home and out of home.

Thank you.

Operator, the next question please.

Your next question will come from the line of Marci Ryvicker with Wells Fargo.

Thanks. I have two questions. The first, Michael, you talked about accelerating programming costs and I was just wondering how much does your thoughts about sub trends chapter in? Meaning that the better the subscriber trends are, presumably the higher the P&L programming costs will be. That's the first question. And secondly, just generally thinking about your M&A strategy, one of the questions I think all of us are getting is how to think about would a domestic distribution deal have any impact on your ability to expand internationally and whether that would be distribution or content? Thanks.

Okay. On programming costs, listen – number one, that's I think a high class program in terms of subscriber growth which I think you might mention. We are I think pretty diligent in negotiating our programming contracts and I think we're somewhat fortunate in 2013 where we had originally projected as our increasing programming costs, we came in lower, I don't know, 140, 150 basis points. Part of this is timing in terms of when contracts are up; part of it is retransmission consent. Those I can say somewhat are controllable but some not. And then part of it is really in terms of sports and some other areas. So it's a hard question because our goal really is to continue to improve on our subscriber trends and that obviously will have a positive impact in our sort of per subscriber program in costs. And I think Neil addressed that earlier. On M&A, the view really is on international we are a bit underweight. We've mentioned that. It's really our goal to be very educated on a country-by-country basis and see if there are opportunities for us whether it's distribution or content. That really makes sense from a shareholder value perspective. On M&A overall we're going to remain very disciplined. We're going to be – as I mentioned before, we're going to have our strategic filters in place. We'll have our financial filters in place and we're really going to evaluate that. So, it's all about can we get it value enhancing from a shareholder perspective and we want to be very focused, we want to be very educated, we want to make sure we look at everything. I think our shareholder base expects us to do that. But if we're to do anything, it's going to be value creative and that's really the focus right now.

Thank you.

Operator, next question please.

Your next question will come from the line of Jason Bazinet with Citi.

I just had a question for Mr. Roberts. Either organically or via M&A, would you say it's a strategic priority of the firm to be hedged, if you will, on content costs? Meaning today, I think you spend about $2 on content on the cable side for every dollar you get for content on the NBC side within cable nets. Is that a priority or is that sort of the long way to think about how you're thinking about the business?

Well, I don't actually think of it that way. I think it happens to be a fact and I think compared to many other companies that's a good fact if you're a shareholder because no one has a perfect crystal ball. But the bottom line is we love both businesses and that's what we said for many, many years all the way for me personally back to when I was on Ted Turner's Board. They were starting all these cable channels, they looked like great businesses that didn't make cable a bad business, it's just – it was a new business. And then finally is the synergy between the two companies and I think what you'll see during the Olympics, as a for instance is by understanding both businesses were smarter and maybe just a little better than we would be if we were two separate companies. And with the kind of hopefully culture and chemistry in the company and across the company that proves itself out, whether it's the electronic sell-through that Neil mentioned or what we're going to do with the Olympics in Sochi, both on the XFINITY side and on the NBCUniversal side. And I think we're creating something very, very special. And as an investor, yes, you get the fact that if programming costs are going up or there's a new type of utilization that causes that cost to go up, we're on both sides. We're helping to innovate and make that possible and I like that balance that the company has.

Thank you very much.

Operator, next question please.

Your next question will come from the line of John Hodulik with UBS.

Great. Thanks. Three quick ones. First, as it relates to table CapEx, I know Michael you don't want to give sort of longer term guidance but that 14% in '14, should we think of that as sort of a peak level or could you see it drifting higher than that in '15? And then given the increased investment you're putting into the home with the X1 box and modems, it sounds like you expect that to eventually be a driver of better video trends going forward with a lower churn. How about pull-through effects on the broadband side, right? Here you'll be able to some more Triple Play, again better capabilities. Do you expect that improve trends on broadband? And then lastly on the leverage, I guess this is a follow-up to the M&A question. You said 1.5 to 2 is your target but have you guys said that you would be willing to go above that if in fact there's a better – there's an M&A opportunity that made sense, would you be willing to go above to that extent?

