filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
Comcast Corporation
Condensed Consolidated Statement of Income
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions, except per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Revenue | $ | 30,298 | $ | 25,532 | $ | 86,049 | $ | 75,856 | |||||||||||||||
| Costs and Expenses: | |||||||||||||||||||||||
| Programming and production | 10,395 | 8,565 | 28,570 | 23,683 | |||||||||||||||||||
| Other operating and administrative | 8,981 | 8,059 | 25,799 | 23,959 | |||||||||||||||||||
| Advertising, marketing and promotion | 1,995 | 1,512 | 5,462 | 4,791 | |||||||||||||||||||
| Depreciation | 2,177 | 2,122 | 6,407 | 6,328 | |||||||||||||||||||
| Amortization | 1,301 | 1,198 | 3,815 | 3,520 | |||||||||||||||||||
| Total costs and expenses | 24,848 | 21,456 | 70,053 | 62,281 | |||||||||||||||||||
| Operating income | 5,450 | 4,076 | 15,996 | 13,575 | |||||||||||||||||||
| Interest expense | (1,050) | (1,220) | (3,161) | (3,544) | |||||||||||||||||||
| Investment and other income (loss), net | 766 | (86) | 2,374 | (382) | |||||||||||||||||||
| Income before income taxes | 5,166 | 2,770 | 15,208 | 9,649 | |||||||||||||||||||
| Income tax expense | (1,235) | (739) | (4,354) | (2,385) | |||||||||||||||||||
| Net income | 3,931 | 2,031 | 10,854 | 7,264 | |||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (104) | 12 | (249) | 110 | |||||||||||||||||||
| Net income attributable to Comcast Corporation | $ | 4,035 | $ | 2,019 | $ | 11,102 | $ | 7,154 | |||||||||||||||
| Basic earnings per common share attributable to Comcast Corporation shareholders | $ | 0.88 | $ | 0.44 | $ | 2.42 | $ | 1.57 | |||||||||||||||
| Diluted earnings per common share attributable to Comcast Corporation shareholders | $ | 0.86 | $ | 0.44 | $ | 2.38 | $ | 1.55 | |||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Comcast Corporation
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Net income | $ | 3,931 | $ | 2,031 | $ | 10,854 | $ | 7,264 | |||||||||||||||
| Currency translation adjustments, net of deferred taxes of $231, $40, $122 and $24 | (692) | 1,642 | (666) | (589) | |||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Deferred gains (losses), net of deferred taxes of $1, $6, $(16) and $23 | 46 | (99) | 151 | (72) | |||||||||||||||||||
| Realized (gains) losses reclassified to net income, net of deferred taxes of $(7), $8, $(7) and $29 | (9) | (8) | (5) | (135) | |||||||||||||||||||
| Employee benefit obligations and other, net of deferred taxes of $2, $2, $7 and $8 | (8) | (7) | (25) | (25) | |||||||||||||||||||
| Comprehensive income | 3,268 | 3,559 | 10,309 | 6,443 | |||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock | (104) | 12 | (249) | 110 | |||||||||||||||||||
| Less: Other comprehensive income (loss) attributable to noncontrolling interests | 2 | 37 | 11 | 14 | |||||||||||||||||||
| Comprehensive income attributable to Comcast Corporation | $ | 3,370 | $ | 3,510 | $ | 10,546 | $ | 6,319 |
See accompanying notes to condensed consolidated financial statements.
Comcast Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| Operating Activities | |||||||||||
| Net income | $ | 10,854 | $ | 7,264 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 10,222 | 9,848 | |||||||||
| Share-based compensation | 1,019 | 922 | |||||||||
| Noncash interest expense (income), net | 287 | 606 | |||||||||
| Net (gain) loss on investment activity and other | (1,953) | 514 | |||||||||
| Deferred income taxes | 2,087 | (224) | |||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||
| Current and noncurrent receivables, net | (720) | 982 | |||||||||
| Film and television costs, net | (541) | 163 | |||||||||
| Accounts payable and accrued expenses related to trade creditors | 667 | (545) | |||||||||
| Other operating assets and liabilities | (465) | 165 | |||||||||
| Net cash provided by operating activities | 21,457 | 19,695 | |||||||||
| Investing Activities | |||||||||||
| Capital expenditures | (6,146) | (6,344) | |||||||||
| Cash paid for intangible assets | (2,006) | (1,771) | |||||||||
| Construction of Universal Beijing Resort | (825) | (1,118) | |||||||||
| Acquisitions, net of cash acquired | (167) | (225) | |||||||||
| Proceeds from sales of businesses and investments | 500 | 2,131 | |||||||||
| Purchases of investments | (122) | (545) | |||||||||
| Other | 359 | (101) | |||||||||
| Net cash provided by (used in) investing activities | (8,406) | (7,973) | |||||||||
| Financing Activities | |||||||||||
| Proceeds from borrowings | 2,515 | 18,339 | |||||||||
| Repurchases and repayments of debt | (9,041) | (16,771) | |||||||||
| Repurchases of common stock under repurchase program and employee plans | (2,617) | (429) | |||||||||
| Dividends paid | (3,387) | (3,086) | |||||||||
| Other | (416) | (1,644) | |||||||||
| Net cash provided by (used in) financing activities | (12,946) | (3,591) | |||||||||
| Impact of foreign currency on cash, cash equivalents and restricted cash | (15) | 17 | |||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 90 | 8,148 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 11,768 | 5,589 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 11,858 | $ | 13,737 |
See accompanying notes to condensed consolidated financial statements.
