Edgar Filing: COMCAST CORP

10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

LOGO


Commission File Number	Registrant; State of Incorporation; Address and Telephone Number	I.R.S. Employer Identification No.
001-32871	COMCAST CORPORATION PENNSYLVANIA One Comcast Center Philadelphia, PA 19103-2838 (215) 286-1700	27-0000798
001-36438	NBCUniversal Media, LLC DELAWARE 30 Rockefeller Plaza New York, NY 10112-0015 (212) 664-4444	14-1682529

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Comcast Corporation –

Title of Each Class

Name of Each Exchange on Which Registered

Class A Common Stock, $0.01 par value

2.0% Exchangeable Subordinated Debentures due 2029

5.00% Notes due 2061

5.50% Notes due 2029

9.455% Guaranteed Notes due 2022

NASDAQ Global Select Market

New York Stock Exchange

NBCUniversal Media, LLC – NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Comcast Corporation – NONE

NBCUniversal Media, LLC – NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


Comcast Corporation	Yes x	No ¨
NBCUniversal Media, LLC	Yes x	No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


Comcast Corporation	Yes ¨	No x
NBCUniversal Media, LLC	Yes ¨	No x

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 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.


Comcast Corporation	Yes x	No ¨
NBCUniversal Media, LLC	Yes x	No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 shorter period that the registrant was required to submit and post such files).


Comcast Corporation	Yes x	No ¨
NBCUniversal Media, LLC	Yes x	No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.


Comcast Corporation		¨
NBCUniversal Media, LLC		N/A

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:


Comcast Corporation	Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
NBCUniversal Media, LLC	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

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


Comcast Corporation	Yes ¨	No x
NBCUniversal Media, LLC	Yes ¨	No x

As of June 30, 2015, the aggregate market value of the Comcast Corporation common stock held by non-affiliates of the registrant was $148.617 billion.

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

As of December 31, 2015, there were 2,432,953,988 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Class B common stock outstanding.

Not applicable for NBCUniversal Media, LLC.

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

DOCUMENTS INCORPORATED BY REFERENCE

Comcast Corporation – Part III – The registrant’s definitive Proxy Statement for its annual meeting of shareholders presently scheduled to be held in May 2016.

NBCUniversal Media, LLC – NONE

Comcast Corporation

2015 Annual Report on Form 10-K

Table of Contents



PART I
Item 1	Business	1
Item 1A	Risk Factors	25
Item 1B	Unresolved Staff Comments	34
Item 2	Properties	34
Item 3	Legal Proceedings	35
Item 4	Mine Safety Disclosures	35

PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36
Item 6	Selected Financial Data	40
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	70
Item 8	Comcast Corporation Financial Statements and Supplementary Data	73
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	125
Item 9A	Controls and Procedures	125
Item 9B	Other Information	126

PART III
Item 10	Directors, Executive Officers and Corporate Governance	127
Item 11	Executive Compensation	128
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	128
Item 13	Certain Relationships and Related Transactions, and Director Independence	129
Item 14	Principal Accountant Fees and Services	129

PART IV
Item 15	Exhibits and Financial Statement Schedules	130
Signatures		141
NBCUniversal Media, LLC Financial Statements and Supplementary Data		143

Explanatory Note

This Annual Report on Form 10-K 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 I(1)(a), (b) and (d) of Form 10-K and is therefore filing its information within this Form 10-K 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 consolidated financial statements for each company, along with notes to the consolidated financial statements, are included in this report. Unless indicated otherwise, throughout this Annual Report on Form 10-K, 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 subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” and NBCUniversal, LLC as “NBCUniversal Holdings.”

This Annual Report on Form 10-K is for the year ended December 31, 2015. This Annual Report on Form 10-K modifies and supersedes documents filed before it.

The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Annual Report on Form 10-K. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Annual Report on Form 10-K.

Our registered trademarks include Comcast, NBCUniversal and the Comcast and NBCUniversal logos. This Annual Report on Form 10-K also contains other trademarks, service marks and trade names owned by us, as well as those owned by others.

Part I

Item 1: Business

We are a global media and technology company with two primary businesses, Comcast Cable and NBCUniversal. We were incorporated under the laws of Pennsylvania in December 2001. Through our predecessors, we have developed, managed and operated cable systems since 1963. In 2011, we acquired control of the businesses of NBCUniversal from General Electric Company (the “NBCUniversal transaction”), and in 2013, we acquired the remaining 49% common equity interest in NBCUniversal Holdings that we did not already own.

We present our operations for Comcast Cable in one reportable business segment, referred to as Cable Communications, and our operations for NBCUniversal in four reportable business segments. The Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks segments comprise the NBCUniversal businesses (collectively, the “NBCUniversal segments”).

•

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

•

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

•

Broadcast Television: Consists primarily of the NBC and Telemundo broadcast networks, our 10 NBC and 17 Telemundo owned local broadcast television stations, and our broadcast television studio production operations.

•

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

•

Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida and Hollywood, California. In November 2015, NBCUniversal acquired a 51% interest in the Universal Studios theme park located in Osaka, Japan (“Universal Studios Japan”).

Our other business interests consist primarily of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses.

For financial and other information about our reportable business segments, refer to Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations; and Note 18 to Comcast’s consolidated financial statements and Note 17 to NBCUniversal’s consolidated financial statements included in this Annual Report on Form 10-K.

Available Information and Websites

Comcast’s phone number is (215) 286-1700, and its principal executive offices are located at One Comcast Center, Philadelphia, PA 19103-2838. NBCUniversal’s phone number is (212) 664-4444, and its principal executive offices are located at 30 Rockefeller Plaza, New York, NY 10112-0015. Comcast and NBCUniversal’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed with or furnished to the SEC under Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the SEC’s


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website at www.sec.gov and on Comcast’s website at www.comcastcorporation.com as soon as reasonably practicable after such reports are electronically filed with the SEC. The information posted on our websites is not incorporated into our SEC filings. The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Description of Our Businesses

Cable Communications Segment

The table below summarizes certain customer and penetration data for our cable system operations.


December 31 (in millions)	2015			2014			2013
Homes and businesses passed^(a)		55.7			54.7			53.8
Total customer relationships^(b)		27.7			27.0			26.7
Single product customers^(b)		8.4			8.4			8.8
Double product customers^(b)		9.2			8.8			8.5
Triple product customers^(b)		10.1			9.9			9.4
Video
Video customers^(c)		22.3			22.4			22.6
Video penetration^(d)		40.1	%		40.9	%		41.9	%
Digital video customers^(e)		22.3			22.2			22.4
Digital video penetration^(e)		99.8	%		99.4	%		99.1	%
High-speed Internet
High-speed Internet customers		23.3			22.0			20.7
High-speed Internet penetration^(d)		41.9	%		40.2	%		38.4	%
Voice
Voice customers		11.5			11.2			10.7
Voice penetration^(d)		20.6	%		20.5	%		19.9	%

Basis of Presentation: Customer metrics include our residential and business customers. Information related to cable system acquisitions is included from the date acquired. Information related to cable systems sold or exchanged is excluded for all periods presented. All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.

(a)

Homes and businesses are considered passed if we can connect them to our distribution system without further extending the transmission lines. Homes and businesses passed is an estimate based on the best available information.

(b)

Customer relationships represent the number of residential and business customers that subscribe to at least one of our cable services. Single product, double product and triple product customers represent customers that subscribe to one, two or three of our cable services, respectively.

(c)

Generally, a home or business receiving video programming from our distribution system counts as one video customer. For multiple dwelling units (“MDUs”) whose residents have the ability to receive additional cable services, such as additional programming choices or our high-definition video (“HD”) or digital video recorder (“DVR”) advanced 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 cable services, the MDU is counted as a single customer.

(d)

Penetration is calculated by dividing the number of customers by the number of homes and businesses passed.

(e)

Digital video customers include customers receiving digital signals through any means, including digital transport adapters and CableCARDs. Digital video penetration is calculated by dividing the number of digital video customers by total video customers.


Comcast 2015 Annual Report on Form 10-K		2

Cable Services

We offer a variety of cable services over our cable distribution system to residential and business customers. Subscription rates and related charges vary according to the services and features customers receive and the type of equipment they use, and customers are typically billed in advance on a monthly basis. The majority of our residential cable services customers are not subject to minimum-term contracts for their services, while substantially all of our business customers are. Minimum-term contracts are typically 2 years in length for residential customers and typically range from 2 to 5 years for business services customers. Customers with minimum-term contracts may only discontinue service in accordance with the terms of their contracts, which may include an early termination fee.

The Areas We Serve

The map below highlights our footprint as of December 31, 2015 and the designated market areas (“DMAs”) in which we offer cable services that have 125,000 or more video customers. The number of high-speed Internet customers in these DMAs is generally similar to the number of our video customers. The locations that are bolded represent the markets we operate in that were also included in the top 25 U.S. television markets as of December 31, 2015.

Video Services

We offer a broad variety of video services under the XFINITY brand, with access to hundreds of channels depending on the customer’s level of service. Our levels of service typically range from a limited basic service with access to between 20 and 40 channels to a full digital service with access to more than 300 channels. Our video services generally include programming provided by national broadcast networks, local broadcast stations, and national and regional cable networks, as well as government and public access programming. Our digital video services generally include access to our On Demand service and an interactive, on-screen program guide. We also offer packages that include extensive amounts of foreign-language programming, and we offer other specialty tiers of programming with sports, family and international themes. We tailor our video services for a particular geographic area according to applicable local and federal regulatory requirements, programming preferences and demographics.


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Our video customers may also subscribe to premium networks. Premium networks include networks such as HBO, Showtime, Starz and Cinemax that generally provide, without commercial interruption, movies, original programming, live and taped sporting events and concerts, and other features.

Our On Demand service provides digital video customers with approximately 75,000 programming choices over the course of a month, including 30,000 in high definition. A substantial portion of our On Demand content is available at no additional charge; other content, primarily movies and special-events programming, such as sporting events and concerts, can be rented or in some cases purchased to own digitally. We continue to increase the number of On Demand choices, including the number of movies and television shows that can be purchased.

Our HD service provides customers with high-resolution picture quality, improved audio quality and a wide-screen format through an HD set-top box. Our HD service includes a broad selection of HD programming choices, including major broadcast networks, national cable networks, premium networks and regional sports networks. Our DVR service allows digital video customers to record and store programs on their set-top box and play them at whatever time is convenient. Our DVR service also provides the ability to pause and rewind live television.

Our X1 service, which is a cloud-enabled video platform, provides customers with integrated search functionality, personalized recommendations and access to certain third-party Internet applications through television sets. We also offer our Cloud DVR technology in substantially all of our markets. Cloud DVR technology allows our video customers to record television shows and movies from their home using cloud-based servers and view those recordings on mobile devices via our mobile apps.

Through our online portal, our video customers may view certain live programming and On Demand content, browse program listings, and schedule and manage DVR recordings. We also have streaming services that provide customers with access to certain programming via On Demand, online and through our mobile apps and, depending on the customer’s level of service, may require an additional monthly fee.

High-Speed Internet Services

We offer a variety of high-speed Internet services with downstream speeds of up to 150 Mbps, as well as downstream speeds of up to 505 Mbps in limited markets. These services include our online portal and mobile apps, which provide access to email, contacts and calendars, and online security features. In addition, we are actively deploying wireless gateways, which combine a customer’s wireless router, cable modem and voice adapter, to improve the performance of multiple Internet-enabled devices used at the same time within the home, provide faster Internet speeds and create an in-home Wi-Fi network. We are continuing to expand our network of residential, outdoor and business Wi-Fi hotspots to allow most of our high-speed Internet customers to access our high-speed Internet services inside and outside the home, and we provide access to approximately 13.3 million of these hotspots as of December 31, 2015.

Voice Services

We offer voice services using an interconnected Voice over Internet Protocol (“VoIP”) technology. Our voice services provide either usage-based or unlimited local and domestic long-distance calling and include options for international calling plans, voicemail, voicemail transcriptions, text messaging, caller ID and call waiting. For customers with our high-speed Internet services, our voice services also include the ability to access and manage voicemail, text messaging and other account features through our online portal or our mobile apps.

Business Services


Comcast 2015 Annual Report on Form 10-K		4

provide to our residential cable services customers, our services for business customers include an interactive tool that allows customers to share, coordinate and store documents online, hosted voice services that use cloud network servers, a business directory listing, and additional capacity for multiple phone lines.

We also offer to medium-sized businesses and large enterprises Ethernet network services that connect multiple locations and provide higher downstream and upstream speed options, and we offer cellular backhaul services to mobile network operators to help those customers manage network bandwidth.

The new enterprise service offering is designed to serve Fortune 1000 companies and other large nationwide enterprises with multiple locations both in and outside of our cable distribution footprint. We service these multiple locations through agreements we have with other cable companies and providers that allow us to use their networks to fill in the gaps in our coverage areas.

Advertising

As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable networks that our Spotlight business sells to local, regional and national advertisers. In most cases, the available advertising units are sold by our sales force. In some cases, we work with representation firms as an extension of our sales force to sell a portion of the advertising units allocated to us. We also represent the advertising sales efforts of other multichannel video providers in some markets. In addition, we generate revenue from the sale of advertising online and on our On Demand service.

Other Revenue Sources

We receive revenue related to cable franchise and other regulatory fees and from our home security and automation services. Cable franchise and other regulatory fees represent the fees we are required to pay to federal, state and local authorities that we pass through to our customers. Under the terms of our cable franchise agreements, we are generally required to pay to the cable franchising authority an amount based on our gross video revenue. Our home security and automation services provide our customers with home monitoring services and the ability to manage other functions within the home, such as lighting and room temperature, through our online portal or our mobile apps.

Technology

Our cable distribution system uses a hybrid fiber-optic and coaxial cable network that we believe is sufficiently flexible and scalable to support our future technology requirements. This network provides the two-way transmissions that are essential to providing interactive video services, such as On Demand, and high-speed Internet and voice services. We are also leveraging our network to develop and deliver innovative services to our customers efficiently and in an accelerated fashion.

We continue to focus on technology initiatives, such as:

•

deploying and launching next-generation media and content delivery platforms, such as our X1 platform and related Cloud DVR technology, that use IP technology and our own cloud network servers to deliver video and advanced search capabilities, including through a voice-activated remote control, and allow access to certain third-party Internet applications

•

deploying wireless gateways to improve the performance of multiple Internet-enabled devices used at the same time within the home, provide faster Internet speeds and create an in-home Wi-Fi network


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•

developing multiple tools to recapture bandwidth and optimize our network to allow for faster Internet speeds and capacity, including using advanced video encoding and digital compression technologies and DOCSIS innovations, such as DOCSIS 3.1

•

developing and deploying various technology and software tools to improve the customer experience

Sources of Supply

To offer our video services, we license a substantial portion of our programming from cable networks and broadcast networks, as well as from local broadcast television stations. We attempt to secure long-term programming distribution agreements with these programming providers. We also license programming for our On Demand and streaming services. We seek to include in our distribution agreements the rights to offer such programming to our subscribers through multiple delivery platforms that may be used in a variety of locations, such as through On Demand, our online portal and our mobile apps.

We purchase from a limited number of suppliers a significant number of set-top boxes and certain other customer premise equipment, network equipment and services that we use to provide our cable services to our residential and business customers.

For our high-speed Internet services, we license software products, such as email and security software, and content, such as news feeds for our online portal, from a variety of suppliers. Under our contracts with these suppliers, we generally pay on a fixed-fee basis, on a per subscriber basis in the case of software product licenses or on a video advertising revenue share basis in the case of content licenses.

For our voice services, we license software products such as voicemail and text messaging from a variety of suppliers under multiyear contracts. The fees we pay are generally based on the consumption of the related services.

We use two primary vendors to provide customer billing for our cable services to our residential and business customers.

Customer and Technical Services

Our customer service call centers provide 24/7 call-answering capability, telemarketing and other services. Our technical services group performs various tasks, including installations, plant maintenance and upgrades to our cable distribution system.

Sales and Marketing

We offer our services directly to residential and business customers through customer service call centers, customer service centers, door-to-door selling, telemarketing and retail outlets, as well as through advertising via direct mail, television and the Internet. We market our cable services both individually and as bundled services.

NBCUniversal Segments

Cable Networks

Our Cable Networks segment consists of a diversified portfolio of 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, and our cable television studio production operations. We also own various digital media properties, which primarily include brand-aligned websites.


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The table below presents a summary of our national cable networks and their advertising reach to U.S. households.


	Approximate U.S. Households at December 31 (in millions)^(a)
Cable Network	2015		2014		2013		Description of Programming
USA Network		94		96		98	General entertainment
E!		92		94		96	Entertainment and pop culture
Syfy		92		95		97	Imagination-based entertainment
MSNBC		92		95		96	News and information
CNBC		91		94		95	Business and financial news
Bravo		90		92		94	Entertainment, culture and arts
NBC Sports Network		83		81		77	Sports
Oxygen		77		78		78	Women’s interests
Golf Channel		77		79		81	Golf competition and golf entertainment
Esquire Network		68		70		71	Men’s lifestyle and entertainment
Sprout		56		58		57	Children’s entertainment
Chiller		38		39		41	Horror and suspense
CNBC World		36		38		36	Global financial news
Universal HD		29		31		29	General entertainment HD programming
Cloo		25		26		29	Crime, mystery and suspense

(a)

Household data is based on The Nielsen Company’s January reports, except for Universal HD, which is derived from information provided by multichannel video providers. Household data for 2015 is derived from information available during the period from December 21, 2015 through December 27, 2015.

Our regional sports and news networks together serve more than 28 million households across the United States, including key markets such as Baltimore/Washington, Boston, Chicago, Philadelphia, Portland, Sacramento and San Francisco.

We market and distribute our cable network programming in the United States and internationally to multichannel video providers, as well as to subscription video on demand services such as those offered by Amazon, Hulu and Netflix. These distributors may provide our content on television, including via video on demand services, online and through mobile apps.

Our cable networks produce their own programs or acquire programming rights from third parties. Our cable television studio production operations identify, develop and produce original content for cable television and other distribution platforms for our cable networks and third parties. We license this content to cable networks, broadcast networks and subscription video on demand services.

Broadcast Television

Our Broadcast Television segment operates the NBC and Telemundo broadcast television networks, which together serve audiences and advertisers in all 50 states. Our Broadcast Television segment also includes our owned NBC and Telemundo local broadcast television stations, the NBC Universo national cable network, our broadcast television studio production operations, and related digital media properties.

NBC Network

The NBC network distributes more than 5,000 hours of entertainment, news and sports programming annually, and its programs reach viewers in virtually all U.S. television households through more than 200 affiliated stations across the United States, including our 10 owned NBC-affiliated local broadcast television stations. The NBC network develops a broad range of entertainment, news and sports content and also broadcasts a


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variety of special-events programming. The NBC network’s programming library consists of rights of varying nature to more than 100,000 episodes of popular television content, including current and classic titles, unscripted programming, sports, news, long-form and short-form programming, and locally produced programming from around the world. In addition, the NBC network owns various digital media properties, which primarily include brand-aligned websites.

The NBC network produces its own programs or acquires the rights to programming from third parties. NBCUniversal has various contractual commitments for the licensing of rights to multiyear programming, primarily sports programming. Our most significant sports programming commitments include an agreement with the NFL to produce and broadcast a specified number of regular season and playoff games, including Sunday Night Football on NBC through the 2022-23 season and the 2018 and 2021 Super Bowl games. In addition, the NBC network owns the U.S. broadcast rights for the summer and winter Olympic Games through 2032. We also have broadcast rights to a specified number of NHL games through the 2020-21 season, U.S. television rights to English Premier League soccer through the 2021-22 season, certain PGA TOUR and other golf events through 2030 and certain NASCAR events through 2024. NBCUniversal’s sports programming agreements also include the rights to distribute content on our national cable networks, including the NBC Sports Network and Golf Channel, on our regional sports networks where applicable, and also online, including through our mobile apps.

Our broadcast television studio production operations develop and produce original content, including scripted and unscripted programming series and talk shows. This original content is licensed to broadcast networks, cable networks and local broadcast television stations owned by us and third parties, as well as to subscription video on demand services, and it is sold on standard-definition DVDs and Blu-ray discs (together, “DVDs”) and through digital distribution services both in the United States and internationally. We also produce first-run syndicated shows for local markets that are broadcast on local broadcast television stations in the United States on a market-by-market basis. We currently distribute some of our television programs after their initial broadcast, as well as older television programs from our library, to local broadcast television stations and cable networks in the off-network syndication market.

NBC Local Broadcast Television Stations

We own and operate 10 NBC-affiliated local broadcast television stations that as of December 31, 2015 collectively reached 33 million U.S. television households, which represents approximately 27% of U.S. television households. In addition to broadcasting the NBC network’s national programming, our local broadcast television stations produce news, sports, public affairs and other programming that addresses local needs and acquire syndicated programming from other sources. The table below presents a summary of the NBC-affiliated local broadcast television stations that we own and operate.


DMA Served^(a)	Station	General Market Rank^(b)		Percentage of U.S. Television Households^(c)
New York, NY	WNBC		1		6	%
Los Angeles, CA	KNBC		2		5	%
Chicago, IL	WMAQ		3		3	%
Philadelphia, PA	WCAU		4		3	%
Dallas-Fort Worth, TX	KXAS		5		2	%
San Francisco-Oakland-San Jose, CA	KNTV		6		2	%
Washington, D.C.	WRC		7		2	%
Miami-Ft. Lauderdale, FL	WTVJ		17		1	%
San Diego, CA	KNSD		27		1	%
Hartford, CT	WVIT		30		1	%

(a)

DMA served is defined by Nielsen Media Research as a geographic market for the sale of national spot and local advertising time.


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(b)

General market rank is based on the relative size of the DMA among the 210 generally recognized DMAs in the United States based on Nielsen estimates for the 2015-16 season.

(c)

Based on Nielsen estimates for the 2015-16 season. The percentage of U.S. television households does not reflect the calculation of national audience reach under the Federal Communications Commission’s (“FCC”) national television ownership cap limits. See “Legislation and Regulation — Broadcast Television — Ownership Limits — National Television Ownership.”

Telemundo

Telemundo is a leading Hispanic media company that produces, acquires and distributes Spanish-language content in the United States and internationally. Telemundo’s operations include the Telemundo network, its 17 owned local broadcast television stations and the NBC Universo national cable network.

The Telemundo network is a leading Spanish-language broadcast television network featuring original telenovelas, movies, news, specials and sporting events. Telemundo develops original programming primarily through its production studio and also acquires the rights to content from third parties. It holds the Spanish-language U.S. broadcast rights to FIFA World Cup soccer through 2022 and the Spanish-language U.S. broadcast rights for the NFL games that the NBC network will broadcast through the 2022-23 season as part of our agreement with the NFL.

Telemundo Local Broadcast Television Stations

As of December 31, 2015, Telemundo owned 17 local broadcast television stations, including 16 local broadcast television stations affiliated with the Telemundo network, which collectively reached approximately 59% of U.S. Hispanic television households as of December 31, 2015, and an independent television station in Puerto Rico. The table below presents a summary of these local broadcast television stations.


