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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                       to                      

 
comcastmcolorblk165a05.jpg
 
Commission File Number
Exact Name of Registrant; State of
Incorporation; Address and Telephone
Number of Principal Executive Offices
I.R.S. Employer Identification No.
001-32871
COMCAST CORPORATION
27-0000798
Pennsylvania
One Comcast Center
Philadelphia, PA 19103-2838
(215286-1700

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, $0.01 par value
 
CMCSA
 
NASDAQ Global Select Market
0.250% Notes due 2027
 
CMCS27
 
NASDAQ Global Market
1.500% Notes due 2029
 
CMCS29
 
NASDAQ Global Market
0.750% Notes due 2032
 
CMCS32
 
NASDAQ Global Market
1.875% Notes due 2036
 
CMCS36
 
NASDAQ Global Market
1.250% Notes due 2040
 
CMCS40
 
NASDAQ Global Market
9.455% Guaranteed Notes due 2022
 
CMCSA/22
 
New York Stock Exchange
5.50% Notes due 2029
 
CCGBP29
 
New York Stock Exchange
2.0% Exchangeable Subordinated Debentures due 2029
 
CCZ
 
New York Stock Exchange
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. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
Indicate the number of shares outstanding of each of the registrant’s classes of stock, as of the latest practicable date:
As of March 31, 2020, there were 4,554,648,825 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Class B common stock outstanding.


 



TABLE OF CONTENTS
  
  
Page
Number
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 5.
Item 6.
 
Explanatory Note
Beginning with this Quarterly Report on Form 10-Q for the three months ended March 31, 2020, we are voluntarily complying with new disclosure rules for guarantors and issuers of guaranteed debt securities issued by the Securities and Exchange Commission (“SEC”) in March 2020, as permitted by the transition guidance contained in the SEC’s final rule release “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities.” As a result, this report includes new disclosures related to our consolidated subsidiaries that guarantee or have issued guaranteed debt securities registered with the SEC that are included within our guarantee structure (refer to Guarantee Structure within the Liquidity and Capital Resources section of Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations). As a result of these rules, NBCUniversal Media, LLC is no longer required to prepare stand-alone periodic reports under SEC rules, and our periodic reports are no longer prepared as a combined report being filed separately by Comcast Corporation and NBCUniversal Media, LLC.
Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to Comcast and its consolidated subsidiaries, as “Comcast,” “we,” “us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” NBCUniversal, LLC as “NBCUniversal Holdings;” NBCUniversal Enterprise, Inc. as “NBCUniversal Enterprise;” NBCUniversal Media, LLC and its consolidated subsidiaries as “NBCUniversal;” and Sky Limited and its consolidated subsidiaries as “Sky.”
This Quarterly Report on Form 10-Q is for the three months ended March 31, 2020. This Quarterly Report on Form 10-Q modifies and supersedes documents filed before it. The 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 on Form 10-Q. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report on Form 10-Q.
You should carefully review the information contained in this Quarterly Report on Form 10-Q and particularly consider any risk factors set forth in this Quarterly Report on Form 10-Q and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report on Form 10-Q, we state our beliefs of future events and of our future financial performance. In some cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “believes,” “estimates,” “potential,” or “continue,” or the negative of these words, and other comparable words. You should be aware that these statements are only our predictions. In evaluating these statements, you should consider various factors, including the risks outlined below and in other reports we file with the SEC. Actual events or our actual results could differ materially from



our forward-looking statements as a result of any such factors, which could adversely affect our businesses, results of operations or financial condition. We undertake no obligation to update any forward-looking statements.
Our businesses may be affected by, among other things, the following:
the COVID-19 pandemic could have a material adverse effect on our businesses and results of operations
our businesses operate in highly competitive and dynamic industries, and our businesses and results of operations could be adversely affected if we do not compete effectively
changes in consumer behavior driven by online video distribution platforms for viewing content continue to adversely affect our businesses and challenge existing business models
a decline in advertisers’ expenditures or changes in advertising markets could negatively impact our businesses
our businesses depend on keeping pace with technological developments
we are subject to regulation by federal, state, local and foreign authorities, which impose additional costs and restrictions on our businesses
programming expenses for our video services are increasing, which could adversely affect Cable Communications’ and Sky’s video businesses
NBCUniversal’s and Sky’s success depends on consumer acceptance of their content, and their businesses may be adversely affected if their content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase
the loss of programming distribution and licensing agreements, or the renewal of these agreements on less favorable terms, could adversely affect our businesses
less favorable telecommunications access regulations, the loss of Sky’s transmission agreements with satellite or telecommunications providers or the renewal of these agreements on less favorable terms could adversely affect Sky’s 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
our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others
we may be unable to obtain necessary hardware, software and operational support
weak economic conditions may have a negative impact on our businesses
acquisitions and other strategic initiatives present many risks, and we may not realize the financial and strategic goals that we had contemplated
we face risks relating to doing business internationally that could adversely affect our businesses
unfavorable litigation or governmental investigation results could require us to pay significant amounts or lead to onerous operating procedures
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
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



