UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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x☒ | Quarterly Report pursuant to SectionQUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended SeptemberJune 30, 20172021
OR
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c | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the Transition Period from to
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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| Commission File Number | Exact Name of Registrant; State of Incorporation; Address and Telephone Number of Principal Executive Offices | I.R.S. Employer Identification No. |
| 001-32871 | COMCAST CORPORATION | 27-0000798 |
Pennsylvania
One Comcast Center
Philadelphia, PA 19103-2838
(215) 286-1700
Securities registered pursuant to Section 12(b) of the Act:
| PENNSYLVANIA
One Comcast Center
Philadelphia, PA 19103-2838
(215) 286-1700
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
001-36438Class A Common Stock, $0.01 par value | NBCUNIVERSAL MEDIA, LLC | 14-1682529CMCSA | | NASDAQ Global Select Market |
| 0.250% Notes due 2027 | DELAWARE
30 Rockefeller Plaza
| CMCS27 | | NASDAQ Global Market |
| 1.500% Notes due 2029 | | CMCS29 | | NASDAQ Global Market |
| 0.750% Notes due 2032 | | CMCS32 | | NASDAQ Global Market |
| 1.875% Notes due 2036 | | CMCS36 | | NASDAQ Global Market |
| 1.250% Notes due 2040 | | CMCS40 | | NASDAQ Global Market |
| 9.455% Guaranteed Notes due 2022 | | CMCSA/22 | | New York NY 10112-0015(212) 664-4444
Stock Exchange |
| 5.50% Notes due 2029 | | CCGBP29 | | New York Stock Exchange |
| 2.0% Exchangeable Subordinated Debentures due 2029 | | CCZ | | New York Stock Exchange |
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. Yes ☒No ☐
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| Comcast Corporation | | Yes | x | | No | c | |
| NBCUniversal Media, LLC | | Yes | x | | No | c | |
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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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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| Comcast Corporation | | Yes | x | | No | c | |
| NBCUniversal Media, LLC | | Yes | x | | No | c | |
Yes ☒No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Comcast Corporation | Large accelerated filer | x☒ | Accelerated filer | c☐ | Non-accelerated filer | c☐ | Smaller reporting company | c☐ | Emerging growth company | c☐ |
NBCUniversal Media, LLC | Large accelerated filer | c | Accelerated filer | c | Non-accelerated filer | x | Smaller reporting company | c | Emerging growth company | c |
If an emerging growth company, indicate by check mark whetherif the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
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Comcast Corporation | c |
NBCUniversal Media, LLC | c |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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| Comcast Corporation | | Yes | c | | No | x | |
| NBCUniversal Media, LLC | | Yes | c | | No | x | |
Yes ☐ No ☒Indicate the number of shares outstanding of each of the registrant’sissuer’s classes of common stock, as of the latest practicalpracticable date:
As of SeptemberJune 30, 2017,2021, there were 4,664,327,4554,580,292,854 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.
TABLE OF CONTENTS
TABLE OF CONTENTS
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| Item 1. | | |
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| Item 2. | | |
| Item 3. | | |
| Item 4. | | |
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| Item 1. | | |
| Item 1A. | | |
| Item 2. | | |
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Item 5.6. | | |
Item 6. | | |
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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;” NBCUniversal, LLC as “NBCUniversal Holdings;” and NBCUniversal Enterprise, Inc. as “NBCUniversal Enterprise.”
This Quarterly Report on Form 10-Q is for the three and ninesix months ended SeptemberJune 30, 2017.2021. This Quarterly Report on Form 10-Q modifies and supersedes documents filed before it. The U.S. 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 on Form 10-Q. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report on Form 10-Q.
You should carefully review the information contained in this Quarterly Report on Form 10-Q and particularly consider any risk factors set forth in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC. InUnless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we staterefer to Comcast and its consolidated subsidiaries, as “Comcast,” “we,” “us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” NBCUniversal Media, LLC and its consolidated subsidiaries as “NBCUniversal;” and Sky Limited and its consolidated subsidiaries as “Sky.”
Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs ofregarding future events, many of which, by their nature, are inherently uncertain and outside of our future financial performance. In some cases, you can identify these so-called “forward-looking statements”control. These may include estimates, projections and statements relating to our business plans, objectives and expected operating results, which are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. These forward-looking statements are generally identified by the words such as“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “potential,” “strategy,” “future,” “opportunity,” “commit,” “plan,” “may,” “should,” “could,” “will,” “should,“would,” “expects,“will be,” “believes,“will continue,” “estimates,” “potential,” or “continue,” or the negative of these words,“will likely result” and other comparable words. You should be aware that these statements are only our predictions. similar expressions.
In evaluating theseforward-looking statements, you should consider various factors, including the risks outlined below and uncertainties we describe in the “Risk Factors” sections of our Forms 10-K and 10-Q and other reports we file with the SEC. Actual events or Additionally, we operate in a highly competitive, consumer-driven and rapidly changing environment. This environment is affected by government regulation; economic, strategic, political and social conditions; consumer response to new and existing products and services; technological developments; and the ability to develop and protect intellectual property rights. Any of these factors could cause
our actual results couldto differ materially from our forward-looking statements, as a result of any such factors, which could adversely affect our businesses, results of operations or financial condition. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update or revise publicly any forward-looking statements.statements, whether because of new information, future events or otherwise.
Our businesses may be affected by, among other things, the following:
•the COVID-19 pandemic has had, and will likely continue to have, a material adverse effect on our businesses currently face a wide rangeand results of competition,operations
•our businesses operate in highly competitive and dynamic industries, and our businesses and results of operations could be adversely affected if we do not compete effectively
•changes in consumer behavior driven by new technologies andonline video distribution platforms for viewing content maycontinue to 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’sCommunications’ video businessbusinesses
•NBCUniversal’s and Sky’s success depends on consumer acceptance of itstheir content, and itstheir businesses may be adversely affected if itstheir content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase
•the loss of NBCUniversal’s programming distribution and licensing agreements, or the renewal of these agreements on less favorable terms, could adversely affect itsour businesses
•less favorable European telecommunications access regulations, the loss of Sky’s transmission access agreements with satellite or telecommunications providers or the renewal of these agreements on less favorable terms could adversely affect Sky’s businesses
•our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others
•we may be unable to obtain necessary hardware, software and operational support
•weak economic conditions may have a negative impact on our businesses
•acquisitions and other strategic initiatives present many risks, and we may not realize the financial and strategic goals that we had contemplated
•we face risks relating to doing business internationally that could adversely affect our businesses
•our businesses depend on keeping pace with technological developments
•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, including the launch of our wireless phone service, 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 relatingare subject to doing business internationally thatregulation by federal, state, local and foreign authorities, which impose additional costs and restrictions on our businesses
•unfavorable litigation or governmental investigation results could require us to pay significant amounts or lead to onerous operating procedures
•labor disputes, whether involving employees or sports organizations, may disrupt our operations and 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
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Comcast Corporation
Condensed Consolidated Balance SheetStatement of Income
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| (in millions, except share data) | September 30,
2017 | | December 31,
2016 |
| Assets | | | |
| Current Assets: | | | |
| Cash and cash equivalents | $ | 4,114 |
| | $ | 3,301 |
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| Receivables, net | 7,915 |
| | 7,955 |
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| Programming rights | 1,779 |
| | 1,250 |
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| Other current assets | 2,152 |
| | 3,855 |
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| Total current assets | 15,960 |
| | 16,361 |
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| Film and television costs | 6,796 |
| | 7,252 |
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| Investments | 6,695 |
| | 5,247 |
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| Property and equipment, net of accumulated depreciation of $49,943 and $49,694 | 37,856 |
| | 36,253 |
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| Franchise rights | 59,364 |
| | 59,364 |
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| Goodwill | 36,752 |
| | 35,980 |
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| Other intangible assets, net of accumulated amortization of $12,371 and $11,013 | 18,733 |
| | 17,274 |
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| Other noncurrent assets, net | 3,145 |
| | 2,769 |
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| Total assets | $ | 185,301 |
| | $ | 180,500 |
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| Liabilities and Equity | | | |
| Current Liabilities: | | | |
| Accounts payable and accrued expenses related to trade creditors | $ | 6,976 |
| | $ | 6,915 |
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| Accrued participations and residuals | 1,811 |
| | 1,726 |
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| Deferred revenue | 1,572 |
| | 1,132 |
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| Accrued expenses and other current liabilities | 5,849 |
| | 6,282 |
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| Current portion of long-term debt | 5,241 |
| | 5,480 |
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| Total current liabilities | 21,449 |
| | 21,535 |
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| Long-term debt, less current portion | 59,720 |
| | 55,566 |
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| Deferred income taxes | 35,602 |
| | 34,854 |
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| Other noncurrent liabilities | 10,914 |
| | 10,925 |
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| Commitments and contingencies (Note 10) |
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| Redeemable noncontrolling interests and redeemable subsidiary preferred stock | 1,353 |
| | 1,446 |
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| 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, 5,537,118,483 and 5,614,950,039; outstanding, 4,664,327,455 and 4,742,159,011 | 55 |
| | 56 |
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| Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375 | — |
| | — |
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| Additional paid-in capital | 37,529 |
| | 38,230 |
|
| Retained earnings | 24,979 |
| | 23,076 |
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| Treasury stock, 872,791,028 Class A common shares | (7,517 | ) | | (7,517 | ) |
| Accumulated other comprehensive income (loss) | 381 |
| | 98 |
|
| Total Comcast Corporation shareholders’ equity | 55,427 |
| | 53,943 |
|
| Noncontrolling interests | 836 |
| | 2,231 |
|
| Total equity | 56,263 |
| | 56,174 |
|
| Total liabilities and equity | $ | 185,301 |
| | $ | 180,500 |
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| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions, except per share data) | 2021 | | 2020 | | 2021 | | 2020 |
| Revenue | $ | 28,546 | | | $ | 23,715 | | | $ | 55,751 | | | $ | 50,324 | |
| Costs and Expenses: | | | | | | | |
| Programming and production | 9,256 | | | 6,817 | | | 18,175 | | | 15,118 | |
| Other operating and administrative | 8,549 | | | 7,646 | | | 16,818 | | | 15,900 | |
| Advertising, marketing and promotion | 1,851 | | | 1,341 | | | 3,467 | | | 3,279 | |
| Depreciation | 2,113 | | | 2,099 | | | 4,231 | | | 4,206 | |
| Amortization | 1,270 | | | 1,165 | | | 2,514 | | | 2,322 | |
| | | | | | | |
| Total costs and expenses | 23,039 | | | 19,068 | | | 45,205 | | | 40,825 | |
| Operating income | 5,507 | | | 4,647 | | | 10,546 | | | 9,499 | |
| Interest expense | (1,093) | | | (1,112) | | | (2,112) | | | (2,324) | |
| Investment and other income (loss), net | 1,216 | | | 420 | | | 1,607 | | | (296) | |
| Income before income taxes | 5,630 | | | 3,955 | | | 10,042 | | | 6,879 | |
| Income tax expense | (2,000) | | | (946) | | | (3,119) | | | (1,646) | |
| Net income | 3,630 | | | 3,009 | | | 6,922 | | | 5,233 | |
| Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (108) | | | 21 | | | (145) | | | 98 | |
| Net income attributable to Comcast Corporation | $ | 3,738 | | | $ | 2,988 | | | $ | 7,067 | | | $ | 5,135 | |
| Basic earnings per common share attributable to Comcast Corporation shareholders | $ | 0.81 | | | $ | 0.65 | | | $ | 1.54 | | | $ | 1.12 | |
| Diluted earnings per common share attributable to Comcast Corporation shareholders | $ | 0.80 | | | $ | 0.65 | | | $ | 1.51 | | | $ | 1.11 | |
| | | | | | | |
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
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| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions, except per share data) | 2017 | | 2016 | | 2017 | | 2016 |
| Revenue | $ | 20,983 |
| | $ | 21,319 |
| | $ | 62,611 |
| | $ | 59,378 |
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| Costs and Expenses: | | | | |
| |
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| Programming and production | 6,077 |
| | 7,003 |
| | 18,492 |
| | 17,926 |
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| Other operating and administrative | 6,423 |
| | 5,996 |
| | 18,310 |
| | 17,285 |
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| Advertising, marketing and promotion | 1,553 |
| | 1,485 |
| | 4,748 |
| | 4,510 |
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| Depreciation | 1,991 |
| | 1,865 |
| | 5,876 |
| | 5,518 |
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| Amortization | 589 |
| | 530 |
| | 1,747 |
| | 1,544 |
|
| Other operating gains | (442 | ) | | — |
| | (442 | ) | | — |
|
| | 16,191 |
| | 16,879 |
| | 48,731 |
| | 46,783 |
|
| Operating income | 4,792 |
| | 4,440 |
| | 13,880 |
| | 12,595 |
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| Other Income (Expense): | | | | | | | |
| Interest expense | (766 | ) | | (751 | ) | | (2,279 | ) | | (2,186 | ) |
| Investment income (loss), net | 82 |
| | 80 |
| | 205 |
| | 168 |
|
| Equity in net income (losses) of investees, net | (39 | ) | | (34 | ) | | 12 |
| | (64 | ) |
| Other income (expense), net | 27 |
| | (11 | ) | | 82 |
| | 104 |
|
| | (696 | ) | | (716 | ) | | (1,980 | ) | | (1,978 | ) |
| Income before income taxes | 4,096 |
| | 3,724 |
| | 11,900 |
| | 10,617 |
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| Income tax expense | (1,413 | ) | | (1,400 | ) | | (4,035 | ) | | (3,989 | ) |
| Net income | 2,683 |
| | 2,324 |
| | 7,865 |
| | 6,628 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | (33 | ) | | (87 | ) | | (136 | ) | | (229 | ) |
| Net income attributable to Comcast Corporation | $ | 2,650 |
| | $ | 2,237 |
| | $ | 7,729 |
| | $ | 6,399 |
|
| Basic earnings per common share attributable to Comcast Corporation shareholders | $ | 0.56 |
| | $ | 0.47 |
| | $ | 1.64 |
| | $ | 1.32 |
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| Diluted earnings per common share attributable to Comcast Corporation shareholders | $ | 0.55 |
| | $ | 0.46 |
| | $ | 1.61 |
| | $ | 1.31 |
|
| Dividends declared per common share | $ | 0.1575 |
| | $ | 0.1375 |
| | $ | 0.4725 |
| | $ | 0.4125 |
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| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Net income | $ | 3,630 | | | $ | 3,009 | | | $ | 6,922 | | | $ | 5,233 | |
| Currency translation adjustments, net of deferred taxes of $(17), $(9), $(109) and $(16) | 61 | | | (74) | | | 26 | | | (2,231) | |
| | | | | | | |
| Cash flow hedges: | | | | | | | |
| Deferred gains (losses), net of deferred taxes of $2, $7, $(17) and $17 | (14) | | | (27) | | | 105 | | | 27 | |
| | | | | | | |
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| | | | | | | |
| Realized (gains) losses reclassified to net income, net of deferred taxes of $0, $4, $0 and $21 | 4 | | | (21) | | | 4 | | | (127) | |
| Employee benefit obligations and other, net of deferred taxes of $3, $3, $5 and $6 | (7) | | | (11) | | | (17) | | | (18) | |
| | | | | | | |
| Comprehensive income | 3,674 | | | 2,876 | | | 7,040 | | | 2,884 | |
| Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (108) | | | 21 | | | (145) | | | 98 | |
| Less: Other comprehensive income (loss) attributable to noncontrolling interests | 24 | | | 2 | | | 10 | | | (23) | |
| Comprehensive income (loss) attributable to Comcast Corporation | $ | 3,758 | | | $ | 2,853 | | | $ | 7,175 | | | $ | 2,809 | |
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statement of Comprehensive IncomeCash Flows
(Unaudited)
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| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Net income | $ | 2,683 |
| | $ | 2,324 |
| | $ | 7,865 |
| | $ | 6,628 |
|
| Unrealized gains (losses) on marketable securities, net of deferred taxes of $35, $—, $26 and $(1) | (59 | ) | | (1 | ) | | (42 | ) | | 2 |
|
| Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(9), $(7), ($16) and $46 | 16 |
| | 12 |
| | 28 |
| | (79 | ) |
| Amounts reclassified to net income: | | | | | | | |
| Realized (gains) losses on marketable securities, net of deferred taxes of $—, $—, $— and $1 | (1 | ) | | — |
| | (1 | ) | | (1 | ) |
| Realized (gains) losses on cash flow hedges, net of deferred taxes of $7, $(6), $15 and $(42) | (12 | ) | | 11 |
| | (26 | ) | | 73 |
|
| Employee benefit obligations, net of deferred taxes of $3, $—, $(30) and $(2) | (6 | ) | | — |
| | 51 |
| | 2 |
|
| Currency translation adjustments, net of deferred taxes of $(8), $(6), $(47) and $(122) | 20 |
| | 45 |
| | 166 |
| | 532 |
|
| Comprehensive income | 2,641 |
| | 2,391 |
| | 8,041 |
| | 7,157 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | (33 | ) | | (87 | ) | | (136 | ) | | (229 | ) |
| Other comprehensive (income) loss attributable to noncontrolling interests | (5 | ) | | (34 | ) | | (87 | ) | | (321 | ) |
| Comprehensive income attributable to Comcast Corporation | $ | 2,603 |
| | $ | 2,270 |
| | $ | 7,818 |
| | $ | 6,607 |
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| | | | | | | | | | | |
| | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 |
| Operating Activities | | | |
| Net income | $ | 6,922 | | | $ | 5,233 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 6,745 | | | 6,528 | |
| Share-based compensation | 711 | | | 621 | |
| Noncash interest expense (income), net | 210 | | | 352 | |
| Net (gain) loss on investment activity and other | (1,403) | | | 399 | |
| Deferred income taxes | 1,297 | | | (84) | |
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | | | |
| Current and noncurrent receivables, net | 137 | | | 900 | |
| Film and television costs, net | 837 | | | 573 | |
| Accounts payable and accrued expenses related to trade creditors | 299 | | | (879) | |
| Other operating assets and liabilities | (398) | | | 824 | |
| Net cash provided by operating activities | 15,357 | | | 14,467 | |
| Investing Activities | | | |
| Capital expenditures | (4,003) | | | (3,957) | |
| Cash paid for intangible assets | (1,283) | | | (1,219) | |
| | | |
| Construction of Universal Beijing Resort | (704) | | | (708) | |
| | | |
| Acquisitions, net of cash acquired | (168) | | | (198) | |
| Proceeds from sales of businesses and investments | 396 | | | 2,042 | |
| Purchases of investments | (86) | | | (471) | |
| | | |
| Other | 217 | | | 33 | |
| Net cash provided by (used in) investing activities | (5,631) | | | (4,478) | |
| Financing Activities | | | |
| | | |
| Proceeds from borrowings | 383 | | | 13,612 | |
| | | |
| Repurchases and repayments of debt | (5,785) | | | (10,712) | |
| Repurchases of common stock under repurchase program and employee plans | (957) | | | (269) | |
| Dividends paid | (2,230) | | | (2,028) | |
| | | |
| Other | (475) | | | (2,128) | |
| Net cash provided by (used in) financing activities | (9,064) | | | (1,525) | |
| Impact of foreign currency on cash, cash equivalents and restricted cash | (12) | | | (77) | |
| Increase (decrease) in cash, cash equivalents and restricted cash | 650 | | | 8,387 | |
| Cash, cash equivalents and restricted cash, beginning of period | 11,768 | | | 5,589 | |
| Cash, cash equivalents and restricted cash, end of period | $ | 12,418 | | | $ | 13,976 | |
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statement of Cash FlowsBalance Sheet
(Unaudited)
|
| | | | | | | |
| | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 |
| Net cash provided by operating activities | $ | 15,961 |
| | $ | 13,989 |
|
| Investing Activities | | | |
| Capital expenditures | (6,839 | ) | | (6,562 | ) |
| Cash paid for intangible assets | (1,240 | ) | | (1,163 | ) |
| Acquisitions and construction of real estate properties | (325 | ) | | (303 | ) |
| Acquisitions, net of cash acquired | (429 | ) | | (3,904 | ) |
| Proceeds from sales of investments | 120 |
| | 188 |
|
| Purchases of investments | (2,064 | ) | | (618 | ) |
| Deposits | — |
| | (1,748 | ) |
| Other | 750 |
| | (42 | ) |
| Net cash provided by (used in) investing activities | (10,027 | ) | | (14,152 | ) |
| Financing Activities | | | |
| Proceeds from (repayments of) short-term borrowings, net | (2,807 | ) | | 610 |
|
| Proceeds from borrowings | 11,460 |
| | 9,231 |
|
| Repurchases and repayments of debt | (5,021 | ) | | (2,994 | ) |
| Repurchases of common stock under repurchase program and employee plans | (4,212 | ) | | (4,061 | ) |
| Dividends paid | (2,147 | ) | | (1,944 | ) |
| Purchase of Universal Studios Japan noncontrolling interests | (2,299 | ) | | — |
|
| Issuances of common stock | — |
| | 23 |
|
| Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock | (198 | ) | | (194 | ) |
| Other | 103 |
| | 4 |
|
| Net cash provided by (used in) financing activities | (5,121 | ) | | 675 |
|
| Increase (decrease) in cash and cash equivalents | 813 |
| | 512 |
|
| Cash and cash equivalents, beginning of period | 3,301 |
| | 2,295 |
|
| Cash and cash equivalents, end of period | $ | 4,114 |
| | $ | 2,807 |
|
| | | | | | | | | | | |
| (in millions, except share data) | June 30,
2021 | | December 31,
2020 |
| Assets | | | |
| Current Assets: | | | |
| Cash and cash equivalents | $ | 12,378 | | | $ | 11,740 | |
| Receivables, net | 11,110 | | | 11,466 | |
| Other current assets | 3,558 | | | 3,535 | |
| Total current assets | 27,046 | | | 26,741 | |
| Film and television costs | 12,372 | | | 13,340 | |
| Investments | 8,903 | | | 7,820 | |
| Investment securing collateralized obligation | 564 | | | 447 | |
| Property and equipment, net of accumulated depreciation of $55,217 and $54,388 | 52,769 | | | 51,995 | |
| Goodwill | 70,429 | | | 70,669 | |
| Franchise rights | 59,365 | | | 59,365 | |
| Other intangible assets, net of accumulated amortization of $21,976 and $19,825 | 34,321 | | | 35,389 | |
| Other noncurrent assets, net | 11,235 | | | 8,103 | |
| Total assets | $ | 277,004 | | | $ | 273,869 | |
| Liabilities and Equity | | | |
| Current Liabilities: | | | |
| Accounts payable and accrued expenses related to trade creditors | $ | 11,672 | | | $ | 11,364 | |
| Accrued participations and residuals | 1,713 | | | 1,706 | |
| Deferred revenue | 3,566 | | | 2,963 | |
| Accrued expenses and other current liabilities | 8,956 | | | 9,617 | |
| Current portion of long-term debt | 3,407 | | | 3,146 | |
| Total current liabilities | 29,314 | | | 28,796 | |
| Long-term debt, less current portion | 95,175 | | | 100,614 | |
| Collateralized obligation | 5,169 | | | 5,168 | |
| Deferred income taxes | 29,525 | | | 28,051 | |
| Other noncurrent liabilities | 20,775 | | | 18,222 | |
| Commitments and contingencies | 0 | | 0 |
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock | 530 | | | 1,280 | |
| Equity: | | | |
| Preferred stock—authorized, 20,000,000 shares; issued, 0 | 0 | | | 0 | |
| Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 5,453,083,882 and 5,444,002,825; outstanding, 4,580,292,854 and 4,571,211,797 | 55 | | | 54 | |
| Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375 | 0 | | | 0 | |
| Additional paid-in capital | 40,046 | | | 39,464 | |
| Retained earnings | 60,359 | | | 56,438 | |
| Treasury stock, 872,791,028 Class A common shares | (7,517) | | | (7,517) | |
| Accumulated other comprehensive income (loss) | 1,992 | | | 1,884 | |
| Total Comcast Corporation shareholders’ equity | 94,935 | | | 90,323 | |
| Noncontrolling interests | 1,581 | | | 1,415 | |
| Total equity | 96,516 | | | 91,738 | |
| Total liabilities and equity | $ | 277,004 | | | $ | 273,869 | |
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions, except per share data) | | (in millions, except per share data) | 2021 | 2020 | | 2021 | 2020 |
| Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock | | Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock | |
| Balance, beginning of period | | Balance, beginning of period | $ | 546 | | $ | 1,259 | | | $ | 1,280 | | $ | 1,372 | |
| Redemption of subsidiary preferred stock | | Redemption of subsidiary preferred stock | 0 | | 0 | | | (725) | | 0 | |
| Contributions from (distributions to) noncontrolling interests, net | | Contributions from (distributions to) noncontrolling interests, net | (13) | | (10) | | | (40) | | (37) | |
| Other | | Other | 0 | | (12) | | | (10) | | (165) | |
| Net income (loss) | | Net income (loss) | (3) | | 19 | | | 24 | | 86 | |
| Balance, end of period | | Balance, end of period | $ | 530 | | $ | 1,256 | | | $ | 530 | | $ | 1,256 | |
| | 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 | B | |
| Balance, December 31, 2015 | $ | 1,221 |
| $ | 57 |
| $ | — |
| $ | 38,490 |
| $ | 21,413 |
| $ | (7,517 | ) | $ | (174 | ) | $ | 1,709 |
| $ | 53,978 |
| |
| Class A Common Stock | | Class A Common Stock | |
| Balance, beginning of period | | Balance, beginning of period | $ | 55 | | $ | 54 | | | $ | 54 | | $ | 54 | |
| Issuances of common stock under employee plans | | Issuances of common stock under employee plans | 0 | | 0 | | | 1 | | 0 | |
| | Balance, end of period | | Balance, end of period | $ | 55 | | $ | 54 | | | $ | 55 | | $ | 54 | |
| | Additional Paid-In Capital | | Additional Paid-In Capital | |
| Balance, beginning of period | | Balance, beginning of period | $ | 39,744 | | $ | 38,597 | | | $ | 39,464 | | $ | 38,447 | |
| | Stock compensation plans | | | | 582 |
| | 582 |
| Stock compensation plans | 274 | | 261 | | | 570 | | 473 | |
| Repurchases of common stock under repurchase program and employee plans | | (1 | ) | | (758 | ) | (3,303 | ) | | (4,062 | ) | Repurchases of common stock under repurchase program and employee plans | (43) | | (10) | | | (131) | | (103) | |
| Employee stock purchase plans | | | | 117 |
| | 117 |
| Employee stock purchase plans | 76 | | 79 | | | 139 | | 133 | |
| Other | | Other | (5) | | 9 | | | 5 | | (14) | |
| Balance, end of period | | Balance, end of period | $ | 40,046 | | $ | 38,936 | | | $ | 40,046 | | $ | 38,936 | |
| | Retained Earnings | | Retained Earnings | |
| Balance, beginning of period | | Balance, beginning of period | $ | 58,321 | | $ | 51,516 | | | $ | 56,438 | | $ | 50,695 | |
| Cumulative effects of adoption of accounting standards | | Cumulative effects of adoption of accounting standards | 0 | | 0 | | | 0 | | (124) | |
| Repurchases of common stock under repurchase program and employee plans | | Repurchases of common stock under repurchase program and employee plans | (543) | | (26) | | | (832) | | (168) | |
| Dividends declared | | | | (1,999 | ) | | (1,999 | ) | Dividends declared | (1,156) | | (1,061) | | | (2,317) | | (2,125) | |
| Other | | Other | 0 | | 3 | | | 4 | | 7 | |
| Net income (loss) | | Net income (loss) | 3,738 | | 2,988 | | | 7,067 | | 5,135 | |
| Balance, end of period | | Balance, end of period | $ | 60,359 | | $ | 53,420 | | | $ | 60,359 | | $ | 53,420 | |
| | Treasury Stock at Cost | | Treasury Stock at Cost | |
| Balance, beginning of period | | Balance, beginning of period | $ | (7,517) | | $ | (7,517) | | | $ | (7,517) | | $ | (7,517) | |
| Balance, end of period | | Balance, end of period | $ | (7,517) | | $ | (7,517) | | | $ | (7,517) | | $ | (7,517) | |
| | Accumulated Other Comprehensive Income (Loss) | | Accumulated Other Comprehensive Income (Loss) | |
| Balance, beginning of period | | Balance, beginning of period | $ | 1,972 | | $ | (1,144) | | | $ | 1,884 | | $ | 1,047 | |
| | Other comprehensive income (loss) | | Other comprehensive income (loss) | 20 | | (135) | | | 108 | | (2,326) | |
| Balance, end of period | | Balance, end of period | $ | 1,992 | | $ | (1,279) | | | $ | 1,992 | | $ | (1,279) | |
| | Noncontrolling Interests | | Noncontrolling Interests | |
| Balance, beginning of period | | Balance, beginning of period | $ | 1,525 | | $ | 1,277 | | | $ | 1,415 | | $ | 1,148 | |
| Other comprehensive income (loss) | | | | 208 |
| 321 |
| 529 |
| Other comprehensive income (loss) | 24 | | 2 | | | 10 | | (12) | |
| Contributions from (distributions to) noncontrolling interests, net | (20 | ) | | | (99 | ) | (99 | ) | Contributions from (distributions to) noncontrolling interests, net | 135 | | (105) | | | 324 | | 15 | |
| Other | 62 |
| | | (33 | ) | | 245 |
| 212 |
| Other | 2 | | 1 | | | 1 | | 14 | |
| Net income (loss) | 63 |
| | | 6,399 |
| | 166 |
| 6,565 |
| Net income (loss) | (105) | | 2 | | | (169) | | 12 | |
| Balance, September 30, 2016 | $ | 1,326 |
| $ | 56 |
| $ | — |
| $ | 38,398 |
| $ | 22,510 |
| $ | (7,517 | ) | $ | 34 |
| $ | 2,342 |
| $ | 55,823 |
| |
| Balance, December 31, 2016 | $ | 1,446 |
| $ | 56 |
| $ | — |
| $ | 38,230 |
| $ | 23,076 |
| $ | (7,517 | ) | $ | 98 |
| $ | 2,231 |
| $ | 56,174 |
| |
| Stock compensation plans | | | 440 |
| | 440 |
| |
| Repurchases of common stock under repurchase program and employee plans | | (1 | ) | | (633 | ) | (3,587 | ) | | (4,221 | ) | |
| Employee stock purchase plans | | | 140 |
| | 140 |
| |
| Dividends declared | | | (2,239 | ) | | (2,239 | ) | |
| Other comprehensive income (loss) | | | 89 |
| 87 |
| 176 |
| |
| Contributions from (distributions to) noncontrolling interests, net | (31 | ) | | (81 | ) | (81 | ) | |
| Purchase of Universal Studios Japan noncontrolling interests | | | (696 | ) | | 194 |
| (1,736 | ) | (2,238 | ) | |
| Other | (114 | ) | | 48 |
| | 251 |
| 299 |
| |
| Net income (loss) | 52 |
| | 7,729 |
| | 84 |
| 7,813 |
| |
| Balance, September 30, 2017 | $ | 1,353 |
| $ | 55 |
| $ | — |
| $ | 37,529 |
| $ | 24,979 |
| $ | (7,517 | ) | $ | 381 |
| $ | 836 |
| $ | 56,263 |
| |
| Balance, end of period | | Balance, end of period | $ | 1,581 | | $ | 1,177 | | | $ | 1,581 | | $ | 1,177 | |
| | Total equity | | Total equity | $ | 96,516 | | $ | 84,791 | | | $ | 96,516 | | $ | 84,791 | |
| | Cash dividends declared per common share | | Cash dividends declared per common share | $ | 0.25 | | $ | 0.23 | | | $ | 0.50 | | $ | 0.46 | |
See accompanying notes to condensed consolidated financial statements.
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, cash flows and 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 20162020 Annual Report on Form 10-K.
Stock Split
On January 24, 2017, our Board of Directors approved a two-for-one stock split in10-K and the form of a 100% stock dividend that was distributed on February 17, 2017 to shareholders of record as of February 8, 2017. The stock split was in the form of one additional share for every share held and was payable in shares of Class A common stock on the existing Class A common stock and Class B common stock. All share-based data, including the number of shares outstanding and per share amounts, have been adjusted to reflect the stock split for all periods presented.notes within this Form 10-Q.
