Page |1 DEVRY UNIVERSITY

Analysis of 2010 Annual Report

Randall Potts Accounting 305 Professor Nekesha Joy August 14, 2011

Comcast Corporation, commonly referred to as Comcast, is the largest cable operator, home internet service provider, and third largest home telephone service provider in the United States, providing cable television, broadband internet, and telephone service to both residential and commercial customers in 39 states and the District of Columbia. The company is headquartered in Philadelphia, Pennsylvania. Comcast also has significant holding in several cable networks (including E! Entertainment Television, Style Network, G4, The Golf Channel and Versus), distribution (The Platform), and related businesses. Comcast acquired a majority stake in media conglomerate NBC Universal in January 2011.

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Contents
Analysis of 2010 Annual Report .................................................................................................................... 1

What is the amount of property and equipment on the balance sheet for the two most recent years? What is the amount of depreciation expense? What amounts are on the cash flow statement for the most recent year that relate to depreciation, gains and sales of property and equipment, and purchases and sale of property and equipment? What amounts are permitted for inclusion in the capitalized cost of property and equipment? ............................................................. 7 Looking at the footnote disclosures of the company, what are the individual components of property and equipment? For example, what are the amounts for land, building, equipment, accumulated depreciation, and so forth? How do companies account for nonmonetary exchange and dispositions of property and equipment? ..................................................................................... 8 Does the company have intangible assets? If so what are the types of intangible assets (patent, copyrights, etc.) and their amounts? What is the amount of amortization expense? What amounts on the most recent cash flow statement relate to the purchase and sale of intangible assets? How do intangible assets differ from property and equipment? What costs do we include in intangible assets? ................................................................................................................................................. 10 What are the company's depreciation methods? What is the range of estimated useful lives used for depreciating their assets? Does the company use the same depreciation methods for financial statements and tax returns? If not, please describe the methods used for tax purposes. ................ 13 What are the company's footnote disclosures relating to impairment? Please also describe how to determine if impairment exists and how to calculate the impairment loss. ...................................... 14 What are the amounts and descriptions for the company's current liabilities for the most recent year? Does the company have any contingent liabilities? If yes, please describe. What are the three categories of contingent liabilities and the treatment for each type? Does the company have any subsequent events disclosed in their footnotes? If so, please describe them. .................................. 15 What are the amounts and descriptions for all of the company's long-term liabilities on their balance sheet for the most recent two years? What is the interest expense for the two most recent years? What amounts are included in the cash flow statements for proceeds from issuance of debt and repayment of debt for the most recent year? For each note payable discussed in the footnotes disclosures, what is the interest rate, total amount borrowed, and maturity date? ......................... 18 Does the company have bonds payable? If so, what are the amounts? Please also describe how bonds payable differ from notes payable and how to account for the issuance of bonds at par, at a discount, and at a premium. How is the discount and premium amortized? What is the effective interest method? ................................................................................................................................ 20 Works Cited ................................................................................................................................................. 21

