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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 June 30, 2015
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 | Registrant; State of Incorporation; Address and Telephone Number |
I.R.S. Employer Identification No. | ||
| 001-32871 | COMCAST CORPORATION | 27-0000798 | ||
| PENNSYLVANIA One Comcast Center Philadelphia, PA 19103-2838 (215) 286-1700 |
||||
| 001-36438 | NBCUNIVERSAL MEDIA, LLC | 14-1682529 | ||
| DELAWARE 30 Rockefeller Plaza New York, NY 10112-0015 (212) 664-4444 |
||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Comcast Corporation |
Yes x |
No ¨ | ||
| NBCUniversal Media, LLC |
Yes x |
No ¨ |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).
| Comcast Corporation |
Yes x |
No ¨ | ||
| NBCUniversal Media, LLC |
Yes x |
No ¨ |
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Comcast Corporation |
Large accelerated filer | x | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ¨ | ||||||||
| NBCUniversal Media, LLC |
Large accelerated filer | ¨ | Accelerated filer | ¨ | Non-accelerated filer | x | Smaller reporting company | ¨ |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
| Comcast Corporation |
Yes ¨ |
No x | ||
| NBCUniversal Media, LLC |
Yes ¨ |
No x |
Indicate the number of shares outstanding of each of the registrant’s classes of stock, as of the latest practical date:
As of June 30, 2015, there were 2,114,785,430 shares of Comcast Corporation Class A common stock, 368,198,461 shares of Comcast Corporation Class A Special 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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Explanatory Note
This Quarterly Report on Form 10-Q is a combined report being filed separately by Comcast Corporation (“Comcast”) and NBCUniversal Media, LLC (“NBCUniversal”). Comcast owns all of the common equity interests in NBCUniversal, and NBCUniversal meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing its information within this Form 10-Q with the reduced disclosure format. Each of Comcast and NBCUniversal is filing on its own behalf the information contained in this report that relates to itself, and neither company makes any representation as to information relating to the other company. Where information or an explanation is provided that is substantially the same for each company, such information or explanation has been combined in this report. Where information or an explanation is not substantially the same for each company, separate information and explanation has been provided. In addition, separate condensed consolidated financial statements for each company, along with notes to the condensed consolidated financial statements, are included in this report. Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to Comcast and its consolidated subsidiaries, including NBCUniversal and its consolidated subsidiaries, as “we,” “us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” and NBCUniversal, LLC as “NBCUniversal Holdings.”
This Quarterly Report on Form 10-Q is for the three and six months ended June 30, 2015. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report.
You should carefully review the information contained in this Quarterly Report and particularly consider any risk factors set forth in this Quarterly Report and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “believes,” “estimates,” “potential,” or “continue,” or the negative of those words, and other comparable words. You should be aware that these statements are only our predictions. In evaluating these statements, you should specifically consider various factors, including the risks outlined below and in other reports we file with the SEC. Actual events or our actual results may differ materially from any of our forward-looking statements. We undertake no obligation to update any forward-looking statements.
Our businesses may be affected by, among other things, the following:
| • | our businesses currently face a wide range of competition, and our businesses and results of operations could be adversely affected if we do not compete effectively |
| • | changes in consumer behavior driven by new products and services may adversely affect our businesses and challenge existing business models |
| • | a decline in advertising 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 businesses |
| • | NBCUniversal’s success depends on consumer acceptance of its content and its businesses may be adversely affected if its content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase |
| • | the loss of NBCUniversal’s programming distribution agreements, or the renewal of these agreements on less favorable terms, could adversely affect its businesses |
| • | we rely on network and information systems and other technologies, as well as key properties, and a disruption, cyber attack, failure or destruction of such networks, systems, technologies or properties may disrupt our businesses |
| • | we may be unable to obtain necessary hardware, software and operational support |
| • | weak economic conditions may have a negative impact on our businesses |
| • | our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others |
| • | acquisitions and other strategic transactions present many risks, and we may not realize the financial and strategic goals that were contemplated at the time of any transaction |
| • | 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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Comcast Corporation
Condensed Consolidated Balance Sheet
(Unaudited)
| (in millions, except share data) | June 30, 2015 |
December 31, 2014 |
||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 3,486 | $ | 3,910 | ||||
| Investments |
144 | 602 | ||||||
| Receivables, net |
7,016 | 6,321 | ||||||
| Programming rights |
847 | 839 | ||||||
| Other current assets |
1,826 | 1,859 | ||||||
| Total current assets |
13,319 | 13,531 | ||||||
| Film and television costs |
5,751 | 5,727 | ||||||
| Investments |
2,999 | 3,135 | ||||||
| Property and equipment, net of accumulated depreciation of $46,738 and $45,410 |
31,572 | 30,953 | ||||||
| Franchise rights |
59,364 | 59,364 | ||||||
| Goodwill |
27,422 | 27,316 | ||||||
| Other intangible assets, net of accumulated amortization of $10,855 and $10,170 |
16,802 | 16,980 | ||||||
| Other noncurrent assets, net |
2,445 | 2,333 | ||||||
| Total assets |
$ | 159,674 | $ | 159,339 | ||||
| Liabilities and Equity |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 5,880 | $ | 5,638 | ||||
| Accrued participations and residuals |
1,583 | 1,347 | ||||||
| Deferred revenue |
1,122 | 915 | ||||||
| Accrued expenses and other current liabilities |
5,093 | 5,293 | ||||||
| Current portion of long-term debt |
3,887 | 4,217 | ||||||
| Total current liabilities |
17,565 | 17,410 | ||||||
| Long-term debt, less current portion |
44,636 | 44,017 | ||||||
| Deferred income taxes |
33,198 | 32,959 | ||||||
| Other noncurrent liabilities |
10,438 | 10,819 | ||||||
| Commitments and contingencies (Note 11) |
||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
1,108 | 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, 2,480,246,180 and 2,496,598,612; outstanding, 2,114,785,430 and 2,131,137,862 |
25 | 25 | ||||||
| Class A Special common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 439,133,225 and 471,419,601; outstanding, 368,198,461 and 400,484,837 |
4 | 5 | ||||||
| Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375 |
— | — | ||||||
| Additional paid-in capital |
38,741 | 38,805 | ||||||
| Retained earnings |
21,313 | 21,539 | ||||||
| Treasury stock, 365,460,750 Class A common shares and 70,934,764 Class A Special common shares |
(7,517 | ) | (7,517 | ) | ||||
| Accumulated other comprehensive income (loss) |
(166 | ) | (146 | ) | ||||
| Total Comcast Corporation shareholders’ equity |
52,400 | 52,711 | ||||||
| Noncontrolling interests |
329 | 357 | ||||||
| Total equity |
52,729 | 53,068 | ||||||
| Total liabilities and equity |
$ | 159,674 | $ | 159,339 | ||||
See accompanying notes to condensed consolidated financial statements.
