Jason Armstrong - Senior Vice President, Investor Relations Brian L. Roberts - Chairman and CEO Michael J. Angelakis - Vice Chairman and CFO Stephen B. Burke - EVP; CEO, NBCUniversal Neil Smit - EVP; President and CEO, Comcast Cable.

Ben Swinburne - Morgan Stanley Jessica Reif Cohen - Bank of America/Merrill Lynch Phil Cusick - JPMorgan Jason Bazinet - Citigroup John Hodulik - UBS Craig Moffett - MoffettNathanson Vijay Jayant - ISI Group Bryan Kraft - Evercore Partners Kannan Venkateshwar - Barclays Amy Yong - Macquarie.

Good morning, ladies and gentlemen, and welcome to Comcast’s Second Quarter 2014 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; Mr. Jason Armstrong. Please go ahead, Mr. Armstrong..

Thank you, operator, and welcome everyone. Joining me on this morning’s call are Brian Roberts, Michael Angelakis, Steve Burke and Neil Smit. 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 two, which contains our Safe Harbor disclaimer, and also 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?.

Thanks Jason and good morning everyone. Our second quarter results continue our strong progress in 2014. This is an important time as we focus on gaining approval for our Time Warner Cable transaction. So it’s just as important that the team stays focused on operations, and we believe that’s apparent in this quarter’s results.

Excluding transaction related costs, we grew operating cash flow 7.8% and as you will see there are several bright spots across the company. Let me start with NBCUniversal. They had a great first half and we are really happy with the performance of our team, and we believe this strategically and financially positions us well in the content business.

For the second quarter, results were very strong with operating cash flow growth of over 20%. At NBC Broadcasting, the team has done a terrific job and we ended the season ranked number one in the important 18 to 49 demo and we’re the only network to deliver ratings growth versus last year.

This ratings momentum translated into a very strong upfront for us where we made solid progress in closing the monetization gap we have relative to our peers, specifically we were able to achieve approximately 80% in CPMs which was substantially higher than the rest of the market.

In cable networks, we have a great set of assets and channels that are generally under monetized relative to our peers that give us a lot of confidence in our position.

In this quarter, NBC Sports Networks had its most watched prime time quarter ever driven by the Stanley Cup playoffs and Bravo continued its claim and is now ranked as the number seven cable entertainment network in the 18 to 49 demo.

But there is no better example of the power of bringing together our broadcast networks, cable networks and strength of our X1 platform in Cable than the Olympics where we were able to leverage the positive experience customers received at the Sochi Olympics to negotiate an extension with the International Olympic Committee whereby we acquired the rights to an additional six Olympic games.

Sports rights are so valuable and we believe these rights are both unique and compelling, and together, we now have the right to the Olympic Games running through the year, 2032. In parts, we have been investing behind what we see as a significant opportunity.

We recently opened Harry Potter 2 in Orlando, and the work is creative and authentic, imaginative and the attention to detail is incredible. Many of us were recently down in Orlando and got to experience the new attraction. It was amazing, and the whole team deserves a lot of congratulations.

When you combine this with the increased hotel capacity with the also imaginative Cabana Bay beach resort, the parks business is set up for a strong trajectory.

In film, we had a relatively quiet theatrical quarter, we have benefited from recent successful films hitting home entertainment and content licensing windows and so our focus now is building towards a strong slate in 2015 and beyond.

So all-in-all NBCUniversal had a terrific first half of 2014 and since we brought the company, we’ve had terrific growth in cash flow and we believe that this progress that we’ve made with ratings of broadcasting success at the upfront and with the new Harry Potter in Orlando NBCUniversal is positioned to continue this momentum.

Our Cable division also delivered impressive results. We operate in a vibrant and competitive market, one that forces us to constantly innovate and improve the customer experience. There is no better example; there’s been our X1 operating system which provides customers an unparalled experience.

Our focus is on embedding the best content and technology from the X1 platform, so in the content side for the first time we now offer four of the top 100 Nielsen rated broadcast shows on On Demand. On the technology side, we are now deploying Cloud DVR and currently have it available in 31% of our footprints.

And our customers are responding very favorably to X1. We are so pleased with the impact that we’ve accelerated our pace of deployment. Our X1 additions nearly doubled this quarter, and we are looking again at further increasing the eligibility.

In high-speed data, we now have 47% of our base receiving a 50-megabits or greater products which is up from 38% at the end of the first quarter.

Customers now have access to over 3 million Wi-Fi hotspots and we are targeting 8 million by the end of this year, offering customers increased reach in the form of a network of millions of additional hotspots at no extra cost, while offering us the potential for new business opportunities overtime.

