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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2013
OR
| ¨ | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the Transition Period from to
Commission File Number 001-32871
COMCAST CORPORATION
(Exact name of registrant as specified in its charter)
| PENNSYLVANIA | 27-0000798 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| One Comcast Center, Philadelphia, PA | 19103-2838 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (215) 286-1700
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 x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).
Yes x No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ¨ No x
As of September 30, 2013, there were 2,136,124,018 shares of our Class A common stock, 469,858,896 shares of our Class A Special common stock and 9,444,375 shares of our Class B common stock outstanding.
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This Quarterly Report on Form 10-Q is for the three and nine months ended September 30, 2013. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. Throughout this Quarterly Report, we refer to Comcast Corporation as “Comcast;” Comcast and its consolidated subsidiaries, including NBCUniversal Media, LLC (“NBCUniversal”), as “we,” “us” and “our;” Comcast Cable Communications, LLC and its subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” and NBCUniversal, LLC as “NBCUniversal Holdings.”
You should carefully review the information contained in this Quarterly Report and particularly consider any risk factors set forth in this Quarterly Report and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “believes,” “estimates,” “potential,” or “continue,” or the negative of those words, and other comparable words. You should be aware that these statements are only our predictions. In evaluating these statements, you should specifically consider various factors, including the risks outlined below and in other reports we file with the SEC. Actual events or our actual results may differ materially from any of our forward-looking statements. We undertake no obligation to update any forward-looking statements.
Our businesses may be affected by, among other things, the following:
| • | our businesses currently face a wide range of competition, and our businesses and results of operations could be adversely affected if we do not compete effectively |
| • | changes in consumer behavior driven by new technologies may adversely affect our businesses |
| • | programming expenses for our video services are increasing, which could adversely affect our businesses |
| • | we are subject to regulation by federal, state, local and foreign authorities, which may impose additional costs and restrictions on our businesses |
| • | weak economic conditions may have a negative impact on our businesses |
| • | a decline in advertising expenditures or changes in advertising markets could negatively impact our businesses |
| • | NBCUniversal’s success depends on consumer acceptance of its content, which is difficult to predict, and its businesses may be adversely affected if its content fails to achieve sufficient consumer acceptance or our costs to acquire content increase |
| • | the loss of NBCUniversal’s programming distribution agreements, or the renewal of these agreements on less favorable terms, could adversely affect its businesses |
| • | 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 |
| • | 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 |
| • | 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 |
| • | sales of DVDs have been declining |
| • | we face risks arising from the outcome of various litigation matters |
| • | we face risks relating to doing business internationally that could adversely affect our businesses |
| • | acquisitions and other strategic transactions present many risks, and we may not realize the financial and strategic goals that were contemplated at the time of any transaction |
| • | our Class B common stock has substantial voting rights and separate approval rights over several potentially material transactions, and our Chairman and CEO has considerable influence over our company through his beneficial ownership of our Class B common stock |
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PART I: FINANCIAL INFORMATION
Condensed Consolidated Balance Sheet
(Unaudited)
| (in millions, except share data) | September 30, 2013 |
December 31, 2012 |
||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 1,603 | $ | 10,951 | ||||
| Investments |
4,132 | 1,464 | ||||||
| Receivables, net |
5,501 | 5,521 | ||||||
| Programming rights |
959 | 909 | ||||||
| Other current assets |
1,212 | 1,146 | ||||||
| Total current assets |
13,407 | 19,991 | ||||||
| Film and television costs |
4,588 | 5,054 | ||||||
| Investments |
3,672 | 6,325 | ||||||
| Property and equipment, net of accumulated depreciation of $41,816 and $39,425 |
28,806 | 27,232 | ||||||
| Franchise rights |
59,364 | 59,364 | ||||||
| Goodwill |
27,079 | 26,985 | ||||||
| Other intangible assets, net of accumulated amortization of $8,570 and $7,662 |
17,334 | 17,840 | ||||||
| Other noncurrent assets, net |
2,345 | 2,180 | ||||||
| Total assets |
$ | 156,595 | $ | 164,971 | ||||
| Liabilities and Equity |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 6,032 | $ | 6,206 | ||||
| Accrued participations and residuals |
1,372 | 1,350 | ||||||
| Deferred revenue |
1,001 | 851 | ||||||
| Accrued expenses and other current liabilities |
7,924 | 5,931 | ||||||
| Current portion of long-term debt |
2,337 | 2,376 | ||||||
| Total current liabilities |
18,666 | 16,714 | ||||||
| Long-term debt, less current portion |
44,188 | 38,082 | ||||||
| Deferred income taxes |
31,261 | 30,110 | ||||||
| Other noncurrent liabilities |
11,493 | 13,271 | ||||||
| Commitments and contingencies (Note 14) |
||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
853 | 16,998 | ||||||
| Equity: |
||||||||
| Preferred stock—authorized, 20,000,000 shares; issued, zero |
— | — | ||||||
| Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 2,501,584,768 and 2,487,739,385; outstanding, 2,136,124,018 and 2,122,278,635 |
25 | 25 | ||||||
| Class A Special common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 540,793,660 and 578,704,227; outstanding, 469,858,896 and 507,769,463 |
5 | 6 | ||||||
| Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375 |
— | — | ||||||
| Additional paid-in capital |
38,991 | 40,547 | ||||||
| Retained earnings |
18,324 | 16,280 | ||||||
| Treasury stock, 365,460,750 Class A common shares and 70,934,764 Class A Special common shares |
(7,517 | ) | (7,517 | ) | ||||
| Accumulated other comprehensive income (loss) |
(110 | ) | 15 | |||||
| Total Comcast Corporation shareholders’ equity |
49,718 | 49,356 | ||||||
| Noncontrolling interests |
416 | 440 | ||||||
| Total equity |
50,134 | 49,796 | ||||||
| Total liabilities and equity |
$ | 156,595 | $ | 164,971 | ||||
See accompanying notes to condensed consolidated financial statements.
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Condensed Consolidated Statement of Income
(Unaudited)
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| (in millions, except per share data) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Revenue |
$ | 16,151 | $ | 16,544 | $ | 47,731 | $ | 46,633 | ||||||||
| Costs and Expenses: |
||||||||||||||||
| Programming and production |
4,787 | 5,726 | 14,418 | 15,013 | ||||||||||||
| Other operating and administrative |
4,751 | 4,580 | 13,787 | 13,190 | ||||||||||||
| Advertising, marketing and promotion |
1,283 | 1,230 | 3,737 | 3,730 | ||||||||||||
| Depreciation |
1,520 | 1,549 | 4,669 | 4,594 | ||||||||||||
| Amortization |
396 | 411 | 1,204 | 1,221 | ||||||||||||
| 12,737 | 13,496 | 37,815 | 37,748 | |||||||||||||
| Operating income |
3,414 | 3,048 | 9,916 | 8,885 | ||||||||||||
| Other Income (Expense): |
||||||||||||||||
| Interest expense |
(639 | ) | (633 | ) | (1,928 | ) | (1,898 | ) | ||||||||
| Investment income (loss), net |
464 | 70 | 549 | 170 | ||||||||||||
| Equity in net income (losses) of investees, net |
(130 | ) | 911 | (96 | ) | 943 | ||||||||||
| Other income (expense), net |
(310 | ) | 987 | (280 | ) | 924 | ||||||||||
| (615 | ) | 1,335 | (1,755 | ) | 139 | |||||||||||
| Income before income taxes |
2,799 | 4,383 | 8,161 | 9,024 | ||||||||||||
| Income tax expense |
(1,021 | ) | (1,405 | ) | (2,994 | ) | (2,966 | ) | ||||||||
| Net income |
1,778 | 2,978 | 5,167 | 6,058 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
(46 | ) | (865 | ) | (264 | ) | (1,373 | ) | ||||||||
| Net income attributable to Comcast Corporation |
$ | 1,732 | $ | 2,113 | $ | 4,903 | $ | 4,685 | ||||||||
| Basic earnings per common share attributable to Comcast Corporation shareholders |
$ | 0.66 | $ | 0.79 | $ | 1.86 | $ | 1.74 | ||||||||
| Diluted earnings per common share attributable to Comcast Corporation shareholders |
$ | 0.65 | $ | 0.78 | $ | 1.84 | $ | 1.72 | ||||||||
| Dividends declared per common share attributable to Comcast Corporation shareholders |
$ | 0.195 | $ | 0.1625 | $ | 0.585 | $ | 0.4875 | ||||||||
See accompanying notes to condensed consolidated financial statements.
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Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| (in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Net income |
$ | 1,778 | $ | 2,978 | $ | 5,167 | $ | 6,058 | ||||||||
| Unrealized gains (losses) on marketable securities, net of deferred taxes of $(11), $(44), $(82) and $(44) |
19 | 75 | 136 | 75 | ||||||||||||
| Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(26), $(29), $(6) and $(20) |
45 | 50 | 10 | 35 | ||||||||||||
| Amounts reclassified to net income: |
||||||||||||||||
| Realized (gains) losses on marketable securities, net of deferred taxes of $165, $—, $177 and $— |
(278 | ) | — | (301 | ) | — | ||||||||||
| Realized (gains) losses on cash flow hedges, net of deferred taxes of $22, $9, $(6) and $8 |
(38 | ) | (15 | ) | 10 | (14 | ) | |||||||||
| Employee benefit obligations, net of deferred taxes of $(34), $(3), $(36) and $(2) |
57 | 11 | 60 | 6 | ||||||||||||
| Currency translation adjustments, net of deferred taxes of $(5), $(4), $9 and $(2) |
8 | 17 | (23 | ) | 10 | |||||||||||
| Comprehensive income |
1,591 | 3,116 | 5,059 | 6,170 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
(46 | ) | (865 | ) | (264 | ) | (1,373 | ) | ||||||||
| Other comprehensive (income) loss attributable to noncontrolling interests |
— | (16 | ) | 9 | (8 | ) | ||||||||||
| Comprehensive income attributable to Comcast Corporation |
$ | 1,545 | $ | 2,235 | $ | 4,804 | $ | 4,789 | ||||||||
See accompanying notes to condensed consolidated financial statements.
