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Form 10-Q
Table of Contents

 

 

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, 2011

OR

 

¨

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from                     to                     

Commission File Number 001-32871

 

 

LOGO

COMCAST CORPORATION

(Exact name of registrant as specified in its charter)

 

PENNSYLVANIA   27-0000798
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
One Comcast Center, Philadelphia, PA   19103-2838
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (215) 286-1700

 

 

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 x No ¨

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x       Accelerated filer ¨       Non-accelerated filer ¨       Smaller reporting company ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨ No x

As of March 31, 2011, there were 2,084,367,723 shares of our Class A common stock, 672,382,858 shares of our Class A Special common stock and 9,444,375 shares of our Class B common stock outstanding.

 

 

 


Table of Contents

TABLE OF CONTENTS

           Page
Number
 
PART I. FINANCIAL INFORMATION   

Item 1.

  Financial Statements      2   
  Condensed Consolidated Balance Sheet as of March 31, 2011 and December 31, 2010 (Unaudited)      2   
  Condensed Consolidated Statement of Income for the Three Months Ended March 31, 2011 and 2010 (Unaudited)      3   
  Condensed Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2011 and 2010 (Unaudited)      4   
  Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2011 and 2010 (Unaudited)      5   
  Condensed Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2011 and 2010 (Unaudited)      6   
  Notes to Condensed Consolidated Financial Statements (Unaudited)      7   

Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations      33   

Item 3.

  Quantitative and Qualitative Disclosures About Market Risk      50   

Item 4.

  Controls and Procedures      51   
PART II. OTHER INFORMATION   

Item 1.

  Legal Proceedings      51   

Item 1A.

  Risk Factors      51   

Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds      52   

Item 6.

  Exhibits      52   
SIGNATURES        53   

 

 

This Quarterly Report on Form 10-Q is for the three months ended March 31, 2011. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. Throughout this Quarterly Report, we refer to Comcast Corporation as “Comcast;” Comcast and its consolidated subsidiaries, including NBCUniversal, as “we,” “us” and “our;” and Comcast Holdings Corporation as “Comcast Holdings.”

You should carefully review the information contained in this Quarterly Report and particularly consider any risk factors set forth in this Quarterly Report and in other reports or documents that we file from time to time with the SEC. In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “believes,” “estimates,” “potential,” or “continue,” or the negative of those words, and other comparable words. You should be aware that those statements are only our predictions. In evaluating those statements, you should specifically consider various factors, including the risks outlined below and in other reports we file with the SEC. Actual events or our actual results may differ materially from any of our forward-looking statements. We undertake no obligation to update any forward-looking statements.

Our businesses may be affected by, among other things, the following:

 

   

our businesses currently face a wide range of competition, and our business and results of operations could be adversely affected if we do not compete effectively

 

 

   

changes in technology and consumer behavior may adversely affect our businesses and results of operations

 

 

   

programming expenses for our video services are increasing, which could adversely affect our future results of operations

 

 

   

as a result of the NBCUniversal transaction, our businesses are subject to the conditions set forth in the NBCUniversal Order and the NBCUniversal Consent Decree, and there can be no assurance that these conditions will not have an adverse effect on our businesses and results of operations

 

 

   

we are subject to regulation by federal, state, local and foreign authorities, which may impose additional costs and restrictions on our businesses

 

 

   

weak economic conditions may have a negative impact on our results of operations and financial condition

 

 

   

a decline in advertising expenditures or changes in advertising markets could negatively impact our results of operations

 

 

   

NBCUniversal’s success depends on consumer acceptance of its content, which is difficult to predict, and our results of operations may be adversely affected if our content fails to achieve sufficient consumer acceptance or our costs to acquire content increase

 

 

   

the loss of our programming distribution agreements, or the renewal of these agreements on less favorable terms, could adversely affect our business

 

 

   

sales of DVDs have been declining

 

 

   

we rely on network and information systems and other technology, as well as key properties, and a disruption, failure or destruction of such networks, systems, technology or properties may disrupt our business

 

 

   

we may be unable to obtain necessary hardware, software and operational support

 

 

   

our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others

 

 

   

labor disputes, whether involving our own employees or sports leagues, may disrupt our operations and adversely affect our business

 

 

   

we may face a significant withdrawal liability if we withdraw from multiemployer pension plans or be required to make additional contributions under such plans

 

 

   

the other risk factors that are described in our Annual Report on Form 10-K for the year ended December 31, 2010

 

 

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Table of Contents

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheet

(Unaudited)

 

(in millions, except share data)   March 31,
2011
    December 31,
2010
 

Assets

   

Current Assets:

   

Cash and cash equivalents

  $ 1,822      $ 5,984   

Investments

    74       81  

Receivables, net

    3,708       1,855  

Programming rights

    776       122  

Other current assets

    1,167       844  

Total current assets

    7,547       8,886  

Film and television costs

    4,945       460  

Investments

    10,711       6,670  

Property and equipment, net

    24,911       23,515  

Franchise rights

    59,442       59,442  

Goodwill

    27,001       14,958  

Other intangible assets, net

    17,725       3,431  

Other noncurrent assets, net

    1,977       1,172  

Total assets

  $ 154,259      $ 118,534   

Liabilities and Equity

   

Current Liabilities:

   

Accounts payable and accrued expenses related to trade creditors

  $ 4,858      $ 3,291   

Accrued participations and residuals

    1,152         

Accrued expenses and other current liabilities

    5,441       3,143  

Current portion of long-term debt

    2,296       1,800  

Total current liabilities

    13,747       8,234  

Long-term debt, less current portion

    38,130       29,615  

Deferred income taxes

    28,919       28,246  

Other noncurrent liabilities

    11,617       7,862  

Commitments and contingencies (Note 16)

   

Redeemable noncontrolling interests

    15,239       143  

Equity:

   

Preferred stock—authorized, 20,000,000 shares; issued, zero

             

Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 2,449,828,473 and 2,437,281,651; outstanding, 2,084,367,723 and 2,071,820,901

    24       24  

Class A Special common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 743,317,622 and 766,168,658; outstanding, 672,382,858 and 695,233,894

    7       8  

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

             

Additional paid-in capital

    41,407       39,780  

Retained earnings

    12,504       12,158  

Treasury stock, 365,460,750 Class A common shares and 70,934,764 Class A Special common shares

    (7,517     (7,517

Accumulated other comprehensive income (loss)

    (97     (99

Total Comcast Corporation shareholders’ equity

    46,328       44,354  

Noncontrolling interests

    279       80  

Total equity

    46,607       44,434  

Total liabilities and equity

  $ 154,259      $ 118,534   

See accompanying notes to condensed consolidated financial statements.

 

2


Table of Contents

Condensed Consolidated Statement of Income

(Unaudited)

 

    Three Months Ended
March 31
 
(in millions, except per share data)   2011     2010  

Revenue

  $ 12,128     $ 9,202  

Costs and Expenses:

   

Operating costs and expenses (excluding depreciation and amortization)

    8,062       5,637  

Depreciation

    1,486       1,379  

Amortization

    356       251  
      9,904       7,267  

Operating income

    2,224       1,935  

Other Income (Expense):

   

Interest expense

    (605     (524

Investment income (loss), net

    89       101  

Equity in net income (losses) of investees, net

    (37     (32

Other income (expense), net

    (36     (10
      (589     (465

Income before income taxes

    1,635       1,470  

Income tax expense

    (596     (591

Net income from consolidated operations

    1,039       879  

Net (income) loss attributable to noncontrolling interests

    (96     (13

Net income attributable to Comcast Corporation

  $ 943     $ 866  

Basic earnings per common share attributable to Comcast Corporation shareholders

  $ 0.34     $ 0.31  

Diluted earnings per common share attributable to Comcast Corporation shareholders

  $ 0.34     $ 0.31  

Dividends declared per common share attributable to Comcast Corporation shareholders

  $ 0.1125     $ 0.0945  

See accompanying notes to condensed consolidated financial statements.

 

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Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Net income from consolidated operations

  $ 1,039     $ 879  

Unrealized gains (losses) on marketable securities, net of deferred taxes of $(3) and $—

    5       1  

Deferred gains (losses) on cash flow hedges, net of deferred taxes of $(6) and $—

    11         

Amounts reclassified to net income:

   

Realized (gains) losses on marketable securities, net of deferred taxes of $4 and $—

    (7       

Realized (gains) losses on cash flow hedges, net of deferred taxes of $7 and $(1)

    (12     2   

Employee benefit obligations, net of deferred taxes of $(2) and $—

    3         

Currency translation adjustments

    4       (4

Comprehensive income from consolidated operations

    1,043       878  

Net (income) loss attributable to noncontrolling interests

    (96     (13

Other comprehensive (income) loss attributable to noncontrolling interests

    (2       

Comprehensive income attributable to Comcast Corporation

  $ 945     $ 865  

See accompanying notes to condensed consolidated financial statements.

 

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Table of Contents

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Net cash provided by operating activities

  $ 3,468     $ 2,903  

Investing Activities

   

Capital expenditures

    (1,106     (925

Cash paid for intangible assets

    (123     (117

Acquisitions, net of cash acquired

    (5,658     (172

Proceeds from sales of investments

    18       1  

Purchases of investments

    (16     (24

Other

    (2     (19

Net cash provided by (used in) investing activities

    (6,887     (1,256

Financing Activities

   

Proceeds from (repayments of) short-term borrowings, net

    1,677         

Proceeds from borrowings

           2,408  

Repurchases and repayments of debt

    (1,759     (612

Repurchases of common stock

    (525     (300

Dividends paid

    (261     (268

Distributions to noncontrolling interests

    (46     (18

Other

    171       (45

Net cash provided by (used in) financing activities

    (743     1,165  

Increase (decrease) in cash and cash equivalents

    (4,162     2,812  

Cash and cash equivalents, beginning of period

    5,984       671  

Cash and cash equivalents, end of period

  $ 1,822     $ 3,483  

See accompanying notes to condensed consolidated financial statements.

