News Column

COMCAST CORP - 10-K - : Management's Discussion and Analysis of Financial Condition and Results of Operations

February 12, 2014

Introduction and Overview

We are a global media and technology company with two primary businesses, Comcast Cable and NBCUniversal. We present our operations for Comcast Cable in one reportable business segment, referred to as Cable Communications, and our operations for NBCUniversal in four reportable business segments.



Cable Communications Segment

Comcast Cable is the nation's largest provider of video, high-speed Internet and voice services ("cable services") to residential customers under the XFINITY brand, and we also provide similar services to small and medium-sized businesses. As of December 31, 2013, our cable systems served 21.7 million video customers, 20.7 million high-speed Internet customers and 10.7 million voice customers and passed more than 53 million homes and businesses. Our Cable Communications segment generates revenue primarily from subscriptions to our cable services, which we market individually and in packages, and from the sale of advertising. In 2013, our Cable Communications segment generated 65% of our consolidated revenue and 80% of our operating income before depreciation and amortization. We offer a broad variety of video services with access to hundreds of channels, including premium networks, such as HBO, Showtime, Starz and Cinemax, pay-per-view channels, as well as On Demand, our video-on-demand service, and an interactive, on-screen program guide. Our video customers may also subscribe to a higher level of video service, including our HD video and DVR services. Our video customers have the ability to use XFINITY TV online or our mobile apps for smartphones and tablets to view certain live television programming and some of our On Demand content, browse program listings, and schedule and manage DVR recordings online. Our high-speed Internet services generally provide Internet access at downstream speeds of up to 105 Mbps, and we also have introduced downstream speeds of up to 505 Mbps in limited markets. Our high-speed Internet service for business customers also includes a website hosting service and an interactive tool that allows customers to share, coordinate and store documents online.



Our voice services provide local and long-distance calling and other features. For our business voice customers, we also offer additional features such as hosted voice services that use cloud network servers, a business directory listing and the added capacity for multiple phone lines.

In addition to the video, high-speed Internet and voice services that we offer to small and medium-sized business customers, we offer Ethernet network services to our medium-sized business customers that connect multiple locations. We also provide cellular backhaul services to mobile network operators to help our customers manage network bandwidth. We also sell advertising, under the Spotlight brand, that we receive through our distribution agreements with cable networks. We generally receive an allocation of scheduled advertising time on cable networks that we sell to local, regional and national advertisers. The majority of our Cable Communications segment revenue is generated from subscriptions to our cable services. Customers are typically billed in advance on a monthly basis based on the services and features they receive and the type of equipment they use. Residential customers may generally discontinue service at any time, while business customers may only discontinue service in accordance with the terms of their contracts, which typically have 2 to 5 year terms. Comcast 2013 Annual Report on Form 10-K 46



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The most significant operating cost for our Cable Communications segment is the programming expenses we incur to provide content to our video customers. We anticipate that our programming expenses will continue to increase. We have, and will continue to attempt to, offset increases in programming expenses through rate increases, the sale of additional video and other services, and through operating efficiencies. NBCUniversal Segments NBCUniversal is one of the world's leading media and entertainment companies that develops, produces and distributes entertainment, news and information, sports, and other content for global audiences. The Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks segments comprise the NBCUniversal businesses and are collectively referred to as the "NBCUniversal segments." Cable Networks Our Cable Networks segment consists primarily of a diversified portfolio of cable television networks. Our cable networks are comprised of our national cable entertainment networks (USA Network, Syfy, E!, Bravo, Oxygen, Esquire Network, Sprout, Chiller, G4, Cloo, and Universal HD); our national cable news and information networks (MSNBC, CNBC and CNBC World); our national cable sports networks (Golf Channel and NBC Sports Network); our regional sports and news networks; various international cable networks; and our cable television production operations. Our Cable Networks segment generates revenue primarily from the distribution of our cable network programming to multichannel video providers, the sale of advertising on our cable networks and our related digital media properties, and the licensing of our owned programming.



Broadcast Television

Our Broadcast Television segment consists primarily of the NBC and Telemundo broadcast networks, our 10 NBC and 17 Telemundo owned local broadcast television stations and our broadcast television production operations. Our Broadcast Television segment generates revenue primarily from the sale of advertising on our broadcast networks, our owned local broadcast television stations and our related digital media properties, the licensing of our owned programming and fees received under retransmission consent agreements.



Filmed Entertainment

Our Filmed Entertainment segment primarily produces, acquires, markets and distributes filmed entertainment worldwide. Our films are produced primarily under the Universal Pictures, Focus Features and Illumination names. Our Filmed Entertainment segment generates revenue primarily from the worldwide distribution of our owned and acquired films for exhibition in movie theaters, the licensing of our owned and acquired films through various distribution platforms, and the sale of our owned and acquired films on standard-definition video discs and Blu-ray discs (together, "DVDs") and through digital distributors. Our Filmed Entertainment segment also generates revenue from producing and licensing live stage plays, from distributing filmed entertainment produced by third parties, as well as from various digital media properties.



Theme Parks

Our Theme Parks segment consists primarily of our Universal theme parks in Orlando and Hollywood. Our Theme Parks segment generates revenue primarily from theme park attendance and per capita spending. Per capita spending includes ticket price and in-park spending on food, beverages and merchandise. We also receive fees from third parties that own and operate Universal Studios Japan and Universal Studios Singapore for intellectual property licenses and other services.



Other

Our other business interests primarily include Comcast-Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia and operates arena management-related businesses.

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2013 Developments

The following are the more significant developments in our businesses during 2013: an increase in consolidated revenue of 3.3% to $64.7 billion and an increase in consolidated operating income of 11.4% to $13.6 billion the acquisition in March 2013 of GE's remaining 49% common equity interest in NBCUniversal Holdings and NBCUniversal's purchase from GE of certain properties NBCUniversal occupies; see "Redemption Transaction" below for additional information Cable Communications Segment an increase in Cable Communications segment revenue of 5.6% to $41.8 billion and an increase in Cable Communications segment operating income before depreciation and amortization of 5.8% to $17.2 billion



an increase in Cable Communications segment capital expenditures

of 9.8% to $5.4 billion primarily due to the investment in our IP and cloud-enabled video platform, referred to as our X1 platform, the deployment of our wireless gateways in customers' homes, and our continued investment in network infrastructure, as well as the expansion of business services and our home security and automation services our X1 platform is now available in all of the markets in which we operate, and we have purchased and deployed over 7 million wireless gateways the continued expansion of video offerings for our customers via On Demand and online, including the launch of a mobile app that enables live-streaming of certain programming content NBCUniversal Segments an increase in total NBCUniversal revenue of 5.7% to $23.7 billion when excluding the impact from our broadcasts of the Super Bowl and London Olympics in 2012, and a decrease of 0.7% when including the $1.4 billion of revenue in the prior year related to these events an increase in total NBCUniversal operating income before depreciation and amortization of 15.2% to $4.7 billion the continued investment in original programming and sports programming rights at both our cable networks and broadcast networks and the continued investment in new attractions at our Universal theme parks, including the Transformers and Despicable Me attractions and the expansion of the Harry Potter attraction



Redemption Transaction

On March 19, 2013, Comcast acquired GE's remaining 49% common equity interest in NBCUniversal Holdings for approximately $16.7 billion (the "Redemption Transaction"). In addition to this transaction, NBCUniversal purchased from GE certain properties NBCUniversal occupies at 30 Rockefeller Plaza in New York City and CNBC's headquarters in Englewood Cliffs, New Jersey for $1.4 billion. See Note 4 to Comcast's consolidated financial statements for additional information on these transactions.



Competition

The results of operations of our reportable business segments are affected by competition, as all of our businesses operate in competitive, consumer-driven and rapidly changing environments and compete with a Comcast 2013 Annual Report on Form 10-K 48



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growing number of companies that provide a broad range of communications products and services and entertainment, news and information content to consumers. Additionally, there continue to be new companies with significant financial resources that potentially may compete on a larger scale with our cable services, as well as with our cable and broadcast networks and filmed entertainment businesses.

