10-Q 1 cmcsa-3312018x10q.htm FORM 10-Q Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2018
OR
c
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from                      to                      
 
comcastmcolorblk165a04.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
(215) 286-1700
 
 
 
 
001-36438
NBCUNIVERSAL MEDIA, LLC
14-1682529
 
DELAWARE
30 Rockefeller Plaza
New York, NY 10112-0015
(212) 664-4444
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Comcast Corporation
 
Yes
x
 
No
c
 
 
NBCUniversal Media, LLC
 
Yes
x
 
No
c
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).
 
Comcast Corporation
 
Yes
x
 
No
c
 
 
NBCUniversal Media, LLC
 
Yes
x
 
No
c
 
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.
Comcast Corporation
Large accelerated filer
x
Accelerated filer
c
Non-accelerated filer
c
Smaller reporting company
c
Emerging growth company
c
NBCUniversal Media, LLC
Large accelerated filer
c
Accelerated filer
c
Non-accelerated filer
x
Smaller reporting company
c
Emerging growth company
c
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.
Comcast Corporation
c
NBCUniversal Media, LLC
c
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
 
Comcast Corporation
 
Yes
c
 
No
x
 
 
NBCUniversal Media, LLC
 
Yes
c
 
No
x
 
Indicate the number of shares outstanding of each of the registrant’s classes of stock, as of the latest practical date:
As of March 31, 2018, there were 4,607,671,892 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Comcast Corporation Class B common stock outstanding.
Not applicable for NBCUniversal Media, LLC.
NBCUniversal Media, LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.
 



TABLE OF CONTENTS
  
  
Page
Number
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
 
Explanatory Note
This Quarterly Report on Form 10-Q is a combined report being filed separately by Comcast Corporation (“Comcast”) and NBCUniversal Media, LLC (“NBCUniversal”). Comcast owns all of the common equity interests in NBCUniversal, and NBCUniversal meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing its information within this Form 10-Q with the reduced disclosure format. Each of Comcast and NBCUniversal is filing on its own behalf the information contained in this report that relates to itself, and neither company makes any representation as to information relating to the other company. Where information or an explanation is provided that is substantially the same for each company, such information or explanation has been combined in this report. Where information or an explanation is not substantially the same for each company, separate information and explanation has been provided. In addition, separate condensed consolidated financial statements for each company, along with notes to the condensed consolidated financial statements, are included in this report. Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to Comcast and its consolidated subsidiaries, including NBCUniversal and its consolidated subsidiaries, as “we,” “us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” NBCUniversal, LLC as “NBCUniversal Holdings;” and NBCUniversal Enterprise, Inc. as “NBCUniversal Enterprise.”
This Quarterly Report on Form 10-Q is for the three months ended March 31, 2018. This Quarterly Report on Form 10-Q modifies and supersedes documents filed before it. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report 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:
our businesses currently face a wide range of competition, and our businesses and results of operations could be adversely affected if we do not compete effectively
changes in consumer behavior driven by online distribution platforms for viewing content could 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 our Cable Communications segment’s video business
NBCUniversal’s success depends on consumer acceptance of its content, and its businesses may be adversely affected if its content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase
the loss of NBCUniversal’s programming distribution agreements, or the renewal of these agreements on less favorable terms, could adversely affect its businesses
we rely on network and information systems and other technologies, as well as key properties, and a disruption, cyber attack, failure or destruction of such networks, systems, technologies or properties may disrupt our businesses
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
labor disputes, whether involving employees or sports organizations, may disrupt our operations and adversely affect our businesses
the loss of key management personnel or popular on-air and creative talent could have an adverse effect on our businesses
we face risks relating to doing business internationally that could adversely affect our businesses
our Class B common stock has substantial voting rights and separate approval rights over several potentially material transactions, and our Chairman and CEO has considerable influence over our company through his beneficial ownership of our Class B common stock



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)
2018
 
2017
Revenue
$
22,791

 
$
20,587

Costs and Expenses:
 
 
 
Programming and production
7,429

 
6,061

Other operating and administrative
6,514

 
5,939

Advertising, marketing and promotion
1,604

 
1,577

Depreciation
2,011

 
1,915

Amortization
588

 
553

Total costs and expenses
18,146

 
16,045

Operating income
4,645

 
4,542

Interest expense
(777
)
 
(755
)
Investment and other income (loss), net
126

 
130

Income before income taxes
3,994

 
3,917

Income tax expense
(818
)
 
(1,262
)
Net income
3,176

 
2,655

Less: Net income attributable to noncontrolling interests and redeemable subsidiary preferred stock
58

 
82

Net income attributable to Comcast Corporation
$
3,118

 
$
2,573

Basic earnings per common share attributable to Comcast Corporation shareholders
$
0.67

 
$
0.54

Diluted earnings per common share attributable to Comcast Corporation shareholders
$
0.66

 
$
0.53

Dividends declared per common share
$
0.19

 
$
0.1575

See accompanying notes to condensed consolidated financial statements.

1


Comcast Corporation

Condensed Consolidated Statement of Comprehensive Income
(Unaudited) 
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Net income
$
3,176

 
$
2,655

Unrealized gains (losses) on marketable securities, net of deferred taxes of $— and $(61)
(1
)
 
104

Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(9) and $(4)
29

 
7

Amounts reclassified to net income:
 
 
 
Realized (gains) losses on cash flow hedges, net of deferred taxes of $6 and $—
(20
)
 

Employee benefit obligations, net of deferred taxes of $2 and $(37)
(8
)
 
63

Currency translation adjustments, net of deferred taxes of $(47) and $(41)
157

 
157

Comprehensive income
3,333

 
2,986

Less: Net income attributable to noncontrolling interests and redeemable subsidiary preferred stock
58

 
82

Less: Other comprehensive income (loss) attributable to noncontrolling interests
4

 
87

Comprehensive income attributable to Comcast Corporation
$
3,271

 
$
2,817

See accompanying notes to condensed consolidated financial statements.