 

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Condensed Consolidated Statement of Changes in Equity

(Unaudited)

 

                      Common Stock                                      
(in millions)  

Redeemable
Non-

controlling
Interests

                  A    

A

Special

    B     Additional
Paid-In
Capital
    Retained
Earnings
    Treasury
Stock at
Cost
    Accumulated
Other
Comprehensive
Income (Loss)
   

Non-

controlling
Interests

    Total
Equity
 

Balance, January 1, 2010

  $ 166            $ 24      $ 8      $  —      $ 40,247      $ 10,005      $ (7,517   $ (46   $ 90      $ 42,811   

Stock compensation plans

                  40       (2           38  

Repurchase and retirement of common stock

                  (215     (85           (300

Employee stock purchase plan

                  14               14  

Dividends declared

                    (267           (267

Other comprehensive income (loss)

                        (1       (1

Sale (purchase) of subsidiary shares to (from) noncontrolling interests, net

    (20                 11               11  

Contributions from (distributions to) noncontrolling interests

                          (4     (4

Net income (loss)

    2                                                       866                       11       877  

Balance, March 31, 2010

  $ 148                      $ 24      $ 8      $      $ 40,097      $ 10,517      $ (7,517   $ (47   $ 97      $ 43,179   

Balance, January 1, 2011

  $ 143            $ 24      $ 8      $      $ 39,780      $ 12,158      $ (7,517   $ (99   $ 80      $ 44,434   

Stock compensation plans

                  182       (22           160  

Repurchase and retirement of common stock

              (1       (261     (263           (525

Employee stock purchase plan

                  14               14  

Dividends declared

                    (312           (312

Other comprehensive income (loss)

    2                         2         2  

NBCUniversal transaction

    15,166                   1,692             188       1,880  

Contributions from (distributions to) noncontrolling interests

    (126                         (31     (31

Net income (loss)

    54                                                       943                       42       985  

Balance, March 31, 2011

  $ 15,239                      $ 24      $ 7      $      $ 41,407      $ 12,504      $ (7,517   $ (97   $ 279      $ 46,607   

See accompanying notes to condensed consolidated financial statements.

 

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Table of Contents

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 Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These financial statements include all adjustments that are necessary for a fair presentation of our results of operations and financial condition for the periods shown, including normal, recurring accruals and other items. We also evaluated events or transactions that occurred after the balance sheet date through the issuance date of these financial statements to determine if financial statement recognition or additional disclosure is required. The 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 annual financial statements for the preceding fiscal year as filed with the SEC.

On January 28, 2011, we closed our transaction with General Electric Company (“GE”) in which we acquired control of the businesses of NBC Universal, Inc. (now named NBCUniversal Media, LLC (“NBCUniversal”)), a leading media and entertainment company that develops, produces and distributes entertainment, news, sports and other content to global audiences. NBCUniversal’s results of operations from January 29 through March 31, 2011 are included in our consolidated results of operations. See Note 4 for more information on the transaction.

Note 2: Summary of Significant Accounting Policies

The accounting policies described below became significant to our business as a result of the NBCUniversal transaction on January 28, 2011.

Use of Estimates

In connection with the NBCUniversal transaction, we have performed a preliminary allocation of purchase price to the assets and liabilities of the businesses acquired using preliminary estimates. The estimates are subject to change as discussed in Note 4. Estimates are also used when accounting for various items, including capitalized film and television costs, amortization of owned and acquired programming, participation and residual payments, and estimates of DVD returns and customer incentives. Actual results could differ from those estimates.

Film and Television Costs

We capitalize film and television production costs, including direct costs, production overhead, print costs, development costs and interest. We amortize capitalized film and television production costs, as well as costs associated with participation and residual payments, on an individual production basis using the ratio of the current period’s actual revenue to the estimated total remaining gross revenue from all sources, which is referred to as ultimate revenue. Estimates of total revenue and total costs are based on anticipated release patterns, public acceptance and historical results for similar productions. We state unamortized film and television costs at the lower of unamortized cost or fair value. We do not capitalize costs related to film exploitation, which are primarily costs associated with the marketing and distribution of film and television programming.

We state acquired film and television libraries at the lower of unamortized cost or fair value. In determining the estimated lives and method of amortization, we generally use the method and life that most closely follows the undiscounted cash flows over the estimated life of the asset.

 

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We capitalize the costs to license programming content, including rights to multiyear live-event sports programming, at the earlier of the acquisition date or when the license period begins and the content is available for use. We amortize capitalized programming costs as the associated programs are broadcast. We amortize multiyear, live-event sports programming rights using the ratio of the current period’s actual direct revenue to the estimated total remaining direct revenue or based on the contract terms.

We state the cost of acquired programming at the lower of unamortized cost or net realizable value on a program-by-program, package, channel or daypart basis. A daypart is defined as an aggregation of programs broadcast during a particular time of day or programs of a similar type. Acquired programming used by our cable programming networks is tested on a channel basis for impairment, whereas the programming for the NBC and Telemundo broadcast networks is tested on a daypart basis. If we determine that the estimates of future cash flows are insufficient or there is no plan to broadcast certain programming, we will recognize an impairment charge in other costs and expenses.

We enter into arrangements with third parties to jointly finance and distribute many of our film productions. These arrangements, which are referred to as cofinancing arrangements, can take various forms. In most cases, the form of the arrangement involves the grant of an economic interest in a film to a third-party investor. The number of investors and the terms of these arrangements can also vary, yet in most cases an investor assumes the full risk for the portion of the film acquired in these arrangements. We account for our proceeds under these arrangements as a reduction to our capitalized film costs. In these arrangements, the investor owns an undivided copyright interest in the film and, therefore, in each period we record either a charge or benefit to operating costs and expenses to reflect the estimate of the third-party investor’s interest in the profit or loss of the film. The estimate of the third-party investor’s interest in the profit or loss of a film is determined by reference to the ratio of actual revenue earned to date in relation to the ultimate revenue expected to be recognized over a film’s useful life.

See Note 5 for more information on film and television costs.

Revenue Recognition

We recognize revenue from the theatrical distribution of films when films are exhibited. We recognize revenue from the licensing of film and television productions when the content is available for use by the licensee, and when certain other conditions are met. When license fees are contracted as part cash and part advertising time, we recognize the advertising time component when the advertising units are aired. We recognize revenue from home entertainment units, net of estimated returns and customer incentives, on the date that units are delivered to and made available for sale by retailers.

We recognize revenue from advance theme park ticket sales when the tickets are used. For nonexpiring, multiday or annual passes, we recognize revenue over the period of benefit based on estimated usage patterns that are derived from historical experience. We recognize revenue from corporate sponsors at the theme parks over the period of the applicable contract.

We also enter into nonmonetary exchanges of advertising units for other advertising units, products or services. Advertising units exchanged for advertising units are recorded at the fair value of advertising units provided and recognized when aired. Advertising units exchanged for products or services are recorded at the fair value of the goods or services received or advertising units provided. Advertising units provided are recognized when aired and costs are recognized in the period the products or services are used.

Foreign Currency Translation

Functional currencies are determined based on entity-specific economic and management indicators. We translate the assets and liabilities of our foreign subsidiaries where the functional currency is the local currency, primarily the euro and the British pound, into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate revenue and expenses using average exchange rates prevailing during the period. The related translation adjustments are recorded as a component of accumulated other comprehensive income (loss).

 

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Reclassifications

Reclassifications have been made to the prior year’s condensed consolidated balance sheet to programming rights, other current assets, film and television costs, other intangible assets, net and other noncurrent assets, net to adjust to classifications used in the current period as a result of the acquisition of the NBCUniversal businesses.

Note 3: Earnings Per Share

Basic earnings per common share attributable to Comcast Corporation shareholders (“basic EPS”) is computed by dividing net income attributable to Comcast Corporation by the weighted-average number of common shares outstanding during the period.

Our potentially dilutive securities include potential common shares related to our stock options and our restricted share units (“RSUs”). Diluted earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our Class A common stock or our Class A Special common stock, as applicable.

Diluted EPS for the three months ended March 31, 2011 and 2010 excludes approximately 32 million and 192 million, respectively, of potential common shares related to our share-based compensation plans, because the inclusion of the potential common shares would have had an antidilutive effect.

Computation of Diluted EPS

 

    Three Months Ended March 31  
    2011      2010  
(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

  $ 943         2,772      $ 0.34       $ 866         2,829      $ 0.31   

Effect of dilutive securities:

                

Assumed exercise or issuance of shares relating to stock plans

             33                          8           

Diluted EPS attributable to Comcast Corporation shareholders

  $ 943         2,805      $ 0.34       $ 866         2,837      $ 0.31   

Note 4: Acquisitions and Other Significant Events

NBCUniversal Transaction

On January 28, 2011, we closed our transaction with GE to form a new company named NBCUniversal, LLC (“NBCUniversal Holdings”). We now control and own 51% of NBCUniversal Holdings and GE owns the remaining 49%. As part of the NBCUniversal transaction, GE contributed the existing businesses of NBCUniversal, which is now a wholly owned subsidiary of NBCUniversal Holdings. The NBCUniversal contributed businesses include its national cable programming networks, the NBC Network and its owned NBC affiliated local television stations, the Telemundo Network and its owned Telemundo affiliated local television stations, Universal Pictures filmed entertainment, the Universal Studios Hollywood theme park and other investments and related assets. We contributed our national cable programming networks, our regional sports and news networks, certain of our Internet businesses, including DailyCandy and Fandango, and other related assets (the “Comcast Content Business”). The combination of businesses creates a leading media and entertainment company capable of providing entertainment, news, sports and other content to a global audience across all platforms. In addition to contributing the Comcast Content Business, we also made a cash payment to GE of $6.2 billion, which included transaction-related costs. We expect to receive tax benefits related to the transaction and have agreed to share with GE certain of these future tax benefits, as they are realized.