DMA Served^(a)	Station	Hispanic Market Rank^(b)		Percentage of U.S. Hispanic Television Households^(c)
Los Angeles, CA	KVEA		1		13	%
New York, NY	WNJU		2		10	%
Miami, FL	WSCV		3		5	%
Houston, TX	KTMD		4		5	%
Dallas-Fort Worth, TX	WSNS		5		4	%
Chicago, IL	KXTX		6		4	%
San Antonio, TX	KVDA^(d)		7		3	%
San Francisco-Oakland-San Jose, CA	KSTS		8		3	%
Phoenix, AZ	KTAZ		9		3	%
Harlingen-Brownsville-McAllen, TX	KTLM		10		2	%
Fresno, CA	KNSO^(d)		13		2	%
Philadelphia, PA	WWSI		16		2	%
Denver, CO	KDEN		17		2	%
Boston, MA	WNEU^(d)		21		1	%
Las Vegas, NV	KBLR		24		1	%
Tucson, AZ	KHRR		25		1	%
Puerto Rico	WKAQ		N/A		N/A

(a)

DMA served is defined by Nielsen Media Research as a geographic market for the sale of national spot and local advertising time.

(b)

Hispanic market rank is based on the relative size of the DMA among approximately 14.7 million U.S. Hispanic households as of December 31, 2015.

(c)

Based on Nielsen estimates for the 2015-16 season. The percentage of U.S. Hispanic television households does not reflect the calculation of national audience reach under the FCC’s national television ownership cap limits. See “Legislation and Regulation — Broadcast Television — Ownership Limits — National Television Ownership.”

(d)

Operated by a third party that provides certain non-network programming and operations services under a time brokerage agreement.


		9		Comcast 2015 Annual Report on Form 10-K

Filmed Entertainment

Our Filmed Entertainment segment primarily produces, acquires, markets and distributes both live-action and animated filmed entertainment worldwide, and it also develops, produces and licenses live stage plays.

We produce films both on our own and jointly with other studios or production companies, as well as with other entities. Our films are produced primarily under the Universal Pictures, Illumination and Focus Features names. Our films are marketed and distributed worldwide primarily through our own marketing and distribution companies. We also acquire distribution rights to films produced by others, which may be limited to particular geographic regions, specific forms of media or certain periods of time. Our content consists of theatrical films, direct-to-video movies and our film library, which is comprised of more than 5,000 movies in a variety of genres.

We have entered into, and may continue to enter into, film cofinancing arrangements with third parties, including both studio and nonstudio entities, to jointly finance or distribute certain of our film productions. These arrangements can take various forms, but in most cases involve the grant of an economic interest in a film to an investor. Investors generally assume the full risks and rewards of ownership proportionate to their ownership in the film.

The majority of our produced and acquired films are initially distributed for exhibition in movie theaters. After their release in movie theaters, we sell and license our films through various methods. We distribute our films globally by selling them on DVD to retail stores, rental kiosks and subscription by mail services and by selling them through digital distribution services and the video on demand services provided by multichannel video providers, including our Cable Communications segment. We also license our films, including selections from our film library, to cable, broadcast and premium networks, to subscription video on demand services, and to video on demand and pay-per-view services. The number of films that we license through subscription video on demand services is increasing as consumers continue to seek additional ways to view our content.

Theme Parks

Our Theme Parks segment consists primarily of our Universal theme parks in Orlando, Florida and Hollywood, California. Universal Orlando includes two theme parks, Universal Studios Florida and Universal’s Islands of Adventure, as well as CityWalk, a dining, retail and entertainment complex. Universal Orlando also features on-site themed hotels in which we own a noncontrolling interest. Our Universal theme park in Hollywood, California consists primarily of Universal Studios Hollywood. We also are expanding our theme park business internationally, such as through NBCUniversal’s acquisition of a 51% interest in Universal Studios Japan in November 2015 and our plans to develop a Universal Studios theme park in Beijing, China along with a consortium of Chinese state owned companies. In addition, we license the right to use the Universal Studios brand name and other intellectual property, and also provide other services, to third parties that own and operate the Universal Studios Singapore theme park on Sentosa Island, Singapore, as well as to the Universal Studios Japan theme park. We also own a water park, Wet ‘n Wild, in Orlando, Florida.

Our Theme Parks segment licenses the right to use a substantial amount of intellectual property from third parties for its themed elements in rides, attractions and merchandising.

Competition

All of our businesses operate in intensely competitive, consumer-driven and rapidly changing environments and compete with a growing number of companies that provide a broad range of communications products and services, and entertainment, news and information products and services, to consumers. Technological changes are further intensifying and complicating the competitive landscape for all of our businesses by challenging existing business models and affecting consumer behavior.


Comcast 2015 Annual Report on Form 10-K		10

Cable Communications

Competition for our video services consists primarily of direct broadcast satellite (“DBS”) providers, which have a national footprint and compete in all of our service areas, and phone companies with fiber-based networks, which overlap more than 55% of our service areas and are continuing to expand the areas they serve. Our high-speed Internet services business primarily competes with phone companies with fiber-based networks that overlap more than 60% of our service areas. Many of these competitors offer features, pricing and packaging for these services, individually and in bundles, comparable to what we offer.

There also continue to be new companies, some with significant financial resources, that offer services that potentially may compete on a larger scale with some or all of our cable services. In particular, Google, which has launched high-speed Internet and video services in a limited number of areas in which we operate, has announced plans to expand in more areas, including in some of our significant markets. As Google expands to more areas, we expect it to become a meaningful wireline competitor to our high-speed Internet and video services. Other companies continue to emerge that provide Internet streaming and downloading of video programming, some of which charge a nominal or no fee. Wireless Internet services, such as 3G and 4G wireless broadband services and Wi-Fi networks, may compete with our video and high-speed Internet services, and our voice services are facing increased competition as customers replace wireline phones with mobile phones and Internet-based phone services such as Skype.

Video Services

We compete with a number of different sources that provide news, sports, information and entertainment programming to consumers, including:

•

DBS providers that transmit satellite signals containing video programming and other information to receiving dishes located on the customer’s premises

•

phone companies that have built and continue to build fiber-based networks that provide cable services similar to ours, which now overlap a substantial portion of our service areas

•

other providers that build and operate wireline communications systems in the same communities that we serve, including those operating as franchised cable operators

•

satellite master antenna television (“SMATV”) systems that generally serve MDUs, office complexes and residential developments

•

online video distributors that offer online services and devices that enable Internet video streaming and downloading of movies, television shows and other video programming

Congress has enacted legislation and the FCC has adopted regulatory policies intended to provide a favorable operating environment for existing competitors and for potential new competitors to our cable services. The FCC adopted rules favoring new investment by certain phone companies in networks capable of distributing video programming and rules allocating and auctioning spectrum for new wireless services that may compete with our video services. The FCC also has launched a rulemaking to classify certain online video distributors as multichannel video providers under the FCC’s rules and thereby provide them with certain regulatory benefits under the rules. See “Legislation and Regulation” below for additional information.

Direct Broadcast Satellite Providers

According to recent government and industry reports, conventional medium-power and high-power satellites provide video programming to 33.5 million subscribers in the United States. DBS providers with high-power satellites typically offer video services substantially similar to our video services. DIRECTV, which was


		11		Comcast 2015 Annual Report on Form 10-K

acquired by AT&T in 2015, and DISH Network offer video services to substantially all U.S. households. DBS providers also have marketing arrangements with certain phone companies in which the DBS provider’s video services are sold together with the phone company’s high-speed Internet and voice services.

Phone Companies

Certain phone companies, in particular AT&T and Verizon, have built and are continuing to build wireline fiber-based networks that provide video, high-speed Internet and voice services, and in some cases have bundled with wireless phone services, in substantial portions of our service areas. These and other phone companies with fiber-based networks or digital subscriber line (“DSL”) technology, such as CenturyLink, also may market video services provided by DBS providers in certain areas where they provide only high-speed Internet and voice services. AT&T’s acquisition of DIRECTV in 2015 created an even larger competitor to our cable services, which enables them to enhance their bundled offerings.

Other Wireline Providers

Federal law prohibits franchising authorities from unreasonably denying requests for additional franchises, and it permits franchising authorities to operate cable systems. In addition to phone companies, various other companies, including those that traditionally have not provided video services and have significant financial resources, have obtained cable franchises and provide competing cable services. These and other cable systems offer cable services in some areas where we hold franchises. We anticipate that facilities-based competitors may emerge in other franchise areas that we serve.

Satellite Master Antenna Television Systems

Our video services also compete for customers with SMATV systems. SMATV system operators typically are not subject to regulation in the same manner as local, franchised cable system operators. SMATV systems offer to their subscribers both improved reception of local broadcast television stations and much of the programming offered by our cable systems. Some SMATV system operators also offer bundled services to residential and business subscribers.

Online Video Services

Our video services also compete with the services of online video distributors that offer Internet video streaming and downloading of movies, television shows and other video programming. A number of companies also have launched online video services that include both linear and on-demand programming and generally involve the offering of smaller packages of programming networks directly to customers over the Internet at prices lower than our traditional video service package offerings, while some programming providers also offer programming directly to customers over the Internet. In most cases, these services charge no fee or a lower fee than our traditional video packages. Consumer electronic companies that sell Internet-connected TVs or gaming consoles that provide a user interface for searching television and other programming over the Internet and offer links to various third-party Internet applications may also compete with our video services. The success of these services could also adversely affect demand for other video services, such as our expanded digital video packages, premium networks, and our DVR and On Demand services.

Other

Our cable services also may compete for customers with other companies, such as local broadcast television stations that provide multiple channels of free over-the-air programming, as well as video rental services and home entertainment and gaming products.

High-Speed Internet Services

We compete with a number of companies offering Internet services, many of which have substantial resources, including:

•

wireline phone companies


Comcast 2015 Annual Report on Form 10-K		12

•

Internet service providers

•

wireless phone companies and other providers of wireless Internet service

•

satellite broadband providers

•

power companies

•

municipal broadband networks

Some phone companies, such as AT&T, CenturyLink, Frontier and Verizon, have built and are continuing to build fiber-based network infrastructure deeper in their networks, which allows them to provide data transmission speeds that exceed those that can be provided with traditional DSL technology, and are now offering these higher-speed services in many of our service areas. DSL technology allows Internet access to be provided to customers over phone lines at data transmission speeds substantially greater than those of dial-up modems, and certain companies that offer DSL service have increased data transmission speeds, lowered prices or created bundled services to compete with our high-speed Internet services.

Google, which has launched a fiber-to-the-home network that provides high-speed Internet services in a limited number of areas in which we operate, has announced plans to expand in additional geographic areas, including in some of our significant markets. As Google expands to more areas, we expect it to become a meaningful wireline competitor to our high-speed Internet and video services. Certain municipalities in our service areas are also building fiber-based networks.

Various wireless companies are offering Internet services using a variety of network types, including 3G and 4G wireless high-speed Internet networks and Wi-Fi networks. Some of these services are similar to ours. These networks work with devices such as smartphones, laptops, tablets and mobile wireless routers, as well as wireless data cards. A number of commercial venues, such as retail malls, restaurants and airports, also offer Wi-Fi service. Numerous local governments are also considering or actively pursuing publicly subsidized Wi-Fi and other Internet access networks. The availability of these wireless offerings could negatively impact the demand for our high-speed Internet services.

Voice Services

Our voice services compete with wireline phone companies, including incumbent local exchange carriers (“ILECs”), competitive local exchange carriers (“CLECs”), wireless phone service providers and other Internet-based and VoIP service providers. Certain phone companies, such as the ILECs AT&T and Verizon, have substantial capital and other resources, longstanding customer relationships, and extensive existing facilities and network rights-of-way. A few CLECs also have existing local networks and significant financial resources. In addition, we are increasingly competing with other phone service providers as customers replace wireline phones with mobile phones and Internet-based phone services.

Business Services

Our business services primarily compete with a variety of phone companies, including ILECs and CLECs. These companies either operate their own network infrastructure or rely on reselling all or part of another carrier’s network. We also compete with satellite operators who offer video services to businesses.

NBCUniversal Segments

Cable Networks and Broadcast Television

Our cable networks, broadcast television networks and owned local broadcast television stations compete for viewers’ attention and audience share with all forms of programming provided to viewers, including cable, broadcast and premium networks, local broadcast television stations, home entertainment, pay-per-view and video on demand services, online activities, such as social networking and viewing user-generated content,


		13		Comcast 2015 Annual Report on Form 10-K

video games, and other forms of entertainment, news and information. Our cable networks, broadcast television networks and owned local broadcast television stations may compete for viewers’ attention with subscription video on demand services, some of which have their own high-quality original content.

Our cable networks, broadcast television networks and owned local broadcast television stations compete for the acquisition of programming and for on-air and creative talent with other cable and broadcast networks, local television stations and subscription video on demand services. The market for programming is very competitive, particularly for sports programming, where the cost for such programming is significant.

Our cable networks compete with other cable networks and programming providers for carriage of their programming by multichannel video providers and subscription video on demand services. Our broadcast television networks compete with the other broadcast networks in markets across the United States to secure affiliations with independently owned television stations, which are necessary to ensure the effective distribution of broadcast network programming to a nationwide audience.

In addition, our cable networks and broadcast television studio production operations compete with other production companies and creators of content for the acquisition of story properties, for creative, performing and technical personnel, and for distribution of, and consumer interest in, their content.

Filmed Entertainment

Our filmed entertainment business competes for audiences for its films and other entertainment content with other major studios and, to a lesser extent, with independent film producers, as well as with alternative forms of entertainment. Our competitive position primarily depends on the number of films we produce, their distribution and marketing success and consumer response. Our filmed entertainment business also competes to obtain creative, performing and technical talent, including writers, actors, directors and producers, as well as scripts for films. Our filmed entertainment business also competes with the other major studios and other producers of entertainment content for the exhibition of its films in theaters and for premium network and digital distribution of its films.

Theme Parks

Our theme parks business competes with other multi-park entertainment companies. We also compete with other providers of entertainment, lodging, tourism and recreational activities. In order to maintain the competitiveness of our theme parks, we have invested and continue to invest in existing and new theme park attractions and infrastructure.

Advertising

Our cable communications business, cable networks, broadcast television networks, and owned local broadcast television stations compete for the sale of advertising time with other television networks and stations, as well as with all other advertising platforms, such as digital, radio and print media. The willingness of advertisers to purchase advertising from us may be adversely affected by lower audience ratings at our cable networks, broadcast television networks and owned local broadcast television stations. Declines in advertising revenue also can be caused by increased competition for the leisure time of audiences and audience fragmentation and from the growing use of technologies such as DVRs and video on demand services, which give consumers greater flexibility to watch programming on a time-delayed or on-demand basis or to fast-forward or skip advertisements within programming, and from subscription video on demand services.

Seasonality and Cyclicality

Each of our businesses is subject to seasonal and cyclical variations. See Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and refer to the “Seasonality and Cyclicality” discussion within that section for additional information.


Comcast 2015 Annual Report on Form 10-K		14

Legislation and Regulation

The Communications Act of 1934, as amended (the “Communications Act”), and FCC regulations and policies affect significant aspects of our businesses. Our businesses are also subject to other regulation by federal, state, local and foreign authorities and to agreements we enter into with local cable franchising authorities. In addition, we must comply with the terms, conditions and commitments of the FCC Order that approved the NBCUniversal transaction in 2011 (the “NBCUniversal Order”) and a consent decree entered into between us, the Department of Justice (“DOJ”) and five states (the “NBCUniversal Consent Decree”), which contain conditions and commitments of varying duration, ranging from three to seven years after September 2011.

Legislators and regulators at all levels of government frequently consider changing, and sometimes do change, existing statutes, rules or regulations, or interpretations of existing statutes, rules or regulations, or prescribe new ones, any of which may significantly affect our businesses. In addition, the FCC and certain states are becoming more active in considering rulemakings and legislation, as well as in conducting inquiries and reviews, regarding our services. Any future legislative, judicial, regulatory or administrative actions may increase our costs or impose additional restrictions on our businesses, some of which may be significant. For example, in February 2015, the FCC adopted new “open Internet” regulations that reclassify broadband Internet access service as a “telecommunications service” and subject it to certain common carrier regulations under Title II of the Communications Act. In addition, in February 2015, the FCC preempted certain state laws that had restricted municipalities from operating municipally owned broadband networks. See “Cable Communications Segment — High Speed Internet Services” below. Congress also is expected to consider proposals to address communications issues, including whether it should rewrite the entire Communications Act to account for changes in the communications marketplace, whether it should address the FCC’s authority to implement or enforce open Internet regulations, and whether it should modify rules relating to cable distribution of local broadcast television stations. We are unable to predict the effects of any of these or any other further regulatory or legislative requirements on our businesses.

The following paragraphs summarize material existing and potential future legal and regulatory requirements affecting our businesses, although reference should be made to the Communications Act, FCC regulations, the NBCUniversal Order, the NBCUniversal Consent Decree, and other legislation and regulations for further information.

Cable Communications Segment

Video Services

Program Carriage

Cable operators and other multichannel video providers are prohibited from requiring a financial interest in, or exclusive distribution rights for, a video programming network as a condition of carriage. FCC regulations, as well as the NBCUniversal Order, also prohibit us from unreasonably restraining the ability of an unaffiliated video programming network to compete fairly by discriminating against the network on the basis of its non-affiliation in the selection, terms or conditions for its carriage. The FCC is considering proposals to further expand program carriage regulations that may be disadvantageous to us. We have been involved in program carriage disputes at the FCC in the past and may be subject to complaints in the future.

Must-Carry/Retransmission Consent

Cable operators are required to carry, without compensation, programming transmitted by most local commercial and noncommercial broadcast television stations. As an alternative to this “must-carry” requirement, local broadcast television stations may choose to negotiate with the cable operator for “retransmission consent,” under which the station gives up its must-carry rights and instead seeks to negotiate a carriage


		15		Comcast 2015 Annual Report on Form 10-K

agreement with the cable operator, which frequently will involve payments to the station. We currently pay certain local broadcast television stations in exchange for their required consent for the retransmission of the stations’ broadcast programming to our video services customers and expect to continue to be subject to demands for increased payment and other concessions from local broadcast television stations. The FCC has initiated a rulemaking to review aspects of these rules. For information on must-carry and retransmission consent issues relating to our broadcast television business, see “NBCUniversal Segments — Broadcast Television” below and refer to the “Must-Carry/Retransmission Consent” discussion within that section.

Pricing and Packaging

In 2015, the FCC revised its rate regulations to create a presumption that all local communities are subject to effective competition and should no longer be subject to rate regulation that limits prices cable operators may charge for basic video service, equipment and installation. That decision has been appealed in federal court. The FCC accepted a certification from a Massachusetts franchising authority that demonstrated an absence of effective competition in a number of the communities we serve in Massachusetts and that will allow for continued rate regulation in those communities. All of the other areas we serve, except for a relatively small number where we have a petition for effective competition still pending at the FCC, are covered by the FCC’s presumption and are unregulated.

Cable Equipment

The Communications Act includes provisions aimed at promoting the retail availability of set-top boxes and other equipment that can be used to receive digital video services. Prior to December 2015, multichannel video providers were prohibited from deploying set-top boxes that performed both channel navigation and security functions, so most of our set-top boxes relied on a separate security device known as a CableCARD. Congress repealed this prohibition, so we may now deploy set-top boxes with integrated security. Congress also directed the FCC to establish a working group to report on software-based security aimed at promoting the retail availability of video devices. In the wake of that report, which was issued in August 2015, some have proposed that the FCC replace the CableCARD requirements with new technology mandates on multichannel video providers to enable retail video devices to work on any multichannel video provider’s system. The Chairman of the FCC proposed such a technology mandate in January 2016, and announced that the FCC plans to open a rulemaking to consider the proposal. If implemented, this proposal would impose substantial costs on us, impair our ability to innovate and have other significant adverse effects on our business.

Pole Attachments

The FCC regulates the rates, terms and conditions that most pole-owning utility companies charge cable operators and telecommunications carriers, including broadband Internet access service providers such as us, for allowing attachments to their poles. States are permitted to preempt FCC jurisdiction and regulate the rates, terms and conditions of attachments themselves, and many states in which we operate have done so. Most of these states have generally followed the FCC’s pole attachment rate standards, which set rates for telecommunications service pole attachments to levels at or near the rates for cable service attachments. In November 2015, the FCC eliminated the ability of utility companies to justify higher rates for telecommunication service pole attachments. Cable operators had requested this FCC action because the FCC’s new open Internet regulations, as described below, reclassified Internet access service as a telecommunications service, which could have allowed for higher rental rates to be applied to a majority of our pole attachments. The FCC’s order ensuring that pole rates for telecommunications service attachments approximate the cable service pole rate is expected to be challenged in court by the utility companies.

Franchising

Cable operators generally operate their cable systems under nonexclusive franchises granted by local or state franchising authorities. While the terms and conditions of franchises vary materially from jurisdiction to jurisdiction, franchises typically last for a fixed term, obligate the franchisee to pay franchise fees and meet


Comcast 2015 Annual Report on Form 10-K		16

service quality, customer service and other requirements, and are terminable if the franchisee fails to comply with material provisions. Franchising authorities also may establish reasonable requirements for public, educational and governmental access programming, and some of our franchises require substantial channel capacity and financial support for this programming. The Communications Act also contains provisions governing the franchising process, including renewal procedures designed to protect incumbent franchisees against arbitrary denials of renewal. We believe that our franchise renewal prospects are generally favorable, but cannot guarantee the future renewal of any individual franchise.

Approximately half of the states in which we operate provide for statewide franchising or have simplified local franchising requirements for new entrants. Some allow new entrants to operate on more favorable terms than our current operations, for instance by not requiring that the new entrant provide service to all parts of the franchise area or permitting the new entrant to designate only those portions it wishes to serve. Certain states allow incumbent cable operators such as us to opt in to the new state franchise immediately or later when a competing state franchise has been issued, although even in those states, incumbent cable operators may be required to retain certain franchise obligations that are more burdensome than the new entrant’s state franchise.

High-Speed Internet Services

We provide high-speed Internet services to our customers. Many of these services are subject to a number of regulatory obligations described below, including open Internet regulations implemented by the FCC and certain common carrier regulations under Title II of the Communications Act. As an Internet service provider (“ISP”), we are also subject to a requirement to implement certain network capabilities to assist law enforcement in conducting surveillance of persons suspected of criminal activity.

Open Internet Regulations

In February 2015, the FCC reclassified broadband Internet access service as a “telecommunications service” subject to new open Internet regulations and certain common carrier regulations under Title II of the Communications Act, including requirements that ISPs’ charges and practices for and in connection with broadband Internet access service be just, reasonable and not unjustly or unreasonably discriminatory. However, the FCC also refrained from implementing a number of utility-style regulations that might otherwise apply under Title II, such as rate regulation, tariffs and unbundling requirements.

The new open Internet regulations bar ISPs from blocking access to lawful content, applications, services or non-harmful devices; prohibit ISPs from impairing or degrading lawful Internet traffic on the basis of content, applications or services, or impairing or degrading the use of non-harmful devices; prohibit ISPs from favoring lawful traffic from one provider of Internet content, applications or services (called an “edge provider”) over lawful traffic of another edge provider in exchange for consideration (i.e., no “paid prioritization”); establish a new “general conduct standard” that prohibits ISPs from unreasonably interfering with or unreasonably disadvantaging the ability of consumers to select, access and use the lawful Internet content, applications, services or devices of their choosing or of edge providers to make lawful content, applications, services or devices available to consumers; and require ISPs to disclose information regarding network management, performance and commercial terms of the service. In addition, interconnection arrangements, which govern how Internet traffic is exchanged between high-speed Internet networks and provide direct, dedicated interconnection capacity to edge providers, will now be subject to FCC oversight under Title II of the Communications Act. All of these regulations are subject to FCC enforcement and could give rise to third-party claims for damages or equitable relief. These new requirements could adversely affect our business, although the extent to which they do so will depend upon the manner in which the FCC interprets and enforces them. The FCC’s new open Internet regulations have been appealed in federal court.

States also may attempt to use the FCC’s open Internet decision to justify imposing new regulations or taxes and fees on ISPs that could adversely affect our business.