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Condensed Consolidated Statement of Cash Flows
(Unaudited)
| Nine Months Ended September 30 |
||||||||
| (in millions) | 2013 | 2012 | ||||||
| Net cash provided by (used in) operating activities |
$ | 11,679 | $ | 11,239 | ||||
| Investing Activities |
||||||||
| Capital expenditures |
(4,593 | ) | (4,043 | ) | ||||
| Cash paid for intangible assets |
(694 | ) | (605 | ) | ||||
| Acquisitions of real estate properties |
(1,705 | ) | — | |||||
| Acquisitions, net of cash acquired |
(42 | ) | (95 | ) | ||||
| Proceeds from sales of businesses and investments |
655 | 3,095 | ||||||
| Return of capital from investees |
146 | 2,281 | ||||||
| Purchases of investments |
(1,177 | ) | (191 | ) | ||||
| Other |
83 | 68 | ||||||
| Net cash provided by (used in) investing activities |
(7,327 | ) | 510 | |||||
| Financing Activities |
||||||||
| Proceeds from (repayments of) short-term borrowings, net |
395 | (555 | ) | |||||
| Proceeds from borrowings |
2,933 | 2,248 | ||||||
| Repurchases and repayments of debt |
(2,442 | ) | (2,505 | ) | ||||
| Repurchases and retirements of common stock |
(1,500 | ) | (2,250 | ) | ||||
| Dividends paid |
(1,454 | ) | (1,176 | ) | ||||
| Issuances of common stock |
35 | 215 | ||||||
| Purchase of NBCUniversal noncontrolling common equity interest |
(10,761 | ) | — | |||||
| Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock |
(164 | ) | (497 | ) | ||||
| Settlement of Station Venture liability |
(602 | ) | — | |||||
| Other |
(140 | ) | 50 | |||||
| Net cash provided by (used in) financing activities |
(13,700 | ) | (4,470 | ) | ||||
| Increase (decrease) in cash and cash equivalents |
(9,348 | ) | 7,279 | |||||
| Cash and cash equivalents, beginning of period |
10,951 | 1,620 | ||||||
| Cash and cash equivalents, end of period |
$ | 1,603 | $ | 8,899 | ||||
See accompanying notes to condensed consolidated financial statements.
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Condensed Consolidated Statement of Changes in Equity
(Unaudited)
| Redeemable Stock |
Common Stock |
Additional |
Retained |
Treasury |
Accumulated |
Non- controlling |
Total |
|||||||||||||||||||||||||||||||||||
| (in millions) | A | A Special | B | |||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2012 |
$ | 16,014 | $ | 25 | $ | 7 | $ | — | $ | 40,940 | $ | 13,971 | $ | (7,517 | ) | $ | (152 | ) | $ | 381 | $ | 47,655 | ||||||||||||||||||||
| Stock compensation plans |
490 | (169 | ) | 321 | ||||||||||||||||||||||||||||||||||||||
| Repurchases and |
(1 | ) | (842 | ) | (1,407 | ) | (2,250 | ) | ||||||||||||||||||||||||||||||||||
| Employee stock purchase plans |
62 | 62 | ||||||||||||||||||||||||||||||||||||||||
| Dividends declared |
(1,306 | ) | (1,306 | ) | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive |
8 | 104 | 104 | |||||||||||||||||||||||||||||||||||||||
| Contributions from (distributions to) noncontrolling interests, net |
(353 | ) | (119 | ) | (119 | ) | ||||||||||||||||||||||||||||||||||||
| Other |
(43 | ) | 2 | 84 | 86 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) |
1,270 | 4,685 | 103 | 4,788 | ||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2012 |
$ | 16,896 | $ | 25 | $ | 6 | $ | — | $ | 40,652 | $ | 15,774 | $ | (7,517 | ) | $ | (48 | ) | $ | 449 | $ | 49,341 | ||||||||||||||||||||
| Balance, January 1, 2013 |
$ | 16,998 | $ | 25 | $ | 6 | $ | — | $ | 40,547 | $ | 16,280 | $ | (7,517 | ) | $ | 15 | $ | 440 | $ | 49,796 | |||||||||||||||||||||
| Stock compensation plans |
433 | (255 | ) | 178 | ||||||||||||||||||||||||||||||||||||||
| Repurchases and |
(1 | ) | (432 | ) | (1,067 | ) | (1,500 | ) | ||||||||||||||||||||||||||||||||||
| Employee stock purchase plans |
75 | 75 | ||||||||||||||||||||||||||||||||||||||||
| Dividends declared |
(1,537 | ) | (1,537 | ) | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive |
(9 | ) | (99 | ) | (99 | ) | ||||||||||||||||||||||||||||||||||||
| Purchase of NBCUniversal noncontrolling common equity interest |
(17,006 | ) | (1,482 | ) | (26 | ) | (1,508 | ) | ||||||||||||||||||||||||||||||||||
| Redeemable subsidiary preferred stock |
725 | |||||||||||||||||||||||||||||||||||||||||
| Contributions from (distributions to) noncontrolling interests, net |
(14 | ) | (103 | ) | (103 | ) | ||||||||||||||||||||||||||||||||||||
| Other |
(24 | ) | (150 | ) | (2 | ) | (152 | ) | ||||||||||||||||||||||||||||||||||
| Net income (loss) |
183 | 4,903 | 81 | 4,984 | ||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2013 |
$ | 853 | $ | 25 | $ | 5 | $ | — | $ | 38,991 | $ | 18,324 | $ | (7,517 | ) | $ | (110 | ) | $ | 416 | $ | 50,134 | ||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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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 Securities and Exchange Commission (“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 filed with the SEC on Form 8-K on September 18, 2013.
Reclassifications have been made to our condensed consolidated financial statements for the prior year periods to conform to classifications used in the current year periods.
Note 2: Earnings Per Share
Computation of Diluted EPS
| Three Months Ended September 30 | ||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||
| (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 |
$ | 1,732 | 2,622 | $ | 0.66 | $ | 2,113 | 2,668 | $ | 0.79 | ||||||||||||||
| Effect of dilutive securities: |
||||||||||||||||||||||||
| Assumed exercise or issuance of shares |
36 | 35 | ||||||||||||||||||||||
| Diluted EPS attributable to Comcast Corporation shareholders |
$ | 1,732 | 2,658 | $ | 0.65 | $ | 2,113 | 2,703 | $ | 0.78 | ||||||||||||||
| Nine Months Ended September 30 | ||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||
| (in millions, except per share data) | Net Income Attributable to Comcast Corporation |
Shares | Per Share Amount |
Net Income Attributable to Comcast Corporation |
Shares | Per Share Amount |
||||||||||||||||||
| Basic EPS attributable to Comcast Corporation shareholders |
$ | 4,903 | 2,629 | $ | 1.86 | $ | 4,685 | 2,687 | $ | 1.74 | ||||||||||||||
| Effect of dilutive securities: |
||||||||||||||||||||||||
| Assumed exercise or issuance of shares |
39 | 37 | ||||||||||||||||||||||
| Diluted EPS attributable to Comcast Corporation shareholders |
$ | 4,903 | 2,668 | $ | 1.84 | $ | 4,685 | 2,724 | $ | 1.72 | ||||||||||||||
Our potentially dilutive securities include potential common shares related to our stock options and our restricted share units (“RSUs”). Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our Class A common stock or our Class A Special common stock, as applicable.
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Diluted EPS for the three and nine months ended September 30, 2013 excludes 18 million and 13 million, respectively, of potential common shares related to our share-based compensation plans, because the inclusion of the potential common shares would have had an antidilutive effect. For the three and nine months ended September 30, 2012, diluted EPS excluded 21 million and 37 million, respectively, of potential common shares.
Note 3: Significant Transactions
Redemption Transaction
On March 19, 2013, we acquired GE’s remaining 49% common equity interest in NBCUniversal Holdings for approximately $16.7 billion (the “Redemption Transaction”). In addition to this transaction, NBCUniversal purchased from GE certain properties NBCUniversal occupies at 30 Rockefeller Plaza in New York City and CNBC’s headquarters in Englewood Cliffs, New Jersey for approximately $1.4 billion.
The total consideration for these transactions consisted of $11.4 billion of cash on hand; $4 billion of senior debt securities issued by NBCUniversal Enterprise, Inc. (“NBCUniversal Enterprise”), a holding company whose principal assets are its interests in NBCUniversal Holdings; $750 million of cash funded through our commercial paper program; $1.25 billion of borrowings under NBCUniversal Enterprise’s credit facility, which replaced NBCUniversal’s credit facility; and $725 million aggregate liquidation preference of Series A cumulative preferred stock of NBCUniversal Enterprise. See Note 7 for additional information on NBCUniversal Enterprise’s senior debt securities and credit facility.