2


Comcast Corporation

Condensed Consolidated Statement of Cash Flows
(Unaudited) 
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Operating Activities
 
 
 
Net income
$
3,176

 
$
2,655

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
2,599

 
2,468

Share-based compensation
199

 
173

Noncash interest expense (income), net
75

 
58

Net (gain) loss on investment activity and other
(74
)
 
(73
)
Deferred income taxes
389

 
269

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
 
 
 
Current and noncurrent receivables, net
85

 
522

Film and television costs, net
(45
)
 
46

Accounts payable and accrued expenses related to trade creditors
200

 
(194
)
Other operating assets and liabilities
(1,130
)
 
(299
)
Net cash provided by operating activities
5,474

 
5,625

Investing Activities
 
 
 
Capital expenditures
(1,973
)
 
(2,078
)
Cash paid for intangible assets
(419
)
 
(385
)
Acquisitions and construction of real estate properties
(59
)
 
(130
)
Acquisitions, net of cash acquired
(89
)
 
(216
)
Proceeds from sales of investments
81

 
51

Purchases of investments
(220
)
 
(1,062
)
Other
387

 
67

Net cash provided by (used in) investing activities
(2,292
)
 
(3,753
)
Financing Activities
 
 
 
Proceeds from (repayments of) short-term borrowings, net
(902
)
 
(1,893
)
Proceeds from borrowings
4,043

 
3,500

Repurchases and repayments of debt
(1,265
)
 
(1,059
)
Repurchases of common stock under repurchase program and employee plans
(1,729
)
 
(996
)
Dividends paid
(738
)
 
(657
)
Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock
(79
)
 
(72
)
Other
94

 
36

Net cash provided by (used in) financing activities
(576
)
 
(1,141
)
Increase (decrease) in cash, cash equivalents and restricted cash
2,606

 
731

Cash, cash equivalents and restricted cash, beginning of period
3,571

 
3,415

Cash, cash equivalents and restricted cash, end of period
$
6,177

 
$
4,146

See accompanying notes to condensed consolidated financial statements.

3


Comcast Corporation

Condensed Consolidated Balance Sheet
(Unaudited)
(in millions, except share data)
March 31,
2018
 
December 31,
2017
Assets
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
6,030

 
$
3,428

Receivables, net
8,759

 
8,834

Programming rights
1,354

 
1,613

Other current assets
2,610

 
2,468

Total current assets
18,753

 
16,343

Film and television costs
7,402

 
7,087

Investments
7,095

 
6,931

Property and equipment, net of accumulated depreciation of $50,393 and $49,916
39,068

 
38,470

Franchise rights
59,365

 
59,364

Goodwill
37,147

 
36,780

Other intangible assets, net of accumulated amortization of $12,465 and $11,950
18,339

 
18,133

Other noncurrent assets, net
3,707

 
4,354

Total assets
$
190,876

 
$
187,462

Liabilities and Equity
 
 
 
Current Liabilities:
 
 
 
Accounts payable and accrued expenses related to trade creditors
$
7,349

 
$
6,908

Accrued participations and residuals
1,659

 
1,644

Deferred revenue
1,578

 
1,687

Accrued expenses and other current liabilities
5,554

 
6,620

Current portion of long-term debt
3,039

 
5,134

Total current liabilities
19,179

 
21,993

Long-term debt, less current portion
63,678

 
59,422

Deferred income taxes
24,702

 
24,259

Other noncurrent liabilities
11,253

 
10,972

Commitments and contingencies (Note 11)


 


Redeemable noncontrolling interests and redeemable subsidiary preferred stock
1,354

 
1,357

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, 5,480,462,920 and 5,507,854,670; outstanding, 4,607,671,892 and 4,635,063,642
55

 
55

Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375

 

Additional paid-in capital
37,375

 
37,497

Retained earnings
38,961

 
38,202

Treasury stock, 872,791,028 Class A common shares
(7,517
)
 
(7,517
)
Accumulated other comprehensive income (loss)
608

 
379

Total Comcast Corporation shareholders’ equity
69,482

 
68,616

Noncontrolling interests
1,228

 
843

Total equity
70,710

 
69,459

Total liabilities and equity
$
190,876

 
$
187,462

See accompanying notes to condensed consolidated financial statements.

4


Comcast Corporation

Condensed Consolidated Statement of Changes in Equity
(Unaudited) 
 
Redeemable
Noncontrolling
Interests and
Redeemable
Subsidiary
Preferred Stock
 
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock at
Cost
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interests
Total
Equity
(in millions)
A
B
Balance, December 31, 2016
$
1,446

$
56

$

$
38,230

$
23,065

$
(7,517
)
$
98

$
2,231

$
56,163

Stock compensation plans
 
 
 
114

 
 
 
 
114

Repurchases of common stock under repurchase program and employee plans
 
 
 
(178
)
(828
)
 
 
 
(1,006
)
Employee stock purchase plans
 
 
 
39

 
 
 
 
39

Dividends declared
 
 
 
 
(751
)
 
 
 
(751
)
Other comprehensive income (loss)
 
 
 
 
 
 
244

87

331

Contributions from (distributions to) noncontrolling interests, net
(8
)
 
 
 
 
 
 
(34
)
(34
)
Other
(11
)
 
 
(90
)
 
 
 
252

162

Net income (loss)
29

 
 
 
2,573

 
 
53

2,626

Balance, March 31, 2017
$
1,456

$
56

$

$
38,115

$
24,059

$
(7,517
)
$
342

$
2,589

$
57,644

Balance, December 31, 2017
$
1,357

$
55

$

$
37,497

$
38,202

$
(7,517
)
$
379

$
843

$
69,459

Cumulative effects of adoption of accounting standards
 
 
 
 
(43
)
 
76

 
33

Stock compensation plans
 
 
 
127

 
 
 
 
127

Repurchases of common stock under repurchase program and employee plans
 
 
 
(294
)
(1,432
)
 
 
 
(1,726
)
Employee stock purchase plans
 
 
 
48

 
 
 
 
48

Dividends declared
 
 
 
 
(884
)
 
 
 
(884
)
Other comprehensive income (loss)
 
 
 
 
 
 
153

4

157

Contributions from (distributions to) noncontrolling interests, net
(17
)
 
 
 
 
 
 
350

350

Other
(10
)
 
 
(3
)
 
 
 
(3
)
(6
)
Net income (loss)
24

 
 
 
3,118

 
 
34

3,152

Balance, March 31, 2018
$
1,354

$
55

$

$
37,375

$
38,961

$
(7,517
)
$
608

$
1,228

$
70,710

See accompanying notes to condensed consolidated financial statements.

5


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 2017 Annual Report on Form 10-K and the footnotes within this Form 10-Q.
Reclassifications
Reclassifications have been made to our condensed consolidated financial statements for the prior year period to conform to classifications used in 2018. See Note 7 for a discussion of the effects of the adoption of new accounting pronouncements and tax reform on our condensed consolidated financial statements.
Note 2: Segment Information
We present our operations in five reportable business segments:
Cable Communications: Consists of the operations of Comcast Cable, which is one of the nation’s largest providers of video, high-speed Internet, voice, and security and automation services (“cable 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, along with a consortium of Chinese state-owned companies, we are developing a Universal theme park and resort in Beijing, China.
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.