		17		Comcast 2015 Annual Report on Form 10-K

Separate and apart from the FCC’s new open Internet regulations, we committed to be bound by the FCC’s original “open Internet” regulations adopted in 2010 as a condition of the NBCUniversal Order and the NBCUniversal Consent Decree until 2018, although we did not agree to be bound by any future open Internet regulations. As a result, among other things, we cannot block access to lawful Internet content, applications, services or non-harmful devices or unreasonably discriminate in transmitting lawful Internet network traffic, although we may engage in reasonable network management.

Municipally Owned Broadband Networks

A number of states have enacted laws that restrict or prohibit local municipalities from operating municipally owned broadband networks. A municipal broadband provider in Tennessee and a municipality in North Carolina requested that the FCC preempt state laws that restrict their ability to provide broadband Internet access service, and in February 2015, the FCC preempted the Tennessee and North Carolina laws in most respects and expressed a willingness to entertain similar preemption requests. The FCC’s decision has been appealed in federal court.

Definition of Advanced Telecommunications Capability

In January 2015, the FCC redefined what connection speeds and other service characteristics constitute “advanced telecommunications capability,” increasing the downstream speed from 4 Mbps to 25 Mbps. The definition of “advanced telecommunications capability” has been used by the FCC in the past to determine whether broadband Internet access services are being deployed to all Americans in a reasonable and timely manner, and if they are not being so deployed, the FCC may adopt new regulations that could conceivably accelerate deployment of such services. The FCC relied in part on this authority to adopt its new open Internet regulations.

NBCUniversal Order/Consent Decree Conditions

The NBCUniversal Order and NBCUniversal Consent Decree include various conditions and commitments requiring us to expand our broadband service areas, to continue to offer all of our broadband Internet access service speed tiers on a standalone basis at reasonable market-based prices, to maintain a broadband Internet access service of at least 12 Mbps downstream across most of our footprint, and to avoid discrimination in how we treat “specialized services” (defined as services we provide over the same last-mile facilities as our broadband Internet access service, but not including our broadband Internet access service, video services or voice services).

Voice Services

We provide voice services using interconnected VoIP technology. The FCC has adopted a number of regulations for providers of nontraditional voice services such as ours, including regulations relating to privacy of customer proprietary network information, local number portability duties and benefits, disability access, E911, law enforcement assistance, outage reporting, rural call completion reporting, Universal Service Fund contribution obligations, domestic discontinuance requirements and certain regulatory filing requirements. The FCC has not yet ruled on whether interconnected VoIP service should be classified as an “information service” or a “telecommunications service” under the Communications Act. The classification determination is important because telecommunications services are regulated more extensively than information services. Unless and until the FCC definitively classifies interconnected VoIP service, state regulatory commissions and legislatures will continue to investigate imposing regulatory requirements on our voice services, and the FCC’s new open Internet regulations reclassifying Internet access as a telecommunications service may further encourage state-level regulatory actions.

Voice Interconnection

Because the FCC has not determined the appropriate classification of our voice services, providers of VoIP services typically either secure CLEC authorization or obtain interconnection to traditional wireline phone


Comcast 2015 Annual Report on Form 10-K		18

company networks by contracting with an existing CLEC, which has the right, as a telecommunications carrier, to request and obtain interconnection with the traditional wireline phone companies. We have arranged for such interconnection rights through affiliated CLECs. If a regulatory or judicial authority were to deny our ability to interconnect through one of our affiliated CLECs, our ability to provide voice services and compete in the area in question would be negatively impacted. The FCC regulates the arrangements by which telecommunications carriers compensate one another for exchanged traffic, and has affirmed the right of CLECs to collect intercarrier compensation when providing interconnection for VoIP providers. In 2012, the FCC sought comment on petitions that raise issues concerning the interconnection obligations for VoIP providers. Further, a Massachusetts state commission is reviewing whether IP interconnection agreements should be subject to regulation and other states could follow.

Universal Service

A federal program known as the Universal Service program generally requires telecommunications service providers to pay a fee based on revenue from their services into a fund used to subsidize the provision of telecommunications services in high-cost areas and to low-income consumers and the provision of Internet and telecommunications services to schools, libraries and certain health care providers. Some states also have analogous programs that support service in high-cost areas or to low-income consumers. The FCC has long considered implementing changes to the Universal Service program, such as changing the fee calculation from a revenue-based formula to a per-user fee or per-connection fee, adopting a fee based on bandwidth, and expanding the services subject to the fee to include broadband Internet access services. In 2014, the FCC referred the question of how to reform Universal Service fees to a joint federal and state commission, which was expected to make a recommendation in 2015, but has not yet done so.

The FCC recently has shifted its focus away from supporting traditional telephone service, and toward subsidizing broadband deployment. This shift could assist some of our competitors. For example, in 2014, the FCC substantially revised the program that provides Universal Service support for services to schools and libraries to shift support from voice services to broadband services and the deployment of Wi-Fi networks.

NBCUniversal Segments

Cable Networks

Program Access

The Communications Act and FCC regulations (i.e., the “program access rules”) generally prevent cable networks affiliated with cable operators from favoring cable operators over competing multichannel video programming distributors (“MVPDs”). The FCC is considering whether certain online video distributors (“OVDs”) should be classified as MVPDs, which would give them the ability to bring complaints under the program access rules.

The FCC and Congress also have considered proposals that would require companies that own multiple cable networks to make each of their networks available individually when negotiating distribution agreements with multichannel video providers and potentially with OVDs. We currently offer our cable networks both on a bundled basis and, when requested, individually.

Under the terms of the NBCUniversal Order, MVPDs can invoke commercial arbitration for access in certain circumstances to our cable networks and broadcast television networks, including our regional sports networks. In addition, under the NBCUniversal Order and NBCUniversal Consent Decree, we are required to make certain of our cable network, broadcast television and filmed entertainment programming available to bona fide OVDs in certain circumstances. For further discussion of these conditions, see “Broadcast Television” below and refer to the “Must-Carry/Retransmission Consent” and “Internet Distribution” discussions within that section.


		19		Comcast 2015 Annual Report on Form 10-K

Children’s Programming

Under federal regulations, the amount of commercial content that may be shown on cable networks, broadcast networks and broadcast television stations during programming originally produced and broadcast primarily for an audience of children under 13 years of age is limited, and certain television station programming must serve the educational and informational needs of children under 17 years of age. In addition, the NBCUniversal Order includes certain commitments and conditions related to children’s television and advertising directed at children.

Broadcast Television

Licensing

Local broadcast television stations may be operated only in accordance with a license issued by the FCC upon a finding that the grant of the license will serve the public interest, convenience and necessity. The FCC grants broadcast television station licenses for specific periods of time, which may be renewed with or without conditions. Substantially all of our broadcast television station licenses have pending applications for renewal, although our stations’ authority to operate is automatically extended while a renewal application is under review. Several of these applications have been opposed by third parties, and other applications are pending. Although our licenses have been renewed in the past, there can be no assurance that we will always obtain them.

Ownership Limits

FCC regulations limit the ability of individuals and entities to have “attributable interests” above specific ownership levels in local television stations and place limitations on ownership of other specified mass media entities, such as limits on the cross-ownership of broadcast stations and newspapers in the same market. The FCC is reviewing the ownership regulations detailed below in 2016.

Local Television Ownership

Under FCC regulations, a licensee generally may own up to two broadcast television stations in the same DMA, as long as at least one of the stations is not among the top four-ranked stations in the market based on audience share and there are at least eight independently owned and operating full-power broadcast television stations in the market. Without regard to the number of remaining independently owned television stations, ownership of more than one television station within the same DMA is permitted so long as certain signal contours of the stations involved do not overlap.

National Television Ownership

The Communications Act and FCC regulations limit the number of broadcast television stations one entity may own or control nationally. No entity may have an attributable interest in broadcast television stations that reach, in the aggregate, more than 39% of all U.S. television households. Our owned television station reach does not exceed this limit. The FCC is considering eliminating a rule that currently affords UHF stations (channels 14 and above) a 50% discount in calculating the extent of an individual station owner’s holdings under the national cap, which if adopted, would place us closer to the national cap and limit our flexibility to acquire stations in the future.

Foreign Ownership

The Communications Act generally limits foreign ownership in a broadcast station to 20% direct ownership and 25% indirect ownership, although the limit on indirect ownership can be waived if the FCC finds it to be in the public interest. For many decades the FCC declined to waive the 25% indirect limit in broadcast transactions, but since 2013, it has been willing to consider such waiver requests.


Comcast 2015 Annual Report on Form 10-K		20

Dual Network Rule

The four major broadcast television networks – ABC, CBS, Fox and NBC – are prohibited from being under common ownership or control with another of the four.

Must-Carry/Retransmission Consent

Every three years, each commercial television station must elect for each cable system in its DMA either must-carry or retransmission consent. A similar regulatory scheme applies to satellite providers. For the current period, which ends on December 31, 2017, all of our owned NBC broadcast television stations and our owned Telemundo broadcast television stations elected retransmission consent.

In enacting the STELA Reauthorization Act of 2014, Congress modified certain aspects of the compulsory copyright licenses under which satellite providers and cable operators retransmit broadcast stations. As directed by this legislation, the FCC is reviewing aspects of the requirement that commercial television stations and multichannel video providers negotiate retransmission consent agreements in good faith. Congress also is considering legislation that would eliminate or modify the must-carry and retransmission consent regime. Under conditions imposed in the NBCUniversal Order, multichannel video providers may invoke commercial arbitration to resolve disputes regarding carriage of our owned local broadcast television stations.

Internet Distribution

The NBCUniversal Order and NBCUniversal Consent Decree establish certain obligations and restraints concerning distribution of our content online. We must make available certain of our cable network, broadcast television and filmed entertainment programming to bona fide online video distributors in certain circumstances, and they may invoke commercial arbitration to resolve disputes over access to such programming. We also must distribute programming via nbc.com that is generally equivalent to the programming that we distributed via nbc.com as of January 1, 2011, on generally equivalent price, terms and conditions, so long as at least one of the other major broadcast networks continues to distribute its programming in a similar fashion. We are one of three broadcast network owners of Hulu, but we have no voting rights or board representation. We have entered into renewal license agreements with Hulu on substantially the same terms as its other broadcast network owners.

Online Video Distributors

The FCC is considering classifying certain online video distributors that offer multiple linear video programming networks to customers with a broadband Internet connection as multichannel video providers under FCC rules to ensure that OVDs have program access rights to video programming from vertically integrated cable programmers and the right to force local television broadcast stations to negotiate to license their content. The FCC also has proposed potentially excusing these entities from all or some of the regulatory obligations applicable to current multichannel video providers. If adopted, these proposals would increase our program access obligations and raise complicated issues regarding the licensing of our broadcast programming.

Indecency

A federal statute and FCC regulations prohibit the broadcast of obscene material on television stations at any time and indecent or profane material between the hours of 6 a.m. and 10 p.m. From time to time, we have received and may receive in the future letters of inquiry from the FCC prompted by complaints alleging that certain programming on our owned local broadcast television stations included indecent or profane material.

Filmed Entertainment

Our filmed entertainment business is subject to “trade practice laws” in effect in 25 states and Puerto Rico relating to theatrical distribution of motion pictures. In countries outside the United States, a variety of existing or contemplated laws and regulations may affect our ability to distribute and license motion picture and


		21		Comcast 2015 Annual Report on Form 10-K

television products, as well as consumer merchandise products. The ability of countries to deny market access or refuse national treatment to products originating outside their territories is regulated under various international agreements.

Theme Parks

Our theme parks are subject to various regulations, including laws and regulations regarding environmental protection, privacy and data protection, consumer product safety and theme park operations, such as health, sanitation, safety and fire standards, as well as liquor licenses.

Other Areas of Regulation

Intellectual Property

Copyright, trademark, unfair competition, patent, trade secret and other proprietary rights laws of the United States and other countries help protect our intellectual property rights. In particular, piracy of programming and films through unauthorized distribution of counterfeit DVDs, peer-to-peer file sharing and other platforms presents challenges for our cable networks, broadcast television and filmed entertainment businesses. The unauthorized reproduction, distribution or display of copyrighted material over the Internet or through other methods of distribution, such as through devices, software or websites that allow the reproduction, viewing, sharing and/or downloading of content by either ignoring or interfering with the content’s security features and copyrighted status, interferes with the market for copyrighted works and disrupts our ability to exploit our content. The extent of copyright protection and the use of technological protections, such as encryption, are controversial. Modifications to existing laws that weaken these protections could have an adverse effect on our ability to license and sell our programming.

While many legal protections exist to combat piracy, laws in the United States and internationally continue to evolve, as do technologies used to evade these laws. We have actively engaged in the enforcement of our intellectual property rights and likely will continue to expend substantial resources to protect our content. The repeal of laws intended to combat piracy and protect intellectual property or weakening of such laws or enforcement in the United States or internationally, or a failure of existing laws to adapt to new technologies, could make it more difficult for us to adequately protect our intellectual property rights, which could negatively impact their value and further increase the costs of enforcing our rights.

Copyright laws also require that we contribute a percentage of revenue to a federal copyright royalty pool in exchange for retransmitting copyrighted material in broadcast signals pursuant to a compulsory license and that we pay standard industry licensing fees for the public performance of music in the programs we distribute, such as local advertising and local origination programming on our cable systems, as well as in the content we create. The fees we pay to music performance rights organizations are typically renegotiated when we renew licenses with those organizations, while the royalties we contribute to the copyright royalty pool for broadcast signals can be challenged by copyright owners in annual audits, and we cannot predict what those fees will be in the future or if disputes will arise over them.

There has been litigation related to a number of online entities that stream our broadcast television content online without the consent of, or compensation to, NBC or its affiliates. In 2014, the U.S. Supreme Court ruled that one such entity, Aereo, violated the broadcasters’ exclusive right to perform their copyrighted works publicly. Subsequently, Aereo sought to operate as a cable system under the Copyright Act. Although the U.S. Copyright Office rejected its application for a compulsory copyright license, other companies continue to seek legislation or court rulings to obtain a compulsory license to stream broadcast programming online. Along with other major broadcasters, we also have brought a suit against a multichannel video provider to challenge the commercial-skipping functionality in its DVR. In addition, the FCC is considering whether to classify certain OVDs as multichannel video providers, giving them the right to negotiate for


Comcast 2015 Annual Report on Form 10-K		22

retransmission consent with local broadcast television stations, and subjecting such negotiations to the good-faith requirements under the FCC’s rules. Any such reclassification could influence the U.S. Copyright Office to extend the compulsory license to OVDs.

Privacy and Data Security Regulation

The Communications Act generally restricts the nonconsensual collection and disclosure to third parties of cable customers’ personally identifiable information by cable operators, except for rendering service, conducting legitimate business activities related to the service, and responding to legal requests. We are also subject to various state and federal regulations that provide privacy protections for customer proprietary network information (“CPNI”) related to our voice services. The FCC expects broadband Internet access service providers such as us to take reasonable, good faith steps to comply with existing statutory requirements to protect broadband CPNI and plans to propose new privacy and data security rules for broadband ISPs in 2016. The FCC has recently imposed substantial civil penalties and remediation obligations on several companies for alleged privacy and data security violations. In 2015, Comcast entered into a settlement with a California regulatory commission regarding Comcast’s inadvertent disclosure of customer telephone numbers for which customers had requested non-published or non-listed status.

The FTC exercises authority over privacy protections generally, using its existing authority over unfair and deceptive acts or practices to apply greater restrictions on the collection and use of personally identifiable and other information relating to consumers. It also has undertaken numerous enforcement actions against parties that do not provide sufficient security protections against the loss or unauthorized disclosure of this type of information. We also are subject to stringent data security and data retention requirements on website operators and online services that are directed to children under 13 years of age, or that knowingly collect or post personal information from children under 13 years of age. Other privacy-oriented laws have been extended by courts to online video providers and are increasingly being used in privacy lawsuits, including class actions, against providers of video materials online.

We are also subject to state and federal “do not call” laws regarding telemarketing and state and federal laws regarding unsolicited commercial emails, as well as FCC regulations relating to automated telemarketing calls, texts or SMS messages. The FTC and state attorneys general also have initiated efforts to increase and enforce transparency requirements about the collection and use of consumer information, even in an aggregated, non-customer-identifiable form, which may require ongoing review of new and rapidly evolving technologies and methods for delivering content and advertising to ensure that appropriate notice is given to consumers and consent is obtained where required.

We are also subject to state and federal laws and regulations regarding data security that primarily apply to sensitive personal information that could be used to commit identity theft. Most states have security breach notification laws that generally require a business to give notice to consumers and government agencies when certain information has been disclosed due to a security breach, and the FCC has adopted security breach rules for voice services. Several states have also enacted general data security requirements to safeguard consumer information, including the proper disposal of consumer information.

The National Institute of Standards and Technology, in cooperation with other federal agencies and owners and operators of U.S. critical infrastructure, including us, have developed a voluntary framework that provides a prioritized, flexible, repeatable, performance-based and cost-effective approach to cybersecurity risk. It is a compendium of existing cross-sector cyber-defense processes, practices and protocols that can help companies identify, assess and manage their cyber risks and vulnerabilities, and several government agencies have encouraged compliance with this framework. Additionally, in December 2015, Congress enacted the Cybersecurity Act of 2015, which is intended to encourage and facilitate the sharing of security threat and defensive measure information with government agencies and other companies, in order to strengthen the


		23		Comcast 2015 Annual Report on Form 10-K

country’s overall cybersecurity protections. Finally, there are pending legislative proposals that could impose new requirements on owners and operators of critical infrastructure, including us, and the FCC is considering expanding its cybersecurity guidelines or adopting new cybersecurity requirements.

FCC Spectrum Auction

Congress has authorized the FCC to conduct an auction to repurpose some broadcast spectrum to mobile broadband use. In this auction, licensees of full-power and Class A television stations have the opportunity to sell some or all of their spectrum rights in exchange for cash. TV stations that do not voluntarily sell their spectrum rights may be assigned new channels on which to operate, but the FCC must make “all reasonable efforts” to preserve those stations’ over-the-air coverage areas and populations served, and to reimburse them for reasonable relocation costs (subject to an aggregate limit of $1.75 billion).

NBCUniversal has submitted applications with the FCC indicating its potential interest in selling broadcast spectrum rights. Potential bidders for the repurposed mobile broadband spectrum licenses must file their applications with the FCC by February 10, 2016. We expect to submit an application to be a potential buyer of those new licenses. Bidding in the auction is expected to begin in the second quarter of 2016. Filing an application in the auction does not create any obligation to sell, bid on, or buy spectrum. We cannot predict whether NBCUniversal will sell any of its broadcast spectrum rights, whether we will bid for or buy any of the new mobile broadband licenses, or what the size of any proceeds or costs may be (although any such amounts may be significant).

State and Local Taxes

Some states and localities have imposed or are considering imposing, through both legislative and administrative channels, new or additional taxes or fees on, or limiting or eliminating incentives or credits earned or monetized by, the businesses operated by the Cable Communications and NBCUniversal segments, or imposing adverse methodologies by which taxes, fees, incentives or credits are earned or monetized. These include combined reporting or other changes to general business taxes, central assessments for property tax, and taxes and fees on the businesses operated or services provided by the Cable Communications and NBCUniversal segments. In some situations, DBS and other competitors that deliver their services over a high-speed Internet connection do not face similar state tax and fee burdens. Congress has also considered, and may consider again, proposals to bar or limit states from imposing taxes on these DBS providers or other competitors that are equivalent to the taxes or fees that we pay. Congress may not extend the Internet Tax Freedom Act, which prohibits most states and localities from imposing taxes on Internet access charges, but expires in October 2016. Additionally, the FCC’s reclassification of broadband Internet access services as Title II telecommunications services may cause or allow, directly or indirectly, some states and localities to impose additional taxes and fees on our high-speed Internet business.

Environmental Matters

Certain of our business operations are subject to environmental laws and regulations since they involve air emissions, wastewater discharges and the use, disposal and cleanup of toxic and hazardous substances. Any failure to comply with environmental requirements could result in monetary fines, civil or criminal sanctions, third-party claims or other costs or liabilities. As disclosed in Item 3, “Legal Proceedings,” we recently settled a matter relating to certain of our waste disposal policies, procedures and practices in California.

Environmental requirements have become more stringent over time, and pending or proposed new regulations could impact our operations or costs. For example, climate change regulation, such as proposed greenhouse gas emissions limits or cap and trade programs, could result in an increase in the cost of electricity, which is a significant component of our operational costs at some locations.


Comcast 2015 Annual Report on Form 10-K		24

Other Regulations

Federal regulators actively regulate other aspects of our businesses, including accessibility to our cable, broadcast and voice services for people with disabilities, customer service standards, inside wiring, leased access, loudness of commercial advertisements, advertising, Emergency Alert System, equal employment opportunity, lottery programming, recordkeeping and public file access requirements, regulatory fees and technical standards relating to the operation of cable systems and television stations. We are occasionally subject to enforcement actions at the FCC, which can result in us having to pay fines to the agency or being subject to other sanctions. We also are subject to various international regulations, including those with respect to television broadcasting, programming and advertising.

Employees

As of December 31, 2015, we had approximately 153,000 full-time and part-time employees. Of these employees, approximately 88,000 and 53,000 were associated with our cable communications business and our NBCUniversal businesses, respectively. We also use freelance and temporary employees in the normal course of our business.

Caution Concerning Forward-Looking Statements

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. In this Annual Report on Form 10-K, 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 these words, and other comparable words. You should be aware that these statements are only our predictions. In evaluating these statements, you should consider various factors, including the risks and uncertainties listed in “Risk Factors” and in other reports we file with the SEC.

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, particularly in view of new technologies, the ability to develop and protect intellectual property rights. Our actual results could differ materially from our forward-looking statements as a result of any of such factors, which could adversely affect our businesses, results of operations or financial condition. We undertake no obligation to update any forward-looking statements.

Item 1A: Risk Factors

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.

All of our businesses operate in intensely competitive, consumer-driven and rapidly changing environments and compete with a growing number of companies that provide a broad range of communications products and services and entertainment, news and information content to consumers. Technological changes are further intensifying and complicating the competitive landscape and influencing consumer behavior, which is discussed in the risk factor immediately below in “Changes in consumer behavior driven by alternative methods for viewing content may adversely affect our businesses and challenge existing business models.”


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Competition for the cable services we offer consists primarily of companies that typically offer features, pricing and packaging for services comparable to our video, high-speed Internet and voice services, such as DBS providers and phone companies with fiber-based networks. In 2015, AT&T, our largest phone company competitor, acquired DirecTV, the nation’s largest DBS provider, which created an even larger competitor.

Wireless Internet services, such as 4G wireless broadband services and Wi-Fi networks, and devices such as wireless data cards, tablets and smartphones, and mobile wireless routers that connect to such devices, may compete with our high-speed Internet services. Our voice services continue to face increased competition from wireless and Internet-based phone services as more consumers choose to replace their traditional wireline phone service with these phone services.

There also continue to be new entrants, some with significant financial resources, that potentially may compete with our cable services. In particular, Google, which has launched high-speed Internet and video services in a limited number of areas, has announced plans to expand in more areas, including in some of our significant markets. As Google expands to more areas, we expect it to become a meaningful wireline competitor to our high-speed Internet and video services. In addition, some local municipalities are launching their own fiber-based high-speed Internet services. Companies that provide subscription video on demand services over the Internet or the ability to download video programming continue to gain consumer acceptance. There can be no assurance that these or other newer entrants will not continue to launch similar services.

