UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED December 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM to
Commission File Number
001-32871
Registrant; State of Incorporation; Address and
Telephone Number
COMCAST CORPORATION
I.R.S. Employer Identification No.
27-0000798
Pennsylvania
One Comcast Center
Philadelphia, PA 19103-2838
(215) 286-1700
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class
Class A Common Stock, $0.01 par value
0.000% Notes due 2026
0.250% Notes due 2027
1.500% Notes due 2029
0.250% Notes due 2029
0.750% Notes due 2032
1.875% Notes due 2036
1.250% Notes due 2040
9.455% Guaranteed Notes due 2022
5.50% Notes due 2029
2.0% Exchangeable Subordinated Debentures due 2029
Trading symbol(s)
CMCSA
CMCS26
CMCS27
CMCS29
CMCS29A
CMCS32
CMCS36
CMCS40
CMCSA/22
CCGBP29
CCZ
Name of Each Exchange on Which Registered
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition
of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
☒ Accelerated filer
☐ Non-accelerated filer
☐ Smaller reporting company
☐ Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2021, the aggregate market value of the Comcast Corporation common stock held by non-affiliates of the registrant was $259.633 billion.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:
As of December 31, 2021, there were 4,523,785,950 shares of Comcast Corporation Class A common stock and 9,444,375 shares of Class B common stock outstanding.
Comcast Corporation – Part III – The registrant’s definitive Proxy Statement for its annual meeting of shareholders.
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
Comcast Corporation
2021 Annual Report on Form 10-K
Table of Contents
PART I
Item 1
Item 1A
Item 1B
Item 2
Item 3
Item 4
PART II
Item 5
Item 6
Item 7
Item 7A
Item 8
Item 9
Item 9A
Item 9B
Item 9C
PART III
Item 10
Item 11
Item 12
Item 13
Item 14
PART IV
Item 15
Item 16
Signatures
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Comcast Corporation Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
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30
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34
60
63
97
97
97
97
98
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99
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100
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104
Explanatory Note
Unless indicated otherwise, throughout this Annual Report on Form 10-K, we refer to Comcast and its consolidated subsidiaries, as “Comcast,” “we,” “us”
and “our;” Comcast Cable Communications, LLC and its consolidated subsidiaries as “Comcast Cable;” Comcast Holdings Corporation as “Comcast
Holdings;” NBCUniversal Enterprise, Inc. as “NBCUniversal Enterprise;” NBCUniversal Media, LLC and its consolidated subsidiaries as
“NBCUniversal;” and Sky Limited and its consolidated subsidiaries as “Sky.”
This Annual Report on Form 10-K is for the year ended December 31, 2021. This Annual Report on Form 10-K modifies and supersedes documents filed
before it. The SEC allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you
by referring you directly to those documents. Information incorporated by reference is considered to be part of this Annual Report on Form 10-K. In
addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Annual Report on Form
10-K.
Table of Contents
Our registered trademarks include Comcast, NBCUniversal and the Comcast and NBCUniversal logos. This Annual Report on Form 10-K also contains
other trademarks, service marks and trade names owned by us, as well as those owned by others.
Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may
exist due to rounding.
Table of Contents
Part I
Item 1: Business
We are a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal and Sky. We were incorporated under the
laws of Pennsylvania in December 2001. Through our predecessors, we have developed, managed and operated cable systems since 1963. Through
transactions in 2011 and 2013, we acquired NBCUniversal, and in 2018, we acquired Sky.
We present our operations in five reportable business segments: (1) Comcast Cable in one reportable business segment, referred to as Cable
Communications; (2) NBCUniversal in three reportable business segments: Media, Studios and Theme Parks (collectively, the “NBCUniversal segments”);
and (3) Sky in one reportable business segment. Beginning in the first quarter of 2021, we changed our presentation of the NBCUniversal segments to
reflect a reorganized operating structure in our television and streaming businesses to a more centralized structure to optimize its content creation,
distribution and monetization model. We also now include Peacock, our direct-to-consumer streaming service (“DTC streaming service”), within the
NBCUniversal segments. NBCUniversal previously reported its operations in four reportable business segments: Broadcast Television, Cable Networks,
Filmed Entertainment and Theme Parks and Peacock was previously reported in Corporate and Other.
2021 Consolidated Operating Results
(a)
Revenue
Adjusted EBITDA
(a) Charts exclude the results of NBCUniversal Headquarters and Other, Corporate and Other, and eliminations. 2021 consolidated operating results were impacted by COVID-19. Refer to our
Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
• Cable Communications: Consists of the operations of Comcast Cable, which is a leading provider of broadband, video, voice, wireless, and other
services to residential customers in the United States under the Xfinity brand; we also provide these and other services to business customers and
sell advertising.
• Media: Consists primarily of NBCUniversal’s television and streaming platforms, including national, regional and international cable networks;
the NBC and Telemundo broadcast networks, NBC and Telemundo owned local broadcast television stations; and Peacock
•
•
•
Studios: Consists primarily of NBCUniversal’s film and television studio production and distribution operations.
Theme Parks: Consists primarily of our Universal theme parks in Orlando, Florida; Hollywood, California; Osaka, Japan; and Beijing, China.
Sky: Consists of the operations of Sky, one of Europe’s leading entertainment companies, which primarily includes a direct-to-consumer business,
providing video, broadband, voice and wireless phone services, and a content business, operating entertainment networks, the Sky News broadcast
network and Sky Sports networks.
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena
in Philadelphia, Pennsylvania, and other business initiatives.
For developments in our business and financial and other information about our reportable business segments, refer to Item 7: Management’s Discussion
and Analysis of Financial Condition and Results of Operations and Note 2 to the consolidated financial statements included in this Annual Report on Form
10-K.
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Description of Our Businesses
Cable Communications Segment
Cable Communications offers broadband, video, voice, wireless, and other services in the United States individually and as bundled services at a
discounted rate over our cable distribution system to residential and business customers. Revenue is generated primarily from residential and business
customers that subscribe to our services and from the sale of advertising. We aim to meet the needs of various segments of our residential customer base by
offering multiple levels within each of our stand-alone and bundled services. Our business services offerings are tailored to meet the needs of various
segments of our business customer base, ranging from broadband services for small business locations to bundled services and solutions designed to meet
the needs of medium-sized customers and larger enterprises.
Customer Relationships and the Areas We Serve
All customer metrics included in this section are as of December 31, 2021.
(in millions)
Customer relationships
Residential customer relationships
Business services customer relationships
Total customer relationships
Homes and businesses passed
Total customer relationships penetration of homes and businesses passed
December 31, 2021
31.7
2.5
34.2
61
57 %
Homes and businesses are considered passed if we can connect them to our cable distribution system without further extending the transmission lines and are estimated based on the best available
information.
The map below highlights Cable Communications’ cable distribution footprint and the designated market areas (“DMAs”) where we have 250,000 or more
customer relationships, with bolded locations representing one of the top 25 U.S. television DMAs as of December 31, 2021.
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Residential
Broadband - 29.6 million customers
We offer broadband services over our hybrid fiber-optic and coaxial cable network with downstream speeds up to over a gigabit per second across nearly
our entire footprint and fiber-based speeds that range up to 3 gigabits per second, and we continue to evolve and enhance our network and plan to leverage
DOCSIS 4.0 technology to begin deploying multigigabit symmetrical speeds in the future.
We also offer wireless gateways to customers that combine an internet modem with a Wi-Fi router to deliver reliable internet speeds and enhanced coverage
through an in-and-out-of-home Wi-Fi network as well as xFi Pod plug-in devices that extend a customer’s in-home Wi-Fi coverage. Customers with
wireless gateways may also personalize and manage their Wi-Fi network and connected home, and access advanced security technology and other features,
with our xFi whole-home application and online portal. Broadband customers have access to our expanding network of secure residential, outdoor and
business Wi-Fi hotspots nationwide. As part of our low-income broadband adoption program, we also offer qualifying customers our Internet Essentials
service, and beginning at the end of 2021 Internet Essential Plus, which have downstream speeds of up to 50 megabits per second and 100 megabits per
second, respectively.
Broadband customers that prefer consuming content over the internet rather than linear cable television are eligible to receive our Flex streaming device for
no additional charge, which includes integrated search functionality and a voice-activated remote control. Flex also provides access to and the integration
of streaming content from Peacock’s premium tier; certain third-party internet-based apps providing content and music such as DTC streaming services
Disney+ and Netflix; and certain pay-per-view and video on demand content available over the internet. We earn commission revenue from the sale of
certain third-party DTC streaming services.
Video - 17.5 million customers
We offer a broad variety of video services, primarily through our X1 platform, which provides integrated search functionality and a voice-activated remote
control. The integrated features provided by X1 operate across content in customers’ cable video services packages and content from internet-based
streaming services that customers may access in a manner similar to our Flex streaming device. Our video packages typically range from a basic cable
service with access to between 20 and 65 channels to a full service with access to more than 300 channels. Customers may view programming live, record
live programming through our digital video recorder (“DVR”) service or access our video on demand services with extensive programming choices such as
television series, movies and special-events programming that are available for free or to rent or own digitally. These viewing options are also available
through our mobile app and online portal.
We tailor our video packages based on particular programming preferences, demographics and geographic areas in accordance with applicable local and
federal regulatory requirements, with programming generally inclusive of national broadcast networks, local broadcast stations, national and regional cable
networks, government and public access programming, and premium channel subscriptions such as HBO and Showtime. We also offer packages with
extensive amounts of foreign-language programming and other specialty tiers of programming.
Voice - 9.1 million customers
We offer voice services using interconnected Voice over Internet Protocol (“VoIP”) technology that provide either unlimited or usage-based local and
domestic long-distance calling, as well as options for international calling plans, voicemail, readable voicemail, nuisance call blocking tools and various
other features.
Wireless - 4.0 million lines
We offer wireless services for handsets, tablets and smart watches using mobile virtual network operator (“MVNO”) rights over Verizon’s wireless
network, including its 5G technology and our existing network of secure residential, outdoor and business Wi-Fi hotspots. Wireless services are only
offered as part of our bundled service offerings to residential customers that subscribe to our broadband services and to eligible small business customers
on similar terms. Customers may activate multiple lines per account and choose to pay for services on an unlimited data plan, shared data plans, or per
gigabyte of data used. Customers may either bring their own device or purchase devices from us with the option to pay upfront or finance the purchase
interest-free over 24 months.
Business Services
Business services customers may subscribe to a variety of products and services, including broadband services over our hybrid fiber-optic and coaxial cable
network with downstream speeds up to a gigabit per second across nearly our entire footprint and fiber-based speeds that range up to 100 gigabits per
second. Our service offerings for small business locations primarily include broadband services, as well as voice and video services, that are similar to
those provided to our residential customers, cloud-based cybersecurity services, wireless backup connectivity, advanced Wi-Fi solutions, video monitoring
services and cloud-
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based services for file sharing, online backup and web conferencing, among other features. We also offer Ethernet network services, which connect
multiple locations and provide higher downstream and upstream speed options to medium-sized customers and larger enterprises, and advanced voice
services, as well as video solutions for hotels and other large venues. In addition, we provide cellular backhaul services to mobile network operators to help
manage their network bandwidth.
Our business services offerings for medium-sized and enterprise customers also include a software-defined networking product, and larger enterprises may
also receive support services related to Wi-Fi networks, router management, network security, business continuity risks and other services. These services
are primarily provided to Fortune 1000 companies and other large enterprises with multiple locations both within and outside of our cable distribution
footprint, where we provide coverage outside of our service areas through agreements with other companies to use their networks.
Advertising
We generally receive an allocation of scheduled advertising time that our advertising business sells to local, regional and national advertisers as part of our
distribution agreements with cable networks, and we also generate revenue from selling advertising on our digital platforms. Our advertising business also
represents the advertising sales efforts of other multichannel video providers in some markets and offers additional technology, tools, data-driven services
and marketplace solutions to customers in the media industry to facilitate advertisers more effectively engaging with their target audiences.
Other
Our security and automation services provide home monitoring services and the ability to manage other functions within the home, such as lighting and
room temperature, through our online portal, mobile apps and the X1 platform. We also license our technology platforms to other multichannel video
providers.
Network and Technology
Our Cable Communications cable distribution system uses a hybrid fiber-optic and coaxial cable network that we believe is sufficiently flexible and
scalable to support our future technology requirements and enables us to continue to grow capacity and capabilities over time. This network provides the
two-way transmissions that are essential to providing broadband services, interactive video services such as integrated search functionality, On Demand
and DVR, voice services, and security and automation services. Leveraging DOCSIS 3.1 technology, Cable Communications currently deploys broadband
services with downstream speeds for residential customers up to over a gigabit per second across nearly our entire footprint. We continue to evolve and
enhance our network and plan to leverage DOCSIS 4.0 technology to begin deploying multigigabit symmetrical speeds in the future. Additionally, Cable
Communications has been automating many core network functions in order to expand capacity and increase operating efficiency and to identify and fix
network issues before they affect our customers.
Cable Communications continues to focus on technology initiatives to design, develop and deploy next-generation media and content delivery platforms,
such as the X1 and Flex platforms and cloud DVR technology that use Internet Protocol (“IP”) technology and our own cloud network servers to deliver
video and advanced search capability. These platforms are based on our global technology platform, which integrates linear television networks, certain
owned and third-party DTC streaming services and other internet-based apps, and on demand content in one unified experience with voice-activated remote
control search and interactive features. Cable Communications also pursues technology initiatives related to broadband services that leverage our global
technology platform, providing customers with in-and-out-of-home Wi-Fi, the ability to manage their Wi-Fi network and connected home with our xFi
whole-home application and online portal, advanced security technology and other features.
Sources of Supply and Other Operations
To offer video services, Cable Communications licenses substantial amounts of programming from cable and broadcast networks, as well as from local
broadcast television stations. The fees associated with these programming distribution agreements are generally based on the number of subscribers who
are able to watch the programming and the platforms on which the content is provided. We seek to include in distribution agreements the rights to offer
such programming through multiple delivery platforms, such as through our On Demand service, online portal, mobile apps and Flex.
For wireless services, we have an MVNO agreement that allows us to offer services using Verizon’s wireless network and we purchase from a limited
number of suppliers a significant number of wireless handsets, tablets and smart watches that we sell to wireless customers.
Cable Communications purchases from a limited number of suppliers a significant amount of customer premise equipment, including wireless gateways
and set-top boxes, network equipment and services to provide services to residential and business customers.
Cable Communications uses two primary vendors to provide customer billing for our residential and business customers.
Comcast 2021 Annual Report on Form 10-K
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Cable Communications offers services directly to residential and business customers through customer service teams, retail stores, customer service
centers, websites, door-to-door selling, telemarketing and third-party outlets, as well as through advertising via direct mail, television and the internet. Our
customer service teams also provide 24/7 call-answering capability, telemarketing and other services. Our technical services group performs various tasks,
including installations, plant maintenance and upgrades to our cable distribution system. Customers can use self-service help and support and perform self-
installations for certain services.
Competition
Competition for Cable Communications’ services consists primarily of telecommunications companies with fiber-based networks, DTC streaming and
other over-the-top (“OTT”) service providers and direct broadcast satellite (“DBS”) providers that typically offer features, pricing and packaging for
services comparable to ours.
Residential
Broadband
Cable Communications competes with a number of companies offering internet services, including:
• wireline telecommunications companies
• wireless telecommunications companies
• municipal broadband networks and power companies
•
satellite broadband providers
Certain wireline telecommunications companies such as AT&T, Frontier, Lumen and Verizon have built and are continuing to build fiber-based network
infrastructure farther into their networks, which allows them to provide data transmission speeds that exceed those that can be provided with traditional
DSL technology, and are offering services with these higher speeds in many of our service areas. Certain companies that offer DSL service have increased
data transmission speeds, lowered prices or created bundled services to compete with our broadband services.
Certain companies have launched fiber-to-the-home networks that provide broadband services in certain areas in which we operate, and certain
municipalities in our service areas are also building fiber-based networks.
Various wireless companies are offering internet services using a variety of technologies, including 4G and 5G, wireless broadband and Wi-Fi networks.
These networks work with devices such as smartphones, laptops, tablets, and mobile and fixed wireless routers, as well as wireless data cards. Moreover,
broadband-deployment funding initiatives at the federal and state level, including as part of COVID-19 relief efforts as well as federal infrastructure
legislation enacted in 2021, may result in other service providers deploying new subsidized internet access networks within our footprint. The availability
of these and other offerings could negatively impact the demand for our broadband services.
Video
Cable Communications competes with a number of different sources in the United States that provide news, sports, information and entertainment
programming to consumers, including:
• DTC streaming and other OTT service providers including:
◦
◦
subscription-based services, such as Disney+ and Netflix, that offer online services that enable internet streaming and downloading of
movies, television shows and other video programming
virtual multichannel video providers, such as Hulu + Live TV and YouTube TV, that offer streamed linear programming networks
• DBS providers, including DIRECTV and DISH Network, that transmit satellite signals to substantially all U.S. households to provide video
programming and other information similar to our video services
•
•
•
companies, including AT&T and Verizon, that have built and continue to build fiber-based networks that provide video services similar to ours,
overlap a substantial portion of our service areas, and in some cases provide bundled offerings that include wireless phone services
other providers that build and operate communications systems and services in the same areas that we serve, including those operating as
franchised cable operators
other companies, such as local broadcast television stations, that provide multiple channels of free over-the-air programming
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Many of these competitors also have significant financial resources.
Voice
Cable Communications competes with wireless and wireline telecommunications providers, including incumbent local exchange carriers (“ILECs”) and
competitive local exchange carriers (“CLECs”), and other internet-based and VoIP service providers. Certain wireless and wireline telecommunications
providers, such as the ILECs AT&T and Verizon, have longstanding customer relationships, and extensive existing facilities and network rights-of-way. A
few CLECs also have existing local networks and significant financial resources. In addition, we are increasingly competing with other telecommunications
service providers as customers replace traditional wireline phone services with wireless and internet-based phone services.
Wireless
Cable Communications competes with national wireless service providers in the United States, including AT&T, T-Mobile and Verizon, which offer
wireless service on both a stand-alone basis or along with other services as bundled offerings, as well as regional wireless service providers.
Business Services
Cable Communications primarily competes with a variety of wireline telecommunications companies, including ILECs and CLECs, and wide area network
managed service providers. These companies either operate their own network infrastructure or use all or part of another carrier’s network. We also
compete with satellite operators who offer video services to businesses and VoIP companies that target businesses of all sizes.
Advertising
Cable Communications competes for the sale of advertising with other television networks and stations, as well as with all other advertising platforms, such
as digital, radio and print media. Similar to the competitive environment in our Media segment, the willingness of advertisers to purchase advertising from
us may be adversely affected by declines in audience ratings and television viewership and difficulty in measuring fragmented audiences. Cable
Communications advertising is sold to local, regional and national advertisers, and competition is affected by the market conditions in the specific
geographies in which we operate.
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, and owns and operates theme parks in the United States and Asia.
Media Segment
NBCUniversal’s television and streaming platforms primarily comprise our Media segment, including:
• National, regional and international cable networks
• NBC and Telemundo broadcast networks and owned local broadcast television stations
•
Peacock, our DTC streaming service
NBCUniversal distributes a wide variety of content to appeal to consumers with varying preferences across demographics and geographies through our
portfolio of television networks and streaming platforms. This content includes programming owned by NBCUniversal and by third parties who license it
to us for distribution.
Media segment revenue is primarily generated from the sale of advertising on our television networks, Peacock and digital properties, and from the
distribution of our television and streaming platform programming.
Our advertising sales are affected by the prices we charge for each advertising unit, which are generally based on the size and demographics of our viewing
audiences, audience ratings on our television networks, the number of advertising units we can place in our programming and on our digital properties, and
our ability to sell our advertising across our platforms.
We market and distribute cable network programming in the United States and internationally to multichannel video providers, including both traditional
providers of linear programming and virtual providers who provide streaming services for linear programming. We also receive fees from multichannel
video providers under NBC and Telemundo retransmission consent agreements and associated fees from NBC-affiliated and Telemundo-affiliated local
broadcast television stations. Our programming distribution agreements are generally multiyear agreements with revenue based on the number of
subscribers
Comcast 2021 Annual Report on Form 10-K
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receiving the programming and the fees charged per subscriber. Certain Peacock subscribers are also charged a monthly subscription fee.
Media generates other revenue from content licensing and from various digital properties.
Cable Networks
We operate a diversified portfolio of cable networks that provide a variety of entertainment, news and information, and sports content.
The table below presents a summary of NBCUniversal’s national cable networks and their advertising reach to U.S. households.
Cable Network
USA Network
E!
Syfy
Bravo
MSNBC
CNBC
Oxygen
Golf Channel
Universal Kids
The Olympic Channel
Universo
CNBC World
Approximate U.S.
Households as of
December 31, 2021
(a)
(in millions) Description of Programming
80 General entertainment and sports
79 Entertainment and pop culture
79 Imagination-based entertainment
79 Entertainment, culture and arts
79 News, political commentary and information
78 Business and financial news
70 Crime, mystery and suspense for women
66 Golf competition and golf entertainment
53 Children’s entertainment
47 Olympic sports events and Olympic-themed original content
37 Spanish language entertainment
29 Global financial news
(a) Household data is based on information from The Nielsen Company as of December 31, 2021 using its Cable Coverage Universe Estimates report and dynamic ad insertion estimates. The
Nielsen estimates include subscribers to both traditional and certain virtual multichannel video providers. The Nielsen estimates are not based on information provided by us and are included
solely to enable comparisons between our cable networks and those operated by our peers. Information presented excludes approximately 79 million households receiving the NBC Sports
Network as of December 31, 2021, which ceased operations in January 2022.
Our regional sports and news networks together serve more than 21 million households across the United States, including in markets such as
Baltimore/Washington, Boston, Chicago, Philadelphia, Sacramento and San Francisco.
Broadcast
NBC
The NBC network features original entertainment, news and sports programming that reaches viewers in virtually all U.S. television households through
more than 200 affiliated stations across the United States, including our 11 owned NBC local broadcast television stations. The NBC owned local broadcast
stations include stations in 8 of the top 10 general markets and collectively reached approximately 35 million U.S. television households as of
December 31, 2021, representing approximately 28% of U.S. television households. In addition to broadcasting the NBC network’s national programming,
local broadcast stations deliver local news, weather and investigative, and consumer reporting across multiple platforms.
Telemundo
The Telemundo network, a Spanish-language broadcast network, features original entertainment, news, live specials and sports programming that reaches
viewers in over 90% of all U.S. Hispanic television households through 82 affiliated stations, including our 30 owned Telemundo local broadcast television
stations and our national feed. The Telemundo owned local broadcast stations include stations in all of the top 20 U.S. Hispanic markets and collectively
reached approximately 73% of U.S. Hispanic television households as of December 31, 2021. In addition to broadcasting the Telemundo network’s national
programming, local broadcast stations deliver local news, weather and investigative, and consumer reporting across multiple platforms. We also own an
independent Telemundo station serving the Puerto Rico television market.
Peacock
Peacock is a premium DTC streaming service that launched in 2020 and features NBCUniversal content including exclusive Peacock originals, current
NBC and Telemundo shows, news, late-night comedy, live sports and a library of television shows and movies, that provides customers access to tens of
thousands of hours of programming. Customers have the choice of three
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tiers of service: a free, ad-supported version; a subscription based, ad-supported version with access to all Peacock content; and a similar subscription-
based, ad-free version. The Peacock app is available to consumers over the internet directly and through distributors and other platforms in the United
States, including to Cable Communications X1 and Flex customers. Beginning in the fourth quarter of 2021, certain ad-supported Peacock programming
was also integrated into Sky video services, launching first in the United Kingdom and Ireland.
Programming
Our television and streaming platforms include content licensed from our Studios segment and from third parties, as well as content produced by Media
segment businesses, such as live news and sports programming and certain original programming, including late-night comedy for NBC and original
telenovelas for Telemundo.
We have various multiyear contractual commitments for the licensing of programming, including contracts related to broadcast rights for sporting events.
We generally seek to include in our sports rights agreements the rights to distribute content on one or more of our television networks and on digital
platforms, including Peacock. Our most significant sports rights commitments include the following:
• NFL: Agreements to produce and broadcast a specified number of regular season and playoff games, including Sunday Night Football on our
NBC network and four Super Bowl games, the next of which is in February 2022, through the 2033-34 season, with a termination right available
to the NFL after the 2029-30 season. These agreements include certain other rights, including streaming rights, additional exclusive games on
Peacock and the Spanish-language U.S. broadcast rights for certain NFL games, which are aired on Telemundo
• Olympics: U.S. broadcast rights for the summer and winter Olympic Games through 2032 with programming aired across the NBC network,
multiple cable networks and on Peacock
We also have U.S. broadcast rights to PGA TOUR and other golf events through 2031, Worldwide Wrestling Entertainment (“WWE”) events through 2026,
certain NASCAR events through 2024 and the Spanish-language U.S. broadcast rights to FIFA World Cup soccer games through 2026, as well as local
broadcast rights for certain professional sports teams through our regional sports networks with terms ending between 2024 and 2040.
Studios Segment
NBCUniversal’s film and television studio production and distribution operations primarily comprise our Studios segment.
Revenue is generated primarily from licensing our owned film and television content in the United States and internationally to cable, broadcast and
premium networks and DTC streaming service providers, as well as through video on demand and pay-per-view services provided by multichannel video
providers and OTT service providers; from the worldwide distribution of our produced and acquired films for exhibition in movie theaters; and from the
sale of owned and acquired content on DVDs and through digital distribution services. We also generate revenue from the production and licensing of live
stage plays.
Film Studios
Our film studios develop, produce, acquire, market and distribute filmed entertainment worldwide. Our films are produced primarily under the following
names:
• Universal Pictures
•
Illumination
• DreamWorks Animation
•
Focus Features
• Working Title
The majority of our films are initially distributed for exhibition in movie theaters, while other titles are produced and distributed direct-to-video. Certain
theatrical titles are also made available for viewing on demand following a shortened theatrical release window. After their initial release, we sell and
license films globally through various methods. We license films, including titles following the theatrical release window and selections from our film
library, to cable, broadcast and premium networks, to DTC streaming service providers, and to video on demand and pay-per-view services provided by
multichannel video providers, including the Cable Communications and Sky segments. We also distribute films globally by selling them on DVDs and
through digital distribution services.
Theatrical revenue is significantly affected by the timing of each release and the number of films we distribute, their acceptance by audiences, the number
of exhibition screens, ticket prices and the percentage of ticket sale retention by the exhibitors and the
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popularity of competing films at the time our films are released. The success of a film in movie theaters is generally a significant factor in determining the
revenue a film is likely to generate in succeeding licensing windows. Revenue from the sale of content on DVDs and through digital distribution services is
significantly affected by the timing and number of our theatrical releases and the popularity of our content, as well as the timing of release dates.
We develop and produce films both alone and jointly with other studios or production companies, as well as with other entities. Films are marketed and
distributed worldwide primarily through NBCUniversal’s marketing and distribution operations. We also acquire distribution rights to films produced by
third parties, which may be limited to particular geographic regions, specific forms of media or certain periods of time.
Our film studios have entered into, and may continue to enter into, film cofinancing arrangements with third parties, including both studio and nonstudio
entities, to jointly finance or distribute certain of our film productions. These arrangements can take various forms, but in most cases involve the grant of an
economic interest in a film to an investor. Investors generally assume the full risks and rewards of ownership proportionate to their ownership in the film.
In connection with studio productions, we typically owe “residuals” payments to individuals hired under collective bargaining agreements to work on
productions, which are generally calculated based on post-theatrical or content licensing revenue. We also owe “participations” payments to creative talent,
to third parties under cofinancing agreements and to other parties involved in content production, which are generally based on the financial performance of
the content.
Television Studios
Our television studios develop and produce original content, including scripted and unscripted television series. NBCUniversal’s television studios,
branded as the Universal Studio Group, produces content under the following names:
• Universal Television
• Universal Content Productions
• Universal Television Alternative Studio
• Universal International Studios
Our original content is primarily licensed initially to cable, broadcast and premium networks, as well as to DTC streaming service providers, including our
Media segment. We also license content after its initial airing and license older television programs from our programming library, as well as sell owned
and acquired content globally on DVDs and through digital distribution services. The production and distribution costs related to original television content
generally exceed the revenue generated from the initial license, which means obtaining subsequent licenses following the initial license is critical to the
content’s financial success. Similar to our film studios, we typically owe residuals and participations payments in connection with television studio
productions.
Theme Parks Segment
The following Universal theme parks primarily comprise the Theme Parks segment:
• Universal Orlando Resort: Includes two theme parks, Universal Studios Florida and Islands of Adventure, and our water park, Volcano Bay, all of
which are located in Orlando Florida. Universal Orlando also includes Universal CityWalk Orlando, a dining, retail and entertainment complex,
and features on-site themed hotels in which we own a noncontrolling interest. We are developing an additional theme park at Universal Orlando
named Universal’s Epic Universe.
• Universal Studios Hollywood: Includes a theme park located in Hollywood, California and Universal CityWalk Hollywood.
• Universal Studios Japan: Includes a theme park located in Osaka, Japan.
• Universal Beijing Resort: Opened in September 2021 and includes a theme park located in Beijing, China, Universal Studios Beijing, as well as
Universal CityWalk Beijing and on-site themed hotels. Universal Beijing Resort is owned by us and a consortium of Chinese state-owned
companies (see Note 7).
Revenue is generated primarily from guest spending at our theme parks, including ticket sales and in-park spending on food, beverages and merchandise,
and from our consumer products business. Revenue for our theme parks generally depends on the overall environment for travel and tourism, including
consumer spending on travel and other recreational activities. We also license the right to use the Universal Studios brand name and other intellectual
property and provide other services to third parties, including the party that owns and operates the Universal Studios Singapore theme park on Sentosa
Island, Singapore.
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The themed elements in our rides, attractions, and merchandising are based on intellectual property in our Studios and Media segments and intellectual
property licensed from third parties under long-term agreements.
Competition
Media
Our Media segment competes for viewers’ attention and audience share with all forms of programming provided to viewers, including cable, broadcast and
premium networks; DTC streaming and other OTT service providers; local broadcast television stations; home entertainment products; video on demand
and pay-per-view services; online activities, such as social networking and viewing user-generated content; gaming products; and other forms of
entertainment, news and information.
Media competes for the sale of advertising with other television networks and stations, digital platforms, and all other advertising platforms. The
willingness of advertisers to purchase advertising from us may be adversely affected by lower audience ratings and viewership at the related networks,
stations, channels, or digital platforms. Declines in audience ratings can be caused by increased competition for the leisure time of viewers and by audience
fragmentation resulting from the increasing number of entertainment choices available, including content from DTC streaming and other OTT service
providers, online media and other digital sources. Additionally, it is increasingly challenging to accurately measure fragmented audiences.
Our television and streaming platforms compete for the acquisition of content and for on-air and creative talent with other cable, broadcast and premium
networks, DTC streaming and other OTT service providers, and local broadcast television stations. The market for content is very competitive, particularly
for sports rights, where the cost is significant.
Our cable networks compete with other cable networks and programming providers for carriage of their programming by multichannel video providers and
DTC streaming and other OTT service providers. Our broadcast networks compete with the other broadcast networks in markets across the United States to
secure affiliations with independently owned television stations, which are necessary to ensure the effective distribution of broadcast network programming
to a nationwide audience.
Studios
Our film and television studios compete for audiences for our film and television content with other major film and television studios, independent film
producers and creators of content, as well as with alternative forms of entertainment. The competitive position of our film and television studios primarily
depends on the number of films and shows and episodes produced, their distribution and marketing success, and consumer response. Our film and
television studios also compete to obtain creative, performing and technical talent, including writers, actors, directors, and producers, as well as scripts for
films and television shows, and for the distribution of, and consumer interest in, their content. We also compete with other major film and television studios
and other producers of entertainment content for the exhibition of content in theaters, on demand, on premium networks and with DTC streaming and other
OTT service providers.
Theme Parks
Theme Parks competes with other multi-park entertainment companies as well as other providers of entertainment, lodging, tourism and recreational
activities. To help maintain the competitiveness of our theme parks, we have invested and continue to invest significantly in existing and new theme park
attractions, hotels and infrastructure, including the new theme parks in Beijing and Orlando.
Sky Segment
Sky is one of Europe’s leading entertainment companies operating in six territories, including three of the largest pay television markets in Western Europe:
the United Kingdom, Italy and Germany. The majority of our revenue is derived from our direct-to-consumer business, which has 23.0 million customer
relationships, and primarily involves the distribution of a wide array of video channels to both residential and business customers. We also offer broadband,
voice and wireless services individually and as bundled services in select countries. We own a diverse portfolio of pay television channels that feature
entertainment, news, sports and movies, which are included in our subscription video services and are also licensed through various distribution
partnerships to third-party video providers to reach an additional 3 million households. We also generate revenue from the licensing of owned and licensed
programming to third-party video providers and from the sale of advertising.
Direct-to-Consumer
Video
Our direct-to-home (“DTH”) video services are delivered primarily through a combination of both satellite transmission and broadband connections that
are marketed under the Sky brand in the United Kingdom, Italy, Germany, Ireland and Austria. We
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also offer a DTC streaming service providing video content over the internet that is marketed as NOW or Sky Ticket (“NOW”) in these countries, as well
as in Switzerland.
We offer a variety of DTH video services, primarily through our Sky Q platform, where customers have access to a diverse selection of our owned
channels, channels owned by third parties and local free-to-air public broadcasting channels, as well as certain ad-supported Peacock programming
beginning in the fourth quarter of 2021, launching first in the United Kingdom and Ireland. The Sky Q platform includes integrated search functionality and
a voice-activated remote control and offers integrated access to certain third-party internet-based apps providing content and music, such as DTC streaming
services Disney+ and Netflix. Our service offerings are tailored by country, with separate packages offered in each market. Basic packages include over
100 pay television channels in the United Kingdom and Ireland, over 50 channels in Italy, and over 30 channels in Germany and Austria. Specialty tiers for
children’s, sports, movie and high-definition (“HD”) programming are available for additional fees. DTH customers may view programming live, record
live programming through our DVR services or access our video on demand services with programming choices such as television series, movies and
special-events programming that are available for free or to rent or own digitally. These viewing options are also available through our mobile app and
online portal. Beginning in the fourth quarter of 2021, we introduced DTH video services over a broadband connection to customers who purchase Sky
Glass smart televisions. Refer to Corporate and Other for additional information on Sky Glass.
Our NOW streaming service offers packages ranging from daily to monthly access to entertainment, sports and movies programming. The entertainment
package includes our owned entertainment channels and a broad range of on demand programming series, including child-friendly on demand
programming, as well as certain ad-supported Peacock programming beginning in the fourth quarter of 2021, launching first in the United Kingdom and
Ireland. The sports package provides access to our owned sports channels and the movie package includes access to a library of films.
Television Channels
We operate a diversified portfolio of Sky-branded channels. Our owned channels include:
•
•
•
•
Entertainment channels featuring premium content, including Sky Atlantic, Sky Max and Sky Showcase
Premium sports channels under the Sky Sports brand, with a majority of channels dedicated to a specific sport, including European football
Premium movie channels under the Sky Cinema brand, including family and children’s movie channels
Sky-branded free-to-air channels, including Sky News
Other Services
We offer broadband and voice services in the United Kingdom, Ireland and Italy. We offer fiber-to-the-cabinet (“FTTC”), standard copper digital subscriber
line (“DSL”) broadband and fiber-to-the-home (“FTTH”) services, with downstream speeds up to 500 megabits per second in the United Kingdom and up
to 1 gigabit per second in Ireland and we offer FTTH and FTTC services in Italy, with downstream speeds up to 1 gigabit per second. We deploy wireless
hubs to customers that combine an internet and voice modem with a Wi-Fi router to deliver reliable internet speeds and enhanced coverage through an in-
home Wi-Fi network.
We offer wireless services for handsets and tablets in the United Kingdom using a combination of an arrangement to access network assets from Telefónica
and our own mobile core network. Customers may activate multiple lines per account, choose to pay for services on various gigabyte plans, roll data over
three years and stream with unlimited data on Sky mobile apps. Customers may either bring their own device or purchase devices from us with the option
to pay upfront or finance the purchase interest-free over periods ranging from 24 to 48 months.
Content
In addition to including owned channels as part of our video services, we distribute some of our owned channels on third-party platforms through both
wholesale arrangements and arrangements with partners who distribute our owned channels as agents to their respective customer bases. We also license
owned and licensed content to third parties and Peacock. Additionally, through a partnership with ViacomCBS, we plan to launch SkyShowtime, a new
DTC streaming service expected to be made available in select European markets starting in 2022.
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Advertising
We sell advertising across our owned television channels and also represent the sales efforts of third-party channels. We also sell advertising on our digital
platforms and offer various technology, tools and solutions relating to our advertising business.
Network and Technology
We rely on various telecommunications providers to deliver video, broadband, voice and wireless services to our customers.
For a majority of customers, our DTH video platform is delivered via one-way digital satellite transmission that uses satellites leased from third parties for
the distribution of television channels and is augmented by a set-top box with local DVR storage and high-speed, two-way broadband connectivity enabling
interactive video services such as integrated search functionality, on demand, DVR and voice services. Our platform incorporates Wi-Fi connectivity for in-
home distribution that allows wireless, multiroom consumption. We have also developed a range of back-end and client software applications that provide
customers with access to our content across multiple third-party devices.
Under the current regulatory regime in the United Kingdom, Ireland and Italy, we are able to access networks owned by third-party telecommunications
providers for a fee to provide our broadband, voice, and wireless services in many cases, on regulated terms. We offer broadband and voice services in the
United Kingdom using a combination of our own core fiber network and BT Openreach’s core and “last mile” network under a wholesale and fee-based
arrangement and in Italy primarily using Open Fiber’s network. We offer wireless services to customers in the United Kingdom using a combination of an
arrangement to access network assets from Telefónica and our own mobile core network .
We continue to focus on technology initiatives to design, develop and deploy next-generation media and content delivery platforms, including Sky Q and
NOW, that deliver video content, provide advanced search capabilities, including through a voice-activated remote control, and provide access to and
integration of certain other DTC streaming services. These platforms and, more recently, Sky Glass leverage our global technology platform. Sky Glass is a
smart television that we launched in the fourth quarter of 2021 in the United Kingdom, with an operating system that provides a video service similar to
Sky Q over a broadband connection, eliminating the need for a satellite dish or set-top box.
Sources of Supply and Other Operations
Programming
Our owned television channels and NOW streaming service include content both owned by us and licensed from third parties and NBCUniversal. In some
cases, licenses are on an exclusive basis. We have various multiyear contractual commitments for the licensing of programming, primarily sports rights and
exclusive entertainment content. Our most significant sports rights commitments include European football broadcast rights for Premier League games
through the 2024-25 season in the United Kingdom and Bundesliga games through the 2024-25 season in Germany. We also have broadcast rights to
Formula One through 2024 in the United Kingdom and Germany and through 2022 in Italy, English and Wales Cricket Board cricket games through 2024
in the United Kingdom, and Union of European Football Associations Champions League (“UCL”) through the 2023-24 season in Italy, as well as non-
exclusive broadcast rights to certain Serie A games through the 2023-24 season in Italy.
Our most significant commitments for the licensing of film and television entertainment content include exclusive rights with HBO, Paramount, Warner
Bros. and NBCUniversal. We also produce and air live news and sports programming and produce certain original programming through Sky Studios. We
are increasingly creating and investing in original scripted content that is broadcast across all of our territories and sold to other markets. We also are
constructing a new studio production facility in Elstree, U.K.
To offer video services, in addition to our owned channels, we license substantial amounts of programming from third parties. The fees associated with
these programming distribution agreements are generally based on the number of customers that are able to watch the programming and the platforms on
which the content is provided. We seek to include in distribution agreements the rights to offer such programming through multiple delivery platforms,
such as through our on demand services, mobile apps and our NOW streaming service.
Other
We purchase from a limited number of suppliers a significant amount of customer premise equipment, including set-top boxes, wireless hubs and network
equipment to provide our video and broadband services to residential and business customers. We also purchase from a limited number of suppliers a
significant number of wireless handsets and tablets that are sold to customers that receive our wireless services.
We offer direct-to-consumer services to residential and business customers through our customer service teams, customer service centers, websites,
telemarketing, and a limited number of retail stores, as well as through advertising via direct mail,
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television and the internet. Our home service group performs various tasks, including installations, servicing and upgrades of customer premise equipment.
Customers can use self-service help and support and perform self-installations for certain services.
Competition
We compete with a broad range of companies engaged in media, entertainment and communications services in Europe. For video services, we compete
with cable operators, providers of both paid-for and free-to-air programming, other satellite television providers, digital terrestrial television providers,
content aggregators, home entertainment products companies, and other suppliers and providers of sports, entertainment, news and information that deliver
DTC and other OTT streaming services. For broadband and wireless services, we compete with service providers making use of new fiber-optic networks,
telecommunications providers, other internet service providers and companies developing new technologies and devices. Our competitive position may be
negatively impacted by an increase in the capacity of, or developments in, the means of delivery competitors use to provide their services as well as
lowered prices, product innovations, new technologies or different value creation approaches. We also compete with organizations that are publicly funded,
in whole or in part, to fulfill a public service broadcasting mandate.
Our owned channels compete for the acquisition of content and for on-air and creative talent with other television networks and with DTC streaming and
other OTT service providers. The market for content is very competitive, particularly for sports rights, where the cost for such content is significant.
We compete for the sale of advertising with other television networks and stations, digital platforms, and all other advertising platforms. Similar to the
competitive environment in our Media segment, the willingness of advertisers to purchase advertising from us may be adversely affected by declines in
television viewership and the increasing number of entertainment choices available.
Corporate and Other
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena
in Philadelphia, Pennsylvania, and other business initiatives, including Sky Glass and XClass TV, which launched in the fourth quarter of 2021. Sky Glass
and XClass TV are smart televisions with operating systems that leverage our global technology platforms similar to Sky Q, X1 and Flex. We sell Sky
Glass televisions in Europe, with the United Kingdom as the first market, to consumers that also subscribe to Sky’s video services. XClass TVs are
manufactured and sold by third parties and operate on our XClass TV operating system.
Seasonality and Cyclicality
Each of our businesses is typically subject to seasonal and cyclical variations. Cable Communications’ results are impacted by the seasonal nature of
residential customers receiving our services in college and vacation markets. This generally results in fewer net customer relationship additions in the
second quarter of each year.
Revenue and operating costs and expenses (comprised of total costs and expenses, excluding depreciation and amortization expense) in our Media segment
are cyclical as a result of our periodic broadcasts of major sporting events, such as the Olympic Games and the Super Bowl. In particular, advertising
revenue increases due to increased demand for advertising time for these events and distribution revenue increases in the period of broadcasts of the
Olympic Games. Operating costs and expenses also increase as a result of our production costs for these broadcasts and the amortization of the related
rights fees.
Revenue in Cable Communications, Media and Sky is also subject to cyclical advertising patterns and changes in viewership levels. Advertising revenue in
the United States is generally higher in the second and fourth quarters of each year and in even-numbered years due to increases in advertising in the spring
and in the period leading up to and including the holiday season, and advertising related to candidates running for political office and issue-oriented
advertising, respectively. Revenue in Media also fluctuates depending on the timing of when our programming is aired, which typically results in additional
advertising revenue in the second and fourth quarters of each year. Advertising revenue in Sky typically has seasonally higher audience levels in winter
months and increased competition in the summer during major sporting events where public service broadcasters lease the rights, such as the Olympic
TM
Games and the FIFA World Cup .
Revenue in Studios fluctuates due to the timing, nature and number of films released in movie theaters, on DVDs, and through various other distribution
platforms, including viewing on demand, DTC platforms or OTT service providers. 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 holiday season. We incur
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significant marketing expenses before and throughout the release of a film in movie theaters and as a result, we typically incur losses on a film prior to and
during the film’s exhibition in movie theaters. Content licensing revenue also fluctuates due to the timing of when our film and television content is made
available to licensees.
Revenue in Theme Parks fluctuates with changes in theme park attendance that typically result from the seasonal nature of vacation travel and weather
variations, local entertainment offerings and the opening of new attractions, as well as with changes in currency exchange rates. Theme Parks generally
experiences peak attendance during the spring holiday period, the summer months when schools are closed and the Christmas holiday season.
Sky’s results are also impacted by the seasonal nature of residential customers receiving our DTH and NOW streaming services, including the start of the
new European football seasons and the Christmas holiday. This generally results in higher net customer relationship additions and higher marketing
expense in the second half of each year to attract new customers.
Exclusive sports rights, such as European football, play a key role within Sky’s wider content strategy. In Europe, broadcasting rights for major sports are
usually tendered through a competitive auction process, with the winning bidder or bidders acquiring rights over a three to five-year period. This creates
some level of cyclicality, although the staggered timing of major sports rights auctions usually gives Sky time to react to any material changes in the
competitive dynamics of the prevailing market. Certain of Sky’s significant sports rights agreements require payments at the start of each season, resulting
in increases in sports rights payments in the third and fourth quarters of each year.
Legislation and Regulation
While all of our businesses are subject to various federal, state and local laws and regulations, with some also subject to international laws and regulations,
the Communications Act of 1934, as amended (the “Communications Act”), and Federal Communications Commission (“FCC”) regulations and policies,
affect significant aspects of our cable communications and broadcast businesses in the United States.
Beyond the significant regulations summarized below, legislators and regulators at all levels of government frequently consider changing, and sometimes
do change, existing statutes, rules or regulations, or interpretations of existing statutes, rules or regulations, or prescribe new ones, any of which may
significantly affect our businesses and ability to effectively compete. These legislators and regulators have been active in considering legislation and
rulemakings, at times looking to adopt regulatory approaches from different countries that may be more burdensome, and they, along with some state
attorneys general and foreign governmental authorities, have also been active in conducting inquiries and reviews, regarding our services. State legislative
and regulatory initiatives can create a patchwork of different and/or conflicting state requirements, such as with respect to privacy and Open Internet/net
neutrality regulations, that can affect our business operations and further constrain our ability to compete.
Legislative and regulatory activity is increasing under the Biden Administration, particularly with respect to broadband networks. For example, Congress
has approved tens of billions of dollars in new funding for broadband deployment and adoption initiatives, and may consider other proposals that address
communications issues, including whether it should rewrite the entire Communications Act to account for changes in the communications marketplace and
whether it should enact new, permanent Open Internet/net neutrality requirements. Federal agencies likewise may consider adopting new regulations for
communications services, including broadband. States and localities are also increasingly proposing new regulations impacting communications services,
including broader regulation of broadband networks. Any of these regulations could significantly affect our business and compliance costs. In addition,
United States and foreign regulators and courts could adopt new interpretations of existing competition laws or enact new competition laws or regulatory
tools that could negatively impact our businesses. Any future legislative, judicial, regulatory or administrative actions may increase our costs or impose
additional restrictions on our businesses, some of which may be significant. We are unable to predict the outcome or effects of any of these potential actions
or any other legislative or regulatory proposals on our businesses.
The following paragraphs summarize the more significant legal and regulatory requirements and risks affecting our businesses.
Communications-Related Regulations in the United States
Broadband
Our broadband services are subject to a number of regulations and commitments. The FCC frequently considers imposing new broadband-related
regulations such as those relating to an Open Internet, and from time to time, imposing new regulatory obligations on internet service providers (“ISPs”)
such as us. States and localities also consider new broadband-related regulations, including those regarding government-owned broadband networks, net
neutrality and connectivity during
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COVID-19. New broadband regulations, if adopted, may have adverse effects on our businesses. We may also be subject to certain broadband-related
commitments as a condition of receiving federal or state broadband funding.
Broadband Deployment and Adoption Initiatives
There have been, and may continue to be, broadband-deployment funding initiatives at the federal and state level, including as part of COVID-19 relief
efforts as well as federal infrastructure legislation enacted in 2021, that could subsidize other service providers building networks within our footprint or
potentially could subsidize expansion of our network to new areas. We cannot predict how such funds will be awarded or the impact of these initiatives on
our businesses.
In 2021, the FCC launched the federal Emergency Broadband Benefit (“EBB”) program to provide a monthly discount toward broadband service for
eligible low-income households during the COVID-19 pandemic. Congress recently created the Affordability Connectivity Program (“ACP”), a new
longer-term program that replaced EBB. We participated in EBB and are participating in ACP. We cannot predict the extent to which eligible households
will opt to use their ACP benefit towards our broadband services.
Open Internet Regulations
Various forms of Open Internet regulations can significantly affect our broadband services. In 2017, the FCC reversed its prior classification of broadband
internet access service as a Title II “telecommunications service” under the Communications Act and classified it as an “information service” under Title I.
In addition, it eliminated its prior “net neutrality” rules prohibiting ISPs from blocking access to lawful content on the internet; impairing or degrading
lawful internet traffic on the basis of content, applications or services (“throttling”); prioritizing certain internet traffic in exchange for consideration or in
favor of an affiliate (“paid or affiliated prioritization”); and generally prohibiting ISPs from unreasonably interfering with or unreasonably disadvantaging
consumers’ ability to access and use the lawful internet content, applications, services or devices of their choosing or unreasonably interfering with or
disadvantaging edge providers’ ability to make lawful content, applications, services, or devices available to consumers (“general conduct standard”). The
FCC stated that jurisdiction to regulate ISP conduct would rest at the Federal Trade Commission (“FTC”), and it expressly preempted all state Open
Internet laws. In addition, the FCC revised the transparency rule to add a requirement that ISPs disclose any blocking and throttling practices, and any paid
or affiliated prioritization practices associated with their broadband offerings. We have disclosed that we do not block, throttle, or engage in paid or
affiliated prioritization, and have committed not to block, throttle, or discriminate against lawful content. The FTC has authority to enforce these public
commitments, and the FCC has authority to enforce compliance with its transparency rule.
