Comcast CFO says M&A possible, but not at debt levels John Malone is comfortable with

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Comcast (Nasdaq: CMCSA) CFO Michael Angelakis said Wednesday that it would be legal for Comcast to acquire more cable systems. But when asked by a Wall Street analyst if Comcast would be willing to take on the amount of debt that Liberty Media (Nasdaq: LMCA) chairman and Charter Communications (Nasdaq: CHTR) board member John Malone reportedly hopes to see Charter take on to expand, his answer was no.

"We've obviously given substantial thought and consideration to our balance sheet. Given the total amount of debt that we have, which is approximately $48 billion, we feel that we're very comfortable in the [leverage ratio] range that we've set, which is 1.5 to 2 times [that]," Angelakis said.

Moffett Research founder Craig Moffett noted on the call that Malone has reportedly said he would be comfortable with striking deals that could result in an MSO having a leverage ratio of 4 times.

Comcast is already the biggest cable MSO, counting 21.8 million video subscribers at the end of the second quarter. Industry observers expect that Charter, backed by Malone and Liberty, could lead to a new wave of cable consolidation that could create another super MSO that would be able to operate more efficiently and obtain volume discounts on programming and hardware.

When asked about potential consolidation, Angelakis noted that legally, Comcast could expand domestically. In 2009, the U.S. Court of Appeals for the D.C. Circuit shot down the FCC's attempt to limit cable operators from controlling more than 30 percent of the U.S. market. But Angelakis said Comcast sees more opportunities to grow its NBCUniversal business overseas.

"We have about $4.5 billion of our roughly $65 billion revenue base in international, so we're bit underweight and every country is very different and certainly relates to NBCUniversal and some of their business. So I would say number one, we're really focused on just running the business and executing our plan. Number two, we remain very disciplined and we have these strategic and financial filters that we utilize for all M&A. And number three, we want to make sure we're very well educated on what the market is in those kinds of items," he added.

For more:
- see the transcript from earnings call

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