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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2016

OR

 

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

For the Transition Period from                      to                      

 

 

 

 

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

 

 

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

 

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

 

 

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

 

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

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

 

Comcast Corporation

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

NBCUniversal Media, LLC

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

¨

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

 

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

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

As of September 30, 2016, there were 2,383,388,019 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Comcast Corporation Class B common stock outstanding.

Not applicable for NBCUniversal Media, LLC.

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

 

 

 

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TABLE OF CONTENTS

				Page Number
PART I. FINANCIAL INFORMATION
Item 1.		Comcast Corporation Financial Statements			1
		Condensed Consolidated Balance Sheet as of September 30, 2016 and December 31, 2015 (Unaudited)			1
		Condensed Consolidated Statement of Income for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)			2
		Condensed Consolidated Statement of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)			3
		Condensed Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)			4
		Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)			5
		Notes to Condensed Consolidated Financial Statements (Unaudited)			6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			43
Item 4.		Controls and Procedures			43
PART II. OTHER INFORMATION
Item 1.		Legal Proceedings			44
Item 1A.		Risk Factors			44
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			44
Item 5.		Other Information			45
Item 6.		Exhibits			45
SIGNATURES					46
NBCUniversal Media, LLC Financial Statements					47

 

 

Explanatory Note

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

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

You should carefully review the information contained in this Quarterly Report and particularly consider any risk factors set forth in this Quarterly Report and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In

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

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

 

•

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

 

•

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

 

•

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

 

•

our businesses depend on keeping pace with technological developments

 

•

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

 

•

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

 

•

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

 

•

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

 

•

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

 

•

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

 

•

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

 

•

weak economic conditions may have a negative impact on our businesses

 

•

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

 

•

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

 

•

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

 

•

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

 

•

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

 

•

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

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PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Comcast Corporation

Condensed Consolidated Balance Sheet

(Unaudited)

 

(in millions, except share data)		September 30, 2016				December 31, 2015
Assets
Current Assets:
Cash and cash equivalents		$	2,807			$	2,295
Receivables, net			7,533				6,896
Programming rights			1,369				1,213
Other current assets			3,519				1,899
Total current assets			15,228				12,303
Film and television costs			7,153				5,855
Investments			3,857				3,224
Property and equipment, net of accumulated depreciation of $49,540 and $48,100			35,656				33,665
Franchise rights			59,364				59,364
Goodwill			36,652				32,945
Other intangible assets, net of accumulated amortization of $10,678 and $9,868			17,356				16,946
Other noncurrent assets, net			2,658				2,272
Total assets		$	177,924			$	166,574
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses related to trade creditors		$	6,594			$	6,215
Accrued participations and residuals			1,570				1,572
Deferred revenue			1,340				1,302
Accrued expenses and other current liabilities			5,201				5,462
Current portion of long-term debt			3,333				3,627
Total current liabilities			18,038				18,178
Long-term debt, less current portion			57,095				48,994
Deferred income taxes			34,523				33,566
Other noncurrent liabilities			11,119				10,637
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests and redeemable subsidiary preferred stock			1,326				1,221
Equity:
Preferred stock—authorized, 20,000,000 shares; issued, zero			—				—
Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 2,819,783,533 and 2,869,349,502; outstanding, 2,383,388,019 and 2,432,953,988			28				29
Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375			—				—
Additional paid-in capital			38,426				38,518
Retained earnings			22,510				21,413
Treasury stock, 436,395,514 Class A common shares			(7,517	)			(7,517	)
Accumulated other comprehensive income (loss)			34				(174	)
Total Comcast Corporation shareholders’ equity			53,481				52,269
Noncontrolling interests			2,342				1,709
Total equity			55,823				53,978
Total liabilities and equity		$	177,924			$	166,574

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Income

(Unaudited)

 

		Three Months Ended September 30								Nine Months Ended September 30
(in millions, except per share data)		2016				2015				2016				2015
Revenue		$	21,319			$	18,669			$	59,378			$	55,265
Costs and Expenses:
Programming and production			7,003				5,582				17,926				16,714
Other operating and administrative			5,994				5,390				17,280				15,738
Advertising, marketing and promotion			1,487				1,513				4,515				4,407
Depreciation			1,865				1,697				5,518				5,005
Amortization			530				486				1,544				1,405
			16,879				14,668				46,783				43,269
Operating income			4,440				4,001				12,595				11,996
Other Income (Expense):
Interest expense			(751	)			(659	)			(2,186	)			(2,028	)
Investment income (loss), net			80				(26	)			168				24
Equity in net income (losses) of investees, net			(34	)			1				(64	)			(202	)
Other income (expense), net			(11	)			(53	)			104				364
			(716	)			(737	)			(1,978	)			(1,842	)
Income before income taxes			3,724				3,264				10,617				10,154
Income tax expense			(1,400	)			(1,223	)			(3,989	)			(3,797	)
Net income			2,324				2,041				6,628				6,357
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock			(87	)			(45	)			(229	)			(165	)
Net income attributable to Comcast Corporation		$	2,237			$	1,996			$	6,399			$	6,192
Basic earnings per common share attributable to Comcast Corporation shareholders		$	0.93			$	0.81			$	2.65			$	2.48
Diluted earnings per common share attributable to Comcast Corporation shareholders		$	0.92			$	0.80			$	2.62			$	2.45
Dividends declared per common share		$	0.275			$	0.25			$	0.825			$	0.75

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

 