Following the close of the Redemption Transaction, we control and consolidate NBCUniversal Enterprise and own all of its capital stock other than its preferred stock. NBCUniversal Enterprise’s senior debt securities and credit facility are guaranteed by us and four of our wholly owned cable holding company subsidiaries, but are not guaranteed by NBCUniversal. In March 2013, NBCUniversal became a part of our existing cross-guarantee structure. See Note 16 for additional information on our cross-guarantee structure.
After the close of the transaction, GE sold the interests in NBCUniversal Enterprise’s senior debt securities and preferred stock it acquired in the Redemption Transaction to unaffiliated third parties. The preferred stock pays dividends at a fixed rate of 5.25% per annum and the holders have the right to cause NBCUniversal Enterprise to redeem their shares at a price equal to the liquidation preference plus accrued but unpaid dividends for a 30 day period beginning on March 19, 2020 and thereafter on every third anniversary of such date (each such date, a “put date”). Shares of preferred stock can be called for redemption by NBCUniversal Enterprise at a price equal to the liquidation preference plus accrued but unpaid dividends one year following each put date applicable to such shares. Because certain of these redemption provisions are outside of our control, the NBCUniversal Enterprise preferred stock is presented outside of equity under the caption “redeemable noncontrolling interests and redeemable subsidiary preferred stock” in our condensed consolidated balance sheet. Its initial value was based on the liquidation preference of the preferred stock and is adjusted for accrued but unpaid dividends.
We recognized an increase to our deferred tax liabilities of $1.5 billion primarily due to an increase in our financial reporting basis in the consolidated net assets of NBCUniversal Holdings in excess of the tax basis following the Redemption Transaction. In addition, our condensed consolidated balance sheet now includes certain tax liabilities of NBCUniversal Enterprise related to periods prior to our acquisition of the common stock of NBCUniversal Enterprise for which we have been indemnified by GE and have recorded a related indemnification asset. We also expect to realize additional tax benefits in the future as a result of the Redemption Transaction, which are expected to increase the amounts we have agreed to share with GE. Our expected future payments to GE are accounted for as contingent consideration. See Note 8 for additional information on the fair value of this contingent consideration as of September 30, 2013.
Because we maintained control of NBCUniversal Holdings, the difference between the consideration transferred and the recorded value of GE’s 49% redeemable noncontrolling common equity interest, and the related tax impacts, were recorded to additional paid-in capital. The related tax impacts are preliminary and subject to change as we obtain the information necessary to complete our analysis.
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Note 4: Film and Television Costs
| (in millions) | September 30, 2013 |
December 31, 2012 |
||||||
| Film Costs: |
||||||||
| Released, less amortization |
$ | 1,439 | $ | 1,472 | ||||
| Completed, not released |
189 | 99 | ||||||
| In production and in development |
394 | 1,048 | ||||||
| 2,022 | 2,619 | |||||||
| Television Costs: |
||||||||
| Released, less amortization |
1,144 | 1,124 | ||||||
| In production and in development |
321 | 334 | ||||||
| 1,465 | 1,458 | |||||||
| Programming rights, less amortization |
2,060 | 1,886 | ||||||
| 5,547 | 5,963 | |||||||
| Less: Current portion of programming rights |
959 | 909 | ||||||
| Film and television costs |
$ | 4,588 | $ | 5,054 | ||||
Note 5: Investments
| (in millions) | September 30, 2013 |
December 31, 2012 |
||||||
| Fair Value Method |
$ | 4,790 | $ | 4,493 | ||||
| Equity Method: |
||||||||
| The Weather Channel |
331 | 471 | ||||||
| Other |
709 | 693 | ||||||
| 1,040 | 1,164 | |||||||
| Cost Method: |
||||||||
| AirTouch |
1,549 | 1,538 | ||||||
| Other |
425 | 594 | ||||||
| 1,974 | 2,132 | |||||||
| Total investments |
7,804 | 7,789 | ||||||
| Less: Current investments |
4,132 | 1,464 | ||||||
| Noncurrent investments |
$ | 3,672 | $ | 6,325 | ||||
Investment Income (Loss), Net
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| (in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Gains on sales and exchanges of investments, net |
$ | 445 | $ | 1 | $ | 483 | $ | 28 | ||||||||
| Investment impairment losses |
(12 | ) | (1 | ) | (25 | ) | (22 | ) | ||||||||
| Unrealized gains (losses) on securities underlying prepaid forward sale agreements |
345 | 500 | 1,197 | 988 | ||||||||||||
| Mark to market adjustments on derivative component of prepaid forward sale agreements and indexed debt instruments |
(348 | ) | (470 | ) | (1,189 | ) | (920 | ) | ||||||||
| Interest and dividend income |
28 | 32 | 84 | 89 | ||||||||||||
| Other, net |
6 | 8 | (1 | ) | 7 | |||||||||||
| Investment income (loss), net |
$ | 464 | $ | 70 | $ | 549 | $ | 170 | ||||||||
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Fair Value Method
As of September 30, 2013, the majority of our fair value method investments were equity securities held as collateral that were related to our obligations under prepaid forward sale agreements.
Prepaid Forward Sale Agreements
| (in millions) | September 30, 2013 |
December 31, 2012 |
||||||
| Assets: |
||||||||
| Fair value equity securities held as collateral |
$ | 3,555 | $ | 4,143 | ||||
| Liabilities: |
||||||||
| Obligations under prepaid forward sale agreements |
$ | 799 | $ | 1,248 | ||||
| Derivative component of prepaid forward sale agreements |
2,397 | 2,302 | ||||||
| Total liabilities |
$ | 3,196 | $ | 3,550 | ||||
During the nine months ended September 30, 2013, we purchased a total of $653 million of equity securities classified as trading securities and held as collateral under our prepaid forward sale agreements. We also settled obligations under certain of our prepaid forward sale agreements totaling $1.6 billion with a combination of cash on hand and $1.4 billion of equity securities. As of September 30, 2013, our remaining prepaid forward sale obligations had an estimated fair value of $3.2 billion. The estimated fair values are based on Level 2 inputs using 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.
Liberty Media
In October 2013, Liberty Media Corporation (“Liberty Media”) redeemed 6.3 million shares of Liberty Media Series A common stock (“Liberty stock”) that had been held by us as collateral as of December 31, 2012 under certain of our prepaid forward sale agreements in exchange for all of the equity of a subsidiary of Liberty Media. As of September 30, 2013, the fair value of the Liberty stock was $925 million. The assets of the subsidiary of Liberty Media included cash of $417 million, Liberty Media’s interests in one of NBCUniversal’s contractual obligations and a wholly owned operating subsidiary, Leisure Arts, Inc. As of September 30, 2013, a liability of $383 million associated with NBCUniversal’s contractual obligation was included in our condensed consolidated balance sheet. Following the close of this transaction, we now consolidate the subsidiary transferred to us and the liability associated with NBCUniversal’s contractual obligation is eliminated in consolidation.
Clearwire
In July 2013, in connection with Sprint’s acquisition of Clearwire Corporation (“Clearwire”), Sprint acquired our investment of 89 million Class A shares of Clearwire for $443 million. As of the date of the acquisition by Sprint, we recognized a pretax gain of $443 million in our condensed consolidated statement of income, which represented the recognition of cumulative unrealized gains previously recorded in accumulated other comprehensive income.
Equity Method
In June 2013, NBCUniversal received a distribution from The Weather Channel Holding Corp. (“The Weather Channel”) of $152 million, of which $128 million was recorded as a return of its investment in The Weather Channel and is included under the caption “return of capital from investees” in our condensed consolidated statement of cash flows.
Cost Method
AirTouch
We hold two series of preferred stock of AirTouch Communications, Inc. (“AirTouch”), a subsidiary of Vodafone, which are redeemable in April 2020. As of September 30, 2013, the estimated fair values of the AirTouch preferred stock and the associated liability related to the redeemable preferred shares issued by one of our consolidated subsidiaries were each $1.7 billion. The estimated fair values are based on Level 2 inputs using
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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 6: Goodwill
| NBCUniversal | ||||||||||||||||||||||||||||
| (in millions) | Cable Communications |
Cable Networks |
Broadcast Television |
Filmed Entertainment |
Theme Parks |
Corporate and Other |
Total | |||||||||||||||||||||
| Balance, December 31, 2012 |
$ | 12,206 | $ | 13,026 | $ | 761 | $ | 1 | $ | 982 | $ | 9 | $ | 26,985 | ||||||||||||||
| Acquisitions |
— | 17 | 1 | — | — | — | 18 | |||||||||||||||||||||
| Adjustments |
— | 69 | 6 | — | — | 1 | 76 | |||||||||||||||||||||
| Balance, September 30, 2013 |
$ | 12,206 | $ | 13,112 | $ | 768 | $ | 1 | $ | 982 | $ | 10 | $ | 27,079 | ||||||||||||||
Adjustments to goodwill during the nine months ended September 30, 2013 were primarily related to an immaterial correction to the allocation of purchase price associated with the January 2011 NBCUniversal transaction, which was recorded in the second quarter of 2013.