Table of Contents

PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Comcast Corporation
Condensed Consolidated Statement of Income
(Unaudited)
 
Three Months Ended
March 31,
(in millions, except per share data)
2020
 
2019
Revenue
$
26,609

 
$
26,859

Costs and Expenses:
 
 
 
Programming and production
8,301

 
8,569

Other operating and administrative
8,254

 
7,900

Advertising, marketing and promotion
1,938

 
1,888

Depreciation
2,107

 
2,240

Amortization
1,157

 
1,080

Total costs and expenses
21,757

 
21,677

Operating income
4,852

 
5,182

Interest expense
(1,212
)
 
(1,150
)
Investment and other income (loss), net
(716
)
 
676

Income before income taxes
2,924

 
4,708

Income tax expense
(700
)
 
(1,076
)
Net income
2,224

 
3,632

Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock
77

 
79

Net income attributable to Comcast Corporation
$
2,147

 
$
3,553

Basic earnings per common share attributable to Comcast Corporation shareholders
$
0.47

 
$
0.78

Diluted earnings per common share attributable to Comcast Corporation shareholders
$
0.46

 
$
0.77

See accompanying notes to condensed consolidated financial statements.

1

Table of Contents

Comcast Corporation

Condensed Consolidated Statement of Comprehensive Income
(Unaudited) 
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Net income
$
2,224

 
$
3,632

Unrealized gains (losses) on marketable securities, net of deferred taxes of $— and $—
1

 
1

Deferred gains (losses) on cash flow hedges, net of deferred taxes of $10 and $9
54

 
(59
)
Amounts reclassified to net income:
 
 
 
Realized (gains) losses on cash flow hedges, net of deferred taxes of $17 and $(11)
(106
)
 
58

Employee benefit obligations, net of deferred taxes of $3 and $3
(8
)
 
(7
)
Currency translation adjustments, net of deferred taxes of $(7) and $(12)
(2,157
)
 
807

Comprehensive income
8

 
4,432

Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock
77

 
79

Less: Other comprehensive income (loss) attributable to noncontrolling interests
(25
)
 
10

Comprehensive income (loss) attributable to Comcast Corporation
$
(44
)
 
$
4,343

See accompanying notes to condensed consolidated financial statements.

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Condensed Consolidated Statement of Cash Flows
(Unaudited) 
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Operating Activities
 
 
 
Net income
$
2,224

 
$
3,632

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
3,264

 
3,320

Share-based compensation
298

 
245

Noncash interest expense (income), net
227

 
77

Net (gain) loss on investment activity and other
791

 
(498
)
Deferred income taxes
(120
)
 
271

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
 
 
 
Current and noncurrent receivables, net
198

 
449

Film and television costs, net
3

 
559

Accounts payable and accrued expenses related to trade creditors
(727
)
 
(574
)
Other operating assets and liabilities
(334
)
 
(250
)
Net cash provided by operating activities
5,824

 
7,231

Investing Activities
 
 
 
Capital expenditures
(1,881
)
 
(2,092
)
Cash paid for intangible assets
(618
)
 
(547
)
Construction of Universal Beijing Resort
(371
)
 
(220
)
Acquisitions, net of cash acquired
(194
)
 
(48
)
Proceeds from sales of businesses and investments
17

 
37

Purchases of investments
(69
)
 
(439
)
Other
15

 
83

Net cash provided by (used in) investing activities
(3,101
)
 
(3,226
)
Financing Activities
 
 
 
Proceeds from (repayments of) short-term borrowings, net

 
(1,288
)
Proceeds from borrowings
9,281

 
222

Repurchases and repayments of debt
(7,439
)
 
(2,084
)
Repurchases of common stock under employee plans
(233
)
 
(247
)
Dividends paid
(977
)
 
(869
)
Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock
(76
)
 
(85
)
Other
(182
)
 
26

Net cash provided by (used in) financing activities
374

 
(4,325
)
Impact of foreign currency on cash, cash equivalents and restricted cash
(77
)
 
8

Increase (decrease) in cash, cash equivalents and restricted cash
3,020

 
(312
)
Cash, cash equivalents and restricted cash, beginning of period
5,589

 
3,909

Cash, cash equivalents and restricted cash, end of period
$
8,609

 
$
3,597

See accompanying notes to condensed consolidated financial statements.