		Three Months Ended September 30								Nine Months Ended September 30
(in millions)		2016				2015				2016				2015
Net income		$	2,324			$	2,041			$	6,628			$	6,357
Unrealized gains (losses) on marketable securities, net of deferred taxes of $—, $—, $(1) and $—			(1	)			1				2				1
Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(7), $30, $46 and $40			12				(50	)			(79	)			(67	)
Amounts reclassified to net income:
Realized (gains) losses on marketable securities, net of deferred taxes of $—, $1, $1 and $1			—				(1	)			(1	)			(1	)
Realized (gains) losses on cash flow hedges, net of deferred taxes of $(6), $(20), $(42) and $(26)			11				32				73				42
Employee benefit obligations, net of deferred taxes of $—, $(8), $(2) and $(8)			—				14				2				14
Currency translation adjustments, net of deferred taxes of $(6), $15, $(122) and $23			45				(41	)			532				(64	)
Comprehensive income			2,391				1,996				7,157				6,282
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock			(87	)			(45	)			(229	)			(165	)
Other comprehensive (income) loss attributable to noncontrolling interests			(34	)			16				(321	)			26
Comprehensive income attributable to Comcast Corporation		$	2,270			$	1,967			$	6,607			$	6,143

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 

		Nine Months Ended September 30
(in millions)		2016				2015
Net cash provided by operating activities		$	13,497			$	13,813
Investing Activities
Capital expenditures			(6,562	)			(5,862	)
Cash paid for intangible assets			(1,163	)			(916	)
Acquisitions and construction of real estate properties			(303	)			(116	)
Acquisitions, net of cash acquired			(3,904	)			(286	)
Proceeds from sales of businesses and investments			188				420
Purchases of investments			(618	)			(712	)
Deposits			(1,761	)			—
Other			(29	)			268
Net cash provided by (used in) investing activities			(14,152	)			(7,204	)
Financing Activities
Proceeds from (repayments of) short-term borrowings, net			610				(220	)
Proceeds from borrowings			9,231				3,996
Repurchases and repayments of debt			(2,994	)			(4,353	)
Repurchases and retirements of common stock			(3,762	)			(5,770	)
Dividends paid			(1,944	)			(1,823	)
Issuances of common stock			23				35
Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock			(194	)			(178	)
Other			197				(313	)
Net cash provided by (used in) financing activities			1,167				(8,626	)
Increase (decrease) in cash and cash equivalents			512				(2,017	)
Cash and cash equivalents, beginning of period			2,295				3,910
Cash and cash equivalents, end of period		$	2,807			$	1,893

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

Condensed Consolidated Statement of Changes in Equity

(Unaudited)

 

		Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock												Common Stock												Additional Paid-In Capital				Retained Earnings				Treasury Stock at Cost				Accumulated Other Comprehensive Income (Loss)				Non- controlling Interests				Total Equity
(in millions)														A				A Special				B
Balance, December 31, 2014		$	1,066											$	25			$	5			$	—			$	38,805			$	21,539			$	(7,517	)		$	(146	)		$	357			$	53,068
Stock compensation plans																											573				(363	)															210
Repurchases and retirements of common stock																			(1	)							(1,155	)			(4,614	)															(5,770	)
Employee stock purchase plans																											106																				106
Dividends declared																															(1,871	)															(1,871	)
Other comprehensive income (loss)																																							(49	)			(26	)			(75	)
Contributions from (distributions to) noncontrolling interests, net			12																																								(114	)			(114	)
Other			67																								187																(74	)			113
Net income (loss)			59																												6,192												106				6,298
Balance, September 30, 2015		$	1,204											$	25			$	4			$	—			$	38,516			$	20,883			$	(7,517	)		$	(195	)		$	249			$	51,965
Balance, December 31, 2015		$	1,221											$	29			$	—			$	—			$	38,518			$	21,413			$	(7,517	)		$	(174	)		$	1,709			$	53,978
Stock compensation plans																											544				(264	)															280
Repurchases and retirements of common stock															(1	)											(722	)			(3,039	)															(3,762	)
Employee stock purchase plans																											117																				117
Dividends declared																															(1,999	)															(1,999	)
Other comprehensive income (loss)																																							208				321				529
Contributions from (distributions to) noncontrolling interests, net			(20	)																																							(99	)			(99	)
Other			62																								(31	)															245				214
Net income (loss)			63																												6,399												166				6,565
Balance, September 30, 2016		$	1,326											$	28			$	—			$	—			$	38,426			$	22,510			$	(7,517	)		$	34			$	2,342			$	55,823

See accompanying notes to condensed consolidated financial statements.

 

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Comcast Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Condensed Consolidated Financial Statements

Basis of Presentation

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

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

Reclassifications

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

Note 2: Recent Accounting Pronouncements

Revenue Recognition

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

Consolidations

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

Financial Assets and Financial Liabilities

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

Leases

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

 

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Comcast Corporation

 

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

Share-Based Compensation

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

We will implement the updated guidance in the first quarter of 2017. As required under the updated guidance, we will prospectively adopt the provisions of this guidance related to the recognition of the excess tax benefits or deficiencies in the statement of income. In addition, upon adoption we will retrospectively adopt the provisions of this guidance related to changes to the statement of cash flows for all periods presented.