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Comcast Corporation, Inc. Consolidated Balance Sheet December 31, 2010 (in millions) Current assets: 2010 2009 Difference %Change Cash and Cash Equivalents $5,984 $671 $5,313 792% Investments 81 50 $31 62% Accounts receivable, less allowance for doubtful 1,855 1,711 $144 8% accounts of $173 and $175 Deferred Income Taxes 174 240 ($66) -28% Other Current Assets 792 551 $241 44% $8,886 $3,223 Total Current Assets $5,663 176% Investments 6,670 5,947 $723 12% Property, plant and equipment, net of 23,515 20,858 $2,657 13% depreciation of $32,505 and $27,810 Franchise Rights 59,442 59,452 ($10) 0% Goodwill 14,958 14,933 $25 0% Other intangible assets, net of accumulated 3,602 4,105 ($503) -12% amortization of $9,791 and $80,711 Other Noncurrent Assets Net 1,461 1,218 $243 20% Total Assets $118,534 $109,736 $8,798 8% Current Liabilities Accounts Payable and accrued expenses related $3,291 $3,094 $197 6% to trade creditors Accrued Salaries and Wages 475 487 ($12) -2% Accrued Expenses and Other Current Liabilities 2,668 2,512 $156 6% Current Portion of Long-Term Debt 1,800 1,156 $644 56% Total Current Liabilities $8,234 $7,249 $985 14% Long-Term Debt, Less Current Portion 29,615 27,940 $1,675 6% Deferred Income Taxes 28,246 27,800 $446 2% Other Noncurrent Liabilities 7,862 6,767 $1,095 16% Redeemable Non-controlling Interests 143 166 ($23) -14% Total Liabilities $74,100 $69,922 $4,178 6% Equity: Class A Common Stock 24 24 $0 0% Class A Special Common Stock 8 8 $0 0% Additional Paid-In Capital 39,780 40,247 ($467) -1% Retained Earnings 12,158 10,005 $2,153 22% Treasury Stock (7,517) (7,517) $0 0% Accumulated Other Comprehensive Income (99) (46) ($53) 115% Non-controlling Interests 80 90 ($10) -11% Total Liabilities and Equity $118,534 $112,733 $5,801 5%
Figure 1: Consolidated Balance Sheet

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Comcast Corporation, Inc. Consolidated Statement of Operations For the year ending December 31, 2010 (in millions except per share data) 2010 $37,937 2009 $35,756 2008 $34,423

Revenue Costs and Expenses: Operating (excluding depreciation and

amortization)

15,250 8,091 5,539 1,077 29,957 7,980 (2,156) 288 (141) 133 (1,876) 6,104 (2,436) 3,668 (33) $3,635 $1.29 $1.29 $0.370

14,380 7,662 5,483 1,017 28,542 7,214 (2,348) 282 (64) 22 (1,487) 5,106 (1,478) 3,620 10 $3,638 $1.27 $1.26 $0.297

13,662 7,629 5,457 943 27,691 6,732 (2,439) 89 (39) (285) (2,674) 4,058 (1,533) 2,525 22 $2,547 $0.87 $0.86 $0.250

Selling, General and Administrative Depreciation Amortization Operating Income Other Income (Expenses): Interest Expense Investment Income (Loss), net Equity in Net Income (Losses) of Affiliates, net Other Income (Expense) Income before Taxes Income Tax Expense Net Income from Consolidated Operations Net (Income) loss Attributed to Noncontrolling Interests Net Income Attributed to Comcast Corporation Basic Earnings per Common Share Attributable To Shareholders Diluted Earnings per Common Share Attributable to Shareholders Dividends Declared per Common Share Attribute Shareholders

Figure 2: Consolidated Statement of Operations

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Comcast Corporation, Inc Consolidated Statement of Cash Flows Year ended December 31 (in millions) 2010 Operating Activities Net income from consolidated operations $3,668 Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities: Depreciation 5,539 Amortization 1,077 Share-based compensation 300 Noncash Interest Expense (Income), net 141 Equity in net (Income) loss of affiliates, net 141 (Gains) losses on investments and noncash other (income) expense, net (267) Deferred income taxes 649 Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: Change in accounts receivable, net (131) Change in accounts payable and accrued expenses related to trade creditors 37 Change in other operating assets and liabilities 125 Net cash provided by (used in) operating activities 11,179 Investing Activities: Capital expenditures (4,961) Cash paid for intangible assets (536) Acquisitions, net of cash acquired (183) Proceeds from sales of investments 99 Purchases of investments (260) Other 130 Net cash provided by (used in) investing activities (5,711) Financing Activities: Proceeds from borrowings 3,420 Repurchases and repayments of debt (1,153) Repurchases of common stock (1,200) Dividends paid (1,064) Issuances of common stock 34 Other (192) Net cash provided by (used in) financing activities (166) Increase (decrease) in cash and cash equivalents 5,313 Cash and cash equivalents, beginning of year 671 Cash and cash equivalents, end of year $5,984 2009 $3,628 2008 $2,525