Comcast Corporation
Condensed Consolidated Balance Sheet
(Unaudited)
| (in millions, except share data) | September 30, 2021 | December 31, 2020 | |||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 11,806 | $ | 11,740 | |||||||
| Receivables, net | 11,974 | 11,466 | |||||||||
| Other current assets | 3,646 | 3,535 | |||||||||
| Total current assets | 27,427 | 26,741 | |||||||||
| Film and television costs | 12,645 | 13,340 | |||||||||
| Investments | 9,163 | 7,820 | |||||||||
| Investment securing collateralized obligation | 563 | 447 | |||||||||
| Property and equipment, net of accumulated depreciation of $55,484 and $54,388 | 52,809 | 51,995 | |||||||||
| Goodwill | 69,626 | 70,669 | |||||||||
| Franchise rights | 59,365 | 59,365 | |||||||||
| Other intangible assets, net of accumulated amortization of $22,902 and $19,825 | 33,393 | 35,389 | |||||||||
| Other noncurrent assets, net | 12,070 | 8,103 | |||||||||
| Total assets | $ | 277,061 | $ | 273,869 | |||||||
| Liabilities and Equity | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable and accrued expenses related to trade creditors | $ | 12,020 | $ | 11,364 | |||||||
| Accrued participations and residuals | 1,683 | 1,706 | |||||||||
| Deferred revenue | 3,091 | 2,963 | |||||||||
| Accrued expenses and other current liabilities | 9,250 | 9,617 | |||||||||
| Current portion of long-term debt | 695 | 3,146 | |||||||||
| Total current liabilities | 26,738 | 28,796 | |||||||||
| Long-term debt, less current portion | 96,522 | 100,614 | |||||||||
| Collateralized obligation | 5,169 | 5,168 | |||||||||
| Deferred income taxes | 30,050 | 28,051 | |||||||||
| Other noncurrent liabilities | 20,756 | 18,222 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable noncontrolling interests and redeemable subsidiary preferred stock | 520 | 1,280 | |||||||||
| Equity: | |||||||||||
| Preferred stock—authorized, 20,000,000 shares; issued, zero | — | — | |||||||||
| Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 5,432,269,698 and 5,444,002,825; outstanding, 4,559,478,670 and 4,571,211,797 | 54 | 54 | |||||||||
| Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375 | — | — | |||||||||
| Additional paid-in capital | 40,134 | 39,464 | |||||||||
| Retained earnings | 61,783 | 56,438 | |||||||||
| Treasury stock, 872,791,028 Class A common shares | (7,517) | (7,517) | |||||||||
| Accumulated other comprehensive income (loss) | 1,328 | 1,884 | |||||||||
| Total Comcast Corporation shareholders’ equity | 95,782 | 90,323 | |||||||||
| Noncontrolling interests | 1,524 | 1,415 | |||||||||
| Total equity | 97,306 | 91,738 | |||||||||
| Total liabilities and equity | $ | 277,061 | $ | 273,869 |
See accompanying notes to condensed consolidated financial statements.
Comcast Corporation
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (in millions, except per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock | |||||||||||||||||
| Balance, beginning of period | $ | 530 | $ | 1,256 | $ | 1,280 | $ | 1,372 | |||||||||
| Redemption of subsidiary preferred stock | — | — | (725) | — | |||||||||||||
| Contributions from (distributions to) noncontrolling interests, net | (19) | (9) | (59) | (46) | |||||||||||||
| Other | — | (9) | (10) | (174) | |||||||||||||
| Net income (loss) | 9 | 16 | 33 | 102 | |||||||||||||
| Balance, end of period | $ | 520 | $ | 1,254 | $ | 520 | $ | 1,254 | |||||||||
| Class A Common Stock | |||||||||||||||||
| Balance, beginning of period | $ | 55 | $ | 54 | $ | 54 | $ | 54 | |||||||||
| Issuances of common stock under employee plans | — | — | — | — | |||||||||||||
| Balance, end of period | $ | 54 | $ | 54 | $ | 54 | $ | 54 | |||||||||
| Additional Paid-In Capital | |||||||||||||||||
| Balance, beginning of period | $ | 40,046 | $ | 38,936 | $ | 39,464 | $ | 38,447 | |||||||||
| Stock compensation plans | 233 | 240 | 802 | 713 | |||||||||||||
| Repurchases of common stock under repurchase program and employee plans | (209) | (61) | (340) | (164) | |||||||||||||
| Employee stock purchase plans | 62 | 60 | 201 | 193 | |||||||||||||
| Other | 2 | (2) | 7 | (16) | |||||||||||||
| Balance, end of period | $ | 40,134 | $ | 39,173 | $ | 40,134 | $ | 39,173 | |||||||||
| Retained Earnings | |||||||||||||||||
| Balance, beginning of period | $ | 60,359 | $ | 53,420 | $ | 56,438 | $ | 50,695 | |||||||||
| Cumulative effects of adoption of accounting standards | — | — | — | (124) | |||||||||||||
| Repurchases of common stock under repurchase program and employee plans | (1,458) | (113) | (2,290) | (281) | |||||||||||||
| Dividends declared | (1,153) | (1,062) | (3,470) | (3,187) | |||||||||||||
| Other | — | (10) | 4 | (3) | |||||||||||||
| Net income (loss) | 4,035 | 2,019 | 11,102 | 7,154 | |||||||||||||
| Balance, end of period | $ | 61,783 | $ | 54,254 | $ | 61,783 | $ | 54,254 | |||||||||
| Treasury Stock at Cost | |||||||||||||||||
| Balance, beginning of period | $ | (7,517) | $ | (7,517) | $ | (7,517) | $ | (7,517) | |||||||||
| Balance, end of period | $ | (7,517) | $ | (7,517) | $ | (7,517) | $ | (7,517) | |||||||||
| Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
| Balance, beginning of period | $ | 1,992 | $ | (1,279) | $ | 1,884 | $ | 1,047 | |||||||||