For both video and high-speed data, this was the strongest second quarter customer results we’ve had in the past six years. Additionally, in business services revenue growth remains robust at 22% this quarter as we approach a $4 billion revenue run rate.

The mid-market segment in business service represents our fastest growing segment and we believe there is a significant opportunity with Time Warner Cable to add to our capabilities in this market and ultimately deliver customers more choice. We firmly believe that our operating improvements are rooted in providing customers a better experience.

And while we are making progress with better service tools and online tools and improved service levels, we are also very cognizant that there is ample room for further improvement and this is a top priority for us. We do feel confident that there are measurable improvements in the experience we are offering customers.

This includes faster broadband speed, best in home Wi-Fi where content choice is on more devices and what we believe is the best user interface and guide experience in the market and maybe in the world. As I said initially, this is an important time for Comcast with lots of opportunity for distraction.

So I am so pleased these results demonstrate that our company is focused on operational excellence and once again delivered strong results across all segments. Let me now pass to Michael to cover the second quarter in greater detail..

Good morning, and thank you, Brian. Let me begin by briefly reviewing our second quarter consolidated financial results starting on slide four. We are very pleased with our second quarter results which once again reflect sustainable profitable growth and strength across our businesses.

Second quarter consolidated revenue increased 3.5% to $16.8 billion and operating cash flow increased 7% to $5.8 billion reflecting strong organic growth in both our cable and NBCUniversal businesses. This result includes $44 million of Time Warner Cable and Charter transaction related costs which were included in our corporate and other segments.

Excluding these transaction cost, consolidated operating cash flow increased 7.8%. Year-to-date consolidated revenue increased 8.5% to $34.3 billion and consolidated operating cash flow increased 8.4% to $11.3 billion.

If we exclude $1.1 billion of revenue related to the Olympics in the first quarter and $61 million of transaction related cost in the first six months, consolidated revenue increased to 5% and consolidated operating cash flow increased 9%.

Earning per share for the second quarter grew 16.9% to $0.76 per share versus $0.65 per share in the second quarter of 2013. To provide a clear comparison, when you exclude a gain on an investment and the transaction related cost I mentioned, our normalized EPS increased 15.4% to $0.75 per share.

Year-to-date our earnings per share increased 23.5% to $1.47 per share versus $1.19 per share in the prior year, again, excluding gains on sales and acquisition related items our normalized year-to-date earnings per share increased 23.3% to $1.43.

Free cash flow for the quarter decreased 40.7% to $1.2 billion and free cash flow per share decreased 39.7% to $0.44 per share as growth in consolidated operating cash flow was offset by higher working capital due to higher expenditures for film and TV production as well as increased capital expenditures and cash taxes.

For the first half of the year, we generated $4 billion of free cash flow, a decrease of 21.8% over the first half of 2013. Year-to-date free cash flow per share has declined 20.5% to $1.51 per share. I will discuss free cash flow in a bit more detail later in the presentation.

Now let’s review the results of our businesses in more detail starting with cable communications on slide five. Our cable communications business continues to execute well and we are pleased with our second quarter performance of healthy revenue and operating cash flow growth along with improved customer metrics.

As Brian mentioned, we had the best second quarter customer results for both our video and high-speed internet services in the past six years. The second quarter is always our weakest due to seasonality and we lost 144,000 video customers but this is a 11% improvement from last years second quarter.

In high-speed internet we added 203,000 new customers, an increase of over 8% year-over-year and as we continue to add value to our product through speed upgrades and the deployment of wireless gateways.

Voice remains a valuable component of the bundle and we increased the voice customer base by 137,000 customers in the second quarter with the highest Triple Play selling in over three years.

While total customer relationships declined 25,000 reflecting the typical second quarter seasonality which I mentioned, our customer relationship result are a 62% improvement over last years second quarter driven by our improved products and improved customer support.

Second quarter cable revenue increased 5.4% to $11 billion reflecting solid growth in our residential businesses, driven by strong high-speed data results, continued strength in business services and healthy growth in advertising revenue.

Total revenue per customer relationship increased 4.5% to $137 per month driven by rate adjustments, a higher contribution for business service and increasing number of customers taking multiple products.

At the end of the quarter, 68% of our customers subscribed to atleast two products and 36% subscribed to three products a 200 basis point improvement compared to last years second quarter.

Moving to our product categories, video revenue increased 1.2% reflecting modest rate adjustments in an increasing number of our customers taking advanced services. We now have 12.7 million high-def and/or DVR customers which equals 57% of our 22.5 million video customers.