 

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In connection with the NBCUniversal transaction, NBCUniversal issued $9.1 billion of senior debt securities with maturities ranging from 2014 to 2041 and repaid approximately $1.7 billion of existing debt during 2010. Prior to the closing, NBCUniversal made a cash distribution of approximately $7.4 billion to GE.

Under the terms of the operating agreement of NBCUniversal Holdings, during the six month period beginning on July 28, 2014, GE has the right to cause NBCUniversal Holdings to redeem half of GE’s interest in NBCUniversal Holdings, and during the six month period beginning January 28, 2018, GE has the right to cause NBCUniversal Holdings to redeem GE’s remaining interest, if any. If GE exercises its first redemption right, we have the immediate right to purchase the remainder of GE’s interest. If GE does not exercise its first redemption right, during the six month period beginning on January 28, 2016, we have the right to purchase half of GE’s interest in NBCUniversal Holdings. During the six month period beginning January 28, 2019, we have the right to purchase GE’s remaining interest, if any, in NBCUniversal Holdings. The purchase price to be paid in connection with any purchase described in this paragraph will be equal to the ownership percentage being purchased multiplied by an amount equal to 120% of the fully distributed public market trading value of NBCUniversal Holdings (determined pursuant to an appraisal process if NBCUniversal Holdings is not then publicly traded), less 50% of an amount (not less than zero) equal to the excess of 120% of the fully distributed public market trading value over $28.4 billion. Subject to various limitations, we are committed to fund up to $2.875 billion in cash or our common stock for each of the two redemptions (up to an aggregate of $5.75 billion), with amounts not used in the first redemption to be available for the second redemption to the extent NBCUniversal Holdings cannot fund the redemptions.

Until July 28, 2014, GE may not directly or indirectly transfer its interest in NBCUniversal Holdings. Thereafter, GE may transfer its interest to a third party, subject to our right of first offer. The right of first offer would permit us to purchase all, but not less than all, of the interests proposed to be transferred. In the event that GE makes a registration request in accordance with certain registration rights that are granted to it under the agreement, we will have the right to purchase, for cash at the market value (determined pursuant to an appraisal process if NBCUniversal Holdings is not then publicly traded), all of GE’s interest in NBCUniversal Holdings that GE is seeking to register.

Acquisition-Related Expenses

We have incurred significant transaction costs directly related to the NBCUniversal transaction. The incremental expenses related to legal, accounting and valuation services, and investment banking fees, are reflected in operating costs and expenses. We also incurred certain financing costs and other shared costs with GE associated with NBCUniversal’s debt facilities that were entered into in December 2009 and with the issuance of NBCUniversal’s senior notes in 2010, which are reflected in other income (expense), net and interest expense.

In addition, during the three months ended March 31, 2011, NBCUniversal incurred transaction-related costs associated with severance and other related compensation charges, which are reflected in operating costs and expenses.

The table below presents the amounts related to these expenses included in our consolidated statement of income.

 

    Three Months Ended
March 31
 
(in millions)       2011              2010      

Operating costs and expenses

    

Transaction costs

  $ 63       $ 14   

Transaction-related costs

    44           

Total operating costs and expenses

    107         14   

Other expense

    16         13   

Interest expense

            2   

Total

  $ 123       $ 29   

Preliminary Allocation of Purchase Price

Because we now control NBCUniversal Holdings, we have applied acquisition accounting to the NBCUniversal contributed businesses and their results of operations are included in our consolidated results of operations

 

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following the acquisition date. The net assets of NBCUniversal contributed businesses were recorded at their estimated fair value using Level 3 inputs (see Note 10 for an explanation of Level 3 inputs). In valuing acquired assets and liabilities, fair value estimates are based on, but are not limited to, future expected cash flows, market rate assumptions for contractual obligations, actuarial assumptions for benefit plans, and appropriate discount rates. The Comcast Content Business continues at its historical or carry-over basis. GE’s interest in NBCUniversal Holdings is recorded as a redeemable noncontrolling interest in our consolidated financial statements due to the redemption provisions outlined above. GE’s redeemable noncontrolling interest has been recorded at fair value for the portion attributable to the net assets we acquired, and at our historical cost for the portion attributable to the Comcast Content Business. The estimated values are not yet final and are subject to change, and the changes could be significant. We will finalize the amounts recognized as soon as possible as we obtain the information necessary to complete the analysis, but no later than one year from the acquisition date.

The tables below present the preliminary fair value of the consideration exchanged and the preliminary allocation of purchase price to the assets and liabilities of the NBCUniversal businesses acquired as a result of the NBCUniversal transaction.

Consideration Exchanged

 

(in millions)       

Cash

  $ 6,127   

Fair value of 49% of the Comcast Content Business

    4,278   

Fair value of contingent consideration

    639   

Fair value of redeemable noncontrolling interest associated with net assets acquired

    13,032   
    $ 24,076   

Assets and Liabilities of Acquired Businesses

 

(in millions)       

Film and television costs (see Note 5)

  $ 4,900   

Investments (see Note 6)

    3,845   

Property and equipment, net (see Note 14)

    1,932   

Intangible assets (see Note 7)

    14,525   

Working capital

    (1,760

Long-term debt (see Note 8)

    (9,115

Deferred income tax liabilities

    (44

Other noncurrent assets and liabilities

    (2,061

Noncontrolling interests acquired (see Note 11)

    (188

Fair value of identifiable net assets acquired

    12,034   

Goodwill

    12,042   
    $ 24,076   

Income Taxes

We are responsible for the tax matters for both NBCUniversal Holdings and NBCUniversal, including the filing of returns and administering any proceedings with taxing authorities. For U.S. federal income tax purposes, NBCUniversal Holdings will be treated as a partnership and NBCUniversal will be disregarded as an entity separate from NBCUniversal Holdings. Accordingly, neither NBCUniversal Holdings nor NBCUniversal and its subsidiaries will incur any material current or deferred U.S. federal income taxes. NBCUniversal Holdings and NBCUniversal and its subsidiaries are, however, expected to incur current and deferred income taxes in a limited number of states and localities. In addition, NBCUniversal’s foreign subsidiaries are expected to incur current and deferred foreign income taxes. GE has indemnified us and NBCUniversal Holdings for any income tax liability attributable to the historical NBCUniversal businesses for periods prior to the acquisition date. We have also indemnified GE and NBCUniversal Holdings for any income tax liability attributable to the Comcast Content Business for periods prior to the acquisition date.

 

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NBCUniversal recognized net deferred income tax liabilities of $44 million in the preliminary allocation of purchase price related primarily to acquired intangible assets in state and foreign jurisdictions. In addition, Comcast recognized $460 million of deferred tax liabilities in connection with GE acquiring an indirect noncontrolling interest in the Comcast Content Business in exchange for our acquisition of a portion of our interest in NBCUniversal Holdings. Because we maintain control of the Comcast Content Business, the excess of fair value received over historical book value and the related tax impact were recorded in additional paid-in capital.

We agreed to share with GE certain tax benefits, as they are realized, related to the form and structure of the transaction. These future payments to GE are contingent on us realizing tax benefits in the future and are accounted for as contingent consideration. We have recorded $639 million in other current and noncurrent liabilities in our acquisition accounting based on the present value of the expected future payments to GE.

Following the close of the NBCUniversal transaction, our provision for income taxes includes a federal and state tax provision on our allocable share of the earnings of NBCUniversal Holdings and NBCUniversal, as well as the state, local and foreign tax provisions of NBCUniversal Holdings and NBCUniversal, adjusted for any foreign tax credits.

Goodwill

Goodwill consists primarily of intangible assets that do not qualify for separate recognition, including assembled workforce, noncontractual relationships and agreements between us and NBCUniversal. Because our allocation of purchase price and estimated values of identifiable assets and liabilities are not yet final, the amount of total goodwill and the amount of goodwill expected to be deductible for tax purposes are not yet final and subject to change.

Unaudited Actual and Pro Forma Information

Our consolidated revenue from January 29, 2011 through March 31, 2011 includes $2.2 billion related to the NBCUniversal contributed business. The net income (loss) attributable to Comcast Corporation from the NBCUniversal contributed businesses was not material for the period January 29, 2011 through March 31, 2011.

The following unaudited pro forma information has been presented as if the NBCUniversal transaction occurred on January 1, 2010. This information is based on historical results of operations, adjusted for the allocation of purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what the results would have been had we operated the business since January 1, 2010. No pro forma adjustments have been made for our incremental transaction costs or other transaction-related costs.

 

    Three Months Ended
March 31
 
(in millions)   2011      2010  

Revenue

  $ 13,289      $ 13,308  

Net income from consolidated operations

  $ 991      $ 762  

Net income attributable to Comcast Corporation

  $ 878      $ 717  

Basic earnings per common share attributable to Comcast Corporation shareholders

  $ 0.32      $ 0.25  

Diluted earnings per common share attributable to Comcast Corporation shareholders

  $ 0.31      $ 0.25  

 

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Note 5: Film and Television Costs

 

(in millions)   March 31,
2011
     December 31,
2010
 

Film Costs

    

Released, less amortization

  $ 1,654      $  —   

Completed, not released

    102          

In-production and in-development

    1,108          
    2,864          

Television Costs

    

Released, less amortization

    1,112        94   

Completed, not released

    1        43   

In-production and in-development

    169          
    1,282        137   

Programming rights, less amortization

    1,575        445  
    5,721        582  

Less: Current portion of programming rights

    776        122  

Film and television costs

  $ 4,945      $ 460  

The March 31, 2011 amounts include the film and television costs acquired in connection with the closing of the NBCUniversal transaction at fair value as of January 28, 2011, less accumulated amortization following the acquisition date. The capitalized programming costs of the Comcast Content Business are reflected at their historical cost less accumulated amortization for both periods presented.

As of March 31, 2011, acquired film and television libraries had remaining unamortized costs of approximately $1.2 billion. For the three months ended March 31, 2011 amortization of acquired film and television libraries, included in operating costs and expenses, totaled approximately $32 million.