Competition for the cable services we offer consists primarily of direct broadcast satellite ("DBS") providers, which have a national footprint and compete in all our service areas, and phone companies, which overlap approximately 45% of our service areas and are continuing to expand their fiber-based networks. We also compete with other providers of traditional cable services. All of these companies typically offer features, pricing and packaging for services comparable to our cable services. Each of NBCUniversal's businesses also face substantial and increasing competition from providers of similar types of content, as well as from other forms of entertainment and recreational activities. NBCUniversal also must compete to obtain talent, programming and other resources required in operating its businesses. Technological changes are further intensifying and complicating the competitive landscape for all of our businesses by challenging existing business models and affecting consumer behavior. Newer services and devices that enable online digital distribution of movies, television shows, and other cable and broadcast video programming continue to gain consumer acceptance and evolve, including some services that charge a nominal or no fee for such programming. These services and devices may potentially negatively affect demand for our video services, as well as demand for our cable network, broadcast television and filmed entertainment content, as the number of entertainment choices available to consumers increases and as video programming is more reliably delivered over the Internet and more easily viewed via the Internet on televisions. Wireless services and devices also continue to evolve allowing consumers to access information, entertainment and communication services, which could negatively impact demand for our cable services, including for our voice services as people substitute mobile phones for landline phones. In addition, delayed viewing and advertising skipping have become more common as the penetration of DVRs and similar products has increased and as content has become increasingly available via video-on-demand services and Internet sources, which may have a negative impact on our advertising revenue. In our Cable Communications segment, we believe that adding more content and delivering it on an increasing variety of platforms will assist in attracting and retaining customers for our cable services. We are also developing and launching new technology initiatives, such as our X1 platform, and deploying new wireless gateway devices, to further enhance our video and high-speed Internet services. In our NBCUniversal segments, to compete for consumers of our content and for customers at our theme parks, we have invested, and will continue to invest, substantial amounts in acquiring content and producing original content for our cable networks and broadcast television networks, including the acquisition of sports rights, and will continue to invest in our film productions and in the development of new theme park attractions. See "Business - Competition" for additional information.



Seasonality and Cyclicality

Each of our businesses is subject to seasonal and cyclical variations. In our Cable Communications segment, our results are impacted by the seasonal nature of customers receiving our cable services in college and vacation markets. This generally results in a reduction in net customer additions in the second calendar quarter and increased net customer additions in the third and fourth calendar quarters of each year. Revenue in our Cable Communications, Cable Networks and Broadcast Television segments is subject to cyclical advertising patterns and changes in viewership levels. Our U.S. advertising revenue is generally higher in the second and fourth calendar quarters of each year, due in part to increases in consumer advertising in the spring and in the period leading up to and including the holiday season. U.S. advertising revenue is also cyclical, benefiting in even-numbered years from advertising related to candidates running for political office 49 Comcast 2013 Annual Report on Form 10-K



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and issue-oriented advertising. Our Broadcast Television revenue and operating costs and expenses are also cyclical as a result of our periodic broadcasts of the Olympic Games and the Super Bowl. Our advertising revenue generally increases in the period of these broadcasts from increased demand for advertising time, and our operating costs and expenses also increase as a result of our production costs and the amortization of the related rights fees. All of the revenue and operating costs and expenses associated with our broadcasts of the 2012 London Olympics and the 2012 Super Bowl were reported in our Broadcast Television segment. Revenue in our Filmed Entertainment segment fluctuates due to the timing of the release of films in movie theaters and the release of our films on DVD and through digital distributors. Release dates are determined by several factors, including competition and the timing of vacation and holiday periods. As a result, revenue tends to be seasonal, with increases experienced each year during the summer months and around the holidays. Revenue in our Cable Networks and Broadcast Television segments fluctuates depending on the timing of when our programming is aired on television, which typically results in higher advertising revenue in the second and fourth calendar quarter of each year. Revenue in our Cable Networks, Broadcast Television and Filmed Entertainment segments also fluctuates due to the timing of when our owned content is made available to licensees.



Revenue in our Theme Parks segment fluctuates with changes in theme park attendance that result from the seasonal nature of vacation travel, local entertainment offerings and seasonal weather variations. Our theme parks generally experience peak attendance during the summer months when schools are closed and during early winter and spring holiday periods.

Consolidated Operating Results

% Change % Change Year ended December 31 (in millions) 2013 2012 2011 2012 to 2013 2011 to 2012 Revenue $ 64,657$ 62,570$ 55,842 3.3 % 12.0 % Costs and Expenses: Programming and production 19,670 19,929 16,596 (1.3 ) 20.1 Other operating and administrative 18,584 17,833 16,646 4.2 7.1 Advertising, marketing and promotion 4,969 4,831 4,243 2.9 13.9 Depreciation 6,254 6,150 6,040 1.7 1.8 Amortization 1,617 1,648 1,596 (1.9 ) 3.3 Operating income 13,563 12,179 10,721 11.4 13.6 Other income (expense) items, net (2,448 ) (570 ) (2,514 ) NM (77.3 ) Income before income taxes 11,115 11,609 8,207 (4.3 ) 41.5 Income tax expense (3,980 ) (3,744 ) (3,050 ) 6.3 22.8 Net income 7,135 7,865 5,157 (9.3 ) 52.5 Net (income) loss attributable to noncontrolling interests and redeemable subsidiary preferred stock (319 ) (1,662 ) (997 ) (80.9 ) 66.8 Net income attributable to Comcast Corporation $ 6,816$ 6,203$ 4,160 9.9 % 49.1 %



All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.

Percentage changes that are considered not meaningful are denoted with NM.

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2013 Consolidated Operating Results by Segment

[[Image Removed: LOGO]] Consolidated Revenue In 2013, our Cable Communications, Cable Networks, Filmed Entertainment and Theme Parks segments accounted for substantially all of the increase in consolidated revenue. The increase was partially offset by a decrease in revenue in our Broadcast Television segment due to revenue recorded in 2012 attributable to our broadcasts of the 2012 Super Bowl and the 2012 London Olympics. Excluding $259 million and $1.2 billion of revenue associated with our broadcasts of the 2012 Super Bowl and the 2012 London Olympics, respectively, consolidated revenue increased 5.8% in 2013. In 2012, our Cable Communications, Broadcast Television and Filmed Entertainment segments accounted for substantially all of the increase in consolidated revenue. The increase in our Broadcast Television segment was primarily due to our broadcasts of the 2012 Super Bowl and the 2012 London Olympics.



Revenue for our segments is discussed separately below under the heading "Segment Operating Results."

Consolidated Costs and Expenses

In 2013, our Cable Communications, Cable Networks and Theme Parks segments accounted for substantially all of the increase in consolidated costs and expenses, excluding depreciation and amortization ("operating costs and expenses"). The increase was partially offset by a decrease in operating costs and expenses in our Broadcast Television segment due to operating costs and expenses recorded in 2012 attributable to our broadcasts of the 2012 Super Bowl and the 2012 London Olympics. In 2012, our Cable Communications, Broadcast Television and Filmed Entertainment segments accounted for substantially all of the increase in consolidated operating costs and expenses. The increase in our Broadcast Television segment was primarily due to our broadcasts of the 2012 Super Bowl and the 2012 London Olympics.



Operating costs and expenses for our segments are discussed separately below under the heading "Segment Operating Results."

Consolidated depreciation and amortization increased slightly in 2013 primarily due to increases in capital spending in our Cable Communications and Theme Parks segments, as well as depreciation associated with the acquisition of real estate properties by NBCUniversal in 2013. Consolidated depreciation and amortization increased slightly in 2012 primarily due to the impact of consolidating NBCUniversal and Universal Orlando for a full year period for the first time in 2012. 51 Comcast 2013 Annual Report on Form 10-K



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Table of Contents Segment Operating Results Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use operating income (loss) before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses from the sale of assets, if any, as the measure of profit or loss for our operating segments. 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. Additionally, it is unaffected by our capital structure or investment activities. We use this 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. We believe that this measure 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 may not be directly comparable to similar measures used by other companies. Because we use operating income (loss) before depreciation and amortization to measure our segment profit or loss, we reconcile it to operating income, the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States ("GAAP") in the business segment footnote to our consolidated financial statements (see Note 19 to Comcast's consolidated financial statements and Note 18 to NBCUniversal's consolidated financial statements). This measure should not be considered a substitute for operating income (loss), net income (loss) attributable to Comcast Corporation, net income (loss) attributable to NBCUniversal, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with GAAP. Beginning in 2013, revenue in our Cable Communications segment from certain business customers, such as hotels, restaurants and bars, is presented in business services revenue rather than in video revenue. Also beginning in 2013, operating costs and expenses for our Cable Communications segment present franchise and other regulatory fees under a new caption, and the former technical labor caption was expanded to include both technical and product support expenses; previously, franchise and other regulatory fees and product support expenses had been included under the "other" caption. The presentation of operating costs and expenses in our Cable Networks, Broadcast Television and Filmed Entertainment segments was also expanded to present programming and production costs, other operating and administrative expenses, and advertising, marketing and promotion expenses. Reclassifications have been made to 2012 and 2011 to conform to the classifications used in 2013.