Reclassifications
Reclassifications have been made to our notes to condensed consolidated financial statements for the prior year periodsperiod to conform to classifications used in 2017.2021. See Note 2 for a discussion of the changes in our presentation of segment operating results.
Note 2: Recent Accounting Pronouncements
Revenue RecognitionSegment Information
In May 2014, the Financial Accounting Standards Board (“FASB”) updatedfirst quarter of 2021, we changed our presentation of segment operating results. We now present our operations in 5 reportable business segments: (1) Comcast Cable in 1 reportable business segment, referred to as Cable Communications; (2) NBCUniversal in 3 reportable business segments: Media, Studios and Theme Parks (collectively, the accounting guidance related to revenue recognition.“NBCUniversal segments”); and (3) Sky in 1 reportable business segment. The updated accounting guidance provideschanges reflect a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenuereorganized operating structure in NBCUniversal’s television and by reducingstreaming businesses and primarily include: (i) the numbercombination of standards to which an entity has to refer. The updated accounting guidance is effective for us asNBCUniversal’s television networks (previously reported in Cable Networks and Broadcast Television) with the operations of January 1, 2018.
We have substantially completedPeacock (previously reported in Corporate and Other) in the review of our revenue arrangementsMedia segment, and do not currently expect that the adoption of the new standard will have a material impact on our financial position or results of operations. Upon adoption, we anticipate implementing certain changes in(ii) the presentation of revenueNBCUniversal’s television studio production operations (previously reported in Cable Networks and expenses, including changes relatedBroadcast Television) with the studio operations of Filmed Entertainment in the Studios segment. Prior periods have been adjusted to the allocationreflect this presentation.
Cable Communications is a leading provider of revenue among the cablebroadband, video, voice, wireless, and security and automation services included in a bundle that ourto residential customers purchase at a discount. We also expect that the new standard will impact the timing of recognition for (1) our Cable Communications segment’s installation revenue and commission expenses, which will be recognized as revenue and costs over a period of time instead of immediately, and (2) our Cable Networks, Broadcast Television and Filmed Entertainment segments’ content licensing revenue associated with renewals or extensions of existing program licensing agreements, which will be recognized as revenue when the licensed content becomes available under the renewal or extension insteadXfinity brand; we also provide these and other services to business customers and sell advertising. Revenue is generated primarily from residential and business customers that subscribe to our services, which are marketed individually and as bundled services, and from the sale of whenadvertising.
Media consists primarily of NBCUniversal’s television and streaming platforms, including national, regional and international cable networks; the agreementNBC and Telemundo broadcast networks; NBC and Telemundo owned local broadcast television stations; Peacock, our direct-to-consumer streaming service; and various digital properties. Revenue is renewed or extended.generated primarily from the sale of advertising on our television networks, Peacock and digital properties; and the fees received from the distribution of our television network programming to traditional and virtual multichannel video providers and from NBC-affiliated and Telemundo-affiliated local broadcast television stations. Media also generates other revenue from various digital properties.
Studios consists primarily of NBCUniversal’s film and television studio production and distribution operations. Revenue is generated primarily from the licensing of our owned film and television content to broadcast, cable and premium networks, and to direct-to-consumer streaming service providers, as well as through video on demand and pay-per-view services provided by multichannel video providers and over-the-top service providers; from the worldwide distribution of our produced and acquired films for exhibition in movie theaters; and from the sale of owned content on DVDs, Blu-ray discs and through digital distribution services.
Theme Parks consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. In addition, we are developing a theme park in Beijing, China along with a consortium of Chinese state-owned companies, and an additional theme park in Orlando, Florida. Revenue is generated primarily from guest spending at our Universal theme parks.
Sky is one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business, providing video, broadband, voice and wireless phone services, and a content business, operating entertainment networks, the updated guidance requires additional disclosures regardingSky News broadcast network and Sky Sports networks. Revenue is generated primarily from residential and business customers that
subscribe to our services; from the nature, timingdistribution of Sky’s owned television networks on third-party platforms and uncertaintythe licensing of owned and acquired programming to third-party video providers; and from the sale of advertising.
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania, and other business initiatives.
We use Adjusted EBITDA to evaluate the profitability of our revenue transactions. We intend to adoptoperating segments and the provisionscomponents of the guidance using the full retrospective method, under which we will adjust any prior periods presented to reflect the updated guidance.
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 in the year the guidance is adopted with certain exceptions. If we had adopted the provisions of the updated guidance as of January 1, 2017 for our equity investments classified as available-for-sale securities, primarily our investment in Snap Inc. (see Note 6), net income attributable to Comcast Corporation would have decreased for the three and nine months ended September 30, 2017excluded from Adjusted EBITDA are not separately evaluated. Our financial data by $63 million and $47 million, respectively. We are currentlyreportable segment is presented in the processtables below.
| | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2021 |
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital
Expenditures | Cash Paid for Intangible Assets |
| Cable Communications | $ | 16,002 | | $ | 7,073 | | $ | 1,950 | | $ | 1,695 | | $ | 337 | |
| NBCUniversal | | | | | |
| Media | 5,148 | | 1,378 | | 254 | | 19 | | 42 | |
| Studios | 2,224 | | 156 | | 12 | | 1 | | 5 | |
| Theme Parks | 1,095 | | 221 | | 195 | | 100 | | 8 | |
| Headquarters and Other | 22 | | (186) | | 125 | | 62 | | 30 | |
Eliminations(a) | (534) | | (15) | | 0 | | 0 | | 0 | |
| NBCUniversal | 7,955 | | 1,553 | | 586 | | 182 | | 86 | |
| Sky | 5,220 | | 560 | | 826 | | 184 | | 211 | |
| Corporate and Other | 92 | | (261) | | 21 | | 83 | | 37 | |
Eliminations(a) | (723) | | 2 | | 0 | | 0 | | 0 | |
| Comcast Consolidated | $ | 28,546 | | $ | 8,927 | | $ | 3,383 | | $ | 2,144 | | $ | 671 | |
| | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2020 |
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital
Expenditures | Cash Paid for Intangible Assets |
| Cable Communications | $ | 14,428 | | $ | 6,176 | | $ | 1,937 | | $ | 1,452 | | $ | 326 | |
| NBCUniversal | | | | | |
| Media | 4,096 | | 1,636 | | 244 | | 29 | | 49 | |
| Studios | 2,052 | | 323 | | 15 | | 2 | | 2 | |
| Theme Parks | 136 | | (393) | | 191 | | 295 | | 16 | |
| Headquarters and Other | 11 | | (82) | | 129 | | 54 | | 37 | |
Eliminations(a) | (580) | | (104) | | 0 | | 0 | | 0 | |
| NBCUniversal | 5,715 | | 1,380 | | 579 | | 380 | | 104 | |
| Sky | 4,079 | | 749 | | 720 | | 215 | | 170 | |
| Corporate and Other | 40 | | (389) | | 28 | | 29 | | 1 | |
Eliminations(a) | (547) | | 11 | | 0 | | 0 | | 0 | |
| Comcast Consolidated | $ | 23,715 | | $ | 7,927 | | $ | 3,264 | | $ | 2,076 | | $ | 601 | |
| | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2021 |
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets |
| Cable Communications | $ | 31,807 | | $ | 13,903 | | $ | 3,880 | | $ | 3,065 | | $ | 652 | |
| NBCUniversal | | | | | |
| Media | 10,184 | | 2,851 | | 501 | | 29 | | 75 | |
| Studios | 4,620 | | 653 | | 25 | | 2 | | 7 | |
| Theme Parks | 1,714 | | 159 | | 402 | | 226 | | 15 | |
| Headquarters and Other | 38 | | (395) | | 241 | | 98 | | 57 | |
Eliminations(a) | (1,576) | | (225) | | 0 | | 0 | | 0 | |
| NBCUniversal | 14,980 | | 3,043 | | 1,168 | | 354 | | 153 | |
| Sky | 10,217 | | 924 | | 1,640 | | 455 | | 412 | |
| Corporate and Other | 181 | | (541) | | 57 | | 128 | | 65 | |
Eliminations(a) | (1,434) | | 11 | | 0 | | 0 | | 0 | |
| Comcast Consolidated | $ | 55,751 | | $ | 17,339 | | $ | 6,745 | | $ | 4,003 | | $ | 1,283 | |
Leases | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2020 |
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets |
| Cable Communications | $ | 29,346 | | $ | 12,252 | | $ | 3,883 | | $ | 2,721 | | $ | 682 | |
| NBCUniversal | | | | | |
| Media | 8,974 | | 3,165 | | 487 | | 60 | | 87 | |
| Studios | 4,461 | | 623 | | 32 | | 6 | | 3 | |
| Theme Parks | 1,061 | | (306) | | 381 | | 591 | | 31 | |
| Headquarters and Other | 20 | | (303) | | 245 | | 100 | | 78 | |
Eliminations(a) | (1,072) | | (110) | | 0 | | 0 | | 0 | |
| NBCUniversal | 13,444 | | 3,069 | | 1,145 | | 757 | | 199 | |
| Sky | 8,596 | | 1,300 | | 1,438 | | 412 | | 336 | |
| Corporate and Other | 160 | | (582) | | 62 | | 67 | | 2 | |
Eliminations(a) | (1,222) | | 18 | | 0 | | 0 | | 0 | |
| Comcast Consolidated | $ | 50,324 | | $ | 16,057 | | $ | 6,528 | | $ | 3,957 | | $ | 1,219 | |
In February 2016, the FASB updated the accounting guidance related
(a)Included in Eliminations are transactions that our segments enter into with one another. Our segments generally report transactions with one another as if they were stand-alone businesses in accordance with GAAP, and these transactions are eliminated in consolidation. When multiple segments enter into transactions to leases. The updated accounting guidance requires lesseesprovide products and services to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. The asset and liability are initially measuredthird parties, revenue is generally allocated to our segments based on the present value of committed lease payments. 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.relative value. The most significant changetransactions between our segments include distribution revenue at Media for us relatesfees received from Cable Communications for the sale of cable network programming and under retransmission consent agreements; content licensing revenue at Studios for licenses of owned content to Media and Sky; and advertising revenue at Media and Cable Communications. Revenue for licenses of content from Studios to Media and Sky is generally recognized at a point in time, consistent with the presentationrecognition of transactions with third parties, when the incomecontent is delivered and withholding tax consequencesmade available for use. The costs of share-based compensationthese licenses at Media and Sky are recognized as the content is used over the license period. The difference in timing of recognition between segments results in an Adjusted EBITDA impact in eliminations, as the profits (losses) on these transactions are deferred in our consolidated financial statements. Amongresults and recognized as the changes,content is used over the updated guidance requires thatlicense period. Under the excess income tax benefits or deficiencies that arise whenprevious segment structure, revenue for licenses of content between our previous NBCUniversal segments was recognized over time to correspond with the tax consequencesamortization of share-based compensation differthe costs of licensed content over the license period.
A summary of revenue for each of our segments resulting from amounts previously recognizedtransactions with other segments and eliminated in consolidation is presented in the statementtable below.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Cable Communications | $ | 47 | | | $ | 41 | | | $ | 93 | | | $ | 82 | |
| NBCUniversal | | | | | | | |
| Media | 543 | | | 426 | | | 1,082 | | | 967 | |
| Studios | 589 | | | 625 | | | 1,678 | | | 1,165 | |
| Theme Parks | 0 | | | 0 | | | 1 | | | 0 | |
| Headquarters and Other | 17 | | | 4 | | | 29 | | | 7 | |
| Sky | 15 | | | 7 | | | 23 | | | 9 | |
| Corporate and Other | 47 | | | 24 | | | 105 | | | 64 | |
| Total intersegment revenue | $ | 1,257 | | | $ | 1,127 | | | $ | 3,010 | | | $ | 2,294 | |
| | | | | | | |
(b)We use Adjusted EBITDA as the measure of profit or loss for our operating segments. From time to time we may report the impact of certain events, gains, losses or other charges related to our operating segments (such as certain costs incurred in response to COVID-19, including severance charges), within Corporate and Other. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated income be recognized asbefore income tax benefit or expensetaxes is presented in the statementtable below.
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Adjusted EBITDA | $ | 8,927 | | | $ | 7,927 | | | $ | 17,339 | | | $ | 16,057 | |
| | | | | | | |
| Adjustments | (36) | | | (16) | | | (48) | | | (30) | |
| Depreciation | (2,113) | | | (2,099) | | | (4,231) | | | (4,206) | |
| Amortization | (1,270) | | | (1,165) | | | (2,514) | | | (2,322) | |
| | | | | | | |
| | | | | | | |
| Interest expense | (1,093) | | | (1,112) | | | (2,112) | | | (2,324) | |
| Investment and other income (loss), net | 1,216 | | | 420 | | | 1,607 | | | (296) | |
| | | | | | | |
| Income before income taxes | $ | 5,630 | | | $ | 3,955 | | | $ | 10,042 | | | $ | 6,879 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Adjustments represent the impacts of income rather than as additional paid-in capitalcertain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including Sky transaction-related costs and costs related to our investment portfolio.
Goodwill by Segment
The changes in the balance sheet. The guidance also statescarrying amount of goodwill by segment for the six months ended June 30, 2021 are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | NBCUniversal | | | |
| (in billions) | Cable
Communications | Cable
Networks | Broadcast
Television | Filmed
Entertainment | Media | Studios | Theme
Parks | Sky | Corporate
and Other | Total |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Balance, December 31, 2020 | $ | 15.3 | | $ | 14.0 | | $ | 1.1 | | $ | 3.3 | | $ | 0 | | $ | 0 | | $ | 7.0 | | $ | 30.0 | | $ | 0 | | $ | 70.7 | |
| Segment change | 0 | | (14.0) | | (1.1) | | (3.3) | | 14.7 | | 3.7 | | 0 | | 0 | | 0 | | 0 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Foreign currency translation and other | 0.1 | | 0 | | 0 | | 0 | | 0 | | 0 | | (0.4) | | 0.1 | | 0 | | (0.2) | |
| Balance, June 30, 2021 | $ | 15.4 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 14.7 | | $ | 3.7 | | $ | 6.6 | | $ | 30.0 | | $ | 0 | | $ | 70.4 | |
| | | | | | | | | | |
Note 3: Revenue
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Residential: | | | | | | | |
| Broadband | $ | 5,717 | | | $ | 5,000 | | | $ | 11,317 | | | $ | 10,001 | |
| Video | 5,554 | | | 5,415 | | | 11,177 | | | 11,047 | |
| Voice | 870 | | | 877 | | | 1,741 | | | 1,776 | |
| Wireless | 556 | | | 326 | | | 1,069 | | | 669 | |
| Business services | 2,202 | | | 2,004 | | | 4,369 | | | 4,047 | |
| Advertising | 679 | | | 428 | | | 1,296 | | | 985 | |
| Other | 425 | | | 378 | | | 838 | | | 821 | |
| Total Cable Communications | 16,002 | | | 14,428 | | | 31,807 | | | 29,346 | |
| | | | | | | |
| Advertising | 2,189 | | | 1,648 | | | 4,282 | | | 3,815 | |
| Distribution | 2,452 | | | 2,060 | | | 4,947 | | | 4,347 | |
| Other | 507 | | | 388 | | | 955 | | | 812 | |
| Total Media | 5,148 | | | 4,096 | | | 10,184 | | | 8,974 | |
| | | | | | | |
| Content licensing | 1,781 | | | 1,746 | | | 3,855 | | | 3,565 | |
| Theatrical | 198 | | | 7 | | | 237 | | | 323 | |
| Home entertainment and other | 245 | | | 299 | | | 527 | | | 573 | |
| Total Studios | 2,224 | | | 2,052 | | | 4,620 | | | 4,461 | |
| | | | | | | |
| Total Theme Parks | 1,095 | | | 136 | | | 1,714 | | | 1,061 | |
| Headquarters and Other | 22 | | | 11 | | | 38 | | | 20 | |
Eliminations(a) | (534) | | | (580) | | | (1,576) | | | (1,072) | |
| Total NBCUniversal | 7,955 | | | 5,715 | | | 14,980 | | | 13,444 | |
| | | | | | | |
| Direct-to-consumer | 4,222 | | | 3,524 | | | 8,288 | | | 7,203 | |
| Content | 355 | | | 234 | | | 713 | | | 559 | |
| Advertising | 643 | | | 321 | | | 1,216 | | | 834 | |
| Total Sky | 5,220 | | | 4,079 | | | 10,217 | | | 8,596 | |
| | | | | | | |
| Corporate and Other | 92 | | | 40 | | | 181 | | | 160 | |
Eliminations(a) | (723) | | | (547) | | | (1,434) | | | (1,222) | |
| Total revenue | $ | 28,546 | | | $ | 23,715 | | | $ | 55,751 | | | $ | 50,324 | |
(a)Included in Eliminations are transactions that excess income tax benefits should not be presented separately from other income taxesour segments enter into with one another. See Note 2 for a description of these transactions.
We operate primarily in the statementUnited States but also in select international markets. The table below summarizes revenue by geographic location.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| United States | $ | 22,182 | | | $ | 18,656 | | | $ | 43,338 | | | $ | 39,346 | |
| Europe | 5,683 | | | 4,621 | | | 11,035 | | | 9,654 | |
| Other | 681 | | | 438 | | | 1,378 | | | 1,324 | |
| Total revenue | $ | 28,546 | | | $ | 23,715 | | | $ | 55,751 | | | $ | 50,324 | |
Condensed Consolidated Balance Sheet
The following tables summarize our accounts receivable and thus, should be classified as an operating activity rather than a financing activity as they were under the prior guidance. In addition, the updated guidance requiresother balances that when an employer withholds shares upon exercise of options or the vesting of restricted stock for the purpose of meeting withholding tax requirements, the cash paid for withholding taxes be classified as a financing activity and we include these amounts in the caption “repurchases of common stock under repurchase program and employee plans”are not separately presented in our condensed consolidated statement of cash flows. We previously recorded these amounts as operating activities.
We adopted the updated guidance as of January 1, 2017 and, as required, we prospectively adopted the provisionsbalance sheet that relate to the recognition of revenue and collection of the excess income tax benefits or deficiencies inrelated cash, as well as the deferred costs associated with our condensed consolidated statementcontracts with customers.
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Receivables, gross | $ | 11,841 | | | $ | 12,273 | |
| Less: Allowance for doubtful accounts | 730 | | | 807 | |
| Receivables, net | $ | 11,110 | | | $ | 11,466 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Noncurrent receivables, net (included in other noncurrent assets, net) | $ | 1,091 | | | $ | 1,091 | |
| Contract acquisition and fulfillment costs (included in other noncurrent assets, net) | $ | 1,022 | | | $ | 1,060 | |
| Noncurrent deferred revenue (included in other noncurrent liabilities) | $ | 719 | | | $ | 750 | |
Note 4: Programming and Production Costs
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Video distribution programming | $ | 3,414 | | | $ | 3,046 | | | $ | 6,930 | | | $ | 6,261 | |
| Film and television content: | | | | | | | |
Owned(a) | 2,227 | | | 1,936 | | | 4,191 | | | 4,063 |
| Licensed, including sports rights | 3,318 | | | 1,584 | | | 6,492 | | | 4,248 |
| Other | 297 | | | 251 | | | 562 | | | 547 |
| Total programming and production costs | $ | 9,256 | | | $ | 6,817 | | | $ | 18,175 | | | $ | 15,118 | |
(a) Amount includes amortization of income. The excess tax benefits resulted in a decrease to income tax expenseowned content of $49 million$1.8 billion and $247 million$3.5 billion for the three and ninesix months ended SeptemberJune 30, 2017, respectively. In addition, the excess tax benefits resulted in an increase to diluted earnings per common share attributable to Comcast Corporation shareholders of $0.012021, respectively, and $0.04$1.5 billion and $3.3 billion for the three and ninesix months ended SeptemberJune 30, 2017, respectively. As required by the updated guidance, the prior year periods in our condensed consolidated statement of income were not adjusted as a result of these provisions.
In addition, we retrospectively adopted the provisions of this guidance related to changes to the statement of cash flows for all periods presented. This resulted in increases to net cash provided by operating activities and decreases to net cash provided by (used in) financing activities of $644 million and $492 million for the nine months ended September 30, 2017 and 2016, respectively.
Note 3: Earnings Per Share
Computation of Diluted EPS
|
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30 |
| | 2017 | | 2016 |
| (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 | $ | 2,650 |
| | 4,698 |
| | $ | 0.56 |
| | $ | 2,237 |
| | 4,805 |
| | $ | 0.47 |
|
| Effect of dilutive securities: | | | | | | | | | | | |
| Assumed exercise or issuance of shares relating to stock plans | | | 79 |
| | | | | | 56 |
| | |
| Diluted EPS attributable to Comcast Corporation shareholders | $ | 2,650 |
| | 4,777 |
| | $ | 0.55 |
| | $ | 2,237 |
| | 4,861 |
| | $ | 0.46 |
|
Comcast Corporation
|
| | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30 |
| | 2017 | | 2016 |
| (in millions, except per share amounts) | 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 | $ | 7,729 |
| | 4,725 |
| | $ | 1.64 |
| | $ | 6,399 |
| | 4,837 |
| | $ | 1.32 |
|
| Effect of dilutive securities: | | | | | | | | | | | |
| Assumed exercise or issuance of shares relating to stock plans | | | 81 |
| | | | | | 56 |
| | |
| Diluted EPS attributable to Comcast Corporation shareholders | $ | 7,729 |
| | 4,806 |
| | $ | 1.61 |
| | $ | 6,399 |
| | 4,893 |
| | $ | 1.31 |
|
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 nine months ended September 30, 2017 and 2016.
Note 4: Significant Transactions
FCC Spectrum Auction
On April 13, 2017, the Federal Communications Commission announced the results of its spectrum auction. In the auction, NBCUniversal relinquished its spectrum rights in the New York, Philadelphia and Chicago designated market areas (“DMAs”) where NBC and Telemundo had overlapping spectrum. NBCUniversal received proceeds of $482 million in July 2017, which were recorded in other investing activities in our condensed consolidated statement of cash flows. NBCUniversal recognized a pretax gain of $337 million in other operating gains for the three months ended September 30, 2017 in our condensed consolidated statement of income. NBC and Telemundo stations will share broadcast signals in these DMAs. In connection with the auction, we also acquired the rights to $1.7 billion of spectrum, which were recorded to other intangible assets, net in our condensed consolidated balance sheet. We had previously made a deposit of $1.8 billion to participate in the auction in the third quarter of 2016 and received a refund for amounts in excess of the purchase price in the second quarter of 2017.
Universal Studios Japan
On April 6, 2017, we acquired the remaining interests in Universal Studios Japan that we did not already own for $2.3 billion. The acquisition was funded through cash on hand and borrowings under our commercial paper program. Because we maintained control of Universal Studios Japan, the difference between the consideration transferred and the recorded value of the noncontrolling interests,2020, respectively, as well as the related taxparticipations and accumulated other comprehensive income impacts, were recorded to additional paid-in capital.residuals expenses.
DreamWorks Animation
On August 22, 2016, we acquired all of the outstanding stock of DreamWorks Animation for $3.8 billion. DreamWorks Animation’s stockholders received $41 in cash for each share of DreamWorks Animation common stock. DreamWorks Animation creates animated feature films, television series and specials, live entertainment, and related consumer products. The results of operations for DreamWorks Animation are reported in our Filmed Entertainment segment following the acquisition date.
Allocation of Purchase Price
The transaction was accounted for under the acquisition method of accounting and, accordingly, the assets and liabilities are to be recorded at their fair market values as of the acquisition date. We recorded the acquired assets and liabilities of DreamWorks Animation at their estimated fair values based on valuation analyses. In valuing acquired assets and liabilities, fair value estimates were primarily based on Level 3 inputs, including future expected cash flows, market rate assumptions and discount rates. The fair value of the assumed debt was primarily based on quoted market values. The fair value of the liability related to a tax receivable agreement that DreamWorks Animation had previously entered into with one of its former stockholders (the “tax receivable agreement”) was based on the contractual settlement provisions in the agreement. Further, we recorded deferred income taxes based on the tax basis of the acquired net assets and the valuation allowances based on the expected use of net operating loss carryforwards. The goodwill is not deductible for tax purposes. During the nine months ended September 30, 2017, we updated the allocation of purchase price for DreamWorks Animation based on final valuation analyses, which primarily resulted in increases
Comcast Corporation
to noncontrolling interests, intangible assets and goodwill and decreases to working capital and deferred income tax assets. The changes did not have a material impact on our condensed consolidated financial statements.
The table below presents the allocation of the purchase price to the assets and liabilities of DreamWorks Animation.
|
| | | |
| Allocation of Purchase Price |
| (in millions) | |
| Film and television costs | $ | 838 |
|
| Intangible assets | 396 |
|
| Working capital | 156 |
|
| Debt | (381 | ) |
| Tax receivable agreement | (146 | ) |
| Deferred income taxes | 291 |
|
| Other noncurrent assets and liabilities | 170 |
|
| Identifiable net assets (liabilities) acquired | 1,324 |
|
| Noncontrolling interests | (337 | ) |
| Goodwill | 2,786 |
|
| Cash consideration transferred | $ | 3,773 |
|
The tax receivable agreement was settled immediately following the acquisition and the payment was recorded as an operating activity in our condensed consolidated statement of cash flows in the third quarter of 2016. We also repaid all of the assumed debt of DreamWorks Animation in the third quarter of 2016.
Revenue and net income attributable to the acquisition of DreamWorks Animation were not material for the three and nine months ended September 30, 2017 and 2016.
Note 5:Capitalized Film and Television Costs
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Owned: | | | |
| Released, less amortization | $ | 4,094 | | | $ | 3,815 | |
| Completed, not released | 421 | | | 139 | |
| In production and in development | 2,423 | | | 2,755 | |
| 6,937 | | | 6,709 | |
| Licensed, including sports advances | 5,435 | | | 6,631 | |
| | | |
| | | |
| Film and television costs | $ | 12,372 | | | $ | 13,340 | |
|
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Film Costs: | | | |
| Released, less amortization | $ | 1,747 |
| | $ | 1,750 |
|
| Completed, not released | 198 |
| | 50 |
|
| In production and in development | 829 |
| | 1,310 |
|
| | 2,774 |
| | 3,110 |
|
| Television Costs: | | | |
| Released, less amortization | 2,047 |
| | 1,953 |
|
| In production and in development | 853 |
| | 853 |
|
| | 2,900 |
| | 2,806 |
|
| Programming rights, less amortization | 2,901 |
| | 2,586 |
|
| | 8,575 |
| | 8,502 |
|
| Less: Current portion of programming rights | 1,779 |
| | 1,250 |
|
| Film and television costs | $ | 6,796 |
| | $ | 7,252 |
|
Comcast Corporation
Note 6: Investments
|
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Fair Value Method: | | | |
| Snap | $ | 427 |
| | $ | — |
|
| Other | 164 |
| | 198 |
|
| 591 |
| | 198 |
|
| Equity Method: |
|
| |
|
|
| Atairos | 2,225 |
| | 1,601 |
|
| Hulu | 255 |
| | 225 |
|
| Other | 871 |
| | 550 |
|
| 3,351 |
| | 2,376 |
|
| Cost Method: |
| |
|
| AirTouch | 1,610 |
| | 1,599 |
|
| BuzzFeed | 400 |
| | 400 |
|
| Other | 756 |
| | 771 |
|
| | 2,766 |
| | 2,770 |
|
| Total investments | 6,708 |
| | 5,344 |
|
| Less: Current investments | 13 |
| | 97 |
|
| Noncurrent investments | $ | 6,695 |
| | $ | 5,247 |
|
Investment Income (Loss), Net |
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Gains (losses) on sales and exchanges of investments, net | $ | 10 |
| | $ | 24 |
| | $ | 9 |
| | $ | 39 |
|
| Investment impairment losses | (3 | ) | | (7 | ) | | (9 | ) | | (28 | ) |
| Interest and dividend income | 36 |
| | 31 |
| | 101 |
| | 91 |
|
| Other, net | 39 |
| | 32 |
| | 104 |
| | 66 |
|
| Investment income (loss), net | $ | 82 |
| | $ | 80 |
| | $ | 205 |
| | $ | 168 |
|
Fair Value Method
Snap
In March 2017, we acquired an interest in Snap Inc. for $500 million as part of its initial public offering, which we have classified as an available-for-sale security. Snap is a camera company whose primary product is Snapchat, a camera app that was created to help people communicate through short videos and images.
Equity Method
Atairos
For the nine months ended September 30, 2017, we made cash capital contributions totaling $994 million to Atairos Group, Inc., which included amounts accrued as of December 31, 2016. Atairos follows investment company accounting and records its investments at their fair values each reporting period with the net gains or losses reflected in its statement of income. We recognize our share of these gains and losses in equity in net income (losses) of investees, net. For the three and nine months ended September 30, 2017, our share of Atairos income was $7 million and $106 million, respectively. For the three and nine months ended September 30, 2016, our share of Atairos losses was $9 million and $36 million, respectively.
In July 2017, we sold a business to a company owned by Atairos and received as consideration an investment in that company, which we account for as an equity method investment. In connection with the sale of the business, we recognized a pretax gain of $105 million in other operating gains for the three months ended September 30, 2017.
The Weather Channel
In January 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 of $108 million in other income (expense), net for the nine months ended September 30, 2016.
Comcast Corporation
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 September 30, 2017, the estimated fair value of the AirTouch preferred stock was $1.7 billion. The estimated fair value of the associated liability related to the redeemable subsidiary preferred shares issued by one of our consolidated subsidiaries was $1.8 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 7:5: Long-Term Debt
As of SeptemberJune 30, 2017,2021, our debt had a carrying value of $65.0$98.6 billion and an estimated fair value of $71.7$114.7 billion. As of December 31, 2020, our debt had a carrying value of $103.8 billion and an estimated fair value of $125.6 billion. The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market valuesvalue for the debt. The estimated fair value of debt for which there are no quoted market prices was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
Debt BorrowingsIn March 2021, we entered into a new $11 billion revolving credit facility due March 30, 2026 with a syndicate of banks that may be used for general corporate purposes. We may increase the commitments under the revolving credit facility up to a total of $14 billion, as well as extend the expiration date to no later than March 30, 2028, subject to approval of the lenders. The interest rate on the revolving credit facility consists of a base rate plus a borrowing margin that is determined based on Comcast’s credit rating. As of June 30, 2021, the borrowing margin for borrowings based on the London Interbank Offered Rate was 1.00%. Our revolving credit facility requires that we maintain certain financial ratios based on debt and RepaymentsEBITDA, as defined in the revolving credit facility. We were in compliance with all financial covenants for all periods presented. The new
In August 2017, we issued $1.65
revolving credit facility replaced an aggregate $9.2 billion aggregateof existing revolving credit facilities due May 26, 2022, which were terminated. Our revolving credit facilities were undrawn as of both June 30, 2021 and December 31, 2020.
Note 6: Significant Transactions
Universal Beijing Resort
We entered into an agreement with a consortium of Chinese state-owned companies to build and operate a Universal theme park and resort in Beijing, China (“Universal Beijing Resort”). We own a 30% interest in Universal Beijing Resort and the construction is being funded through a combination of debt financing and equity contributions from the investors in accordance with their equity interests. As of June 30, 2021, Universal Beijing Resort had $3.3 billion of debt outstanding, including $2.9 billion principal amount of 3.15% senior notes due 2028 and $850 million aggregate principal amount of 4.00% senior notes due 2047. In June 2017, NBCUniversal Enterprise issued $1.5 billion aggregate principal amount of senior floating rate notes due 2021. In March 2017, we issued $1.005 billion aggregate principal amount of 4.45% senior notes due 2047. In January 2017, we issued $1.25 billion aggregate principal amount of 3.00% senior notes due 2024 and $1.25 billion aggregate principal amount of 3.30% senior notes due 2027.
In May 2017, we repaid at maturity $550 million aggregate principal amount of 8.875% senior notes due 2017. In January 2017, we repaid at maturity $1.0 billion aggregate principal amount of 6.50% senior notes due 2017.
In May 2017, Universal Studios Japan entered into ¥450 billion ($3.9 billion at issuance) of newa term loans with a final maturity of March 2022. We usedloan under the proceeds from these borrowings to repay in full $3.3 billion of Universal Studios Japan’s existing yen-denominated term loans and a portion of amounts outstanding under our commercial paper program.
Revolving Credit Facilitiesdebt financing agreement.