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Comcast Corporation
Condensed Consolidated Statement of Income
(Unaudited)
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| (in millions, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Revenue |
$ | 18,743 | $ | 16,844 | $ | 36,596 | $ | 34,252 | ||||||||
| Costs and Expenses: |
||||||||||||||||
| Programming and production |
5,669 | 4,874 | 11,132 | 10,782 | ||||||||||||
| Other operating and administrative |
5,280 | 4,922 | 10,359 | 9,671 | ||||||||||||
| Advertising, marketing and promotion |
1,528 | 1,244 | 2,883 | 2,457 | ||||||||||||
| Depreciation |
1,674 | 1,599 | 3,308 | 3,168 | ||||||||||||
| Amortization |
487 | 401 | 919 | 802 | ||||||||||||
| 14,638 | 13,040 | 28,601 | 26,880 | |||||||||||||
| Operating income |
4,105 | 3,804 | 7,995 | 7,372 | ||||||||||||
| Other Income (Expense): |
||||||||||||||||
| Interest expense |
(713 | ) | (648 | ) | (1,369 | ) | (1,290 | ) | ||||||||
| Investment income (loss), net |
17 | 120 | 50 | 233 | ||||||||||||
| Equity in net income (losses) of investees, net |
(236 | ) | 22 | (203 | ) | 54 | ||||||||||
| Other income (expense), net |
315 | (39 | ) | 417 | (54 | ) | ||||||||||
| (617 | ) | (545 | ) | (1,105 | ) | (1,057 | ) | |||||||||
| Income before income taxes |
3,488 | 3,259 | 6,890 | 6,315 | ||||||||||||
| Income tax expense |
(1,313 | ) | (1,234 | ) | (2,574 | ) | (2,352 | ) | ||||||||
| Net income |
2,175 | 2,025 | 4,316 | 3,963 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
(38 | ) | (33 | ) | (120 | ) | (100 | ) | ||||||||
| Net income attributable to Comcast Corporation |
$ | 2,137 | $ | 1,992 | $ | 4,196 | $ | 3,863 | ||||||||
| Basic earnings per common share attributable to Comcast Corporation shareholders |
$ | 0.85 | $ | 0.77 | $ | 1.67 | $ | 1.49 | ||||||||
| Diluted earnings per common share attributable to Comcast Corporation shareholders |
$ | 0.84 | $ | 0.76 | $ | 1.65 | $ | 1.47 | ||||||||
| Dividends declared per common share |
$ | 0.25 | $ | 0.225 | $ | 0.50 | $ | 0.45 | ||||||||
See accompanying notes to condensed consolidated financial statements.
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Comcast Corporation
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Net income |
$ | 2,175 | $ | 2,025 | $ | 4,316 | $ | 3,963 | ||||||||
| Unrealized gains (losses) on marketable securities, net of deferred taxes of $—, $(2), $— and $(19) |
— | 4 | — | 34 | ||||||||||||
| Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(13), $(2), $10 and $(1) |
22 | 4 | (17 | ) | 2 | |||||||||||
| Amounts reclassified to net income: |
||||||||||||||||
| Realized (gains) losses on marketable securities, net of deferred taxes of $—, $28, $— and $58 |
— | (47 | ) | — | (97 | ) | ||||||||||
| Realized (gains) losses on cash flow hedges, net of deferred taxes of $16, $10, $(6) and $12 |
(27 | ) | (17 | ) | 10 | (20 | ) | |||||||||
| Employee benefit obligations, net of deferred taxes of $—, $—, $— and $— |
— | (1 | ) | — | (1 | ) | ||||||||||
| Currency translation adjustments, net of deferred taxes of $(15), $(6), $8 and $(7) |
27 | 10 | (13 | ) | 12 | |||||||||||
| Comprehensive income |
2,197 | 1,978 | 4,296 | 3,893 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
(38 | ) | (33 | ) | (120 | ) | (100 | ) | ||||||||
| Comprehensive income attributable to Comcast Corporation |
$ | 2,159 | $ | 1,945 | $ | 4,176 | $ | 3,793 | ||||||||
See accompanying notes to condensed consolidated financial statements.
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Comcast Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
| Six Months Ended June 30 |
||||||||
| (in millions) | 2015 | 2014 | ||||||
| Net cash provided by operating activities |
$ | 8,834 | $ | 7,547 | ||||
| Investing Activities |
||||||||
| Capital expenditures |
(3,697 | ) | (3,246 | ) | ||||
| Cash paid for intangible assets |
(600 | ) | (477 | ) | ||||
| Acquisitions and construction of real estate properties |
(65 | ) | (10 | ) | ||||
| Acquisitions, net of cash acquired |
(179 | ) | (406 | ) | ||||
| Proceeds from sales of businesses and investments |
395 | 481 | ||||||
| Purchases of investments |
(272 | ) | (77 | ) | ||||
| Other |
182 | (153 | ) | |||||
| Net cash provided by (used in) investing activities |
(4,236 | ) | (3,888 | ) | ||||
| Financing Activities |
||||||||
| Proceeds from (repayments of) short-term borrowings, net |
(137 | ) | (343 | ) | ||||
| Proceeds from borrowings |
3,996 | 2,187 | ||||||
| Repurchases and repayments of debt |
(3,666 | ) | (3,163 | ) | ||||
| Repurchases and retirements of common stock |
(3,585 | ) | (1,500 | ) | ||||
| Dividends paid |
(1,200 | ) | (1,092 | ) | ||||
| Issuances of common stock |
32 | 29 | ||||||
| Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock |
(114 | ) | (117 | ) | ||||
| Other |
(348 | ) | 151 | |||||
| Net cash provided by (used in) financing activities |
(5,022 | ) | (3,848 | ) | ||||
| Increase (decrease) in cash and cash equivalents |
(424 | ) | (189 | ) | ||||
| Cash and cash equivalents, beginning of period |
3,910 | 1,718 | ||||||
| Cash and cash equivalents, end of period |
$ | 3,486 | $ | 1,529 | ||||
See accompanying notes to condensed consolidated financial statements.
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Comcast Corporation
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
| Redeemable |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock at Cost |
Accumulated Other Comprehensive Income (Loss) |
Non- controlling |
Total Equity |
|||||||||||||||||||||||||||||||||||||
| (in millions) | A | A Special | B | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2013 |
$ | 957 | $ | 25 | $ | 5 | $ | — | $ | 38,890 | $ | 19,235 | $ | (7,517 | ) | $ | 56 | $ | 364 | $ | 51,058 | |||||||||||||||||||||||
| Stock compensation plans |
442 | (343 | ) | 99 | ||||||||||||||||||||||||||||||||||||||||
| Repurchases and retirements of common stock |
(345 | ) | (1,155 | ) | (1,500 | ) | ||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plans |
60 | 60 | ||||||||||||||||||||||||||||||||||||||||||
| Dividends declared |
(1,168 | ) | (1,168 | ) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) |
(70 | ) | (70 | ) | ||||||||||||||||||||||||||||||||||||||||
| Issuance of subsidiary shares to noncontrolling interests |
85 | 13 | 13 | |||||||||||||||||||||||||||||||||||||||||
| Contributions from |
(8 | ) | (74 | ) | (74 | ) | ||||||||||||||||||||||||||||||||||||||
| Other |
(14 | ) | (7 | ) | (7 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||||
| Net income (loss) |
35 | 3,863 | 65 | 3,928 | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2014 |
$ | 1,055 | $ | 25 | $ | 5 | $ | — | $ | 39,040 | $ | 20,432 | $ | (7,517 | ) | $ | (14 | ) | $ | 361 | $ | 52,332 | ||||||||||||||||||||||
| Balance, December 31, 2014 |
$ | 1,066 | $ | 25 | $ | 5 | $ | — | $ | 38,805 | $ | 21,539 | $ | (7,517 | ) | $ | (146 | ) | $ | 357 | $ | 53,068 | ||||||||||||||||||||||
| Stock compensation plans |
436 | (308 | ) | 128 | ||||||||||||||||||||||||||||||||||||||||
| Repurchases and retirements of common stock |
(1 | ) | (724 | ) | (2,860 | ) | (3,585 | ) | ||||||||||||||||||||||||||||||||||||
| Employee stock purchase |
71 | 71 | ||||||||||||||||||||||||||||||||||||||||||
| Dividends declared |
(1,254 | ) | (1,254 | ) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive |
(20 | ) | (20 | ) | ||||||||||||||||||||||||||||||||||||||||
| Contributions from (distributions to) noncontrolling interests, net |
4 | (73 | ) | (73 | ) | |||||||||||||||||||||||||||||||||||||||
| Other |
(2 | ) | 153 | (35 | ) | 118 | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) |
40 | 4,196 | 80 | 4,276 | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2015 |
$ | 1,108 | $ | 25 | $ | 4 | $ | — | $ | 38,741 | $ | 21,313 | $ | (7,517 | ) | $ | (166 | ) | $ | 329 | $ | 52,729 | ||||||||||||||||||||||
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 2014 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 2015.