High-speed internet was the largest contributor to cable revenue growth in the second quarter with revenue increasing 9.7% driven by continued growth in our customer base, rate adjustments in an increasing number of our customers taking higher speed services.

At the end of the quarter, 47% of our residential high-speed customers received speeds of 50-megabits or greater as we have doubled the speeds included in some of our bundled plans.

With regard to voice, revenue increased 1.3% for the second quarter, driven by growth in our customer base as our bundling efforts continue to drive Triple Play penetration.

We are successfully converting single and double play customers to Triple Play, and acquiring new Triple Play customer relationships resulting in a net addition of 152,000 Triple product customer relationships during the quarter.

Moving on to our commercial business, second quarter business services revenue increased 22.4% to $965 million and was again the second largest contributor to cable revenue growth in the quarter.

The small end of the market or businesses with less than 20 employees continues to have strong growth, while the contribution from mid-sized businesses is increasing. We continue to experience real momentum in this business and are focused on competing effectively in gaining share.

Cable advertising revenue increased 7.5% primarily reflecting higher automotive advertising and political revenue as we are beginning to benefit from advertising for the upcoming mid-term elections. Excluding this political revenue, our core cable advertising increased 3.2%. Please refer to Slide six.

During the second quarter, cable communications operating cash flow increased 5.3% to $4.6 billion, representing a consistent margin of 41.4%.

In the second quarter, total expenses in cable increased 5.4% primarily reflecting higher programming expenses and advertising marketing and promotion expenses as well as additional cost related to the deployment of X1, Cloud DVR and wireless gateways as well as the expansion of our business services and XFINITY Home.

The second quarter programming expenses increases 6.7% reflecting increases in retransmission consent fees, higher sports programming costs, and step-ups for recently completed long-term agreements.

We expect programming expense growth to accelerate in the second half of 2014 due to the timing of network launches and mid-year step ups and certain long term contracts. We now expect our full year programming expenses to be slightly lower than the 9% to 10% we had previously forecast.

Advertising, marketing and promotion expenses increased 8% in the second quarter due to timing as well as increased investments to enhance our competitive position in both our residential and commercial businesses resulting in a positive impact on our core customer metrics.

We remain focused on gaining efficiencies in our customer service and technical operations, however, we have experienced modest expense growth as a majority of our Triple Play connects are X1 and as we deploy Cloud DVR, wireless gateways and XFINITY Home across our customer base.

We are not only committed to offering the best products, we want to support them with a great customer experience and in some cases that means investing more time at the customers home or answering additional questions on a customer service call.

However, overall we continue to experience reduce truck rolls and Asian car volumes and 44% of our installations are now completed with self installation kits. Our expectation is this number will grow as we are beginning to offer X1 self installations.

We are effectively off-setting some of these higher expenses with an improving product mix with more high-speed data in business service customers and increasing number of our customers upgrading to higher level of services such as high-def DVRs, faster internet speeds and modest rate adjustments.

Overall, our second quarter and year-to-date cable results prove that we are balanced in our strategy, and we continue to execute well and deliver strong financial customer and operational performance. We are focused on delivering the best and most innovative products and providing more value to our customers.

Now lets move on to NBCUniversal’s results which are presented on slide seven. For the second quarter of 2014, NBCUniversal performed very well as revenue increased 0.3% and operating cash flow increased 20.4%. Now let’s review the individual business segments at NBCUniversal.

For the second quarter, cable networks generated revenue of $2.5 billion, an increase of 2.6% driven by a 14.3% increase in content licensing and other revenue and a 4.2% increase in distribution revenue. However, if we adjust with the closure of the Style Network, distribution revenue would have increased 6%.

Advertising revenue declined 2.2% as increases in price were offset by some ratings pressure, however, when adjusted again for the closure of Style and the movement of Fandango from our cable networks group to our film group, advertising revenue would have increased 1%.

Cable networks operating cash flow increased 6.3% to $914 million, reflecting higher revenue, partially offset by higher sports programming costs, including a new long term relationship with Philadelphia Phillies on Comcast SportsNet and a continued impact of a launch of English Premier League on NBC Sports Network.

With regards to our broadcast television segment, revenue increased 4.9% to $1.8 billion in the second quarter, reflecting increased retransmission consent fees and the impact of new content licensing agreements.

Advertising revenue was down slightly at 1.7% due to the timing of the voice which aired significantly few hours in the second quarter compared to last year. Year-to-date advertising revenue is up 5.8% excluding the impact of the Sochi Olympics which is more indicative of the rating strength in the broadcast segment.