Note 7: Long-Term Debt
Long-Term Debt Outstanding
| (in millions) | Weighted-Average Interest Rate as of September 30, 2013 |
September 30, 2013 |
December 31, 2012 |
|||||||||
| Commercial paper |
0.290 | % | $ | 400 | $ | — | ||||||
| Revolving credit facilities |
1.252 | % | 1,250 | — | ||||||||
| Senior notes with maturities of 5 years or less |
4.711 | % | 15,111 | 12,991 | ||||||||
| Senior notes with maturities between 6 and 10 years |
4.558 | % | 11,534 | 10,334 | ||||||||
| Senior notes with maturities greater than 10 years |
5.979 | % | 17,985 | 16,801 | ||||||||
| Other, including capital lease obligations |
— | 245 | 332 | |||||||||
| Total debt |
4.86 | %(a) | 46,525 | 40,458 | ||||||||
| Less: Current portion |
2,337 | 2,376 | ||||||||||
| Long-term debt |
$ | 44,188 | $ | 38,082 | ||||||||
| (a) | Includes the effects of our derivative financial instruments. |
As of September 30, 2013, our debt had an estimated fair value of $51.1 billion. The estimated fair value of our publicly traded debt is based on quoted market values for the debt. To estimate the fair value of debt for which there are no quoted market prices, we use interest rates available to us for debt with similar terms and remaining maturities.
Redemption Transaction
The Redemption Transaction resulted in the consolidation of an additional $4 billion aggregate principal amount of senior notes issued by NBCUniversal Enterprise and $1.25 billion of borrowings under the NBCUniversal Enterprise credit facility. The total consideration for the Redemption Transaction also included $750 million of cash funded through our commercial paper program.
The NBCUniversal Enterprise senior notes are comprised of $1.1 billion aggregate principal amount of 1.662% senior notes due 2018, $1.5 billion aggregate principal amount of 1.974% senior notes due 2019, $700 million aggregate principal amount of floating rate senior notes due 2016 and $700 million aggregate principal amount of floating rate senior notes due 2018. The floating rate senior notes due 2016 and 2018 accrue interest for each quarterly interest period at a rate equal to the three-month London Interbank Offered Rate (“LIBOR”) plus 0.537% and 0.685%, respectively.
On March 19, 2013, NBCUniversal Enterprise amended and restated the existing credit agreement of NBCUniversal to, among other things, substitute NBCUniversal Enterprise for NBCUniversal as the sole borrower, reduce the borrowing capacity of the facility from $1.5 billion to $1.35 billion, extend the term of the facility to March 2018 and revise the interest rate on borrowings. The interest rate on the credit facility consists of
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a base rate plus a borrowing margin that is determined based on our credit rating. As of September 30, 2013, the interest rate was 1.252%.
Debt Borrowings
In January 2013, we issued $750 million aggregate principal amount of 2.850% senior notes due 2023, $1.7 billion aggregate principal amount of 4.250% senior notes due 2033 and $500 million aggregate principal amount of 4.500% senior notes due 2043.
Commercial Paper Program
During the nine months ended September 30, 2013, borrowings, net of repayments of commercial paper under our commercial paper program, were $400 million. Following the amendments to the NBCUniversal credit agreement, NBCUniversal’s commercial paper program was terminated.
Revolving Credit Facilities
As of September 30, 2013, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper program and undrawn letters of credit, totaled $5.7 billion, which included $100 million available under NBCUniversal Enterprise’s credit facility.
Note 8: Fair Value Measurements
The accounting guidance related to financial assets and financial liabilities (“financial instruments”) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). Level 1 consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2 consists of financial instruments that are valued using models or other valuation methodologies. These models use inputs that are observable either directly or indirectly. Level 3 consists of financial instruments whose values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Our financial instruments that are accounted for at fair value on a recurring basis are presented in the table below.
Recurring Fair Value Measures
| Fair Value as of | ||||||||||||||||||||
| September 30, 2013 | December 31, 2012 |
|||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||
| Assets |
||||||||||||||||||||
| Trading securities |
$ | 4,477 | $ | — | $ | — | $ | 4,477 | $ | 4,027 | ||||||||||
| Available-for-sale securities |
183 | 118 | 12 | 313 | 464 | |||||||||||||||
| Interest rate swap agreements |
— | 137 | — | 137 | 210 | |||||||||||||||
| Other |
— | 59 | — | 59 | 38 | |||||||||||||||
| Total |
$ | 4,660 | $ | 314 | $ | 12 | $ | 4,986 | $ | 4,739 | ||||||||||
| Liabilities |
||||||||||||||||||||
| Derivative component of prepaid forward sale |
$ | — | $ | 2,402 | $ | — | $ | 2,402 | $ | 2,305 | ||||||||||
| Contractual obligations |
— | — | 1,130 | 1,130 | 1,055 | |||||||||||||||
| Contingent consideration |
— | — | 682 | 682 | 587 | |||||||||||||||
| Other |
— | 116 | — | 116 | 14 | |||||||||||||||
| Total |
$ | — | $ | 2,518 | $ | 1,812 | $ | 4,330 | $ | 3,961 | ||||||||||
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Contractual Obligations and Contingent Consideration
The fair values of the contractual obligations and contingent consideration in the table above are primarily based on certain expected future discounted cash flows, the determination of which involves the use of significant unobservable inputs. The most significant unobservable inputs we use are our estimates of the future revenue we expect to generate from certain NBCUniversal entities, which are related to our contractual obligations, and future net tax benefits that will affect payments to GE, which are related to contingent consideration. The discount rates used in the measurements of fair value were between 5% and 14% and are based on the underlying risk associated with our estimate of future revenue, as well as the terms of the respective contracts, and the uncertainty in the timing of our payments to GE. The fair value adjustments to contractual obligations and contingent consideration are sensitive to the assumptions related to future revenue and tax benefits, respectively, as well as to current interest rates, and therefore, the adjustments are recorded to other income (expense), net in our condensed consolidated statement of income.
Changes in Contractual Obligations and Contingent Consideration
| (in millions) | Contractual Obligations |
Contingent Consideration |
||||||
| Balance, December 31, 2012 |
$ | 1,055 | $ | 587 | ||||
| Fair value adjustments |
141 | 25 | ||||||
| Payments |
(66 | ) | (101 | ) | ||||
| Redemption Transaction |
— | 171 | ||||||
| Balance, September 30, 2013 |
$ | 1,130 | $ | 682 | ||||
Nonrecurring Fair Value Measures
We have assets and liabilities that we are required to record at fair value on a nonrecurring basis when certain circumstances occur. In the case of film or stage play production costs, upon the occurrence of an event or change in circumstance that may indicate that the fair value of a production is less than its unamortized costs, we determine the fair value of the production and record an adjustment for the amount by which the unamortized capitalized costs exceed the production’s fair value. The estimate of the fair value of a production is determined using Level 3 inputs, primarily an analysis of future expected cash flows. Adjustments to capitalized film production costs of $150 million and $155 million were recorded during the nine months ended September 30, 2013 and 2012, respectively.
Note 9: Noncontrolling Interests
Certain of the subsidiaries that we consolidate are not wholly owned. Some of the agreements with the minority partners of these subsidiaries contain redemption features whereby interests held by the minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. If interests were to be redeemed under these agreements, we would generally be required to purchase the interest at fair value on the date of redemption. These interests are presented on the balance sheet outside of equity as a component of the caption “redeemable noncontrolling interests and redeemable subsidiary preferred stock.” Noncontrolling interests and subsidiary preferred stock that do not contain such redemption features are presented in equity.
We acquired GE’s remaining 49% common equity interest in NBCUniversal Holdings, which had previously been presented as a redeemable noncontrolling interest in our condensed consolidated balance sheet. See Note 3 for additional information on the Redemption Transaction. The difference between the consideration transferred and the recorded value of GE’s 49% redeemable noncontrolling common equity interest, as well as the related tax impacts, were recorded to additional paid-in capital. The table below includes the impact of the Redemption Transaction on our changes in equity.
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Changes in Equity
| Nine Months Ended September 30 |
||||||||
| (in millions) | 2013 | 2012 | ||||||
| Net income attributable to Comcast Corporation |
$ | 4,903 | $ | 4,685 | ||||
| Transfers from (to) noncontrolling interests: |
||||||||
| Decrease in Comcast Corporation additional paid-in capital resulting from the purchase of GE’s redeemable noncontrolling common equity interest |
(1,482 | ) | — | |||||
| Other |
(26 | ) | 2 | |||||
| Changes in equity resulting from net income attributable to Comcast Corporation and transfers from (to) noncontrolling interests |
$ | 3,395 | $ | 4,687 | ||||
Note 10: Pension Plans
In August 2013, we settled all of our obligations related to the termination in February 2012 of the qualified pension plan that provided benefits to former AT&T Broadband employees. In connection with this final settlement, we fully funded the plan with additional contributions of $55 million and recorded an expense of $74 million in other operating and administrative expenses, which was previously recorded in accumulated other comprehensive income.
Note 11: Share-Based Compensation
Our share-based compensation primarily consists of awards of stock options and RSUs to certain employees and directors and is awarded as part of our approach to long-term incentive compensation. Additionally, through our employee stock purchase plans, employees are able to purchase shares of Comcast Class A common stock at a discount through payroll deductions.
In March 2013, we granted 18.4 million stock options and 5.2 million RSUs related to our annual management awards. The weighted-average fair values associated with these grants were $8.80 per stock option and $37.85 per RSU.
Recognized Share-Based Compensation Expense
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| (in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Stock options |
$ | 34 | $ | 32 | $ | 102 | $ | 99 | ||||||||
| Restricted share units |
44 | 38 | 130 | 114 | ||||||||||||
| Employee stock purchase plans |
4 | 4 | 15 | 12 | ||||||||||||
| Total |
$ | 82 | $ | 74 | $ | 247 | $ | 225 | ||||||||
As of September 30, 2013, we had unrecognized pretax compensation expense of $351 million and $414 million related to nonvested stock options and nonvested RSUs, respectively.
