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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016

OR

 

¨

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from                      to                      

 

 

 

LOGO

 

Commission File Number  

Registrant; State of

Incorporation; Address and Telephone

Number

  I.R.S. Employer Identification No.
001-32871   COMCAST CORPORATION   27-0000798
 

PENNSYLVANIA

One Comcast Center

Philadelphia, PA 19103-2838

(215) 286-1700

 
001-36438   NBCUNIVERSAL MEDIA, LLC   14-1682529
 

DELAWARE

30 Rockefeller Plaza

New York, NY 10112-0015

(212) 664-4444

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Comcast Corporation

 

Yes x

 

No ¨

NBCUniversal Media, LLC

 

Yes x

 

No ¨

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).

 

Comcast Corporation

 

Yes x

 

No ¨

NBCUniversal Media, LLC

 

Yes x

 

No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Comcast Corporation

  Large accelerated filer   x   Accelerated filer   ¨   Non-accelerated filer   ¨   Smaller reporting company   ¨

NBCUniversal Media, LLC

  Large accelerated filer   ¨   Accelerated filer   ¨   Non-accelerated filer   x   Smaller reporting company   ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

 

Comcast Corporation

 

Yes ¨

 

No x

NBCUniversal Media, LLC

 

Yes ¨

 

No x

Indicate the number of shares outstanding of each of the registrant’s classes of stock, as of the latest practical date:

As of June 30, 2016, there were 2,402,381,311 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Comcast Corporation Class B common stock outstanding.

Not applicable for NBCUniversal Media, LLC.

NBCUniversal Media, LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

 

 

 


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TABLE OF CONTENTS

          Page
Number
 
PART I. FINANCIAL INFORMATION   

Item 1.

  Comcast Corporation Financial Statements     1   
  Condensed Consolidated Balance Sheet as of June 30, 2016 and December 31, 2015 (Unaudited)     1   
  Condensed Consolidated Statement of Income for the Three and Six Months Ended June 30, 2016 and 2015 (Unaudited)     2   
  Condensed Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015 (Unaudited)     3   
  Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (Unaudited)     4   
  Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2016 and 2015 (Unaudited)     5   
  Notes to Condensed Consolidated Financial Statements (Unaudited)     6   

Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations     27   

Item 3.

  Quantitative and Qualitative Disclosures About Market Risk     42   

Item 4.

  Controls and Procedures     42   
PART II. OTHER INFORMATION  

Item 1.

  Legal Proceedings     42   

Item 1A.

  Risk Factors     42   

Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds     43   

Item 6.

  Exhibits     44   
SIGNATURES     45   
NBCUniversal Media, LLC Financial Statements     46   

 

 

Explanatory Note

This Quarterly Report on Form 10-Q is a combined report being filed separately by Comcast Corporation (“Comcast”) and NBCUniversal Media, LLC (“NBCUniversal”). Comcast owns all of the common equity interests in NBCUniversal, and NBCUniversal meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing its information within this Form 10-Q with the reduced disclosure format. Each of Comcast and NBCUniversal is filing on its own behalf the information contained in this report that relates to itself, and neither company makes any representation as to information relating to the other company. Where information or an explanation is provided that is substantially the same for each company, such information or explanation has been combined in this report. Where information or an explanation is not substantially the same for each company, separate information and explanation has been provided. In addition, separate condensed consolidated financial statements for each company, along with notes to the condensed consolidated financial statements, are included in this report. Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to Comcast and its consolidated subsidiaries, including NBCUniversal and its consolidated subsidiaries, as “we,” “us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” and NBCUniversal, LLC as “NBCUniversal Holdings.”

This Quarterly Report on Form 10-Q is for the three and six months ended June 30, 2016. This Quarterly Report modifies and supersedes documents filed before it. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report.

You should carefully review the information contained in this Quarterly Report and particularly consider any risk factors set forth in this Quarterly Report and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,”


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“should,” “expects,” “believes,” “estimates,” “potential,” or “continue,” or the negative of those words, and other comparable words. You should be aware that these statements are only our predictions. In evaluating these statements, you should specifically consider various factors, including the risks outlined below and in other reports we file with the SEC. Actual events or our actual results may differ materially from any of our forward-looking statements. We undertake no obligation to update any forward-looking statements.

Our businesses may be affected by, among other things, the following:

 

   

our businesses currently face a wide range of competition, and our businesses and results of operations could be adversely affected if we do not compete effectively

 

 

   

changes in consumer behavior driven by alternative methods for viewing content may adversely affect our businesses and challenge existing business models

 

 

   

a decline in advertisers’ expenditures or changes in advertising markets could negatively impact our businesses

 

 

   

our businesses depend on keeping pace with technological developments

 

 

   

we are subject to regulation by federal, state, local and foreign authorities, which may impose additional costs and restrictions on our businesses

 

 

   

changes to existing statutes, rules, regulations, or interpretations thereof, or adoption of new ones, could have an adverse effect on our businesses

 

 

   

programming expenses for our video services are increasing, which could adversely affect our Cable Communications segment’s video business

 

 

   

NBCUniversal’s success depends on consumer acceptance of its content, and its businesses may be adversely affected if its content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase

 

 

   

the loss of NBCUniversal’s programming distribution agreements, or the renewal of these agreements on less favorable terms, could adversely affect its businesses

 

 

   

we rely on network and information systems and other technologies, as well as key properties, and a disruption, cyber attack, failure or destruction of such networks, systems, technologies or properties may disrupt our businesses

 

 

   

we may be unable to obtain necessary hardware, software and operational support

 

 

   

weak economic conditions may have a negative impact on our businesses

 

 

   

our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others

 

 

   

acquisitions and other strategic initiatives present many risks, and we may not realize the financial and strategic goals that we had contemplated

 

 

   

labor disputes, whether involving employees or sports organizations, may disrupt our operations and adversely affect our businesses

 

 

   

the loss of key management personnel or popular on-air and creative talent could have an adverse effect on our businesses

 

 

   

we face risks relating to doing business internationally that could adversely affect our businesses

 

 

   

our Class B common stock has substantial voting rights and separate approval rights over several potentially material transactions, and our Chairman and CEO has considerable influence over our company through his beneficial ownership of our Class B common stock

 


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PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Comcast Corporation

Condensed Consolidated Balance Sheet

(Unaudited)

 

(in millions, except share data)   June 30,
2016
    December 31,
2015
 

Assets

   

Current Assets:

   

Cash and cash equivalents

  $ 4,665      $ 2,295   

Receivables, net

    6,708        6,896   

Programming rights

    1,435        1,213   

Other current assets

    1,969        1,899   

Total current assets

    14,777        12,303   

Film and television costs

    5,811        5,855   

Investments

    3,679        3,224   

Property and equipment, net of accumulated depreciation of $49,119 and $48,100

    34,896        33,665   

Franchise rights

    59,364        59,364   

Goodwill

    33,792        32,945   

Other intangible assets, net of accumulated amortization of $10,299 and $9,868

    17,204        16,946   

Other noncurrent assets, net

    2,462        2,272   

Total assets

  $ 171,985      $ 166,574   

Liabilities and Equity

   