Note 2: Recent Accounting Pronouncements
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board 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. In July 2015, FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. 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.
Debt Issuance Costs
In April 2015, FASB updated the accounting guidance related to the balance sheet presentation of debt issuance costs. The updated accounting guidance requires that debt issuance costs be presented as a direct deduction from the associated debt liability. The updated accounting guidance will be effective for us on January 1, 2016, and early adoption is permitted. The updated accounting guidance will be applied retrospectively to all prior periods presented. The updated accounting guidance will not have a material impact on our consolidated balance sheet.
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Comcast Corporation
Note 3: Earnings Per Share
Computation of Diluted EPS
| Three Months Ended June 30 | ||||||||||||||||||||||||
| 2015 | 2014 | |||||||||||||||||||||||
| (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 |
$ | 2,137 | 2,500 | $ | 0.85 | $ | 1,992 | 2,594 | $ | 0.77 | ||||||||||||||
| Effect of dilutive securities: |
||||||||||||||||||||||||
| Assumed exercise or issuance of shares relating to stock plans |
31 | 34 | ||||||||||||||||||||||
| Diluted EPS attributable to Comcast Corporation shareholders |
$ | 2,137 | 2,531 | $ | 0.84 | $ | 1,992 | 2,628 | $ | 0.76 | ||||||||||||||
| Six Months Ended June 30 | ||||||||||||||||||||||||
| 2015 | 2014 | |||||||||||||||||||||||
| (in millions, except per share data) | Net Income Attributable to Comcast Corporation |
Shares | Per Share Amount |
Net Income Attributable to Comcast Corporation |
Shares | Per Share Amount |
||||||||||||||||||
| Basic EPS attributable to Comcast Corporation shareholders |
$ | 4,196 | 2,510 | $ | 1.67 | $ | 3,863 | 2,598 | $ | 1.49 | ||||||||||||||
| Effect of dilutive securities: |
||||||||||||||||||||||||
| Assumed exercise or issuance of shares relating to stock plans |
34 | 38 | ||||||||||||||||||||||
| Diluted EPS attributable to Comcast Corporation shareholders |
$ | 4,196 | 2,544 | $ | 1.65 | $ | 3,863 | 2,636 | $ | 1.47 | ||||||||||||||
Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Our potentially dilutive securities include potential common shares related to our stock options and our restricted share units (“RSUs”). The amount of potential common shares related to our share-based compensation plans that were excluded from diluted EPS because their effect would have been antidilutive was not material for the three and six months ended June 30, 2015 and 2014.
Note 4: Significant Transactions
Time Warner Cable Merger and Related Divestiture Transactions
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. In connection with these proposed transactions, we incurred incremental transaction-related expenses of $99 million and $198 million for the three and six months ended June 30, 2015, respectively, and $44 million and $61 million for the three and six months ended June 30, 2014, respectively. The transaction-related expenses are reflected primarily in other operating and administrative expenses, with $20 million recorded in depreciation and amortization expenses associated with the write-off of certain capitalized costs in the three and six months ended June 30, 2015.
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Comcast Corporation
Note 5: Film and Television Costs
| (in millions) | June 30, 2015 |
December 31, 2014 |
||||||
| Film Costs: |
||||||||
| Released, less amortization |
$ | 1,499 | $ | 1,371 | ||||
| Completed, not released |
138 | 71 | ||||||
| In production and in development |
856 | 1,189 | ||||||
| 2,493 | 2,631 | |||||||
| Television Costs: |
||||||||
| Released, less amortization |
1,407 | 1,273 | ||||||
| In production and in development |
624 | 505 | ||||||
| 2,031 | 1,778 | |||||||
| Programming rights, less amortization |
2,074 | 2,157 | ||||||
| 6,598 | 6,566 | |||||||
| Less: Current portion of programming rights |
847 | 839 | ||||||
| Film and television costs |
$ | 5,751 | $ | 5,727 | ||||
Note 6: Investments
| (in millions) | June 30, 2015 |
December 31, 2014 |
||||||
| Fair Value Method |
$ | 181 | $ | 662 | ||||
| Equity Method: |
||||||||
| The Weather Channel |
86 | 335 | ||||||
| Hulu |
267 | 167 | ||||||
| Other |
491 | 517 | ||||||
| 844 | 1,019 | |||||||
| Cost Method: |
||||||||
| AirTouch |
1,575 | 1,568 | ||||||
| Other |
543 | 488 | ||||||
| 2,118 | 2,056 | |||||||
| Total investments |
3,143 | 3,737 | ||||||
| Less: Current investments |
144 | 602 | ||||||
| Noncurrent investments |
$ | 2,999 | $ | 3,135 | ||||
Investment Income (Loss), Net
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Gains on sales and exchanges of investments, net |
$ | 4 | $ | 90 | $ | 4 | $ | 173 | ||||||||
| Investment impairment losses |
(16 | ) | (19 | ) | (31 | ) | (24 | ) | ||||||||
| Unrealized gains (losses) on securities underlying prepaid forward sale agreements |
— | 85 | 42 | (28 | ) | |||||||||||
| Mark to market adjustments on derivative component of prepaid forward sale agreements and indexed debt instruments |
1 | (85 | ) | (37 | ) | 32 | ||||||||||
| Interest and dividend income |
28 | 28 | 56 | 56 | ||||||||||||
| Other, net |
— | 21 | 16 | 24 | ||||||||||||
| Investment income (loss), net |
$ | 17 | $ | 120 | $ | 50 | $ | 233 | ||||||||
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Fair Value Method
During the six months ended June 30, 2015, we settled $517 million of our obligations under prepaid forward sale agreements by delivering equity securities. As of June 30, 2015, we have no remaining liabilities related to obligations under prepaid forward sale agreements.
Equity Method
During the three months ended June 30, 2015, The Weather Channel recorded an impairment charge related to goodwill. We recorded an expense of $252 million representing NBCUniversal’s proportionate share of this impairment charge in equity in net income (losses) of investees, net in our condensed consolidated statement of income.
