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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
iClass
A Common Stock, $0.01 par value
iCMCSA
iThe Nasdaq Stock Market LLC
i0.000%
Notes due 2026
iCMCS26
iThe Nasdaq Stock Market LLC
i0.250%
Notes due 2027
iCMCS27
iThe Nasdaq Stock Market LLC
i1.500%
Notes due 2029
iCMCS29
iThe Nasdaq Stock Market LLC
i0.250%
Notes due 2029
iCMCS29A
iThe Nasdaq Stock Market LLC
i0.750%
Notes due 2032
iCMCS32
iThe Nasdaq Stock Market LLC
i1.875%
Notes due 2036
iCMCS36
iThe Nasdaq Stock Market LLC
i1.250%
Notes due 2040
iCMCS40
iThe Nasdaq Stock Market LLC
i9.455%
Guaranteed Notes due 2022
iCMCSA/22
iNew York Stock Exchange
i5.50%
Notes due 2029
iCCGBP29
iNew York Stock Exchange
i2.0%
Exchangeable Subordinated Debentures due 2029
iCCZ
iNew York Stock Exchange
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. iYes☒No ☐
Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). iYes☒No ☐
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,”“accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
iLarge
accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
i☐
Emerging growth
company
i☐
If an emerging growth company, indicate by check mark if the registrant has elected not
to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i☐No ☒
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date:
As of March 31, 2022, there were i4,471,872,439 shares of Comcast Corporation Class A common stock and i9,444,375
shares of Class B common stock outstanding.
This Quarterly Report on Form 10-Q is for the three months ended March 31, 2022. This Quarterly Report on Form 10-Q modifies and supersedes documents filed before it. The U.S. Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report on Form 10-Q. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report on Form 10-Q.
Unless indicated otherwise, throughout this Quarterly Report
on Form 10-Q, we refer to Comcast and its consolidated subsidiaries, as “Comcast,”“we,”“us” and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast Holdings;” NBCUniversal Media, LLC and its consolidated subsidiaries as “NBCUniversal;” and Sky Limited and its consolidated subsidiaries as “Sky.”
Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage
calculations may exist due to rounding.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. These may include estimates, projections and statements relating to our business plans, objectives and expected operating results, which are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially.
These forward-looking statements are generally identified by the words “believe,”“project,”“expect,”“anticipate,”“estimate,”“intend,”“potential,”“strategy,”“future,”“opportunity,”“commit,”“plan,”“goal,”“may,”“should,”“could,”“will,”“would,”“will be,”“will continue,”“will likely result” and similar expressions.
In evaluating forward-looking statements, you should consider various factors, including the risks and uncertainties we describe in the “Risk Factors” sections of our Forms 10-K and 10-Q and other reports we file with the SEC. Additionally, we operate in a highly competitive, consumer-driven and rapidly changing environment. This environment is affected by government regulation; economic, strategic, political and social conditions; consumer response
to new and existing products and services; technological developments; and the ability to develop and protect intellectual property rights. Any of these factors could cause
our actual results to differ materially from our forward-looking statements, which could adversely affect our businesses, results of operations or financial condition. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise.
Our businesses may be affected by, among other things, the following:
•the
COVID-19 pandemic has had, and may continue to have, a material adverse effect on our businesses and results of operations
•our businesses operate in highly competitive and dynamic industries, and our businesses and results of operations could be adversely affected if we do not compete effectively
•changes in consumer behavior continue to adversely affect our businesses and challenge existing business models
•a decline in advertisers’ expenditures or changes in advertising markets could negatively impact our businesses
•programming expenses for our video services are increasing, which could adversely affect Cable Communications’ video businesses
•NBCUniversal’s
and Sky’s success depends on consumer acceptance of their content, and their businesses may be adversely affected if their content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase
•the loss of programming distribution and licensing agreements, or the renewal of these agreements on less favorable terms, could adversely affect our businesses
•less favorable European telecommunications access regulations, the loss of Sky’s transmission access agreements with satellite or telecommunications providers or the renewal of these agreements on less favorable terms could adversely affect Sky’s businesses
•our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property
rights of others
•we may be unable to obtain necessary hardware, software and operational support
•our businesses depend on keeping pace with technological developments
•a cyber attack, information or security breach, or technology disruption or failure may negatively impact our ability to conduct our business or result in the misuse of confidential information, all of which could adversely affect our business, reputation and results of operations
•weak economic conditions may have a negative impact on our businesses
•acquisitions and other strategic initiatives present many risks, and we may not realize the financial and strategic
goals that we had contemplated
•we face risks relating to doing business internationally that could adversely affect our businesses
•natural disasters, severe weather and other uncontrollable events could adversely affect our business, reputation and results of operations
•the loss of key management personnel or popular on-air and creative talent could have an adverse effect on our businesses
•we are subject to regulation by federal, state, local and foreign authorities, which impose additional costs and restrictions on our businesses
•unfavorable litigation or governmental investigation results could require us to pay significant amounts
or lead to onerous operating procedures
•labor disputes, whether involving employees or sports organizations, may disrupt our operations and adversely affect our businesses
•our Class B common stock has substantial voting rights and separate approval rights over several potentially material transactions, and our Chairman and CEO has considerable influence over our company through his beneficial ownership of our Class B common stock
Class
A common stock, $ii0.01/ par value—authorized, ii7,500,000,000/
shares; issued, i5,344,663,467 and i5,396,576,978; outstanding, i4,471,872,439
and i4,523,785,950
i53
i54
Class
B common stock, $ii0.01/ par value—authorized, ii75,000,000/
shares; issued and outstanding, iiii9,444,375///
i—
i—
Additional
paid-in capital
i39,926
i40,173
Retained
earnings
i61,555
i61,902
Treasury
stock, ii872,791,028/ Class A common shares
(i7,517)
(i7,517)
Accumulated
other comprehensive income (loss)
i674
i1,480
Total
Comcast Corporation shareholders’ equity
i94,693
i96,092
Noncontrolling
interests
i1,300
i1,398
Total
equity
i95,992
i97,490
Total
liabilities and equity
$
i274,074
$
i275,905
See
accompanying notes to condensed consolidated financial statements.
iWe have prepared these unaudited condensed consolidated financial statements based on SEC rules that permit reduced disclosure for interim periods. These financial statements include all adjustments that are necessary for a fair presentation of our consolidated results of operations, cash flows and financial condition for the periods shown, including normal, recurring accruals and other items. The consolidated results
of operations for the interim periods presented are not necessarily indicative of results for the full year.
The year-end condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). For a more complete discussion of our accounting policies and certain other information, refer to our consolidated financial statements included in our 2021 Annual Report on Form 10-K and the notes within this Form 10-Q.