Current Liabilities:

   

Accounts payable and accrued expenses related to trade creditors

  $ 6,359      $ 6,215   

Accrued participations and residuals

    1,542        1,572   

Deferred revenue

    1,611        1,302   

Accrued expenses and other current liabilities

    5,155        5,462   

Current portion of long-term debt

    2,934        3,627   

Total current liabilities

    17,601        18,178   

Long-term debt, less current portion

    52,629        48,994   

Deferred income taxes

    34,512        33,566   

Other noncurrent liabilities

    10,719        10,637   

Commitments and contingencies (Note 12)

   

Redeemable noncontrolling interests and redeemable subsidiary preferred stock

    1,248        1,221   

Equity:

   

Preferred stock—authorized, 20,000,000 shares; issued, zero

             

Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 2,838,776,825 and 2,869,349,502; outstanding, 2,402,381,311 and 2,432,953,988

    28        29   

Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375

             

Additional paid-in capital

    38,469        38,518   

Retained earnings

    22,117        21,413   

Treasury stock, 436,395,514 Class A common shares

    (7,517     (7,517

Accumulated other comprehensive income (loss)

    1        (174

Total Comcast Corporation shareholders’ equity

    53,098        52,269   

Noncontrolling interests

    2,178        1,709   

Total equity

    55,276        53,978   

Total liabilities and equity

  $ 171,985      $ 166,574   

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Income

(Unaudited)

 

    Three Months Ended
June 30
    Six Months Ended
June 30
 
(in millions, except per share data)   2016     2015     2016     2015  

Revenue

  $ 19,269      $ 18,743      $ 38,059      $ 36,596   

Costs and Expenses:

       

Programming and production

    5,492        5,669        10,923        11,132   

Other operating and administrative

    5,761        5,274        11,286        10,348   

Advertising, marketing and promotion

    1,561        1,534        3,028        2,894   

Depreciation

    1,868        1,674        3,653        3,308   

Amortization

    521        487        1,014        919   
      15,203        14,638        29,904        28,601   

Operating income

    4,066        4,105        8,155        7,995   

Other Income (Expense):

       

Interest expense

    (732     (713     (1,435     (1,369

Investment income (loss), net

    58        17        88        50   

Equity in net income (losses) of investees, net

    (19     (236     (30     (203

Other income (expense), net

    (15     315        115        417   
      (708     (617     (1,262     (1,105

Income before income taxes

    3,358        3,488        6,893        6,890   

Income tax expense

    (1,278     (1,313     (2,589     (2,574

Net income

    2,080        2,175        4,304        4,316   

Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock

    (52     (38     (142     (120

Net income attributable to Comcast Corporation

  $ 2,028      $ 2,137      $ 4,162      $ 4,196   

Basic earnings per common share attributable to Comcast Corporation shareholders

  $ 0.84      $ 0.85      $ 1.71      $ 1.67   

Diluted earnings per common share attributable to Comcast Corporation shareholders

  $ 0.83      $ 0.84      $ 1.70      $ 1.65   

Dividends declared per common share

  $ 0.275      $ 0.25      $ 0.55      $ 0.50   

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

 

    Three Months Ended
June 30
     Six Months Ended
June 30
 
(in millions)   2016      2015      2016      2015  

Net income

  $ 2,080       $ 2,175       $ 4,304       $ 4,316   

Unrealized gains (losses) on marketable securities, net of deferred taxes of $—, $—, $(1) and $—

    1                 3           

Deferred gains (losses) on cash flow hedges, net of deferred taxes of $35, $(13), $53 and $10

    (60      22         (91      (17

Amounts reclassified to net income:

          

Realized (gains) losses on marketable securities, net of deferred taxes of $—, $—, $1 and $—

                    (1        

Realized (gains) losses on cash flow hedges, net of deferred taxes of $(26), $16, $(36) and $(6)

    45         (27      62         10   

Employee benefit obligations, net of deferred taxes of $—, $—, $(2) and $—

                    2           

Currency translation adjustments, net of deferred taxes of $(58), $(15), $(116) and $8

    249         32         487         (23

Comprehensive income

    2,315         2,202         4,766         4,286   

Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock

    (52      (38      (142      (120

Other comprehensive (income) loss attributable to noncontrolling interests

    (150      (5      (287      10   

Comprehensive income attributable to Comcast Corporation

  $ 2,113       $ 2,159       $ 4,337       $ 4,176   

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 

    Six Months Ended
June 30
 
(in millions)   2016      2015  

Net cash provided by operating activities

  $ 9,383       $ 8,834   

Investing Activities

    

Capital expenditures

    (4,156      (3,697

Cash paid for intangible assets

    (737      (600

Acquisitions and construction of real estate properties

    (211      (65

Acquisitions, net of cash acquired

    (126      (179

Proceeds from sales of businesses and investments

    138         395   

Purchases of investments

    (580      (272

Other

    (156      182   

Net cash provided by (used in) investing activities

    (5,828      (4,236

Financing Activities

    

Proceeds from (repayments of) short-term borrowings, net

    205         (137

Proceeds from borrowings

    4,753         3,996   

Repurchases and repayments of debt

    (2,551      (3,666

Repurchases and retirements of common stock

    (2,385      (3,585

Dividends paid

    (1,281      (1,200

Issuances of common stock

    19         32   

Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock

    (125      (114

Other

    180         (348

Net cash provided by (used in) financing activities

    (1,185      (5,022

Increase (decrease) in cash and cash equivalents

    2,370         (424

Cash and cash equivalents, beginning of period

    2,295         3,910   

Cash and cash equivalents, end of period

  $ 4,665       $ 3,486   

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Changes in Equity

(Unaudited)

 

    Redeemable
Noncontrolling
Interests and
Redeemable
Subsidiary
Preferred Stock
               

 

Common Stock

    Additional
Paid-In
Capital
    Retained
Earnings
    Treasury
Stock at
Cost
    Accumulated
Other
Comprehensive
Income (Loss)
    Non-
controlling
Interests
    Total
Equity
 
(in millions)                 A     A Special     B              

Balance, December 31, 2014

  $ 1,066                      $ 25      $ 5      $  —      $ 38,805      $ 21,539      $ (7,517   $ (146   $ 357      $ 53,068   

Stock compensation plans

                436        (308           128   

Repurchases and retirements of common stock

            (1       (724     (2,860           (3,585

Employee stock purchase plans

                71                71   

Dividends declared

                  (1,254           (1,254

Other comprehensive income (loss)

                      (20     (10     (30

Contributions from (distributions to) noncontrolling interests, net

    4                          (73     (73

Other

    (2               153              (25     128   

Net income (loss)

    40                                                        4,196                        80        4,276   

Balance, June 30, 2015

  $ 1,108                      $ 25      $ 4      $      $ 38,741      $ 21,313      $ (7,517   $ (166   $ 329      $ 52,729   

Balance, December 31, 2015

  $ 1,221          $ 29      $      $      $ 38,518      $ 21,413      $ (7,517   $ (174   $ 1,709      $ 53,978   

Stock compensation plans

                377        (212           165   

Repurchases and retirements of common stock

          (1         (475     (1,909           (2,385

Employee stock purchase plans

                78                78   

Dividends declared

                  (1,337           (1,337

Other comprehensive income (loss)

                      175        287        462   

Contributions from (distributions to) noncontrolling interests, net

    1                          (68     (68

Other

    (20               (29           154        125   

Net income (loss)

    46                                                        4,162                        96        4,258   

Balance, June 30, 2016

  $ 1,248                      $ 28      $  —      $      $ 38,469      $ 22,117      $ (7,517   $ 1      $ 2,178      $ 55,276   

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Condensed Consolidated Financial Statements

Basis of Presentation

We have prepared these unaudited condensed consolidated financial statements based on SEC rules that permit reduced disclosure for interim periods. These financial statements include all adjustments that are necessary for a fair presentation of our consolidated results of operations, financial condition and cash flows for the periods shown, including normal, recurring accruals and other items. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year.