Note 12: Supplemental Financial Information
Receivables
| (in millions) | September 30, 2013 |
December 31, 2012 |
||||||
| Receivables, gross |
$ | 5,964 | $ | 6,026 | ||||
| Less: Allowance for returns and customer incentives |
249 | 307 | ||||||
| Less: Allowance for doubtful accounts |
214 | 198 | ||||||
| Receivables, net |
$ | 5,501 | $ | 5,521 | ||||
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Accumulated Other Comprehensive Income (Loss)
| (in millions) | September 30, 2013 |
September 30, 2012 |
||||||
| Unrealized gains (losses) on marketable securities |
$ | 18 | $ | 97 | ||||
| Deferred gains (losses) on cash flow hedges |
(47 | ) | (90 | ) | ||||
| Unrecognized gains (losses) on employee benefit obligations |
(50 | ) | (54 | ) | ||||
| Cumulative translation adjustments |
(31 | ) | (1 | ) | ||||
| Accumulated other comprehensive income (loss), net of deferred taxes |
$ | (110 | ) | $ | (48 | ) | ||
Net Cash Provided by Operating Activities
| Nine Months Ended September 30 |
||||||||
| (in millions) | 2013 | 2012 | ||||||
| Net income |
$ | 5,167 | $ | 6,058 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
5,873 | 5,815 | ||||||
| Amortization of film and television costs |
5,998 | 7,295 | ||||||
| Share-based compensation |
312 | 278 | ||||||
| Noncash interest expense (income), net |
122 | 158 | ||||||
| Equity in net (income) losses of investees, net |
96 | (943 | ) | |||||
| Cash received from investees |
89 | 178 | ||||||
| Net (gain) loss on investment activity and other |
(239 | ) | (1,071 | ) | ||||
| Deferred income taxes |
(52 | ) | 321 | |||||
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
||||||||
| Change in current and noncurrent receivables, net |
145 | (865 | ) | |||||
| Change in film and television costs |
(5,590 | ) | (7,290 | ) | ||||
| Change in accounts payable and accrued expenses related to trade creditors |
(108 | ) | 553 | |||||
| Change in other operating assets and liabilities |
(134 | ) | 752 | |||||
| Net cash provided by operating activities |
$ | 11,679 | $ | 11,239 | ||||
Cash Payments for Interest and Income Taxes
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| (in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Interest |
$ | 636 | $ | 567 | $ | 1,768 | $ | 1,725 | ||||||||
| Income taxes |
$ | 958 | $ | 833 | $ | 3,180 | $ | 1,855 | ||||||||
Noncash Investing and Financing Activities
During the nine months ended September 30, 2013:
| • | we acquired GE’s remaining 49% common equity interest in NBCUniversal Holdings for total consideration of $16.7 billion, which included noncash consideration of $6 billion from the consolidation of NBCUniversal Enterprise that was comprised of $4 billion aggregate principal amount of senior notes, $1.25 billion of borrowings under its credit facility and $725 million aggregate liquidation preference of its Series A cumulative preferred stock (see Note 3 for additional information on the Redemption Transaction) |
| • | we acquired $807 million of property and equipment and intangible assets that were accrued but unpaid |
| • | we recorded a liability of $510 million for a quarterly cash dividend of $0.195 per common share paid in October 2013 |
| • | we used $1.4 billion of equity securities to settle a portion of our obligations under prepaid forward sale agreements |
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Note 13: Receivables Monetization
NBCUniversal monetizes certain of its accounts receivable under programs with a syndicate of banks. We account for receivables monetized through these programs as sales in accordance with the appropriate accounting guidance. We receive deferred consideration from the assets sold in the form of a receivable, which is funded by residual cash flows after the senior interests have been fully paid. The deferred consideration is included in receivables, net at its initial fair value, which reflects the net cash flows we expect to receive related to these interests. The accounts receivable we sold that underlie the deferred consideration are generally short-term in nature and, therefore, the fair value of the deferred consideration approximated its carrying value as of September 30, 2013 and December 31, 2012.
NBCUniversal is responsible for servicing the receivables and remitting collections to the purchasers under the monetization programs. NBCUniversal performs this service for a fee that is equal to the prevailing market rate for such services. As a result, no servicing asset or liability has been recorded on our condensed consolidated balance sheet as of September 30, 2013 and December 31, 2012. The servicing fees are recorded as a component of other income (expense), net.
The net cash payments on transfers that are included within net cash provided by operating activities in our condensed consolidated statement of cash flows were $367 million for the nine months ended September 30, 2013. The net cash proceeds on transfers that are included within net cash provided by operating activities in our condensed consolidated statement of cash flows were $70 million for the nine months ended September 30, 2012. The receivables monetization program did not have a material effect on our condensed consolidated statement of income for the periods presented.
Receivables Monetized and Deferred Consideration
| (in millions) | September 30, 2013 |
December 31, 2012 |
||||||
| Monetized receivables sold |
$ | 642 | $ | 791 | ||||
| Deferred consideration |
$ | 217 | $ | 274 | ||||
In addition to the amounts presented above, we had $616 million and $882 million payable to our monetization programs as of September 30, 2013 and December 31, 2012, respectively. These amounts represent cash receipts that were not yet remitted to the monetization programs as of the balance sheet date and are recorded to accounts payable and accrued expenses related to trade creditors.
Note 14: Commitments and Contingencies
Commitments
Station Venture
NBCUniversal previously held an equity interest in Station Venture Holdings, LLC (“Station Venture”), a nonconsolidated variable interest entity, and the remaining equity interests in Station Venture were held by LIN TV, Corp. Station Venture was the obligor on an $816 million senior secured note (the “Station Venture note”) that was due in 2023 to General Electric Capital Corporation (“GECC”) as servicer. The Station Venture note, among other things, was collateralized by substantially all of the assets of Station Venture and Station Venture Operations, LP (“Station LP”). Station LP was a less than wholly owned consolidated subsidiary of NBCUniversal. In connection with the acquisition of our controlling interest in NBCUniversal Holdings on January 28, 2011, a liability of $482 million was recorded to noncurrent liabilities in our allocation of purchase price, which represented the fair value of the net assets of Station LP. In February 2013, we closed our agreement with GE, GECC and LIN TV under which, among other things, NBCUniversal purchased the Station Venture note from GECC for $602 million, which represented the agreed upon fair value of the assets of Station LP. As of the closing date of the transaction, the $482 million recorded liability was effectively settled, and Station Venture and Station LP became wholly owned subsidiaries of NBCUniversal. We now consolidate Station Venture, and the Station Venture note is eliminated in consolidation. Due to the related party nature of this transaction, the excess of the purchase price of the Station Venture note over the recorded amount of the liability was recorded to additional paid-in capital.
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Contingencies
Antitrust Cases
We are defendants in two purported class actions originally filed in December 2003 in the United States District Courts for the District of Massachusetts and the Eastern District of Pennsylvania. The potential class in the Massachusetts case, which has been transferred to the Eastern District of Pennsylvania, is our customer base in the “Boston Cluster” area, and the potential class in the Pennsylvania case is our customer base in the “Philadelphia and Chicago Clusters,” as those terms are defined in the complaints. In each case, the plaintiffs allege that certain customer exchange transactions with other cable providers resulted in unlawful horizontal market restraints in those areas and seek damages under antitrust statutes, including treble damages.
Classes of Chicago Cluster and Philadelphia Cluster customers were certified in October 2007 and January 2010, respectively. We appealed the class certification in the Philadelphia Cluster case to the Third Circuit Court of Appeals, which affirmed the class certification in August 2011 and denied our petition for a rehearing en banc in September 2011. In March 2010, we moved for summary judgment dismissing all of the plaintiffs’ claims in the Philadelphia Cluster. In April 2012, the District Court issued a decision dismissing some of the plaintiffs’ claims, but allowing two claims to proceed to trial. The plaintiffs’ claims concerning the other two clusters are stayed pending determination of the Philadelphia Cluster claims. In June 2012, the U.S. Supreme Court granted our petition to review the Third Circuit Court of Appeals’ ruling and in September 2012, the trial court stayed all proceedings pending resolution of the Supreme Court appeal. In March 2013, the Supreme Court ruled that the class had been improperly certified and reversed the judgment of the Third Circuit. The matter has been returned to the District Court for action consistent with the Supreme Court’s opinion. In August 2013, a plaintiff in the Philadelphia Cluster case moved to certify a new class, and in September 2013, we moved to strike that motion on procedural grounds.