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Condensed Consolidated Balance Sheet
(Unaudited)
(in millions, except share data)
March 31,
2020
 
December 31,
2019
Assets
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
8,516

 
$
5,500

Receivables, net
10,800

 
11,292

Programming rights

 
3,877

Other current assets
4,768

 
4,723

Total current assets
24,084

 
25,392

Film and television costs
12,385

 
8,933

Investments
6,468

 
6,989

Investment securing collateralized obligation
612

 
694

Property and equipment, net of accumulated depreciation of $53,566 and $53,239
48,442

 
48,322

Goodwill
67,218

 
68,725

Franchise rights
59,365

 
59,365

Other intangible assets, net of accumulated amortization of $16,292 and $17,217
34,672

 
36,128

Other noncurrent assets, net
9,175

 
8,866

Total assets
$
262,421

 
$
263,414

Liabilities and Equity
 
 
 
Current Liabilities:
 
 
 
Accounts payable and accrued expenses related to trade creditors
$
9,963

 
$
10,826

Accrued participations and residuals
1,894

 
1,730

Deferred revenue
2,634

 
2,768

Accrued expenses and other current liabilities
10,136

 
10,516

Current portion of long-term debt
2,973

 
4,452

Total current liabilities
27,600

 
30,292

Long-term debt, less current portion
100,604

 
97,765

Collateralized obligation
5,166

 
5,166

Deferred income taxes
27,865

 
28,180

Other noncurrent liabilities
17,144

 
16,765

Commitments and contingencies (Note 12)


 


Redeemable noncontrolling interests and redeemable subsidiary preferred stock
1,259

 
1,372

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, 5,427,439,853 and 5,416,381,298; outstanding, 4,554,648,825 and 4,543,590,270
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
38,597

 
38,447

Retained earnings
51,516

 
50,695

Treasury stock, 872,791,028 Class A common shares
(7,517
)
 
(7,517
)
Accumulated other comprehensive income (loss)
(1,144
)
 
1,047

Total Comcast Corporation shareholders’ equity
81,506

 
82,726

Noncontrolling interests
1,277

 
1,148

Total equity
82,783

 
83,874

Total liabilities and equity
$
262,421

 
$
263,414

See accompanying notes to condensed consolidated financial statements.

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Condensed Consolidated Statement of Changes in Equity
(Unaudited)
 
Three Months Ended
March 31,
(in millions, except per share data)
2020
2019
Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock
 
 
Balance, beginning of period
$
1,372

$
1,316

Contributions from (distributions to) noncontrolling interests, net
(27
)
(20
)
Other
(153
)
(8
)
Net income (loss)
67

28

Balance, end of period
$
1,259

$
1,316

 
 
 
Class A common stock
 
 
Balance, beginning of period
$
54

$
54

Balance, end of period
$
54

$
54

 
 
 
Additional Paid-In Capital
 
 
Balance, beginning of period
$
38,447

$
37,461

Stock compensation plans
212

174

Repurchases of common stock under employee plans
(93
)
(62
)
Employee stock purchase plans
54

48

Other
(23
)

Balance, end of period
$
38,597

$
37,621

 
 
 
Retained Earnings
 
 
Balance, beginning of period
$
50,695

$
41,983

Cumulative effects of adoption of accounting standards
(124
)

Repurchases of common stock under employee plans
(142
)
(193
)
Dividends declared
(1,064
)
(964
)
Other
4


Net income (loss)
2,147

3,553

Balance, end of period
$
51,516

$
44,379

 
 
 
Treasury Stock at Cost
 
 
Balance, beginning of period
$
(7,517
)
$
(7,517
)
Balance, end of period
$
(7,517
)
$
(7,517
)
 
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
Balance, beginning of period
$
1,047

$
(368
)
Other comprehensive income (loss)
(2,191
)
790

Balance, end of period
$
(1,144
)
$
422

 
 
 
Noncontrolling Interests
 
 
Balance, beginning of period
$
1,148

$
889

Other comprehensive income (loss)
(14
)
10

Contributions from (distributions to) noncontrolling interests, net
120

(46
)
Other
13

(1
)
Net income (loss)
10

51

Balance, end of period
$
1,277

$
903

Total equity
$
82,783

$
75,862

Cash dividends declared per common share
$
0.23

$
0.21

See accompanying notes to condensed consolidated financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Condensed Consolidated Financial Statements
Business and 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 2019 Annual Report on Form 10-K and the notes within this Form 10-Q.
Note 2: Segment Information
We present our operations in six reportable business segments: (1) Comcast Cable in one reportable business segment, referred to as Cable Communications; (2) NBCUniversal in four reportable business segments: Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks (collectively, the “NBCUniversal segments”); and (3) Sky in one reportable business segment.
Cable Communications is a leading provider of high-speed internet, 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.
Cable Networks consists primarily of our national cable networks that provide a variety of entertainment, news and information, and sports content; our regional sports and news networks; our international cable networks; our cable television studio production operations; and various digital properties.
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, our broadcast television studio production operations, and various digital properties.
Filmed Entertainment consists primarily of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment worldwide; our films are also produced under the Illumination, DreamWorks Animation and Focus Features names.
Theme Parks consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. In addition, we are developing a theme park in Beijing, China along with a consortium of Chinese state-owned companies, and an additional theme park in Orlando, Florida.
Sky is one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business, providing video, high-speed internet, voice and wireless phone services, and a content business, operating entertainment networks, the Sky News broadcast network and Sky Sports networks.
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, such as the development of Peacock, our direct-to-consumer streaming service that will feature NBCUniversal content.
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 business segment is presented in the tables below.