| Other comprehensive income (loss) | (664) | 1,491 | (556) | (835) | |||||||||||||
| Balance, end of period | $ | 1,328 | $ | 212 | $ | 1,328 | $ | 212 | |||||||||
| Noncontrolling Interests | |||||||||||||||||
| Balance, beginning of period | $ | 1,581 | $ | 1,177 | $ | 1,415 | $ | 1,148 | |||||||||
| Other comprehensive income (loss) | 2 | 38 | 11 | 14 | |||||||||||||
| Contributions from (distributions to) noncontrolling interests, net | 55 | 185 | 379 | 200 | |||||||||||||
| Other | (2) | (1) | — | 25 | |||||||||||||
| Net income (loss) | (112) | (4) | (282) | 8 | |||||||||||||
| Balance, end of period | $ | 1,524 | $ | 1,395 | $ | 1,524 | $ | 1,395 | |||||||||
| Total equity | $ | 97,306 | $ | 87,571 | $ | 97,306 | $ | 87,571 | |||||||||
| Cash dividends declared per common share | $ | 0.25 | $ | 0.23 | $ | 0.75 | $ | 0.69 |
See accompanying notes to condensed consolidated financial statements.
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, cash flows and financial condition 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 2020 Annual Report on Form 10-K and the notes within this Form 10-Q.
Reclassifications
Reclassifications have been made to our notes to condensed consolidated financial statements for the prior year period to conform to classifications used in 2021. See Note 2 for a discussion of the changes in our presentation of segment operating results.
Note 2: Segment Information
In the first quarter of 2021, we changed our presentation of segment operating results. We now present our operations in five reportable business segments: (1) Comcast Cable in one reportable business segment, referred to as Cable Communications; (2) NBCUniversal in three reportable business segments: Media, Studios and Theme Parks (collectively, the “NBCUniversal segments”); and (3) Sky in one reportable business segment. The changes reflect a reorganized operating structure in NBCUniversal’s television and streaming businesses and primarily include: (i) the combination of NBCUniversal’s television networks (previously reported in Cable Networks and Broadcast Television) with the operations of Peacock (previously reported in Corporate and Other) in the Media segment, and (ii) the presentation of NBCUniversal’s television studio production operations (previously reported in Cable Networks and Broadcast Television) with the studio operations of Filmed Entertainment in the Studios segment. Prior periods have been adjusted to reflect this presentation.
Cable Communications is a leading provider of broadband, video, voice, wireless, and security and automation services to residential customers under the Xfinity brand; we also provide these and other services to business customers and sell advertising. Revenue is generated primarily from residential and business customers that subscribe to our services, which are marketed individually and as bundled services, and from the sale of advertising.
Media consists primarily of NBCUniversal’s television and streaming platforms, including national, regional and international cable networks; the NBC and Telemundo broadcast networks; NBC and Telemundo owned local broadcast television stations; Peacock, our direct-to-consumer streaming service; and various digital properties. Revenue is generated primarily from the sale of advertising on our television networks, Peacock and digital properties; and the fees received from the distribution of our television network programming to traditional and virtual multichannel video providers and from NBC-affiliated and Telemundo-affiliated local broadcast television stations. Media also generates other revenue from content licensing and various digital properties.
Studios consists primarily of NBCUniversal’s film and television studio production and distribution operations. Revenue is generated primarily from the licensing of our owned film and television content to broadcast, cable and premium networks, and to direct-to-consumer streaming service providers, as well as through video on demand and pay-per-view services provided by multichannel video providers and over-the-top service providers; from the worldwide distribution of our produced and acquired films for exhibition in movie theaters; and from the sale of owned content on DVDs, Blu-ray discs and through digital distribution services.
Theme Parks consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; Osaka, Japan; and Beijing, China. We are developing an additional theme park in Orlando, Florida. Revenue is generated primarily from guest spending at our Universal theme parks.
Comcast Corporation
Sky is one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business, providing video, broadband, voice and wireless phone services, and a content business, operating entertainment networks, the Sky News broadcast network and Sky Sports networks. Revenue is generated primarily from residential and business customers that subscribe to our services; from the distribution of Sky’s owned television networks on third-party platforms and the licensing of owned and acquired programming to third-party video providers; and from the sale of advertising.