If we had adopted the provisions of the updated guidance as of January 1, 2016, it would have increased net income attributable to Comcast Corporation by $34 million and $193 million for the three and nine months ended September 30, 2016, respectively. In addition, the updated guidance would have increased net cash provided by operating activities and decreased net cash provided by (used in) financing activities by $493 million for the nine months ended September 30, 2016. The most significant impact of implementing the new guidance is expected to occur in the first quarter of each year as a result of the vesting of restricted stock awards, which primarily occurs in March.

Note 3: Earnings Per Share

Computation of Diluted EPS

 

		Three Months Ended September 30
		2016												2015
(in millions, except per share data)		Net Income Attributable to Comcast Corporation				Shares				Per Share Amount				Net Income Attributable to Comcast Corporation				Shares				Per Share Amount
Basic EPS attributable to Comcast Corporation shareholders		$	2,237				2,403			$	0.93			$	1,996				2,472			$	0.81
Effect of dilutive securities:
Assumed exercise or issuance of shares relating to stock plans							28												30
Diluted EPS attributable to Comcast Corporation shareholders		$	2,237				2,431			$	0.92			$	1,996				2,502			$	0.80

 

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Comcast Corporation

 

		Nine Months Ended September 30
		2016												2015
(in millions, except per share data)		Net Income Attributable to Comcast Corporation				Shares				Per Share Amount				Net Income Attributable to Comcast Corporation				Shares				Per Share Amount
Basic EPS attributable to Comcast Corporation shareholders		$	6,399				2,419			$	2.65			$	6,192				2,498			$	2.48
Effect of dilutive securities:
Assumed exercise or issuance of shares relating to stock plans							27												32
Diluted EPS attributable to Comcast Corporation shareholders		$	6,399				2,446			$	2.62			$	6,192				2,530			$	2.45

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

Note 4: Significant Transactions

DreamWorks

On August 22, 2016, we acquired all of the outstanding stock of DreamWorks Animation SKG, Inc. (“DreamWorks”) for $3.8 billion. DreamWorks’ stockholders received $41 in cash for each share of DreamWorks common stock. DreamWorks creates animated feature films, television series and specials, live entertainment and related consumer products. The results of operations for DreamWorks are reported in our Filmed Entertainment segment following the acquisition date.

The transaction is accounted for under the acquisition method of accounting and, accordingly, the assets and liabilities are to be recorded at their fair market values as of the acquisition date. Due to the limited amount of time since the acquisition date, the assets and liabilities of DreamWorks were recorded based primarily on their historical carrying values. We recorded the debt we assumed from DreamWorks at its estimated fair value of $381 million and we recorded a liability related to a tax receivable agreement that DreamWorks had previously entered into with one of its former stockholders (the “tax receivable agreement”) at its estimated fair value of $146 million. The fair value of the assumed debt was primarily based on quoted market values. The fair value of the tax receivable agreement was based on the contractual settlement provisions in the agreement and the value is subject to adjustment. In addition, we recorded deferred income taxes based on our estimate of the tax basis of the acquired assets and valuation allowances based on the expected use of net operating loss carryforwards. The remaining assets and liabilities primarily consisted of goodwill and film and television costs. We will adjust the remaining assets and liabilities to fair value and will record the related deferred income tax adjustments as valuations are completed and we obtain information necessary to complete the analyses, but no later than one year from the acquisition date. For purposes of the preliminary allocation of purchase price, the excess of the total transaction value over the recorded values of the net assets acquired has been recorded as goodwill.

The tax receivable agreement was settled immediately following the acquisition and the payment was recorded as an operating activity in our condensed consolidated statement of cash flows. In addition, during the three months ended September 30, 2016, we repaid all of the assumed debt of DreamWorks (see Note 8).

Revenue and net income attributable to the acquisition of DreamWorks were not material for the three and nine months ended September 30, 2016. During the three months ended September 30, 2016, we incurred severance costs of $50 million, which were recorded in operating costs and expenses in our Filmed Entertainment segment.

 

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Universal Studios Japan

On November 13, 2015, NBCUniversal acquired a 51% economic interest in the Universal Studios theme park in Osaka, Japan (“Universal Studios Japan”) for $1.5 billion.

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

Preliminary Allocation of Purchase Price

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

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

Preliminary Allocation of Purchase Price

 

(in millions)
Property and equipment		$	780
Intangible assets			323
Working capital			(33	)
Debt			(3,271	)
Other noncurrent assets and liabilities			22
Identifiable net assets (liabilities) acquired			(2,179	)
Noncontrolling interest			(1,440	)
Goodwill			5,118
Cash consideration transferred		$	1,499

Actual and Unaudited Pro Forma Results

Our consolidated revenue for the three and nine months ended September 30, 2016 included $424 million and $1.1 billion, respectively, from the acquisition of Universal Studios Japan. Our consolidated net income attributable to Comcast Corporation for the three and nine months ended September 30, 2016 included $48 million and $76 million, respectively, from the acquisition of Universal Studios Japan.