Cost Method
AirTouch
We hold two series of preferred stock of AirTouch Communications, Inc. (“AirTouch”), a subsidiary of Verizon Communications Inc., which are redeemable in April 2020. As of June 30, 2015, 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: Long-Term Debt
As of June 30, 2015, our debt had a carrying value of $48.5 billion and an estimated fair value of $53.2 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, Redemptions and Repayments
In May 2015, we issued $1.5 billion aggregate principal amount of 3.375% senior notes due 2025, $800 million aggregate principal amount of 4.400% senior notes due 2035 and $1.7 billion aggregate principal amount of 4.600% senior notes due 2045. The proceeds from this offering were used for working capital and general corporate purposes, including the 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. The early redemption resulted in $47 million of additional interest expense in our condensed consolidated statement of income.
In January 2015, we repaid at maturity $900 million aggregate principal amount of 6.50% senior notes due 2015. In April 2015, we repaid at maturity $1 billion aggregate principal amount of 3.65% senior notes due 2015.
Revolving Credit Facilities
As of June 30, 2015, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $6.7 billion, which included $645 million available under NBCUniversal Enterprise Inc.’s (“NBCUniversal Enterprise”) revolving credit facility.
Commercial Paper Programs
As of June 30, 2015, NBCUniversal Enterprise had $705 million face amount of commercial paper outstanding.
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Note 8: Fair Value Measurements
The accounting guidance related to financial assets and financial liabilities (“financial instruments”) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). Level 1 consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2 consists of financial instruments that are valued using models or other valuation methodologies. These models use inputs that are observable either directly or indirectly. Level 3 consists of financial instruments whose values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Our financial instruments that are accounted for at fair value on a recurring basis are presented in the table below.
Recurring Fair Value Measures
| Fair Value as of | ||||||||||||||||||||
| June 30, 2015 |
December 31, 2014 |
|||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||
| Assets |
||||||||||||||||||||
| Trading securities |
$ | 37 | $ | — | $ | — | $ | 37 | $ | 523 | ||||||||||
| Available-for-sale securities |
2 | 122 | 10 | 134 | 132 | |||||||||||||||
| Interest rate swap agreements |
— | 71 | — | 71 | 84 | |||||||||||||||
| Other |
— | 60 | 10 | 70 | 71 | |||||||||||||||
| Total |
$ | 39 | $ | 253 | $ | 20 | $ | 312 | $ | 810 | ||||||||||
| Liabilities |
||||||||||||||||||||
| Derivative component of prepaid forward sale agreements and indexed debt instruments |
$ | — | $ | 4 | $ | — | $ | 4 | $ | 361 | ||||||||||
| Contractual obligations |
— | — | 980 | 980 | 883 | |||||||||||||||
| Contingent consideration |
— | — | — | — | 644 | |||||||||||||||
| Other |
— | 10 | — | 10 | 8 | |||||||||||||||
| Total |
$ | — | $ | 14 | $ | 980 | $ | 994 | $ | 1,896 | ||||||||||
Contractual Obligations and Contingent Consideration
In June 2015, we settled a contingent consideration liability related to the acquisition of NBCUniversal, which was based upon future net tax benefits realized by us that would affect future payments to General Electric Company, for a payment of $450 million, which is included as a financing activity in the condensed consolidated statement of cash flows. The settlement resulted in a gain of $240 million which was recorded to other income (expense), net in our condensed consolidated statement of income.
The estimated fair values of the contractual obligations in the table below are primarily based on certain expected future discounted cash flows, the determination of which involves the use of significant unobservable inputs. The most significant unobservable inputs we use include our estimates of the future revenue we expect to generate from certain NBCUniversal businesses. The discount rates used in the measurements of fair value as of June 30, 2015 were between 12% and 13% and are based on the underlying risk associated with our estimate of future revenue and the terms of the respective contracts. The fair value adjustments to the contractual obligations are sensitive to the assumptions related to future revenue, as well as to current interest rates, and therefore the adjustments are recorded to other income (expense), net in our condensed consolidated statement of income.
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Changes in Contractual Obligations
| (in millions) | Contractual Obligations |
|||
| Balance, December 31, 2014 |
$ | 883 | ||
| Fair value adjustments |
136 | |||
| Payments |
(39 | ) | ||
| Balance, June 30, 2015 |
$ | 980 | ||
Fair Value of Redeemable Subsidiary Preferred Stock
As of June 30, 2015, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $748 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 9: Share-Based Compensation
Our share-based compensation primarily consists of awards of stock options and RSUs 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 2015, we granted 17.6 million stock options and 5.1 million RSUs related to our annual management awards. The weighted-average fair values associated with these grants were $11.79 per stock option and $59.50 per RSU.
Recognized Share-Based Compensation Expense
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Stock options |
$ | 43 | $ | 47 | $ | 78 | $ | 83 | ||||||||
| Restricted share units |
80 | 68 | 138 | 116 | ||||||||||||
| Employee stock purchase plans |
6 | 7 | 14 | 13 | ||||||||||||
| Total |
$ | 129 | $ | 122 | $ | 230 | $ | 212 | ||||||||
As of June 30, 2015, we had unrecognized pretax compensation expense of $424 million and $647 million related to nonvested stock options and nonvested RSUs, respectively.
Note 10: Supplemental Financial Information
Receivables
| (in millions) | June 30, 2015 |
December 31, 2014 |
||||||
| Receivables, gross |
$ | 7,529 | $ | 6,885 | ||||
| Less: Allowance for returns and customer incentives |
288 | 359 | ||||||
| Less: Allowance for doubtful accounts |
225 | 205 | ||||||
| Receivables, net |
$ | 7,016 | $ | 6,321 | ||||
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Accumulated Other Comprehensive Income (Loss)
| (in millions) | June 30, 2015 |
June 30, 2014 |
||||||
| Unrealized gains (losses) on marketable securities |
$ | 1 | $ | 4 | ||||
| Deferred gains (losses) on cash flow hedges |
(11 | ) | (63 | ) | ||||
| Unrecognized gains (losses) on employee benefit obligations |
(68 | ) | 70 | |||||
| Cumulative translation adjustments |
(88 | ) | (25 | ) | ||||
| Accumulated other comprehensive income (loss), net of deferred taxes |
$ | (166 | ) | $ | (14 | ) | ||
Net Cash Provided by Operating Activities
| Six Months Ended June 30 |
||||||||
| (in millions) | 2015 | 2014 | ||||||
| Net income |
$ | 4,316 | $ | 3,963 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
4,227 | 3,970 | ||||||
| Share-based compensation |
294 | 266 | ||||||
| Noncash interest expense (income), net |
95 | 87 | ||||||
| Equity in net (income) losses of investees, net |
203 | (54 | ) | |||||
| Cash received from investees |
52 | 50 | ||||||
| Net (gain) loss on investment activity and other |
(437 | ) | (113 | ) | ||||
| Deferred income taxes |
111 | (22 | ) | |||||
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
||||||||
| Current and noncurrent receivables, net |
(707 | ) | 60 | |||||
| Film and television costs, net |
176 | (28 | ) | |||||
| Accounts payable and accrued expenses related to trade creditors |
109 | (168 | ) | |||||
| Other operating assets and liabilities |
395 | (464 | ) | |||||
| Net cash provided by operating activities |
$ | 8,834 | $ | 7,547 | ||||
Cash Payments for Interest and Income Taxes
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Interest |
$ | 550 | $ | 541 | $ | 1,241 | $ | 1,164 | ||||||||
| Income taxes |
$ | 1,881 | $ | 1,718 | $ | 1,999 | $ | 1,904 | ||||||||
Noncash Investing and Financing Activities
During the six months ended June 30, 2015:
| • | we acquired $964 million of property and equipment and intangible assets that were accrued but unpaid |
| • | we recorded a liability of $624 million for a quarterly cash dividend of $0.25 per common share paid in July 2015 |
| • | we used $517 million of equity securities to settle our obligations under prepaid forward sale agreements |
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Note 11: 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 12: 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 a leading provider of video, high-speed Internet and voice services (“cable services”) to residential customers under the XFINITY brand; we also provide similar and other services to small and medium-sized businesses 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 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 production operations. |
| • | Filmed Entertainment: Consists primarily of the studio 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 evaluating the profitability of our operating segments, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management. Our financial data by business segment is presented in the tables below.