As of SeptemberJune 30, 2017, amounts available2021, our condensed consolidated balance sheet included assets and liabilities of Universal Beijing Resort, totaling $8.9 billion and $7.1 billion, respectively. The assets and liabilities of Universal Beijing Resort primarily consist of property and equipment, operating lease assets and liabilities, and debt.
Note 7: Investments
Investment and Other Income (Loss), Net
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Equity in net income (losses) of investees, net | $ | 959 | | | $ | 300 | | | $ | 1,095 | | | $ | (368) | |
| Realized and unrealized gains (losses) on equity securities, net | 189 | | | 5 | | | 426 | | | (53) | |
| Other income (loss), net | 69 | | | 115 | | | 87 | | | 125 | |
| Investment and other income (loss), net | $ | 1,216 | | | $ | 420 | | | $ | 1,607 | | | $ | (296) | |
The amount of unrealized gains (losses) recognized in the three months ended June 30, 2021 and 2020 that related to marketable and nonmarketable equity securities still held as of the end of each reporting period were gains of $153 million and losses of $79 million, respectively. The amount of unrealized gains (losses) recognized in the six months ended June 30, 2021 and 2020 that related to marketable and nonmarketable equity securities still held as of the end of each reporting period were gains of $264 million and losses of $120 million, respectively.
Investments
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Equity method | $ | 6,921 | | | $ | 6,006 | |
| Marketable equity securities | 338 | | | 460 | |
| Nonmarketable equity securities | 2,116 | | | 1,950 | |
| Other investments | 131 | | | 143 | |
| Total investments | 9,506 | | | 8,559 | |
| Less: Current investments | 39 | | | 292 | |
| Less: Investment securing collateralized obligation | 564 | | | 447 | |
| Noncurrent investments | $ | 8,903 | | | $ | 7,820 | |
Equity Method
Atairos
Atairos follows investment company accounting and records its investments at their fair values each reporting period with the net gains or losses reflected in its statement of operations. We recognize our share of these gains and losses in equity in net income (losses) of investees, net. For the six months ended June 30, 2021 and 2020, we made cash capital contributions to Atairos totaling $24 million and $172 million, respectively. As of June 30, 2021 and December 31, 2020, our investment in Atairos was $4.8 billion and $3.9 billion, respectively.
Hulu and Collateralized Obligation
In 2019, we borrowed $5.2 billion under a term loan facility due March 2024 which is fully collateralized by the minimum guaranteed proceeds of the put/call option related to our investment in Hulu. As of June 30, 2021 and December 31, 2020, the
carrying value and fair value of our collateralized obligation were $5.2 billion. The estimated fair value was based on Level 2 inputs that use interest rates for debt with similar terms and remaining maturities. We present our investment in Hulu and the term loan separately in our condensed consolidated balance sheet in the captions “investment securing collateralized obligation” and “collateralized obligation,” respectively. The recorded value of our investment reflects our historical cost in applying the equity method, and as a result, is less than its fair value.
Other Investments
AirTouch
In April 2020, Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”), redeemed the 2 series of preferred stock and we received cash payments totaling $1.7 billion. Subsequently, we redeemed and repurchased the 3 series of preferred shares issued by one of our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programssubsidiaries and outstanding letters of credit, totaled $8.3 billion, which included $1.5 billion available under NBCUniversal Enterprise’s revolving credit facility.made cash payments totaling $1.8 billion.
Commercial Paper Programs
In June 2017, we increased the Comcast and NBCUniversal Enterprise commercial paper programs to $7.0 billion and $1.5 billion, respectively, to coincide with the borrowing capacities under the Comcast and NBCUniversal Enterprise revolving credit facilities.
As of September 30, 2017, Comcast and NBCUniversal Enterprise had no commercial paper outstanding.
Senior Notes Exchange
In October 2017, we and NBCUniversal announced and settled a private debt exchange transaction. We issued $2.0 billion aggregate principal amount of new 3.969% senior notes due 2047, $2.0 billion aggregate principal amount of new 3.999% senior notes due 2049, and $1.5 billion aggregate principal amount of new 4.049% senior notes due 2052 in exchange for $3.9 billion aggregate principal amount of certain series of outstanding senior notes issued by Comcast and NBCUniversal. The new notes are fully and unconditionally guaranteed by NBCUniversal and Comcast Cable Communications, LLC.
Note 8: Equity and Share-Based Compensation
Weighted-Average Common Shares Outstanding
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | 2021 | | 2020 |
| Weighted-average number of common shares outstanding – basic | 4,601 | | | 4,570 | | 4,596 | | | 4,566 | |
| Effect of dilutive securities | 72 | | | 37 | | 73 | | | 45 | |
| Weighted-average number of common shares outstanding – diluted | 4,673 | | | 4,607 | | 4,669 | | | 4,611 | |
Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. 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 in any of the periods presented.
Accumulated Other Comprehensive Income (Loss)
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Cumulative translation adjustments | $ | 1,806 | | | $ | 1,790 | |
| | | |
| Deferred gains (losses) on cash flow hedges | 0 | | | (109) | |
| Unrecognized gains (losses) on employee benefit obligations and other | 186 | | | 203 | |
| | | |
| Accumulated other comprehensive income (loss), net of deferred taxes | $ | 1,992 | | | $ | 1,884 | |
Share-Based Compensation
Our share-based compensation plans consist primarily 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 our common stock at a discount through payroll deductions.
In March 2017,2021, we granted 10.612.8 million RSUs and 39.142.3 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $37.42$54.62 per RSU and $7.01$9.64 per stock option.
Comcast Corporation
Recognized Share-Based Compensation Expense | | | | Three Months Ended
September 30 | | Nine Months Ended
September 30 | | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 | (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Restricted share units | $ | 99 |
| | $ | 77 |
| | $ | 284 |
| | $ | 236 |
| Restricted share units | $ | 185 | | | $ | 179 | | | $ | 391 | | | $ | 320 | |
| Stock options | 52 |
| | 48 |
| | 155 |
| | 133 |
| Stock options | 89 | | | 83 | | | 178 | | | 154 | |
| Employee stock purchase plans | 8 |
| | 6 |
| | 25 |
| | 22 |
| Employee stock purchase plans | 9 | | | 9 | | | 20 | | | 21 | |
| Total | $ | 159 |
| | $ | 131 |
|
| $ | 464 |
| | $ | 391 |
| Total | $ | 282 | | | $ | 271 | | | $ | 589 | | | $ | 495 | |
As of SeptemberJune 30, 2017,2021, we had unrecognized pretax compensation expense of $886 million$1.4 billion and $451$726 million related to nonvested RSUs and nonvested stock options, respectively.
Note 9: Supplemental Financial Information
ReceivablesIncome Taxes
In the second quarter of 2021, tax law changes were enacted in the United Kingdom that, among other provisions, will increase the corporate tax rate to 25% from 19% effective April 1, 2023. The rate change resulted in an increase to our net deferred tax liabilities of $498 million and a corresponding increase to income tax expense in the second quarter of 2021. Our income tax expense in the United Kingdom will be based on the new rate beginning in 2023. |
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Receivables, gross | $ | 8,549 |
| | $ | 8,622 |
|
| Less: Allowance for returns and customer incentives | 357 |
| | 417 |
|
| Less: Allowance for doubtful accounts | 277 |
| | 250 |
|
| Receivables, net | $ | 7,915 |
| | $ | 7,955 |
|
Accumulated Other Comprehensive Income (Loss)
|
| | | | | | | |
| (in millions) | September 30,
2017 | | September 30,
2016 |
| Unrealized gains (losses) on marketable securities | $ | (43 | ) | | $ | 2 |
|
| Deferred gains (losses) on cash flow hedges | (12 | ) | | (52 | ) |
| Unrecognized gains (losses) on employee benefit obligations | 270 |
| | 8 |
|
| Cumulative translation adjustments | 166 |
| | 76 |
|
| Accumulated other comprehensive income (loss), net of deferred taxes | $ | 381 |
| | $ | 34 |
|
Net Cash Provided by Operating Activities
|
| | | | | | | |
| | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 |
| Net income | $ | 7,865 |
| | $ | 6,628 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation, amortization and other operating gains | 7,181 |
| | 7,062 |
|
| Share-based compensation | 594 |
| | 495 |
|
| Noncash interest expense (income), net | 187 |
| | 172 |
|
| Equity in net (income) losses of investees, net | (12 | ) | | 64 |
|
| Cash received from investees | 72 |
| | 58 |
|
| Net (gain) loss on investment activity and other | (193 | ) | | (159 | ) |
| Deferred income taxes | 678 |
| | 985 |
|
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | | | |
| Current and noncurrent receivables, net | 28 |
| | (315 | ) |
| Film and television costs, net | (71 | ) | | (593 | ) |
| Accounts payable and accrued expenses related to trade creditors | (17 | ) | | 46 |
|
| Other operating assets and liabilities | (351 | ) | | (454 | ) |
| Net cash provided by operating activities | $ | 15,961 |
| | $ | 13,989 |
|
Comcast Corporation
Cash Payments for Interest and Income Taxes
| | | | Three Months Ended
September 30 | | Nine Months Ended
September 30 | | Six Months Ended
June 30, |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 | (in millions) | 2021 | | 2020 |
| Interest | $ | 905 |
| | $ | 808 |
| | $ | 2,277 |
| | $ | 2,043 |
| Interest | $ | 1,909 | | | $ | 1,936 | |
| Income taxes | $ | 1,206 |
| | $ | 1,031 |
| | $ | 3,415 |
| | $ | 2,716 |
| Income taxes | $ | 1,832 | | | $ | 333 | |
Noncash Investing and Financing Activities
During the ninesix months ended SeptemberJune 30, 2017:2021:
•we recognized operating lease assets and liabilities of $2.8 billion related to Universal Beijing Resort with lease terms of 33 years and using a weighted average discount rate of 4.4%
•we acquired $1.4$1.5 billion of property and equipment and intangible assets that were accrued but unpaid
•we recorded a liability of $736 million$1.2 billion for a quarterly cash dividend of $0.1575$0.25 per common share to be paid in October 2017
July 2021During the six months ended June 30, 2020: •we acquired $1.8 billion of property and equipment and intangible assets that were accrued but unpaid
•we recorded a liability of $1.1 billion for a quarterly cash dividend of $0.23 per common share paid in July 2020
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheet to the total of the amounts reported in our condensed consolidated statement of cash flows.
| | | | | | | | | | | |
| (in millions) | June 30,
2021 | | December 31,
2020 |
| Cash and cash equivalents | $ | 12,378 | | | $ | 11,740 | |
| Restricted cash included in other current assets | 26 | | | 14 | |
| Restricted cash included in other noncurrent assets, net | 14 | | | 14 | |
| Cash, cash equivalents and restricted cash, end of period | $ | 12,418 | | | $ | 11,768 | |
Note 10: Commitments and Contingencies
Redeemable Subsidiary Preferred Stock
AsIn the first quarter of September 30, 2017, the fair value2021, we redeemed all of the NBCUniversal Enterprise, Inc. preferred stock and made cash payments equal to the aggregate liquidation preference of $725 million. As of December 31, 2020, the preferred stock had a carrying value equal to its liquidation preference and was presented in redeemable noncontrolling interests and redeemable subsidiary preferred stock was $756 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.stock.
Contingencies
We were a defendant in a lawsuit filed in December 2011 by Sprint Communications Company L.P. (“Sprint”) in the United States District Court for the District of Kansas. Sprint’s initial complaint alleged that Comcast Digital Voice and XFINITY Voice infringe twelve Sprint patents covering various aspects of a telecommunications system. In March 2015, Sprint withdrew its allegations of infringement for two of the patents. In December 2016, the Court granted summary judgment for us with respect to non-infringement on one of the patents and granted summary judgment for Sprint on one of the patents as to infringement with respect to some but not all of our accused telecommunications systems but not as to the patent’s validity. In January 2017, the Court entered judgment in favor of us on Sprint’s claims for infringement of two of the patents. In March 2017, Sprint indicated that it would not proceed to trial on three of the patents. Trial with respect to the four remaining patents, including the patent for which the Court granted partial summary judgment to Sprint, was set to begin on October 23, 2017. On October 16, 2017, the parties entered into a settlement agreement which dismisses all claims and resolves the parties’ disputes asserted in the matters described above, as well as in all other outstanding patent litigation matters between the parties, for a payment to Sprint and certain contractual rights. In connection therewith, we recorded a charge of $250 million in the third quarter of 2017.
We also 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. In addition, we are 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 11: 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, voice, and security and automation services to residential customers under the XFINITY brand; we also provide these and other services to business customers and sell advertising.14
Cable Networks: Consists primarilyBroadcast 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.
Comcast Corporation
Filmed Entertainment: Consists primarily of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment worldwide; our films are also produced under the Illumination, Focus Features and DreamWorks Animation names.
Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan.
We use Adjusted EBITDA to evaluate the profitability of our operating segments and the components of net income attributable to Comcast Corporation below Adjusted EBITDA are not separately evaluated. Our financial data by business segment is presented in the tables below.
|
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2017 |
| (in millions) | Revenue(f) | Adjusted EBITDA(g) | Depreciation, Amortization and Other(h) | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Communications(a) | $ | 13,203 |
| $ | 5,246 |
| $ | 2,049 |
| $ | 3,197 |
| $ | 2,061 |
| $ | 322 |
|
| NBCUniversal | | | | | | |
| Cable Networks | 2,603 |
| 905 |
| 179 |
| 726 |
| 5 |
| 4 |
|
| Broadcast Television | 2,133 |
| 321 |
| (305 | ) | 626 |
| 66 |
| 4 |
|
| Filmed Entertainment | 1,784 |
| 394 |
| 32 |
| 362 |
| 18 |
| 6 |
|
| Theme Parks | 1,550 |
| 775 |
| 166 |
| 609 |
| 199 |
| 18 |
|
Headquarters and Other(b) | 15 |
| (122 | ) | 97 |
| (219 | ) | 66 |
| 37 |
|
Eliminations(c) | (71 | ) | 1 |
| — |
| 1 |
| — |
| — |
|
| NBCUniversal | 8,014 |
| 2,274 |
| 169 |
| 2,105 |
| 354 |
| 69 |
|
Corporate and Other(d) | 266 |
| (349 | ) | 170 |
| (519 | ) | 19 |
| 13 |
|
Eliminations(c) | (500 | ) | 9 |
| — |
| 9 |
| — |
| — |
|
| Comcast Consolidated | $ | 20,983 |
| $ | 7,180 |
| $ | 2,388 |
| $ | 4,792 |
| $ | 2,434 |
| $ | 404 |
|
|
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2016 |
| (in millions) | Revenue(f) | Adjusted EBITDA(g) | Depreciation, Amortization and Other | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Communications(a) | $ | 12,557 |
| $ | 4,986 |
| $ | 1,929 |
| $ | 3,057 |
| $ | 2,044 |
| $ | 352 |
|
| NBCUniversal | | | | | | |
Cable Networks(e) | 2,942 |
| 893 |
| 184 |
| 709 |
| 7 |
| 4 |
|
Broadcast Television(e) | 3,087 |
| 378 |
| 27 |
| 351 |
| 28 |
| 6 |
|
| Filmed Entertainment | 1,792 |
| 353 |
| 13 |
| 340 |
| 6 |
| 4 |
|
| Theme Parks | 1,440 |
| 706 |
| 130 |
| 576 |
| 228 |
| 19 |
|
Headquarters and Other(b) | 1 |
| (183 | ) | 91 |
| (274 | ) | 67 |
| 34 |
|
Eliminations(c) | (84 | ) | (1 | ) | — |
| (1 | ) | — |
| — |
|
| NBCUniversal | 9,178 |
| 2,146 |
| 445 |
| 1,701 |
| 336 |
| 67 |
|
Corporate and Other(d) | 168 |
| (223 | ) | 21 |
| (244 | ) | 26 |
| 7 |
|
Eliminations(c) | (584 | ) | (74 | ) | — |
| (74 | ) | — |
| — |
|
| Comcast Consolidated | $ | 21,319 |
| $ | 6,835 |
| $ | 2,395 |
| $ | 4,440 |
| $ | 2,406 |
| $ | 426 |
|
Comcast Corporation
|
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2017 |
| (in millions) | Revenue(f) | Adjusted EBITDA(g) | Depreciation, Amortization and Other(h) | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Communications(a) | $ | 39,237 |
| $ | 15,764 |
| $ | 6,030 |
| $ | 9,734 |
| $ | 5,798 |
| $ | 1,001 |
|
| NBCUniversal | | | | | |
|
| Cable Networks | 7,940 |
| 3,076 |
| 574 |
| 2,502 |
| 15 |
| 11 |
|
| Broadcast Television | 6,582 |
| 1,059 |
| (242 | ) | 1,301 |
| 125 |
| 11 |
|
| Filmed Entertainment | 5,920 |
| 1,047 |
| 79 |
| 968 |
| 47 |
| 17 |
|
| Theme Parks | 3,982 |
| 1,723 |
| 494 |
| 1,229 |
| 671 |
| 57 |
|
Headquarters and Other(b) | 32 |
| (542 | ) | 292 |
| (834 | ) | 119 |
| 101 |
|
Eliminations(c) | (243 | ) | (1 | ) | — |
| (1 | ) | — |
| — |
|
| NBCUniversal | 24,213 |
| 6,362 |
| 1,197 |
| 5,165 |
| 977 |
| 197 |
|
Corporate and Other(d) | 679 |
| (845 | ) | 204 |
| (1,049 | ) | 64 |
| 42 |
|
Eliminations(c) | (1,518 | ) | 30 |
| — |
| 30 |
| — |
| — |
|
| Comcast Consolidated | $ | 62,611 |
| $ | 21,311 |
| $ | 7,431 |
| $ | 13,880 |
| $ | 6,839 |
| $ | 1,240 |
|
|
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2016 |
| (in millions) | Revenue(f) | Adjusted EBITDA(g) | Depreciation, Amortization and Other | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Communications(a) | $ | 37,205 |
| $ | 14,923 |
| $ | 5,676 |
| $ | 9,247 |
| $ | 5,501 |
| $ | 965 |
|
| NBCUniversal | | | | | |
|
Cable Networks(e) | 7,961 |
| 2,793 |
| 561 |
| 2,232 |
| 15 |
| 8 |
|
Broadcast Television(e) | 7,299 |
| 1,056 |
| 89 |
| 967 |
| 77 |
| 12 |
|
| Filmed Entertainment | 4,526 |
| 576 |
| 33 |
| 543 |
| 14 |
| 10 |
|
| Theme Parks | 3,602 |
| 1,550 |
| 373 |
| 1,177 |
| 668 |
| 48 |
|
Headquarters and Other(b) | 10 |
| (518 | ) | 268 |
| (786 | ) | 217 |
| 103 |
|
Eliminations(c) | (256 | ) | — |
| — |
| — |
| — |
| — |
|
| NBCUniversal | 23,142 |
| 5,457 |
| 1,324 |
| 4,133 |
| 991 |
| 181 |
|
Corporate and Other(d) | 547 |
| (668 | ) | 62 |
| (730 | ) | 70 |
| 17 |
|
Eliminations(c) | (1,516 | ) | (55 | ) | — |
| (55 | ) | — |
| — |
|
| Comcast Consolidated | $ | 59,378 |
| $ | 19,657 |
| $ | 7,062 |
| $ | 12,595 |
| $ | 6,562 |
| $ | 1,163 |
|
| |
(a) | For the three and nine months ended September 30, 2017 and 2016, Cable Communications segment revenue was derived from the following sources: |
|
| | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Residential: | | | | | | | |
| Video | 44.1 | % | | 44.5 | % | | 44.3 | % | | 44.9 | % |
| High-speed Internet | 28.1 | % | | 27.1 | % | | 28.0 | % | | 27.0 | % |
| Voice | 6.4 | % | | 7.0 | % | | 6.5 | % | | 7.2 | % |
| Business services | 11.9 | % | | 11.1 | % | | 11.7 | % | | 10.9 | % |
| Advertising | 4.1 | % | | 5.0 | % | | 4.1 | % | | 4.7 | % |
| Other | 5.4 | % | | 5.3 | % | | 5.4 | % | | 5.3 | % |
| Total | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
Subscription revenue received from residential customers who purchase bundled services at a discounted rate is allocated proportionally to each cable service based on the individual service’s price on a stand-alone basis.
For the three and nine months ended September 30, 2017, 2.7% and 2.8%, respectively, of Cable Communications segment revenue was derived from franchise and other regulatory fees. For both the three and nine months ended September 30, 2016, 2.8% of Cable Communications segment revenue was derived from franchise and other regulatory fees.
| |
(b) | NBCUniversal Headquarters and Other activities include costs associated with overhead, allocations, personnel costs and headquarter initiatives.
|
| |
(c) | 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
Comcast Corporation
our Filmed Entertainment and Broadcast Television segments generate revenue from the licensing of film and television content to our Cable Networks segment
| |
(d) | Corporate and Other activities include costs associated with overhead and personnel, the costs of other business development initiatives, including our new wireless phone service, and the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses. |
| |
(e) | The revenue and operating costs and expenses associated with our broadcast of the 2016 Rio Olympics were reported in our Cable Networks and Broadcast Television segments. |
| |
(f) | No single customer accounted for a significant amount of revenue in any period.
|
| |
(g) | We use Adjusted EBITDA as the measure of profit or loss for our operating segments. Adjusted EBITDA is defined as net income attributable to Comcast Corporation before net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax expense, other income (expense) items, net, depreciation and amortization expense, and other operating gains, and excluding impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets, if any. From time to time we may exclude from Adjusted EBITDA the impact of events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. Other income (expense) items, net include interest expense, investment income (loss), equity in net income (losses) of investees, and other income (expense), net (as stated in our condensed consolidated statement of income). 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 and tax structures and by our 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), 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. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated income before income taxes is presented in the table below. |
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Adjusted EBITDA | $ | 7,180 |
| | $ | 6,835 |
| | $ | 21,311 |
| | $ | 19,657 |
|
| Adjustment for legal settlement | (250 | ) | | — |
| | (250 | ) | | — |
|
| Depreciation | (1,991 | ) | | (1,865 | ) | | (5,876 | ) | | (5,518 | ) |
| Amortization | (589 | ) | | (530 | ) | | (1,747 | ) | | (1,544 | ) |
| Other operating gains | 442 |
| | — |
| | 442 |
| | — |
|
| Other income (expense) items, net | (696 | ) | | (716 | ) | | (1,980 | ) | | (1,978 | ) |
| Income before income taxes | $ | 4,096 |
| | $ | 3,724 |
| | $ | 11,900 |
| | $ | 10,617 |
|
| |
(h) | Other represents other operating gains in our condensed consolidated statement of income and a charge related to a legal settlement. For both the three and nine months ended September 30, 2017, other operating gains included a pretax gain of $337 million related to NBCUniversal’s relinquishment of spectrum rights in our Broadcast Television segment and a pretax gain of $105 million related to the sale of a business in Corporate and Other. A charge related to a legal settlement of $250 million was recorded in other operating and administrative expenses in Corporate and Other and was excluded from Adjusted EBITDA for both the three and nine months ended September 30, 2017. |
Note 12: 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, including the Comcast revolving credit facility.
Comcast Parent and CCCL Parent also fully and unconditionally guarantee NBCUniversal Enterprise’s $4.8 billion aggregate principal amount of senior notes, $1.5 billion revolving credit facility and commercial paper program. NBCUniversal Media Parent does not guarantee the NBCUniversal Enterprise senior notes, revolving credit facility or commercial paper program.
Comcast Parent provides an unconditional guarantee of the Universal Studios Japan ¥450 billion term loans with a final maturity of March 2022. Comcast Parent also 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.