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

 

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Unaudited Pro Forma Results

 

(in millions, except per share amounts)		Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
Revenue		$	19,013			$	56,147
Net income		$	2,113			$	6,498
Net income attributable to Comcast Corporation		$	2,033			$	6,263
Basic earnings per common share attributable to Comcast Corporation shareholders		$	0.82			$	2.51
Diluted earnings per common share attributable to Comcast Corporation shareholders		$	0.81			$	2.48

Note 5: Film and Television Costs

 

(in millions)		September 30, 2016				December 31, 2015
Film Costs:
Released, less amortization		$	1,586			$	1,275
Completed, not released			222				226
In production and in development			1,402				907
			3,210				2,408
Television Costs:
Released, less amortization			1,839				1,573
In production and in development			886				737
			2,725				2,310
Programming rights, less amortization			2,587				2,350
			8,522				7,068
Less: Current portion of programming rights			1,369				1,213
Film and television costs		$	7,153			$	5,855

Note 6: Investments

 

 

(in millions)		September 30, 2016				December 31, 2015
Fair Value Method		$	166			$	167
Equity Method:
Atairos			363				—
Hulu			286				184
Other			563				494
			1,212				678
Cost Method:
AirTouch			1,595				1,583
Other			938				902
			2,533				2,485
Total investments			3,911				3,330
Less: Current investments			54				106
Noncurrent investments		$	3,857			$	3,224

 

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Investment Income (Loss), Net

 

		Three Months Ended September 30								Nine Months Ended September 30
(in millions)		2016				2015				2016				2015
Gains on sales and exchanges of investments, net		$	24			$	3			$	39			$	7
Investment impairment losses			(7	)			(15	)			(28	)			(46	)
Unrealized gains (losses) on securities underlying prepaid forward sale agreements			—				—				—				42
Mark to market adjustments on derivative component of prepaid forward sale agreements and indexed debt instruments			(4	)			(5	)			(3	)			(42	)
Interest and dividend income			31				27				91				83
Other, net			36				(36	)			69				(20	)
Investment income (loss), net		$	80			$	(26	)		$	168			$	24

Equity Method

The Weather Channel

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

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

Atairos

In 2015, we entered into an agreement to establish Atairos Group, Inc. (“Atairos”), a strategic company focused on investing in and operating companies in a range of industries and business sectors, both domestically and internationally. The agreement became effective as of January 1, 2016. Atairos has a term of up to 12 years and is controlled by management companies led by our former CFO through interests that carry all of the voting rights. We are the only investor other than our former CFO and the other management company employees. We have committed to fund up to $4 billion in the aggregate at any one time in Atairos, subject to certain offsets, and $40 million annually to fund a management fee, subject to certain adjustments, while the management company investors have committed to fund up to $100 million (with at least $40 million to be funded by our former CFO, subject to his continued role with Atairos). Our economic interests do not carry voting rights and obligate us to absorb approximately 99% of any losses and provide us the right to receive approximately 86.5% of any residual returns in Atairos, in either case on a cumulative basis.

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

For the nine months ended September 30, 2016, we made capital contributions totaling $399 million to Atairos.

Hulu

In August 2016, Time Warner Inc. acquired a 10% interest in Hulu, LLC (“Hulu”), which diluted our interest in Hulu from 33% to 30%. For a period not to exceed three years, Time Warner may put its shares to Hulu or Hulu

 

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may call Time Warner’s shares under certain limited circumstances arising from regulatory review. Given the contingent nature of the put and call options, we recorded a deferred gain of $159 million and a corresponding increase to our investment in Hulu as a result of the dilution. The deferred gain will be recognized in other income (expense), net if and when the options expire unexercised.

For the three and nine months ended September 30, 2016, we recognized our proportionate share of losses of $43 million and $108 million, respectively, related to our investment in Hulu. For the three and nine months ended September 30, 2015, we recognized our proportionate share of losses of $19 million and $43 million, respectively, related to our investment in Hulu.

Cost Method

AirTouch

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

Note 7: Goodwill

 

						NBCUniversal
(in millions)		Cable Communications				Cable Networks				Broadcast Television				Filmed Entertainment				Theme Parks				Corporate and Other				Total
Balance, December 31, 2015		$	12,389			$	12,947			$	806			$	267			$	6,344			$	192			$	32,945
Acquisitions			73				247				—				2,560				—				—				2,880
Adjustments			175				—				—				2				(255	)			(181	)			(259	)
Foreign currency translation			—				5				—				10				1,071				—				1,086
Balance, September 30, 2016		$	12,637			$	13,199			$	806			$	2,839			$	7,160			$	11			$	36,652

Acquisitions during the nine months ended September 30, 2016 included the DreamWorks acquisition in our Filmed Entertainment segment (see Note 4 for additional information). Adjustments to goodwill during the nine months ended September 30, 2016 included the updated preliminary allocation of the purchase price for Universal Studios Japan in our Theme Parks segment and the reclassification of certain operations and businesses from Corporate and Other to our Cable Communications segment.

Note 8: Long-Term Debt

As of September 30, 2016, our debt had a carrying value of $60.4 billion and an estimated fair value of $69.4 billion. The estimated fair value of our publicly traded debt is primarily based on Level 1 inputs that use quoted market values for the debt. The estimated fair value of debt for which there are no quoted market prices is based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.

Debt Borrowings and Repayments

In July 2016, we issued $700 million aggregate principal amount of 1.625% senior notes due 2022, $1.4 billion aggregate principal amount of 2.35% senior notes due 2027, $1.0 billion aggregate principal amount of 3.20% senior notes due 2036 and $1.4 billion aggregate principal amount of 3.40% senior notes due 2046. The proceeds from this offering were primarily used to fund our acquisition of DreamWorks. In May 2016, we issued $1.43 billion aggregate principal amount of 4.05% senior notes due 2046. In February and March 2016, we issued $1.1 billion aggregate principal amount of 2.75% senior notes due 2023 and $2.2 billion aggregate principal amount of 3.15% senior notes due 2026.