The year-end condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). For a more complete discussion of our accounting policies and certain other information, refer to our consolidated financial statements included in our 2015 Annual Report on Form 10-K.

Reclassifications

Reclassifications have been made to our condensed consolidated financial statements for the prior year periods to conform to classifications used in 2016.

Note 2: Recent Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue and by reducing the number of standards to which an entity has to refer. The updated accounting guidance is effective for us as of January 1, 2018. The updated accounting guidance provides companies with alternative methods of adoption. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements and our method of adoption.

Consolidations

In February 2015, the FASB updated the accounting guidance related to consolidation under the variable interest entity (“VIE”) and voting interest entity models. The updated accounting guidance modifies the consolidation guidance for VIEs, limited partnerships and similar legal entities. We have adopted this guidance as of January 1, 2016 and it did not have a material impact on our consolidated financial statements.

Financial Assets and Financial Liabilities

In January 2016, the FASB updated the accounting guidance related to the recognition and measurement of financial assets and financial liabilities. The updated accounting guidance, among other things, requires that all nonconsolidated equity investments, except those accounted for under the equity method, be measured at fair value and that the changes in fair value be recognized in net income. The updated guidance is effective for us as of January 1, 2018. The updated accounting guidance requires a cumulative effect adjustment to beginning retained earnings when the guidance is adopted with certain exceptions. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements.

Leases

In February 2016, the FASB updated the accounting guidance related to leases. The updated accounting guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the

 

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exception of short-term leases. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease do not significantly change from previous guidance. For a lessor, the accounting applied is also largely unchanged from previous guidance. The updated guidance is effective for us as of January 1, 2019 and early adoption is permitted. The updated accounting guidance must be adopted using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements.

Share-Based Compensation

In March 2016, the FASB updated the accounting guidance that affects several aspects of the accounting for share-based compensation. The most significant change for us relates to the presentation of the income and withholding tax consequences of share-based compensation in our consolidated financial statements. Among the changes, the updated guidance requires that the excess income tax benefits or deficiencies that arise when the tax consequences of share-based compensation differ from amounts previously recognized in the statement of income be recognized as income tax benefit or expense in the statement of income rather than as additional paid-in capital in the balance sheet. The guidance also states that excess income tax benefits should not be presented separately from other income taxes in the statement of cash flows and, thus, should be classified as an operating activity rather than a financing activity as they are under the current guidance. In addition, the updated guidance requires when an employer withholds shares upon exercise of options or the vesting of restricted stock for the purpose of meeting withholding tax requirements, that the cash paid for withholding taxes be classified as a financing activity. We currently record these amounts within operating activities.

The updated guidance is effective for us as of January 1, 2017 and early adoption is permitted. The updated guidance provides companies with alternative methods of adoption, with certain items that are allowed to be applied retrospectively and certain other items that are only to be applied prospectively in the period of adoption. We are currently in the process of determining our method of adoption of this updated accounting guidance.

If we had adopted the provisions of the updated guidance as of January 1, 2016, it would have increased net income attributable to Comcast Corporation by $48 million and $159 million for the three and six months ended June 30, 2016, respectively. In addition, the updated guidance would have increased net cash provided by operating activities and decreased net cash provided by (used in) financing activities by $411 million for the six months ended June 30, 2016. The most significant impact of implementing the new guidance is expected to occur in the first quarter of each year as a result of the vesting of restricted stock awards, which primarily occurs in March.

Note 3: Earnings Per Share

Computation of Diluted EPS

 

    Three Months Ended June 30  
    2016      2015  
(in millions, except per share data)   Net Income
Attributable to
Comcast
Corporation
     Shares      Per Share
Amount
     Net Income
Attributable to
Comcast
Corporation
     Shares      Per Share
Amount
 

Basic EPS attributable to Comcast Corporation shareholders

  $ 2,028         2,420       $ 0.84       $ 2,137         2,500       $ 0.85   

Effect of dilutive securities:

                

Assumed exercise or issuance of shares relating to stock plans

             26                           31            

Diluted EPS attributable to Comcast Corporation shareholders

  $ 2,028         2,446       $ 0.83       $ 2,137         2,531       $ 0.84   

 

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Comcast Corporation

 

    Six Months Ended June 30  
    2016      2015  
(in millions, except per share data)   Net Income
Attributable to
Comcast
Corporation
     Shares      Per Share
Amount
     Net Income
Attributable to
Comcast
Corporation
     Shares      Per Share
Amount
 

Basic EPS attributable to Comcast Corporation shareholders

  $ 4,162         2,427       $ 1.71       $ 4,196         2,510       $ 1.67   

Effect of dilutive securities:

                

Assumed exercise or issuance of shares relating to stock plans

             27                           34            

Diluted EPS attributable to Comcast Corporation shareholders

  $ 4,162         2,454       $ 1.70       $ 4,196         2,544       $ 1.65   

Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Our potentially dilutive securities include potential common shares related to our stock options and our restricted share units (“RSUs”). The amount of potential common shares related to our share-based compensation plans that were excluded from diluted EPS because their effect would have been antidilutive was not material for the three and six months ended June 30, 2016 and 2015.

Note 4: Significant Transactions

DreamWorks

On April 28, 2016, we entered into an agreement to acquire all of the outstanding stock of DreamWorks Animation SKG, Inc. (“DreamWorks”) for approximately $3.8 billion. DreamWorks stockholders will receive $41 in cash for each share of DreamWorks common stock. DreamWorks creates animated feature films, television series and specials, live entertainment and related consumer products. The transaction is expected to close in 2016, subject to receipt of certain international regulatory approvals and the satisfaction of other customary closing conditions.

Universal Studios Japan

On November 13, 2015, NBCUniversal acquired a 51% economic interest in the Universal Studios theme park in Osaka, Japan (“Universal Studios Japan”) for $1.5 billion. The acquisition was funded through cash on hand and borrowings under our commercial paper program.