Note 2: iSegment
Information
We present our operations in ifive reportable business segments: (1) Comcast Cable in ione reportable
business segment, referred to as Cable Communications; (2) NBCUniversal in ithree reportable business segments: Media, Studios and Theme Parks (collectively, the “NBCUniversal segments”); and (3) Sky in ione
reportable business segment.
Cable Communications is a leading provider of broadband, video, voice, wireless, and other services to residential customers in the United States under the Xfinity brand. We also provide these and other services to business customers and sell advertising.
Media consists primarily of NBCUniversal’s television and streaming platforms, including national, regional and international cable networks; the NBC and Telemundo broadcast networks; NBC and Telemundo owned local broadcast television stations; and Peacock, our direct-to-consumer streaming service.
Studios consists primarily of NBCUniversal’s film and television studio production and distribution operations.
Theme Parks consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; Osaka,
Japan; and Beijing, China.
Sky is one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business, providing video, broadband, voice and wireless phone services, and a content business, operating entertainment networks, the Sky News broadcast network and Sky Sports networks.
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania, and other business initiatives, including Sky Glass and XClass TV smart televisions.
We use Adjusted EBITDA to evaluate the profitability of our operating segments and the components of net income attributable to Comcast Corporation excluded from Adjusted EBITDA are not separately evaluated. iOur
financial data by reportable segment is presented in the tables below.
(a)Included in Eliminations are transactions that our segments enter into with one another. Our segments generally report transactions with one another as if they were stand-alone businesses in accordance with GAAP, and these transactions are eliminated in consolidation. When multiple segments enter into transactions to provide products and services to third parties, revenue is generally allocated to our segments based on relative value. The most significant transactions between our segments include content licensing revenue in Studios for licenses of owned content to Media and Sky; distribution revenue in Media for fees received from Cable Communications for the sale of cable network programming and under retransmission consent agreements; and advertising revenue in Media and Cable Communications.
Revenue for licenses of content from Studios to Media and Sky is generally recognized at a point in time, consistent with the recognition of transactions with third parties, when the content is delivered and made available for use. The costs of these licenses in Media and Sky are recognized as the content is used over the license period. The difference in timing of recognition between segments results in an Adjusted EBITDA impact in eliminations, as the profits (losses) on these transactions are deferred in our consolidated results and recognized as the content is used over the license period.
A summary of revenue for each of our segments resulting from transactions with other segments and eliminated in consolidation is presented in the table below.
Three
Months Ended March 31,
(in millions)
2022
2021
Cable Communications
$
i56
$
i45
NBCUniversal
Media
i669
i540
Studios
i939
i1,089
Theme
Parks
i—
i1
Headquarters
and Other
i12
i12
Sky
i5
i8
Corporate
and Other
i58
i58
Total
intersegment revenue
$
i1,741
$
i1,753
(b)We
use Adjusted EBITDA as the measure of profit or loss for our operating segments. From time to time we may report the impact of certain events, gains, losses or other charges related to our operating segments within Corporate and Other. iOur reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated income before income taxes is presented in the table below.
Three
Months Ended March 31,
(in millions)
2022
2021
Adjusted EBITDA
$
i9,150
$
i8,413
Adjustments
(i33)
(i12)
Depreciation
(i2,213)
(i2,117)
Amortization
(i1,335)
(i1,245)
Interest
expense
(i993)
(i1,018)
Investment
and other income (loss), net
i188
i390
Income
before income taxes
$
i4,764
$
i4,411
Adjustments
represent the impact of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including costs related to our investment portfolio, and Sky transaction-related costs in 2021.
(a)Included
in Eliminations are transactions that our segments enter into with one another. See Note 2 for a description of these transactions.
/
Condensed Consolidated Balance Sheet
i
The following tables summarize our accounts receivable and other balances that are not separately presented in our condensed consolidated balance sheet that relate to the recognition of revenue
and collection of the related cash, as well as the deferred costs associated with our contracts with customers.
(a)
Amount includes amortization of owned content of $i2.0 billion and $i1.6 billion for the three months ended March 31, 2022
and 2021, respectively, as well as participations and residuals expenses.
As of March 31, 2022, our debt had a carrying value of $i94.6 billion and an estimated
fair value of $i99.8 billion. As of December 31, 2021, our debt had a carrying value of $i94.8 billion and an estimated fair value of
$i109.3 billion. The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market value for the debt. The estimated fair value of debt for which there are no quoted market prices was based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
Note 6: iSignificant
Transactions
Acquisitions
In October 2021, we acquired Masergy, a provider of software-defined networking and cloud platforms for global enterprises, for total cash consideration of $i1.2 billion. The acquisition accelerates our growth in serving large and mid-sized companies, particularly U.S.-based organizations with multi-site global enterprises. Masergy’s results of operations are included in our consolidated results of operations
since the acquisition date and are reported in our Cable Communications segment. We have recorded a preliminary estimate of Masergy’s assets and liabilities with approximately $i850 million recorded to goodwill and the remainder primarily attributed to software and customer relationship intangible assets. These estimates are not yet final and are subject to change. The acquisition was not material to our consolidated results of operations.
Note 7: iInvestments and Variable Interest Entities
i
Investment
and Other Income (Loss), Net
Three Months Ended March 31,
(in millions)
2022
2021
Equity
in net income (losses) of investees, net
$
i133
$
i136
Realized
and unrealized gains (losses) on equity securities, net
i117
i237
Other
income (loss), net
(i62)
i17
Investment
and other income (loss), net
$
i188
$
i390
/
The
amount of unrealized gains (losses), net recognized in the three months ended March 31, 2022 and 2021 that related to marketable and nonmarketable equity securities still held as of the end of each reporting period was $i90 million and $i98 million,
respectively.
The amount of cash distributions received from equity method investments presented within operating activities in the condensed consolidated statement of cash flows in the three months ended March 31, 2022 and 2021 was $i32 million and $i115
million, respectively.
Atairos
Atairos is a variable interest entity (“VIE”) that follows investment company accounting and records its investments at their fair values each reporting period with the net gains or losses reflected in its statement of operations. We recognize our share of these gains and losses in equity in net income (losses) of investees, net. For the three months ended March 31, 2022 and 2021, we made cash capital contributions to Atairos totaling $i13
million and $i12 million, respectively. As of March 31, 2022 and December 31, 2021, our investment in Atairos, inclusive of certain distributions retained by Atairos on our behalf and classified as advances within other investments, was $i4.8
billion and $i4.7 billion, respectively. As of March 31, 2022, our remaining unfunded capital commitment was $i1.5
billion.
Hulu and Collateralized Obligation
In 2019, we borrowed $i5.2 billion under a term loan facility due March 2024 which is fully collateralized by the minimum guaranteed proceeds of the put/call option related to our investment in Hulu. As of March 31, 2022 and December 31, 2021, the carrying value and estimated fair value of our collateralized obligation were
$iiii5.2///
billion. The estimated fair value was based on Level 2 inputs that use interest rates for debt with similar terms and remaining maturities. We present our investment in Hulu and the term loan separately in our condensed consolidated balance sheet in the captions “investment securing collateralized obligation” and “collateralized obligation,” respectively. The recorded value of our investment reflects our historical cost in applying the equity method, and as a result, is less than its fair value.