Our cable communications business continues to seek ways enhance the value of our cable services network, such as by growing our high-speed Internet and business services businesses and by launching additional services, such as our home security and automation services. There can be no assurance that we can execute on these and other initiatives in a manner sufficient to grow or maintain our Cable Communications segment revenue, maintain our Cable Communications segment operating margin, or to compete successfully in the future.

In addition, some of our phone company competitors have their own wireless facilities and may expand their service offerings to include bundled wireless offerings. Because we do not have our own wireless facilities, our inability to provide a competitive wireless product as part of our bundled cable services offering could have an adverse effect on our competitive position, business and results of operations.

Each of NBCUniversal’s businesses also faces substantial and increasing competition from providers of similar types of content, as well as from other forms of entertainment and recreational activities. NBCUniversal must compete to obtain talent, programming and other resources required in operating these businesses.

All of our businesses’ ability to compete effectively depends on our perceived image and reputation among our various constituencies, including our customers, consumers, advertisers, investors and government authorities. Our ability to compete may be negatively affected if we do not provide our customers with a satisfactory customer experience. There can be no assurance that we will be able to compete effectively against existing or new competitors or that competition will not have an adverse effect on our businesses. For a more detailed description of the competition facing our businesses, see Item 1: Business and refer to the “Competition” discussion within that section.

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

Alternative products and services for the distribution, sale and viewing of content have been, and will likely continue to be, developed that further increase the number of competitors that all our businesses face and challenge existing business models. These products and services are also driving changes in consumer behavior as consumers seek more control over when, where and how they consume content and access communications services.


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While our cable communications business is attempting to adapt to changing consumer behaviors, for example, by deploying our X1 platform and Cloud DVR technology, products and services have emerged that compete with our video services, including those that offer subscription video on demand services or the ability to download content that can be viewed on television sets, computers, smartphones and tablets. Some of these products and services charge no fee or a lower fee than our traditional video packages for access to their content, which adversely affects demand for our video services, including for expanded digital video packages, premium networks, and our DVR and On Demand services.

The increased availability of these products and services, including some that also offer high-quality original video programming that is exclusive to that service, have contributed to an increased number of entertainment choices available to consumers, which intensifies audience fragmentation. Additionally, the increased availability of DVRs and cloud-based recording services and video on demand services reduces the viewing of content through traditional linear television distribution outlets. Reduced viewing of our content through traditional linear television distribution outlets has caused and will likely continue to cause audience ratings declines for NBCUniversal’s linear television content and may adversely affect the price and amount of advertising that advertisers are willing to purchase from us and the amount NBCUniversal receives for distribution of its content.

Additionally, several companies now offer smaller packages of channels directly to customers over the Internet at price points lower than our standard packages, which could adversely affect demand for our video services and reduce the subscription revenue that our cable networks or broadcast television businesses receive from multichannel video providers. These smaller packages could also cause our cable communications business to offer more customized programming packages that may be less profitable.

The success of any of these ongoing and future developments or our failure to effectively anticipate or adapt to emerging competitors or changes in consumer behavior, including among younger consumers, could have an adverse effect on our competitive position, businesses and results of operations.

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

Our cable communications, cable networks and broadcast television businesses compete for the sale of advertising time with other television networks and stations, as well as with all other advertising platforms, such as radio, print and, increasingly, digital media. We derive substantial revenue from the sale of advertising, and a decline in expenditures by advertisers, including through traditional linear television distribution models, could negatively impact our results of operations. Declines can be caused by the economic prospects of specific advertisers or industries, increased competition for the leisure time of audiences and audience fragmentation, by the growing use of new technologies, or the economy in general. In addition, advertisers’ willingness to purchase advertising from us may be adversely affected by lower audience ratings, which some of our networks have experienced and likely will continue to experience. Advertising sales and rates also are dependent on audience measurement methodologies and could be negatively affected if methodologies do not accurately reflect actual viewership levels. For example, certain methods of viewing content, such as delayed viewing on DVRs or viewing content online, might not be counted in audience measurements or may generate less, if any, revenue than traditional distribution methods, which could have an adverse effect on our advertising revenue. Reductions in advertisers’ expenditures could adversely affect our revenue and businesses.

Our businesses depend on keeping pace with technological developments.

Our success is, to a large extent, dependent on our ability to acquire, develop, adopt and leverage new and existing technologies, and our competitors’ use of certain types of technology and equipment may provide


		27		Comcast 2015 Annual Report on Form 10-K

them with a competitive advantage. For example, some companies and municipalities are building advanced fiber-based networks that provide very fast Internet access speeds, and wireless Internet technologies continue to evolve rapidly to allow for greater speed and reliability. We expect other advances in communications technology to occur in the future. If we choose technology or equipment that is not as effective or attractive to consumers as that employed by our competitors, if we fail to employ technologies desired by consumers before our competitors do so, or if we fail to execute effectively on our technology initiatives, our businesses and results of operations could be adversely affected. We also will continue to incur additional costs as we execute our technology initiatives, such as the deployment of DOCSIS 3.1, X1 set-top boxes, wireless gateways and Cloud DVR technology, and there can be no assurance that we can execute on these and other initiatives in a manner sufficient to grow or maintain our revenue or to compete successfully in the future. We also may incur increased costs if changes in the products and services that our competitors offer require that we offer certain of our existing services or enhancements at a lower or no cost to our customers or that we make additional research and development expenditures.

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

Federal, state and local governments extensively regulate the video and voice services industry, and more recently, Internet services. We expect that legislative enactments, court actions and regulatory proceedings will continue to clarify, and in some cases may adversely affect, the rights and obligations of cable operators and other entities under the Communications Act and other laws. Our broadcast television business is also highly regulated by federal laws and regulations. Our cable networks, filmed entertainment and theme parks businesses are also subject to various other laws and regulations at the international, federal, state and local levels, including laws and regulations relating to environmental protection, which have become more stringent over time, and the safety of consumer products and theme park operations. In addition, we are subject to the NBCUniversal Order and the NBCUniversal Consent Decree, which have imposed numerous conditions on our businesses relating to the treatment of competitors and other matters. Failure to comply with the laws and regulations applicable to our businesses could result in administrative enforcement actions, fines, and civil and criminal liability. For a more extensive discussion of the significant risks associated with the regulation of our businesses, see Item 1, Business and refer to the “Legislation and Regulation” discussion within that section.

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

Legislators and regulators at all levels of government frequently consider changing, and sometimes do change, existing statutes, rules, regulations, or interpretations thereof, or prescribe new ones, which may significantly affect our businesses. In addition, the FCC and certain states are becoming more active in considering rulemakings and legislation, as well as in conducting inquiries and reviews, regarding our services. Any future legislative, judicial, regulatory or administrative actions may increase our costs or impose additional restrictions on our businesses, some of which may be significant. For example, as more fully discussed in Item 1, Business – “Legislation and Regulation,” in 2015, the FCC adopted new open Internet regulations that reclassify broadband Internet access service as a “telecommunications service,” making it subject to certain common carriage regulations under Title II of the Communications Act. This change could have a material adverse effect on our business and results of operations. In addition, in 2015, the FCC adopted an order that preempted certain state laws that had restricted municipalities from operating municipally owned broadband networks. The FCC is also considering the appropriate regulatory framework for VoIP service, including whether that service should be regulated under Title II. Accordingly, the legal and regulatory environment applicable to our businesses continues to intensify. Any changes to the legal and regulatory framework applicable to any of our services or businesses could have a negative impact on our businesses and results of operations.


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

We expect programming expenses for our video services to continue to be our Cable Communications segment’s largest single expense item and to increase in the foreseeable future. The multichannel video provider industry has experienced continued increases in the cost of programming, especially sports programming, which we expect will continue for the foreseeable future. Our programming expenses may also increase as we add programming to our video services or distribute existing programming to more of our customers or through additional delivery platforms, such as On Demand or streaming services. Additionally, in the past few years, we have begun paying certain local broadcast television stations in exchange for their required consent for the retransmission of broadcast network programming to our video services customers; we expect to continue to be subject to increasing demands for payment and other concessions from local broadcast television stations. These market factors may be exacerbated by increased consolidation in the media industry, which may further increase our programming expenses. If we are unable to raise our customers’ rates or offset programming cost increases through the sale of additional services, the increasing cost of programming could have an adverse effect on our Cable Communications segment’s results of operations. Moreover, as our contracts with content providers expire, there can be no assurance that they will be renewed on acceptable terms or that they will be renewed at all, in which case we may be unable to provide such content as part of our video services, and our businesses and results of operations could be adversely affected.

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

Most of NBCUniversal’s businesses create and acquire media and entertainment content, the success of which depends substantially on consumer tastes and preferences that change in often unpredictable ways. The success of these businesses depends on our ability to consistently create, acquire, market and distribute cable network and broadcast television programming, filmed entertainment, theme park attractions and other content that meet the changing preferences of the broad domestic and international consumer market. We have invested, and will continue to invest, substantial amounts in our content, including in the production of original content on our cable networks and broadcast television networks, in our films and for theme park attractions, before learning the extent to which it would earn consumer acceptance.

We also obtain a significant portion of our content from third parties, such as movie studios, television production companies, sports organizations and other suppliers. Competition for popular content, particularly for sports programming, is intense, and we may have to increase the price we are willing to pay or be outbid by our competitors for popular content. Entering into or renewing contracts for such programming rights or acquiring additional rights may result in significantly increased costs. Particularly with respect to long-term contracts for sports programming rights, our results of operations and cash flows over the term of a contract depend on a number of factors, including the strength of the advertising market, our audience size, and the ability to secure distribution from and impose surcharges or obtain carriage on, multichannel video providers for the content and the timing and amount of our rights payments. There can be no assurance that revenue from these contracts will exceed our costs for the rights, as well as the other costs of producing and distributing the programming. If our content does not achieve sufficient consumer acceptance, or if we cannot obtain or retain rights to popular content on acceptable terms, or at all, our businesses may be adversely affected.

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

Our cable networks depend on their ability to secure and maintain distribution agreements with multichannel video providers. Our broadcast television networks depend on their ability to secure and maintain network affiliation agreements with third-party local broadcast television stations in the markets where we do not own the affiliated local broadcast television station. In addition, every three years, each of our owned local broadcast television stations must elect, with respect to its retransmission by multichannel video providers within its


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DMA, either “must-carry” status, in which the distributor’s carriage of the station is mandatory and does not generate any compensation for the local station, or “retransmission consent,” in which the station gives up its right to mandatory carriage and instead seeks to negotiate the terms and conditions of carriage with the distributor, including the amount of compensation, if any, paid to the station by such distributor. All of our NBC and Telemundo owned local broadcast television stations have elected retransmission consent through December 31, 2017. Increasingly, our cable networks, broadcast television and filmed entertainment businesses have entered into agreements to license their prior season and library content on other distribution platforms, including subscription video on demand services, and some multichannel video providers are offering smaller packages of channels as part of their streaming and linear television programming packages. In addition, certain online entities may stream our broadcast television content online without our consent and without paying any compensation to us. As a result, there can be no assurance that any of our distribution agreements will be renewed in the future on acceptable terms, or at all. The loss of any of these agreements, or the renewal of these agreements on less favorable terms, could reduce our distribution revenue and the reach of our television programming and its attractiveness to advertisers, which in turn could adversely affect our cable networks, broadcast television and filmed entertainment businesses.

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

Network and information systems and other technologies, including those related to our network management, customer service operations and programming delivery, are critical to our business activities. Network and information systems-related events, including those caused by us or by third parties, such as computer hackings, cyber attacks, computer viruses, worms or other destructive or disruptive software, process breakdowns, denial of service attacks, malicious social engineering or other malicious activities, or any combination of the foregoing, or power outages, natural disasters, terrorist attacks or other similar events, could result in a degradation or disruption of our services, excessive call volume to call centers or damage to our equipment, data and properties. These events also could result in large expenditures to repair or replace the damaged properties, networks or information systems or to protect them from similar events in the future, and any such events could have an adverse effect on our results of operations.

In addition, we may obtain certain confidential, proprietary and personal information about our customers, personnel and vendors, and may provide this information to third parties, in connection with our business. While we obtain assurances that these third parties will protect this information, there is a risk that this information may be compromised. Any security breaches, such as misappropriation, misuse, leakage, falsification or accidental release or loss of information maintained in our information technology systems, including customer, personnel and vendor data, could damage our reputation and require us to expend significant capital and other resources to remedy any such security breach, and could cause regulators to impose fines or other remedies for failure to comply with relevant customer privacy rules.

The risk of these systems-related events and security breaches occurring continues to intensify in many lines of business, and our lines of business may be at a disproportionately heightened risk of these events occurring, due to the nature of our businesses and the fact that we maintain certain information necessary to conduct our business in digital form stored on cloud servers. In the ordinary course of our business, there are frequent attempts to cause such systems-related events and security breaches, and we have experienced a few minor systems-related events that, to date, have not resulted in any significant degradation or disruption to our network or information systems or our services or operations. While we develop and maintain systems, and operate a comprehensive security program, seeking to prevent systems-related events and security breaches from occurring, the development, maintenance and operation of these systems and programs is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite any efforts to prevent these events and security breaches,


Comcast 2015 Annual Report on Form 10-K		30

there can be no assurance that they will not occur in the future or will not have an adverse effect on our businesses. Moreover, the amount and scope of insurance we maintain against losses resulting from any such events or security breaches likely would not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our business that may result, and the occurrence of any such events or security breaches could have an adverse effect on our business.

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

We depend on third-party vendors to supply us with a significant amount of the hardware, software and operational support necessary to provide certain of our services. Some of these vendors represent our primary source of supply or grant us the right to incorporate their intellectual property into some of our hardware and software products. While we actively monitor the operations and financial condition of key vendors in an attempt to detect any potential difficulties, there can be no assurance that we would timely identify any operating or financial difficulties associated with these vendors or that we could effectively mitigate our risks with respect to any such difficulties. If any of these vendors experience operating or financial difficulties, if our demand exceeds their capacity or if they are otherwise unable to meet our specifications or provide the equipment or services we need in a timely manner or at reasonable prices, our ability to provide some services may be adversely affected.

Weak economic conditions may have a negative impact on our businesses.

A substantial portion of our revenue comes from customers whose spending patterns may be affected by prevailing economic conditions. Weak economic conditions could adversely affect demand for any of our products and services and have a negative impact on our results of operations. For example, customers may reduce the level of cable services to which they subscribe, or may discontinue subscribing to one or more of our cable services. This risk may be increased by the expanded availability of free or lower cost competitive services, such as subscription video on demand services, or substitute services for our high-speed Internet and voice services, such as mobile phones, smartphones and Wi-Fi networks. Weak economic conditions also may have a negative impact on our advertising revenue, the performance of our films and home entertainment releases, and attendance and spending in our theme parks business. Weak economic conditions and turmoil in the global financial markets may also impair the ability of third parties to satisfy their obligations to us, and any disruption in the global financial markets may affect our ability to obtain financing, including refinancing any existing debt, on acceptable terms.

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

We rely on our intellectual property, such as patents, copyrights, trademarks and trade secrets, as well as licenses and other agreements with our vendors and other third parties, to use various technologies, conduct our operations and sell our products and services. Legal challenges to our intellectual property rights and claims of intellectual property infringement by third parties could require that we enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from further use of the intellectual property in question or from the continuation of our businesses as currently conducted. We may need to change our business practices if any of these events occur, which may limit our ability to compete effectively and could have an adverse effect on our results of operations. Even if we believe any such challenges or claims are without merit, they can be time-consuming and costly to defend and divert management’s attention and resources away from our businesses. Moreover, if we are unable to obtain or continue to obtain licenses from our vendors and other third parties on reasonable terms, our businesses could be adversely affected.

In addition, intellectual property constitutes a significant part of the value of NBCUniversal’s businesses, and its success is highly dependent on protecting intellectual property rights in the content it creates or acquires against third-party misappropriation, reproduction or infringement. The unauthorized reproduction, dis-


		31		Comcast 2015 Annual Report on Form 10-K

tribution or display of copyrighted material negatively affects our ability to generate revenue from the legitimate sale of our content, as well as from the sale of advertising in connection with our content, and increases our costs due to our active enforcement of our intellectual property rights. For example, NBCUniversal has brought a suit against a multichannel video provider to challenge the commercial-skipping functionality in its DVR. Additionally, legislation has been proposed in the U.S. Congress that seems intended to legitimize the unauthorized online streaming of local broadcast content. We cannot predict whether such legislation will be enacted or how any such legislation would ultimately affect our businesses.

Piracy and other unauthorized uses of content are made easier, and the enforcement of intellectual property rights more challenging, by technological advances allowing the conversion of programming, films and other content into digital formats, which facilitates the creation, transmission and sharing of high-quality unauthorized copies. In particular, piracy of programming and films through unauthorized distribution on DVDs, peer-to-peer computer networks and other platforms continues to present challenges for our cable networks, broadcast television and filmed entertainment businesses. While piracy is a challenge in the United States, it is particularly prevalent in many parts of the world that lack developed copyright laws, effective enforcement of copyright laws and technical protective measures like those in effect in the United States. If any U.S. or international laws intended to combat piracy and protect intellectual property rights are repealed or weakened or are not adequately enforced, or if the legal system fails to adapt to new technologies that facilitate piracy, we may be unable to effectively protect our rights, and the value of our intellectual property may be negatively impacted and our costs of enforcing our rights may increase. See Item 1, Business and refer to the “Legislation and Regulation — Other Areas of Regulation — Intellectual Property” discussion for additional information.

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

From time to time, we make acquisitions and investments and may pursue other strategic initiatives, including, for example, with respect to a wireless strategy. In connection with such acquisitions and strategic initiatives, we may incur unanticipated expenses, fail to realize anticipated benefits, have difficulty incorporating an acquired or new line of business, disrupt relationships with current and new employees, customers and vendors, incur significant debt, or have to delay or not proceed with announced transactions or initiatives. Additionally, regulatory agencies, such as the FCC or DOJ, may impose restrictions on the operation of our businesses as a result of our seeking regulatory approvals for any significant acquisitions and strategic initiatives. The occurrence of any of these events could have an adverse effect on our businesses.

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

Many of NBCUniversal’s employees, including writers, directors, actors, technical and production personnel and others, as well as some of our on-air and creative talent and cable communications’ employees, are covered by collective bargaining agreements or works councils. Most of NBCUniversal’s collective bargaining agreements are industry-wide agreements, and we may lack practical control over the negotiations and terms of the agreements. If we are unable to reach agreement with a labor union before the expiration of a collective bargaining agreement, our employees who were covered by that agreement may have a right to strike or take other actions that could adversely affect us, which could disrupt our operations and reduce our revenue, and the resolution of any disputes may increase our costs. There can be no assurance that we will renew our collective bargaining agreements as they expire or that we can renew them on favorable terms or without any work stoppages.

In addition, our cable networks and broadcast television networks have programming rights agreements of varying scope and duration with various sports organizations to broadcast and produce sporting events, including certain NFL, NHL, NBA and MLB games. Labor disputes in these and other sports organizations could have an adverse effect on our businesses.


Comcast 2015 Annual Report on Form 10-K		32

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

We rely on certain key management personnel in the operation of our businesses. While we maintain long-term and emergency transition plans for key management personnel and believe we could either identify internal candidates or attract outside candidates to fill any vacancy created by the loss of any key management personnel, the loss of one or more of our key management personnel could have a negative impact on our businesses. In addition, our cable networks, broadcast television and filmed entertainment businesses depend on the abilities and expertise of our on-air and creative talent. If we fail to retain our on-air or creative talent, if the costs to retain such talent increase materially, if we need to make significant termination payments, or if these individuals lose their current appeal, our businesses could be adversely affected.

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

We, primarily through NBCUniversal, operate our businesses worldwide. There are risks inherent in doing business internationally, including global financial market turmoil, economic volatility and the global economic slowdown, currency exchange rate fluctuations and inflationary pressures, the requirements of local laws and customs relating to the publication and distribution of content and the display and sale of advertising, import or export restrictions and changes in trade regulations, difficulties in developing, staffing and managing foreign operations, issues related to occupational safety and adherence to diverse local labor laws and regulations, and potentially adverse tax developments. In addition, doing business internationally is subject to risks relating to political or social unrest, corruption and government regulation, including U.S. laws such as the Foreign Corrupt Practices Act, that impose stringent requirements on how we conduct our foreign operations. If any of these events occur, our businesses may be adversely affected.

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.

Our Class B common stock has a nondilutable 33¹/₃% of the combined voting power of our Class A and Class B common stock. This nondilutable voting power is subject to proportional decrease to the extent the number of shares of Class B common stock is reduced below 9,444,375, which was the number of shares of Class B common stock outstanding on the date of our 2002 acquisition of AT&T Corp.’s cable business, subject to adjustment in specified situations. Stock dividends payable on the Class B common stock in the form of Class B or Class A common stock do not decrease the nondilutable voting power of the Class B common stock. The Class B common stock also has separate approval rights over several potentially material transactions, even if they are approved by our Board of Directors or by our other shareholders and even if they might be in the best interests of our other shareholders. These potentially material transactions include mergers or consolidations involving Comcast Corporation, transactions (such as a sale of all or substantially all of our assets) or issuances of securities that require shareholder approval, transactions that result in any person or group owning shares representing more than 10% of the combined voting power of the resulting or surviving corporation, issuances of Class B common stock or securities exercisable or convertible into Class B common stock, and amendments to our articles of incorporation or by-laws that would limit the rights of holders of our Class B common stock. Brian L. Roberts, our chairman and CEO, beneficially owns all of the outstanding shares of our Class B common stock and, accordingly, has considerable influence over our company and the potential ability to transfer effective control by selling the Class B common stock, which could be at a premium.


		33		Comcast 2015 Annual Report on Form 10-K

Item 1B: Unresolved Staff Comments

None.

Item 2: Properties

We believe that substantially all of our physical assets were in good operating condition as of December 31, 2015. Our corporate headquarters and Cable Communications segment headquarters are located in Philadelphia, Pennsylvania at One Comcast Center. We own an 80% interest in the entity whose primary asset is One Comcast Center. We also lease locations for numerous business offices, warehouses and properties housing divisional information technology operations throughout the United States.

Cable Communications Segment

Our principal physical assets consist of operating plant and equipment, including signal receiving, encoding and decoding devices, headends and distribution networks, and equipment at or near our customers’ homes. Our distribution network consists primarily of headends, content distribution servers, coaxial and fiber-optic cables, lasers, routers, switches and related electronic equipment. Our cable plant and related equipment generally are connected to utility poles under pole rental agreements with local public utilities, although in some areas the distribution cable is buried in underground ducts or trenches. Customer premise equipment consists primarily of set-top boxes, cable modems and wireless gateways. The physical components of cable systems require periodic maintenance and replacement.

Our signal reception sites, which consist primarily of antenna towers and headends, and our microwave facilities are located on owned and leased parcels of land, and we own or lease space on the towers on which certain of our equipment is located. We own most of our service vehicles.

Our high-speed Internet network consists of fiber-optic cables owned or leased by us and related equipment. We also operate regional data centers with equipment that is used to provide services (such as email, news and web services) to our high-speed Internet and voice customers. In addition, we maintain two network operations centers with equipment necessary to monitor and manage the status of our high-speed Internet network.

We own or lease buildings throughout the country that contain customer service call centers, customer service centers, warehouses and administrative space. We also own a building that houses our digital media center. The digital media center contains equipment that we own or lease, including equipment related to network origination, video transmission via satellite and terrestrial fiber-optics, broadcast studios, post-production services and interactive television services.