In addition, we are the defendant in 22 purported class actions filed in federal district courts throughout the country. All of these actions have been consolidated by the Judicial Panel on Multidistrict Litigation in the United States District Court for the Eastern District of Pennsylvania for pre-trial proceedings. In a consolidated complaint filed in November 2009 on behalf of all plaintiffs in the multidistrict litigation, the plaintiffs allege that we improperly “tie” the rental of set-top boxes to the provision of premium cable services in violation of Section 1 of the Sherman Antitrust Act, various state antitrust laws and unfair/deceptive trade practices acts in California, Illinois and Alabama. The plaintiffs also allege a claim for unjust enrichment and seek relief on behalf of a nationwide class of our premium cable customers and on behalf of subclasses consisting of premium cable customers from California, Alabama, Illinois, Pennsylvania and Washington. In January 2010, we moved to compel arbitration of the plaintiffs’ claims for unjust enrichment and violations of the unfair/deceptive trade practices acts of Illinois and Alabama. In September 2010, the plaintiffs filed an amended complaint alleging violations of additional state antitrust laws and unfair/deceptive trade practices acts on behalf of new subclasses in Connecticut, Florida, Minnesota, Missouri, New Jersey, New Mexico and West Virginia. In the amended complaint, plaintiffs omitted their unjust enrichment claim, as well as their state law claims on behalf of the Alabama, Illinois and Pennsylvania subclasses. In June 2011, the plaintiffs filed another amended complaint alleging only violations of Section 1 of the Sherman Antitrust Act, antitrust law in Washington and unfair/deceptive trade practices acts in California and Washington. The plaintiffs seek relief on behalf of a nationwide class of our premium cable customers and on behalf of subclasses consisting of premium cable customers from California and Washington. In July 2011, we moved to compel arbitration of most of the plaintiffs’ claims and to stay the remaining claims pending arbitration. The West Virginia Attorney General also filed a complaint in West Virginia state court in July 2009 alleging that we improperly “tie” the rental of set-top boxes to the provision of digital cable services in violation of the West Virginia Antitrust Act and the West Virginia Consumer Credit and Protection Act. The Attorney General also alleges a claim for unjust enrichment/restitution. We removed the case to the United States District Court for West Virginia, and it was subsequently transferred to the United States District Court for the Eastern District of Pennsylvania and consolidated with the multidistrict litigation described above. In June 2013, a comprehensive settlement agreement for all 23 cases was submitted to the District Court for preliminary approval. Regardless of whether this settlement agreement is approved, we do not expect these cases to have a material effect on our results of operations, cash flows or financial position.
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We believe the claims in each of the pending actions described above in this item are without merit and intend to defend the actions vigorously. We cannot predict the outcome of any of the actions described above, including a range of possible loss, or how the final resolution of any such actions would impact our results of operations or cash flows for any one period or our financial position. In addition, as any action nears a trial, there is an increased possibility that the action may be settled by the parties. Nevertheless, the final disposition of any of the above actions is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations or cash flows for any one period.
Other
We are a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases other industry participants are also defendants, and also in certain of these cases we expect that any potential liability would be in part or in whole the responsibility of our equipment and technology vendors under applicable contractual indemnification provisions. We are also subject to other legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal proceedings or claims could be time consuming, costly and injure our reputation.
Note 15: 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 the nation’s largest provider of video, high-speed Internet and voice services (“cable services”) to residential customers under the XFINITY brand, and we also provide these services to businesses and sell advertising. |
| • | Cable Networks: Consists primarily of our national cable networks, our regional sports and news networks, our international cable networks, our cable television production operations, and our related digital media properties. |
| • | Broadcast Television: Consists primarily of the NBC and Telemundo broadcast networks, our NBC and Telemundo owned local broadcast television stations, our broadcast television production operations, and our related digital media properties. |
| • | Filmed Entertainment: Consists primarily of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment worldwide. |
| • | Theme Parks: Consists primarily of our Universal theme parks in Orlando and Hollywood. |
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In evaluating the profitability of our operating segments, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management. Our financial data by business segment is presented in the tables below.
| Three Months Ended September 30, 2013 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 10,491 | $ | 4,246 | $ | 1,549 | $ | 2,697 | $ | 1,432 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
2,239 | 853 | 183 | 670 | 19 | |||||||||||||||
| Broadcast Television |
1,644 | 34 | 23 | 11 | 21 | |||||||||||||||
| Filmed Entertainment |
1,400 | 189 | 4 | 185 | 1 | |||||||||||||||
| Theme Parks |
661 | 343 | 73 | 270 | 142 | |||||||||||||||
| Headquarters and Other(b) |
7 | (167 | ) | 69 | (236 | ) | 101 | |||||||||||||
| Eliminations(c) |
(100 | ) | (2 | ) | — | (2 | ) | — | ||||||||||||
| NBCUniversal |
5,851 | 1,250 | 352 | 898 | 284 | |||||||||||||||
| Corporate and Other |
133 | (178 | ) | 16 | (194 | ) | 10 | |||||||||||||
| Eliminations(c) |
(324 | ) | 12 | (1 | ) | 13 | — | |||||||||||||
| Comcast Consolidated |
$ | 16,151 | $ | 5,330 | $ | 1,916 | $ | 3,414 | $ | 1,726 | ||||||||||
| Three Months Ended September 30, 2012 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 9,976 | $ | 3,998 | $ | 1,607 | $ | 2,391 | $ | 1,364 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
2,152 | 809 | 190 | 619 | 56 | |||||||||||||||
| Broadcast Television |
2,790 | 88 | 25 | 63 | 17 | |||||||||||||||
| Filmed Entertainment |
1,355 | 72 | 4 | 68 | — | |||||||||||||||
| Theme Parks |
614 | 316 | 65 | 251 | 55 | |||||||||||||||
| Headquarters and Other(b) |
8 | (143 | ) | 53 | (196 | ) | 81 | |||||||||||||
| Eliminations(c) |
(97 | ) | (2 | ) | — | (2 | ) | — | ||||||||||||
| NBCUniversal |
6,822 | 1,140 | 337 | 803 | 209 | |||||||||||||||
| Corporate and Other |
112 | (101 | ) | 14 | (115 | ) | 9 | |||||||||||||
| Eliminations(c) |
(366 | ) | (29 | ) | 2 | (31 | ) | — | ||||||||||||
| Comcast Consolidated |
$ | 16,544 | $ | 5,008 | $ | 1,960 | $ | 3,048 | $ | 1,582 | ||||||||||
| Nine Months Ended September 30, 2013 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 31,175 | $ | 12,800 | $ | 4,780 | $ | 8,020 | $ | 3,766 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
6,877 | 2,572 | 549 | 2,023 | 67 | |||||||||||||||
| Broadcast Television |
4,893 | 205 | 74 | 131 | 38 | |||||||||||||||
| Filmed Entertainment |
4,004 | 291 | 11 | 280 | 4 | |||||||||||||||
| Theme Parks |
1,669 | 747 | 218 | 529 | 427 | |||||||||||||||
| Headquarters and Other(b) |
25 | (416 | ) | 193 | (609 | ) | 271 | |||||||||||||
| Eliminations(c) |
(282 | ) | (5 | ) | — | (5 | ) | — | ||||||||||||
| NBCUniversal |
17,186 | 3,394 | 1,045 | 2,349 | 807 | |||||||||||||||
| Corporate and Other |
431 | (380 | ) | 48 | (428 | ) | 20 | |||||||||||||
| Eliminations(c) |
(1,061 | ) | (25 | ) | — | (25 | ) | — | ||||||||||||
| Comcast Consolidated |
$ | 47,731 | $ | 15,789 | $ | 5,873 | $ | 9,916 | $ | 4,593 | ||||||||||
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| Nine Months Ended September 30, 2012 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 29,472 | $ | 12,054 | $ | 4,802 | $ | 7,252 | $ | 3,544 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
6,520 | 2,408 | 548 | 1,860 | 87 | |||||||||||||||
| Broadcast Television |
6,203 | 268 | 70 | 198 | 36 | |||||||||||||||
| Filmed Entertainment |
3,778 | (5 | ) | 12 | (17 | ) | 4 | |||||||||||||
| Theme Parks |
1,565 | 708 | 190 | 518 | 154 | |||||||||||||||
| Headquarters and Other(b) |
31 | (444 | ) | 149 | (593 | ) | 195 | |||||||||||||
| Eliminations(c) |
(299 | ) | — | — | — | — | ||||||||||||||
| NBCUniversal |
17,798 | 2,935 | 969 | 1,966 | 476 | |||||||||||||||
| Corporate and Other |
416 | (255 | ) | 44 | (299 | ) | 23 | |||||||||||||
| Eliminations(c) |
(1,053 | ) | (34 | ) | — | (34 | ) | — | ||||||||||||
| Comcast Consolidated |
$ | 46,633 | $ | 14,700 | $ | 5,815 | $ | 8,885 | $ | 4,043 | ||||||||||
| (a) | For the three and nine months ended September 30, 2013 and 2012, Cable Communications segment revenue was derived from the following sources: |
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Residential: |
||||||||||||||||
| Video |
48.9% | 49.9% | 49.4% | 50.7% | ||||||||||||
| High-speed Internet |
24.7% | 24.1% | 24.6% | 24.1% | ||||||||||||
| Voice |
8.8% | 9.0% | 8.8% | 9.0% | ||||||||||||
| Business services |
8.0% | 6.6% | 7.6% | 6.3% | ||||||||||||
| Advertising |
5.2% | 6.1% | 5.1% | 5.5% | ||||||||||||
| Other |
4.4% | 4.3% | 4.5% | 4.4% | ||||||||||||
| Total |
100% | 100% | 100% | 100% | ||||||||||||
Subscription revenue received from customers who purchase bundled services at a discounted rate is allocated proportionally to each service based on the individual service’s price on a stand-alone basis. Beginning in 2013, revenue from certain business customers, such as hotels, restaurants and bars, is presented in the business services revenue line item rather than in video revenue. Reclassifications have been made to the prior year periods to conform to this presentation.