Consolidated Variable Interest Entity
Universal Beijing Resort
We own a i30%
interest in a Universal theme park and resort in Beijing, China (“Universal Beijing Resort”), which opened in September 2021. Universal Beijing Resort is a consolidated VIE with the remaining interest owned by a consortium of Chinese state-owned companies. The construction was funded through a combination of debt financing and equity contributions from
the partners in accordance with their equity interests. As of March 31, 2022, Universal Beijing Resort had $i3.7
billion of debt outstanding, including $i3.3 billion principal amount of a term loan outstanding under the debt financing agreement.
As of March 31, 2022, our condensed consolidated balance sheet included assets and liabilities of Universal Beijing Resort totaling $i9.6
billion and $i8.1 billion, respectively. The assets and liabilities of Universal Beijing Resort primarily consist of property and equipment, operating lease assets and liabilities, and debt.
Note 8: iEquity
and Share-Based Compensation
i
Weighted-Average Common Shares Outstanding
Three
Months Ended March 31,
(in millions)
2022
2021
Weighted-average number of common shares outstanding – basic
i4,512
i4,591
Effect
of dilutive securities
i46
i74
Weighted-average
number of common shares outstanding – diluted
i4,558
i4,665
/
iDiluted
earnings per common share attributable to Comcast Corporation shareholders (“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. The amount of potential common shares related to our share-based compensation plans that were excluded from diluted EPS because their effect would have been antidilutive was not material in any of the periods presented.
Unrecognized
gains (losses) on employee benefit obligations and other
i248
i257
Accumulated
other comprehensive income (loss), net of deferred taxes
$
i674
$
i1,480
/
Share-Based
Compensation
Our share-based compensation plans consist primarily of awards of RSUs and stock options to certain employees and directors as part of our approach to long-term incentive compensation. Additionally, through our employee stock purchase plans, employees are able to purchase shares of our common stock at a discount through payroll deductions.
In March 2022, we granted i16
million RSUs and i51 million stock options related to our annual management awards. The weighted-average fair values associated with these grants were $i46.46
per RSU and $i8.81 per stock option.
i
Recognized
Share-Based Compensation Expense
Three Months Ended March 31,
(in millions)
2022
2021
Restricted
share units
$
i197
$
i206
Stock
options
i91
i90
Employee
stock purchase plans
i12
i11
Total
$
i300
$
i307
/
As
of March 31, 2022, we had unrecognized pretax compensation expense of $i1.7 billion and $i868
million related to nonvested RSUs and nonvested stock options, respectively.
•we recognized operating lease assets and liabilities of $i2.8
billion related to Universal Beijing Resort
•we acquired $i1.6 billion of property and equipment and intangible assets that were accrued but unpaid
•we recorded a liability of $i1.2
billion for a quarterly cash dividend of $i0.25 per common share paid in April 2021
Cash, Cash Equivalents and Restricted Cash
ii
The
following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheet to the total of the amounts reported in our condensed consolidated statement of cash flows.
Restricted
cash included in other noncurrent assets, net
i12
i12
Cash,
cash equivalents and restricted cash, end of period
$
i8,914
$
i8,778
//
Note
10: iCommitments and Contingencies
Redeemable Subsidiary Preferred Stock
In the first quarter of 2021, we redeemed all of the NBCUniversal Enterprise, Inc. preferred stock and made cash payments equal to the aggregate liquidation preference of $i725 million.
The redeemable subsidiary preferred stock was presented in redeemable noncontrolling interests.
Contingencies
We are subject to legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal proceedings or claims could be time-consuming and injure our reputation.
ITEM 2:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our 2021 Annual Report on Form 10-K.
Overview
We are a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal and Sky. We present our operations in five reportable business segments (1) Comcast Cable in one reportable business segment, referred to as Cable Communications; (2) NBCUniversal in three reportable business segments: Media, Studios and Theme Parks (collectively,
the “NBCUniversal segments”); and (3) Sky in one reportable business segment.
Impacts of COVID-19
COVID-19 and measures taken to prevent its spread across the globe have impacted our businesses in a number of ways, affecting the comparability of periods included in this report. The most significant continuing impacts to our businesses from COVID-19 have resulted from temporary restrictions at our international theme parks. We expect the effects of the COVID-19 pandemic will continue to adversely impact our results of operations over the near to medium term, although the extent of such impact will depend on restrictive governmental measures, U.S. and global economic conditions, and consumer behavior.
Consolidated
Operating Results
Three Months Ended March 31,
Increase/
(Decrease)
(in
millions, except per share data)
2022
2021
%
Revenue
$
31,010
$
27,205
14.0
%
Costs
and Expenses:
Programming and production
10,570
8,919
18.5
Other operating
and administrative
9,260
8,269
12.0
Advertising, marketing and promotion
2,062
1,616
27.6
Depreciation
2,213
2,117
4.5
Amortization
1,335
1,245
7.3
Total costs and expenses
25,440
22,166
14.8
Operating
income
5,569
5,039
10.5
Interest expense
(993)
(1,018)
(2.4)
Investment
and other income (loss), net
188
390
(52.0)
Income before income taxes
4,764
4,411
8.0
Income
tax expense
(1,288)
(1,119)
15.1
Net income
3,476
3,292
5.6
Less:
Net income (loss) attributable to noncontrolling interests
(73)
(37)
97.4
Net income attributable to Comcast Corporation
$
3,549
$
3,329
6.6
%
Basic
earnings per common share attributable to Comcast Corporation shareholders
$
0.79
$
0.73
8.2
%
Diluted earnings per common share attributable to Comcast Corporation shareholders
$
0.78
$
0.71
9.9
%
Adjusted
EBITDA(a)
$
9,150
$
8,413
8.8
%
(a)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 24 for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation
from net income attributable to Comcast Corporation to Adjusted EBITDA.
Consolidated Revenue
Consolidated revenue increased for the three months ended March 31, 2022, driven by Media, Theme Parks, Cable Communications and Studios, partially offset by decreases in revenue in Sky.
Revenue for our segments and other businesses is discussed separately below under the heading “Segment Operating Results.”
Consolidated
operating costs and expenses, which is comprised of total costs and expenses excluding depreciation and amortization expense, increased for the three months ended March 31, 2022, driven by Media, Studios, Theme Parks and Cable Communications, partially offset by decreases in operating costs and expenses in Sky.
Operating costs and expenses for our segments and our corporate operations, businesses development initiatives and other businesses are discussed separately below under the heading “Segment Operating Results.”
