Note 15: Related Party Transactions

In the ordinary course of our business, we enter into transactions with Comcast.

We generate revenue from Comcast primarily from the distribution of our cable network programming, the fees received under retransmission consent agreements in our Broadcast Television segment and, to a lesser extent, the sale of advertising and our owned programming, and we incur expenses primarily related to advertising and various support services provided by Comcast to us.

In September 2016, as part of the Comcast cash management process, we and Comcast amended and restated our revolving credit agreements to increase the amount that we can borrow from Comcast and that Comcast can borrow from us from $3 billion to $5 billion and to extend the maturity date to 2026. Depending on the receivable or payable position, amounts owed by us to Comcast or to us by Comcast under the revolving credit agreements are presented under the captions “note payable to Comcast” and “note receivable from Comcast,” respectively, in our consolidated balance sheet and are presented as current since the amounts include daily borrowings and repayments throughout the year based on our working capital needs. The revolving credit agreements bear interest at floating rates equal to the interest rate calculation under Comcast’s revolving credit facility. The interest rate on Comcast’s revolving credit facility consists of a base rate plus a borrowing margin that is determined based on Comcast’s credit rating. As of December 31, 2018, the borrowing margin for London Interbank Offered Rate-based borrowings was 1.00%.

Comcast is also the counterparty to one of our contractual obligations. As of both December 31, 2018 and 2017, the carrying value of the liability associated with this contractual obligation was $383 million.

Senior Notes Exchange

In October 2017, we and Comcast completed a debt exchange transaction. Comcast issued $2.0 billion aggregate principal amount of new 3.97% senior notes due 2047, $2.0 billion aggregate principal amount of new 4.00% senior notes due 2049, and $1.5 billion aggregate principal amount of new 4.05% senior notes due 2052 in exchange for $3.9 billion aggregate principal amount of certain series of outstanding senior notes issued by Comcast and us, including $442 million of our 6.40% senior notes due 2040. The new notes are fully and unconditionally guaranteed by us and CCCL Parent. In connection with the exchange transaction, we issued $610 million of 4.00% notes due 2049 to Comcast. The debt exchange transaction was accounted for as a debt extinguishment, and therefore we recorded a charge of $157 million to interest expense upon retirement of the old notes.

The following tables present transactions with Comcast and its consolidated subsidiaries that are included in our consolidated financial statements.



Consolidated Statement of Income
Year ended December 31 (in millions)	2018			2017			2016
Transactions with Comcast and Consolidated Subsidiaries
Revenue	$	2,156		$	1,837		$	1,742
Total costs and expenses	$	(245	)	$	(214	)	$	(220	)
Interest expense and investment and other income (loss), net	$	(54	)	$	(250	)	$	(69	)



Consolidated Balance Sheet
December 31 (in millions)	2018		2017
Transactions with Comcast and Consolidated Subsidiaries
Receivables, net	$	464	$	326
Note receivable from Comcast	$	2,054	—
Accounts payable and accrued expenses related to trade creditors	$	78	$	54
Accrued expenses and other current liabilities	$	32	$	50
Note payable to Comcast	$	54	$	1,831
Long-term debt	$	701	$	610
Other noncurrent liabilities	$	410	$	389

Distributions to NBCUniversal Holdings

In addition to the transaction amounts presented in the table above, we make distributions to NBCUniversal Holdings on a periodic basis to enable its owners to meet their obligations to pay taxes on taxable income generated by our businesses. We also make quarterly distributions to NBCUniversal Holdings to enable it to make its required quarterly payments to NBCUniversal Enterprise at an initial annual rate of 8.25% on the $9.4 billion aggregate liquidation preference of its preferred units. On March 1, 2023, and thereafter on every fifth anniversary of such date, this rate will reset to 7.44% plus the yield on actively traded United States Treasury securities having a 5 year maturity. These distributions are presented under the caption “distributions to member” in our consolidated statement of cash flows.

Share-Based Compensation

Comcast maintains share-based compensation plans that consist primarily of awards of restricted share units (“RSUs”) and stock options to certain employees and directors as part of its approach to long-term incentive compensation. Additionally, through its employee stock purchase plans, employees are able to purchase shares of Comcast common stock at a discount through payroll deductions. The cost associated with Comcast’s share-based compensation is based on an award’s estimated fair value at the date of grant and is recognized over the period in which any related services are provided. RSUs are valued based on the closing price of Comcast common stock on the date of grant and are discounted for the lack of dividends, if any, during the vesting period. Stock options are valued using the Black-Scholes option pricing model. Certain of our employees participate in these plans and the expense associated with their participation is settled in cash with Comcast. In 2018, 2017 and 2016, we recognized share-based compensation expense of $151 million, $133 million and $99 million, respectively. As of December 31, 2018, we had unrecognized pretax compensation expense of $270 million related to nonvested Comcast RSUs and unrecognized pretax compensation expense of $23 million related to nonvested Comcast stock options that will be recognized over a weighted-average period of approximately 1.6 years and 1.0 years, respectively.