Comcast Corporation
Condensed Consolidating Balance Sheet
September 30, 2017
|
| | | | | | | | | | | | | | | | | | | | | |
| (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 | $ | — |
| $ | — |
| $ | — |
| $ | 260 |
| $ | 3,854 |
| $ | — |
| $ | 4,114 |
|
| Receivables, net | — |
| — |
| — |
| — |
| 7,915 |
| — |
| 7,915 |
|
| Programming rights | — |
| — |
| — |
| — |
| 1,779 |
| — |
| 1,779 |
|
| Other current assets | 65 |
| — |
| — |
| 30 |
| 2,057 |
| — |
| 2,152 |
|
| Total current assets | 65 |
| — |
| — |
| 290 |
| 15,605 |
| — |
| 15,960 |
|
| Film and television costs | — |
| — |
| — |
| — |
| 6,796 |
| — |
| 6,796 |
|
| Investments | 132 |
| 11 |
| 79 |
| 691 |
| 5,782 |
| — |
| 6,695 |
|
| Investments in and amounts due from subsidiaries eliminated upon consolidation | 102,930 |
| 128,663 |
| 126,361 |
| 50,474 |
| 111,087 |
| (519,515 | ) | — |
|
| Property and equipment, net | 482 |
| — |
| — |
| — |
| 37,374 |
| — |
| 37,856 |
|
| Franchise rights | ��� |
| — |
| — |
| — |
| 59,364 |
| — |
| 59,364 |
|
| Goodwill | — |
| — |
| — |
| — |
| 36,752 |
| — |
| 36,752 |
|
| Other intangible assets, net | 11 |
| — |
| — |
| — |
| 18,722 |
| — |
| 18,733 |
|
| Other noncurrent assets, net | 1,178 |
| 687 |
| — |
| 86 |
| 2,249 |
| (1,055 | ) | 3,145 |
|
| Total assets | $ | 104,798 |
| $ | 129,361 |
| $ | 126,440 |
| $ | 51,541 |
| $ | 293,731 |
| $ | (520,570 | ) | $ | 185,301 |
|
| Liabilities and Equity |
|
|
|
|
|
| |
| Accounts payable and accrued expenses related to trade creditors | $ | 17 |
| $ | — |
| $ | — |
| $ | — |
| $ | 6,959 |
| $ | — |
| $ | 6,976 |
|
| Accrued participations and residuals | — |
| — |
| — |
| — |
| 1,811 |
| — |
| 1,811 |
|
| Accrued expenses and other current liabilities | 1,640 |
| 92 |
| 208 |
| 394 |
| 5,087 |
| — |
| 7,421 |
|
| Current portion of long-term debt | 2,913 |
| — |
| — |
| 4 |
| 2,324 |
| — |
| 5,241 |
|
| Total current liabilities | 4,570 |
| 92 |
| 208 |
| 398 |
| 16,181 |
| — |
| 21,449 |
|
| Long-term debt, less current portion | 42,237 |
| 139 |
| 2,100 |
| 8,204 |
| 7,040 |
| — |
| 59,720 |
|
| Deferred income taxes | — |
| 492 |
| — |
| 70 |
| 36,124 |
| (1,084 | ) | 35,602 |
|
| Other noncurrent liabilities | 2,564 |
| — |
| — |
| 1,138 |
| 7,183 |
| 29 |
| 10,914 |
|
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| 1,353 |
| — |
| 1,353 |
|
| Equity: |
|
|
|
|
|
| |
| Common stock | 55 |
| — |
| — |
| — |
| — |
| — |
| 55 |
|
| Other shareholders’ equity | 55,372 |
| 128,638 |
| 124,132 |
| 41,731 |
| 225,014 |
| (519,515 | ) | 55,372 |
|
| Total Comcast Corporation shareholders’ equity | 55,427 |
| 128,638 |
| 124,132 |
| 41,731 |
| 225,014 |
| (519,515 | ) | 55,427 |
|
| Noncontrolling interests | — |
| — |
| — |
| — |
| 836 |
| — |
| 836 |
|
| Total equity | 55,427 |
| 128,638 |
| 124,132 |
| 41,731 |
| 225,850 |
| (519,515 | ) | 56,263 |
|
| Total liabilities and equity | $ | 104,798 |
| $ | 129,361 |
| $ | 126,440 |
| $ | 51,541 |
| $ | 293,731 |
| $ | (520,570 | ) | $ | 185,301 |
|
Comcast Corporation
Condensed Consolidating Balance Sheet
December 31, 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 | $ | — |
| $ | — |
| $ | — |
| $ | 482 |
| $ | 2,819 |
| $ | — |
| $ | 3,301 |
|
| Receivables, net | — |
| — |
| — |
| — |
| 7,955 |
| — |
| 7,955 |
|
| Programming rights | — |
| — |
| — |
| — |
| 1,250 |
| — |
| 1,250 |
|
| Other current assets | 151 |
| — |
| — |
| 36 |
| 3,668 |
| — |
| 3,855 |
|
| Total current assets | 151 |
| — |
| — |
| 518 |
| 15,692 |
| — |
| 16,361 |
|
| Film and television costs | — |
| — |
| — |
| — |
| 7,252 |
| — |
| 7,252 |
|
| Investments | 75 |
| — |
| — |
| 651 |
| 4,521 |
| — |
| 5,247 |
|
| Investments in and amounts due from subsidiaries eliminated upon consolidation | 98,350 |
| 120,071 |
| 117,696 |
| 47,393 |
| 97,704 |
| (481,214 | ) | — |
|
| Property and equipment, net | 298 |
| — |
| — |
| — |
| 35,955 |
| — |
| 36,253 |
|
| Franchise rights | — |
| — |
| — |
| — |
| 59,364 |
| — |
| 59,364 |
|
| Goodwill | — |
| — |
| — |
| — |
| 35,980 |
| — |
| 35,980 |
|
| Other intangible assets, net | 13 |
| — |
| — |
| — |
| 17,261 |
| — |
| 17,274 |
|
| Other noncurrent assets, net | 1,138 |
| 638 |
| — |
| 89 |
| 1,921 |
| (1,017 | ) | 2,769 |
|
| Total assets | $ | 100,025 |
| $ | 120,709 |
| $ | 117,696 |
| $ | 48,651 |
| $ | 275,650 |
| $ | (482,231 | ) | $ | 180,500 |
|
| Liabilities and Equity | | | | | | | |
| Accounts payable and accrued expenses related to trade creditors | $ | 23 |
| $ | — |
| $ | — |
| $ | — |
| $ | 6,892 |
| $ | — |
| $ | 6,915 |
|
| Accrued participations and residuals | — |
| — |
| — |
| — |
| 1,726 |
| — |
| 1,726 |
|
| Accrued expenses and other current liabilities | 1,726 |
| — |
| 341 |
| 302 |
| 5,045 |
| — |
| 7,414 |
|
| Current portion of long-term debt | 3,739 |
| — |
| 550 |
| 4 |
| 1,187 |
| — |
| 5,480 |
|
| Total current liabilities | 5,488 |
| — |
| 891 |
| 306 |
| 14,850 |
| — |
| 21,535 |
|
| Long-term debt, less current portion | 38,123 |
| 141 |
| 2,100 |
| 8,208 |
| 6,994 |
| — |
| 55,566 |
|
| Deferred income taxes | — |
| 542 |
| — |
| 70 |
| 35,259 |
| (1,017 | ) | 34,854 |
|
| Other noncurrent liabilities | 2,471 |
| — |
| — |
| 1,166 |
| 7,288 |
| — |
| 10,925 |
|
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| 1,446 |
| — |
| 1,446 |
|
| Equity: | | | | | | | |
| Common stock | 56 |
| — |
| — |
| — |
| — |
| — |
| 56 |
|
| Other shareholders’ equity | 53,887 |
| 120,026 |
| 114,705 |
| 38,901 |
| 207,582 |
| (481,214 | ) | 53,887 |
|
| Total Comcast Corporation shareholders’ equity | 53,943 |
| 120,026 |
| 114,705 |
| 38,901 |
| 207,582 |
| (481,214 | ) | 53,943 |
|
| Noncontrolling interests | — |
| — |
| — |
| — |
| 2,231 |
| — |
| 2,231 |
|
| Total equity | 53,943 |
| 120,026 |
| 114,705 |
| 38,901 |
| 209,813 |
| (481,214 | ) | 56,174 |
|
| Total liabilities and equity | $ | 100,025 |
| $ | 120,709 |
| $ | 117,696 |
| $ | 48,651 |
| $ | 275,650 |
| $ | (482,231 | ) | $ | 180,500 |
|
Comcast Corporation
Condensed Consolidating Statement of Income
For theThree Months Ended September 30, 2017
|
| | | | | | | | | | | | | | | | | | | | | |
| (in millions) | Comcast
Parent | Comcast
Holdings | CCCL
Parent | NBCUniversal
Media Parent | Non-
Guarantor
Subsidiaries | Elimination
and
Consolidation
Adjustments | Consolidated
Comcast
Corporation |
| Revenue: | | | | | | | |
| Service revenue | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 20,983 |
| $ | — |
| $ | 20,983 |
|
| Management fee revenue | 285 |
| — |
| 280 |
| — |
| — |
| (565 | ) | — |
|
| | 285 |
| — |
| 280 |
| — |
| 20,983 |
| (565 | ) | 20,983 |
|
| Costs and Expenses: | | | | | | | |
| Programming and production | — |
| — |
| — |
| — |
| 6,077 |
| — |
| 6,077 |
|
| Other operating and administrative | 183 |
| — |
| 280 |
| 277 |
| 6,248 |
| (565 | ) | 6,423 |
|
| Advertising, marketing and promotion | — |
| — |
| — |
| — |
| 1,553 |
| — |
| 1,553 |
|
| Depreciation | 7 |
| — |
| — |
| — |
| 1,984 |
| — |
| 1,991 |
|
| Amortization | 1 |
| — |
| — |
| — |
| 588 |
| — |
| 589 |
|
| Other operating gains | — |
| — |
| — |
| — |
| (442 | ) | — |
| (442 | ) |
| | 191 |
| — |
| 280 |
| 277 |
| 16,008 |
| (565 | ) | 16,191 |
|
| Operating income (loss) | 94 |
| — |
| — |
| (277 | ) | 4,975 |
| — |
| 4,792 |
|
| Other Income (Expense): | | | | | | | |
| Interest expense | (544 | ) | (3 | ) | (48 | ) | (116 | ) | (55 | ) | — |
| (766 | ) |
| Investment income (loss), net | (2 | ) | 32 |
| — |
| (9 | ) | 61 |
| — |
| 82 |
|
| Equity in net income (losses) of investees, net | 2,944 |
| 2,483 |
| 1,992 |
| 2,221 |
| 1,786 |
| (11,465 | ) | (39 | ) |
| Other income (expense), net | — |
| — |
| — |
| 12 |
| 15 |
| — |
| 27 |
|
| | 2,398 |
| 2,512 |
| 1,944 |
| 2,108 |
| 1,807 |
| (11,465 | ) | (696 | ) |
| Income (loss) before income taxes | 2,492 |
| 2,512 |
| 1,944 |
| 1,831 |
| 6,782 |
| (11,465 | ) | 4,096 |
|
| Income tax (expense) benefit | 158 |
| (10 | ) | 17 |
| (6 | ) | (1,572 | ) | — |
| (1,413 | ) |
| Net income (loss) | 2,650 |
| 2,502 |
| 1,961 |
| 1,825 |
| 5,210 |
| (11,465 | ) | 2,683 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (33 | ) | — |
| (33 | ) |
| Net income (loss) attributable to Comcast Corporation | $ | 2,650 |
| $ | 2,502 |
| $ | 1,961 |
| $ | 1,825 |
| $ | 5,177 |
| $ | (11,465 | ) | $ | 2,650 |
|
| Comprehensive income (loss) attributable to Comcast Corporation | $ | 2,603 |
| $ | 2,486 |
| $ | 1,965 |
| $ | 1,740 |
| $ | 5,049 |
| $ | (11,240 | ) | $ | 2,603 |
|
Comcast Corporation
Condensed Consolidating Statement of Income
For the Three Months Ended September 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 | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 21,319 |
| $ | — |
| $ | 21,319 |
|
| Management fee revenue | 268 |
| — |
| 263 |
| — |
| — |
| (531 | ) | — |
|
| | 268 |
| — |
| 263 |
| — |
| 21,319 |
| (531 | ) | 21,319 |
|
| Costs and Expenses: | | | | | | | |
| Programming and production | — |
| — |
| — |
| — |
| 7,003 |
| — |
| 7,003 |
|
| Other operating and administrative | 194 |
| — |
| 263 |
| 222 |
| 5,848 |
| (531 | ) | 5,996 |
|
| Advertising, marketing and promotion | — |
| — |
| — |
| — |
| 1,485 |
| — |
| 1,485 |
|
| Depreciation | 7 |
| — |
| — |
| — |
| 1,858 |
| — |
| 1,865 |
|
| Amortization | 1 |
| — |
| — |
| — |
| 529 |
| — |
| 530 |
|
| Other operating gains | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 202 |
| — |
| 263 |
| 222 |
| 16,723 |
| (531 | ) | 16,879 |
|
| Operating income (loss) | 66 |
| — |
| — |
| (222 | ) | 4,596 |
| — |
| 4,440 |
|
| Other Income (Expense): | | | | | | | |
| Interest expense | (502 | ) | (3 | ) | (59 | ) | (113 | ) | (74 | ) | — |
| (751 | ) |
| Investment income (loss), net | 3 |
| (4 | ) | — |
| (12 | ) | 93 |
| — |
| 80 |
|
| Equity in net income (losses) of investees, net | 2,519 |
| 2,385 |
| 2,134 |
| 1,644 |
| 1,255 |
| (9,971 | ) | (34 | ) |
| Other income (expense), net | — |
| — |
| — |
| (2 | ) | (9 | ) | — |
| (11 | ) |
| | 2,020 |
| 2,378 |
| 2,075 |
| 1,517 |
| 1,265 |
| (9,971 | ) | (716 | ) |
| Income (loss) before income taxes | 2,086 |
| 2,378 |
| 2,075 |
| 1,295 |
| 5,861 |
| (9,971 | ) | 3,724 |
|
| Income tax (expense) benefit | 151 |
| 2 |
| 21 |
| (6 | ) | (1,568 | ) | — |
| (1,400 | ) |
| Net income (loss) | 2,237 |
| 2,380 |
| 2,096 |
| 1,289 |
| 4,293 |
| (9,971 | ) | 2,324 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (87 | ) | — |
| (87 | ) |
| Net income (loss) attributable to Comcast Corporation | $ | 2,237 |
| $ | 2,380 |
| $ | 2,096 |
| $ | 1,289 |
| $ | 4,206 |
| $ | (9,971 | ) | $ | 2,237 |
|
| Comprehensive income (loss) attributable to Comcast Corporation | $ | 2,270 |
| $ | 2,388 |
| $ | 2,096 |
| $ | 1,310 |
| $ | 4,235 |
| $ | (10,029 | ) | $ | 2,270 |
|
Comcast Corporation
Condensed Consolidating Statement of Income
For the Nine Months Ended September 30, 2017
|
| | | | | | | | | | | | | | | | | | | | | |
| (in millions) | Comcast Parent | Comcast Holdings | CCCL Parent | NBCUniversal Media Parent | Non- Guarantor Subsidiaries | Elimination and Consolidation Adjustments | Consolidated Comcast Corporation |
| Revenue: | | | | | | | |
| Service revenue | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 62,611 |
| $ | — |
| $ | 62,611 |
|
| Management fee revenue | 841 |
| — |
| 827 |
| — |
| — |
| (1,668 | ) | — |
|
| | 841 |
| — |
| 827 |
| — |
| 62,611 |
| (1,668 | ) | 62,611 |
|
| Costs and Expenses: | | | | | | | |
| Programming and production | — |
| — |
| — |
| — |
| 18,492 |
| — |
| 18,492 |
|
| Other operating and administrative | 553 |
| — |
| 827 |
| 844 |
| 17,754 |
| (1,668 | ) | 18,310 |
|
| Advertising, marketing and promotion | — |
| — |
| — |
| — |
| 4,748 |
| — |
| 4,748 |
|
| Depreciation | 21 |
| — |
| — |
| — |
| 5,855 |
| — |
| 5,876 |
|
| Amortization | 4 |
| — |
| — |
| — |
| 1,743 |
| — |
| 1,747 |
|
| Other operating gains | — |
| — |
| — |
| — |
| (442 | ) | — |
| (442 | ) |
| | 578 |
| — |
| 827 |
| 844 |
| 48,150 |
| (1,668 | ) | 48,731 |
|
| Operating income (loss) | 263 |
| — |
| — |
| (844 | ) | 14,461 |
| — |
| 13,880 |
|
| Other Income (Expense): | | | | | | | |
| Interest expense | (1,592 | ) | (9 | ) | (159 | ) | (344 | ) | (175 | ) | — |
| (2,279 | ) |
| Investment income (loss), net | (1 | ) | 84 |
| — |
| (29 | ) | 151 |
| — |
| 205 |
|
| Equity in net income (losses) of investees, net | 8,594 |
| 7,746 |
| 6,613 |
| 5,477 |
| 4,313 |
| (32,731 | ) | 12 |
|
| Other income (expense), net | — |
| — |
| — |
| 58 |
| 24 |
| — |
| 82 |
|
| | 7,001 |
| 7,821 |
| 6,454 |
| 5,162 |
| 4,313 |
| (32,731 | ) | (1,980 | ) |
| Income (loss) before income taxes | 7,264 |
| 7,821 |
| 6,454 |
| 4,318 |
| 18,774 |
| (32,731 | ) | 11,900 |
|
| Income tax (expense) benefit | 465 |
| (26 | ) | 56 |
| (17 | ) | (4,513 | ) | — |
| (4,035 | ) |
| Net income (loss) | 7,729 |
| 7,795 |
| 6,510 |
| 4,301 |
| 14,261 |
| (32,731 | ) | 7,865 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (136 | ) | — |
| (136 | ) |
| Net income (loss) attributable to Comcast Corporation | $ | 7,729 |
| $ | 7,795 |
| $ | 6,510 |
| $ | 4,301 |
| $ | 14,125 |
| $ | (32,731 | ) | $ | 7,729 |
|
| Comprehensive income (loss) attributable to Comcast Corporation | $ | 7,818 |
| $ | 7,793 |
| $ | 6,516 |
| $ | 4,266 |
| $ | 13,998 |
| $ | (32,573 | ) | $ | 7,818 |
|
Comcast Corporation
Condensed Consolidating Statement of Income
For the Nine Months Ended September 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 | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 59,378 |
| $ | — |
| $ | 59,378 |
|
| Management fee revenue | 793 |
| — |
| 778 |
| — |
| — |
| (1,571 | ) | — |
|
| | 793 |
| — |
| 778 |
| — |
| 59,378 |
| (1,571 | ) | 59,378 |
|
| Costs and Expenses: | | | | | | | |
| Programming and production | — |
| — |
| — |
| — |
| 17,926 |
| — |
| 17,926 |
|
| Other operating and administrative | 635 |
| — |
| 778 |
| 739 |
| 16,704 |
| (1,571 | ) | 17,285 |
|
| Advertising, marketing and promotion | — |
| — |
| — |
| — |
| 4,510 |
| — |
| 4,510 |
|
| Depreciation | 21 |
| — |
| — |
| — |
| 5,497 |
| — |
| 5,518 |
|
| Amortization | 4 |
| — |
| — |
| — |
| 1,540 |
| — |
| 1,544 |
|
| Other operating gains | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 660 |
| — |
| 778 |
| 739 |
| 46,177 |
| (1,571 | ) | 46,783 |
|
| Operating income (loss) | 133 |
| — |
| — |
| (739 | ) | 13,201 |
| — |
| 12,595 |
|
| Other Income (Expense): | | | | | | | |
| Interest expense | (1,431 | ) | (9 | ) | (179 | ) | (342 | ) | (225 | ) | — |
| (2,186 | ) |
| Investment income (loss), net | 6 |
| (3 | ) | — |
| (20 | ) | 185 |
| — |
| 168 |
|
| Equity in net income (losses) of investees, net | 7,239 |
| 6,924 |
| 6,375 |
| 4,229 |
| 3,160 |
| (27,991 | ) | (64 | ) |
| Other income (expense), net | — |
| — |
| — |
| 115 |
| (11 | ) | — |
| 104 |
|
| | 5,814 |
| 6,912 |
| 6,196 |
| 3,982 |
| 3,109 |
| (27,991 | ) | (1,978 | ) |
| Income (loss) before income taxes | 5,947 |
| 6,912 |
| 6,196 |
| 3,243 |
| 16,310 |
| (27,991 | ) | 10,617 |
|
| Income tax (expense) benefit | 452 |
| 4 |
| 63 |
| (19 | ) | (4,489 | ) | — |
| (3,989 | ) |
| Net income (loss) | 6,399 |
| 6,916 |
| 6,259 |
| 3,224 |
| 11,821 |
| (27,991 | ) | 6,628 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (229 | ) | — |
| (229 | ) |
| Net income (loss) attributable to Comcast Corporation | $ | 6,399 |
| $ | 6,916 |
| $ | 6,259 |
| $ | 3,224 |
| $ | 11,592 |
| $ | (27,991 | ) | $ | 6,399 |
|
| Comprehensive income (loss) attributable to Comcast Corporation | $ | 6,607 |
| $ | 7,015 |
| $ | 6,261 |
| $ | 3,552 |
| $ | 12,134 |
| $ | (28,962 | ) | $ | 6,607 |
|
Comcast Corporation
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2017
|
| | | | | | | | | | | | | | | | | | | | | |
| (in millions) | Comcast
Parent | Comcast
Holdings | CCCL
Parent | NBCUniversal
Media Parent | Non-
Guarantor
Subsidiaries | Elimination
and
Consolidation
Adjustments | Consolidated
Comcast
Corporation |
| Net cash provided by (used in) operating activities | $ | (931 | ) | $ | 91 |
| $ | (233 | ) | $ | (1,054 | ) | $ | 18,088 |
| $ | — |
| $ | 15,961 |
|
| Investing Activities | | | | | | | |
| Net transactions with affiliates | 4,216 |
| (91 | ) | 818 |
| 833 |
| (5,776 | ) | — |
| — |
|
| Capital expenditures | (6 | ) | — |
| — |
| — |
| (6,833 | ) | — |
| (6,839 | ) |
| Cash paid for intangible assets | (2 | ) | — |
| — |
| — |
| (1,238 | ) | — |
| (1,240 | ) |
| Acquisitions and construction of real estate properties | (190 | ) | — |
| — |
| — |
| (135 | ) | — |
| (325 | ) |
| Acquisitions, net of cash acquired | — |
| — |
| — |
| — |
| (429 | ) | — |
| (429 | ) |
| Proceeds from sales of investments | — |
| — |
| — |
| 10 |
| 110 |
| — |
| 120 |
|
| Purchases of investments | (56 | ) | — |
| (35 | ) | (57 | ) | (1,916 | ) | — |
| (2,064 | ) |
| Deposits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Other | 101 |
| — |
| — |
| 49 |
| 600 |
| — |
| 750 |
|
| Net cash provided by (used in) investing activities | 4,063 |
| (91 | ) | 783 |
| 835 |
| (15,617 | ) | — |
| (10,027 | ) |
| Financing Activities | | | | | | | |
| Proceeds from (repayments of) short-term borrowings, net | (1,739 | ) | — |
| — |
| — |
| (1,068 | ) | — |
| (2,807 | ) |
| Proceeds from borrowings | 5,997 |
| — |
| — |
| — |
| 5,463 |
| — |
| 11,460 |
|
| Repurchases and repayments of debt | (1,000 | ) | — |
| (550 | ) | (3 | ) | (3,468 | ) | — |
| (5,021 | ) |
| Repurchases of common stock under repurchase program and employee plans | (4,212 | ) | — |
| — |
| — |
| — |
| — |
| (4,212 | ) |
| Dividends paid | (2,147 | ) | — |
| — |
| — |
| — |
| — |
| (2,147 | ) |
| Purchase of Universal Studios Japan noncontrolling interests | — |
| — |
| — |
| — |
| (2,299 | ) | — |
| (2,299 | ) |
| Issuances of common stock | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (198 | ) | — |
| (198 | ) |
| Other | (31 | ) | — |
| — |
| — |
| 134 |
| — |
| 103 |
|
| Net cash provided by (used in) financing activities | (3,132 | ) | — |
| (550 | ) | (3 | ) | (1,436 | ) | — |
| (5,121 | ) |
| Increase (decrease) in cash and cash equivalents | — |
| — |
| — |
| (222 | ) | 1,035 |
| — |
| 813 |
|
| Cash and cash equivalents, beginning of period | — |
| — |
| — |
| 482 |
| 2,819 |
| — |
| 3,301 |
|
| Cash and cash equivalents, end of period | $ | — |
| $ | — |
| $ | — |
| $ | 260 |
| $ | 3,854 |
| $ | — |
| $ | 4,114 |
|
Comcast Corporation
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2016
|
| | | | | | | | | | | | | | | | | | | | | |
| (in millions) | Comcast Parent | Comcast Holdings | CCCL Parent | NBCUniversal Media Parent | Non- Guarantor Subsidiaries | Elimination and Consolidation Adjustments | Consolidated Comcast Corporation |
| Net cash provided by (used in) operating activities | $ | (637 | ) | $ | — |
| $ | (179 | ) | $ | (1,068 | ) | $ | 15,873 |
| $ | — |
| $ | 13,989 |
|
| Investing Activities | | | | | | | |
| Net transactions with affiliates | (1,746 | ) | — |
| 179 |
| 2,150 |
| (583 | ) | — |
| — |
|
| Capital expenditures | (9 | ) | — |
| — |
| — |
| (6,553 | ) | — |
| (6,562 | ) |
| Cash paid for intangible assets | (4 | ) | — |
| — |
| — |
| (1,159 | ) | — |
| (1,163 | ) |
| Acquisitions and construction of real estate properties | (2 | ) | — |
| — |
| — |
| (301 | ) | — |
| (303 | ) |
| Acquisitions, net of cash acquired | — |
| — |
| — |
| — |
| (3,904 | ) | — |
| (3,904 | ) |
| Proceeds from sales of investments | — |
| — |
| — |
| 104 |
| 84 |
| — |
| 188 |
|
| Purchases of investments | (23 | ) | — |
| — |
| (9 | ) | (586 | ) | — |
| (618 | ) |
| Deposits | — |
| — |
| — |
| — |
| (1,748 | ) | — |
| (1,748 | ) |
| Other | (108 | ) | — |
| — |
| (35 | ) | 101 |
| — |
| (42 | ) |
| Net cash provided by (used in) investing activities | (1,892 | ) | — |
| 179 |
| 2,210 |
| (14,649 | ) | — |
| (14,152 | ) |
| Financing Activities | | | | | | | |
| Proceeds from (repayments of) short-term borrowings, net | 105 |
| — |
| — |
| — |
| 505 |
| — |
| 610 |
|
| Proceeds from borrowings | 9,231 |
| — |
| — |
| — |
| — |
| — |
| 9,231 |
|
| Repurchases and repayments of debt | (750 | ) | — |
| — |
| (1,005 | ) | (1,239 | ) | — |
| (2,994 | ) |
| Repurchases of common stock under repurchase program and employee plans | (4,061 | ) | — |
| — |
| — |
| — |
| — |
| (4,061 | ) |
| Dividends paid | (1,944 | ) | — |
| — |
| — |
| — |
| — |
| (1,944 | ) |
| Issuances of common stock | 23 |
| — |
| — |
| — |
| — |
| — |
| 23 |
|
| Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock | — |
| — |
| — |
| — |
| (194 | ) | — |
| (194 | ) |
| Other | (75 | ) | — |
| — |
| 25 |
| 54 |
| — |
| 4 |
|
| Net cash provided by (used in) financing activities | 2,529 |
| — |
| — |
| (980 | ) | (874 | ) | — |
| 675 |
|
| Increase (decrease) in cash and cash equivalents | — |
| — |
| — |
| 162 |
| 350 |
| — |
| 512 |
|
| Cash and cash equivalents, beginning of period | — |
| — |
| — |
| 414 |
| 1,881 |
| — |
| 2,295 |
|
| Cash and cash equivalents, end of period | $ | — |
| $ | — |
| $ | — |
| $ | 576 |
| $ | 2,231 |
| $ | — |
| $ | 2,807 |
|
| | | | | | | | |
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our 2020 Annual Report on Form 10-K.
Overview
We are a global media and technology company with twothree primary businesses,businesses: Comcast Cable, NBCUniversal, and NBCUniversal.Sky. We present our operations for (1) Comcast Cable in one reportable business segment, referred to as Cable Communications, and our operations forCommunications; (2) NBCUniversal in fourthree reportable business segments: Cable Networks, Broadcast Television, Filmed EntertainmentMedia, Studios and Theme Parks (collectively, the “NBCUniversal segments”).; and (3) Sky in one reportable business segment. Refer to Note 2 for information on our reportable segments, including a description of the segment change implemented in the first quarter of 2021. All amounts are presented on a consistent basis under the new segment structure.
Impacts of COVID-19
The novel coronavirus disease 2019 (“COVID-19”) and measures taken to prevent its spread across the globe have impacted our businesses in a number of ways. COVID-19 has had material negative impacts on NBCUniversal and Sky results of operations primarily due to the temporary restrictions and closures at our theme parks and the impacts of professional sports, respectively. We expect the effects of the COVID-19 pandemic will continue to adversely impact our consolidated results of operations over the near to medium term, although the extent of such impact will depend on restrictive governmental measures, U.S. and global economic conditions, expanded availability and acceptance of vaccines and consumer behavior in response to COVID-19. The most significant effects of COVID-19 began in the latter part of the first quarter of 2020, affecting the comparability of periods included in this report. The following summary provides a discussion of current and potential future effects of the pandemic with direct impacts to our businesses.
Cable Communications Segment
Comcast Cable is one•Beginning in March 2020, new qualifying customers for Internet Essentials, our low-income internet adoption program, receive 60 days of free broadband services. Our customer metrics do not include customers in the nation’s largest providersfree Internet Essentials offer or certain high-risk customers who continued to receive service following nonpayment as a result of video, high-speed Internet, voice,COVID-19 programs. The number of customers excluded from our customer metrics has continued to decrease as some of these customers either began paying for service, resulting in customer net additions, or disconnected and securityno longer receive service, and automation services (“cable services”)we expect this to residential customers under the XFINITY brand;continue in future periods. We have experienced improvement in customer collections; however, we also provide these and other servicesbelieve there continues to business customers and sell advertising. As of September 30, 2017, our cable systems had 29.1 million total customer relationships, including 27.0 million residential and 2.1 million business customer relationships, and passed more than 57 million homes and businesses. Our Cable Communications segment generates revenue primarily from residential and business customers that subscribe to our cable services, which we market individually and as bundled services, and from the sale of advertising. During the nine months ended September 30, 2017, our Cable Communications segment generated 63% of our consolidated revenue and 70% of the aggregate Adjusted EBITDA for our reportable business segments.
NBCUniversal Segments
NBCUniversal is one of the world’s leading media and entertainment companies that develops, produces and distributes entertainment, news and information, sports, and other content for global audiences, and owns and operates theme parks worldwide.
Cable Networks
Our Cable Networks segment consists primarily ofbe a diversified portfolio of cable television networks. Our cable networks are comprised of our national cable networks that provide a variety of entertainment, news and information, and sports content; our regional sports and news networks; our international cable networks; our cable television studio production operations; and related digital media properties. Our Cable Networks segment generates revenue primarily from the distribution of our cable network programming to traditional and virtual multichannel video providers; from the sale of advertisingrisk associated with collections on our cable networks and related digital media properties; from the licensingoutstanding receivables as a result of our owned programming, including programming from our cable television studio production operations, to cable and broadcast networks and subscription video on demand services; and from the sale of our owned programming on standard-definition digital video discs and Blu-ray discs (together, “DVDs”) and through digital distribution services such as iTunes.COVID-19.
Broadcast TelevisionNBCUniversal
•Our Broadcast Television segment consists primarily of the NBC and Telemundo broadcast networks, our NBC and Telemundo owned local broadcast television stations, the NBC Universo national cable network, our broadcast television studio production operations, and related digital media properties. Our Broadcast Television segment generates revenue primarily from the sale of advertising on our broadcast networks, owned local broadcast television stations and related digital media properties; from the licensing of our owned programming by our broadcast television studio production operations to various distribution platforms, including to cable and broadcast networks as well as to subscription video on demand services; from the fees received under retransmission consent agreements and associated fees received from NBC-affiliated local broadcast television stations; and from the sale of our owned programming on DVDs and through digital distribution services.
Filmed Entertainment
Our Filmed Entertainment segment primarily produces, acquires, markets and distributes filmed entertainment worldwide, and it also develops, produces and licenses live stage plays. Our films are produced primarily under the Universal Pictures, Illumination, Focus Features and DreamWorks Animation names. Our Filmed Entertainment segment generates revenue primarily from the worldwide distribution of our produced and acquired films for exhibition in movie theaters, from the licensing of produced and acquired films through various distribution platforms, and from the sale of produced and acquired films on DVDs and through digital distribution services. Our Filmed Entertainment segment also generates revenue from producing and licensing live stage plays, from the distribution of filmed entertainment produced by third parties, and from Fandango, our movie ticketing and entertainment business.
Theme Parks
Our Theme Parks segment consists primarily of our Universal theme parks in Orlando Florida;and Hollywood California; and Osaka, Japan. In addition, alongwere operating without capacity restrictions as of the end of the second quarter of 2021, following periods with a consortium of Chinese state-owned companies, we are developing acapacity restrictions in place. Our theme park in China. Our Theme Parks segment generates revenue primarily from ticket sales and guest spending at our Universal theme parks.
Corporate and Other
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses.
We are also pursuing other business development initiatives, such as our wireless phone service that we launchedJapan was temporarily closed for a period in the second quarter of 20172021, but was reopened and operating with capacity restrictions as of the end of the quarter. The capacity restrictions and temporary closures of our theme parks had a significant impact on our revenue and Adjusted EBITDA for the three and six months ended June 30, 2021 on a small scale to our residential cable customers using our virtual network operator rights to provideconsolidated basis. We expect the service over Verizon’s wireless network and our existing network of in-home and outdoor Wi-Fi hotspots. We offer the wireless phone service only as part of our bundled service offerings to residential customers subscribing to our high-speed Internet service within our cable distribution footprint and may in the future also offer wireless phone service to our small business customers on similar terms. The wireless phone service has success-based working capital requirements, primarily associated with the procurement of handsets, which customers are able to pay for upfront or finance interest-free over 24 months, and other equipment.
Competition
The results of operations at our theme parks will continue to be negatively impacted and we cannot predict if our parks will remain open or be subject to capacity restrictions, or the level of attendance at our reportable business segments are affected by competition, as allreopened parks. We currently expect that Universal Beijing Resort will open later in 2021. The development of our businesses operatethe Epic Universe theme park in intensely competitive, consumer-driven and rapidly changing environments and compete with a growing numberOrlando resumed in the first quarter of companies that provide a broad range of communications products and services and entertainment, news and information content to consumers.2021.
For additional information on the competition our businesses face, see our 2016 Annual Report on Form 10-K and refer to Item 1: Business and Item 1A: Risk Factors. Within the Business section, refer•Delays to the “Competition” discussion,start of seasons for certain professional sports leagues, including the 2020-2021 NHL and within the Risk Factors section, refer to the risk factors entitled “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” and “Changes in consumer behavior driven by new technologies and distribution platforms for viewing content may adversely affect our businesses and challenge existing business models.”
Seasonality and Cyclicality
Each of our businesses is subject to seasonal and cyclical variations. In our Cable Communications segment, our results are impacted by the seasonal nature of customers receiving our cable services in college and vacation markets. This generally results in a reduction in net customer additionsNBA seasons, resulted in the second quartershift of each year.
Revenue in our Cable Communications, Cable Networksadditional events into the first and Broadcast Television segments is subject to cyclical advertising patterns and changes in viewership levels. Advertising revenue in the U.S. is generally higher in the second and fourth quarters of each2021 compared to a normal year, due in part to increases in consumer advertising in the spring and in the period leading up to and including the holiday season. Advertising revenue in the U.S. is also cyclical, with a benefit in even-numbered years due to advertising related to candidates running for political office and issue-oriented advertising. Revenue in our Cable Networks and Broadcast Television segments fluctuates depending onwhich impacted the timing of when our programming is aired, which typically results in higherrevenue and expense recognition, because both advertising revenue and costs associated with broadcasting these programs are recognized when events are broadcast. We expect the timing of sports seasons to generally return to a normal calendar beginning in the secondthird quarter of 2021. In addition, the 2020 Tokyo Olympics were postponed from the third quarter of 2020 to the third quarter of 2021, resulting in a corresponding delay of the associated revenue and fourthcosts.
•Our studio production operations have generally returned to full capacity. With the temporary closure and limited capacity operation of many movie theaters worldwide, we have delayed or altered the theatrical distribution strategy for certain of our films, both domestically and internationally. Delays in theatrical releases affect both current and future periods as a result of corresponding delays in subsequent content licensing windows. We expect results of
operations in our Studios segment to continue to be negatively impacted over the near to medium term as a result of COVID-19.
Sky
•Direct-to-consumer revenue has been negatively impacted, and future periods may be negatively impacted, as a result of lower sports subscription revenue due to the closures and extent of reopening of our commercial customers’ locations. In addition, delays to the start of the 2020-2021 seasons for certain sports, including European football, resulted in the shift of additional events and the significant costs associated with broadcasting these programs into the first and second quarters of each2021 compared to a normal year. Our revenueWe expect the timing of sports seasons to generally return to a normal calendar beginning in the third quarter of 2021.
In 2020, our businesses implemented separate cost savings initiatives, with the most significant relating to severance at NBCUniversal in connection with the realignment of the operating structure in our television businesses as well as overall reductions in the cost base. The costs of these initiatives were presented in Corporate and Other. Payments related to NBCUniversal employee severance are expected to be completed in 2021 and the related costs savings will be realized in operating costs and expenses are cyclical as a resultprimarily beginning in 2021. A portion of our periodic broadcasts of major sporting events, such as the Olympic Games, which affect our Cable Networks and Broadcast Television segments, and the Super Bowl, which affects our Broadcast Television segment. We define our operating costs and expenses as total costs and expenses, excluding depreciation and amortization expensethese cost savings may be reallocated to investments in content and other operating gains. Our advertising revenue increases in the period of these broadcasts due to increased demand for advertising time, and our operating costs and expenses also increase as a result of our production costs and the amortization of the related rights fees.strategic initiatives.
Revenue in our Filmed Entertainment segment fluctuates due to the timing of the release of films in movie theaters, on DVDs and through various other distribution platforms. Release dates are determined by several factors, including competition and the timing of vacation and holiday periods. As a result, revenue tends to be seasonal, with increases experienced each year during the summer months and around the holiday season. Revenue in our Cable Networks, Broadcast Television and Filmed Entertainment segments also fluctuates due to the timing of when our content is made available to licensees.
Revenue in our Theme Parks segment fluctuates with changes in theme park attendance that result from the seasonal nature of vacation travel and weather variations, local entertainment offerings and the opening of new attractions, as well as with changes in currency exchange rates. Our theme parks generally experience peak attendance during the spring holiday period, the summer months when schools are closed and the holiday season.