Okay. On the CapEx side, we said 2014 will come in approximately 14%. You're right, John. We don't give guidance going forward and the vast majority of our capital is actually growth-oriented capital. So I think we really want to take a look as we go through the year on the success of that deployment and that's really part of the plan. If it's successfully deployed, that's terrific and we'll reevaluate as we enter towards the end of '14 of what '15 will look like. So we're hopeful that the deployment will be successful. I don't know what peaked in – I really don't want to get into that, but I just want to make sure that you understand that the vast majority of our CapEx is growth oriented and we have checkpoints along the way to make sure that the deployment is successful and generating the financial returns and strategic returns were impending too. Do you want to take the one on the…?

Concerning X1 and its impact on other customers or RGUs, we have seen that excellent customers are more likely to upgrade to the Triple Play. We have seen that they are generally – they request DVRs more, they over-index in that category. So I think it will have a positive impact on insurance. We know Triple Play sub churn at a lower level and we think it will have a positive impact on ARPU as well as thereby [ph] upgrade to DVR and buy more VOD. Generally speaking, the product has been very well received by the field and by the customers and I think it will have a positive overall effect on the business.

John, I'll go back to the leverage ones. So when we closed NBCUniversal, that was sort of nine, 10 months ago, our leverage popped up to about 2.4 times. And now we ended 2013 at roughly 2.3 times, so it's a modest decrease. It's really our goal, more medium-term goal to bring that leverage down to, as I mentioned, under 2; between 1.5 and 2 but we recognize that's going to take years, and I think that’s really all we can say that, I think we can do several things at once. We can invest for growth like we’re doing NBC and at Comcast cable. We can increase our returns of capital which obviously we announced today. I think we’ll modestly deliver over a number of years.

Got you. Thanks guys.

Operator, we have time for one last question.

Our final question will come from the line of Kannan Venkateshwar with Barclays.

Thank you. A couple of questions from me, first is on video subscriber growth during the quarter, I mean it's still a video (indiscernible) largely given the state of the housing market even now. So in that sense, given the overbuild in your footprint, just between your competitors, is it fair to assume that a lot of this is coming from the satellite operators? And secondly from a regulatory perspective there has been obviously a lot of movement over the quarter in terms of net neutrality as well as Supreme Court taking up the area of ruling and so on. So it would be great to get your thoughts on that as well as to whether things like pay for priority services could become real over time?

So I'll take them in two chunks; one is the overbuild and the effect on the business, and then Brian I’ll turn it over to you for the regulatory issue. We had about $2.3 million overbuilds -- incremental overbuilds in the fourth quarter, the majority of those coming from AT&T. I think we performed well given that. The housing starts, so that didn’t really have a material effect and I think if we look to get a tailwind from those overtime that would be positive in the business. But we feel we are competing well on both the fiber side as well as the satellite side. And I think part of that is the X1 product it's performing well. I think part of it this is great execution by Dave Watson and the divisional teams. And I think part of it is where we’re targeting our marketing a little better, our services were getting better as Michael mentioned. We have 3.5 million fewer truck rolls where we have 45% of the installs are just self installs, 36% of the people manage their accounts online. So, I think we’re just executing better on the service front. Brian?

Well there was obviously the court ruling on the Verizon case, and we do not believe that the government is going to maturely order. The approach has taken for many years that would in some ways hinder our business objective going forward. We were a supporter of the internet order when it was originally drafted by the commission, because it was a nice balance between consumer interest and not interfering with network management and engineering decisions. And we are confident and hopeful that they’re going to continue to strike that balance. And so we’re supportive of working with the Chairman and the Commission on trying to find that balance. As I just sum up for the year in this quarter, in my opinion we’re also trying to find a balance between really strong operations, I think both at NBC Universal and at cable we had a really strong year. And in finding opportunity like buying back the 49% stake for $18 billion in cash while still achieving the leverage targets that Michael just talked about and being able to increase the dividend and the buy back program. And I think we’ve done that. We have a great plan for 2014 and thank you all for your support.

Great. We’ll leave it there. Thank you everyone for joining us.

There will be a replay available of today's call starting at 12.30 PM Easter Standard Time. It will run through Tuesday, February 4 at midnight Eastern Time. The dial-in number is 855-859-2056 and the conference ID Number is 24847495. 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.