Note 6: Investments

 

(in millions)   March 31,
2011
     December 31,
2010
 

Fair value method

  $ 3,120      $ 2,815  

Equity method, primarily SpectrumCo and Clearwire

    2,111        2,193  

Cost method, primarily AirTouch redeemable preferred shares

    1,760        1,743  

Acquired NBCUniversal investments

    3,794          

Total investments

    10,785        6,751  

Less: Current investments

    74        81  

Noncurrent investments

  $ 10,711      $ 6,670  

Investments acquired in connection with the NBCUniversal transaction primarily include equity method investments in A&E Television Networks, LLC (16%); Universal City Development Partners (“UCDP”) (50%), consisting of the ownership and operation of two theme parks in Orlando, Florida; The Weather Channel (25%); and MSNBC.com (50%); and cost method investments, primarily in Hulu (32%). See Note 4 for more information on the NBCUniversal transaction.

 

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Components of Investment Income (Loss), Net

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Gains on sales and exchanges of investments, net

  $ 14     $ 2  

Investment impairment losses

           (8

Unrealized gains (losses) on securities underlying prepaid forward sale agreements

    309       360  

Mark to market adjustments on derivative component of prepaid forward sale agreements

    (265     (277

Mark to market adjustments on derivative component of ZONES

    4       1  

Interest and dividend income

    26       22  

Other, net

    1       1  

Investment income (loss), net

  $ 89     $ 101  

Note 7: Goodwill and Other Intangible Assets

Goodwill

The table below presents our goodwill attributable to our Cable Communications segment (previously our Cable Segment), the Comcast Content Business (now included in the new NBCUniversal segments) and Corporate and Other, as well as the total goodwill attributable to the NBCUniversal acquired businesses. See Note 17 for additional information on our segments.

 

           NBCUniversal                
(in millions)   Cable
Communications
     Comcast Content
Business
     NBCUniversal
Acquired Businesses
     Corporate and
Other
     Total  

Balance, December 31, 2010

  $ 12,207      $ 2,564      $  —       $ 187      $ 14,958  

Acquisitions

                    12,042                12,042  

Settlements and adjustments

    1                                1  

Balance, March 31, 2011

  $ 12,208      $ 2,564      $ 12,042      $ 187      $ 27,001  

The change in goodwill for the three months ended March 31, 2011 is primarily related to the closing of the NBCUniversal transaction on January 28, 2011. The preliminary allocation of purchase price to the assets and liabilities of the NBCUniversal businesses acquired, as well as the allocation of goodwill among reporting segments, is not complete and is subject to change. We expect the majority of the goodwill will be related to our Cable Networks segment. See Note 4 for more information on the NBCUniversal transaction.

The carrying amount of goodwill at both December 31, 2010 and March 31, 2011 includes accumulated impairments of $76 million within our Cable Networks segment.

Other Intangible Assets

 

           March 31, 2011     December 31, 2010  
(in millions)   Original Useful Life
at March 31, 2011
     Gross Carrying
Amount
     Accumulated
Amortization
    Gross Carrying
Amount
     Accumulated
Amortization
 

Other intangible assets

    2-25 years       $ 8,842      $ (5,526   $ 12,271      $ (8,840

Acquired NBCUniversal intangible assets

            

Finite-lived intangible assets

    4-19 years         11,430        (121               

Indefinite-lived intangible assets

    N/A         3,100                           

Total

           $ 23,372      $ (5,647   $ 12,271      $ (8,840

The decrease in the gross carrying amount and accumulated amortization of other intangible assets for the three months ended March 31, 2011 was due to the write off of fully amortized customer relationship and other intangible assets.

The intangible assets recorded as a result of the NBCUniversal transaction include finite-lived intangible assets, primarily customer-related intangible assets and capitalized software, and indefinite-lived intangible assets, primarily trade names and Federal Communication Commission licenses. See Note 4 for more information on the NBCUniversal transaction.

 

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Note 8: Long-Term Debt

As of March 31, 2011, our debt had an estimated fair value of $42.8 billion. The estimated fair value of our publicly traded debt is based on quoted market values for the debt. To estimate the fair value of debt for which there are no quoted market prices, we use interest rates available to us for debt with similar terms and remaining maturities.

NBCUniversal

NBCUniversal issued $9.1 billion principal amount of senior debt securities during 2010 in connection with the NBCUniversal transaction. In accordance with acquisition accounting, the senior debt securities were recorded at fair value based on interest rates available to us for debt with similar terms and remaining maturities as of January 28, 2011. The table below presents the carrying value of these senior debt securities included in our balance sheet as of March 31, 2011.

 

(in millions)   Interest Rate     March 31,
2011
 

Senior notes due 2014

    2.100   $ 897   

Senior notes due 2015

    3.650     1,031   

Senior notes due 2016

    2.875     980   

Senior notes due 2020

    5.150     2,065   

Senior notes due 2021

    4.375     1,935   

Senior notes due 2040

    6.400     1,033   

Senior notes due 2041

    5.950     1,176   

Total

          $ 9,117   

Revolving Bank Credit Facilities

Effective with the closing of the NBCUniversal transaction on January 28, 2011, NBCUniversal has a $750 million revolving credit facility due January 2014 with a syndicate of banks. As of March 31, 2011, the credit facility remained undrawn.

Repayments

In January 2011, we repaid $1 billion principal amount of 6.75% notes due at maturity. In March 2011, we repaid $750 million principal amount of 5.5% notes due at maturity.

Commercial Paper

During the three months ended March 31, 2011, we issued $1.69 billion face amount of commercial paper, net of repayments.

Note 9: Derivative Financial Instruments

We use derivative financial instruments to manage our exposure to the risks associated with fluctuations in interest rates, equity prices and foreign exchange rates. Our objective is to manage the financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the derivatives used to economically hedge them. Derivative financial instruments are recorded in our consolidated balance sheet at fair value. We formally document, at inception of the relationship, derivative financial instruments designated to hedge the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment (“fair value hedge”) or the exposure to changes in cash flows of a forecasted transaction (“cash flow hedge”), and we evaluate them for effectiveness at the time they are designated, as well as throughout the hedging period.

We manage our exposure to fluctuations in interest rates by using derivative financial instruments such as interest rate exchange agreements (“swaps”) and interest rate lock agreements (“rate locks”). We sometimes enter into rate locks or collars to hedge the risk that the cash flows related to the interest payments on an anticipated issuance or assumption of fixed-rate debt may be adversely affected by interest rate fluctuations.

 

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We manage our exposure to foreign exchange risk related to our foreign currency denominated borrowings by using cross-currency swaps, effectively converting these borrowings to U.S. dollar denominated borrowings. We manage our exposure to foreign exchange risk related to NBCUniversal’s foreign currency denominated production costs and rights, as well as international content-related revenue and royalties, by using foreign exchange contracts such as forward contracts and currency options.

We manage our exposure to price fluctuations in the common stock of some of our investments by using equity derivative financial instruments embedded in other contracts, such as prepaid forward sale agreements, whose values, in part, are derived from the market value of certain publicly traded common stock.

We manage the credit risks associated with our derivative financial instruments through diversification and the evaluation and monitoring of the creditworthiness of the counterparties. Although we may be exposed to losses in the event of nonperformance by the counterparties, we do not expect such losses, if any, to be significant. We have agreements with certain counterparties that include collateral provisions. These provisions require a party with an aggregate unrealized loss position in excess of certain thresholds to post cash collateral for the amount in excess of the threshold. The threshold levels in our collateral agreements are based on our and the counterparties’ credit ratings. As of March 31, 2011, neither we nor any of the counterparties were required to post collateral under the terms of the agreements.

As of March 31, 2011, our derivative financial instruments designated as hedges included (i) the derivative component of one of our prepaid forward sale agreements, which is recorded to other noncurrent liabilities, (ii) our interest rate swap agreements, which are recorded to other current or noncurrent assets and liabilities, (iii) our cross-currency swaps, which are recorded to other noncurrent liabilities, and (iv) certain of our foreign exchange contracts, which are recorded to other current assets or accrued expenses and other current liabilities. As of March 31, 2011, our derivative financial instruments not designated as hedges were (i) the derivative component of our indexed debt instruments (our ZONES debt), which is recorded to long-term debt, (ii) the derivative components of certain of our prepaid forward sale agreements, which are recorded to other current and noncurrent liabilities, and (iii) certain of our foreign exchange contracts, which are recorded to other current assets or accrued expenses and other current liabilities.

We do not engage in any speculative or leveraged derivative transactions. All derivative transactions must comply with the derivatives policy approved by our Board of Directors.

See Note 10 for more information on the fair values of our derivative financial instruments as of March 31, 2011 and December 31, 2010.

Fair Value Hedges

Amount of Gain (Loss) Recognized in Income

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Interest Income (Expense):

   

Interest rate swap agreements (fixed to variable)

  $ (45   $ 28  

Long-term debt—interest rate swap agreements (fixed to variable)

    45       (28

Investment Income (Expense):

   

Mark to market adjustments on derivative component of prepaid forward sale agreement

    (3     (11

Unrealized gains (losses) on securities underlying prepaid forward sale agreement

    5       19  

Gain (loss) on fair value hedging relationships

  $ 2     $ 8  

During the period from January 29, 2011 through March 31, 2011, NBCUniversal entered into fixed to variable swaps on $600 million principal amount of NBCUniversal senior debt securities with maturities ranging from 2014 to 2016. These fixed to variable swaps are designated as effective fair value hedges.

As of March 31, 2011 and December 31, 2010, the fair value of our prepaid forward sale agreement designated as a fair value hedge was a liability of $32 million and $29 million, respectively.