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Three Months Ended March 31, 2020
(in millions)
Revenue
Adjusted EBITDA(d)
Depreciation and Amortization
Capital
Expenditures
Cash Paid for Intangible Assets
Cable Communications
$
14,918

$
6,076

$
1,946

$
1,269

$
356

NBCUniversal
 
 
 
 
 
Cable Networks
2,859

1,248

195

5

3

Broadcast Television
2,684

501

43

25

3

Filmed Entertainment
1,370

106

22

4

5

Theme Parks
869

76

189

296

15

Headquarters and Other(a)
23

(187
)
116

47

41

Eliminations(b)
(71
)
3




NBCUniversal
7,734

1,747

565

377

67

Sky
4,517

551

718

197

166

Corporate and Other(c)
120

(252
)
35

38

29

Eliminations(b)
(680
)
8




Comcast Consolidated
$
26,609

$
8,130

$
3,264

$
1,881

$
618

 
Three Months Ended March 31, 2019
(in millions)
Revenue
Adjusted EBITDA(d)
Depreciation and Amortization
Capital
Expenditures
Cash Paid for Intangible Assets
Cable Communications
$
14,280

$
5,728

$
2,035

$
1,363

$
323

NBCUniversal
 
 
 
 
 
Cable Networks
2,868

1,262

182

6

2

Broadcast Television
2,467

387

39

13

3

Filmed Entertainment
1,768

364

19

4

5

Theme Parks
1,276

498

162

394

19

Headquarters and Other(a)
17

(174
)
113

36

42

Eliminations(b)
(83
)




NBCUniversal
8,313

2,337

515

453

71

Sky
4,797

663

741

259

151

Corporate and Other(c)
108

(187
)
29

17

2

Eliminations(b)
(639
)
12




Comcast Consolidated
$
26,859

$
8,553

$
3,320

$
2,092

$
547


(a)
NBCUniversal Headquarters and Other activities include costs associated with overhead, allocations, personnel costs and headquarter initiatives.
(b)
Included in Eliminations are transactions that our segments enter into with one another. The most common types of transactions are the following:
Cable Networks generates revenue by selling programming to Cable Communications, which represents a substantial majority of the revenue elimination amount
Broadcast Television generates revenue from the fees received under retransmission consent agreements with Cable Communications
Cable Communications generates revenue by selling advertising and by selling the use of satellite feeds to Cable Networks
Cable Networks and Broadcast Television generate revenue by selling advertising to Cable Communications
Filmed Entertainment and Broadcast Television generate revenue by licensing content to Cable Networks; for segment reporting, this revenue is recognized as the programming rights asset for the licensed content is amortized based on third-party revenue
Filmed Entertainment, Cable Networks and Broadcast Television generate revenue by licensing content to Sky; for segment reporting, this revenue is recognized as content is delivered and available for use by Sky
(c)
Corporate and Other activities include costs associated with overhead and personnel, revenue and expenses associated with our other business interests.
(d)
We use Adjusted EBITDA as the measure of profit or loss for our operating segments. Adjusted EBITDA is defined as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. 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.

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Three Months Ended
March 31,
(in millions)
2020
 
2019
Adjusted EBITDA
$
8,130

 
$
8,553

Adjustment for Sky transaction-related costs
(14
)
 
(51
)
Depreciation
(2,107
)
 
(2,240
)
Amortization
(1,157
)
 
(1,080
)
Interest expense
(1,212
)
 
(1,150
)
Investment and other income (loss), net
(716
)
 
676

Income before income taxes
$
2,924

 
$
4,708



Note 3: Revenue
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Residential:
 
 
 
High-speed internet
$
5,001

 
$
4,577

Video
5,632

 
5,628

Voice
899

 
990

Wireless
343

 
225

Business services
2,043

 
1,891

Advertising
557

 
556

Other
443

 
413

Total Cable Communications(a)
14,918

 
14,280

 
 
 
 
Distribution
1,708

 
1,735

Advertising
834

 
852

Content licensing and other
317

 
281

Total Cable Networks
2,859

 
2,868

 
 
 
 
Advertising
1,318

 
1,317

Content licensing
735

 
560

Distribution and other
631

 
590

Total Broadcast Television
2,684

 
2,467

 
 
 
 
Theatrical
317

 
445

Content licensing
691

 
817

Home entertainment
171

 
267

Other
191

 
239

Total Filmed Entertainment
1,370

 
1,768

 
 
 
 