6


Comcast Corporation

 
Three Months Ended March 31, 2018
(in millions)
Revenue
Adjusted EBITDA(e)
Depreciation and Amortization
Capital
Expenditures
Cash Paid for Intangible Assets
Cable Communications
$
13,518

$
5,415

$
2,053

$
1,688

$
269

NBCUniversal
 
 
 
 

Cable Networks(a)
3,194

1,268

189

3

4

Broadcast Television(a)
3,497

507

34

30

72

Filmed Entertainment
1,647

203

28

7

6

Theme Parks
1,281

495

155

182

16

Headquarters and Other(b)
14

(188
)
104

47

32

Eliminations(a)(c)
(103
)




NBCUniversal
9,530

2,285

510

269

130

Corporate and Other(d)
391

(397
)
36

16

20

Eliminations(a)(c)
(648
)
(59
)



Comcast Consolidated
$
22,791

$
7,244

$
2,599

$
1,973

$
419

 
Three Months Ended March 31, 2017
(in millions)
Revenue
Adjusted EBITDA(e)
Depreciation and Amortization
Capital
Expenditures
Cash Paid for Intangible Assets
Cable Communications
$
13,050

$
5,174

$
1,946

$
1,781

$
322

NBCUniversal
 
 
 
 

Cable Networks
2,640

1,115

214

2

3

Broadcast Television
2,208

322

32

29

3

Filmed Entertainment
1,967

371

22

10

5

Theme Parks
1,118

397

142

229

13

Headquarters and Other(b)
8

(185
)
98

15

31

Eliminations(c)
(88
)
(1
)



NBCUniversal
7,853

2,019

508

285

55

Corporate and Other(d)
208

(194
)
14

12

8

Eliminations(c)
(524
)
11




Comcast Consolidated
$
20,587

$
7,010

$
2,468

$
2,078

$
385

(a)
The revenue and operating costs and expenses associated with our broadcast of the 2018 PyeongChang Olympics were reported in our Cable Networks and Broadcast Television segments. The revenue and operating costs and expenses associated with our broadcast of the 2018 Super Bowl were reported in our Broadcast Television segment. Included in Eliminations are transactions relating to these events that our Broadcast Television and Cable Networks segments enter into with our other segments.
(b)
NBCUniversal Headquarters and Other activities include costs associated with overhead, allocations, personnel costs and headquarter initiatives.
(c)
Included in Eliminations are transactions that our segments enter into with one another. The most common types of transactions are the following:
our Cable Networks segment generates revenue by selling programming to our Cable Communications segment, which represents a substantial majority of the revenue elimination amount
our Broadcast Television segment generates revenue from the fees received under retransmission consent agreements with our Cable Communications segment
our Cable Communications segment generates revenue by selling advertising and by selling the use of satellite feeds to our Cable Networks segment
our Cable Networks and Broadcast Television segments generate revenue by selling advertising to our Cable Communications segment
our Filmed Entertainment and Broadcast Television segments generate revenue by licensing content to our Cable Networks segment; for segment reporting, this revenue is recognized as the programming rights asset for the licensed content is amortized based on third party revenue
(d)
Corporate and Other activities include costs associated with overhead and personnel, revenue and expenses associated with other business development initiatives, including our wireless phone service, and the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses.
(e)
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 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.

7


Comcast Corporation

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
March 31
(in millions)
2018
 
2017
Adjusted EBITDA
$
7,244

 
$
7,010

Depreciation
(2,011
)
 
(1,915
)
Amortization
(588
)
 
(553
)
Interest expense
(777
)
 
(755
)
Investment and other income (loss), net
126

 
130

Income before income taxes
$
3,994

 
$
3,917

Note 3: Revenue
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Residential:
 
 
 
Video
$
5,659

 
$
5,706

High-Speed Internet
4,157

 
3,842

Voice
1,006

 
1,034

Business services
1,726

 
1,543

Advertising
582

 
554

Other
388

 
371

Total Cable Communications(a)
13,518

 
13,050

 
 
 
 
Distribution
1,887

 
1,562

Advertising
988

 
826

Content licensing and other
319

 
252

Total Cable Networks
3,194

 
2,640

 
 
 
 
Advertising
2,365

 
1,279

Content licensing
522

 
503

Distribution and other
610

 
426

Total Broadcast Television
3,497

 
2,208

 
 
 
 
Theatrical
423

 
651

Content licensing
733

 
734

Home entertainment
248

 
286

Other
243

 
296

Total Filmed Entertainment
1,647

 
1,967

 
 
 
 
Total Theme Parks
1,281

 
1,118

Headquarters and Other
14

 
8

Eliminations(b)
(103
)
 
(88
)
Total NBCUniversal
9,530

 
7,853

 
 
 
 
Corporate and Other
391

 
208

Eliminations(b)
(648
)
 
(524
)
Total revenue
$
22,791

 
$
20,587

(a)
For the three months ended March 31, 2018 and 2017, 2.8% and 2.9%, respectively, 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.

8


Comcast Corporation

We operate primarily in the United States, but also in select international markets primarily in Europe and Asia. The table below summarizes revenue by geographic location.
 
Three Months Ended
March 31
(in millions)
2018
  
2017
United States
$
20,885

  
$
18,832

Foreign
1,906

  
1,755

Total revenue
$
22,791

 
$
20,587

No single customer accounted for a significant amount of revenue in any period presented.
Cable Communications Segment
Residential
Our Cable Communications segment generates revenue from residential customers subscribing to our video, high-speed Internet, voice, and security and automation services, which we market individually and as bundled services at a discounted rate in the United States. Revenue from residential customers that purchase bundled services at a discounted rate is allocated between the separate services based on the respective stand-alone selling prices. The stand-alone selling prices are determined based on the current prices at which we separately sell the cable services. Significant judgment is used to determine performance obligations that should be accounted for separately and the allocation of revenue when services are combined in a bundle. Revenue related to our security and automation services is reported in other revenue.
We recognize revenue from residential cable services as the services are provided on a monthly basis. Subscription rates and related charges vary according to the services and features customers receive. Customers are typically billed in advance and pay on a monthly basis. Installation fees are deferred and recognized as revenue over the period of benefit to the customer, which is less than a year for residential customers. While a portion of our residential customers are subject to contracts for their cable services, which are typically 2 years in length, based on our evaluation of the terms of these contracts, we recognize revenue for these cable services on a basis that is consistent with our customers that are not subject to contracts. Our cable services generally involve customer premise equipment, such as set-top boxes, cable modems and wireless gateways. The timing and pattern of recognition for customer premise equipment revenue are consistent with those of our residential cable services. Sales commissions related to our residential customers are expensed as incurred, as the related period of benefit is less than a year.
Under the terms of our cable franchise agreements, we are generally required to pay the cable franchising authority an amount based on our gross video revenue. We generally pass these and other similar fees through to our cable services customers and classify these fees in the respective cable service revenue, with the corresponding costs included in other operating and administrative expenses.
Business Services
Our Cable Communications segment generates revenue from business customers subscribing to a variety of products and services. Our small business services offerings primarily include high-speed Internet services, as well as voice and video services, similar to those that we provide to our residential customers, and also include cloud-based solutions that provide file sharing, online backup and web conferencing, among other features. We also offer Ethernet network services that connect multiple locations and provide higher downstream and upstream speed options to medium-sized customers and larger enterprises, as well as advanced voice services. In addition, we provide cellular backhaul services to mobile network operators to help these customers manage their network bandwidth.
Recently, we have expanded our enterprise service offerings to include a software-defined networking product and our managed solutions business to offer enterprise customers support related to Wi-Fi networks, router management, network security, business continuity risks and other services. We primarily offer our enterprise service offerings to Fortune 1000 companies and other large enterprises with multiple locations both within and outside of our cable distribution footprint where we have agreements with other companies to use their networks to provide coverage.
We recognize revenue from business services as the services are provided on a monthly basis. Substantially all of our business customers are initially under contracts, with terms typically ranging from 2 years for small and medium-sized businesses to up to 5 years for larger enterprises. At any given time, the amount of future revenue to be earned related to fixed pricing under existing agreements is equal to approximately half of our annual business services revenue, of which the substantial majority will be recognized within 2 years. Customers with contracts may only discontinue service in accordance with the terms of their contracts. We receive payments from business customers based on a billing schedule established in our contracts, which is typically on a monthly basis. Installation revenue related to our business services customers and sales commissions are generally deferred and recognized over the respective contract terms.