 

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Cash Flow Hedges

Pretax Amount of Gain (Loss) Recognized in Accumulated

Other Comprehensive Income

 

    Three Months Ended March 31  
    2011     2010  
(in millions)   Interest
Rate
Risk
     Foreign
Exchange
Risk
    Total     Interest
Rate
Risk
     Foreign
Exchange
Risk
     Total  

Deferred gain (loss) recognized

  $  —       $ 17     $ 17     $  —       $  —       $  —   

Deferred (gain) loss reclassified to income

    6        (25     (19     4                4  

Total change in accumulated other comprehensive income

  $ 6      $ (8   $ (2   $ 4      $       $ 4  

Interest rate risk deferred losses relate to interest rate lock agreements entered into to fix the interest rates of certain of our debt obligations in advance of their issuance. Unless we retire this debt early, these unrealized losses will be reclassified as an adjustment to interest expense, primarily through 2022, in the period in which the related interest expense is recognized in earnings. As of March 31, 2011, we expect $23 million of unrealized losses, $15 million net of deferred taxes, to be reclassified as an adjustment to interest expense over the next 12 months. The foreign exchange risk deferred losses for the three months ended March 31, 2011 relate to cross-currency swaps on foreign currency denominated debt due in 2029 and foreign exchange contracts with initial maturities generally not exceeding one year and up to 18 months in certain circumstances. As of March 31, 2011, the fair value of the foreign exchange contracts related to NBCUniversal operations that were designated as cash flow hedges was a liability of $3 million.

Ineffectiveness related to our cash flow hedges was not material for the three months ended March 31, 2011 or 2010.

Nondesignated

Amount of Gain (Loss) Recognized in Income

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Operating Costs and Expenses:

   

Mark to market adjustments on foreign exchange contracts

  $ (9   $   

Investment Income (Expense):

   

Mark to market adjustments on derivative component of prepaid forward sale agreements

    (262     (266

Unrealized gains (losses) on securities underlying prepaid forward sale agreements

    304       341  

Mark to market adjustments on derivative component of ZONES

    4       1  

Total gain (loss)

  $ 37      $ 76  

As of March 31, 2011, foreign exchange contracts related to NBCUniversal operations that were not designated had a total notional value of $1.236 billion. The notional amount is a measure of the activity related to our risk exposure and does not represent the amount of exposure to credit loss, or reflect the gains or losses associated with the exposures and transactions that the foreign exchange contracts are intended to offset. The amounts ultimately realized upon settlement of these derivative financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the derivative financial instruments.

Note 10: Fair Value Measurements

The accounting guidance related to financial assets and financial liabilities (“financial instruments”) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). Level 1 consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2

 

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consists of financial instruments that are valued using models or other valuation methodologies. These models use inputs that are observable in the marketplace either directly or indirectly. Level 3 consists of financial instruments whose values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Our financial instruments that are accounted for at fair value on a recurring basis are presented in the table below.

Recurring Fair Value Measures

 

    Fair Value as of March 31, 2011      December 31, 2010  
(in millions)   Level 1      Level 2      Level 3      Total      Total  

Assets

             

Trading securities

  $ 2,995      $       $  —       $ 2,995      $ 2,688  

Available-for-sale securities

    124                23        147        126  

Equity warrants

                    1        1        1  

Interest rate swap agreements

            193                193        232  

Foreign exchange contracts

            9                9          
    $ 3,119      $ 202      $ 24      $ 3,345      $ 3,047  

Liabilities

             

Derivative component of ZONES

  $       $ 4      $       $ 4      $ 8  

Derivative component of prepaid forward sale agreements

            1,286                1,286        1,021  

Interest rate swap agreements

            7                7          

Cross-currency swaps

            13                13        29  

Foreign exchange contracts

            31                31          
    $       $ 1,341      $       $ 1,341      $ 1,058  

Note 11: Noncontrolling Interests

Certain of our subsidiaries that we consolidate are not wholly owned. Some of the agreements with the minority partners of these subsidiaries contain redemption features whereby interests held by the minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. If interests were to be redeemed under these agreements, we would generally be required to purchase the interest at fair value on the date of redemption. These interests are presented on the balance sheet outside of equity under the caption “Redeemable noncontrolling interests.” Noncontrolling interests that do not contain such redemption features are presented in equity.

GE’s 49% interest in NBCUniversal Holdings is recorded as a redeemable noncontrolling interest in our consolidated financial statements due to the redemption provisions discussed in Note 4, with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to the Comcast Content Business. GE’s redeemable noncontrolling interest is adjusted for its 49% interest in NBCUniversal Holdings’ and NBCUniversal’s earnings and changes in other comprehensive income, as well as for other capital transactions attributable to GE.

The table below presents the changes in equity resulting from net income attributable to Comcast Corporation and transfers from or to noncontrolling interests.

 

    Three Months Ended
March 31
 
(in millions)       2011              2010      

Net income attributable to Comcast Corporation

  $ 943      $ 866  

Transfers from (to) noncontrolling interests:

    

Increase in Comcast Corporation additional paid-in capital resulting from the sale of noncontrolling interest

    1,692        11  

Changes from net income attributable to Comcast Corporation and transfers from (to) noncontrolling interests

  $ 2,635      $ 877  

 

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Note 12: Postretirement, Pension and Other Employee Benefit Plans

NBCUniversal Employee Benefit Plans

At the close of the NBCUniversal transaction on January 28, 2011, we established new employee benefit plans for U.S. employees of NBCUniversal, including defined benefit pension plans and postretirement medical and life insurance plans. Additionally, NBCUniversal assumed certain liabilities related to its obligation to reimburse GE for amounts paid by GE for specified employee benefits and insurance programs that GE will continue to administer. NBCUniversal’s defined benefit pension plans for NBCUniversal employees (“qualified plan”) and executives (“nonqualified plan”) provide a lifetime income benefit based on an individual’s length of service and related compensation. The defined benefit pension plans are closed to new participants and give credit to eligible participants for service provided prior to the close of the NBCUniversal transaction. The postretirement medical and life insurance benefit plans that were established provide continued coverage to employees eligible to receive such benefits and give credit for service provided prior to the closing of the NBCUniversal transaction. Certain covered employees also retain the right, upon retirement, to elect to participate in corresponding plans sponsored by GE. To the extent our employees make such elections, we will reimburse GE for any amounts due. NBCUniversal funds the nonqualified plan and the postretirement medical and life insurance benefit plan on a pay-as-you-go basis. We expect to contribute approximately $8 million in 2011 to fund these benefits. We do not plan to fund our qualified defined benefit plan until the second quarter of 2012.

The table below provides condensed information on NBCUniversal’s pension and postretirement benefit plans.

 

   

Three Months Ended

March 31, 2011

 
(in millions)  

Pension

Benefits

   

Postretirement

Benefits

 

Benefit obligation

  $ 269      $ 157   

Benefits expense

  $ 20      $ 3   

Discount rate

    5.5%-6.0     5.75

NBCUniversal has also established a U.S. defined contribution 401(k) plan with 100% matching contributions on the first 3.5% of pay plus additional contributions based on employee classification and NBCUniversal’s results of operations. The related expense for the three months ended March 31, 2011 was $9 million.

NBCUniversal Other Benefit Plans

Our condensed consolidated financial statements include the assets and liabilities of certain legacy NBCUniversal benefit plans, as well as the assets and liabilities for benefit plans of certain foreign subsidiaries. NBCUniversal also participates in various multiemployer pension plans covering some of their employees who are represented by labor unions. NBCUniversal makes periodic contributions to these plans in accordance with the terms of applicable collective bargaining agreements and laws, but does not sponsor or administer the plans.

Note 13: Share-Based Compensation

Our Board of Directors may grant share-based awards, in the form of stock options and RSUs, to certain employees and directors. Additionally, through our employee stock purchase plan, employees are able to purchase shares of Comcast Class A common stock at a discount through payroll deductions.

In March 2011, we granted 23.8 million stock options and 6.6 million RSUs related to our annual management grant program. The weighted-average fair values associated with these grants were $6.97 per stock option and $23.33 per RSU.

 

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Recognized Share-Based Compensation Expense

 

    Three Months Ended
March 31
 
(in millions)       2011              2010      

Stock options

  $ 22       $ 28   

Restricted share units

    40         35   

Employee stock purchase plan

    3         4   

Total

  $ 65       $ 67   

As of March 31, 2011, we had $408 million of unrecognized pretax compensation costs related to nonvested stock options and $409 million related to nonvested RSUs.

The employee cost associated with participation in the employee stock purchase plan was satisfied with payroll deductions of approximately $15 million for both the three months ended March 31, 2011 and 2010.

Note 14: Supplemental Financial Information

Receivables

 

(in millions)   March 31,
2011
     December 31,
2010
 

Receivables, gross

  $ 3,974      $ 2,028  

Less: Allowance for returns and customer incentives

    113          

Less: Allowance for doubtful accounts

    153        173  

Receivables, net

  $ 3,708      $ 1,855  

Allowances for returns and customer incentives are primarily attributable to the NBCUniversal film business.

The table below presents our unbilled receivables related to long-term content licensing arrangements included in our consolidated balance sheet as of March 31, 2011. Current and noncurrent unbilled receivables are recorded in receivables, net and other noncurrent assets, net, respectively.

 

(in millions)   March 31,
2011
 

Current

  $ 255  

Noncurrent, net of imputed interest

  $ 480  

Property and Equipment

 

(in millions)   March 31,
2011
    December 31,
2010
 

Property and equipment, at cost

  $ 56,437     $ 56,020  

Acquired NBCUniversal property and equipment

    1,977         

Property and equipment, at cost

    58,414       56,020  

Less: Accumulated depreciation

    (33,503     (32,505

Property and equipment, net

  $ 24,911     $ 23,515  

Accumulated Other Comprehensive Income (Loss)

 

(in millions)   March 31,
2011
    March 31,
2010
 

Unrealized gains (losses) on marketable securities

  $ 24     $ 23  

Deferred gains (losses) on cash flow hedges

    (106     (60

Unrecognized gains (losses) on employee benefit obligations

    (16     (6

Currency translation adjustments

    3       (4

Accumulated other comprehensive (income) attributable to noncontrolling interests

    (2       

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

  $ (97   $ (47

 

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Operating Costs and Expenses

 

    Three Months Ended
March 31
 
(in millions)       2011              2010      

Programming and production

  $ 3,275      $ 2,114  

Cable Communications technical labor

    584        561  

Cable Communications customer service

    464        454  

Advertising, marketing and promotion

    984        545  

Other

    2,755        1,963  

Operating costs and expenses (excluding depreciation and amortization)

  $ 8,062      $ 5,637  

Net Cash Provided by Operating Activities

The table below presents adjustments to reconcile net income from consolidated operations to net cash provided by operating activities.