Consolidated Depreciation and Amortization Expense
Three
Months Ended March 31,
Increase/
(Decrease)
(in millions)
2022
2021
%
Cable Communications
$
1,960
$
1,929
1.6
%
NBCUniversal
662
583
13.6
Sky
870
814
7.0
Corporate
and Other
56
36
55.2
Comcast Consolidated
$
3,548
$
3,362
5.5
%
Consolidated
depreciation and amortization expense increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increased depreciation at NBCUniversal driven by the opening of Universal Beijing Resort and increased amortization at Sky driven by increased amortization of software.
Amortization expense from acquisition-related intangible assets totaled $592 million for both the three months ended March 31, 2022 and 2021. Amounts primarily relate to customer relationship intangible assets recorded in connection with the Sky transaction in the fourth quarter of 2018 and the NBCUniversal transaction in 2011.
Consolidated
Interest Expense
Interest expense decreased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to a decrease in average debt outstanding in the current year period.
Consolidated Investment and Other Income (Loss), Net
Three
Months Ended March 31,
Increase/ (Decrease)
(in millions)
2022
2021
%
Equity in net income (losses) of investees, net
$
133
$
136
(2.2)
%
Realized
and unrealized gains (losses) on equity securities, net
117
237
(50.7)
Other income (loss), net
(62)
17
NM
Total
investment and other income (loss), net
$
188
$
390
(52.0)
%
Percentage changes that are considered not meaningful are denoted with NM.
The change in investment and other income (loss), net for the three months ended March 31,
2022 compared to the same period in 2021 was primarily due to realized and unrealized gains (losses) on equity securities, net and other income (loss), net. The change in realized and unrealized gains (losses) on equity securities, net for the three months ended March 31, 2022 compared to the same period in 2021 primarily resulted from losses on marketable securities in the current year period compared to gains in the prior year period, partially offset by increased gains from fair value adjustments for nonmarketable equity securities in the current year period. The change in other income (loss), net for the three months ended March 31, 2022 compared to the same period in 2021 primarily resulted from losses on insurance contracts
and net losses on foreign exchange remeasurement in the current year period. Equity in net income (losses) of investees, net was consistent with the prior year period and included income for our investment in Atairos of $78 million and $77 million for the three months ended March 31, 2022 and 2021, respectively.
Consolidated Income Tax Expense
Income tax expense for the three months ended March 31, 2022 and 2021 reflects an effective income tax rate that differs from the federal statutory rate primarily
due to state and foreign income taxes and adjustments associated with uncertain tax positions. The increase in income tax expense for the three months ended March 31, 2022 compared to the same period in 2021 was primarily driven by tax benefits recognized on share-based compensation plans and higher income before income taxes.
Consolidated Net Income (Loss) Attributable to Noncontrolling Interests
The changes in net income (loss) attributable to noncontrolling interests for the three months ended March 31,
2022 compared to the same period in 2021 was primarily due to decreased losses at Universal Beijing Resort due to operations in the current year period compared to pre-opening costs in the prior year period in advance of the park’s opening in September 2021 (see Note 7).
Segment Operating Results
Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use Adjusted EBITDA as the measure of profit or loss for our operating segments.
See Note 2 for our definition of Adjusted EBITDA and a reconciliation from the aggregate amount of Adjusted EBITDA for our reportable business segments to consolidated
income before income taxes.
Cable Communications Segment Results of Operations
Customer metrics are presented based on actual amounts. Customer relationships represent the number of residential and business customers that subscribe to at least one of our services. One product, two product, and three or more product customers represent residential customers that subscribe
to one, two, or three or more of our services, respectively. For multiple dwelling units (“MDUs”), including buildings located on college campuses, whose residents have the ability to receive additional services, such as additional programming choices or our high-definition video (“HD”) or digital video recorder (“DVR”) services, we count and report customers based on the number of potential billable relationships within each MDU. For MDUs whose residents are not able to receive additional services, the MDU is counted as a single customer. Residential broadband and video customer metrics include certain customers that have prepaid for services. Business customers are generally counted based on the number of locations receiving services within our distribution system, with certain offerings such as Ethernet network services counted as individual customer relationships. Wireless lines represent the number of activated, eligible
wireless devices on customers’ accounts. Individual customer relationships may have multiple wireless lines. Customer metrics in 2021 did not include customers in certain pandemic-related programs through which portions of our customers temporarily received our services for free. These programs ended in December 2021, resulting in a one-time benefit to net additions in the three months ended March 31, 2022.
Three
Months Ended March 31,
Increase/(Decrease)
2022
2021
%
Average monthly total revenue per customer relationship
$
160.67
$
158.17
1.6
%
Average
monthly Adjusted EBITDA per customer relationship
$
70.64
$
68.35
3.3
%
Average monthly total revenue per customer relationship is impacted by rate adjustments and changes in the types and levels of services received by our residential and business services customers, as well as changes in advertising revenue. While revenue from our residential broadband, video and voice services is also impacted by
changes in the allocation of revenue among services sold in a bundle, the allocation does not impact average monthly total revenue per customer relationship. Each of our services has a different contribution to operating margin. We use average monthly Adjusted EBITDA per customer relationship to evaluate the profitability of our customer base across our service offerings. We believe both metrics are useful to understand the trends in our business, and average monthly Adjusted EBITDA per customer relationship is useful particularly as we continue to focus on growing our higher-margin businesses.
Cable Communications Segment – Revenue
Broadband
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 due to an increase in the number of residential broadband
customers and an increase in average rates.
Revenue decreased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to a decline in the number of residential video customers, partially offset by an increase in average rates. We expect that the number of residential video customers will continue to decline, negatively impacting video revenue as a result of the competitive environment and shifting video consumption patterns.
Voice
Revenue
decreased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to a decline in the number of residential voice customers. We expect that the number of residential voice customers and voice revenue will continue to decline.
Wireless
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to an increase in the number of customer lines.
Business Services
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in average rates and customer relationships compared to the
prior year period and due to the acquisition of Masergy in October 2021.
Advertising
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in political advertising, advertising at our Xumo streaming service and revenue from our advanced advertising businesses.
Other
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 due to increases in revenue from licensing of our technology platforms and from our security and automation services.
Cable Communications Segment – Operating Costs and Expenses
Programming
expenses decreased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to a decline in the number of video subscribers, partially offset by contractual rate increases.
Technical and product support expenses increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to an increase in costs associated with our wireless phone service resulting from increases in the number of customers receiving the service and device sales, and the acquisition of Masergy.
Customer service expenses decreased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to lower labor costs as a result of reduced call volumes.
Advertising,
marketing and promotion expenses increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increased spending associated with attracting new customers and promoting our service offerings, including advertising expenses associated with the Beijing Olympics.
Franchise and other regulatory fees decreased for the three months endedMarch 31, 2022 compared to the same period in 2021 primarily due to a decrease in regulatory costs.
Other operating costs and expenses increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to lower levels of bad debt expense in the prior year period, and higher personnel
and other overhead costs.