 

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Following our acquisition of DreamWorks, we paid $381 million to settle all of the debt we assumed in the DreamWorks acquisition. In June 2016, we repaid at maturity $750 million aggregate principal amount of 4.95% senior notes due 2016. In April 2016, we repaid at maturity $1 billion aggregate principal amount of 2.875% senior notes due 2016 and $700 million aggregate principal amount of NBCUniversal Enterprise Inc.’s (“NBCUniversal Enterprise”) senior notes due 2016.

Revolving Credit Facilities

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

As of September 30, 2016, amounts available under the new consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $6.6 billion, which included $408 million available under NBCUniversal Enterprise’s revolving credit facility.

Commercial Paper Programs

As of September 30, 2016, Comcast and NBCUniversal Enterprise had $505 million and $1.1 billion, respectively, face amount of commercial paper outstanding.

Note 9: Fair Value Measurements

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

 

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Recurring Fair Value Measurements

 

		Fair Value as of
		September 30, 2016																December 31, 2015
(in millions)		Level 1				Level 2				Level 3				Total				Total
Assets
Trading securities		$	5			$	—			$	—			$	5			$	22
Available-for-sale securities			—				126				11				137				133
Interest rate swap agreements			—				43				—				43				53
Other			—				6				24				30				17
Total		$	5			$	175			$	35			$	215			$	225
Liabilities
Other		$	—			$	212			$	—			$	212			$	91
Total		$	—			$	212			$	—			$	212			$	91

Fair Value of Redeemable Subsidiary Preferred Stock

As of September 30, 2016, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $757 million. The estimated fair value is based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument.

Note 10: Share-Based Compensation

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

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

Recognized Share-Based Compensation Expense

 

		Three Months Ended September 30								Nine Months Ended September 30
(in millions)		2016				2015				2016				2015
Restricted share units		$	77			$	67			$	236			$	205
Stock options			48				40				133				118
Employee stock purchase plans			6				6				22				20
Total		$	131			$	113			$	391			$	343

As of September 30, 2016, we had unrecognized pretax compensation expense of $771 million and $425 million related to nonvested RSUs and nonvested stock options, respectively.

 

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Note 11: Supplemental Financial Information

Receivables

 

(in millions)		September 30, 2016				December 31, 2015
Receivables, gross		$	8,090			$	7,595
Less: Allowance for returns and customer incentives			289				473
Less: Allowance for doubtful accounts			268				226
Receivables, net		$	7,533			$	6,896

Accumulated Other Comprehensive Income (Loss)

 

(in millions)		September 30, 2016				September 30, 2015
Unrealized gains (losses) on marketable securities		$	2			$	1
Deferred gains (losses) on cash flow hedges			(52	)			(29	)
Unrecognized gains (losses) on employee benefit obligations			8				(54	)
Cumulative translation adjustments			76				(113	)
Accumulated other comprehensive income (loss), net of deferred taxes		$	34			$	(195	)

Net Cash Provided by Operating Activities

 

		Nine Months Ended September 30
(in millions)		2016				2015
Net income		$	6,628			$	6,357
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			7,062				6,410
Share-based compensation			495				430
Noncash interest expense (income), net			172				147
Equity in net (income) losses of investees, net			64				202
Cash received from investees			58				139
Net (gain) loss on investment activity and other			(159	)			(344	)
Deferred income taxes			985				67
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Current and noncurrent receivables, net			(315	)			(322	)
Film and television costs, net			(593	)			(65	)
Accounts payable and accrued expenses related to trade creditors			46				169
Other operating assets and liabilities			(946	)			623
Net cash provided by operating activities		$	13,497			$	13,813

Cash Payments for Interest and Income Taxes

 

		Three Months Ended September 30								Nine Months Ended September 30
(in millions)		2016				2015				2016				2015
Interest		$	808			$	673			$	2,043			$	1,914
Income taxes		$	1,031			$	1,146			$	2,716			$	3,145

Noncash Investing and Financing Activities

During the nine months ended September 30, 2016:

 

•

we acquired $1.3 billion of property and equipment and intangible assets that were accrued but unpaid

 

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•

we recorded a liability of $658 million for a quarterly cash dividend of $0.275 per common share to be paid in October 2016

Note 12: Commitments and Contingencies

Contingencies

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

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

Note 13: Financial Data by Business Segment

We present our operations in five reportable business segments:

 

•

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

 

•

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

 

•

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

 

•

Filmed Entertainment: Consists primarily of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment worldwide. On August 22, 2016, we acquired all of the outstanding stock of DreamWorks.

 

•

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

 

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

 

		Three Months Ended September 30, 2016
(in millions)		Revenue(g)				Operating Income (Loss) Before Depreciation and Amortization(h)				Depreciation and Amortization				Operating Income (Loss)				Capital Expenditures
Cable Communications(a)(b)		$	12,557			$	4,986			$	1,929			$	3,057			$	2,044
NBCUniversal
Cable Networks(c)			2,942				893				184				709				7
Broadcast Television(c)			3,087				378				27				351				28
Filmed Entertainment			1,792				353				13				340				6
Theme Parks(d)			1,440				706				130				576				228
Headquarters and Other(e)			1				(183	)			91				(274	)			67
Eliminations(f)			(84	)			(1	)			—				(1	)			—
NBCUniversal			9,178				2,146				445				1,701				336
Corporate and Other(b)			168				(223	)			21				(244	)			26
Eliminations(d)(f)			(584	)			(74	)			—				(74	)			—
Comcast Consolidated		$	21,319			$	6,835			$	2,395			$	4,440			$	2,406