The FCC’s 2017 decision was challenged and, in 2019, the U.S. Court of Appeals for the District of Columbia largely upheld the FCC’s decision, including
the classification of broadband as a Title I information service and repeal of its prior rules. However, it vacated the FCC’s express preemption of all state
Open Internet laws, but noted that state laws may nevertheless be preempted on a case-by-case basis if those regulations conflict with federal law or policy
or under other theories and precedent on implied preemption.
Several states have passed or introduced legislation, or have adopted executive orders, that impose Open Internet requirements in a variety of ways, and
new state legislation may be introduced and adopted in the future. Certain of these state initiatives have been challenged in court. Such attempts by the
states to regulate have the potential to create differing and/or conflicting state regulations.
The FCC under the Biden Administration likely will revisit the regulatory classification of broadband internet access service and reclassify it as a
“telecommunications service,” which would authorize the FCC to subject it to traditional common carriage regulation under Title II of the Communications
Act. Under a Title II framework, the FCC could potentially regulate our customer rates, speeds, data usage thresholds or other terms for internet services
and could prohibit or seriously restrict arrangements between us and internet content, applications and service providers, including backbone
interconnection arrangements. Any FCC action could impact state Open Internet initiatives and related legal challenges, and also could prompt further
litigation. Congress may also consider legislation addressing these regulations and the regulatory framework for broadband internet access services. We
cannot predict whether or how the rules might be changed, the impact of potential new legislation, or the outcome of any litigation.
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Municipally Owned Broadband Networks
A number of local municipalities operate municipally owned broadband networks, and there may be further efforts by local governments to expand or
create government-owned networks, particularly in light of federal funding for broadband deployment. Certain states have enacted laws that restrict or
prohibit local municipalities from operating municipally owned broadband networks, and there may be efforts in other state legislatures to restrict the
development of government-owned networks, although others may choose to ease or facilitate such networks. Much of the federal funding authorized in
2021 for broadband deployment is conditioned on states agreeing to make it available for potential use by government-owned networks, although the
funding prioritizes deployment to unserved areas and locations. We cannot predict how successful those efforts will be and how they might affect our
businesses.
Video
The video marketplace continues to become even more competitive, particularly with DTC streaming and other OTT service providers. There are a number
of laws and regulations that apply solely to multichannel video programming distributors (“MVPDs”) or cable operators such as our Cable
Communications business, and to cable networks and local broadcast television stations operated by NBCUniversal. These laws and regulations can
constrain our ability to compete, particularly against DTC streaming and other OTT service providers, which are not subject to these same requirements.
Cable Pricing and Packaging
While our video services, including equipment and installation fees, are no longer subject to rate regulation by the FCC, certain state entities monitor and
challenge in court the marketing and advertising of our services, and some have attempted to regulate the service packages we offer and our billing
practices. We cannot predict the outcome of any current litigation with state entities or whether other states may pursue similar actions.
Cable Franchising
Cable operators generally operate their cable systems under nonexclusive franchises granted by local or state franchising authorities. While the terms and
conditions of franchises vary materially from jurisdiction to jurisdiction, franchises typically last for a fixed term, obligate the franchisee to pay franchise
fees and meet service quality, customer service and other requirements, and are terminable if the franchisee fails to comply with material provisions.
Franchising authorities also may require adequate channel capacity, facilities and financial support for public, educational and governmental access
programming, and other in-kind contributions.
The Communications Act also contains provisions governing the franchising process, including renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal and unreasonable renewal conditions. We believe that our franchise renewal prospects are generally
favorable but cannot guarantee the future renewal of any individual franchise. The FCC adopted an order in 2019 that prohibits state and local authorities
from imposing duplicative franchise and/or fee requirements on the provision of broadband and other non-cable services over franchised cable systems and
that ruled that in-kind contributions generally should be treated as franchise fees subject to a statutory cap on franchise fees of 5% of cable service revenue.
While the order was upheld by a federal appellate court, that decision has been appealed to the U.S. Supreme Court. In addition, several localities have
attempted, generally unsuccessfully to date, to impose franchise fees on DTC streaming and other OTT service providers.
Program Carriage
FCC regulations prohibit us from unreasonably restraining the ability of an unaffiliated video programming network to compete fairly by discriminating
against the network on the basis of its non-affiliation in the selection, terms or conditions for its carriage. In addition, cable operators and other MVPDs in
the United States are prohibited from requiring as a condition of carriage a financial interest in, or exclusive distribution rights for, a video programming
network. We have been involved in program carriage disputes at the FCC, as well as in the courts, and may be subject to new complaints in the future.
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Program Access
The Communications Act and FCC regulations generally prevent cable networks affiliated with cable operators from favoring affiliated cable operators
over competing MVPDs. The FCC and Congress have considered proposals that would require companies that own multiple cable networks to make each
of their networks available individually when negotiating distribution agreements with MVPDs and potentially with DTC streaming and other OTT service
providers. We currently offer our cable networks on a packaged basis (in “tiers”) and, in various cases, individually. We have been involved in program
access disputes at the FCC and may be subject to new complaints in the future.
Must-Carry/Retransmission Consent
Cable operators are required to carry, without compensation, programming transmitted by most local commercial and noncommercial broadcast television
stations. As an alternative to this “must-carry” requirement, local broadcast television stations may choose to negotiate with the cable operator for
“retransmission consent,” under which the station gives up its must-carry rights and instead seeks to negotiate a carriage agreement with the cable operator,
which frequently will involve payments to the station. We currently pay certain local broadcast television stations in exchange for their required consent for
the retransmission of the stations’ broadcast programming to our video services customers and expect to continue to be subject to demands for increased
payments and other concessions from local broadcast television stations. Failure to reach a retransmission consent agreement with a broadcaster could
result in the loss of popular programming on our video services.
With respect to our broadcast television business, every three years, each local commercial broadcast television station must elect for each cable system in
its DMA either must carry or retransmission consent. A similar regulatory scheme applies to satellite providers. For the three-year period from January 1,
2021 to December 31, 2023, all of our owned NBC and Telemundo local broadcast television stations elected retransmission consent. Although we have
reached retransmission consent agreements with almost all MVPDs in the past, there can be no assurance that we will always be able to renew those
agreements under favorable terms or at all.
Broadcast Licensing
Local broadcast television stations may be operated only in accordance with a license issued by the FCC upon a finding that the grant of the license will
serve the public interest, convenience and necessity. The FCC grants broadcast television station licenses for specific periods of time, which may be
renewed with or without conditions. The FCC renewed all of our broadcast television station licenses without conditions during the last license renewal
cycle; the current television license renewal cycle began in 2020 and some of our licenses have been renewed. Although our licenses have been renewed in
prior cycles, there can be no assurance that we will always obtain renewal grants.
Broadcast Ownership Restrictions
The Communications Act and FCC regulations impose certain limitations on local and national television ownership, as well as limits on foreign ownership
in a broadcast television station. Some of these limitations currently are under review at the FCC, including the national television ownership limit, the
local television ownership limit, and the prohibition on each of the four major broadcast television networks, ABC, CBS, Fox and NBC, from being under
common ownership or control with another of the four.
Children’s Programming
Under federal regulations, the amount of commercial content that may be shown on cable networks, broadcast networks and local broadcast television
stations during programming originally produced and broadcast primarily for an audience of children 12 years of age and under is limited, and certain
television station programming must serve the educational and informational needs of children 16 years of age and under.
FCC 5G Spectrum Proceedings
The FCC also has established or is in the process of evaluating and potentially modifying its rules to make available additional spectrum that will likely be
used for licensed and unlicensed commercial services, including new 5G services, some of which has been or is in the process of being auctioned by the
FCC. Because Cable Communications and NBCUniversal both use some of this spectrum to provide services, they must transition their operations to
different frequencies in order to accommodate the reallocation of spectrum for 5G, which could disrupt our services and impose additional costs.
Voice
We provide voice services using VoIP technology. The FCC has adopted a number of regulations for providers of nontraditional voice services such as ours,
including regulations relating to privacy of customer proprietary network information, local number portability duties and benefits, disability access, E911,
law enforcement assistance, outage reporting, Universal Service Fund contribution obligations, rural call completion, customer equipment back-up power,
robocall
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mitigation, service discontinuance and certain regulatory filing requirements. The FCC has not yet ruled on whether VoIP services such as ours should be
classified as an “information service” or a “telecommunications service” under the Communications Act. The classification determination is important
because telecommunications services are regulated more extensively than information services. One federal court of appeals in the 8th Circuit has held that
VoIP is an information service and preempted state regulation of VoIP, and the U.S. Supreme Court has declined to review that determination, but that
ruling remains limited to the seven states located in that circuit. State regulatory commissions and legislatures in other jurisdictions may continue to
consider imposing regulatory requirements on our voice services as long as the regulatory classification of VoIP remains unsettled at the federal level.
Wireless
We offer a wireless voice and data service using our MVNO rights to provide the service over Verizon’s wireless network. MVNOs are subject to many of
the same FCC regulations as facilities-based wireless carriers (e.g., E911 services, local number portability, etc.), as well as certain state or local
regulations. The FCC or other regulatory authorities may adopt new or different regulations for MVNOs and/or mobile broadband providers in the future,
which could adversely affect our wireless phone service offering or our business generally.
International Communications-Related Regulations
Sky and certain NBCUniversal international businesses are subject to telecommunications and media-specific regulation described below in Europe, Latin
America and other international jurisdictions, and all of our international businesses are subject to regulation under generally applicable laws, such as
competition, consumer protection, data protection and taxation in the jurisdictions where they operate. Our international businesses are currently, and may
be in the future, subject to proceedings or investigations from regulatory and antitrust authorities in the jurisdictions in which they operate. In addition, in
connection with our acquisition of Sky, we have made certain legally binding commitments with respect to Sky’s operations, including for example, to
maintain annual funding for Sky News in an amount no lower than Sky News’ 2017 fiscal year expenditures, as adjusted by inflation, until 2029.
Platform Services
In the United Kingdom, Sky is required to ensure that agreements to provide its electronic program guide (“EPG”) and conditional access (“CA”) services
to other programming providers are on fair, reasonable and non-discriminatory terms, among other things, so that those providers’ content is available on
Sky’s satellite platform via the EPG on set-top boxes. Sky also has voluntarily committed to the United Kingdom’s communications regulator, the Office of
Communications, or Ofcom, to provide access control services to third parties that enable them to provide interactive services. Sky is subject to similar
EPG and CA obligations in Germany.
Television Channels and On-Demand Services
Sky and NBCUniversal hold a number of licenses and authorizations for their portfolios of television channels and on-demand services. For example, in the
United Kingdom, Sky’s channels are licensed and subject to various codes issued by Ofcom affecting the content and delivery of these channels. Sky and
NBCUniversal also hold various broadcast licenses in certain E.U. and other countries. These content-related rules and regulations cover issues such as the
acquisition and exploitation of sports rights, media concentration and plurality, television advertising, the protection of children, accessibility, airtime for
commercials and teleshopping, sponsorship and ensuring clear distinctions between program content and advertising.
Broadband and Voice
Sky provides broadband and voice services in the United Kingdom, Ireland and Italy pursuant to wholesale distribution agreements that third-party
broadband and telecommunications companies either make available commercially or are required to make available under applicable laws in those
jurisdictions. Material changes to these regulations could affect Sky’s business. As a provider of broadband services, Sky is subject to applicable laws and
regulations relating to telecommunications security, including a U.K. law that requires providers to take certain measures with respect to potential security
compromises. Sky is also subject to E.U. and other Open Internet/net neutrality regulations, which prohibit the blocking, throttling or discrimination of
online content, applications and services and require ISPs to disclose their traffic management, throughput limitations and other practices impacting quality
of service in customer contracts.
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Other Areas of Regulation
Intellectual Property
Copyright, trademark, unfair competition, patent, trade secret and other proprietary-rights laws of the United States and other countries help protect our
intellectual property rights. In particular, unauthorized copying, distribution and piracy of programming and films over the internet, through devices,
software and websites, counterfeit DVDs and through other platforms interfere with the market for copyrighted works and present challenges for our
content businesses. We have actively engaged in the enforcement of our intellectual property rights and likely will continue to expend substantial resources
to protect our content. Although many legal protections exist to combat such practices, the extent of copyright protection is sometimes ambiguous and the
use of technological protections can be controversial. Modifications to existing laws, a weakening of these protections or their enforcement or a failure of
existing laws, in the United States or internationally, to adapt to new technologies could have an adverse effect on our ability to license and sell our
programming.
U.S. copyright laws establish a cable compulsory copyright license that requires our video distribution business to contribute a specified percentage of
revenue to a federal copyright royalty pool in exchange for retransmitting copyrighted material included in broadcast signals. We also pay standard industry
licensing fees for the public performance of music in the programs we create or distribute. The cable compulsory copyright license and the royalties we pay
are subject to audits and possible regulatory and legislative changes that could impact the royalty fees we pay and our ability to retransmit broadcast signals
over cable systems. In addition, the landscape for music licensing is constantly changing, and music fees we pay are subject to new fee demands and
negotiations. We cannot predict how changes to the compulsory copyright license and music licensing will impact the fees that we pay.
Privacy and Data Security Regulation
Our businesses are subject to federal, state and foreign laws and regulations that impose various restrictions and obligations related to privacy and the
handling of consumers’ personal information. In the United States, the Communications Act generally restricts cable operators’ nonconsensual collection
and disclosure to third parties of cable customers’ personally identifiable information, except for rendering service, conducting legitimate business
activities related to the service and responding to legal requests. We are also subject to various state and federal regulations that provide privacy protections
for customer proprietary network information related to our voice services.
The FTC generally exercises oversight of consumer privacy protections using its enforcement authority over unfair and deceptive acts or practices. For
example, the FTC often partners with state attorneys general to enforce transparency requirements regarding the collection and use of consumer
information. These enforcement efforts may require ongoing review on our part of new and rapidly evolving technologies and methods for delivering
content and advertising to ensure that appropriate notice is given to consumers and consent is obtained where required in connection with the collection,
use or sharing of personal information. We are also subject to stringent data security and data retention requirements that apply to website operators and
online services directed to children 12 years of age and under, or that knowingly collect or post personal information from children 12 years of age and
under.
In addition, certain states have enacted detailed laws establishing explicit consumer privacy protections and data security requirements in their respective
states. For example, the California Consumer Privacy Act (“CCPA”) gives California residents rights to receive certain disclosures regarding the collection,
use and sharing of “Personal Information,” as well as rights to access, delete and restrict the sale of certain personal information collected about them.
Moreover, all 50 states have security breach notification laws that generally require a business to give notice to consumers and government agencies when
certain information has been disclosed to an unauthorized party due to a security breach.
Certain of our businesses are subject to the European Union’s General Data Protection Regulation (“GDPR”) and the United Kingdom’s Data Protection
Act 2018 (“DPA”), which broadly regulate the processing of personal data collected from individuals in the European Union and United Kingdom,
respectively. DPA, GDPR and the Member States’ legislation implementing the GDPR, related rules regulating the privacy of electronic communications
services and networks (including “cookie” rules), and various initiatives by regulatory authorities pursuant to these laws affect how we are able to process
certain personal data for particular purposes, what we must tell our customers about this processing, and what controls our customers have over such
processing.
Privacy and data security remained a priority legislative issue in 2021. For example, new laws have been enacted in Virginia and Colorado, which come
into effect in 2023 and include many requirements similar to those in the CCPA for companies that collect personal information from consumers in those
states. In addition, California voters approved a ballot initiative enacting the California Privacy Rights Act (“CPRA”), which updates the CCPA and
establishes a new California Privacy Protection Agency to oversee implementation and enforcement of the state’s privacy laws. Changes enacted in the
CPRA generally go into
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effect on January 1, 2023, though several aspects of the law remain subject to further rulemaking. Legislation similar to the laws enacted in Virginia and
Colorado is under consideration in many other states, and various regulatory authorities are considering rulemakings around privacy and data collection.
We cannot predict how these changes to the laws will affect our business, or whether any legislation or proposed rules currently under consideration will be
enacted or adopted or what the impact of any such laws or regulations may be on our businesses.
State and Local Taxes
Some U.S. states and localities have imposed or are considering imposing, through both legislative and administrative channels, new or additional taxes or
fees on, or limiting or eliminating incentives or credits earned or monetized by, the businesses operated by our Cable Communications and NBCUniversal
segments, or imposing adverse methodologies by which taxes, fees, incentives or credits are computed, earned or monetized. These include combined
reporting or other changes to general business taxes, central assessments for property tax and taxes and fees on the businesses operated or services provided
by our Cable Communications and NBCUniversal segments. In some situations, DBS providers and other competitors that deliver their services over a
broadband connection do not face the same state tax and fee burdens. Congress has also considered, and may consider again, proposals to bar or limit states
from imposing taxes on these DBS providers or other competitors that are equivalent to the taxes or fees that we pay. The Internet Tax Freedom Act
(“ITFA”) prohibits most states and localities from imposing sales and other taxes on our internet access charges; however, some jurisdictions may challenge
the ITFA or the application of the ITFA to our business, or may assert that certain taxes akin to right-of-way fees are not preempted by the ITFA.
U.K. Exit from the European Union
The telecommunications and media regulatory framework applicable to our business in the United Kingdom is subject to greater uncertainty as a result of
the United Kingdom’s withdrawal from the European Union. In 2021, the U.K. government signaled its intention of moving away from the E.U.’s approach
in a number of policy areas, increasing the possibility of greater divergence between the regulation of our U.K. business and our other European businesses
over time. We are not able to predict the extent of any such divergence at this point in time.
Other Regulations
U.S. states and localities, and various regulatory authorities, actively regulate other aspects of our businesses, including our Studios and Theme Parks
businesses, accessibility to our video and voice services and broadcast television programming for people with disabilities, customer service standards,
inside wiring, cable equipment, pole attachments, universal service fees, regulatory fees, public safety, telemarketing, leased access, indecency, loudness of
commercial advertisements, advertising, political broadcasting, sponsorship identification, Emergency Alert System, equal employment opportunity and
other employment-related laws, environmental-related matters, our equipment supply chain, and technical standards relating to the operation of cable
systems and television stations. In addition, our international businesses are subject to various similar regulations, including those that cover television
broadcasting, programming and advertising. We are occasionally subject to enforcement actions and investigations at the FCC and other federal, state and
local agencies, as well as foreign governments and regulatory authorities, which can result in us having to pay fines or being subject to other sanctions.
Human Capital Resources
As of December 31, 2021, we had approximately 189,000 full-time and part-time employees calculated on a full-time equivalent basis. Of these employees,
approximately 79,000, 74,000 and 34,000 were associated with Cable Communications, NBCUniversal and Sky, respectively. Approximately 30% of these
employees were located in over 30 countries outside the United States, with larger workforce concentrations in the United Kingdom, China, Japan, Italy
and Germany. We also use freelance and temporary employees in the normal course of our business. A small overall portion of our full-time U.S.
employees are unionized; outside the United States, employees in certain countries, particularly in Europe, are represented by an employee representative
organization, such as a union, works council or employee association. Our employee numbers reflect additional employees in our theme parks both due to
the opening of our park in Beijing, China and reversing temporary workforce reductions implemented in 2020 due to capacity restrictions and closures at
our parks resulting from COVID-19.
Our company has been built on a foundation of respect, integrity and trust, and we are committed to creating and fostering a work environment that
promotes those values. As a global media and technology company, we have a wide range of employees, including management professionals, technicians,
engineers, call center employees, theme park employees, and media talent and production employees. Given the breadth of our employee base, we tailor
our human capital management policies with a view to specific employee populations within our businesses. Some of our key workforce-related programs
and initiatives include the following:
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Diversity, Equity and Inclusion
• Our commitment to diversity, equity and inclusion is longstanding. We believe that a diverse, equitable and inclusive company helps to foster
creativity, innovation and success. We embrace diversity of background, perspective, culture and experience throughout our business.
• We offer a variety of training programs and initiatives focused on creating a more inclusive workplace culture. These efforts include company-
wide forums like our diversity, equity and inclusion speaker series which is designed to educate, inspire dialogue and foster employee engagement
through a curated experience anchored by scholars, authors, thought leaders and expert speakers focusing on a variety of diversity, equity and
inclusion topics.
• We support nine employee resource groups, with 35,000 members in over 200 chapters, including a variety of uniquely tailored mentorship
programs across our business.
Employee Engagement
• We seek to create an engaged workforce through proactive listening and constructive dialogue, including through employee engagement surveys,
as well as through the employee resource groups described above.
• We have an open door policy and culture so employees can report any questions or concerns – whether involving a workplace issue, a concern
about suspected illegal or unethical conduct or any other matter – trusting that we will take their concerns seriously and without fear of retaliation.
Talent Development
• We provide a wide variety of opportunities for professional growth for all employees with in-classroom and online trainings and on-the-job
experience.
• We offer education tuition assistance to full-time employees in the United States.
• Our Board of Directors discusses succession planning for our CEO and the remainder of our senior executive management team at least once a
year. Throughout the year, our senior executive management team, as well as a broader array of executives throughout our businesses, make
presentations to the Board and its committees and interact with our directors informally outside of regularly scheduled Board meetings, which
provides directors with meaningful insight into our current pool of talent, what attracts and retains our executives, and our company culture.
Health and Welfare Benefits
• We offer a portfolio of services and tools to support our employees’ health and well-being (including dedicated health assistants, expert medical
opinion services, diabetes treatment programs, tobacco cessation, and others).
•
In 2021, we enhanced benefits related to virtual care, telehealth options, and back-up family care resources and support services and launched new
behavioral health and counseling tools to support emotional wellbeing.
• We provide female and male employees the same paid parental leave options, including for adoption and surrogacy, and provide specialized
support teams to help manage first months of parenthood.
•
In response to COVID-19, we completed hundreds of thousands of COVID-19 tests, made physician-directed COVID-19 screening, testing,
vaccination and treatment available at no out-of-pocket cost to benefit-enrolled employees and their dependents and we hosted onsite vaccine
clinics.
Financial Benefits
• We focus on attracting and retaining employees by providing compensation and benefits packages that are competitive within the applicable
market, taking into account the job position’s location and responsibilities.
• We provide competitive financial benefits such as a 401(k) retirement plan in the United States with a company match and other retirement
arrangements internationally.
• We have employee stock purchase plans in the United States, United Kingdom, Ireland and several other European countries where most of our
full-time and part-time employees can purchase our stock at a discount.
• We generally grant awards of restricted stock units and stock options on an annual basis to a meaningful portion of our employees, with over
18,000 employees receiving such awards in 2021.
• We offer financial literacy training and counseling to support employees in making their own financial decisions.
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Available Information and Websites
Our phone number is (215) 286-1700, and our principal executive offices are located at One Comcast Center, Philadelphia, PA 19103-2838. Our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed with or furnished to the
SEC under Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the SEC’s
website at www.sec.gov and on our website at www.comcastcorporation.com as soon as reasonably practicable after such reports are electronically filed
with the SEC. The information posted on our websites is not incorporated into our SEC filings.
Caution Concerning Forward-Looking Statements
The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make
informed investment decisions. In this Annual Report on Form 10-K, we state our beliefs of future events and of our future financial performance. In some
cases, you can identify these so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “believes,” “estimates,”
“potential,” or “continue,” or the negative of these words, and other comparable words. You should be aware that these statements are only our predictions.
In evaluating these statements, you should consider various factors, including the risks and uncertainties listed in “Risk Factors” and in other reports we file
with the SEC.
Additionally, we operate in a highly competitive, consumer-driven and rapidly changing environment. This environment is affected by government
regulation; economic, strategic, political and social conditions; consumer response to new and existing products and services; technological developments;
and, particularly in view of new technologies, the ability to develop and protect intellectual property rights. Our actual results could differ materially from
our forward-looking statements as a result of any of such factors, which could adversely affect our businesses, results of operations or financial condition.
We undertake no obligation to update any forward-looking statements.
Item 1A: Risk Factors
Risks Related to Our Business, Industry and Operations
The COVID-19 pandemic has had, and may continue to have, a material adverse effect on our businesses and results of operations.
The impacts of COVID-19 and measures to prevent its spread across the globe have impacted our businesses in a number of ways. In particular, COVID-19
has had material negative impacts on NBCUniversal and Sky results of operations. For example, as a result of COVID-19, we have at times temporarily
closed our theme parks or operated them with capacity restrictions. The creation and availability of our film and television programming globally also have
been disrupted as a result of COVID-19, such as postponements or cancellations of sporting events, theatrical closures and suspensions of entertainment
content production.
The impact of COVID-19 on our businesses also generally depends on the extent of restrictive governmental measures taken that affect day-to-day life,
travel protocols and the length of time that such measures remain in place, global economic conditions, current and new variants and vaccination rates and
efficacy. It is difficult to predict the extent and duration and the degree to which our results of operations will continue to be affected.
COVID-19 may also have the effect of heightening many of the other risks set forth below.
Our businesses operate in highly competitive and dynamic industries, and our businesses and results of operations could be adversely affected if
we do not compete effectively.
All of our businesses operate in intensely competitive, consumer-driven, rapidly changing environments and compete with a growing number of companies
that provide a broad range of communications products and services as well as entertainment, sports, news and information content to consumers. There
can be no assurance that we will be able to compete effectively against our competitors or that competition will not have an adverse effect on our
businesses.
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Below is a summary of the most significant sources of competition; for a more detailed description of the competition facing our businesses, see Item 1:
Business and refer to the “Competition” discussion within that section.
•
Cable Communications’ and Sky’s broadband services compete primarily against wireline telecommunications companies, including many that
are increasing deployment of fiber-based networks, wireless telecommunications companies offering internet services (such as 4G and 5G wireless
broadband services), certain electric cooperatives and municipalities in the United States that own and operate their own broadband networks and
DBS and newer satellite broadband providers. Broadband-deployment funding initiatives at the federal and state level, including as part of
COVID-19 relief efforts as well as federal infrastructure legislation enacted in 2021, may result in other service providers deploying new
subsidized internet access networks within our footprint. Competition for Cable Communications’ video services consists primarily of DTC
streaming and other OTT service providers, DBS providers and telecommunications companies with fiber-based networks. Sky faces competition
for its video services from cable and telecommunications providers in its European markets. Our voice and wireless services primarily compete
with wireless and wireline telecommunications providers. Many of our competitors offer customers bundled products and services with favorable
pricing, which has increased competition.
• NBCUniversal and Sky face substantial and increasing competition from providers of similar types of entertainment, sports, news and information
content, as well as from other forms of entertainment and recreational activities. NBCUniversal and Sky must compete to obtain talent, popular
content (including sports programming) and other resources required to successfully operate their businesses. This competition has intensified as
DTC streaming and other OTT service providers seek to develop high-quality programming and acquire live sports programming to attract
viewers.
Consolidation of, or cooperation between, our competitors, including suppliers and distributors of content, may increase competition in all of these areas, as
may the emergence of additional competitors with significant resources, greater efficiencies of scale, fewer regulatory burdens and more competitive
pricing and packaging, who are competing with our businesses in all forms of content distribution and production. For example, such consolidation or
cooperation may allow competitors to offer free or lower cost streaming services, potentially on an exclusive basis, through unlimited data-usage plans for
internet or wireless phone services.
The ability of our businesses to compete effectively also depends on our perceived image and reputation among our various constituencies, including our
customers, consumers, advertisers, business partners, employees, investors and government authorities. In addition, our ability to compete will be
negatively affected if we do not provide our customers with a satisfactory customer experience.
Changes in consumer behavior continue to adversely affect our businesses and challenge existing business models.
Distribution platforms for viewing and purchasing content over the internet have been, and will likely continue to be, developed that further increase the
number of competitors that all our businesses face and challenge existing business models. As consumers increasingly turn to DTC streaming and other
OTT services, the number of Cable Communications’ video customers and amount of subscriber fees paid to NBCUniversal’s television networks decrease,
even as Cable Communications’ broadband services have become more important to consumers. DTC streaming and other OTT services have driven, and
will continue to drive, changes in consumer behavior as consumers seek more control over when, where and how they consume content and access
communications services, and how much they pay for such content.
For example, Cable Communications continues to experience net video customer losses. In Europe, more of Sky’s new video customers have recently
subscribed, and may continue to subscribe, to NOW, Sky’s DTC streaming service, instead of its traditional DTH video service. Although we have
attempted to adapt our video service offerings and enhance our broadband services for changing consumer behaviors, for example, by deploying the X1 and
Sky Q platforms, Flex, developing new smart televisions using our global technology platform at Sky and Cable Communications, and by offering
Peacock, the continuing trend of content owners delivering their content directly to consumers rather than through, or in addition to, traditional video
distribution channels continues to disrupt traditional distribution business models.
The increase in DTC streaming and other OTT service providers also has significantly increased the number of entertainment choices available to
consumers, which has intensified audience fragmentation and disaggregated the way that content traditionally has been distributed and viewed by
consumers. The use of DTC streaming and other OTT services reduce traditional television viewership, and coupled with time-shifting technologies, such
as DVR and on demand services, have caused and likely will continue to cause audience ratings declines for our television programming channels. In
addition, as more programming providers offer their content directly to consumers through their own apps or platforms, they may reduce the quantity and
quality of the programming they license to NBCUniversal or Sky’s television channels or to Peacock.
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Our failure to effectively anticipate or adapt to emerging competitors or changes in consumer behavior, including among younger consumers, and shifting
business models could have an adverse effect on our competitive position, businesses and results of operations.
A decline in advertisers’ expenditures or changes in advertising markets could negatively impact our businesses.
Cable Communications, NBCUniversal and Sky compete for the sale of advertising time with digital media distributors, websites and search engines, other
television networks and stations, as well as with all other advertising platforms, such as radio and print. We derive substantial revenue from the sale of
advertising, and a decline in expenditures by advertisers, including through traditional linear television distribution models, could negatively impact our
results of operations. Declines can be caused by the economic prospects of specific advertisers or industries, increased competition for the leisure time of
viewers, such as from social media and video games, audience fragmentation, increased viewing of content through DTC streaming and other OTT service
providers, regulatory intervention regarding where and when advertising may be placed, or economic conditions generally. In addition, advertisers have
shifted a portion of their total expenditures to digital media, which can deliver targeted advertising. Their willingness to purchase advertising from us may
be adversely affected by lower audience ratings and reduced viewership, which many of NBCUniversal’s networks and some of Sky’s television channels
have experienced and likely will continue to experience, or from the level of popularity or perceived acceptance of Peacock. Advertising sales and rates
also are dependent on the methodology used for audience measurement and could be negatively affected if methodologies do not accurately reflect actual
viewership levels.
Programming expenses for our video services are increasing, which could adversely affect Cable Communications’ video businesses.
We expect programming expenses for our video services to continue to be the largest single expense item for our Cable Communications segment and to
continue to increase on a per subscriber basis. Part of Cable Communications’ programming expenses include payments to certain local broadcast
television stations in exchange for their required consent for the retransmission of broadcast network programming to video services customers; we expect
to continue to be subject to increasing demands for payment and other concessions from local broadcast television stations. These market factors may be
exacerbated by increased consolidation in the media industry, which may further increase our programming expenses. If we are unable to raise our
customers’ rates or otherwise offset programming cost increases through the sale of additional services, cost management or other initiatives, the increasing
cost of programming could have an adverse effect on our Cable Communications segment’s results of operations.
Moreover, as our contracts with content providers expire, there can be no assurance that they will be renewed on acceptable terms, or at all, in which case
we may be unable to provide such content as part of Cable Communications’ video services, and our businesses and results of operations could be
adversely affected.
NBCUniversal’s and Sky’s success depends on consumer acceptance of their content, and their businesses may be adversely affected if their
content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase.
NBCUniversal and Sky create and acquire media and entertainment content, the success of which depends substantially on consumer tastes and preferences
that often change in unpredictable ways. The success of these businesses depends on our ability to consistently create, acquire, market and distribute
television programming, filmed entertainment, theme park attractions and other content that meet the changing preferences of the broad domestic and
international consumer markets. We have invested, and will continue to invest, substantial amounts in our content, including in the production of original
content for NBCUniversal, including Peacock, and Sky, in our films and for new theme parks and theme park attractions, before learning the extent to
which they will earn consumer acceptance. In addition, there can be no assurance that Peacock will continue to grow or sustain its revenue or user base or
successfully compete as a standalone DTC streaming service.
NBCUniversal and Sky also obtain a significant portion of their content from third parties, such as movie studios, television production companies, sports
organizations and other suppliers, sometimes on an exclusive basis. Competition for popular content, particularly for sports programming, is intense, and at
times, we may increase the price we are willing to pay or be outbid by our competitors for popular content. We also may be unable to license popular third-
party content for NBCUniversal’s and Sky’s television programming channels if media companies determine that licensing the content to us is not in their
strategic best interests. For example, content creators have launched and may continue to launch their own DTC streaming or other OTT services, forgoing
license fees from us to provide their content directly to consumers, or they may license their content to our competitors on an exclusive basis.
Entering into or renewing contracts for such programming rights or acquiring additional rights has in the past and in the future may result in significantly
increased costs. Particularly with respect to long-term contracts for sports programming rights for NBCUniversal and Sky, our results of operations and
cash flows over the term of a contract depend on a number of factors,
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including the strength of the advertising market, audience size, the timing and amount of rights payments, and the ability to secure distribution from,
impose surcharges on, or obtain carriage on multichannel video providers. There can be no assurance that revenue from these contracts will exceed our
costs for the rights, as well as the other costs of producing and distributing the programming. If our content does not achieve sufficient consumer
acceptance, or if we cannot obtain or retain rights to popular content on acceptable terms, or at all, NBCUniversal’s and Sky’s businesses may be adversely
affected.
The loss of programming distribution and licensing agreements, or the renewal of these agreements on less favorable terms, could adversely affect
our businesses.
NBCUniversal’s cable television networks depend on their ability to secure and maintain distribution agreements with traditional and virtual multichannel
video providers. The number of subscribers to NBCUniversal’s cable television networks has been, and likely will continue to be, reduced as a result of
fewer subscribers to multichannel video providers. In addition, NBCUniversal’s broadcast television networks depend on their ability to secure and
maintain network affiliation agreements with third-party local broadcast television stations in the markets where we do not own the affiliated local
broadcast television station. Our owned local broadcast television stations must elect, with respect to retransmission by certain multichannel video
providers, either “must-carry” status, in which we require the provider to carry the station without generating any compensation to us, or “retransmission
consent,” in which we give up our right to mandatory carriage and instead seek to negotiate the terms and conditions of carriage, including the amount of
compensation, if any, paid to us by such provider. Sky also depends on its ability to secure and maintain wholesale distribution agreements for its television
channels with multichannel video providers.
Increasingly, NBCUniversal and Sky license their prior season and library content on third-party distribution platforms, including to DTC streaming and
other OTT service providers. If this programming does not attract sufficient viewers, these providers may not distribute NBCUniversal’s or Sky’s
programming. In addition, at times we have opted to, and expect that we may in the future, not license certain popular owned content to third parties so we
may offer it exclusively through Peacock, which would result in foregone licensing revenue.
For all of these types of arrangements, NBCUniversal’s and Sky’s ability to renew agreements on favorable terms may be affected by industry
consolidation and new participants entering the market for distribution of content on digital platforms. There can be no assurance that any of these
agreements will be entered into or renewed in the future on acceptable terms. The inability to enter into or renew these agreements could reduce our
revenues and the reach of our programming, which could adversely affect NBCUniversal’s and Sky’s businesses.
Less favorable European telecommunications access regulations, the loss of Sky’s transmission access agreements with satellite or
telecommunications providers or the renewal of these agreements on less favorable terms could adversely affect Sky’s businesses.
Sky relies on various third-party telecommunications providers to deliver its video, broadband, voice and wireless phone services to its customers. For
example, Sky relies on satellite transponder capacity leased from third parties to provide most of its video services. In addition, under the current regulatory
regimes in the United Kingdom, Ireland and Italy, Sky accesses networks owned by third-party telecommunications providers to offer its broadband and
phone services, in many cases, on regulated terms, including price. If there is a change in regulation in these markets, the regulated terms could become less
favorable. Moreover, while Sky receives wholesale fiber access on fair, reasonable and non-discriminatory terms, specific pricing terms are not regulated.
As a result, if Sky is only able to enter into or renew its transmission agreements with satellite or telecommunications operators on less favorable terms, it
would adversely affect Sky’s ability to compete, and if it is ultimately unable to do so on commercially viable terms or if these operators were to terminate
their agreements, Sky may be unable to deliver certain of its services to customers in one or more of the markets in which it operates, which would
adversely affect Sky’s businesses and results of operations.
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Our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual property rights of others.
We rely on our intellectual property, such as patents, copyrights, trademarks and trade secrets, as well as licenses and other agreements with our vendors
and other third parties, to use various technologies, conduct our business operations and sell our products and services. Legal challenges to our intellectual
property rights and claims of intellectual property infringement by third parties could require that we enter into royalty or licensing agreements on
unfavorable terms, incur substantial monetary liability, or be enjoined preliminarily or permanently from further use of the intellectual property in question,
from importing into the United States or other jurisdictions in which we operate hardware or software that uses such intellectual property or from the
continuation of our businesses as currently conducted. We may need to change our business practices if any of these events occur, which may limit our
ability to compete effectively and could have an adverse effect on our results of operations. Even if we believe any such challenges or claims are without
merit, they can be time-consuming, costly to defend and may divert management’s attention and resources away from our businesses. Moreover, if we are
unable to obtain or continue to obtain licenses from our vendors and other third parties on reasonable terms, our businesses could be adversely affected.
In addition, intellectual property constitutes a significant part of the value of NBCUniversal’s and Sky’s businesses, and their success is highly dependent
on protecting the intellectual property rights of the content they create or acquire against third-party misappropriation, reproduction or infringement. The
unauthorized reproduction, distribution or display of copyrighted material negatively affects our ability to generate revenue from the legitimate sale of our
content, as well as from the sale of advertising in connection with our content, and increases our costs due to our active enforcement of our intellectual
property rights.
Piracy and other unauthorized uses of content are made easier, and the enforcement of intellectual property rights more challenging, by technological
advances that allow the conversion of programming, films and other content into digital formats, which facilitates the creation, transmission and sharing of
high-quality unauthorized copies. In particular, piracy of programming and films through unauthorized distribution platforms continues to present
challenges for NBCUniversal’s businesses, and certain entities may stream our broadcast television content illegally online without our consent and without
paying us any compensation. It also presents similar challenges for Sky’s businesses, including as a result of illegal retransmission of sports events. While
piracy is a challenge in the United States, it is particularly prevalent in many parts of the world that lack developed copyright laws, effective enforcement
of copyright laws and technical protective measures like those in effect in the United States. If any U.S. or international laws intended to combat piracy and
protect intellectual property rights are repealed or weakened or are not adequately enforced, or if the legal system fails to adapt to new technologies that
facilitate piracy, we may be unable to effectively protect our rights, the value of our intellectual property may be negatively impacted and our costs of
enforcing our rights may increase.
We may be unable to obtain necessary hardware, software and operational support.
We depend on third-party vendors to supply us with a significant amount of the hardware, software and operational support necessary to provide certain of
our products and services. Some of these vendors represent our primary source of supply or grant us the right to incorporate their intellectual property into
some of our hardware and software products. While we monitor the operations and financial condition of key vendors in an attempt to detect any potential
difficulties, there can be no assurance that we would timely identify any operating or financial difficulties associated with these vendors or that we could
effectively mitigate our risks with respect to any such difficulties. For example, global supply chains in general have been, and may continue to be,
disrupted as a result of COVID-19. If any of these vendors experience operating or financial difficulties or any other supply chain compliance-related
issues, if our demand exceeds their capacity or if they breach or terminate their agreements with us or are otherwise unable to meet our specifications or
provide the equipment, products or services we need in a timely manner (or at all), or at reasonable prices, our ability to provide some products or services
may be adversely affected and we may incur additional costs.
Our businesses depend on keeping pace with technological developments.
Our success is, to a large extent, dependent on our ability to acquire, develop, adopt and leverage new and existing technologies, and our competitors’ use
of certain types of technology and equipment may provide them with a competitive advantage. New technologies can materially impact our businesses in a
number of ways, including affecting the demand for our products, the distribution methods of our products and content to our customers, the ways in which
our customers can purchase and view our content and the growth of distribution platforms available to advertisers. For example, current and new wireless
internet technologies such as 4G and 5G wireless broadband services continue to evolve rapidly and may allow for greater speed and reliability for those
services as compared with prior technologies. In addition, some companies and U.S. municipalities are building advanced fiber-based networks that
provide very fast internet access speeds. We expect advances in communications technology to continue to occur in the future. If we choose technology or
equipment that is not as effective or attractive to consumers as that employed by our competitors, if we fail to employ technologies desired by consumers
before our competitors do so, or if we fail to execute effectively on our technology initiatives, our businesses and results of operations
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could be adversely affected. We also will continue to incur additional costs as we execute our technology initiatives, such as the deployment of Flex and
Sky Q set-top boxes, wireless gateways, developing smart televisions using our technology platform, and the operation of Peacock. There can be no
assurance that we can execute on these and other initiatives in a manner sufficient to grow or maintain our revenue or to successfully compete in the future.
We also may generate less revenue or incur increased costs if changes in our competitors’ product offerings require that we offer certain services or
enhancements at a lower or no cost to our customers or that we increase our research and development expenditures.
A cyber attack, information or security breach, or technology disruption or failure may negatively impact our ability to conduct our business or
result in the misuse of confidential information, all of which could adversely affect our business, reputation and results of operations.
Network and information systems and other technologies, including those that are related to our network management, customer service operations and
programming delivery and are embedded in our products and services, are critical to our business activities. In the ordinary course of our business, there are
constant attempts by third parties to cause systems-related events and security incidents and to identify and exploit vulnerabilities in security architecture
and system design. These incidents include computer hackings, cyber attacks, computer viruses, worms or other destructive or disruptive software, denial
of service attacks, phishing attacks, malicious social engineering, and other malicious activities. Incidents also may be caused inadvertently by us or our
third-party vendors, such as process breakdowns and vulnerabilities in security architecture or system design.
Cyber threats and attacks are constantly evolving and are growing in sophistication and frequency, which increases the difficulty of detecting and
successfully defending against them. Some cyber attacks have had, and in the future can have, cascading impacts that unfold with increasing speed across
networks, information systems and other technologies across the world and create latent vulnerabilities in our and third-party vendors’ systems and other
technologies. Moreover, as we also obtain certain confidential, proprietary and personal information about our customers, personnel and vendors, and in
some cases provide this information to third party vendors who agree to protect it, we face the risk that this information may become compromised through
a cyber attack or data breach, misappropriation, misuse, leakage, falsification or accidental release or loss of information. Due to the nature of our
businesses, we may be at a disproportionately heightened risk of these types of incidents occurring because we maintain certain information necessary to
conduct our business in digital form. We also incorporate third-party software (including extensive open-source software), applications, and data hosting
and cloud-based services into many aspects of our products, services and operations, all of which expose us to cyber attacks on such third-party suppliers
and service providers.
While we develop and maintain systems, and operate extensive programs that seek to prevent security incidents from occurring, these efforts are costly and
must be constantly monitored and updated in the face of sophisticated and rapidly evolving attempts to overcome our security measures and protections.
The occurrence of both intentional and unintentional incidents have in the past, and could in the future, cause a variety of potential adverse business
impacts. These include degradation or disruption of our network, products and services, excessive call volume to call centers, theft or misuse of our
intellectual property or other assets, disruption of the security of our internal systems, products, services or satellite transmission signals, power outages,
and the compromise of confidential or technical business information or damage to our or our customers’ or vendors’ data, equipment and reputation.
Moreover, the amount and scope of insurance we maintain against losses resulting from any of the foregoing events likely would not be sufficient to fully
cover our losses or otherwise adequately compensate us for disruptions to our business that may result. In addition, any such events could lead to litigation
or cause regulators in the United States and internationally to impose significant fines or other remedial measures, including with respect to relevant
customer privacy rules, or otherwise have an adverse effect on our company. Despite our efforts, we expect that we will continue to experience such
incidents in the future, and there can be no assurance that any such incident will not have an adverse effect on our business, reputation or results of
operations.
Weak economic conditions may have a negative impact on our businesses.
A substantial portion of our revenue comes from customers whose spending patterns may be affected by prevailing economic conditions. Weak economic
conditions in the United States or globally could adversely affect demand for any of our products and services and have a negative impact on our results of
operations. For example, weak economic conditions will likely impact our customers’ discretionary spending and as a result, they may reduce the level of
services to which they subscribe or may discontinue subscribing to one or more of Cable Communications’ or Sky’s services altogether. This risk may be
increased by the expanded availability of free or lower cost competitive services, such as certain DTC streaming and other OTT services, or substitute
services for broadband and voice services, such as wireless and public Wi-Fi networks. Weak economic conditions also negatively impact our advertising
revenue, the performance of our films and home entertainment releases, and attendance and spending in our theme parks. In particular, the success of our
theme parks and theatrical releases largely depends on consumer demand for out-of-home entertainment experiences, which may be limited by weakened
economic conditions (as well as natural disasters, infectious disease outbreaks (such as COVID-19), terrorist attacks or other similar events).
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Weak economic conditions and disruptions in the global financial markets may impact our ability to obtain financing or to refinance existing debt on
acceptable terms, if at all, could increase the cost of our borrowings and may increase our exposure to currency fluctuations in countries where we operate.
Further, inflationary pressures in the United States and globally may also have negative impacts on our cost structure and pricing models and may impact
the ability of third parties (including advertisers, customers, suppliers, wholesale distributors, retailers and content creators, among others) to satisfy their
obligations to us.
Acquisitions and other strategic initiatives present many risks, and we may not realize the financial and strategic goals that we had contemplated.
From time to time, we make acquisitions and investments and may pursue other strategic initiatives, such as Peacock. In connection with such acquisitions
and strategic initiatives, we may incur significant or unanticipated expenses, fail to realize anticipated benefits and synergies, have difficulty incorporating
an acquired or new line of business, disrupt relationships with current and new employees, customers and vendors, incur significant debt, divert the
attention of management from our current operations, or have to delay or not proceed with announced transactions or initiatives. Additionally, federal
regulatory agencies such as the FCC or DOJ or international regulators may impose restrictions on the operation of our businesses as a result of our seeking
regulatory approvals for any significant acquisitions and strategic initiatives or may dissuade us from pursuing certain transactions. The occurrence of any
of these events could have an adverse effect on our business and results of operations.
We face risks relating to doing business internationally that could adversely affect our businesses.
We operate our businesses worldwide. There are risks inherent in doing business internationally, including global financial market turmoil; economic
volatility and global economic slowdown; currency exchange rate fluctuations and inflationary pressures; political risks; the requirements of local laws and
customs relating to the publication and distribution of content and the display and sale of advertising; import or export restrictions, tariffs, sanctions and
trade regulations; difficulties in developing, staffing and managing foreign operations; issues related to occupational safety and adherence to diverse local
labor laws and regulations; and potentially adverse tax developments. Additionally, although we employ foreign currency derivative instruments to hedge
certain exposure to foreign currency exchange rate risks, including the British pound, Euro and Japanese yen, the use of such derivative instruments may
not be sufficient to mitigate exchange rate fluctuations. Sky’s businesses in particular are also subject to risks relating to uncertainties and effects of the
United Kingdom’s recent withdrawal from the European Union (referred to as “Brexit”), including financial, legal, tax and trade implications. In addition,
doing business internationally subjects us to risks relating to political or social unrest, as well as corruption and government regulation, including U.S. laws
such as the Foreign Corrupt Practices Act and the U.K. Bribery Act, that impose stringent requirements on how we conduct our foreign operations.
Moreover, foreign enforcement of laws and contractual rights in certain countries where we do business can be inconsistent and unpredictable, which may
affect our ability to enforce our rights or make investments that we believe otherwise make strategic sense. If any of these events occur or our conduct does
not comply with such laws and regulations, our businesses may be adversely affected.
Natural disasters, severe weather and other uncontrollable events could adversely affect our business, reputation and results of operations.
Our services, products and properties are vulnerable to damage from the occurrence of certain events, including natural disasters, severe weather events
such as hurricanes and wild fires, and a range of other unforeseeable events such as infectious disease outbreaks, terrorist attacks or other similar events.
Such events have in the past caused, and could in the future cause, a variety of adverse business impacts including degradation or disruption of our
network, products and services, excessive call volume to call centers, a reduction in demand for our products, services and theme parks, disruption of our
internal systems, products, services or satellite transmission signals, power outages, and damage to our or our customers’ or vendors’ equipment and
properties. These events also may result in lost revenue and large expenditures to repair or replace damaged properties, products and services and could
lead to litigation and fines, including if we inadvertently contributed to damages suffered by others. The amount and scope of insurance we maintain
against losses resulting from these types of events likely would not be sufficient to fully cover our losses or otherwise adequately compensate us for
disruptions to our business that may result. We expect that we will continue to experience some or all of these events in the future, and there can be no
assurance that any such event will not have an adverse effect on our business, reputation or results of operations.