Cable Communications Segment – Operating Margin
Our operating margin is Adjusted EBITDA as a percentage of revenue. We believe this metric is useful particularly as we continue to focus on growing our higher-margin businesses and improving overall operating cost management.
Our operating margin for the three months ended March 31, 2022 and 2021 was 44.0% and 43.2%, respectively.
Percentage changes that are considered not meaningful are denoted with NM.
Media
Segment Results of Operations
Three Months Ended March 31,
Increase/ (Decrease)
(in
millions)
2022
2021
%
Revenue
Advertising
$
3,332
$
2,094
59.2
%
Distribution
3,033
2,495
21.6
Other
499
447
11.6
Total
revenue
6,865
5,036
36.3
Operating costs and expenses
Programming
and production
4,351
2,522
72.5
Other operating and administrative
929
819
13.5
Advertising,
marketing and promotion
426
222
91.8
Total operating costs and expenses
5,706
3,563
60.1
Adjusted
EBITDA
$
1,159
$
1,473
(21.3)
%
Media Segment – Revenue
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in advertising and
distribution revenue, and included revenue from our broadcasts of the Beijing Olympics and Super Bowl in the first quarter of 2022. Excluding $1.0 billion and $0.5 billion of incremental revenue associated with our broadcasts of the Beijing Olympics and Super Bowl, respectively, Media revenue increased 6.9% for the three months ended March 31, 2022 compared to the same period in 2021.
Three
Months Ended March 31,
Increase/ (Decrease)
(in millions)
2022
2021
%
Advertising
$
3,332
$
2,094
59.2
%
Advertising,
excluding Beijing Olympics and Super Bowl
2,178
2,094
4.0
Advertising revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to our broadcasts of the Beijing Olympics and Super Bowl. Excluding $1.2 billion of incremental revenue associated with our broadcasts of the Beijing Olympics and Super Bowl, for the three months ended March 31,
2022, advertising revenue increased due to higher pricing at our networks in the current year period and increased advertising revenue at Peacock. These increases were partially offset by continued audience ratings declines at our networks and increased revenue related to other sporting events in the prior year period due to COVID-19 timing impacts.
Distribution revenue increased for the three months ended March 31, 2022 compared to the same period in 2021, primarily due to our broadcast of the Beijing Olympics. Excluding $327 million of incremental revenue associated with our broadcast of the Beijing Olympics, for the three months ended March 31, 2022, distribution revenue
increased due to an increase in distribution revenue at Peacock, as well as an increase at our networks due to contractual rate increases, partially offset by a decline in the number of subscribers.
We expect the number of subscribers and audience ratings at our networks will continue to decline as a result of the competitive environment and shifting video consumption patterns. Revenue included $472 million and $91 million related to Peacock for the three months ended March 31, 2022 and 2021, respectively, including amounts related to the Beijing Olympics and Super Bowl.
Media Segment – Operating Costs and Expenses
Operating costs and expenses increased for the three months ended March 31, 2022
compared to the same period in 2021 due to increases in programming and production costs; advertising, marketing and promotion costs; and other operating and administrative costs. Programming and production costs increased for the three months ended March 31, 2022 primarily due to costs associated with our broadcasts of the Beijing Olympics and Super Bowl and higher programming costs at Peacock. Advertising, marketing and promotion costs increased primarily due to higher marketing costs related to Peacock and higher spending related to our networks. Other operating and administrative costs increased primarily due to increased costs related to Peacock.
Operating costs and expenses included $928 million and $368 million related to Peacock for the three months ended March 31, 2022 and 2021,
respectively, including amounts related to the Beijing Olympics and Super Bowl. We expect to continue to incur significant costs related to additional content and marketing as we invest in the platform and attract new customers.
Studios Segment Results of Operations
Three
Months Ended March 31,
Increase/ (Decrease)
(in millions)
2022
2021
%
Revenue
Content
licensing
$
2,279
$
2,075
9.8
%
Theatrical
168
39
NM
Home
entertainment and other
310
282
9.8
Total revenue
2,757
2,396
15.1
Operating
costs and expenses
Programming and production
1,974
1,614
22.3
Other
operating and administrative
210
161
31.1
Advertising, marketing and promotion
327
124
163.0
Total
operating costs and expenses
2,511
1,899
32.3
Adjusted EBITDA
$
245
$
497
(50.7)
%
Percentage
changes that are considered not meaningful are denoted with NM.
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021 due to increases in content licensing revenue and theatrical revenue. Content licensing revenue increased primarily due to the timing of when content was made available by our film and television studios under licensing agreements, including additional sales of content as production levels returned to normal, partially offset by the impact of a
new licensing agreement for content that became exclusively available for streaming on Peacock in the prior year period. Theatrical revenue increased primarily due to recent releases, including Sing 2,and the impact of theater closures and theaters operating at reduced capacity as a result of COVID-19 in the prior year period.
Studios Segment – Operating Costs and Expenses
Operating costs and expenses increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in programming and production costs and advertising, marketing and promotion costs. Programming and production costs increased primarily due to higher costs associated with content licensing sales and
theatrical releases in the current year period. Advertising, marketing and promotion costs increased due to higher spending on theatrical releases in the current year period.
Theme Parks Segment Results of Operations
Three
Months Ended March 31,
Increase/ (Decrease)
(in millions)
2022
2021
%
Revenue
$
1,560
$
619
151.9
%
Operating
costs and expenses
1,109
680
63.0
Adjusted EBITDA
$
451
$
(61)
NM
Percentage
changes that are considered not meaningful are denoted with NM.
Theme Parks Segment – Revenue
Revenue increased for the three months ended March 31, 2022 primarily due to improved operating conditions compared to the same period in 2021, when each of our theme parks was either operating at a limited capacity or closed as a result of COVID-19, and from the operations of Universal Beijing Resort, which opened in September 2021. In 2022, our theme parks in Orlando and Hollywood operated without capacity restrictions and the requirement for proof of vaccination or a negative COVID-19 test previously put in place in the fourth quarter of 2021 was lifted for our theme park in Hollywood. Our theme park in Japan temporarily reinstated capacity restrictions during the first quarter of 2022, which were lifted by the
end of the period. Our newest theme park in Beijing continues to be impacted by COVID-19 and related travel restrictions.
Theme Parks Segment – Operating Costs and Expenses
Expenses increased for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increased operating costs at our theme parks, as compared to decreased operating costs during the temporary closures and capacity restrictions in the prior year period, and due to operating costs associated with Universal Beijing Resort in the current year period, which were higher than pre-opening costs in the prior year period.
NBCUniversal Headquarters, Other and Eliminations
Headquarters
and Other Results of Operations
Three Months Ended March 31,
Increase/ (Decrease)
(in
millions)
2022
2021
%
Revenue
$
16
$
16
1.9
%
Operating
costs and expenses
208
225
(7.6)
Adjusted EBITDA
$
(191)
$
(209)
8.3
%
Expenses
include overhead, personnel costs and costs associated with corporate initiatives.