9


Comcast Corporation

Advertising
Our Cable Communications segment generates revenue from the sale of advertising and from our advanced advertising businesses. As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable networks that we sell to local, regional and national advertisers. In most cases, the available advertising units are sold by our sales force. We also represent the advertising sales efforts of other multichannel video providers in some markets. Since we are acting as the principal in these arrangements, we record the advertising that is sold in advertising revenue and the fees paid to multichannel video providers in other operating and administrative expenses. In some cases, we work with representation firms as an extension of our sales force to sell a portion of the advertising units allocated to us and record the revenue net of agency commissions. In addition, we generate revenue from the sale of advertising online and on our On Demand service. We enter into advertising arrangements with customers and have determined that a contract exists once all terms and conditions are agreed upon, typically when the number of advertising units is specifically identified and the timing of airing is scheduled. Advertisements are generally aired or viewed within one year once all terms and conditions are agreed upon. Advertising revenue is recognized in the period in which advertisements are aired or viewed. Payment terms vary by contract, although terms generally require payment within 30 to 60 days from when advertisements are aired or viewed. Our advanced advertising businesses provide technology, tools, marketplace solutions and data-driven insights to various customers in the media industry to more effectively engage with their targeted audiences. Revenue earned from our advanced advertising businesses is recognized when services are provided.
NBCUniversal Segments
Distribution
Our Cable Networks segment generates distribution revenue from the distribution of our cable network programming to traditional and virtual multichannel video providers. Our Broadcast Television segment generates distribution revenue from the fees received under retransmission consent agreements and associated fees received from NBC-affiliated local broadcast television stations.
Distribution revenue is recognized as programming is provided on a monthly basis, generally under multiyear agreements. Monthly fees received under distribution agreements with multichannel video providers are generally based on the number of subscribers. Payment terms and conditions vary by contract type, although terms generally include payment within 30 to 60 days.
Advertising
Our Cable Networks and Broadcast Television segments generate advertising revenue from the sale of advertising on our cable and broadcast networks, our owned local broadcast television stations and various digital properties.
We enter into advertising arrangements with customers and have determined that a contract exists once all terms and conditions are agreed upon, typically when the number of advertising units is specifically identified and the timing of airing is scheduled. Advertisements are generally aired or viewed within one year once all terms are agreed upon. Advertising revenue is recognized, net of agency commissions, in the period in which advertisements are aired or viewed and payment occurs thereafter, generally within 30 days. In some instances, we guarantee audience ratings for the advertisements. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within one year of the original airing.
Theatrical
Our Filmed Entertainment segment theatrical revenue is generated from the worldwide theatrical release of our produced and acquired films for exhibition in movie theaters and is affected by the timing, nature and number of films released in movie theaters and their acceptance by audiences. Theatrical revenue is also affected by the number of exhibition screens, ticket prices, the percentage of ticket sale retention by the exhibitors and the popularity of competing films at the time our films are released. We recognize theatrical revenue as the films are viewed and exhibited in theaters and payment generally occurs within 60 days after exhibition.
Content Licensing
Our Cable Networks, Broadcast Television and Filmed Entertainment segments generate revenue from the licensing of our owned film and television content in the United States and internationally to cable, broadcast and premium networks and subscription video on demand services. Our content licensing agreements generally include fixed pricing and span multiple years. For example, following a film’s theatrical release, our Filmed Entertainment segment may license the exhibition rights of a film to different customers over multiple successive distribution windows.

10


Comcast Corporation

We recognize revenue when the content is delivered and available for use by the licensee. When the term of an existing agreement is renewed or extended, we recognize revenue at the later of when the content is available or when the renewal or extension period begins. Payment terms and conditions vary by contract type, although payments are generally collected over the license term. The amount of future revenue to be earned related to fixed pricing under existing agreements primarily relates to our Filmed Entertainment segment, which at any given time equals approximately 1 to 2 years of our annual Filmed Entertainment content licensing revenue. The substantial majority of this revenue will be recognized within 2 years. This amount may fluctuate from period to period depending on the timing of the release and the availability of content under existing agreements and may not represent the total content licensing revenue expected to be recognized as it does not include revenue from future agreements or from variable pricing or optional purchases under existing agreements.
For our content licensing agreements that also include variable pricing, such as pricing based on the number of subscribers to a subscription video on demand service, we generally recognize revenue for variable pricing as the content is delivered and available and as the variable amounts become known.
Home Entertainment
Our Filmed Entertainment segment generates revenue from the sale of our produced and acquired films on standard-definition digital video discs and Blu-ray discs (together, “DVDs”) and through digital distribution services. Our Cable Networks and Broadcast Television networks also generate revenue from the sale of owned programming on DVDs and through digital distribution services, which is reported in other revenue. We recognize revenue from DVD sales, net of estimated returns and customer incentives, on the date that DVDs are delivered to and made available for sale by retailers. Payment terms generally include payment within 60 to 90 days from delivery to the retailer.
Theme Parks
Our Theme Parks segment generates revenue primarily from ticket sales and guest spending at our Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. Guest spending includes in-park spending on food, beverages and merchandise. We recognize revenue from theme park ticket sales when the tickets are used, generally within a year from the date of purchase. For annual passes, we generally recognize revenue on a straight-line basis over the period the pass is available to be used. We recognize revenue from guest spending at the point of sale.
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,
2018
 
December 31,
2017
Receivables, gross
$
9,052

 
$
9,122

Less: Allowance for doubtful accounts
293

 
288

Receivables, net
$
8,759

 
$
8,834

(in millions)
March 31,
2018
 
December 31,
2017
Noncurrent receivables (included in other noncurrent assets, net)
$
1,180

 
$
1,184

Contract acquisition and fulfillment costs (included in other noncurrent assets, net)
$
929

 
$
922

Noncurrent deferred revenue (included in other noncurrent liabilities)
$
536

 
$
497

In our Cable Communications segment, we manage credit risk by screening applicants through the use of internal customer information, identification verification tools and credit bureau data, as well as offering customers the opportunity to establish automatic monthly payments. If a customer’s account is delinquent, various measures are used to collect outstanding amounts, including termination of the customer’s cable services.