 

    Three Months Ended
March 31
 
(in millions)       2011             2010      

Net income from consolidated operations

  $ 1,039     $ 879  

Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:

   

Depreciation and amortization

    1,842       1,630  

Amortization of film and television costs

    574       25  

Share-based compensation

    84       82  

Noncash interest expense (income), net

    40       35  

Equity in net (income) losses of investees, net

    37       32  

Net (gain) loss on investment activity and other

    13       (67

Deferred income taxes

    130         

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

   

Change in receivables, net

    725       143  

Change in film and television costs

    (856     (38

Change in accounts payable and accrued expenses related to trade creditors

    (131     (71

Change in other operating assets and liabilities

    (29 )     253  

Net cash provided by operating activities

  $ 3,468     $ 2,903  

Cash Payments for Interest and Income Taxes

 

    Three Months Ended
March 31
 
(in millions)       2011              2010      

Interest

  $ 657      $ 615  

Income taxes

  $ 74      $ 46  

Noncash Investing and Financing Activities

During the three months ended March 31, 2011, we:

 

   

acquired 51% of NBCUniversal Holdings for cash and a 49% interest in the Comcast Content Business on January 28, 2011; see Note 4 for more information on the NBCUniversal transaction

 

 

   

acquired approximately $457 million of property and equipment and software that was accrued but unpaid, which is a noncash investing activity

 

 

   

recorded a liability of approximately $312 million for a quarterly cash dividend of $0.1125 per common share paid in April 2011, which is a noncash financing activity

 

 

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Note 15: Receivables Monetization

Through January 27, 2011, NBCUniversal monetized its trade accounts receivable through two programs established with GE and various GE subsidiaries. Through these programs, NBCUniversal retained limited interests in the assets sold and provided reserves for all expected losses with respect to these interests. As a result of the closing of the NBCUniversal transaction on January 28, 2011, NBCUniversal terminated those programs and has since established new third-party monetization programs with a syndicate of banks, of which the primary relationship is with General Electric Capital Corporation, a subsidiary of GE.

We account for receivables monetized through both our new and terminated programs as sales in accordance with the appropriate accounting guidance. We retain limited interests in the assets sold, and we provided reserves for losses that we expect to incur related to these interests. The accounts receivable we sold that underlie the retained interests are generally short-term in nature and, therefore, the fair value of the retained interests approximated their carrying value, net of provision for doubtful accounts, as of March 31, 2011.

For a majority of the receivables monetized under the new programs, an affiliate of GE is responsible for servicing the receivables and remitting collections to the owner and the lenders. We perform this service on the affiliate’s behalf for a fee, which is equal to the prevailing market rate for such services. As a result, no servicing asset or liability has been recorded on our consolidated balance sheet as of March 31, 2011. We received sub-servicing fees of $1 million for the three months ended March 31, 2011, which is included in other income (expense), net.

The table below represents the receivables transferred to our respective programs that remain outstanding and our retained interests in those receivables as of March 31, 2011. The retained interest is included in receivables, net.

 

(in millions)   March 31,
2011
 

Monetized receivables outstanding

  $ 989   

Retained interest

  $ 210   

In addition to the amounts presented above, we had $480 million payable to our new and terminated securitization programs as of March 31, 2011. This amount represents cash received from monetized receivables not yet remitted to the program as of the balance sheet date and is recorded in accounts payable and accrued expenses related to trade creditors.

The table below summarizes certain activities related to our securitization programs.

 

    Three Months Ended  
(in millions)   March 31, 2011  

Cash flows on transfers

 

Net proceeds on new transfers

  $ (424

Effect on income from services

 

Net loss on sale

  $ (8

Note 16: Commitments and Contingencies

NBCUniversal Obligations, Commitments and Guarantees

NBCUniversal enters into long-term commitments with third parties in the ordinary course of business, including commitments to acquire film and television programming, take-or-pay creative talent and employment agreements, and various other television commitments. Many of NBCUniversal’s employees, including writers, directors, actors, technical and production personnel and others, as well as some of our on-air and creative talent, are covered by collective bargaining agreements or works councils. Approximately 29 collective bargaining agreements covering approximately 2,950 of our full-time, part-time and full-time equivalent freelance employees on our payroll are scheduled to expire during 2011.

NBCUniversal provides guarantees in the ordinary course of business, including the guarantee of a loan of one of NBCUniversal’s partners in one of their equity method investments and an obligation of the equity method investment’s consulting agreement with a third party. These guarantees are underwritten considering economic,

 

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liquidity and credit risk of the counterparty. We believe the likelihood is remote that these arrangements could have an adverse effect on our financial statements.

Station Venture

NBCUniversal owns an 80% equity interest and a 50% voting interest in Station Venture Holdings, LLC (“Station Venture”), a variable interest entity. The remaining equity interests in Station Venture are held by LIN TV, Corp. (“LIN TV”). Station Venture holds an indirect interest in the NBC Network affiliated local television stations in Dallas, Texas and San Diego, California through its ownership interests in Station Venture Operations, LP (“Station LP”), which is a less than wholly owned consolidated subsidiary of NBCUniversal. Station Venture is the obligor on an $816 million senior secured note that is due in 2023 to General Electric Capital Corporation, a subsidiary of GE. The note is non-recourse to NBCUniversal, guaranteed by LIN TV and collateralized by substantially all of the assets of Station Venture and Station LP. In connection with the closing of the NBCUniversal transaction, GE has indemnified NBCUniversal for all liabilities NBCUniversal may incur as a result of any credit support, risk of loss or similar arrangement related to the note, in existence prior to the closing of the NBCUniversal transaction on January 28, 2011. We are not the primary beneficiary of, and accordingly do not consolidate, Station Venture. We have attributed no value to the investment in Station Venture in our allocation of purchase price for the NBCUniversal transaction. Because the assets of Station LP serve as collateral for Station Venture’s $816 million senior secured note, we have recorded a $350 million liability representing the estimated fair value of the assets of Station LP.

Contingencies

Antitrust Cases

We are defendants in two purported class actions originally filed in December 2003 in the United States District Courts for the District of Massachusetts and the Eastern District of Pennsylvania. The potential class in the Massachusetts case, which has been transferred to the Eastern District of Pennsylvania, is our customer base in the “Boston Cluster” area, and the potential class in the Pennsylvania case is our customer base in the “Philadelphia and Chicago Clusters,” as those terms are defined in the complaints. In each case, the plaintiffs allege that certain customer exchange transactions with other cable providers resulted in unlawful horizontal market restraints in those areas and seek damages under antitrust statutes, including treble damages.

Classes of Philadelphia Cluster and Chicago Cluster customers were certified in May 2007 and October 2007, respectively. In March 2009, as a result of a Third Circuit Court of Appeals decision clarifying the standards for class certification, the order certifying the Philadelphia Cluster class was vacated without prejudice to the plaintiffs filing a new motion. In January 2010, in its decision on the plaintiffs’ new motion, the Eastern District of Pennsylvania certified a class subject to certain limitations. In June 2010, the Third Circuit Court of Appeals granted our petition for an interlocutory appeal from the class certification decision. Oral agreement on the appeal was held in January 2011. In March 2010, we moved for summary judgment dismissing all of the plaintiffs’ claims in the Philadelphia Cluster; the summary judgment motion is stayed pending the class certification appeal. The plaintiffs’ claims concerning the other two clusters are stayed pending determination of the Philadelphia Cluster claims.

We also are among the defendants in a purported class action filed in the United States District Court for the Central District of California in September 2007. The potential class is comprised of all persons residing in the United States who have subscribed to an expanded basic level of video service provided by one of the defendants. The plaintiffs allege that the defendants who produce video programming have entered into agreements with the defendants who distribute video programming via cable and satellite (including us), which preclude the distributor defendants from reselling channels to customers on an “unbundled” basis in violation of federal antitrust laws. The plaintiffs seek treble damages and injunctive relief requiring each distributor defendant to resell certain channels to its customers on an “unbundled” basis. In October 2009, the Central District of California issued an order dismissing the plaintiffs’ complaint with prejudice. The plaintiffs have appealed that order to the Ninth Circuit Court of Appeals. Oral argument on the appeal was held in March 2011.

In addition, we are the defendant in 22 purported class actions filed in federal district courts throughout the country. All of these actions have been consolidated by the Judicial Panel on Multidistrict Litigation in the United States District Court for the Eastern District of Pennsylvania for pre-trial proceedings. In a consolidated

 

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complaint filed in November 2009 on behalf of all plaintiffs in the multidistrict litigation, the plaintiffs allege that we improperly “tie” the rental of set-top boxes to the provision of premium cable services in violation of Section 1 of the Sherman Antitrust Act, various state antitrust laws and unfair/deceptive trade practices acts in California, Illinois and Alabama. The plaintiffs also allege a claim for unjust enrichment and seek relief on behalf of a nationwide class of our premium cable customers and on behalf of subclasses consisting of premium cable customers from California, Alabama, Illinois, Pennsylvania and Washington. In January 2010, we moved to compel arbitration of the plaintiffs’ claims for unjust enrichment and violations of the unfair/deceptive trade practices acts of Illinois and Alabama. In September 2010, the plaintiffs filed an amended complaint alleging violations of additional state antitrust laws and unfair/deceptive trade practices acts on behalf of new subclasses in Connecticut, Florida, Minnesota, Missouri, New Jersey, New Mexico and West Virginia. In the amended complaint, plaintiffs dropped their unjust enrichment claim, as well as their state law claims on behalf of the Alabama, Illinois and Pennsylvania subclasses. In November 2010, the court stayed the case until the United States Supreme Court renders its decision in AT&T Mobility LLC v. Concepcion.

