|By Business Wire||
|February 19, 2014 03:31 PM EST||
Fitch Ratings has assigned an 'A-' rating to Comcast Corporation's (Comcast) benchmark size, senior unsecured notes maturing 2024 and 2044. Proceeds from the offering are expected to be used for general corporate purposes which may include the repayment of amounts outstanding under the company's commercial paper program and a portion of NBCUniversal's $900 million principal amount of 2.1% notes due April 2014. The notes will be guaranteed by Comcast's subsidiaries included in the company's cross-guaranty structure. The Rating Outlook for all of Comcast's ratings is Stable. As of Dec. 31, 2013 Comcast had approximately $48.6 billion of debt outstanding, including $11.2 billion outstanding at NBCUniversal Media, LLC (NBCUniversal).
KEY RATING DRIVERS
--Comcast's pending merger with TWC is strategically sound and creates significant opportunity to realize operating and capital spending efficiencies with minimal execution risk and enables the combined entity to effectively compete on a national scale for incremental commercial segment business.
--The all-stock consideration structure of the merger with TWC is not expected to have a material impact on Comcast's credit protection measures.
--Comcast's capital structure and financial strategy remains intact and centered on reducing leverage to its target of between 1.5x and 2.0x.
--Fitch does not expect any material change to Comcast's capital allocation strategy over the near term and believes there is sufficient capacity within the ratings to accommodate a contemplated expansion of Comcast's share repurchase authorization.
Comcast's ratings reflect its strong competitive position as one of the largest video, high-speed Internet and phone providers to residential and business customers in the U.S. and the company's compelling subscriber clustering profile. In Fitch's view, NBCUniversal's size, scale, leading brand positions, and diversity of operations and business risk as one of the world's leading media and entertainment companies, all lower the business risk attributable to Comcast's credit profile. These factors also create new avenues for revenue and cash flow growth while limiting the near-term impact on Comcast's balance sheet and credit profile.
The pending merger with TWC enables Comcast to extend its operating strategies and technology roadmap into TWC's operations, creating the opportunity to realize material operating cost and capital spending efficiencies. Fitch points out that Comcast's cable-segment EBITDA margin was nearly 500 basis points higher than the comparable TWC EBITDA margin during the year ended 2013. Comcast's ability to successfully establish its key operating strategies within TWC's legacy operations creates a potential $1 billion EBITDA benefit for the combined entity. Additionally, the national scope of the combined entities' cable infrastructure will position the company to effectively compete for a higher tier commercial business. Combined commercial-segment revenues totaled approximately $5.5 billion during 2013, representing the second-fastest growing business segment of the combined entity. Fitch anticipates the merger with TWC will close by the end of 2014.
Fitch estimates that approximately $73.6 billion of debt and preferred stock was outstanding as of Dec. 31, 2013 on a pro forma basis translating into pro forma leverage of 2.5x. The pro forma leverage represents a modest increase relative to Comcast's actual leverage of 2.2x (Fitch calculation). Fitch expects Comcast's credit profile will strengthen on a pro forma basis with consolidated pro forma leverage of 2.2x by year-end 2014, approaching 2x by the end of 2015 in the absence of significant cost or operating synergies.
Comcast's liquidity position and overall financial flexibility are strong based on Fitch's expectation that the company will continue to generate material amounts of free cash flow (FCF). Fitch acknowledges that Comcast's share repurchase program represents a significant use of cash; however, Fitch believes that the company would reduce the level of share repurchases should the operating environment materially change, in order to maximize financial flexibility. The liquidity position is further supported by cash on hand (which totaled $1.7 billion on a consolidated basis as of Dec. 31, 2013) and $4.7 billion of collective available borrowing capacity (as of Dec. 31, 2013) from Comcast's two revolving credit facilities. Commitments under Comcast's $6.25 billion revolver will expire during June 2017 while the commitments related to NBCUniversal Enterprise's $1.35 billion revolver expire during March 2018.
Comcast's debt maturity profile is well-laddered and within Fitch's FCF expectation. Maturities total approximately $1.9 billion during 2014 (including $900 million at NBCUniversal Media) excluding outstanding commercial paper, followed by $3.4 billion during 2015.
--A positive rating action would likely coincide with Comcast achieving and committing to a financial policy consistent with an 'A' rating, including maintaining its leverage below 1.5x on a sustained basis. Comcast would need to demonstrate that its operating profile will not materially decline in the face of competition and less than robust housing and employment conditions.
--Negative rating actions would likely coincide with discretionary actions of Comcast's management including, but not limited to, the company adopting a more aggressive financial strategy, or event-driven merger and acquisition activity, that drive leverage beyond 2.5x in the absence of a credible deleveraging plan.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 5, 2013);
--'Rating Telecom Companies' (Aug. 9, 2012).
Applicable Criteria and Related Research:
Rating Telecom Companies
Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage
As someone who has been dedicated to automation and Application Release Automation (ARA) technology for almost six years now, one of the most common questions I get asked regards Platform-as-a-Service (PaaS). Specifically, people want to know whether release automation is still needed when a PaaS is in place, and why. Isn't that what a PaaS provides? A solution to the deployment and runtime challenges of an application? Why would anyone using a PaaS then need an automation engine with workflow ...
Feb. 12, 2016 01:45 PM EST Reads: 228
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Feb. 12, 2016 01:00 PM EST Reads: 224
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
Feb. 12, 2016 12:30 PM EST Reads: 259
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 12, 2016 12:30 PM EST Reads: 104
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
Feb. 12, 2016 12:00 PM EST Reads: 496
SYS-CON Events announced today that FalconStor Software® Inc., a 15-year innovator of software-defined storage solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. FalconStor Software®, Inc. (NASDAQ: FALC) is a leading software-defined storage company offering a converged, hardware-agnostic, software-defined storage and data services platform. Its flagship solution FreeStor®, utilizes a horizonta...
Feb. 12, 2016 11:45 AM EST
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Feb. 12, 2016 11:45 AM EST Reads: 447
Recognizing the need to identify and validate information security professionals’ competency in securing cloud services, the two leading membership organizations focused on cloud and information security, the Cloud Security Alliance (CSA) and (ISC)^2, joined together to develop an international cloud security credential that reflects the most current and comprehensive best practices for securing and optimizing cloud computing environments.
Feb. 12, 2016 11:45 AM EST
In most cases, it is convenient to have some human interaction with a web (micro-)service, no matter how small it is. A traditional approach would be to create an HTTP interface, where user requests will be dispatched and HTML/CSS pages must be served. This approach is indeed very traditional for a web site, but not really convenient for a web service, which is not intended to be good looking, 24x7 up and running and UX-optimized. Instead, talking to a web service in a chat-bot mode would be muc...
Feb. 12, 2016 11:30 AM EST Reads: 298
SYS-CON Events announced today that Column Technologies will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principal...
Feb. 12, 2016 11:16 AM EST
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Feb. 12, 2016 11:15 AM EST Reads: 261
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
Feb. 12, 2016 11:15 AM EST Reads: 431
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
Feb. 12, 2016 11:15 AM EST Reads: 139
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
Feb. 12, 2016 10:41 AM EST
SYS-CON Events announced today that (ISC)²® (“ISC-squared”) will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Two leading non-profits focused on cloud and information security, (ISC)² and Cloud Security Alliance (CSA), developed the Certified Cloud Security Professional (CCSP) certification to address the increased demand for cloud security expertise due to rapid growth in cloud. Recently named “The Next...
Feb. 12, 2016 10:30 AM EST