11


Comcast Corporation

Note 4: Earnings Per Share
Computation of Diluted EPS
 
Three Months Ended March 31
 
2018
 
2017
(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
$
3,118

 
4,633

 
$
0.67

 
$
2,573

 
4,747

 
$
0.54

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Assumed exercise or issuance of shares relating to stock plans
 
 
72

 
 
 
 
 
85

 
 
Diluted EPS attributable to Comcast Corporation shareholders
$
3,118

 
4,705

 
$
0.66

 
$
2,573

 
4,832

 
$
0.53

Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Our potentially dilutive securities include potential common shares related to our stock options and our restricted share units (“RSUs”). The amount of potential common shares related to our share-based compensation plans that were excluded from diluted EPS because their effect would have been antidilutive was not material for the three months ended March 31, 2018 and 2017.
Note 5: Long-Term Debt
As of March 31, 2018, our debt had a carrying value of $66.7 billion and an estimated fair value of $70.7 billion. The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market values for the debt. The estimated fair value of debt for which there are no quoted market prices was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
Debt Borrowings
(in millions)
Three months ended
March 31, 2018
Comcast 3.90% senior notes due 2038
$
1,200

Comcast 3.55% senior notes due 2028
1,000

Comcast 4.00% senior notes due 2048
1,000

Comcast 4.25% senior notes due 2053
800

Other
43

Total
$
4,043

Debt Repayments
(in millions)
Three months ended
March 31, 2018
Comcast 5.875% senior notes due 2018
$
900

Other
365

Total
$
1,265

In April 2018, NBCUniversal Enterprise repaid at maturity $700 million aggregate principal amount of senior floating rate notes due 2018 and $1.1 billion aggregate principal amount of 1.662% senior notes due 2018.
Revolving Credit Facilities
As of March 31, 2018, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper programs and outstanding letters of credit, totaled $8.3 billion, which included $1.5 billion available under NBCUniversal Enterprise’s revolving credit facility.
Commercial Paper Programs
As of March 31, 2018, Comcast and NBCUniversal Enterprise had no commercial paper outstanding.

12


Comcast Corporation

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”). We own a 30% interest in Universal Beijing Resort and the construction will be funded through a combination of debt financing and equity contributions from the investors in accordance with their equity interests. The debt financing, which is being provided by a syndicate of Chinese financial institutions, contains certain financial and operating covenants and a maximum borrowing limit of ¥26.6 billion RMB (approximately $4 billion). The debt financing is secured by the assets of Universal Beijing Resort and the equity interests of the investors.
We have concluded that Universal Beijing Resort is a variable interest entity based on its governance structure, and we consolidate it because we have the power to direct activities that most significantly impact its economic performance. There are no liquidity arrangements, guarantees or other financial commitments between us and Universal Beijing Resort, and therefore our maximum risk of financial loss is our 30% interest. Universal Beijing Resort’s results of operations are reported in our Theme Parks segment.
In March 2018, Universal Beijing Resort received initial equity investments through a combination of cash and noncash contributions from the investors. As of March 31, 2018, our condensed consolidated balance sheet included assets, primarily including property and equipment, and liabilities of Universal Beijing Resort totaling $1.2 billion and $523 million, respectively.
Sky Offer
On April 25, 2018, we announced a pre-conditional all-cash firm offer for the entire issued and to be issued share capital of Sky plc. Pursuant to the offer, Sky shareholders will be entitled to receive £12.50 in cash for each Sky share (implying a value of approximately £22 billion, or $31 billion using the exchange rate at the time of the offer), plus any final dividend in respect of Sky’s fiscal year ending June 30, 2018 up to an amount of £0.218 per Sky share which is declared and paid prior to the offer going wholly unconditional. The acquisition is subject to the satisfaction (or waiver, where applicable) of certain conditions, including receipt of antitrust and regulatory approvals and securing acceptances carrying more than 50% of the voting rights then normally exercisable at a general meeting of Sky. In connection with the offer, we have entered into an unsecured bridge credit agreement in an aggregate principal amount of up to £16 billion and an unsecured term loan credit agreement in an aggregate principal amount of up to £7 billion ($22 billion and $10 billion, respectively, using the exchange rate at the time of the offer), which will be guaranteed by Comcast Cable Communications, LLC and NBCUniversal.
Note 7: Recent Accounting Pronouncements and Tax Reform
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue and by reducing the number of standards to which an entity has to refer. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.
We adopted the updated guidance on January 1, 2018 on a full retrospective basis, which required us to reflect the impact of the updated guidance for all periods presented. Upon adoption, we also implemented changes in our presentation of certain revenues and expenses, primarily in our Cable Communications segment.
The adoption of the new standard did not have a material impact on our consolidated results of operations or financial position for any period presented. The updated guidance also requires additional disclosures regarding the nature, timing and uncertainty of our revenue transactions (see Note 3).
The tables below present the effects on our condensed consolidated statement of income and balance sheet for the prior year periods presented.

13


Comcast Corporation

Condensed Consolidated Statement of Income
 
Three Months Ended
March 31, 2017
(in millions)
Previously Reported

Effects of Adoption

As Adjusted

Revenue
$
20,463

$
124

$
20,587

Total costs and expenses
$
15,933

$
112

$
16,045

Operating income
$
4,530

$
12

$
4,542

Net income attributable to Comcast Corporation
$
2,566

$
7

$
2,573

Condensed Consolidated Balance Sheet
 
As of December 31, 2017
(in millions)
Previously Reported

Effects of Adoption

As Adjusted

Total current assets
$
16,060

$
283

$
16,343

Film and television costs
$
7,076

$
11

$
7,087

Other intangible assets, net
$
18,779

$
(646
)
$
18,133

Other noncurrent assets, net
$
3,489

$
865

$
4,354

Total assets
$
186,949

$
513

$
187,462

 
 
 
 
Total current liabilities
$
21,561

$
432

$
21,993

Deferred income taxes
$
24,256

$
3

$
24,259

Other noncurrent liabilities
$
10,904

$
68

$
10,972

Total equity
$
69,449

$
10

$
69,459

Total liabilities and equity
$
186,949

$
513

$
187,462

Cable Communications
A summary of the changes implemented for the Cable Communications segment is presented below.
Changes to Presentation of Revenue and Related Costs
Revenue from our residential video services decreased with corresponding increases to high-speed Internet and voice revenue due to a change in the allocation of revenue among our cable services included in a bundle that our residential customers purchase at a discount.
Revenue from franchise and other regulatory fees, which was previously presented in other revenue, is now presented with the corresponding cable services. This resulted in increases to video, voice and business services revenue.
Residential customer late fees are now presented in other revenue. These fees were previously presented as a reduction to other operating costs and expenses.
Certain costs, including costs related to the fulfillment of contracts with customers, are now presented as other assets and the related costs are recognized over time in operating costs and expenses, which are comprised of total costs and expenses, excluding depreciation and amortization expense and other operating gains. These amounts were previously presented as intangible assets, and the expenses were previously presented in amortization expense. The payments related to these assets are now presented in net cash provided by operating activities rather than in cash paid for intangible assets in our consolidated statement of cash flows.
Changes to the Timing of Recognition of Revenue and Related Costs
Installation revenue and commission expense are now recognized as revenue and operating costs and expenses, respectively, over a period of time rather than recognized immediately as they were previously. We recorded a deferred revenue liability related to upfront installation fees that are not distinct services, which required us to allocate the installation fees to the respective service. The installation fees are generally recognized as revenue over the period that the fee would influence a customer to renew their service. This period is less than a year for residential customers and the term of the related contract for business services customers. Incremental costs to obtain a contract with a customer, such as commissions for our business customers, are now deferred and recognized over the contract term. Sales commissions related to our residential customers are expensed as incurred as the related period of benefit is less than a year.