Cable Communications Segment Results of Operations

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% Change from % Change from Year ended December 31 (in millions) 2013 2012 2011 2012 to 2013 2011 to 2012 Revenue Residential: Video $ 20,535$ 19,952$ 19,464 2.9 % 2.5 % High-speed Internet 10,334 9,544 8,743 8.3 9.2 Voice 3,657 3,557 3,503 2.8 1.5 Business services 3,241 2,565 1,953 26.4 31.3 Advertising 2,189 2,284 2,001 (4.2 ) 14.1 Other 1,880 1,702 1,562 10.5 9.0 Total revenue 41,836 39,604 37,226 5.6 6.4 Operating costs and expenses Programming 9,107 8,386 7,851 8.6 6.8 Technical and product support 5,349 5,187 5,048 3.1 2.7 Customer service 2,097 1,995 1,911 5.1 4.4 Franchise and other regulatory fees 1,246 1,176 1,104 6.0 6.5 Advertising, marketing and promotion 2,896 2,731 2,430 6.0 12.4 Other 3,936 3,874 3,594 1.6 7.8 Total operating costs and expenses 24,631 23,349 21,938 5.5 6.4 Operating income before depreciation and amortization $ 17,205$ 16,255$ 15,288 5.8 % 6.3 % Customer Metrics Total Customers Net Additional Customers December 31 (in thousands) 2013 2012 2011 2013 2012 2011 Video customers 21,690 21,995 22,331 (305 ) (336 ) (459 ) High-speed Internet customers 20,662 19,367 18,144 1,296 1,223 1,159 Voice customers 10,723 9,955 9,342 768 613 732



Customer data includes residential and business customers.

Cable Communications Segment - Revenue

Our Cable Communications segment leverages our existing cable distribution system to grow revenue by, among other things, adding new customers, encouraging existing cable customers to add new or higher tier services, and growing other services such as our business services offerings and our home security and automation services. We offer our cable services in bundles and often provide promotional incentives. We seek to balance promotional offers and rate increases with their expected effects on the number of customers and overall revenue.



Video

Video revenue increased 2.9% and 2.5% in 2013 and 2012, respectively. Increases in revenue of approximately 5% in both years were primarily related to customers receiving additional and higher levels of video service, as well as from rate adjustments. As of December 31, 2013, 12.4 million customers subscribed to at least one of our HDTV or DVR advanced services compared to 11.8 million customers and 10.9 million customers as of December 31, 2012 and 2011, respectively. In both years, the increases in revenue were partially offset by fewer residential video customers. These decreases were primarily due to competitive pressures in our service areas from phone and satellite competitors and the impact of rate adjustments. We may experience further declines in the number of residential video customers. 53 Comcast 2013 Annual Report on Form 10-K



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As of December 31, 2013, 40% of the homes and businesses in the areas we serve subscribed to our video services, compared to 41% and 43% as of December 31, 2012 and 2011, respectively. High-Speed Internet High-speed Internet revenue increased 8.3% and 9.2% in 2013 and 2012, respectively. Increases in the number of residential customers accounted for increases in revenue of approximately 6% in both years. The remaining increases in revenue in 2013 and 2012 were primarily due to higher rates from customers receiving higher levels of service and rate adjustments. As of December 31, 2013, 38% of the homes and businesses in the areas we serve subscribed to our high-speed Internet services, compared to 36% and 35% as of December 31, 2012 and 2011, respectively. Our customer base continues to grow as consumers continue to choose our high-speed Internet service and seek higher speed offerings. Voice Voice revenue increased 2.8% and 1.5% in 2013 and 2012, respectively. Increases in the number of residential customers receiving our services through our discounted bundled offerings accounted for increases in revenue of approximately 6% and 4% in 2013 and 2012, respectively. These increases were partially offset in both years by the impact of the allocation of voice revenue for our bundled customers because revenue attributable to voice services represents a lower proportion of the bundled rate. The amounts allocated to voice revenue in the bundled rate have decreased in 2013 and 2012 because video and high-speed Internet rates have increased, while voice rates have remained relatively flat. As of December 31, 2013, 20% of the homes and businesses in the areas we serve subscribed to our voice services, compared to 19% and 18% as of December 31, 2012 and 2011, respectively. Business Services Business services revenue increased 26.4% and 31.3% in 2013 and 2012, respectively. The increases in both years were primarily due to a higher number of business customers receiving our cable services. The remaining increases in both years were primarily due to continued growth in the number of medium-sized business customers, including those receiving our Ethernet network and cellular backhaul services. In 2013, our medium-sized business customers represented 19% of total business services revenue, compared to 15% and 12% in 2012 and 2011, respectively. We believe these increases in business customers are primarily the result of our efforts to gain market share from competitors by offering competitive products and pricing.



Advertising

As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable networks that we sell to local, regional and national advertisers under the Spotlight brand. In most cases, the available advertising time is sold by our sales force. In some cases, we work with representation firms as an extension of our sales force to sell a portion of the advertising time allocated to us. We also represent the advertising sales of other multichannel video providers in some markets. In addition, we generate revenue from the sale of advertising online and on our On Demand service. Advertising revenue is affected by the strength of the advertising market and general economic conditions. Advertising revenue decreased 4.2% in 2013 primarily due to lower political advertising revenue. Excluding the impact of political advertising revenue in 2012, advertising revenue increased 4.8% primarily due to increases in the national and regional advertising markets. Advertising revenue increased 14.1% in 2012 primarily due to increases in political advertising revenue and improvements in the local and regional advertising markets, which were primarily driven by increased spending from automotive advertisers. Comcast 2013 Annual Report on Form 10-K 54



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Other

We receive revenue related to cable franchise and other regulatory fees, our digital media center, commissions from electronic retailing networks, and fees from other services. Cable franchise and regulatory fees represent the fees required to be paid to federal, state and local authorities that we pass through to our customers. Under the terms of our cable franchise agreements, we are generally required to pay to the cable franchising authority an amount based on our gross video revenue. The changes in franchise and other regulatory fees collected from our cable services customers are generally due to changes in the revenue on which the fees apply.



Other revenue increased 10.5% and 9.0% in 2013 and 2012, respectively, primarily due to increases in franchise and other regulatory fees and in revenue from other services, including our home security and automation services.

Cable Communications Segment - Operating Costs and Expenses

We continue to focus on controlling the growth of expenses. Our operating margin, which is our operating income before depreciation and amortization as a percentage of revenue, for 2013, 2012 and 2011 was 41.1%, 41.0% and 41.1%, respectively.

Programming Costs

Programming expenses, our largest operating expense, are the fees we pay to license the programming we distribute to our video customers. These expenses are affected by the programming license fees charged by cable networks, fees for retransmission of the signals from local broadcast television stations, the number of video customers we serve and the amount of content we provide. Programming costs increased in 2013 and 2012 primarily due to increases in programming license fees, including sports programming and retransmission consent fees, and fees to secure rights for additional programming for our customers across an increasing number of platforms. We anticipate that our programming expenses will continue to increase as we provide additional content, including in HD, to our video customers; as we deliver this content through an increasing number of platforms, including On Demand, online and through our mobile apps for smartphones and tablets; and as the fees we pay increase, primarily from sports programming costs and retransmission consent fees. We believe that adding more content and delivering it on various platforms will help us to attract and retain video customers.



Technical and Product Support Expenses

Technical and product support expenses include costs to complete service call and installation activities, as well as network operations, product development, fulfillment and provisioning costs. Technical and product support expenses increased in 2013 and 2012 primarily due to expenses related to customer fulfillment activities and expenses related to the development, delivery and support of our products and services, and continued growth in business services.



Customer Service Expenses

Customer service expenses include the personnel and other costs associated with handling customer sales and service activity. Customer service expenses increased in 2013 and 2012 primarily due to increases in total labor costs associated with increases in customer service activity. The increases in customer service activity were primarily due to increases in the number of customers as well as sales and related support activities associated with the continued deployment of enhanced services and devices, including our X1 platform and wireless gateways, and continued growth in business services. 55 Comcast 2013 Annual Report on Form 10-K



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Franchise and Other Regulatory Fees

Franchise and other regulatory fees increased in 2013 and 2012 primarily due to increases in residential and business services revenue.

Advertising, Marketing and Promotion Expenses

Advertising, marketing and promotion expenses increased in 2013 and 2012 primarily due to increases in spending associated with attracting new residential and business services customers and expanding our services to existing customers.

Other Costs and Expenses

Other costs and expenses increased in 2013 and 2012 primarily due to increases in other administrative costs and advertising sales activities.

NBCUniversal Segments Overview

The discussion below compares the NBCUniversal segments' actual results for 2013 and 2012, as well as the pro forma combined results for 2011. The pro forma combined amounts for 2011 presented in the tables below include pro forma adjustments as if the NBCUniversal and Universal Orlando transactions each had occurred on January 1, 2010. Pro forma combined amounts are not necessarily indicative of what our results would have been had we operated the NBCUniversal contributed businesses or Universal Orlando since that date, nor of our future results.



During 2013, 2012 and 2011, there were no changes to NBCUniversal's accounting principles or practices that had a material effect on its net income.

2013 NBCUniversal Segments Operating Results

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The operating results of the NBCUniversal segments for 2013, 2012 and 2011 are presented in the table below.