5,483 1,017 257 160 64 (201) 832 (84) (136) (739) 10,281 (5,177) (522) (88) (346) 74 (5,897) 1,564 (4,738) (765) (761) 1 (209) (4,908) (524) 1,195 $671

5,457 943 258 209 39 321 495 39 (38) (17) 10,231 (5,750) (527) (738) 737 (1,167) (32) (7,477) 3,535 (2,610) (2,800) (547) 53 (153) (2,522) 232 963 $1,195

Figure 3: Consolidated Statement of Cash Flows

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What is the amount of property and equipment on the balance sheet for the two most recent years? What is the amount of depreciation expense? What amounts are on the cash flow statement for the most recent year that relate to depreciation, gains and sales of property and equipment, and purchases and sale of property and equipment? What amounts are permitted for inclusion in the capitalized cost of property and equipment?

Property and equipment are stated at cost. Comcast capitalizes improvements that extend asset lives and expense repairs and maintenance costs as incurred. For assets that are sold or retired, they remove the applicable cost and accumulated depreciation and, unless the gain or loss on disposition is presented separately, Comcast recognizes it as a component of depreciation expense (Comcast Corporation Annual Report, 2011). Comcast capitalizes the costs associated with the construction of and improvements to their cable transmission and distribution facilities and new service installations. Costs include all direct labor and materials, as well as various indirect costs. They capitalize initial customer installation costs that are directly attributable to installation of the product, including material, labor and overhead costs, in accordance with accounting guidance related to cable television companies. All costs incurred in connection with subsequent service disconnects and reconnects are expensed as they are incurred. Comcast records depreciation using the straightline method over the assets estimated useful life (Comcast Corporation Annual Report, 2011). Comcast evaluates the recoverability of their property and equipment whenever events or substantive changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. The evaluation is based on the cash flows generated by the underlying assets and profitability information, including estimated future operating

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results, trends or other determinants of fair value. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset, we would recognize an impairment charge for the difference between the estimated fair value and the carrying value of the asset (Comcast Corporation Annual Report, 2011). Looking at the footnote disclosures of the company, what are the individual components of property and equipment? For example, what are the amounts for land, building, equipment, accumulated depreciation, and so forth? How do companies account for nonmonetary exchange and dispositions of property and equipment?

Comcast Corporation, Inc Property and Equipment Detail December 31, 2011 (in millions) Weighted Average Original Useful Life at December 31, 11 years 6 years 6 years 20 years -

Cable Distribution System Customer Premises Equipment Vehicles and Other Equipment Buildings and Building Improvements Land Property and Equipment at Cost Less: Accumulated Depreciation Property and Equipment, net

2010 2009 $27,727 $24,540 21,716 19,639 4,392 5,343 1,981 1,937 204 206 56,020 51,665 (32,505) (27,810) $23,515 $23,855

Figure 4: Property and Equipment Detail

In 2010, Comcast performed an evaluation of its asset base, resulting in the removal of fully depreciated assets no longer in service. Comcast also made adjustments within property and equipment that resulted in changes in the prior year amounts classified in the cable distribution system, customer premises equipment and vehicles and other equipment categories. These adjustments did not affect prior year property and equipment, net.

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The accounting guidance related to financial assets and financial liabilities (financial instruments) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1: consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2: consists of financial instruments that are valued using models or other valuation methodologies. These models use inputs that are observable either directly or indirectly; Level 2 inputs include: Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets or liabilities in markets that are not active. Pricing models whose inputs are observable for substantially the full term of the financial instrument. Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument. Level 3: consists of financial instruments whose values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

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Comcasts assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial instruments and their classification within the fair value hierarchy. Financial instruments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There have been no changes in the classification of any financial instruments within the fair value hierarchy in the periods presented (Comcast Corporation Annual Report, 2011). Does the company have intangible assets? If so what are the types of intangible assets (patent, copyrights, etc.) and their amounts? What is the amount of amortization expense? What amounts on the most recent cash flow statement relate to the purchase and sale of intangible assets? How do intangible assets differ from property and equipment? What costs do we include in intangible assets?

