OREANDA-NEWS. April 28, 2015. Comcast Corporation's (Comcast) 'A-' Issuer Default Rating (IDR) is not affected by the termination of its merger agreement with Time Warner Cable, Inc. (TWC). The company's decision follows intensifying regulatory concerns from the Federal Communications Commission and the Department of Justice. As of Dec. 31, 2014, Comcast had approximately \\$49 billion of debt and preferred stock outstanding, including \\$10.3 billion outstanding at NBCUniversal Media, LLC (NBCUniversal).

Comcast's credit profile will remain largely intact owing to the transaction structure's equity focus. Going forward, Fitch does not expect any material changes to Comcast's capital structure or financial policy. From Fitch's perspective the merger dissolution, along with the positive operating momentum will keep Comcast on its path to reduce leverage to its target ranging between 1.5x and 2.0x. Comcast's leverage metric through the latest 12 months (LTM) period ended Dec. 31, 2014 was 2.1x reflecting a modest improvement from 2.2x as of year-end 2013. Fitch continues to believe that Comcast's operating profile will drive leverage to approximately 2x by the end of 2015.

While the merger with TWC would have benefited Comcast, the company has a very compelling portfolio of businesses and assets which provide Comcast significant competitive advantages and growth opportunities and enable the company to address secular threats to its business.

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 United States 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, lower the business risk attributable to Comcast's credit profile.

Comcast's capital allocation policy is expected to remain relatively consistent and focused on returning capital to its shareholders while continuing to invest in the strategic needs of its business. However, Fitch's expectation that shareholder returns as a percentage of pre-dividend cash flow will increase during the ratings horizon is incorporated into the ratings. Comcast's board of directors authorized a \\$10 billion share repurchase program in February 2015. The company's management indicated that share repurchases should total \\$4.25 billion during 2015 including \\$1.25 billion of shares it committed to repurchase in connection with the TWC merger. Cash returned to shareholders (dividends plus buybacks) totaled approximately \\$6.5 billion or approximately 68% of cash flow before dividends during year-end 2014.

Fitch believes Comcast's strong operating profile and solid free cash flow (FCF) metrics afford the company a high degree of financial flexibility at the current rating category. Comcast generated approximately \\$7 billion of FCF (defined as cash flow from operations less capital expenditures and dividends), during the year ended Dec. 31, 2014 reflecting a 31% increase relative to year-end 2013. Going forward, Fitch anticipates that the company will consistently generate consolidated FCF in excess of \\$7 billion.

RATING SENSITIVITIES

--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.

--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.

Fitch currently rates Comcast as follows:

Comcast Corporation
--Long-term IDR 'A-';
--Senior unsecured debt 'A-';
--\\$6.25 billion revolving bank facility (co-borrower with Comcast Cable Communications LLC) 'A-';
--Short-term IDR 'F2';
--Commercial paper 'F2'.

Comcast Holdings Corporation
--IDR 'A-';
--Subordinated exchangeable notes 'BBB'.

Comcast Cable Communications, LLC
--IDR 'A-';
--Senior unsecured debt 'A-';
--\\$6.25 billion revolving bank facility (co-borrower with Comcast) 'A-'.

Comcast Cable Holdings, LLC
--IDR 'A-';
--Senior unsecured debt 'A-'.

Comcast MO Group, Inc.
--IDR 'A-';
--Senior unsecured debt 'A-'.

Comcast MO of Delaware, LLC
--IDR 'A-'.

NBC Universal Media, LLC

--IDR 'A-';
--Senior unsecured debt 'A-'.

NBCUniversal Enterprise, Inc.

--IDR 'A-';
--Senior unsecured debt 'A-';
--\\$1.35 billion revolving bank facility 'A-';
--Series A preferred stock 'BBB';
--Short-term IDR 'F2';
--Commercial paper 'F2'.