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania, and other business initiatives.
We use Adjusted EBITDA to evaluate the profitability of our operating segments and the components of net income attributable to Comcast Corporation excluded from Adjusted EBITDA are not separately evaluated. Our financial data by reportable segment is presented in the tables below.
| Three Months Ended September 30, 2021 | |||||||||||||||||
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets | ||||||||||||
| Cable Communications | $ | 16,115 | $ | 7,069 | $ | 1,965 | $ | 1,673 | $ | 370 | |||||||
| NBCUniversal | |||||||||||||||||
| Media | 6,770 | 997 | 248 | 20 | 38 | ||||||||||||
| Studios | 2,407 | 179 | 14 | 1 | 3 | ||||||||||||
| Theme Parks | 1,449 | 434 | 213 | 122 | 8 | ||||||||||||
| Headquarters and Other | 28 | (248) | 115 | 87 | 36 | ||||||||||||
| Eliminations(a) | (654) | (12) | — | — | — | ||||||||||||
| NBCUniversal | 10,001 | 1,349 | 591 | 229 | 85 | ||||||||||||
| Sky | 4,988 | 971 | 884 | 160 | 221 | ||||||||||||
| Corporate and Other | 65 | (335) | 38 | 80 | 48 | ||||||||||||
| Eliminations(a) | (871) | (98) | — | — | — | ||||||||||||
| Comcast Consolidated | $ | 30,298 | $ | 8,957 | $ | 3,477 | $ | 2,142 | $ | 723 |
| Three Months Ended September 30, 2020 | |||||||||||||||||
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets | ||||||||||||
| Cable Communications | $ | 15,000 | $ | 6,411 | $ | 1,952 | $ | 1,770 | $ | 296 | |||||||
| NBCUniversal | |||||||||||||||||
| Media | 4,589 | 985 | 245 | 19 | 39 | ||||||||||||
| Studios | 1,898 | 340 | 17 | 3 | 1 | ||||||||||||
| Theme Parks | 385 | (174) | 209 | 306 | 11 | ||||||||||||
| Headquarters and Other | 12 | (127) | 112 | 29 | 28 | ||||||||||||
| Eliminations(a) | (551) | (114) | — | — | — | ||||||||||||
| NBCUniversal | 6,333 | 910 | 583 | 357 | 79 | ||||||||||||
| Sky | 4,793 | 515 | 750 | 237 | 176 | ||||||||||||
| Corporate and Other | 44 | (264) | 35 | 23 | 1 | ||||||||||||
| Eliminations(a) | (638) | 11 | — | — | — | ||||||||||||
| Comcast Consolidated | $ | 25,532 | $ | 7,583 | $ | 3,320 | $ | 2,387 | $ | 552 |
Comcast Corporation
| Nine Months Ended September 30, 2021 | |||||||||||||||||
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets | ||||||||||||
| Cable Communications | $ | 47,922 | $ | 20,972 | $ | 5,845 | $ | 4,739 | $ | 1,022 | |||||||
| NBCUniversal | |||||||||||||||||
| Media | 16,955 | 3,847 | 749 | 49 | 112 | ||||||||||||
| Studios | 7,027 | 833 | 39 | 2 | 9 | ||||||||||||
| Theme Parks | 3,163 | 593 | 615 | 348 | 23 | ||||||||||||
| Headquarters and Other | 65 | (643) | 356 | 184 | 93 | ||||||||||||
| Eliminations(a) | (2,230) | (238) | — | — | — | ||||||||||||
| NBCUniversal | 24,981 | 4,392 | 1,759 | 584 | 238 | ||||||||||||
| Sky | 15,205 | 1,895 | 2,524 | 615 | 633 | ||||||||||||
| Corporate and Other | 246 | (876) | 95 | 208 | 113 | ||||||||||||
| Eliminations(a) | (2,304) | (87) | — | — | — | ||||||||||||
| Comcast Consolidated | $ | 86,049 | $ | 26,297 | $ | 10,222 | $ | 6,146 | $ | 2,006 |
| Nine Months Ended September 30, 2020 | |||||||||||||||||
| (in millions) | Revenue(a) | Adjusted EBITDA(b) | Depreciation and Amortization | Capital Expenditures | Cash Paid for Intangible Assets | ||||||||||||
| Cable Communications | $ | 44,346 | $ | 18,663 | $ | 5,835 | $ | 4,491 | $ | 978 | |||||||
| NBCUniversal | |||||||||||||||||
| Media | 13,563 | 4,150 | 732 | 79 | 126 | ||||||||||||
| Studios | 6,359 | 963 | 49 | 9 | 4 | ||||||||||||
| Theme Parks | 1,446 | (480) | 590 | 897 | 42 | ||||||||||||
| Headquarters and Other | 32 | (430) | 357 | 129 | 106 | ||||||||||||
| Eliminations(a) | (1,623) | (224) | — | — | — | ||||||||||||
| NBCUniversal | 19,777 | 3,979 | 1,728 | 1,114 | 278 | ||||||||||||
| Sky | 13,389 | 1,815 | 2,188 | 649 | 512 | ||||||||||||
| Corporate and Other | 204 | (846) | 97 | 90 | 3 | ||||||||||||
| Eliminations(a) | (1,860) | 29 | — | — | — | ||||||||||||