Amounts
represent eliminations of transactions between our NBCUniversal segments, which are affected by the timing of recognition of content licenses between our Studios and Media segments. Prior year amounts include the impact of a new licensing agreement for content that became exclusively available for streaming on Peacock during the first quarter of 2021. Results of operations for NBCUniversal may be impacted as we continue to use content on our platforms, including Peacock, rather than licensing it to third parties.
For the three months ended March 31, 2022 and 2021, approximately 41% and 52%, respectively, of Studios segment content licensing revenue resulted from transactions with other segments, primarily with the Media segment. Eliminations increase or decrease to the extent that additional content is made available to our other
segments. Refer to Note 2 for further discussion of transactions between our segments.
Sky Segment Results of Operations
Three
Months Ended March 31,
Increase/
(Decrease)
Constant Currency Change(a)
(in millions)
2022
2021
%
%
Revenue
Direct-to-consumer
$
3,884
$
4,065
(4.5)
%
(0.4)
%
Content
295
358
(17.5)
(14.3)
Advertising
596
574
3.8
7.9
Total
revenue
4,775
4,997
(4.5)
(0.5)
Operating costs and expenses
Programming
and production
1,948
2,485
(21.6)
(17.6)
Direct network costs
672
631
6.5
9.7
Other
1,532
1,517
1.0
5.2
Total
operating costs and expenses
4,153
4,633
(10.4)
(6.3)
Adjusted EBITDA
$
622
$
364
71.0
%
71.2
%
(a)Constant
currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 24 for additional information, including our definition and our use of constant currency, and for a reconciliation of Sky’s constant currency growth rates.
Customer Metrics
Net
Additions / (Losses)
March 31,
Three Months Ended March 31,
(in thousands)
2022
2021
2022
2021
Total
customer relationships
22,921
23,446
(106)
221
Customer metrics are presented based on actual amounts. Customer relationships represent the number of residential customers that subscribe to at least one of Sky’s four primary services of video, broadband, voice and wireless phone service. Sky reports business customers, including hotels, bars, workplaces and restaurants, generally based on the number of locations receiving our services.
Three
Months Ended March 31,
Increase/ (Decrease)
Constant
Currency
Change(a)
2022
2021
%
%
Average
monthly direct-to-consumer revenue per customer relationship
$
56.35
$
58.06
(2.9)
%
1.1
%
(a)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 24 for additional information, including our definition and our use of constant
currency, and for a reconciliation of Sky’s constant currency growth rates.
Average monthly direct-to-consumer revenue per customer relationship is impacted by rate adjustments and changes in the types and levels of services received by Sky’s customers. Each of Sky’s services has a different contribution to Adjusted EBITDA. We believe average monthly direct-to-consumer revenue per customer relationship is useful in understanding the trends in our business across all of our direct-to-consumer service offerings.
Sky Segment – Revenue
Direct-to-Consumer
Revenue
decreased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, revenue remained consistent with the prior year period primarily due to a decrease in customer relationships offset by an increase in average revenue per customer relationship. The decrease in customer relationships was driven by a decrease in Italy, partially offset by an increase in the United Kingdom. The increase in average revenue per customer relationship reflects the impacts of COVID-19 on business customers in the prior year period and the impact of rate increases in the United Kingdom, partially offset by declines in average rates in Italy. The decline in customer relationships and average revenue per customer relationship in Italy included the effects of the reduced broadcast rights for Serie A, which we had held through the end of the 2020-21 season. Beginning
with the 2021-22 season in the third quarter of 2021 and through the 2023-24 season, we have nonexclusive broadcast rights to fewer matches, which has resulted and we expect will continue to result in declines in revenue in Italy in 2022.
Content
Revenue decreased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, revenue decreased primarily due to lower sports programming licensing revenue driven by changes in licensing agreements in Italy and Germany.
Advertising
Revenue increased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, revenue increased primarily
as a result of an overall market improvement in the United Kingdom compared to the prior year period, partially offset by decreased advertising revenue associated with Serie A.
Sky Segment – Operating Costs and Expenses
Programming and production costs decreased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, programming and production costs decreased for the three months ended March 31, 2022 primarily reflecting lower costs associated with Serie A in Italy as a result of the reduced broadcast rights and lower costs associated with other sports contracts in Germany in the current year period, as well as the timing of recognition
of costs related to sporting events.
Direct network costs increased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, direct network costs increased primarily due to an increase in costs associated with Sky’s broadband and wireless phone services as a result of increases in the number of customers receiving these services and wireless device sales.
Other expenses increased for the three months ended March 31, 2022 compared to the same period in 2021. Excluding the impact of foreign currency, other expenses increased primarily due to higher administrative costs and higher fees paid to third-party channels related to advertising sales.
Corporate,
Other and Eliminations
Corporate and Other Results of Operations
Three Months Ended March 31,
Increase/ (Decrease)
(in
millions)
2022
2021
%
Revenue
$
238
$
89
168.8
%
Operating
costs and expenses
500
370
35.4
Adjusted
EBITDA
$
(262)
$
(281)
6.7
%
Corporate and other primarily includes overhead and personnel costs, the results of other business initiatives and Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania. Other business
initiatives include costs associated with Sky Glass and the related hardware sales, as well as costs associated with XClass TV.
Revenue increased for the three months ended March 31, 2022 primarily due to increases at Comcast Spectacor as a result of the impacts of COVID-19 in the prior year period and sales of Sky Glass smart televisions.
Expenses increased for the three months ended March 31, 2022 primarily due to costs related to Sky Glass and XClass TV. We expect to continue to incur increased costs
in 2022 related to the launch of Sky Glass and XClass TV.
Eliminations
Three Months Ended March 31,
Increase/ (Decrease)
(in
millions)
2022
2021
%
Revenue
$
(840)
$
(710)
18.2
%
Operating
costs and expenses
(757)
(720)
5.2
Adjusted EBITDA
$
(82)
$
10
NM
Percentage
changes that are considered not meaningful are denoted with NM.
Amounts represent eliminations of transactions between Cable Communications, NBCUniversal, Sky and other businesses. Eliminations of transactions between NBCUniversal segments are presented separately. Current year amounts reflect an increase in eliminations associated with the Beijing Olympics. Refer to Note 2 for a description of transactions between our segments.
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying
trends in our businesses. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of certain of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, and by our investment activities, including the results of entities that we do not consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our consolidated operating performance and 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. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other
companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
We define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance.
We reconcile consolidated Adjusted EBITDA to net income attributable to Comcast Corporation.
This measure should not be considered a substitute for operating income (loss), net income (loss), net income (loss) attributable to Comcast Corporation, or net cash provided by operating activities that we have reported in accordance with GAAP.