| Three Months Ended June 30, 2015 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 11,729 | $ | 4,798 | $ | 1,726 | $ | 3,072 | $ | 1,676 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
2,450 | 872 | 211 | 661 | 5 | |||||||||||||||
| Broadcast Television |
1,813 | 231 | 30 | 201 | 14 | |||||||||||||||
| Filmed Entertainment |
2,266 | 422 | 6 | 416 | 4 | |||||||||||||||
| Theme Parks |
773 | 354 | 76 | 278 | 166 | |||||||||||||||
| Headquarters and Other(b) |
3 | (169 | ) | 82 | (251 | ) | 83 | |||||||||||||
| Eliminations(c) |
(75 | ) | 2 | — | 2 | — | ||||||||||||||
| NBCUniversal |
7,230 | 1,712 | 405 | 1,307 | 272 | |||||||||||||||
| Corporate and Other |
176 | (252 | ) | 30 | (282 | ) | 23 | |||||||||||||
| Eliminations(c) |
(392 | ) | 8 | — | 8 | — | ||||||||||||||
| Comcast Consolidated |
$ | 18,743 | $ | 6,266 | $ | 2,161 | $ | 4,105 | $ | 1,971 | ||||||||||
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| Three Months Ended June 30, 2014 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 11,029 | $ | 4,564 | $ | 1,604 | $ | 2,960 | $ | 1,493 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
2,476 | 914 | 180 | 734 | 8 | |||||||||||||||
| Broadcast Television |
1,816 | 240 | 27 | 213 | 26 | |||||||||||||||
| Filmed Entertainment |
1,176 | 195 | 5 | 190 | 3 | |||||||||||||||
| Theme Parks |
615 | 244 | 73 | 171 | 158 | |||||||||||||||
| Headquarters and Other(b) |
4 | (159 | ) | 85 | (244 | ) | 103 | |||||||||||||
| Eliminations(c) |
(71 | ) | — | — | — | — | ||||||||||||||
| NBCUniversal |
6,016 | 1,434 | 370 | 1,064 | 298 | |||||||||||||||
| Corporate and Other |
172 | (182 | ) | 26 | (208 | ) | 7 | |||||||||||||
| Eliminations(c) |
(373 | ) | (12 | ) | — | (12 | ) | — | ||||||||||||
| Comcast Consolidated |
$ | 16,844 | $ | 5,804 | $ | 2,000 | $ | 3,804 | $ | 1,798 | ||||||||||
| Six Months Ended June 30, 2015 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 23,159 | $ | 9,472 | $ | 3,401 | $ | 6,071 | $ | 3,121 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
4,809 | 1,770 | 395 | 1,375 | 11 | |||||||||||||||
| Broadcast Television |
4,061 | 413 | 59 | 354 | 25 | |||||||||||||||
| Filmed Entertainment |
3,712 | 715 | 11 | 704 | 5 | |||||||||||||||
| Theme Parks |
1,424 | 617 | 142 | 475 | 328 | |||||||||||||||
| Headquarters and Other(b) |
7 | (309 | ) | 162 | (471 | ) | 171 | |||||||||||||
| Eliminations(c) |
(179 | ) | — | — | — | — | ||||||||||||||
| NBCUniversal |
13,834 | 3,206 | 769 | 2,437 | 540 | |||||||||||||||
| Corporate and Other |
380 | (477 | ) | 57 | (534 | ) | 36 | |||||||||||||
| Eliminations(c) |
(777 | ) | 21 | — | 21 | — | ||||||||||||||
| Comcast Consolidated |
$ | 36,596 | $ | 12,222 | $ | 4,227 | $ | 7,995 | $ | 3,697 | ||||||||||
| Six Months Ended June 30, 2014 | ||||||||||||||||||||
| (in millions) | Revenue(d) | Operating Income (Loss) Before Depreciation and Amortization(e) |
Depreciation and Amortization |
Operating Income (Loss) |
Capital Expenditures |
|||||||||||||||
| Cable Communications(a) |
$ | 21,786 | $ | 8,964 | $ | 3,188 | $ | 5,776 | $ | 2,638 | ||||||||||
| NBCUniversal |
||||||||||||||||||||
| Cable Networks |
4,981 | 1,809 | 369 | 1,440 | 19 | |||||||||||||||
| Broadcast Television |
4,437 | 362 | 54 | 308 | 37 | |||||||||||||||
| Filmed Entertainment |
2,527 | 483 | 10 | 473 | 4 | |||||||||||||||
| Theme Parks |
1,102 | 414 | 142 | 272 | 302 | |||||||||||||||
| Headquarters and Other(b) |
6 | (322 | ) | 160 | (482 | ) | 227 | |||||||||||||
| Eliminations(c) |
(161 | ) | (1 | ) | — | (1 | ) | — | ||||||||||||
| NBCUniversal |
12,892 | 2,745 | 735 | 2,010 | 589 | |||||||||||||||
| Corporate and Other |
346 | (335 | ) | 47 | (382 | ) | 19 | |||||||||||||
| Eliminations(c) |
(772 | ) | (32 | ) | — | (32 | ) | — | ||||||||||||
| Comcast Consolidated |
$ | 34,252 | $ | 11,342 | $ | 3,970 | $ | 7,372 | $ | 3,246 | ||||||||||
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| (a) | For the three and six months ended June 30, 2015 and 2014, Cable Communications segment revenue was derived from the following sources: |
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Residential: |
||||||||||||||||
| Video |
46.3 | % | 47.5 | % | 46.5 | % | 47.8 | % | ||||||||
| High-speed Internet |
26.4 | % | 25.6 | % | 26.5 | % | 25.6 | % | ||||||||
| Voice |
7.7 | % | 8.4 | % | 7.8 | % | 8.5 | % | ||||||||
| Business services |
9.9 | % | 8.7 | % | 9.8 | % | 8.6 | % | ||||||||
| Advertising |
5.0 | % | 5.3 | % | 4.7 | % | 5.0 | % | ||||||||
| Other |
4.7 | % | 4.5 | % | 4.7 | % | 4.5 | % | ||||||||
| Total |
100 | % | 100 | % | 100 | % | 100.0 | % | ||||||||
Subscription revenue received from customers who purchase bundled services at a discounted rate is allocated proportionally to each service based on the individual service’s price on a stand-alone basis.