Comcast Corporation, Inc. The Carrying Amount and Accumulated Amortization of Intangible Assets December 31, 2011 (in millions) Useful Life at December 31, 2010 4 to 12 years 6 to 22 years 5 to 15 years 3 to 5 years 3 to 10 years 1 to 10 years 2 to 25 years 2010 Gross Caring Amount $5,554 1,858 1,077 2,594 307 1,149 854 $13,393 Accumulated Amortization ($4,682) (1,287) (608) (1,624) (207) (976) (417) ($9,791) Gross Caring Amount $5,515 1,861 968 2,283 246 1,094 849 $12,816 2009 Accumulated Amortization ($4,370) (1,119) (499) (1,388) (148) (853) (334) ($8,711)

Customer Relationships Programming Distribution Rights Cable franchise renewal cost and contractual operating rights Software Patents and Other Technology Rights Programming Agreements and Rights Other Agreements and Rights Total

Figure 5: The Carrying Amount and Accumulated Amortization of Intangible Assets

Franchise Rights Comcast franchise rights consist primarily of cable franchise rights. Cable franchise rights represent the value the company attributes to agreements with state and local authorities that allow access to homes and businesses in cable service areas acquired in business combinations. Comcast also has sports franchise rights, which represent the value the company attaches to our two professional sports teams that were acquired in business

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combinations. Comcast does not amortize their franchise rights because the company has determined that they have an indefinite life. The company reassesses this determination periodically or whenever events or substantive changes in circumstances occur. Costs the company incurs in negotiating and renewing cable franchise agreements are included in other intangible assets and are primarily amortized on a straight-line basis over the term of the franchise agreement (Comcast Corporation Annual Report, 2011). Programming Distribution Rights Comcast programming subsidiaries enter into multiyear license agreements with various multichannel video providers for distribution of their networks programming (programming distribution rights). Comcast capitalizes amounts paid to secure or extend these programming distribution rights and include them within other intangible assets. They amortize these programming distribution rights on a straight-line basis over the term of the related license agreements. Comcast classifies the amortization of these programming distribution rights as a reduction to revenue unless the Programming subsidiary receives, or will receive, an identifiable benefit from the distributor separate from the fee paid for the programming distribution right, in which case they recognize the fair value of the identified benefit in the period in which it is received (Comcast Corporation Annual Report, 2011). Software Comcast capitalizes direct development costs associated with internal-use software, including external direct costs of material and services and payroll costs for employees devoting time to these software projects. They also capitalize costs associated with the purchase of software licenses. Comcast includes these costs within other intangible assets and amortize

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them on a straight-line basis over a period not to exceed 5 years, beginning when the asset is substantially ready for use. The company expenses maintenance and training costs, as well as costs incurred during the preliminary stage of a project, as they are incurred. They capitalize initial operating system software costs and amortize them over the life of the associated hardware (Comcast Corporation Annual Report, 2011).

Other Intangibles Other intangible assets consist primarily of customer relationships acquired in business combinations, programming distribution rights, software, cable franchise renewal costs, and programming agreements and rights. These assets are amortized primarily on a straight-line basis over the estimated useful life or the term of the related agreements (Comcast Corporation Annual Report, 2011). Does the company have goodwill? What are the footnote disclosures relating to goodwill and the related acquisition? Please also describe the calculation of goodwill and how we account for differences between fair value and book value of assets acquired.
Comcast Corporation, Inc. Changes in the Caring Amount of Goodwill By Business Segment (in millions) Corporate Cable Programming and Other a $12,732 $1,620 $537 Balance, December 31, 2008 Acquisitions 33 10 Settlements in Adjustments 63 (62) a 12,828 1,630 475 Balance, December 31, 2009 Acquisitions 81 13 10 Impairments (60) (16) Settlements and Adjustments (3) (1) 1 Balance, December 31, 2010 $12,906 $1,582 $470