Consolidated Operating Results |
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/ (Decrease) | | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | |
| | 2017 | | 2016 | | |
|
| Revenue | $ | 20,983 |
| | $ | 21,319 |
| | (1.6 | )% | | $ | 62,611 |
| | $ | 59,378 |
| | 5.4 | % |
| Costs and Expenses: | | | | | | | | | | | |
| Programming and production | 6,077 |
| | 7,003 |
| | (13.2 | ) | | 18,492 |
| | 17,926 |
| | 3.2 |
|
| Other operating and administrative | 6,423 |
| | 5,996 |
| | 7.1 |
| | 18,310 |
| | 17,285 |
| | 5.9 |
|
| Advertising, marketing and promotion | 1,553 |
| | 1,485 |
| | 4.5 |
| | 4,748 |
| | 4,510 |
| | 5.3 |
|
| Depreciation | 1,991 |
| | 1,865 |
| | 6.8 |
| | 5,876 |
| | 5,518 |
| | 6.5 |
|
| Amortization | 589 |
| | 530 |
| | 11.0 |
| | 1,747 |
| | 1,544 |
| | 13.1 |
|
| Other operating gains | (442 | ) | | — |
| | NM |
| | (442 | ) | | — |
| | NM |
|
| Operating income | 4,792 |
| | 4,440 |
| | 7.9 |
| | 13,880 |
| | 12,595 |
| | 10.2 |
|
| Other income (expense) items, net | (696 | ) | | (716 | ) | | (2.9 | ) | | (1,980 | ) | | (1,978 | ) | | 0.1 |
|
| Income before income taxes | 4,096 |
| | 3,724 |
| | 10.0 |
| | 11,900 |
| | 10,617 |
| | 12.1 |
|
| Income tax expense | (1,413 | ) | | (1,400 | ) | | 1.0 |
| | (4,035 | ) | | (3,989 | ) | | 1.2 |
|
| Net income | 2,683 |
| | 2,324 |
| | 15.5 |
| | 7,865 |
| | 6,628 |
| | 18.7 |
|
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock | (33 | ) | | (87 | ) | | (61.9 | ) | | (136 | ) | | (229 | ) | | (40.7 | ) |
| Net income attributable to Comcast Corporation | $ | 2,650 |
| | $ | 2,237 |
| | 18.5 | % | | $ | 7,729 |
| | $ | 6,399 |
| | 20.8 | % |
All percentages are calculated based on actual amounts. Minor differences may exist due to rounding. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/ (Decrease) |
| (in millions, except per share data) | 2021 | | 2020 | | % | | 2021 | | 2020 | | % |
| Revenue | $ | 28,546 | | | $ | 23,715 | | | 20.4 | % | | $ | 55,751 | | | $ | 50,324 | | | 10.8 | % |
| Costs and Expenses: | | | | | | | | | | | |
| Programming and production | 9,256 | | | 6,817 | | | 35.8 | | | 18,175 | | | 15,118 | | | 20.2 | |
| Other operating and administrative | 8,549 | | | 7,646 | | | 11.8 | | | 16,818 | | | 15,900 | | | 5.8 | |
| Advertising, marketing and promotion | 1,851 | | | 1,341 | | | 38.0 | | | 3,467 | | | 3,279 | | | 5.7 | |
| Depreciation | 2,113 | | | 2,099 | | | 0.7 | | | 4,231 | | | 4,206 | | | 0.6 | |
| Amortization | 1,270 | | | 1,165 | | | 8.9 | | | 2,514 | | | 2,322 | | | 8.3 | |
| | | | | | | | | | | |
| Operating income | 5,507 | | | 4,647 | | | 18.5 | | | 10,546 | | | 9,499 | | | 11.0 | |
| Interest expense | (1,093) | | | (1,112) | | | (1.7) | | | (2,112) | | | (2,324) | | | (9.1) | |
| Investment and other income (loss), net | 1,216 | | | 420 | | | 189.8 | | | 1,607 | | | (296) | | | NM |
| Income before income taxes | 5,630 | | | 3,955 | | | 42.4 | | | 10,042 | | | 6,879 | | | 46.0 | |
| Income tax expense | (2,000) | | | (946) | | | 111.4 | | | (3,119) | | | (1,646) | | | 89.5 | |
| Net income | 3,630 | | | 3,009 | | | 20.7 | | | 6,922 | | | 5,233 | | | 32.3 | |
| Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (108) | | | 21 | | | NM | | (145) | | | 98 | | | NM |
| Net income attributable to Comcast Corporation | $ | 3,738 | | | $ | 2,988 | | | 25.1 | % | | $ | 7,067 | | | $ | 5,135 | | | 37.6 | % |
| Basic earnings per common share attributable to Comcast Corporation shareholders | $ | 0.81 | | | $ | 0.65 | | | 24.6 | % | | $ | 1.54 | | | $ | 1.12 | | | 37.5 | % |
| Diluted earnings per common share attributable to Comcast Corporation shareholders | $ | 0.80 | | | $ | 0.65 | | | 23.1 | % | | $ | 1.51 | | | $ | 1.11 | | | 36.0 | % |
| | | | | | | | | | | |
Adjusted EBITDA(a) | $ | 8,927 | | | $ | 7,927 | | | 12.6 | % | | $ | 17,339 | | | $ | 16,057 | | | 8.0 | % |
Percentage changes that are considered not meaningful are denoted with NM.
(a)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 26 for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income attributable to Comcast Corporation to Adjusted EBITDA.
Consolidated Revenue
Consolidated revenue decreased for the three months ended September 30, 2017 primarily due to revenue associated with our broadcast of the Rio Olympics in August 2016, which is reflected in our Cable Networks and Broadcast Television segments in the prior year period. The decrease was partially offset by increases in revenue in our Cable Communications, andSky, Media, Theme Parks segments. Excluding $1.5 billion of revenue associated with our broadcast of the 2016 Rio Olympics, consolidated revenue increased 5.8% for the three months ended September 30, 2017.
Our Cable Communications, Filmed Entertainment and Theme Parks segments accounted for the increaseStudios drove increases in consolidated revenue for the ninethree and six months ended SeptemberJune 30, 2017, which was partially offset by decreases in our Cable Networks and Broadcast Television segments due to revenue associated with our broadcast of the 2016 Rio Olympics in the prior year period. Excluding $1.5 billion of revenue associated with our broadcast of the 2016 Rio Olympics, consolidated revenue increased 8.2% for the nine months ended September 30, 2017.2021.
Revenue for our segments and other businesses is discussed separately below under the heading “Segment Operating Results.” Revenue for our other businesses is discussed separately below under the heading “Corporate and Other Results of Operations.”
Consolidated Costs and Expenses
Consolidated operating costs and expenses decreased for the three months ended September 30, 2017 primarily due to expenses associated with our broadcast of the 2016 Rio Olympics, which is reflected in our Cable Networks and Broadcast Television segments in the prior year period. The decrease was partially offset by increases in operating costs and expenses in ourSky, Media, Cable Communications, segment.
Our Cable Communications, Filmed Entertainment and Theme Parks segments accounted for the increaseand Studios drove increases in consolidated operating costs and expenses for the ninethree and six months ended SeptemberJune 30, 2017, which was partially offset by decreases in our Cable Networks and Broadcast Television segments due to expenses associated with our broadcast of the 2016 Rio Olympics in the prior year period.2021.
Operating costs and expenses for our segments and our corporate operations, businesses development initiatives and other businesses are discussed separately below under the heading “Segment Operating Results.” Operating costs and expenses for our corporate and other businesses and initiatives are discussed separately below under the heading “Corporate and Other Results of Operations.”
Consolidated Depreciation and Amortization Expense | | | | Three Months Ended
September 30 | | Increase/ (Decrease) | | Nine Months Ended
September 30 | | Increase/ (Decrease) | | Three Months Ended
June 30, | | Increase/ (Decrease) | | Six Months Ended
June 30, | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | | | 2017 | | 2016 | | | (in millions) | 2021 | | 2020 | | % | | 2021 | | 2020 | | % |
| Cable Communications | $ | 2,049 |
| | $ | 1,929 |
| | 6.3 | % | | $ | 6,030 |
| | $ | 5,676 |
| | 6.2 | % | Cable Communications | $ | 1,950 | | | $ | 1,937 | | | 0.7 | % | | $ | 3,880 | | | $ | 3,883 | | | (0.1) | % |
| NBCUniversal | 506 |
| | 445 |
| | 13.5 |
| | 1,534 |
| | 1,324 |
| | 15.8 |
| NBCUniversal | 586 | | | 579 | | | 1.0 | | | 1,168 | | | 1,145 | | | 2.0 | |
| Sky | | Sky | 826 | | | 720 | | | 14.7 | | | 1,640 | | | 1,438 | | | 14.0 | |
| Corporate and Other | 25 |
| | 21 |
| | 16.7 |
| | 59 |
| | 62 |
| | (6.7 | ) | Corporate and Other | 21 | | | 28 | | | (23.3) | | | 57 | | | 62 | | | (7.0) | |
| Total | $ | 2,580 |
| | $ | 2,395 |
| | 7.7 | % | | $ | 7,623 |
| | $ | 7,062 |
| | 7.9 | % | |
| Comcast Consolidated | | Comcast Consolidated | $ | 3,383 | | | $ | 3,264 | | | 3.6 | % | | $ | 6,745 | | | $ | 6,528 | | | 3.3 | % |
Consolidated depreciation and amortization expense increased for both the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2020 primarily due to increasesincreased amortization expense at Sky due to the impact of foreign currency.
Amortization expense from acquisition-related intangible assets totaled $586 million and $1.2 billion for the three and six months ended June 30, 2021, respectively. Amortization expense from acquisition-related intangible assets totaled $565 million and $1.1 billion for the three and six months ended June 30, 2020, respectively. Amounts primarily relate to customer relationship intangible assets recorded in capital expenditures,connection with the Sky transaction in the fourth quarter of 2018 and the NBCUniversal transaction in 2011.
Consolidated Interest Expense
Interest expense decreased for the three months ended June 30, 2021 compared to the same period in 2020 primarily due to a decrease in average debt outstanding, partially offset by a $78 million charge recorded in the current period related to the early redemption of senior notes due 2024. Interest expense decreased for the six months ended June 30, 2021 compared to the same period in 2020 primarily due to a $140 million charge recorded in the prior year period related to the early redemption of senior notes, as well as expenditures for software,a decrease in our Cable Communications segmentaverage debt outstanding, partially offset by a $78 million charge recorded in recent years and our continued investments in new attractions in our Theme Parks segment. We continue to invest to increase our network capacity and in customer premise equipment, primarily for our X1 platform, cloud DVR technology and wireless gateways. Certain of these assets have shorter estimated useful lives, which is also a contributorthe current period related to the increaseearly redemption of senior notes due 2024.
Consolidated Investment and Other Income (Loss), Net
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | % | | 2021 | | 2020 | | % |
| Equity in net income (losses) of investees, net | $ | 959 | | | $ | 300 | | | NM | | $ | 1,095 | | | $ | (368) | | | NM |
| Realized and unrealized gains (losses) on equity securities, net | 189 | | | 5 | | | NM | | 426 | | | (53) | | | NM |
| Other income (loss), net | 69 | | | 115 | | | (40.1) | | | 87 | | | 125 | | | (30.8) |
| Total investment and other income (loss), net | $ | 1,216 | | | $ | 420 | | | 189.8 | % | | $ | 1,607 | | | $ | (296) | | | NM |
The change in depreciation expenseinvestment and other income (loss) net for both the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2020 was primarily due to equity in net income (losses) of investees, net related to our Cable Communications segment.
Consolidated Other Operating Gains
Consolidated other operatinginvestment in Atairos Group, Inc. and realized and unrealized gains (losses) on equity securities, net related to fair value adjustments for bothnonmarketable equity securities. The income (losses) at Atairos were driven by fair value adjustments on its underlying investments with income of $883 million and $960 million for the three and ninesix months ended SeptemberJune 30, 2017 included $3372021, respectively, and income of $446 million and losses of $135 million for the three and six months ended June 30, 2020, respectively.
Consolidated Income Tax Expense
Income tax expense for the three and six months ended June 30, 2021 and 2020 reflects an effective income tax rate that differs from the federal statutory rate primarily due to state and foreign income taxes and adjustments associated with uncertain tax positions. The increases in income tax expense for the three and six months ended June 30, 2021 compared to the same periods in 2020 were primarily due to higher income before income taxes. We also recognized income tax expense of $498 million related to NBCUniversal’s relinquishmentan increase in our net deferred tax liability as a result of spectrum rights (seethe enactment of tax law changes in the United Kingdom in the second quarter of 2021. Refer to Note 4 to Comcast’s condensed consolidated financial statements and Note 3 to NBCUniversal's condensed consolidated financial statements) and $105 million related to the sale of a business in Corporate and Other (see Note 6 to Comcast's condensed consolidated financial statements).9 for further discussion.
Segment Operating Results
Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use Adjusted EBITDA as the measure of profit or loss for our operating segments. See Note 2 for our definition of Adjusted EBITDA is defined as net income attributable to Comcast Corporation before net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax expense, other income (expense) items, net, depreciation and amortization expense, and other operating gains, and excluding impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets, if any. From time to time we may excludea reconciliation from Adjusted EBITDA the impact of events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. Other income (expense) items, net include interest expense, investment income (loss), equity in net income (losses) of investees and other income (expense), net, as stated in our condensed consolidated statement of income. 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 and tax structures and by our 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. We reconcile the aggregate amount of Adjusted EBITDA for our reportable business segments to consolidated income before income taxes in the business segment footnote to our condensed consolidated financial statements (see Note 11 to Comcast’s condensed consolidated financial statements and Note 10 to NBCUniversal’s condensed consolidated financial statements). This measure should not be considered a substitute for operating income (loss), net income (loss), net income (loss) attributable to Comcast Corporation or NBCUniversal, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with generally accepted accounting principles in the United States.taxes.
To be consistent with our current management reporting presentation, certain 2016 operating results were reclassified within the Cable Communications segment.
Cable Communications Segment Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | | | | | | | | | | | | |
| Residential: | | | | | | | | | | | | |
| Broadband | $ | 5,717 | | | $ | 5,000 | | | | 14.3 | % | | $ | 11,317 | | | $ | 10,001 | | | 13.2 | % |
| Video | 5,554 | | | 5,415 | | | | 2.6 | | | 11,177 | | | 11,047 | | | 1.2 | |
| Voice | 870 | | | 877 | | | | (0.8) | | | 1,741 | | | 1,776 | | | (2.0) | |
| Wireless | 556 | | | 326 | | | | 70.4 | | | 1,069 | | | 669 | | | 59.8 | |
| Business services | 2,202 | | | 2,004 | | | | 9.9 | | | 4,369 | | | 4,047 | | | 8.0 | |
| Advertising | 679 | | | 428 | | | | 58.6 | | | 1,296 | | | 985 | | | 31.6 | |
| Other | 425 | | | 378 | | | | 12.4 | | | 838 | | | 821 | | | 2.1 | |
| Total revenue | 16,002 | | | 14,428 | | | | 10.9 | | | 31,807 | | | 29,346 | | | 8.4 | |
| Operating costs and expenses | | | | | | | | | | | | |
| Programming | 3,593 | | | 3,203 | | | | 12.1 | | | 7,263 | | | 6,682 | | | 8.7 | |
| Technical and product support | 2,075 | | | 1,933 | | | | 7.3 | | | 4,096 | | | 3,945 | | | 3.8 | |
| Customer service | 582 | | | 601 | | | | (3.2) | | | 1,184 | | | 1,238 | | | (4.4) | |
| Advertising, marketing and promotion | 971 | | | 834 | | | | 16.5 | | | 1,876 | | | 1,788 | | | 4.9 | |
| Franchise and other regulatory fees | 449 | | | 398 | | | | 12.8 | | | 950 | | | 804 | | | 18.1 | |
| Other | 1,260 | | | 1,283 | | | | (1.8) | | | 2,536 | | | 2,637 | | | (3.8) | |
| Total operating costs and expenses | 8,929 | | | 8,252 | | | | 8.2 | | | 17,904 | | | 17,094 | | | 4.7 | |
| Adjusted EBITDA | $ | 7,073 | | | $ | 6,176 | | | | 14.5 | % | | $ | 13,903 | | | $ | 12,252 | | | 13.5 | % |
|
| | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | | % |
| Revenue | | | | | | | |
| Residential: | | | | | | | |
| Video | $ | 5,825 |
| | $ | 5,591 |
| | $ | 234 |
| | 4.2 | % |
| High-speed Internet | 3,709 |
| | 3,405 |
| | 304 |
| | 8.9 |
|
| Voice | 840 |
| | 878 |
| | (38 | ) | | (4.5 | ) |
| Business services | 1,575 |
| | 1,399 |
| | 176 |
| | 12.6 |
|
| Advertising | 542 |
| | 625 |
| | (83 | ) | | (13.2 | ) |
| Other | 712 |
| | 659 |
| | 53 |
| | 7.8 |
|
| Total revenue | 13,203 |
| | 12,557 |
| | 646 |
| | 5.1 |
|
| Operating costs and expenses | | | | | | | |
| Programming | 3,264 |
| | 2,905 |
| | 359 |
| | 12.4 |
|
| Technical and product support | 1,633 |
| | 1,600 |
| | 33 |
| | 2.1 |
|
| Customer service | 626 |
| | 627 |
| | (1 | ) | | (0.1 | ) |
| Advertising, marketing and promotion | 912 |
| | 934 |
| | (22 | ) | | (2.4 | ) |
| Franchise and other regulatory fees | 379 |
| | 371 |
| | 8 |
| | 2.2 |
|
| Other | 1,143 |
| | 1,134 |
| | 9 |
| | 0.6 |
|
| Total operating costs and expenses | 7,957 |
| | 7,571 |
| | 386 |
| | 5.1 |
|
| Adjusted EBITDA | $ | 5,246 |
| | $ | 4,986 |
| | $ | 260 |
| | 5.2 | % |
|
| | | | | | | | | | | | | | |
| | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | | % |
| Revenue | | | | | | | |
| Residential: | | | | | | | |
| Video | $ | 17,396 |
| | $ | 16,710 |
| | $ | 686 |
| | 4.1 | % |
| High-speed Internet | 10,994 |
| | 10,049 |
| | 945 |
| | 9.4 |
|
| Voice | 2,559 |
| | 2,667 |
| | (108 | ) | | (4.1 | ) |
| Business services | 4,596 |
| | 4,070 |
| | 526 |
| | 12.9 |
|
| Advertising | 1,628 |
| | 1,757 |
| | (129 | ) | | (7.3 | ) |
| Other | 2,064 |
| | 1,952 |
| | 112 |
| | 5.7 |
|
| Total revenue | 39,237 |
| | 37,205 |
| | 2,032 |
| | 5.5 |
|
| Operating costs and expenses |
| |
| |
| |
|
| Programming | 9,698 |
| | 8,659 |
| | 1,039 |
| | 12.0 |
|
| Technical and product support | 4,778 |
| | 4,674 |
| | 104 |
| | 2.2 |
|
| Customer service | 1,854 |
| | 1,869 |
| | (15 | ) | | (0.8 | ) |
| Advertising, marketing and promotion | 2,666 |
| | 2,646 |
| | 20 |
| | 0.7 |
|
| Franchise and other regulatory fees | 1,142 |
| | 1,106 |
| | 36 |
| | 3.3 |
|
| Other | 3,335 |
| | 3,328 |
| | 7 |
| | 0.2 |
|
| Total operating costs and expenses | 23,473 |
| | 22,282 |
| | 1,191 |
| | 5.3 |
|
| Adjusted EBITDA | $ | 15,764 |
| | $ | 14,923 |
| | $ | 841 |
| | 5.6 | % |
|
| | | | | | | | | | | | |
| | Total Customers | Net Additional Customers |
| | September 30 | Three Months Ended
September 30 | Nine Months Ended
September 30 |
| (in thousands, except per customer amounts) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 |
| Video | | | | | | |
| Video residential customers | 21,341 |
| 21,420 |
| (134 | ) | 19 |
| (147 | ) | 36 |
|
| Video business services customers | 1,049 |
| 1,007 |
| 9 |
| 13 |
| 30 |
| 45 |
|
| Total video customers | 22,390 |
| 22,428 |
| (125 | ) | 32 |
| (118 | ) | 81 |
|
| High-Speed Internet | | | | | | |
| High-speed Internet residential customers | 23,546 |
| 22,477 |
| 182 |
| 288 |
| 718 |
| 868 |
|
| High-speed Internet business services customers | 1,974 |
| 1,839 |
| 32 |
| 41 |
| 100 |
| 120 |
|
| Total high-speed Internet customers | 25,519 |
| 24,316 |
| 214 |
| 330 |
| 818 |
| 988 |
|
| Voice | | | | | | |
| Voice residential customers | 10,351 |
| 10,527 |
| (119 | ) | (24 | ) | (195 | ) | 90 |
|
| Voice business services customers | 1,214 |
| 1,116 |
| 25 |
| 26 |
| 74 |
| 77 |
|
| Total voice customers | 11,565 |
| 11,643 |
| (94 | ) | 2 |
| (122 | ) | 168 |
|
| Security and Automation | | | | | | |
| Security and automation customers | 1,079 |
| 815 |
| 51 |
| 78 |
| 188 |
| 203 |
|
| Customer Relationships | | | | | | |
| Residential customer relationships | 26,957 |
| 26,312 |
| 83 |
| 175 |
| 424 |
| 484 |
|
| Business services customer relationships | 2,146 |
| 2,006 |
| 31 |
| 43 |
| 102 |
| 119 |
|
| Total customer relationships | 29,104 |
| 28,318 |
| 115 |
| 217 |
| 527 |
| 604 |
|
| Residential customer relationships mix | | | | | | |
| Single product customers | 8,055 |
| 7,722 |
| 125 |
| 51 |
| 299 |
| 75 |
|
| Double product customers | 8,983 |
| 8,682 |
| 38 |
| 97 |
| 186 |
| 203 |
|
| Triple and quad product customers | 9,919 |
| 9,908 |
| (79 | ) | 26 |
| (61 | ) | 205 |
|
| | | | | | | | | | | | | | | | | | | | |
| | | Net Additions / (Losses) |
| | June 30, | Three Months Ended
June 30, | Six Months Ended
June 30, |
| (in thousands) | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| Customer relationships | | | | | | |
| Residential customer relationships | 31,339 | | 29,724 | | 277 | | 241 | | 647 | | 601 | |
| Business services customer relationships | 2,454 | | 2,384 | | 17 | | (24) | | 28 | | (12) | |
| Total customer relationships | 33,793 | | 32,108 | | 294 | | 217 | | 675 | | 589 | |
| Residential customer relationships mix | | | | | | |
| One product customers | 13,477 | | 11,306 | | 480 | | 531 | | 1,069 | | 1,085 | |
| Two product customers | 8,562 | | 8,742 | | (83) | | (107) | | (173) | | (181) | |
| Three or more product customers | 9,299 | | 9,676 | | (120) | | (184) | | (250) | | (303) | |
| Broadband | | | | | | |
| Residential customers | 29,108 | | 27,194 | | 334 | | 340 | | 782 | | 806 | |
| Business services customers | 2,280 | | 2,209 | | 20 | | (17) | | 32 | | (6) | |
| Total broadband customers | 31,388 | | 29,403 | | 354 | | 323 | | 814 | | 800 | |
| Video | | | | | | |
| Residential customers | 18,225 | | 19,473 | | (364) | | (427) | | (768) | | (814) | |
| Business services customers | 731 | | 894 | | (34) | | (51) | | (121) | | (72) | |
| Total video customers | 18,956 | | 20,367 | | (399) | | (477) | | (889) | | (887) | |
| Voice | | | | | | |
| Residential customers | 9,412 | | 9,698 | | (121) | | (142) | | (233) | | (236) | |
| Business services customers | 1,376 | | 1,331 | | 13 | | (16) | | 19 | | (12) | |
| Total voice customers | 10,788 | | 11,029 | | (108) | | (158) | | (214) | | (248) | |
| | | | | | |
| | | | | | |
| Wireless | | | | | | |
| Wireless lines | 3,383 | | 2,393 | | 280 | | 126 | | 558 | | 342 | |
Customer metrics are presented based on actual amounts. Minor differences may exist due to rounding. Beginning in 2017, we include prepaid customers, which are customers who prepay for at least 30 days of service, in our customer metrics. Residential video and high-speed Internet customers as of September 30, 2017 included prepaid customers totaling approximately 2,000 and 42,000, respectively. Customer relationships represent the number of residential and business customers that subscribe to at least one of our cable services. SingleOne product, doubletwo product, and triple and quadthree or more product customers represent residential customers that subscribe to one, two, or three and fouror more of our cable services, respectively. Beginning in 2017,For multiple dwelling units (“MDUs”), including buildings located on college campuses, whose residents have the ability to receive additional services, such as additional programming choices or our high-definition video (“HD”) or digital video recorder (“DVR”) services, we count and report customers based on the number of potential billable relationships within each MDU. For MDUs whose residents are not able to receive additional services, the MDU is counted as a single customer. Residential broadband and video customer metrics include certain customers that have prepaid for services. Business customers are generally counted based on the number of locations receiving services within our distribution system, with certain offerings such as Ethernet network services counted as individual customer relationships. Wireless lines represent the number of activated, eligible wireless devices on customers’ accounts. Individual customer relationships may have multiple wireless lines. Customer metrics for 2021 and 2020 do not include customers subscribingin the free Internet Essentials offer or certain high-risk customers who continued to our securityreceive service following nonpayment (refer to “Impacts of COVID-19” for further discussion). Total residential customer relationships and automation servicesbroadband customers were updated in customer relationship information. Allthe first quarter of 2021 due to a conforming change to methodology, resulting in a reduction of approximately 26,000 customers. There was no impact to net additions and information for all periods presented have been adjusted for the inclusion of security and automation customers.recast on a comparable basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | Increase/(Decrease) | | Six Months Ended
June 30, | Increase/(Decrease) |
| 2021 | | 2020 | % | | 2021 | | 2020 | % |
| Average monthly total revenue per customer relationship | $ | 158.53 | | | $ | 150.29 | | 5.5 | % | | $ | 158.45 | | | $ | 153.74 | | 3.1 | % |
| Average monthly Adjusted EBITDA per customer relationship | $ | 70.07 | | | $ | 64.33 | | 8.9 | % | | $ | 69.26 | | | $ | 64.18 | | 7.9 | % |
Average monthly total revenue per customer relationship foris impacted by rate adjustments and changes in the threetypes and nine months ended September 30, 2017 was $151.51levels of services received by our residential and $151.16, respectively. Averagebusiness services customers, as well as changes in advertising revenue. While revenue from our residential broadband, video and voice services is also impacted by changes in the allocation of revenue among services sold in a bundle, the allocation does not impact average monthly total revenue per customer relationship.
Each of our services has a different contribution to operating margin and we also use average monthly Adjusted EBITDA per customer relationship to evaluate the profitability of our customer base across our service offerings. We believe these metrics are useful to understand the trends in our business and average monthly Adjusted EBITDA per customer relationship is useful particularly as we continue to focus on growing our higher-margin businesses, including residential broadband and business services.
Cable Communications Segment – Revenue
Broadband
Revenue increased for the three and ninesix months ended SeptemberJune 30, 2016 was $148.38 and $147.55, respectively.
Cable Communications Segment—Revenue
Video
Video revenue increased 4.2% and 4.1% for the three and nine months ended September 30, 2017, respectively,2021 compared to the same periods in 2016. The primary contributors2020 due to revenue growth were rate adjustments, revenue received from a boxing event available on pay-per-view and increases in the number of residential broadband customers subscribing to additional services such as advanced services, which are high-definition video and DVR services. These contributors accounted for substantially all of the increases in revenueaverage rates. Average rates in the second quarter of 2020 were negatively impacted by waived fees due to COVID-19 and the impacts of customer adjustments. Refer to “Video” below for further information.
Video
Revenue increased for the three and ninesix months ended SeptemberJune 30, 2017. We have experienced, and may experience2021 compared to the same periods in the future,2020 due to increases in average rates, partially offset by declines in the number of residential video customers. Average rates in the second quarter of 2020 were negatively impacted by customer adjustments accrued as a result of provisions in our programming distribution agreements with regional sports networks related to canceled sporting events. For customers due to competitive pressures andreceiving bundled services, the impactrevenue reduction was allocated across each of rate adjustments. Competition is intense, both from traditional multichannel video providers and from new technologies and distribution platforms for viewing content.the services in the bundle. We have responded to this competition, and have attempted to mitigate industry-wide declines inexpect that the number of residential video customers at traditional multichannelwill continue to decline, negatively impacting video providers, through our X1 platformrevenue as a result of the competitive environment and sales and marketing programs, such as promotions, bundled service offerings and service offerings targeted at specific market segments.shifting video consumption patterns.
High-Speed InternetVoice
High-speed Internet revenue increased 8.9% and 9.4%Revenue decreased for the three and ninesix months ended SeptemberJune 30, 2017, respectively,2021 compared to the same periods in 2016. Increases2020 primarily due to declines in the number of residential voice customers, receiving our high-speed Internet services accounted forpartially offset by increases in average rates. We expect that the number of residential voice customers and voice revenue of 5.0% and 5.2%will continue to decline.
Wireless
Revenue increased for the three and ninesix months ended SeptemberJune 30, 2017, respectively. The remaining increases2021 compared to the same periods in revenue were2020 primarily due to increases in the number of customers receiving higher levelscustomer lines and sales of service anddevices.
the impact of rate adjustments. Our customer base continues to grow as consumers choose our high-speed Internet services and seek higher-speed offerings.
Voice
Voice revenue decreased 4.5% and 4.1% for the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016. The decreases were primarily due to the allocation of voice revenue for our customers who received bundled services. The amount allocated to voice revenue in the rate charged for bundled services decreased for the three and nine months ended September 30, 2017 because video and high-speed Internet rates increased while voice rates remained relatively flat. The decreases in revenue were also partially due to decreases in the number of residential voice customers, which may continue to decline.
Business Services
Business services revenueRevenue increased 12.6% and 12.9% for the three and ninesix months ended SeptemberJune 30, 2017, respectively,2021 compared to the same periods in 2016. The increases were2020 primarily due to increases in average rates compared to the prior year periods, which were negatively impacted by COVID-19, and increases in the number of customers receiving our small and medium-sized business services offerings. We believe the increases in the number of business customers are primarily the result of our efforts to gain market share from competitors by offering competitive services and pricing, although the rate of growth in the number of our small business customers may slow as the business matures.services.
Advertising
Advertising revenue decreased 13.2% and 7.3%Revenue increased for the three and ninesix months ended SeptemberJune 30, 2017, respectively,2021 compared to the same periods in 2016 primarily due to decreases2020 reflecting an overall market recovery in political advertising revenue. Excluding political advertising revenue, advertising revenue decreased 4.7%the current year periods and 2.7%reduced spending from advertisers in the prior year periods as a result of COVID-19.
Other
Revenue increased for the three and nine months ended SeptemberJune 30, 2017, respectively,2021 compared to the same periodsperiod in 2016.
For both the three and nine months ended September 30, 2017, 4% of our Cable Communications segment advertising revenue was generated from our NBCUniversal segments. For both the three and nine months ended September 30, 2016, 5% of our Cable Communications segment advertising revenue was generated from our NBCUniversal segments. These amounts are eliminated in our condensed consolidated financial statements but are included in the amounts presented above.
Other
Other revenue increased 7.8% and 5.7% for the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016 primarily2020 due to increases in revenue associated with the licensing of our X1 platform to other multichannel video providers, increases in revenue from our security and automation services and increasesfrom the licensing of our technology platforms. Revenue increased for the six months ended June 30, 2021 compared to the same period in cable franchise and other regulatory fees.2020 due to an increase in the licensing of our technology platforms.
Cable Communications Segment—Segment – Operating Costs and Expenses
Programming expenses increased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2016 primarily2020. The prior year periods include the impacts of adjustment provisions in our programming distribution agreements with regional sports networks related to canceled sporting events as a result of COVID-19. Excluding these adjustments, programming expenses increased due to increases in retransmission consent and sports programming rates, partially offset by declines in the number of video subscribers. We anticipate that our programming expenses will be impacted by rate increases to a greater extent in 2021 compared to 2020 due to the timing of contract renewals, other increasespartially offset by expected declines in programming license fees, including retransmission consent fees and sports programming costs, and fees associated with a boxing event available on pay-per-view.the number of residential video customers.
Technical and product support expenses increased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2016 primarily2020 due to expenses related to the development, delivery and support ofincreased costs associated with our X1 platform, cloud DVR technology and wireless gateways, and the continued growth in business services and security and automation services.phone service, partially offset by lower personnel costs.
Customer service expenses remained relatively flatdecreased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 20162020 primarily due to lower labor costs as a result of cost savings initiatives and reduced call volumes, which were partially offset by increased personnel costs.volumes.
Advertising, marketing and promotion expenses decreasedincreased for the three and six months ended SeptemberJune 30, 20172021 compared to the same periodperiods in 20162020 primarily due to higher advertising expenses associated with the 2016 Rio Olympicsdecreased spending as a result of COVID-19 in the prior year period. Advertising, marketing and promotion expenses remained relatively flat for the nine months ended September 30, 2017 compared to the same period in 2016, which reflects increases in spending in the current year period associated with attracting new customers and encouraging existing customers to add additional or higher-tier services offset by higher advertising expenses associated with the 2016 Rio Olympics.periods.
Franchise and other regulatory fees increased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 20162020 primarily due to increases in the revenue to which the fees apply.regulatory costs.
Other operating costs and expenses remained relatively flatdecreased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2016.
2020 primarily due to decreases in bad debt expense, partially offset by higher third-party advertising costs.
Cable Communications Segment—Segment – Operating Margin
Our Cable Communications segment operating margin is Adjusted EBITDA as a percentage of revenue. We believe this metric is useful particularly as we continue to focus on growing our higher-margin businesses, including residential broadband and business services, and on improving overall operating cost management.