 

		Three Months Ended September 30, 2015
(in millions)		Revenue(g)				Operating Income (Loss) Before Depreciation and Amortization(h)				Depreciation and Amortization				Operating Income (Loss)				Capital Expenditures
Cable Communications(a)(b)		$	11,751			$	4,726			$	1,782			$	2,944			$	1,853
NBCUniversal
Cable Networks			2,412				835				193				642				9
Broadcast Television			1,971				150				26				124				28
Filmed Entertainment			1,946				376				8				368				2
Theme Parks(d)			896				434				72				362				156
Headquarters and Other(e)			5				(164	)			81				(245	)			94
Eliminations(f)			(79	)			2				—				2				—
NBCUniversal			7,151				1,633				380				1,253				289
Corporate and Other(b)			167				(211	)			21				(232	)			23
Eliminations(d)(f)			(400	)			36				—				36				—
Comcast Consolidated		$	18,669			$	6,184			$	2,183			$	4,001			$	2,165

 

		Nine Months Ended September 30, 2016
(in millions)		Revenue(g)				Operating Income (Loss) Before Depreciation and Amortization(h)				Depreciation and Amortization				Operating Income (Loss)				Capital Expenditures
Cable Communications(a)(b)		$	37,205			$	14,923			$	5,676			$	9,247			$	5,501
NBCUniversal
Cable Networks(c)			7,961				2,793				561				2,232				15
Broadcast Television(c)			7,299				1,056				89				967				77
Filmed Entertainment			4,526				576				33				543				14
Theme Parks(d)			3,602				1,550				373				1,177				668
Headquarters and Other(e)			10				(518	)			268				(786	)			217
Eliminations(f)			(256	)			—				—				—				—
NBCUniversal			23,142				5,457				1,324				4,133				991
Corporate and Other(b)			547				(668	)			62				(730	)			70
Eliminations(d)(f)			(1,516	)			(55	)			—				(55	)			—
Comcast Consolidated		$	59,378			$	19,657			$	7,062			$	12,595			$	6,562

 

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		Nine Months Ended September 30, 2015
(in millions)		Revenue(g)				Operating Income (Loss) Before Depreciation and Amortization(h)				Depreciation and Amortization				Operating Income (Loss)				Capital Expenditures
Cable Communications(a)(b)		$	34,932			$	14,161			$	5,194			$	8,967			$	4,977
NBCUniversal
Cable Networks			7,221				2,605				588				2,017				20
Broadcast Television(c)			6,032				563				85				478				53
Filmed Entertainment			5,658				1,091				19				1,072				7
Theme Parks(d)			2,320				1,012				214				798				484
Headquarters and Other(e)			12				(473	)			243				(716	)			265
Eliminations(f)			(258	)			2				—				2				—
NBCUniversal			20,985				4,800				1,149				3,651				829
Corporate and Other(b)			524				(651	)			67				(718	)			56
Eliminations(d)(f)			(1,176	)			96				—				96				—
Comcast Consolidated		$	55,265			$	18,406			$	6,410			$	11,996			$	5,862

 

(a)	For the three and nine months ended September 30, 2016 and 2015, Cable Communications segment revenue was derived from the following sources:

 

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

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

 

(b)

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

 

(c)

The revenue and operating costs and expenses associated with our broadcast of the 2016 Rio Olympics were reported in our Cable Networks and Broadcast Television segments. The revenue and operating costs and expenses associated with our broadcast of the 2015 Super Bowl were reported in our Broadcast Television segment.

 

(d)

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

 

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

 

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

•

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

 

•

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

 

•

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

 

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•

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

 

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

 

(h)

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

Note 14: Condensed Consolidating Financial Information

Comcast (“Comcast Parent”), Comcast Cable Communications, LLC (“CCCL Parent”), and NBCUniversal (“NBCUniversal Media Parent”) have fully and unconditionally guaranteed each other’s debt securities, including the Comcast revolving credit facility.

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

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

 

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Comcast Corporation

Condensed Consolidating Balance Sheet

September 30, 2016

 