Total $14,889 43 1 14,933 104 (76) (3) $14,958

(a) The December 31, 2008 and 2009 Cable segment and Corporate and Other amounts have been adjusted for segment reclassifications to be consistent with our 2010

Figure 6: Changes in the Carrying Amount of Goodwill by Business Segment

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Comcast assess the recoverability of its goodwill annually, or more frequently whenever events or substantive changes in circumstances indicate that the asset might be impaired. The company generally performs the assessment of its goodwill one level below the operating segment level. In its Cable business, since components one level below the segment level (Cable divisions) are not separate reporting units and have similar economic characteristics, the company aggregates the components into one reporting unit at the Cable segment level. The assessment of recoverability considers if the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the carrying amount of the reporting units goodwill exceeds its implied fair value. Unless presented separately, the impairment charge is included as a component of amortization expense (Comcast Corporation Annual Report, 2011). What are the company's depreciation methods? What is the range of estimated useful lives used for depreciating their assets? Does the company use the same depreciation methods for financial statements and tax returns? If not, please describe the methods used for tax purposes.

For its financial reports Comcast uses straight-line depreciation with a range of estimated useful lives shown in figure 4, "Property and Equipment Detail". The company bases their provision for income taxes on its current period income, changes in its deferred income tax assets and liabilities, income tax rates, changes in estimates of their uncertain tax positions, and tax planning opportunities available in the jurisdictions in which they operate. Substantially all of the companies income is from operations in the United States. Comcast recognizes its deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of their assets and liabilities and for the expected benefits of using

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net operating loss carry forwards. When a change in the tax rate or tax law has an impact on deferred taxes, Comcast applies the change based on the years in which the temporary differences are expected to reverse. Comcast records the change in its consolidated financial statements in the period of enactment (Comcast Corporation Annual Report, 2011). Income tax consequences that arise in connection with business combinations include identifying the tax bases of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination. Deferred tax assets and liabilities related to temporary differences of acquired entities are recorded as of the date of the business combination and are based on the companies estimate of the ultimate tax basis that will be accepted by the various taxing authorities. Comcast records liabilities for contingencies associated with prior tax returns filed by the acquired entity based on criteria set forth in the accounting guidance related to accounting for uncertainty in income taxes. Comcast adjusts the deferred tax accounts and the liabilities periodically to reflect any revised estimated tax basis and any estimated settlements with the various taxing authorities. The effects of these adjustments are applied to income tax expense (Comcast Corporation Annual Report, 2011). Comcast classifies interest and penalties, if any, associated with their uncertain tax positions as a component of income tax expense (Comcast Corporation Annual Report, 2011).
What are the company's footnote disclosures relating to impairment? Please also describe how to determine if impairment exists and how to calculate the impairment loss.

Comcast's disclosures regarding impairment are demonstrated in figure 6, "The Changes in the Carrying Amount of Goodwill by Business Segments". Assets are tested for impairment

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when events or changes in indicators suggest that book value may not be recoverable. An impairment loss is required when an assets book value exceeds the undiscounted sum of the estimated future cash flows. The impairment loss is the difference between book value and fair value. Asset impairment occurs when there are:

Changes in regulation and business climate. Declines in usage rate. Technology changes. Forecasts of a significant decline in the long-term profitability of the asset (Spiceland, Sepe, & Nelson, 2011).

What are the amounts and descriptions for the company's current liabilities for the most recent year? Does the company have any contingent liabilities? If yes, please describe. What are the three categories of contingent liabilities and the treatment for each type? Does the company have any subsequent events disclosed in their footnotes? If so, please describe them. Comcast Corporation, Inc. Consolidated Balance Sheet (partial) December 31, 2010 (in millions)

Current Liabilities Accounts Payable and accrued expenses related to trade creditors Accrued Salaries and Wages Accrued Expenses and Other Current Liabilities Current Portion of Long-Term Debt Total Current Liabilities
Loss Contingencies