Our operating margin for the three and six months ended June 30, 2021 was and 44.2% and 43.7%, respectively. Our operating margin for the three and six months ended June 30, 2020 was 42.8% and 41.7%, respectively. While the accrued adjustments for regional sports networks did not impact Adjusted EBITDA, they resulted in an increase to operating margins in the prior year periods. The most significant operating costs and expenses for our Cable Communications segment are the programming expenses we incur to provide content to our video customers. We expect that our programming expenses will continue to increase,customers, which may negatively impact our operating margin. We will attempt to mitigate increases in operating costsincreased 12.1% and expenses by growing revenue, particularly in our high-speed Internet, video and business services businesses, and through cost management. Adjusted EBITDA was negatively impacted by two hurricanes that affected our service areas in the third quarter of 2017.
Our operating margin8.7% for both the three and six months ended SeptemberJune 30, 2017 and 2016 was 39.7%. Our operating margin for2021, respectively, compared to the nine months ended September 30, 2017 and 2016 was 40.2% and 40.1%, respectively.same periods in 2020.
NBCUniversal Segments Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | | | | | | | | | | | | |
| Media | $ | 5,148 | | | $ | 4,096 | | | | 25.7 | % | | $ | 10,184 | | | $ | 8,974 | | | 13.5 | % |
| Studios | 2,224 | | | 2,052 | | | | 8.4 | | | 4,620 | | | 4,461 | | | 3.6 | |
| Theme Parks | 1,095 | | | 136 | | | | NM | | 1,714 | | | 1,061 | | | 61.5 | |
| Headquarters and Other | 22 | | | 11 | | | | 97.4 | | | 38 | | | 20 | | | 92.3 | |
| Eliminations | (534) | | | (580) | | | | 7.8 | | | (1,576) | | | (1,072) | | | (47.1) | |
| Total revenue | $ | 7,955 | | | $ | 5,715 | | | | 39.2 | % | | $ | 14,980 | | | $ | 13,444 | | | 11.4 | % |
| Adjusted EBITDA | | | | | | | | | | | | |
| Media | $ | 1,378 | | | $ | 1,636 | | | | (15.8) | % | | $ | 2,851 | | | $ | 3,165 | | | (9.9) | % |
| Studios | 156 | | | 323 | | | | (51.7) | | | 653 | | | 623 | | | 4.8 | |
| Theme Parks | 221 | | | (393) | | | | NM | | 159 | | | (306) | | | NM |
| Headquarters and Other | (186) | | | (82) | | | | (127.3) | | | (395) | | | (303) | | | (30.3) | |
| Eliminations | (15) | | | (104) | | | | 85.6 | | | (225) | | | (110) | | | (103.0) | |
| Total Adjusted EBITDA | $ | 1,553 | | | $ | 1,380 | | | | 12.5 | % | | $ | 3,043 | | | $ | 3,069 | | | (0.8) | % |
|
| | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Cable Networks | $ | 2,603 |
| | $ | 2,942 |
| | $ | (339 | ) | (11.5 | )% |
| Broadcast Television | 2,133 |
| | 3,087 |
| | (954 | ) | (30.9 | ) |
| Filmed Entertainment | 1,784 |
| | 1,792 |
| | (8 | ) | (0.5 | ) |
| Theme Parks | 1,550 |
| | 1,440 |
| | 110 |
| 7.7 |
|
| Headquarters, other and eliminations | (56 | ) | | (83 | ) | | 27 |
| NM |
|
| Total revenue | $ | 8,014 |
| | $ | 9,178 |
| | $ | (1,164 | ) | (12.7 | )% |
| Adjusted EBITDA | | | | | | |
| Cable Networks | $ | 905 |
| | $ | 893 |
| | $ | 12 |
| 1.5 | % |
| Broadcast Television | 321 |
| | 378 |
| | (57 | ) | (15.0 | ) |
| Filmed Entertainment | 394 |
| | 353 |
| | 41 |
| 11.9 |
|
| Theme Parks | 775 |
| | 706 |
| | 69 |
| 9.8 |
|
| Headquarters, other and eliminations | (121 | ) | | (184 | ) | | 63 |
| NM |
|
| Total Adjusted EBITDA | $ | 2,274 |
| | $ | 2,146 |
| | $ | 128 |
| 6.0 | % |
|
| | | | | | | | | | | | | |
| | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Cable Networks | $ | 7,940 |
| | $ | 7,961 |
| | $ | (21 | ) | (0.3 | )% |
| Broadcast Television | 6,582 |
| | 7,299 |
| | (717 | ) | (9.8 | ) |
| Filmed Entertainment | 5,920 |
| | 4,526 |
| | 1,394 |
| 30.8 |
|
| Theme Parks | 3,982 |
| | 3,602 |
| | 380 |
| 10.6 |
|
| Headquarters, other and eliminations | (211 | ) | | (246 | ) | | 35 |
| NM |
|
| Total revenue | $ | 24,213 |
| | $ | 23,142 |
| | $ | 1,071 |
| 4.6 | % |
| Adjusted EBITDA | | | | | | |
| Cable Networks | $ | 3,076 |
| | $ | 2,793 |
| | $ | 283 |
| 10.1 | % |
| Broadcast Television | 1,059 |
| | 1,056 |
| | 3 |
| 0.3 |
|
| Filmed Entertainment | 1,047 |
| | 576 |
| | 471 |
| 81.9 |
|
| Theme Parks | 1,723 |
| | 1,550 |
| | 173 |
| 11.2 |
|
| Headquarters, other and eliminations | (543 | ) | | (518 | ) | | (25 | ) | NM |
|
| Total Adjusted EBITDA | $ | 6,362 |
| | $ | 5,457 |
| | $ | 905 |
| 16.6 | % |
Cable NetworksMedia Segment Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | | | | | | | | | | | | |
| Advertising | $ | 2,189 | | | $ | 1,648 | | | | 32.8 | % | | $ | 4,282 | | | $ | 3,815 | | | 12.3 | % |
| Distribution | 2,452 | | | 2,060 | | | | 19.0 | | | 4,947 | | | 4,347 | | | 13.8 | |
| Other | 507 | | | 388 | | | | 31.1 | | | 955 | | | 812 | | | 17.6 | |
| Total revenue | 5,148 | | | 4,096 | | | | 25.7 | | | 10,184 | | | 8,974 | | | 13.5 | |
| Operating costs and expenses | | | | | | | | | | | | |
| Programming and production | 2,679 | | | 1,589 | | | | 68.6 | | | 5,201 | | | 3,857 | | | 34.8 | |
| Other operating and administrative | 854 | | | 755 | | | | 13.0 | | | 1,673 | | | 1,595 | | | 4.8 | |
| Advertising, marketing and promotion | 238 | | | 116 | | | | 106.2 | | | 460 | | | 357 | | | 29.0 | |
| Total operating costs and expenses | 3,770 | | | 2,460 | | | | 53.3 | | | 7,334 | | | 5,809 | | | 26.2 | |
| Adjusted EBITDA | $ | 1,378 | | | $ | 1,636 | | | | (15.8) | % | | $ | 2,851 | | | $ | 3,165 | | | (9.9) | % |
|
| | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Distribution | $ | 1,533 |
| | $ | 1,772 |
| | $ | (239 | ) | (13.4 | )% |
| Advertising | 787 |
| | 943 |
| | (156 | ) | (16.5 | ) |
| Content licensing and other | 283 |
| | 227 |
| | 56 |
| 24.0 |
|
| Total revenue | 2,603 |
| | 2,942 |
| | (339 | ) | (11.5 | ) |
| Operating costs and expenses | | | | | | |
| Programming and production | 1,219 |
| | 1,572 |
| | (353 | ) | (22.5 | ) |
| Other operating and administrative | 344 |
| | 344 |
| | — |
| (0.4 | ) |
| Advertising, marketing and promotion | 135 |
| | 133 |
| | 2 |
| 2.2 |
|
| Total operating costs and expenses | 1,698 |
| | 2,049 |
| | (351 | ) | (17.2 | ) |
| Adjusted EBITDA | $ | 905 |
| | $ | 893 |
| | $ | 12 |
| 1.5 | % |
|
| | | | | | | | | | | | | |
| | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Distribution | $ | 4,645 |
| | $ | 4,644 |
| | $ | 1 |
| — | % |
| Advertising | 2,519 |
| | 2,708 |
| | (189 | ) | (7.0 | ) |
| Content licensing and other | 776 |
| | 609 |
| | 167 |
| 27.3 |
|
| Total revenue | 7,940 |
| | 7,961 |
| | (21 | ) | (0.3 | ) |
| Operating costs and expenses | | | | | | |
| Programming and production | 3,499 |
| | 3,824 |
| | (325 | ) | (8.5 | ) |
| Other operating and administrative | 990 |
| | 964 |
| | 26 |
| 2.6 |
|
| Advertising, marketing and promotion | 375 |
| | 380 |
| | (5 | ) | (1.1 | ) |
| Total operating costs and expenses | 4,864 |
| | 5,168 |
| | (304 | ) | (5.9 | ) |
| Adjusted EBITDA | $ | 3,076 |
| | $ | 2,793 |
| | $ | 283 |
| 10.1 | % |
Cable Networks Segment—Media Segment – Revenue
Cable Networks revenue decreasedRevenue increased for the three and six months ended SeptemberJune 30, 20172021 compared to the same periodperiods in 20162020 due to decreasesincreases in advertising revenue, distribution revenue and other revenue. Advertising revenue increased primarily due to an increased number of sporting events and higher pricing in the current year periods, reduced spending from advertisers in the prior year periods as a result of COVID-19 and increased advertising revenue whichat Peacock. These increases were partially offset by an increase in content licensing and other revenue. The decrease in distributioncontinued audience ratings declines at our networks. Distribution revenue was primarilyincreased due to contractual rate increases in the current year periods and credits accrued in the prior year periods at some of our broadcastregional sports networks resulting from the reduced number of the 2016 Rio Olympics and a declinegames played by professional sports leagues due to COVID-19, partially offset by declines in the number of subscribers at our cable networks in the current year period, which were partially offset by increases in the contractual rates charged under distribution agreements and the timing of contract renewals in the current year period. The decrease in advertisingnetworks. Other revenue wasincreased primarily due to advertisingincreased revenue infrom our digital properties.
We expect the prior year period associated with our broadcastnumber of the 2016 Rio Olympicssubscribers and the impact of continued declines in audience ratings at our networks in the current year period, which was partially offset by higher prices for advertising units sold. The increase in content licensing and other revenue was primarily duewill continue to the timing of content provided under our licensing agreements. Excluding $432 million of revenue associated with our broadcastdecline as a result of the 2016 Rio Olympics, Cable Networks segment revenue increased 3.7%competitive environment and shifting video consumption patterns. Revenue included $122 million and $213 million related to Peacock for the three and six months ended SeptemberJune 30, 2017.
Cable Networks revenue decreased slightly2021, respectively. Revenue included $6 million related to Peacock for the nine months ended September 30, 2017 compared to the same period in 2016 due to a decrease in advertising revenue, which was partially offset by an increase in content licensing and other revenue. The decrease in advertising revenue was primarily due to advertising revenue in the prior year period associated with our broadcast of the 2016 Rio Olympics and the impact of continued declines in audience ratings at our networks in the current year period, which was partially offset by higher prices for advertising units sold. The increase in content licensing and other revenue was primarily due to the timing of content provided under our licensing agreements. Distribution revenue remained flat primarily due to increases in the contractual rates charged under distribution agreements and the timing of contract renewals in the current year period, which were offset by our broadcast of the 2016 Rio Olympics and a decline in the number of subscribers at our cable networks. Excluding $432 million of revenue associated with our broadcast of the 2016 Rio Olympics, Cable Networks segment revenue increased 5.5% for the nine months ended September 30, 2017.
For both the three and ninesix months ended SeptemberJune 30, 2017, 15% of our Cable Networks segment revenue was generated from our Cable Communications segment. For both the three and nine months ended September 30, 2016, 14% of our Cable Networks segment revenue was generated from our Cable Communications segment. These amounts are eliminated in our condensed consolidated financial statements but are included in the amounts presented above.2020.
Cable Networks Segment—Media Segment – Operating Costs and Expenses
Operating costs and expenses decreasedincreased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 2016 primarily2020 due to programming and production costs in the prior year periods associated with the 2016 Rio Olympics. The decreasesincreases in programming and production costs, were partially offsetadvertising, marketing and promotion costs and other operating and administrative costs. Programming and production costs increased primarily due to higher sports programming costs driven by increases in sports programming rights coststhe number of sporting events as a result of the postponement and higher studio production costs in the current year periods.
Broadcast Television Segment Resultscancellation of Operations
|
| | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Advertising | $ | 1,241 |
| | $ | 2,281 |
| | $ | (1,040 | ) | (45.6 | )% |
| Content licensing | 440 |
| | 365 |
| | 75 |
| 20.5 |
|
| Distribution and other | 452 |
| | 441 |
| | 11 |
| 2.3 |
|
| Total revenue | 2,133 |
| | 3,087 |
| | (954 | ) | (30.9 | ) |
| Operating costs and expenses | | | | | | |
| Programming and production | 1,342 |
| | 2,205 |
| | (863 | ) | (39.1 | ) |
| Other operating and administrative | 337 |
| | 371 |
| | (34 | ) | (9.4 | ) |
| Advertising, marketing and promotion | 133 |
| | 133 |
| | — |
| — |
|
| Total operating costs and expenses | 1,812 |
| | 2,709 |
| | (897 | ) | (33.1 | ) |
| Adjusted EBITDA | $ | 321 |
| | $ | 378 |
| | $ | (57 | ) | (15.0 | )% |
|
| | | | | | | | | | | | | |
| | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Advertising | $ | 3,790 |
| | $ | 4,841 |
| | $ | (1,051 | ) | (21.7 | )% |
| Content licensing | 1,466 |
| | 1,367 |
| | 99 |
| 7.2 |
|
| Distribution and other | 1,326 |
| | 1,091 |
| | 235 |
| 21.6 |
|
| Total revenue | 6,582 |
| | 7,299 |
| | (717 | ) | (9.8 | ) |
| Operating costs and expenses | | | | | | |
| Programming and production | 4,126 |
| | 4,872 |
| | (746 | ) | (15.3 | ) |
| Other operating and administrative | 1,022 |
| | 1,024 |
| | (2 | ) | (0.1 | ) |
| Advertising, marketing and promotion | 375 |
| | 347 |
| | 28 |
| 7.9 |
|
| Total operating costs and expenses | 5,523 |
| | 6,243 |
| | (720 | ) | (11.5 | ) |
| Adjusted EBITDA | $ | 1,059 |
| | $ | 1,056 |
| | $ | 3 |
| 0.3 | % |
Broadcast Television Segment—Revenue
Broadcast Television revenue decreased for the three and nine months ended September 30, 2017 compared to the same periods in 2016 due to decreases in advertising revenue, which were partially offset by increases in content licensing revenue and distribution and other revenue. The decreases in advertising revenue were primarily due to advertising revenueevents in the prior year periods associated with our broadcastas a result of the 2016 Rio OlympicsCOVID-19 and declines in audience ratingshigher amortization expenses in the current year periods related to programming at Peacock. Advertising, marketing and promotion costs increased primarily due to higher marketing related to Peacock, which werewas partially offset by higher prices for advertising units sold. The increaseslower spend related to our networks in content licensing revenue were primarilythe six month period. Other operating and administrative costs increased due to the timing of content provided under our licensing agreements. The increases in distribution and other revenue were primarily dueincreased costs related to increases in fees recognized under our retransmission consent agreements, which werePeacock, partially offset by revenue associated with our broadcast of the 2016 Rio Olympicscost savings initiatives in the prior year periods. Excluding $1.2 billion of revenue associated with our broadcast of the 2016 Rio Olympics, revenue increased 12.3% and 7.7% for the three and nine months ended September 30, 2017, respectively.
Broadcast Television Segment—Operating Costs and Expensessix month period.
Operating costs and expenses decreasedincluded $485 million and $853 million related to Peacock for the three and ninesix months ended SeptemberJune 30, 2017 compared to the same periods in 2016 primarily due to decreases in programming and production costs. The decreases in programming and production costs were primarily due to costs associated with our broadcast of the 2016 Rio Olympics, which were partially offset by higher studio production2021, respectively. Operating costs and our continued investment in original programmingexpenses included $123 million and sports programming rights$182 million related to Peacock for the three and six months ended June 30, 2020, respectively. We expect to continue to incur significant costs related to additional content and marketing as we invest in the current year periods.platform and attract new customers.
Filmed EntertainmentStudios Segment Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | | | | | | | | | | | | |
| Content licensing | $ | 1,781 | | | $ | 1,746 | | | | 2.0 | % | | $ | 3,855 | | | $ | 3,565 | | | 8.1 | % |
| Theatrical | 198 | | | 7 | | | | NM | | 237 | | | 323 | | | (26.6) | |
| Home entertainment and other | 245 | | | 299 | | | | (17.6) | | | 527 | | | 573 | | | (7.8) | |
| Total revenue | 2,224 | | | 2,052 | | | | 8.4 | | | 4,620 | | | 4,461 | | | 3.6 | |
| Operating costs and expenses | | | | | | | | | | | | |
| Programming and production | 1,603 | | | 1,398 | | | | 14.8 | | | 3,217 | | | 2,911 | | | 10.5 | |
| Other operating and administrative | 169 | | | 167 | | | | 1.4 | | | 329 | | | 380 | | | (13.2) | |
| Advertising, marketing and promotion | 296 | | | 164 | | | | 80.4 | | | 420 | | | 547 | | | (23.2) | |
| Total operating costs and expenses | 2,068 | | | 1,729 | | | | 19.7 | | | 3,967 | | | 3,838 | | | 3.4 | |
| Adjusted EBITDA | $ | 156 | | | $ | 323 | | | | (51.7) | % | | $ | 653 | | | $ | 623 | | | 4.8 | % |
|
| | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Theatrical | $ | 515 |
| | $ | 700 |
| | $ | (185 | ) | (26.4 | )% |
| Content licensing | 683 |
| | 595 |
| | 88 |
| 14.9 |
|
| Home entertainment | 306 |
| | 267 |
| | 39 |
| 14.4 |
|
| Other | 280 |
| | 230 |
| | 50 |
| 21.0 |
|
| Total revenue | 1,784 |
| | 1,792 |
| | (8 | ) | (0.5 | ) |
| Operating costs and expenses | | | | | | |
| Programming and production | 789 |
| | 800 |
| | (11 | ) | (1.5 | ) |
| Other operating and administrative | 286 |
| | 314 |
| | (28 | ) | (9.4 | ) |
| Advertising, marketing and promotion | 315 |
| | 325 |
| | (10 | ) | (3.1 | ) |
| Total operating costs and expenses | 1,390 |
| | 1,439 |
| | (49 | ) | (3.6 | ) |
| Adjusted EBITDA | $ | 394 |
| | $ | 353 |
| | $ | 41 |
| 11.9 | % |
|
| | | | | | | | | | | | | |
| | Nine Months Ended
September 30 | | Increase/ (Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | | | | | | |
| Theatrical | $ | 2,003 |
| | $ | 1,233 |
| | $ | 770 |
| 62.4 | % |
| Content licensing | 2,097 |
| | 1,845 |
| | 252 |
| 13.7 |
|
| Home entertainment | 949 |
| | 783 |
| | 166 |
| 21.1 |
|
| Other | 871 |
| | 665 |
| | 206 |
| 31.1 |
|
| Total revenue | 5,920 |
| | 4,526 |
| | 1,394 |
| 30.8 |
|
| Operating costs and expenses | | | | | | |
| Programming and production | 2,752 |
| | 2,050 |
| | 702 |
| 34.2 |
|
| Other operating and administrative | 948 |
| | 750 |
| | 198 |
| 26.4 |
|
| Advertising, marketing and promotion | 1,173 |
| | 1,150 |
| | 23 |
| 2.0 |
|
| Total operating costs and expenses | 4,873 |
| | 3,950 |
| | 923 |
| 23.3 |
|
| Adjusted EBITDA | $ | 1,047 |
| | $ | 576 |
| | $ | 471 |
| 81.9 | % |
Filmed Entertainment Segment—Studios Segment – Revenue
Filmed Entertainment revenue decreasedRevenue increased for the three months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 due to increases in theatrical revenue and content licensing revenue, offset by a decrease in theatrical revenue, which was partially offset by increases in content licensing revenue, other revenue and home entertainment and other revenue. The decrease in theatricalTheatrical revenue wasincreased primarily due to a higher numberreleases in the current year period, including F9, and the impact of releasestheater closures in the prior year period including The Secret Life of Pets and Jason Bourne, which was partially offset by the strong performance of Despicable Me 3 in the current year period. The increase in content. Content licensing revenue wasincreased primarily due to the timing of when content was made available by our television studios under licensing agreements. The increaseagreements, partially offset by decreases at our film studios as a result of COVID-19 and the impacts of initial licenses of content associated with the launch of Peacock in the prior year period. Home entertainment and other revenue wasdecreased primarily due to an increasea reduced number of releases in revenue from consumer products. The increase in home entertainment revenue was primarilythe current year period due to strong sales of our 2017 film slate, including The Fate of the Furious.COVID-19.
Filmed Entertainment revenueRevenue increased for the ninesix months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 due to increasesan increase in theatrical revenue, content licensing revenue, otheroffset by decreases in theatrical revenue and home entertainment and other revenue. Theatrical revenue
increased due to the strong performances of several releases in our 2017 film slate, including The Fate of the Furious, Despicable Me 3 and Fifty Shades Darker. Content licensing revenue increased primarily due to the inclusiontiming of DreamWorks Animationwhen content was made available by our television studios under licensing agreements, including a new licensing agreement for content that became exclusively available for streaming on Peacock during the first quarter of 2021. Theatrical revenue decreased primarily due to the impacts of COVID-19 on the operation of movie theaters. Home entertainment and other revenue decreased primarily due to a reduced number of releases in the current year period. Other revenue increased primarilyperiod due to increases in revenue from consumer products, including from DreamWorks Animation, in the current year period. Home entertainment revenue increased primarily due to strong sales of several 2017 releases, including Sing, The Fate of the Furious and Fifty Shades Darker.COVID-19.
Filmed Entertainment Segment—Studios Segment – Operating Costs and Expenses
Operating costs and expenses decreasedincreased for the three months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 due to decreasesincreases in other operating and administrative expenses, programming and production costs and advertising, marketing and promotion costs. The decrease in other operatingProgramming and administrative expenses wasproduction costs increased primarily due to $50 millionhigher amortization associated with content licensing sales in the current year period, as well as the impact from the updated accounting guidance related to severance costs attributable to DreamWorksepisodic television series, which was adopted and had a favorable impact on programming and production expense in the prior year period. The decreases in programming and production costs and advertising,Advertising, marketing and promotion costs were primarilyincreased due to a higher number ofspending on theatrical releases in the priorcurrent year period.
Operating costs and expenses increased for the ninesix months ended SeptemberJune 30, 20172021 compared to the same period in 2016 primarily2020 due to an increaseincreases in programming and production costs, partially offset by decreases in advertising, marketing and promotion costs and other operating and administrative expenses. The increase in programmingcosts. Programming and production costs wasincreased primarily due to higher amortization associated with content licensing sales, including the new licensing agreement for content that became exclusively available for streaming on Peacock during the first quarter of film production costs for our 2017 releases,2021, as well as the inclusion of costsimpact from the updated accounting guidance related to episodic television series in the prior year period. These increases were partially offset by a decrease in amortization associated with DreamWorks Animation. The increasetheatrical releases in otherthe current year period. Advertising, marketing and promotion costs decreased due to lower spending on theatrical film releases in the current year period. Other operating and administrative expenses was primarilycosts decreased due to an increase in employee-related costs as well as the inclusion of expenses associated with DreamWorks Animation.cost savings initiatives.
Theme Parks Segment Results of Operations
|
| | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % |
| Revenue | $ | 1,550 |
| | $ | 1,440 |
| | $ | 110 |
| 7.7 | % |
| Operating costs and expenses | 775 |
| | 734 |
| | 41 |
| 5.6 |
|
| Adjusted EBITDA | $ | 775 |
| | $ | 706 |
| | $ | 69 |
| 9.8 | % |
| | | | Nine Months Ended
September 30 | | Increase/
(Decrease) | | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2017 | | 2016 | | $ | % | (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | $ | 3,982 |
| | $ | 3,602 |
| | $ | 380 |
| 10.6 | % | Revenue | $ | 1,095 | | | $ | 136 | | | | NM | | $ | 1,714 | | | $ | 1,061 | | | 61.5 | % |
| Operating costs and expenses | 2,259 |
| | 2,052 |
| | 207 |
| 10.1 |
| Operating costs and expenses | 874 | | | 529 | | | | 65.4 | | | 1,555 | | | 1,367 | | | 13.7 | |
| Adjusted EBITDA | $ | 1,723 |
| | $ | 1,550 |
| | $ | 173 |
| 11.2 | % | Adjusted EBITDA | $ | 221 | | | $ | (393) | | | | NM | | $ | 159 | | | $ | (306) | | | NM |
Theme Parks Segment—Segment – Revenue
Theme Parks revenueRevenue increased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 20162020 primarily due to increasesthe operation of our theme parks in guest spending that reflect the continued successcurrent year periods compared to temporary closures and capacity restrictions as a result of The Wizarding WorldCOVID-19 in the prior year periods. All of Harry Potter™ attractionour theme parks temporarily closed beginning in mid to late first quarter of 2020. Our theme park in Orlando reopened with capacity restrictions in the second quarter of 2020 and was operating without capacity restrictions as of the end of the second quarter of 2021. Our theme park in Hollywood which openedreopened with capacity restrictions early in April 2016,the second quarter of 2021 and was operating without capacity restrictions as of the openingsend of Minion Park™the quarter. Our theme park in Japan reopened with capacity restrictions in April 2017the second quarter of 2020, was temporarily closed for a period in the second quarter of 2021 and Volcano Bay™ in Orlando in May 2017.has reopened, with capacity restrictions as of the end of the quarter.
Theme Parks Segment—Segment – Operating Costs and Expenses
Operating costs and expenses increased for the three and ninesix months ended SeptemberJune 30, 20172021 compared to the same periods in 20162020 primarily due to the operation of our theme parks in the current year periods compared to temporary closures and capacity
restrictions in the prior year periods, as well as increased pre-opening costs associated with Universal Beijing Resort. We expect to incur additional pre-opening costs ahead of the expected opening of Universal Beijing Resort later in 2021.
NBCUniversal Headquarters, Other and Eliminations
Headquarters and Other Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | $ | 22 | | | $ | 11 | | | | 97.4 | % | | $ | 38 | | | $ | 20 | | | 92.3 | % |
| Operating costs and expenses | 208 | | | 93 | | | | 123.7 | | | 433 | | | 323 | | | 34.0 | |
| Adjusted EBITDA | $ | (186) | | | $ | (82) | | | | (127.3) | % | | $ | (395) | | | $ | (303) | | | (30.3) | % |
Operating costs and expenses include overhead, personnel costs and costs associated with corporate initiatives.
Eliminations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | $ | (534) | | | $ | (580) | | | | (7.8) | % | | $ | (1,576) | | | $ | (1,072) | | | 47.1 | % |
| Operating costs and expenses | (518) | | | (476) | | | | 9.5 | | | (1,351) | | | (962) | | | 40.6 | |
| Adjusted EBITDA | $ | (15) | | | $ | (104) | | | | (85.6) | % | | $ | (225) | | | $ | (110) | | | 103.0% |
Amounts represent eliminations of transactions between our NBCUniversal segments, which are affected by the timing of recognition of content licenses between our Studios and Media segments. Current year amounts include the impact of a new licensing agreement for content that became exclusively available for streaming on Peacock during the first quarter of 2021, and prior year amounts include the impacts of initial licenses of content associated with the launch of Peacock.
For the three and six months ended June 30, 2021, approximately 33% and 44%, respectively, of Studios segment content licensing revenue resulted from transactions with other segments, primarily with the Media segment. For the three and six months ended June 30, 2020, approximately 36% and 33%, respectively, of Studios segment content licensing revenue resulted from transactions with other segments, primarily with the Media segment. Eliminations will increase or decrease to the extent that additional content is made available to our other segments. Refer to Note 2 for further discussion of transactions between our segments.
Sky Segment Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | Increase/ (Decrease) | | | Constant Currency Growth(a) | | Six Months Ended
June 30, | | Increase/ (Decrease) | | Constant Currency Growth(a) |
| (in millions) | 2021 | | 2020 | | | | % | | | % | | 2021 | | 2020 | | % | | % |
| Revenue | | | | | | | | | | | | | | | | | | |
| Direct-to-consumer | $ | 4,222 | | | $ | 3,524 | | | | | 19.9 | % | | | 7.7 | % | | $ | 8,288 | | | $ | 7,203 | | | 15.1 | % | | 4.7 | % |
| Content | 355 | | | 234 | | | | | 51.6 | | | | 36.1 | | | 713 | | | 559 | | | 27.6 | | | 16.3 | |
| Advertising | 643 | | | 321 | | | | | 99.8 | | | | 78.8 | | | 1,216 | | | 834 | | | 45.8 | | | 33.0 | |
| Total revenue | 5,220 | | | 4,079 | | | | | 28.0 | | | | 14.9 | | | 10,217 | | | 8,596 | | | 18.9 | | | 8.2 | |
| Operating costs and expenses | | | | | | | | | | | | | | | | | | |
| Programming and production | 2,447 | | | 1,543 | | | | | 58.5 | | | | 42.6 | | | 4,931 | | | 3,607 | | | 36.7 | | | 24.7 | |
| Direct network costs | 625 | | | 498 | | | | | 25.4 | | | | 11.4 | | | 1,256 | | | 955 | | | 31.5 | | | 19.2 | |
| Other | 1,589 | | | 1,289 | | | | | 23.4 | | | | 10.6 | | | 3,107 | | | 2,734 | | | 13.7 | | | 3.5 | |
| Total operating costs and expenses | 4,660 | | | 3,330 | | | | | 40.0 | | | | 25.5 | | | 9,294 | | | 7,296 | | | 27.4 | | | 16.0 | |
| Adjusted EBITDA | $ | 560 | | | $ | 749 | | | | | (25.3) | % | | | (32.4) | % | | $ | 924 | | | $ | 1,300 | | | (29.0) | % | | (35.4) | % |
All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.
(a)Constant currency growth is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 26 for additional information, including our definition and our use of constant currency, and for a reconciliation of Sky’s constant currency growth rates.
Customer Metrics
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Net Additions / (Losses) |
| June 30, | | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | | | | | | | | |
| (in thousands) | 2021 | | 2020 | | 2021 | 2020 | 2021 | | 2020 |
| Total customer relationships | 23,198 | | | 23,002 | | | (248) | | (214) | | (26) | | | (278) | |
Customer metrics are presented based on actual amounts. Minor differences may exist due to rounding. Customer relationships represent the number of residential customers that subscribe to at least one of Sky’s four primary services of video, broadband, voice and wireless phone service. Sky reports commercial customers, including hotels, bars, workplaces and restaurants, generally based on the number of locations receiving our services. In the first quarter of 2021, we implemented conforming changes to our methodology for counting commercial customers in Italy and Germany, which are now counted as described above, consistent with customers in the United Kingdom. Previously these customers were counted based on a residential equivalent unit in Italy and the number of active venues or rooms in Germany. This change resulted in a reduction in Sky’s total customer relationships of 714,000 as of December 31, 2020. The impact of the change in methodology to customer relationship net additions for any period was not material. For comparative purposes, we have updated Sky’s historical total customer relationships and average monthly direct-to-consumer revenue per customer relationship to reflect this adjustment.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| Three Months Ended
June 30, | | Increase/ (Decrease) | Constant Currency Growth(a) | | Six Months Ended
June 30, | | Increase/ (Decrease) | Constant Currency Growth(a) |
| 2021 | 2020 | | % | % | | 2021 | 2020 | | % | % |
| Average monthly direct-to-consumer revenue per customer relationship | $ | 60.35 | | $ | 50.82 | | | 18.8 | % | 6.7 % | | $ | 59.50 | | $ | 51.87 | | | 14.7 | % | 4.4 | % |
(a)Constant currency growth is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 26 for additional information, including our definition and our use of constant currency, and for a reconciliation of Sky’s constant currency growth rates.
Average monthly direct-to-consumer revenue per customer relationship is impacted by rate adjustments and changes in the types and levels of services received by Sky’s customers. Each of Sky’s services has a different contribution to Adjusted EBITDA. We believe average monthly direct-to-consumer revenue per customer relationship is useful in understanding the trends in our business across all of our direct-to-consumer service offerings.