The loss of key management personnel or popular on-air and creative talent could have an adverse effect on our businesses.
We rely on certain key management personnel in the operation of our businesses. While we maintain long-term and emergency transition plans for key
management personnel and believe we could either identify internal candidates or attract outside
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candidates to fill any vacancy created by the loss of any key management personnel, the loss of one or more of our key management personnel could have a
negative impact on our businesses.
In addition, NBCUniversal and Sky depend on the abilities and expertise of on-air and creative talent. If we fail to attract or retain on-air or creative talent,
if the costs to attract or retain such talent increase materially, or if these individuals cause negative publicity or lose their current appeal, our businesses
could be adversely affected.
Risks Related to Legal, Regulatory and Governance Matters
We are subject to regulation by federal, state, local and foreign authorities, which impose additional costs and restrictions on our businesses.
While all of our businesses are subject to various federal, state and local laws and regulations, compliance with certain laws and regulations is most
material with respect to our Cable Communications and broadcast television businesses in the United States. In addition, our international businesses are
subject to various laws and regulations in the jurisdiction of the foreign regulatory authorities where they operate.
Legislators and regulators at all levels of government frequently consider changing, and sometimes do change, existing statutes, rules or regulations, or
interpretations of existing statutes, rules or regulations, or prescribe new ones, any of which may significantly affect our businesses and ability to
effectively compete. These legislators and regulators have been active in considering legislation and rulemakings, at times looking to adopt regulatory
approaches from different countries that may be more burdensome, and they, along with some state attorneys general and foreign governmental authorities,
have also been active in conducting inquiries and reviews regarding our services. State legislative and regulatory initiatives can create a patchwork of
different and/or conflicting state requirements, such as with respect to privacy and Open Internet/net neutrality regulations, that can affect our business
operations and further constrain our ability to compete.
Legislative and regulatory activity is increasing under the Biden Administration, particularly with respect to broadband networks. For example, Congress
has approved tens of billions of dollars in new funding for broadband deployment and adoption initiatives, and may consider other proposals that address
communications issues, including whether it should rewrite the entire Communications Act to account for changes in the communications marketplace and
whether it should enact new, permanent Open Internet/net neutrality requirements. Federal agencies likewise may consider adopting new regulations for
communications services, including broadband. States and localities are also increasingly proposing new regulations impacting communications services,
including broader regulation of broadband networks. Any of these regulations could significantly affect our business and compliance costs. In addition,
United States and foreign regulators and courts could adopt new interpretations of existing competition laws or enact new competition laws or regulatory
tools that could negatively impact our businesses. Any future legislative, judicial, regulatory or administrative actions may increase our costs or impose
additional restrictions on our businesses, some of which may be significant. We are unable to predict the outcome or effects of any of these potential actions
or any other legislative or regulatory proposals on our businesses.
Failure to comply with the laws and regulations applicable to our businesses could result in administrative enforcement actions, fines, and civil and
criminal liability. Any changes to the legal and regulatory framework applicable to any of our services or businesses could have an adverse impact on our
businesses and results of operations. For a more extensive discussion of the significant risks associated with the regulation of our businesses, see Item 1:
Business and refer to the “Legislation and Regulation” discussion within that section.
Unfavorable litigation or governmental investigation results could require us to pay significant amounts or lead to onerous operating procedures.
We are subject from time to time to a number of lawsuits both in the United States and in foreign countries, including claims relating to competition,
intellectual property rights (including patents), employment and labor matters, personal injury and property damage, free speech, customer privacy,
regulatory requirements, advertising, marketing and selling practices, and credit and collection issues. Greater constraints on the use of arbitration to
resolve certain of these disputes could adversely affect our business. We also spend substantial resources complying with various regulatory and
government standards, including any related investigations and litigation. We may incur significant expenses defending any such suit or government charge
and may be required to pay amounts or otherwise change our operations in ways that could adversely impact our businesses, results of operations or
financial condition.
Labor disputes, whether involving employees or sports organizations, may disrupt our operations and adversely affect our businesses.
Many of NBCUniversal’s writers, directors, actors, technical and production personnel, as well as some of our on-air and creative talent employees, are
covered by collective bargaining agreements or works councils. Most of NBCUniversal’s
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collective bargaining agreements are industry-wide agreements, and we may lack practical control over the negotiations and terms of the agreements. If we
are unable to reach agreement with a labor union before the expiration of a collective bargaining agreement, our employees who were covered by that
agreement may have a right to strike or take other actions that could adversely affect us, which could disrupt our operations and reduce our revenue, and the
resolution of any disputes may increase our costs. There can be no assurance that we will renew our collective bargaining agreements as they expire or that
we can renew them on favorable terms or without any work stoppages.
In addition, NBCUniversal’s Media segment and Sky have programming rights agreements of varying scope and duration with various sports organizations
to broadcast and produce sporting events. Labor disputes in these and other sports organizations could have an adverse effect on our businesses.
Our Class B common stock has substantial voting rights and separate approval rights over several potentially material transactions, and our
Chairman and CEO has considerable influence over our company through his beneficial ownership of our Class B common stock.
1
Our Class B common stock has a non-dilutable 33 /3% of the combined voting power of our Class A and Class B common stock. This non-dilutable voting
power is subject to proportional decrease to the extent the number of shares of Class B common stock is reduced below 9,444,375, which was the number
of shares of Class B common stock outstanding on the date of our 2002 acquisition of AT&T Corp.’s cable business, subject to adjustment in specified
situations. Stock dividends payable on the Class B common stock in the form of Class B or Class A common stock do not decrease the non-dilutable voting
power of the Class B common stock. The Class B common stock also has separate approval rights over several potentially material transactions, even if
they are approved by our Board of Directors or by our other shareholders and even if they might be in the best interests of our other shareholders. These
potentially material transactions include mergers or consolidations involving us, transactions (such as a sale of all or substantially all of our assets) or
issuances of securities that require shareholder approval, transactions that result in any person or group owning shares representing more than 10% of the
combined voting power of the resulting or surviving corporation, issuances of Class B common stock or securities exercisable or convertible into Class B
common stock, and amendments to our articles of incorporation or by-laws that would limit the rights of holders of our Class B common stock. Brian L.
Roberts, our chairman and CEO, beneficially owns all of the outstanding shares of our Class B common stock and, accordingly, has considerable influence
over our company and the potential ability to transfer effective control by selling the Class B common stock, which could be at a premium.
Item 1B: Unresolved Staff Comments
None.
Item 2: Properties
We believe that substantially all of our physical assets were in good operating condition as of December 31, 2021. Our corporate headquarters and Cable
Communications segment headquarters are located in Philadelphia, Pennsylvania at One Comcast Center. Additionally, the Comcast Technology Center,
which is adjacent to the Comcast Center, is a center for Cable Communications’ technology and engineering workforce, as well as the home of our
NBCUniversal and Telemundo owned local broadcast stations in Philadelphia, Pennsylvania. We also have leases for numerous business offices,
warehouses and properties throughout the United States that house divisional information technology operations.
Cable Communications Segment
Our principal physical assets consist of operating plant and equipment, including cable system signal receiving, encoding and decoding devices, headends
and distribution networks. Our distribution network consists primarily of headends, content distribution servers, coaxial and fiber-optic cables, lasers,
routers, switches and related electronic equipment. Our cable plant and related equipment generally are connected to utility poles under pole rental
agreements with local public utilities, although in some areas the distribution cable is buried in underground ducts or trenches. The physical components of
cable systems require periodic maintenance and replacement.
Our cable system signal reception sites, which consist primarily of antenna towers and headends, and our microwave facilities are located on owned and
leased parcels of land, and we own or lease space on the towers on which certain of our equipment is located. We own most of our service vehicles.
Our broadband network consists of fiber-optic cables owned or leased by us and related equipment. We also operate national and regional data centers with
equipment that is used to provide services, such as email and web services, to our broadband and
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voice customers, as well as cloud services to our video customers. In addition, we maintain network operations centers with equipment necessary to
monitor and manage the status of our services and network.
We own or lease buildings throughout the United States that contain customer service call centers, retail stores and customer service centers, warehouses
and administrative space. We also own a building that houses our digital media center. The digital media center contains equipment that we own or lease,
including equipment related to network origination, video transmission via satellite and terrestrial fiber-optics, broadcast studios, post-production services
and interactive television services.
NBCUniversal Segments
NBCUniversal’s corporate headquarters are located in New York, New York at 30 Rockefeller Plaza and surrounding campus and include offices and
studios, which are used by Headquarters and Other and the Media segment. NBCUniversal owns substantially all of the space it occupies at 30 Rockefeller
Plaza. NBCUniversal also leases space in 10 Rockefeller Plaza that includes The Today Show studio, production facilities and offices used by the Media
segment. Telemundo’s leased headquarters and production facilities are located in Miami, Florida and are used by the Media segment and Headquarters and
Other. The Universal City location in California includes offices, studios, and theme park and retail operations that are owned by NBCUniversal and used
by all NBCUniversal segments. Our owned CNBC headquarters and production facilities and disaster recovery center are located in Englewood Cliffs,
New Jersey and are used by the Media segment and Headquarters and Other. We also own or lease offices, studios, production facilities, screening rooms,
retail operations, warehouse space, satellite transmission receiving facilities and data centers in numerous locations in the United States and around the
world, including property for our owned local broadcast television stations. In addition, we own theme parks and own or lease related facilities in Orlando,
Florida; Hollywood, California; Osaka, Japan; and Beijing, China, that are used in the Theme Parks segment, and we are developing a new theme park in
Orlando, Florida.
Sky Segment
Sky’s principal physical assets consist of operating plant and equipment, including leased satellite system signal receiving, encoding and decoding devices,
and owned and leased headends and distribution networks, including coaxial, fiber-optic cables and other related equipment. In the United Kingdom, Sky
uses a combination of its own core fiber network and wholesaling arrangements over third-party telecommunication providers’ networks as the core
network and also accesses the “last mile” network from third-party network operators for a fee to provide its services to customers. The physical
components of cable systems require periodic maintenance and replacement.
Sky’s corporate headquarters are located in Middlesex, U.K. Sky owns the space it occupies in Middlesex. Sky leases the Sky Deutschland headquarters
located in Unterföhring, Germany and the Sky Italia headquarters located in Milan, Italy.
Additionally, Sky owns and leases offices, production facilities and studios, broadcasting facilities, and customer support centers throughout Europe,
including in the United Kingdom, Ireland, Germany, Italy and Austria. We are currently constructing a new studio production facility in Elstree, U.K., that
Sky will lease upon completion.
Other
The Wells Fargo Center, a large, multipurpose arena in Philadelphia, Pennsylvania that we own was the principal physical operating asset used by our other
businesses as of December 31, 2021.
Item 3: Legal Proceedings
See Note 15 included in this Annual Report on Form 10-K for a discussion of legal proceedings.
Item 4: Mine Safety Disclosures
Not applicable.
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Part II
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
Comcast’s Class A common stock is listed on the NASDAQ Global Select Market under the symbol CMCSA. There is no established public trading market
for Comcast’s Class B common stock. The Class B common stock can be converted, on a share for share basis, into Class A common stock.
Dividends Declared
Month Declared:
January
May
July
October (paid in January 2022)
Total
2021
2020
Dividend Per Share
$
$
$
$
$
Month Declared:
January
0.25
0.25 May
0.25
July
0.25 October (paid in January 2021)
1.00
Total
Dividend Per Share
0.23
0.23
0.23
0.23
0.92
$
$
$
$
$
We expect to continue to pay quarterly dividends, although each dividend is subject to approval by our Board of Directors. In January 2022, our Board of
Directors approved an 8% increase in our dividend to $1.08 per share on an annualized basis.
Holders of Class A common stock in the aggregate hold 66 /3% of the combined voting power of our common stock. The number of votes that each share
of Class A common stock has at any given time depends on the number of shares of Class A common stock and Class B common stock then outstanding,
with each share of Class B common stock having 15 votes per share. The Class B common stock represents 33 /3% of the combined voting power of our
common stock, which percentage is generally non-dilutable under the terms of our articles of incorporation. Mr. Brian L. Roberts beneficially owns all
outstanding shares of Class B common stock. Generally, including as to the election of directors, holders of Class A common stock and Class B common
stock vote as one class except where class voting is required by law.
1
2
Record holders as of December 31, 2021 are presented in the table below.
Stock Class
Class A Common Stock
Class B Common Stock
The table below summarizes Comcast’s common stock repurchases during 2021.
Period
First Quarter 2021
Second Quarter 2021
Third Quarter 2021
October 1-31, 2021
November 1-30, 2021
December 1-31, 2021
Total
Total Number of
Shares
Purchased
— $
8,785,149 $
25,881,698 $
12,911,147 $
15,334,579 $
10,297,809 $
73,210,382 $
Average
Price Per
Share
—
56.91
57.96
53.48
52.79
48.55
54.64
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Authorization
Total Dollar
Amount
Purchased Under the Publicly
Announced
Authorization
— $
8,785,149 $
25,881,698 $
12,911,147 $
15,334,579 $
10,297,809 $
73,210,382 $
— $
499,999,935 $
1,500,000,038 $
690,452,411 $
809,547,566 $
500,000,046 $
3,999,999,996 $
Record
Holders
352,581
3
Maximum Dollar Value
of Shares That
May Yet Be Purchased
Under the Publicly
Announced
(a)
Authorization
—
9,500,000,065
8,000,000,027
7,309,547,616
6,500,000,050
6,000,000,004
6,000,000,004
(a) Effective May 25, 2021, our Board of Directors increased our share repurchase program authorization to $10 billion. In January 2022, our Board of Directors increased our share repurchase
program authorization from the $6 billion remaining as of December 31, 2021 to $10 billion. Under the authorization, which does not have an expiration date, we expect to repurchase
additional shares, which may be in the open market or in private transactions.
The total number of shares purchased during 2021 does not include any shares received in the administration of employee share-based compensation plans
as there were none received in 2021.
Comcast 2021 Annual Report on Form 10-K
32
Table of Contents
Stock Performance Graph
The following graph compares the annual percentage change in the cumulative total shareholder return on Comcast’s Class A common stock during the five
years ended December 31, 2021 with the cumulative total returns on the Standard & Poor’s 500 Stock Index and a select peer group consisting of us and
other companies engaged in the cable, communications and media industries. This peer group consists of our Class A common stock and the common stock
of AT&T Inc., Charter Communications, Inc., DISH Network Corporation (Class A), Lumen Technologies, Inc., T-Mobile US, Inc. and Verizon
Communications Inc. (the “transmission and distribution subgroup”); and Discovery, Inc. (Class A), ViacomCBS Inc. (Class B) and The Walt Disney
Company (the “media subgroup”).
The peer group is constructed as a composite peer group in which the transmission and distribution subgroup is weighted 75% and the media subgroup is
weighted 25% based on the respective revenue of our transmission and distribution and media businesses. The comparison assumes $100 was invested on
December 31, 2016 in our Class A common stock and in each of the following indices and assumes the reinvestment of dividends.
Comparison of 5 Year Cumulative Total Return
Comcast Class A
S&P 500 Stock Index
Peer Group Index
Item 6: [Reserved]
[Reserved]
$
$
$
2017
117 $
122 $
106 $
2018
102 $
116 $
97 $
2019
137 $
153 $
136 $
2020
164 $
181 $
141 $
2021
160
233
132
33
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction
with, the consolidated financial statements and related notes to enhance the understanding of our operations and our present business environment. For
more information about our company’s operations and the risks facing our businesses, see Item 1: Business and Item 1A: Risk Factors, respectively. As
discussed in Note 2, we changed the presentation of our segment operating results in 2021, and all amounts are presented on a consistent basis under the
new segment structure. Refer to Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2020 Annual
Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2020 compared to fiscal
year 2019, with the exception of the discussion and analysis related to our NBCUniversal segments, which is included below for all periods based on the
updated segment structure.
Overview
We are a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal and Sky. We present our operations in five
reportable business segments (1) Comcast Cable in one reportable business segment, referred to as Cable Communications; (2) NBCUniversal in three
reportable business segments: Media, Studios and Theme Parks (collectively, the “NBCUniversal segments”); and (3) Sky in one reportable business
segment.
Consolidated Revenue, Net Income Attributable to Comcast Corporation and Adjusted EBITDA
(in billions)
(a)
Revenue
Net Income Attributable to
Comcast Corporation
Adjusted EBITDA
(a) Adjusted EBITDA is a financial measure that is not defined by generally accepted accounting principles in the United States (“GAAP”). Refer to the “Non-GAAP Financial Measure” section
on page 52 for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income attributable to Comcast Corporation to Adjusted
EBITDA.
2021 Developments
The following are the more significant developments in our businesses during 2021:
Cable Communications
•
Revenue increased 7.1% to $64.3 billion, reflecting increases in broadband, wireless, business services, advertising, video and other revenue,
partially offset by a decline in voice revenue.
• Adjusted EBITDA increased 11.2% to $28.1 billion primarily due to increases in revenue, partially offset by increases in programming and
technical and product support expenses.
• Operating margin increased from 42.1% to 43.7%.
Comcast 2021 Annual Report on Form 10-K
34
Table of Contents
•
•
Total customer relationships increased by 1.1 million, total broadband customers increased by 1.3 million, total wireless lines increased by 1.2
million and total video customers decreased by 1.7 million.
Capital expenditures increased 4.9% to $6.9 billion, reflecting increased spending on scalable infrastructure and line extensions, partially offset by
decreased spending on customer premise equipment and support capital.
NBCUniversal
•
Total NBCUniversal revenue increased 26.1% to $34.3 billion and total NBCUniversal Adjusted EBITDA increased 6.0% to $5.7 billion.
• Media segment revenue increased 20.3% to $22.8 billion and Adjusted EBITDA decreased 18.0% to $4.6 billion, including the impact of our
broadcast of the Tokyo Olympics in 2021. Excluding $1.8 billion of revenue associated with our broadcast of the Tokyo Olympics in 2021,
revenue in the Media segment increased 11.0%, primarily due to increases in distribution revenue, advertising revenue and other revenue,
including the effects of COVID-19 in the prior year period.
• Media segment results include the operations of Peacock, which in 2021 generated revenue of $778 million and operating costs and expenses of
$2.5 billion, compared to revenue of $118 million and operating costs and expenses of $781 million in 2020. We continued to invest in content and
grow our customer base during 2021, and in the fourth quarter of 2021, we introduced certain ad-supported Peacock programming into Sky video
services, launching first in the United Kingdom and Ireland.
•
•
•
Sky
Studios segment revenue increased 16.2% to $9.4 billion, due to increases in content licensing revenue, theatrical revenue and home entertainment
and other revenue as our film and television production operations returned to full capacity. Studios revenue included licenses of content to our
Media and other segments, including the impact of a new licensing agreement for content that became exclusively available for streaming on
Peacock in 2021, and the impacts of initial content licenses associated with the launch of Peacock in 2020, which are eliminated in consolidation.
Theme Parks segment revenue increased 141.2% to $5.1 billion and Adjusted EBITDA increased from $(0.5) billion to $1.3 billion, reflecting the
operation of our theme parks in the current year period compared to temporary closures and capacity restrictions as a result of COVID-19 in the
prior year period and the opening of our theme park in Beijing, China in September 2021.
Revenue increased 9.1% to $20.3 billion. Excluding the impact of foreign currency, Sky revenue increased 3.1% due to increases in advertising
and direct-to-consumer revenue, partially offset by a decrease in content revenue, which were affected by COVID-19 in the prior year period and
reduced broadcast rights for Serie A in the current year period.
• Adjusted EBITDA increased 20.8% to $2.4 billion. Excluding the impact of foreign currency, Sky Adjusted EBITDA increased 10.2% primarily
due to increases in revenue and decreases in programming and production expenses, partially offset by increases in direct network costs and other
expenses.
Other
•
•
•
Corporate and Other Adjusted EBITDA losses decreased from $1.8 billion to $1.4 billion primarily due to costs incurred in the prior year period in
response to COVID-19, including severance charges related to our businesses.
Resumed our share repurchase program in the second quarter of 2021. We repurchased a total of 73.2 million shares of our Class A common stock
for $4.0 billion in 2021. Raised our dividend by $0.08 to $1.00 per share on an annualized basis in January 2021 and paid $4.5 billion of dividends
in 2021.
Reduced debt by $8.9 billion in 2021 and ended the year with $94.8 billion of total short-term and long-term debt and $8.7 billion of cash and cash
equivalents.
Impacts of COVID-19
COVID-19 and measures taken to prevent its spread across the globe have impacted our businesses in a number of ways, with the most significant effects
in 2020, affecting the comparability of periods included in this report. COVID-19 has had material negative impacts on NBCUniversal and Sky results of
operations primarily due to the temporary restrictions and closures at our theme parks and the impacts of professional sports, respectively. We expect the
effects of the COVID-19 pandemic will continue to adversely impact our consolidated results of operations over the near to medium term, although the
extent of such
35
Comcast 2021 Annual Report on Form 10-K
Table of Contents
impact will depend on restrictive governmental measures, U.S. and global economic conditions, expanded availability and acceptance of vaccines and
consumer behavior in response to COVID-19. The following summary provides a discussion of current and potential future effects of the pandemic with
direct impacts to our businesses.
NBCUniversal
• Our theme parks in Orlando and Hollywood operated without capacity restrictions, following periods with capacity restrictions in place in the
second quarter of 2021. Our theme park in Hollywood began requiring proof of vaccination or a negative COVID-19 test result for park entry in
accordance with local requirements in the fourth quarter of 2021. Our theme park in Japan began operating without capacity restrictions in the
fourth quarter of 2021, following periods with capacity restrictions in place. Our newest theme park, Universal Beijing Resort, opened in
September 2021 with capacity restrictions. The capacity restrictions and temporary closures of our theme parks had a significant impact on our
revenue and Adjusted EBITDA on a consolidated basis. The results of operations at our theme parks may continue to be negatively impacted and
we cannot predict if our parks will remain open or be subject to capacity restrictions, or the level of attendance at our reopened parks. The
development of the Epic Universe theme park in Orlando resumed in 2021 after having been paused in 2020.
• Delays to the start of seasons for certain professional sports leagues, including the 2020-21 NHL and NBA seasons, resulted in the shift of
additional events into the first half of 2021 compared to a normal year. The delays impacted the timing of revenue and expense recognition,
because both advertising revenue and costs associated with broadcasting these programs are recognized when events are broadcast. The timing of
sports seasons generally returned to a normal calendar beginning in the third quarter of 2021. In addition, the Tokyo Olympics were postponed
from the third quarter of 2020 to the third quarter of 2021, resulting in a corresponding delay of the associated revenue and costs.
• Our studio production operations have generally returned to full capacity. We delayed or altered the theatrical distribution strategy for certain of
our films, both domestically and internationally as a result of the temporary closures and limited capacity operations of many movie theaters
worldwide caused by COVID-19. Delays in theatrical releases affect both current and future periods as a result of corresponding delays in
subsequent content licensing windows. Results of operations in our Studios segment may be negatively impacted over the near to medium term as
a result of COVID-19.
Sky
•
Direct-to-consumer revenue has been negatively impacted, and future periods may be negatively impacted, as a result of lower sports subscription
revenue due to the closures and extent of reopening of our commercial customers’ locations. In addition, delays to the start of the 2020-21 seasons
for certain sports, including European football, resulted in the shift of additional events and the significant costs associated with broadcasting these
programs into the first and second quarters of 2021 compared to a normal year. The timing of sports seasons generally returned to a normal
calendar beginning in the third quarter of 2021.
Comcast 2021 Annual Report on Form 10-K
36
Table of Contents
Consolidated Operating Results
Year ended December 31 (in millions, except per share data)
Revenue
Costs and Expenses:
Programming and production
Other operating and administrative
Advertising, marketing and promotion
Depreciation
Amortization
Total costs and expenses
Operating income
Interest expense
Investment and other income (loss), net
Income before income taxes
Income tax expense
Net income
Less: Net income (loss) attributable to noncontrolling interests
and redeemable subsidiary preferred stock
Net income attributable to Comcast Corporation
Basic earnings per common share attributable to Comcast
Corporation shareholders
Diluted earnings per common share attributable to
Comcast Corporation shareholders
Adjusted EBITDA
(a)
Percentage changes that are considered not meaningful are denoted with NM.
$
$
$
$
2021
2020
$
116,385 $
103,564 $
2019
108,942
% Change
2020 to 2021
12.4 %
% Change
2019 to 2020
(4.9)%
38,450
35,619
7,695
8,628
5,176
95,568
20,817
(4,281)
2,557
19,093
(5,259)
13,833
33,121
33,109
6,741
8,320
4,780
86,071
17,493
(4,588)
1,160
14,065
(3,364)
10,701
(325)
14,159 $
167
10,534 $
3.09 $
3.04 $
2.30 $
2.28 $
34,440
32,807
7,617
8,663
4,290
87,817
21,125
(4,567)
438
16,996
(3,673)
13,323
266
13,057
2.87
2.83
34,708 $
30,826 $
34,258
16.1
7.6
14.2
3.7
8.3
11.0
19.0
(6.7)
120.4
35.7
56.3
29.3
NM
34.4 %
34.3 %
33.3 %
12.6 %
(3.8)
0.9
(11.5)
(4.0)
11.4
(2.0)
(17.2)
0.5
164.8
(17.2)
(8.4)
(19.7)
(37.5)
(19.3)%
(19.9)%
(19.4)%
(10.0)%
(a) Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measure” section on page 52 for additional information, including our definition and our use of
Adjusted EBITDA, and for a reconciliation from net income attributable to Comcast Corporation to Adjusted EBITDA.
Consolidated Revenue
The following graph illustrates the contributions to the change in consolidated revenue made by our Cable Communications, NBCUniversal and Sky
segments, as well as by Corporate and Other activities, including eliminations.
The primary drivers of the change in revenue from 2020 to 2021 were as follows:
• Growth in our NBCUniversal segments driven by increased revenue in the Media, Theme Parks and Studios segments.
• Growth in our Cable Communications segment driven by increased broadband, wireless, business services, advertising, video and other revenue,
partially offset by decreased voice revenue.
37
Comcast 2021 Annual Report on Form 10-K
Table of Contents
• Growth in our Sky segment driven by increased advertising and direct-to-consumer revenue, partially offset by decreased content revenue, as well
as the impact of foreign currency translation.
Revenue for our segments and other businesses is discussed separately below under the heading “Segment Operating Results.”
Consolidated Costs and Expenses
The following graph illustrates the contributions to the change in consolidated operating costs and expenses, representing total costs and expenses
excluding depreciation and amortization expense, made by our Cable Communications, NBCUniversal and Sky segments, as well as by Corporate and
Other activities, including adjustments and eliminations.
The primary drivers of the change in operating costs and expenses from 2020 to 2021 were as follows:
• An increase in NBCUniversal expenses due to increases in our Media, Studios and Theme Parks segments.
• An increase in Cable Communications segment expenses due to increased programming expenses, technical and product support costs, franchise
and other regulatory fees, and advertising, marketing and promotion expenses, partially offset by a decrease in other expenses and customer
service expenses.
• An increase in Sky segment expenses primarily due to increases in direct network costs and other expenses, partially offset by decreases in
programming and production costs, as well as the impacts of foreign currency translation.
• A decrease in Corporate and Other expenses primarily due to severance charges related to our businesses in the prior year period.
•
Consolidated costs and expenses for 2020 also includes an adjustment of $177 million related to a legal settlement that was excluded from
Adjusted EBITDA and our segment operating results.
Operating costs and expenses for our segments and our corporate operations, business development initiatives and other businesses are discussed separately
below under the heading “Segment Operating Results.”
Consolidated Depreciation and Amortization Expense
Year ended December 31 (in millions)
Cable Communications
NBCUniversal
Sky
Corporate and Other
Comcast Consolidated
2021
7,811 $
2,466
3,379
147
13,804 $
2020
7,753 $
2,307
3,034
6
13,100 $
2019
7,994
2,129
2,699
131
12,953
$
$
% Change
2020 to 2021
0.7 %
6.9
11.4
NM
5.4 %
% Change
2019 to 2020
(3.0)%
8.4
12.4
(96.0)
1.1 %
Percentage changes that are considered not meaningful are denoted with NM.
Sky depreciation and amortization expense increased in 2021 primarily due to the impacts of foreign currency and increased amortization of software.
NBCUniversal depreciation and amortization expense increased primarily due to the opening of
Comcast 2021 Annual Report on Form 10-K
38
Table of Contents
Universal Beijing Resort in September 2021. Cable Communications depreciation and amortization expense increased primarily due to increased spending
on scalable infrastructure and line extensions.
Amortization expense from acquisition-related intangible assets totaled $2.4 billion, $2.3 billion and $2.0 billion for 2021, 2020 and 2019, respectively.
Amounts primarily relate to customer relationship intangible assets recorded in connection with the Sky transaction in the fourth quarter of 2018 and the
NBCUniversal transaction in 2011.
Consolidated Interest Expense
Interest expense decreased in 2021 compared to 2020 primarily due to $360 million of charges recorded in 2020 related to the early redemption of senior
notes compared to $204 million of charges related to early redemptions in 2021, as well as a decrease in average debt outstanding and lower weighted-
average interest rates.
Consolidated Investment and Other Income (Loss), Net
Year ended December 31 (in millions)
Equity in net income (losses) of investees, net
Realized and unrealized gains (losses) on equity securities, net
Other income (loss), net
Total investment and other income (loss), net
$
$
2021
2,006 $
339
211
2,557 $
2020
(113) $
1,014
259
1,160 $
2019
(505)
656
287
438
The change in investment and other income (loss), net in 2021 compared to 2020 was primarily due to equity in net income (losses) of investees, net related
to our investment in Atairos and realized and unrealized gains (losses) on equity securities, net. The income (losses) at Atairos were driven by fair value
adjustments on its underlying investments with income (loss) of $1.8 billion, $286 million and $(64) million 2021, 2020 and 2019, respectively. Realized
and unrealized gains (losses) on equity securities, net in 2021 primarily included gains related to nonmarketable equity securities and losses on certain
marketable securities, compared to the prior year period which primarily included gains on nonmarketable securities.
Consolidated Income Tax (Expense) Benefit
Our effective income tax rate in 2021 and 2020 was 27.5% and 23.9%, respectively.
In 2021, the effective income tax rate included $498 million of expense relating to the impact of tax law changes enacted in the United Kingdom in the
second quarter of 2021, which, among other provisions, will increase the corporate tax rate to 25% from 19% effective April 1, 2023. The rate change
resulted in an increase in our net deferred tax liabilities and a corresponding increase in income tax expense. Our income tax expense will reflect the new
rate in the United Kingdom in 2023.
In 2020, the effective income tax rate included $145 million of expense relating to the impact of tax law changes in the third quarter of 2020.
Consolidated Net Income (Loss) Attributable to Noncontrolling Interests and Redeemable Subsidiary
Preferred Stock
The changes in net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock in 2021 compared to 2020 was
primarily due to losses at Universal Beijing Resort, which increased due to pre-opening costs prior to its opening in September 2021 (see Note 7).
Segment Operating Results
Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use Adjusted
EBITDA as the measure of profit or loss for our operating segments.
See Note 2 for our definition of Adjusted EBITDA and a reconciliation from the aggregate amount of Adjusted EBITDA for our reportable business
segments to consolidated income before income taxes.
39
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Cable Communications Segment Results of Operations
Revenue and Adjusted EBITDA
Residential Customer Relationships
(in billions)
(in millions)
Year ended December 31 (in millions)
Revenue
Residential:
Broadband
Video
Voice
Wireless
Business services
Advertising
Other
Total revenue
Operating costs and expenses
Programming
Technical and product support
Customer service
Advertising, marketing and promotion
Franchise and other regulatory fees
Other
Total operating costs and expenses
Adjusted EBITDA
2021
2020
2019
% Change
2020 to 2021
% Change
2019 to 2020
$
$
22,979 $
22,079
3,417
2,380
8,933
2,820
1,719
64,328
14,285
8,566
2,347
3,938
1,806
5,290
36,231
28,097 $
20,599 $
21,937
3,532
1,574
8,191
2,594
1,624
60,051
13,498
8,022
2,432
3,759
1,625
5,445
34,781
25,270 $
18,752
22,270
3,879
1,167
7,795
2,465
1,754
58,082
13,389
7,973
2,494
4,014
1,582
5,364
34,816
23,266
11.6 %
0.6
(3.3)
51.2
9.1
8.7
5.9
7.1
5.8
6.8
(3.5)
4.8
11.1
(2.8)
4.2
11.2 %
9.9 %
(1.5)
(8.9)
34.9
5.1
5.2
(7.5)
3.4
0.8
0.6
(2.5)
(6.3)
2.7
1.5
(0.1)
8.6 %
Comcast 2021 Annual Report on Form 10-K
40
Table of Contents
Customer Metrics
(in thousands)
Customer relationships
Residential customer relationships
Business services customer relationships
Total customer relationships
Residential customer relationships mix
One product customers
Two product customers
Three or more product customers
Broadband
Residential customers
Business services customers
Total broadband customers
Video
Residential customers
Business services customers
Total video customers
Voice
Residential customers
Business services customers
Total voice customers
Wireless
Wireless lines
2021
2020
2019
2021
2020
2019
Net Additions / (Losses)
31,728
2,489
34,218
14,330
8,407
8,992
29,583
2,318
31,901
17,495
681
18,176
9,062
1,391
10,454
30,692
2,426
33,119
12,408
8,734
9,550
28,326
2,248
30,574
18,993
852
19,846
9,645
1,357
11,002
29,123
2,396
31,519
10,221
8,923
9,979
26,388
2,215
28,603
20,288
966
21,254
9,934
1,342
11,276
1,036
63
1,099
1,922
(328)
(558)
1,257
70
1,327
(1,498)
(171)
(1,669)
(583)
34
(548)
3,980
2,826
2,052
1,154
1,569
30
1,599
2,187
(188)
(429)
1,937
34
1,971
(1,295)
(114)
(1,408)
(289)
15
(275)
774
1,040
94
1,134
1,232
(69)
(123)
1,317
89
1,406
(671)
(61)
(733)
(218)
46
(173)
816
Customer metrics are presented based on actual amounts. Customer relationships represent the number of residential and business customers that subscribe to at least one of our services. One
product, two product, and three or more product customers represent residential customers that subscribe to one, two, or three or more of our services, respectively. For multiple dwelling units
(“MDUs”), including buildings located on college campuses, whose residents have the ability to receive additional services, such as additional programming choices or our HD video or DVR
services, we count and report customers based on the number of potential billable relationships within each MDU. For MDUs whose residents are not able to receive additional services, the MDU
is counted as a single customer. Residential broadband and video customer metrics include certain customers that have prepaid for services. Business customers are generally counted based on the
number of locations receiving services within our distribution system, with certain offerings such as Ethernet network services counted as individual customer relationships. Wireless lines
represent the number of activated, eligible wireless devices on customers’ accounts. Individual customer relationships may have multiple wireless lines. Customer metrics for 2021 and 2020 do
not include customers in certain temporary COVID-19 programs, including an Internet Essentials promotion for new qualifying customers to receive 60 days of free broadband services. This 60-
day free Internet Essentials promotional offer ended at the end of December 2021. Customers under this program are excluded from our customer metrics until they begin paying for their service.
Total residential customer relationships and broadband customers were updated in the first quarter of 2021 due to a conforming change to methodology, resulting in a reduction of approximately
26,000 customers. There was no impact to net additions and information for all periods presented have been recast on a comparable basis.
Average monthly total revenue per customer relationship
Average monthly Adjusted EBITDA per customer relationship
2021
159.22 $
69.55 $
2020
154.84 $
65.16 $
$
$
2019
156.37
62.64
% Change 2021 to
2020
2.8 %
6.7 %
% Change 2020 to
2019
(1.0)%
4.0 %
Average monthly total revenue per customer relationship is impacted by rate adjustments and changes in the types and levels of services received by our
residential and business services customers, as well as changes in advertising revenue. While revenue from our residential broadband, video and voice
services is also impacted by changes in the allocation of revenue among services sold in a bundle, the allocation does not impact average monthly total
revenue per customer relationship. Each of our services has a different contribution to operating margin. We use average monthly Adjusted EBITDA per
customer relationship to evaluate the profitability of our customer base across our service offerings. We believe both metrics are useful to understand the
trends in our business, and average monthly Adjusted EBITDA per customer relationship is useful particularly as we continue to focus on growing our
higher-margin businesses.
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Comcast 2021 Annual Report on Form 10-K
Table of Contents
Cable Communications Segment – Revenue
We are a leading provider of broadband, video, voice, wireless, and other services to residential customers in the United States under the Xfinity brand; we
also provide these and other services to business customers and sell advertising. Our residential and business customers are marketed individually and as
bundled services at a discounted rate.
Residential
Revenue from our residential customers includes amounts earned for providing our broadband, video, voice and wireless services, including equipment and
installation services. Broadband revenue also includes revenue earned related to our customers’ use of Flex and streaming services, and wireless revenue
also includes the sale of devices. Revenue from each of our residential services is impacted by changes in the allocation of revenue among services sold in
a bundle. Franchise and regulatory fees billed to our customers are included with the relevant service, which primarily relate to video and voice services.
Broadband
Revenue increased in 2021 primarily due to an increase in the number of residential broadband customers. The remaining increase in revenue was due to an
increase in average rates. Average rates in 2020 were negatively impacted by waived fees due to COVID-19 and the impacts of customer adjustments.
Refer to “Video” below for additional information.
We believe our customer base will continue to grow as consumers choose our broadband service and seek higher-speed offerings.
Video
Revenue was flat in 2021 primarily due to a decline in the number of residential video customers, offset by an increase in average rates. Average rates in
2020 were negatively impacted by customer adjustments accrued as a result of provisions in our programming distribution agreements with regional sports
networks related to canceled sporting events. For customers receiving bundled services, the revenue reduction was allocated across each of the services in
the bundle.
We expect that the number of residential video customers will continue to decline, negatively impacting video revenue as a result of the competitive
environment and shifting video consumption patterns.
Voice
Revenue decreased in 2021 primarily due to a decline in the number of residential voice customers, partially offset by increases in average rates.
We expect that the number of residential voice customers and voice revenue will continue to decline.
Wireless
Revenue increased in 2021 primarily due to an increase in the number of customer lines and device sales.
Business Services
Revenue from our business customers includes our service offerings for small business locations, which primarily include broadband, voice and video
services, as well as our solutions for medium-sized customers and larger enterprises, and cellular backhaul services to mobile network operators.
Revenue increased in 2021 primarily due to increases in average rates and an increase in the number of customers receiving our services, which included
the negative impacts of COVID-19 on small businesses in the prior year period.
Advertising
Revenue consists of the sale of advertising on linear television and digital platforms to local, regional and national advertisers, including where we
represent the advertising sales efforts of other multichannel video providers and revenue from our advanced advertising business.
Revenue increased in 2021 reflecting an overall market recovery in the current year period and increases in revenue from our advanced advertising
business, partially offset by decreases in political advertising compared to the prior year period.
Other
Revenue primarily relates to our security and automation services and also includes revenue related to residential customer late fees and related to other
services, such as the licensing of our technology platforms to other multichannel video providers.
Revenue increased in 2021 primarily due to increases in revenue from licensing of our technology platforms and from our security and automation services.
Comcast 2021 Annual Report on Form 10-K
42
Table of Contents
Cable Communications Segment – Operating Costs and Expenses
Programming Expenses
Programming expenses, which represent our most significant operating expense, are the fees we incur to provide content to our customers. These expenses
represent the programming license fees charged by content providers, including the fees related to the distribution of cable and broadcast network
programming and fees charged for retransmission of the signals from local broadcast television stations.
Expenses increased in 2021 primarily due to increases in retransmission consent and sports programming rates, and the impacts in 2020 of adjustment
provisions in our programming distribution agreements with regional sports networks related to canceled sporting events as a result of COVID-19. These
increases were partially offset by declines in the number of video subscribers.
We expect that our programming expenses will be impacted by rate increases, although to a lesser extent in 2022 compared to 2021 due to the timing of
contract renewals, which will be offset by expected declines in the number of residential video customers.
Technical and Product Support Expenses
Expenses include costs to complete service call and installation activities; costs for network operations, product development, fulfillment and provisioning;
the cost of wireless handsets, tablets and smart watches sold to customers; and monthly wholesale wireless access fees.
Expenses increased in 2021 primarily due to increased costs associated with our wireless phone service from increases in the sale of devices and the
number of customers receiving service, partially offset by lower personnel costs.
Customer Service Expenses
Expenses include the personnel and other costs associated with handling the sale of services to customers and customer service activity.
Expenses decreased in 2021 primarily due to lower labor costs as a result of reduced call volumes.
Advertising, Marketing and Promotion Expenses
Expenses include the costs associated with attracting new customers and promoting our service offerings.
Expenses increased in 2021 primarily due to increased spending associated with attracting new customers and promoting our service offerings, including
advertising expenses associated with the Tokyo Olympics, as well as decreased spending as a result of COVID-19 in the prior year period.
Franchise and Other Regulatory Fees
Expenses represent the fees we are required to pay to federal, state and local authorities, including fees under the terms of our cable franchise agreements.
Expenses increased in 2021 primarily due to increases in regulatory costs.
Other Expenses
Expenses primarily include administrative personnel costs; fees paid to third-party channels for which Cable represents the advertising sales efforts; other
business support costs, including building and office expenses, taxes and billing costs; and bad debt.
Expenses decreased in 2021 primarily due to a decrease in bad debt expense.
Cable Communications Segment – Operating Margin
Our operating margin is Adjusted EBITDA as a percentage of revenue. We believe this metric is useful particularly as we continue to focus on growing our
higher-margin businesses and improving overall operating cost management. Our operating margin was 43.7%, 42.1% and 40.1% in 2021, 2020 and 2019,
respectively. While the accrued adjustments for regional sports networks did not impact Adjusted EBITDA, they resulted in an increase to operating
margins in 2020.
43
Comcast 2021 Annual Report on Form 10-K
Table of Contents
NBCUniversal Segments Overview
2021 NBCUniversal Segments Operating Results
(a)
Revenue
(in billions)
Adjusted EBITDA
(in billions)
(a) Segment details in the charts exclude the results of NBCUniversal Headquarters and Other and Eliminations and therefore the amounts do not equal the total. Revenue and Adjusted EBITDA
charts are not presented on the same scale.
Year ended December 31 (in millions)
Revenue
Media
Studios
Theme Parks
Headquarters and Other
Eliminations
Total revenue
Adjusted EBITDA
Media
Studios
Theme Parks
Headquarters and Other
Eliminations
Total Adjusted EBITDA
2021
2020
2019
% Change
2020 to 2021
% Change
2019 to 2020
$
$
$
$
22,780 $
9,449
5,051
87
(3,048)
34,319 $
4,569 $
884
1,267
(840)
(205)
5,675 $
18,936 $
8,134
2,094
53
(2,006)
27,211 $
5,574 $
1,041
(477)
(563)
(220)
5,355 $
19,947
9,352
6,213
31
(1,585)
33,958
5,834
1,058
2,498
(690)
11
8,711
20.3 %
16.2
141.2
63.8
(51.9)
26.1 %
(18.0)%
(15.1)
NM
(49.3)
6.5
6.0 %
(5.1)%
(13.0)
(66.3)
69.6
(26.6)
(19.9)%
(4.5)%
(1.6)
(119.1)
18.4
NM
(38.5)%
Percentage changes that are considered not meaningful are denoted with NM.
Comcast 2021 Annual Report on Form 10-K
44
Table of Contents
Media Segment Results of Operations
Year ended December 31 (in millions)
Revenue
Advertising
Distribution
Other
Total revenue
Operating costs and expenses
Programming and production
Other operating and administrative
Advertising, marketing and promotion
Total operating costs and expenses
Adjusted EBITDA
Media Segment – Revenue
Advertising
2021
2020
2019
% Change
2020 to 2021
% Change
2019 to 2020
$
$
10,291 $
10,449
2,040
22,780
13,337
3,611
1,264
18,212
4,569 $
8,296 $
8,795
1,845
18,936
9,319
3,209
834
13,362
5,574 $
9,267
8,887
1,793
19,947
9,907
3,286
920
14,113
5,834
24.1 %
18.8
10.5
20.3
43.1
12.5
51.4
36.3
(18.0)%
(10.5)%
(1.0)
2.9
(5.1)
(5.9)
(2.3)
(9.3)
(5.3)
(4.5)%
Revenue consists of the sale of advertising on our television networks, Peacock and digital properties.
Year ended December 31 (in millions)
Advertising
Advertising, excluding Tokyo Olympics
$
2021
10,291 $
9,054
2020
8,296 $
8,296
2019
9,267
9,267
% Change
2020 to 2021
24.1 %
9.1
% Change
2019 to 2020
(10.5)%
(10.5)
Revenue increased in 2021 compared to 2020 primarily due to our broadcast of the Tokyo Olympics. Excluding $1.2 billion of revenue associated with our
broadcast of the Tokyo Olympics, advertising revenue increased due to higher pricing in the current year period, reduced spending from advertisers in the
prior year period as a result of COVID-19, increased advertising revenue in Peacock and an increased number of sporting events, partially offset by
continued audience ratings declines at our networks.
Revenue decreased in 2020 compared to 2019 primarily due to continued audience rating declines at our networks and reduced spending from advertisers
as a result of COVID-19, including as a result of the reduced number of sporting events, partially offset by higher prices for advertising units sold and
advertising revenue in Peacock following its launch in 2020.
Distribution
Revenue includes the fees received from the distribution of our cable and broadcast television network programming to traditional and virtual multichannel
video providers and from NBC-affiliated and Telemundo-affiliated local broadcast television stations. Distribution revenue also includes distribution
revenue associated with our periodic broadcasts of the Olympic Games and subscription fees received from Peacock subscribers.
Year ended December 31 (in millions)
Distribution
Distribution, excluding Tokyo Olympics
$
2021
10,449 $
9,928
2020
8,795 $
8,795
2019
8,887
8,887
% Change
2020 to 2021
18.8 %
12.9
% Change
2019 to 2020
(1.0)%
(1.0)
Revenue increased in 2021 compared to 2020, including the impact of our broadcast of the Tokyo Olympics. Excluding $522 million of revenue associated
with our broadcast of the Tokyo Olympics, distribution revenue increased due to contractual rates increases, increased distribution revenue at Peacock, and
credits accrued in 2020 at some of our regional sports networks from fewer games played due to COVID-19 as certain of our distribution agreements with
multichannel video providers require contractual adjustments if a minimum number of sporting events does not occur. This increase was partially offset by
declines in the number of subscribers at our networks.
Revenue decreased in 2020 compared to 2019 primarily due to declines in the number of subscribers at our networks and credits accrued at some of our
regional sports networks resulting from the reduced number of games played by professional sports leagues due to COVID-19, partially offset by
contractual rate increases.
45
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Other
Revenue primarily relates to the licensing of our owned programming and revenue generated by various digital properties.
Revenue increased in 2021 compared to 2020 primarily due to increased revenue from our digital properties and increased content licensing.
Revenue increased in 2020 compared to 2019 primarily due to timing of content provided under our licensing agreements, offset by decreased revenue
from our digital properties.
We expect the number of subscribers and audience ratings at our networks will continue to decline as a result of the competitive environment and shifting
video consumption patterns. Media segment total revenue included $778 million and $118 million related to Peacock in 2021 and 2020, respectively.
* * *
Media Segment – Operating Costs and Expenses
Programming and Production Costs
Expenses include the amortization of owned and licensed programming, including sports rights, direct production costs, production overhead, on-air talent
costs and costs associated with the distribution of our programming to third-party networks and other distribution platforms.
Expenses increased in 2021 primarily due to costs associated with our broadcast of the Tokyo Olympics, higher programming costs at Peacock and higher
costs related to other sporting events due to COVID-19 timing impacts.
Expenses decreased in 2020 due to decreases in sports programming costs driven by decreases in the number of sports events as a result of the
postponement and cancellation of events due to COVID-19, delays in airing of new programs and cost saving initiatives, partially offset by higher
programming costs at Peacock.
Other Operating and Administrative Expenses
Expenses include salaries, employee benefits, rent and other overhead expenses.
Expenses increased in 2021 primarily due to increased costs related to Peacock, partially offset by cost saving initiatives.
Expenses decreased in 2020 primarily due to decreased costs associated with our digital properties and cost saving initiatives, partially offset by increased
costs related to Peacock.
Advertising, Marketing and Promotion Expenses
Expenses consist primarily of the costs associated with promoting content on our networks, Peacock and digital properties, as well as costs associated with
promoting our platforms and digital properties.
Expenses increased in 2021 primarily due to higher marketing related to Peacock and higher spending related to our networks.
Expenses decreased in 2020 primarily due to lower spending on marketing related to our networks, partially offset by higher marketing expenses related to
Peacock.
Media segment total operating costs and expenses included $2.5 billion and $781 million related to Peacock in 2021 and 2020, respectively. We expect to
continue to incur significant costs related to additional content and marketing as we invest in the platform and attract new customers.