NBCUniversal Segments

NBCUniversal’s corporate headquarters are located in New York City at 30 Rockefeller Plaza. NBCUniversal owns the space it occupies at 30 Rockefeller Plaza. We also own or lease offices, studios, production facilities, screening rooms, retail operations, warehouse space, satellite transmission receiving facilities and data centers in numerous locations in the United States and around the world, including property for our owned local broadcast television stations. In addition, we own theme parks and related facilities in Orlando, Florida and Hollywood, California. In November 2015, NBCUniversal acquired a 51% interest in the Universal Studios Japan.


Comcast 2015 Annual Report on Form 10-K		34

NBCUniversal Properties as of December 31, 2015


Location	Principal Use	Principal Segment in Which Used	Owned or Leased

30 Rockefeller Plaza New York, NY	NBCUniversal corporate headquarters, offices and studios	Headquarters and Other, Cable Networks and Broadcast Television	Owned

10 Rockefeller Plaza New York, NY	The Today Show studio, production facilities and offices	Broadcast Television	Leased

Universal City Universal City, CA	Offices, studios, theme park and retail operations	All	Owned

1000 Universal Studios Plaza Orlando, FL	Theme parks, production facilities, parking structures and administrative buildings	Theme Parks	Owned

Osaka, Japan	Theme park and administrative buildings	Theme Parks	Tangible properties owned on leased parcels of land

2290 W 8^th Ave. Hialeah, FL	Telemundo headquarters and production facilities	Headquarters and Other and Broadcast Television	Leased

Other

The Wells Fargo Center, a large, multipurpose arena in Philadelphia, Pennsylvania that we own, was the principal physical operating asset of our other businesses as of December 31, 2015.

Item 3: Legal Proceedings

Refer to Note 17 to Comcast’s consolidated financial statements included in this Annual Report on Form 10-K for a discussion of recent developments related to our legal proceedings.

In addition to the matters described in Note 17, the California Attorney General and the Alameda County, California District Attorney investigated whether certain of our waste disposal policies, procedures and practices were in violation of the California Business and Professions Code and the California Health and Safety Code. These claims were settled in 2015 and did not have a material effect on our results of operations, financial condition or cash flows.

NBCUniversal is subject to legal proceedings and claims that arise in the ordinary course of its business and it 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 4: Mine Safety Disclosures

Not applicable.


		35		Comcast 2015 Annual Report on Form 10-K

Part II

Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Comcast’s Class A common stock is listed on the NASDAQ Global Select Market under the symbol CMCSA. In December 2015, our shareholders approved a proposal to amend and restate our Amended and Restated Certificate of Incorporation in order to reclassify each issued share of Comcast’s Class A Special common stock into one share of Comcast’s Class A common stock. This reclassification became effective as of the close of business on December 11, 2015, at which time Comcast’s Class A Special common stock was no longer outstanding and ceased trading on the NASDAQ under the symbol CMCSK and instead became listed on the NASDAQ under the symbol CMCSA. There is no established public trading market for Comcast’s Class B common stock. The Class B common stock can be converted, on a share for share basis, into Class A common stock.


Dividends Declared
2015			2014
Month Declared:	Dividend Per Share		Month Declared:	Dividend Per Share
February	$	0.25	January	$	0.225
May	$	0.25	May	$	0.225
July	$	0.25	July	$	0.225
October (paid in January 2016)	$	0.25	October (paid in January 2015)	$	0.225
Total	$	1.00	Total	$	0.90

We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors. In January 2016, our Board of Directors approved a 10.0% increase in our dividend to $1.10 per share on an annualized basis and approved our first quarter dividend of $0.275 per share to be paid in April 2016.

Holders of Class A common stock in the aggregate hold 66 ²/₃% of the voting power of our common stock. The number of votes that each share of Class A common stock has at any given time depends on the number of shares of Class A common stock and Class B common stock then outstanding. The Class B common stock has a 33¹/₃% nondilutable voting interest, and each share of Class B common stock has 15 votes per share. Mr. Brian L. Roberts beneficially owns all outstanding shares of Class B common stock. Generally, including as to the election of directors, holders of Class A common stock and Class B common stock vote as one class except where class voting is required by law.

Record holders as of December 31, 2015, are presented in the table below.


Stock Class	Record Holders
Class A Common Stock		485,163
Class B Common Stock		3


Comcast 2015 Annual Report on Form 10-K		36

The table below summarizes our repurchases under our Board-authorized share repurchase program during 2015.


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 Authorization		Maximum Dollar Value of Shares That May Yet Be Purchased Under the Authorization^(a)
First Quarter 2015
Comcast Class A		15,765,801	$	57.12		15,756,663	$	900,000,000	$	9,100,000,000
Comcast Class A Special		19,302,589	$	56.99		19,302,589	$	1,100,000,000	$	8,000,000,000
Second Quarter 2015
Comcast Class A		14,420,948	$	57.90		14,420,373	$	835,000,000	$	7,165,000,000
Comcast Class A Special		12,984,017	$	57.76		12,984,017	$	750,000,000	$	6,415,000,000
Third Quarter 2015
Comcast Class A		16,224,430	$	57.58		16,224,430	$	934,212,151	$	5,480,787,849
Comcast Class A Special		20,871,773	$	59.93		20,871,773	$	1,250,787,795	$	4,230,000,054
October 1-31, 2015
Comcast Class A		9,637,354	$	60.53		9,637,354	$	583,369,979	$	3,646,630,075
Comcast Class A Special		419,745	$	61.93		419,745	$	25,993,675	$	3,620,636,400
November 1-30, 2015
Comcast Class A		2,144,403	$	62.01		2,144,403	$	132,967,644	$	3,487,668,756
Comcast Class A Special		—	$	—		—	$	—	$	3,487,668,756
December 1-31, 2015
Comcast Class A		4,132,904	$	57.51		4,132,904	$	237,668,659	$	3,250,000,097
Comcast Class A Special		—	$	—		—	$	—	$	3,250,000,097
Total		115,903,964	$	58.24		115,894,251	$	6,749,999,903	$	3,250,000,097

(a)

In February 2015, our Board of Directors increased our share repurchase program authorization to $10 billion, and in December 2015, it increased the authorization to $10 billion effective January 1, 2016, which does not have an expiration date.

The total number of shares purchased during 2015 includes 9,713 shares received in the administration of employee share-based compensation plans.

Under our share repurchase program authorization, we may repurchase shares in the open market or in private transactions. We expect to repurchase $5 billion of our Class A common stock during 2016, subject to market conditions. The number of shares we repurchase during 2016 will depend on prevailing market conditions.

Issuance of Equity Securities

On June 11, 2015, we issued 2,655,008 shares of our Class A common stock in connection with our acquisition of a closely-held company in a private transaction exempt from registration under the Securities Act of 1933, as amended, in accordance with Section 4(a)(2) thereof.


		37		Comcast 2015 Annual Report on Form 10-K

Comcast Common Stock Sales Price Table

The following table sets forth, for the indicated periods, the high and low sales prices of Comcast’s Class A and Class A Special common stock.


	Class A				Class A Special
	High		Low		High		Low
2015
First Quarter	$	60.70	$	52.45	$	60.19	$	52.23
Second Quarter	$	61.64	$	56.05	$	61.38	$	55.74
Third Quarter	$	64.99	$	50.00	$	64.70	$	51.26
Fourth Quarter^(a)	$	63.38	$	55.39	$	63.48	$	56.88

2014
First Quarter	$	55.28	$	49.00	$	53.10	$	47.87
Second Quarter	$	54.26	$	47.74	$	53.88	$	47.21
Third Quarter	$	57.49	$	52.52	$	57.16	$	52.43
Fourth Quarter	$	59.30	$	49.33	$	58.94	$	49.26

(a)

The high and low sales price of Comcast’s Class A Special common stock reflects the prices until December 11, 2015 when each issued share of Class A Special common stock was reclassified into one share of Class A common stock.


Comcast 2015 Annual Report on Form 10-K		38

Stock Performance Graph

Comcast

The graph below compares the yearly percentage change in the cumulative total shareholder return on Comcast’s Class A common stock during the five years ended December 31, 2015 with the cumulative total returns on the Standard & Poor’s 500 Stock Index and with a select peer group consisting of us and other companies engaged in the cable, communications and media industries. This peer group consists of us, as well as Cablevision Systems Corporation (Class A), DISH Network Corporation (Class A), DirecTV Inc. (included through July 24, 2015, the date of acquisition by AT&T Corp.) and Time Warner Cable Inc. (the “cable subgroup”), and Time Warner Inc., Walt Disney Company, Viacom Inc. (Class B), Twenty-First Century Fox, Inc. (Class A), and CBS Corporation (Class B) (the “media subgroup”). The peer group was constructed as a composite peer group in which the cable subgroup is weighted 63% and the media subgroup is weighted 37% based on the respective revenue of our Cable Communications and NBCUniversal segments. The graph assumes $100 was invested on December 31, 2010 in our Class A common stock and in each of the following indices and assumes the reinvestment of dividends.

Comparison of 5 Year Cumulative Total Return

LOGO


	2011		2012		2013		2014		2015
Comcast Class A	$	110	$	177	$	250	$	282	$	279
S&P 500 Stock Index	$	102	$	118	$	156	$	177	$	180
Peer Group Index	$	110	$	157	$	231	$	267	$	265

NBCUniversal

NBCUniversal is a wholly owned subsidiary of NBCUniversal Holdings and there is no market for its equity securities.


		39		Comcast 2015 Annual Report on Form 10-K

Item 6: Selected Financial Data

Comcast


Year ended December 31 (in millions, except per share data)	2015			2014			2013			2012			2011^(b)
Statement of Income Data
Revenue	$	74,510		$	68,775		$	64,657		$	62,570		$	55,842
Operating income		15,998			14,904			13,563			12,179			10,721
Net income attributable to Comcast Corporation^(a)		8,163			8,380			6,816			6,203			4,160
Basic earnings per common share attributable to Comcast Corporation shareholders		3.28			3.24			2.60			2.32			1.51
Diluted earnings per common share attributable to Comcast Corporation shareholders		3.24			3.20			2.56			2.28			1.50
Dividends declared per common share		1.00			0.90			0.78			0.65			0.45
Balance Sheet Data (at year end)
Total assets^(c)	$	166,574		$	159,186		$	158,672		$	164,837		$	157,664
Total debt, including current portion^(c)		52,621			48,081			47,706			40,323			39,155
Comcast Corporation shareholders’ equity		52,269			52,711			50,694			49,356			47,274
Statement of Cash Flows Data
Net cash provided by (used in):
Operating activities		18,778			16,945			14,160			14,854			14,345
Investing activities		(11,964	)		(8,733	)		(9,514	)		(1,486	)		(12,508	)
Financing activities		(8,429	)		(6,020	)		(13,879	)		(4,037	)		(6,201	)

(a)

For 2015, 2014 and 2013, refer to Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report on Form 10-K for a discussion of the effects of items impacting net income attributable to Comcast Corporation. In 2015, 2014, 2013, 2012 and 2011, net income attributable to Comcast Corporation is stated after deducting net income attributable to noncontrolling interests of $250 million, $212 million, $319 million, $1.7 billion and $1 billion, respectively. The reduction in net income attributable to noncontrolling interests in 2013 was primarily due to the acquisition of General Electric Company’s 49% common equity interest in NBCUniversal Holdings that we did not already own in March 2013 (the “NBCUniversal redemption transaction”). See Note 5 to Comcast’s consolidated financial statements for additional information on the NBCUniversal redemption transaction.

(b)

On January 28, 2011, we completed the NBCUniversal transaction in which Comcast acquired a controlling interest in NBCUniversal. The results of operations of NBCUniversal are included in the financial information above for all periods following January 28, 2011.

(c)

As of December 31, 2015, we have adopted the updated accounting guidance that requires debt issuance costs to be presented as a direct deduction from the associated debt obligation. As a result, we reclassified unamortized debt issuance costs from other noncurrent assets to a reduction of long-term debt for all periods presented.

NBCUniversal

Omitted pursuant to General Instruction I(2)(a) to Form 10-K.


Comcast 2015 Annual Report on Form 10-K		40

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction and Overview

We are a global media and technology company with two primary businesses, Comcast Cable and NBCUniversal. We present our operations for Comcast Cable in one reportable business segment, referred to as Cable Communications, and our operations for NBCUniversal in four reportable business segments. The Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks segments comprise the NBCUniversal businesses (collectively, the “NBCUniversal segments”).

In 2015, our consolidated revenue was $74.5 billion and our operating income was $16.0 billion.

LOGO

2015 Consolidated Operating Results by Segment

LOGO

Cable Communications Segment

Comcast Cable is one of the nation’s largest providers of video, high-speed Internet and voice services (“cable services”) to residential customers under the XFINITY brand, and we also provide these and other services to business customers. As of December 31, 2015, our cable systems had 27.7 million total customer relationships; served 22.3 million video customers, 23.3 million high-speed Internet customers and 11.5 million voice customers; and passed more than 55 million homes and businesses.

Our Cable Communications segment generates revenue primarily from residential and business customers subscribing to our cable services, which we market individually and as bundled services, and from the sale of advertising. Customers are typically billed in advance on a monthly basis based on the services and features they receive and the type of equipment they use. The majority of our residential cable services customers are


		41		Comcast 2015 Annual Report on Form 10-K

not subject to minimum-term contracts for their services, while substantially all of our business customers are. Minimum-term contracts are typically 2 years in length for residential customers and typically range from 2 to 5 years for business services customers. Customers with minimum-term contracts may only discontinue service in accordance with the terms of their contracts, which may include an early termination fee.

Residential Cable Services

Our Cable Communications segment offers a broad variety of video service packages that may include premium networks such as HBO, Showtime, Starz and Cinemax; pay-per-view services; and our On Demand service. Our video customers may subscribe for additional fees to our high-definition video (“HD”) and digital video recorder (“DVR”) advanced services. We are actively deploying X1 set-top boxes throughout our footprint and have launched Cloud DVR technology in substantially all of our markets.

We offer residential customers a variety of high-speed Internet services with downstream speeds of up to 150 Mbps and downstream speeds of up to 505 Mbps in limited markets. We are actively deploying wireless gateways throughout our footprint, which combine a customer’s wireless router, cable modem and voice adapter, to improve the performance of multiple Internet-enabled devices used at the same time within the home, provide faster Internet speeds and create an in-home Wi-Fi network. We are continuing to expand our network of residential, outdoor and business Wi-Fi hotspots to allow most of our high-speed Internet customers to access our high-speed Internet services inside and outside the home, and we provide access to approximately 13.3 million of these hotspots as of December 31, 2015.

We offer voice services that provide local and long-distance calling and other related features.

Business Services

We offer our cable services to small and medium-sized businesses, and more recently, we have begun to offer services to large enterprises with multiple locations (“business services”). We offer to medium-sized businesses and large enterprises Ethernet network services that connect multiple locations and provide higher downstream and upstream speed options. We also provide cellular backhaul services to mobile network operators to help those customers manage network bandwidth.

Advertising

Our Cable Communications segment also sells advertising. As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable networks that our Spotlight business sells to local, regional and national advertisers.

Operating Margin

Our Cable Communications segment operating margin is operating income before depreciation and amortization as a percentage of revenue. 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. As further discussed in Cable Communications Segment Results of Operations, we expect that our programming expenses will continue to increase, which may negatively impact our operating margin. We will attempt to mitigate increases in operating costs and expenses by growing revenue, particularly in our high-speed Internet, video and business services businesses.

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, as well as owns and operates several theme parks worldwide.


Comcast 2015 Annual Report on Form 10-K		42

Cable Networks

Our Cable Networks segment consists primarily of a diversified portfolio of cable television networks. Our cable networks are comprised of our national cable entertainment networks (USA Network, Syfy, E!, Bravo, Oxygen, Esquire Network, Sprout, Chiller, Universal HD and Cloo), our national cable news and information networks (MSNBC, CNBC and CNBC World), our national cable sports networks (Golf Channel and NBC Sports Network), our regional sports and news networks, various international cable networks, our cable television studio production operations, and related digital media properties.

Our Cable Networks segment generates revenue primarily from the distribution and licensing of its programming and from the sale of advertising on its networks.

Broadcast Television

Our Broadcast Television segment consists primarily of the NBC and Telemundo broadcast television networks, its 10 NBC and 17 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 its networks, from the licensing of its programming, and from fees received under retransmission consent agreements.

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 and Focus Features names.

Our Filmed Entertainment segment generates revenue primarily from the worldwide distribution of our produced and acquired films for exhibition in movie theaters and from the licensing and sale of our owned and acquired films.

Theme Parks

Our Theme Parks segment consists primarily of our Universal theme parks in Orlando, Florida and Hollywood, California. In November 2015, NBCUniversal acquired a 51% interest in the Universal Studios theme park in Osaka, Japan (“Universal Studios Japan”). In addition, along with a consortium of Chinese state owned companies, we are developing a theme park in China.

Our Theme Parks segment generates revenue primarily from ticket sales and guest spending at our theme parks, as well as from licensing and other fees.

2015 Developments

The following are the more significant developments in our businesses during 2015:

Cable Communications Segment

•

An increase in Cable Communications segment revenue of 6.2% to $46.9 billion and an increase in Cable Communications segment operating income before depreciation and amortization of 5.6% to $19.1 billion

•

An increase in Cable Communications segment capital expenditures of 14.3% to $7 billion primarily due to our continued investment in the following initiatives:

•

the accelerated deployment of our IP and cloud-enabled video platform, referred to as our X1 platform, which is available in all of the markets in which we operate, and our Cloud DVR technology, which is available in substantially all of our markets


		43		Comcast 2015 Annual Report on Form 10-K

•

the deployment of wireless gateways to more than 70% of our residential high-speed Internet customers

•

the improvement of our network infrastructure to increase network capacity

•

the expansion of our business services, including the creation of the new enterprise service offering designed to serve certain Fortune 1000 companies and other large nationwide enterprises with multiple locations

•

Investments to improve the customer experience, including by hiring additional personnel and developing and deploying various technology and software tools

NBCUniversal Segments

•

An increase in total NBCUniversal revenue of 11.9% to $28.5 billion

•

An increase in total NBCUniversal operating income before depreciation and amortization of 14.8% to $6.4 billion

•

An increase in our Filmed Entertainment segment revenue of 45.5% largely due to the success of Furious 7, Jurassic World and Minions, which each exceeded $1 billion in worldwide theatrical receipts

•

An increase in our Theme Parks segment revenue of 27.3% due to the continued success of attractions at our Universal theme parks, including The Wizarding World of Harry Potter™ — Diagon Alley™ in Orlando and the Fast & Furious™ —Supercharged™ studio tour in Hollywood

•

The continued investment in original programming and sports programming rights at both our cable networks and broadcast television networks, including the premiere of NASCAR programming

•

The acquisition of a 51% interest in Universal Studios Japan for $1.5 billion

Competition

The results of operations of our reportable business segments are affected by competition, as all of our businesses operate in intensely competitive, consumer-driven and rapidly changing environments and compete with a growing number of companies that provide a broad range of communications products and services and entertainment, news and information content to consumers.

For additional information on the competition our businesses face, see Item 1A: Risk Factors and 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 alternative methods for viewing content may adversely affect our businesses and challenge existing business models” within that section.

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 additions in the second quarter and an increase in net customer additions in the third and fourth quarters of each year.

Revenue in our Cable Communications, Cable Networks and Broadcast Television segments is subject to cyclical advertising patterns and changes in viewership levels. Our U.S. advertising revenue is generally higher


Comcast 2015 Annual Report on Form 10-K		44

in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and in the period leading up to and including the holiday season. U.S. advertising revenue 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 on the timing of when our programming is aired on television, which typically results in higher advertising revenue in the second and fourth quarters of each year. Our revenue and operating costs and expenses, excluding depreciation and amortization (“operating costs and expenses”) are cyclical as a result 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 affect our Broadcast Television segment. Our advertising revenue generally 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.

Revenue in our Filmed Entertainment segment fluctuates due to the timing of the release of films in movie theaters, on DVD and through digital distribution services. 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 holidays. 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. Our theme parks generally experience peak attendance during the summer months when schools are closed and during early winter and spring holiday periods.

Consolidated Operating Results


Year ended December 31 (in millions)	2015			2014			2013			% Change 2014 to 2015			% Change 2013 to 2014
Revenue	$	74,510		$	68,775		$	64,657			8.3	%		6.4	%
Costs and Expenses:
Programming and production		22,550			20,912			19,670			7.8			6.3
Other operating and administrative		21,339			19,854			18,575			7.5			6.9
Advertising, marketing and promotion		5,943			5,086			4,978			16.8			2.2
Depreciation		6,781			6,337			6,254			7.0			1.3
Amortization		1,899			1,682			1,617			12.8			4.1
Operating income		15,998			14,904			13,563			7.3			9.9
Other income (expense) items, net		(2,626	)		(2,439	)		(2,448	)		7.7			(0.4	)
Income before income taxes		13,372			12,465			11,115			7.3			12.2
Income tax expense		(4,959	)		(3,873	)		(3,980	)		28.0			(2.7	)
Net income		8,413			8,592			7,135			(2.1	)		20.4
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock		(250	)		(212	)		(319	)		18.1			(33.3	)
Net income attributable to Comcast Corporation	$	8,163		$	8,380		$	6,816			(2.6	)%		22.9	%

All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.


		45		Comcast 2015 Annual Report on Form 10-K

Consolidated Revenue

The following graph illustrates the contributions to the increases in consolidated revenue by our Cable Communications and NBCUniversal segments, as well as our Corporate and Other activities.

LOGO

Consolidated revenue in 2015 included $376 million of revenue associated with our broadcast of the Super Bowl in February 2015 and an increase in revenue at our Filmed Entertainment segment of $2.3 billion, both of which are reported in our NBCUniversal segments. Consolidated revenue in 2014 included $1.1 billion of revenue associated with our broadcast of the Sochi Olympics in February 2014, which is reported in our NBCUniversal segments.

Revenue for our segments is discussed separately below under the heading “Segment Operating Results.” Revenue for our other businesses is discussed separately under the heading “Corporate and Other Results of Operations.”


Comcast 2015 Annual Report on Form 10-K		46

Consolidated Costs and Expenses

The following graph illustrates the contributions to the increases in consolidated operating costs and expenses by our Cable Communications and NBCUniversal segments, as well as our Corporate and Other activities.

LOGO

Our consolidated operating costs and expenses in 2015 included expenses associated with our broadcast of the 2015 Super Bowl and our larger film slate, both of which are included in our NBCUniversal segments. Our consolidated operating costs and expenses in 2014 included expenses associated with our broadcast of the 2014 Sochi Olympics, which is reported in our NBCUniversal segments. Our consolidated operating costs and expenses also included transaction-related costs associated with the Time Warner Cable merger and the related divestiture transactions of $178 million and $237 million in 2015 and 2014, respectively, which is included in Corporate and Other. On April 24, 2015, we and Time Warner Cable Inc. terminated our planned merger and we terminated our related agreement with Charter Communications, Inc. to spin off, exchange and sell certain cable systems.

Operating costs and expenses for our segments is discussed separately below under the heading “Segment Operating Results.” Operating costs and expenses for our other businesses is discussed separately below under the heading “Corporate and Other Results of Operations.”