Universal Studios Japan is a VIE based on the governance structure and we consolidate Universal Studios Japan as we have the power to direct activities that most significantly impact its economic performance. There are no liquidity arrangements, guarantees, or other financial commitments between us and Universal Studios Japan, and therefore our maximum risk of financial loss is NBCUniversal’s 51% interest. Universal Studios Japan’s results of operations are reported in our Theme Parks segment following the acquisition date.

Preliminary Allocation of Purchase Price

The acquired assets and liabilities of Universal Studios Japan and the 49% noncontrolling interest were recorded at their estimated fair values. During the three months ended June 30, 2016, we updated the preliminary allocation of purchase price for Universal Studios Japan based on valuation analyses, which resulted in increases to property and equipment and intangible assets and a decrease in goodwill. The changes did not have a material impact on our consolidated financial statements. We may adjust these amounts further as valuations are finalized and we obtain information necessary to complete the analyses, but no later than one year from the acquisition date.

 

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The table below presents the preliminary allocation of the purchase price to the assets and liabilities of Universal Studios Japan.

Preliminary Allocation of Purchase Price

 

(in millions)       

Property and equipment

  $ 793     

Intangible assets

    323     

Working capital

    (33)    

Debt

    (3,271)    

Other noncurrent assets and liabilities

    43     

Identifiable net assets (liabilities) acquired

    (2,145)    

Noncontrolling interest

    (1,440)    

Goodwill

    5,084     

Cash consideration transferred

  $ 1,499     

Actual and Unaudited Pro Forma Results

Our consolidated revenue for the three and six months ended June 30, 2016 included $283 million and $576 million, respectively, from the acquisition of Universal Studios Japan. Our consolidated net income attributable to Comcast Corporation for the three and six months ended June 30, 2016 included $10 million and $28 million, respectively, from the acquisition of Universal Studios Japan.

The following unaudited pro forma information has been presented as if the acquisition occurred on January 1, 2014. This information is primarily based on historical results of operations and is subject to change as valuations are finalized. In addition, the unaudited pro forma accounting adjustments are not necessarily indicative of what our results would have been had we operated Universal Studios Japan since January 1, 2014. No pro forma adjustments have been made for our transaction-related expenses.

 

(in millions, except per share amounts)   Three Months Ended
June 30, 2015
     Six Months Ended
June 30, 2015
 

Revenue

  $ 18,997       $ 37,134   

Net income

  $ 2,208       $ 4,385   

Net income attributable to Comcast Corporation

  $ 2,153       $ 4,230   

Basic earnings per common share attributable to Comcast Corporation shareholders

  $ 0.86       $ 1.69   

Diluted earnings per common share attributable to Comcast Corporation shareholders

  $ 0.85       $ 1.66   

Note 5: Film and Television Costs

 

(in millions)   June 30,
2016
     December 31,
2015
 

Film Costs:

    

Released, less amortization

  $ 1,425       $ 1,275   

Completed, not released

    101         226   

In production and in development

    1,005         907   
    2,531         2,408   

Television Costs:

    

Released, less amortization

    1,577         1,573   

In production and in development

    635         737   
    2,212         2,310   

Programming rights, less amortization

    2,503         2,350   
    7,246         7,068   

Less: Current portion of programming rights

    1,435         1,213   

Film and television costs

  $ 5,811       $ 5,855   

 

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Note 6: Investments

 

(in millions)   June 30,
2016
     December 31,
2015
 

Fair Value Method

  $ 167       $ 167   

Equity Method:

    

Atairos

    402           

Hulu

    170         184   

Other

    527         494   
    1,099         678   

Cost Method:

    

AirTouch

    1,591         1,583   

Other

    915         902   
      2,506         2,485   

Total investments

    3,772         3,330   

Less: Current investments

    93         106   

Noncurrent investments

  $ 3,679       $ 3,224   

Investment Income (Loss), Net

 

    Three Months Ended
June 30
     Six Months Ended
June 30
 
(in millions)       2016             2015              2016             2015      

Gains on sales and exchanges of investments, net

  $ 13      $ 4       $ 15      $ 4   

Investment impairment losses

    (1     (16      (21     (31

Unrealized gains (losses) on securities underlying prepaid forward sale agreements

                          42   

Mark to market adjustments on derivative component of prepaid forward sale agreements and indexed debt instruments

    1        1         1        (37

Interest and dividend income

    31        28         60        56   

Other, net

    14                33        16   

Investment income (loss), net

  $ 58      $ 17       $ 88      $ 50   

Equity Method

The Weather Channel

On January 29, 2016, following a legal restructuring at The Weather Channel, we and the other investors sold the entity holding The Weather Channel’s product and technology businesses to IBM. Following the close of the transaction, we continue to hold an investment in The Weather Channel cable network through a new holding company. As a result of the sale of our investment, we recognized a pretax gain for the six months ended June 30, 2016 of $108 million in other income (expense), net.

During the three months ended June 30, 2015, The Weather Channel recorded an impairment charge related to goodwill. We recorded an expense of $252 million that represents NBCUniversal’s proportionate share of this impairment charge in equity in net income (losses) of investees, net in our condensed consolidated statement of income.

Atairos

In 2015, we entered into an agreement to establish Atairos Group, Inc. (“Atairos”), a strategic company focused on investing in and operating companies in a range of industries and business sectors, both domestically and internationally. The agreement became effective as of January 1, 2016. Atairos has a term of up to 12 years and is controlled by management companies led by our former CFO through interests that carry all of the voting rights. We are the only investor other than our former CFO and the other management company employees. We have

 

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committed to fund up to $4 billion in the aggregate at any one time in Atairos, subject to certain offsets, and $40 million annually to fund a management fee, subject to certain adjustments, while the management company investors have committed to fund up to $100 million (with at least $40 million to be funded by our former CFO, subject to his continued role with Atairos). Our economic interests do not carry voting rights and obligate us to absorb approximately 99% of any losses and provide us the right to receive approximately 86.5% of any residual returns in Atairos, in either case on a cumulative basis.

We have concluded that Atairos is a VIE, that we do not have the power to direct the activities that most significantly impact the economic performance of Atairos as we have no voting rights and only certain consent rights, and that we are not a related party with our former CFO or the management companies. We therefore do not consolidate Atairos and account for this investment as an equity method investment. There are no other liquidity arrangements, guarantees, or other financial commitments between Comcast and Atairos, and therefore our maximum risk of financial loss is our investment balance and remaining unfunded capital commitment.

For the six months ended June 30, 2016, we made capital contributions totaling $429 million to Atairos.

Hulu

For the three and six months ended June 30, 2016, we recognized our proportionate share of losses of $40 million and $65 million, respectively, related to our investment in Hulu, LLC (“Hulu”). For the three and six months ended June 30, 2015, we recognized our proportionate share of losses of $13 million and $24 million, respectively, related to our investment in Hulu.

Cost Method

AirTouch

We hold two series of preferred stock of Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”), a subsidiary of Verizon Communications Inc., which are redeemable in April 2020. As of June 30, 2016, the estimated fair value of the AirTouch preferred stock and the estimated fair value of the associated liability related to the redeemable subsidiary preferred shares issued by one of our consolidated subsidiaries were each $1.7 billion. The estimated fair values are based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument.