14


Comcast Corporation

The table below presents the effects these changes had on our Cable Communications segment revenue, operating costs and expenses, and depreciation and amortization expense as a result of the updated guidance for the prior year period. Previously reported amounts are based on amounts previously presented in the segment information footnote.
 
Three months ended
March 31, 2017
(in millions)
Previously Reported

Effects of Adoption

As Adjusted

Residential:
 
 
 
Video
$
5,774

$
(68
)
$
5,706

High-speed Internet
3,606

236

3,842

Voice
863

171

1,034

Business services
1,490

53

1,543

Advertising
512

42

554

Other
667

(296
)
371

Total Cable Communications revenue
$
12,912

$
138

$
13,050

Operating costs and expenses
$
7,714

$
162

$
7,876

Depreciation and amortization expense
$
1,980

$
(34
)
$
1,946

NBCUniversal Segments
The adoption of the updated guidance impacted the timing of recognition for some of our revenue contracts, primarily for content licensing agreements. As a result of the adoption of the updated guidance, when the term of existing content licensing agreements is renewed or extended, revenue is not recognized until the date when the renewal or extension period begins. Under the prior guidance, revenue for the content licensing renewal period was recognized on the date that the renewal was agreed to contractually. This change resulted in delayed revenue recognition for content licensing renewals or extensions in our Cable Networks, Broadcast Television and Filmed Entertainment segments. This change also impacted the timing of the related amortization of our film and television costs and participations and residuals expenses. The adoption of the updated guidance did not have a material impact on the results of operations or financial position for the NBCUniversal segments.
Financial Assets and Financial Liabilities
In January 2016, the FASB updated the accounting guidance related to the recognition and measurement of financial assets and financial liabilities. The updated accounting guidance, among other things, requires that all nonconsolidated equity investments, except those accounted for under the equity method, be measured at fair value and the changes in fair value be recognized in net income. On January 1, 2018, we adopted the updated guidance prospectively along with a related clarifying update and as a result, we recorded an immaterial cumulative effect adjustment to retained earnings, accumulated other comprehensive income (loss) and investments. See Note 9 for further information.
Tax Reform
On December 22, 2017, new federal tax reform legislation was enacted in the United States (“2017 Tax Act”), resulting in significant changes from previous tax law. The new legislation reduced the federal corporate income tax rate to 21% from 35% effective January 1, 2018. In the fourth quarter of 2017, we recorded a net income tax benefit of approximately $12.7 billion on the date of enactment of the new legislation, primarily relating to a reduction of our net deferred tax liabilities as a result of the rate change. This amount also includes the reversal of our net deferred tax liabilities related to cumulative undistributed foreign earnings and deferred tax assets for related foreign tax credits, partially offset by the one-time deemed repatriation tax on undistributed foreign earnings and profits.
The adjustments to deferred tax assets and liabilities, and the liability related to the transition tax are provisional amounts based on information available as of March 31, 2018. These amounts are subject to change as we obtain information necessary to complete the calculations. We did not recognize any changes to the provisional amounts for the three months ended March 31, 2018. We will update the provisional amounts as we refine our estimates of cumulative temporary differences, including those related to the immediate deduction for qualified property, and our interpretations of the application of the new legislation. We expect to complete our analysis of the provisional items during the second half of 2018.
In February 2018, the FASB issued guidance that permits companies to reclassify disproportionate tax effects recorded in accumulated other comprehensive income as a result of the 2017 Tax Act to retained earnings. We adopted the guidance as of January 1, 2018 and as a result we recorded an immaterial cumulative effect adjustment to retained earnings and accumulated other comprehensive income (loss).

15


Comcast Corporation

In February 2018, the Bipartisan Budget Act of 2018 was enacted. As part of this legislation, various tax provisions that had expired on December 31, 2016 were retroactively extended to December 31, 2017, including the statute permitting the immediate deduction for certain film and television production costs. The legislation resulted in an income tax benefit of $128 million for the three months ended March 31, 2018.
Restricted Cash
In November 2016, the FASB updated the accounting guidance related to restricted cash. The new standard requires that the statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents, and a reconciliation of such total to amounts on the balance sheet. We adopted the updated guidance on January 1, 2018 and as required applied the retrospective transition method. The adoption did not have a material impact for any period presented.
Leases
In February 2016, the FASB updated the accounting guidance related to leases. The updated accounting guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. The asset and liability are initially measured based on the present value of committed lease payments. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease do not significantly change from previous guidance. For a lessor, the accounting applied is also largely unchanged from previous guidance. The updated guidance is effective for us as of January 1, 2019 and early adoption is permitted. The updated accounting guidance must be adopted using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements.
Note 8: Film and Television Costs
(in millions)
March 31,
2018
 
December 31,
2017
Film Costs:
 
 
 
Released, less amortization
$
1,590

 
$
1,734

Completed, not released
54

 
50

In production and in development
1,287

 
1,149

 
2,931

 
2,933

Television Costs:
 
 
 
Released, less amortization
2,361

 
2,260

In production and in development
845

 
818

 
3,206

 
3,078

Programming rights, less amortization
2,619

 
2,689

 
8,756

 
8,700

Less: Current portion of programming rights
1,354

 
1,613

Film and television costs
$
7,402

 
$
7,087

Note 9: Investments
(in millions)
March 31,
2018
 
December 31,
2017
Equity method
$
3,615

 
$
3,546

Marketable equity securities
471

 
433

Nonmarketable equity securities
1,235

 
1,186

Other investments
1,789

 
1,785

Total investments
7,110

 
6,950

Less: Current investments
15

 
19

Noncurrent investments
$
7,095

 
$
6,931


16


Comcast Corporation

Investment and Other Income (Loss), Net
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Equity in net income (losses) of investees, net
$
(49
)
 