$3,291 475 2,668 1,800 $8,234

$3,094 487 2,512 1,156 $7,249

$197 ($12) $156 $644 $985

6% -2% 6% 56% 14%

Figure 7: Consolidated Balance Sheet (partial)

A loss contingency is an existing uncertain situation involving potential loss depending on whether some future event occurs. Two factors effect whether a loss contingency must be

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accrued and reported as a liability: First, the likelihood that the confirming event will occur. Second, whether the loss amount can be reasonably estimated. Accounting standards require that the likelihood that the future event(s) will confirm the incurrence of a liability be categorized as: probable, meaning that the confirming event is likely to occur, which requires that the liability be accrued and a disclosure note; reasonably possible, meaning that the chance the confirming event will occur is more than remote, but less than likely which requires the disclosure note only; remote, meaning that the chance the confirming event will occur is slight (Spiceland, Sepe, & Nelson, 2011). Contingencies Comcast and the minority owner group in Comcast Spectacor each have the right to initiate an exit process under which the fair market value of Comcast Spectacor would be determined by appraisal. Following such determination, Comcast would have the option to acquire the 24.3% interest in Comcast Spectacor owned by the minority owner group based on the appraised fair market value. In the event the company does not exercise this option, Comcast and the minority owner group would then be required to use our best efforts to sell Comcast Spectacor (Comcast Corporation Annual Report, 2011). Subsequent Events A subsequent event is significant developments that take place after the companys fiscal year and before the financial statements are issued or available to be issued. These events are described in the disclosure note. Disclosure notes are required for certain transactions and events that occur infrequently, but are potentially important to investors and creditors and other financial statement users. Examples include irregularities (intentional distortion of

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financial statements), illegal acts (for example, bribes or kickbacks), and related third party transactions (transactions with owners, management, families of owners or management, affiliated companies, and other parties who can significantly influence are being influenced by the company) (Spiceland, Sepe, & Nelson, 2011). On January 28, 2011, Comcast closed its transaction with GE to form a new company named NBC Universal, LLC (NBC Universal Holdings). Comcast controls and owns 51% of NBC Universal Holdings and GE owns the remaining 49%. As part of the NBC Universal transaction, GE contributed the historical businesses of NBC Universal, which is now a wholly owned subsidiary of NBC Universal Holdings. The NBC Universal contributed businesses include its national cable programming networks, the NBC network and its owned NBC affiliated local television stations, the Telemundo network and its owned Telemundo affiliated local television stations, Universal Pictures filmed entertainment, the Universal Studios Hollywood theme park and other related assets (Comcast Corporation Annual Report, 2011). Comcast contributed its national cable programming networks, its regional sports and news networks, certain of its Internet businesses, including Daily Candy and Fandango, and other related assets (Comcast Content Business). In addition to contributing the Comcast Content Business, Comcast also made a cash payment of $6.2 billion at the closing. The cash paid will be adjusted subsequent to close to reflect final balances of certain working capital accounts and other closing adjustments. The transaction also calls for the payment to GE, in the future, of certain tax benefits to the extent realized. The combination of businesses creates a

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leading media and entertainment company capable of providing entertainment, news, sports and other content to a global audience across all platforms (Comcast Corporation Annual Report, 2011). What are the amounts and descriptions for all of the company's long-term liabilities on their balance sheet for the most recent two years? What is the interest expense for the two most recent years? What amounts are included in the cash flow statements for proceeds from issuance of debt and repayment of debt for the most recent year? For each note payable discussed in the footnotes disclosures, what is the interest rate, total amount borrowed, and maturity date?
Comcast Corporation, Inc. Long-Term Debt December 31, 2010 (in millions) Weighted Average Interest Rate as of December 31, 2010 6.96% 5.90% 6.88% 10.63% 2.00% 6.26% b 2010 $8,145 8,381 14,258 202 108 321 $31,416 1,800 $29,615 2009 $6,861 9,293 12,267 202 124 329 $29,096 1,156 $27,940