* * *
Comcast 2021 Annual Report on Form 10-K
46
Table of Contents
Studios Segment Results of Operations
Year ended December 31 (in millions)
Revenue
Content licensing
Theatrical
Home entertainment and other
Total revenue
Operating costs and expenses
Programming and production
Other operating and administrative
Advertising, marketing and promotion
Total operating costs and expenses
Adjusted EBITDA
Studios Segment – Revenue
Content Licensing
2021
2020
2019
% Change
2020 to 2021
% Change
2019 to 2020
$
7,565 $
691
1,193
9,449
6,820
667
1,078
8,565
$
884 $
6,557 $
418
1,159
8,134
5,413
813
867
7,093
1,041 $
6,373
1,469
1,510
9,352
5,903
849
1,542
8,294
1,058
15.4 %
65.4
2.9
16.2
26.0
(18.0)
24.3
20.7
(15.1)%
2.9 %
(71.6)
(23.2)
(13.0)
(8.3)
(4.1)
(43.8)
(14.5)
(1.6)%
Revenue relates to the licensing of our owned film and television content in the United States and internationally to cable, broadcast and premium networks
and DTC streaming service providers, as well as through video on demand and pay-per-view services provided by multichannel video providers and OTT
service providers.
Revenue increased in 2021 primarily due to the timing of when content was made available by our television studios under licensing agreements, including
additional sales of content as production levels returned to normal in 2021 and a new licensing agreement for content that became exclusively available for
streaming on Peacock in 2021, which more than offset the benefit from initial content licenses associated with the launch of Peacock in 2020. Revenue in
2021 also was negatively impacted by delays in theatrical releases due to COVID-19 for our film studios.
Revenue increased in 2020 primarily due to the timing of when content was made available under licensing agreements, including initial licenses of content
associated with the launch of Peacock, and increased sales of titles made available on demand, including certain 2020 releases after theater closures due to
COVID-19, partially offset by decreases in revenue from our television studios due to delays in production.
Theatrical
Revenue relates to the worldwide distribution of our films for exhibition in movie theaters.
Revenue increased in 2021 primarily due to current year releases, including F9, and the impact of theater closures as a result of COVID-19 in the prior year
period.
Revenue decreased in 2020 primarily due to theater closures as a result of COVID-19.
Home Entertainment and Other
Revenue consists of the sale of content on DVDs and through digital distribution services, as well as the production and licensing of live stage plays and
the distribution of filmed entertainment produced by third parties. The overall DVD market continues to experience declines due to the maturation of the
DVD format from increasing shifts in consumer behavior toward digital distribution services and subscription rental services, both of which generate less
revenue per transaction than DVD sales, as well as due to piracy.
Revenue increased in 2021 primarily due to increased sales of television titles in the current year period.
Revenue decreased in 2020 primarily due to COVID-19, including from our live stage plays, which were impacted by theater and entertainment venue
closures, and a reduced number of releases in 2020.
47
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Studios Segment – Operating Costs and Expenses
Programming and Production Costs
Expenses include the amortization of capitalized film and television production and acquisition costs, residuals and participations payments, and
distribution expenses. The costs associated with producing film and television content have generally increased in recent years and may continue to
increase in the future.
Expenses increased in 2021 due to higher costs associated with content licensing sales, including the new licensing agreement for content that became
exclusively available for streaming on Peacock in 2021, higher costs associated with theatrical releases in the current year period and the impact of updated
accounting guidance related to episodic television series, which was adopted and had a favorable impact on programming and production expense in the
prior year period.
Expenses decreased in 2020 due to higher costs associated with theatrical releases in 2019, lower production costs as a result of delays in production and
the impact of updated accounting guidance related to episodic television series, partially offset by higher costs associated with content licensing sales.
Other Operating and Administrative Expenses
Expenses include salaries, employee benefits, rent and other overhead expenses.
Expenses decreased in 2021 primarily due to cost saving initiatives.
Expenses decreased in 2020 primarily due to lower costs associated with live stage plays, which were impacted by theater and entertainment venue closures
as a result of COVID-19.
Advertising, Marketing and Promotion Expenses
Expenses consist primarily of expenses associated with advertising for our theatrical releases and the marketing of DVDs. The costs associated with
marketing films have generally increased in recent years and may continue to increase in the future.
Expenses increased in 2021 primarily due to higher spending on theatrical film releases in the current year period.
Expenses decreased in 2020 primarily due to lower spending on theatrical film releases as a result of COVID-19.
Theme Parks Segment Results of Operations
Year ended December 31 (in millions)
Revenue
Operating costs and expenses
Adjusted EBITDA
Theme Parks Segment – Revenue
$
$
2021
5,051 $
3,783
1,267 $
2020
2,094 $
2,571
(477) $
2019
6,213
3,715
2,498
% Change
2020 to 2021
141.2 %
47.1
NM
% Change
2019 to 2020
(66.3)%
(30.8)
(119.1)%
Revenue primarily relates to guest spending at our theme parks, including ticket sales and in-park spending and our consumer products business.
Revenue increased in 2021 primarily due to improved operating conditions compared to 2020 when each of our theme parks were either operating at a
limited capacity or closed as a result of COVID-19 and from the operations of Universal Beijing Resort, which opened in September 2021. All of our
theme parks temporarily closed beginning in mid to late first quarter of 2020. Our theme park in Orlando reopened with capacity restrictions in the second
quarter of 2020 and began operating without capacity restrictions during the second quarter of 2021. Our theme park in Hollywood reopened with capacity
restrictions early in the second quarter of 2021 and began operating without capacity restrictions by the end of that quarter. Our theme park in Japan
reopened with capacity restrictions in the second quarter of 2020, had a temporary closure in the second quarter of 2021 and began operating without
capacity restrictions in the fourth quarter of 2021. Our newest theme park in Beijing opened in September 2021 with capacity restrictions.
Revenue decreased in 2020 due to the temporary closures and capacity restrictions at our theme parks as a result of COVID-19.
Comcast 2021 Annual Report on Form 10-K
48
Table of Contents
Theme Parks Segment – Operating Costs and Expenses
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.
Expenses increased in 2021 primarily due to increased operating costs at our theme parks, as compared to the temporary closures and capacity restrictions
in the prior year period. Expenses also include increased pre-opening costs and operating costs associated with Universal Beijing Resort.
Expenses decreased in 2020 primarily due to temporary closures and capacity restrictions and lower marketing-related costs, partially offset by pre-opening
costs associated with Universal Beijing Resort.
NBCUniversal Headquarters, Other and Eliminations
Headquarters and Other Results of Operations
Year ended December 31 (in millions)
Revenue
Operating costs and expenses
Adjusted EBITDA
$
$
2021
87 $
927
(840) $
2020
53 $
616
(563) $
2019
31
721
(690)
% Change
2020 to 2021
63.8 %
50.5
(49.3)%
Expenses include overhead, personnel costs and costs associated with corporate initiatives, which were affected by COVID-19 in 2020.
Eliminations
Year ended December 31 (in millions)
Revenue
Operating costs and expenses
Adjusted EBITDA
2021
(3,048) $
(2,843)
(205) $
2020
(2,006) $
(1,786)
(220) $
$
$
2019
(1,585)
(1,596)
11
% Change
2020 to 2021
51.9 %
59.0
(6.5)%
% Change
2019 to 2020
69.6 %
(14.5)
18.4 %
% Change
2019 to 2020
26.6 %
12.0
NM
Amounts represent eliminations of transactions between our NBCUniversal segments, which are affected by the timing of recognition of content licenses
between our Studios and Media segments. Current year amounts include the impact of a new licensing agreement for content that became exclusively
available for streaming on Peacock during the first quarter of 2021, and prior year amounts include the impacts of initial licenses of content associated with
the launch of Peacock.
For the years ended 2021, 2020 and 2019, approximately 42%, 34% and 27%, respectively, of Studios segment content licensing revenue resulted from
transactions with other segments, primarily with the Media segment. Eliminations will increase or decrease to the extent that additional content is made
available to our other segments. Refer to Note 2 for further discussion of transactions between our segments.
Sky Segment Results of Operations
Year ended December 31 (in millions)
Revenue
Direct-to-consumer
Content
Advertising
Total revenue
Operating costs and expenses
Programming and production
Direct network costs
Other
Total operating costs and expenses
Adjusted EBITDA
2021
2020
2019
% Change
2020 to 2021
% Change
2019 to 2020
Actual
Actual
Actual
Actual
$
$
16,455 $
1,341
2,489
20,285
15,223 $
1,373
1,998
18,594
8,949
2,612
6,364
17,925
2,359 $
8,649
2,086
5,905
16,640
1,954 $
15,538
1,432
2,249
19,219
8,865
1,746
5,509
16,120
3,099
8.1 %
(2.3)
24.6
9.1
3.5
25.2
7.8
7.7
20.8 %
Constant
Currency
(a)
Change
2.0 %
(7.4)
18.4
3.1
(1.3)
17.1
2.0
2.2
10.2 %
Actual
(2.0)%
(4.1)
(11.2)
(3.3)
(2.4)
19.5
7.2
3.2
(37.0)%
Constant
Currency
(a)
Change
(3.0)%
(4.9)
(12.0)
(4.2)
(3.5)
18.6
6.3
2.2
(37.6)%
49
Comcast 2021 Annual Report on Form 10-K
Table of Contents
(a) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 52 for additional information, including our definition and our use of
constant currency, and for a reconciliation of Sky’s constant currency growth rates.
Customer Metrics
(in thousands)
Total customer relationships
2021
Actual
23,027
2020
Actual
23,224
2019
Actual
23,280
2021
Actual
(198)
2020
Actual
(56)
2019
Actual
394
Net Additions / (Losses)
Customer metrics are presented based on actual amounts. Customer relationships represent the number of residential customers that subscribe to at least one of Sky’s four primary services of
video, broadband, voice and wireless phone service. Sky reports business customers, including hotels, bars, workplaces and restaurants, generally based on the number of locations receiving our
services. In the first quarter of 2021, we implemented conforming changes to our methodology for counting commercial customers in Italy and Germany, which are counted as described above,
consistent with the methodology for customers in the United Kingdom. Previously, customers were counted based on a residential equivalent unit in Italy or the number of active venues or rooms
in Germany. This change resulted in a reduction in Sky’s total customer relationships of 714,000 as of December 31, 2020. The impact of the change in methodology to customer relationship net
additions for any period was not material. For comparative purposes, we have updated Sky’s historical total customer relationships and average monthly direct-to-consumer revenue per customer
relationship to reflect this adjustment.
Average monthly direct-to-consumer revenue
per customer relationship
$
59.29 $
54.56 $
56.09
Actual
Actual
Actual
Actual
8.7 %
Constant
Currency
(a)
Growth
Actual
Constant
Currency
(a)
Growth
2.6 %
(2.7)%
(3.7)%
2021
2020
2019
% Change 2020 to 2021
% Change 2019 to 2020
(a) Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section on page 52 for additional information, including our definition and our use of
constant currency, and for a reconciliation of Sky’s constant currency growth rates.
Average monthly direct-to-consumer revenue per customer relationship is impacted by rate adjustments and changes in the types and levels of services
received by Sky’s customers. Each of Sky’s services has a different contribution to Adjusted EBITDA. We believe average monthly direct-to-consumer
revenue per customer relationship is useful in understanding the trends in our business across all of our direct-to-consumer service offerings.
Sky Segment – Revenue
Direct-to-Consumer
Revenue primarily relates to video services provided to both residential and business customers, as well as broadband, voice and wireless services. Video
service revenue includes both DTH video services and our NOW streaming service. Revenue from our wireless customers also includes the sale of devices.
Revenue increased in 2021 compared to 2020. Excluding the impact of foreign currency, revenue increased primarily due to an increase in average revenue
per customer relationship. This increase reflected the impacts of the postponement of sporting events in the prior year period as a result of COVID-19, an
increase in the sale of wireless handsets and rate increases in the United Kingdom, which were partially offset by declines in average rates in Italy.
Customer relationships remained relatively consistent with the prior year period as decreases in Italy were offset by increases in the United Kingdom and
Germany. The declines in customer relationships and average revenue per customer relationship in Italy primarily resulted from reduced broadcast rights
for Serie A, which we had held through the end of the 2020-21 season. Beginning with the 2021-22 season in the third quarter of 2021 and through the
2023-24 season, we have nonexclusive broadcast rights to fewer matches, which has resulted and we expect will continue to result in declines in revenue
and customer relationships in Italy.
Content
Revenue relates to the distribution of our owned television channels on third-party platforms and the licensing of owned and licensed content.
Revenue decreased in 2021 compared to 2020. Excluding the impact of foreign currency, revenue decreased primarily due to lower sports programming
licensing revenue driven by changes in licensing agreements in Italy and Germany, partially offset by higher revenue from the distribution of Sky’s sports
programming on third-party platforms due to the impacts of COVID-19 in the prior year period.
Comcast 2021 Annual Report on Form 10-K
50
Table of Contents
Advertising
Revenue consists of the sale of advertising on linear television and digital platforms, including where we represent the sales efforts of third-party channels,
as well revenue from various technology, tools and solutions relating to our advertising business.
Revenue increased in 2021 compared to 2020. Excluding the impact of foreign currency, revenue increased primarily reflecting an overall market recovery
compared to the prior year period.
Sky Segment – Operating Costs and Expenses
Programming and Production Costs
Expenses primarily relate to content broadcast on our channels. These costs include the amortization of owned and licensed programming, including sports
rights, direct production costs, production overhead and on-air talent costs. These expenses also include the fees associated with programming distribution
agreements for channels owned by third parties.
Expenses increased in 2021 compared to 2020. Excluding the impact of foreign currency, expenses decreased primarily due to lower costs associated with
Serie A and entertainment programming in the current year period, partially offset by an increase in the number of sporting events in the current year period
due to COVID-19, which delayed the starts of the 2020-21 European football seasons.
Direct Network Costs
Expenses primarily include costs directly related to the supply of broadband and voice services, including wireless services for wireless handsets and
tablets, to our customers. This includes call costs, monthly wholesale access fees and other variable costs associated with our network. In addition, it
includes the cost of wireless handsets sold to customers.
Expenses increased in 2021 compared to 2020. Excluding the impact of foreign currency, expenses increased primarily due to an increase in costs
associated with Sky’s wireless phone and broadband services as a result of increases in the sale of wireless handsets and the number of customers receiving
these services.
Other Expenses
Expenses include costs related to marketing, fees paid to third-party channels for which Sky represents the advertising sales efforts, subscriber
management, supply chain, transmission, technology, fixed networks and general administrative costs.
Expenses increased in 2021 compared to 2020. Excluding the impact of foreign currency, expenses increased primarily due to higher fees paid to third-
party channels related to advertising sales, partially offset by lower personnel costs.
Corporate, Other and Eliminations
Corporate and Other Results of Operations
Year ended December 31 (in millions)
Revenue
Operating costs and expenses
Adjusted EBITDA
2021
461 $
1,819
(1,358) $
2020
248 $
2,033
(1,785) $
$
$
2019
333
1,153
(820)
% Change
2020 to 2021
86.1 %
(10.5)
23.9 %
% Change
2019 to 2020
(25.6)%
76.3
(117.8)%
Corporate and other primarily includes overhead and personnel costs, the results of other business initiatives and Comcast Spectacor, which owns the
Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania. Other business initiatives include costs associated with the launch of
Sky Glass and the related hardware sales, as well as costs associated with the launch of XClass TV.
Revenue increased in 2021 primarily due to increases at Comcast Spectacor as a result of the impacts of COVID-19 in the prior year period and sales of
Sky Glass televisions.
Expenses decreased in 2021 primarily due to costs incurred in the prior year periods in response to COVID-19, including severance charges related to our
businesses, partially offset by costs related to Sky Glass and XClass TV. In 2020, our businesses implemented separate cost savings initiatives, with the
most significant relating to severance at NBCUniversal in connection with the realignment of the operating structure in our television businesses as well as
overall reductions in the cost base. The costs of these initiatives were presented in Corporate and Other. Payments related to NBCUniversal employee
severance were substantially complete in 2021 and the substantial majority of the related costs savings were being realized in operating costs and expenses
as of the end of 2021. A portion of these cost savings may be reallocated to investments in content and other strategic initiatives. We expect to incur
increased costs in 2022 related to the launch of Sky Glass and XClass TV.
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Eliminations
Year ended December 31 (in millions)
Revenue
Operating costs and expenses
Adjusted EBITDA
2021
(3,008) $
(2,942)
(65) $
2020
(2,540) $
(2,572)
32 $
2019
(2,650)
(2,652)
2
$
$
% Change
2020 to 2021
18.5 %
14.4
% Change
2019 to 2020
(4.2)%
(3.1)
NM
NM
Percentage changes that are considered not meaningful are denoted with NM.
Amounts represent eliminations of transactions between Cable Communications, NBCUniversal, Sky and other businesses. Eliminations of transactions
between NBCUniversal are presented separately. Current year amounts reflect an increase in eliminations associated with the Tokyo Olympics. Refer to
Note 2 for a description of transactions between our segments.
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses
as well as to assist in the evaluation of underlying trends in our businesses. This measure eliminates the significant level of noncash depreciation and
amortization expense that results from the capital-intensive nature of certain of our businesses and from intangible assets recognized in business
combinations. It is also unaffected by our capital and tax structures, and by our investment activities, including the results of entities that we do not
consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this
financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources
and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. Additionally, we
believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in
our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
We define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests and
redeemable subsidiary preferred stock, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization
expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived
assets), if any. From time to time we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant
legal settlements) that affect the period-to-period comparability of our operating performance.
We reconcile consolidated Adjusted EBITDA to net income attributable to Comcast Corporation. This measure should not be considered a substitute for
operating income (loss), net income (loss), net income (loss) attributable to Comcast Corporation, or net cash provided by operating activities that we have
reported in accordance with GAAP.
Reconciliation from Net Income Attributable to Comcast Corporation to Adjusted EBITDA
Year ended December 31 (in millions)
Net income attributable to Comcast Corporation
Net income (loss) attributable to noncontrolling interests and redeemable subsidiary preferred stock
Income tax expense
Investment and other (income) loss, net
Interest expense
Depreciation
Amortization
(a)
Adjustments
Adjusted EBITDA
2021
14,159 $
(325)
5,259
(2,557)
4,281
8,628
5,176
87
34,708 $
2020
10,534 $
167
3,364
(1,160)
4,588
8,320
4,780
233
30,826 $
2019
13,057
266
3,673
(438)
4,567
8,663
4,290
180
34,258
$
$
(a) Amounts represent the impacts of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including Sky transaction-related costs and costs related to our
investment portfolio. Year to date 2020 also includes $177 million related to a legal settlement.
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Constant Currency
Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated
effects of foreign currency exchange rate fluctuations. Certain of our businesses, including Sky, have operations outside the United States that are
conducted in local currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency
exchange rates. In our Sky segment, we use constant currency and constant currency growth rates to evaluate the underlying performance of the business,
and we believe it is helpful for investors to present operating results on a comparable basis year over year to evaluate its underlying performance.
Constant currency and constant currency growth rates are calculated by comparing the prior year results adjusted to reflect the average exchange rates from
the current year rather than the actual exchange rates that were in effect during the respective prior year.
Reconciliation of Sky Constant Currency Growth Rates
Year ended December 31 (in millions, except per customer data)
Revenue
Direct-to-consumer
Content
Advertising
Total revenue
Operating costs and expenses
Programming and production
Direct network costs
Other
Total operating costs and expenses
Adjusted EBITDA
Average monthly direct-to-consumer revenue per
customer relationship
Liquidity and Capital Resources
Year ended December 31 (in millions)
Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities
December 31 (in millions)
Cash and cash equivalents
Short-term and long-term debt
2021
Actual
16,455 $
1,341
2,489
20,285
8,949
2,612
6,364
17,925
2,359 $
2020
Constant
Currency
% Change 2020 to
2021
Constant Currency
Change
16,125
1,448
2,101
19,675
9,064
2,230
6,239
17,533
2,142
2.0 % $
(7.4)
18.4
3.1
(1.3)
17.1
2.0
2.2
10.2 % $
2020
Actual
15,223 $
1,373
1,998
18,594
8,649
2,086
5,905
16,640
1,954 $
2019
Constant
Currency
% Change 2019 to
2020
Constant Currency
Change
15,698
1,443
2,270
19,411
8,967
1,759
5,556
16,282
3,129
(3.0)%
(4.9)
(12.0)
(4.2)
(3.5)
18.6
6.3
2.2
(37.6)%
59.29 $
57.79
2.6 % $
54.56 $
56.67
(3.7)%
$
$
$
$
2021
29,146 $
(13,446)
(18,618)
2020
24,737 $
(12,047)
(6,513)
2019
25,697
(14,841)
(9,181)
2021
8,711 $
94,850
2020
11,740
103,760
$
$
Our businesses generate significant cash flows from operating activities. We believe that we will be able to continue to meet our current and long-term
liquidity and capital requirements, including fixed charges, through our cash flows from operating activities; existing cash, cash equivalents and
investments; available borrowings under our existing credit facility; and our ability to obtain future external financing. Refer to “Contractual Obligations”
discussion below for additional information regarding our cash requirements. We anticipate that we will continue to use a substantial portion of our cash
flows from operating activities in repaying our debt obligations, funding our capital expenditures and cash paid for intangible assets, investing in business
opportunities, and returning capital to shareholders.
We maintain significant availability under our revolving credit facility and our commercial paper program to meet our short-term liquidity requirements.
Our commercial paper program provides a lower-cost source of borrowing to fund our short-term working capital requirements. As of December 31, 2021,
amounts available under our revolving credit facility, net of amounts outstanding under our commercial paper program and outstanding letters of credit and
bank guarantees, totaled $11.0 billion. We entered into a new revolving credit facility in March 2021 (see Note 6).
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We are subject to customary covenants and restrictions set forth in agreements related to debt issued at Comcast and certain of our subsidiaries, including
the indentures governing our public debt securities and the credit agreement governing the Comcast revolving credit facility. Our credit facility contains a
financial covenant pertaining to leverage, which is the ratio of debt to EBITDA, as defined in the credit facility. Compliance with this financial covenant is
tested on a quarterly basis under the terms of the credit facility. As of December 31, 2021, we met this financial covenant by a significant margin and we
expect to remain in compliance with this financial covenant and other covenants related to our debt. The covenants and restrictions in our revolving credit
facility do not apply to certain entities, including Sky and our international theme parks.
Operating Activities
Components of Net Cash Provided by Operating Activities
Year ended December 31 (in millions)
Operating income
Depreciation and amortization
Noncash share-based compensation
Changes in operating assets and liabilities
Payments of interest
Payments of income taxes
Proceeds from investments and other
Net cash provided by operating activities
2021
20,817 $
13,804
1,315
(1,499)
(3,908)
(2,628)
1,246
29,146 $
2020
17,493 $
13,100
1,193
(178)
(3,878)
(3,183)
190
24,737 $
2019
21,125
12,953
1,021
(2,335)
(4,254)
(3,231)
418
25,697
$
$
The decrease resulting from changes in operating assets and liabilities in 2021 compared to 2020 was primarily related to the timing of amortization and
related payments for our film and television costs, including increased production spending, offset by an increased number of sporting events in 2021, as
well as increases in accounts receivable and decreases in deferred revenue, which included the impacts of our broadcast of the Tokyo Olympics. These
decreases were partially offset by increases related to the operations of our theme parks.
The decrease in income tax payments in 2021 was primarily due to the tax deductions resulting from our senior notes exchange (refer to “Financing
Activities” below for additional information), which reduced tax payments by $1.3 billion in the current year period and more than offset the higher taxable
income from operations in 2021.
The increase in proceeds from investments and other in 2021 was primarily due to increased cash distributions received from equity method investments
(see Note 8).
Investing Activities
Our most significant recurring investing activity has been capital expenditures, which are discussed further below. The increase in cash used in investing
activities in 2021 compared to 2020 was primarily due to proceeds received from the sale of our investment in AirTouch in 2020, the acquisition of
Masergy in 2021 and increased cash paid for intangible assets related to software development, partially offset by decreases in purchases of investments,
decreases in costs related to the construction of Universal Beijing Resort and the purchase of spectrum in the prior year period.
Capital Expenditures
Capital expenditures were flat in 2021 primarily due to reduced spending in our Theme Parks segment as a result of COVID-19, offset by increases in
spending in our Cable Communications segment. The costs associated with the construction of Universal Beijing Resort are presented separately in our
consolidated statement of cash flows. See Note 7.
Our most significant capital expenditures are in our Cable Communications segment, and we expect that this will continue in the future. Cable
Communications’ capital expenditures increased primarily due to increased spending on scalable infrastructure and line extensions, partially offset by
decreased spending on customer premise equipment and support capital. The table below summarizes the capital expenditures we incurred in our Cable
Communications segment in 2021, 2020 and 2019.
Year ended December 31 (in millions)
Customer premise equipment
Scalable infrastructure
Line extensions
Support capital
Total
$
$
2021
2,203 $
2,658
1,565
503
6,930 $
2020
2,333 $
2,289
1,394
589
6,605 $
2019
2,659
2,000
1,392
858
6,909
We expect our capital expenditures for 2022 will be focused on the increased investment in scalable infrastructure to increase network capacity and in line
extensions for the expansion of both business services and residential in our Cable
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Communications segment; and the continued deployment of wireless gateways, X1 and Sky Q. In addition, we expect to continue investment in existing
and new attractions at our Universal theme parks in the future, including the development of our additional theme park in Orlando, Florida, which resumed
in 2021. Capital expenditures for subsequent years will depend on numerous factors, including competition, changes in technology, regulatory changes, the
timing and rate of deployment of new services, the capacity required for existing services, the timing of new attractions at our theme parks and potential
acquisitions.
Financing Activities
Net cash used in financing activities in 2021 consisted primarily of repayments of debt and the related early redemption payments presented in other
financing activities, repurchases of common stock under our share repurchase program and employee plans, dividend payments, and payments related to
the redemption of NBCUniversal Enterprise redeemable subsidiary preferred stock presented in other financing activities, partially offset by proceeds from
borrowings. Net cash used in financing activities in 2020 consisted primarily of repayments of debt and the related early redemption payments presented in
other financing activities, dividend payments, and payments related to the redemption and repayment of subsidiary preferred shares in the second quarter of
2020 presented in other financing activities, partially offset by proceeds from borrowings and proceeds from the settlement of cross-currency swaps related
to our debt presented in other financing activities.
In August 2021, we completed a debt exchange transaction. We issued $15.0 billion aggregate principal amount of new senior notes, which have maturities
ranging from 2051 to 2063 and a weighted-average interest rate of 2.93%, and made cash payments of $0.5 billion in exchange for $11.2 billion aggregate
principal amount of certain series of outstanding senior notes with maturities ranging from 2033 to 2058 and a weighted-average interest rate of 5.04%. The
debt exchange resulted in an overall reduction in the weighted-average interest rate for our total outstanding debt of 0.27% and extended the overall
weighted-average maturity by 2 years. The debt exchange transaction was accounted for as a debt modification, and therefore following the exchange, the
book value of the new senior notes is equal to the book value of the exchanged senior notes reduced by the amount of the cash payments, and the difference
between the principal and carrying amounts of the new senior notes will accrue through interest expense over the period to maturity of the new senior
notes.
In 2021, we made debt repayments of $11.5 billion, including $4.9 billion of optional repayments of term loans due 2022 to 2023 and the early redemption
of $3.3 billion of senior notes maturing in 2024 and 2025, as well as amounts due at maturity and the cash payments in the debt exchange transaction.
In 2021, we issued €1.75 billion ($2.1 billion using exchange rates on the date of issuance) aggregate principal amount of fixed-rate Euro senior notes
maturing in 2026 and 2029. In 2021, we had borrowings of $0.6 billion under the Universal Beijing Resort term loan.
We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases or exchanges
of our outstanding public notes and debentures, depending on various factors, such as market conditions. Any such repurchases may be effected through
privately negotiated transactions, market transactions, tender offers, redemptions or otherwise. See Notes 6 and 7 for additional information on our
financing activities.
Share Repurchases and Dividends
In the second quarter of 2021, we restarted our share repurchase program, which had been paused since the beginning of 2019. Effective May 25, 2021, our
Board of Directors increased our share repurchase program authorization to $10 billion. During 2021, we repurchased a total of 73.2 million shares of our
Class A common stock for $4.0 billion. In January 2022, our Board of Directors increased our share repurchase program authorization from the $6 billion
remaining as of December 31, 2021 to $10 billion. Under the authorization, which does not have an expiration date, we expect to repurchase additional
shares, which may be in the open market or in private transactions.
Our Board of Directors declared quarterly dividends totaling $4.6 billion in 2021. We paid dividends of $4.5 billion in 2021. In January 2022, our Board of
Directors approved an 8% increase in our dividend to $1.08 per share on an annualized basis. We expect to continue to pay quarterly dividends, although
each dividend is subject to approval by our Board of Directors.
The chart below summarizes our share repurchases under our publicly announced share repurchase program authorization and dividends paid in 2021, 2020
and 2019. In addition, we paid $674 million and $534 million in 2021 and 2020, respectively, related to employee taxes associated with the administration
of our share-based compensation plans.
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Share Repurchases Under Share Repurchase Program Authorization and Dividends Paid
(in billions)
Contractual Obligations
The following table summarizes our most significant contractual obligations as of December 31, 2021:
As of December 31, 2021 (in billions)
Debt obligations
Programming and production obligations
(a)
$
Total
100.8 $
75.7
Within the next 12
months
Beyond the next
12 months
98.7
60.4
2.1 $
15.4
(a) Amounts represent the face value of debt and exclude interest payments and a collateralized obligation (see Note 8).
Our largest contractual obligations relate to our outstanding debt. As of December 31, 2021, our debt has a weighted-average time to maturity of
approximately 18 years and a weighted-average interest rate based on the stated coupons and including the effects of our derivative financial instruments of
3.44%. We typically fund and expect to continue to be able to fund debt maturities and interest payments with cash flows generated in our operations;
existing cash, cash equivalents and investments; or proceeds from additional external financing. See Note 6 for additional information on our debt.
We also have significant contractual obligations associated with our programming and production expenses. NBCUniversal and Sky have multiyear
agreements for broadcast rights of sporting events, such as the Olympics, the NFL and European football leagues, which represent the substantial majority
of our programming and production obligations. Cable Communications’ programming expenses related to the distribution of third-party programmed
channels are generally acquired under multiyear distribution agreements, with fees typically based on the number of customers that receive the
programming and the extent of distribution. As a result, the amounts included in the table above under fixed or minimum guaranteed commitments for
these distribution agreements are not material and we expect the total fees to be paid under these arrangements to be significantly higher than the amounts
included above. We have funded and expect to continue to be able to fund our programming and production obligations with the cash generated from our
operations. As of December 31, 2021, approximately 40% of cash payments related to our programming and production obligations are due after five years,
primarily related to multiyear sports rights agreements. See Note 4 for additional information on programming and production costs.
Our other contractual obligations relate primarily to operating leases (see Note 15) and other arrangements recorded in our balance sheet and/or disclosed in
the notes to our financial statements, including benefit plan obligations (see Note 11), liabilities for uncertain tax positions (see Note 5), our remaining
unfunded capital commitment to Atairos (see Note 8) and a contractual obligation related to an interest held by a third party in the revenue of certain theme
parks (see Note 15).
Guarantee Structure
Our debt is primarily issued at Comcast, although we also have debt at certain of our subsidiaries as a result of acquisitions and other issuances. A
substantial amount of this debt is subject to guarantees by Comcast and by certain subsidiaries that we have put in place to simplify our capital structure.
We believe this guarantee structure provides liquidity benefits to debt investors and helps to simplify credit analysis with respect to relative value
considerations of guaranteed subsidiary debt.
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Debt and Guarantee Structure
December 31 (in billions)
Debt Subject to Cross-Guarantees
Comcast
Comcast Cable
NBCUniversal
(a)
(a)
Debt Subject to One-Way Guarantees
Sky
Other
(a)
Debt Not Guaranteed
Universal Beijing Resort
Other
(b)
Debt issuance costs, premiums, discounts, fair value adjustments for acquisition accounting and hedged
positions, net
Total debt
2021
85.9 $
2.1
1.6
89.6
6.3
0.1
6.5
3.6
1.2
4.7
(6.0)
94.8 $
2020
85.7
2.1
2.8
90.6
8.4
2.8
11.2
2.5
1.1
3.6
(1.6)
103.8
$
$
(a) NBCUniversal, Comcast Cable and Comcast Holdings (included within other debt subject to one-way guarantees) are each consolidated subsidiaries subject to the periodic reporting
requirements of the SEC. The guarantee structures and related disclosures in this section, together with Exhibit 22, satisfy these reporting obligations.
(b) Universal Beijing Resort debt financing is secured by the assets of Universal Beijing Resort and the equity interests of the investors. See Note 7 for additional information.
Cross-Guarantees
Comcast, NBCUniversal and Comcast Cable (the “Guarantors”) fully and unconditionally, jointly and severally, guarantee each other’s debt securities.
NBCUniversal and Comcast Cable also guarantee other borrowings of Comcast, including its revolving credit facility. These guarantees rank equally with
all other general unsecured and unsubordinated obligations of the respective Guarantors. However, the obligations of the Guarantors under the guarantees
are structurally subordinated to the indebtedness and other liabilities of their respective non-guarantor subsidiaries. The obligations of each Guarantor are
limited to the maximum amount that would not render such Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance
provisions of U.S. and non-U.S. law. Each Guarantor’s obligations will remain in effect until all amounts payable with respect to the guaranteed securities
have been paid in full. However, a guarantee by NBCUniversal or Comcast Cable of Comcast’s debt securities, or by NBCUniversal of Comcast Cable’s
debt securities, will terminate upon a disposition of such Guarantor entity or all or substantially all of its assets.
The Guarantors are each holding companies that principally hold investments in, borrow from and lend to non-guarantor subsidiary operating companies;
issue and service third-party debt obligations; repurchase shares and pay dividends; and engage in certain corporate and headquarters activities. The
Guarantors are generally dependent on non-guarantor subsidiary operating companies to fund these activities.
As of December 31, 2021 and 2020, the combined Guarantors have noncurrent notes payable to non-guarantor subsidiaries of $126 billion and
$124 billion, respectively, and noncurrent notes receivable from non-guarantor subsidiaries of $30 billion and $26 billion, respectively. This financial
information is that of the Guarantors presented on a combined basis with intercompany balances between the Guarantors eliminated. The combined
financial information excludes financial information of non-guarantor subsidiaries. The underlying net assets of the non-guarantor subsidiaries are
significantly in excess of the Guarantor obligations. Excluding investments in non-guarantor subsidiaries, external debt and the noncurrent notes payable
and receivable with non-guarantor subsidiaries, the Guarantors do not have material assets, liabilities or results of operations.
One-Way Guarantees
Comcast provides full and unconditional guarantees of certain debt issued by Sky and other consolidated subsidiaries not subject to the periodic reporting
requirements of the SEC.
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Comcast also provides a full and unconditional guarantee of $138 million principal amount of subordinated debt issued by Comcast Holdings. Comcast’s
obligations under this guarantee are subordinated and subject, in right of payment, to the prior payment in full of all of Comcast’s senior indebtedness,
including debt guaranteed by Comcast on a senior basis; and are structurally subordinated to the indebtedness and other liabilities of its non-guarantor
subsidiaries (for purposes of this Comcast Holdings discussion, Comcast Cable and NBCUniversal are included within the non-guarantor subsidiary
group). Comcast’s obligations as guarantor will remain in effect until all amounts payable with respect to the guaranteed debt have been paid in full.
However, the guarantee will terminate upon a disposition of Comcast Holdings or all or substantially all of its assets. Comcast Holdings is a consolidated
subsidiary holding company that directly or indirectly holds 100% and approximately 37% of our equity interests in Comcast Cable and NBCUniversal,
respectively.
As of December 31, 2021 and 2020, Comcast and Comcast Holdings, the combined issuer and guarantor of the guaranteed subordinated debt, have
noncurrent senior notes payable to non-guarantor subsidiaries of $96 billion and $94 billion, respectively, and noncurrent notes receivable from non-
guarantor subsidiaries of $29 billion and $23 billion, respectively. This financial information is that of Comcast and Comcast Holdings presented on a
combined basis with intercompany balances between Comcast and Comcast Holdings eliminated. The combined financial information excludes financial
information of non-guarantor subsidiaries of Comcast and Comcast Holdings. The underlying net assets of the non-guarantor subsidiaries of Comcast and
Comcast Holdings are significantly in excess of the obligations of Comcast and Comcast Holdings. Excluding investments in non-guarantor subsidiaries,
external debt and the noncurrent notes payable and receivable with non-guarantor subsidiaries, Comcast and Comcast Holdings do not have material assets,
liabilities or results of operations.
Critical Accounting Judgments and Estimates
The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and
expenses, and the related disclosure of contingent assets and contingent liabilities. We base our judgments on our historical experience and on various other
assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
We believe our judgments and related estimates associated with the valuation and impairment testing of goodwill and cable franchise rights and the
accounting for film and television costs 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 the related disclosures below. See also Notes 4 and 10.
Valuation and Impairment Testing of Goodwill and Cable Franchise Rights
We assess the recoverability of our goodwill and indefinite-lived intangible assets, including cable franchise rights, annually as of July 1, or more
frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. The assessment of recoverability may first
consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair
value of a reporting unit or an indefinite-lived intangible asset is less than its carrying amount. A quantitative assessment is performed if the qualitative
assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed.
Goodwill
Goodwill results from business combinations and represents the excess amount of the consideration paid over the identifiable assets and liabilities recorded
in the acquisition. We test goodwill for impairment at the reporting unit level and have concluded that our reporting units are generally the same as
our reportable segments. We evaluate the determination of our reporting units periodically or whenever events or substantive changes in circumstances
occur. When performing a quantitative assessment, we estimate the fair values of our reporting units primarily based on a discounted cash flow analysis
that involves significant judgment, including market participant estimates of future cash flows expected to be generated by the business and the selection of
discount rates. When analyzing the fair values indicated under discounted cash flow models, we also consider multiples of Adjusted EBITDA generated by
the underlying assets, current market transactions and profitability information.
We performed qualitative assessments in 2021 for goodwill in our Cable Communications and NBCUniversal segments. The qualitative assessments
considered that the estimated fair values of these reporting units substantially exceeded their carrying values at the time of our previous quantitative
assessments in 2018; changes in projected future cash flows; recent market transactions and overall macroeconomic conditions, including the effects of
COVID-19; discount rates; and changes in our market capitalization. Based on these assessments, we concluded that it was more likely than not that the
estimated fair values of our reporting units were higher than their carrying values and that the performance of a quantitative impairment test was not
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required. We performed a quantitative assessment in 2021 for goodwill in our Sky segment and the estimated fair value of the reporting unit was higher
than the carrying value. Assets and liabilities resulting from a business combination are initially recorded at fair value and the risk of goodwill impairment
is reduced as the value of the businesses in a reporting unit increases and as the carrying value of the reporting unit decreases due to the amortization of the
historical cost of acquired long-lived assets over time. Given that the goodwill in our Sky segment resulted from our acquisition of Sky in the fourth quarter
of 2018, the fair value is in close proximity to the carrying value of the Sky reporting unit.
Changes in market conditions, laws and regulations, and key assumptions made in future quantitative assessments, including expected cash flows,
competitive factors and discount rates, could negatively impact the results of future impairment testing and could result in the recognition of an impairment
charge.
Cable Franchise Rights
Our cable franchise rights assets result 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 additional 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 6,500 franchise areas in the United States.
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 that limit the period over which these rights will contribute to our cash flows. Accordingly, we do not amortize our cable franchise rights.
For purposes of 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.
When performing a quantitative assessment, we estimate the fair values of our cable franchise rights primarily based on a discounted cash flow analysis
that involves significant judgment, including the estimate of future cash flows and the selection of discount rates. When analyzing the fair values indicated
under the discounted cash flow models, we also consider multiples of Adjusted EBITDA generated by the underlying assets, current market transactions
and profitability information.
In 2021, we performed a qualitative assessment of our cable franchise rights. At the time of our previous quantitative assessment in 2018, the estimated fair
values of our franchise rights substantially exceeded their carrying values. We also considered various factors that would affect the estimated fair values of
our cable franchise rights in our qualitative assessment, including changes in our projected future cash flows associated with our Cable Communications
segment; recent market transactions and overall macroeconomic conditions, including the effects of COVID-19; discount rates; and changes in our market
capitalization. Based on this assessment, we concluded that it was more likely than not that the estimated fair values of our cable franchise rights were
higher than the carrying values and that the performance of a quantitative impairment test was not required.
Changes in market conditions, laws and regulations and key assumptions made in future quantitative assessments, including expected cash flows,
competitive factors and discount rates, could negatively impact the results of future impairment testing and could result in the recognition of an impairment
charge.
Film and Television Content
We capitalize costs for owned film and television content, including direct costs, production overhead, print costs, development costs and interest, as well
as acquired libraries. We have determined that the predominant monetization strategy for the substantial majority of our content is on an individual basis.
Amortization for owned content predominantly monetized on an individual basis and accrued costs associated with participations and residuals payments
are recorded using the individual film forecast computation method, which recognizes the costs in the same ratio as the associated ultimate revenue.
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 distribution strategy and 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 from content licensing across multiple platforms and home entertainment sales,
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
59
Comcast 2021 Annual Report on Form 10-K
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ultimate revenue is whether the series can be successfully licensed beyond its initial license window. Initial estimates of ultimate revenue are limited to the
amount of revenue attributed to the initial license window. Once it is determined that a television series or other owned television programming can be
licensed beyond the initial license window, revenue estimates for these additional windows or platforms, such as U.S. and international syndication, home
entertainment, and other distribution platforms, are included in ultimate revenue. 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.
We capitalize the costs of licensed content when the license period begins, the content is made available for use and the costs of the licenses are known.
Licensed content is amortized as the associated programs are broadcast. We recognize the costs of multiyear, live-event sports rights as the rights are
utilized over the contract term based on estimated relative value. Estimated relative value is generally based on terms of the contract and the nature of and
potential revenue generation of the deliverables within the contract.
Capitalized film and television costs are subject to impairment testing when certain triggering events are identified. The substantial majority of our owned
content is evaluated for impairment on an individual title basis. Licensed content that is not part of a film group is tested for impairment primarily on a
channel, network or platform basis, with the exception of our broadcast networks and owned local broadcast television stations, which are tested on a
daypart basis. Sports rights are accounted for as executory contracts and are not subject to impairment. When performing an impairment assessment, we
estimate fair value primarily based on a discounted cash flow analysis that involves significant judgment, including market participant estimates of future
cash flows, which are supported by internal forecasts. Adjustments to capitalized film and television costs were not material in any of the periods
presented.
Item 7A: Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk Management
We maintain a mix of fixed-rate and variable-rate debt and we are exposed to the market risk of adverse changes in interest rates. In order to manage the
cost and volatility relating to the interest cost of our outstanding debt, we enter into various interest rate risk management derivative transactions in
accordance with our policy.
We monitor our exposure to the risk of adverse changes in interest rates through the use of techniques that include market valuation and sensitivity
analyses. We do not engage in any speculative or leveraged derivative transactions.
Our interest rate derivative financial instruments, which primarily include cross-currency swaps and interest rate swaps, represent an integral part of our
interest rate risk management program.
The effect of our interest rate derivative financial instruments to our consolidated interest expense was a decrease of $2 million in 2021, a decrease of $9
million in 2020, and a decrease of $49 million in 2019. Interest rate derivative financial instruments may have a significant effect on consolidated interest
expense in the future.
The table below summarizes by contractual year of maturity the principal amount of our debt, notional amount of our interest rate instruments, effective
rates, and fair values subject to interest rate risk maintained by us as of December 31, 2021. We estimate interest rates on variable rate debt and swaps using
the relevant average implied forward rates through the year of maturity based on the yield curve in effect on December 31, 2021, plus the applicable
borrowing margin.
(in millions)
Debt
Fixed-rate debt
Average interest rate
(a)
Variable-rate debt
Average interest rate
Fixed-to-Variable Swaps
Notional amount
(b)
Average pay rate
Average receive rate
2022
2023
2024
2025
2026
Thereafter
Total
Estimated
Fair Value as of
December 31, 2021
$
$
$
$
$
$
2,135
6.3 %
—
— %
—
— %
— %
$
$
$
1,056
2.0 %
—
— %
—
— %
— %
$
$
$
3,824
3.0 %
500
1.7 %
—
— %
— %
$
$
$
6,136
3.4 %
—
— %
—
— %
— %
$
$
5,232
2.4 %
—
— %
78,771
3.5 %
3,148
4.4 %
$
$
97,155
3.5 %
3,648
4.0 %
$
$
105,613
3,654
1,250
$
1,250
$
2,500
$
(24)
3.5 %
3.3 %
4.1 %
4.0 %
3.8 %
3.7 %
Comcast 2021 Annual Report on Form 10-K
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(a) Includes the effects of our fixed-to-fixed cross-currency swaps, which are discussed further below under the heading “Foreign Exchange Risk Management.”
(b) Notional amounts are used to calculate the interest to be paid or received and do not represent our exposure to credit loss. The estimated fair value approximates the amount of payments to be
made or proceeds to be received to settle the outstanding contracts, excluding accrued interest.
Additionally, we have a $5.2 billion variable rate term loan presented separately as a collateralized obligation that will mature in March 2024. We entered
into a series of variable-to-fixed interest rate swaps on $5.2 billion of this term loan with an average pay rate of 1.1% and an average receive rate of 0.9%
estimated using December 31, 2021 implied forward rates through the year of maturity. As of December 31, 2021 and 2020, the estimated fair value of the
term loan was $5.2 billion for each period, and the estimated fair value of the related interest rate swaps was a net liability of $29 million and a net liability
of $155 million, respectively.
See Notes 1, 6 and 8 for additional information.
Foreign Exchange Risk Management
We have significant operations in a number of countries outside the United States through Sky and NBCUniversal, and certain of our operations are
conducted in foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. These changes could adversely affect the U.S. dollar
equivalent value of our non-U.S. dollar operations, which could negatively affect our business, financial condition and results of operations in a given
period or in specific territories.
As part of our overall strategy to manage the level of exposure to the risk of foreign exchange rate fluctuations, we enter into derivative financial
instruments related to a significant portion of our foreign currency exposure for transactions denominated in currencies other than the functional currency
of the transacting entity. We enter into foreign currency forward contracts that change in value as currency exchange rates fluctuate to protect the functional
currency equivalent value of non-functional currency denominated assets, liabilities, commitments, and forecasted non-functional currency revenue and
expenses. In accordance with our policy, we hedge forecasted foreign currency transactions for periods generally not to exceed 30 months. As of
December 31, 2021 and 2020, we had foreign exchange contracts on transactions other than debt with a total notional value of $8.0 billion and $8.1 billion,
respectively. As of December 31, 2021 and 2020, the aggregate estimated fair value of these foreign exchange contracts was not material.
We use cross-currency swaps as cash flow hedges for certain foreign currency denominated debt obligations with obligations denominated in a currency
other than the functional currency of the issuer. Cross-currency swaps effectively convert foreign currency denominated debt to debt denominated in the
functional currency, which hedge currency exchange risks associated with foreign currency denominated cash flows such as interest and principal debt
repayments. As of December 31, 2021 and 2020, we had cross-currency swaps designated as cash flow hedges on $1.6 billion and $1.7 billion of our
foreign currency denominated debt, respectively. As of December 31, 2021 and 2020, the aggregate estimated fair value of cross-currency swaps
designated as cash flow hedges was a net liability of $53 million and a net liability of $45 million, respectively.
We are also exposed to foreign exchange risk on the consolidation of our foreign operations. We have foreign currency denominated debt and cross-
currency swaps designated as hedges of our net investments in certain of these subsidiaries. Transaction gains and losses resulting from currency
movements on debt and changes in the fair value of cross-currency swaps designated as net investment hedges are recorded within the currency translation
adjustments component of accumulated other comprehensive income (loss). As of December 31, 2021 and 2020, the amount of our net investment in
foreign subsidiaries hedged using foreign currency denominated debt was $8.2 billion and $10.3 billion, respectively, and the amount of our net investment
in foreign subsidiaries hedged using cross-currency swaps was $3.6 billion and $4.0 billion, respectively. As of December 31, 2021 and 2020, the aggregate
estimated fair value of these cross-currency swaps was a net liability of $104 million and $376 million, respectively. The amount of pre-tax gains (losses)
related to net investment hedges recognized in the cumulative translation adjustments component of other comprehensive income (loss) were gains of $760
million in 2021, losses of $686 million in 2020 and gains of $343 million in 2019.
We have analyzed our foreign currency exposure related to our foreign operations as of December 31, 2021, including our hedging contracts, to identify
assets and liabilities denominated in a currency other than their functional currency. For those assets and liabilities, we then evaluated the effect of a
hypothetical 10% shift in currency exchange rates, inclusive of the effects of derivatives. The results of our analysis indicate that such a shift in exchange
rates would not have a material impact on our 2021 net income attributable to Comcast Corporation.