For both the three and nine months ended September 30, 2013, 2.9% of Cable Communications revenue was derived from franchise and other regulatory fees. For both the three and nine months ended September 30, 2012, 2.8% of Cable Communications revenue was derived from franchise and other regulatory fees.
| (b) | NBCUniversal Headquarters and Other activities included costs associated with overhead, 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 and Broadcast Television segments generate revenue by selling programming to our Cable Communications segment, which represents the substantial majority of the transactions among our segments |
| • | our Cable Communications segment generates revenue by selling advertising and by selling the use of satellite feeds to our Cable Networks segment |
| • | our Filmed Entertainment and Broadcast Television segments generate revenue by licensing content to our Cable Networks segment |
| • | our Cable Communications segment receives incentives offered by our Cable Networks segment in connection with its distribution of the Cable Networks’ content that are recorded as a reduction to programming expenses |
| (d) | No single customer accounted for a significant amount of revenue in any period. |
| (e) | We use operating income (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses from the sale of assets, if any, as the measure of profit or loss for our operating segments. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of certain of our businesses and from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital structure or investment activities. We use this measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that this measure is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. This measure should not be considered a substitute for operating income (loss), net income (loss) attributable to Comcast Corporation, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with GAAP. |
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Note 16: Condensed Consolidating Financial Information
Comcast Corporation (“Comcast Parent”) and four of our wholly owned cable holding company subsidiaries, Comcast Cable Communications, LLC (“CCCL Parent”), Comcast MO Group, Inc. (“Comcast MO Group”), Comcast Cable Holdings, LLC (“CCH”) and Comcast MO of Delaware, LLC (“Comcast MO of Delaware”) (collectively, the “cable guarantors”), have fully and unconditionally guaranteed each other’s debt securities. Comcast MO Group, CCH and Comcast MO of Delaware are collectively referred to as the “Combined CCHMO Parents.”
On March 27, 2013, Comcast Parent, the cable guarantors and NBCUniversal Media, LLC (referred to as “NBCUniversal Media Parent” in the tables below) entered into a series of agreements and supplemental indentures to include NBCUniversal Media, LLC as part of our existing cross-guarantee structure. As members of the cross-guarantee structure, Comcast Parent and the cable guarantors fully and unconditionally guarantee NBCUniversal Media, LLC’s public debt securities, and NBCUniversal Media, LLC fully and unconditionally guarantees all of Comcast Parent’s and the cable guarantors’ public debt securities, as well as the $6.25 billion revolving credit facility of Comcast Parent and Comcast Cable Communications, LLC.
Comcast Parent and the cable guarantors also fully and unconditionally guarantee NBCUniversal Enterprise’s $4 billion of senior notes and its $1.35 billion credit facility due March 2018. NBCUniversal Media, LLC does not guarantee the NBCUniversal Enterprise senior notes or credit facility.
Comcast Parent provides an unconditional subordinated guarantee of the $185 million principal amount currently outstanding of Comcast Holdings’ ZONES due October 2029. Neither the cable guarantors nor NBCUniversal Media, LLC guarantee the Comcast Holdings ZONES due October 2029. None of Comcast Parent, the cable guarantors nor NBCUniversal Media, LLC guarantee the $62 million principal amount currently outstanding of Comcast Holdings’ ZONES due November 2029.
20
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Condensed Consolidating Balance Sheet
September 30, 2013
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | — | $ | — | $ | — | $ | 240 | $ | 1,363 | $ | — | $ | 1,603 | ||||||||||||||||
| Investments |
— | — | — | — | — | 4,132 | — | 4,132 | ||||||||||||||||||||||||
| Receivables, net |
— | — | — | — | — | 5,501 | — | 5,501 | ||||||||||||||||||||||||
| Programming rights |
— | — | — | — | — | 959 | — | 959 | ||||||||||||||||||||||||
| Other current assets |
203 | — | — | — | 45 | 964 | — | 1,212 | ||||||||||||||||||||||||
| Total current assets |
203 | — | — | — | 285 | 12,919 | — | 13,407 | ||||||||||||||||||||||||
| Film and television costs |
— | — | — | — | — | 4,588 | — | 4,588 | ||||||||||||||||||||||||
| Investments |
8 | — | — | — | 374 | 3,290 | — | 3,672 | ||||||||||||||||||||||||
| Investments in and amounts due from subsidiaries eliminated upon consolidation |
78,024 | 95,366 | 100,411 | 53,230 | 40,496 | 82,558 | (450,085 | ) | — | |||||||||||||||||||||||
| Property and equipment, net |
223 | — | — | — | — | 28,583 | — | 28,806 | ||||||||||||||||||||||||
| Franchise rights |
— | — | — | — | — | 59,364 | — | 59,364 | ||||||||||||||||||||||||
| Goodwill |
— | — | — | — | — | 27,079 | — | 27,079 | ||||||||||||||||||||||||
| Other intangible assets, net |
9 | — | — | — | — | 17,325 | — | 17,334 | ||||||||||||||||||||||||
| Other noncurrent assets, net |
1,095 | 145 | — | — | 118 | 1,881 | (894 | ) | 2,345 | |||||||||||||||||||||||
| Total assets |
$ | 79,562 | $ | 95,511 | $ | 100,411 | $ | 53,230 | $ | 41,273 | $ | 237,587 | $ | (450,979 | ) | $ | 156,595 | |||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 7 | $ | — | $ | — | $ | — | $ | — | $ | 6,025 | $ | — | $ | 6,032 | ||||||||||||||||
| Accrued participations and residuals |
— | — | — | — | — | 1,372 | — | 1,372 | ||||||||||||||||||||||||
| Accrued expenses and other current liabilities |
1,232 | 266 | 301 | 21 | 385 | 6,720 | — | 8,925 | ||||||||||||||||||||||||
| Current portion of long-term debt |
1,411 | — | — | — | 904 | 22 | — | 2,337 | ||||||||||||||||||||||||
| Total current liabilities |
2,650 | 266 | 301 | 21 | 1,289 | 14,139 | — | 18,666 | ||||||||||||||||||||||||
| Long-term debt, less current portion |
25,163 | 119 | 1,827 | 1,507 | 10,239 | 5,333 | — | 44,188 | ||||||||||||||||||||||||
| Deferred income taxes |
— | 774 | — | — | 74 | 31,166 | (753 | ) | 31,261 | |||||||||||||||||||||||
| Other noncurrent liabilities |
2,031 | — | — | — | 989 | 8,614 | (141 | ) | 11,493 | |||||||||||||||||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | 853 | — | 853 | ||||||||||||||||||||||||
| Equity: |
||||||||||||||||||||||||||||||||
| Common stock |
30 | — | — | — | — | — | — | 30 | ||||||||||||||||||||||||
| Other shareholders’ equity |
49,688 | 94,352 | 98,283 | 51,702 | 28,682 | 177,066 | (450,085 | ) | 49,688 | |||||||||||||||||||||||
| Total Comcast Corporation shareholders’ equity |
49,718 | 94,352 | 98,283 | 51,702 | 28,682 | 177,066 | (450,085 | ) | 49,718 | |||||||||||||||||||||||
| Noncontrolling interests |
— | — | — | — | — | 416 | — | 416 | ||||||||||||||||||||||||
| Total equity |
49,718 | 94,352 | 98,283 | 51,702 | 28,682 | 177,482 | (450,085 | ) | 50,134 | |||||||||||||||||||||||
| Total liabilities and equity |
$ | 79,562 | $ | 95,511 | $ | 100,411 | $ | 53,230 | $ | 41,273 | $ | 237,587 | $ | (450,979 | ) | $ | 156,595 | |||||||||||||||
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Table of Contents
Condensed Consolidating Balance Sheet
December 31, 2012
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | — | $ | — | $ | — | $ | 5,129 | $ | 5,822 | $ | — | $ | 10,951 | ||||||||||||||||
| Investments |
— | — | — | — | — | 1,464 | — | 1,464 | ||||||||||||||||||||||||
| Receivables, net |
— | — | — | — | 3 | 5,518 | — | 5,521 | ||||||||||||||||||||||||
| Programming rights |
— | — | — | — | — | 909 | — | 909 | ||||||||||||||||||||||||
| Other current assets |
233 | — | 14 | 4 | 51 | 844 | — | 1,146 | ||||||||||||||||||||||||
| Total current assets |
233 | — | 14 | 4 | 5,183 | 14,557 | — | 19,991 | ||||||||||||||||||||||||
| Film and television costs |
— | — | — | — | — | 5,054 | — | 5,054 | ||||||||||||||||||||||||
| Investments |
— | — | — | — | 529 | 5,796 | — | 6,325 | ||||||||||||||||||||||||
| Investments in and amounts due from subsidiaries eliminated upon consolidation |