| Comcast Consolidated | $ | 75,856 | $ | 23,640 | $ | 9,848 | $ | 6,344 | $ | 1,771 |
Comcast Corporation
(a)Included in Eliminations are transactions that our segments enter into with one another. Our segments generally report transactions with one another as if they were stand-alone businesses in accordance with GAAP, and these transactions are eliminated in consolidation. When multiple segments enter into transactions to provide products and services to third parties, revenue is generally allocated to our segments based on relative value. The most significant transactions between our segments include distribution revenue at Media for fees received from Cable Communications for the sale of cable network programming and under retransmission consent agreements; content licensing revenue at Studios for licenses of owned content to Media and Sky; and advertising revenue at Media and Cable Communications. Revenue for licenses of content from Studios to Media and Sky is generally recognized at a point in time, consistent with the recognition of transactions with third parties, when the content is delivered and made available for use. The costs of these licenses at Media and Sky are recognized as the content is used over the license period. The difference in timing of recognition between segments results in an Adjusted EBITDA impact in eliminations, as the profits (losses) on these transactions are deferred in our consolidated results and recognized as the content is used over the license period. Under the previous segment structure, revenue for licenses of content between our previous NBCUniversal segments was recognized over time to correspond with the amortization of the costs of licensed content over the license period.
A summary of revenue for each of our segments resulting from transactions with other segments and eliminated in consolidation is presented in the table below.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Cable Communications | $ | 69 | $ | 56 | $ | 162 | $ | 139 | |||||||||||||||
| NBCUniversal | |||||||||||||||||||||||
| Media | 714 | 478 | 1,799 | 1450 | |||||||||||||||||||
| Studios | 682 | 615 | 2,357 | 1,780 | |||||||||||||||||||
| Theme Parks | — | — | 1 | — | |||||||||||||||||||
| Headquarters and Other | 23 | 9 | 52 | 15 | |||||||||||||||||||
| Sky | 3 | 6 | 26 | 15 | |||||||||||||||||||
| Corporate and Other | 32 | 24 | 137 | 84 | |||||||||||||||||||
| Total intersegment revenue | $ | 1,525 | $ | 1,189 | $ | 4,535 | $ | 3,483 | |||||||||||||||
(b)We use Adjusted EBITDA as the measure of profit or loss for our operating segments. From time to time we may report the impact of certain events, gains, losses or other charges related to our operating segments (such as certain costs incurred in response to COVID-19, including severance charges), within Corporate and Other. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated income before income taxes is presented in the table below.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Adjusted EBITDA | $ | 8,957 | $ | 7,583 | $ | 26,297 | $ | 23,640 | |||||||||||||||
| Adjustments | (30) | (187) | (79) | (217) | |||||||||||||||||||
| Depreciation | (2,177) | (2,122) | (6,407) | (6,328) | |||||||||||||||||||
| Amortization | (1,301) | (1,198) | (3,815) | (3,520) | |||||||||||||||||||
| Interest expense | (1,050) | (1,220) | (3,161) | (3,544) | |||||||||||||||||||
| Investment and other income (loss), net | 766 | (86) | 2,374 | (382) | |||||||||||||||||||
| Income before income taxes | $ | 5,166 | $ | 2,770 | $ | 15,208 | $ | 9,649 | |||||||||||||||
Adjustments represent the impacts of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including Sky transaction-related costs and costs related to our investment portfolio. Adjustments for the three and nine months ended September 30, 2020 also include $177 million related to a legal settlement.