Broadcast’s second quarter operating cash flow increased 16.2% to $240 million reflecting higher revenue and a modest increase in operating expenses. We are really pleased with the overall performance of the broadcast business.

In just three and a half years, we have improved from fourth place to ending this past broadcast season in first place in a 18 to 49 demo. This rating success, as well as the strength across our portfolio of cable networks help us make meaningful progress in closing the monetization gap both on the broadcast side and on the cable side.

For Broadcast, we had double digit growth overall with CPM increases of 8% leading the market in both rate of change and volume growth.

As we move to filmed entertainment, second quarter revenue declined 15.3% to $1.2 billion driven by difficult theatrical comparisons to last year which included Fast 6, and the international performance of Despicable Me 2 partially offset by an increasing in content licensing revenue driven by Despicable Me 2 and Fast 6 as well as the home entertainment performance of successful films like Ride Along and Lone Survivor.

Second quarter operating cash flow increased $162 million to $195 million as this year’s reduced theatrical slate recorded significantly lower marketing and advertising cost compared to last year.

Switching to our theme park segment, revenue increased 12.8% to $615 million, reflecting increases in per capita spending in guest attendance at both our Orlando and Hollywood Parks, which benefited in part from the spring holidays occurring in the second quarter this year, compared to the first quarter of last year.

Second quarter operating cash flow for the parks increased 5.6% to $244 million reflecting higher revenue, partly offset by increased marketing and training expenses to support the successful launch of the new Harry Potter attraction in Orlando which opened on July 8.

Let’s move to Slide eight to review our consolidated and segment capital expenditures. In the second quarter, capital expenditures are tracking to plan an increased 19.4% to $1.8 billion compared to the second quarter of 2013 which is driven primarily by increased investments at cable and a modest increase at NBCUniversal.

At cable communications, second quarter capital expenditures increased $253 million or 20.4% to $1.5 billion, equal to 13.5% of cable revenue versus 11.9% in the second quarter of 2013.

The increase was primarily driven by higher spending on CPE, particularly for X1 and Cloud DVR as well as our continued investments in network infrastructure to increase our network capacity. Year-to-date cable communications capital expenditure have increased 13% to $2.6 billion representing 12.1% of cable revenue.

We continue to be very pleased with our X1 rollout. We’ve almost doubled our X1 net additions in each of the past two quarters and the positive customer results have continued.

More customers are subscribing to DVRs and additional outlets upgrading the Triple Play, increasing video-on-demand usage and we continue to see reduced churn levels among these customers.

As planned, our cable CapEx spend will accelerate in the second half of the year as we continue to deploy more X1 platform boxes and wireless gateways and we continue to expect that for the full year of 2014, cable capital intensity will increase to approximately 14% of cable revenue compared to 12.9% in 2013.

Second quarter capital expenditures at NBCUniversal, increased $38 million to $298 million and year-to-date have increased $66 million to $589 million.

This higher CapEx is primarily driven by increased investments in facilities as well as the theme parks as we build new attractions including the Harry Porter attraction, in both parks at a Fast & Furious attraction in Hollywood. We continue to expect that NBCUniversal’s 2014 capital expenditures will remain relatively flat at 2013’s level.

Please refer to Slide nine.

As I mentioned earlier, we generated consolidated free cash flow of $1.2 billion in the second quarter, a decrease of 40.7% as growth in consolidated operating cash flow was primarily offset by increased working capital, which was mainly driven by net production spend at our film and TV studios as well as higher cash taxes and capital expenditures.

For the first half of the year we generated $4 billion in free cash flow, a decrease of 21.8% over the first half of 2013 and year-to-date free cash flow per share has decreased 20.5% to $1.51 per share again, primarily reflecting increased working capital.

As I indicated on our fourth quarter earnings call compared to a modest film slate in 2014, we have increased our film production spending as we prepare for a larger 2015 film slate, which will pressure free cash flow during 2014.

Saying that, we would expect second half working capital comparisons in 2014 to be more favorable than what we have experienced in the first half of this year.

We are executing on our 2014 financial plan and year-to-date we have increased our return of capital to shareholders by 33.5% to $2.6 billion, including share repurchases totaling $1.5 million and dividend payments totaling $1.1 billion.

Turning to our acquisition of Time Warner Cable and our related transactions with Charter, we remained focused on our regulatory and share holder approvals as well as our integration planning. We are pleased that the FCC has started its 180-day review clock as of July 10.

In addition, we are progressing towards a share holder vote on the Time Warner Cable merger as quickly as possible realizing that the divestiture transactions with Charter have added some complexity to the normal SEC review of our S4 filing.