The West Virginia Attorney General also filed a complaint in West Virginia state court in July 2009 alleging that we improperly “tie” the rental of set-top boxes to the provision of premium cable services in violation of the West Virginia Antitrust Act and the West Virginia Consumer Credit and Protection Act. The Attorney General also alleges a claim for unjust enrichment/restitution. We removed the case to the United States District Court for West Virginia, and it was subsequently transferred to the United States District Court for the Eastern District of Pennsylvania and consolidated with the multidistrict litigation described above. In March 2010, the Eastern District of Pennsylvania denied the Attorney General’s motion to remand the case back to West Virginia state court. In June 2010, the Attorney General moved to sever and remand the portion of the claims seeking civil penalties and injunctive relief back to West Virginia state court. We filed a brief in opposition to the motion in July 2010.

Other

We are a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases other industry participants are also defendants, and also in certain of these cases we expect that any potential liability would be in part or in whole the responsibility of our equipment and technology vendors under applicable contractual indemnification provisions. We are also subject to other legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our financial position, results of operations or cash flows, any litigation resulting from any such legal proceedings or claims could be time consuming, costly and injure our reputation.

* * *

We believe the claims in each of the pending actions described above in this item are without merit and intend to defend the actions vigorously. We cannot predict the outcome of any of the actions described above, including a range of possible loss, or how the final resolution of any such actions would impact our results of operations or cash flows for any one period or our consolidated financial position. Nevertheless, the final disposition of any of the above actions is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations or cash flows for any one period.

Note 17: Financial Data by Business Segment

Following the NBCUniversal transaction, we now present our operations in five reportable segments: Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks. The Comcast Content Business is presented with NBCUniversal’s businesses in the Cable Networks segment. The businesses of Comcast Interactive Media (previously presented in Corporate and Other) that were not contributed to NBCUniversal are included in the Cable Communications segment. We have recast our segment presentation for the three months ended March 31, 2010 in order to reflect our current operating segments. See Note 4 for more information on the NBCUniversal transaction.

 

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In evaluating the profitability of our segments, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management. Our financial data by business segment is presented in the table below.

 

     Three Months Ended March 31, 2011  
(in millions)   Revenue(i)     Operating
Income (Loss)
Before
Depreciation
and
Amortization(j)
    Depreciation
and
Amortization
    Operating
Income
(Loss)
    Capital
Expenditures
    Assets  

Cable Communications(a)

  $ 9,084      $ 3,749      $ 1,621      $ 2,128      $ 1,053      $ 116,653   

NBCUniversal

           

Cable Networks(b)

    1,632        665        153       512       12       29,737  

Broadcast Television(c)

    888        35        21       14       5       6,615  

Filmed Entertainment(d)

    622        (143 )       4       (147     1       3,754  

Theme Parks(e)

    68        33        6       27       12       2,378  

Headquarters and Other(f)

    11        (96 )       22       (118     17       4,730  

Eliminations(h)

    (78     (36 )              (36            (435

NBCUniversal

    3,143        458        206       252       47       46,779  

Corporate and Other(g)

    188        (141 )       16       (157     6       6,539  

Eliminations(h)

    (287 )              (1     1              (15,712

Comcast Consolidated

  $ 12,128      $ 4,066      $ 1,842      $ 2,224      $ 1,106      $ 154,259   
    Three Months Ended March 31, 2010        
(in millions)   Revenue(i)     Operating
Income (Loss)
Before
Depreciation
and
Amortization(j)
    Depreciation
and
Amortization
    Operating
Income
(Loss)
    Capital
Expenditures
       

Cable Communications(a)

  $ 8,583      $ 3,480      $ 1,550      $ 1,930      $ 913     

Cable Networks(b)

    638        188        73       115       10    

Corporate and Other(g)

    71        (104 )       7       (111     2    

Eliminations(h)

    (90 )       1               1           

Comcast Consolidated

  $ 9,202      $ 3,565      $ 1,630      $ 1,935      $ 925     

 

(a)

Our Cable Communications segment consists primarily of our cable services business and the businesses of Comcast Interactive Media that were not contributed to NBCUniversal.

For the three months ended March 31, 2011 and 2010, Cable Communications segment revenue was derived from the following sources:

 

    Three Months Ended
March 31
 
         2011             2010      

Video

    53.8     56.0

High-speed Internet

    23.2     22.6

Phone

    9.5     9.4

Advertising

    5.0     4.8

Business services

    4.3     3.1

Other

    4.2     4.1

Total

    100.0     100.0

 

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Subscription revenue received from customers who purchase bundled services at a discounted rate is allocated proportionally to each service based on the individual service’s price on a stand-alone basis. For both the three months ended March 31, 2011 and 2010, approximately 2.8% of Cable Communications revenue was derived from franchise and other regulatory fees.

 

(b)

Our Cable Networks segment consists primarily of the Comcast Content Business and the historical NBCUniversal national cable programming networks, international entertainment and news and information networks, certain digital media properties and our cable television production operations.

 

(c)

Our Broadcast Television segment consists primarily of the NBC Network and its owned NBC affiliated local television stations, the Telemundo Network and its owned Telemundo affiliated local television stations, our television production operations, and our related digital media properties.

 

(d)

Our Filmed Entertainment segment consists of the operations of Universal Pictures, which produces, acquires, markets and distributes filmed entertainment and stage plays worldwide in various media formats for theatrical, home entertainment, television and other distribution platforms.

 

(e)

Our Theme Parks segment consists primarily of Universal Studios Hollywood theme park, Wet ‘n Wild water park, and fees for intellectual property licenses and other services from third parties that own and operate Universal Studios Japan and Universal Studios Singapore, as well as our 50% equity interest in UCDP and related fees.

 

(f)

NBCUniversal Headquarters and Other activities include costs associated with overhead and allocations, employee benefits and other initiatives.

 

(g)

Corporate and Other activities include Comcast Spectacor, corporate activities and all other businesses not presented in our other segments.

 

(h)

Included in the Eliminations columns are transactions that our segments enter into with one another. The most common types of transactions are the following:

 

   

our Cable Networks and Broadcast Television segments generate revenue by selling programming to our Cable Communications segment, which represents a substantial majority of the revenue elimination amount

 

 

   

our Cable Communications segment receives incentives offered by our Cable Networks segment when negotiating programming contracts that are recorded as a reduction to programming expenses

 

 

   

our Cable Communications segment generates revenue by selling advertising and by selling the use of satellite feeds to our Cable Networks segment

 

 

   

our Filmed Entertainment segment generates revenue by licensing content to our Cable Networks and Broadcast Television segments

 

 

(i)

Non-U.S. revenue, primarily in Europe and Asia, for the three months ended March 31, 2011, was approximately $621 million. Non-U.S. revenue was not significant for the three months ended March 31, 2010. No single customer accounted for a significant amount of our revenue in any period.

 

(j)

We use operating income (loss) before depreciation and amortization, excluding impairments related to fixed and intangible assets and gains or losses from the sale of assets, if any, to measure the profit or loss of our operating segments. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital structure or investment activities. In the Theme Parks segment, we also include the equity in income (loss) of investees in measuring operating income (loss) before depreciation and amortization. This amount is not included when we measure total NBCUniversal and our consolidated operating income (loss) before depreciation and amortization. We use this measure to evaluate our consolidated operating performance, the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that this measure is useful to investors because it is one of the bases for comparing our operating performance with other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. This measure should not be considered a substitute for operating income (loss), net income (loss) attributable to Comcast Corporation, net cash provided by operating activities, or other measures of performance or liquidity reported in accordance with GAAP.

Note 18: Condensed Consolidating Financial Information

Comcast Corporation and four of our 100% owned cable holding company subsidiaries, Comcast Cable Communications, LLC (“CCCL”), Comcast MO Group, Inc. (“Comcast MO Group”), Comcast Cable Holdings, LLC (“CCH”) and Comcast MO of Delaware, LLC (“Comcast MO of Delaware”), have fully and unconditionally guaranteed each other’s debt securities. Comcast MO Group, CCH and Comcast MO of Delaware are collectively referred to as the “Combined CCHMO Parents.”

Comcast Corporation provides an unconditional subordinated guarantee of the $185 million principal amount currently outstanding of Comcast Holdings’ ZONES due October 2029 and the $202 million principal amount currently outstanding of Comcast Holdings’ 105/8% senior subordinated debentures due 2012. Comcast Corporation does not guarantee the $62 million principal amount currently outstanding of Comcast Holdings’ ZONES due November 2029.

 

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As a result of the NBCUniversal transaction on January 28, 2011, our investments in NBCUniversal Holdings are held by the Comcast Corporation Parent (“Comcast Parent”) and Comcast Holdings. Certain entities of the Comcast Content Business were subsidiaries of Comcast Holdings. Since these entities were contributed to NBCUniversal Holdings, they are included with the Comcast Parent’s investment in NBCUniversal Holdings. However, the operations of these businesses are presented in the non-guarantor subsidiaries column. Our condensed consolidating financial information is presented in the tables below.