Goodwill by Segment
The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2021 are as follows:
| NBCUniversal | ||||||||||||||||||||||||||||||||
| (in billions) | Cable Communications | Cable Networks | Broadcast Television | Filmed Entertainment | Media | Studios | Theme Parks | Sky | Corporate and Other | Total | ||||||||||||||||||||||
| Balance, December 31, 2020 | $ | 15.3 | $ | 14.0 | $ | 1.1 | $ | 3.3 | $ | — | $ | — | $ | 7.0 | $ | 30.0 | $ | — | $ | 70.7 | ||||||||||||
| Segment change | — | (14.0) | (1.1) | (3.3) | 14.7 | 3.7 | — | — | — | — | ||||||||||||||||||||||
| Foreign currency translation and other | 0.1 | — | — | — | — | — | (0.4) | (0.6) | — | (1.0) | ||||||||||||||||||||||
| Balance, September 30, 2021 | $ | 15.3 | $ | — | $ | — | $ | — | $ | 14.7 | $ | 3.7 | $ | 6.6 | $ | 29.3 | $ | — | $ | 69.6 | ||||||||||||
Comcast Corporation
Note 3: Revenue
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Residential: | |||||||||||||||||||||||
| Broadband | $ | 5,801 | $ | 5,198 | $ | 17,118 | $ | 15,199 | |||||||||||||||
| Video | 5,499 | 5,421 | 16,676 | 16,468 | |||||||||||||||||||
| Voice | 851 | 876 | 2,592 | 2,652 | |||||||||||||||||||
| Wireless | 603 | 400 | 1,672 | 1,069 | |||||||||||||||||||
| Business services | 2,227 | 2,049 | 6,597 | 6,096 | |||||||||||||||||||
| Advertising | 705 | 674 | 2,002 | 1,659 | |||||||||||||||||||
| Other | 427 | 382 | 1,265 | 1,203 | |||||||||||||||||||
| Total Cable Communications | 16,115 | 15,000 | 47,922 | 44,346 | |||||||||||||||||||
| Advertising | 3,255 | 1,881 | 7,537 | 5,696 | |||||||||||||||||||
| Distribution | 2,987 | 2,194 | 7,934 | 6,541 | |||||||||||||||||||
| Other | 528 | 514 | 1,483 | 1,326 | |||||||||||||||||||
| Total Media | 6,770 | 4,589 | 16,955 | 13,563 | |||||||||||||||||||
| Content licensing | 1,827 | 1,584 | 5,683 | 5,149 | |||||||||||||||||||
| Theatrical | 307 | 28 | 544 | 351 | |||||||||||||||||||
| Home entertainment and other | 273 | 286 | 801 | 859 | |||||||||||||||||||
| Total Studios | 2,407 | 1,898 | 7,027 | 6,359 | |||||||||||||||||||
| Total Theme Parks | 1,449 | 385 | 3,163 | 1,446 | |||||||||||||||||||
| Headquarters and Other | 28 | 12 | 65 | 32 | |||||||||||||||||||
| Eliminations(a) | (654) | (551) | (2,230) | (1,623) | |||||||||||||||||||
| Total NBCUniversal | 10,001 | 6,333 | 24,981 | 19,777 | |||||||||||||||||||
| Direct-to-consumer | 4,127 | 3,943 | 12,415 | 11,146 | |||||||||||||||||||
| Content | 300 | 388 | 1,013 | 947 | |||||||||||||||||||
| Advertising | 561 | 462 | 1,777 | 1,296 | |||||||||||||||||||
| Total Sky | 4,988 | 4,793 | 15,205 | 13,389 | |||||||||||||||||||
| Corporate and Other | 65 | 44 | 246 | 204 | |||||||||||||||||||
| Eliminations(a) | (871) | (638) | (2,304) | (1,860) | |||||||||||||||||||
| Total revenue | $ | 30,298 | $ | 25,532 | $ | 86,049 | $ | 75,856 |
(a)Included in Eliminations are transactions that our segments enter into with one another. See Note 2 for a description of these transactions.
We operate primarily in the United States but also in select international markets. The table below summarizes revenue by geographic location.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| United States | $ | 23,978 | $ | 19,680 | $ | 67,317 | $ | 59,026 | |||||||||||||||
| Europe | 5,517 | 5,196 | 16,552 | 14,850 | |||||||||||||||||||
| Other | 802 | 656 | 2,180 | 1,980 | |||||||||||||||||||
| Total revenue | $ | 30,298 | $ | 25,532 | $ | 86,049 | $ | 75,856 |
Comcast Corporation
Condensed Consolidated Balance Sheet
The following tables summarize our accounts receivable and other balances that are not separately presented in our condensed consolidated balance sheet that relate to the recognition of revenue and collection of the related cash, as well as the deferred costs associated with our contracts with customers.
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Receivables, gross | $ | 12,729 | $ | 12,273 | |||||||
| Less: Allowance for doubtful accounts | 754 | 807 | |||||||||
| Receivables, net | $ | 11,974 | $ | 11,466 | |||||||
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Noncurrent receivables, net (included in other noncurrent assets, net) | $ | 1,024 | $ | 1,091 | |||||||
| Contract acquisition and fulfillment costs (included in other noncurrent assets, net) | $ | 1,000 | $ | 1,060 | |||||||
| Noncurrent deferred revenue (included in other noncurrent liabilities) | $ | 732 | $ | 750 |
Note 4: Programming and Production Costs
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Video distribution programming | $ | 3,337 | $ | 3,089 | $ | 10,267 | $ | 9,351 | |||||||||||||||
| Film and television content: | |||||||||||||||||||||||
| Owned(a) | 2,215 | 1,674 | 6,406 | 5,737 | |||||||||||||||||||
| Licensed, including sports rights | 4,536 | 3,526 | 11,028 | 7,774 | |||||||||||||||||||
| Other | 307 | 276 | 868 | 822 | |||||||||||||||||||
| Total programming and production costs | $ | 10,395 | $ | 8,565 | $ | 28,570 | $ | 23,683 |
(a) Amount includes amortization of owned content of $1.9 billion and $5.3 billion for the three and nine months ended September 30, 2021, respectively, and $1.6 billion and $4.9 billion for the three and nine months ended September 30, 2020, respectively, as well as participations and residuals expenses.