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Counterparty Credit Risk Management
We manage the credit risks associated with our derivative financial instruments through diversification and the evaluation and monitoring of the
creditworthiness of counterparties. Although we may be exposed to losses in the event of nonperformance by counterparties, we do not expect such losses,
if any, to be significant. We have agreements with certain counterparties that include collateral provisions. These provisions require a party with an
aggregate unrealized loss position in excess of certain thresholds to post cash collateral for the amount in excess of the threshold. The threshold levels in
our collateral agreements are based on our and the counterparty’s credit ratings. As of December 31, 2021 and 2020, we were not required to post collateral
under the terms of these agreements, nor did we hold any collateral under the terms of these agreements.
Comcast 2021 Annual Report on Form 10-K
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Item 8: Comcast Corporation Financial Statements and Supplementary Data
Index
Report of Management
Report of Independent Registered Public Accounting Firm
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Notes to Consolidated Financial Statements
Page
64
65
67
68
69
70
71
72
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Report of Management
Management’s Report on Financial Statements
Our management is responsible for the preparation, integrity and fair presentation of information in the consolidated financial statements, including
estimates and judgments. The consolidated financial statements presented in this report have been prepared in accordance with accounting principles
generally accepted in the United States. Our management believes the consolidated financial statements and other financial information included in this
report fairly present, in all material respects, the financial condition, results of operations and cash flows as of and for the periods presented in this report.
The consolidated financial statements have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their
report, which is included herein.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our system of internal
control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States.
Our internal control over financial reporting includes those policies and procedures that:
•
•
•
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets.
Provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with
accounting principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and our directors.
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have
a material effect on the financial statements.
Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or
detect misstatements. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time. Our system
contains self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.
Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
our management concluded that the system of internal control over financial reporting was effective as of December 31, 2021. The effectiveness of internal
control over financial reporting has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report,
which is included herein.
Audit Committee Oversight
The Audit Committee of the Board of Directors, which is comprised solely of independent directors, has oversight responsibility for our financial reporting
process and the audits of the consolidated financial statements and internal control over financial reporting. The Audit Committee meets regularly with
management and with our internal auditors and independent registered public accounting firm (collectively, the “auditors”) to review matters related to the
quality and integrity of our financial reporting, internal control over financial reporting (including compliance matters related to our Code of Conduct), and
the nature, extent, and results of internal and external audits. Our auditors have full and free access and report directly to the Audit Committee. The Audit
Committee recommended, and the Board of Directors approved, that the audited consolidated financial statements be included in this Form 10-K.
/s/ BRIAN L. ROBERTS
Brian L. Roberts
Chairman and
Chief Executive Officer
/s/ MICHAEL J. CAVANAGH
/s/ DANIEL C. MURDOCK
Michael J. Cavanagh
Chief Financial Officer
Daniel C. Murdock
Executive Vice President, Chief
Accounting Officer and Controller
Comcast 2021 Annual Report on Form 10-K
64
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Comcast Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Comcast Corporation and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the
related consolidated statements of income, comprehensive income, cash flows, and changes in equity for each of the three years in the period ended December 31,
2021, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as
of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and
2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting
principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.
Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to
be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Sky Goodwill - Refer to Note 10 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the Sky reporting unit to its carrying value.
The Company used the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to
discount rates and forecasts of expected cash flows. Changes in these assumptions could have a significant impact on
65
Comcast 2021 Annual Report on Form 10-K
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Report of Independent Registered Public Accounting Firm
either the fair value, the amount of any goodwill impairment charge, or both. The goodwill balance was $70,189 million as of December 31, 2021, of which
$29,196 million was allocated to the Sky reporting unit. The fair value of the Sky reporting unit remains in close proximity to its carrying value as of the
measurement date.
We identified goodwill for Sky as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Sky reporting
unit. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing
audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the selection of the discount rate and forecasts of future
expected cash flows for the Sky reporting unit.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the discount rate and forecasts of future expected cash flows used by management to estimate the fair value of Sky included the
following, among others:
• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of
Sky, such as controls related to management’s selection of the discount rate and forecasts of future expected cash flows.
• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate, including testing
the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range of
independent estimates and comparing those to the discount rate selected by management.
• We evaluated management’s ability to accurately forecast future revenue and cash flows by comparing actual results to (1) historical results, including
management’s forecasting accuracy, (2) projections utilized in the prior year goodwill impairment analysis, (3) internal communications to management,
and (4) forecasted information included in Company press releases as well as in analyst and industry reports of the Company and companies in its peer
group.
Film and Television Costs - Refer to Note 4 to the financial statements
Critical Audit Matter Description
The Company amortizes capitalized film and television production costs that are predominantly monetized on an individual basis using the individual film forecast
computation method, which amortizes such costs using the ratio of current period revenue to the total remaining revenue forecasted to be realized, also known as
“ultimate revenue.” The estimates of ultimate revenue have a significant impact on the rate at which capitalized costs are amortized.
The determination of ultimate revenue for capitalized film and television costs requires the Company to make significant estimates of future revenue based on the
distribution strategy and historical performance of similar content, as well as factors unique to the content itself. Given the judgments necessary to estimate ultimate
revenue, auditing these estimates involved especially subjective judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of ultimate revenue for individual film or television productions included the following, among others:
• We tested the effectiveness of management’s controls over its amortization of film and television costs, including controls over forecasts of ultimate
revenue.
• We tested management’s selection of inputs and assumptions, including considering the historical performance of similar titles, expected distribution
platforms, factors unique to the individual film or television production, and third-party projections. In addition, we evaluated the historical accuracy of
management’s forecast of future revenues by comparing actual results to management’s historical estimates of ultimate revenue.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 2, 2022
We have served as the Company’s auditor since 1963.
Comcast 2021 Annual Report on Form 10-K
66
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Comcast Corporation
Consolidated Statement of Income
Year ended December 31 (in millions, except per share data)
Revenue
Costs and Expenses:
Programming and production
Other operating and administrative
Advertising, marketing and promotion
Depreciation
Amortization
Total costs and expenses
Operating income
Interest expense
Investment and other income (loss), net
Income before income taxes
Income tax expense
Net income
Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary
preferred stock
Net income attributable to Comcast Corporation
Basic earnings per common share attributable to Comcast Corporation shareholders
Diluted earnings per common share attributable to Comcast Corporation shareholders
$
$
$
See accompanying notes to consolidated financial statements.
$
2021
116,385
$
2020
103,564
$
2019
108,942
38,450
35,619
7,695
8,628
5,176
95,568
20,817
(4,281)
2,557
19,093
(5,259)
13,833
(325)
14,159
3.09
3.04
$
$
$
33,121
33,109
6,741
8,320
4,780
86,071
17,493
(4,588)
1,160
14,065
(3,364)
10,701
167
10,534
2.30
2.28
$
$
$
34,440
32,807
7,617
8,663
4,290
87,817
21,125
(4,567)
438
16,996
(3,673)
13,323
266
13,057
2.87
2.83
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Comcast 2021 Annual Report on Form 10-K
Table of Contents
Comcast Corporation
Consolidated Statement of Comprehensive Income
Year ended December 31 (in millions)
Net income
Currency translation adjustments, net of deferred taxes of $76, $(331) and $(66)
Cash flow hedges:
Deferred gains (losses), net of deferred taxes of $(36), $26 and $(4)
Realized (gains) losses reclassified to net income, net of deferred taxes of $(4), $31 and
$(10)
Employee benefit obligations and other, net of deferred taxes of $(16), $20 and $16
Comprehensive income
Less: Net income (loss) attributable to noncontrolling interests and redeemable subsidiary
preferred stock
Less: Other comprehensive income (loss) attributable to noncontrolling interests
Comprehensive income attributable to Comcast Corporation
$
$
2021
13,833
(664)
229
(16)
54
13,436
(325)
7
13,755
$
$
2020
10,701
1,213
$
(101)
(147)
(68)
11,598
167
60
11,371
$
2019
13,323
1,375
19
65
(57)
14,725
266
(13)
14,472
See accompanying notes to consolidated financial statements.
Comcast 2021 Annual Report on Form 10-K
68
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Comcast Corporation
Consolidated Statement of Cash Flows
Year ended December 31 (in millions)
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
2021
2020
2019
$
13,833
$
10,701
$
13,323
Depreciation and amortization
Share-based compensation
Noncash interest expense (income), net
Net (gain) loss on investment activity and other
Deferred income taxes
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Current and noncurrent receivables, net
Film and television costs, net
Accounts payable and accrued expenses related to trade creditors
Other operating assets and liabilities
Net cash provided by operating activities
Investing Activities
Capital expenditures
Cash paid for intangible assets
Construction of Universal Beijing Resort
Purchase of spectrum
Acquisitions, net of cash acquired
Proceeds from sales of businesses and investments
Purchases of investments
Other
Net cash provided by (used in) investing activities
Financing Activities
Proceeds from (repayments of) short-term borrowings, net
Proceeds from borrowings
Proceeds from collateralized obligation
Repurchases and repayments of debt
Repurchases of common stock under repurchase program and employee plans
Dividends paid
Other
Net cash provided by (used in) financing activities
Impact of foreign currency on cash, cash equivalents and restricted cash
Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year
See accompanying notes to consolidated financial statements.
$
13,804
1,315
482
(1,311)
1,892
(1,335)
(680)
765
382
29,146
(9,174)
(2,883)
(976)
—
(1,374)
684
(174)
451
(13,446)
—
2,628
—
(11,498)
(4,672)
(4,532)
(544)
(18,618)
(71)
(2,989)
11,768
8,778
$
13,100
1,193
697
(970)
(550)
(20)
(244)
(266)
1,096
24,737
(9,179)
(2,455)
(1,498)
(459)
(233)
2,339
(812)
250
(12,047)
—
18,644
—
(18,777)
(534)
(4,140)
(1,706)
(6,513)
2
6,179
5,589
11,768
$
12,953
1,021
417
(20)
563
(57)
(929)
(347)
(1,227)
25,697
(9,953)
(2,475)
(1,116)
—
(370)
886
(1,899)
86
(14,841)
(1,288)
5,479
5,175
(14,354)
(504)
(3,735)
46
(9,181)
5
1,680
3,909
5,589
69
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Comcast Corporation
Consolidated Balance Sheet
December 31 (in millions, except share data)
Assets
Current Assets:
Cash and cash equivalents
Receivables, net
Other current assets
Total current assets
Film and television costs
Investments
Investment securing collateralized obligation
Property and equipment, net
Goodwill
Franchise rights
Other intangible assets, net
Other noncurrent assets, net
Total assets
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses related to trade creditors
Accrued participations and residuals
Deferred revenue
Accrued expenses and other current liabilities
Current portion of long-term debt
Total current liabilities
Long-term debt, less current portion
Collateralized obligation
Deferred income taxes
Other noncurrent liabilities
Commitments and contingencies
Redeemable noncontrolling interests and redeemable subsidiary preferred stock
Equity:
Preferred stock—authorized, 20,000,000 shares; issued, zero
Class A common stock, $0.01 par value—authorized, 7,500,000,000 shares; issued, 5,396,576,978 and
5,444,002,825; outstanding, 4,523,785,950 and 4,571,211,797
Class B common stock, $0.01 par value—authorized, 75,000,000 shares; issued and outstanding, 9,444,375
Additional paid-in capital
Retained earnings
Treasury stock, 872,791,028 Class A common shares
Accumulated other comprehensive income (loss)
Total Comcast Corporation shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to consolidated financial statements.
Comcast 2021 Annual Report on Form 10-K
70
2021
2020
$
$
$
$
8,711
12,008
4,088
24,807
12,806
8,082
605
54,047
70,189
59,365
33,580
12,424
275,905
12,455
1,822
3,040
9,899
2,132
29,348
92,718
5,170
30,041
20,620
519
—
54
—
40,173
61,902
(7,517)
1,480
96,092
1,398
97,490
275,905
$
$
$
$
11,740
11,466
3,535
26,741
13,340
7,820
447
51,995
70,669
59,365
35,389
8,103
273,869
11,364
1,706
2,963
9,617
3,146
28,796
100,614
5,168
28,051
18,222
1,280
—
54
—
39,464
56,438
(7,517)
1,884
90,323
1,415
91,738
273,869
Table of Contents
Comcast Corporation
Consolidated Statement of Changes in Equity
(in millions, except per share data)
Redeemable Noncontrolling Interests and Redeemable Subsidiary Preferred Stock
Balance, beginning of year
Redemption of subsidiary preferred stock
Contributions from (distributions to) noncontrolling interests, net
Other
Net income (loss)
Balance, end of year
Class A common stock
Balance, beginning of year
Repurchases of common stock under repurchase program and employee plans
Balance, end of year
Class B common stock
Balance, beginning and end of year
Additional Paid-In Capital
Balance, beginning of year
Stock compensation plans
Repurchases of common stock under repurchase program and employee plans
Employee stock purchase plans
Other
Balance, end of year
Retained Earnings
Balance, beginning of year
Cumulative effects of adoption of accounting standards
Repurchases of common stock under repurchase program and employee plans
Dividends declared
Other
Net income (loss)
Balance, end of year
Treasury Stock at Cost
Balance, beginning and end of year
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of year
Other comprehensive income (loss)
Balance, end of year
Noncontrolling Interests
Balance, beginning of year
Other comprehensive income (loss)
Contributions from (distributions to) noncontrolling interests, net
Other
Net income (loss)
Balance, end of year
Total equity
Cash dividends declared per common share
See accompanying notes to consolidated financial statements.
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2021
1,280
(725)
(77)
(10)
51
519
54
—
54
—
39,464
1,037
(596)
269
(2)
40,173
56,438
—
(4,088)
(4,613)
6
14,159
61,902
(7,517)
1,884
(404)
1,480
1,415
7
353
—
(377)
1,398
97,490
1.00
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2020
1,372
—
(51)
(190)
149
1,280
54
—
54
—
38,447
920
(143)
255
(15)
39,464
50,695
(124)
(407)
(4,250)
(10)
10,534
56,438
(7,517)
1,047
837
1,884
1,148
60
192
(3)
18
1,415
91,738
0.92
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2019
1,316
—
(62)
(38)
156
1,372
54
—
54
—
37,461
783
(34)
222
15
38,447
41,983
—
(485)
(3,860)
—
13,057
50,695
(7,517)
(368)
1,415
1,047
889
(13)
176
(14)
110
1,148
83,874
0.84
71
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Comcast Corporation
Notes to Consolidated Financial Statements
Note 1: Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include all entities in which we have a controlling voting interest and variable interest entities
(“VIEs”) required to be consolidated, including Universal Beijing Resort (see Note 7).
We translate assets and liabilities of our foreign operations where the functional currency is the local currency into U.S. dollars at the exchange rate as of
the balance sheet date and translate revenue and expenses using average monthly exchange rates. The related translation adjustments are recorded as a
component of accumulated other comprehensive income (loss) in our consolidated balance sheet. Any foreign currency transaction gains or losses are
included in our consolidated statement of income in investment and other income (loss), net. For disclosures containing future amounts where the
functional currency is the local currency, we translate the amounts into U.S. dollars at the exchange rates as of the balance sheet date.
Reclassifications
Reclassifications have been made to our notes to consolidated financial statements for the prior year period to conform to classifications used in 2021. See
Note 2 for a discussion of the changes in our presentation of segment operating results.
Accounting Policies
Our consolidated financial statements are prepared in accordance with GAAP, which require us to select accounting policies, including in certain cases
industry-specific policies, and make estimates that affect the reported amount of assets, liabilities, revenue and expenses, and the related disclosure of
contingent assets and contingent liabilities. Actual results could differ from these estimates. The following accounting policies are specific to the industries
in which we operate:
•
•
capitalization and amortization of film and television costs (see Note 4)
costs for connecting customers to our cable systems (see Note 9)
Information on other accounting policies and methods that we use in the preparation of our consolidated financial statements are included, where
applicable, in their respective footnotes that follow. The collateralized obligation related to our investment in Hulu is discussed in Note 8 and our other
long-term debt is discussed in Note 6. Below is a discussion of accounting policies and methods used in our consolidated financial statements that are not
presented within other footnotes.
Advertising Expenses
Advertising costs are expensed as incurred.
Derivative Financial Instruments
We use derivative financial instruments to manage our exposure to the risks associated with fluctuations in interest rates, foreign exchange rates and equity
prices. Our objective is to manage the financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures
with gains and losses on the derivatives used to economically hedge them.
Our derivative financial instruments are recorded in our consolidated balance sheet at fair value. We designate certain derivative instruments as cash flow
hedges of forecasted transactions, including foreign currency denominated cash flows associated with non-functional currency debt and non-functional
currency revenue and expenses. Changes in the fair value of derivative instruments accounted for as cash flow hedges are recorded as a component of
accumulated other comprehensive income (loss) until the hedged items affect earnings. For derivatives not designated as cash flow hedges, changes in fair
value are recognized in earnings.
Refer to Note 6 for further information on certain derivative instruments related to debt. The impact of our remaining derivative financial instruments was
not material to our consolidated financial statements in any of the periods presented.
Fair Value Measurements
The accounting guidance related to fair value measurements establishes a hierarchy based on the types of inputs used for the various valuation techniques.
The levels of the hierarchy are described below.
•
•
Level 1: Values are determined using quoted market prices for identical financial instruments in an active market.
Level 2: Values are determined using quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in
markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active
markets.
Comcast 2021 Annual Report on Form 10-K
72
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Comcast Corporation
•
Level 3: Values are determined using 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.
We use the three tier fair value hierarchy to measure the fair value of certain financial instruments on a recurring basis, such as for investments (see Note
8); on a non-recurring basis, such as for acquisitions and impairment testing; and for disclosure purposes, such as for long-term debt (see Note 6). Our
assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation and classification within
the fair value hierarchy.
Note 2: Segment Information
We are a global media and technology company with three primary businesses: Comcast Cable, NBCUniversal and Sky. In 2021, we changed our
presentation of segment operating results. We now present our operations for (1) Comcast Cable in one reportable business segment, referred to as Cable
Communications; (2) NBCUniversal in three reportable business segments: Media, Studios and Theme Parks; and (3) Sky in one reportable business
segment. The changes reflect a reorganized operating structure in NBCUniversal’s television and streaming businesses and primarily include: (i) the
combination of NBCUniversal’s television networks (previously reported in Cable Networks and Broadcast Television) with the operations of Peacock
(previously reported in Corporate and Other) in the Media segment, and (ii) the presentation of NBCUniversal’s television studio production operations
(previously reported in Cable Networks and Broadcast Television) with the studio operations of Filmed Entertainment in the Studios segment. Prior periods
have been adjusted to reflect this presentation. See Note 3 for a description of the various products and services within each reportable segment.
Our other business interests consist primarily of the operations of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena
in Philadelphia, Pennsylvania, and other business initiatives including our new Sky Glass and XClass TV smart television product launches.
Our financial data by reportable segment is presented in the tables below. We do not present a measure of total assets for our reportable business segments
as this information is not used by management to allocate resources and capital.
(in millions)
2021
Cable Communications
NBCUniversal
Media
Studios
Theme Parks
Headquarters and Other
Eliminations
NBCUniversal
Sky
Corporate and Other
Eliminations
Comcast Consolidated
(a)
(a)
Revenue
(a)
Adjusted EBITDA
(b)
Depreciation and
Amortization
Capital
Expenditures
Cash Paid for
Intangible
Assets
$
64,328 $
28,097 $
7,811 $
6,930 $
1,438
22,780
9,449
5,051
87
(3,048)
34,319
20,285
461
(3,008)
116,385 $
$
4,569
884
1,267
(840)
(205)
5,675
2,359
(1,358)
(65)
34,708 $
1,030
53
906
478
—
2,466
3,379
147
—
13,804 $
100
5
614
366
—
1,086
948
210
—
9,174 $
163
11
43
143
—
360
814
272
—
2,883
73
Comcast 2021 Annual Report on Form 10-K
Table of Contents
Comcast Corporation
(in millions)
2020
Cable Communications
NBCUniversal
Media
Studios
Theme Parks
Headquarters and Other
Eliminations
NBCUniversal
Sky
Corporate and Other
Eliminations
Comcast Consolidated
(a)
(a)
(in millions)
2019
Cable Communications
NBCUniversal
Media
Studios
Theme Parks
Headquarters and Other
Eliminations
NBCUniversal
Sky
Corporate and Other
Eliminations
Comcast Consolidated
(a)
(a)
Revenue
(a)
Adjusted EBITDA
(b)
Depreciation and
Amortization
Capital
Expenditures
Cash Paid for
Intangible
Assets
$
60,051 $
25,270 $
7,753 $
6,605 $
1,333
18,936
8,134
2,094
53
(2,006)
27,211
18,594
248
(2,540)
103,564 $
5,574
1,041
(477)
(563)
(220)
5,355
1,954
(1,785)
32
993
67
772
475
—
2,307
3,034
6
—
30,826 $
13,100 $
122
12
1,171
186
—
1,491
959
124
—
9,179 $
176
5
56
136
—
373
741
8
—
2,455
Revenue
(a)
Adjusted EBITDA
(b)
Depreciation and
Amortization
Capital
Expenditures
Cash Paid for
Intangible
Assets
58,082 $
23,266 $
7,994 $
6,909 $
1,426
19,947
9,352
6,213
31
(1,585)
33,958
19,219
333
(2,650)
108,942 $
5,834
1,058
2,498
(690)
11
8,711
3,099
(820)
2
924
49
697
459
—
2,129
2,699
131
—
34,258 $
12,953 $
204
19
1,605
244
—
2,072
768
204
—
9,953 $
101
10
60
166
—
337
707
5
—
2,475
$
$
$
Comcast 2021 Annual Report on Form 10-K
74
Table of Contents
Comcast Corporation
(a)
Included in Eliminations are transactions that our segments enter into with one another. Our segments generally report transactions with one another as if they were stand-alone businesses in
accordance with GAAP, and these transactions are eliminated in consolidation. When multiple segments enter into transactions to provide products and services to third parties, revenue is
generally allocated to our segments based on relative value. The most significant transactions between our segments include distribution revenue in Media for fees received from Cable
Communications for the sale of cable network programming and under retransmission consent agreements; content licensing revenue in Studios for licenses of owned content to Media and
Sky; and advertising revenue in Media and Cable Communications. Revenue for licenses of content from Studios to Media and Sky is generally recognized at a point in time, consistent with
the recognition of transactions with third parties, when the content is delivered and made available for use. The costs of these licenses in Media and Sky are recognized as the content is used
over the license period. The difference in timing of recognition between segments results in an Adjusted EBITDA impact in eliminations, as the profits (losses) on these transactions are
deferred in our consolidated results and recognized as the content is used over the license period. Under the previous segment structure, revenue for licenses of content between our previous
NBCUniversal segments was recognized over time to correspond with the amortization of the costs of licensed content over the license period.
A summary of revenue for each of our segments resulting from transactions with other segments and eliminated in consolidation is presented in the table below.
Year ended December 31 (in millions)
Cable Communications
NBCUniversal
Media
Studios
Theme Parks
Headquarters and Other
Sky
Corporate and Other
Total intersegment revenue
$
$
2021
244 $
2,330
3,186
2
68
32
193
6,055 $
2020
202 $
1,965
2,214
—
31
17
117
4,546 $
2019
162
2,202
1,727
—
1
21
121
4,235
(b) We use Adjusted EBITDA as the measure of profit or loss for our operating segments. From time to time we may report the impact of certain events, gains, losses or other charges related to
our operating segments (such as certain costs incurred in response to COVID-19, including severance charges), within Corporate and Other. Our reconciliation of the aggregate amount of
Adjusted EBITDA for our reportable segments to consolidated income before income taxes is presented in the table below.
Year ended December 31 (in millions)
Adjusted EBITDA
Adjustments
Depreciation
Amortization
Interest expense
Investment and other income (loss), net
Income before income taxes
2020
30,826 $
(233)
(8,320)
(4,780)
(4,588)
1,160
14,065 $
2021
34,708 $
(87)
(8,628)
(5,176)
(4,281)
2,557
19,093 $
2019
34,258
(180)
(8,663)
(4,290)
(4,567)
438
16,996
$
$
Adjustments represent the impacts of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA, including Sky transaction-related costs and costs related to our
investment portfolio. Adjustments for 2020 also include $177 million related to a legal settlement.
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Table of Contents
Comcast Corporation
Note 3: Revenue
Year ended December 31 (in millions)
Residential:
Broadband
Video
Voice
Wireless
Business services
Advertising
Other
Total Cable Communications
Advertising
Distribution
Other
Total Media
Content licensing
Theatrical
Home entertainment and other
Total Studios
Total Theme Parks
Headquarters and Other
Eliminations
Total NBCUniversal
(a)
Direct-to-consumer
Content
Advertising
Total Sky
Corporate and Other
Eliminations
Total revenue
(a)
$
2021
2020
2019
$
22,979
22,079
3,417
2,380
8,933
2,820
1,719
64,328
10,291
10,449
2,040
22,780
7,565
691
1,193
9,449
5,051
87
(3,048)
34,319
16,455
1,341
2,489
20,285
$
20,599
21,937
3,532
1,574
8,191
2,594
1,624
60,051
8,296
8,795
1,845
18,936
6,557
418
1,159
8,134
2,094
53
(2,006)
27,211
15,223
1,373
1,998
18,594
18,752
22,270
3,879
1,167
7,795
2,465
1,754
58,082
9,267
8,887
1,793
19,947
6,373
1,469
1,510
9,352
6,213
31
(1,585)
33,958
15,538
1,432
2,249
19,219
461
(3,008)
116,385
$
248
(2,540)
103,564
$
333
(2,650)
108,942
$
(a) Included in Eliminations are transactions that our segments enter into with one another. See Note 2 for a description of these transactions.
We operate primarily in the United States but also in select international markets. The table below summarizes our consolidated revenue from customers in
certain geographic locations.
Year ended December 31 (in millions)
United States
United Kingdom
Other
Total revenue
$
$
2021
90,926
13,999
11,460
116,385
$
$
2020
80,327
11,986
11,251
103,564
$
$
2019
82,952
12,501
13,489
108,942
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76
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Comcast Corporation
Cable Communications Segment
Revenue is generated from the sale of our broadband, video, voice, wireless and other services to residential customers in the United States under the
Xfinity brand, which we market individually and as bundled services at a discounted rate. We also provide these and other services to business customers
and sell advertising.
Residential
We recognize revenue as the services are provided on a monthly basis. Subscription rates and related charges vary according to the services and features
customers receive. Revenue from customers that purchase bundled services at a discounted rate is allocated between the separate services based on the
respective stand-alone selling prices. The stand-alone selling prices are determined based on the current prices at which we separately sell the services.
Significant judgment is used to determine performance obligations that should be accounted for separately and the allocation of revenue when services are
combined in a bundle. Customers are typically billed in advance and pay on a monthly basis. Installation fees are deferred and recognized as revenue over
the period of benefit to the customer, which is less than a year. While a portion of our customers are subject to contracts for their services, which are
typically 1 to 2 years in length, based on our evaluation of the terms of these contracts, we recognize revenue for these services on a basis that is consistent
with our customers that are not subject to contracts. Our services generally involve customer premise equipment, such as set-top boxes, cable modems and
wireless gateways. The timing and pattern of recognition for customer premise equipment revenue are consistent with those of our services. We recognize
revenue from the sale of wireless handsets at the point of sale. Sales commissions are expensed as incurred, as the related period of benefit is less than a
year. We also have arrangements to sell certain DTC streaming services to our customers. We have concluded we are generally the sales agent in these
arrangements and we record net commission revenue as earned, which is generally as customers are billed on a monthly basis, within broadband revenue.
Under the terms of cable franchise agreements, we are generally required to pay the cable franchising authority an amount based on gross video revenue.
We generally pass these and other similar fees through to our customers and classify these fees in the respective Cable Communications services revenue
with the corresponding costs included in other operating and administrative expenses.
Business Services
Revenue is generated from subscribers to a variety of our products and services which are offered to businesses. Our service offerings for small business
locations primarily include broadband services, as well as voice and video services, that are similar to those provided to residential customers, and include
certain other features specific to businesses. We also offer Ethernet network services that connect multiple locations and other services to meet the needs of
medium-sized customers and larger enterprises, and we provide cellular backhaul services to mobile network operators.
We recognize revenue as the services are provided on a monthly basis. Substantially all of our customers are initially under contracts, with terms typically
ranging from 2 years for small and medium-sized businesses to up to 5 years for larger enterprises. At any given time, the amount of future revenue to be
earned related to fixed pricing under existing agreements is equal to approximately half of our annual business services revenue, of which the substantial
majority will be recognized within 2 years. Customers with contracts may only discontinue service in accordance with the terms of their contracts. We
receive payments based on a billing schedule established in our contracts, which is typically on a monthly basis. Installation revenue and sales commissions
are generally deferred and recognized over the respective contract terms.
Advertising
Revenue is generated from the sale of advertising and technology, tools and solutions relating to advertising businesses. As part of distribution agreements
with cable networks, we generally receive an allocation of scheduled advertising time that we sell to local, regional and national advertisers. In most cases,
the available advertising units are sold by our sales force. We also represent the advertising sales efforts of other multichannel video providers in some
markets. Since we are acting as the principal in these arrangements, we record the advertising that is sold in advertising revenue and the fees paid to
multichannel video providers in other operating and administrative expenses. In some cases, we work with representation firms as an extension of our sales
force to sell a portion of the advertising units allocated to us and record the revenue net of agency commissions. In addition, we generate revenue from the
sale of advertising on digital platforms. We enter into advertising arrangements with customers and have determined that a contract exists once all terms
and conditions are agreed upon, typically when the number of advertising units is specifically identified and the timing of airing is scheduled.
Advertisements are generally aired or viewed within one year once all terms and conditions are agreed upon. Revenue from these arrangements is
recognized in the period in which advertisements are aired or viewed. Payment terms vary by contract, although terms generally require payment within 30
to 60 days from when advertisements are aired or viewed. In addition, we also provide technology, tools, data-driven services and marketplace solutions to
customers in the media industry to facilitate advertisers more effectively engaging with their target audiences. Revenue earned in this manner is recognized
when services are provided.
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Comcast Corporation
NBCUniversal Segments
Advertising
Media generates revenue from the sale of advertising on our television networks, Peacock and digital properties.
We enter into advertising arrangements with customers and have determined that a contract exists once all terms and conditions are agreed upon, typically
when the number of advertising units is specifically identified and the timing of airing is scheduled. Advertisements are generally aired or viewed within
one year once all terms are agreed upon. Revenue is recognized, net of agency commissions, in the period in which advertisements are aired or viewed and
payment occurs thereafter, with payment generally required within 30 days. In some instances, we guarantee audience ratings for the advertisements. To the
extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the revenue is deferred until the shortfall is settled, typically by
providing additional advertising units generally within one year of the original airing.
Distribution
Media generates revenue from the distribution of cable network programming in the United States and internationally to multichannel video providers,
including both traditional providers of linear programming and virtual providers who provide streaming services for linear programming. Media also
generates revenue from the fees received from multichannel video providers under NBC and Telemundo retransmission consent agreements and associated
fees from NBC-affiliated and Telemundo-affiliated local broadcast television stations. Additionally, Media generates revenue from monthly subscription
fees received from certain Peacock subscribers.
Monthly fees received under distribution agreements with multichannel video providers are generally under multiyear agreements and based on the number
of subscribers. Payment terms and conditions vary by contract type, although terms generally include payment within 60 days. These arrangements are
accounted for as licenses of functional intellectual property and revenue is recognized as programming is provided on a monthly basis.
Content Licensing
Studios generates revenue from the licensing of our owned film and television content in the United States and internationally to cable, broadcast and
premium networks and to DTC streaming service providers, as well as through video on demand and pay-per-view services. Media also generates revenue
from licensing of our owned television content, which is reported in other revenue. Our agreements generally include fixed pricing and span multiple years.
For example, following a film’s theatrical release, Studios may license the exhibition rights of a film to different customers over multiple successive
distribution windows.
We recognize revenue when the content is delivered and available for use by the licensee. When the term of an existing agreement is renewed or extended,
we recognize revenue at the later of when the content is available or when the renewal or extension period begins. Payment terms and conditions vary by
contract type, although payments are generally collected over the license term. The amount of future revenue to be earned related to fixed pricing under
existing third-party agreements at any given time equals approximately one half year to 1 year of annual Studios content licensing revenue, which is the
segment with the largest portion of this future revenue. The majority of this revenue will be recognized within 2 years. This amount may fluctuate from
period to period depending on the timing of the releases and the availability of content under existing agreements and may not represent the total revenue
expected to be recognized as it does not include revenue from future agreements or from variable pricing or optional purchases under existing agreements.
For our agreements that include variable pricing, such as pricing based on the number of subscribers to a DTC streaming service sold by our customers, we
generally recognize revenue as our customers sell to their subscribers.
Theatrical
Studios generates revenue from the worldwide theatrical release of produced and acquired films for exhibition in movie theaters. Our arrangements with
exhibitors generally entitle us to a percentage of ticket sales. We recognize revenue as the films are viewed and exhibited in theaters and payment generally
occurs within 30 days after exhibition.
Home Entertainment
Studios generates revenue from the sale of our produced and acquired films on DVDs and through digital distribution services. Media also generates
revenue from the sale of owned programming on DVDs and through digital distribution services, which is reported in other revenue. We generally
recognize revenue from DVD sales, net of estimated returns and customer incentives, on the date that DVDs are delivered to and made available for sale by
retailers. Payment terms generally include payment within 60 to 90 days from delivery to the retailer.
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Theme Parks
Theme Parks generates revenue primarily from guest spending at our Universal theme parks in Orlando, Florida; Hollywood, California; Osaka, Japan; and
Beijing, China. Guest spending includes ticket sales and in-park spending on food, beverages and merchandise. We also generate revenue from our
consumer products business. Additionally, we license the right to use the Universal Studios brand name and other intellectual property and provide other
services to third parties, including the party that owns and operates the Universal Studios Singapore theme park on Sentosa Island, Singapore. We
recognize revenue from ticket sales when the tickets are used, generally within a year from the date of purchase. For annual passes, we generally recognize
revenue on a straight-line basis over the period the pass is available to be used. We recognize revenue from in-park spending and consumer products at the
point of sale.
Sky Segment
Direct-to-Consumer
Revenue is generated from subscribers to our video services from both residential and business customers, primarily in the United Kingdom, Italy and
Germany. We also provide broadband, voice and wireless phone services in select countries. Generally, all of our residential customers are initially under
contracts, with terms typically ranging from rolling monthly to 18 months, depending on the product and territory, and may only discontinue service in
accordance with the terms of their contracts. Subscription rates and related charges vary according to the services and features customers receive and the
types of equipment they use, and customers are typically billed in advance on a monthly basis. Our video, broadband, voice and wireless services generally
may be purchased individually or in bundles. We recognize revenue from video, broadband, voice and wireless services as the services are provided on a
monthly basis. At any given time, the amount of future revenue to be earned related to existing agreements is equal to less than half of our annual direct-to-
consumer revenue, which generally will be recognized within 18 months.
Content
Revenue is generated from the distribution of our owned channels on third-party platforms and the licensing of owned and licensed content to third-party
video providers. See the NBCUniversal segment discussion of distribution and content licensing revenue above for accounting policies for these types of
arrangements.
Advertising
Revenue is generated from advertising across our owned television channels and where we represent the sales efforts of third-party channels. We also
generate revenue from the sale of advertising on digital platforms and various technology, tools and solutions relating to our advertising business. Revenue
is recognized when the advertising is aired or viewed. Since we are acting as the principal in the arrangements where we represent the sales efforts of third
parties, we record the advertising that is sold in advertising revenue and the fees paid to the third-party channels in other operating and administrative
expenses.
Consolidated Balance Sheet
The following table summarizes our accounts receivable:
December 31 (in millions)
Receivables, gross
Less: Allowance for doubtful accounts
Receivables, net
The following table presents changes in our allowance for doubtful accounts:
(in millions)
Beginning balance
Additions charged to costs and expenses and other accounts
Deductions from reserves
Ending balance
$
$
$
$
$
$
2021
807
316
465
658
2021
12,666
658
12,008
2020
419
912
524
807
$
$
$
$
2020
12,273
807
11,466
2019
352
769
702
419
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The following table summarizes our other balances that are not separately presented in our consolidated balance sheet that relate to the recognition of
revenue and collection of the related cash, as well as the deferred costs associated with our contracts with customers:
December 31 (in millions)
Noncurrent receivables, net (included in other noncurrent assets, net)
Contract acquisition and fulfillment costs (included in other noncurrent assets, net)
Noncurrent deferred revenue (included in other noncurrent liabilities)
Note 4: Programming and Production Costs
Year ended December 31 (in millions)
Video distribution programming
Film and television content:
Owned
(a)
Licensed, including sports rights
Other
Total programming and production costs
$
$
$
$
$
2021
1,632
1,094
695
2021
13,550
8,957
14,733
1,210
38,450
$
$
$
$
$
2020
1,091
1,060
750
2020
12,684
7,973
11,264
1,200
33,121
(a) Amount includes amortization of owned content of $7.3 billion and $6.6 billion for the year ended December 31, 2021 and 2020, respectively, as well as participations and residuals expenses.
Video Distribution Programming Expenses
We incur programming expenses related to the license of the rights to distribute the third-party programmed channels, platforms and related content
included in video services we sell to end consumers. Programming is generally acquired under multiyear distribution agreements, with fees typically based
on the number of customers that receive the programming and the extent of distribution. Programming distribution arrangements are accounted for as
executory contracts with expenses generally recognized based on the rates in the agreements and the arrangements are not subject to impairment.
Film and Television Content
We incur costs related to the production of owned content and the license of the rights to use content owned by third parties and sports rights on our owned
networks and platforms, which are described as owned and licensed content, respectively. We have determined that the predominant monetization strategy
for the substantial majority of our content is on an individual basis.
Capitalized Film and Television Costs
December 31 (in millions)
Owned:
Released, less amortization
Completed, not released
In production and in development
Licensed, including sports advances
Film and television costs
2021
2020
3,726
536
2,732
6,994
5,811
12,806
$
$
3,815
139
2,755
6,709
6,631
13,340
$
$
The table below summarizes estimated future amortization expense for the capitalized film and television costs recorded in our consolidated balance sheet
as of December 31, 2021.
(in millions)
Completed, not released:
2022
Released and licensed content:
2022
2023
2024
Owned
Licensed
345
1,799
700
387
$
$
$
3,649
902
563
$
$
$
$
We have future minimum commitments for sports rights and licensed content that are not recognized in our consolidated balance sheet as of December 31,
2021 totaling $59.5 billion and $5.5 billion, respectively.
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Capitalization and Recognition of Film and Television Content
We capitalize costs for owned film and television content, including direct costs, production overhead, print costs, development costs and interest, as well
as acquired libraries. Amortization for owned content predominantly monetized on an individual basis and accrued costs associated with participations and
residuals payments are recorded using the individual film forecast computation method, which recognizes the costs in the same ratio as the associated
ultimate revenue. Estimates of ultimate revenue and total costs are based on anticipated release patterns and distribution strategies, public acceptance and
historical results for similar productions. Amortization for content predominantly monetized with other owned or licensed content is recorded based on
estimated usage. In determining the method of amortization and estimated life of an acquired film or television library, we generally use the method and the
life that most closely follow the undiscounted cash flows over the estimated life of the asset. We do not capitalize costs related to the distribution of a film
in movie theaters or the licensing or sale of a film or television production, which primarily include costs associated with marketing and distribution.
We may enter into cofinancing arrangements with third parties to jointly finance or distribute certain of our film productions. Cofinancing arrangements
can take various forms, but in most cases involve the grant of an economic interest in a film to an investor who owns an undivided copyright interest in the
film. The number of investors and the terms of these arrangements can vary, although investors generally assume the full risks and rewards for the portion
of the film acquired in these arrangements. We account for the proceeds received from the investor under these arrangements as a reduction of our
capitalized film costs and the investor’s interest in the profit or loss of the film is recorded as either a charge or a benefit, respectively, in programming and
production costs. The investor’s interest in the profit or loss of a film is recorded each period using the individual film forecast computation method.
We capitalize the costs of licensed content when the license period begins, the content is made available for use and the costs of the licenses are known.
Licensed content is amortized as the associated programs are broadcast.
Owned and licensed content are presented as noncurrent assets in film and television costs. We present amortization of owned and licensed content and
accrued costs associated with participations and residuals payments in programming and production costs.
When an event or a change in circumstance occurs that was known or knowable as of the balance sheet date and that indicates the fair value of either
owned or licensed content is less than the unamortized costs in the balance sheet, we determine the fair value and record an impairment charge to the extent
the unamortized costs exceed the fair value. Owned content is assessed either individually or in identified film groups, for content predominantly
monetized on an individual basis or with other content, respectively. The substantial majority of our owned content is evaluated for impairment on an
individual title basis. Licensed content that is not part of a film group is generally assessed in packages, channels or dayparts. A daypart is an aggregation
of programs broadcast during a particular time of day or programs of a similar type. Licensed content is tested for impairment primarily on a channel,
network or platform basis, with the exception of our broadcast networks and owned local broadcast television stations, which are tested on a daypart basis.
Estimated fair values of owned and licensed content are generally based on Level 3 inputs including analysis of market participant estimates of future cash
flows. We record charges related to impairments or content that is substantively abandoned to programming and production costs. Impairments of
capitalized film and television costs were not material in any of the periods presented.
Sports Rights
We recognize the costs of multiyear, live-event sports rights as the rights are utilized over the contract term based on estimated relative value. Estimated
relative value is generally based on the terms of the contract and the nature of and potential revenue generation of the deliverables within the contract.
Sports rights are accounted for as executory contracts and are not subject to impairment. When cash payments, including advanced payments, exceed the
relative value of the sports rights delivered, we recognize an asset in licensed content. Production costs incurred in advance of airing are also presented with
licensed content.
Note 5: Income Taxes
Income Before Income Taxes
Year ended December 31 (in millions)
Domestic
Foreign
$
$
2021
21,243
(2,150)
19,093
$
$
2020
16,211
(2,146)
14,065
$
$
2019
16,646
350
16,996
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Components of Income Tax Expense
Year ended December 31 (in millions)
Current (Expense) Benefit:
Federal
State
Foreign
Deferred (Expense) Benefit:
Federal
State
Foreign
Income tax (expense) benefit
2021
2020
2019
$
$
(2,355)
(669)
(343)
(3,367)
(1,504)
(255)
(133)
(1,892)
(5,259)
$
$
(2,824)
(836)
(254)
(3,914)
111
71
368
550
(3,364)
$
$
$
$
(2,085)
(425)
(600)
(3,110)
(902)
15
324
(563)
(3,673)
2019
(3,569)
(306)
(126)
(3)
124
196
31
(20)
(3,673)
Our income tax expense differs from the federal statutory amount because of the effect of the items detailed in the table below.
Year ended December 31 (in millions)
Federal tax at statutory rate
State income taxes, net of federal benefit
Foreign income taxed at different rates
Adjustments to uncertain and effectively settled tax positions, net
Federal research and development credits
Excess tax benefits recognized on share-based compensation
Tax legislation
Other
Income tax (expense) benefit
$
$
2021
(4,009)
(464)
(392)
(238)
85
209
(498)
48
(5,259)
$
$
2020
(2,954)
(265)
(24)
(344)
164
150
(120)
29
(3,364)
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, tax planning opportunities available in the jurisdictions in which we operate and excess tax benefits or deficiencies
that arise when the tax consequences of share-based compensation differ from amounts previously recognized in the statement of income. We recognize
deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of our assets and liabilities and
for the expected benefits of using net operating loss carryforwards. When a change in the tax rate or tax law has an impact on deferred taxes, we apply the
change based on the years in which the temporary differences are expected to reverse. We record the change in our consolidated financial statements in the
period of enactment.
The determination of the income tax consequences of a business combination includes identifying the tax basis 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 an acquired entity are recorded as of the date of the business combination and are based on our estimate of the ultimate tax basis
that will be accepted by the various tax authorities. We record liabilities for contingencies associated with prior tax returns filed by the acquired entity
based on criteria set forth in the appropriate accounting guidance. We adjust the deferred tax accounts and the liabilities periodically to reflect any revised
estimated tax basis and any estimated settlements with the various tax authorities. The effects of these adjustments are recorded to income tax expense.
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 position
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, certain
financing transactions, and the allocation of income among state and local tax jurisdictions. 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. 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 consolidated financial statements. We classify interest and
penalties, if any, associated with our uncertain tax positions as a component of income tax (expense) benefit.
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Components of Net Deferred Tax Liability
December 31 (in millions)
Deferred Tax Assets:
Net operating loss and other loss carryforwards
Nondeductible accruals and other
Less: Valuation allowance
Deferred Tax Liabilities:
Differences between book and tax basis of property and equipment and intangible assets
Differences between book and tax basis of investments
Differences between book and tax basis of long-term debt
Differences between book and tax basis of foreign subsidiaries and undistributed foreign earnings
Net deferred tax liability
The following table presents changes in our valuation allowance for deferred tax assets:
(in millions)
Beginning balance
Additions charged to income tax expense and other accounts
Deductions from reserves
Ending balance
$
$
2021
2,312
635
40
2,907
2021
3,194
3,246
2,907
3,533
30,584
526
1,788
394
33,292
29,759
2020
1,906
430
24
2,312
$
$
$
$
$
$
$
$
2020
2,609
3,253
2,312
3,550
29,829
405
680
468
31,382
27,832
2019
632
1,403
129
1,906
Changes in our net deferred tax liability in 2021 that were not recorded as deferred income tax benefit (expense) are primarily related to an increase of $73
million related to acquisitions and a decrease of $44 million associated with items included in other comprehensive income (loss).
As of December 31, 2021, we had federal net operating loss carryforwards of $196 million, and various state net operating loss carryforwards, the majority
of which expire in periods through 2041. As of December 31, 2021, we also had foreign net operating loss carryforwards of $9.6 billion related to our
foreign operations, primarily at Sky and NBCUniversal, the majority of which can be carried forward indefinitely. The determination of the realization of
the state and foreign net operating loss carryforwards is dependent on our subsidiaries’ taxable income or loss, apportionment percentages, redetermination
from taxing authorities, and state and foreign laws that can change from year to year and impact the amount of such carryforwards. We recognize a
valuation allowance if we determine it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. As of December 31,
2021 and 2020, our valuation allowance was primarily related to foreign and state net operating loss carryforwards.
Uncertain Tax Positions
Reconciliation of Unrecognized Tax Benefits
(in millions)
Gross unrecognized tax benefits, January 1
Additions based on tax positions related to the current year
Additions based on tax positions related to prior years
Reductions for tax positions of prior years
Reductions due to expiration of statutes of limitations
Settlements with tax authorities and other
Gross unrecognized tax benefits, December 31
$
$
2021
1,879
352
111
(181)
(107)
(12)
2,042
$
$
2020
1,422
436
152
(31)
(76)
(24)
1,879
$
$
2019
1,543
230
133
(344)
(117)
(23)
1,422
Our gross unrecognized tax benefits include both amounts related to positions for which we have recorded liabilities for potential payment obligations and
those for which tax has been assessed and paid. The amounts exclude the federal benefits on state tax positions that were recorded to deferred income taxes.
If we were to recognize our gross unrecognized tax benefits in the future, $1.5 billion would impact our effective tax rate and the remaining amount would
increase our deferred income tax liability. The amount and timing of the recognition of any such tax benefit is dependent on the completion of examinations
of our tax filings by the various tax authorities and the expiration of statutes of limitations. It is reasonably possible that certain tax contests could be
resolved within the next 12 months that may result in a decrease in our effective tax rate. As of December 31, 2021 and 2020, accrued interest and penalties
associated with our liability for uncertain tax positions were not material.
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The IRS has completed its examination of our income tax returns for all years through 2016. Various states are examining our state tax returns and the tax
years of those tax returns currently under examination vary by state, with most of the periods relating to tax years 2011 and forward. Various foreign
jurisdictions are examining our tax returns and the tax years of those tax returns currently under examination vary by country, with most of the periods
relating to tax years 2010 and forward.
Note 6: Long-Term Debt
Long-Term Debt Outstanding
December 31 (in millions)
Term loans
Senior notes with maturities of 5 years or less, at face value
Senior notes with maturities between 5 and 10 years, at face
value
Senior notes with maturities greater than 10 years, at face value
Finance lease obligations and other
Debt issuance costs, premiums, discounts, fair value
adjustments for acquisition accounting and hedged positions,
net
Total debt
Less: Current portion
Long-term debt
Weighted-Average
Interest Rate as of
December 31, 2021
4.41 %
3.50 %
Weighted-Average Interest
Rate as of December 31,
2020
2.07 %
3.41 %
3.16 %
3.67 %
3.47 %
4.03 %
3.74 %
(a)
3.67 %
(a)
(b)
2021
3,148 $
18,443
22,964
54,536
1,713
(5,954)
94,850
2,132
92,718 $
(b)
2020
7,641
19,190
23,114
54,203
1,261
(1,649)
103,760
3,146
100,614
$
$
(a) Rate represents an effective interest rate and includes the effects of amortization of debt issuance costs, premiums, discounts, fair value adjustments for acquisition accounting and hedged
positions, as well as the effects of our derivative financial instruments.
(b) As of December 31, 2021, included in our outstanding debt were foreign currency denominated senior notes and term loans with principal amounts of £2.6 billion, €7.5 billion and ¥20.0
billion RMB. As of December 31, 2020, included in our outstanding debt were foreign currency denominated senior notes and term loans with principal amounts of £4.7 billion, €7.3 billion,
¥238.5 billion and ¥16.4 billion RMB.