At this point we currently believe a reasonable estimate for the timing of our shareholder vote would be in the fall. This does not have any impact on the FCC or Department of Justice review processes and is not expected to impact the timing of the closing of the deal.

As we have mentioned before, we remain committed to repurchasing an additional 2.5 billion in shares following our shareholder approval for the transaction. So all-in-all we’ve had a strong first half of the year in both cable and NBCUniversal.

We are pleased with the financial and operational momentum we’re showing in all of our businesses and we are focused on continuing that momentum throughout the year. We are making meaningful progress on the integration planning of the Time Warner Cable merger and the Charter divestitures.

We remain excited about the strategic benefits these transactions bring to Comcast and the value they create for our customers and our shareholders. Finally, we remained confident that our ongoing investments along with our focused and disciplined execution will continue to yield positive results and profitable growth.

Now let me turn the call over to Jason for Q&A.

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

Thank you. We’ll now begin the question and answer session. (Operator Instructions) Our first question will come from the line of Ben Swinburne with Morgan Stanley. Please go ahead..

Thank you. Good morning. This is really for anybody who wants to take it. I wanted to revisit the X1 trends which obviously sound encouraging.

I’m wondering if you could spend a little more time telling me what that’s doing to the business and particularly what the Cloud DVR means to the consumer experience, to the economics of the product and whether the success you’ve had has changed. How you view the ultimate adoption of that product in your base.

And I’m wondering if it impacts your broadband business. You’re putting up double-digit revenue growth this far into the penetration curve.

Is the X1 helping sort of the other products in the bundle as well?.

This is Neil. So the X1 rollout we are very pleased with. We’re in 100% of the footprint right now. It’s brought down churn 20% to 30%, VOD usage up 25%, and VOD transactions up 20%. Additionally, you’re getting two times the DVR take rate on it and you’re getting more additional outlets.

So the ARPU of the product once it’s deployed has gone up very nicely. It’s still not having a material impact on the video results, because that hasn’t been deployed to a large portion of our base yet. We’re about 50% of the Triple Play packages that we sold had X1 in them and where that’s been deployed its worked well.

In terms of the impact on the HSD business, I mean, I think bringing internet functionality to video experience will help lift the -- both products and our Triple Play sell-in was at the highest rate ever. We’ve got more -- 68% of our customers on two products or more. And so we are selling well in the Triple Play and X1 is a great part of that.

I think there is some really interesting new product developments. I mean, if you think about it, we’ve launched EST on that over the last six months and that’s been a very successful product. And I think there is more to come on the platform..

On the Cloud DVR part, it’s Brian. We’re very encouraged by what that product means. It basically means that inside your home any device whether it’s a mobile phone or a tablet or a Kindle by any of the different providers, can become a television set without a box. And then you can use -- see all the channels, as well as access your DVR.

And then it gives you a feature to download and take with you certain shows from that DVR. So, the Cloud has tremendous promise not just for the guide interface but for the user’s functionality.

The other thing, and one of the reasons I think the results Neil just talked about are so encouraging, is you also get a whole home DVR with the X1 experience of any of our customers.

So just everything gets better, the -- those of who that have the product, if you just look at On Demand in the last week, there is a whole new series of ways to see what’s on television. Its – the guide just gets better and better every few weeks, not every few years.

And right now, we have all sorts of categories that are being stunted, so you can see the Top 10 types of shows you like every single night of the week, the best shows of the day. Really it’s very programmer friendly, because it encourages people -- you don’t have to DVR, its basically right there for you On Demand now that we have Top 100 shows..

Thanks for the color..

Thanks, Ben. Let’s move to the next question, please..

Your next question will come from the line of Jessica Reif Cohen with Bank of America/Merrill Lynch. Please go ahead..

Thank you. On NBCUniversal I guess two-part question. You obviously had a great relative upfront performance, but the ad market was down.

And so I would love your views on how -- if the advertising market, what’s going on in advertising for Broadcasting and Cable? Do you see the decline is cyclical or secular? And if it’s even somewhat secular how are you positioning your assets differently? And also on NBCU, given the likely consolidation in content, how are you positioning your assets differently.

Do you need to bulk up?.

We certainly don’t think we need to bulk up in content. We’ve sold all of our Broadcasting and Cable assets together in the upfront and I think that was a major reason why we had such a successful upfront relative to rest of the industry.

If the industry was down call it 5% in the upfront, we’re not sure of the precise number, but that’s what we gather is pretty close. If the industry was down 5% and we were up 10% that’s a 15% difference versus what we would have done -- had we done exactly what the industry did.