(in millions)		Comcast Parent				Comcast Holdings				CCCL Parent				NBCUniversal Media Parent				Non- Guarantor Subsidiaries				Elimination and Consolidation Adjustments				Consolidated Comcast Corporation
Assets
Cash and cash equivalents		$	—			$	—			$	—			$	576			$	2,231			$	—			$	2,807
Receivables, net			—				—				—				—				7,533				—				7,533
Programming rights			—				—				—				—				1,369				—				1,369
Other current assets			70				—				—				16				3,433				—				3,519
Total current assets			70				—				—				592				14,566				—				15,228
Film and television costs			—				—				—				—				7,153				—				7,153
Investments			58				—				—				449				3,350				—				3,857
Investments in and amounts due from subsidiaries eliminated upon consolidation			96,542				119,137				125,719				47,218				119,344				(507,960	)			—
Property and equipment, net			244				—				—				—				35,412				—				35,656
Franchise rights			—				—				—				—				59,364				—				59,364
Goodwill			—				—				—				—				36,652				—				36,652
Other intangible assets, net			10				—				—				—				17,346				—				17,356
Other noncurrent assets, net			1,388				147				—				89				2,328				(1,294	)			2,658
Total assets		$	98,312			$	119,284			$	125,719			$	48,348			$	295,515			$	(509,254	)		$	177,924
Liabilities and Equity
Accounts payable and accrued expenses related to trade creditors		$	7			$	—			$	—			$	—			$	6,587			$	—			$	6,594
Accrued participations and residuals			—				—				—				—				1,570				—				1,570
Accrued expenses and other current liabilities			1,448				335				224				361				4,173				—				6,541
Current portion of long-term debt			1,504				—				550				4				1,275				—				3,333
Total current liabilities			2,959				335				774				365				13,605				—				18,038
Long-term debt, less current portion			39,177				138				2,100				8,208				7,472				—				57,095
Deferred income taxes			—				561				—				93				35,017				(1,148	)			34,523
Other noncurrent liabilities			2,695				—				—				1,160				7,410				(146	)			11,119
Redeemable noncontrolling interests and redeemable subsidiary preferred stock			—				—				—				—				1,326				—				1,326
Equity:
Common stock			28				—				—				—				—				—				28
Other shareholders’ equity			53,453				118,250				122,845				38,522				228,343				(507,960	)			53,453
Total Comcast Corporation shareholders’ equity			53,481				118,250				122,845				38,522				228,343				(507,960	)			53,481
Noncontrolling interests			—				—				—				—				2,342				—				2,342
Total equity			53,481				118,250				122,845				38,522				230,685				(507,960	)			55,823
Total liabilities and equity		$	98,312			$	119,284			$	125,719			$	48,348			$	295,515			$	(509,254	)		$	177,924

 

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Comcast Corporation

Condensed Consolidating Balance Sheet

December 31, 2015

 

(in millions)		Comcast Parent				Comcast Holdings				CCCL Parent				NBCUniversal Media Parent				Non- Guarantor Subsidiaries				Elimination and Consolidation Adjustments				Consolidated Comcast Corporation
Assets
Cash and cash equivalents		$	—			$	—			$	—			$	414			$	1,881			$	—			$	2,295
Receivables, net			—				—				—				—				6,896				—				6,896
Programming rights			—				—				—				—				1,213				—				1,213
Other current assets			69				—				—				17				1,813				—				1,899
Total current assets			69				—				—				431				11,803				—				12,303
Film and television costs			—				—				—				—				5,855				—				5,855
Investments			33				—				—				430				2,761				—				3,224
Investments in and amounts due from subsidiaries eliminated upon consolidation			87,142				111,241				119,354				42,441				109,598				(469,776	)			—
Property and equipment, net			210				—				—				—				33,455				—				33,665
Franchise rights			—				—				—				—				59,364				—				59,364
Goodwill			—				—				—				—				32,945				—				32,945
Other intangible assets, net			12				—				—				—				16,934				—				16,946
Other noncurrent assets, net			1,301				147				—				78				2,114				(1,368	)			2,272
Total assets		$	88,767			$	111,388			$	119,354			$	43,380			$	274,829			$	(471,144	)		$	166,574
Liabilities and Equity
Accounts payable and accrued expenses related to trade creditors		$	16			$	—			$	—			$	—			$	6,199			$	—			$	6,215
Accrued participations and residuals			—				—				—				—				1,572				—				1,572
Accrued expenses and other current liabilities			1,789				335				290				389				3,961				—				6,764
Current portion of long-term debt			1,149				—				—				1,005				1,473				—				3,627
Total current liabilities			2,954				335				290				1,394				13,205				—				18,178
Long-term debt, less current portion			31,106				130				2,650				8,211				6,897				—				48,994
Deferred income taxes			—				624				—				66				34,098				(1,222	)			33,566
Other noncurrent liabilities			2,438				—				—				1,087				7,258				(146	)			10,637
Redeemable noncontrolling interests and redeemable subsidiary preferred stock			—				—				—				—				1,221				—				1,221
Equity:
Common stock			29				—				—				—				—				—				29
Other shareholders’ equity			52,240				110,299				116,414				32,622				210,441				(469,776	)			52,240
Total Comcast Corporation shareholders’ equity			52,269				110,299				116,414				32,622				210,441				(469,776	)			52,269
Noncontrolling interests			—				—				—				—				1,709				—				1,709
Total equity			52,269				110,299				116,414				32,622				212,150				(469,776	)			53,978
Total liabilities and equity		$	88,767			$	111,388			$	119,354			$	43,380			$	274,829			$	(471,144	)		$	166,574

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended September 30, 2016

 

(in millions)		Comcast Parent				Comcast Holdings				CCCL Parent				NBCUniversal Media Parent				Non- Guarantor Subsidiaries				Elimination and Consolidation Adjustments				Consolidated Comcast Corporation
Revenue:
Service revenue		$	—			$	—			$	—			$	—			$	21,319			$	—			$	21,319
Management fee revenue			268				—				263				—				—				(531	)			—
			268				—				263				—				21,319				(531	)			21,319
Costs and Expenses:
Programming and production			—				—				—				—				7,003				—				7,003
Other operating and administrative			194				—				263				222				5,846				(531	)			5,994
Advertising, marketing and promotion			—				—				—				—				1,487				—				1,487
Depreciation			7				—				—				—				1,858				—				1,865
Amortization			1				—				—				—				529				—				530
			202				—				263				222				16,723				(531	)			16,879
Operating income (loss)			66				—				—				(222	)			4,596				—				4,440
Other Income (Expense):
Interest expense			(502	)			(3	)			(59	)			(113	)			(74	)			—				(751	)
Investment income (loss), net			3				(4	)			—				(12	)			93				—				80
Equity in net income (losses) of investees, net			2,519				2,385				2,134				1,644				1,255				(9,971	)			(34	)
Other income (expense), net			—				—				—				(2	)			(9	)			—				(11	)
			2,020				2,378				2,075				1,517				1,265				(9,971	)			(716	)
Income (loss) before income taxes			2,086				2,378				2,075				1,295				5,861				(9,971	)			3,724
Income tax (expense) benefit			151				2				21				(6	)			(1,568	)			—				(1,400	)
Net income (loss)			2,237				2,380				2,096				1,289				4,293				(9,971	)			2,324
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock			—				—				—				—				(87	)			—				(87	)
Net income (loss) attributable to Comcast Corporation		$	2,237			$	2,380			$	2,096			$	1,289			$	4,206			$	(9,971	)		$	2,237
Comprehensive income (loss) attributable to Comcast Corporation		$	2,270			$	2,388			$	2,096			$	1,310			$	4,235			$	(10,029	)		$	2,270