For both the three and six months ended June 30, 2015 and 2014, 2.8% of Cable Communications segment revenue was derived from franchise and other regulatory fees.
| (b) | NBCUniversal Headquarters and Other activities include costs associated with overhead, allocations, personnel costs and headquarter initiatives. |
| (c) | Included in Eliminations are transactions that our segments enter into with one another. The most common types of transactions are the following: |
| • | our Cable Networks and Broadcast Television segments generate revenue by selling programming to our Cable Communications segment, which represents a substantial majority of the revenue elimination amount |
| • | our Cable Communications segment generates revenue by selling advertising and by selling the use of satellite feeds to our Cable Networks segment |
| • | our Filmed Entertainment and Broadcast Television segments generate revenue by licensing content to our Cable Networks segment |
| • | our Cable Communications segment receives incentives offered by our Cable Networks segment in connection with its distribution of the Cable Networks’ content that are recorded as a reduction to programming expenses |
| (d) | No single customer accounted for a significant amount of revenue in any period. |
| (e) | We use operating income (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses 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. |
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Note 13: Condensed Consolidating Financial Information
Comcast (“Comcast Parent”), Comcast Cable Communications, LLC (“CCCL Parent”), Comcast MO Group, Inc. (“Comcast MO Group”), Comcast Cable Holdings, LLC (“CCH”) and Comcast MO of Delaware, LLC (“Comcast MO of Delaware”) (collectively, the “cable guarantors”) and NBCUniversal (“NBCUniversal Media Parent”) have fully and unconditionally guaranteed each other’s debt securities. In addition, the Comcast and Comcast Cable Communications, LLC $6.25 billion revolving credit facility due June 2017 and the Comcast commercial paper program are also fully and unconditionally guaranteed by NBCUniversal Media Parent. The Comcast commercial paper program is supported by the Comcast and Comcast Cable Communications, LLC revolving credit facility. Comcast MO Group, CCH and Comcast MO of Delaware are collectively referred to as the “Combined CCHMO Parents.”
Comcast Parent and the cable guarantors also fully and unconditionally guarantee NBCUniversal Enterprise’s $4 billion senior notes, as well as its $1.35 billion revolving credit facility due March 2018 and the associated commercial paper program. NBCUniversal Media Parent does not guarantee the NBCUniversal Enterprise senior notes, credit facility or commercial paper program.
Comcast Parent provides an unconditional subordinated guarantee of the $185 million principal amount currently outstanding of Comcast Holdings’ ZONES due October 2029. Neither the cable guarantors nor NBCUniversal Media Parent guarantee the Comcast Holdings’ ZONES due October 2029. None of Comcast Parent, the cable guarantors nor NBCUniversal Media Parent guarantee the $62 million principal amount currently outstanding of Comcast Holdings’ ZONES due November 2029.
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Condensed Consolidating Balance Sheet
June 30, 2015
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | — | $ | — | $ | — | $ | 299 | $ | 3,187 | $ | — | $ | 3,486 | ||||||||||||||||
| Investments |
— | — | — | — | — | 144 | — | 144 | ||||||||||||||||||||||||
| Receivables, net |
— | — | — | — | — | 7,016 | — | 7,016 | ||||||||||||||||||||||||
| Programming rights |
— | — | — | — | — | 847 | — | 847 | ||||||||||||||||||||||||
| Other current assets |
363 | — | — | — | 41 | 1,422 | — | 1,826 | ||||||||||||||||||||||||
| Total current assets |
363 | — | — | — | 340 | 12,616 | — | 13,319 | ||||||||||||||||||||||||
| Film and television costs |
— | — | — | — | — | 5,751 | — | 5,751 | ||||||||||||||||||||||||
| Investments |
29 | — | — | — | 110 | 2,860 | — | 2,999 | ||||||||||||||||||||||||
| Investments in and amounts due from subsidiaries eliminated upon consolidation |
85,330 | 107,732 | 114,403 | 62,010 | 41,566 | 103,682 | (514,723 | ) | — | |||||||||||||||||||||||
| Property and equipment, net |
203 | — | — | — | — | 31,369 | — | 31,572 | ||||||||||||||||||||||||
| Franchise rights |
— | — | — | — | — | 59,364 | — | 59,364 | ||||||||||||||||||||||||
| Goodwill |
— | — | — | — | — | 27,422 | — | 27,422 | ||||||||||||||||||||||||
| Other intangible assets, net |
10 | — | — | — | — | 16,792 | — | 16,802 | ||||||||||||||||||||||||
| Other noncurrent assets, net |
1,223 | 148 | — | — | 91 | 2,048 | (1,065 | ) | 2,445 | |||||||||||||||||||||||
| Total assets |
$ | 87,158 | $ | 107,880 | $ | 114,403 | $ | 62,010 | $ | 42,107 | $ | 261,904 | $ | (515,788 | ) | $ | 159,674 | |||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 18 | $ | — | $ | — | $ | — | $ | — | $ | 5,862 | $ | — | $ | 5,880 | ||||||||||||||||
| Accrued participations and residuals |
— | — | — | — | — | 1,583 | — | 1,583 | ||||||||||||||||||||||||
| Accrued expenses and other current liabilities |
1,838 | 283 | 219 | 49 | 341 | 3,485 | — | 6,215 | ||||||||||||||||||||||||
| Current portion of long-term debt |
750 | — | — | 674 | 1,004 | 1,459 | — | 3,887 | ||||||||||||||||||||||||
| Total current liabilities |
2,606 | 283 | 219 | 723 | 1,345 | 12,389 | — | 17,565 | ||||||||||||||||||||||||
| Long-term debt, less current portion |
29,857 | 128 | 1,828 | 822 | 8,214 | 3,787 | — | 44,636 | ||||||||||||||||||||||||
| Deferred income taxes |
— | 662 | — | — | 59 | 33,398 | (921 | ) | 33,198 | |||||||||||||||||||||||
| Other noncurrent liabilities |
2,295 | — | — | — | 1,122 | 7,165 | (144 | ) | 10,438 | |||||||||||||||||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | 1,108 | — | 1,108 | ||||||||||||||||||||||||
| Equity: |
||||||||||||||||||||||||||||||||
| Common stock |