And you apply that to a base of $5.3 billion and it’s a swing of $750 million. And the reason why that occurred is because we made the investments in programming, NBC was number one. People came to us first and we sold together.

So that’s $750 million improvement we think goes a long way not all the way, but a long way to closing what we’ve always refer to as the monetization gap. We’ve always said that the other broadcasters are on the order of $1 billion better off than we are. So we closed $750 million of the gap.

We think we’re about half way and so we can continue to count on closing that gap providing the fact that our ratings are good and we continue to bundle the properties and sell appropriately.

In terms of the overall market, I think the real question is what is scatter? And if scatter ends up being strong, this could end up being a very good year for advertising, and if scatter ends up weak that will obviously not be the case. So, we don’t put too much into the down 5% in the upfront.

I think the year is going to play itself out and we’ll see where we end. There is some shift to digital. We don’t think that’s the majority factors here. That’s a minority factor. And I think the real question is what’s going to happen as the calendar and broadcast seasons play out.

Can I -- I want to just ask one follow-up for Brian. You said the eligibility of X1 is increasing.

Can you just clarify, what do you mean?.

Neil, why don’t you do that?.

Yeah, the X1 product is currently available to all Triple Play customers and it’s available in the Retention Q as well as to some of the double play customers depending on their packaging..

So what we mean by that is you can then go to more Double Play customers or other or even Single Play. So it’s just who can get the product in the beginning. We had inventory issues and also we’re looking at the ability to use it as a sales tool.

But we have not put out -- the rate of installations continues as I said earlier, continues to increase each quarter and its scaling really well. There haven’t been any big hiccups at all and frankly just the opposite..

Yeah, I describe it as ramping up the business right now. The last two sequential quarters we’ve doubled the number of boxes we’ve deployed. So, I think we’re seeing it ramp up and it’s been very stable, the platform has been..

Do you want to use this as an opportunity to say how many boxes?.

No. Thanks. .

That’s okay Jessica. We’ll go to the next question..

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

Hey, guys. I guess following up on Jessica’s questions fairly quickly.

Can you help us quantify the remaining discount to peers on advertising, sort of where NBC should be versus where you are? I think you said 50%, but can you help us quantify that?.

What we’ve said before that, if you at NBC and then you look at USA, sort of our biggest cable channel that they were trading at about a 20% discount on CPMs to our competition. And really when you look at it, it’s not as precise as just looking at number. You also have to factor in volume.

But we think if you take volume and rate and you look at them both, we were at about a 20% discount and we’re now at about a 10% discount..

Okay.

And then also on the X1 side, just a quick follow-up, you said it’s available to Triple Plays and some Double Plays, why not widen that availability to everyone, what are the gating factors?.

Well, we’re basically trying to maximize the return on our capital, and we want to make sure that we’re rolling out the product to customers where we know there is a good return. And also as Brian said we initially had some inventory issues, those have since been resolved.

But put it -- I describe it as we’re ramping as quickly as we can and the product has been very well received..

The only thing I would add to that, Phil, is really as we rolled it out early, we really wanted to use it as a premium product and we had a lot of folks who were wanting that product, so, we want to go to those folks who have the highest customer lifetime value and that’s both in terms of higher ARPU, more services and lower churn..

Thanks, guys..

Thanks, Phil. Next question please..

Your next question will come from the line of Jason Bazinet with Citigroup. Please go ahead..

Yeah. Can I -- just back to the Mr. Burke for a second. You mentioned the upfront -- I guess your estimate upfront down 5%, you said the shift to digital is not the majority of what’s going on. Do you mind elaborating and what you think is the majority and what causes you to draw that conclusion? Thanks..

I think -- and by the way this is not a science and we don’t have perfect information on every single participant and what’s going..

Sure..

But when you look at the ad dollars that are related to video, the shift to digital doesn’t -- in our opinion doesn’t represent the majority of why the upfront was down 5%.

We think the majority reason why the upfront was down 5% is because of broad array of advertisers and their agencies decided to be less aggressive in the upfront and they will show up in scatter..

Okay..

Okay. Now that maybe wrong, but that’s our analysis..

Okay..

I think, Jason, from the Cable perspective as an advertiser, while we’ve seen a movement towards digital has not come generally speaking at the expense of our media spend..

Understood. Okay, thank you..

Thanks, Jason. Next question, please..

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

Thanks. Maybe question for Michael. Just a clarification on the buyback with the shareholder vote getting push back a little bit. You guys have changed the guidance to $5.5 billion, but that was I think under the impression that the shareholder vote will take place in the middle of the year.