Comcast Corporation

Condensed Consolidating Balance Sheet

March 31, 2011

 

(in millions)  

Comcast

Parent

    

CCCL

Parent

    

Combined

CCHMO

Parents

    

Comcast

Holdings

    

Non-

Guarantor

Subsidiaries

    

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

ASSETS

                  

Cash and cash equivalents

  $       $       $       $       $ 1,822       $      $ 1,822   

Investments

                                    74               74  

Receivables, net

                                    3,708               3,708  

Programming rights

                                    776               776  

Other current assets

    160        2        1                1,004                1,167  

Total current assets

    160        2        1                7,384               7,547  

Film and television costs

                                    4,945               4,945  

Investments

                                    10,711               10,711  

Investments in and amounts due from subsidiaries eliminated upon consolidation

    71,906        90,746        48,009        89,877        48,782        (349,320       

Property and equipment, net

    272                                24,639               24,911  

Franchise rights

                                    59,442               59,442  

Goodwill

                                    27,001               27,001  

Other intangible assets, net

    9                                17,716               17,725  

Other noncurrent assets, net

    1,027        37        4        148        1,542        (781     1,977  

Total assets

  $ 73,374       $ 90,785       $ 48,014       $ 90,025       $ 202,162       $ (350,101   $ 154,259   

LIABILITIES AND EQUITY

                  

Accounts payable and accrued expenses related to trade creditors

  $ 7       $       $       $       $ 4,851       $      $ 4,858   

Accrued participations and residuals

                                    1,152               1,152  

Accrued expenses and other current liabilities

    955        259        32        259        3,936               5,441  

Current portion of long-term debt

    1,690                563                43               2,296  

Total current liabilities

    2,652        259        595        259        9,982               13,747  

Long-term debt, less current portion

    22,747        3,955        1,770        307        9,351               38,130  

Deferred income taxes

                            712        28,845        (638     28,919  

Other noncurrent liabilities

    1,647                                10,113        (143     11,617  

Redeemable noncontrolling interests

                                    15,239               15,239  

Equity:

                  

Common stock

    31                                               31  

Other shareholders’ equity

    46,297        86,571        45,649        88,747        128,353        (349,320     46,297  

Total Comcast Corporation shareholders’ equity

    46,328        86,571        45,649        88,747        128,353        (349,320     46,328  

Noncontrolling interests

                                    279               279  

Total equity

    46,328        86,571        45,649        88,747        128,632        (349,320     46,607  

Total liabilities and equity

  $ 73,374       $ 90,785       $ 48,014       $ 90,025       $ 202,162       $ (350,101   $ 154,259   

 

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Comcast Corporation

Condensed Consolidating Balance Sheet

December 31, 2010

 

(in millions)  

Comcast

Parent

   

CCCL

Parent

   

Combined

CCHMO

Parents

   

Comcast

Holdings

   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

ASSETS

             

Cash and cash equivalents

  $  —      $  —      $  —      $  —      $ 5,984      $  —      $ 5,984   

Investments

                                81              81  

Receivables, net

                                1,855              1,855  

Programming rights

                                122              122  

Other current assets

    162                            682              844  

Total current assets

    162                            8,724              8,886  

Film and television costs

            460         460  

Investments

                                6,670              6,670  

Investments in and amounts due from subsidiaries eliminated upon consolidation

    68,987       90,076       52,652       72,629       12,339       (296,683       

Property and equipment, net

    278                            23,237              23,515  

Franchise rights

                                59,442              59,442  

Goodwill

                                14,958              14,958  

Other intangible assets, net

    10                            3,421              3,431  

Other noncurrent assets, net

    1,128       45              148       670       (819     1,172  

Total assets

  $ 70,565      $ 90,121      $ 52,652      $ 72,777      $ 129,921      $ (297,502   $ 118,534   

LIABILITIES AND EQUITY

             

Accounts payable and accrued expenses related to trade creditors

  $ 6      $ 3      $      $      $ 3,282      $      $ 3,291   

Accrued expenses and other current liabilities

    1,038       187       74       266       1,578              3,143  

Current portion of long-term debt

    755       1,000                     45              1,800  

Total current liabilities

    1,799       1,190       74       266       4,905              8,234  

Long-term debt, less current portion

    22,754       3,963       2,339       310       249              29,615  

Deferred income taxes

                         704       28,218       (676     28,246  

Other noncurrent liabilities

    1,658                            6,347       (143     7,862  

Redeemable noncontrolling interests

                                143              143  

Equity:

             

Common stock

    32                                          32  

Other shareholders’ equity

    44,322       84,968       50,239       71,497       89,979       (296,683     44,322  

Total Comcast Corporation shareholders’ equity

    44,354       84,968       50,239       71,497       89,979       (296,683     44,354  

Noncontrolling interests

                                80              80  

Total equity

    44,354       84,968       50,239       71,497       90,059       (296,683     44,434  

Total liabilities and equity

  $ 70,565      $ 90,121      $ 52,652      $ 72,777      $ 129,921      $ (297,502   $ 118,534   

 

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Table of Contents

Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended March 31, 2011

 

(in millions)  

Comcast

Parent

   

CCCL

Parent

   

Combined

CCHMO

Parents

   

Comcast

Holdings

   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Revenue:

             

Service revenue

  $  —      $  —      $  —      $  —      $ 12,128      $  —      $ 12,128   

Management fee revenue

    198       185       115                     (498       
      198       185       115              12,128       (498     12,128  

Costs and Expenses:

             

Operating costs and expenses (excluding depreciation and amortization)

    148       185       115       5       8,107       (498     8,062  

Depreciation

    7                            1,479              1,486  

Amortization

    1                            355              356  
      156       185       115       5       9,941       (498     9,904  

Operating income (loss)

    42                     (5     2,187              2,224  

Other Income (Expense):

             

Interest expense

    (361     (91     (43     (8     (102            (605

Investment income (loss), net

    1                     4       84              89  

Equity in net income (losses) of investees, net

    1,161       1,323       794       1,292       (37     (4,570     (37

Other income (expense), net

    (17                   1       (20            (36
      784       1,232       751       1,289       (75     (4,570     (589

Income (loss) before income taxes

    826       1,232       751       1,284       2,112       (4,570     1,635  

Income tax (expense) benefit

    117       32       15       3       (763            (596

Net income (loss) from consolidated operations

    943       1,264       766       1,287       1,349       (4,570     1,039  

Net (income) loss attributable to noncontrolling interests

                                (96            (96

Net income (loss) attributable to Comcast Corporation

  $ 943      $ 1,264      $ 766      $ 1,287      $ 1,253      $ (4,570   $ 943   

 

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Table of Contents

Comcast Corporation

Condensed Consolidating Statement of Income

For the Three Months Ended March 31, 2010

 

(in millions)  

Comcast

Parent

   

CCCL

Parent

   

Combined

CCHMO

Parents

   

Comcast

Holdings

   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

   

Consolidated

Comcast

Corporation

 

Revenue:

             

Service revenue

  $  —      $  —      $  —      $  —      $ 9,202      $  —      $ 9,202   

Management fee revenue

    196       237       110                     (543       
      196       237       110              9,202       (543     9,202  

Costs and Expenses:

             

Operating costs and expenses (excluding depreciation and amortization)

    112       237       110       14       5,707       (543     5,637  

Depreciation

    7                            1,372              1,379  

Amortization

                                251              251  
      119       237       110       14       7,330       (543     7,267  

Operating income (loss)

    77                     (14     1,872              1,935  

Other Income (Expense):

             

Interest expense

    (335     (102     (43     (8     (36            (524

Investment income (loss), net

    2                     1       98              101  

Equity in net income (losses) of investees, net

    1,041       1,170       682       1,155       (32     (4,048     (32

Other income (expense), net

    (13                          3              (10
      695       1,068       639       1,148       33       (4,048     (465

Income (loss) before income taxes

    772       1,068       639       1,134       1,905       (4,048     1,470  

Income tax (expense) benefit

    94       35       15       7       (742            (591

Net income (loss) from consolidated operations

    866       1,103       654       1,141       1,163       (4,048     879  

Net (income) loss attributable to noncontrolling interests

                                (13            (13

Net income (loss) attributable to Comcast Corporation

  $ 866      $ 1,103      $ 654      $ 1,141      $ 1,150      $ (4,048   $ 866   

 

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Table of Contents

Comcast Corporation

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2011

 

(in millions)  

Comcast

Parent

   

CCCL

Parent

   

Combined

CCHMO

Parents

   

Comcast

Holdings

   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

    

Consolidated

Comcast

Corporation

 

Net cash provided by (used in) operating activities

  $ (210   $ 24      $ (75   $ (15   $ 3,744      $  —       $ 3,468   

Investing Activities:

              

Net transactions with affiliates

    (102     976       75       15       (964               

Capital expenditures

    (2                          (1,104             (1,106

Cash paid for intangible assets

                                (123             (123

Acquisitions, net of cash acquired

                                (5,658             (5,658

Proceeds from sales of investments

                                18               18  

Purchases of investments

                                (16             (16

Other

                                (2             (2

Net cash provided by (used in) investing activities

    (104     976       75       15       (7,849             (6,887

Financing Activities:

              

Proceeds from (repayments of) short-term borrowings, net

    1,688                            (11             1,677  

Proceeds from borrowings

                                                 

Repurchases and repayments of debt

    (750     (1,000                   (9             (1,759

Repurchases of common stock

    (525                                         (525

Dividends paid

    (261                                         (261

Distributions to noncontrolling interests

                                (46             (46

Other

    162                            9               171  

Net cash provided by (used in) financing activities

    314       (1,000                   (57             (743

Increase (decrease) in cash and cash equivalents

                                (4,162             (4,162

Cash and cash equivalents, beginning of period

                                5,984               5,984  

Cash and cash equivalents, end of period

  $  —      $  —      $  —      $  —      $ 1,822      $  —       $ 1,822   

 

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Table of Contents

Comcast Corporation

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2010

 

(in millions)  

Comcast

Parent

   

CCCL

Parent

   

Combined

CCHMO

Parents

   

Comcast

Holdings

   

Non-

Guarantor

Subsidiaries

   

Elimination

and

Consolidation

Adjustments

    

Consolidated

Comcast

Corporation

 

Net cash provided by (used in) operating activities

  $ (1,178   $ 25      $ (76   $ (19   $ 4,151      $  —       $ 2,903   

Investing Activities:

              

Net transactions with affiliates

    12       (25     76       19       (82               

Capital expenditures

    (1                          (924             (925

Cash paid for intangible assets

                                (117             (117

Acquisitions, net of cash acquired

                                (172             (172

Proceeds from sales of investments

                                1               1  

Purchases of investments

                                (24             (24

Other

                                (19             (19

Net cash provided by (used in) investing activities

    11       (25     76       19       (1,337