Consolidated Depreciation and Amortization


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Cable Communications	$	7,028	$	6,422	$	6,394		9.4	%		0.4	%
NBCUniversal		1,539		1,495		1,411		2.9			5.9
Corporate and Other		113		102		66		10.3			58.1
Comcast Consolidated	$	8,680	$	8,019	$	7,871		8.2	%		1.9	%

Consolidated depreciation and amortization expenses increased in 2015 primarily due to increases in capital expenditures, as well as expenditures for software, in our Cable Communications segment in recent years. We continue to invest in customer premise equipment, primarily for our X1 platform, wireless gateways and Cloud DVR technology, and in equipment to increase our network capacity. In addition, because these assets generally have shorter estimated useful lives, our depreciation expenses have increased, which we expect will


		47		Comcast 2015 Annual Report on Form 10-K

continue in 2016. In 2015, depreciation and amortization expenses included $20 million related to the acceleration of amortization for certain intangible assets and the write-off of certain capitalized costs associated with the termination of the Time Warner Cable merger and related divestiture transactions. Consolidated depreciation and amortization expenses increased slightly in 2014 primarily due to increases in capital spending in our Cable Communications and NBCUniversal segments, as well as increases related to our acquisitions in 2013 of our corporate headquarters and real estate properties for NBCUniversal.

Segment Operating Results

Our segment operating results are presented based on how we assess operating performance and internally report financial information. 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. Because we use operating income (loss) before depreciation and amortization to measure our segment profit or loss, we reconcile it to operating income, the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), in the business segment footnote to our consolidated financial statements (see Note 18 to Comcast’s consolidated financial statements and Note 17 to NBCUniversal’s consolidated financial statements). This measure should not be considered a substitute for operating 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 GAAP.

The revenue and operating costs and expenses associated with our broadcast of the 2015 Super Bowl were reported in our Broadcast Television segment. The revenue and operating costs and expenses associated with our broadcast of the 2014 Sochi Olympics were reported in our Cable Networks and Broadcast Television segments.

Cable Communications Segment Results of Operations

LOGO


Comcast 2015 Annual Report on Form 10-K		48


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Revenue
Residential:
Video	$	21,526	$	20,783	$	20,535		3.6	%		1.2	%
High-speed Internet		12,471		11,321		10,334		10.2			9.5
Voice		3,608		3,671		3,657		(1.7	)		0.4
Business services		4,742		3,951		3,241		20.0			21.9
Advertising		2,318		2,393		2,147		(3.1	)		11.5
Other		2,214		2,021		1,922		9.6			5.1
Total revenue		46,879		44,140		41,836		6.2			5.5
Operating costs and expenses
Programming		10,516		9,819		9,107		7.1			7.8
Technical and product support		5,904		5,547		5,373		6.4			3.2
Customer service		2,377		2,205		2,097		7.8			5.2
Franchise and other regulatory fees		1,382		1,296		1,246		6.7			4.0
Advertising, marketing and promotion		3,340		3,083		2,905		8.4			6.1
Other		4,240		4,078		3,903		3.9			4.5
Total operating costs and expenses		27,759		26,028		24,631		6.7			5.7
Operating income before depreciation and amortization	$	19,120	$	18,112	$	17,205		5.6	%		5.3	%

Customer Metrics


	Total Customers						Net Additional Customers
December 31 (in thousands)	2015		2014		2013		2015			2014			2013
Total customer relationships^(a)		27,701		27,035		26,677		666			358			215
Single product customers^(a)		8,366		8,409		8,752		(43	)		(343	)		(593	)
Double product customers^(a)		9,221		8,750		8,541		472			209			34
Triple product customers^(a)		10,114		9,876		9,384		238			492			774
Video customers		22,347		22,383		22,577		(36	)		(194	)		(267	)
High-speed Internet customers		23,329		21,962		20,685		1,367			1,277			1,296
Voice customers		11,475		11,193		10,723		282			470			768
Average monthly total revenue per customer relationship	$	142.74	$	136.97	$	131.22

Customer metrics include residential and business customers and are presented based on actual amounts. Minor differences may exist due to rounding.

(a)

Cable Communications Segment – Revenue

Video

Video revenue increased 3.6% and 1.2% in 2015 and 2014, respectively. The increases in revenue in both years were due to increases in the number of residential customers receiving additional and higher levels of video service and rate adjustments, partially offset by decreases in the number of residential video customers. The increases in residential customers receiving additional and higher levels of video service and rate adjustments accounted for increases in revenue of 4.5% and 2.7% in 2015 and 2014, respectively. As of December 31, 2015, 13.9 million customers subscribed to at least one of our HD or DVR advanced services compared to 13.0 million customers and 12.5 million customers as of December 31, 2014 and 2013,


		49		Comcast 2015 Annual Report on Form 10-K

respectively. The decreases in the number of residential video customers in 2015 and 2014 were primarily due to competitive pressures and the impact of rate adjustments.

As of December 31, 2015, 40.1% of the homes and businesses in the areas we serve subscribed to our video services, compared to 40.9% and 41.9% as of December 31, 2014 and 2013, respectively. We may experience further declines in the number of residential video customers.

High-Speed Internet

High-speed Internet revenue increased 10.2% and 9.5% in 2015 and 2014, respectively. Increases in the number of residential customers receiving our high-speed Internet services accounted for increases in revenue of 5.8% and 5.9% in 2015 and 2014, respectively. The remaining increases in revenue in both 2015 and 2014 were primarily due to increases in the number of customers receiving higher levels of service and rate adjustments.

As of December 31, 2015, 41.9% of the homes and businesses in the areas we serve subscribed to our high-speed Internet services, compared to 40.2% and 38.4% as of December 31, 2014 and 2013, respectively. Our customer base continues to grow as consumers choose our high-speed Internet service and seek higher-speed offerings.

Voice

Voice revenue decreased 1.7% in 2015 and increased slightly in 2014. While the number of residential customers receiving voice services through our discounted bundled service offerings increased in both years, revenue was negatively impacted by the allocation of voice revenue for our customers who receive bundled services. The amount allocated to voice revenue in the rate charged for bundled services decreased in 2015 and 2014 because video and high-speed Internet rates increased while voice rates remained relatively flat.

As of December 31, 2015, 20.6% of the homes and businesses in the areas we serve subscribed to our voice services, compared to 20.5% and 19.9% as of December 31, 2014 and 2013, respectively.

Business Services

Business services revenue increased 20.0% and 21.9% in 2015 and 2014, respectively. The increases in 2015 and 2014 were primarily due to increases in the number of small business customers receiving our high-speed Internet and voice services and rate adjustments. In 2015, 2014 and 2013, our small business customers represented more than 70% of total business services revenue. The remaining increases in both years were primarily due to continued growth in our medium-sized business services, including Ethernet network and advanced voice services.

We believe the increases in the number of business customers were primarily the result of our efforts to gain market share from competitors by offering competitive services and pricing.

Advertising

As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable networks that our Spotlight business sells to local, regional and national advertisers. In most cases, the available advertising units are sold by our sales force. In some cases, we work with representation firms as an extension of our sales force to sell a portion of the advertising time allocated to us. We also represent the advertising sales efforts of other multichannel video providers in some markets. In addition, we generate revenue from the sale of advertising online and on our On Demand service. Advertising revenue is affected by the strength of the advertising market and general economic conditions.

Advertising revenue decreased 3.1% in 2015 primarily due to a decrease in political advertising revenue. Excluding the impact of political advertising revenue, advertising revenue increased 3.7% in 2015. Advertising


Comcast 2015 Annual Report on Form 10-K		50

revenue increased 11.5% in 2014 primarily due to an increase in political revenue of 8.0%, as well as an increase in revenue in our national and local advertising markets. Excluding the impact of political advertising revenue, advertising revenue increased 3.5% in 2014.

In 2015, 7% of our Cable Communications segment’s advertising revenue was generated from our NBCUniversal segments, compared to 5% and 4% in 2014 and 2013, respectively. These amounts are eliminated in our consolidated financial statements but are included in the amounts presented above.

Other

Other revenue primarily includes revenue related to cable franchise and other regulatory fees. We also receive revenue related to fees from other services, such as our home security and automation services. Cable franchise and other regulatory fees represent the fees we are required to pay to federal, state and local authorities that we pass through to our customers. Under the terms of our cable franchise agreements, we are generally required to pay to the cable franchising authority an amount based on our gross video revenue. The changes in franchise and other regulatory fees collected from our cable services customers are generally due to changes in the revenue on which the fees apply.

Other revenue increased 9.6% and 5.1% in 2015 and 2014, respectively, primarily due to increases in revenue from our home security and automation services, as well as increases in cable franchise and other regulatory fees.

Cable Communications Segment – Operating Costs and Expenses

Our operating margin, which is our operating income before depreciation and amortization as a percentage of revenue, for 2015, 2014 and 2013 was 40.8%, 41.0% and 41.1%, respectively.

Programming Expenses

Programming expenses, which represent our most significant operating expense, are the fees we incur to provide content to our video customers. These expenses are affected by the programming license fees charged by cable networks, the fees charged for retransmission of the signals from local broadcast television stations, the number of video customers we serve and the amount of content we provide. Programming expenses increased in 2015 and 2014 primarily due to increases in programming license fees, including sports programming costs and retransmission consent fees, and fees to secure rights for additional programming for our customers across an increasing number of platforms.

We anticipate that our programming expenses will continue to increase as we provide additional content to our video customers; as we deliver this content through an increasing number of platforms, including On Demand, online and through our mobile apps; and as the fees we pay increase, primarily sports programming costs and retransmission consent fees. We believe that adding more content and delivering it on various platforms will help us to attract and retain video customers.

Technical and Product Support Expenses

Technical and product support expenses include costs to complete service call and installation activities, as well as costs for network operations, product development, fulfillment and provisioning. Technical and product support expenses increased in 2015 and 2014 primarily due to expenses related to the development, delivery and support of our enhanced devices, including our X1 set-top boxes, Cloud DVR technology and wireless gateways, and the continued growth in business services and home security and automation services. The increase in 2015 was also due to expenses related to investments we are making to improve the customer experience.


		51		Comcast 2015 Annual Report on Form 10-K

Customer Service Expenses

Customer service expenses include the personnel and other costs associated with handling the sale of services to customers and customer service activity. Customer service expenses increased in 2015 primarily due to increases in support for improving the customer experience and increases in total labor costs associated with increases in customer service activity. Customer service expenses increased in 2014 due to increases in total labor costs associated with increases in customer service activity. The increases in customer service activity in both periods were due to sales and support activities associated with the continued deployment of our enhanced devices and services, which include our X1 platform, Cloud DVR technology, wireless gateways, and home security and automation services, and the continued growth in business services.

Franchise and Other Regulatory Fees

Franchise and other regulatory fees increased in 2015 and 2014 primarily due to increases in the revenue on which the fees apply.

Advertising, Marketing and Promotion Expenses

Advertising, marketing and promotion expenses increased in 2015 and 2014 primarily due to increases in spending associated with attracting new residential and business services customers and encouraging existing customers to add additional or higher-tier services.

Other Operating Costs and Expenses

Other operating costs and expenses increased in 2015 and 2014 primarily due to increases in costs to support our advertising sales business, as well as increases in other administrative costs.

NBCUniversal Segments Overview

2015 NBCUniversal Segments Operating Results

LOGO


Comcast 2015 Annual Report on Form 10-K		52


Year ended December 31 (in millions)	2015			2014			2013			% Change 2014 to 2015			% Change 2013 to 2014
Revenue
Cable Networks	$	9,628		$	9,563		$	9,201			0.7	%		3.9	%
Broadcast Television		8,530			8,542			7,120			(0.1	)		20.0
Filmed Entertainment		7,287			5,008			5,452			45.5			(8.2	)
Theme Parks		3,339			2,623			2,235			27.3			17.3
Headquarters, other and eliminations		(322	)		(308	)		(358	)		NM			NM
Total revenue	$	28,462		$	25,428		$	23,650			11.9	%		7.5	%
Operating Income Before Depreciation and Amortization
Cable Networks	$	3,499		$	3,589		$	3,501			(2.5	)%		2.5	%
Broadcast Television		780			734			345			6.3			112.5
Filmed Entertainment		1,234			711			483			73.5			47.3
Theme Parks^(a)		1,464			1,096			943			33.5			16.3
Headquarters, other and eliminations^(a)		(563	)		(542	)		(540	)		(3.8	)		(0.7	)
Total operating income before depreciation and amortization	$	6,414		$	5,588		$	4,732			14.8	%		18.1	%

Percentage changes that are considered not meaningful are denoted with NM.

(a)

As disclosed in Note 11 to the Comcast consolidated financial statements, NBCUniversal changed its method of accounting for a contractual obligation that involves an interest in the revenue of certain theme parks. As a result of the change, beginning in the fourth quarter of 2015, amounts payable based on current period revenue are presented in operating costs and expenses. Amounts paid through the third quarter of 2015 were included in other income (expense), net in our consolidated statement of income. For segment reporting purposes, we have adjusted periods prior to the fourth quarter of 2015 to reflect this expense on a consistent basis for all periods in the Theme Parks segment, which resulted in an offsetting adjustment in NBCUniversal Headquarters, Other and Eliminations.

Cable Networks Segment Results of Operations


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Revenue
Distribution	$	5,461	$	5,307	$	4,905		2.9	%		8.2	%
Advertising		3,435		3,494		3,536		(1.7	)		(1.2	)
Content licensing and other		732		762		760		(4.0	)		0.3
Total revenue		9,628		9,563		9,201		0.7			3.9
Operating costs and expenses
Programming and production		4,319		4,241		3,850		1.8			10.2
Other operating and administrative		1,270		1,232		1,342		3.1			(8.3	)
Advertising, marketing and promotion		540		501		508		7.7			(1.3	)
Total operating costs and expenses		6,129		5,974		5,700		2.6			4.8
Operating income before depreciation and amortization	$	3,499	$	3,589	$	3,501		(2.5	)%		2.5	%

Cable Networks Segment – Revenue

Distribution

Distribution revenue is generated from distribution agreements with multichannel video providers and is affected by the number of subscribers receiving our cable networks and the fees we charge per subscriber.

Distribution revenue increased in 2015 primarily due to increases in the contractual rates charged under distribution agreements which were partially due to the premiere of NASCAR programming on the NBC Sports


		53		Comcast 2015 Annual Report on Form 10-K

Network in 2015. These increases were partially offset by a decrease in revenue from the decline in subscribers at some of our cable networks. Distribution revenue increased in 2014 primarily due to our broadcast of the 2014 Sochi Olympics and increases in contractual rates charged under distribution agreements. Excluding $177 million of revenue associated with the 2014 Sochi Olympics, distribution revenue increased 6.5% and 4.6% in 2015 and 2014, respectively.

Advertising

Advertising revenue is generated from the sale of advertising units sold on our cable networks and related digital media properties. Advertising revenue is primarily based on the price we charge for each advertising unit, which is generally based on audience ratings and the value of our viewer demographics to advertisers, and the number of advertising units we can place in our cable networks’ programming schedules. Advertising revenue is affected by the success and ratings of our programming, the strength of the national advertising market, general economic conditions, and cyclicality related to political campaigns and issue-oriented advertising. Audience ratings at some of our cable networks have declined and may continue to decline as the number of programming choices continues to increase and as more viewers use DVRs and video on demand services to view content outside of audience ratings measurement periods.

Advertising revenue decreased in 2015 primarily due to revenue in the prior year associated with our broadcast of the 2014 Sochi Olympics. In addition, while we continued to experience audience ratings declines that negatively affected advertising revenue, the impact of audience ratings was partially offset by higher prices for, and an increase in the volume of, advertising units sold, as well as increased advertising revenue associated with the broadcast of NASCAR programming. Advertising revenue decreased slightly in 2014 primarily due to continued declines in audience ratings at our cable networks and the absence of the Style network and Fandango in 2014. In 2014, we began presenting the operations of Fandango, our movie ticketing and entertainment business, in the Filmed Entertainment segment. The decrease was partially offset by higher prices for, and an increase in the volume of, advertising units sold and our broadcast of the 2014 Sochi Olympics. Excluding $80 million of revenue associated with the 2014 Sochi Olympics, advertising revenue increased slightly in 2015 due to the broadcast of NASCAR programming and decreased 3.5% in 2014 due to continued declines in audience ratings at our cable networks.

Content Licensing and Other

We generate other revenue primarily from the licensing of our owned programming in the United States and internationally to cable and broadcast networks and subscription video on demand services, as well as from the sale of our owned programming through digital distribution services such as iTunes. In addition, our cable television production generates revenue from programming it produces for third-party networks and subscription video on demand services.

Content licensing and other revenue decreased in 2015 primarily due to the timing of content provided under our licensing agreements. Content licensing and other revenue remained flat in 2014.

In 2015, 2014 and 2013, 13%, 12% and 13%, respectively, of our Cable Networks segment revenue was generated from our Cable Communications segment. These amounts are eliminated in Comcast’s consolidated financial statements but are included in the amounts presented above.

Cable Networks Segment – Operating Costs and Expenses

Programming and Production Costs

Programming and production costs include the amortization of owned and acquired programming, sports rights, direct production costs, residual and participation payments, production overhead, costs associated with the distribution of our programming to third-party networks and other distribution platforms, and on-air talent costs.


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Programming and production costs increased in 2015 primarily due to our continued investment in programming, including the premiere of NASCAR programming and other sports programming rights costs. These increases were partially offset by costs in the prior year associated with our broadcast of the 2014 Sochi Olympics. Programming and production costs increased in 2014 primarily due to costs associated with our broadcast of the 2014 Sochi Olympics, as well as our continued investment in programming, including original programming at our entertainment networks and sports programming rights costs. The increase in sports programming rights costs in 2014 included the impact of a new rights agreement with a professional sports team and costs associated with the first full year of our airing of English Premier League soccer.

Other Operating and Administrative Costs and Expenses

Other operating and administrative costs and expenses include salaries, employee benefits, rent and other overhead expenses.

Other operating and administrative costs and expenses increased in 2015 primarily due to an increase in employee-related costs. Other operating and administrative costs and expenses decreased in 2014 primarily due to lower employee-related costs and the absence of the Style network and Fandango in 2014.

Advertising, Marketing and Promotion Expenses

Advertising, marketing and promotion expenses consist primarily of the costs associated with promoting our cable networks programming and costs associated with our related digital media properties.

Advertising, marketing and promotion expenses increased in 2015 primarily due to an increase in marketing expenses related to the launch of new programming on our cable networks. Advertising, marketing and promotion expenses remained relatively flat in 2014.

Broadcast Television Segment Results of Operations


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Revenue
Advertising	$	5,747	$	5,888	$	4,930		(2.4	)%		19.4	%
Content licensing		1,784		1,569		1,447		13.7			8.4
Other		999		1,085		743		(7.8	)		46.0
Total revenue		8,530		8,542		7,120		(0.1	)		20.0
Operating costs and expenses
Programming and production		5,950		6,127		5,192		(2.9	)		18.0
Other operating and administrative		1,276		1,199		1,204		6.4			(0.4	)
Advertising, marketing and promotion		524		482		379		8.9			27.0
Total operating costs and expenses		7,750		7,808		6,775		(0.7	)		15.3
Operating income before depreciation and amortization	$	780	$	734	$	345		6.3	%		112.5	%

Broadcast Television Segment – Revenue

Advertising

Advertising revenue is generated from the sale of advertising units sold on our broadcast networks, our owned local television stations and our related digital media properties. Advertising revenue is primarily based on the price we receive for each advertising unit, which is generally based on audience ratings and the value of our viewer demographics to advertisers, and the number of advertising units we can place in our broadcast


		55		Comcast 2015 Annual Report on Form 10-K

networks’ and owned local television stations’ programming schedules. Advertising revenue is affected by the strength of the national and local advertising markets, general economic conditions, cyclicality related to political campaigns and issue-oriented advertising, and the success and ratings of our programming.

Advertising revenue decreased in 2015 primarily due to revenue in the prior year associated with our broadcast of the 2014 Sochi Olympics, which was partially offset by an increase in advertising revenue in the current year associated with our broadcast of the 2015 Super Bowl. Advertising revenue increased in 2014 primarily due to revenue associated with our broadcast of the 2014 Sochi Olympics. Excluding $730 million of revenue associated with our broadcast of the 2014 Sochi Olympics and $376 million of revenue associated with our broadcast of the 2015 Super Bowl, revenue increased 4.1% and 4.6% in 2015 and 2014, respectively, primarily due to higher prices and increases in the volume of advertising units sold.

Content Licensing

Content licensing revenue is generated from the licensing of our owned programming in the United States and internationally to various distribution platforms, including to cable and broadcast networks, as well as to subscription video on demand services. In addition, our broadcast television production studio develops and produces original content that it licenses to broadcast networks, cable networks and local broadcast television stations owned by us and third parties, as well as to subscription video on demand services. The production and distribution costs related to our owned programming generally exceed the revenue generated from the initial network license, which means the subsequent licensing of our owned programming series following the initial network license is critical to their financial success.

Content licensing revenue increased in 2015 and 2014 primarily due to the timing of content provided under our licensing agreements.

Other

We generate other revenue primarily from fees for retransmission consent of our owned local broadcast television stations and associated fees received from NBC-affiliated local broadcast television stations, as well as from the sale of our owned programming on DVD and through digital distribution services. The sale of our owned programming is driven primarily by the popularity of our broadcast networks and programming series and therefore fluctuates based on consumer spending and acceptance. Other revenue also includes distribution revenue associated with our periodic broadcasts of the Olympic Games.

Other revenue decreased in 2015 primarily due to distribution revenue in the prior year that was associated with our broadcast of the 2014 Sochi Olympics. The decrease was partially offset by an increase in fees recognized under our retransmission consent agreements, as well as new syndication agreements entered into in 2015. Other revenue increased in 2014 primarily due to $116 million of distribution revenue that was associated with our broadcast of the 2014 Sochi Olympics.

Broadcast Television Segment – Operating Costs and Expenses

Programming and Production Costs

Programming and production costs relate to content originating on our broadcast networks and owned local broadcast television stations, as well as owned content that is licensed to third parties. These costs include the amortization of owned and acquired programming costs, sports rights, direct production costs, residual and participation payments, production overhead, costs associated with the distribution of our programming to third-party networks and other distribution platforms, and on-air talent costs.

Programming and production costs decreased in 2015 primarily due to costs in the prior year associated with our broadcast of the 2014 Sochi Olympics. The decrease was partially offset by costs associated with our


Comcast 2015 Annual Report on Form 10-K		56

broadcast of the 2015 Super Bowl, the timing of content provided under our licensing agreements and higher studio production costs. Programming and production costs increased in 2014 primarily due to costs associated with our broadcast of the 2014 Sochi Olympics, as well as our continued investment in original programming.

Other Operating and Administrative Costs and Expenses

Other operating and administrative costs and expenses include salaries, employee benefits, rent and other overhead expenses.

Other operating and administrative costs increased in 2015 primarily due to an increase in employee-related costs. Other operating and administrative costs and expenses remained flat in 2014.

Advertising, Marketing and Promotion Expenses

Advertising, marketing and promotion expenses consist primarily of the costs associated with promoting our owned and licensed television programming, as well as the marketing of DVDs and costs associated with our related digital media properties.

Advertising, marketing and promotion expenses increased in 2015 and 2014 primarily due to increased spending on marketing associated with our NBC primetime lineup.

Filmed Entertainment Segment Results of Operations


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Revenue
Theatrical	$	2,829	$	1,101	$	1,568		156.9	%		(29.8	)%
Content licensing		1,923		1,792		1,654		7.3			8.3
Home entertainment		1,801		1,457		1,828		23.6			(20.3	)
Other		734		658		402		11.5			63.7
Total revenue		7,287		5,008		5,452		45.5			(8.2	)
Operating costs and expenses
Programming and production		3,488		2,331		2,982		49.6			(21.8	)
Other operating and administrative		872		849		716		2.8			18.5
Advertising, marketing and promotion		1,693		1,117		1,271		51.7			(12.2	)
Total operating costs and expenses		6,053		4,297		4,969		40.9			(13.5	)
Operating income before depreciation and amortization	$	1,234	$	711	$	483		73.5	%		47.3	%

Filmed Entertainment Segment – Revenue

Theatrical

Theatrical revenue is generated from the worldwide theatrical release of our owned and acquired films for exhibition in movie theaters and is significantly affected by the timing of each release and the number of films we distribute, as well as their acceptance by audiences. Theatrical revenue is also affected by the number of exhibition screens, ticket prices, the percentage of ticket sale retention by the exhibitors and the popularity of competing films at the time our films are released. The success of a film in movie theaters is a significant factor in determining the revenue a film is likely to generate in succeeding distribution platforms.