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended September 30, 2015

 

(in millions)		Comcast Parent				Comcast Holdings				CCCL Parent				NBCUniversal Media Parent				Non- Guarantor Subsidiaries				Elimination and Consolidation Adjustments				Consolidated Comcast Corporation
Revenue:
Service revenue		$	—			$	—			$	—			$	—			$	18,669			$	—			$	18,669
Management fee revenue			251				—				244				—				—				(495	)			—
			251				—				244				—				18,669				(495	)			18,669
Costs and Expenses:
Programming and production			—				—				—				—				5,582				—				5,582
Other operating and administrative			146				—				244				235				5,260				(495	)			5,390
Advertising, marketing and promotion			—				—				—				—				1,513				—				1,513
Depreciation			8				—				—				—				1,689				—				1,697
Amortization			1				—				—				—				485				—				486
			155				—				244				235				14,529				(495	)			14,668
Operating income (loss)			96				—				—				(235	)			4,140				—				4,001
Other Income (Expense):
Interest expense			(428	)			(3	)			(65	)			(111	)			(52	)			—				(659	)
Investment income (loss), net			3				(4	)			—				(3	)			(22	)			—				(26	)
Equity in net income (losses) of investees, net			2,210				2,123				1,981				1,289				928				(8,530	)			1
Other income (expense), net			—				—				—				(7	)			(46	)			—				(53	)
			1,785				2,116				1,916				1,168				808				(8,530	)			(737	)
Income (loss) before income taxes			1,881				2,116				1,916				933				4,948				(8,530	)			3,264
Income tax (expense) benefit			115				2				23				(6	)			(1,357	)			—				(1,223	)
Net income (loss)			1,996				2,118				1,939				927				3,591				(8,530	)			2,041
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock			—				—				—				—				(45	)			—				(45	)
Net income (loss) attributable to Comcast Corporation		$	1,996			$	2,118			$	1,939			$	927			$	3,546			$	(8,530	)		$	1,996
Comprehensive income (loss) attributable to Comcast Corporation		$	1,967			$	2,112			$	1,940			$	902			$	3,546			$	(8,500	)		$	1,967

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2016

 

(in millions)		Comcast Parent				Comcast Holdings				CCCL Parent				NBCUniversal Media Parent				Non- Guarantor Subsidiaries				Elimination and Consolidation Adjustments				Consolidated Comcast Corporation
Revenue:
Service revenue		$	—			$	—			$	—			$	—			$	59,378			$	—			$	59,378
Management fee revenue			793				—				778				—				—				(1,571	)			—
			793				—				778				—				59,378				(1,571	)			59,378
Costs and Expenses:
Programming and production			—				—				—				—				17,926				—				17,926
Other operating and administrative			635				—				778				739				16,699				(1,571	)			17,280
Advertising, marketing and promotion			—				—				—				—				4,515				—				4,515
Depreciation			21				—				—				—				5,497				—				5,518
Amortization			4				—				—				—				1,540				—				1,544
			660				—				778				739				46,177				(1,571	)			46,783
Operating income (loss)			133				—				—				(739	)			13,201				—				12,595
Other Income (Expense):
Interest expense			(1,431	)			(9	)			(179	)			(342	)			(225	)			—				(2,186	)
Investment income (loss), net			6				(3	)			—				(20	)			185				—				168
Equity in net income (losses) of investees, net			7,239				6,924				6,375				4,229				3,160				(27,991	)			(64	)
Other income (expense), net			—				—				—				115				(11	)			—				104
			5,814				6,912				6,196				3,982				3,109				(27,991	)			(1,978	)
Income (loss) before income taxes			5,947				6,912				6,196				3,243				16,310				(27,991	)			10,617
Income tax (expense) benefit			452				4				63				(19	)			(4,489	)			—				(3,989	)
Net income (loss)			6,399				6,916				6,259				3,224				11,821				(27,991	)			6,628
Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock			—				—				—				—				(229	)			—				(229	)
Net income (loss) attributable to Comcast Corporation		$	6,399			$	6,916			$	6,259			$	3,224			$	11,592			$	(27,991	)		$	6,399
Comprehensive income (loss) attributable to Comcast Corporation		$	6,607			$	7,015			$	6,261			$	3,552			$	12,134			$	(28,962	)		$	6,607

 

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Comcast Corporation

Condensed Consolidating Statement of Income

For the Nine Months Ended September 30, 2015

 

(in millions)

Comcast Parent