$
36

Realized and unrealized gains (losses) on equity securities, net
28

 
(5
)
Other income (loss), net
147

 
99

Investment and other income (loss), net
$
126

 
$
130

Beginning January 1, 2018, in connection with our adoption of the updated accounting guidance related to the recognition and measurement of financial assets and financial liabilities (see Note 7), we updated the presentation and accounting policies for our investments previously classified as fair value and cost method investments. The investment categories presented in the table above are based on the new guidance and updated policies, where applicable, are presented below.
Equity Method
Atairos
In February 2018, we amended our agreement with Atairos, which primarily increases our commitment to fund Atairos from up to $4 billion to up to $5 billion in the aggregate at any one time, subject to certain offsets.
As of both March 31, 2018 and December 31, 2017, we had an investment in Atairos of $2.4 billion. For the three months ended March 31, 2018 and 2017, we made cash capital contributions to Atairos totaling $31 million and $457 million, respectively. 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 income. 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, 2018 and 2017, our share of Atairos income was $35 million and $57 million, respectively.
Hulu
As of March 31, 2018 and December 31, 2017, we had an investment in Hulu of $231 million and $249 million, respectively. For the three months ended March 31, 2018, we made cash capital contributions totaling $114 million to Hulu. For the three months ended March 31, 2018 and 2017, we recognized our proportionate share of Hulu’s losses of $131 million and $54 million, respectively, in equity in net income (losses) of investees, net.
The Weather Channel
In March 2018, we sold our investment in The Weather Channel cable network and recognized a pretax gain of $64 million in other income (loss), net.
Marketable Equity Securities
We classify publicly traded investments with readily determinable fair values that are not accounted for under the equity method as marketable equity securities. Marketable equity securities are recorded at cost and adjusted to fair value at each reporting period. The changes in fair value between measurement dates are recorded in realized and unrealized gains (losses) on equity securities, net. The fair values of our marketable equity securities are based on Level 1 inputs that use quoted market prices.
Snap
In March 2017, we acquired an interest in Snap Inc. for $500 million as part of its initial public offering, which we have classified as a marketable equity security. Snap is a camera company whose primary product is Snapchat, a camera app that was created to help people communicate through short videos and images. As of March 31, 2018 and December 31, 2017, we had an investment in Snap of $467 million and $430 million, respectively. For the three months ended March 31, 2018, we recognized unrealized gains of $37 million in realized and unrealized gains (losses) on equity securities, net related to our investment in Snap.
Nonmarketable Equity Securities
We classify investments without readily determinable fair values that are not accounted for under the equity method as nonmarketable equity securities. The accounting guidance requires nonmarketable equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. We apply this measurement alternative to a majority of our nonmarketable equity securities. When an observable event occurs, we estimate the fair values of our nonmarketable equity securities based on Level 2 inputs that are derived from observable price changes of similar securities adjusted for insignificant differences in rights and obligations. The changes in value are recorded in realized and unrealized gains (losses) on equity securities, net.

17


Comcast Corporation

Other Investments
AirTouch
We hold two series of preferred stock of Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”), a subsidiary of Verizon Communications Inc., which are redeemable in April 2020. As of both March 31, 2018 and December 31, 2017, we had an investment in AirTouch of $1.6 billion. We account for our investment in AirTouch as a held to maturity investment using the cost method. As of March 31, 2018, the estimated fair value of the AirTouch preferred stock and the estimated fair value of the associated liability related to the redeemable subsidiary preferred shares issued by one of our consolidated subsidiaries were each $1.7 billion. The estimated fair values are based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument.
Note 10: 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 2018, we granted 12.1 million RSUs and 41.0 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $35.94 per RSU and $7.15 per stock option.
Recognized Share-Based Compensation Expense
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Restricted share units
$
83

 
$
74

Stock options
44

 
40

Employee stock purchase plans
12

 
10

Total
$
139

 
$
124

As of March 31, 2018, we had unrecognized pretax compensation expense of $1.1 billion and $607 million related to nonvested RSUs and nonvested stock options, respectively.
Cash Payments for Interest and Income Taxes 
 
Three Months Ended
March 31
(in millions)
2018
 
2017
Interest
$
854

 
$
895

Income taxes
$
162

 
$
132

Noncash Investing and Financing Activities
During the three months ended March 31, 2018:
we acquired $1.5 billion of property and equipment and intangible assets that were accrued but unpaid
we recorded a liability of $877 million for a quarterly cash dividend of $0.19 per common share to be paid in April 2018
we received noncash contributions from noncontrolling interests totaling $316 million related to Universal Beijing Resort (see Note 6)

18


Comcast Corporation

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,
2018
 
December 31,
2017
Cash and cash equivalents
$
6,030

 
$
3,428

Restricted cash included in other current assets
64

 
60

Restricted cash included in other noncurrent assets, net
83

 
83

Cash, cash equivalents and restricted cash, end of period
$
6,177

 
$
3,571

Accumulated Other Comprehensive Income (Loss)
(in millions)
March 31,
2018
 
March 31,
2017
Unrealized gains (losses) on marketable securities
$
1

 
$
104

Deferred gains (losses) on cash flow hedges
20

 
(7
)
Unrecognized gains (losses) on employee benefit obligations
310

 
282

Cumulative translation adjustments
277

 
(37
)
Accumulated other comprehensive income (loss), net of deferred taxes
$
608

 
$
342

Note 11: Commitments and Contingencies
Redeemable Subsidiary Preferred Stock
As of March 31, 2018, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $753 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 a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases, other industry participants are also defendants, and also in certain of these cases, we expect that any potential liability would be in part or in whole the responsibility of our equipment and technology vendors under applicable contractual indemnification provisions. In addition, we are subject to other legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal proceedings or claims could be time-consuming and injure our reputation.
Note 12: Condensed Consolidating Financial Information
Comcast (“Comcast Parent”), Comcast Cable Communications, LLC (“CCCL Parent”), and NBCUniversal (“NBCUniversal Media Parent”) have fully and unconditionally guaranteed each other’s debt securities, including the Comcast revolving credit facility.
Comcast Parent and CCCL Parent also fully and unconditionally guarantee NBCUniversal Enterprise’s $4.8 billion aggregate principal amount of senior notes, $1.5 billion revolving credit facility and commercial paper program. NBCUniversal Media Parent does not guarantee the NBCUniversal Enterprise senior notes, revolving credit facility or commercial paper program.
Comcast Parent provides an unconditional guarantee of the Universal Studios Japan ¥430 billion term loans with a final maturity of March 2022. Comcast Parent also provides an unconditional subordinated guarantee of the $185 million principal amount currently outstanding of Comcast Holdings’ ZONES due October 2029. Neither CCCL Parent nor NBCUniversal Media Parent guarantee the Comcast Holdings’ ZONES due October 2029. None of Comcast Parent, CCCL Parent nor NBCUniversal Media Parent guarantee the $62 million principal amount currently outstanding of Comcast Holdings’ ZONES due November 2029.