Sky Segment – Revenue
Direct-to-Consumer
Revenue increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, revenue increased primarily due to increases in average revenue per customer relationship and customer relationships. The increases in average revenue per customer relationship were primarily due to the impacts of the postponement of sporting events in the prior year periods as a result of COVID-19 and rate increases in the United Kingdom.
Content
Revenue increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, revenue increased primarily due to higher operatingrevenue from sports programming licensing arrangements and from the distribution of Sky’s sports programming on third-party platforms, both reflecting the postponement of sporting events in the prior year periods as a result of COVID-19.
Advertising
Revenue increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, revenue increased primarily reflecting an overall market recovery and an increased number of sporting events in the current year periods, and reduced spending from advertisers in the prior year periods, as a result of COVID-19.
Sky Segment – Operating Costs and Expenses
Programming and production costs increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, programming and production costs increased primarily due to increases in the number of sporting events in the current year periods due to COVID-19, including the impacts of the delayed starts of the 2020-2021 European football seasons and the disrupted seasons in the first and second quarters of 2020. We held the Italian broadcast rights to Lega Nazionale Professionisti Serie A through the end of the 2020-2021 season. Beginning with the 2021-2022 season and through the 2023-2024 season, we will have nonexclusive broadcast rights to a reduced number of matches, which will result in a reduction in programming and production costs and we expect will result in declines in revenue and customer relationships in Italy.
Direct network costs increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, direct network costs increased primarily due to increases in costs associated with
Sky’s wireless phone and broadband services as a result of increases in the sale of handsets and the number of customers receiving these services.
Other expenses increased for the three and six months ended June 30, 2021 compared to the same periods in 2020. Excluding the impact of foreign currency, other expenses increased primarily due to higher fees paid to third-party channels related to new attractions, employee-related costsadvertising sales and additionalhigher marketing costs, associated with our domestic theme parks.both reflecting the impact of COVID-19 in the prior year periods, partially offset by lower personnel costs.
Corporate, Other and Eliminations
Corporate and Other Results of Operations
| | | | Three Months Ended
September 30 | | Increase/ (Decrease) | | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) | |
| (in millions) | 2017 | | 2016 | | $ | | % | (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % | |
| Revenue | $ | 266 |
|
| $ | 168 |
|
| $ | 98 |
|
| 58.2 | % | Revenue | $ | 92 | | | $ | 40 | | | | 128.4 | % | | $ | 181 | | | $ | 160 | | | 12.9 | % | |
| Operating costs and expenses | 865 |
|
| 391 |
|
| 474 |
|
| NM |
| Operating costs and expenses | 353 | | | 429 | | | | (17.7) | | | 722 | | | 742 | | | (2.6) | | |
| Adjustment for legal settlement | (250 | ) | | — |
| | (250 | ) | | NM |
| |
| Adjusted EBITDA | $ | (349 | ) |
| $ | (223 | ) |
| $ | (126 | ) |
| (56.7 | )% | |
| | | | | | | | | |
| | Nine Months Ended
September 30 |
| Increase/
(Decrease) | |
| (in millions) | 2017 |
| 2016 |
| $ |
| % | |
| Revenue | $ | 679 |
|
| $ | 547 |
|
| $ | 132 |
|
| 24.1 | % | |
| Operating costs and expenses | 1,774 |
|
| 1,215 |
|
| 559 |
|
| 46.1 |
| |
| Adjustment for legal settlement | (250 | ) | | — |
| | (250 | ) | | NM |
| |
| Adjusted EBITDA | $ | (845 | ) |
| $ | (668 | ) |
| $ | (177 | ) |
| (26.6 | )% | Adjusted EBITDA | $ | (261) | | | $ | (389) | | | | 32.9 | % | | $ | (541) | | | $ | (582) | | | 6.9 | % | |
Corporate and Other—Other – Revenue
Other revenueRevenue primarily relates to Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses, as well as revenue from other business development initiatives, such as our wireless phone service.Pennsylvania.
Corporate and Other—Other – Operating Costs and Expenses
Corporate and Other operatingOperating costs and expenses primarily include overhead, personnel costs, the costs of other business development initiatives, and operating costs and expenses associated with Comcast Spectacor.
Corporate and Other operating costs and expenses increasedExpenses decreased for the three and ninesix months ended SeptemberJune 30, 2017 primarily due to expenses associated with our new wireless phone service. Corporate and Other Adjusted EBITDA excludes $250 million of expense related to a legal settlement for the three and nine months ended September 30, 2017 (see Note 10 to Comcast's condensed consolidated financial statements).
Consolidated Other Income (Expense) Items, Net |
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Interest expense | $ | (766 | ) | | $ | (751 | ) | | $ | (2,279 | ) | | $ | (2,186 | ) |
| Investment income (loss), net | 82 |
| | 80 |
| | 205 |
| | 168 |
|
| Equity in net income (losses) of investees, net | (39 | ) | | (34 | ) | | 12 |
| | (64 | ) |
| Other income (expense), net | 27 |
| | (11 | ) | | 82 |
| | 104 |
|
| Total | $ | (696 | ) | | $ | (716 | ) | | $ | (1,980 | ) | | $ | (1,978 | ) |
Interest Expense
Interest expense increased for the three and nine months ended September 30, 20172021 compared to the same periods in 20162020 primarily due to increasescosts incurred in the prior year periods in response to COVID-19, including severance charges related to our businesses.
Eliminations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | | Increase/
(Decrease) | | Six Months Ended
June 30, | | Increase/
(Decrease) |
| (in millions) | 2021 | | 2020 | | | % | | 2021 | | 2020 | | % |
| Revenue | $ | (723) | | | $ | (547) | | | | 32.3 | % | | $ | (1,434) | | | $ | (1,222) | | | 17.4 | % |
| Operating costs and expenses | (725) | | | (558) | | | | 30.1 | | | (1,445) | | | (1,240) | | | 16.6 | |
| Adjusted EBITDA | $ | 2 | | | $ | 11 | | | | (83.2) | % | | $ | 11 | | | $ | 18 | | | (38.0) | % |
Amounts represent eliminations of transactions between Cable Communications, NBCUniversal, Sky and other businesses. Eliminations of transactions between NBCUniversal segments are presented separately. Refer to Note 2 for a description of transactions between our segments.
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying trends in our debt outstanding.businesses. 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. It is also unaffected by our capital and tax structures, and by our investment activities, including the results of entities that we do not consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial 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. Additionally, we believe that Adjusted EBITDA 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 of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
Investment Income (Loss), Net
The components ofWe define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance.
We reconcile consolidated Adjusted EBITDA to net income attributable to Comcast Corporation. This measure should not be considered a substitute for the three and nine months ended September 30, 2017 and 2016 are presentedoperating income, net income (loss), net income attributable to Comcast Corporation, or net cash provided by operating activities that we have reported in a table in Note 6 to Comcast’s condensed consolidated financial statements.accordance with GAAP.
Equity inReconciliation from Net Income (Losses)Attributable to Comcast Corporation to Adjusted EBITDA
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (in millions) | 2021 | | 2020 | | 2021 | | 2020 |
| Net income attributable to Comcast Corporation | $ | 3,738 | | | $ | 2,988 | | | $ | 7,067 | | | $ | 5,135 | |
| Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (108) | | | 21 | | | (145) | | | 98 | |
| Income tax expense | 2,000 | | | 946 | | | 3,119 | | | 1,646 | |
| Investment and other (income) loss, net | (1,216) | | | (420) | | | (1,607) | | | 296 | |
| Interest expense | 1,093 | | | 1,112 | | | 2,112 | | | 2,324 | |
| Depreciation | 2,113 | | | 2,099 | | | 4,231 | | | 4,206 | |
| Amortization | 1,270 | | | 1,165 | | | 2,514 | | | 2,322 | |
| | | | | | | |
Adjustments(a) | 36 | | | 16 | | | 48 | | | 30 | |
| | | | | | | |
| | | | | | | |
| Adjusted EBITDA | $ | 8,927 | | | $ | 7,927 | | | $ | 17,339 | | | $ | 16,057 | |
(a)Amounts represent the impacts of Investees, Net
The changes in equity in net income (losses) of investees, net for the threecertain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including Sky transaction-related costs and nine months ended September 30, 2017 compared to the same periods in 2016 were primarilycosts related to our equity method investmentsinvestment portfolio.
Constant Currency
Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. Certain of our businesses, including Sky, have operations outside the United States that are conducted in Atairos Group, Inc.local currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. In our Sky segment, we use constant currency and Hulu, LLC. Atairos follows investment company accountingconstant currency growth rates to evaluate the underlying performance of the business, and recordswe believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its investments at their fair values each reportingunderlying performance.
Constant currency and constant currency growth rates are calculated by comparing the comparative period with the net gains or losses reflected in its statement of income. We recognize our share of these gains and losses in equity in net income (losses) of
investees, net. The losses at Hulu were primarily due to its higher programming and marketing costs. The equity in net income (losses) of Atairos and Hulu for the three and nine months ended September 30, 2017 and 2016 are presentedresults in the table below.
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Atairos | $ | 7 |
| | $ | (9 | ) | | $ | 106 |
| | $ | (36 | ) |
| Hulu | $ | (62 | ) | | $ | (43 | ) | | $ | (168 | ) | | $ | (108 | ) |
Other Income (Expense), Net
Other income (expense), net forprior year adjusted to reflect the nine months ended September 30, 2016 included a gain of $108 million related to the sale of our investment in The Weather Channel’s product and technology businesses.
Consolidated Income Tax Expense
Income tax expense for the three and nine months ended September 30, 2017 and 2016 reflects an effective income tax rate that differsaverage exchange rates from the federal statutory rate primarily due to state income taxes and adjustments associated with uncertain tax positions. In 2017, we prospectively adoptedcurrent year period rather than the new accounting guidance related to share-based compensation, which resultedactual exchange rates in decreases in income tax expenseeffect during the respective prior year periods.
Reconciliation of an internal legal reorganization, which was partially offset by an increase of $53 million due to state tax law changes for both the three and nine months ended September 30, 2017. Including the impacts of these items, we expect our 2017 annual effective tax rate to be in the range of 34% to 36%, absent further changes in tax laws or significant changes in uncertain tax positions.Sky Constant Currency Growth Rates
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| Actual | | Constant Currency | | Constant Currency Growth | | Actual | | Constant Currency | | Constant Currency Growth |
| (in millions, except per customer data) | 2021 | | 2020 | | % | | 2021 | | 2020 | | % |
| Revenue | | | | | | | | | | | |
| Direct-to-consumer | $ | 4,222 | | | $ | 3,921 | | | 7.7 | % | | $ | 8,288 | | | $ | 7,914 | | | 4.7 | % |
| Content | 355 | | | 261 | | | 36.1 | | | 713 | | | 613 | | | 16.3 | |
| Advertising | 643 | | | 359 | | | 78.8 | | | 1,216 | | | 914 | | | 33.0 | |
| Total revenue | 5,220 | | | 4,541 | | | 14.9 | | | 10,217 | | | 9,441 | | | 8.2 | |
| Operating costs and expenses | | | | | | | | | | | |
| Programming and production | 2,447 | | | 1,716 | | | 42.6 | | | 4,931 | | | 3,956 | | | 24.7 | |
| Direct network costs | 625 | | | 561 | | | 11.4 | | | 1,256 | | | 1,054 | | | 19.2 | |
| Other | 1,589 | | | 1,437 | | | 10.6 | | | 3,107 | | | 3,002 | | | 3.5 | |
| Total operating costs and expenses | 4,660 | | | 3,714 | | | 25.5 | | | 9,294 | | | 8,012 | | | 16.0 | |
| Adjusted EBITDA | $ | 560 | | | $ | 828 | | | (32.4) | % | | $ | 924 | | | $ | 1,429 | | | (35.4) | % |
| Average monthly direct-to-consumer revenue per customer relationship | $ | 60.35 | | | $ | 56.56 | | | 6.7 % | | $ | 59.50 | | | $ | 57.00 | | | 4.4 | % |
Liquidity and Capital Resources
Our businesses generate significant cash flows from operating activities. We believe that we will be able to continue to meet our current and long-term liquidity and capital requirements, including fixed charges, through our cash flows from operating activities; existing cash, cash equivalents and investments; available borrowings under our existing credit facilities;facility; and our ability to obtain future external financing.
We anticipate that we will continuemaintain significant availability under our revolving credit facility and commercial paper program to usemeet our short-term liquidity requirements. As of June 30, 2021, amounts available under our revolving credit facility, net of amounts outstanding under our commercial paper program and outstanding letters of credit and bank guarantees, totaled $11.0 billion. We entered into a substantial portionnew revolving credit facility in March 2021 (see Note 5).
We are subject to customary covenants and restrictions set forth in agreements related to debt issued at Comcast and certain of our cash flowssubsidiaries, including the indentures governing our public debt securities and the credit agreements governing the Comcast revolving credit facility. Our credit facility contains a financial covenant pertaining to leverage, which is the ratio of debt to EBITDA, as defined in repayingthe credit facility. Compliance with this financial covenant is tested on a quarterly basis under the terms of the credit facility. As of June 30, 2021, we met this financial covenant by a significant margin and we would expect to remain in compliance with this financial covenant and other covenants related to our debt obligations, fundingdebt. The covenants and restrictions in our capital expenditures, investing in business opportunitiesrevolving credit facility do not apply to certain entities, including Sky and returning capital to shareholders.our international theme parks.
Operating Activities
Components of Net Cash Provided by Operating Activities
| | | | Nine Months Ended
September 30 | | Six Months Ended
June 30, |
| (in millions) | 2017 | | 2016 | (in millions) | 2021 | | 2020 |
| Operating income | $ | 13,880 |
| | $ | 12,595 |
| Operating income | $ | 10,546 | | | $ | 9,499 | |
| Depreciation, amortization and other operating gains | 7,181 |
| | 7,062 |
| |
| Depreciation and amortization | | Depreciation and amortization | 6,745 | | | 6,528 | |
| Noncash share-based compensation | 594 |
| | 495 |
| Noncash share-based compensation | 711 | | | 621 | |
| Changes in operating assets and liabilities | (168 | ) | | (1,575 | ) | Changes in operating assets and liabilities | 892 | | | (15) | |
| Payments of interest | (2,277 | ) | | (2,043 | ) | Payments of interest | (1,909) | | | (1,936) | |
| Payments of income taxes | (3,415 | ) | | (2,716 | ) | Payments of income taxes | (1,832) | | | (333) | |
| Other | 166 |
| | 171 |
| Other | 204 | | | 103 | |
| Net cash provided by operating activities | $ | 15,961 |
| | $ | 13,989 |
| Net cash provided by operating activities | $ | 15,357 | | | $ | 14,467 | |
The variance in changes in operating assets and liabilities for the ninesix months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 was primarily due to the timing of collections onamortization and related payments for our receivablesfilm and recognitiontelevision costs, including the
timing of sporting events partially offset by increased production spend, as well as increases in deferred revenue associated with our broadcast of the 2016 Rio Olympics and the payment of a tax receivable agreement that DreamWorks previouslyaccounts receivable.
In March 2021, we entered into an agreement with one of its former stockholdersthe NFL extending our rights for an additional 11 years through the 2033-2034 season. The new agreement includes exhibition rights for three additional Super Bowls and certain other rights, including streaming rights and additional exclusive games on Peacock.
The increase in income tax payments for the prior year period. The variancesix months ended June 30, 2021 compared to the same period in 2020 was alsoprimarily due to the timingextension of film and television spending, including certain sports programming obligations, and an increase relateddue dates for estimated second quarter 2020 federal income tax payments to a legal settlement in the current year period.
third quarter of 2020.
Investing Activities
Net cash used in investing activities for both the ninesix months ended SeptemberJune 30, 20172021 and 2020 consisted primarily of capital expenditures, purchases of investments, cash paid for intangible assets and acquisitions.the construction of Universal Beijing Resort, which were partially offset by proceeds from sales of businesses and investments. Capital expenditures increased for the ninesix months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 primarily due to increased spending at our Cable Communications segment's continued investment insegment related to scalable infrastructure, to increase network capacity and increased investment in line extensions primarily for the expansion of business services, partially offset by a decrease in spending on customer premise equipment.equipment and line extensions. NBCUniversal capital expenditures decreased as a result of reduced spending at our Theme Parks. Proceeds from sales of businesses and investments decreased for the ninesix months ended SeptemberJune 30, 20172021 compared to the same period in 20162020 primarily due to the timingsale of real estate and infrastructure spending. Purchases of investments for the nine months ended September 30, 2017 consisted primarily of our cash capital contributions to Atairos of $994 million and our investment in Snap Inc. of $500 million.
On April 13, 2017, the Federal Communications Commission announced the results of its spectrum auction. In the auction, NBCUniversal relinquished its spectrum rightsAirTouch in the New York, Philadelphia and Chicago designated market areas where NBC and Telemundo had overlapping spectrum. NBCUniversal received proceeds of $482 million in July 2017, which were recorded in other investing activities in our condensed consolidated statement of cash flows. In connection with the auction, we also acquired the rights to $1.7 billion of spectrum. We had previously made a deposit of $1.8 billion to participate in the auction in the third quarter of 2016 and received a refund for amounts in excess of the purchase price in the second quarter of 2017.prior year period.
Financing Activities
Net cash used in financing activities for the ninesix months ended SeptemberJune 30, 20172021 consisted primarily of repayments of debt, dividend payments, repurchases of common stock under our share repurchase program and employee plans and payments related to the purchaseredemption of NBCUniversal Enterprise redeemable subsidiary preferred stock presented in other financing activities. Net cash used in financing activities for the remaining 49% noncontrolling interests in Universal Studios Japan, andsix months ended June 30, 2020 consisted primarily of repayments of debt, dividend payments and payments related to the redemption and repayment of subsidiary preferred shares presented in other financing activities, which were partially offset by proceeds from borrowings.
For the six months ended June 30, 2021, we made debt repayments totaling $5.8 billion, including $4.0 billion of optional repayments of term loans due 2022 to 2023 and the early redemption of $1.3 billion of senior notes maturing in 2024.
As of June 30, 2021, we had no commercial paper outstanding and there were no amounts outstanding under our revolving credit facility.
We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases or exchanges of our outstanding public notes and debentures, depending on various factors, such as market conditions. See Note 7 to Comcast’s condensed consolidated financial statementsNotes 5 and 6 for additional information on our financing activities, including details of our debt repayments and borrowings and our exchange of senior notes.
Available Borrowings Under Credit Facilities
We also maintain significant availability under our lines of credit and commercial paper programs to meet our short-term liquidity requirements.
As of September 30, 2017, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $8.3 billion, which included $1.5 billion available under the NBCUniversal Enterprise revolving credit facility.activities.
Share Repurchases and Dividends
In the second quarter of 2021, we restarted our share repurchase program. Effective January 1, 2017,May 25, 2021, our Board of Directors increased our share repurchase program authorization to $12$10 billion, which does not have an expiration date. Under the authorization, we may repurchase shares in the open market or in private transactions. During the ninesix months ended SeptemberJune 30, 2017,2021, we repurchased a total of 988.8 million shares of our Class A common stock for $3.8 billion. We$500 million. Under the authorization, we expect to make $1.2 billion more in repurchases under this authorizationrepurchase additional shares during the remainder of 2017, although the actual repurchase amount2021, which may be morein the open market or less.in private transactions.
In addition, we paid $397$459 million for the ninesix months ended SeptemberJune 30, 20172021 related to employee taxes associated with the administration of our share-based compensation plans.
In January 2017,2021, our Board of Directors approved a 15%9% increase in our dividend to $0.63$1.00 per share on an annualized basis. On April 28, 2021, we paid dividends of $1.2 billion. In July 2017,May 2021, our Board of Directors approved our thirdsecond quarter dividend of $0.1575$0.25 per share, to bewhich was paid in October 2017.July 2021. We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors.
Guarantee Structure
Our debt is primarily issued at Comcast, although we also have debt at certain of our subsidiaries as a result of acquisitions and other issuances. A substantial amount of this debt is subject to guarantees by Comcast and by certain subsidiaries that we have put in place to simplify our capital structure. We believe this guarantee structure provides liquidity benefits to debt investors and helps to simplify credit analysis with respect to relative value considerations of guaranteed subsidiary debt.
Debt and Guarantee Structure
| | | | | | | | |
|
| | |
| (in billions) | June 30, 2021 | December 31, 2020 |
| Debt subject to cross-guarantees | | |
| Comcast | $ | 81.6 | | $ | 85.7 | |
NBCUniversal(a) | 2.8 | | 2.8 | |
Comcast Cable(a) | 2.1 | | 2.1 | |
| 86.5 | | 90.6 | |
| Debt subject to one-way guarantees | | |
| Sky | 8.3 | | 8.4 | |
Other(a) | 1.0 | | 2.8 | |
| 9.3 | | 11.2 | |
| Debt not guaranteed | | |
Universal Beijing Resort(b) | 3.3 | | 2.5 | |
| Other | 1.1 | | 1.1 | |
| 4.4 | | 3.6 | |
| Debt issuance costs, premiums, discounts, fair value adjustments for acquisition accounting and hedged positions, net | (1.6) | | (1.6) | |
| Total debt | $ | 98.6 | | $ | 103.8 | |
| | |
|
(a)NBCUniversal, Comcast Cable and Comcast Holdings (included within other debt subject to one-way guarantees) are each consolidated subsidiaries subject to the periodic reporting requirements of the SEC. The guarantee structures and related disclosures in this section, together with Exhibit 22, satisfy these reporting obligations.
(b)Universal Beijing Resort debt financing is secured by the assets of Universal Beijing Resort and the equity interests of the investors. See Note 6 for additional information.
Cross-guarantees
Comcast, NBCUniversal and Comcast Cable (the “Guarantors”) fully and unconditionally, jointly and severally, guarantee each other’s debt securities. NBCUniversal and Comcast Cable also guarantee other borrowings of Comcast, including its revolving credit facility. These guarantees rank equally with all other general unsecured and unsubordinated obligations of the respective Guarantors. However, the obligations of the Guarantors under the guarantees are structurally subordinated to the indebtedness and other liabilities of their respective non-guarantor subsidiaries. The obligations of each Guarantor are limited to the maximum amount that would not render such Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of U.S. and non-U.S. law. Each Guarantor’s obligations will remain in effect until all amounts payable with respect to the guaranteed securities have been paid in full. However, a guarantee by NBCUniversal or Comcast Cable of Comcast’s debt securities, or by NBCUniversal of Comcast Cable’s debt securities, will terminate upon a disposition of such Guarantor entity or all or substantially all of its assets.
The Guarantors are each holding companies that principally hold investments in, borrow from and lend to non-guarantor subsidiary operating companies; issue and service third-party debt obligations; repurchase shares and pay dividends; and engage in certain corporate and headquarters activities. The Guarantors are generally dependent on non-guarantor subsidiary operating companies to fund these activities.
As of June 30, 2021 and December 31, 2020, the combined Guarantors have noncurrent notes payable to non-guarantor subsidiaries of $125 billion and $124 billion, respectively, and noncurrent notes receivable from non-guarantor subsidiaries of $28 billion and $26 billion, respectively. This financial information is that of the Guarantors presented on a combined basis with intercompany balances between the Guarantors eliminated. The combined financial information excludes financial information of non-guarantor subsidiaries. The underlying net assets of the non-guarantor subsidiaries are significantly in excess of the Guarantor obligations. Excluding investments in non-guarantor subsidiaries, external debt and the noncurrent notes payable and receivable with non-guarantor subsidiaries, the Guarantors do not have material assets, liabilities or results of operations.
One-way Guarantees
Comcast provides full and unconditional guarantees of certain debt issued by Sky and other consolidated subsidiaries not subject to the periodic reporting requirements of the SEC.
Comcast also provides a full and unconditional guarantee of $138 million principal amount of subordinated debt issued by Comcast Holdings. Comcast’s obligations under this guarantee are subordinated and subject, in right of payment, to the prior payment in full of all of Comcast’s senior indebtedness, including debt guaranteed by Comcast on a senior basis; and are
structurally subordinated to the indebtedness and other liabilities of its non-guarantor subsidiaries (for purposes of this Comcast Holdings discussion, Comcast Cable and NBCUniversal are included within the non-guarantor subsidiary group). Comcast’s obligations as guarantor will remain in effect until all amounts payable with respect to the guaranteed debt have been paid in full. However, the guarantee will terminate upon a disposition of Comcast Holdings or all or substantially all of its assets. Comcast Holdings is a consolidated subsidiary holding company that directly or indirectly holds 100% and approximately 37% of our equity interests in Comcast Cable and NBCUniversal, respectively.
As of June 30, 2021 and December 31, 2020, Comcast and Comcast Holdings, the combined issuer and guarantor of the guaranteed subordinated debt, have noncurrent senior notes payable to non-guarantor subsidiaries of $97 billion and $94 billion, respectively, and noncurrent notes receivable from non-guarantor subsidiaries of $25 billion and $23 billion, respectively. This financial information is that of Comcast and Comcast Holdings presented on a combined basis with intercompany balances between Comcast and Comcast Holdings eliminated. The combined financial information excludes financial information of non-guarantor subsidiaries of Comcast and Comcast Holdings. The underlying net assets of the non-guarantor subsidiaries of Comcast and Comcast Holdings are significantly in excess of the obligations of Comcast and Comcast Holdings. Excluding investments in non-guarantor subsidiaries, external debt and the noncurrent notes payable and receivable with non-guarantor subsidiaries, Comcast and Comcast Holdings do not have material assets, liabilities or results of operations.
Critical Accounting Judgments and Estimates
The preparation of our condensed consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe our judgments and related estimates associated withFollowing the valuation and impairment testingchange in presentation of our cable franchise rights and accounting for film and television costs are criticalsegment operating results in the preparationfirst quarter of 2021, we reassessed the reporting units related to goodwill in our condensed consolidated financial statements. We performedNBCUniversal segments and concluded that our annual impairment testing ofreporting units are the same as our cable franchise rights as of July 1, 2017 and no impairment charge was required.reportable segments. See Note 2 for additional information.
For a more complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our condensed consolidated financial statements, please refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 20162020 Annual Report on Form 10-K.
Recent Accounting Pronouncements
See Note 2 to each of Comcast’s and NBCUniversal’s condensed consolidated financial statements for additional information related to recent accounting pronouncements.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have evaluated the information required under this item that was disclosed in our 20162020 Annual Report on Form 10-K and there have been no significant changes to this information.
ITEM 4: CONTROLS AND PROCEDURES
Comcast Corporation
Conclusions regarding disclosure controls and procedures
Our principal executive and principal financial officers, after evaluating the effectiveness of Comcast’sour disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, Comcast’ssuch disclosure controls and procedures were effective.
Changes in internal control over financial reporting
There were no changes in Comcast’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during Comcast’sthe last fiscal quarter that have materially affected, or are reasonably likely to materially affect, Comcast’sour internal control over financial reporting.
NBCUniversal Media, LLC
Conclusions regarding disclosure controls and proceduresOur principal executive and principal financial officers, after evaluating the effectiveness
Changes in internal control over financial reporting
There were no changes in NBCUniversal’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during NBCUniversal’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, NBCUniversal’s internal control over financial reporting.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Refer toSee Note 10 to Comcast’s condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of legal proceedings.
NBCUniversal is subject to legal proceedings and claims that arise in the ordinary course of its business and does not expect the final disposition of these matters to have a material adverse effect on its results of operations, cash flows or financial condition, although any such matters could be time-consuming and costly and could injure its reputation.
ITEM 1A: RISK FACTORS
There have been no significantmaterial changes from the risk factors previously disclosed in Item 1A of our 20162020 Annual Report on Form 10-K.
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below summarizes Comcast’sComcast's common stock repurchases during the three months ended SeptemberJune 30, 2017.2021.
Purchases of Equity Securities
| | | | | | | | | | | | | | | | | | | | |
| Period | Total
Number of
Shares
Purchased | | Average
Price
Per
Share | Total Number of
Shares Purchased
as Part of Publicly
Announced Authorization | Total Dollar
Amount
Purchased
Under the Publicly Announced
Authorization | Maximum Dollar
Value of Shares That
May Yet Be
Purchased Under the Publicly Announced
Authorization(a) |
| April 1-30, 2021 | — | | | $ | — | | — | | $ | — | | $ | — | |
| May 1-31, 2021 | 986,784 | |
| $ | 57.25 | | 986,784 | | $ | 56,498,065 | | $ | 9,943,501,935 | |
| June 1-30, 2021 | 7,798,365 | | | $ | 56.87 | | 7,798,365 | | $ | 443,501,870 | | $ | 9,500,000,065 | |
| Total | 8,785,149 | | | $ | 56.91 | | 8,785,149 | | $ | 499,999,935 | | $ | 9,500,000,065 | |
|
| | | | | | | | | | | | | | |
| Period | Total
Number of
Shares
Purchased | | Average
Price
Per
Share | Total Number of
Shares Purchased
as Part of Publicly
Announced Authorization | Total Dollar
Amount
Purchased
Under the Publicly Announced
Authorization | Maximum Dollar
Value of Shares That
May Yet Be
Purchased Under the Publicly Announced
Authorization(a) |
| July 1-31, 2017 | — |
| | $ | — |
| — |
| $ | — |
| $ | 9,868,909,599 |
|
| August 1-31, 2017 | 18,907,754 |
|
| $ | 39.34 |
| 18,907,754 |
| $ | 743,909,599 |
| $ | 9,125,000,000 |
|
| September 1-30, 2017 | 23,975,477 |
| | $ | 39.21 |
| 23,975,477 |
| $ | 939,986,531 |
| $ | 8,185,013,469 |
|
| Total | 42,883,231 |
| | $ | 39.27 |
| 42,883,231 |
| $ | 1,683,896,130 |
| $ | 8,185,013,469 |
|
| |
(a) | Effective January 1, 2017, our Board of Directors increased our share repurchase program authorization to $12 billion, which does not have an expiration date. Under this authorization, we may repurchase shares in the open market or in private transactions.
|
The total number of shares purchased during the three months ended SeptemberJune 30, 20172021 does not include any shares received in the administration of employee share-based compensation plans.
ITEM 5: OTHER INFORMATION
Iran Threat Reduction and Syria Human Rights Act Disclosure
Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, companies are required, among other things, to disclose certain activities, transactions or dealings with the Government of Iran or entities controlled directly or indirectly by the Government of Iran. Disclosure is generally required even where the activities, transactions or dealings are conducted in compliance with applicable laws and regulations and are de minimis. As of the date of this report, we are not aware of any activity, transaction or dealing during the three months ended September 30, 2017 that requires disclosure under the Act, except with respect to a January 2016 licensing agreement by a non-U.S. subsidiary of DreamWorks Animation prior to our August 2016 DreamWorks Animation acquisition. The agreement licensed a prior season of a children’s animated television series for a three-year, non-cancelable term and for a one-time fee of $5,200 to a broadcasting company that is owned and controlled by the Government of Iran. The broadcasting company paid the license fee in the first quarter of 2016. We believe that DreamWorks Animation conducted its licensing activity in compliance with applicable laws and that the license is for the permissible exportation of informational materials pursuant to certain statutory and regulatory exemptions from U.S. sanctions.