2013 2012 2011 Pro Forma Actual Actual Actual Pro Forma Combined For the Period January 1 % Change % Change Year Ended Year Ended Year Ended through Year Ended 2012 2011 (in millions) December 31 December 31 December 31 January 28 December 31 to 2013 to 2012 Revenue Cable Networks $ 9,201$ 8,727$ 8,061$ 385$ 8,446 5.4 % 3.3 % Broadcast Television 7,120 8,200 5,982 467 6,449 (13.2 ) 27.2 Filmed Entertainment 5,452 5,159 4,239 353 4,592 5.7 12.4 Theme Parks 2,235 2,085 1,874 115 1,989 7.2 4.8 Headquarters, other and eliminations (358 ) (359 ) (896 ) 544 (352 ) NM NM Total revenue $ 23,650$ 23,812$ 19,260$ 1,864$ 21,124 (0.7 )% 12.7 % Operating Income Before Depreciation and Amortization Cable Networks $ 3,501$ 3,303$ 3,199$ 153$ 3,352 6.0 % (1.5 )% Broadcast Television 345 358 124 (15 ) 109 (3.6 ) 230.1 Filmed Entertainment 483 79 27 (3 ) 24 509.7 234.2 Theme Parks 1,004 953 830 37 867 5.3 9.9 Headquarters, other and eliminations (601 ) (586 ) (718 ) 135 (583 ) (2.3 ) (0.6 ) Total operating income before depreciation and amortization $ 4,732$ 4,107$ 3,462$ 307$ 3,769 15.2 % 9.0 %



Cable Networks Segment Actual and Pro Forma Results of Operations

2013 2012 2011 Pro Forma Actual Actual Actual Pro Forma Combined For the Period January 1 % Change % Change Year Ended Year Ended Year Ended through Year Ended 2012 2011 (in millions) December 31 December 31 December 31 January 28 December 31 to 2013 to 2012 Revenue Distribution $ 4,905$ 4,604$ 4,210$ 188$ 4,398 6.5 % 4.7 % Advertising 3,536 3,389 3,154 162 3,316 4.3 2.2 Content licensing and other 760 734 697 35 732 3.6 0.2 Total revenue 9,201 8,727 8,061 385 8,446 5.4 3.3 Operating costs and expenses Programming and production 3,850 3,659 3,218 167 3,385 5.2 8.1 Other operating and administrative 1,342 1,306 1,218 26 1,244 2.8 5.0 Advertising, marketing and promotion 508 459 426 39 465 10.7 (1.4 ) Total operating costs and expenses 5,700 5,424 4,862 232 5,094 5.1 6.5



Operating income before depreciation and amortization $ 3,501 $

3,303 $ 3,199$ 153$ 3,352 6.0 % (1.5 )% 57 Comcast 2013 Annual Report on Form 10-K



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Cable Networks Segment - Revenue

Distribution

Distribution revenue is generated from distribution agreements with multichannel video providers and is affected by the number of subscribers receiving our cable networks and the fees we charge per subscriber.



Distribution revenue increased in 2013 and 2012 primarily due to increases in the contractual rates that we charged under distribution agreements.

In 2013, 2012 and 2011, 13% of our Cable Networks segment revenue was generated from our Cable Communications segment. These amounts are eliminated in Comcast's consolidated financial statements but are included in the amounts presented above.



Advertising

Advertising revenue is generated from the sale of advertising time on our cable networks and related digital media properties. Our advertising revenue is generally based on audience ratings, the value of our viewer demographics to advertisers, and the number of advertising units we can place in our cable networks' programming schedules. Advertising revenue is affected by the strength of the national advertising market, general economic conditions and the success of our programming. Advertising revenue increased 4.3% and 2.2% in 2013 and 2012, respectively. Higher prices and an increase in the volume of advertising units sold contributed to increases of 8.9% and 12.9% in 2013 and 2012, respectively. These increases were partially offset by continued declines in audience ratings at some of our networks. Content Licensing and Other



We also generate other revenue primarily from the licensing of our owned programming to various distribution platforms, including cable and broadcast networks, and to digital distributors.

Content licensing and other revenue increased in 2013 primarily due to a new licensing agreement entered into during the year. Content licensing and other revenue remained flat in 2012.



Cable Networks Segment - Operating Costs and Expenses

Programming and Production

Programming and production costs include the amortization of owned and acquired programming, sports rights, direct production costs, residual and participation payments, production overhead, costs associated with the distribution of our programming to third-party networks and other distribution platforms, and on-air talent costs. Programming and production costs increased in 2013 and 2012 primarily due to our continued investment in original programming at certain of our cable networks and higher sports programming costs. The increase in sports programming costs in 2013 included the impact from an increase in the number of NHL games compared to 2012 due to the NHL lockout in 2012 as well as costs associated with our broadcasts of the English Premier League soccer. The increase in sports programming costs in 2012 included the impact from an increase in the number of NBA games compared to 2011 due to the NBA lockout in 2011.



Other Operating and Administrative

Other operating and administrative costs and expenses include salaries, employee benefits, rent and other overhead expenses.

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Other operating and administrative costs and expenses increased in 2013 and 2012 primarily due to an increase in employee-related costs.

Advertising, Marketing and Promotion

Advertising, marketing and promotion expenses consist primarily of the costs incurred in promoting our cable networks and costs associated with digital media.

Advertising, marketing and promotion expenses increased in 2013 primarily due to increased spending on marketing across our cable network portfolio primarily due to the launch of new programming on our cable networks. Advertising, marketing and promotion expenses remained relatively flat in 2012.



Broadcast Television Segment Actual and Pro Forma Results of Operations

2013 2012 2011 Pro Forma Actual Actual Actual Pro Forma Combined For the Period For the Period January 29 January 1 Year Ended Year Ended through through Year Ended % Change % Change (in millions) December 31 December 31 December 31 January 28 December 31 2012 to 2013 2011 to 2012 Revenue Advertising $ 4,930$ 5,876 $ 3,976 $ 315 $ 4,291 (16.1 )% 36.9 % Content licensing 1,447 1,474 1,509 111 1,620 (1.8 ) (9.1 ) Other 743 850 497 41 538 (12.6 ) 58.2 Total revenue 7,120 8,200 5,982 467 6,449 (13.2 ) 27.2 Operating costs and expenses Programming and production 5,192 6,291 4,515 448 4,963 (17.5 ) 26.7 Other operating and administrative 1,204 1,206 1,075 13 1,088 (0.2 ) 10.8 Advertising, marketing and promotion 379 345 268 21 289 10.0 19.3 Total operating costs and expenses 6,775 7,842 5,858 482 6,340 (13.6 ) 23.7



Operating income (loss) before depreciation and amortization $ 345 $ 358 $

124 $ (15 ) $ 109 (3.6 )% 230.1 %



Broadcast Television Segment - Revenue

Advertising

Advertising revenue is generated from the sale of advertising time on our broadcast networks, our owned local television stations and our related digital media properties. Our advertising revenue is generally based on audience ratings, the value of our viewer demographics to advertisers, and the number of advertising units we can place in our broadcast networks' and owned local television stations' programming schedules. Advertising revenue is affected by the strength of the national and local advertising markets, general economic conditions, and the success and ratings of our programming.



Advertising revenue decreased in 2013 and increased in 2012 primarily due to $1.2 billion of advertising revenue recorded in 2012 associated with our broadcasts of the 2012 Super Bowl and the 2012 London

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Olympics. Excluding the impact of these events, advertising revenue increased 5% and 9% in 2013 and 2012, respectively, primarily due to higher prices and volume of advertising units sold, which included the impact of an increase in political advertising in 2012. Content Licensing Content licensing revenue is generated from the licensing of our owned programming in the United States and internationally, including to cable and broadcast networks and digital distributors. The subsequent licensing of our owned programming series following the initial network license is critical to their financial success as the production and distribution costs related to our owned programming generally exceed the revenue generated from the initial network license.



Content licensing revenue decreased in 2013 and 2012 primarily due to the timing of licensing agreements.

Other We also generate other revenue primarily from fees for retransmission consent of our owned broadcast television stations and associated fees received from our affiliated local television stations, as well as from the sale of our owned programming on DVDs and through online digital distributors. The sale of our owned programming is driven primarily by the popularity of our broadcast networks and programming series and, therefore, fluctuates based on consumer spending and acceptance. Other revenue also includes distribution revenue associated with our periodic broadcasts of the Olympic Games.



Other revenue decreased in 2013 and increased in 2012 primarily due to $266 million of distribution revenue from multichannel video providers in 2012 associated with our broadcast of the London Olympics. The decrease in 2013 was partially offset by an increase in fees received under our retransmission consent agreements.

Broadcast Television Segment - Operating Costs and Expenses

Programming and Production

Programming and production expenses relate to content originating on our broadcast networks and owned local broadcast television stations and include the amortization of owned and acquired programming costs, sports rights, direct production costs, residual and participation payments, production overhead, costs associated with the distribution of our programming to third-party networks and other distribution platforms, and on-air talent costs.

Programming and production costs decreased in 2013 and increased in 2012 primarily due to programming rights and production costs of $1.3 billion associated with our broadcasts of the 2012 London Olympics and 2012 Super Bowl. Excluding the impact of these events, programming and production costs increased in 2013 and 2012 primarily due to our continued investment in original programming.



Other Operating and Administrative

Other operating and administrative expenses include salaries, employee benefits, rent and other overhead expenses.