29 | — | — | — | — | — | — | 29 | ||||||||||||||||||||||||
| Other shareholders’ equity |
52,371 | 106,807 | 112,356 | 60,465 | 31,367 | 203,728 | (514,723 | ) | 52,371 | |||||||||||||||||||||||
| Total Comcast Corporation shareholders’ equity |
52,400 | 106,807 | 112,356 | 60,465 | 31,367 | 203,728 | (514,723 | ) | 52,400 | |||||||||||||||||||||||
| Noncontrolling interests |
— | — | — | — | — | 329 | — | 329 | ||||||||||||||||||||||||
| Total equity |
52,400 | 106,807 | 112,356 | 60,465 | 31,367 | 204,057 | (514,723 | ) | 52,729 | |||||||||||||||||||||||
| Total liabilities and equity |
$ | 87,158 | $ | 107,880 | $ | 114,403 | $ | 62,010 | $ | 42,107 | $ | 261,904 | $ | (515,788 | ) | $ | 159,674 | |||||||||||||||
17
Table of Contents
Comcast Corporation
Condensed Consolidating Balance Sheet
December 31, 2014
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | — | $ | — | $ | — | $ | 385 | $ | 3,525 | $ | — | $ | 3,910 | ||||||||||||||||
| Investments |
— | — | — | — | — | 602 | — | 602 | ||||||||||||||||||||||||
| Receivables, net |
— | — | — | — | — | 6,321 | — | 6,321 | ||||||||||||||||||||||||
| Programming rights |
— | — | — | — | — | 839 | — | 839 | ||||||||||||||||||||||||
| Other current assets |
267 | — | — | — | 41 | 1,551 | — | 1,859 | ||||||||||||||||||||||||
| Total current assets |
267 | — | — | — | 426 | 12,838 | — | 13,531 | ||||||||||||||||||||||||
| Film and television costs |
— | — | — | — | — | 5,727 | — | 5,727 | ||||||||||||||||||||||||
| Investments |
36 | — | — | — | 378 | 2,721 | — | 3,135 | ||||||||||||||||||||||||
| Investments in and amounts due from subsidiaries eliminated upon consolidation |
84,142 | 103,420 | 110,323 | 58,677 | 41,239 | 98,152 | (495,953 | ) | — | |||||||||||||||||||||||
| Property and equipment, net |
199 | — | — | — | — | 30,754 | — | 30,953 | ||||||||||||||||||||||||
| Franchise rights |
— | — | — | — | — | 59,364 | — | 59,364 | ||||||||||||||||||||||||
| Goodwill |
— | — | — | — | — | 27,316 | — | 27,316 | ||||||||||||||||||||||||
| Other intangible assets, net |
11 | — | — | — | — | 16,969 | — | 16,980 | ||||||||||||||||||||||||
| Other noncurrent assets, net |
1,224 | 148 | — | — | 92 | 1,949 | (1,080 | ) | 2,333 | |||||||||||||||||||||||
| Total assets |
$ | 85,879 | $ | 103,568 | $ | 110,323 | $ | 58,677 | $ | 42,135 | $ | 255,790 | $ | (497,033 | ) | $ | 159,339 | |||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses related to trade creditors |
$ | 19 | $ | — | $ | — | $ | 1 | $ | — | $ | 5,618 | $ | — | $ | 5,638 | ||||||||||||||||
| Accrued participations and residuals |
— | — | — | — | — | 1,347 | — | 1,347 | ||||||||||||||||||||||||
| Accrued expenses and other current liabilities |
1,547 | 283 | 233 | 47 | 331 | 3,767 | — | 6,208 | ||||||||||||||||||||||||
| Current portion of long-term debt |
1,650 | — | — | 677 | 1,006 | 884 | — | 4,217 | ||||||||||||||||||||||||
| Total current liabilities |
3,216 | 283 | 233 | 725 | 1,337 | 11,616 | — | 17,410 | ||||||||||||||||||||||||
| Long-term debt, less current portion |
27,616 | 126 | 1,827 | 822 | 9,218 | 4,408 | — | 44,017 | ||||||||||||||||||||||||
| Deferred income taxes |
— | 701 | — | — | 67 | 33,127 | (936 | ) | 32,959 | |||||||||||||||||||||||
| Other noncurrent liabilities |
2,336 | — | — | — | 1,143 | 7,484 | (144 | ) | 10,819 | |||||||||||||||||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | 1,066 | — | 1,066 | ||||||||||||||||||||||||
| Equity: |
||||||||||||||||||||||||||||||||
| Common stock |
30 | — | — | — | — | — | — | 30 | ||||||||||||||||||||||||
| Other shareholders’ equity |
52,681 | 102,458 | 108,263 | 57,130 | 30,370 | 197,732 | (495,953 | ) | 52,681 | |||||||||||||||||||||||
| Total Comcast Corporation shareholders’ equity |
52,711 | 102,458 | 108,263 | 57,130 | 30,370 | 197,732 | (495,953 | ) | 52,711 | |||||||||||||||||||||||
| Noncontrolling interests |
— | — | — | — | — | 357 | — | 357 | ||||||||||||||||||||||||
| Total equity |
52,711 | 102,458 | 108,263 | 57,130 | 30,370 | 198,089 | (495,953 | ) | 53,068 | |||||||||||||||||||||||
| Total liabilities and equity |
$ | 85,879 | $ | 103,568 | $ | 110,323 | $ | 58,677 | $ | 42,135 | $ | 255,790 | $ | (497,033 | ) | $ | 159,339 | |||||||||||||||
18
Table of Contents
Comcast Corporation
Condensed Consolidating Statement of Income
For the Three Months Ended June 30, 2015
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Revenue |
||||||||||||||||||||||||||||||||
| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 18,743 | $ | — | $ | 18,743 | ||||||||||||||||
| Management fee revenue |
252 | — | 246 | 156 | — | — | (654 | ) | — | |||||||||||||||||||||||
| 252 | — | 246 | 156 | — | 18,743 | (654 | ) | 18,743 | ||||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||||||||
| Programming and production |
— | — | — | — | — | 5,669 | — | 5,669 | ||||||||||||||||||||||||
| Other operating and administrative |
225 | — | 246 | 156 | 255 | 5,052 | (654 | ) | 5,280 | |||||||||||||||||||||||
| Advertising, marketing and promotion |
— | — | — | — | — | 1,528 | — | 1,528 | ||||||||||||||||||||||||
| Depreciation |
7 | — | — | — | — | 1,667 | — | 1,674 | ||||||||||||||||||||||||
| Amortization |
2 | — | — | — | — | 485 | — | 487 | ||||||||||||||||||||||||
| 234 | — | 246 | 156 | 255 | 14,401 | (654 | ) | 14,638 | ||||||||||||||||||||||||
| Operating income (loss) |
18 | — | — | — | (255 | ) | 4,342 | — | 4,105 | |||||||||||||||||||||||
| Other Income (Expense): |
||||||||||||||||||||||||||||||||
| Interest expense |
(472 | ) | (3 | ) | (43 | ) | (30 | ) | (116 | ) | (49 | ) | — | (713 | ) | |||||||||||||||||
| Investment income (loss), net |
— | (1 | ) | — | — | (8 | ) | 26 | — | 17 | ||||||||||||||||||||||
| Equity in net income (losses) of investees, net |
2,431 | 2,162 | 2,001 | 1,713 | 1,281 | 676 | (10,500 | ) | (236 | ) | ||||||||||||||||||||||
| Other income (expense), net |
2 | — | — | — | 16 | 297 | — | 315 | ||||||||||||||||||||||||