19


Comcast Corporation

Condensed Consolidating Statement of Income
For the Three Months Ended March 31, 2018 
(in millions)
Comcast
Parent
Comcast
Holdings
CCCL
Parent
NBCUniversal
Media Parent
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation
Revenue:
 
 
 
 
 
 
 
Service revenue
$

$

$

$

$
22,791

$

$
22,791

Management fee revenue
292


286



(578
)

Total revenue
292


286


22,791

(578
)
22,791

Costs and Expenses:
 
 
 
 
 
 
 
Programming and production




7,429


7,429

Other operating and administrative
228


286

318

6,260

(578
)
6,514

Advertising, marketing and promotion




1,604


1,604

Depreciation
11




2,000


2,011

Amortization
1




587


588

Total cost and expenses
240


286

318

17,880

(578
)
18,146

Operating income (loss)
52



(318
)
4,911


4,645

Interest expense
(561
)
(3
)
(47
)
(106
)
(60
)

(777
)
Investment and other income (loss), net
3,520

3,319

2,826

1,942

1,588

(13,069
)
126

Income (loss) before income taxes
3,011

3,316

2,779

1,518

6,439

(13,069
)
3,994

Income tax (expense) benefit
107


9

(5
)
(929
)

(818
)
Net income (loss)
3,118

3,316

2,788

1,513

5,510

(13,069
)
3,176

Less: Net income attributable to noncontrolling interests and redeemable subsidiary preferred stock




58


58

Net income (loss) attributable to Comcast Corporation
$
3,118

$
3,316

$
2,788

$
1,513

$
5,452

$
(13,069
)
$
3,118

Comprehensive income (loss) attributable to Comcast Corporation
$
3,271

$
3,369

$
2,789

$
1,696

$
5,791

$
(13,645
)
$
3,271


20


Comcast Corporation

Condensed Consolidating Statement of Income
For the Three Months Ended March 31, 2017
(in millions)
Comcast
Parent
Comcast
Holdings
CCCL
Parent
NBCUniversal
Media Parent
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation
Revenue:
 
 
 
 
 
 
 
Service revenue
$

$

$

$

$
20,587

$

$
20,587

Management fee revenue
275


270



(545
)

Total revenue
275


270


20,587

(545
)
20,587

Costs and Expenses:
 
 
 
 
 
 
 
Programming and production




6,061


6,061

Other operating and administrative
170


270

306

5,738

(545
)
5,939

Advertising, marketing and promotion




1,577


1,577

Depreciation
7




1,908


1,915

Amortization
2




551


553

Total costs and expenses
179


270

306

15,835

(545
)
16,045

Operating income (loss)
96



(306
)
4,752


4,542

Interest expense
(517
)
(3
)
(60
)
(112
)
(63
)

(755
)
Investment and other income (loss), net
2,847

2,686

2,327

1,623

1,279

(10,632
)
130

Income (loss) before income taxes
2,426

2,683

2,267

1,205

5,968

(10,632
)
3,917

Income tax (expense) benefit
147

(9
)
21

(3
)
(1,418
)

(1,262
)
Net income (loss)
2,573

2,674

2,288

1,202

4,550

(10,632
)
2,655

Less: Net income attributable to noncontrolling interests and redeemable subsidiary preferred stock




82


82

Net income (loss) attributable to Comcast Corporation
$
2,573

$
2,674

$
2,288

$
1,202

$
4,468

$
(10,632
)
$
2,573

Comprehensive income (loss) attributable to Comcast Corporation
$
2,817

$
2,724

$
2,289

$
1,408

$
4,712

$
(11,133
)
$
2,817


21


Comcast Corporation

Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2018 
(in millions)
Comcast
Parent
Comcast
Holdings
CCCL
Parent
NBCUniversal
Media Parent
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation
Net cash provided by (used in) operating activities
$
(270
)
$
453

$
(149
)
$
(382
)
$
5,822

$

$
5,474

Investing Activities:
 
 
 
 
 
 
 
Net transactions with affiliates
640

(897
)
149

347

(239
)


Capital expenditures




(1,973
)

(1,973
)
Cash paid for intangible assets
(2
)



(417
)

(419
)
Acquisitions and construction of real estate properties
(39
)



(20
)

(59
)
Acquisitions, net of cash acquired




(89
)

(89
)
Proceeds from sales of investments



57

24


81

Purchases of investments
(11
)


(5
)
(204
)

(220
)
Other

444



(57
)

387

Net cash provided by (used in) investing activities
588

(453
)
149

399

(2,975
)

(2,292
)
Financing Activities:
 
 
 
 
 
 
 
Proceeds from (repayments of) short-term borrowings, net
(902
)





(902
)
Proceeds from borrowings
3,973




70


4,043

Repurchases and repayments of debt
(900
)


(3
)
(362
)

(1,265
)
Repurchases of common stock under repurchase program and employee plans
(1,729
)





(1,729
)
Dividends paid
(738
)





(738
)
Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock




(79
)

(79
)
Other
(22
)



116


94

Net cash provided by (used in) financing activities
(318
)


(3
)
(255
)

(576
)
Increase (decrease) in cash, cash equivalents and restricted cash



14

2,592


2,606

Cash, cash equivalents and restricted cash, beginning of period



496

3,075


3,571

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

$

$

$
510

$
5,667

$

$
6,177



22


Comcast Corporation

Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2017
(in millions)
Comcast
Parent
Comcast
Holdings
CCCL
Parent
NBCUniversal
Media Parent
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation
Net cash provided by (used in) operating activities
$
(453
)
$
(10
)
$
(168
)
$
(330
)
$
6,586

$

$
5,625

Investing Activities:
 
 
 
 
 
 
 
Net transactions with affiliates
1,385

10

168

115

(1,678
)


Capital expenditures
(1
)



(2,077
)

(2,078
)
Cash paid for intangible assets




(385
)

(385
)
Acquisitions and construction of real estate properties
(69
)



(61
)

(130
)
Acquisitions, net of cash acquired




(216
)

(216
)
Proceeds from sales of investments



10

41


51

Purchases of investments
(9
)


(4
)
(1,049
)

(1,062
)
Other
55




12


67

Net cash provided by (used in) investing activities
1,361

10

168

121

(5,413
)

(3,753
)
Financing Activities:
 
 
 
 
 
 
 
Proceeds from (repayments of) short-term borrowings, net
(1,739
)



(154
)

(1,893
)
Proceeds from borrowings
3,500






3,500

Repurchases and repayments of debt
(1,000
)


(3
)
(56
)

(1,059
)
Repurchases of common stock under repurchase program and employee plans
(996
)





(996
)
Dividends paid
(657
)





(657
)
Distributions to noncontrolling interests and dividends for redeemable subsidiary preferred stock




(72
)

(72
)
Other
(16
)



52


36

Net cash provided by (used in) financing activities
(908
)


(3
)
(230
)

(1,141
)
Increase (decrease) in cash, cash equivalents and restricted cash



(212
)
943


731

Cash, cash equivalents and restricted cash, beginning of period



482

2,933


3,415

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