Other operating and administrative expenses remained relatively flat in 2013. Other operating and administrative expenses increased in 2012 primarily due to higher employee-related costs.



Advertising, Marketing and Promotion

Advertising, marketing and promotion expenses consist primarily of the costs associated with promoting our owned television programming, as well as the marketing of DVDs and costs associated with our digital media properties.

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Advertising, marketing and promotion expenses increased in 2013 and 2012 primarily due to increased spending on marketing associated with our primetime schedule.

Filmed Entertainment Segment Actual and Pro Forma Results of Operations

2013 2012 2011 Pro Forma Actual Actual Actual Pro Forma Combined For the Period For the Period January 29 January 1 Year Ended Year Ended through through Year Ended % Change % Change (in millions) December 31 December 31 December 31 January 28 December 31 2012 to 2013 2011 to 2012 Revenue Theatrical $ 1,568$ 1,390 $ 983 $ 58 $ 1,041 12.8 % 33.5 % Content licensing 1,654 1,540 1,234 171 1,405 7.4 9.7 Home entertainment 1,828 1,834 1,559 96 1,655 (0.3 ) 10.8 Other 402 395 463 28 491 1.8 (19.6 ) Total revenue 5,452 5,159 4,239 353 4,592 5.7 12.4 Operating costs and expenses Programming and production 2,982 3,002 2,266 205 2,471 (0.7 ) 21.5 Other operating and administrative 716 652 768 55 823 9.8 (20.6 ) Advertising, marketing and promotion 1,271 1,426 1,178 96 1,274 (10.8 ) 11.9 Total operating costs and expenses 4,969 5,080 4,212 356 4,568 (2.2 ) 11.2



Operating income (loss) before depreciation and amortization $ 483 $ 79 $

27 $ (3 ) $ 24 509.7 % 234.2 %



Filmed Entertainment Segment - Revenue

Theatrical

Theatrical revenue is generated from the worldwide theatrical release of our owned and acquired films for exhibition in movie theaters and is significantly affected by the timing of each release and the number of films we distribute, as well as their acceptance by consumers. Theatrical revenue is also affected by the number of exhibition screens, ticket prices, the percentage of ticket sale retention by the exhibitors and the popularity of competing films at the time our films are released. The success of a film in movie theaters is a significant factor in determining the revenue a film is likely to generate in succeeding distribution platforms. Theatrical revenue increased in 2013 primarily due to the strong performance of Despicable Me 2 and Fast and Furious 6. Theatrical revenue increased in 2012 primarily due to the strong performance of Ted, Dr. Seuss' The Lorax and The Bourne Legacy. Content Licensing



Content licensing revenue is generated primarily from the licensing of our owned and acquired films to cable, broadcast and premium networks, as well as to digital distributors.

Content licensing revenue increased in 2013 primarily due to the international licensing of our 2012 theatrical releases as well as from the licensing of our current year theatrical releases to digital distributors. Content 61 Comcast 2013 Annual Report on Form 10-K



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licensing revenue increased in 2012 primarily due to a higher volume of our owned and acquired films made available to licensees in 2012, as well as an increase in the licensing of our content to digital distributors.

Home Entertainment

Home entertainment revenue is generated from the sale of our owned and acquired films on DVDs to retail stores, rental kiosks and subscription by mail services, and through digital distributors. Home entertainment revenue is significantly affected by the timing and number of our releases and their acceptance by consumers. Release dates are determined by several factors, including the timing of the exhibition of a film in movie theaters, holiday periods and the timing of competitive releases. Home entertainment revenue remained flat in 2013 primarily due to a decrease in the number of releases in 2013 compared to 2012 offset by the strong performance of Despicable Me 2 and Fast and Furious 6. Home entertainment revenue increased in 2012 primarily due to an increased number of, and improved performance of, our 2012 releases compared to our 2011 releases. While we experienced successful DVD releases in 2013 such as Despicable Me 2 and Fast and Furious 6, the overall DVD market continues to experience declines due to the impact of weak economic conditions, the maturation of the standard-definition DVD format, piracy, and increasing shifts in consumer behavior toward digital distributors, subscription rental services and discount rental kiosks, which generate less revenue per transaction than DVD sales.



Other

We also generate revenue from producing and licensing live stage plays, distributing filmed entertainment produced by third parties and from various digital media properties. Other revenue increased slightly in 2013 primarily due to an increase in revenue generated from our stage plays. Other revenue decreased in 2012 primarily due to lower revenue generated from our stage plays as a result of fewer productions.



Filmed Entertainment Segment - Operating Costs and Expenses

Programming and Production

Programming and production expenses include the amortization of capitalized film production and acquisition costs, residual and participation payments, and distribution expenses. Residual payments represent amounts payable to certain of our employees, including freelance and temporary employees, who are represented by labor unions or guilds and are based on post-theatrical revenue. Participation payments are primarily based on film performance and represent contingent consideration payable to creative talent, third parties that have entered into cofinancing agreements with us and other parties involved in the production of a film. Programming and production costs decreased slightly in 2013 and increased in 2012 primarily due to higher amortization of film costs in 2012 associated with the higher cost of our 2012 film slate.



Other Operating and Administrative

Other operating and administrative expenses include salaries, employee benefits, rent and other overhead expenses.

Other operating and administrative expenses increased in 2013 primarily due to the realization of a receivable in 2012 that was previously reserved for as uncollectible. Other operating and administrative expenses decreased in 2012 due to lower costs associated with our stage plays business as a result of fewer productions.



Advertising, Marketing and Promotion

Advertising and marketing expenses consist primarily of expenses associated with advertising for our theatrical releases and the marketing of DVDs. We incur significant marketing expenses before and throughout the

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release of a film in movie theaters. As a result, we typically incur losses on a film prior to and during the film's exhibition in movie theaters and may not realize profits, if any, until the film generates home entertainment and content licensing revenue. The costs associated with producing and marketing films have generally increased in recent years and may continue to increase in the future. Advertising, marketing and promotion expenses decreased in 2013 primarily due to fewer significant theatrical releases in 2013 compared to 2012. Advertising, marketing and promotion expenses increased in 2012 primarily due to an increase in marketing costs associated with our 2012 theatrical and DVD releases.



Theme Parks Segment Actual and Pro Forma Results of Operations

2013 2012 2011 Pro Forma Actual Actual Actual(a) Pro Forma Combined For the Period For the Period January 29 January 1 Year Ended Year Ended through through Year Ended % Change % Change (in millions) December 31 December 31 December 31 January 28 December 31 2012 to 2013 2011 to 2012 Revenue $ 2,235$ 2,085 $ 1,874 $ 115 $ 1,989 7.2 % 4.8 % Operating costs and expenses 1,231 1,132 1,044 78 1,122 8.8 0.9 Operating income before depreciation and amortization $ 1,004 $ 953 $ 830 $ 37 $ 867 5.3 % 9.9 % (a) Actual amounts include the results of operations for the NBCUniversal acquired businesses and Universal Orlando for the period January 29, 2011



through December 31, 2011. The results of operations for Universal Orlando

for the period January 29, 2011 through June 30, 2011 are eliminated from

our consolidated results because Universal Orlando was recorded as an equity

method investment during that period.

Theme Parks Segment - Revenue

Our Theme Parks segment revenue is generated primarily from theme park attendance and per capita spending at our Universal theme parks in Orlando and Hollywood, as well as from license and other fees.

Attendance at our theme parks and per capita spending depend heavily on the general environment for travel and tourism, including consumer spending on travel and other recreational activities. License and other fees relate primarily to our agreements with third parties that operate the Universal Studios Japan and the Universal Studios Singapore theme parks to license the Universal Studios brand name and other intellectual property.

Theme Parks segment revenue increased in 2013 and 2012 primarily due to higher guest attendance and increases in per capita spending at our Orlando and Hollywood theme parks. The increases in 2013 and 2012 were primarily driven by the continued success of The Wizarding World of Harry Potter attraction in Orlando and the Transformers attractions in Orlando and Hollywood, which opened in June 2013 and May 2012, respectively.



Theme Parks Segment - Operating Costs and Expenses

Our Theme Parks segment operating costs and expenses consist primarily of theme park operations, including repairs and maintenance and related administrative expenses; food, beverage and merchandise costs; labor costs; and sales and marketing costs.



Theme Parks segment operating costs and expenses increased in 2013 and 2012 primarily due to additional costs at our Orlando and Hollywood theme parks associated with additional attractions and increases in food, beverage and merchandise costs associated with the increases in attendance.

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NBCUniversal Headquarters, Other and Eliminations

Headquarters and Other operating costs and expenses incurred by our NBCUniversal businesses include overhead, personnel costs and costs associated with corporate initiatives. Operating costs and expenses increased in 2013 primarily due to higher employee costs. Operating costs and expenses remained flat in 2012 primarily due to higher technology and administrative costs offset by the impact of transaction-related costs associated with the 2011 NBCUniversal transaction, including severance and other compensation-related costs. Eliminations include the results of operations for Universal Orlando for the period January 29, 2011 through June 30, 2011. Our Theme Parks segment included the results of operations of Universal Orlando for this period because these amounts had been reflected in our segment performance measure. These amounts were not included when we measured total NBCUniversal and our consolidated results of operations because we recorded Universal Orlando as an equity method investment for the period January 29, 2011 through June 30, 2011.