Reconciliation from Net Income Attributable to Comcast Corporation to Adjusted EBITDA
Three
Months Ended March 31,
(in millions)
2022
2021
Net income attributable to Comcast Corporation
$
3,549
$
3,329
Net income
(loss) attributable to noncontrolling interests
(73)
(37)
Income tax expense
1,288
1,119
Investment and other (income) loss, net
(188)
(390)
Interest
expense
993
1,018
Depreciation
2,213
2,117
Amortization
1,335
1,245
Adjustments(a)
33
12
Adjusted
EBITDA
$
9,150
$
8,413
(a)Amounts represent the impact of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including costs related to our investment portfolio, and Sky transaction-related costs in 2021.
Constant Currency
Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated
effects of foreign currency exchange rate fluctuations. Certain of our businesses, including Sky, have operations outside the United States that are conducted in local currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. In our Sky segment, we use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.
Constant currency and constant currency growth rates are calculated by comparing the comparative period results in the prior year adjusted to reflect the average exchange rates from the current year period rather than the actual exchange rates in effect during the respective prior year periods.
Reconciliation
of Sky Constant Currency Growth Rates
Three Months Ended March 31,
Actual
Constant Currency
Constant
Currency Change
(in millions, except per customer data)
2022
2021
%
Revenue
Direct-to-consumer
$
3,884
$
3,901
(0.4)
%
Content
295
345
(14.3)
Advertising
596
552
7.9
Total
revenue
4,775
4,797
(0.5)
Operating costs and expenses
Programming
and production
1,948
2,365
(17.6)
Direct network costs
672
613
9.7
Other
1,532
1,457
5.2
Total
operating costs and expenses
4,153
4,434
(6.3)
Adjusted EBITDA
$
622
$
363
71.2
%
Average
monthly direct-to-consumer revenue per customer relationship
Our businesses generate significant cash flows from operating activities. We believe that we will be able to continue to meet our current and long-term
liquidity and capital requirements, including fixed charges, through our cash flows from operating activities; existing cash, cash equivalents and investments; available borrowings under our existing credit facility; and our ability to obtain future external financing. We anticipate that we will continue to use a substantial portion of our cash flows from operating activities in repaying our debt obligations, funding our capital expenditures and cash paid for intangible assets, investing in business opportunities, and returning capital to shareholders.
We maintain significant availability under our revolving credit facility and our commercial paper program to meet our short-term liquidity requirements. Our commercial paper program provides a lower-cost source of borrowing to fund our short-term working capital requirements. As of March 31, 2022, amounts
available under our revolving credit facility, net of amounts outstanding under our commercial paper program and outstanding letters of credit and bank guarantees, totaled $11.0 billion.
Operating Activities
Components of Net Cash Provided by Operating Activities
Three Months Ended March 31,
(in millions)
2022
2021
Operating
income
$
5,569
$
5,039
Depreciation and amortization
3,548
3,362
Noncash share-based compensation
376
373
Changes in operating assets and liabilities
(1,475)
(176)
Payments
of interest
(747)
(911)
Payments of income taxes
(90)
(87)
Proceeds from investments and other
75
151
Net cash provided by operating activities
$
7,257
$
7,751
The
variance in changes in operating assets and liabilities for the three months ended March 31, 2022 compared to the same period in 2021 was primarily related to increases in accounts receivable and decreases in deferred revenue, which included the impacts of our broadcasts of the Beijing Olympics and Super Bowl, and the timing of amortization and related payments for our film and television costs, including increased production spending, partially offset by the timing of sporting events.
The decrease in payments of interest for the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to the timing of interest payments following the debt exchange in August 2021 and a decrease in average debt outstanding in the current year period.
The decrease in proceeds
from investments and other for the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to decreased cash distributions received from equity method investments.
Net cash used in investing activities remained consistent for the three months ended March 31, 2022 compared to the same period in 2021, primarily reflecting decreased cash paid related to the construction of Universal Beijing Resort in the current year period and cash paid for the acquisition
of a business in the prior year period, offset by decreased proceeds from sales of business and investments in the current year period. Capital expenditures, which is our most significant recurring investing activity, remained consistent for the three months ended March 31, 2022 compared to the same period in 2021, primarily reflecting increased spending at Theme Parks related to the development of the Epic Universe theme park in Orlando, offset by decreased spending at Sky primarily related to customer premise equipment. Capital expenditures at Cable Communications were consistent with the prior period.
In 2022, we formed the SkyShowtime joint venture with Paramount Global. The new direct-to-consumer streaming service is expected to be made available in select European markets starting in 2022, and the partners have committed to
a multiyear funding plan that is expected to begin in 2022.
Financing Activities
Net cash used in financing activities increased for the three months ended March 31, 2022 primarily due to increases in repurchases of common stock under our share repurchase program and employee plans. Net cash used in financing activities in both periods included dividend payments and repayments of debt, partially offset by proceeds from borrowings, and net cash used in financing activities for the three months ended March 31, 2021 included payments related to the redemption of NBCUniversal Enterprise redeemable subsidiary preferred stock presented in other financing activities.
We have made, and may from time to time in the future make,
optional repayments on our debt obligations, which may include repurchases or exchanges of our outstanding public notes and debentures, depending on various factors, such as market conditions. Any such repurchases may be effected through privately negotiated transactions, market transactions, tender offers, redemptions or otherwise. See Notes 5 and 7 for additional information on our financing activities.
Share Repurchases and Dividends
In the second quarter of 2021, we restarted our share repurchase program, which had been paused since the beginning of 2019. In January 2022, our Board of Directors increased our share repurchase program authorization to $10 billion. During the three months ended March 31, 2022, we repurchased a total of 62.5 million shares of our Class A common stock
for $3.0 billion. Under the authorization, which does not have an expiration date, we expect to repurchase additional shares during the remainder of 2022, which may be in the open market or in private transactions.
In addition, we paid $223 million for the three months ended March 31, 2022 related to employee taxes associated with the administration of our share-based compensation plans.
In January 2022, we paid dividends of $1.2 billion, and our Board of Directors approved an 8% increase in our dividend to $1.08 per share on an annualized basis and approved our first quarter dividend of $0.27 per share, which was paid in April 2022. We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors.
Guarantee Structure
Our
debt is primarily issued at Comcast, although we also have debt at certain of our subsidiaries as a result of acquisitions and other issuances. A substantial amount of this debt is subject to guarantees by Comcast and by certain subsidiaries that we have put in place to simplify our capital structure. We believe this guarantee structure provides liquidity benefits to debt investors and helps to simplify credit analysis with respect to relative value considerations of guaranteed subsidiary debt.
Debt issuance costs, premiums, discounts, fair value adjustments for acquisition accounting and hedged positions, net
(6.1)
(6.0)
Total
debt
$
94.6
$
94.8
(a)NBCUniversal, Comcast Cable and Comcast Holdings (included within other debt subject to one-way guarantees) are each consolidated subsidiaries subject to the periodic reporting requirements of the SEC. The guarantee structures and related disclosures in this section, together with Exhibit 22, satisfy these reporting obligations.