Our senior notes are unsubordinated and unsecured obligations and are subject to parent and/or subsidiary guarantees. As of December 31, 2021 and 2020,
our debt had an estimated fair value of $109.3 billion and $125.6 billion, respectively. The estimated fair value of our publicly traded debt was primarily
based on Level 1 inputs that use quoted market value for the debt. The estimated fair value of debt for which there are no quoted market prices was based
on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities.
Principal Maturities of Debt
(in millions)
2022
2023
2024
2025
2026
Thereafter
$
$
$
$
$
$
2,135
1,056
4,324
6,136
5,232
81,919
We use cross-currency swaps as cash flow hedges for certain foreign currency denominated debt obligations with obligations denominated in a currency
other than the functional currency of the issuer. Cross-currency swaps effectively convert foreign currency denominated debt to debt denominated in the
functional currency, which hedge currency exchange risks associated with foreign currency denominated cash flows such as interest and principal debt
repayments. As of December 31, 2021 and 2020, we had cross-currency swaps designated as cash flow hedges on $1.6 billion and $1.7 billion of our
foreign currency denominated debt, respectively. As of December 31, 2021 and 2020, the aggregate estimated fair value of cross-currency swaps
designated as cash flow hedges was a net liability of $53 million and a net liability of $45 million, respectively.
We are also exposed to foreign exchange risk on the consolidation of our foreign operations. We have foreign currency denominated debt and cross-
currency swaps designated as hedges of our net investments in certain of these subsidiaries. Transaction gains and losses resulting from currency
movements on debt and changes in the fair value of cross-currency swaps designated as net investment hedges are recorded within the currency translation
adjustments component of accumulated other comprehensive income (loss). As of December 31, 2021 and 2020, the amount of our net investment in
foreign subsidiaries
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hedged using foreign currency denominated debt was $8.2 billion and $10.3 billion, respectively, and the amount of our net investment in foreign
subsidiaries hedged using cross-currency swaps was $3.6 billion and $4.0 billion, respectively. As of December 31, 2021 and 2020, the aggregate estimated
fair value of these cross-currency swaps was a net liability of $104 million and $376 million, respectively. The amount of pre-tax gains (losses) related to
net investment hedges recognized in the cumulative translation adjustments component of other comprehensive income (loss) were gains of $760 million in
2021, losses of $686 million in 2020 and gains of $343 million in 2019.
Revolving Credit Facilities and Commercial Paper Programs
In March 2021, we entered into a new $11 billion revolving credit facility due March 30, 2026 with a syndicate of banks that may be used for general
corporate purposes. We may increase the commitments under the revolving credit facility up to a total of $14 billion, as well as extend the expiration date
to no later than March 30, 2028, subject to approval of the lenders. The interest rate on the revolving credit facility consists of a base rate plus a borrowing
margin that is determined based on Comcast’s credit rating. As of December 31, 2021, the borrowing margin for borrowings based on the London
Interbank Offered Rate was 1.00%. Our revolving credit facility requires that we maintain certain financial ratios based on debt and EBITDA, as defined in
the revolving credit facility. We were in compliance with all financial covenants for all periods presented. The new revolving credit facility replaced an
aggregate $9.2 billion of existing revolving credit facilities due May 26, 2022, which were terminated.
Our commercial paper program is supported by our revolving credit facility and provides a lower cost source of borrowing to fund short-term working
capital requirements.
As of December 31, 2021 and 2020, we had no borrowings outstanding under our commercial paper programs or revolving credit facilities. As of
December 31, 2021, amounts available under our revolving credit facility, net of amounts outstanding under our commercial paper program and
outstanding letters of credit and bank guarantees, totaled $11 billion.
Letters of Credit and Bank Guarantees
As of December 31, 2021, we and certain of our subsidiaries had undrawn irrevocable standby letters of credit and bank guarantees totaling $341 million to
cover potential fundings under various agreements.
Note 7: Significant Transactions
Universal Beijing Resort
In 2018, we entered into an agreement with a consortium of Chinese state-owned companies to build and operate a Universal theme park and resort in
Beijing, China (“Universal Beijing Resort”), which opened in September 2021. We own a 30% interest in Universal Beijing Resort and the construction
was funded through a combination of debt financing and equity contributions from the investors in accordance with their equity interests. The debt
financing, which is being provided by a syndicate of Chinese financial institutions, contains certain covenants and a maximum borrowing limit of ¥29.7
billion RMB (approximately $4.7 billion), which was increased from ¥26.6 billion RMB (approximately $4.2 billion) in the third quarter of 2021. The debt
financing is secured by the assets of Universal Beijing Resort and the equity interests of the investors. As of December 31, 2021, Universal Beijing Resort
had $3.6 billion of debt outstanding, including $3.1 billion principal amount of a term loan outstanding under the debt financing agreement.
We have concluded that Universal Beijing Resort is a VIE based on its governance structure, and we consolidate it because we have the power to direct
activities that most significantly impact its economic performance. There are no liquidity arrangements, guarantees or other financial commitments between
us and Universal Beijing Resort, and therefore our maximum risk of financial loss is our 30% interest. Universal Beijing Resort’s results of operations are
reported in our Theme Parks segment. Our consolidated statement of cash flows includes the costs of construction and related borrowings in the
“construction of Universal Beijing Resort” and “proceeds from borrowings” captions, respectively, and equity contributions from the noncontrolling
interests are included in other financing activities.
As of December 31, 2021, our consolidated balance sheet included assets and liabilities of Universal Beijing Resort totaling $9.7 billion and $8.1 billion,
respectively. The assets and liabilities of Universal Beijing Resort primarily consist of property and equipment, operating lease assets and liabilities, and
debt.
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Acquisitions
In October 2021, we acquired Masergy, a provider of software-defined networking and cloud platforms for global enterprises, for total cash consideration
of $1.2 billion. The acquisition accelerates our growth in serving large and mid-sized companies, particularly U.S.-based organizations with multi-site
global enterprises. Masergy’s results of operations are included in our consolidated results of operations since the acquisition date and are reported in our
Cable Communications segment. We have recorded a preliminary estimate of Masergy’s assets and liabilities with approximately $850 million recorded to
goodwill and the remainder primarily attributed to software and customer relationship intangible assets. These estimates are not yet final and are subject to
change. The acquisition was not material to our consolidated results of operations.
Note 8: Investments
Investment and Other Income (Loss), Net
Year ended December 31 (in millions)
Equity in net income (losses) of investees, net
Realized and unrealized gains (losses) on equity securities, net
Other income (loss), net
Investment and other income (loss), net
$
$
2021
2,006
339
211
2,557
$
$
2020
(113)
1,014
259
1,160
$
$
2019
(505)
656
287
438
The amount of unrealized gains (losses), net recognized in 2021, 2020 and 2019 that related to marketable and nonmarketable equity securities still held as
of the end of each reporting period was $(80) million, $339 million and $237 million, respectively.
Investments
December 31 (in millions)
Equity method
Marketable equity securities
Nonmarketable equity securities
Other investments
Total investments
Less: Current investments
Less: Investment securing collateralized obligation
Noncurrent investments
Equity Method
$
$
2021
6,111
406
1,735
803
9,055
368
605
8,082
$
$
2020
6,006
460
1,950
143
8,559
292
447
7,820
We use the equity method to account for investments in which we have the ability to exercise significant influence over the investee’s operating and
financial policies, or in which we hold a partnership or limited liability company interest in an entity with specific ownership accounts, unless we have
virtually no influence over the investee’s operating and financial policies. Equity method investments are recorded at cost and are adjusted to recognize (1)
our share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) amortization of the
recorded investment that exceeds our share of the book value of the investee’s net assets, (3) additional contributions made and dividends or other
distributions received, and (4) impairments resulting from other-than-temporary declines in fair value. For some investments, we record our share of the
investee’s net income or loss one quarter in arrears due to the timing of our receipt of such information. Gains or losses on the sale of equity method
investments are recorded to other income (loss), net. If an equity method investee were to issue additional securities that would change our proportionate
share of the entity, we would recognize the change, if any, as a gain or loss to other income (loss), net. Cash distributions received from equity method
investments are considered returns on investment and presented within operating activities in the consolidated statement of cash flows to the extent of
cumulative equity in net income of the investee. Additional distributions are presented as investing activities. Distributions presented within operating
activities totaled $1.1 billion, $66 million and $215 million for 2021, 2020 and 2019, respectively.
Atairos
On January 1, 2016, we established Atairos Group, Inc., a strategic company focused on investing in and operating companies in a range of industries and
business sectors, both domestically and internationally. Atairos is controlled by management companies led by our former CFO through interests that carry
all of the voting rights. We are the only third-party investor in Atairos.
In November 2020, we amended our agreement with Atairos, which primarily extended the investment term of the agreement from up to 12 years to up to
16.5 years, extended the period in which capital can be recycled to the full investment period and
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decreased our commitment to fund Atairos from up to $5 billion to up to $4.5 billion in the aggregate at any one time, subject to certain offsets, with the
maximum amount of annual capital calls reduced to $400 million, plus certain amounts previously distributed. In addition, we have separately committed
to fund Atairos $45 million annually for a management fee, subject to certain adjustments. The management company investors have committed to fund
from $50 million to $100 million, with at least $40 million to be funded by our former CFO, subject to his continued role with Atairos. Our economic
interests do not carry voting rights and obligate us to absorb approximately 99% of any losses and they provide us the right to receive approximately 86%
of any residual returns in Atairos, in either case on a cumulative basis.
We have concluded that Atairos is a VIE, that we do not have the power to direct the activities that most significantly impact the economic performance of
Atairos as we have no voting rights and only certain consent rights, and that we are not a related party with our former CFO or the management companies.
We therefore do not consolidate Atairos and account for our investment as an equity method investment. Certain distributions retained by Atairos on our
behalf are accounted for as advances and classified within other investments. Atairos may pledge our remaining unfunded capital commitment as security
to lenders in connection with certain financing arrangements. This has no effect on our funding commitments. There are no other liquidity arrangements,
guarantees or other financial commitments between Comcast and Atairos, and therefore our maximum risk of financial loss is our investment balance and
our remaining unfunded capital commitment of $1.5 billion as of December 31, 2021.
Atairos follows investment company accounting and records its investments at their fair values each reporting period with the net gains or losses reflected
in its statement of operations. We recognize our share of these gains and losses in equity in net income (losses) of investees, net. In 2021, 2020 and 2019,
we made cash capital contributions totaling $47 million, $383 million and $571 million, respectively, to Atairos. As of December 31, 2021 and 2020, our
investment, inclusive of advances classified within other investments, was $4.7 billion and $3.9 billion, respectively.
Hulu and Collateralized Obligation
In May 2019, we entered into a series of agreements (the “Hulu Transaction”) with The Walt Disney Company and certain of its subsidiaries, whereby we
relinquished our board seats and substantially all voting rights associated with our investment in Hulu, and Disney assumed full operational control. We
also acquired our proportionate share of the approximate 10% interest in Hulu previously held by AT&T for approximately $477 million, increasing our
ownership interest to approximately 33% from approximately 30%.
Following the Hulu Transaction, future capital calls are limited to $1.5 billion in the aggregate each year, with any excess funding requirements funded
with member loans. We have the right, but not the obligation, to fund our proportionate share of these capital calls, and if we elect not to fund our share of
future equity capital calls, our ownership interest will be diluted, subject to an ownership floor of 21%. The Hulu Transaction agreements include put and
call provisions regarding our ownership interest in Hulu, pursuant to which, as early as January 2024, we can require Disney to buy, and Disney can require
us to sell our interest, in either case, for fair value at that future time subject to a minimum equity value of $27.5 billion for 100% of the equity of Hulu.
The minimum total equity value and ownership floor guarantee minimum proceeds of approximately $5.8 billion upon exercise of the put or call.
In connection with the Hulu Transaction, we agreed to extend certain licenses of NBCUniversal content until late 2024. We can terminate most of our
content license agreements with Hulu beginning in 2022, and we obtained the right, beginning in 2020, to modify certain exclusive content licenses so that
we can exhibit the content on our platforms in return for reduced license fees.
In August 2019, we entered into a financing arrangement with a syndicate of banks whereby we received proceeds of $5.2 billion under a term loan facility
due March 2024. The principal amount of the term loan is secured by the proceeds guaranteed by Disney under the put/call provisions related to our
investment in Hulu. The proceeds from the put/call provisions are available only for the repayment of the term loan and are not available to us unless and
until the bank lenders are fully paid under the term loan provisions. The bank lenders have no rights to proceeds from the put/call provisions in excess of
amounts owed under the term loan. As a result of this transaction, we now present our investment in Hulu and the term loan separately in our consolidated
balance sheet in the captions “investment securing collateralized obligation” and “collateralized obligation”, respectively. The recorded value of our
investment reflects our historical cost in applying the equity method, and as a result, is less than its fair value. As of December 31, 2021, our collateralized
obligation had both a carrying value and estimated fair value of $5.2 billion. The estimated fair value was based on Level 2 inputs that use interest rates for
debt with similar terms and remaining maturities.
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Marketable Equity Securities
We classify investments with readily determinable fair values that are not accounted for under the equity method as marketable equity securities. The
changes in fair value of our marketable equity securities between measurement dates are recorded in realized and unrealized gains (losses) on equity
securities, net. The fair values of our marketable equity securities are based on Level 1 inputs that use quoted market prices.
Nonmarketable Equity Securities
We classify investments without readily determinable fair values that are not accounted for under the equity method as nonmarketable equity securities.
The accounting guidance requires nonmarketable equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the
guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable
price changes of identical or similar investments of the same issuer. We apply the measurement alternative, adjusting the investments for observable price
changes of identical or similar investments of the same issuer, to a majority of our nonmarketable equity securities. When an observable event occurs, we
estimate the fair values of our nonmarketable equity securities primarily based on Level 2 inputs that are derived from observable price changes of similar
securities adjusted for insignificant differences in rights and obligations. The changes in value are recorded in realized and unrealized gains (losses) on
equity securities, net.
Other Investments
AirTouch
In April 2020, Verizon Americas, Inc., formerly known as AirTouch Communications, Inc. (“AirTouch”), redeemed the two series of preferred stock we
previously held and we received cash payments totaling $1.7 billion. Subsequently, we redeemed and repurchased the related three series of preferred
shares issued by one of our consolidated subsidiaries and made cash payments totaling $1.8 billion.
Impairment Testing of Investments
We review our investment portfolio, other than our marketable equity securities, each reporting period to determine whether there are identified events or
circumstances that would indicate there is a decline in the fair value. For our nonpublic investments, if there are no identified events or circumstances that
would have a significant adverse effect on the fair value of the investment, then the fair value is not estimated. For our equity method investments and held
to maturity investments, if an investment is deemed to have experienced an other-than-temporary decline below its cost basis, we reduce the carrying
amount of the investment to its quoted or estimated fair value, as applicable, and establish a new cost basis for the investment. For our nonmarketable
equity securities, we record the impairment to realized and unrealized gains (losses) on equity securities, net. For our equity method investments and our
held to maturity investments, we record the impairment to other income (loss), net.
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Note 9: Property and Equipment
December 31 (in millions)
Distribution systems
Customer premise equipment
Buildings, theme park infrastructure and leasehold improvements
Other equipment
Construction in process
Land
Property and equipment, at cost
Less: Accumulated depreciation
Property and equipment, net
The table below summarizes our property and equipment by geographic location.
December 31 (in millions)
United States
Other
Property and equipment, net
Weighted-Average
Original Useful Life
as of December 31, 2021
11 years
6 years
31 years
11 years
N/A
N/A
$
$
2021
41,814
25,772
20,258
16,960
3,131
1,722
109,658
55,611
54,047
$
$
$
$
2021
41,187
12,860
54,047
$
$
2020
40,861
26,323
15,885
14,371
7,095
1,848
106,383
54,388
51,995
2020
40,580
11,415
51,995
Property and equipment are stated at cost. We capitalize improvements that extend asset lives and expense repairs and maintenance costs as incurred. We
record depreciation using the straight-line method over the asset’s estimated useful life. For assets that are sold or retired, we remove the applicable cost
and accumulated depreciation and, unless the gain or loss on disposition is presented separately, we recognize it as a component of depreciation expense.
Capital expenditures for the construction of Universal Beijing Resort are presented separately in our consolidated statement of cash flows.
Cable Communications capitalizes the costs associated with the construction of and improvements to our cable transmission and distribution facilities,
including scalable infrastructure and line extensions; costs associated with acquiring and deploying new customer premise equipment; and costs associated
with installation of our services, including the customer’s connection to our network, in accordance with the accounting guidance related to cable television
companies. Costs capitalized include all direct costs for labor and materials, as well as various indirect costs. Costs incurred in connection with subsequent
disconnects, and reconnects of previously deployed customer premise equipment, are expensed as they are incurred.
We evaluate the recoverability of our property and equipment whenever events or substantive changes in circumstances indicate that the carrying amount
may not be recoverable. The evaluation is based on the cash flows generated by the underlying asset groups, including estimated future operating 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 group,
we would recognize an impairment charge to the extent the carrying amount of the asset group exceeded its estimated fair value. Unless presented
separately, the impairment charge is included as a component of depreciation expense.
Certain of our cable franchise agreements and lease agreements contain provisions requiring us to restore facilities or remove property in the event that the
franchise or lease agreement is not renewed. We expect to continually renew our cable franchise agreements and therefore cannot reasonably estimate
liabilities associated with such agreements. A remote possibility exists that franchise agreements could be terminated unexpectedly, which could result in us
incurring significant expense in complying with restoration or removal provisions. We do not have any material liabilities related to asset retirement
obligations recorded in our consolidated financial statements.
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Note 10: Goodwill and Intangible Assets
Goodwill by Segment
(in millions)
Balance, December 31, 2019 $
Acquisitions
Foreign currency translation
and other
Balance, December 31, 2020
Segment change
Acquisitions
Foreign currency
translation and other
Balance, December 31,
2021
$
NBCUniversal
Cable
Communications
Cable
Networks
Broadcast
Television
Filmed
Entertainment
15,074 $ 14,067 $
122
—
1,059 $
—
3,321 $
27
Media
Studios
— $ — $
—
—
Theme
Parks
Corporate
and Other
Sky
6,739 $ 28,461 $
4 $
—
—
68
15,264
—
950
(73)
13,994
(13,994)
—
3
1,062
(1,062)
—
(4)
3,344
(3,344)
—
—
—
14,728
6
—
—
3,672
3
314
7,053
—
—
1,489
29,950
—
21
(22)
—
—
—
(34)
(3)
(624)
(775)
Total
68,725
149
1,795
70,669
—
979
(1,459)
—
(2)
2
—
—
(2)
16,192 $
— $
— $
— $ 14,700 $ 3,672 $
6,429 $ 29,196 $
— $
70,189
Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired in a business combination and represents the
future economic benefits expected to arise from anticipated synergies and intangible assets acquired that do not qualify for separate recognition, including
increased footprint, assembled workforce, noncontractual relationships and other agreements. We assess the recoverability of our goodwill annually, or
more frequently whenever events or substantive changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value.
We test goodwill for impairment at the reporting unit level. To determine our reporting units, we evaluate the components one level below the segment
level and we aggregate the components if they have similar economic characteristics. We evaluate the determination of our reporting units used to test for
impairment periodically or whenever events or substantive changes in circumstances occur. The assessment of recoverability may first consider qualitative
factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or
if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in
which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value. Unless presented separately, the
impairment charge is included as a component of amortization expense. We have not recognized any material impairment charges.
Intangible Assets
December 31 (in millions)
Indefinite-Lived Intangible Assets:
Franchise rights
FCC licenses
Finite-Lived Intangible Assets:
Customer relationships
Software
Other agreements and rights
Total
Weighted-Average
Original Useful Life
as of December 31, 2021
N/A $
N/A
14 years
5 years
28 years
$
2021
Gross
Carrying
Amount
59,365
2,807
22,119 $
20,329
11,870
116,491 $
Accumulated
Amortization
2020
Gross
Carrying
Amount
Accumulated
Amortization
$
59,365
2,804
(10,612)
(11,520)
(1,413)
(23,545) $
22,197 $
17,819
12,394
114,579 $
(8,914)
(9,518)
(1,393)
(19,825)
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Indefinite-Lived Intangible Assets
Indefinite-lived intangible assets consist primarily of our cable franchise rights. Our cable franchise rights represent the values we attributed to agreements
with state and local authorities that allow access to homes and businesses in cable service areas acquired in business combinations. We do not amortize our
cable franchise rights because we have determined that they meet the definition of indefinite-lived intangible assets since there are no legal, regulatory,
contractual, competitive, economic or other factors that limit the period over which these rights will contribute to our cash flows. We reassess this
determination periodically or whenever events or substantive changes in circumstances occur. The purchase of spectrum rights is presented separately in
our consolidated statement of cash flows.
We assess the recoverability of our cable franchise rights and other indefinite-lived intangible assets annually, or more frequently whenever events or
substantive changes in circumstances indicate that the assets might be impaired. Our three Cable Communications divisions represent the unit of account
we use to test for impairment of our cable franchise rights. We evaluate the unit of account used to test for impairment of our cable franchise rights and
other indefinite-lived intangible assets periodically or whenever events or substantive changes in circumstances occur to ensure impairment testing is
performed at an appropriate level. The assessment of recoverability may first consider qualitative factors to determine whether it is more likely than not that
the fair value of an indefinite-lived intangible asset is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment
results in a more-likely-than-not determination or if a qualitative assessment is not performed. When performing a quantitative assessment, we estimate the
fair value of our cable franchise rights and other indefinite-lived intangible assets 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 Adjusted EBITDA
generated by the underlying assets, current market transactions and profitability information. If the fair value of our cable franchise rights or other
indefinite-lived intangible assets were less than the carrying amount, we would recognize an impairment charge for the difference between the estimated
fair value and the carrying value of the assets. Unless presented separately, the impairment charge is included as a component of amortization expense. We
did not recognize any material impairment charges in any of the periods presented.
Finite-Lived Intangible Assets
Estimated Amortization Expense of Finite-Lived Intangible Assets
(in millions)
2022
2023
2024
2025
2026
$
$
$
$
$
5,140
4,513
3,737
2,996
2,403
Finite-lived intangible assets are subject to amortization and consist primarily of customer relationships acquired in business combinations, software, trade
names and intellectual property rights. Our finite-lived intangible assets are amortized primarily on a straight-line basis over their estimated useful life or
the term of the associated agreement.
We capitalize 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. We also capitalize costs associated with arrangements that constitute the purchase of, or convey a
license to, software licenses. We generally amortize them on a straight-line basis over a period not to exceed five years. We expense maintenance and
training costs, as well as costs incurred during the preliminary stage of a project, as they are incurred. We capitalize initial operating system software costs
and amortize them over the life of the associated hardware.
We evaluate the recoverability of our finite-lived intangible assets whenever events or substantive changes in circumstances indicate that the carrying
amount may not be recoverable. The evaluation is based on the cash flows generated by the underlying asset groups, including estimated future operating
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
group, we would recognize an impairment charge to the extent the carrying amount of the asset group exceeded its estimated fair value. Unless presented
separately, the impairment charge is included as a component of amortization expense.
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Note 11: Employee Benefit Plans
Deferred Compensation Plans
Year ended December 31 (in millions)
Benefit obligation
Interest expense
$
$
2021
4,002 $
265 $
2020
3,648 $
293 $
2019
3,273
285
We maintain unfunded, nonqualified deferred compensation plans for certain members of management and nonemployee directors. The amount of
compensation deferred by each participant is based on participant elections. Participant accounts are credited with income primarily based on a fixed annual
rate. Participants are eligible to receive distributions from their account based on elected deferral periods that are consistent with the plans and applicable
tax law.
We have purchased life insurance policies to recover a portion of the future payments related to our deferred compensation plans. As of December 31, 2021
and 2020, the cash surrender value of these policies, which is recorded to other noncurrent assets, net, was $549 million and $481 million, respectively.
Pension and Postretirement Benefit Plans
We sponsor several 401(k) defined contribution retirement plans that allow eligible employees to contribute a portion of their compensation through payroll
deductions in accordance with specified plan guidelines. We make contributions to the plans that include matching a percentage of the employees’
contributions up to certain limits. In 2021, 2020 and 2019, expenses related to these plans totaled $595 million, $599 million and $573 million,
respectively.
We participate in various multiemployer benefit plans, including pension and postretirement benefit plans, that cover some of our employees and temporary
employees who are represented by labor unions. We also participate in other multiemployer benefit plans that provide health and welfare and retirement
savings benefits to active and retired participants. If we cease to be obligated to make contributions or were to otherwise withdraw from participation in any
of these plans, applicable law would require us to fund our allocable share of the unfunded vested benefits, which is known as a withdrawal liability. In
addition, actions taken by other participating employers may lead to adverse changes in the financial condition of one of these plans, which could result in
an increase in our withdrawal liability. Total contributions we made to multiemployer benefit plans and any potential withdrawal liabilities were not
material in any of the periods presented.
Note 12: Equity
Common Stock
1
In the aggregate, holders of our Class A common stock have 66 /3% of the voting power of our common stock and holders of our Class B common stock
have 33 /3% of the voting power of our common stock, which percentage is generally non-dilutable under the terms of our articles of incorporation. Each
share of our Class B common stock is entitled to 15 votes. The number of votes held by each share of our Class A common stock depends on the number of
shares of Class A and Class B common stock outstanding at any given time. The 33 /3% aggregate voting power of our Class B common stock cannot be
diluted by additional issuances of any other class of common stock. Our Class B common stock is convertible, share for share, into Class A common stock,
subject to certain restrictions.
1
2
Shares of Common Stock Outstanding
(in millions)
Balance, December 31, 2018
Stock compensation plans
Employee stock purchase plans
Balance, December 31, 2019
Stock compensation plans
Employee stock purchase plans
Balance, December 31, 2020
Stock compensation plans
Repurchases and retirements of common stock
Employee stock purchase plans
Balance, December 31, 2021
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92
Class A
4,517
21
6
4,544
20
7
4,571
21
(73)
5
4,524
Class B
9
—
—
9
—
—
9
—
—
—
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Weighted-Average Common Shares Outstanding
Year ended December 31 (in millions)
Weighted-average number of common shares outstanding – basic
Effect of dilutive securities
Weighted-average number of common shares outstanding – diluted
2021
4,584
70
4,654
2020
4,574
50
4,624
2019
4,548
62
4,610
Weighted-average common shares outstanding used in calculating diluted earnings per common share attributable to Comcast Corporation shareholders
(“diluted EPS”) considers the impact of potentially dilutive securities using the treasury stock method. Our potentially dilutive securities include potential
common shares related to our stock options and our restricted share units (“RSUs”). Diluted EPS excludes the impact of potential common shares related to
our stock options in periods in which the combination of the option exercise price and the associated unrecognized compensation expense is greater than
the average market price of our common stock. The amount of potential common shares related to our share-based compensation plans that were excluded
from diluted EPS because their effect would have been antidilutive was not material in any of the periods presented.
Accumulated Other Comprehensive Income (Loss)
December 31 (in millions)
Cumulative translation adjustments
Deferred gains (losses) on cash flow hedges
Unrecognized gains (losses) on employee benefit obligations and other
Accumulated other comprehensive income (loss), net of deferred taxes
2021
1,119
104
257
1,480
2020
1,790
(109)
203
1,884
$
$
$
$
Note 13: Share-Based Compensation
The tables below provide information on our share-based compensation.
Recognized Share-Based Compensation Expense
Year ended December 31 (in millions)
Restricted share units
Stock options
Employee stock purchase plans
Total
$
$
2021
729
314
38
1,081
$
$
2020
628
294
38
960
$
$
2019
564
231
30
825
Our share-based compensation plans consist primarily of awards of RSUs and stock options to certain employees and directors as part of our approach to
long-term incentive compensation. Awards generally vest over a period of 5 years and, in the case of stock options, have a 10 year term. Additionally,
through our employee stock purchase plans, employees are able to purchase shares of our common stock at a discount through payroll deductions. As of
December 31, 2021, all of our stock options outstanding were net settled stock options, which result in fewer shares being issued and no cash proceeds
being received by us when the options are exercised.
Stock Options and Restricted Share Units
As of December 31, 2021, unless otherwise stated (in millions, except per share data)
Awards granted during 2021
Weighted-average exercise price of awards granted during 2021
Stock options outstanding and nonvested RSUs
Weighted-average exercise price of stock options outstanding
Weighted-average fair value at grant date of nonvested RSUs
Stock
Options
44
54.22
211
40.38
$
$
RSUs
17
44
$
45.33
The cost associated with our share-based compensation is based on an award’s estimated fair value at the date of grant and is recognized over the period in
which any related services are provided. RSUs are valued based on the closing price of our common stock on the date of grant and are discounted for the
lack of dividends, if any, during the vesting period. We use the Black-Scholes option pricing model to estimate the fair value of stock option awards.
The table below presents the weighted-average fair value on the date of grant of RSUs and stock options awarded under our various plans and the related
weighted-average valuation assumptions.
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Year ended December 31
RSUs fair value
Stock options fair value
Stock Option Valuation Assumptions:
Dividend yield
Expected volatility
Risk-free interest rate
Expected option life (in years)
$
$
2021
54.52
9.72
$
$
2020
41.71
6.61
$
$
1.8 %
22.8 %
0.9 %
5.9
2.2 %
21.0 %
1.0 %
6.0
2019
40.42
7.91
2.1 %
22.0 %
2.5 %
6.0
As of December 31, 2021, we had unrecognized pretax compensation expense of $1.2 billion related to nonvested RSUs and unrecognized pretax
compensation expense of $592 million related to nonvested stock options that will be recognized over a weighted-average period of approximately 1.6 and
1.7 years, respectively. In 2021, 2020, and 2019, we recognized $209 million, $150 million and $196 million, respectively, as a reduction to income tax
expense as a result of excess tax benefits associated with our share-based compensation plans.
Note 14: Supplemental Financial Information
Cash Payments for Interest and Income Taxes
Year ended December 31 (in millions)
Interest
Income taxes
Noncash Activities
During 2021:
$
$
2021
3,908 $
2,628 $
2020
3,878 $
3,183 $
2019
4,254
3,231
• we acquired $2.0 billion of property and equipment and intangible assets that were accrued but unpaid
• we recorded a liability of $1.1 billion for a quarterly cash dividend of $0.25 per common share paid in January 2022
During 2020:
• we acquired $1.9 billion of property and equipment and intangible assets that were accrued but unpaid
• we recorded a liability of $1.1 billion for a quarterly cash dividend of $0.23 per common share paid in January 2021
During 2019:
• we acquired $1.9 billion of property and equipment and intangible assets that were accrued but unpaid
• we recorded a liability of $956 million for a quarterly cash dividend of $0.21 per common share paid in January 2020
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet to the total of the
amounts reported in our consolidated statement of cash flows.
December 31 (in millions)
Cash and cash equivalents
Restricted cash included in other current assets
Restricted cash included in other noncurrent assets, net
Cash, cash equivalents and restricted cash, end of year
$
$
2021
8,711 $
56
12
8,778 $
2020
11,740
14
14
11,768
Our cash equivalents consist primarily of money market funds and U.S. government obligations, as well as commercial paper and certificates of deposit
with maturities of three months or less when purchased. The carrying amounts of our cash equivalents approximate their fair values, which are primarily
based on Level 1 inputs.
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Note 15: Commitments and Contingencies
Sports Rights and Licensed Content
Our most significant fixed-price purchase obligations relate to long-term commitments for sports rights and licensed content. Refer to Note 4 for additional
information.
Leases
Our leases consist primarily of real estate, vehicles and other equipment. We determine if an arrangement is a lease at inception. Lease assets and liabilities
are recognized upon commencement of the lease based on the present value of the future minimum lease payments over the lease term. The lease term
includes options to extend the lease when it is reasonably certain that we will exercise that option. We generally utilize our incremental borrowing rate
based on information available at the commencement of the lease in determining the present value of future payments. The lease asset also includes any
lease payments made and initial direct costs incurred and excludes lease incentives. Lease assets and liabilities are not recorded for leases with an initial
term of one year or less. Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the
future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. In 2021, 2020 and 2019,
operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our consolidated statement of income were $1.2 billion,
$1.1 billion and $1.1 billion, respectively. These amounts do not include lease costs associated with production activities or other amounts capitalized in
our consolidated balance sheet, which were not material.
The table below summarizes the operating lease assets and liabilities recorded in our consolidated balance sheet.
December 31 (in millions)
Other noncurrent assets, net
Accrued expenses and other current liabilities
Other noncurrent liabilities
$
$
$
2021
6,467
766
6,473
$
$
$
2020
3,784
718
3,740
The table below summarizes our future minimum lease commitments for operating leases as of December 31, 2021.
(in millions)
2022
2023
2024
2025
2026
Thereafter
Total future minimum lease payments
Less: imputed interest
Total liability
December 31,
2021
932
875
771
626
551
7,933
11,688
4,449
7,239
$
$
The weighted-average remaining lease terms for operating leases and the weighted-average discount rates used to calculate our operating lease liabilities as
of December 31, 2021 were 19 years and 3.94%, respectively, and as of December 31, 2020 were 9 years and 3.58%, respectively.
In 2021, 2020 and 2019, cash payments for operating leases recorded in the consolidated balance sheet were $987 million, $936 million and $914 million
respectively. We recognized operating lease assets and liabilities of $2.8 billion related to Universal Beijing Resort in 2021. Lease assets and liabilities
associated with other operating leases entered into or modified were not material in any period presented.
Contractual Obligation
We are party to a contractual obligation that involves an interest held by a third party in the revenue of certain theme parks. The arrangement provides the
counterparty with the right to periodic payments associated with current period revenue which are recorded as an operating expense, and beginning in June
2017, the option to require NBCUniversal to purchase the interest for cash in an amount based on a contractual formula. The contractual formula is based
on an average of specified historical theme park revenue at the time of exercise, which amount could be significantly higher than our carrying value. As of
December 31,
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Comcast Corporation
2021, our carrying value was $1.1 billion, and the estimated value of the contractual obligation was $1.5 billion based on inputs to the contractual formula
as of that date.
Redeemable Subsidiary Preferred Stock
In the first quarter of 2021, we redeemed all of the NBCUniversal Enterprise, Inc. preferred stock and made cash payments equal to the aggregate
liquidation preference of $725 million. As of December 31, 2020, the preferred stock had a carrying value equal to its liquidation preference and was
presented in redeemable noncontrolling interests and redeemable subsidiary preferred stock.
Contingencies
We are subject to legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such
actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal
proceedings or claims could be time-consuming and injure our reputation.
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Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A: Controls and Procedures
Conclusions regarding disclosure controls and procedures
Our principal executive and principal financial officers, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and
procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, such disclosure controls and procedures were effective.
Management’s annual report on internal control over financial reporting
Refer to Management’s Report on Internal Control Over Financial Reporting on page 64.
Attestation report of the registered public accounting firm
Refer to Report of Independent Registered Public Accounting Firm on page 65.
Changes in internal control over financial reporting
There were no changes in internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act
Rules 13a-15 or 15d-15 that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item 9B: Other Information
None.
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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Part III
Item 10: Directors, Executive Officers and Corporate Governance
Except for the information regarding executive officers required by Item 401 of Regulation S-K, we incorporate the information required by this item by
reference to our definitive proxy statement for our annual meeting of shareholders. We refer to this proxy statement as the 2022 Proxy Statement.
The term of office of each of our executive officers continues until his successor is selected and qualified or until his earlier death, resignation or removal.
The following table sets forth information concerning our executive officers, including their ages, positions and tenure, as of December 31, 2021.
Name
Brian L. Roberts
Michael J. Cavanagh
Adam L. Miller
Daniel C. Murdock
Thomas J. Reid
Jeffrey S. Shell
Dana Strong
David N. Watson
Age
62
55
51
48
57
56
51
63
Officer Since
1986
2015
2020
2017
2019
2020
2021
2017
Position with Comcast
Chairman and Chief Executive Officer; President
Chief Financial Officer
Chief Administration Officer; Executive Vice President, NBCUniversal
Executive Vice President; Chief Accounting Officer and Controller
Chief Legal Officer and Secretary
Chief Executive Officer, NBCUniversal
Group Chief Executive Officer, Sky
President and Chief Executive Officer, Comcast Cable
Brian L. Roberts has served as a director and as our President, Chairman of the Board and Chief Executive Officer for more than five years. As of
December 31, 2021, Mr. Roberts had sole voting power over approximately 33 /3% of the combined voting power of our two classes of common stock. He
is a son of our late founder, Mr. Ralph J. Roberts.
1
Michael J. Cavanagh has served as the Chief Financial Officer of Comcast Corporation since July 2015. Prior to joining our company, Mr. Cavanagh had
been Co-President and Co-Chief Operating Officer for The Carlyle Group, a global investment firm, since 2014. Prior to that, Mr. Cavanagh was the Co-
Chief Executive Officer of the Corporate & Investment Bank of JPMorgan Chase & Co. from 2012 until 2014; the Chief Executive Officer of JPMorgan
Chase & Co.’s Treasury & Securities Services business from 2010 to 2012; and the Chief Financial Officer of JPMorgan Chase & Co. from 2004 to 2010.
Adam L. Miller has served as Chief Administration Officer of Comcast since February 2020 and Executive Vice President of NBCUniversal since 2012.
Prior to joining our company, Mr. Miller was President of The Abernathy MacGregor Group, a leading strategic communications firm headquartered in
New York.
Daniel C. Murdock has served as an Executive Vice President since March 2020, our Chief Accounting Officer since March 2017 and our Controller since
July 2015. Prior to joining our company, Mr. Murdock had been with the U.S. Securities and Exchange Commission where he served as the Deputy Chief
Accountant in the agency’s Office of the Chief Accountant since 2013. Prior to that, he was Deloitte & Touche’s Audit/Industry Professional Practice
Director for media and entertainment.
Thomas J. Reid has served as our Chief Legal Officer and Secretary since April 2019. Prior to joining our company, Mr. Reid had served as the Chairman
and Managing Partner of Davis Polk & Wardwell LLP, a global law firm, since 2011. Prior to that, Mr. Reid was a partner at Davis Polk & Wardwell LLP
from 2003 to 2011 and a Managing Director in the Investment Banking Division of Morgan Stanley from 2000 to 2003.
Jeffrey S. Shell has served as the Chief Executive Officer of NBCUniversal since January 2020. Previously, Mr. Shell was the Chairman of NBCUniversal
Film and Entertainment since January 2019. Prior to that, Mr. Shell served as the Chairman of Universal Filmed Entertainment Group (UFEG) since 2013
and Chairman of NBCUniversal International prior to joining UFEG. Prior to joining NBCUniversal, Mr. Shell served as President of Comcast
Programming Group for six years. Prior to joining our company, Mr. Shell was the CEO of Gemstar TV Guide International and President of FOX Cable
Networks Group.
Dana Strong has served as the Group Chief Executive Officer of Sky since January 2021. Previously, Ms. Strong was the President of Consumer Services
at Comcast Cable since January 2018. Prior to joining our company, Ms. Strong served as President and Chief Operating Officer of Virgin Media and Chief
Transformation Officer of Liberty Global, a European cable company. In addition, Ms. Strong held numerous leadership roles in Europe and Australia,
including Chief Executive Officer of UPC Ireland (now Virgin Media Ireland) and Chief Operating Officer of Austar United Communications in Australia.
David N. Watson has served as Chief Executive Officer, Comcast Cable since April 2017 and previously had served as Chief Operating Officer, Comcast
Cable for more than five years. Mr. Watson is also a director of Amkor Technology, Inc.
Comcast 2021 Annual Report on Form 10-K
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Item 11: Executive Compensation
We incorporate the information required by this item by reference to our 2022 Proxy Statement.
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
We incorporate the information required by this item by reference to our 2022 Proxy Statement.
Item 13: Certain Relationships and Related Transactions, and Director Independence
We incorporate the information required by this item by reference to our 2022 Proxy Statement.
Item 14: Principal Accountant Fees and Services
We incorporate the information required by this item relating to our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), by reference to our
2022 Proxy Statement.
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Part IV
Item 15: Exhibits and Financial Statement Schedules
(a) Our consolidated financial statements are filed as a part of this report on Form 10-K in Item 8, Financial Statements and Supplementary Data, and a list
of Comcast’s consolidated financial statements are found on page 63 of this report. Financial statement schedules are omitted because the required
information is not applicable, or because the information required is included in the consolidated financial statements and notes thereto.
(b) Exhibits required to be filed by Item 601 of Regulation S-K (all of which are under Commission File No. 001-32871, except as otherwise noted):
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Amended and Restated Articles of Incorporation of Comcast Corporation (incorporated by reference to Exhibit 3.1 to Comcast’s Current
Report on Form 8-K filed on December 15, 2015).
Amended and Restated By-Laws of Comcast Corporation (incorporated by reference to Exhibit 3.2 to Comcast’s Annual Report on Form 10-K
for the year ended December 31, 2018).
Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Comcast’s Annual Report on Form 10-K for the year
ended December 31, 2002).
Indenture, dated January 7, 2003, between Comcast Corporation, the subsidiary guarantor party thereto, and The Bank of New York Mellon
(f/k/a The Bank of New York), as trustee (incorporated by reference to Exhibit 4.4 to Comcast’s Annual Report on Form 10-K for the year
ended December 31, 2008).
First Supplemental Indenture, dated March 25, 2003, to the Indenture between Comcast Corporation, the subsidiary guarantors party thereto,
and The Bank of New York Mellon (f/k/a The Bank of New York), as trustee, dated January 7, 2003 (incorporated by reference to Exhibit 4.5
to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2008).
Second Supplemental Indenture, dated August 31, 2009, to the Indenture between Comcast Corporation, the subsidiary guarantors party
thereto, and The Bank of New York Mellon, as Trustee, dated January 7, 2003, as supplemented by a First Supplemental Indenture dated
March 25, 2003 (incorporated by reference to Exhibit 4.1 to Comcast’s Current Report on Form 8-K filed on September 2, 2009).
Third Supplemental Indenture, dated March 27, 2013, to the Indenture between Comcast Corporation, the subsidiary guarantors party thereto,
and The Bank of New York Mellon (f/k/a The Bank of New York), as trustee, dated January 7, 2003, as supplemented by a First Supplemental
Indenture dated March 25, 2003 and a second Supplemental Indenture dated August 31, 2009 (incorporated by reference to Exhibit 4.4 to
Comcast’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
Fourth Supplemental Indenture, dated October 1, 2015, to the Indenture dated January 7, 2003 between Comcast Corporation, the subsidiary
guarantors party thereto, and The Bank of New York Mellon (f/k/a The Bank of New York), as trustee, as supplemented by a First
Supplemental Indenture dated March 25, 2003, a second Supplemental Indenture dated August 31, 2009 and a Third Supplemental Indenture
dated March 27, 2013 (incorporated by reference to Exhibit 4.1 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2015).
Senior Indenture dated September 18, 2013, among Comcast Corporation, the guarantors party thereto and The Bank of New York Mellon, as
trustee (incorporated by reference to Exhibit 4.3 to Comcast’s Registration Statement on Form S-3 filed September 18, 2013).
First Supplemental Indenture dated as of November 17, 2015, to the Senior Indenture dated September 18, 2013, among Comcast Corporation,
the guarantors party thereto, and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.4 to Post Effective
Amendment No. 2 to Comcast’s Registration Statement on Form S-3 filed November 23, 2015).
Indenture, dated as of April 30, 2010, between NBC Universal, Inc. (n/k/a NBCUniversal Media, LLC) and The Bank of New York Mellon, as
trustee (incorporated by reference to Exhibit 4 to the Registration Statement on Form S-4 of NBCUniversal Media, LLC (Commission File No.
333-174175) filed on May 13, 2011).
4.10
First Supplemental Indenture, dated March 27, 2013, to the Indenture between NBCUniversal Media, LLC (f/k/a NBC Universal, Inc.) and
The Bank of New York Mellon, as trustee, dated April 30, 2010 (incorporated by reference to Exhibit 4.3 to Comcast’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2013).
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4.11
4.12
4.13
4.14
4.15
10.1
10.2
10.3
10.4*
10.5*
10.6*
10.7*
10.8*
10.9*
10.10*
10.11*
10.12*
10.13*
Second Supplemental Indenture, dated October 1, 2015, to the Indenture dated April 30, 2010 between NBC Universal, Inc. (n/k/a
NBCUniversal Media, LLC) and The Bank of New York Mellon, as trustee, as supplemented by a First Supplemental Indenture dated March
27, 2013 (incorporated by reference to Exhibit 4.2 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
Trust Deed dated September 5, 2014 among BSKYB Finance UK plc, British Sky Broadcasting Group plc, the initial guarantors party thereto
and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated by reference to Exhibit 4.13 to Comcast’s Annual Report on
Form 10-K for the year ended December 31, 2018).
Supplemental Trust Deed dated March 18, 2015 among Sky Group Finance plc (f/k/a BSKYB Finance UK plc), Sky plc (f/k/a British Sky
Broadcasting Group plc), the initial guarantors party thereto and BNY Mellon Corporate Trustee Services Limited, as trustee (incorporated by
reference to Exhibit 4.14 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2018).
Registration Rights Agreement, dated as of August 19, 2021 (incorporated by reference to Exhibit 4.2 to Comcast’s Current Report on Form 8-
K filed on August 19, 2021).
Description of Comcast Corporation’s securities registered pursuant to Section 12 of the Securities Exchange Act.
Certain instruments defining the rights of holders of long-term obligation of the registrant and certain of its subsidiaries (the total amount of
securities authorized under each of which does not exceed ten percent of the total assets of the registrant and its subsidiaries on a consolidated
basis), are omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. We agree to furnish copies of any such instruments to the SEC upon
request.
Credit Agreement dated as of March 30, 2021, among Comcast Corporation, the financial institutions party thereto, JPMorgan Chase Bank,
N.A., as administrative agent, Citibank, N.A., as syndication agent, Bank of America, N.A., Mizuho Bank, Ltd., Morgan Stanley MUFG
Partners, LLC and Wells Fargo Bank, National Association, as co-documentation agents (incorporated by reference to Exhibit 10.1 to
Comcast’s Current Report on Form 8-K filed on March 31, 2021).
Amendment No. 1 dated December 31, 2021, to Credit Agreement dated as of March 30, 2021, among Comcast Corporation, the financial
institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Citibank, N.A., as syndication agent, Bank of America, N.A.,
Mizuho Bank, Ltd., Morgan Stanley MUFG Partners, LLC and Wells Fargo Bank, National Association, as co-documentation agents.
Comcast Select Deferred Compensation Plan, as amended and restated effective October 12, 2021.
Comcast Corporation 2003 Stock Option Plan, as amended and restated April 10, 2020 (incorporated by reference to Exhibit 10.4 to Comcast’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).
Comcast Corporation 2002 Deferred Compensation Plan, as amended and restated effective March 1, 2021 (incorporated by reference to
Exhibit 10.2 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021).
Comcast Corporation 2005 Deferred Compensation Plan, as amended and restated effective July 13, 2021.
Comcast Corporation 2002 Restricted Stock Plan, as amended and restated effective March 1, 2021 (incorporated by reference to Exhibit 10.1
to Comcast’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021).
Comcast Corporation 2006 Cash Bonus Plan, as amended and restated effective February 18, 2015 (incorporated by reference to Exhibit 10.11
to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2015).
Comcast Corporation 2002 Non-Employee Director Compensation Plan, as amended and restated effective July 31, 2020 (incorporated by
reference to Exhibit 10.2 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).
Comcast Corporation 2002 Employee Stock Purchase Plan, as amended and restated effective February 22, 2016 (incorporated by reference to
Appendix C to our Definitive Proxy Statement on Schedule 14A filed on April 8, 2016).
Comcast-NBCUniversal 2011 Employee Stock Purchase Plan, as amended and restated effective February 22, 2016 (incorporated by reference
to Appendix D to our Definitive Proxy Statement on Schedule 14A filed on April 8, 2016).
Employment Agreement with Brian L. Roberts, dated as of July 26, 2017 (incorporated by reference to Exhibit 10.2 to Comcast’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017).
Amendment No. 1 to Employment Agreement with Brian L. Roberts, dated as of December 16, 2019 (incorporated by reference to Exhibit
10.20 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2019).
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Comcast 2021 Annual Report on Form 10-K
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10.14*
10.15*
10.16*
10.17*
10.18*
10.19*
10.20*
10.21*
10.22*
10.23*
10.24*
10.25*
10.26*
10.27
10.28
10.29
10.30
Employment Agreement dated as of December 21, 2018 between Comcast Corporation and Michael J. Cavanagh (incorporated by reference to
Exhibit 99.1 to Comcast’s Current Report on Form 8-K filed on December 21, 2018).
Amendment No. 1 to Employment Agreement with Michael J. Cavanagh, dated as of December 16, 2019 (incorporated by reference to Exhibit
10.29 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2019).
Employment Agreement dated as of April 2, 2018 between Comcast Corporation and David N. Watson (incorporated by reference to Exhibit
10.4 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018).
Amendment No. 1 to Employment Agreement with David N. Watson, dated as of December 16, 2019 (incorporated by reference to Exhibit
10.31 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2019).
Amendment No. 2 to Employment Agreement with David N. Watson, dated as of April 29, 2020 (incorporated by reference to Exhibit 10.5 to
Comcast’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).