Corporate and Other Results of Operations

% Change % Change Year ended December 31 (in millions) 2013 2012 2011 2012 to 2013 2011 to 2012 Revenue $ 600$ 498$ 558 20.6 % (10.8 )% Operating costs and expenses 1,089 874 974 24.7 (10.3 ) Operating income (loss) before depreciation and amortization $ (489 )$ (376 )$ (416 ) (30.2 )% 9.7 %



Corporate and Other - Revenue

Other revenue primarily relates to Comcast-Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia and operates arena management-related businesses.

Other revenue increased in 2013 primarily due to an increase in the number of NHL games compared to 2012 due to the lockout in 2012. Other revenue decreased in 2012 primarily due to a loss in revenue associated with the NHL lockout.



Corporate and Other - Operating Costs and Expenses

Corporate and Other operating costs and expenses primarily include overhead, personnel costs, the cost of corporate initiatives incurred by our Comcast businesses and operating costs and expenses associated with Comcast-Spectacor.

Corporate and Other operating costs and expenses increased in 2013 primarily due to $74 million of expenses associated with the final settlement of the terminated qualified pension plan that provided benefits to former employees of a company we acquired as part of the AT&T Broadband transaction in 2002 as well as an increase in labor costs in our Comcast-Spectacor business. Corporate and Other operating costs and expenses decreased in 2012 primarily due to the NHL lockout. Comcast 2013 Annual Report on Form 10-K 64



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Consolidated Other Income (Expense) Items, Net

Year ended December 31 (in millions) 2013 2012 2011 Interest expense $ (2,574 )$ (2,521 )$ (2,505 ) Investment income (loss), net 576 219 159 Equity in net income (losses) of investees, net (86 ) 959 (35 ) Other income (expense), net (364 ) 773 (133 ) Total $ (2,448 )$ (570 )$ (2,514 ) Interest Expense



Interest expense increased in 2013 primarily due to an increase in our debt outstanding, partially offset by a lower average cost of debt. Interest expense remained flat in 2012.

Investment Income (Loss), Net

Investment income (loss), net increased in 2013 primarily due to the $443 million gain related to the sale of our investment in Clearwire Corporation ("Clearwire") in July 2013. The components of investment income (loss), net in 2013, 2012 and 2011 are presented in a table in Note 6 to Comcast's consolidated financial statements.



Equity in Net Income (Losses) of Investees, Net

The changes in equity in net income (losses) of investees, net in 2013 and 2012 were primarily due to the $876 million of income that was recorded in 2012 related to our portion of SpectrumCo's gain on sale of its advanced wireless services spectrum licenses, as well as $142 million of total equity losses recorded in 2013 attributable to our investment in Hulu, LLC ("Hulu"). In July 2013, we entered into an agreement to provide capital contributions totaling $247 million to Hulu, which we had previously accounted for as a cost method investment. This represented an agreement to provide our first capital contribution to Hulu since our interest was acquired as part of the NBCUniversal transaction, therefore we began to apply the equity method of accounting for this investment. The change in the method of accounting for this investment required us to recognize Hulu's accumulated losses from the date of the NBCUniversal transaction through July 2013.



Other Income (Expense), Net

The changes in other income (expense), net in 2013 and 2012 were primarily due to the $1 billion gain recorded in 2012 related to the sale of our investment in A&E Television Networks LLC ("A&E Television Networks"), as well as an impairment of $236 million of our equity method investment in, and loans with, a regional sports cable network based in Houston, Texas, which was recorded in 2013.



Consolidated Income Tax Expense

Income tax expense reflects federal and state income taxes, adjustments associated with uncertain tax positions and, until the close of the Redemption Transaction in March 2013, the partnership structure of NBCUniversal Holdings whereby income tax expense was not recorded on the portion of its consolidated income that was attributable to GE's noncontrolling interest. Our effective income tax rate in 2013, 2012 and 2011 was 35.8%, 32.3% and 37.2%, respectively. In 2013, our effective income tax rate increased due to the Redemption Transaction in March 2013 in which we acquired GE's noncontrolling common equity interest in NBCUniversal and subsequently recorded income tax expense on all of its consolidated income. In addition, our 2013 income tax expense was reduced by $158 million due to the nontaxable portion of the increase in tax basis associated with the redemption of Liberty Media Series A common stock in October 2013. In 2012, our effective income tax rate decreased due to proportionately higher pretax income at NBCUniversal, which included NBCUniversal's gain on the sale of its equity interest in A&E Television Networks. In addition, our 2012 income tax expense decreased by $109 million due to certain changes in state tax laws that became 65 Comcast 2013 Annual Report on Form 10-K



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effective in 2012. Our income tax expense in the future may continue to be impacted by adjustments to uncertain tax positions and related interest, and changes in tax laws. We expect our 2014 annual effective tax rate to be in the range of 37% to 39%, absent changes in tax laws or significant changes in uncertain tax positions.



Consolidated Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Subsidiary Preferred Stock

The decrease in net income attributable to noncontrolling interests and redeemable subsidiary preferred stock in 2013 was primarily due to our acquisition of GE's remaining 49% common equity interest in NBCUniversal Holdings in March 2013. The increase in net income attributable to noncontrolling interests in 2012 was primarily due to GE's allocated share of the increase in earnings of NBCUniversal during 2012.

Liquidity and Capital Resources

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 facilities, and our ability to obtain future external financing. We anticipate that we will continue to use a substantial portion of our cash flows to meet our debt repayment obligations, to fund our capital expenditures, to invest in business opportunities and to return capital to shareholders.



We also maintain significant availability under our lines of credit 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 and is supported by the Comcast and Comcast Cable Communications, LLC$6.25 billion revolving credit facility due June 2017. In September 2013, we increased the borrowing capacity of our commercial paper program from $2.25 billion to $6.25 billion. As of December 31, 2013, amounts available under our consolidated revolving credit facilities, net of amounts outstanding under our commercial paper program and outstanding letters of credit, totaled $4.7 billion, which included $100 million available under NBCUniversal Enterprise, Inc.'s ("NBCUniversal Enterprise") credit facility. In March 2013, we, four of our wholly owned cable holding company subsidiaries (the "cable guarantors") and NBCUniversal entered into a series of agreements and supplemental indentures to include NBCUniversal as part of our existing cross-guarantee structure. As members of the cross-guarantee structure, we and the cable guarantors fully and unconditionally guarantee NBCUniversal's public debt securities, and NBCUniversal fully and unconditionally guarantees all of our and the cable guarantors' public debt securities, as well as our $6.25 billion revolving credit facility. We and the cable guarantors also fully and unconditionally guarantee NBCUniversal Enterprise's $4 billion of senior notes and its $1.35 billion credit facility due March 2018. NBCUniversal does not guarantee the NBCUniversal Enterprise senior notes or credit facility. See Note 21 to Comcast's consolidated financial statements for additional information on our subsidiary cross-guarantee structure. We, NBCUniversal and our Cable Communications subsidiaries that have provided guarantees are subject to the covenants and restrictions set forth in the indentures governing our public debt securities and in the credit agreements governing the Comcast and Comcast Cable Communications credit facility. We test for compliance with the covenants for our credit facility on an ongoing basis. The only financial covenant is in our credit facility and pertains to leverage, which is the ratio of debt to operating income before depreciation and Comcast 2013 Annual Report on Form 10-K 66



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amortization, as defined in the credit facility. As of December 31, 2013, we met this financial covenant by a significant margin. We do not expect to have to reduce debt or improve operating results in order to continue to comply with this financial covenant. Receivables Monetization In December 2013, the programs under which NBCUniversal monetized certain of its accounts receivable with a syndicate of banks were terminated. The final payments of $1.4 billion associated with the termination of these programs are a component of net cash provided by operating activities in Comcast's and NBCUniversal's consolidated statement of cash flows. See Note 17 to Comcast's consolidated financial statements and Note 16 to NBCUniversal's consolidated financial statements for additional information.