Note 7: Goodwill

 

           NBCUniversal              
(in millions)   Cable
Communications
     Cable
Networks
     Broadcast
Television
     Filmed
Entertainment
     Theme
Parks
    Corporate
and Other
    Total  

Balance, December 31, 2015

  $ 12,389       $ 12,947       $ 806       $ 267       $ 6,344      $ 192      $ 32,945   

Acquisitions

    73                         92                       165   

Adjustments

    176                                 (289     (181     (294

Foreign currency translation

            7                 12         957               976   

Balance, June 30, 2016

  $ 12,638       $ 12,954       $ 806       $ 371       $ 7,012      $ 11      $ 33,792   

Adjustments to goodwill during the six months ended June 30, 2016 included the updated preliminary allocation of the purchase price for Universal Studios Japan in our Theme Parks segment and the reclassification of certain operations and businesses from Corporate and Other to our Cable Communications segment.

Note 8: Long-Term Debt

As of June 30, 2016, our debt had a carrying value of $55.6 billion and an estimated fair value of $64.4 billion. The estimated fair value of our publicly traded debt is primarily based on Level 1 inputs that use quoted market values for the debt. The estimated fair value of debt for which there are no quoted market prices is based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.

 

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Debt Borrowings and Repayments

In July 2016, we issued $700 million aggregate principal amount of 1.625% senior notes due 2022, $1.4 billion aggregate principal amount of 2.35% senior notes due 2027, $1.0 billion aggregate principal amount of 3.20% senior notes due 2036 and $1.4 billion aggregate principal amount of 3.40% senior notes due 2046. We intend to use the proceeds from this offering to fund our acquisition of DreamWorks, and for working capital and general corporate purposes. In May 2016, we issued $1.43 billion aggregate principal amount of 4.05% senior notes due 2046. In February and March 2016, we issued $1.1 billion aggregate principal amount of 2.75% senior notes due 2023 and $2.2 billion aggregate principal amount of 3.15% senior notes due 2026.

In June 2016, we repaid at maturity $750 million aggregate principal amount of 4.95% senior notes due 2016. In April 2016, we repaid at maturity $1 billion aggregate principal amount of 2.875% senior notes due 2016 and $700 million aggregate principal amount of NBCUniversal Enterprise Inc.’s (“NBCUniversal Enterprise”) senior notes due 2016.

Revolving Credit Facilities

In May 2016, we entered into a new $7 billion revolving credit facility due 2021 with a syndicate of banks (“Comcast revolving credit facility”) that may be used for general corporate purposes. We may increase the commitment under the Comcast revolving credit facility up to a total of $10 billion, as well as extend the expiration date to a date no later than 2023, subject to approval of the lenders. In addition, NBCUniversal Enterprise entered into a new $1.5 billion revolving credit facility due 2021 with a syndicate of banks (“NBCUniversal Enterprise revolving credit facility”) that may be used for general corporate purposes. We may increase the commitment under the NBCUniversal Enterprise revolving credit facility up to a total of $2 billion, as well as extend the expiration date to a date no later than 2023, subject to approval of the lenders. The new revolving credit facilities replaced Comcast’s $6.25 billion and NBCUniversal Enterprise’s $1.35 billion revolving credit facilities, which were terminated in connection with the execution of the new revolving credit facilities. The interest rates on the new revolving credit facilities consist of a base rate plus a borrowing margin that is determined based on Comcast’s credit rating. As of June 30, 2016, the borrowing margin for borrowings based on the London Interbank Offered Rate was 1.00%. The terms of the new revolving credit facilities’ financial covenants and guarantees are substantially the same as those under the prior revolving credit facilities.

As of June 30, 2016, amounts available under the new consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $7.1 billion, which included $326 million available under NBCUniversal Enterprise’s revolving credit facility.

Commercial Paper Programs

As of June 30, 2016, NBCUniversal Enterprise had $1.2 billion face amount of commercial paper outstanding.

Note 9: Fair Value Measurements

The accounting guidance related to financial assets and financial liabilities (“financial instruments”) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). Level 1 consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2 consists of financial instruments that are valued using models or other valuation methodologies. These models use inputs that are observable either directly or indirectly. Level 3 consists of financial instruments whose values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Our financial instruments that are accounted for at fair value on a recurring basis are presented in the table below.

 

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Recurring Fair Value Measurements

 

    Fair Value as of  
   

June 30,

2016

    

December 31,

2015

 
(in millions)   Level 1      Level 2      Level 3      Total      Total  

Assets

             

Trading securities

  $ 9       $       $       $ 9       $ 22   

Available-for-sale securities

            125         14         139         133   

Interest rate swap agreements

            61                 61         53   

Other

            10         19         29         17   

Total

  $ 9       $ 196       $ 33       $ 238       $ 225   

Liabilities

             

Other

  $       $ 235       $       $ 235       $ 91   

Total

  $  —       $ 235       $  —       $ 235       $ 91   

Fair Value of Redeemable Subsidiary Preferred Stock

As of June 30, 2016, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $761 million. The estimated fair value is based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument.

Note 10: Share-Based Compensation

Our share-based compensation plans primarily consist of awards of RSUs and stock options to certain employees and directors as part of our approach to long-term incentive compensation. Additionally, through our employee stock purchase plans, employees are able to purchase shares of Comcast Class A common stock at a discount through payroll deductions.

In March 2016, we granted 5.9 million RSUs and 20.7 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $59.50 per RSU and $11.45 per stock option.

Recognized Share-Based Compensation Expense

 

   

Three Months Ended

June 30

    

Six Months Ended

June 30

 
(in millions)       2016              2015              2016              2015      

Restricted share units

  $ 89       $ 80       $ 159       $ 138   

Stock options

    48         43         85         78   

Employee stock purchase plans

    8         6         16         14   

Total

  $ 145       $ 129       $ 260       $ 230   

As of June 30, 2016, we had unrecognized pretax compensation expense of $831 million and $448 million related to nonvested RSUs and nonvested stock options, respectively.