Now is it happening let’s say end of third quarter, does that slide back the $5.5 billion.

I mean, should we assume that you do sort of $2 billion in the fourth quarter then maybe $2 million in the first -- how should we think of the sort of timing of that? And then I guess for Neil on the broadband side, the numbers were I think stronger then we expect in terms of the net ads.

Can you give us a sense of what you think from a competitive standpoint? Did you see any less competitive pressure than you have in the past maybe from some of the larger telcos? Thanks..

I’ll take the buyback one. Really, we don’t know when we’ll have the shareholder vote. Our hope is we’ll have it in the fall. And really the plan has been that between the shareholder vote and when the deal actually closes we will execute an additional $2.5 billion of buyback.

So our teams are ready to go, but obviously we need to get through the SEC, get the S-4 filed and go through a variety of other things. Our hope is we’ll get it all done this year including closing of the transaction. We’ll have to see how that all plays out both from a shareholder approval perspective and obviously from a regulatory perspective.

But I think the key point is between shareholder vote and when closing we’re going to try our best to executive on an additional $2.5 billion..

And on the competitiveness of the data market, it’s still very competitive. We’ve been upgrading our customers to higher speeds. We now have 47% of the residential customers get at least 50 megabits per second versus 33% last year. So its -- we’re getting customers on to better higher speeds.

We’re investing heavily in the best fastest in-home Wi-Fi, but it is a very competitive market..

Great. Thanks, guys..

Thanks, John. Next question please..

Your question comes from the line of Craig Moffett with MoffettNathanson. Please go ahead..

Hi, good morning. I wanted to ask a couple of questions about Wi-Fi if I could. Neil, I think you said you’re going to have 8 million hotspots.

How many of those are public hotspots versus dual SSID? And can you updates us on your thinking about whether the Wi-Fi business would become a retail strategy or whether it’s continued to be tied to your terrestrial broadband product? And then last, can you talk about how you think about spectrum as it relates to Wi-Fi would you like to have license spectrum -- or a license LTE component of – that would sort of substitute for Wi-Fi with better interference? Or do you see it as an unlicensed product entirely?.

With regards to the hotspots we have about 3.6 million hotspots across the in-home network right now. Of the 8 million we’re going to, the majority of those close to 7 million will be in-home versus out of home. We’re currently extending the out of home markets at a pretty aggressive pace and so the network will fill out.

And you would add to those in-homes, those SMB locations where we have dual SSIDs. In terms of spectrum and how we think of it. We think our Wi-Fi network has a lot of potential. We’re not buttoned down totally on how we’d like to deploy that.

But there’s lot of opportunities for example, the XFINITY home product we launched across the Wi-Fi network and there are other products that Wi-Fi can be the foundation for. So we’re going to continue deploying it. We have the fastest in-home Wi-Fi routers and they’re going to keep developing that product.

And I think that we’re seeing 75% to 80% of data usage -- mobile data usage, its happening either in the home or in the office, so we think we’re well positioned going forward..

And can you talk about your strategy for a wireless replacement product versus a terrestrial supplement product?.

We haven’t finished our planning yet, but as you know we do have some MVNO relationships and those -- if we elected to, could play a role..

Thanks, Neil..

Thanks, Craig, next question please..

Your next question comes from the line of Vijay Jayant with ISI Group. Please go ahead..

Neil, now that you have some more time to sort of evaluate the Time Warner Cable, its synergies, can you sort of give us any update on sort of how you feel about the $1.5 billion number on the cost side and any color on the revenue side? Thanks..

Yeah, we feel very good about the cost synergies. They are in duplicated areas or in operations and we’ve gone through quite a bit of detail, the make up of those synergies, the cost synergies and feel very good about them.

In terms of the revenue opportunities, we’ve also been through those and I think the opportunity to up sell and penetrate to a greater rate on the resi product is an interesting opportunity, as well as the opportunity to go into the enterprise base with commercial or of a more advanced advertising products across the broader base.

So we feel -- net-net we feel good about the synergies on the cost side and the CapEx side which were about $400 million and we also feel positive about the revenue upside..

The only think I would add, Vijay, I think you know we did these divestiture transactions and even with the divestiture transactions we’re reconfirming what we think our operating expense savings will be through the synergies and obviously the vast majority of those don’t come from the programming side.

So, when we did the original transaction we set a target and even after the divestiture transactions we’re confirming that target is something that we think make sense..

Great. Thank you..

Thanks, Vijay. Next question please..