Operating Activities

Components of Net Cash Provided by Operating Activities

Year ended December 31 (in millions) 2013 2012 2011 Operating income $ 13,563$ 12,179$ 10,721 Depreciation and amortization 7,871 7,798 7,636 Operating income before depreciation and amortization 21,434 19,977 18,357 Noncash share-based compensation 419 371 344 Termination of receivables monetization programs (1,442 ) - - Changes in operating assets and liabilities 93 (418 ) (603 ) Cash basis operating income 20,504 19,930 18,098 Payments of interest (2,355 ) (2,314 ) (2,441 ) Payments of income taxes (3,946 ) (2,841 ) (1,626 ) Proceeds from investments and other 162 213 360 Excess tax benefits under share-based compensation (205 ) (134 ) (46 ) Net cash provided by operating activities $ 14,160 $



14,854 $ 14,345

The changes in operating assets and liabilities in 2013 compared to the changes in 2012 were primarily due to the timing of receipts for our accounts receivable, increases in deferred revenue associated with our Olympics broadcasts and a decrease in film and television costs. The increases were partially offset by payments made in 2013 related to the termination of a film financing arrangement and payments of our accounts payable and accrued expenses related to trade creditors, as well as the timing of other operating items. The changes in operating assets and liabilities in 2012 compared to the changes in 2011 were primarily related to a decrease in film and television costs, partially offset by the settlement in 2012 of a $237 million liability associated with an unfavorable Olympic contract that had been recorded through the application of acquisition accounting in 2011, as well as the timing of other operating items, including accounts receivable and accounts payable and accrued expenses related to trade creditors.



Interest payments remained relatively flat in 2013 compared to 2012. The decrease in interest payments in 2012 was primarily due to the repayment and redemption of certain of our debt obligations.

The increase in income tax payments in 2013 was primarily due to higher taxable income from operations, the net impact of the economic stimulus legislation, the settlement of tax disputes and the repatriation of foreign earnings. The increase in income tax payments in 2012 was primarily due to increases in taxable income, which resulted in higher federal tax payments made in 2012, and the lower net benefit in 2012 of the economic stimulus legislation. We expect income tax payments to increase in 2014 primarily due to higher taxable income from operations and the expiration of the economic stimulus legislation. 67 Comcast 2013 Annual Report on Form 10-K



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Investing Activities

Net cash used in investing activities in 2013 consisted primarily of cash paid for capital expenditures, acquisitions of real estate properties, purchases of investments and cash paid for intangible assets. Net cash used in investing activities in 2012 consisted primarily of cash paid for capital expenditures, cash paid for intangible assets and the purchase of investments and was substantially offset by proceeds from sales of businesses and investments and return of capital from investees.



Capital Expenditures

Our most significant recurring investing activity has been capital expenditures in our Cable Communications segment, and we expect that this will continue in the future. The table below summarizes the capital expenditures we incurred in our Cable Communications segment in 2013, 2012 and 2011. Year ended December 31 (in millions) 2013 2012 2011 Cable distribution system $ 1,819$ 1,720$ 1,715 Customer premise equipment 2,990 2,678 2,594 Other equipment 527 462 420 Buildings and building improvements 67 57 77 Land - 4 - Total $ 5,403$ 4,921$ 4,806Cable Communications capital expenditures increased in 2013 and 2012 primarily due to an increase in customer premise equipment purchases, including purchases related to our X1 platform and our wireless gateways in 2013, and increased investment in business services and network capacity. Capital expenditures in our NBCUniversal segments increased 52.0% to $1.2 billion in 2013 primarily due to continued investment at our Universal theme parks. Capital expenditures in our NBCUniversal segments increased 75.7% to $763 million in 2012 primarily due to increased investment at our Universal theme parks and increased investment in technical infrastructure to support our cable networks and broadcast television operations. The rate of growth of our capital expenditures for 2014 is expected to increase as we continue to invest significantly in the deployment of our X1 platform and wireless gateways to our customers and the expansion of business services and our home security and automation services. Capital expenditures for subsequent years will depend on numerous factors, including acquisitions, competition, changes in technology, regulatory changes, and the timing and rate of deployment of new services and capacity for existing services. In addition, we have invested and expect to continue to invest in existing and new attractions at our Universal theme parks.



Cash Paid for Intangible Assets

In 2013 and 2012, cash paid for intangible assets consisted primarily of software.

Acquisitions of Real Estate Properties

In 2013, acquisitions of real estate properties included NBCUniversal's purchases of the 30 Rockefeller Plaza properties it occupies in connection with the Redemption Transaction, NBCUniversal's purchase of the property located at 10 Universal City Plaza, which is adjacent to Universal Studios in Hollywood, California and our purchase of an 80% interest in a business whose primary asset is our corporate headquarters located in Philadelphia, Pennsylvania. Comcast 2013 Annual Report on Form 10-K 68



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Acquisitions

Our 2013 and 2012 acquisitions were not significant. In 2011, we closed the NBCUniversal transaction and NBCUniversal acquired the remaining 50% equity interest in Universal Orlando that it did not already own. See Note 4 to Comcast's consolidated financial statements for additional information on our acquisitions.

Proceeds from Sales of Businesses and Investments

In 2013, proceeds from sales of businesses and investments were primarily related to the redemption of our Liberty Media Series A common stock by Liberty Media Corporation and the sale of our investment in Clearwire. In 2012, proceeds from sales of businesses and investments were primarily related to the A&E Television Networks transaction. Following the close of the A&E Television Networks transaction, NBCUniversal no longer receives dividends from A&E Television Networks. In 2012 and 2011, NBCUniversal received $129 million and $196 million, respectively, in dividends from A&E Television Networks, which were included in net cash provided by operating activities. In 2011, proceeds from sales of businesses and investments were primarily related to the sale of the Philadelphia 76ers.



Return of Capital from Investees

In 2013, return of capital from investees consisted primarily of a distribution received from The Weather Channel Holding Corp. ("The Weather Channel"). In 2012, return of capital from investees consisted primarily of distributions received from the SpectrumCo transaction. Our return of capital from investees in 2011 was not significant. Purchases of Investments In 2013, purchases of investments related primarily to equity securities that were held as collateral for our prepaid forward sale agreements. Our purchases of investments in 2012 and 2011 were not significant.



Financing Activities

Net cash used in financing activities consisted primarily of our acquisition of GE's remaining 49% common equity interest in NBCUniversal Holdings, repayments of debt, repurchases of our common stock, dividend payments and the effective settlement of our Station Venture liability, which were partially offset by proceeds from borrowings and issuances of common stock. Proceeds from borrowings fluctuate from year to year based on the amounts paid to fund acquisitions and debt repayments. In January 2013, we issued $750 million aggregate principal amount of 2.850% senior notes due 2023, $1.7 billion aggregate principal amount of 4.250% senior notes due 2033 and $500 million aggregate principal amount of 4.500% senior notes due 2043. In March 2013, in connection with the Redemption Transaction, we consolidated an additional $4 billion aggregate principal amount of senior notes issued by NBCUniversal Enterprise and $1.25 billion of borrowings under the NBCUniversal Enterprise credit facility.



During 2013, we repaid $2.3 billion aggregate principal amount of our debt outstanding at maturity.

We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases of our outstanding public notes and debentures, depending on various factors, such as market conditions. See Note 9 to Comcast's consolidated financial statements for additional information on our financing activities, including details of our debt repayments and borrowings, and long-term debt incurred in connection with the Redemption Transaction, including the debt issued by NBCUniversal Enterprise, which we now consolidate. 69 Comcast 2013 Annual Report on Form 10-K



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Share Repurchases and Dividends

In 2013, we repurchased 49 million shares of our Class A Special common stock for $2.0 billion. As of December 31, 2013, we had $1.5 billion remaining under this authorization. In January 2014, our Board of Directors increased our share repurchase program authorization to $7.5 billion, which does not have an expiration date. Under this authorization, we may repurchase shares in the open market or in private transactions. We intend to repurchase $3 billion of shares during 2014, subject to market conditions. Our Board of Directors declared quarterly dividends totaling $2.0 billion in 2013. We paid dividends of $2.0 billion in 2013. In January 2014, our Board of Directors approved a 15% increase in our dividend to $0.90 per share on an annualized basis and approved our first quarter dividend of $0.225 per share to be paid in April 2014. We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors.



The table below sets forth information on our share repurchases and dividends paid in 2013, 2012 and 2011.

[[Image Removed: LOGO]] Contractual Obligations



The table below presents our future contractual obligations as of December 31, 2013 by the period in which the payments are due.

Payment Due by Period (in millions) Total Year 1 Years 2-3 Years 4-5 More than 5 Debt obligations(a) $ 47,810$ 3,273$ 6,910$ 7,946$ 29,681 Capital lease obligations 37 7 11 5 14 Operating lease obligations 2,144 385 628 458 673 Purchase obligations(b) 46,867 8,434 9,488 7,573 21,372 Other long-term liabilities reflected on the balance sheet(c) 10,184 3,674 1,757 814 3,939 Total(d) $ 107,042$ 15,773$ 18,794$ 16,796$ 55,679



Refer to Note 9 (long-term debt) and Note 18 (commitments and contingencies) to our consolidated financial statements.

(a) Excludes interest payments.