Theatrical revenue increased in 2015 primarily due to the strong performance of our larger 2015 film slate, including Furious 7, Jurassic World and Minions. Theatrical revenue decreased in 2014 primarily due to the


		57		Comcast 2015 Annual Report on Form 10-K

strong performance of our major films in 2013, including Despicable Me 2 and Fast and Furious 6. The decrease in theatrical revenue in 2014 was partially offset by the performance of our 2014 releases, including Lucy and Neighbors.

Content Licensing

Content licensing revenue is generated primarily from the licensing of our owned and acquired films to cable, broadcast and premium networks, as well as to subscription video on demand services.

Content licensing revenue increased in 2015 and 2014 primarily due to the timing of when content was made available under licensing agreements.

Home Entertainment

Home entertainment revenue is generated from the sale of our owned and acquired films on DVDs to retail stores, rental kiosks and subscription by mail services, and in digital formats. Home entertainment revenue is significantly affected by the timing and number of our releases and their acceptance by consumers. Release dates are determined by several factors, including the timing of the exhibition of a film in movie theaters, holiday periods and the timing of competitive releases. The overall DVD market continues to experience declines due to the maturation of the standard-definition DVD format, increasing shifts in consumer behavior toward digital distribution services, and subscription rental services, all of which generate less revenue per transaction than DVD sales, as well as due to piracy.

Home entertainment revenue increased in 2015 primarily due to the strong performance of our 2015 releases, including Minions and Jurassic World. Home entertainment revenue decreased in 2014 primarily due to the strong performance of our 2013 releases, including Despicable Me 2 and Fast and Furious 6.

Other

We also generate revenue from producing and licensing live stage plays, from distributing filmed entertainment produced by third parties, and from Fandango, our movie ticketing and entertainment business.

Other revenue increased in 2015 primarily due to an increase in revenue generated from Fandango. Other revenue increased in 2014 primarily due to the inclusion of Fandango, which was previously presented in our Cable Networks segment.

Filmed Entertainment Segment – Operating Costs and Expenses

Programming and Production Costs

Programming and production costs include the amortization of capitalized film production and acquisition costs, residual and participation payments, and distribution expenses. Residual payments represent amounts payable to certain of our employees, including freelance and temporary employees, who are represented by labor unions or guilds and are based on post-theatrical revenue. Participation payments are primarily based on film performance and represent contingent consideration payable to creative talent, third parties that have entered into cofinancing agreements with us and other parties involved in the production of a film.

Programming and production costs increased in 2015 primarily due to higher amortization of film production costs associated with our larger 2015 film slate, including Furious 7, Jurassic World and Minions. Programming and production costs decreased in 2014 primarily due to lower amortization of film costs associated with the lower costs of our 2014 film slate compared to 2013.

Other Operating and Administrative Costs and Expenses

Other operating and administrative costs and expenses include salaries, employee benefits, rent and other overhead expenses.


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Other operating and administrative expenses increased slightly in 2015 due to increased expenses associated with our larger film slate. Other operating and administrative expenses increased in 2014 primarily due to the inclusion of Fandango, which was previously presented in our Cable Networks segment.

Advertising, Marketing and Promotion Expenses

Advertising, marketing and promotion expenses consist primarily of expenses associated with advertising for our theatrical releases and the marketing of our films on DVD and in digital formats. We incur significant marketing expenses before and throughout the release of a film in movie theaters. As a result, we typically incur losses on a film prior to and during the film’s exhibition in movie theaters and may not realize profits, if any, until the film generates home entertainment and content licensing revenue. The costs associated with producing and marketing films have generally increased in recent years and may continue to increase in the future.

Advertising, marketing and promotion expenses increased in 2015 primarily due to higher promotional costs associated with our larger 2015 film slate and increased advertising expenses for Fandango. Advertising, marketing and promotion expenses decreased in 2014 primarily due to fewer major film releases compared to 2013.

Theme Parks Segment Results of Operations


Year ended December 31 (in millions)	2015		2014		2013		% Change 2014 to 2015			% Change 2013 to 2014
Revenue	$	3,339	$	2,623	$	2,235		27.3	%		17.3	%
Operating costs and expenses		1,875		1,527		1,292		22.8			18.1
Operating income before depreciation and amortization	$	1,464	$	1,096	$	943		33.5	%		16.3	%

Theme Parks Segment – Revenue

In 2015, our Theme Parks segment revenue was generated primarily from ticket sales and guest spending at our Universal theme parks in Orlando, Florida and Hollywood, California, as well as from licensing and other fees. In November 2015, NBCUniversal acquired a 51% interest in Universal Studios Japan. Guest spending includes in-park spending on food, beverages and merchandise. Guest attendance at our theme parks and guest spending depend heavily on the general environment for travel and tourism, including consumer spending on travel and other recreational activities. Licensing and other fees relate primarily to our agreements with third parties that own and operate the Universal Studios Singapore theme park, as well as from the Universal Studios Japan theme park, to license the right to use the Universal Studios brand name and other intellectual property.

Theme Parks segment revenue increased in 2015 and 2014 primarily due to increases in guest attendance and increases in guest spending at our Orlando and Hollywood theme parks. The increase in 2015 was primarily due to the continued success of our attractions, including The Wizarding World of Harry Potter™ — Diagon Alley™ in Orlando and the Fast & Furious™ — Supercharged™ studio tour and The Simpson’s Springfield attraction in Hollywood, both of which opened in 2015. In addition, Theme Parks segment revenue in 2015 includes $169 million of revenue attributable to Universal Studios Japan for the period from November 13, 2015 to December 31, 2015. The increase in 2014 was primarily due to new attractions, such as The Wizarding World of Harry Potter™ — Diagon Alley™ in Orlando, which opened in July 2014, and Despicable Me: Minion Mayhem in Hollywood.


		59		Comcast 2015 Annual Report on Form 10-K

Theme Parks Segment – Operating Costs and Expenses

Our Theme Parks segment operating costs and expenses consist primarily of theme park operations, including repairs and maintenance and related administrative expenses; food, beverage and merchandise costs; labor costs; and sales and marketing costs.

Theme Parks segment operating costs and expenses increased in 2015 and 2014 primarily due to additional costs at our Orlando and Hollywood theme parks associated with newer attractions, such as the Fast Furious™ — Supercharged™ studio tour in Hollywood in 2015 and The Wizarding World of Harry Potter™ — Diagon Alley™ in Orlando in 2014 and increases in food, beverage and merchandise costs associated with the increases in attendance in both years. Operating costs and expenses also increased in 2015 due to $89 million of operating costs and expenses attributable to Universal Studios Japan and $22 million of transaction costs related to our development of a theme park in China.

NBCUniversal Headquarters, Other and Eliminations

Headquarters and Other operating costs and expenses incurred by our NBCUniversal businesses include overhead, personnel costs and costs associated with corporate initiatives. Operating costs and expenses increased in 2015 and 2014 primarily due to higher employee-related costs, including severance costs in 2014.

Corporate and Other Results of Operations


Year ended December 31 (in millions)	2015			2014			2013			% Change 2014 to 2015			% Change 2013 to 2014
Revenue	$	766		$	709		$	600			8.0	%		18.1	%
Operating costs and expenses		1,664			1,487			1,089			11.9			36.5
Operating loss before depreciation and amortization	$	(898	)	$	(778	)	$	(489	)		(15.5	)%		(59.1	)%

Corporate and Other – Revenue

Other revenue 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.

Other revenue increased in 2015 and 2014 primarily due to increases in revenue from food and other services associated with new contracts entered into by one of our Comcast Spectacor businesses. The increase in other revenue in 2014 was also due to an increase in revenue associated with newly acquired businesses.

Corporate and Other – Operating Costs and Expenses

Corporate and Other operating costs and expenses primarily include overhead, personnel costs, the costs of corporate initiatives and branding, and operating costs and expenses associated with Comcast Spectacor.

Excluding transaction costs associated with the Time Warner Cable merger and related divestiture transactions of $178 million and $237 million in 2015 and 2014, respectively, Corporate and Other operating costs and expenses increased 19% in 2015. This was primarily due to $56 million of expenses related to a contract settlement, an increase in expenses related to corporate strategic business initiatives and an increase in operating costs and expenses at Comcast Spectacor primarily associated with new contracts entered into by one of its businesses. Corporate and Other operating costs and expenses increased in 2014 primarily due to $237 million of transaction-related costs associated with the Time Warner Cable merger and related divestiture transactions, as well as an increase in operating costs and expenses associated with new contracts entered into by one of our Comcast Spectacor businesses.


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Consolidated Other Income (Expense) Items, Net


Year ended December 31 (in millions)	2015			2014			2013
Interest expense	$	(2,702	)	$	(2,617	)	$	(2,574	)
Investment income (loss), net		81			296			576
Equity in net income (losses) of investees, net		(325	)		97			(86	)
Other income (expense), net		320			(215	)		(364	)
Total	$	(2,626	)	$	(2,439	)	$	(2,448	)

Interest Expense

Interest expense increased in 2015 primarily due to an increase in our debt outstanding and $47 million of additional interest expense associated with the early redemption in June 2015 of our $750 million aggregate principal amount of 5.85% senior notes due November 2015 and our $1.0 billion aggregate principal amount of 5.90% senior notes due March 2016. Interest expense increased in 2014 primarily due to the effect of our interest rate derivative financial instruments.

Investment Income (Loss), Net

The change in investment income (loss), net in 2015 was primarily due to a $154 million gain related to the sale of our shares of Arris Group common stock in 2014. The change in investment income (loss), net in 2014 was primarily due to a $443 million gain related to the sale of our investment in Clearwire Corporation in 2013. The components of investment income (loss), net are presented in a table in Note 7 to Comcast’s consolidated financial statements.

Equity in Net Income (Losses) of Investees, Net

The change in equity in net income (losses) of investees, net in 2015 was primarily due to TWCC Holding Corp. (“The Weather Channel”) recording impairment charges related to goodwill. We recorded expenses of $333 million in 2015 that represent NBCUniversal’s proportionate share of these impairment charges. The change in 2015 was also due to an increase in our proportionate share of losses in Hulu, LLC (“Hulu”), which were driven by Hulu’s higher programming and marketing costs. In 2015 and 2014, we recognized our proportionate share of losses of $106 million and $20 million, respectively, related to our investment in Hulu.

The change in equity in net income (losses) of investees, net in 2014 was primarily due to $142 million of total equity losses recorded in 2013 attributable to our investment in Hulu. In July 2013, we entered into an agreement to provide capital contributions totaling $247 million to Hulu, which we had previously accounted for as a cost method investment. This represented an agreement to provide our first capital contribution to Hulu since we acquired our interest in it as part of our acquisition of a controlling interest in NBCUniversal in 2011 (the “NBCUniversal transaction”); therefore, we began to apply the equity method of accounting for this investment. The change in the method of accounting for this investment required us to recognize our proportionate share of Hulu’s accumulated losses from the date of the NBCUniversal transaction through July 2013.

Other Income (Expense), Net

Other income (expense), net for 2015 included gains of $335 million on the sales of a business and an investment, $240 million recorded on the settlement of a contingent consideration liability with General Electric Company (“GE”) related to the acquisition of NBCUniversal, and $43 million related to an equity method investment. These gains were partially offset by $236 million of expenses related to fair value adjustments to a contractual obligation. See Note 11 to Comcast’s consolidated financial statements for additional information on this contractual obligation.

Other income (expense), net for 2014 included a $27 million favorable settlement of a contingency related to the AT&T Broadband transaction in 2002, which was more than offset by $208 million of expenses related to


		61		Comcast 2015 Annual Report on Form 10-K

fair value adjustments to contractual obligations and $35 million of expenses related to an indemnification receivable associated with the adjustment to our accruals for uncertain tax positions.

Other income (expense), net for 2013 included a $108 million gain related to our sale of wireless communications spectrum licenses, which was more than offset by the net impact of an impairment of $236 million of our equity method investment in, and loans with, a regional sports cable network based in Houston, Texas and $136 million of expenses related to fair value adjustments to contractual obligations.

Consolidated Income Tax Expense

Income tax expense reflects federal and state income taxes and adjustments associated with uncertain tax positions. Our effective income tax rate in 2015, 2014 and 2013 was 37.1%, 31.1% and 35.8%, respectively.

In 2014, we reduced our accruals for uncertain tax positions and the related accrued interest on these tax positions and, as a result, our income tax expense decreased by $759 million. See Note 15 to Comcast’s consolidated financial statements for additional information on the changes in our accruals for uncertain tax positions and related interest on these tax positions. Our 2013 income tax expense was reduced by $158 million due to the nontaxable portion of the increase in tax basis associated with the redemption of our Liberty Media Series A common stock in October 2013.

Our income tax expense in the future may continue to be impacted by adjustments to uncertain tax positions and related interest, and changes in tax laws. We expect our 2016 annual effective tax rate to be in the range of 37% to 39%, absent changes in tax laws or significant changes in uncertain tax positions.

Consolidated Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Subsidiary Preferred Stock

The increase in net income attributable to noncontrolling interests and redeemable subsidiary preferred stock in 2015 was primarily due to NBCUniversal’s acquisition of Universal Studios Japan. The decrease in 2014 was primarily due to the NBCUniversal redemption transaction.

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; and our ability to obtain future external financing. We anticipate that we will continue to use a substantial portion of our cash flows to meet our debt repayment obligations, to fund our capital expenditures, to invest in business opportunities and to return capital to shareholders.

We also maintain significant availability under our lines of credit and our commercial paper programs to meet our short-term liquidity requirements.

Our commercial paper programs provide a lower-cost source of borrowing to fund our short-term working capital requirements. The Comcast commercial paper program is fully and unconditionally guaranteed by us and our 100% owned cable holding company subsidiary, Comcast Cable Communications, LLC (“CCCL Parent”), as well as by NBCUniversal. The maximum borrowing capacity under the Comcast commercial paper program is $6.25 billion, and it is supported by the Comcast and Comcast Cable Communications, LLC $6.25 billion revolving credit facility due June 2017 (“Comcast revolving credit facility”). The maximum borrowing capacity under the NBCUniversal Enterprise, Inc. (“NBCUniversal Enterprise”) commercial paper program is $1.35 billion, and it is supported by NBCUniversal Enterprise’s $1.35 billion revolving credit facility due March 2018.


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As of December 31, 2015, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $6.4 billion, which included $775 million available under the NBCUniversal Enterprise revolving credit facility.

We, NBCUniversal and CCCL Parent are subject to the covenants and restrictions set forth in the indentures governing our public debt securities and in the credit agreements governing the Comcast revolving credit facility. The only financial covenant is in this credit facility and pertains to leverage, which is the ratio of debt to operating income before depreciation and amortization, as defined in the credit facility. We test for compliance with the financial covenant for this credit facility on an ongoing basis. As of December 31, 2015, we met this financial covenant by a significant margin. We do not expect to have to reduce debt or improve operating results in order to continue to comply with this financial covenant. In addition, as a result of the acquisition of Universal Studios Japan, we consolidated approximately ¥400 billion (approximately $3.3 billion as of December 31, 2015) in term loans that contain certain financial covenants. As of December 31, 2015, Universal Studios Japan was in compliance with all of these covenants.

In 2015, we entered into an agreement to establish Atairos Group, Inc., a new, strategic company focused on investing in and operating growth-oriented companies, both domestically and internationally. The agreement became effective as of January 1, 2016 and Michael J. Angelakis, who served as our Chief Financial Officer through June 30, 2015, now serves as the Chairman and Chief Executive Officer of Atairos. Under the agreement, we are the exclusive non-management investor. Atairos has a term of up to 12 years. We are committed to invest up to $4 billion at any one time in the company, subject to certain offsets, and $40 million annually to fund a management fee, subject to certain adjustments. We will account for our investment in this company under the equity method of accounting.

Operating Activities

Components of Net Cash Provided by Operating Activities


Year ended December 31 (in millions)	2015			2014			2013
Operating income	$	15,998		$	14,904		$	13,563
Depreciation and amortization		8,680			8,019			7,871
Operating income before depreciation and amortization		24,678			22,923			21,434
Noncash share-based compensation		567			513			419
Termination of receivables monetization programs		—			—			(1,442	)
Changes in operating assets and liabilities		(267	)		(357	)		93
Cash basis operating income		24,978			23,079			20,504
Payments of interest		(2,443	)		(2,389	)		(2,355	)
Payments of income taxes		(3,726	)		(3,668	)		(3,946	)
Proceeds from investments and other		251			190			162
Excess tax benefits under share-based compensation		(282	)		(267	)		(205	)
Net cash provided by operating activities	$	18,778		$	16,945		$	14,160

The changes in operating assets and liabilities in 2015 compared to the changes in 2014 were primarily related to the timing of film and television production spending and related costs, net of amortization, the timing of payments related to our accounts payable and accrued expenses related to trade creditors and increases in deferred revenue associated with our Olympics broadcasts, partially offset by the timing of collections on our receivables.

The changes in operating assets and liabilities in 2014 compared to the changes in 2013 were primarily due to the timing of film and television production spending and related costs, net of amortization of approximately $600 million.


		63		Comcast 2015 Annual Report on Form 10-K

Interest payments increased in 2015 primarily due to a higher level of debt outstanding. Interest payments remained relatively flat in 2014.

The increase in income tax payments in 2015 was primarily due to higher taxable income from operations offset by the timing of certain tax deductions. The decrease in income tax payments in 2014 was primarily due to the settlement of tax disputes and the repatriation of foreign earnings in 2013. The decrease was partially offset by higher taxable income from operations and the net impact of the economic stimulus legislation in 2014. We expect income tax payments to increase in 2016 primarily due to higher taxable income from operations.

Investing Activities

Net cash used in investing activities in 2015 consisted primarily of cash paid for capital expenditures, intangible assets, acquisitions and the purchases of investments, which was partially offset by proceeds from the sales of businesses and investments. Net cash used in investing activities in 2014 consisted primarily of cash paid for capital expenditures and intangible assets. Net cash used in investing activities in 2013 consisted primarily of cash paid for capital expenditures, acquisitions and construction of real estate properties, purchases of investments, and cash paid for intangible assets.

Capital Expenditures

Our most significant recurring investing activity has been capital expenditures in our Cable Communications segment, and we expect that this will continue in the future. The table below summarizes the capital expenditures we incurred in our Cable Communications segment in 2015, 2014 and 2013.


Year ended December 31 (in millions)	2015		2014		2013
Cable distribution system	$	2,424	$	2,047	$	1,819
Customer premise equipment		3,698		3,397		2,990
Other equipment		756		613		527
Buildings and building improvements		156		97		67
Total	$	7,034	$	6,154	$	5,403

Cable Communications capital expenditures increased in 2015 and 2014 primarily due to increased spending on customer premise equipment related to our X1 platform and wireless gateways, our continued investment in network infrastructure to increase network capacity, increased investment in support capital as we expand our cloud-based initiatives, and our continued investment to expand business services.

Capital expenditures in our NBCUniversal segments increased 13.5% to $1.4 billion in 2015 and 5.3% to $1.2 billion in 2014 primarily due to continued investment in our Universal theme parks, including a purchase of land in 2015.

Our capital expenditures for 2016 are focused on the continued deployment of our X1 platform and Cloud DVR technology, acceleration of wireless gateways, network infrastructure to increase network capacity, and the expansion of business services. Capital expenditures for subsequent years will depend on numerous factors, including acquisitions, competition, changes in technology, regulatory changes, the timing and rate of deployment of new services, and the capacity required for existing services. In addition, we expect to continue to invest in existing and new attractions at our Universal theme parks. We are developing a Universal theme park in Beijing, China. We expect the development of this park to continue in 2016.

Cash Paid for Intangible Assets

In 2015, 2014 and 2013, cash paid for intangible assets consisted primarily of expenditures for software.


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Acquisitions and Construction of Real Estate Properties

Acquisitions and construction of real estate properties in 2015 and 2014 include our investment in the construction of the Comcast Innovation and Technology Center located in Philadelphia, Pennsylvania. In 2013, acquisitions and construction of real estate properties included NBCUniversal’s purchases of the 30 Rockefeller Plaza properties it occupies and the property located at 10 Universal City Plaza, which is adjacent to Universal Studios Hollywood in University City, California, and our purchase of an 80% interest in a business whose primary asset is our corporate headquarters located in Philadelphia, Pennsylvania.

Acquisitions, Net of Cash Acquired

In November 2015, NBCUniversal acquired a 51% interest in Universal Studios Japan for $1.5 billion. The acquisition was funded through cash on hand and borrowings under our commercial paper program.

Proceeds from Sales of Businesses and Investments

In 2015, proceeds from sales of businesses and investments were primarily related to the sale of our investment in TV One, LLC and the sale of a business, CTI Towers. In 2014, proceeds from sales of businesses and investments were primarily related to the sale of our investment in Arris Group and the sale of equity securities following the settlement of certain of our prepaid forward sale agreements. In 2013, proceeds from sales of businesses and investments were primarily related to the redemption of our Liberty Media Series A common stock by Liberty Media Corporation and the sale of our investment in Clearwire.

Purchases of Investments

Our purchases of investments in 2015 were primarily related to NBCUniversal’s investments in Vox Media, Inc. and BuzzFeed, Inc. Our purchases of investments in 2014 were not significant. In 2013, our purchases of investments were primarily related to equity securities that were held as collateral for our prepaid forward sale agreements.

Financing Activities

Net cash used in financing activities consisted primarily of repurchases of our common stock, repayments of debt and dividend payments, which were partially offset by proceeds from new borrowings. Proceeds from borrowings fluctuate from year to year based on the amounts paid to fund acquisitions and debt repayments.

We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases of our outstanding public notes and debentures, depending on various factors, such as market conditions. See Note 10 to Comcast’s consolidated financial statements for additional information on our financing activities, including details of our debt repayments and borrowings.

Share Repurchases and Dividends

In 2015, we repurchased a total of 116 million shares of our Class A Special and Class A common stock for $6.75 billion. Effective January 1, 2016, our Board of Directors increased our share repurchase program authorization to a total of $10 billion, which does not have an expiration date. Under the authorization, we may repurchase shares in the open market or in private transactions. We expect to repurchase $5 billion of our Class A common stock during 2016, subject to market conditions.

Our Board of Directors declared quarterly dividends totaling $2.5 billion in 2015. We paid dividends of $2.4 billion in 2015. In January 2016, our Board of Directors approved an 10.0% increase in our dividend to $1.10 per share on an annualized basis and approved our first quarter dividend of $0.275 per share to be paid in April 2016. We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors.


		65		Comcast 2015 Annual Report on Form 10-K

The table below sets forth information on our share repurchases and dividends paid in 2015, 2014 and 2013.

LOGO

Contractual Obligations


	Payment Due by Period
As of December 31, 2015 (in millions)	Total		Year 1		Years 2-3		Years 4-5		More than 5
Debt obligations^(a)	$	52,727	$	3,597	$	6,842	$	8,482	$	33,806
Capital lease obligations		156		30		47		39		40
Operating lease obligations		3,459		452		782		608		1,617
Purchase obligations^(b)		53,644		10,848		10,080		8,537		24,179
Other long-term liabilities reflected on the balance sheet^(c)		6,280		590		1,245		2,390		2,055
Total^(d)(e)	$	116,266	$	15,517	$	18,996	$	20,056	$	61,697

Refer to Note 10 and Note 17 to Comcast’s consolidated financial statements.