Capitalized Film and Television Costs
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Owned: | |||||||||||
| Released, less amortization | $ | 3,586 | $ | 3,815 | |||||||
| Completed, not released | 373 | 139 | |||||||||
| In production and in development | 2,598 | 2,755 | |||||||||
| 6,557 | 6,709 | ||||||||||
| Licensed, including sports advances | 6,088 | 6,631 | |||||||||
| Film and television costs | $ | 12,645 | $ | 13,340 |
Note 5: Long-Term Debt
As of September 30, 2021, our debt had a carrying value of $97.2 billion and an estimated fair value of $112.4 billion. As of December 31, 2020, our debt had a carrying value of $103.8 billion and an estimated fair value of $125.6 billion. The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market value for the debt. The estimated fair value of debt for which there are no quoted market prices was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
Comcast Corporation
In March 2021, we entered into a new $11 billion revolving credit facility due March 30, 2026 with a syndicate of banks that may be used for general corporate purposes. We may increase the commitments under the revolving credit facility up to a total of $14 billion, as well as extend the expiration date to no later than March 30, 2028, subject to approval of the lenders. The interest rate on the revolving credit facility consists of a base rate plus a borrowing margin that is determined based on Comcast’s credit rating. As of September 30, 2021, the borrowing margin for borrowings based on the London Interbank Offered Rate was 1.00%. Our revolving credit facility requires that we maintain certain financial ratios based on debt and EBITDA, as defined in the revolving credit facility. We were in compliance with all financial covenants for all periods presented. The new revolving credit facility replaced an aggregate $9.2 billion of existing revolving credit facilities due May 26, 2022, which were terminated. Our revolving credit facilities were undrawn as of both September 30, 2021 and December 31, 2020.
Note 6: Significant Transactions
Universal Beijing Resort
We entered into an agreement with a consortium of Chinese state-owned companies to build and operate a Universal theme park and resort in Beijing, China (“Universal Beijing Resort”), which opened in September 2021. We own a 30% interest in Universal Beijing Resort and the construction was funded through a combination of debt financing and equity contributions from the investors in accordance with their equity interests. In the third quarter of 2021, the maximum borrowing limit under the debt financing agreement was increased to ¥29.7 billion RMB (approximately $4.6 billion) from ¥26.6 billion RMB (approximately $4.1 billion). As of September 30, 2021, Universal Beijing Resort had $3.4 billion of debt outstanding, including $3.0 billion principal amount of a term loan under the debt financing agreement.
As of September 30, 2021, our condensed consolidated balance sheet included assets and liabilities of Universal Beijing Resort totaling $9.1 billion and $7.5 billion, respectively. The assets and liabilities of Universal Beijing Resort primarily consist of property and equipment, operating lease assets and liabilities, and debt.
Acquisitions
In October 2021, we acquired Masergy, a provider of software-defined networking and cloud platforms for global enterprises, for total cash consideration of $1.2 billion. The acquisition accelerates our growth in serving large and mid-sized companies, particularly U.S.-based organizations with multi-site global enterprises. We will apply acquisition accounting to Masergy and its results of operations will be included in our consolidated results of operations following the date of acquisition and be reported in our Cable Communications segment. The assets and liabilities acquired as a result of the transaction will be recorded at their estimated fair values, however, due to the limited time since the acquisition date, the initial acquisition accounting is incomplete.
Note 7: Investments
Investment and Other Income (Loss), Net
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Equity in net income (losses) of investees, net | $ | 602 | $ | (266) | $ | 1,696 | $ | (634) | |||||||||||||||
| Realized and unrealized gains (losses) on equity securities, net | 106 | 118 | 532 | 65 | |||||||||||||||||||
| Other income (loss), net | 59 | 62 | 146 | 187 | |||||||||||||||||||
| Investment and other income (loss), net | $ | 766 | $ | (86) | $ | 2,374 | $ | (382) |
The amount of unrealized gains (losses) recognized in the three months ended September 30, 2021 and 2020 that related to marketable and nonmarketable equity securities still held as of the end of each reporting period were losses of $165 million and gains of $79 million, respectively. The amount of unrealized gains (losses) recognized in the nine months ended September 30, 2021 and 2020 that related to marketable and nonmarketable equity securities still held as of the end of each reporting period were gains of $91 million and losses of $2 million, respectively.
Comcast Corporation
Investments
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Equity method | $ | 7,044 | $ | 6,006 | |||||||
| Marketable equity securities | 368 | 460 | |||||||||
| Nonmarketable equity securities | 2,092 | 1,950 | |||||||||
| Other investments | 345 | 143 | |||||||||
| Total investments | 9,849 | 8,559 | |||||||||
| Less: Current investments | 123 | 292 | |||||||||
| Less: Investment securing collateralized obligation | 563 | 447 | |||||||||
| Noncurrent investments | $ | 9,163 | $ | 7,820 |
Equity Method
Atairos
Atairos follows investment company accounting and records its investments at their fair values each reporting period with the net gains or losses reflected in its statement of operations. We recognize our share of these gains and losses in equity in net income (losses) of investees, net. For the nine months ended September 30, 2021 and 2020, we made cash capital contributions to Atairos totaling $36 million and $184 million, respectively. As of September 30, 2021 and December 31, 2020, our investment in Atairos, inclusive of certain distributions retained by Atairos on our behalf and classified as advances within other investments, was $5.2 billion and $3.9 billion, respectively. As of September 30, 2021, our remaining unfunded capital commitment was $1.5 billion.