Your next question will come from the line of Bryan Kraft with Evercore. Please go ahead..

Hi. Thanks. Michael, I had a working capital question.

Whatever the working capital use ends up being this year for Film and Television, would you expect essential a full reversal of that next year as this production investments at the box office and television? And I don’t know if you could provide any range for what you expect the net working capital use to be this year that would be really helpful? Thanks..

So obviously working capital was a large factor in the first half of this year with regards to investing in more film and more TV, but I think a little bit of it normally is actually more in 2013 than in 2014 or 2015.

If you really look at our 2014 slate, it’s a relatively modest slate and we really didn’t invest that much in film related in 2013 and I think as you we talked about, we have quite a bit of positive working capital in 2013 that obviously helped out.

There’s been some reversal of that in the first half of 2014 where we are building up a more meaningful slate in 2015. We actually have a great slate plan for 2015 and we’re investing in that. As we look at all of 2014 I think you’ll see a bit of a swing to more normalization in the second half of the year.

And our expectation is really that 2013 and a little of 2014 were a bit of anomalies given how we managed the film slates, but 2015 should normalized. I don’t want to get too much into 2015, but we feel that really what we’re seeing is in 2014 is what actually was in effect in 2013 versus next year.

Is that helped you, Bryan?.

Yeah, that’s helpful. Thank you..

Thanks, Bryan. Next question, please..

Your next question will come from the line of Kannan Venkateshwar with Barclays. Please go ahead..

Thank you. A couple of questions. The first is on dynamic ad insertion. I mean, we have seen some deals this year on dynamic ad insertion, but the way I understand it is there has to be backend support, especially from Comcast, just given the technology component of this.

So just from a structure perspective, how are these contracts structured between you, the advertiser and the content company on the dynamic aspect? And secondly, as we look at the asset base post all the transactions which are outstanding right now, are you right now at a stage where you expect this to be the steady-state? Or should we expect a few more asset swaps and so on to fill out some of the holes that you have especially in regions like New York?.

I’ll take the dynamic ad insertion. We basically do that through Canoe. We’ve done deals with all the programmers where we almost told the programmers where we disabled Fast Forward in exchange for full VOD line up. And then we – the programmers were able to with Canoe insert those ads dynamically in the pre post and mid row.

We haven’t disclosed the nature of the financial transaction though..

I mean, we really don’t see any further activity. We have quite a full plate and we are very focused on integration and obviously we’ve got to spend that we are going to be doing so.

I think that we’re really focused on our business and the reality is that we are very excited about having those assets come to us from Time Warner Cable and from Charter and the clustering will do so, I think our plate is quite full..

Thank you..

Thanks, Kannan. Regina lets take our last question, please..

Our final question will come from the line of Mike McCormack with Jefferies. Please go ahead. Mike, your line maybe on mute. And that question has been withdrawn..

Okay, lets try one more then..

Okay, Amy Yong with Macquarie, your line is open..

Thanks. I was just wondering if you could talk about the impact of the AT&T DTV merger. How does this change your view as a competitor of perhaps different product sets including a quad play or mobile video? And then you can talk about how that might change the longer-term regulatory picture? Thanks.

Well this is Brian.

I think, first of all they are two wonderful companies with wonderful products and you know the reality is last six years they both have been part of the reason that we have lost video subs and that’s why you are seeing some of the competitive response and the progress we are making which I am very pleased about, but it’s a very powerful combination and you know its sort of for me validates the changing and dynamic nature of the market that we are living in, the technological changes, the consumer behavior changes that are happening at very fast speeds.

And so, you have to look at each situation differently and individually one of the things that I like about our transaction from the regulatory standpoint is that the nature of the cable business is you wire up an entire community and then you see what customers you can get, other technologies whether from the Cloud or from satellite you know are ubiquitously available by a different technology.

So we do not overlap in any market as you know with Time Warner Cable hence there is no diminish competitive choice for any consumer. So each situation is different. I think long term we are assuming it and we always did assume that the world is changing who your competitors are, what their capabilities are, whether its quad play or other things.

And I think our company is really well positioned and that’s why we are excited about the proposed transaction.

But as I started the call right now the main focus of this company is to execute well quarter after quarter, and as we end this call, I just want to say that everybody I think we did that again this quarter and we hope to do it again next quarter. Thank you. We’ll leave it there. Thanks everyone for joining us..

There will be a replay available of today’s call starting at 12:30 PM Eastern Standard Time. It will run through Tuesday, July 29, at midnight, Eastern Time. The dial-in number is (855) 859-2056 and the conference ID number is 57489596. 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..