 

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Note 11: Supplemental Financial Information

Receivables

 

(in millions)  

June 30,

2016

    

December 31,

2015

 

Receivables, gross

  $ 7,255       $ 7,595   

Less: Allowance for returns and customer incentives

    292         473   

Less: Allowance for doubtful accounts

    255         226   

Receivables, net

  $ 6,708       $ 6,896   

Accumulated Other Comprehensive Income (Loss)

 

(in millions)  

June 30,

2016

   

June 30,

2015

 

Unrealized gains (losses) on marketable securities

  $ 3      $ 1   

Deferred gains (losses) on cash flow hedges

    (75     (11

Unrecognized gains (losses) on employee benefit obligations

    8        (68

Cumulative translation adjustments

    65        (88

Accumulated other comprehensive income (loss), net of deferred taxes

  $ 1      $ (166

Net Cash Provided by Operating Activities

 

   

Six Months Ended

June 30

 
(in millions)       2016             2015      

Net income

  $ 4,304      $ 4,316   

Adjustments to reconcile net income to net cash provided by operating activities:

   

Depreciation and amortization

    4,667        4,227   

Share-based compensation

    331        294   

Noncash interest expense (income), net

    113        95   

Equity in net (income) losses of investees, net

    30        203   

Cash received from investees

    42        52   

Net (gain) loss on investment activity and other

    (126     (437

Deferred income taxes

    618        111   

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

   

Current and noncurrent receivables, net

    172        (707

Film and television costs, net

    (171     176   

Accounts payable and accrued expenses related to trade creditors

    (104     109   

Other operating assets and liabilities

    (493     395   

Net cash provided by operating activities

  $ 9,383      $ 8,834   

Cash Payments for Interest and Income Taxes

 

   

Three Months Ended

June 30

     Six Months Ended
June 30
 
(in millions)       2016              2015              2016              2015      

Interest

  $ 512       $ 550       $ 1,235       $ 1,241   

Income taxes

  $ 1,495       $ 1,881       $ 1,685       $ 1,999   

 

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Noncash Investing and Financing Activities

During the six months ended June 30, 2016:

 

   

we acquired $1.2 billion of property and equipment and intangible assets that were accrued but unpaid

 

 

   

we recorded a liability of $663 million for a quarterly cash dividend of $0.275 per common share to be paid in July 2016

 

Note 12: Commitments and Contingencies

Insurance Obligations

We recorded an operating expense of $116 million during the three months ended June 30, 2016 and eliminated substantially all of our liabilities related to certain insurance obligations, which are disclosed in Note 12 of our consolidated financial statements included in our 2015 Annual Report on Form 10-K.

Contingencies

We are a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases other industry participants are also defendants, and also in certain of these cases we expect that any potential liability would be in part or in whole the responsibility of our equipment and technology vendors under applicable contractual indemnification provisions.

We are also subject to other legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal proceedings or claims could be time-consuming and injure our reputation.

Note 13: Financial Data by Business Segment

We present our operations in five reportable business segments:

 

   

Cable Communications: Consists of the operations of Comcast Cable, which is one of the nation’s largest providers of video, high-speed Internet and voice services to residential customers under the XFINITY brand; we also provide these and other services to business customers and sell advertising.

 

 

   

Cable Networks: Consists primarily of our national cable networks, our regional sports and news networks, our international cable networks and our cable television studio production operations.

 

 

   

Broadcast Television: Consists primarily of the NBC and Telemundo broadcast networks, our NBC and Telemundo owned local broadcast television stations, the NBC Universo national cable network, and our broadcast television studio production operations.

 

 

   

Filmed Entertainment: Consists primarily of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment worldwide.

 

 

   

Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan.

 

 

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In evaluating the profitability of our operating segments, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management. Our financial data by business segment is presented in the tables below.

 

    Three Months Ended June 30, 2016  
(in millions)   Revenue(g)    

Operating Income (Loss)
Before Depreciation and

Amortization(h)

    Depreciation
and
Amortization
     Operating
Income
(Loss)
    Capital
Expenditures
 

Cable Communications(a)(b)

  $ 12,444      $ 5,048      $ 1,904       $ 3,144      $ 1,881   

NBCUniversal

          

Cable Networks

    2,566        944        187         757        7   

Broadcast Television

    2,128        394        30         364        30   

Filmed Entertainment

    1,351        56        12         44        5   

Theme Parks(d)

    1,136        469        145         324        240   

Headquarters and Other(e)

    6        (175     91         (266     78   

Eliminations(f)

    (84     1                1          

NBCUniversal

    7,103        1,689        465         1,224        360   

Corporate and Other(b)

    180        (291     20         (311     30   

Eliminations(d)(f)

    (458     9                9          

Comcast Consolidated

  $ 19,269      $ 6,455      $ 2,389       $ 4,066      $ 2,271   

 

    Three Months Ended June 30, 2015  
(in millions)   Revenue(g)    

Operating Income (Loss)
Before Depreciation and

Amortization(h)

    Depreciation
and
Amortization
     Operating
Income
(Loss)
    Capital
Expenditures
 

Cable Communications(a)(b)

  $ 11,740      $ 4,777      $ 1,732       $ 3,045      $ 1,678   

NBCUniversal

          

Cable Networks

    2,450        872        211         661        5   

Broadcast Television

    1,813        231        30         201        14   

Filmed Entertainment

    2,266        422        6         416        4   

Theme Parks(d)

    773        334        76         258        166   

Headquarters and Other(e)

    3        (169     82         (251     83   

Eliminations(f)

    (75     2                2          

NBCUniversal

    7,230        1,692        405         1,287        272   

Corporate and Other(b)

    164        (231     24         (255     21   

Eliminations(d)(f)

    (391     28                28          

Comcast Consolidated

  $ 18,743      $ 6,266      $ 2,161       $ 4,105      $ 1,971   

 

    Six Months Ended June 30, 2016  
(in millions)   Revenue(g)    

Operating Income (Loss)
Before Depreciation and

Amortization(h)

    Depreciation
and
Amortization
     Operating
Income
(Loss)
    Capital
Expenditures
 

Cable Communications(a)(b)

  $ 24,648      $ 9,937      $ 3,747       $ 6,190      $ 3,457   

NBCUniversal

          

Cable Networks

    5,019        1,900        377         1,523        8   

Broadcast Television

    4,212        678        62         616        49   

Filmed Entertainment

    2,734        223        20         203        8   

Theme Parks(d)

    2,162        844        243         601        440   

Headquarters and Other(e)

    9        (335     177         (512     150   

Eliminations(f)

    (172     1                1          

NBCUniversal

    13,964        3,311        879         2,432        655   

Corporate and Other(b)

    379        (445     41         (486     44   

Eliminations(d)(f)

    (932     19                19          

Comcast Consolidated

  $ 38,059      $ 12,822      $ 4,667       $ 8,155      $ 4,156   

 

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    Six Months Ended June 30, 2015  
(in millions)   Revenue(g)    

Operating Income (Loss)

Before Depreciation and
Amortization(h)

    Depreciation
and
Amortization
     Operating
Income
(Loss)
    Capital
Expenditures
 

Cable Communications(a)(b)

  $ 23,181      $ 9,435      $ 3,412       $ 6,023      $ 3,124   

NBCUniversal

          

Cable Networks

    4,809        1,770        395         1,375        11   

Broadcast Television(c)

    4,061        413        59         354        25   

Filmed Entertainment

    3,712        715        11         704        5   

Theme Parks(d)

    1,424        578        142         436        328   

Headquarters and Other(e)

    7        (309     162         (471     171   

Eliminations(f)

    (179                             

NBCUniversal

    13,834        3,167        769         2,398        540   

Corporate and Other(b)

    357        (440     46         (486     33   

Eliminations(d)(f)

    (776     60                60          

Comcast Consolidated

  $ 36,596      $ 12,222      $ 4,227       $ 7,995      $ 3,697   

 

(a)

For the three and six months ended June 30, 2016 and 2015, Cable Communications segment revenue was derived from the following sources:

 

   

Three Months Ended

June 30

   

Six Months Ended

June 30

 
         2016             2015             2016             2015      

Residential:

       

Video

    44.9     46.3     45.1     46.4

High-speed Internet

    27.1     26.4     27.0     26.5

Voice

    7.2     7.7     7.3     7.8

Business services

    10.9     9.9     10.8     9.8

Advertising

    4.8     4.9     4.7     4.6

Other

    5.1     4.8     5.1     4.9

Total

    100     100     100     100

Subscription revenue received from customers who purchase bundled services at a discounted rate is allocated proportionally to each service based on the individual service’s price on a stand-alone basis.