(a)

Excludes interest payments.

(b)

Purchase obligations consist of agreements to purchase goods and services that are legally binding on us and specify all significant terms, including fixed or minimum quantities to be purchased and price provisions. Our purchase obligations related to our Cable Communications segment include programming contracts with cable networks and local broadcast television stations; contracts with customer premise equipment manufacturers, communications vendors and multichannel video providers for which we provide advertising sales representation; and other contracts entered into in the normal course of business. Cable Communications programming contracts in the table above include amounts payable under fixed or minimum guaranteed commitments and do not represent the total fees that are expected to be paid under programming contracts, which we expect to be significantly higher because these contracts are generally based on the number of subscribers receiving the programming. Our purchase obligations related to our NBCUniversal segments consist primarily of commitments to acquire film and television programming, including U.S. television rights to future Olympic Games through 2032, Sunday Night Football on the NBC network through the 2022-23 season, including the Super Bowl in 2018 and 2021, NHL games through the 2020-21 season, Spanish-language U.S. television rights to FIFA World Cup games through 2022, U.S television rights to English Premier League soccer games through the 2021-22 season, certain PGA TOUR and other golf events through 2030 and certain NASCAR events through 2024, as well as obligations under various creative talent and employment agreements, including obligations to actors, producers, television personalities and executives, and various other television commitments. Purchase obligations do not include contracts with immaterial future commitments.

(c)

Other long-term liabilities reflected on the balance sheet consist primarily of subsidiary preferred shares; deferred compensation obligations; and pension, postretirement and postemployment benefit obligations. A contractual obligation with a carrying value of $1.1 billion is not included in the table above because it is uncertain if the arrangement will be settled. The contractual obligation involves an interest held by a third party in the revenue of certain theme parks. The arrangement provides the counterparty with the right to periodic payments associated with current period revenue and, beginning in 2017, the option to require NBCUniversal to purchase the interest for cash in an amount based on a contractually specified formula, which amount could be significantly higher than our current carrying value. See Note 11 to Comcast’s consolidated financial statements for additional information related to this arrangement. Reserves for uncertain tax positions of $1.1 billion are not included in the table above because it is uncertain if and when these reserves will become payable. Payments of $2.1 billion of participations and residuals are also not included in the table above because we cannot make a reliable estimate of the period in which these obligations will be settled.

(d)

Our contractual obligations do not include the commitment to invest up to $4 billion at any one time as an investor in Atairos due to our inability to estimate the timing of this funding. In addition, we do not include any future expenditures related to the construction and development of the proposed Universal Studios theme park in Beijing, China as we are not currently obligated to make such funding.


Comcast 2015 Annual Report on Form 10-K		66

(e)

Total contractual obligations are made up of the following components.


(in millions)
Liabilities recorded on the balance sheet	$	60,578
Commitments not recorded on the balance sheet		55,688
Total	$	116,266

Off-Balance Sheet Arrangements

As of December 31, 2015, we did not have any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Recent Accounting Pronouncements

See Note 3 to each of Comcast’s and NBCUniversal’s consolidated financial statements for additional information related to recent accounting pronouncements.

Critical Accounting Judgments and Estimates

The preparation of our 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 with the valuation and impairment testing of our cable franchise rights and the accounting for film and television costs are critical in the preparation of our consolidated financial statements. Management has discussed the development and selection of these critical accounting judgments and estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed our disclosures relating to them, which are presented below. See Notes 9 and 6 to Comcast’s consolidated financial statements for a discussion of our accounting policies with respect to these items.

Valuation and Impairment Testing of Cable Franchise Rights

Our largest asset, our cable franchise rights, results from agreements we have with state and local governments that allow us to construct and operate a cable business within a specified geographic area. The value of a franchise is derived from the economic benefits we receive from the right to solicit new customers and to market new services, such as advanced video services and high-speed Internet and voice services, in a particular service area. The amounts we record for cable franchise rights are primarily a result of cable system acquisitions. Typically when we acquire a cable system, the most significant asset we record is the value of the cable franchise rights. Often these cable system acquisitions include multiple franchise areas. We currently serve approximately 6,400 franchise areas in the United States.

We have concluded that our cable franchise rights have an indefinite useful life since there are no legal, regulatory, contractual, competitive, economic or other factors which limit the period over which these rights will contribute to our cash flows. Accordingly, we do not amortize our cable franchise rights but assess the carrying value of our cable franchise rights annually, or more frequently whenever events or changes in circumstances indicate that the carrying amount may exceed the fair value (“impairment testing”).


		67		Comcast 2015 Annual Report on Form 10-K

For the purpose of our impairment testing, we have grouped the recorded values of our various cable franchise rights into our three Cable Communications divisions or units of account. We evaluate the unit of account periodically to ensure our impairment testing is performed at an appropriate level.

The annual impairment test for indefinite-lived intangibles allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible is less than its carrying amount. An entity may choose to perform the qualitative assessment or an entity may bypass the qualitative assessment and proceed directly to the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible is, more likely than not, less than its carrying value, the quantitative impairment test is required. When performing a quantitative assessment, we estimate the fair value of our cable franchise rights primarily based on a discounted cash flow analysis that involves significant judgment. When analyzing the fair values indicated under the discounted cash flow models, we also consider multiples of operating income before depreciation and amortization generated by the underlying assets, current market transactions and profitability information.

In 2015, we performed a qualitative assessment of our cable franchise rights. We considered various factors that would affect the estimated fair values of our cable franchise rights, including changes in our projected future cash flows associated with our Cable Communications segment; market transactions and macroeconomic conditions; and also the 8% increase in our market capitalization since we performed our 2014 quantitative assessment. In addition, we considered the results of our 2014 quantitative assessment, in which the estimated fair values of our franchise rights exceeded the carrying value in our three Cable Communications Divisions by 26%, 42% and 50%, respectively. We also compared our weighted-average cost of capital in 2015 to that used in our 2014 quantitative assessment and it had remained relatively consistent. Based on our 2015 qualitative assessment, we concluded that it was more likely than not that the estimated fair values of our franchise rights were higher than our carrying values and that the performance of a quantitative impairment test was not required.

Since the adoption of the accounting guidance related to goodwill and intangible assets in 2002, we have not recorded any significant impairment charges to cable franchise rights as a result of our impairment testing. A future change in the unit of account could result in the recognition of an impairment charge.

We could also record impairment charges in the future if there are changes in long-term market conditions, in expected future operating results, or in federal or state regulations that prevent us from recovering the carrying value of these cable franchise rights. Assumptions made about increased competition and economic conditions could also impact the results of any qualitative assessment and the valuations used in future annual quantitative impairment testing and result in a reduction in the fair values of our cable franchise rights.

Film and Television Costs

We capitalize film and television production costs, including direct costs, production overhead, print costs, development costs and interest. We amortize capitalized film and television production costs, including acquired libraries, and accrue costs associated with participation and residual payments to programming and production expenses. We generally record the amortization and the accrued costs using the individual film forecast computation method, which amortizes such costs using the ratio of the current period’s revenue to estimated total remaining gross revenue from all sources (“ultimate revenue”). Estimates of ultimate revenue have a significant impact on how quickly capitalized costs are amortized and, therefore, are updated regularly.

Our estimates of ultimate revenue for films generally include revenue from all sources that are expected to be earned within 10 years from the date of a film’s initial release. These estimates are based on the historical performance of similar content, as well as factors unique to the content itself. The most sensitive factor affecting our estimate of ultimate revenue for a film intended for theatrical release is the film’s theatrical


Comcast 2015 Annual Report on Form 10-K		68

performance, as subsequent revenue from the licensing and sale of a film has historically exhibited a high correlation to its theatrical performance. Upon a film’s release, our estimates of revenue from succeeding markets, including home entertainment and other distribution platforms, are revised based on historical relationships and an analysis of current market trends.

With respect to television series or other owned television programming, the most sensitive factor affecting our estimate of ultimate revenue is whether the series can be successfully licensed beyond its initial license. Initial estimates of ultimate revenue are limited to the amount of revenue contracted for each episode under the initial license. Once it is determined that a television series or other owned television programming can be licensed for subsequent platforms, revenue estimates for these platforms, such as U.S. and international syndication, home entertainment, and other distribution platforms, are included in ultimate revenue. Revenue estimates for produced episodes include revenue expected to be earned within 10 years of delivery of the initial episode or, if still in production, 5 years from the delivery of the most recent episode, if later.

We capitalize the costs of programming content that we license but do not own, including rights to multiyear, live-event sports programming, at the earlier of when payments are made for the programming or when the license period begins and the content is available for use. We amortize capitalized programming costs as the associated programs are broadcast. We amortize multiyear, live-event sports programming rights using the ratio of the current period revenue to the estimated ultimate revenue or under the terms of the contract.

Capitalized film and television costs, as well as stage play production costs, are subject to impairment testing when certain triggering events are identified. If the fair value of a production were to fall below its unamortized cost, we would record an adjustment for the amount by which the unamortized capitalized costs exceed the production’s fair value. The fair value assessment is generally based on estimated future discounted cash flows, which are supported by our internal forecasts. Adjustments to capitalized film and stage play production costs of $42 million, $26 million and $167 million were recorded in 2015, 2014 and 2013, respectively.


		69		Comcast 2015 Annual Report on Form 10-K

Item 7A: Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk Management

We maintain a mix of fixed-rate and variable-rate debt and we are exposed to the market risk of adverse changes in interest rates. In order to manage the cost and volatility relating to the interest cost of our outstanding debt, we enter into various interest rate risk management derivative transactions in accordance with our policies.

We monitor our exposure to the risk of adverse changes in interest rates through the use of techniques that include market value and sensitivity analyses. We do not engage in any speculative or leveraged derivative transactions.

Our interest rate derivative financial instruments, which may include swaps, rate locks, caps and collars, represent an integral part of our interest rate risk management program. Comcast’s interest rate derivative financial instruments reduced the portion of Comcast’s total consolidated debt at fixed rates as of December 31, 2015 to 84.5% from 89.2%. NBCUniversal’s interest rate derivative financial instruments reduced the portion of NBCUniversal’s total consolidated debt at fixed rates as of December 31, 2015 to 71.5% from 73.9%.

In 2015, 2014 and 2013, the effect of our interest rate derivative financial instruments was to decrease Comcast’s consolidated interest expense by $62 million, $66 million and $98 million, respectively. The effect of NBCUniversal’s interest rate derivative financial instruments was not material to NBCUniversal’s consolidated financial statements for all periods presented. Interest rate derivative financial instruments may have a significant effect on Comcast’s interest expense in the future.

The table below summarizes as of December 31, 2015 the principal cash flows, notional amounts, fair values and contract terms of financial instruments by contractual year of maturity subject to interest rate risk maintained by us.


(in millions)	2016			2017			2018			2019			2020			Thereafter			Total			Estimated Fair Value as of December 31, 2015
Debt
Fixed rate	$	1,801		$	2,587		$	3,329		$	2,224		$	3,419		$	33,846		$	47,206		$	52,336
Average interest rate		3.9	%		6.9	%		4.4	%		3.2	%		5.1	%		5.2	%		5.1	%
Variable rate	$	1,826		$	108		$	865		$	221		$	2,657		$	—		$	5,677		$	5,678
Average interest rate		1.7	%		3.0	%		2.9	%		3.0	%		2.7	%		0.0	%		2.4	%
Interest Rate Instruments
Fixed to variable swaps	$	300		$	400		$	1,600		$	200		$	—		$	—		$	2,500		$	64
Average pay rate		0.9	%		6.0	%		4.4	%		5.0	%		0.0	%		0.0	%		3.6	%
Average receive rate		2.9	%		6.3	%		5.8	%		5.7	%		0.0	%		0.0	%		5.5	%

The estimated fair value of our interest rate swaps in the table above includes $3 million associated with interest rate swaps held by NBCUniversal.

We use the notional amount of each interest rate derivative financial instrument to calculate the interest to be paid or received. The notional amounts do not represent our exposure to credit loss. The estimated fair value approximates the amount of payments to be made or proceeds to be received to settle the outstanding contracts, including accrued interest. We estimate interest rates on variable rate debt and swaps using the


Comcast 2015 Annual Report on Form 10-K		70

relevant average implied forward rates through the year of maturity based on the yield curve in effect on December 31, 2015, plus the applicable borrowing margin on December 31, 2015.

See Note 2 to each of Comcast’s and NBCUniversal’s consolidated financial statements for additional information on our accounting policies for derivative financial instruments.

Foreign Exchange Risk Management

NBCUniversal has significant operations in a number of countries outside the United States, and certain of NBCUniversal’s operations are conducted in foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. These changes could adversely affect the U.S. dollar value of our non-U.S. dollar revenue and operating costs and expenses and reduce international demand for our content, all of which could negatively affect our business, financial condition and results of operations in a given period or in specific territories.

As part of our overall strategy to manage the level of exposure to the risk of foreign exchange rate fluctuations, NBCUniversal enters into derivative financial instruments related to a significant portion of its foreign currency exposure, resulting from transactions denominated in other than the functional currency. NBCUniversal enters into foreign currency forward contracts that change in value as foreign exchange rates change to protect the U.S. dollar equivalent value of its foreign currency assets, liabilities, commitments, and forecasted foreign currency revenue and expenses. In accordance with our policy, NBCUniversal hedges forecasted foreign currency transactions for periods generally not to exceed 18 months. In certain circumstances, NBCUniversal enters into foreign exchange contracts with initial maturities in excess of 18 months. As of December 31, 2015 and 2014, NBCUniversal had foreign exchange contracts with a total notional value of $998 million and $890 million, respectively. As of December 31, 2015 and 2014, the aggregate estimated fair value of these foreign exchange contracts was not material.

We have analyzed our foreign currency exposure related to NBCUniversal’s operations as of December 31, 2015, including our hedging contracts, to identify assets and liabilities denominated in a currency other than their functional currency. For those assets and liabilities, we then evaluated the effect of a 10% shift in currency exchange rates between the functional currency and the U.S. dollar. Our analysis of such a shift in exchange rates indicated that there would be an immaterial effect on our 2015 income. In addition, the impact of fluctuations in currencies relative to the U.S. dollar for our non-U.S. dollar functional currency operations did not have a material impact on our financial condition or results of operations in 2015.

Comcast is also exposed to the market risks associated with fluctuations in foreign exchange rates as they relate to its foreign currency denominated debt obligations. We use cross-currency swaps for foreign currency denominated debt obligations, when those obligations are denominated in other than the functional currency. Cross-currency swaps effectively convert fixed-rate foreign currency denominated debt to fixed-rate U.S. dollar denominated debt, in order to hedge the risk that the cash flows related to annual interest payments and the payment of principal at maturity may be adversely affected by fluctuations in currency exchange rates. The gains and losses on the cross-currency swaps offset changes in the U.S. dollar equivalent value of the related exposures. As of December 31, 2015 and 2014, the fair value of our cross-currency swaps on our £625 million principal amount of 5.50% senior notes due 2029 was a liability of $71 million and an asset of $37 million, respectively.

Counterparty Credit Risk Management

Comcast and NBCUniversal manage the credit risks associated with our derivative financial instruments through diversification and the evaluation and monitoring of the creditworthiness of counterparties. Although we may be exposed to losses in the event of nonperformance by counterparties, we do not expect such


		71		Comcast 2015 Annual Report on Form 10-K

losses, if any, to be significant. Comcast has agreements with certain counterparties that include collateral provisions. These provisions require a party with an aggregate unrealized loss position in excess of certain thresholds to post cash collateral for the amount in excess of the threshold. The threshold levels in our collateral agreements are based on our and the counterparty’s credit ratings. As of December 31, 2015 and 2014, Comcast was not required to post collateral under the terms of these agreements. As of December 31, 2015, we did not hold any collateral under the terms of these agreements.


Comcast 2015 Annual Report on Form 10-K		72

Item 8: Comcast Corporation Financial Statements and Supplementary Data


Index		Page
Report of Management		74

Report of Independent Registered Public Accounting Firm		75

Consolidated Balance Sheet		76

Consolidated Statement of Income		77

Consolidated Statement of Comprehensive Income		78

Consolidated Statement of Cash Flows		79

Consolidated Statement of Changes in Equity		80

Notes to Consolidated Financial Statements		81

NBCUniversal Media, LLC

See Index to NBCUniversal Media, LLC Financial Statements and Supplemental Data on page 143.


		73		Comcast 2015 Annual Report on Form 10-K

Report of Management

Management’s Report on Comcast’s Financial Statements

Our management is responsible for the preparation, integrity and fair presentation of information in Comcast’s consolidated financial statements, including estimates and judgments. The consolidated financial statements presented in this report have been prepared in accordance with accounting principles generally accepted in the United States. Our management believes the Comcast consolidated financial statements and other financial information included in this report fairly present, in all material respects, Comcast’s financial condition, results of operations and cash flows as of and for the periods presented in this report. The Comcast consolidated financial statements have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

Management’s Report on Comcast’s Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Our internal control over financial reporting includes those policies and procedures that:

•

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets.

•

Provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors.

•

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time. Our system contains self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.

Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that Comcast’s system of internal control over financial reporting was effective as of December 31, 2015. Our assessment of the effectiveness of internal control over financial reporting as of December 31, 2015 did not include the internal controls of the Universal Studios Japan theme park, in which NBCUniversal acquired a 51% interest on November 13, 2015, as permitted by Securities and Exchange Commission guidelines that allow companies to exclude certain acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition. The total assets and total revenues of Universal Studios Japan represented approximately 4% of our total assets as of December 31, 2015, and less than 1% of our total revenues for the year ended December 31, 2015. The effectiveness of Comcast’s internal controls over financial reporting of Comcast has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

Audit Committee Oversight

The Audit Committee of the Board of Directors, which is comprised solely of independent directors, has oversight responsibility for our financial reporting process and the audits of Comcast’s consolidated financial statements and internal control over financial reporting. The Audit Committee meets regularly with management and with our internal auditors and independent registered public accounting firm (collectively, the “auditors”) to review matters related to the quality and integrity of our financial reporting, internal control over financial reporting (including compliance matters related to our Code of Conduct), and the nature, extent, and results of internal and external audits. Our auditors have full and free access and report directly to the Audit Committee. The Audit Committee recommended, and the Board of Directors approved, that the Comcast audited consolidated financial statements be included in this Form 10-K.



Brian L. Roberts	Michael J. Cavanagh	Lawrence J. Salva
Chairman and Chief Executive Officer	Senior Executive Vice President and Chief Financial Officer	Executive Vice President and Chief Accounting Officer


Comcast 2015 Annual Report on Form 10-K		74

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Comcast Corporation

Philadelphia, Pennsylvania

We have audited the accompanying consolidated balance sheets of Comcast Corporation and subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2015. We also have audited the Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in the Report of Management on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the Universal Studios Japan theme park, acquired on November 13, 2015 and whose financial statements constitute approximately 4% of total assets as of December 31, 2015 and less than 1% of total revenue for the year ended December 31, 2015. Accordingly, our audit did not include the internal control over financial reporting at Universal Studios Japan theme park. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Comcast’s Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Comcast Corporation and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

February 5, 2016


		75		Comcast 2015 Annual Report on Form 10-K

Comcast Corporation

Consolidated Balance Sheet


December 31 (in millions, except share data)	2015			2014
Assets
Current Assets:
Cash and cash equivalents	$	2,295		$	3,910
Investments		106			602
Receivables, net		6,896			6,321
Programming rights		1,213			839
Other current assets		1,793			1,859
Total current assets		12,303			13,531
Film and television costs		5,855			5,727
Investments		3,224			3,135
Property and equipment, net		33,665			30,953
Franchise rights		59,364			59,364
Goodwill		32,945			27,316
Other intangible assets, net		16,946			16,980
Other noncurrent assets, net		2,272			2,180
Total assets	$	166,574		$	159,186
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses related to trade creditors	$	6,215		$	5,638
Accrued participations and residuals		1,572			1,347
Deferred revenue		1,302			915
Accrued expenses and other current liabilities		5,462			5,293
Current portion of long-term debt		3,627			4,217
Total current liabilities		18,178			17,410
Long-term debt, less current portion		48,994			43,864
Deferred income taxes		33,566			32,959
Other noncurrent liabilities		10,637			10,819
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests and redeemable subsidiary preferred stock		1,221			1,066
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, 2,869,349,502 and 2,496,598,612; outstanding, 2,432,953,988 and 2,131,137,862		29			25
Class A Special common stock as of December 31, 2014, $0.01 par value— authorized, 7,500,000,000 shares; issued, 471,419,601; outstanding, 400,484,837		—			5
Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375		—			—
Additional paid-in capital		38,518			38,805
Retained earnings		21,413			21,539
Treasury stock, 436,395,514 and 365,460,750 Class A common shares as of December 31, 2015 and 2014, respectively, and 70,934,764 Class A Special common shares as of December 31, 2014		(7,517	)		(7,517	)
Accumulated other comprehensive income (loss)		(174	)		(146	)
Total Comcast Corporation shareholders’ equity		52,269			52,711
Noncontrolling interests		1,709			357
Total equity		53,978			53,068
Total liabilities and equity	$	166,574		$	159,186

See accompanying notes to consolidated financial statements.


Comcast 2015 Annual Report on Form 10-K		76

Comcast Corporation

Consolidated Statement of Income


Year ended December 31 (in millions, except per share data)	2015			2014			2013
Revenue	$	74,510		$	68,775		$	64,657
Costs and Expenses:
Programming and production		22,550			20,912			19,670
Other operating and administrative		21,339			19,854			18,575
Advertising, marketing and promotion		5,943			5,086			4,978
Depreciation		6,781			6,337			6,254
Amortization		1,899			1,682			1,617
		58,512			53,871			51,094
Operating income		15,998			14,904			13,563
Other Income (Expense):
Interest expense		(2,702	)		(2,617	)		(2,574	)
Investment income (loss), net		81			296			576
Equity in net income (losses) of investees, net		(325	)		97			(86	)
Other income (expense), net		320			(215	)		(364	)
		(2,626	)		(2,439	)		(2,448	)
Income before income taxes		13,372			12,465			11,115
Income tax expense		(4,959	)		(3,873	)		(3,980	)
Net income		8,413			8,592			7,135
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock		(250	)		(212	)		(319	)
Net income attributable to Comcast Corporation	$	8,163		$	8,380		$	6,816
Basic earnings per common share attributable to Comcast Corporation shareholders	$	3.28		$	3.24		$	2.60
Diluted earnings per common share attributable to Comcast Corporation shareholders	$	3.24		$	3.20		$	2.56
Dividends declared per common share	$	1.00		$	0.90		$	0.78

See accompanying notes to consolidated financial statements.


		77		Comcast 2011 Annual Report on Form 10-K

Comcast Corporation

Consolidated Statement of Comprehensive Income


Year ended December 31 (in millions)	2015			2014			2013
Net income	$	8,413		$	8,592		$	7,135
Unrealized gains (losses) on marketable securities, net of deferred taxes of $(1), $(19) and $(110)		1			33			185
Deferred gains (losses) on cash flow hedges, net of deferred taxes of $62, $3 and $(14)		(106	)		(5	)		25
Amounts reclassified to net income:
Realized (gains) losses on marketable securities, net of deferred taxes of $1, $59 and $177		(1	)		(99	)		(301	)
Realized (gains) losses on cash flow hedges, net of deferred taxes of $(38), $(27) and $2		64			46