(b)Universal
Beijing Resort debt financing is secured by the assets of Universal Beijing Resort and the equity interests of the investors. See Note 7 for additional information.
Cross-Guarantees
Comcast, NBCUniversal and Comcast Cable (the “Guarantors”) fully and unconditionally, jointly and severally, guarantee each other’s debt securities. NBCUniversal and Comcast Cable also guarantee other borrowings of Comcast, including its revolving credit facility. These guarantees rank equally with all other general unsecured and unsubordinated obligations of the respective Guarantors. However, the obligations of the Guarantors under the guarantees are structurally subordinated to the indebtedness and other liabilities of their respective non-guarantor subsidiaries. The obligations of each Guarantor are limited
to the maximum amount that would not render such Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of U.S. and non-U.S. law. Each Guarantor’s obligations will remain in effect until all amounts payable with respect to the guaranteed securities have been paid in full. However, a guarantee by NBCUniversal or Comcast Cable of Comcast’s debt securities, or by NBCUniversal of Comcast Cable’s debt securities, will terminate upon a disposition of such Guarantor entity or all or substantially all of its assets.
The Guarantors are each holding companies that principally hold investments in, borrow from and lend to non-guarantor subsidiary operating companies; issue and service third-party debt obligations; repurchase shares and pay dividends; and engage in certain corporate and headquarters activities. The Guarantors are generally dependent on non-guarantor subsidiary operating companies
to fund these activities.
As of March 31, 2022 and December 31, 2021, the combined Guarantors have noncurrent notes payable to non-guarantor subsidiaries of $126 billion and noncurrent notes receivable from non-guarantor subsidiaries of $30 billion. This financial information is that of the Guarantors presented on a combined basis with intercompany balances between the Guarantors eliminated. The combined financial information excludes financial information of non-guarantor subsidiaries. The underlying net assets of the non-guarantor subsidiaries
are significantly in excess of the Guarantor obligations. Excluding investments in non-guarantor subsidiaries, external debt and the noncurrent notes payable and receivable with non-guarantor subsidiaries, the Guarantors do not have material assets, liabilities or results of operations.
One-Way Guarantees
Comcast provides full and unconditional guarantees of certain debt issued by Sky and other consolidated subsidiaries not subject to the periodic reporting requirements of the SEC.
Comcast also provides a full and unconditional guarantee of $138 million principal amount of subordinated debt issued by Comcast Holdings. Comcast’s obligations under this guarantee are subordinated and subject, in right of payment, to the prior payment in full of all of Comcast’s senior indebtedness, including debt guaranteed by Comcast on a senior basis, and are structurally subordinated to the indebtedness and other liabilities of its non-guarantor subsidiaries (for purposes of this Comcast Holdings discussion, Comcast Cable and NBCUniversal are included within the non-guarantor subsidiary group). Comcast’s obligations as guarantor will remain in effect until all amounts payable with respect to the guaranteed debt have been paid in full. However, the guarantee will terminate upon a disposition of Comcast Holdings
or all or substantially all of its assets. Comcast Holdings is a consolidated subsidiary holding company that directly or indirectly holds 100% and approximately 37% of our equity interests in Comcast Cable and NBCUniversal, respectively.
As of March 31, 2022 and December 31, 2021, Comcast and Comcast Holdings, the combined issuer and guarantor of the guaranteed subordinated debt, have noncurrent senior notes payable to non-guarantor subsidiaries of $97 billion and $96 billion, respectively, and noncurrent notes receivable from non-guarantor subsidiaries of $29 billion. This financial information is that of Comcast and Comcast Holdings presented
on a combined basis with intercompany balances between Comcast and Comcast Holdings eliminated. The combined financial information excludes financial information of non-guarantor subsidiaries of Comcast and Comcast Holdings. The underlying net assets of the non-guarantor subsidiaries of Comcast and Comcast Holdings are significantly in excess of the obligations of Comcast and Comcast Holdings. Excluding investments in non-guarantor subsidiaries, external debt, and the noncurrent notes payable and receivable with non-guarantor subsidiaries, Comcast and Comcast Holdings do not have material assets, liabilities
or results of operations.
Critical Accounting Judgments and Estimates
The preparation of our condensed consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a more complete
discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our condensed consolidated financial statements, please refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report on Form 10-K.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have evaluated the information required under this item that was disclosed in our 2021 Annual Report on Form 10-K and there have been no significant changes to this information.
ITEM 4: CONTROLS AND PROCEDURES
Conclusions
regarding disclosure controls and procedures
Our principal executive and principal financial officers, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, such disclosure controls and procedures were effective.
Changes in internal control over financial reporting
There were no changes in internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
See Note 10 included in this Quarterly Report on Form 10-Q for a discussion of legal proceedings.
ITEM 1A:
RISK FACTORS
There have been no material changes from the risk factors previously disclosed in Item 1A of our 2021 Annual Report on Form 10-K.
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below summarizes Comcast's common stock repurchases during the three months ended March 31, 2022.
Purchases of Equity Securities
Period
Total Number of Shares Purchased
Average Price Per Share
Total Number of Shares Purchased as Part of Publicly Announced Authorization
Total
Dollar Amount Purchased Under the Publicly Announced Authorization
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Authorization(a)
January 1-31, 2022
16,430,614
$
49.91
16,430,614
$
819,999,896
$
9,180,000,104
February
1-28, 2022
31,571,308
$
47.51
31,571,308
$
1,499,986,778
$
7,680,013,327
March 1-31, 2022
14,526,731
$
46.81
14,526,731
$
680,013,306
$
7,000,000,020
Total
62,528,653
$
47.98
62,528,653
$
2,999,999,980
$
7,000,000,020
(a)Effective
January 1, 2022, our Board of Directors increased our share repurchase program authorization to $10 billion. Under the authorization, which does not have an expiration date, we expect to repurchase additional shares, which may be in the open market or in private transactions.
The total number of shares purchased during the three months ended March 31, 2022 does not include any shares received in the administration of employee share-based compensation plans as there were none received during the period.
Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the registrant (incorporated by reference to Exhibit 22 to Comcast's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following financial statements from Comcast Corporation’s Quarterly Report on Form 10-Q for the three months ended March 31, 2022, filed with the Securities and Exchange Commission on April 28, 2022, formatted
in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Statement of Income; (ii) the Condensed Consolidated Statement of Comprehensive Income; (iii) the Condensed Consolidated Statement of Cash Flows; (iv) the Condensed Consolidated Balance Sheet; (v) the Condensed Consolidated Statement of Changes in Equity; and (vi) the Notes to Condensed Consolidated Financial Statements.
104
Cover Page Interactive Data File (embedded within the iXBRL document).
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