| 1,961 | 2,158 | 1,958 | 1,683 | 1,173 | 950 | (10,500 | ) | (617 | ) | |||||||||||||||||||||||
| Income (loss) before income taxes |
1,979 | 2,158 | 1,958 | 1,683 | 918 | 5,292 | (10,500 | ) | 3,488 | |||||||||||||||||||||||
| Income tax (expense) benefit |
158 | 2 | 15 | 11 | (6 | ) | (1,493 | ) | — | (1,313 | ) | |||||||||||||||||||||
| Net income (loss) |
2,137 | 2,160 | 1,973 | 1,694 | 912 | 3,799 | (10,500 | ) | 2,175 | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | (38 | ) | — | (38 | ) | ||||||||||||||||||||||
| Net income (loss) attributable to Comcast Corporation |
$ | 2,137 | $ | 2,160 | $ | 1,973 | $ | 1,694 | $ | 912 | $ | 3,761 | $ | (10,500 | ) | $ | 2,137 | |||||||||||||||
| Comprehensive income (loss) attributable to Comcast Corporation |
$ | 2,159 | $ | 2,168 | $ | 1,973 | $ | 1,694 | $ | 936 | $ | 3,761 | $ | (10,532 | ) | $ | 2,159 | |||||||||||||||
19
Table of Contents
Comcast Corporation
Condensed Consolidating Statement of Income
For the Three Months Ended June 30, 2014
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Revenue |
||||||||||||||||||||||||||||||||
| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 16,844 | $ | — | $ | 16,844 | ||||||||||||||||
| Management fee revenue |
237 | — | 231 | 145 | — | — | (613 | ) | — | |||||||||||||||||||||||
| 237 | — | 231 | 145 | — | 16,844 | (613 | ) | 16,844 | ||||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||||||||
| Programming and production |
— | — | — | — | — | 4,874 | — | 4,874 | ||||||||||||||||||||||||
| Other operating and administrative |
181 | — | 231 | 145 | 237 | 4,741 | (613 | ) | 4,922 | |||||||||||||||||||||||
| Advertising, marketing and promotion |
— | — | — | — | — | 1,244 | — | 1,244 | ||||||||||||||||||||||||
| Depreciation |
8 | — | — | — | — | 1,591 | — | 1,599 | ||||||||||||||||||||||||
| Amortization |
2 | — | — | — | — | 399 | — | 401 | ||||||||||||||||||||||||
| 191 | — | 231 | 145 | 237 | 12,849 | (613 | ) | 13,040 | ||||||||||||||||||||||||
| Operating income (loss) |
46 | — | — | — | (237 | ) | 3,995 | — | 3,804 | |||||||||||||||||||||||
| Other Income (Expense): |
||||||||||||||||||||||||||||||||
| Interest expense |
(400 | ) | (3 | ) | (44 | ) | (30 | ) | (125 | ) | (46 | ) | — | (648 | ) | |||||||||||||||||
| Investment income (loss), net |
1 | — | — | — | 4 | 115 | — | 120 | ||||||||||||||||||||||||
| Equity in net income (losses) of investees, net |
2,222 | 1,908 | 1,774 | 1,554 | 1,171 | 836 | (9,443 | ) | 22 | |||||||||||||||||||||||
| Other income (expense), net |
— | — | — | — | 7 | (46 | ) | — | (39 | ) | ||||||||||||||||||||||
| 1,823 | 1,905 | 1,730 | 1,524 | 1,057 | 859 | (9,443 | ) | (545 | ) | |||||||||||||||||||||||
| Income (loss) before income taxes |
1,869 | 1,905 | 1,730 | 1,524 | 820 | 4,854 | (9,443 | ) | 3,259 | |||||||||||||||||||||||
| Income tax (expense) benefit |
123 | 1 | 15 | 11 | (6 | ) | (1,378 | ) | — | (1,234 | ) | |||||||||||||||||||||
| Net income (loss) |
1,992 | 1,906 | 1,745 | 1,535 | 814 | 3,476 | (9,443 | ) | 2,025 | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
— | — | — | — | — | (33 | ) | — | (33 | ) | ||||||||||||||||||||||
| Net income (loss) attributable to Comcast Corporation |
$ | 1,992 | $ | 1,906 | $ | 1,745 | $ | 1,535 | $ | 814 | $ | 3,443 | $ | (9,443 | ) | $ | 1,992 | |||||||||||||||
| Comprehensive income (loss) attributable to Comcast Corporation |
$ | 1,945 | $ | 1,912 | $ | 1,744 | $ | 1,535 | $ | 832 | $ | 3,401 | $ | (9,424 | ) | $ | 1,945 | |||||||||||||||
20
Table of Contents
Comcast Corporation
Condensed Consolidating Statement of Income
For the Six Months Ended June 30, 2015
| (in millions) | Comcast Parent |
Comcast Holdings |
CCCL Parent |
Combined CCHMO Parents |
NBCUniversal Media Parent |
Non- Guarantor Subsidiaries |
Elimination and Consolidation Adjustments |
Consolidated Comcast Corporation |
||||||||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||||||||||
| Service revenue |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 36,596 | $ | — | $ | 36,596 | ||||||||||||||||
| Management fee revenue |
496 | — | 483 | 306 | — | — | (1,285 | ) | — | |||||||||||||||||||||||
| 496 | — | 483 | 306 | — | 36,596 | (1,285 | ) | 36,596 | ||||||||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||||||||||
| Programming and production |
— | — | — | — | — | 11,132 | — | 11,132 | ||||||||||||||||||||||||
| Other operating and administrative |
451 | — | 483 | 306 | 492 | 9,912 | (1,285 | ) | 10,359 | |||||||||||||||||||||||
| Advertising, marketing and promotion |
— | — | — | — | — | 2,883 | — | 2,883 | ||||||||||||||||||||||||
| Depreciation |
15 | — | — | — | — | 3,293 | — | 3,308 | ||||||||||||||||||||||||
| Amortization |
3 | — | — | — | — | 916 | — | 919 | ||||||||||||||||||||||||
| 469 | — | 483 | 306 | 492 | 28,136 | (1,285 | ) | 28,601 | ||||||||||||||||||||||||
| Operating income (loss) |
27 | — | — | — | (492 | ) | 8,460 | — | 7,995 | |||||||||||||||||||||||
| Other Income (Expense): |
||||||||||||||||||||||||||||||||
| Interest expense |
(882 | ) | (6 | ) | (87 | ) | (59 | ) | (236 | ) | (99 | ) | — | (1,369 | ) | |||||||||||||||||
| Investment income (loss), net |
1 | 1 | — | — | (14 | ) | 62 | — | 50 | |||||||||||||||||||||||
| Equity in net income (losses) of investees, net |
4,753 | 4,388 | 3,974 | 3,359 | 2,512 | 1,561 | (20,750 | ) | (203 | ) | ||||||||||||||||||||||
| Other income (expense), net |
(3 | ) | — | — | — | 5 | 415 | — | 417 | |||||||||||||||||||||||
| 3,869 | 4,383 | 3,887 | 3,300 | 2,267 | 1,939 | (20,750 | ) | (1,105 | ) | |||||||||||||||||||||||
| Income (loss) before income taxes |
3,896 | 4,383 | 3,887 | 3,300 | 1,775 | 10,399 | (20,750 | ) | 6,890 | |||||||||||||||||||||||
| Income tax (expense) benefit |
300 | 2 | 30 | 21 | (11 | ) | (2,916 | ) | — | (2,574 | ) | |||||||||||||||||||||
| Net income (loss) |
4,196 | 4,385 | 3,917 | 3,321 | 1,764 | 7,483 | (20,750 | ) | 4,316 | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock |
— | — | ||||||||||||||||||||||||||||||