(b) Purchase obligations consist of agreements to purchase goods and services

that are legally binding on us and specify all significant terms, including

fixed or minimum quantities to be purchased and price provisions. Our

purchase obligations related to our Cable Communications segment include

programming contracts with cable networks and local broadcast television

stations, contracts with customer premise equipment manufacturers,

communication vendors and multichannel video providers for which we provide

advertising sales representation, and other contracts entered into in the

normal course of business. Cable Communications programming contracts in the

table above include amounts payable under fixed or minimum guaranteed

commitments and do not represent the total fees that are expected to be paid

under programming contracts, which we expect to be higher because these

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the number of subscribers receiving the programming. Our purchase obligations

related to our NBCUniversal segments consist primarily of commitments to

acquire film and television programming, including U.S. television rights to

future Olympic Games through 2020, Sunday Night Football on NBC through the

2022-23 season, including the Super Bowl in 2015, 2018 and 2021, NHL games

through the 2020-21 season, Spanish-language U.S. television rights to FIFA

World Cup games through 2022, U.S television rights to English Premier League

soccer games through the 2015-16 season, certain PGA TOUR golf events through

2021 and certain NASCAR events through 2024, as well as obligations under

various creative talent and employment agreements, including obligations to

actors, producers, television personalities and executives, and various other

television commitments. Purchase obligations do not include contracts with

immaterial future commitments.



(c) Other long-term liabilities reflected on the balance sheet consist primarily

of prepaid forward sale agreements of equity securities we hold; subsidiary

preferred shares; deferred compensation obligations; pension, postretirement

and postemployment benefit obligations; contingent consideration obligation

related to the NBCUniversal transaction; and a contractual obligation

acquired in connection with the Universal Orlando transaction. This

contractual obligation involves financial interests held by a third party in

certain NBCUniversal businesses and is based on a percentage of future

revenue of the specified businesses. This contractual obligation provides

the third party with the option, beginning in 2017, to require NBCUniversal

to purchase the interest for cash in an amount equal to the fair value of

the estimated future payments. Reserves for uncertain tax positions of $1.7

billion are not included in the table above because it is uncertain if and

when these reserves will become payable. Payments of $1.6 billion of

participations and residuals are also not included in the table above

because we cannot make a reliable estimate of the period in which these

obligations will be settled.



(d) Total contractual obligations are made up of the following components.

(in millions) Liabilities recorded on the balance sheet $ 59,410 Commitments not recorded on the balance sheet 47,632 Total $ 107,042



Off-Balance Sheet Arrangements

As of December 31, 2013, we did not have any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.



Critical Accounting Judgments and Estimates

The preparation of our 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 values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe our judgments and related estimates associated with the valuation and impairment testing of our cable franchise rights, the accounting for film and television costs, and the accounting for income taxes are critical in the preparation of our consolidated financial statements. Management has discussed the development and selection of these critical accounting judgments and estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed our disclosures relating to them, which are presented below. See Notes 8, 5 and 15 to Comcast's consolidated financial statements for a discussion of our accounting policies with respect to these items.



Valuation and Impairment Testing of Cable Franchise Rights

Our largest asset, our cable franchise rights, results from agreements we have with state and local governments that allow us to construct and operate a cable business within a specified geographic area. The value of a franchise is derived from the economic benefits we receive from the right to solicit new customers and to market new services, such as advanced video services and high-speed Internet and voice services, in a particular service area. The amounts we record for cable franchise rights are primarily a result of cable system acquisitions. Typically when we acquire a cable system, the most significant asset we record is the value of the cable franchise rights. Often these cable system acquisitions include multiple franchise areas. We currently serve approximately 6,400 franchise areas in the United States. 71 Comcast 2013 Annual Report on Form 10-K



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We have concluded that our cable franchise rights have an indefinite useful life since there are no legal, regulatory, contractual, competitive, economic or other factors which limit the period over which these rights will contribute to our cash flows. Accordingly, we do not amortize our cable franchise rights but assess the carrying value of our cable franchise rights annually, or more frequently whenever events or changes in circumstances indicate that the carrying amount may exceed the fair value ("impairment testing"). For the purpose of our impairment testing, we have grouped the recorded values of our various cable franchise rights into our three Cable Communications divisions or units of account. We evaluate the unit of account periodically to ensure our impairment testing is performed at an appropriate level. The annual impairment test for indefinite-lived intangibles allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible is less than its carrying amount. An entity may choose to perform the qualitative assessment or an entity may bypass the qualitative assessment and proceed directly to the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. When performing a quantitative assessment, we estimate the fair value of our cable franchise rights primarily based on a discounted cash flow analysis that involves significant judgment. When analyzing the fair values indicated under the discounted cash flow models, we also consider multiples of operating income before depreciation and amortization generated by the underlying assets, current market transactions and profitability information. In 2013, we performed a qualitative assessment of our cable franchise rights. We considered various factors that would affect the estimated fair values of our cable franchise rights, including changes in our projected future cash flows associated with our Cable Communications segment, industry, market and macroeconomic conditions and also the 27% increase in our market capitalization since we performed our 2012 quantitative assessment. In addition, we considered the results of our 2012 quantitative assessment, in which the estimated fair values of our franchise rights exceeded the carrying value in our three Cable Communications Divisions by 19%, 33% and 37%, respectively. We also compared our weighted average cost of capital in 2013 to that used in our 2012 quantitative assessment and it had remained relatively consistent. Based on our 2013 qualitative assessment, we concluded that it was more likely than not that the estimated fair values of our franchise rights were higher than our carrying values and that the performance of a quantitative impairment test was not required. Since the adoption of the accounting guidance related to goodwill and intangible assets in 2002, we have not recorded any significant impairment charges to cable franchise rights as a result of our impairment testing. A future change in the unit of account could result in the recognition of an impairment charge. We could also record impairment charges in the future if there are changes in long-term market conditions, in expected future operating results, or in federal or state regulations that prevent us from recovering the carrying value of these cable franchise rights. Assumptions made about increased competition and economic conditions could also impact the results of any qualitative assessment and the valuations used in future annual quantitative impairment testing and result in a reduction in the fair values of our cable franchise rights.



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, including acquired libraries, and accrue costs associated with participation and residual payments to programming and production expense. We generally record the amortization and the accrued costs using the individual film forecast computation method, which amortizes such costs using the ratio of the current period's revenue to estimated total remaining gross revenue from all sources ("ultimate revenue"). Estimates of ultimate revenue have a significant impact on how quickly capitalized costs are amortized and, therefore, are updated regularly. Comcast 2013 Annual Report on Form 10-K 72



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Our estimates of ultimate revenue for films generally include revenue from all sources that are expected to be earned within 10 years from the date of a film's initial release. These estimates are based on the historical performance of similar content, as well as factors unique to the content itself. The most sensitive factor affecting our estimate of ultimate revenue for a film intended for theatrical release is the film's theatrical performance, as subsequent revenue from the licensing and sale of a film has historically exhibited a high correlation to its theatrical performance. Upon a film's release, our estimates of revenue from succeeding markets, including home entertainment and other distribution platforms, are revised based on historical relationships and an analysis of current market trends. With respect to television series or other owned television programming, the most sensitive factor affecting our estimate of ultimate revenue is whether the series can be successfully licensed beyond its initial license. Initial estimates of ultimate revenue are limited to the amount of revenue contracted for each episode under the initial license. Once it is determined that a series can be licensed for subsequent platforms, revenue estimates for these platforms, such as U.S. and international syndication, home entertainment, and other distribution platforms, are included in ultimate revenue. In the case of television series and owned television programming, revenue estimates for produced episodes include revenue expected to be earned within 10 years of delivery of the initial episode or, if still in production, 5 years from the delivery of the most recent episode, if later. Capitalized film and television costs, as well as stage play production costs, are subject to impairment testing when certain triggering events are identified. If the fair value of a production falls below its unamortized cost, we would record an adjustment for the amount by which the unamortized capitalized costs exceed the production's fair value. The fair value assessment is generally based on estimated future discounted cash flows, which are supported by our internal forecasts. Adjustments to capitalized film and stage play production costs of $167 million and $161 million were recorded in 2013 and 2012, respectively.



Income Taxes

We base our provision for income taxes on our current period income, changes in our deferred income tax assets and liabilities, income tax rates, changes in estimates of our uncertain tax positions, and tax planning opportunities available in the jurisdictions in which we operate. We prepare and file tax returns based on our interpretation of tax laws and regulations, and we record estimates based on these judgments and interpretations. From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. In these cases, we evaluate our tax positions using the recognition threshold and the measurement attribute in accordance with the accounting guidance related to uncertain tax positions. Examples of these transactions include business acquisitions and dispositions, including consideration paid or received in connection with these transactions, and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We determine whether it is more-likely-than-not that a tax position will be sustained on examination, including the resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to be recognized in our financial statements. The tax position is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized when the position is ultimately resolved. We adjust our estimates periodically to reflect changes in circumstances in ongoing examinations by and settlements with the various taxing authorities, as well as changes in tax laws, regulations and precedent. We believe that adequate accruals have been made for income taxes. When uncertain tax positions are ultimately 73 Comcast 2013 Annual Report on Form 10-K



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resolved, either individually or in the aggregate, differences between our estimated amounts and the actual amounts are 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 flow for any one period. As of December 31, 2013, our uncertain tax positions and related accrued interest were $1.7 billion and $780 million, respectively.


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