Total Theme Parks
869

 
1,276

Headquarters and Other
23

 
17

Eliminations(b)
(71
)
 
(83
)
Total NBCUniversal
7,734

 
8,313

 
 
 
 
Direct-to-consumer
3,679

 
3,834

Content
325

 
370

Advertising
513

 
593

Total Sky
4,517

 
4,797

 
 
 
 
Corporate and Other
120

 
108

Eliminations(b)
(680
)
 
(639
)
Total revenue
$
26,609

 
$
26,859

(a)
For both the three months ended March 31, 2020 and 2019, 2.6% of Cable Communications segment revenue was derived from franchise and other regulatory fees.
(b)
Included in Eliminations are transactions that our segments enter into with one another. See Note 2 for a description of these transactions.

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We operate primarily in the United States but also in select international markets. The table below summarizes revenue by geographic location.
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
United States
$
20,690

 
$
20,457

Europe
5,033

 
5,370

Other
886

 
1,032

Total revenue
$
26,609

 
$
26,859


No single customer accounted for a significant amount of revenue in any period presented.
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 deferred costs associated with our contracts with customers.
(in millions)
March 31,
2020
 
December 31,
2019
Receivables, gross
$
11,412

 
$
11,711

Less: Allowance for doubtful accounts
612

 
419

Receivables, net
$
10,800

 
$
11,292


(in millions)
March 31,
2020
 
December 31,
2019
Noncurrent receivables, net (included in other noncurrent assets, net)
$
1,323

 
$
1,337

Contract acquisition and fulfillment costs (included in other noncurrent assets, net)
$
1,078

 
$
1,083

Noncurrent deferred revenue (included in other noncurrent liabilities)
$
894

 
$
618


Note 4: Programming and Production Costs
Film and Television Costs
Cable Networks, Broadcast Television, Filmed Entertainment and Sky produce owned content or acquire the rights to programming from third parties, which are described as owned film and television costs and programming rights, respectively. We adopted new accounting guidance related to film and television costs in 2020 (see Note 8), and accordingly amounts presented below for periods in 2020 and the policy discussion reflect the updated accounting guidance, and amounts presented for 2019 reflect the accounting guidance in effect at that time. Under the new accounting guidance, we have determined that the predominant monetization strategy for the substantial majority of our content is on an individual basis.
Amortization of Film and Television Costs
 
Three Months Ended
March 31,
(in millions)
2020
Owned film and television costs
$
1,788

Programming rights
$
2,664



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Capitalized Film and Television Costs
 
March 31, 2020
 
December 31, 2019
(in millions)
Film and Television Costs
 
Film Costs
 
Television Costs
 
Total
Owned film and television costs:
 
 
 
 
 
 
 
Released, less amortization
$
4,317

 
$
1,551

 
$
2,810

 
$
4,361

Completed, not released
238

 
187

 

 
187

In production and in development
2,509

 
1,314

 
1,162

 
2,476

 
7,064

 
3,052

 
3,972

 
7,024

Programming rights, less amortization
5,321

 
 
 
 
 
5,786

 
12,385

 
 
 
 
 
12,810

Less: Current portion of programming rights

 
 
 
 
 
3,877

Film and television costs
$
12,385

 
 
 
 
 
$
8,933


The table below summarizes estimated future amortization expense for the capitalized film and television costs recorded in our condensed consolidated balance sheet as of March 31, 2020.
(in millions)
Owned Film and Television Costs
 
Programming Rights
Completed, not released:
 
 
 
Remaining nine months of 2020
$
119

 
 
 
 
 
 
Released and programming rights:
 
 
 
Remaining nine months of 2020
$
1,485

 
$
2,775

2021
$
672

 
$
1,197

2022
$
418

 
$
433


Capitalization and Recognition of Film and Television Costs
We capitalize costs for owned film and television content, including direct costs, production overhead, print costs, development costs and interest, as well as acquired libraries. Amortization for content predominantly monetized on an individual basis and accrued costs associated with participations and residual payments are recorded using the individual film forecast computation method, which recognizes the costs in the same ratio as the associated ultimate revenue. Estimates of ultimate revenue and total costs are based on anticipated release patterns, public acceptance and historical results for similar productions. Amortization for content predominantly monetized with other owned or licensed content is recorded based on estimated usage. In determining the method of amortization and estimated life of an acquired film or television library, we generally use the method and the life that most closely follow the undiscounted cash flows over the estimated life of the asset. We do not capitalize costs related to the distribution of a film in movie theaters or the licensing or sale of a film or television production, which primarily include costs associated with marketing and distribution.
We may enter into cofinancing arrangements with third parties to jointly finance or distribute certain of our film productions. Cofinancing arrangements can take various forms, but in most cases involve the grant of an economic interest in a film to an investor who owns an undivided copyright interest in the film. The number of investors and the terms of these arrangements can vary, although investors generally assume the full risks and rewards for the portion of the film acquired in these arrangements. We account for the proceeds received from the investor under these arrangements as a reduction of our capitalized film costs and the investor’s interest in the profit or loss of the film is recorded as either a charge or a benefit, respectively, in programming and production costs. The investor’s interest in the profit or loss of a film is recorded each period using the individual film forecast computation method.
We capitalize the costs of programming rights for content that we license but do not own when the license period begins, the content is made available for use and the costs of programming licenses are known. Programming rights are amortized as the associated programs are broadcast.
Owned film and television costs and programming rights are presented as noncurrent assets in film and television costs. We present amortization of film and television costs and accrued costs associated with participation and residual payments in programming and production costs.
When an event or a change in circumstance occurs that was known or knowable as of the balance sheet date and that indicates the fair value of either owned film and television content or programming rights is less than the unamortized costs in the balance sheet,