Senior notes with maturities of 5 years or less Senior notes with maturities between 6 and 10 years Senior notes with maturities greater than 10 years (a) Senior subordinated notes due 2012 ZONES due 2029 Other, including capital lease obligations Total debt Less: Current portion Long-term debt

(a) The December 31, 2010 amount includes 625 million of 5.50% notes due 2029 valued at $976 million using the exchange rate at that date. (b) Includes the effects of our derivative financial instruments.
Figure 8: Long-Term Debt

Interest Expense

Comcast Corporation, Inc. Interest Expense December 31, 2010 (in millions) 2010 $2,156

2009 $2,348

2008 $2,439

Figure 9: Interest Expense

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Comcast Corporation, Inc. Consolidated Statement of Cash Flows (partial) December 31, 2010 (in millions) 2010 Financing Activities Proceeds from borrowings Repurchases and repayments of debt Repurchases of common stock Dividends paid Issuances of common stock Other Net cash provided by (used in) financing activities $3,420 (1,153) (1,200) (1,064) 34 (192) ($155) 2009 $1,564 (4,738) (765) (761) 1 (209) ($4,908) 2008 $3,535 (2,610) (2,800) (547) 53 (153) ($2,522)

Figure 10: Consolidated Statement of Cash Flows (partial)

Debt Maturities

Debt Borrowings
Year Ended December 31, 2010 (in millions) 5.15% notes due 2020 $1,400 6.40% notes due 2040 1000 5.50 notes due 2029 997 Other 23 Total $3,420
Figure 11: Debt Borrowing

Debt Instruments Commercial Paper Program Comcasts commercial paper program provides a lower cost borrowing source of liquidity to fund their short-term working capital requirements. The program allows for a maximum of $2.25 billion of commercial paper to be issued at any one time. The companys revolving bank credit facility supports this program (Comcast Corporation Annual Report, 2011). Revolving Bank Credit Facilities As of December 31, 2010, Comcast had a $6.8 billion revolving credit facility due January 2013 (the credit facility) with a syndicate of banks. The base rate, chosen at their option, is either the London Interbank Offered Rate (LIBOR) or the greater of the prime rate or the Federal

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Funds rate plus 0.5%. The borrowing margin is based on their senior unsecured debt ratings. As of December 31, 2010, the borrowing margin for LIBOR-based loans was 0.35% (Comcast Corporation Annual Report, 2011). Lines and Letters of Credit As of December 31, 2010, Comcast and certain of their subsidiaries had unused lines of credit totaling $6.4 billion under various credit facilities and unused irrevocable standby letters of credit totaling $431 million to cover potential funding under various agreements (Comcast Corporation Annual Report, 2011).
Does the company have bonds payable? If so, what are the amounts? Please also describe how bonds payable differ from notes payable and how to account for the issuance of bonds at par, at a discount, and at a premium. How is the discount and premium amortized? What is the effective interest method?

ZONES At maturity, holders of Comcast 2.0% Exchangeable Subordinated Debentures due 2029 (ZONES) are entitled to receive in cash an amount equal to the higher of the principal amount of the outstanding ZONES of $247 million or the market value of approximately 3.3 million shares of Sprint Nextel common stock and 228,807 shares of CenturyLink common stock. Before maturity, each of the ZONES is exchangeable at the holders option for an amount of cash equal to 95% of the aggregate market value of one share of Sprint Nextel common stock and 0.0685 shares of CenturyLink common stock (Comcast Corporation Annual Report, 2011) Effective Interest Method Interest accrues on an outstanding debt at a constant percentage of the debt each period. Interest each period is recorded as the effective market rate of interest multiplied by the outstanding balance of the debt (during the interest period) (Spiceland, Sepe, & Nelson, 2011).

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Works Cited
(2011). Comcast Corporation Annual Report. Philadelphia: Edgar Online. Spiceland, J. D., Sepe, J. F., & Nelson, M. W. (2011). Intermediate Accounting (Sixth Edition). New York: McGraw - Hill / Irwin.