Hulu and Collateralized Obligation
In 2019, we borrowed $5.2 billion under a term loan facility due March 2024 which is fully collateralized by the minimum guaranteed proceeds of the put/call option related to our investment in Hulu. As of September 30, 2021 and December 31, 2020, the carrying value and fair value of our collateralized obligation were $5.2 billion. The estimated fair value was based on Level 2 inputs that use interest rates for debt with similar terms and remaining maturities. We present our investment in Hulu and the term loan separately in our condensed consolidated balance sheet in the captions “investment securing collateralized obligation” and “collateralized obligation,” respectively. The recorded value of our investment reflects our historical cost in applying the equity method, and as a result, is less than its fair value.
Other Investments
AirTouch
In April 2020, Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”), redeemed the two series of preferred stock and we received cash payments totaling $1.7 billion. Subsequently, we redeemed and repurchased the three series of preferred shares issued by one of our consolidated subsidiaries and made cash payments totaling $1.8 billion.
Note 8: Equity and Share-Based Compensation
Weighted-Average Common Shares Outstanding
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Weighted-average number of common shares outstanding – basic | 4,588 | 4,577 | 4,593 | 4,571 | ||||||||||||||||
| Effect of dilutive securities | 77 | 51 | 75 | 45 | ||||||||||||||||
| Weighted-average number of common shares outstanding – diluted | 4,665 | 4,628 | 4,668 | 4,616 |
Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. The amount of potential common shares related to our share-based compensation plans that were excluded from diluted EPS because their effect would have been antidilutive was not material in any of the periods presented.
Comcast Corporation
Accumulated Other Comprehensive Income (Loss)
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Cumulative translation adjustments | $ | 1,113 | $ | 1,790 | |||||||
| Deferred gains (losses) on cash flow hedges | 37 | (109) | |||||||||
| Unrecognized gains (losses) on employee benefit obligations and other | 178 | 203 | |||||||||
| Accumulated other comprehensive income (loss), net of deferred taxes | $ | 1,328 | $ | 1,884 |
Share-Based Compensation
Our share-based compensation plans consist primarily of awards of RSUs and stock options to certain employees and directors as part of our approach to long-term incentive compensation. Additionally, through our employee stock purchase plans, employees are able to purchase shares of our common stock at a discount through payroll deductions.
In March 2021, we granted 12.8 million RSUs and 42.3 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $54.62 per RSU and $9.64 per stock option.
Recognized Share-Based Compensation Expense
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Restricted share units | $ | 167 | $ | 164 | $ | 560 | $ | 484 | |||||||||||||||
| Stock options | 70 | 72 | 248 | 226 | |||||||||||||||||||
| Employee stock purchase plans | 9 | 9 | 29 | 30 | |||||||||||||||||||
| Total | $ | 246 | $ | 245 | $ | 837 | $ | 740 |
As of September 30, 2021, we had unrecognized pretax compensation expense of $1.3 billion and $649 million related to nonvested RSUs and nonvested stock options, respectively.
Note 9: Supplemental Financial Information
Income Taxes
In the second quarter of 2021, tax law changes were enacted in the United Kingdom that, among other provisions, will increase the corporate tax rate to 25% from 19% effective April 1, 2023. The rate change resulted in an increase to our net deferred tax liabilities of $498 million and a corresponding increase to income tax expense in the second quarter of 2021. Our income tax expense in the United Kingdom will be based on the new rate beginning in 2023.
Cash Payments for Interest and Income Taxes
| Nine Months Ended September 30, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| Interest | $ | 2,943 | $ | 2,845 | |||||||
| Income taxes | $ | 2,201 | $ | 2,298 |
Noncash Activities
During the nine months ended September 30, 2021:
-
we recognized operating lease assets and liabilities of $2.8 billion related to Universal Beijing Resort with lease terms of 33 years and using a weighted average discount rate of 4.4%
-
we acquired $1.6 billion of property and equipment and intangible assets that were accrued but unpaid
-
we recorded a liability of $1.2 billion for a quarterly cash dividend of $0.25 per common share paid in October 2021
Comcast Corporation
During the nine months ended September 30, 2020:
-
we acquired $1.9 billion of property and equipment and intangible assets that were accrued but unpaid
-
we recorded a liability of $1.1 billion for a quarterly cash dividend of $0.23 per common share paid in October 2020
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheet to the total of the amounts reported in our condensed consolidated statement of cash flows.
| (in millions) | September 30, 2021 | December 31, 2020 | |||||||||
| Cash and cash equivalents | $ | 11,806 | $ | 11,740 | |||||||
| Restricted cash included in other current assets | 39 | 14 | |||||||||
| Restricted cash included in other noncurrent assets, net | 12 | 14 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 11,858 | $ | 11,768 |
Note 10: Commitments and Contingencies
Redeemable Subsidiary Preferred Stock
In the first quarter of 2021, we redeemed all of the NBCUniversal Enterprise, Inc. preferred stock and made cash payments equal to the aggregate liquidation preference of $725 million. As of December 31, 2020, the preferred stock had a carrying value equal to its liquidation preference and was presented in redeemable noncontrolling interests and redeemable subsidiary preferred stock.
Contingencies
We are subject to 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.
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