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we determine the fair value and record an impairment charge to the extent the unamortized costs exceed the fair value. Owned film and television costs are assessed either individually or in identified film groups, for content predominantly monetized on an individual basis or with other content, respectively. The substantial majority of our owned film and television costs are evaluated for impairment on an individual title basis. Programming rights that are not part of a film group are generally assessed in packages, channels, or dayparts. A daypart is an aggregation of programs broadcast during a particular time of day or programs of a similar type. Programming rights licensed by Cable Networks are primarily tested on a channel basis for impairment, whereas programming rights licensed by Broadcast Television are tested on a daypart basis. Estimated fair values of owned film and television costs or programming rights are generally based on level 3 inputs including analysis of market participant estimates of future cash flows. We record charges related to impairments or content that is substantively abandoned to programming and production costs. Impairments of capitalized film and television costs were not material in any of the periods presented.
Sports Programming Rights
We recognize the costs of multiyear, live-event sports programming rights as the rights are utilized over the contract term based on estimated relative value. Estimated relative value is generally based on the ratio of the current period revenue to the estimated ultimate revenue or the terms of the contract. When cash payments, including advanced payments, exceed the relative value of the programming delivered, we recognize an asset in programming rights. Production costs incurred in advance of airing are also presented in programming rights.
Note 5: Earnings Per Share
Computation of Diluted EPS
 
Three Months Ended March 31,
 
2020
 
2019
(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
$
2,147

 
4,562

 
$
0.47

 
$
3,553

 
4,534

 
$
0.78

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Assumed exercise or issuance of shares relating to stock plans
 
 
55

 
 
 
 
 
60

 
 
Diluted EPS attributable to Comcast Corporation shareholders
$
2,147

 
4,617

 
$
0.46

 
$
3,553

 
4,594

 
$
0.77


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”). Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the combination of the option exercise price and the associated unrecognized compensation expense is greater than the average market price of our common stock. 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 months ended March 31, 2020 or 2019.
Note 6: Long-Term Debt
As of March 31, 2020, our debt had a carrying value of $103.6 billion and an estimated fair value of $118.8 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.
In April 2020, Sky repaid at maturity $655 million (using the exchange rate on the date of repayment) aggregate principal amount of senior floating rate notes due 2020.

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Note 7: 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”). We own a 30% interest in Universal Beijing Resort and the construction is being funded through a combination of debt financing and equity contributions from the investors in accordance with their equity interests. As of March 31, 2020, Universal Beijing Resort had $1.5 billion principal amount of a term loan outstanding under the debt financing agreement.
As of March 31, 2020, our condensed consolidated balance sheet included assets, primarily property and equipment, and liabilities, including the term loan, of Universal Beijing Resort totaling $3.4 billion and $2.3 billion, respectively.
Note 8: Recent Accounting Pronouncements
Film and Television Costs
In March 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to film and television costs. The updated guidance aligned the accounting for production costs of episodic television series with those of films, allowing for costs to be capitalized in excess of amounts of revenue contracted for each episode. The guidance also updated certain presentation and disclosure requirements for capitalized film and television costs, and when content is predominantly monetized with other owned or licensed content the guidance requires impairment testing for capitalized film and television costs to be performed at a film group level and amortization to be based on usage. We adopted the updated guidance on January 1, 2020 on a prospective basis and as a result, prior period amounts were not adjusted.
Following the adoption, we now present all film and television costs, including acquired programming rights previously classified as current, as noncurrent in the condensed consolidated balance sheet. The adoption of the updated accounting guidance did not have a material impact on our consolidated results of operations or financial position. See Note 4 for further information.
Credit Losses
In June 2016, the FASB updated the accounting guidance related to the measurement of credit losses on financial instruments, including trade receivables and loans. The updated guidance requires the recognition of credit losses on financial instruments based on an estimate of expected losses, replacing the incurred loss model in the prior guidance. We adopted the updated guidance on January 1, 2020 on a prospective basis recording $124 million, net of tax, as a cumulative effect adjustment to retained earnings and as a result, prior period amounts were not adjusted. The adoption of the updated accounting guidance did not have a material impact on our consolidated results of operations or financial position for any periods presented.
Note 9: Investments
Investment and Other Income (Loss), Net
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Equity in net income (losses) of investees, net
$
(668
)
 