74,227 | 87,630 | 96,853 | 50,242 | 38,464 | 73,298 | (420,714 | ) | — | |||||||||||||||||||||||
| Property and equipment, net |
242 | — | — | — | — | 26,990 | — | 27,232 | ||||||||||||||||||||||||
| Franchise rights |
— | — | — | — | — | 59,364 | — | 59,364 | ||||||||||||||||||||||||
| Goodwill |
— | — | — | — | — | 26,985 | — | 26,985 | ||||||||||||||||||||||||
| Other intangible assets, net |
12 | — | — | — | — | 17,828 | — | 17,840 | ||||||||||||||||||||||||
| Other noncurrent assets, net |
1,130 | 147 | 1 | — | 152 | 1,650 | (900 | ) | 2,180 | |||||||||||||||||||||||
| Total assets |
$ | 75,844 | $ | 87,777 | $ | 96,868 | $ | 50,246 | $ | 44,328 | $ | 231,522 | $ | (421,614 | ) | $ | 164,971 | |||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 8 | $ | — | $ | — | $ | — | $ | — | $ | 6,198 | $ | — | $ | 6,206 | ||||||||||||||||
| Accrued participations and residuals |
— | — | — | — | — | 1,350 | — | 1,350 | ||||||||||||||||||||||||
| Accrued expenses and other current liabilities |
1,290 | 275 | 210 | 54 | 263 | 4,690 | — | 6,782 | ||||||||||||||||||||||||
| Current portion of long-term debt |
— | — | 2,105 | 241 | 7 | 23 | — | 2,376 | ||||||||||||||||||||||||
| Total current liabilities |
1,298 | 275 | 2,315 | 295 | 270 | 12,261 | — | 16,714 | ||||||||||||||||||||||||
| Long-term debt, less current portion |
23,306 | 113 | 1,827 | 1,512 | 11,219 | 105 | — | 38,082 | ||||||||||||||||||||||||
| Deferred income taxes |
— | 754 | — | — | 78 | 30,035 | (757 | ) | 30,110 | |||||||||||||||||||||||
| Other noncurrent liabilities |
1,884 | — | — | — | 926 | 10,604 | (143 | ) | 13,271 | |||||||||||||||||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | 16,998 | — | 16,998 | ||||||||||||||||||||||||
| Equity: |
||||||||||||||||||||||||||||||||
| Common stock |
31 | — | — | — | — | — | — | 31 | ||||||||||||||||||||||||
| Other shareholders’ equity |
49,325 | 86,635 | 92,726 | 48,439 | 31,835 | 161,079 | (420,714 | ) | 49,325 | |||||||||||||||||||||||
| Total Comcast Corporation shareholders’ equity |
49,356 | 86,635 | 92,726 | 48,439 | 31,835 | 161,079 | (420,714 | ) | 49,356 | |||||||||||||||||||||||
| Noncontrolling interests |
— | — | — | — | — | 440 | — | 440 | ||||||||||||||||||||||||
| Total equity |
49,356 | 86,635 | 92,726 | 48,439 | 31,835 | 161,519 | (420,714 | ) | 49,796 | |||||||||||||||||||||||
| Total liabilities and equity |
$ | 75,844 | $ | 87,777 | $ | 96,868 | $ | 50,246 | $ | 44,328 | $ | 231,522 | $ | (421,614 | ) | $ | 164,971 | |||||||||||||||
22
Table of Contents
Condensed Consolidating Statement of Income
For the Three Months Ended September 30, 2013
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||||||||||
| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 16,151 | $ | — | $ | 16,151 | ||||||||||||||||
| Management fee revenue |
225 | — | 219 | 137 | — | — | (581 | ) | — | |||||||||||||||||||||||
| 225 | — | 219 | 137 | — | 16,151 | (581 | ) | 16,151 | ||||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||||||||
| Programming and production |
— | — | — | — | — | 4,787 | — | 4,787 | ||||||||||||||||||||||||
| Other operating and administrative |
92 | — | 219 | 137 | 211 | 4,673 | (581 | ) | 4,751 | |||||||||||||||||||||||
| Advertising, marketing and promotion |
— | — | — | — | — | 1,283 | — | 1,283 | ||||||||||||||||||||||||
| Depreciation |
7 | — | — | — | — | 1,513 | — | 1,520 | ||||||||||||||||||||||||
| Amortization |
1 | — | — | — | — | 395 | — | 396 | ||||||||||||||||||||||||
| 100 | — | 219 | 137 | 211 | 12,651 | (581 | ) | 12,737 | ||||||||||||||||||||||||
| Operating income (loss) |
125 | — | — | — | (211 | ) | 3,500 | — | 3,414 | |||||||||||||||||||||||
| Other Income (Expense): |
||||||||||||||||||||||||||||||||
| Interest expense |
(382 | ) | (3 | ) | (45 | ) | (30 | ) | (123 | ) | (56 | ) | — | (639 | ) | |||||||||||||||||
| Investment income (loss), net |
1 | (5 | ) | — | — | (3 | ) | 471 | — | 464 | ||||||||||||||||||||||
| Equity in net income (losses) of investees, net |
1,898 | 1,787 | 1,850 | 1,371 | 576 | 106 | (7,718 | ) | (130 | ) | ||||||||||||||||||||||
| Other income (expense), net |
— | — | — | — | — | (310 | ) | — | (310 | ) | ||||||||||||||||||||||
| 1,517 | 1,779 | 1,805 | 1,341 | 450 | 211 | (7,718 | ) | (615 | ) | |||||||||||||||||||||||
| Income (loss) before income taxes |
1,642 | 1,779 | 1,805 | 1,341 | 239 | 3,711 | (7,718 | ) | 2,799 | |||||||||||||||||||||||
| Income tax (expense) benefit |
90 | 3 | 15 | 11 | (3 | ) | (1,137 | ) | — | (1,021 | ) | |||||||||||||||||||||
| Net income (loss) |
1,732 | 1,782 | 1,820 | 1,352 | 236 | 2,574 | (7,718 | ) | 1,778 | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable
subsidiary |
— | — | — | — | — | (46 | ) | — | (46 | ) | ||||||||||||||||||||||
| Net income (loss) attributable to Comcast Corporation |
$ | 1,732 | $ | 1,782 | $ | 1,820 | $ | 1,352 | $ | 236 | $ | 2,528 | $ | (7,718 | ) | $ | 1,732 | |||||||||||||||
| Comprehensive income (loss) attributable to Comcast Corporation |
$ | 1,545 | $ | 1,828 | $ | 1,864 | $ | 1,415 | $ | 244 | $ | 2,327 | $ | (7,678 | ) | $ | 1,545 | |||||||||||||||
23
Table of Contents
Condensed Consolidating Statement of Income
For the Three Months Ended September 30, 2012
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
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| Revenue: |
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| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 16,544 | $ | — | $ | 16,544 | ||||||||||||||||
| Management fee revenue |
211 | — | 205 | 129 | — | — | (545 | ) | — | |||||||||||||||||||||||
| 211 | — | 205 | 129 | — | 16,544 | (545 | ) | 16,544 | ||||||||||||||||||||||||
| Costs and Expenses: |
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| Programming and production |
— | — | — | — | — | 5,726 | — | 5,726 | ||||||||||||||||||||||||
| Other operating and administrative |
99 | — | 205 | 129 | 211 | 4,481 | (545 | ) | 4,580 | |||||||||||||||||||||||
| Advertising, marketing and promotion |
— | — | — | — | — | 1,230 | — | 1,230 | ||||||||||||||||||||||||
| Depreciation |
8 | — | — | — | — | 1,541 | — | 1,549 | ||||||||||||||||||||||||
| Amortization |
1 | — | — | — | — | 410 | — | 411 | ||||||||||||||||||||||||
| 108 | — | 205 | 129 | 211 | 13,388 | (545 | ) | 13,496 | ||||||||||||||||||||||||
| Operating income (loss) |
103 | — | — | — | (211 | ) | 3,156 | — | 3,048 | |||||||||||||||||||||||
| Other Income (Expense): |
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| Interest expense |
(363 | ) | (4 | ) | (81 | ) | (33 | ) | (102 | ) | (50 | ) | — | (633 | ) | |||||||||||||||||
| Investment income (loss), net |
1 | (3 | ) | — | — | 2 | 70 | — | 70 | |||||||||||||||||||||||
| Equity in net income (losses) of investees, net |
2,281 | 2,047 | 1,641 | 1,216 | 1,988 | 2,583 | (10,845 | ) | 911 | |||||||||||||||||||||||
| Other income (expense), net |
— | — | — | — | (1 | ) | 988 | — | 987 | |||||||||||||||||||||||
| 1,919 | 2,040 | 1,560 | 1,183 | 1,887 | 3,591 | (10,845 | ) | 1,335 | ||||||||||||||||||||||||
| Income (loss) before income taxes |
2,022 | 2,040 | 1,560 | 1,183 | 1,676 | 6,747 | (10,845 | ) | 4,383 | |||||||||||||||||||||||
| Income tax (expense) benefit |
91 | 3 | 28 | 12 | (4 | ) | (1,535 | ) | — | (1,405 | ) | |||||||||||||||||||||
| Net income (loss) |
2,113 | 2,043 | 1,588 | 1,195 | 1,672 | 5,212 | (10,845 | ) | 2,978 | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable
subsidiary |
— | — | — | — | — | (865 | ) | — | (865 | ) | ||||||||||||||||||||||
| Net (income) loss attributable to Comcast Corporation |
$ | 2,113 | $ | 2,043 | $ | 1,588 | $ | 1,195 | $ | 1,672 | $ | 4,347 | $ | (10,845 | ) | $ | 2,113 | |||||||||||||||
| Comprehensive income (loss) attributable to Comcast Corporation |
$ | 2,235 | $ | 2,043 | $ | 1,591 | $ | 1,195 | $ | 1,706 | $ | 4,398 | $ | (10,933 | ) | $ | 2,235 | |||||||||||||||
24
Table of Contents
Condensed Consolidating Statement of Income
For the Nine Months Ended September 30, 2013
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
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| Revenue: |
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| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 47,731 | $ | — | $ | 47,731 | ||||||||||||||||
| Management fee revenue |
668 | — | 650 | 407 | — | — | (1,725 | ) | — | |||||||||||||||||||||||
| 668 | — | 650 | 407 | — | 47,731 | |||||||||||||||||||||||||||