Employment Agreement dated as of February 19, 2020 between Comcast Corporation and Jeffrey Shell (incorporated by reference to Exhibit
10.2 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021).
Employment Agreement dated as of April 15, 2019 between Comcast Corporation and Thomas J. Reid (incorporated by reference to Exhibit
10.1 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021).
Form of Non-Qualified Stock Option and Long-Term Incentive Awards Summary Schedule under the Comcast Corporation 2003 Stock Option
Plan (incorporated by reference to Exhibit 10.35 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2020).
Form of Restricted Stock Unit Award and Long-Term Incentive Awards Summary Schedule under the Comcast Corporation 2002 Restricted
Stock Plan (incorporated by reference to Exhibit 10.36 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2020).
Form of Restricted Stock Unit Award and Long-Term Incentive Awards Summary Schedule under the Comcast Corporation 2002 Restricted
Stock Plan (incorporated by reference to Exhibit 10.37 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2020).
Form of Restricted Stock Unit Award and Long-Term Incentive Awards Summary Schedule under the Comcast Corporation 2002 Restricted
Stock Plan (incorporated by reference to Exhibit 10.38 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2020).
Form of Airplane Time Sharing Agreement (incorporated by reference to Exhibit 10.60 to Comcast’s Annual Report on Form 10-K for the
year ended December 31, 2014).
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.3 to Comcast’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009).
Third Amended and Restated Shareholders Agreement, dated as of November 26, 2020, among Atairos Group, Inc., Comcast AG Holdings,
LLC, Comcast Spectacor Ventures, LLC, Atairos Partners, L.P., Atairos Management, L.P. and Comcast Corporation (incorporated by
reference to Exhibit 10.41 to Comcast’s Annual Report on Form 10-K for the year ended December 31, 2020).
Consultant Agreement, dated as of January 20, 1987, between Steven Spielberg and Universal City Florida Partners (incorporated by reference
to Exhibit 10.49 to the Registration Statement on Form S-4 of Universal City Development Partners, Ltd. and UCDP Finance, Inc. filed on
January 20, 2010 (File No. 333-164431)).
Amendment dated February 5, 2001 to the Consultant Agreement dated as of January 20, 1987, between the Consultant and Universal City
Florida Partners (incorporated by reference to Exhibit 10.50 to the Registration Statement on Form S-4 of Universal City Development
Partners, Ltd. and UCDP Finance, Inc. filed on January 20, 2010 (File No. 333-164431)).
Amendment to the Consultant Agreement, dated as of October 18, 2009, between Steven Spielberg, Diamond Lane Productions, Inc. and
Universal City Development Partners, Ltd. (incorporated by reference to Exhibit 10.52 to the Registration Statement on Form S-4 of Universal
City Development Partners, Ltd. and UCDP Finance, Inc. filed on January 20, 2010 (File No. 333-164431)).
Comcast 2021 Annual Report on Form 10-K
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Table of Contents
10.31
Letter Agreement dated July 15, 2003, among Diamond Lane Productions, Vivendi Universal Entertainment LLLP and Universal City
Development Partners, Ltd. (incorporated by reference to Exhibit 10.51 to the Registration Statement on Form S-4 of Universal City
Development Partners, Ltd. and UCDP Finance, Inc. filed on January 20, 2010 (File No. 333-164431)).
21
22
23
31
32
101
104
*
List of subsidiaries.
Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the registrant (incorporated
by reference to Exhibit 22 to Comcast’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).
Consent of Deloitte & Touche LLP.
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
The following financial statements from Comcast Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021, filed
with the Securities and Exchange Commission on February 2, 2022, formatted in Inline Extensible Business Reporting Language (iXBRL): (1)
the Consolidated Statement of Income; (2) the Consolidated Statement of Comprehensive Income; (3) the Consolidated Statement of Cash
Flows; (4) the Consolidated Balance Sheet; (5) the Consolidated Statement of Changes in Equity; and (6) the Notes to Consolidated Financial
Statements.
Cover Page Interactive Data File (embedded within the iXBRL document)
Constitutes a management contract or compensatory plan or arrangement.
Item 16: Form 10-K Summary
None.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in Philadelphia, Pennsylvania on February 2, 2022.
By:
/s/ BRIAN L. ROBERTS
Brian L. Roberts
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ BRIAN L. ROBERTS
Brian L. Roberts
/s/ MICHAEL J. CAVANAGH
Michael J. Cavanagh
/s/ DANIEL C. MURDOCK
Daniel C. Murdock
/s/ KENNETH J. BACON
Kenneth J. Bacon
/s/ MADELINE S. BELL
Madeline S. Bell
/s/ NAOMI M. BERGMAN
Naomi M. Bergman
/s/ EDWARD D. BREEN
Edward D. Breen
/s/ GERALD L. HASSELL
Gerald L. Hassell
/s/ JEFFREY A. HONICKMAN
Jeffrey A. Honickman
/s/ MARITZA G. MONTIEL
Maritza G. Montiel
/s/ ASUKA NAKAHARA
Asuka Nakahara
/s/ DAVID C. NOVAK
David C. Novak
Chairman and Chief Executive Officer; Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
Executive Vice President, Chief Accounting
Officer and Controller
(Principal Accounting Officer)
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
February 2, 2022
Comcast 2021 Annual Report on Form 10-K
104
Exhibit 4.15
DESCRIPTION OF COMCAST CORPORATION’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934
As of December 31, 2021, Comcast Corporation (“Comcast,” the “Company,” “we,” “us” or “our”) had eleven classes
of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) our
common stock, (2) our 2.0% Exchangeable Subordinated Debentures due 2029, (3) our 5.50% Notes due 2029, (4) our 9.455%
Guaranteed Notes due 2022, (5) our 0.000% Notes due 2026, (6) our 0.250% Notes due 2027, (7) our 1.500% Notes due 2029,
(8) our 0.250% Notes due 2029, (9) our 0.750% Notes due 2032, (10) our 1.875% Notes due 2036 and (11) our 1.250% Notes
due 2040.
(1) DESCRIPTION OF OUR COMMON STOCK
In the following summary, references to the “Company,” “we,” “us” and “our” refer only to Comcast and not any of its
subsidiaries. The statements made under this caption include summaries of certain provisions contained in our articles of
incorporation and by-laws. This summary does not purport to be complete and is qualified in its entirety by reference to such
articles of incorporation and by-laws.
We have two classes of common stock outstanding: Class A common stock, $0.01 par value per share, and Class B
common stock, $0.01 par value per share. There are currently authorized 7.5 billion shares of Class A common stock, 75 million
shares of Class B common stock and 20 million shares of preferred stock. Our Board of Directors (the “Board”) may issue
preferred stock, in one or more series, without par value, with full, limited, multiple, fractional, or no voting rights, and with such
designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights and other special rights as
our Board shall determine.
Dividends
Subject to the preferential rights of any preferred stock then outstanding, holders of our Class A common stock and Class
B common stock are entitled to receive, from time to time, when, as and if declared, in the discretion of our Board, such cash
dividends as our Board may from time to time determine, out of such funds as are legally available therefor, in proportion to the
number of shares held by them, respectively, without regard to class.
Holders of our Class A common stock and Class B common stock will also be entitled to receive, from time to time,
when, as and if declared by our Board, such dividends of our stock or other property as our Board may determine, out of such
funds as are legally available therefor. However, stock dividends on, or stock splits of, any class of common stock will not be
paid or issued unless paid or issued on all classes of our common stock, in which case they will be paid or issued only in shares
of that class; provided, however, that stock dividends on, or stock splits of, our Class B common stock may also be paid or issued
in shares of our Class A common stock.
Voting Rights
As a general matter, on all matters submitted for a vote to holders of all classes of our voting stock, holders of our Class A
common stock in the aggregate hold 66 2/3% of the aggregate voting power of our capital stock, and holders of our Class B
common stock in the aggregate hold a non-dilutable 33 1/3% of the combined voting power of our capital stock. This
nondilutable voting power is subject to proportional decrease to the extent the number of shares
of Class B common stock is reduced below 9,444,375, subject to adjustment in specified situations. Stock dividends payable on
the Class B common stock in the form of Class B common stock do not decrease the nondilutable voting power of the Class B
common stock.
Approval Rights
Except as required by law, holders of Class A common stock have no specific approval rights over any corporate actions.
Holders of our Class B common stock have an approval right over (1) any merger of us with another company or any other
transaction, in each case that requires our shareholders’ approval under applicable law, or any other transaction that would result
in any person or group owning shares representing in excess of 10% of the aggregate voting power of the resulting or surviving
corporation, or any issuance of securities (other than pursuant to director or officer stock option or purchase plans) requiring our
shareholders’ approval under the rules and regulations of any stock exchange or quotation system; (2) any issuance of our Class
B common stock or any securities exercisable or exchangeable for or convertible into our Class B common stock; and (3) articles
of incorporation or by-law amendments (such as an amendment to the articles of incorporation to opt in to any of the
Pennsylvania antitakeover statutes) and other actions (such as the adoption, amendment or redemption of a shareholder rights
plan) that limit the rights of holders of our Class B common stock or any subsequent transferee of our Class B common stock to
transfer, vote or otherwise exercise rights with respect to our capital stock.
Conversion of Class B Common Stock
The Class B common stock is convertible share for share into Class A common stock, subject to certain restrictions.
Preference on Liquidation
In the event of our liquidation, dissolution or winding up, either voluntary or involuntary, the holders of Class A common
stock and Class B common stock are entitled to receive, subject to any liquidation preference of any preferred stock then
outstanding, our remaining assets, if any, in proportion to the number of shares held by them without regard to class.
Mergers, Consolidations, Etc.
Our articles of incorporation provide that if in a transaction such as a merger, consolidation, share exchange or
recapitalization, holders of each class of our common stock outstanding do not receive the same consideration for each of their
shares of our common stock (i.e., the same amount of cash or the same number of shares of each class of stock issued in the
transaction in proportion to the number of shares of our common stock held by them, respectively, without regard to class),
holders of each such class of our common stock will receive “mirror” securities (i.e., shares of a class of stock having
substantially equivalent rights as the applicable class of our common stock).
Miscellaneous
The holders of Class A common stock and Class B common stock do not have any preemptive rights. All shares of Class
A common stock and Class B common stock presently outstanding are, and all shares of the Class A common stock offered
hereby, or issuable upon conversion, exchange or exercise of securities offered hereby, will, when issued, be, fully paid and
nonassessable.
(2) DESCRIPTION OF OUR 2.0% EXCHANGEABLE SUBORDINATED DEBENTURES DUE 2029
The following summary of our 2.0% Exchangeable Subordinated Debentures due 2029 (the “ZONES”) is based on the
indenture dated as of June 15, 1999 between Comcast Holdings Corporation (“Comcast Holdings” or the “Issuer”) and Deutsche
Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee (the “Trustee”) (the “Base Indenture”),
as amended by the first supplemental indenture dated as of September 12, 2005 among Comcast Holdings, the Trustee and
Comcast (together with the Base Indenture, the “Indenture”). This summary does not purport to be complete and is qualified in its
entirety by reference to such Indenture. For the purposes of this summary, references to “we” and “our” refer only to Comcast
Holdings.
General
The ZONES are unsecured, subordinated obligations of Comcast Holdings and will mature on November 15, 2029.
Principal, premium, if any, and interest on the ZONES are payable at the office or agency we maintain for such purpose
within the City and State of New York or, at our option, payment of interest may be made by check mailed to the holders of the
ZONES at their respective addresses set forth in the register of holders of the ZONES, provided that all payments with respect to
ZONES, the holders of which have given wire transfer instructions, on or prior to the relevant record date, to the paying agent,
are made by wire transfer of immediately available funds to the accounts specified by the holders. Until we otherwise designate,
our office or agency in New York will be the office of the trustee maintained for that purpose. The ZONES are issued in
denominations of one ZONES and integral multiples thereof.
Interest
We make quarterly interest payments in an amount equal to $0.4082 per ZONES, or 2.0% per year of the original
principal amount, plus the amount of any quarterly cash dividend paid on the reference shares attributable to each ZONES.
Holders of the ZONES are not expected to receive interest attributable to any cash dividend on the reference shares for this
payment period because Sprint has never paid a cash dividend on its Sprint PCS stock.
Interest on the ZONES accrues from the issue date of the ZONES. We pay this interest quarterly in arrears on February
15, May 15, August 15 and November 15 of each year, beginning February 15, 2000, but subject to our right to defer quarterly
payments of interest.
We also distribute, as additional interest on the ZONES, any property, including cash (other than any quarterly cash
dividend), distributed on or with respect to the reference shares (other than publicly traded equity securities, which will
themselves become reference shares). If the additional interest on the reference shares includes publicly traded securities (other
than equity securities), we will distribute those securities. We will not, however, distribute fractional units of securities. We will
pay cash instead of distributing the fractional units. Otherwise, we will distribute the fair market value of any property
comprising additional interest as determined in good faith by our board of directors. We will distribute any additional interest to
holders of the ZONES on the 20th business day after it is distributed on the reference shares. The record date for any distribution
of additional interest is the 10th business day after the date any cash or property is distributed on the reference shares.
If extraordinary dividends on the reference shares are paid, the contingent principal amount will be reduced on a quarterly
basis to the extent necessary so that the yield to the date of computation (including all interest payments other than those
attributable to regular periodic cash
dividends) does not exceed 2.0%. In no event will the contingent principal amount be less than zero. Changes in the contingent
principal amount will not affect the amount of the quarterly interest payments.
If interest or additional interest is payable on a date that is not a business day (as defined at the end of this paragraph),
payment will be made on the next business day (and without any interest or other payment in respect of this delay). However, if
the next business day is in the next calendar year, payment of interest will be made on the preceding business day. A “business
day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The
City of New York are authorized or obligated by law or regulation to close.
Deferral of interest payments
If no event of default has occurred and is continuing under the ZONES, we can, on one or more occasions, defer quarterly
interest payments on the ZONES for up to 20 consecutive quarterly periods. If we terminate a deferral period and subsequently
elect to defer quarterly interest payments, we will again be subject to the 20 consecutive quarterly period limitation.
We will not, however, be subject to the 20 consecutive quarterly period limitation on deferral if, as a result of a tender
offer, an exchange offer, a business combination or otherwise, all reference shares cease to be outstanding, and we subsequently
elect to defer quarterly payments of interest on the ZONES.
Any deferral of interest payments cannot extend, however, beyond the maturity date of the ZONES. We can never defer
distributions of additional interest.
If we defer quarterly payments of interest, the contingent principal amount of the ZONES will increase by the amount of
the deferred quarterly payments of interest, plus accrued interest thereon at an annual rate of 2.0%, compounded quarterly, and
the early exchange ratio will be 100% for the quarter following each deferral of a payment of quarterly interest. Once we have
paid all deferred quarterly interest, plus accrued interest thereon, together with the quarterly interest payment for the current
quarterly interest payment period, the contingent principal amount will reduce by the amount of that payment of deferred
quarterly interest plus accrued interest thereon, the early exchange ratio will decrease to 95% and we can again defer quarterly
interest payments as described above. Instead of accruing cash interest on the ZONES during a quarterly deferral period, so long
as the current market value of the reference shares exceeds the original principal amount of the ZONES, we may at our option,
but are not obligated to, increase the number of reference shares attributable to each ZONES by an annual rate of 2.0%. If we
elect to make this increase, we will be deemed current on that quarterly payment of interest and will not increase the contingent
principal amount, although the early exchange ratio will remain at 100% only for the five business days immediately following
the scheduled quarterly interest payment date related to the deferral. After that five day period, the early exchange ratio will
decrease to 95%. At the time we give notice that we intend to defer a quarterly payment of interest, we must elect to either accrue
cash interest on the ZONES for that quarterly interest period or increase the number of reference shares attributable to the
ZONES, each as described above.
If we elect to defer interest on the ZONES in any particular quarter, we will give the trustee notice. We will also prepare a
press release and provide it to DTC for dissemination through the DTC broadcast facility. We will give this notice one business
day before the earlier of:
•
the record date for the next date that interest on the ZONES is payable; or
•
the date we are required to give notice to the NYSE (or any other applicable self-regulatory organization) or to
holders of the ZONES of the record date or the date any quarterly interest payment is payable.
We refer to the last date on which we can give notice that we intend to defer the payment of interest in respect of a
quarterly payment of interest as a deferral notice date. When applicable, we will state in any deferral notice that we are not
subject to the 20 consecutive period limitation on deferrals and may continue to defer the payment of quarterly interest until
maturity or earlier redemption.
Principal amount
The original principal amount per ZONES is equal to its initial purchase price, or $81.6325. The minimum amount
payable upon redemption or maturity of a ZONES (which we refer to as the contingent principal amount) will initially be equal to
the original principal amount. If an “extraordinary dividend” is ever paid on the reference shares, the contingent principal amount
will be reduced on a quarterly basis to the extent necessary so that the yield to the date of computation (including all quarterly
interest payments other than those attributable to regular periodic cash dividends) does not exceed a 2.0% annual yield. In no
event will the contingent principal amount be less than zero.
An “extraordinary dividend” means a dividend or distribution consisting of cash or any other property (other than
additional reference shares), except for regular periodic cash dividends.
If all of the reference shares cease to be outstanding as a result of a tender offer, an exchange offer, a business
combination or otherwise, the maturity of the ZONES will not be accelerated and the ZONES will continue to remain outstanding
until the maturity date unless earlier redeemed by us.
At maturity, holders will be entitled to receive the higher of (a) the contingent principal amount of the ZONES or (b) the
sum of the current market value of the reference shares on the maturity date plus any deferred quarterly payments of interest
(including any accrued interest thereon), plus, in each case, the final period distribution.
A “final period distribution” means, in respect of (a) the maturity date, a distribution determined in accordance with
clauses (2), (3) and (4) below, and (b) the redemption date, a distribution determined in accordance with clauses (1), (2), (3) and
(4) below. If the redemption date is in connection with a rollover offering, the distribution determined in accordance with clause
(4) shall be all dividends and distributions on or in respect of the reference shares which a holder of reference shares on the
pricing date (defined below) would be entitled to receive.
(1) Unless (a) the scheduled redemption date of the ZONES is also a scheduled quarterly interest payment date or (b)
quarterly interest has been deferred for the then current quarterly dividend period, an amount equal to an annual
rate of 2.0% on the original principal amount of the ZONES from the most recent scheduled interest payment date
to the date of redemption, plus
(2) all dividends and distributions on or in respect of the reference shares declared by the applicable reference
company and for which the ex- date for the dividend or distribution falls during the period from the date of
original issuance of the ZONES to the most recent scheduled interest payment date and which have not been
distributed to holders of reference shares prior to the most recent scheduled interest payment date, plus
(3) all dividends and distributions on or in respect of the reference shares which a holder of reference shares during
the period from the most recent scheduled quarterly interest payment date to the date immediately preceding the
first trading day of the averaging period is entitled to receive, plus
(4) a distribution equal to the sum of, for each successive day in the averaging period that is anticipated on the first
day of the averaging period to be a trading day, the amounts determined in accordance with the following formula:
E x (1 - 0.05n)
where:
E = all dividends and distributions on or in respect of the reference shares which a holder of reference shares on the
applicable day would be entitled to receive, provided that an ex- date that occurs on a day that is not a scheduled
trading day shall be deemed to have occurred on the immediately preceding scheduled trading day; and
n = the number of scheduled trading days that have elapsed in the averaging period with the first trading day of the
averaging period being counted as zero.
A holder of the ZONES is only entitled to receive distributions determined in accordance with clauses (2), (3) or (4) to the
extent actually distributed by the applicable reference company. Amounts calculated with respect to cash amounts paid by the
applicable reference company on reference shares as described in clauses (2), (3) or (4) before the redemption date or the
maturity date, as the case may be, will be paid on the redemption date or the maturity date, as the case may be. Amounts
calculated with respect to all other property distributed, or the cash value of the property, will be distributed within 20 business
days after it is distributed on the reference shares.
Exchange option
At any time or from time to time, holders of the ZONES may exchange the ZONES for an amount of cash equal to 95%
(which we refer to as the early exchange ratio) of the exchange market value of the reference shares attributable to each ZONES.
The early exchange ratio will be equal to (a) 95% of the exchange market value of the reference shares attributable to each
ZONES or (b) during a deferral of the quarterly interest payments on the ZONES or, if we so elect, during the pendency of any
tender or exchange offer for any of the reference shares, 100% of the exchange market value of the reference shares attributable
to each ZONES.
We will pay the amount due upon exchange as soon as reasonably practicable after delivery of an exchange notice to the
trustee, but in no event earlier than three trading days after the date of the notice or later than ten trading days after the date of the
notice.
The “exchange market value” means the closing price (as defined below) on the trading day (as defined below) following
the date of delivery of an exchange notice to the trustee, unless more than 500,000 ZONES have been delivered for exchange on
that date. If more than 500,000 ZONES have been delivered for exchange, then the exchange market value shall be the average
closing price on the five trading days following that date.
If more than 500,000 ZONES are delivered for exchange on any one day, we will give the trustee notice. We will also
issue a press release prior to 9:00 a.m., New York City time, on the next trading day, and provide it to DTC for dissemination
through the DTC broadcast facility.
Our failure to provide these notices, however, will not affect the determination of exchange market value as described above.
So long as the ZONES are held through DTC, a holder may exercise his or her exchange right through the relevant direct
participant in the DTC ATOP system. If the ZONES are held in certificated form, such holder may exercise his or her exchange
right as follows:
•
•
•
•
complete and manually sign an exchange notice in the form available from the trustee and deliver this notice to the
trustee at the office maintained by the trustee for this purpose;
surrender the ZONES to the trustee;
if required, furnish appropriate endorsement and transfer documents; and
if required, pay all transfer or similar taxes.
Pursuant to the Indenture, the date on which all of the foregoing requirements have been satisfied is the redemption date
with respect to the ZONES delivered for exchange.
Redemption
We may redeem at any time all but not some of the ZONES at a redemption price equal to the sum of the higher of the
contingent principal amount of the ZONES or the sum of the current market value of the reference shares plus any deferred
quarterly payments of interest, plus, in either case, the final period distribution.
The “current market value” (other than in the case of a rollover offering, which is described below) is defined as the
average closing price per reference share on the 20 trading days (which we refer to as the averaging period) immediately prior to
(but not including) the fifth business day preceding the redemption date; provided, however, that for purposes of determining the
payment required upon redemption in connection with a rollover offering, “current market value” means the closing price per
reference share on the trading day immediately preceding the date that the rollover offering is priced (which we refer to as the
pricing date) or, if the rollover offering is priced after 4:00 p.m., New York City time, on the pricing date, the closing price per
share on the pricing date, except that if there is not a trading day immediately preceding the pricing date or (where pricing occurs
after 4:00 p.m., New York City time, on the pricing date) if the pricing date is not a trading day, “current market value” means the
market value per reference share as of the redemption date as determined by a nationally recognized independent investment
banking firm retained by us.
A “rollover offering” means a refinancing by us of the ZONES by way of either (a) a sale of the reference shares or (b) a
sale of securities that are priced by reference to the reference shares, in either case, by means of a completed public offering or
offerings by us (which may include one or more exchange offers) and which is expected to yield net proceeds which are
sufficient to pay the redemption amount for all of the ZONES. The trustee will notify holders if we elect to redeem their ZONES
in connection with a rollover offering not less than 30 nor more than 60 business days prior to the redemption date. We will also
issue a press release prior to 4:00 p.m., New York City time, on the business day immediately before the day on which the closing
price of the reference shares is to be measured for the purpose of determining the current market value in connection with a
rollover offering. The notice will state we are firmly committed to price the rollover offering, will specify the date on which the
rollover offering is to be priced (including whether the rollover offering will be priced during trading on the pricing date or after
the close of trading on the pricing date) and consequently, whether the closing price
for the reference shares by which the current market value will be measured will be the closing price on the trading date
immediately preceding the pricing date or the closing price on the pricing date. We will provide that press release to DTC for
dissemination through the DTC broadcast facility.
The “closing price” of any security on any date of determination means the closing sale price (or, if no closing sale price
is reported, the last reported sale price) of that security (regular way) on the NYSE on that date or, if that security is not listed for
trading on the NYSE on that date, as reported in the composite transactions for the principal United States securities exchange on
which that security is so listed, or if that security is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq National Market, or if that security is not so reported, the last quoted bid price for that security in the
over-the-counter market as reported by the National Quotation Bureau or similar organization. In the event that no such quotation
is available for any day, our board of directors will be entitled to determine the closing price on the basis of those quotations that
it in good faith considers appropriate. To the extent that trading of reference shares regular way continues past 4:00 p.m., New
York City time, “closing price” shall be deemed to refer to the price at the time that is then customary for determining the trading
day’s index levels for stocks traded on the primary national securities exchange or automated quotation system on which the
reference shares are then traded or quoted. All references to 4:00 p.m., New York City time, in the definition of “current market
value” shall thereafter be deemed to refer to the then customary determination time.
A “trading day” is defined as a day on which the security, the closing price of which is being determined, (a) is not
suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of
business and (b) has traded at least once on the national or regional securities exchange or association or over-the-counter market
that is the primary market for the trading of that security.
In addition, if at any time on or prior to January 30, 2000, a “tax event” shall occur and be continuing, we will have the
right exercisable within 180 days after such “tax event”, upon not less than 15 business days’ notice, to redeem the ZONES, in
whole, at a redemption price equal to the higher of the contingent principal amount of the ZONES or the sum of the current
market value of the reference shares, determined by reference to an averaging period of 5 rather than 20 trading days, plus, in
either case, the final period distribution (computed by accounting for the 5-day averaging period), plus any deferred quarterly
payments of interest.
A “tax event” means that the trustee shall have received an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of (a) any amendment to, clarification of, or change (including any
announced prospective change) in the laws, or any regulations thereunder, of the United States or any political subdivision or
taxing authority thereof or therein, or (b) any judicial decision, official administrative pronouncement, ruling, regulatory
procedure, notice or announcement, including any notice or announcement of intent to adopt such procedures or regulations, in
each case, on or after the date of this prospectus supplement (a “change in tax law”), there is the creation by such change in tax
law of a substantial risk that, as a result of entrance into the ZONES, we will be treated for purposes of Section 1259 of the
Internal Revenue Code as having constructively sold some or all of our Sprint PCS Stock.
We will give holders 30 business days’ notice before the redemption of the ZONES (in the case of a redemption not
pursuant to a “tax event”) and will irrevocably deposit with the trustee sufficient funds to pay the redemption amount.
Distributions to be paid on or before the redemption date of the ZONES will be payable to the holders on the record dates for the
related dates of distribution.
Once notice of redemption is given and funds are irrevocably deposited, interest on the ZONES will cease to accrue on
and after the date of redemption and all rights of the holders of the ZONES will cease, except for the right of the holders to
receive the redemption amount (but without interest on that redemption amount), including, if applicable, the final period
distribution.
If the redemption date is not a business day, then the redemption amount will be payable on the next business day (and
without any interest or other payment in respect of that delay). However, if the next business day is in the next calendar year, the
redemption amount will be payable on the preceding business day.
If we improperly withhold or refuse to pay the redemption amount for the ZONES, interest on the ZONES will continue
to accrue at an annual rate of 2.0% from the original redemption date to the actual date of payment. In this case, the actual
payment date will be considered the redemption date for purposes of calculating the redemption amount. The final period
distribution will be deemed paid on the original redemption date scheduled to the extent paid as set forth in the definition of final
period distribution above.
In compliance with applicable law (including the United States federal securities laws), we and our affiliates may, at any
time, purchase outstanding ZONES by tender, in the open market or by private agreement.
Subordination
The ZONES are unsecured and junior in right of payment to all senior indebtedness (as we define below). This means that
no payment of principal, premium (if any) or interest on the ZONES may be made if:
•
•
any of our senior indebtedness is not paid when due, any applicable grace period with respect to any default for
non-payment of principal, premium, interest or any other payment due on any senior indebtedness has ended and
that default has not been cured or waived or ceased to exist; or
the maturity of any senior indebtedness has been accelerated because of a default.
On any distribution of our assets to creditors upon any dissolution, winding-up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership, reorganization or other similar proceedings, all principal of,
premium, if any, interest and any other amounts due or to become due on, all senior indebtedness must be paid in full before the
holders of the ZONES are entitled to receive or retain any payment. Because of this subordination, if we dissolve or otherwise
liquidate, holders of senior indebtedness may receive more, ratably, and holders of subordinated debt, including the ZONES, may
receive less, ratably, than our other creditors. Upon payment in full of the senior indebtedness, the holders of the ZONES will
assume rights similar to the holders of senior indebtedness to receive any remaining payments or distributions applicable to
senior indebtedness until all amounts owing on the ZONES are paid in full. The ZONES are intended to rank equally with all
other existing and future subordinated debt and trade obligations of Comcast Holdings.
“Senior indebtedness” means the principal of, premium, if any, interest on, and any other payment due pursuant to any of
the following, whether outstanding today or incurred by us in the future:
•
all of our indebtedness for money borrowed, including any indebtedness secured by a mortgage or other lien
which is (1) given to secure all or part of the purchase
price of property subject to the mortgage or lien, whether given to the vendor of that property or to another lender,
or (2) existing on property at the time we acquire it;
all of our indebtedness evidenced by notes, debentures, bonds or other securities sold by us for money;
all of our lease obligations which are capitalized on our books in accordance with generally accepted accounting
principles;
all indebtedness of others of the kinds described in the first two bullet points above and all lease obligations of
others of the kind described in the third bullet point above that we, in any manner, assume or guarantee or that we
in effect guarantee through an agreement to purchase, whether that agreement is contingent or otherwise; and
all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet
point above and all renewals or extensions of leases of the kinds described in the third or fourth bullet point above;
•
•
•
•
unless, in the case of any particular indebtedness, lease, renewal, extension or refunding, the instrument or lease creating
or evidencing it or the assumption or guarantee relating to it expressly provides that such indebtedness, lease, renewal, extension
or refunding is not superior in right of payment to subordinated debt securities. Our senior debt securities, and any indebtedness
outstanding under our senior subordinated debentures indenture dated as of October 17, 1991 between us and Harris Trust and
Savings Bank as successor trustee to Morgan Guaranty Trust Company of New York, constitute senior indebtedness for purposes
of the Indenture. Senior Indebtedness does not include any indebtedness that is by its terms junior or equal with the ZONES.
The ZONES do not limit our ability or that of our subsidiaries to incur additional indebtedness, including indebtedness
that ranks senior in priority of payment to the ZONES.
Amount payable upon bankruptcy
Upon dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other similar proceedings in respect of Comcast Holdings, holders of the ZONES should be entitled to
a claim against us in an amount equal to the higher of (a) the contingent principal amount of the ZONES or (b) the sum of the
current market value (without giving effect to the provisions relating to rollover offerings) of the reference shares plus any
deferred quarterly payments of interest (including any accrued interest thereon), plus, in either case, the final period distribution
determined as if the date of such event was the maturity date of the ZONES.
Because of the subordination provisions contained in the Indenture, the amount holders actually receive is likely to be
substantially less than the amount of their claim.
Dilution adjustments
For purposes of this document, “reference company” means Sprint and any other issuer of a reference share.
A “reference share” means, collectively:
•
•
initially, one share of Sprint PCS stock; and
after the issuance of the ZONES, each share or fraction of a share of publicly traded equity securities received by a
holder of a reference share in respect of that reference share, and, to the extent the reference share remains
outstanding after any of the following events but without duplication, including the reference share, in each case
directly or as the result of successive applications of this paragraph upon any of the following events:
◦
◦
◦
◦
◦
◦
the distribution on or in respect of a reference share in reference shares;
the combination of reference shares into a smaller number of shares or other units;
the subdivision of outstanding shares or other units of reference shares;
the conversion or reclassification of reference shares by issuance or exchange of other securities;
any consolidation or merger of a reference company, or any surviving entity or subsequent surviving entity
of a reference company (which we refer to as a reference company successor), with or into another entity
(other than a merger or consolidation in which the reference company is the continuing corporation and in
which the reference company common stock outstanding immediately prior to the merger or consolidation
is not exchanged for cash, securities or other property of the reference company or another corporation);
any statutory exchange of securities of the reference company or any reference company successor with
another corporation (other than in connection with a merger or acquisition and other than a statutory
exchange of securities in which the reference company is the continuing corporation and in which the
reference company common stock outstanding immediately prior to the statutory exchange is not
exchanged for cash, securities or other property of the reference company or another corporation); and
◦
any liquidation, dissolution or winding up of the reference company or any reference company successor.
For purposes of the foregoing:
•
•
a conversion or redemption by Sprint of all shares of Sprint PCS stock pursuant to Article Sixth, Section 7.1 of its
Articles of Incorporation shall be deemed a consolidation or merger, with the Sprint PCS Group deemed to be the
reference company, with Sprint deemed to be the reference company successor if Sprint FON stock or any other
common stock of Sprint is issued in exchange for the Sprint PCS stock or with the relevant acquiror of the Sprint
PCS Group assets deemed to be the reference company successor if common stock other than Sprint FON stock is
issued in exchange for the Sprint PCS stock; and
a redemption by Sprint pursuant to Article Sixth, Section 7.2 of its Articles of Incorporation of all of the
outstanding shares of Sprint PCS stock in exchange for common stock of one or more wholly-owned subsidiaries
that collectively hold all
of the assets and liabilities attributed to its PCS Group shall be deemed an exchange of shares of Sprint PCS stock
for shares of common stock of the relevant subsidiary or subsidiaries.
As described above under “Interest,” we will pay as additional interest to holders of the ZONES any property received in
distribution on a reference share, unless it is also a reference share, in which case it shall become part of a reference share. Upon
any distribution of fractional shares or units of securities, other than fractional reference shares, we will pay the holders cash in
lieu of distribution of such fractional shares or other units.
A “reference share offer” means any tender offer or exchange offer made for all or a portion of a class of reference shares
of a reference company. A “reference share offer” shall include a conversion or redemption by Sprint of less than all shares of
Sprint PCS stock pursuant to Article Sixth, Section 7.1 of its Articles of Incorporation.
If a reference share offer is made, we may, at our option, either:
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during the pendency of the offer, increase the early exchange ratio to 100%; or
• make a reference share offer adjustment.
A “reference share offer adjustment” means including as part of a reference share each share of publicly traded equity
securities, if any, deemed to be distributed on or in respect of a reference share as average transaction consideration less the
reference share proportionate reduction (as defined below).
The average transaction consideration deemed to be received by a holder of one reference share in a reference share offer
will be equal to (a) the aggregate consideration actually paid or distributed to all holders of reference shares in the reference share
offer, divided by (b) the total number of reference shares outstanding immediately prior to the expiration of the reference share
offer and entitled to participate in that reference share offer.
The “reference share proportionate reduction” means a proportionate reduction in the number of reference shares which
are the subject of the applicable reference share offer and attributable to one ZONES calculated in accordance with the following
formula:
where:
R = X / N
R =
X =
N =
the fraction by which the number of reference shares of the class of reference shares subject to the reference share
offer and attributable to one ZONES will be reduced.
the aggregate number of reference shares of the class of reference shares subject to the reference share offer
accepted in the reference share offer.
the aggregate number of reference shares of the class of reference shares subject to the reference share offer
outstanding immediately prior to the expiration of the reference share offer.
If we elect to make a reference share offer adjustment, we will distribute as additional interest on each ZONES the
average transaction consideration deemed to be received on the reference shares of the class subject to the reference share offer
and attributable to each ZONES immediately prior to giving effect to the reference share proportionate reduction relating to that
reference share offer (other than average transaction consideration that is publicly traded equity securities which will themselves
become reference shares as a result of a reference share offer adjustment).
If we elect to make a reference share offer adjustment, and during the pendency of the reference share offer another
reference share offer is commenced in relation to the reference shares the subject of the then existing reference share offer, we
can change our original election by electing to increase the early exchange ratio to 100% during the pendency of the new
reference share offer, or we can continue to elect to make a reference share offer adjustment. We will similarly be entitled to
change our election for each further reference share offer made during the pendency of any reference share offer for the same
class of reference shares. For the purposes of these adjustments, a material change to the terms of an existing reference share
offer will be deemed to be a new reference share offer.
If we elect to increase the early exchange ratio to 100% in connection with a reference share offer, no reference share
offer adjustment will be made and we cannot change our election if any further reference share offer is made.
We will give the trustee notice of our election in the event of any reference share offer. We will also prepare a press
release and provide it to DTC for dissemination through the DTC broadcast facility. We will give this notice no later than 10
business days before the scheduled expiration of the reference share offer.
Calculations in respect of the ZONES
We will be responsible for making all calculations called for under the ZONES. These calculations include, but are not
limited to, determination of:
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the contingent principal amount of the ZONES;
the current market value of the reference shares;
the exchange market value of the reference shares;
the final period distribution on the ZONES;
the cash value of any property distributed on the reference shares;
the average transaction consideration in a reference share offer;
the composition of a reference share; and
the amount of accrued interest payable upon redemption or at maturity of the ZONES.
We will make all these calculations in good faith and, absent manifest error, our calculations are final and binding on
holders of the ZONES. We will provide a schedule of our calculations to the trustee and the trustee is entitled to rely upon the
accuracy of our calculations without independent verification.
Modification and Waiver
Comcast Holdings, when authorized by a resolution of its Board certified to the Trustee, and the Trustee, without consent
of holders, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of
the following purposes:
(a) to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of the Issuer;
(b) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture
which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; or to make
such other provisions in regard to matters or questions arising under the Indenture or under any supplemental indenture as the
Board may deem necessary or desirable and which shall not adversely affect the interests of the holders of the ZONES in any
material respect;
(c) to establish the form or terms of securities of any series as permitted by Sections 2.01 and 2.03 to the Base Indenture;
(d) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the
ZONES and to add to or change any of the provisions of the Base Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 5.10 to the Base
Indenture;
(e) to comply with any requirements in connection with the qualification of the Indenture under the Trust Indenture Act of
1939;
(f) to provide for uncertificated or unregistered securities and to make all appropriate changes for such purpose;
(g) to make any change that does not adversely affect the rights of any holder;
(h) as provided by or pursuant to a board resolution or indenture supplemental hereto establishing the terms of one or
more series of ZONES;
(i) to add to the covenants of the Issuer such new covenants, restrictions, conditions or provisions as its Board shall
consider to be for the protection of the holders of ZONES, and with respect to which the Trustee has received an opinion of
counsel to a similar effect, and to make the occurrence, or the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default; provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement
upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the
right of the holders of a majority in aggregate principal amount of the ZONES to waive such an Event of Default; or
(j) to make any change so long as no ZONES are outstanding.
With the consent of the holders of not less than a majority in aggregate principal amount of the ZONES at the time
outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a
resolution of its Board, and the Trustee may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the
ZONES; provided, that no such supplemental indenture shall without the consent of each holder affected thereby:
(a) change the stated maturity of the principal of, or any sinking fund obligation or any installment of interest on the
ZONES;
(b) reduce the principal thereof or the rate of interest thereon, or any premium payable with respect thereto;
(c) change any place of payment where, or the currency in which, any ZONES or any premium or the interest thereon is
payable;
(d) change the provisions for calculating the optional redemption price, including the definitions relating thereto; make
any change to Section 4.07 or 4.10 to the Base Indenture;
(e) reduce the percentage in principal amount of outstanding ZONES the consent of whose holders is required for any
such supplemental indenture, for any waiver of compliance with any provisions of the Indenture or any defaults and their
consequences provided for in the Base Indenture;
(f) alter or impair the right to convert any ZONES at the rate and upon the terms provided in Article 13 to the Base
Indenture;
(g) waive a default in the payment of principal of or interest on any ZONES;
(h) adversely affect the rights of such holder under any mandatory redemption or repurchase provision or any right of
redemption or repurchase at the option of such holder;
(i) modify any of the provisions of Section 7.02 to the Base Indenture, except to increase any such percentage or to
provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of
ZONES affected thereby; or
(j) change or waive any provision that, pursuant to a board resolution or indenture supplemental hereto establishing the
terms of the ZONES, is prohibited to be so changed or waived.
Events of Default
“Event of Default” means each one of the following events which shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon any ZONES as and when the same shall become due and
payable, and continuance of such default for a period of 30 days;
(b) default in the payment of all or any part of the principal on any ZONES as and when the same shall become due
and payable either at maturity, upon redemption, by declaration or otherwise;
(c) default in the performance, or breach, of any covenant or warranty of the Issuer in respect of the ZONES (other
than a covenant or warranty in respect of the
ZONES a default in whose performance or whose breach is elsewhere in this section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the holders of at least 25% in principal amount
of the outstanding ZONES affected thereby, a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a “Notice of Default” pursuant to the Indenture;
(d) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an
involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for
any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order
shall remain unstayed and in effect for a period of 180 consecutive days;
(e) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or
consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any substantial part of its property, or make any general
assignment for the benefit of creditors; or
(f) any other Event of Default provided in the supplemental indenture or resolution of the Board under which such
ZONES are issued or in the form of security for such series.
If an Event of Default described in clauses (a), (b), (c), or (f) above occurs and is continuing, then, and in each and
every such case, unless the principal of all ZONES shall have already become due and payable, either the Trustee or the holders
of not less than 25% in aggregate principal amount of the ZONES then outstanding hereunder (each such series voting as a
separate class) by notice in writing to the Issuer (and to the Trustee if given by holders), may declare the entire principal of all
ZONES and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable. If an Event of Default described in clauses (d) or (e) occurs and is continuing, then the
principal amount of all ZONES then outstanding and interest accrued thereon, if any, shall be and become immediately due and
payable, without any notice or other action by any holder or the Trustee, to the full extent permitted by applicable law.
(3) DESCRIPTION OF OUR 9.455% GUARANTEED NOTES DUE 2022
The following summary of our 9.455% Guaranteed Notes due 2022 (the “2022 Notes”) is based on the indenture dated as
of November 14, 2002 between AT&T Broadband Corp., certain guarantors named therein and the Bank of New York (the “Base
Indenture”), as amended by the first supplemental indenture dated as of August 31, 2009, the second supplemental indenture
dated as of March 27, 2013 and the third supplemental indenture dated as of October 1, 2015 among Comcast Cable
Communications, LLC as the obligor (as successor issuer to AT&T Broadband Corp., the “Issuer”), Comcast, NBCUniversal
Media, LLC (together with Comcast, the “Guarantors”), and The Bank of New York Mellon (f/k/a The Bank of New York), as
trustee (the “Trustee”) (collectively with the Base Indenture, the “Indenture”). This summary does not purport to be complete and
is qualified in its entirety by reference to such Indenture. For the purposes of this summary, references to “we” and “our” refer to
Comcast Cable Communications, LLC.
The 2022 Notes are the Issuer’s direct unsecured and unsubordinated obligations and are fully and unconditionally
guaranteed by the Guarantors.
Interest Payments
The 2029 Notes bears interest at a rate of 9.455% per annum and the Issuer will pay interest semi-annually in arrears on
each May 15 and November 15, commencing May 15, 2003. Interest for the 2022 Notes is computed on the basis of a 360-day
year consisting of twelve 30-day months. Interest on the 2022 Notes will accrue from the date of original issuance, or from the
most recent interest payment date to which interest has been paid and will be payable semiannually on interest payment dates
described of each year.
Guarantees
The guarantees will rank equally with all other general unsecured and unsubordinated obligations of the Guarantors.
The guarantees will not contain any restrictions on the ability of any of Guarantor to (i) pay dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any of that Guarantor’s capital stock or (ii) make
any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of that guarantor.
No Optional Redemption
The 2022 Notes will not be subject to optional redemption by the Issuer.
No Mandatory Redemption or Sinking Fund
There is no mandatory redemption prior to maturity or sinking fund payments for the 2022 Notes.
Additional Debt
The Indenture does not limit the amount of debt the Issuer may issue under the Indenture or otherwise.
Certain Covenants
The Issuer and the Guarantors are subject to some restrictions on their activities for the benefit of holders of all series of
debt securities issued under the Indenture. The restrictive covenants summarized below apply, unless the covenants are waived or
amended, so long as any of the debt securities are outstanding.
The Indenture does not contain any financial covenants other than those summarized below and does not restrict the
Issuer or its subsidiaries from paying dividends or incurring additional debt. In addition, the Indenture does not protect holders of
notes issued under it in the event of a highly leveraged transaction or a change in control.
Limitation on Liens Securing Indebtedness
Neither Issuer nor any Guarantor shall create, incur or assume any Lien (other than any Permitted Lien) on such person’s
assets, including the Capital Stock of its wholly owned subsidiaries to secure the payment of Indebtedness of the Issuer or any
Guarantor, unless the
Issuer secures the outstanding 2022 Notes equally and ratably with (or prior to) all Indebtedness secured by such Lien, so long as
such Indebtedness shall be so secured.
Limitation on Sale and Leaseback Transactions
Neither the Issuer nor any Guarantor shall enter into any Sale and Leaseback Transaction involving any of such person’s
assets, including the Capital Stock of its wholly owned subsidiaries.
The restriction in the foregoing paragraph shall not apply to any Sale and Leaseback Transaction if:
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the lease is for a period of not in excess of three years, including renewal of rights;
the lease secures or relates to industrial revenue or similar financing;
the transaction is solely between the Issuer and a Guarantor or between or among Guarantors; or
the Issuer or such Guarantor, within 270 days after the sale is completed, applies an amount equal to or greater
than (a) the net proceeds of the sale of the assets or part thereof leased or (b) the fair market value of the assets or
part thereof leased (as determined in good faith by the Issuer’s Board of Directors) either to:
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the retirement (or open market purchase) of notes, other long-term Indebtedness of the Issuer ranking on a
parity with or senior to the 2022 Notes or long-term Indebtedness of a Guarantor; or
the purchase by the Issuer or any Guarantor of other property, plant or equipment related to the business of
the Issuer or any Guarantor having a value at least equal to the value of the assets or part thereof leased.
“Capitalized Lease” means, as applied to any person, any lease of any property (whether real, personal, or mixed) of
which the discounted present value of the rental obligations of such person as lessee, in conformity with GAAP, is required to be
capitalized on the balance sheet of such person; and “Capitalized Lease Obligation” is defined to mean the rental obligations, as
aforesaid, under such lease.
“Capital Stock” means, with respect to any person, any and all shares, interests, participations, or other equivalents
(however designated, whether voting or non-voting) of such person’s capital stock or other ownership interests, whether now
outstanding or issued after the date of the Indenture, including, without limitation, all common stock and preferred stock.
“Currency Agreement” means any foreign exchange contract, currency swap agreement, or other similar agreement or
arrangement designed to protect against the fluctuation in currency values.
“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the date of
determination, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by a significant
segment of the accounting profession. All ratios and computations contained in the Indenture shall be computed in conformity
with GAAP applied on a consistent basis.
“Guarantee” means any obligation, contingent or otherwise, of any person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other person and, without limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such person:
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to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other person (whether arising by virtue of partnership arrangements, or by agreement to keep-
well, to purchase assets, goods, securities, or services, to take-or-pay, or to maintain financial statement conditions
or otherwise); or
entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” used as a verb has a corresponding meaning.
“Indebtedness” means, with respect to any person at any date of determination (without duplication):
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all indebtedness of such person for borrowed money;
all obligations of such person evidenced by bonds, debentures, notes, or other similar instruments;
all obligations of such person in respect of letters of credit or other similar instruments (including reimbursement
obligations with respect thereto);
all obligations of such person to pay the deferred and unpaid purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of business);
all obligations of such person as lessee under Capitalized Leases;
all Indebtedness of other persons secured by a Lien on any asset of such person, whether or not such Indebtedness
is assumed by such person; provided that the amount of such Indebtedness shall be the lesser of:
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the fair market value of such asset at such date of determination; and
the amount of such Indebtedness;
all Indebtedness of other persons Guaranteed by such person to the extent such Indebtedness is Guaranteed by
such person; and
to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate
Agreements.
The amount of Indebtedness of any person at any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation; provided:
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that the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at
such time as determined in conformity with GAAP; and
that Indebtedness shall not include any liability for federal, state, local, or other taxes.
“Interest Rate Agreements” means any obligations of any person pursuant to any interest rate swaps, caps, collars, and
similar arrangements providing protection against fluctuations in interest rates. For purposes of the indenture, the amount of such
obligations shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such
person, based on the assumption that such obligation had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such obligation provides for the netting of amounts payable by and to such person
thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such person, then in each such
case, the amount of such obligations shall be the net amount so determined, plus any premium due upon default by such person.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind,
or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset.
For the purposes of the Indenture, the Issuer or any Guarantor shall be deemed to own subject to a Lien any asset that it has
acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
“Permitted Liens” means:
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any Lien on any asset incurred prior to the date of the Indenture;
any Lien on any assets acquired after the date of the Indenture (including by way of merger or consolidation) by
the Issuer or any Guarantor, which Lien is created, incurred or assumed contemporaneously with such acquisition,
or within 270 days thereafter, to secure or provide for the payment or financing of any part of the purchase price
thereof, or any Lien upon any assets acquired after the date of the Indenture existing at the time of such acquisition
(whether or not assumed by the Issuer or any Guarantor), provided that any such Lien shall attach only to the
assets so acquired;
any Lien on any assets in favor of the Issuer or any Guarantor;
any Lien on assets incurred in connection with the issuance of tax-exempt governmental obligations (including,
without limitation, industrial revenue bonds and similar financing);
any Lien granted by any Guarantor on assets to the extent limitations on the incurrence of such Liens are
prohibited by any agreement to which such Guarantor is subject as of the date of the Indenture; and
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any renewal of or substitution for any Lien permitted by any of the preceding bullet points, including any Lien
securing reborrowing of amounts previously secured within 270 days of the repayment thereof, provided that no
such renewal or substitution shall extend to any assets other than the assets covered by the Lien being renewed or
substituted.