$
262

Realized and unrealized gains (losses) on equity securities, net
(58
)
 
214

Other income (loss), net
10

 
200

Investment and other income (loss), net
$
(716
)
 
$
676


(in millions)
March 31,
2020
 
December 31,
2019
Equity method
$
4,777

 
$
5,347

Marketable equity securities
320

 
353

Nonmarketable equity securities
1,892

 
1,896

Other investments
1,794

 
1,796

Total investments
8,783

 
9,392

Less: Current investments
1,703

 
1,709

Less: Investment securing collateralized obligation
612

 
694

Noncurrent investments
$
6,468

 
$
6,989



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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 three months ended March 31, 2020 and 2019, we recognized losses of $581 million and income of $374 million, respectively. For the three months ended March 31, 2020 and 2019, we made cash capital contributions totaling $12 million and $37 million, respectively, to Atairos. As of March 31, 2020 and December 31, 2019, our investment was $2.8 billion and $3.2 billion, respectively.
Hulu and Collateralized Obligation
For the three months ended March 31, 2020 and 2019, we recognized our proportionate share of Hulu’s losses of $82 million and $141 million, respectively, in equity in net income (losses) of investees, net and in the first quarter 2019, we recognized a previously deferred dilution gain of $159 million. For the three months ended March 31, 2019, we made cash capital contributions totaling $233 million to Hulu. There were no cash capital contributions made during the three months ended March 31, 2020. As of March 31, 2020 and December 31, 2019, our investment was $612 million and $694 million, respectively.
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 March 31, 2020, the carrying value and fair value of our collateralized obligation was $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.
Marketable Equity Securities
Peloton
Following Peloton’s initial public offering in September 2019, we present our investment in marketable equity securities, which was previously presented in nonmarketable equity securities. For the three months ended March 31, 2020, we recognized unrealized losses of $19 million in realized and unrealized gains (losses) on equity securities, net. As of March 31, 2020 and December 31, 2019, our investment in Peloton was $275 million and $294 million, respectively.
Snap
In the fourth quarter of 2019, we sold our investment in Snap. For the three months ended March 31, 2019, we recognized unrealized gains of $162 million in realized and unrealized gains (losses) on equity securities, net.
Other Investments
AirTouch
As of March 31, 2020 and December 31, 2019, our investment in the two series of preferred stock of Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”) was $1.7 billion and $1.6 billion, respectively, and the associated liability related to redeemable subsidiary preferred shares was $1.7 billion as of both dates.
In April 2020, AirTouch redeemed the preferred stock and we received cash payments totaling $1.7 billion. Subsequently, we redeemed and repurchased the three series of subsidiary preferred stock and made cash payments totaling $1.8 billion.

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Note 10: Intangible Assets
 
 
March 31, 2020
December 31, 2019
(in millions)
Weighted-Average
Original Useful Life
as of March 31, 2020
Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization

Indefinite-Lived Intangible Assets:
 
 
 
 
 
Franchise rights
N/A
$
59,365

 
$
59,365

 
Trade names
N/A

 
8,809

 
FCC licenses
N/A
2,337

 
2,337

 
Finite-Lived Intangible Assets:
 
 
 
 
 
Customer relationships
14 years
21,236

$
(7,446
)
22,884

$
(8,295
)
Software
5 years
15,631

(7,742
)
15,357

(7,287
)
Other agreements and rights
28 years
11,760

(1,104
)
3,958

(1,635
)
Total
 
$
110,329

$
(16,292
)
$
112,710

$
(17,217
)

Estimated Amortization Expense of Finite-Lived Intangible Assets
(in millions)
  
Remaining nine months of 2020
$
3,381

2021
$
4,107

2022
$
3,539

2023
$
2,951

2024
$
2,451


Note 11: Supplemental Financial Information
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 2020, we granted 15.8 million RSUs and 59.9 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $42.47 per RSU and $6.53 per stock option.
Recognized Share-Based Compensation Expense
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Restricted share units
$
141

 
$
127

Stock options
71

 
47

Employee stock purchase plans
12

 
9

Total
$
224

 
$
183


As of March 31, 2020, we had unrecognized pretax compensation expense of $1.6 billion and $760 million related to nonvested RSUs and nonvested stock options, respectively.
Cash Payments for Interest and Income Taxes
 
Three Months Ended
March 31,
(in millions)
2020
 
2019
Interest
$
991

 
$
970

Income taxes
$
281

 
$
189



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Noncash Activities
During the three months ended March 31, 2020:
we acquired $1.6 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 to be paid in April 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)
March 31,
2020
 