ITEM 6: EXHIBITS
Comcast
|
| | | | | | | |
Exhibit No. | | Description |
| | Employment Agreement between Comcast Corporation and Brian L. Roberts,Thomas J. Reid, dated as of July 26, 2017April 15, 2019 |
| | Employment Agreement between Comcast Corporation and Jeff Shell, dated as of February 19, 2020 |
| | Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the registrant (incorporated by reference to Exhibit 10.222.1 to Comcast'sComcast’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017).March 31, 2020) |
| | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002 |
| | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002 |
| 101 | | The following financial statements from Comcast Corporation’s Quarterly Report on Form 10-Q for the three and ninesix months ended SeptemberJune 30, 2017,2021, filed with the Securities and Exchange Commission on October 26, 2017,July 29, 2021, formatted in XBRL (eXtensibleInline Extensible Business Reporting Language)Language (iXBRL): (i) the Condensed Consolidated Balance Sheet;Statement of Income; (ii) the Condensed Consolidated Statement of Comprehensive Income; (iii) the Condensed Consolidated Statement of Comprehensive Income;Cash Flows; (iv) the Condensed Consolidated Statement of Cash Flows;Balance Sheet; (v) the Condensed Consolidated Statement of Changes in Equity; and (vi) the Notes to Condensed Consolidated Financial Statements. |
104 | | Cover Page Interactive Data File (embedded within the iXBRL document) |
| * | | Constitutes a management contract or compensatory plan or arrangement. |
NBCUniversal
|
| | |
Exhibit
No.
| | Description |
| | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | | The following financial statements from NBCUniversal Media, LLC’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2017, filed with the Securities and Exchange Commission on October 26, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheet; (ii) the Condensed Consolidated Statement of Income; (iii) the Condensed Consolidated Statement of Comprehensive Income; (iv) the Condensed Consolidated Statement of Cash Flows; (v) the Condensed Consolidated Statement of Changes in Equity; and (vi) the Notes to Condensed Consolidated Financial Statements. |
SIGNATURES
Comcast
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | |
| | COMCAST CORPORATION |
| | COMCAST CORPORATION |
| By: | |
By: | | /s/ DANIEL C. MURDOCK |
| | Daniel C. Murdock SeniorExecutive Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer) |
Date: October 26, 2017July 29, 2021
NBCUniversal
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
| | |
| | NBCUNIVERSAL MEDIA, LLC |
| |
By: | | /s/ DANIEL C. MURDOCK |
| | Daniel C. Murdock
Senior Vice President
(Principal Accounting Officer)
|
Date: October 26, 2017
NBCUniversal Media, LLC Financial Statements
NBCUniversal Media, LLC
Condensed Consolidated Balance Sheet
(Unaudited)
|
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Assets | | | |
| Current Assets: | | | |
| Cash and cash equivalents | $ | 2,014 |
| | $ | 1,966 |
|
| Receivables, net | 6,177 |
| | 6,302 |
|
| Programming rights | 1,772 |
| | 1,241 |
|
| Other current assets | 1,114 |
| | 938 |
|
| Total current assets | 11,077 |
| | 10,447 |
|
| Film and television costs | 6,791 |
| | 7,245 |
|
| Investments | 1,817 |
| | 1,263 |
|
| Property and equipment, net of accumulated depreciation of $3,999 and $3,350 | 11,040 |
| | 10,511 |
|
| Goodwill | 23,963 |
| | 23,323 |
|
| Intangible assets, net of accumulated amortization of $7,372 and $6,568 | 13,375 |
| | 13,777 |
|
| Other noncurrent assets, net | 1,582 |
| | 1,688 |
|
| Total assets | $ | 69,645 |
| | $ | 68,254 |
|
| Liabilities and Equity | | | |
| Current Liabilities: | | | |
| Accounts payable and accrued expenses related to trade creditors | $ | 1,449 |
| | $ | 1,647 |
|
| Accrued participations and residuals | 1,811 |
| | 1,726 |
|
| Program obligations | 576 |
| | 807 |
|
| Deferred revenue | 1,479 |
| | 1,016 |
|
| Accrued expenses and other current liabilities | 1,807 |
| | 1,888 |
|
| Note payable to Comcast | 1,805 |
| | 2,703 |
|
| Current portion of long-term debt | 196 |
| | 127 |
|
| Total current liabilities | 9,123 |
| | 9,914 |
|
| Long-term debt, less current portion | 12,157 |
| | 11,461 |
|
| Accrued participations, residuals and program obligations | 1,202 |
| | 1,202 |
|
| Other noncurrent liabilities | 4,099 |
| | 4,130 |
|
| Commitments and contingencies |
| |
|
| Redeemable noncontrolling interests | 407 |
| | 530 |
|
| Equity: |
| | |
| Member’s capital | 41,760 |
| | 39,036 |
|
| Accumulated other comprehensive income (loss) | (29 | ) | | (135 | ) |
| Total NBCUniversal member’s equity | 41,731 |
| | 38,901 |
|
| Noncontrolling interests | 926 |
| | 2,116 |
|
| Total equity | 42,657 |
| | 41,017 |
|
| Total liabilities and equity | $ | 69,645 |
| | $ | 68,254 |
|
See accompanying notes to condensed consolidated financial statements.
NBCUniversal Media, LLC
Condensed Consolidated Statement of Income
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Revenue | $ | 8,014 |
| | $ | 9,178 |
| | $ | 24,213 |
| | $ | 23,142 |
|
| Costs and Expenses: | | | | | | | |
| Programming and production | 3,257 |
| | 4,501 |
| | 10,157 |
| | 10,503 |
|
| Other operating and administrative | 1,859 |
| | 1,912 |
| | 5,586 |
| | 5,159 |
|
| Advertising, marketing and promotion | 624 |
| | 619 |
| | 2,108 |
| | 2,023 |
|
| Depreciation | 253 |
| | 209 |
| | 749 |
| | 624 |
|
| Amortization | 253 |
| | 236 |
| | 785 |
| | 700 |
|
| Other operating gains | (337 | ) | | — |
| | (337 | ) | | — |
|
| | 5,909 |
| | 7,477 |
| | 19,048 |
| | 19,009 |
|
| Operating income | 2,105 |
| | 1,701 |
| | 5,165 |
| | 4,133 |
|
| Other Income (Expense): | | | | | | | |
| Interest expense | (139 | ) | | (151 | ) | | (431 | ) | | (444 | ) |
| Investment income (loss), net | 10 |
| | 6 |
| | 34 |
| | 20 |
|
| Equity in net income (losses) of investees, net | (52 | ) | | (34 | ) | | (107 | ) | | (55 | ) |
| Other income (expense), net | 16 |
| | (16 | ) | | 31 |
| | 81 |
|
| | (165 | ) | | (195 | ) | | (473 | ) | | (398 | ) |
| Income before income taxes | 1,940 |
| | 1,506 |
| | 4,692 |
| | 3,735 |
|
| Income tax expense | (98 | ) | | (139 | ) | | (289 | ) | | (311 | ) |
| Net income | 1,842 |
| | 1,367 |
| | 4,403 |
| | 3,424 |
|
| Net (income) loss attributable to noncontrolling interests | (17 | ) | | (78 | ) | | (102 | ) | | (200 | ) |
| Net income attributable to NBCUniversal | $ | 1,825 |
| | $ | 1,289 |
| | $ | 4,301 |
| | $ | 3,224 |
|
See accompanying notes to condensed consolidated financial statements.
NBCUniversal Media, LLC
Condensed Consolidated Statement of Comprehensive Income
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Net income | $ | 1,842 |
| | $ | 1,367 |
| | $ | 4,403 |
| | $ | 3,424 |
|
| Unrealized gains (losses) on marketable securities, net | (94 | ) | | — |
| | (233 | ) | | — |
|
| Deferred gains (losses) on cash flow hedges, net | (5 | ) | | 5 |
| | (27 | ) | | (7 | ) |
| Employee benefit obligations, net | (3 | ) | | — |
| | 101 |
| | 4 |
|
| Currency translation adjustments, net | 22 |
| | 50 |
| | 211 |
| | 652 |
|
| Comprehensive income | 1,762 |
| | 1,422 |
| | 4,455 |
| | 4,073 |
|
| Net (income) loss attributable to noncontrolling interests | (17 | ) | | (78 | ) | | (102 | ) | | (200 | ) |
| Other comprehensive (income) loss attributable to noncontrolling interests | (5 | ) | | (34 | ) | | (87 | ) | | (321 | ) |
| Comprehensive income attributable to NBCUniversal | $ | 1,740 |
| | $ | 1,310 |
| | $ | 4,266 |
| | $ | 3,552 |
|
See accompanying notes to condensed consolidated financial statements.
NBCUniversal Media, LLC
Condensed Consolidated Statement of Cash Flows
|
| | | | | | | |
| | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 |
| Net cash provided by operating activities | $ | 5,572 |
| | $ | 3,339 |
|
| Investing Activities | | | |
| Capital expenditures | (977 | ) | | (991 | ) |
| Cash paid for intangible assets | (197 | ) | | (181 | ) |
| Acquisitions of real estate properties | — |
| | (78 | ) |
| Proceeds from sales of investments | 42 |
| | 104 |
|
| Purchases of investments | (368 | ) | | (74 | ) |
| Other | 474 |
| | (236 | ) |
| Net cash provided by (used in) investing activities | (1,026 | ) | | (1,456 | ) |
| Financing Activities | | | |
| Proceeds from borrowings | 3,948 |
| | — |
|
| Repurchases and repayments of debt | (3,450 | ) | | (1,515 | ) |
| Proceeds from (repayments of) borrowings from Comcast, net | (898 | ) | | 1,132 |
|
| Distributions to member | (1,720 | ) | | (1,213 | ) |
| Distributions to noncontrolling interests | (165 | ) | | (161 | ) |
| Purchase of Universal Studios Japan noncontrolling interests | (2,299 | ) | | — |
|
| Other | 86 |
| | 354 |
|
| Net cash provided by (used in) financing activities | (4,498 | ) | | (1,403 | ) |
| Increase (decrease) in cash and cash equivalents | 48 |
| | 480 |
|
| Cash and cash equivalents, beginning of period | 1,966 |
| | 1,410 |
|
| Cash and cash equivalents, end of period | $ | 2,014 |
| | $ | 1,890 |
|
See accompanying notes to condensed consolidated financial statements.
NBCUniversal Media, LLC
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (in millions) | Redeemable
Noncontrolling
Interests | | Member’s
Capital | | Accumulated
Other
Comprehensive
Income (Loss) | | Noncontrolling
Interests | | Total Equity |
| Balance, December 31, 2015 | $ | 372 |
| | $ | 32,834 |
| | $ | (212 | ) | | $ | 1,681 |
| | $ | 34,303 |
|
| Dividends declared |
| | (1,213 | ) | |
| |
| | (1,213 | ) |
| Contributions from (distributions to) noncontrolling interests, net | (47 | ) | |
| |
| | (114 | ) | | (114 | ) |
| DreamWorks contributions | | | 3,558 |
| | | | 89 |
| | 3,647 |
|
| Other comprehensive income (loss) |
| |
| | 328 |
| | 321 |
| | 649 |
|
| Other | 72 |
| | 3 |
| |
| | 160 |
| | 163 |
|
| Net income (loss) | 30 |
| | 3,224 |
| | | | 170 |
| | 3,394 |
|
| Balance, September 30, 2016 | $ | 427 |
| | $ | 38,406 |
| | $ | 116 |
| | $ | 2,307 |
| | $ | 40,829 |
|
| Balance, December 31, 2016 | $ | 530 |
| | $ | 39,036 |
| | $ | (135 | ) | | $ | 2,116 |
| | $ | 41,017 |
|
| Dividends declared | | | (1,720 | ) | |
| |
| | (1,720 | ) |
| Contributions from (distributions to) noncontrolling interests, net | (56 | ) | |
| |
| | (95 | ) | | (95 | ) |
| Contribution from member |
| | 662 |
| |
|
| |
|
| | 662 |
|
| Other comprehensive income (loss) |
| |
|
| | (35 | ) | | 87 |
| | 52 |
|
| Purchase of Universal Studios Japan noncontrolling interests | | | (704 | ) | | 141 |
| | (1,736 | ) | | (2,299 | ) |
| Other | (85 | ) | | 185 |
| |
| | 470 |
| | 655 |
|
| Net income (loss) | 18 |
| | 4,301 |
| |
| | 84 |
| | 4,385 |
|
| Balance, September 30, 2017 | $ | 407 |
| | $ | 41,760 |
| | $ | (29 | ) | | $ | 926 |
| | $ | 42,657 |
|
See accompanying notes to condensed consolidated financial statements.
NBCUniversal Media, LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Condensed Consolidated Financial Statements
Basis of Presentation
Unless indicated otherwise, throughout these notes to the condensed consolidated financial statements, we refer to NBCUniversal and its consolidated subsidiaries as “we,” “us” and “our.” 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 2016 Annual Report on Form 10-K.
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.
We have substantially completed the review of our revenue arrangements and do not currently expect that the adoption of the new standard will have a material impact on our financial position or results of operations. However, we do expect that the new standard will impact the timing of recognition for our Cable Networks, Broadcast Television and Filmed Entertainment segments’ content licensing revenue associated with renewals or extensions of existing program licensing agreements, which will be recognized as revenue when the licensed content becomes available under the renewal or extension instead of when the agreement is renewed or extended. The updated guidance also requires additional disclosures regarding the nature, timing and uncertainty of our revenue transactions. We intend to adopt the provisions of the guidance using the full retrospective method, under which we will adjust any prior periods presented to reflect the updated guidance.
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 in the year the guidance is adopted with certain exceptions. If we had adopted the provisions of the updated guidance as of January 1, 2017 for our equity investments classified as available-for-sale securities, primarily our investment in Snap Inc. (see Note 6), net income attributable to NBCUniversal would have decreased for the three and nine months ended September 30, 2017 by $95 million and $234 million, respectively. We are currently in the process of determining the impact that the updated accounting guidance will have on our cost method investments.
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 exception of short-term leases. The asset and liability are initially measured based on the present value of committed lease payments. 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.
NBCUniversal Media, LLC
Note 3: Significant Transactions
FCC Spectrum Auction
On April 13, 2017, the Federal Communications Commission announced the results of its spectrum auction. In the auction, we relinquished our spectrum rights in the New York, Philadelphia and Chicago designated market areas (“DMAs”) where NBC and Telemundo had overlapping spectrum. We received proceeds of $482 million in July 2017, which were recorded in other investing activities in our condensed consolidated statement of cash flows. We recognized a pretax gain of $337 million in other operating gains for the three months ended September 30, 2017 in our condensed consolidated statement of income. NBC and Telemundo stations will share broadcast signals in these DMAs.
Universal Studios Japan
On April 6, 2017, we acquired the remaining interests in Universal Studios Japan that we did not already own for $2.3 billion. The acquisition was funded through borrowings under our revolving credit agreement with Comcast. Because we maintained control of Universal Studios Japan, the difference between the consideration transferred and the recorded value of the noncontrolling interests, as well as the related accumulated other comprehensive income impact, were recorded to additional paid-in capital.
DreamWorks Animation
On August 22, 2016, Comcast acquired all of the outstanding stock of DreamWorks Animation for $3.8 billion. DreamWorks Animation’s stockholders received $41 in cash for each share of DreamWorks Animation common stock. DreamWorks Animation creates animated feature films, television series and specials, live entertainment, and related consumer products.
Following the acquisition, Comcast converted DreamWorks Animation to a limited liability company and contributed its equity to us as a capital contribution. The net assets contributed to us excluded deferred income taxes and other tax-related items recorded by Comcast. The results of operations for DreamWorks Animation are reported in our Filmed Entertainment segment following the acquisition date and are presented as if the initial equity contribution occurred on the date of Comcast’s acquisition.
Allocation of Purchase Price
The transaction was accounted for under the acquisition method of accounting and, accordingly, the assets and liabilities are to be recorded at their fair market values as of the acquisition date. We recorded the acquired assets and liabilities of DreamWorks Animation at their estimated fair values based on valuation analyses. In valuing acquired assets and liabilities, fair value estimates were primarily based on Level 3 inputs, including future expected cash flows, market rate assumptions and discount rates. The fair value of the assumed debt was primarily based on quoted market values. The fair value of the liability related to a tax receivable agreement that DreamWorks Animation had previously entered into with one of its former stockholders (the “tax receivable agreement”) was based on the contractual settlement provisions in the agreement. During the nine months ended September 30, 2017, we updated the allocation of purchase price for DreamWorks Animation based on final valuation analyses, which primarily resulted in increases to noncontrolling interests, intangible assets and goodwill and a decrease to working capital. The changes did not have a material impact on our condensed consolidated financial statements.
The table below presents the allocation of the purchase price to the assets and liabilities of DreamWorks Animation.
|
| | | |
| Allocation of Purchase Price |
| (in millions) | |
| Film and television costs | $ | 838 |
|
| Intangible assets | 396 |
|
| Working capital | 156 |
|
| Debt | (381 | ) |
Tax receivable agreement(a) | (146 | ) |
Other noncurrent assets and liabilities and other(b) | 461 |
|
| Identifiable net assets (liabilities) acquired | 1,324 |
|
| Noncontrolling interests | (337 | ) |
| Goodwill | 2,786 |
|
| Cash consideration transferred | $ | 3,773 |
|
| |
(a) | The tax receivable agreement was settled immediately following the acquisition and the payment was recorded as an operating activity in our condensed consolidated statement of cash flows in the third quarter of 2016. Comcast made a separate cash capital contribution of $146 million to fund the settlement which was recorded as a financing activity in our condensed consolidated statement of cash flows in the third quarter of 2016. |
| |
(b) | Other included $279 million recorded to member’s capital that represented deferred income tax assets and other tax-related items recorded by Comcast but excluded from the net assets contributed to us. |
NBCUniversal Media, LLC
Revenue and net income attributable to the acquisition of DreamWorks Animation were not material for the three and nine months ended September 30, 2017 and 2016.
Note 4: Related Party Transactions
In the ordinary course of our business, we enter into transactions with Comcast.
We generate revenue from Comcast primarily from the distribution of our cable network programming, the fees received under retransmission consent agreements in our Broadcast Television segment and, to a lesser extent, the sale of advertising and our owned programming, and we incur expenses primarily related to advertising and various support services provided by Comcast to us.
Comcast is also the counterparty to one of our contractual obligations. As of September 30, 2017, the carrying value of the liability associated with this contractual obligation was $383 million.
The following tables present transactions with Comcast and its consolidated subsidiaries that are included in our condensed consolidated financial statements.
Condensed Consolidated Balance Sheet |
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Transactions with Comcast and Consolidated Subsidiaries | | | |
| Receivables, net | $ | 327 |
| | $ | 285 |
|
| Accounts payable and accrued expenses related to trade creditors | $ | 33 |
| | $ | 55 |
|
| Accrued expenses and other current liabilities | $ | 39 |
| | $ | 4 |
|
| Note payable to Comcast | $ | 1,805 |
| | $ | 2,703 |
|
| Other noncurrent liabilities | $ | 389 |
| | $ | 389 |
|
Condensed Consolidated Statement of Income |
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Transactions with Comcast and Consolidated Subsidiaries | | | | | | | |
| Revenue | $ | 463 |
| | $ | 522 |
| | $ | 1,382 |
| | $ | 1,335 |
|
| Operating costs and expenses | $ | (38 | ) | | $ | (53 | ) | | $ | (148 | ) | | $ | (157 | ) |
| Other income (expense) | $ | (20 | ) | | $ | (18 | ) | | $ | (67 | ) | | $ | (48 | ) |
Note 5: Film and Television Costs |
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Film Costs: | | | |
| Released, less amortization | $ | 1,747 |
| | $ | 1,750 |
|
| Completed, not released | 198 |
| | 50 |
|
| In production and in development | 829 |
| | 1,310 |
|
| | 2,774 |
| | 3,110 |
|
| Television Costs: | | | |
| Released, less amortization | 2,047 |
| | 1,953 |
|
| In production and in development | 853 |
| | 853 |
|
| | 2,900 |
| | 2,806 |
|
| Programming rights, less amortization | 2,889 |
| | 2,570 |
|
| | 8,563 |
| | 8,486 |
|
| Less: Current portion of programming rights | 1,772 |
| | 1,241 |
|
| Film and television costs | $ | 6,791 |
| | $ | 7,245 |
|
NBCUniversal Media, LLC
|
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Fair Value Method: |
|
| |
|
|
| Snap | $ | 427 |
| | $ | — |
|
| Other | 4 |
| | 6 |
|
| 431 |
| | 6 |
|
| Equity Method: |
|
| |
|
|
| Hulu | 255 |
| | 225 |
|
| Other | 432 |
| | 336 |
|
| 687 |
| | 561 |
|
| Cost Method: |
|
| |
|
|
| BuzzFeed | 400 |
| | 400 |
|
| Other | 299 |
| | 296 |
|
| 699 |
| | 696 |
|
| Total investments | $ | 1,817 |
| | $ | 1,263 |
|
Fair Value Method
Snap
In March 2017, Comcast acquired an interest in Snap Inc. as part of its initial public offering. On March 31, 2017, Comcast contributed its investment in Snap to us as an equity contribution of $662 million, which was recorded in our condensed consolidated statement of equity based on the fair value of the investment as of March 31, 2017. We have classified our investment as an available-for-sale security. Snap is a camera company whose primary product is Snapchat, a camera app that was created to help people communicate through short videos and images.
Equity Method
The Weather Channel
In January 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 of $108 million in other income (expense), net for the nine months ended September 30, 2016.
Note 7: Long-Term Debt
As of September 30, 2017, our debt, excluding the note payable to Comcast, had a carrying value of $12.4 billion and an estimated fair value of $13.5 billion. The estimated fair value of our publicly traded debt was 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 was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
In May 2017, Universal Studios Japan entered into ¥450 billion ($3.9 billion at issuance) of new term loans with a final maturity of March 2022. We used the proceeds from these borrowings to repay in full $3.3 billion of Universal Studios Japan’s existing yen-denominated term loans and a portion of amounts outstanding under our revolving credit agreement with Comcast.
Cross-Guarantee Structure
We, Comcast and a 100% owned cable holding company subsidiary of Comcast (“CCCL Parent”) have fully and unconditionally guaranteed each other’s debt securities, including the $7 billion Comcast revolving credit facility due 2021. As of September 30, 2017, outstanding debt securities of $47.5 billion of Comcast and CCCL Parent were subject to the cross-guarantee structure.
We do not, however, guarantee the obligations of NBCUniversal Enterprise with respect to its $4.8 billion aggregate principal amount of senior notes, $1.5 billion revolving credit facility, commercial paper program, or $725 million liquidation preference of Series A cumulative preferred stock.
The Universal Studios Japan term loans are not subject to the cross-guarantee structure, however they have a separate guarantee from Comcast.
Senior Notes Exchange
In October 2017, we and Comcast announced and settled a private debt exchange transaction. Comcast issued $2.0 billion aggregate principal amount of new 3.969% senior notes due 2047, $2.0 billion aggregate principal amount of new 3.999% senior notes due 2049, and $1.5 billion aggregate principal amount of new 4.049% senior notes due 2052 in exchange for $3.9 billion aggregate
NBCUniversal Media, LLC
principal amount of certain series of outstanding senior notes issued by Comcast and us, including $442 million of our 6.400% senior notes due 2040. The new notes are fully and unconditionally guaranteed by us and Comcast Cable Communications, LLC. In connection with the exchange transaction, we issued $610 million of 3.999% notes due 2049 to Comcast.
Note 8: Share-Based Compensation
Comcast maintains share-based compensation plans that consist primarily of awards of restricted share units and stock options to certain employees and directors as part of its approach to long-term incentive compensation. Additionally, through its employee stock purchase plans, employees are able to purchase shares of Comcast common stock at a discount through payroll deductions. Certain of our employees participate in these plans and the expense associated with their participation is settled in cash with Comcast.
Recognized Share-Based Compensation Expense |
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Restricted share units | $ | 32 |
| | $ | 19 |
| | $ | 86 |
| | $ | 64 |
|
| Stock options | 3 |
| | 3 |
| | 10 |
| | 7 |
|
| Employee stock purchase plans | 3 |
| | 1 |
| | 7 |
| | 6 |
|
| Total | $ | 38 |
| | $ | 23 |
| | $ | 103 |
| | $ | 77 |
|
Note 9: Supplemental Financial Information
|
| | | | | | | |
| (in millions) | September 30,
2017 | | December 31,
2016 |
| Receivables, gross | $ | 6,610 |
| | $ | 6,799 |
|
| Less: Allowance for returns and customer incentives | 352 |
| | 413 |
|
| Less: Allowance for doubtful accounts | 81 |
| | 84 |
|
| Receivables, net | $ | 6,177 |
| | $ | 6,302 |
|
Accumulated Other Comprehensive Income (Loss) |
| | | | | | | |
| (in millions) | September 30,
2017 | | September 30,
2016 |
| Unrealized gains (losses) on marketable securities | $ | (233 | ) | | $ | — |
|
| Deferred gains (losses) on cash flow hedges | (4 | ) | | (8 | ) |
| Unrecognized gains (losses) on employee benefit obligations | 115 |
| | 3 |
|
| Cumulative translation adjustments | 93 |
| | 121 |
|
| Accumulated other comprehensive income (loss) | $ | (29 | ) | | $ | 116 |
|
NBCUniversal Media, LLC
Net Cash Provided by Operating Activities
|
| | | | | | | |
| | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 |
| Net income | $ | 4,403 |
| | $ | 3,424 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation, amortization and other operating gains | 1,197 |
| | 1,324 |
|
| Equity in net (income) losses of investees, net | 107 |
| | 55 |
|
| Cash received from investees | 63 |
| | 45 |
|
| Net (gain) loss on investment activity and other | (45 | ) | | (72 | ) |
| Deferred income taxes | (6 | ) | | 139 |
|
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | | | |
| Current and noncurrent receivables, net | 152 |
| | (338 | ) |
| Film and television costs, net | (75 | ) | | (600 | ) |
| Accounts payable and accrued expenses related to trade creditors | (270 | ) | | (114 | ) |
| Other operating assets and liabilities | 46 |
| | (524 | ) |
| Net cash provided by operating activities | $ | 5,572 |
| | $ | 3,339 |
|
Cash Payments for Interest and Income Taxes
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Interest | $ | 53 |
| | $ | 69 |
| | $ | 340 |
| | $ | 354 |
|
| Income taxes | $ | 64 |
| | $ | 33 |
| | $ | 213 |
| | $ | 155 |
|
Noncash Investing and Financing Activities
During the nine months ended September 30, 2017:
we acquired $296 million of property and equipment and intangible assets that were accrued but unpaid
Comcast contributed its investment in Snap to us at its fair value as of March 31, 2017, which was a noncash transaction (see Note 6 for additional information)
Note 10: Financial Data by Business Segment
We present our operations in four reportable business segments:
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; our films are also produced under the Illumination, Focus Features and DreamWorks Animation names.
Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan.
We use Adjusted EBITDA to evaluate the profitability of our operating segments and the components of net income attributable to NBCUniversal below Adjusted EBITDA are not separately evaluated. Our financial data by business segment is presented in the tables below.
NBCUniversal Media, LLC
|
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2017 |
| (in millions) | Revenue(d) | Adjusted EBITDA(e) | Depreciation, Amortization and Other(f) | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
| Cable Networks | $ | 2,603 |
| $ | 905 |
| $ | 179 |
| $ | 726 |
| $ | 5 |
| $ | 4 |
|
| Broadcast Television | 2,133 |
| 321 |
| (305 | ) | 626 |
| 66 |
| 4 |
|
| Filmed Entertainment | 1,784 |
| 394 |
| 32 |
| 362 |
| 18 |
| 6 |
|
| Theme Parks | 1,550 |
| 775 |
| 166 |
| 609 |
| 199 |
| 18 |
|
Headquarters and Other(a) | 15 |
| (122 | ) | 97 |
| (219 | ) | 66 |
| 37 |
|
Eliminations(b) | (71 | ) | 1 |
| — |
| 1 |
| — |
| — |
|
| Total | $ | 8,014 |
| $ | 2,274 |
| $ | 169 |
| $ | 2,105 |
| $ | 354 |
| $ | 69 |
|
|
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2016 |
| (in millions) | Revenue(d) | Adjusted EBITDA(e) | Depreciation, Amortization and Other | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Networks(c) | $ | 2,942 |
| $ | 893 |
| $ | 184 |
| $ | 709 |
| $ | 7 |
| $ | 4 |
|
Broadcast Television(c) | 3,087 |
| 378 |
| 27 |
| 351 |
| 28 |
| 6 |
|
| Filmed Entertainment | 1,792 |
| 353 |
| 13 |
| 340 |
| 6 |
| 4 |
|
| Theme Parks | 1,440 |
| 706 |
| 130 |
| 576 |
| 228 |
| 19 |
|
Headquarters and Other(a) | 1 |
| (183 | ) | 91 |
| (274 | ) | 67 |
| 34 |
|
Eliminations(b) | (84 | ) | (1 | ) | — |
| (1 | ) | — |
| — |
|
| Total | $ | 9,178 |
| $ | 2,146 |
| $ | 445 |
| $ | 1,701 |
| $ | 336 |
| $ | 67 |
|
|
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2017 |
| (in millions) | Revenue(d) | Adjusted EBITDA(e) | Depreciation, Amortization and Other(f) | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
| Cable Networks | $ | 7,940 |
| $ | 3,076 |
| $ | 574 |
| $ | 2,502 |
| $ | 15 |
| $ | 11 |
|
| Broadcast Television | 6,582 |
| 1,059 |
| (242 | ) | 1,301 |
| 125 |
| 11 |
|
| Filmed Entertainment | 5,920 |
| 1,047 |
| 79 |
| 968 |
| 47 |
| 17 |
|
| Theme Parks | 3,982 |
| 1,723 |
| 494 |
| 1,229 |
| 671 |
| 57 |
|
Headquarters and Other(a) | 32 |
| (542 | ) | 292 |
| (834 | ) | 119 |
| 101 |
|
Eliminations(b) | (243 | ) | (1 | ) | — |
| (1 | ) | — |
| — |
|
| Total | $ | 24,213 |
| $ | 6,362 |
| $ | 1,197 |
| $ | 5,165 |
| $ | 977 |
| $ | 197 |
|
|
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2016 |
| (in millions) | Revenue(d) | Adjusted EBITDA(e) | Depreciation, Amortization and Other | Operating Income (Loss) | Capital Expenditures | Cash Paid for Intangible Assets |
Cable Networks(c) | $ | 7,961 |
| $ | 2,793 |
| $ | 561 |
| $ | 2,232 |
| $ | 15 |
| $ | 8 |
|
Broadcast Television(c) | 7,299 |
| 1,056 |
| 89 |
| 967 |
| 77 |
| 12 |
|
| Filmed Entertainment | 4,526 |
| 576 |
| 33 |
| 543 |
| 14 |
| 10 |
|
| Theme Parks | 3,602 |
| 1,550 |
| 373 |
| 1,177 |
| 668 |
| 48 |
|
Headquarters and Other(a) | 10 |
| (518 | ) | 268 |
| (786 | ) | 217 |
| 103 |
|
Eliminations(b) | (256 | ) | — |
| — |
| — |
| — |
| — |
|
| Total | $ | 23,142 |
| $ | 5,457 |
| $ | 1,324 |
| $ | 4,133 |
| $ | 991 |
| $ | 181 |
|
| |
(a) | Headquarters and Other activities include costs associated with overhead, allocations, personnel costs and headquarter initiatives. |
| |
(b) | Included in Eliminations are transactions that our segments enter into with one another, which consist primarily of the licensing of film and television content from our Filmed Entertainment and Broadcast Television segments to our Cable Networks segment. |
| |
(c) | The revenue and operating costs and expenses associated with our broadcast of the 2016 Rio Olympics were reported in our Cable Networks and Broadcast Television segments. |
| |
(d) | No single customer accounted for a significant amount of revenue in any period.
|
| |
(e) | We use Adjusted EBITDA as the measure of profit or loss for our operating segments. Adjusted EBITDA is defined as net income attributable to NBCUniversal before net (income) loss attributable to noncontrolling interests, income tax expense, other income (expense) items, net, depreciation and amortization expense, and other operating gains, and excluding impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets, if any. From time to time we may exclude from Adjusted EBITDA the impact of events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. Other income (expense) items, net include interest expense, investment income (loss), equity in net income (losses) of investees, and other income (expense), net (as stated in our condensed consolidated statement of |
NBCUniversal Media, LLC
income). This measure eliminates the significant level of noncash amortization expense that results from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital and tax structures and by our 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), net income (loss) attributable to NBCUniversal, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with GAAP. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated income before income taxes is presented in the table below.
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30 | | Nine Months Ended
September 30 |
| (in millions) | 2017 | | 2016 | | 2017 | | 2016 |
| Adjusted EBITDA | $ | 2,274 |
| | $ | 2,146 |
| | $ | 6,362 |
| | $ | 5,457 |
|
| Depreciation | (253 | ) | | (209 | ) | | (749 | ) | | (624 | ) |
| Amortization | (253 | ) | | (236 | ) | | (785 | ) | | (700 | ) |
| Other operating gains | 337 |
| | — |
| | 337 |
| | — |
|
| Other income (expense) items, net | (165 | ) | | (195 | ) | | (473 | ) | | (398 | ) |
| Income before income taxes | $ | 1,940 |
| | $ | 1,506 |
| | $ | 4,692 |
| | $ | 3,735 |
|
| |
(f) | Other represents other operating gains in our condensed consolidated statement of income. For both the three and nine months ended September 30, 2017, other operating gains included a pretax gain of $337 million related to our relinquishment of spectrum rights in our Broadcast Television segment.
|