For both the three and six months ended June 30, 2016 and 2015, 2.8% of Cable Communications segment revenue was derived from franchise and other regulatory fees.

 

(b)

Beginning in the first quarter of 2016, certain operations and businesses, including several strategic business initiatives, that were previously presented in Corporate and Other are now presented in our Cable Communications segment to reflect a change in our management reporting presentation. For segment reporting purposes, we have adjusted all periods presented to reflect this change.

 

(c)

The revenue and operating costs and expenses associated with our broadcast of the 2015 Super Bowl were reported in our Broadcast Television segment.

 

(d)

Beginning in the fourth quarter of 2015, we changed our method of accounting for a contractual obligation that involves an interest in the revenue of certain theme parks. As a result of the change, amounts payable based on current period revenue are presented in operating costs and expenses. Amounts paid through the third quarter of 2015 were included in other income (expense), net in our consolidated statement of income. For segment reporting purposes, we have adjusted periods prior to the fourth quarter of 2015 to reflect management reporting presentation for this expense on a consistent basis for all periods in the Theme Parks segment and total NBCUniversal, which resulted in a corresponding offsetting adjustment in Eliminations to reconcile to consolidated totals.

 

(e)

NBCUniversal Headquarters and Other activities include costs associated with overhead, personnel costs and headquarter initiatives.

 

(f)

Included in Eliminations are transactions that our segments enter into with one another. The most common types of transactions are the following:

 

   

our Cable Networks segment generates revenue by selling programming to our Cable Communications segment, which represents a substantial majority of the revenue elimination amount

 

 

   

our Broadcast Television segment generates revenue from the fees received under retransmission consent agreements with our Cable Communications segment

 

 

   

our Cable Communications segment generates revenue by selling advertising and by selling the use of satellite feeds to our Cable Networks segment

 

 

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Comcast Corporation

 

   

our Filmed Entertainment and Broadcast Television segments generate revenue by licensing content to our Cable Networks segment

 

 

(g)

No single customer accounted for a significant amount of revenue in any period.

 

(h)

We use operating income (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on the sale of assets, if any, as the measure of profit or loss for our operating segments. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of certain of our businesses and from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital structure or investment activities. We use this measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that this measure is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. This measure should not be considered a substitute for operating income (loss), net income (loss) attributable to Comcast Corporation, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with GAAP.

Note 14: Condensed Consolidating Financial Information

Comcast (“Comcast Parent”), Comcast Cable Communications, LLC (“CCCL Parent”), and NBCUniversal (“NBCUniversal Media Parent”) have fully and unconditionally guaranteed each other’s debt securities. In addition, the Comcast revolving credit facility and the Comcast commercial paper program are also fully and unconditionally guaranteed by NBCUniversal. The Comcast commercial paper program is supported by the Comcast revolving credit facility.

Comcast Parent and CCCL Parent also fully and unconditionally guarantee NBCUniversal Enterprise’s $3.3 billion of senior notes, as well as the NBCUniversal Enterprise revolving credit facility and the associated commercial paper program. NBCUniversal Media Parent does not guarantee the NBCUniversal Enterprise senior notes, credit facility or commercial paper program.

Comcast Parent provides an unconditional subordinated guarantee of the $185 million principal amount currently outstanding of Comcast Holdings’ ZONES due October 2029. Neither CCCL Parent nor NBCUniversal Media Parent guarantee the Comcast Holdings’ ZONES due October 2029. None of Comcast Parent, CCCL Parent nor NBCUniversal Media Parent guarantee the $62 million principal amount currently outstanding of Comcast Holdings’ ZONES due November 2029 or the $3.8 billion of Universal Studios Japan term loans.

 

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Comcast Corporation

Condensed Consolidating Balance Sheet

June 30, 2016

 

(in millions)  

Comcast

Parent

    

Comcast

Holdings

    

CCCL

Parent

    NBCUniversal
Media Parent
   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Assets

               

Cash and cash equivalents

  $       $       $      $ 270      $ 4,395      $      $ 4,665   

Receivables, net

                                  6,708               6,708   

Programming rights

                                  1,435               1,435   

Other current assets

    138                        49        1,782               1,969   

Total current assets

    138                        319        14,320               14,777   

Film and television costs

                                  5,811               5,811   

Investments

    48                        445        3,186               3,679   

Investments in and amounts due from subsidiaries eliminated upon consolidation

    91,382         115,253         123,620        42,893        113,686        (486,834       

Property and equipment, net

    218                               34,678               34,896   

Franchise rights

                                  59,364               59,364   

Goodwill

                                  33,792               33,792   

Other intangible assets, net

    10                               17,194               17,204   

Other noncurrent assets, net

    1,361         147                85        2,117        (1,248     2,462   

Total assets

  $ 93,157       $ 115,400       $ 123,620      $ 43,742      $ 284,148      $ (488,082   $ 171,985   

Liabilities and Equity

               

Accounts payable and accrued expenses related to trade creditors

  $ 31       $       $      $      $ 6,328      $      $ 6,359   

Accrued participations and residuals

                                  1,542               1,542   

Accrued expenses and other current liabilities

    1,672         335         282        282        4,195               6,766   

Current portion of long-term debt

    1,000                 550        4        1,380               2,934   

Total current liabilities

    2,703         335         832        286        13,445               17,601   

Long-term debt, less current portion

    34,757         133         2,100        8,228        7,411               52,629   

Deferred income taxes

            581                69        34,964        (1,102     34,512   

Other noncurrent liabilities

    2,599                        1,143        7,123        (146     10,719   

Redeemable noncontrolling interests and redeemable subsidiary preferred stock

                                  1,248               1,248   

Equity:

               

Common stock

    28                                             28   

Other shareholders’ equity

    53,070         114,351         120,688        34,016        217,779        (486,834     53,070   

Total Comcast Corporation shareholders’ equity

    53,098         114,351         120,688        34,016        217,779        (486,834     53,098   

Noncontrolling interests

                                  2,178               2,178   

Total equity

    53,098         114,351         120,688        34,016        219,957        (486,834     55,276   

Total liabilities and equity

  $ 93,157       $ 115,400       $ 123,620      $ 43,742      $ 284,148      $ (488,082   $ 171,985   

 

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Comcast Corporation

Condensed Consolidating Balance Sheet

December 31, 2015

 

(in millions)  

Comcast

Parent

   

Comcast

Holdings

   

CCCL

Parent

    NBCUniversal
Media Parent
   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Assets