December 31,
2019
Cash and cash equivalents
$
8,516

 
$
5,500

Restricted cash included in other current assets
47

 
42

Restricted cash included in other noncurrent assets, net
46

 
47

Cash, cash equivalents and restricted cash, end of period
$
8,609

 
$
5,589


Accumulated Other Comprehensive Income (Loss)
(in millions)
March 31,
2020
 
March 31,
2019
Unrealized gains (losses) on marketable securities
$
7

 
$
4

Deferred gains (losses) on cash flow hedges
87

 
54

Unrecognized gains (losses) on employee benefit obligations
257

 
318

Cumulative translation adjustments
(1,495
)
 
46

Accumulated other comprehensive income (loss), net of deferred taxes
$
(1,144
)
 
$
422


Note 12: Commitments and Contingencies
Redeemable Subsidiary Preferred Stock
None of the holders of the Series A cumulative preferred stock of NBCUniversal Enterprise exercised their rights to cause NBCUniversal Enterprise to redeem their shares during the first 30 day election period beginning on March 19, 2020. As of March 31, 2020, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $734 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.
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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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal, and Sky. We present our operations for (1) Comcast Cable in one reportable business segment, referred to as Cable Communications; (2) NBCUniversal in four reportable business segments: Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks (collectively, the “NBCUniversal segments”); and (3) Sky in one reportable business segment.
Cable Communications Segment
Cable Communications is a leading provider of high-speed internet, 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. As of March 31, 2020, our cable systems had 31.9 million total customer relationships, including 29.5 million residential and 2.4 million business customer relationships, and passed more than 59 million homes and businesses. 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.
NBCUniversal Segments
NBCUniversal is one of the world’s leading media and entertainment companies that develops, produces and distributes entertainment, news and information, sports, and other content for global audiences, and owns and operates theme parks worldwide.
Cable Networks
Cable Networks consists primarily of our national cable networks that provide a variety of entertainment, news and information, and sports content; our regional sports and news networks; our international cable networks; our cable television studio production operations; and various digital properties. Revenue is generated primarily from the distribution of our cable network programming to traditional and virtual multichannel video providers; from the sale of advertising on our cable networks and digital properties; from the licensing of our owned programming, including programming from our cable television studio production operations, to cable and broadcast networks and subscription video on demand services; and from the sale of our owned content on standard-definition DVDs and Blu-ray discs (together, “DVDs”) and through digital distribution services such as iTunes.
Broadcast Television
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, our broadcast television studio production operations, and various digital properties. Revenue is generated primarily from the sale of advertising on our networks and digital properties, from the licensing of programming, including to cable and broadcast networks as well as to subscription video on demand services; from the fees received under retransmission consent agreements and associated fees received from NBC-affiliated and Telemundo-affiliated local broadcast television stations; and from the sale of our owned programming on DVDs and through digital distribution services.
Filmed Entertainment
Filmed Entertainment primarily produces, acquires, markets and distributes filmed entertainment worldwide. Our films are produced primarily under the Universal Pictures, Illumination, DreamWorks Animation and Focus Features names. Revenue is generated primarily from the worldwide distribution of our produced and acquired films for exhibition in movie theaters, from the licensing of produced and acquired films through various distribution platforms, and from the sale of produced and acquired films on DVDs and through digital distribution services. Filmed Entertainment also generates revenue from Fandango, a movie ticketing and entertainment business, consumer products, the production and licensing of live stage plays, and the distribution of filmed entertainment produced by third parties.
Theme Parks
Theme Parks consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. In addition, we are developing a theme park in Beijing, China along with a consortium of Chinese state-owned companies, and an additional theme park in Orlando, Florida. Revenue is generated primarily from guest spending at our Universal theme parks.
Sky Segment
Sky is one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business, providing video, high-speed internet, voice and wireless phone services, and a content business, operating entertainment networks, the Sky News broadcast network and Sky Sports networks. As of March 31, 2020, Sky had 23.9 million retail customer relationships.

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Corporate and Other
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, such as the development of Peacock.
Impacts of COVID-19
The novel coronavirus disease 2019 (“COVID-19”) and measures taken to prevent its spread across the globe are impacting our businesses in a number of ways. Our Cable Communications results of operations, while strong in the first quarter 2020, will be negatively affected in the second quarter by the significant deterioration in domestic economic conditions in recent weeks and by the costs associated with our support of customer connectivity as the population increasingly works and learns remotely from home. NBCUniversal and Sky results of operations also will be negatively impacted to a greater extent in the second quarter 2020. As a result, we expect the impacts of COVID-19 to increase in significance in the second quarter 2020 and to have a material adverse impact on our consolidated results of operations over the near to medium term.
Cable Communications
Our distribution network to date has performed well under the stress of increased traffic and peak usage driven by increased video streaming, gaming and videoconferencing as more customers work and learn remotely from home.