             

Cash and cash equivalents

  $      $      $      $ 414      $ 1,881      $      $ 2,295   

Receivables, net

                                6,896               6,896   

Programming rights

                                1,213               1,213   

Other current assets

    69                      17        1,813               1,899   

Total current assets

    69                      431        11,803               12,303   

Film and television costs

                                5,855               5,855   

Investments

    33                      430        2,761               3,224   

Investments in and amounts due from subsidiaries eliminated upon consolidation

    87,142        111,241        119,354        42,441        109,598        (469,776       

Property and equipment, net

    210                             33,455               33,665   

Franchise rights

                                59,364               59,364   

Goodwill

                                32,945               32,945   

Other intangible assets, net

    12                             16,934               16,946   

Other noncurrent assets, net

    1,301        147               78        2,114        (1,368     2,272   

Total assets

  $ 88,767      $ 111,388      $ 119,354      $ 43,380      $ 274,829      $ (471,144   $ 166,574   

Liabilities and Equity

             

Accounts payable and accrued expenses related to trade creditors

  $ 16      $      $      $      $ 6,199      $      $ 6,215   

Accrued participations and residuals

                                1,572               1,572   

Accrued expenses and other current liabilities

    1,789        335        290        389        3,961               6,764   

Current portion of long-term debt

    1,149                      1,005        1,473               3,627   

Total current liabilities

    2,954        335        290        1,394        13,205               18,178   

Long-term debt, less current portion

    31,106        130        2,650        8,211        6,897               48,994   

Deferred income taxes

           624               66        34,098        (1,222     33,566   

Other noncurrent liabilities

    2,438                      1,087        7,258        (146     10,637   

Redeemable noncontrolling interests and redeemable subsidiary preferred stock

                                1,221               1,221   

Equity:

             

Common stock

    29                                           29   

Other shareholders’ equity

    52,240        110,299        116,414        32,622        210,441        (469,776     52,240   

Total Comcast Corporation shareholders’ equity

    52,269        110,299        116,414        32,622        210,441        (469,776     52,269   

Noncontrolling interests

                                1,709               1,709   

Total equity

    52,269        110,299        116,414        32,622        212,150        (469,776     53,978   

Total liabilities and equity

  $ 88,767      $ 111,388      $ 119,354      $ 43,380      $ 274,829      $ (471,144   $ 166,574   

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended June 30, 2016

 

(in millions)  

Comcast

Parent

   

Comcast

Holdings

   

CCCL

Parent

    NBCUniversal
Media Parent
   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Revenue:

             

Service revenue

  $  —      $  —      $  —      $  —      $ 19,269      $  —      $ 19,269   

Management fee revenue

    266               261                      (527       
      266               261               19,269        (527     19,269   

Costs and Expenses:

             

Programming and production

                                5,492               5,492   

Other operating and administrative

    285               261        222        5,520        (527     5,761   

Advertising, marketing and promotion

                                1,561               1,561   

Depreciation

    6                             1,862               1,868   

Amortization

    2                             519               521   
      293               261        222        14,954        (527     15,203   

Operating income (loss)

    (27                   (222     4,315               4,066   

Other Income (Expense):

             

Interest expense

    (478     (3     (61     (112     (78            (732

Investment income (loss), net

    3        1               (6     60               58   

Equity in net income (losses) of investees, net

    2,354        2,275        2,127        1,288        914        (8,977     (19

Other income (expense), net

                         (7     (8            (15
      1,879        2,273        2,066        1,163        888        (8,977     (708

Income (loss) before income taxes

    1,852        2,273        2,066        941        5,203        (8,977     3,358   

Income tax (expense) benefit

    176        1        21        (8     (1,468            (1,278

Net income (loss)

    2,028        2,274        2,087        933        3,735        (8,977     2,080   

Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock

                                (52            (52

Net income (loss) attributable to Comcast Corporation

  $ 2,028      $ 2,274      $ 2,087      $ 933      $ 3,683      $ (8,977   $ 2,028   

Comprehensive income (loss) attributable to Comcast Corporation

  $ 2,113      $ 2,321      $ 2,087      $ 1,096      $ 4,194      $ (9,698   $ 2,113   

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended June 30, 2015

 

(in millions)  

Comcast

Parent

   

Comcast

Holdings

   

CCCL

Parent

    NBCUniversal
Media Parent
   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Revenue:

             

Service revenue

  $      $      $      $      $ 18,743      $      $ 18,743   

Management fee revenue

    252               246                      (498       
      252               246               18,743        (498     18,743   

Costs and Expenses:

             

Programming and production

                                5,669               5,669   

Other operating and administrative

    225               246        255        5,046        (498     5,274   

Advertising, marketing and promotion

                                1,534               1,534   

Depreciation

    7                             1,667               1,674   

Amortization

    2                             485               487   
      234               246        255        14,401        (498     14,638   

Operating income (loss)

    18                      (255     4,342               4,105   

Other Income (Expense):

             

Interest expense

    (472     (3     (73     (116     (49            (713

Investment income (loss), net

           (1            (8     26               17   

Equity in net income (losses) of investees, net

    2,431        2,162        2,020        1,281        676        (8,806     (236

Other income (expense), net

    2                      16        297               315   
      1,961        2,158        1,947        1,173        950        (8,806     (617

Income (loss) before income taxes

    1,979        2,158        1,947        918        5,292        (8,806     3,488   

Income tax (expense) benefit

    158        2        26        (6     (1,493            (1,313

Net income (loss)

    2,137        2,160        1,973        912        3,799        (8,806     2,175   

Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock

                                (38            (38

Net income (loss) attributable to Comcast Corporation

  $ 2,137      $ 2,160      $ 1,973      $ 912      $ 3,761      $ (8,806   $ 2,137   

Comprehensive income (loss) attributable to Comcast Corporation

  $ 2,159      $ 2,168      $ 1,973      $ 936      $ 3,761      $ (8,838   $ 2,159   

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Six Months Ended June 30, 2016

 

(in millions)  

Comcast

Parent

   

Comcast

Holdings

   

CCCL

Parent

    NBCUniversal
Media Parent
   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Revenue:

             

Service revenue

  $  —      $  —      $  —      $  —      $ 38,059      $  —      $ 38,059   

Management fee revenue

    525               515                      (1,040       
      525               515               38,059        (1,040     38,059   

Costs and Expenses:

             

Programming and production

                                10,923               10,923   

Other operating and administrative

    441               515        517        10,853        (1,040     11,286   

Advertising, marketing and promotion

                                3,028               3,028   

Depreciation

    14                             3,639               3,653   

Amortization

    3                             1,011               1,014   
      458               515        517        29,454        (1,040     29,904   

Operating income (loss)

    67                      (517     8,605               8,155   

Other Income (Expense):

             

Interest expense

    (929     (6     (120     (229     (151            (1,435

Investment income (loss), net

    3        1               (8     92               88   

Equity in net income (losses) of investees, net

    4,720        4,539        4,241        2,585        1,905        (18,020     (30

Other income (expense), net