“Sale and Leaseback Transaction” means any direct or indirect arrangement with any person or to which any such
person is a party, providing for the leasing to the Issuer or a Guarantor of any property, whether owned by the Issuer or such
Guarantor at the date of the original issuance of the 2022 Notes or later acquired, which has been or is to be sold or transferred by
the Issuer or such Guarantor to such person or to any other person by whom funds have been or are to be advanced on the
security of such property.
Consolidation, Merger and Sale of Assets
The Indenture restricts the Issuer’s ability to consolidate with, merge with or into, or sell, convey, transfer, lease, or
otherwise dispose of all or substantially all of its property and assets as an entirety or substantially an entirety in one transaction
or a series of related transactions to any person (other than a consolidation with or merger with or into or a sale, conveyance,
transfer, lease or other disposition to a wholly-owned subsidiary with a positive net worth; provided that, in connection with any
merger of the Issuer and a wholly-owned subsidiary, no consideration other than common stock in the surviving person shall be
issued or distributed to the Issuer’s stockholders) or permit any person to merge with or into such party unless:
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the Issuer is the continuing person or the person formed by such consolidation or into which such party is merged
or that acquired or leased such property and assets shall be a corporation or limited liability company organized
and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, all of the Issuer’s obligations on all of
the 2022 Notes and under the Indenture;
immediately after giving effect to such transaction, no default or event of default shall have occurred and be
continuing; and
the Issuer delivers to the Trustee an officers’ certificate and opinion of counsel, in each case stating that such
consolidation, merger, or transfer and such supplemental indenture complies with this provision and that all
conditions precedent provided for in the Indenture and notes relating to such transaction have been complied with;
provided, however, that the foregoing limitations will not apply if, in the good faith determination of the Issuer’s board of
directors, whose determination must be set forth in a board resolution, the principal purpose of such transaction is to change the
state of incorporation of such party; and provided further that any such transaction shall not have as one of its purposes the
evasion of the foregoing limitations.
Upon any express assumption of the Issuer’s obligations as described above, the Issuer shall be released and discharged
from all obligations and covenants under the Indenture and all the 2022 Notes.
The Indenture and the guarantees do not limit the ability of any guarantor to consolidate with or merge into or sell all or
substantially all its assets. Upon the sale or disposition of any guarantor (by merger, consolidation, the sale of its capital stock or
the sale of all or substantially
all of its assets) to any person, that guarantor will be deemed released from all its obligations under the Indenture and its
guarantee.
Modification and Waiver
The Issuer and the Trustee may amend or supplement the Indenture or the 2022 Notes without notice to or the consent of
any holder:
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to cure any ambiguity, defect, or inconsistency in the Indenture; provided that such amendments or supplements
shall not adversely affect the interests of the holders in any material respect;
to comply with the provisions described under “-Certain Covenants-Consolidation, Merger and Sale of Assets;”
to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust
Indenture Act;
to evidence and provide for the acceptance of appointment hereunder by a successor Trustee;
to establish the form or forms or terms of the 2022 Notes as permitted by the Indenture;
to provide for uncertificated notes and to make all appropriate changes for such purpose;
to make any change that does not adversely affect the rights of any holder;
to add to its covenants such new covenants, restrictions, conditions or provisions for the protection of the holders,
and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an event of default; or
to make any change so long as no 2022 Notes are outstanding.
Subject to certain conditions, without prior notice to any holder of 2022 Notes, modifications and amendments of the
Indenture may be made by the Issuer and the Trustee with respect to any series of 2022 Notes with the written consent of the
holders of a majority in principal amount of the affected series of 2022 Notes, and compliance by the Issuer with any provision of
the Indenture with respect to any series of 2022 Notes may be waived by written notice to the Trustee by the holders of a majority
in principal amount of the affected series of 2022 Notes outstanding; provided, however, that each affected holder must consent
to any modification, amendment or waiver that:
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changes the stated maturity of the principal of, or any installment of interest on, the 2022 Notes of the affected
series;
reduces the principal amount of, or premium, if any, or interest on, the 2022 Notes of the affected series;
changes the place or currency of payment of principal of, or premium, if any, or interest on, the 2022 Notes of the
affected series;
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changes the provisions for calculating the optional redemption price, including the definitions relating thereto;
changes the provisions relating to the waiver of past defaults or changes or impairs the right of holders to receive
payment or to institute suit for the enforcement of any payment of the 2022 Notes of the affected series on or after
the due date therefor;
reduces the above-stated percentage of outstanding 2022 Notes of the affected series the consent of whose holders
is necessary to modify or amend or to waive certain provisions of or defaults under the Indenture;
• waives a default in the payment of principal of, premium, if any, or interest on the 2022 Notes; or
• modifies any of the provisions of this paragraph, except to increase any required percentage or to provide that
certain other provisions cannot be modified or waived without the consent of the holder of each 2022 Note of the
series affected by the modification.
It is not necessary for the consent of the holders under the Indenture to approve the particular form of any note
amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment,
supplement or waiver under the Indenture becomes effective, notice must be given to the holders affected thereby briefly
describing the amendment, supplement, or waiver. Supplemental indentures will be mailed to holders upon request. Any failure
to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Events of Default
For purposes of this section, the term “Obligor” shall mean each of the Issuer and Guarantors, in each case excluding such
entities’ subsidiaries.
An event of default for a series of 2022 Notes is defined under the Indenture as being:
(1) a default by any Obligor in the payment of principal or premium on the 2022 Notes of such series when the same
becomes due and payable whether at maturity, upon acceleration, redemption or otherwise;
(2) a default by any Obligor in the payment of interest on the 2022 Notes of such series when the same becomes due
and payable, if that default continues for a period of 30 days;
(3) default by any Obligor in the performance of or breach by any Obligor of any of its other covenants or agreements
in the Indenture applicable to all the 2022 Notes or applicable to the 2022 Notes of any series and that default or
breach continues for a period of 30 consecutive days after written notice is received from the Trustee or from the
holders of 25% or more in aggregate principal amount of the 2022 Notes of all affected series;
(4) any guarantee is not in full force and effect;
(5) a court having jurisdiction enters a decree or order for:
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relief in respect of any Obligor in an involuntary case under any applicable bankruptcy, insolvency, or
other similar law now or hereafter in effect;
appointment of a receiver, liquidator, assignee, custodian, Trustee, sequestrator or similar official of any
Obligor for any substantial part of such party’s property and assets; or
the winding up or liquidation of any Obligor’s affairs and such decree or order shall remain unstayed and
in effect for a period of 180 consecutive days; or
(6) any Obligor:
•
•
•
commences a voluntary case under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law;
consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official of such party or for any substantial part of such party’s property; or
effects any general assignment for the benefit of creditors.
A default under any Obligor’s other indebtedness is not a default under the Indenture.
If an event of default other than an event of default specified in clauses (5) and (6) above occurs with respect to an issue
of 2022 Notes and is continuing under the Indenture, then, and in each and every such case, either the Trustee or the holders of
not less than 25% in aggregate principal amount of such 2022 Notes then outstanding under the Indenture by written notice to the
Issuer and to the Trustee, if such notice is given by the holders, may, and the Trustee at the request of such holders shall, declare
the principal amount of and accrued interest, if any, on such 2022 Notes to be immediately due and payable. The amount due
upon acceleration shall include only the original issue price of the 2022 Notes and accrued to the date of acceleration and accrued
interest, if any. Upon a declaration of acceleration, such principal amount of and accrued interest, if any, on such 2022 Notes shall
be immediately due and payable. If an event of default specified in clauses (5) and (6) above occurs with respect to any Obligor,
the principal amount of and accrued interest, if any, on each issue of 2022 Notes then outstanding shall be and become
immediately due and payable without any notice or other action on the part of the Trustee or any holder.
Upon certain conditions such declarations may be rescinded and annulled and past defaults may be waived by the holders
of a majority in aggregate principal amount of an issue of 2022 Notes that has been accelerated. Furthermore, subject to various
provisions in the Indenture, the holders of at least a majority in aggregate principal amount of an issue of 2022 Notes by notice to
the Trustee may waive an existing default or event of default with respect to such 2022 Notes and its consequences, except a
default in the payment of principal of or interest on such 2022 Notes or in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the holders of each such 2022 Notes. Upon any such waiver, such
default shall cease to exist, and any event of default with respect to such 2022 Notes shall be deemed to have been cured, for
every purpose of the Indenture; but no such waiver shall extend to any subsequent or other default or event of default or impair
any right consequent thereto. For information as to the waiver of defaults, see “-- Modification and Waiver.”
The holders of at least a majority in aggregate principal amount of an issue of 2022 Notes may direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to such 2022 Notes. However, the Trustee may refuse to follow any direction that conflicts with law or the
Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of holders of such issue of 2022 Notes not joining in the giving of such direction and may take any other
action it deems proper that is not inconsistent with any such direction received from holders of such issue of 2022 Notes. A
holder may not pursue any remedy with respect to the Indenture or any series of 2022 Notes unless:
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•
the holder gives the Trustee written notice of a continuing event of default;
the holders of at least 25% in aggregate principal amount of such series of 2022 Notes make a written request to
the Trustee to pursue the remedy in respect of such event of default;
the requesting holder or holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability,
or expense;
the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity;
and
during such 60-day period, the holders of a majority in aggregate principal amount of such series of 2022 Notes do
not give the Trustee a direction that is inconsistent with the request.
These limitations, however, do not apply to the right of any holder of the 2022 Note to receive payment of the principal
of, premium, if any, or interest on such the 2022 Note, or to bring suit for the enforcement of any such payment, on or after the
due date for the 2022 Notes, which right shall not be impaired or affected without the consent of the holder.
The Indenture will require certain of officers of the Issuer to certify, on or before a date not more than 120 days after the
end of each fiscal year, as to their knowledge of the Issuer’s compliance with all conditions and covenants under the Indenture,
such compliance to be determined without regard to any period of grace or requirement of notice provided under the Indenture.
(4) DESCRIPTION OF OUR 5.50% NOTES DUE 2029
The following summary of our 5.50% Notes due 2029 (the “2029 Notes”) is based on the indenture dated as of January 7,
2003 among Comcast as the issuer (the “Issuer”), certain guarantors named therein and the Bank of New York (the “Base
Indenture”), as amended by the first supplemental indenture dated as of March 25, 2003, the second supplemental indenture dated
as of August 31, 2009, the third supplemental indenture dated as of March 27, 2013 and the fourth supplemental indenture dated
as of October 1, 2015 among Comcast, Comcast Cable Communications, LLC, NBCUniversal Media, LLC (together with
Comcast Cable Communications, LLC, the “Guarantors”), and The Bank of New York Mellon (f/k/a The Bank of New York), as
trustee (the “Trustee”) (collectively with the Base Indenture, the “Indenture”). This summary does not purport to be complete and
is qualified in its entirety by reference to such Indenture.
Interest Payments
The 2029 Notes bears interest at a rate of 5.50% per annum and we will pay interest on the 2029 Notes on November 23
of each year, beginning November 23, 2011. Interest on the 2029 Notes is computed on the basis of the actual number of days in
the period for which interest is being calculated and the actual number of days from and including the date from which interest
begins to accrue for the period (or November 23, 2010 if no interest has been paid on the 2029 Notes), to but excluding the next
scheduled interest payment date. If the scheduled interest payment date is not a business day, then interest will be paid on the first
business day following the scheduled interest payment date. Interest periods are unadjusted. The day count convention is
ACTUAL/ACTUAL (ICMA).
Guarantees
Our obligations under the 2029 Notes and the Indenture, including the payment of principal, premium, if any, and interest,
are fully and unconditionally guaranteed by each of the Guarantors
The guarantees will not contain any restrictions on the ability of any Guarantor to (i) pay dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of that Guarantor’s capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of that Guarantor.
Optional Redemption
We have the right at our option to redeem any of the 2029 Notes in whole or in part, at any time or from time to time prior
to their maturity, on at least 30 days, but not more than 60 days, prior notice mailed to the registered address of each holder of
notes, at a redemption price equal to the greater of (i) 100% of the principal amount of such notes and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of
redemption) discounted to the redemption date on an annual basis (actual/actual (ICMA)) at the Comparable Government Bond
Rate plus 28 basis points (the “Make-Whole Amount”) plus, in each case, accrued and unpaid interest thereon to the date of
redemption.
“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places,
0.0005 being rounded upwards), at which the gross redemption yield (as calculated by the trustee) on the 2029 Notes, if they
were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross
redemption yield on such business day of the Comparable Government Bond (as defined below) on the basis of the middle
market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by
an independent investment bank selected by us.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the
discretion of an independent investment bank selected by us, a United Kingdom government bond whose maturity is closest to
the maturity of the 2029 Notes, or if such independent investment bank in its discretion considers that such similar bond is not in
issue, such other United Kingdom government bond as such independent investment bank may, with the advice of three brokers
of, and/or market makers in, United Kingdom government bonds selected by such independent investment bank, determine to be
appropriate for determining the Comparable Government Bond Rate.
On and after the redemption date, interest will cease to accrue on the 2029 Notes or any portion of the 2029 Notes called
for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date,
we will deposit with
the trustee money sufficient to pay the redemption price of and (unless the redemption date shall be an interest payment date)
accrued and unpaid interest to the redemption date on the 2029 Notes to be redeemed on such date. If less than all of the 2029
Notes of any series are to be redeemed, the 2029 Notes to be redeemed shall be selected by the trustee by such method as the
trustee shall deem fair and appropriate. Additionally, we may at any time repurchase notes in the open market and may hold or
surrender such notes to the trustee for cancellation.
The 2029 Notes are also subject to redemption prior to maturity if certain events occur involving United States taxation. If
any of these special tax events do occur, the 2029 Notes will be redeemed at a redemption price of 100% of their principal
amount plus accrued and unpaid interest to the date fixed for redemption. See “-Redemption for Tax Reasons.”
Payment of Additional Amounts
We are required, subject to the exceptions and limitations set forth below, to pay as additional interest on the 2029 Notes
such additional amounts as are necessary in order that the net payment by us or a paying agent of the principal of and interest on
the 2029 Notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or
future tax, assessment or other governmental charge imposed by the United States or a taxing authority in the United States will
not be less than the amount provided in the 2029 Notes to be then due and payable; provided, however, that the foregoing
obligation to pay additional amounts shall not apply:
(1) to any tax, assessment or other governmental charge that would not have been imposed but for the holder, or a
fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or
corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being
considered as:
(a)
(b)
(c)
(d)
(e)
being or having been engaged in a trade or business in the United States or having or having had a
permanent establishment in the United States;
having a current or former connection with the United States (other than a connection arising solely as a
result of the ownership of the 2029 Notes, the receipt of any payment or the enforcement of any rights
hereunder), including being or having been a citizen or resident of the United States;
being or having been a personal holding company, a passive foreign investment company or a controlled
foreign corporation with respect to the United States or a corporation that has accumulated earnings to
avoid United States federal income tax;
being or having been a “10-percent shareholder” of Comcast as defined in section 871(h)(3) of the United
States Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision; or
being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into
the ordinary course of its trade or business;
(2) to any holder that is not the sole beneficial owner of the 2029 Notes, or a portion of the 2029 Notes, or that is a
fiduciary, partnership or limited liability company, but only to the extent that a beneficiary or settlor with respect
to the fiduciary, a beneficial owner or member of the partnership or limited liability company would
not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or
member received directly its beneficial or distributive share of the payment;
(3) to any tax, assessment or other governmental charge that would not have been imposed but for the failure of the
holder or any other person to comply with certification, identification or information reporting requirements
concerning the nationality, residence, identity or connection with the United States of the holder or beneficial
owner of the 2029 Notes, if compliance is required by statute, by regulation of the United States or any taxing
authority therein or by an applicable income tax treaty to which the United States is a party as a precondition to
exemption from such tax, assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a
paying agent from the payment;
(5) to any tax, assessment or other governmental charge that would not have been imposed but for a change in law,
regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment
becomes due or is duly provided for, whichever occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax,
assessment or other governmental charge;
(7) to any withholding or deduction that is imposed on a payment to an individual and that is required to be made
pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union
Directive on the taxation of savings;
(8) to any tax, assessment or other governmental charge required to be withheld by any paying agent from any
payment of principal of or interest on any note, if such payment can be made without such withholding by at least
one other paying agent;
(9) to any tax, assessment or other governmental charge that would not have been imposed but for the presentation by
the holder of any note, where presentation is required, for payment on a date more than 30 days after the date on
which payment became due and payable or the date on which payment thereof is duly provided for, whichever
occurs later; or
(10) in the case of any combination of items (1), (2), (3), (4), (5), (6), (7), (8), and (9).
The 2029 Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial
interpretation applicable to the 2029 Notes. Except as specifically provided under this heading “-Payments of Additional
Amounts,” we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any
government or a political subdivision or taxing authority of or in any government or political subdivision.
As used under this heading “-Payments of Additional Amounts” and under the heading “-Redemption for Tax Reasons”,
the term “United States” means the United States of America (including the states and the District of Columbia and any political
subdivision thereof), and the term “United States person” means any individual who is a citizen or resident of the United States
for U.S. federal income tax purposes, a corporation, partnership or other entity created or
organized in or under the laws of the United States, any state of the United States or the District of Columbia (other than a
partnership that is not treated as a United States person under any applicable Treasury regulations), or any estate or trust the
income of which is subject to United States federal income taxation regardless of its source.
Redemption for Tax Reasons
If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of
the United States (or any taxing authority in the United States), or any change in, or amendments to, an official position regarding
the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes
effective on or after the date of this prospectus supplement, we become or, based upon a written opinion of independent counsel
selected by us, will become obligated to pay additional amounts as described herein under the heading “-Payment of Additional
Amounts” with respect to the 2029 Notes, then we may at any time at our option redeem, in whole, but not in part, the 2029
Notes on not less than 30 nor more than 60 days prior notice, at a redemption price equal to 100% of their principal amount,
together with interest accrued but unpaid on those notes to the date fixed for redemption.
No Mandatory Redemption or Sinking Fund
There is no mandatory redemption prior to maturity or sinking fund payments for the 2029 Notes.
Additional Debt
The indenture does not limit the amount of debt we may issue under the indenture or otherwise.
Certain Covenants
The Issuer and the Guarantors are subject to some restrictions on their activities for the benefit of holders of all series of
debt securities issued under the Indenture. The restrictive covenants summarized below apply, unless the covenants are waived or
amended, so long as any of the debt securities are outstanding.
The Indenture does not contain any financial covenants other than those summarized below and does not restrict the
Issuer or its subsidiaries from paying dividends or incurring additional debt. In addition, the Indenture will not protect holders of
notes issued under it in the event of a highly leveraged transaction or a change in control.
Limitation on Liens Securing Indebtedness
Neither Issuer nor any Guarantor shall create, incur or assume any Lien (other than any Permitted Lien) on such person’s
assets, including the Capital Stock of its wholly owned subsidiaries to secure the payment of Indebtedness of the Issuer or any
Guarantor, unless the Issuer secures the outstanding 2029 Notes equally and ratably with (or prior to) all Indebtedness secured by
such Lien, so long as such Indebtedness shall be so secured.
Limitation on Sale and Leaseback Transactions
Neither the Issuer nor any Guarantor shall enter into any Sale and Leaseback Transaction involving any of such person’s
assets, including the Capital Stock of its wholly owned subsidiaries.
The restriction in the foregoing paragraph shall not apply to any Sale and Leaseback Transaction if:
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the lease is for a period of not in excess of three years, including renewal of rights;
the lease secures or relates to industrial revenue or similar financing;
the transaction is solely between the Issuer and a Guarantor or between or among Guarantors; or
the Issuer or such Guarantor, within 270 days after the sale is completed, applies an amount equal to or greater
than (a) the net proceeds of the sale of the assets or part thereof leased or (b) the fair market value of the assets or
part thereof leased (as determined in good faith by the Issuer’s Board of Directors) either to:
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the retirement (or open market purchase) of notes, other long-term Indebtedness of the Issuer ranking on a
parity with or senior to the 2029 Notes or long-term Indebtedness of a Guarantor; or
the purchase by the Issuer or any Guarantor of other property, plant or equipment related to the business of
the Issuer or any Guarantor having a value at least equal to the value of the assets or part thereof leased.
“Capitalized Lease” means, as applied to any person, any lease of any property (whether real, personal, or mixed) of
which the discounted present value of the rental obligations of such person as lessee, in conformity with GAAP, is required to be
capitalized on the balance sheet of such person; and “Capitalized Lease Obligation” is defined to mean the rental obligations, as
aforesaid, under such lease.
“Capital Stock” means, with respect to any person, any and all shares, interests, participations, or other equivalents
(however designated, whether voting or non-voting) of such person’s capital stock or other ownership interests, whether now
outstanding or issued after the date of the Indenture, including, without limitation, all common stock and preferred stock.
“Currency Agreement” means any foreign exchange contract, currency swap agreement, or other similar agreement or
arrangement designed to protect against the fluctuation in currency values.
“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the date of
determination, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting
profession. All ratios and computations contained in the Indenture shall be computed in conformity with GAAP applied on a
consistent basis.
“Guarantee” means any obligation, contingent or otherwise, of any person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other person and, without limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such person:
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to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other person (whether arising by virtue of partnership arrangements, or by agreement to keep-
well, to purchase assets, goods, securities, or services, to take-or-pay, or to maintain financial statement conditions
or otherwise); or
entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” used as a verb has a corresponding meaning.
“Indebtedness” means, with respect to any person at any date of determination (without duplication):
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all indebtedness of such person for borrowed money;
all obligations of such person evidenced by bonds, debentures, notes, or other similar instruments;
all obligations of such person in respect of letters of credit or other similar instruments (including reimbursement
obligations with respect thereto);
all obligations of such person to pay the deferred and unpaid purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of business);
all obligations of such person as lessee under Capitalized Leases;
all Indebtedness of other persons secured by a Lien on any asset of such person, whether or not such Indebtedness
is assumed by such person; provided that the amount of such Indebtedness shall be the lesser of:
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the fair market value of such asset at such date of determination; and
the amount of such Indebtedness;
all Indebtedness of other persons Guaranteed by such person to the extent such Indebtedness is Guaranteed by
such person; and
to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate
Agreements.
The amount of Indebtedness of any person at any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation; provided:
•
that the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at
such time as determined in conformity with GAAP; and
•
that Indebtedness shall not include any liability for federal, state, local, or other taxes.
“Interest Rate Agreements” means any obligations of any person pursuant to any interest rate swaps, caps, collars, and
similar arrangements providing protection against fluctuations in interest rates. For purposes of the indenture, the amount of such
obligations shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such
person, based on the assumption that such obligation had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such obligation provides for the netting of amounts payable by and to such person
thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such person, then in each such
case, the amount of such obligations shall be the net amount so determined, plus any premium due upon default by such person.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind,
or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset.
For the purposes of the Indenture, the Issuer or any Guarantor shall be deemed to own subject to a Lien any asset that it has
acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
“Permitted Liens” means:
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any Lien on any asset incurred prior to the date of the Indenture;
any Lien on any assets acquired after the date of the Indenture (including by way of merger or consolidation) by
the Issuer or any Guarantor, which Lien is created, incurred or assumed contemporaneously with such acquisition,
or within 270 days thereafter, to secure or provide for the payment or financing of any part of the purchase price
thereof, or any Lien upon any assets acquired after the date of the Indenture existing at the time of such acquisition
(whether or not assumed by the Issuer or any Guarantor), provided that any such Lien shall attach only to the
assets so acquired;
any Lien on any assets in favor of the Issuer or any Guarantor;
any Lien on assets incurred in connection with the issuance of tax-exempt governmental obligations (including,
without limitation, industrial revenue bonds and similar financing);
any Lien granted by any Guarantor on assets to the extent limitations on the incurrence of such Liens are
prohibited by any agreement to which such Guarantor is subject as of the date of the Indenture; and
any renewal of or substitution for any Lien permitted by any of the preceding bullet points, including any Lien
securing reborrowing of amounts previously secured within 270 days of the repayment thereof, provided that no
such renewal or substitution shall extend to any assets other than the assets covered by the Lien being renewed or
substituted.
“Sale and Leaseback Transaction” means any direct or indirect arrangement with any person or to which any such
person is a party, providing for the leasing to the Issuer or a Guarantor of any property, whether owned by the Issuer or such
Guarantor at the date of the original issuance of the 2029 Notes or later acquired, which has been or is to be sold or
transferred by the Issuer or such Guarantor to such person or to any other person by whom funds have been or are to be advanced
on the security of such property.
Consolidation, Merger and Sale of Assets
The Indenture restricts the Issuer’s ability to consolidate with, merge with or into, or sell, convey, transfer, lease, or
otherwise dispose of all or substantially all of its property and assets as an entirety or substantially an entirety in one transaction
or a series of related transactions to any person (other than a consolidation with or merger with or into or a sale, conveyance,
transfer, lease or other disposition to a wholly-owned subsidiary with a positive net worth; provided that, in connection with any
merger of the Issuer and a wholly-owned subsidiary, no consideration other than common stock in the surviving person shall be
issued or distributed to the Issuer’s stockholders) or permit any person to merge with or into such party unless:
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the Issuer is the continuing person or the person formed by such consolidation or into which such party is merged
or that acquired or leased such property and assets shall be a corporation or limited liability company organized
and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, all of the Issuer’s obligations on all of
the 2029 Notes and under the Indenture;
immediately after giving effect to such transaction, no default or event of default shall have occurred and be
continuing; and
the Issuer delivers to the Trustee an officers’ certificate and opinion of counsel, in each case stating that such
consolidation, merger, or transfer and such supplemental indenture complies with this provision and that all
conditions precedent provided for in the Indenture and notes relating to such transaction have been complied with;
provided, however, that the foregoing limitations will not apply if, in the good faith determination of the Issuer’s board of
directors, whose determination must be set forth in a board resolution, the principal purpose of such transaction is to change the
state of incorporation of such party; and provided further that any such transaction shall not have as one of its purposes the
evasion of the foregoing limitations.
Upon any express assumption of the Issuer’s obligations as described above, the Issuer shall be released and discharged
from all obligations and covenants under the Indenture and all the 2029 Notes.
The Indenture and the guarantees do not limit the ability of any guarantor to consolidate with or merge into or sell all or
substantially all its assets. Upon the sale or disposition of any guarantor (by merger, consolidation, the sale of its capital stock or
the sale of all or substantially all of its assets) to any person, that guarantor will be deemed released from all its obligations under
the Indenture and its guarantee.
Modification and Waiver
The Issuer and the Trustee may amend or supplement the Indenture or the 2029 Notes without notice to or the consent of
any holder:
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to cure any ambiguity, defect, or inconsistency in the Indenture; provided that such amendments or supplements
shall not adversely affect the interests of the holders in any material respect;
to comply with the provisions described under “-Certain Covenants-Consolidation, Merger and Sale of Assets;”
to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust
Indenture Act;
to evidence and provide for the acceptance of appointment hereunder by a successor Trustee;
to establish the form or forms or terms of the 2029 Notes as permitted by the Indenture;
to provide for uncertificated notes and to make all appropriate changes for such purpose;
to make any change that does not adversely affect the rights of any holder;
to add to its covenants such new covenants, restrictions, conditions or provisions for the protection of the holders,
and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an event of default; or
to make any change so long as no 2029 Notes are outstanding.
Subject to certain conditions, without prior notice to any holder of 2029 Notes, modifications and amendments of the
Indenture may be made by the Issuer and the Trustee with respect to any series of 2029 Notes with the written consent of the
holders of a majority in principal amount of the affected series of 2029 Notes, and compliance by the Issuer with any provision of
the Indenture with respect to any series of 2029 Notes may be waived by written notice to the Trustee by the holders of a majority
in principal amount of the affected series of 2029 Notes outstanding; provided, however, that each affected holder must consent
to any modification, amendment or waiver that:
•
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•
changes the stated maturity of the principal of, or any installment of interest on, the 2029 Notes of the affected
series;
reduces the principal amount of, or premium, if any, or interest on, the 2029 Notes of the affected series;
changes the place or currency of payment of principal of, or premium, if any, or interest on, the 2029 Notes of the
affected series;
changes the provisions for calculating the optional redemption price, including the definitions relating thereto;
changes the provisions relating to the waiver of past defaults or changes or impairs the right of holders to receive
payment or to institute suit for the enforcement of any payment of the 2029 Notes of the affected series on or after
the due date therefor;
•
reduces the above-stated percentage of outstanding 2029 Notes of the affected series the consent of whose holders
is necessary to modify or amend or to waive certain provisions of or defaults under the Indenture;
• waives a default in the payment of principal of, premium, if any, or interest on the 2029 Notes; or
• modifies any of the provisions of this paragraph, except to increase any required percentage or to provide that
certain other provisions cannot be modified or waived without the consent of the holder of each 2029 Note of the
series affected by the modification.
It is not necessary for the consent of the holders under the Indenture to approve the particular form of any note
amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment,
supplement or waiver under the Indenture becomes effective, notice must be given to the holders affected thereby briefly
describing the amendment, supplement, or waiver. Supplemental indentures will be mailed to holders upon request. Any failure
to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Events of Default
For purposes of this section, the term “Obligor” shall mean each of the Issuer and Guarantors, in each case excluding such
entities’ subsidiaries.
An event of default for a series of 2029 Notes is defined under the Indenture as being:
(1) a default by any Obligor in the payment of principal or premium on the 2029 Notes of such series when the same
becomes due and payable whether at maturity, upon acceleration, redemption or otherwise;
(2) a default by any Obligor in the payment of interest on the 2029 Notes of such series when the same becomes due
and payable, if that default continues for a period of 30 days;
(3) default by any Obligor in the performance of or breach by any Obligor of any of its other covenants or agreements
in the Indenture applicable to all the 2029 Notes or applicable to the 2029 Notes of any series and that default or
breach continues for a period of 30 consecutive days after written notice is received from the Trustee or from the
holders of 25% or more in aggregate principal amount of the 2029 Notes of all affected series;
(4) any guarantee is not in full force and effect;
(5) a court having jurisdiction enters a decree or order for:
•
•
relief in respect of any Obligor in an involuntary case under any applicable bankruptcy, insolvency, or
other similar law now or hereafter in effect;
appointment of a receiver, liquidator, assignee, custodian, Trustee, sequestrator or similar official of any
Obligor for any substantial part of such party’s property and assets; or
•
the winding up or liquidation of any Obligor’s affairs and such decree or order shall remain unstayed and
in effect for a period of 180 consecutive days; or
(6) any Obligor:
•
•
•
commences a voluntary case under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law;
consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official of such party or for any substantial part of such party’s property; or
effects any general assignment for the benefit of creditors.
A default under any Obligor’s other indebtedness is not a default under the Indenture.
If an event of default other than an event of default specified in clauses (5) and (6) above occurs with respect to an issue
of 2029 Notes and is continuing under the Indenture, then, and in each and every such case, either the Trustee or the holders of
not less than 25% in aggregate principal amount of such 2029 Notes then outstanding under the Indenture by written notice to the
Issuer and to the Trustee, if such notice is given by the holders, may, and the Trustee at the request of such holders shall, declare
the principal amount of and accrued interest, if any, on such 2029 Notes to be immediately due and payable. The amount due
upon acceleration shall include only the original issue price of the 2029 Notes and accrued to the date of acceleration and accrued
interest, if any. Upon a declaration of acceleration, such principal amount of and accrued interest, if any, on such 2029 Notes shall
be immediately due and payable. If an event of default specified in clauses (5) and (6) above occurs with respect to any Obligor,
the principal amount of and accrued interest, if any, on each issue of 2029 Notes then outstanding shall be and become
immediately due and payable without any notice or other action on the part of the Trustee or any holder.
Upon certain conditions such declarations may be rescinded and annulled and past defaults may be waived by the holders
of a majority in aggregate principal amount of an issue of 2029 Notes that has been accelerated. Furthermore, subject to various
provisions in the Indenture, the holders of at least a majority in aggregate principal amount of an issue of 2029 Notes by notice to
the Trustee may waive an existing default or event of default with respect to such 2029 Notes and its consequences, except a
default in the payment of principal of or interest on such 2029 Notes or in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the holders of each such 2029 Notes. Upon any such waiver, such
default shall cease to exist, and any event of default with respect to such 2029 Notes shall be deemed to have been cured, for
every purpose of the Indenture; but no such waiver shall extend to any subsequent or other default or event of default or impair
any right consequent thereto. For information as to the waiver of defaults, see “-Modification and Waiver.”
The holders of at least a majority in aggregate principal amount of an issue of 2029 Notes may direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to such 2029 Notes. However, the Trustee may refuse to follow any direction that conflicts with law or the
Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of holders of such issue of 2029 Notes not joining in the giving of such direction and may take any other
action it deems proper that is not
inconsistent with any such direction received from holders of such issue of 2029 Notes. A holder may not pursue any remedy
with respect to the Indenture or any series of 2029 Notes unless:
•
•
•
•
•
the holder gives the Trustee written notice of a continuing event of default;
the holders of at least 25% in aggregate principal amount of such series of 2029 Notes make a written request to
the Trustee to pursue the remedy in respect of such event of default;
the requesting holder or holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability,
or expense;
the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity;
and
during such 60-day period, the holders of a majority in aggregate principal amount of such series of 2029 Notes do
not give the Trustee a direction that is inconsistent with the request.
These limitations, however, do not apply to the right of any holder of the 2029 Note to receive payment of the principal
of, premium, if any, or interest on such the 2029 Note, or to bring suit for the enforcement of any such payment, on or after the
due date for the 2029 Notes, which right shall not be impaired or affected without the consent of the holder.
The Indenture will require certain of officers of the Issuer to certify, on or before a date not more than 120 days after the
end of each fiscal year, as to their knowledge of the Issuer’s compliance with all conditions and covenants under the Indenture,
such compliance to be determined without regard to any period of grace or requirement of notice provided under the Indenture.
(5) DESCRIPTION OF OUR 0.000% NOTES DUE 2026, OUR 0.250% NOTES DUE 2027, OUR 0.250% NOTES DUE
2029, OUR 0.750% NOTES DUE 2032, OUR 1.250% NOTES DUE 2040, OUR 1.500% NOTES DUE 2029 AND
OUR 1.875% NOTES DUE 2036
The following summary of our 0.000% Notes due 2026 (the “2026 Euro Notes”), our 0.250% Notes due 2027 (the “2027
Euro Notes”), our 0.250% Notes due 2029 (the “2029 Euro Notes”), our 0.750% Notes due 2032 (the “2032 Euro Notes”), our
1.250% Notes due 2040 (the “2040 Euro Notes”), our 1.500% Notes due 2029 (the “2029 Sterling Notes”) and our 1.875% Notes
due 2036 (the “2036 Sterling Notes” and together with the 2026 Euro Notes, the 2027 Euro Notes, the 2029 Euro Notes, the 2032
Euro Notes, the 2040 Euro Notes and the 2029 Sterling Notes, collectively, the “Notes”) is based on the senior indenture dated as
of September 18, 2013 among Comcast as issuer (the “Issuer”), Comcast Cable Communications, LLC and NBCUniversal
Media, LLC (the “Guarantors”) and The Bank of New York Mellon (f/k/a The Bank of New York), as trustee (the “Trustee”) (the
“Base Indenture”), as amended by the first supplemental indenture dated as of November 17, 2015 among the Issuer, the
Guarantors and the Trustee (collectively with the Base Indenture, the “Indenture”). This summary does not purport to be
complete and is qualified in its entirety by reference to such Indenture.
Interest Payments
Interest on the Notes will be computed on the basis of the actual number of days in the period for which interest is being
calculated and the actual number of days from and including
the last date to which interest was paid on the Notes (or February 20, 2020 if no interest has been paid in the case of the 2027
Euro Notes, the 2032 Euro Notes, the 2040 Euro Notes, the 2029 Sterling Notes or the 2036 Sterling Notes, or September 14,
2021 if no interest has been paid in the case of the 2026 Euro Notes or the 2029 Euro Notes), to but excluding the next scheduled
interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the
International Capital Market Association.
If any interest payment date, maturity date or redemption date falls on a day that is not a business day, the payment will be
made on the next business day with the same force and effect as if made on the relevant interest payment date, maturity date or
redemption date, and no interest will accrue in respect of the delay.
The term “business day” means any day other than a Saturday or Sunday (i) which is not a day on which banking
institutions in The City of New York or London are authorized or obligated by law, regulation or executive order to close and (ii)
in the case of the 2026 Euro Notes, the 2027 Euro Notes, the 2029 Euro Notes, the 2032 Euro Notes and the 2040 Euro Notes
(collectively, the “Euro Notes”), on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System
(the TARGET2 system) or any successor thereto is open.
Issuance in Euro; Issuance in GBP
Principal, premium, if any, and interest payments in respect of the Euro Notes will be payable in euro. If euro is
unavailable to the Issuer due to the imposition of exchange controls or other circumstances beyond the Issuer’s control, then all
payments in respect of the Euro Notes will be made in U.S. dollars until euro is again available to the Issuer. The amount payable
on any date in euro will be converted into U.S. dollars at the Market Exchange Rate (as defined below) or, if such Market
Exchange Rate is not then available, on the basis of the most recently available market exchange rate for euro. Any payment in
respect of the Euro Notes so made in U.S. dollars will not constitute an event of default under the Indenture.
Principal, premium, if any, and interest payments in respect of the 2029 Sterling Notes and the 2036 Sterling Notes
(together, the “Sterling Notes”) will be payable in GBP. If GBP is unavailable to the Issuer due to the imposition of exchange
controls or other circumstances beyond the Issuer’s control, then all payments in respect of the Sterling Notes will be made in
U.S. dollars until GBP is again available to the Issuer. The amount payable on any date in GBP will be converted into U.S.
dollars at the Market Exchange Rate (as defined below) or, if such Market Exchange Rate is not then available, on the basis of
the most recently available market exchange rate for GBP. Any payment in respect of the Sterling Notes so made in U.S. dollars
will not constitute an event of default under the Indenture.
The amount payable on any date in euro or GBP, as applicable, will be converted into U.S. dollars at the Market Exchange
Rate (as defined below) or, if such Market Exchange Rate is not then available, on the basis of the then most recent U.S.
dollar/euro exchange rate or U.S. dollar/GBP exchange rate, as applicable. Any payment in respect of the Notes so made in U.S.
dollars will not constitute an event of default under the Indenture. Neither the Trustee nor the paying agent will be responsible
for obtaining exchange rates, effecting currency conversions or otherwise handling re-denominations.
“Market Exchange Rate” means the noon buying rate in The City of New York for cable transfers of euro or GBP, as
applicable, as certified for customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of
New York.
Guarantees
The Issuer’s obligations, including the payment of principal, premium, if any, and interest, will be fully and
unconditionally guaranteed by each of the Guarantors as described in the accompanying prospectus.
The guarantees will not contain any restrictions on the ability of any Guarantor to (i) pay dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of that Guarantor’s capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of that Guarantor.
Optional Redemption
The Issuer will have the right at the Issuer’s option to redeem any of the Notes of each series in whole or in part, at any
time or from time to time prior to their maturity, on at least 15 days, but not more than 30 days, prior notice delivered
electronically or mailed to the registered address of each holder of notes, at the applicable Redemption Price. The Issuer will
calculate the Redemption Price in connection with any redemption hereunder.
“Redemption Price” means:
•
•
with respect to the 2026 Euro Notes, at any time prior to August 14, 2026 (one month prior to the maturity of the 2026
Euro Notes) (the “2026 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii) the sum of
the present values of the principal amount of such notes and the scheduled payments of interest thereon (exclusive of
interest accrued to the date of redemption) from the redemption date to the 2026 Par Call Date, in each case discounted
to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable comparable
government bond rate plus 10 basis points; provided that, if the 2026 Euro Notes are redeemed on or after the 2026 Par
Call Date, the Redemption Price will equal 100% of the principal amount of such notes;
with respect to the 2027 Euro Notes, at any time prior to March 20, 2027 (two months prior to the maturity of the 2027
Euro Notes) (the “2027 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii) the sum of
the present values of the principal amount of such notes and the scheduled payments of interest thereon (exclusive of
interest accrued to the date of redemption) from the redemption date to the 2027 Par Call Date, in each case discounted
to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable comparable
government bond rate plus 15 basis points; provided that, if the 2027 Euro Notes are
•
•
•
•
redeemed on or after the 2027 Par Call Date, the Redemption Price will equal 100% of the principal amount of such
notes;
with respect to the 2029 Euro Notes, at any time prior to June 14, 2029 (three months prior to the maturity of the 2029
Euro Notes) (the “2029 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii) the sum of
the present values of the principal amount of such notes and the scheduled payments of interest thereon (exclusive of
interest accrued to the date of redemption) from the redemption date to the 2029 Par Call Date, in each case discounted
to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable comparable
government bond rate plus 15 basis points; provided that, if the 2029 Euro Notes are redeemed on or after the 2029 Par
Call Date, the Redemption Price will equal 100% of the principal amount of such notes;
with respect to the 2032 Euro Notes, at any time prior to November 20, 2031 (three months prior to the maturity of the
2032 Euro Notes) (the “2032 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii) the
sum of the present values of the principal amount of such notes and the scheduled payments of interest thereon
(exclusive of interest accrued to the date of redemption) from the redemption date to the 2032 Par Call Date, in each case
discounted to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable
comparable government bond rate plus 20 basis points; provided that, if the 2032 Euro Notes are redeemed on or after
the 2032 Par Call Date, the Redemption Price will equal 100% of the principal amount of such notes;
with respect to the 2040 Euro Notes, at any time prior to August 20, 2039 (six months prior to the maturity of the 2040
Euro Notes) (the “2040 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii) the sum of
the present values of the principal amount of such notes and the scheduled payments of interest thereon (exclusive of
interest accrued to the date of redemption) from the redemption date to the 2040 Par Call Date, in each case discounted
to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable comparable
government bond rate plus 25 basis points; provided that, if the 2040 Euro Notes are redeemed on or after the 2040 Par
Call Date, the Redemption Price will equal 100% of the principal amount of such notes;
with respect to the 2029 Sterling Notes, at any time prior to November 20, 2028 (three months prior to the maturity of
the 2029 Sterling Notes) (the “2029 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii)
the sum of the present values of the principal amount of such notes and the scheduled payments of interest thereon
(exclusive of interest accrued to the date of redemption) from the redemption date to the 2029 Par Call Date, in each case
discounted to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable
comparable government bond rate plus 15 basis points; provided that, if the 2029 Sterling Notes are
redeemed on or after the 2029 Par Call Date, the Redemption Price will equal 100% of the principal amount of such
notes; and
•
with respect to the 2036 Sterling Notes, at any time prior to November 20, 2035 (three months prior to the maturity of
the 2036 Sterling Notes) (the “2036 Par Call Date”), the greater of (i) 100% of the principal amount of such notes and (ii)
the sum of the present values of the principal amount of such notes and the scheduled payments of interest thereon
(exclusive of interest accrued to the date of redemption) from the redemption date to the 2036 Par Call Date, in each case
discounted to the redemption date on an actual (ACTUAL/ACTUAL (ICMA)) basis at a rate equal to the applicable
comparable government bond rate plus 15 basis points; provided that, if the 2036 Sterling Notes are redeemed on or after
the 2036 Par Call Date, the Redemption Price will equal 100% of the principal amount of such notes;
plus, in each case, accrued and unpaid interest thereon to the date of redemption.
The term “comparable government bond” means (i) with respect to the Euro Notes, in relation to any comparable
government bond rate calculation, at the discretion of an independent investment banker selected by us, a German government
bond whose maturity is closest to the maturity of the applicable series of Euro Notes to be redeemed (assuming for this purpose
that each series of Euro Notes matured on the related Par Call Date), or if such independent investment banker in its discretion
determines that such similar bond is not in issue, such other German government bond as such independent investment banker
may, with the advice of three brokers of, and/ or market makers in, German government bonds selected by us, determine to be
appropriate for determining the comparable government bond rate and (ii) with respect to the Sterling Notes, in relation to any
comparable government bond rate calculation, at the discretion of an independent investment banker selected by us, a United
Kingdom government bond whose maturity is closest to the maturity of the applicable series of Sterling Notes to be redeemed
(assuming for this purpose that each series of Sterling Notes matured on the related Par Call Date), or if such independent
investment banker in its discretion determines that such similar bond is not in issue, such other United Kingdom government
bond as such independent investment banker may, with the advice of three brokers of, and/or market makers in, United Kingdom
government bonds selected by us, determine to be appropriate for determining the comparable government bond rate.
The term “comparable government bond rate” means the yield to maturity, expressed as a percentage (rounded to three
decimal places, with 0.0005 being rounded upwards), on the third business day prior to the date fixed for redemption, of the
applicable comparable government bond on the basis of the middle market price of such comparable government bond prevailing
at 11:00 a.m. (London time) on such business day as determined by an independent investment banker selected by us.
The term “independent investment banker” means each of BNP Paribas, Citigroup Global Markets Limited and J.P.
Morgan Securities plc (or their respective successors), with respect to the 2027 Euro Notes, the 2032 Euro Notes, the 2040 Euro
Notes and the Sterling
Notes, and Barclays Bank PLC and Deutsche Bank AG, London Branch (or their respective successors), with respect to the 2026
Euro Notes and the 2029 Euro Notes, or if each such firm is unwilling or unable to select the comparable government bond, an
independent investment banking institution of international standing appointed by us.
On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes called for
redemption (unless the Issuer defaults in the payment of the Redemption Price and accrued interest). On or before the redemption
date, the Issuer will deposit with the Trustee or the paying agent money sufficient to pay the Redemption Price of and (unless the
redemption date shall be an interest payment date) accrued and unpaid interest to the redemption date on the Notes to be
redeemed on such date. If less than all of the Notes of any series are to be redeemed, the Notes to be redeemed shall be selected
by the Trustee by lottery provided that notes represented by a Global Note will be selected for redemption by the applicable
depositary in accordance with its standard procedures therefor). Additionally, the Issuer may at any time repurchase Notes in the
open market and may hold or surrender such Notes to the Trustee for cancellation.
The Notes are also subject to redemption prior to maturity if certain events occur involving United States taxation. If any
of these special tax events occur, the Notes may be redeemed at a redemption price of 100% of their principal amount plus
accrued and unpaid interest to the date fixed for redemption.
Payment of Additional Amounts
The Issuer will, subject to the exceptions and limitations set forth below, pay as additional interest in respect of the Notes
such additional amounts as are necessary in order that the net payment by the Issuer or its paying agent of the principal of and
interest in respect of the Notes to a beneficial owner who is not a United States person (as defined below), after withholding or
deduction for any present or future tax, assessment or other governmental charge imposed by the United States or a taxing
authority in the United States, will not be less than the amount provided in the Notes to be then due and payable; provided,
however, that the foregoing obligation to pay additional amounts shall not apply:
(1) to the extent any tax, assessment or other governmental charge that is imposed by reason of the holder (or the beneficial
owner for whose benefit such holder holds such Note), or a fiduciary, settlor, beneficiary, member or shareholder of the
holder or beneficial owner if the holder or beneficial owner is an estate, trust, partnership, corporation or other entity, or
a person holding a power over an estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been engaged in a trade or business in the United States or having or having had a permanent
establishment in the United States;
(b) having a current or former connection with the United States (other than a connection arising solely as a result of
the ownership of the Notes or the receipt of
any payment or the enforcement of any rights thereunder), including being or having been a citizen or resident of
the United States;
(c) being or having been a personal holding company, a passive foreign investment company or a controlled foreign
corporation for U.S. federal income tax purposes, a foreign-tax exempt organization, or a corporation that has
accumulated earnings to avoid U.S. federal income tax;
(d) being or having been a “10-percent shareholder” of the Issuer or applicable Guarantor as defined in section 871(h)
(3) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or any successor provision; or
(e) being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business, as described in Section 881(c)(3) of the Code or any successor provision;
(2) to any holder that is not the sole beneficial owner of the Notes, or a portion of the Notes, or that is a fiduciary, partnership,
limited liability company or other fiscally transparent entity, but only to the extent that a beneficial owner with respect to
the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership,
limited liability company or other fiscally transparent entity, would not have been entitled to the payment of an
additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive
share of the payment;
(3) to the extent any tax, assessment or other governmental charge would not have been imposed but for the failure of the
holder or any other person to comply with certification, identification or information reporting requirements concerning
the nationality, residence, identity or connection with the United States of the holder or beneficial owner of the Notes, if
compliance is required by statute, by regulation of the United States or any taxing authority therein or by an applicable
income tax treaty to which the United States is a party as a precondition to exemption from, or reduction in such tax,
assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by the Issuer or an
applicable withholding agent from the payment;
(5) to any tax, assessment or other governmental charge that would not have been imposed but for a change in law,
regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment
becomes due or is duly provided for, whichever occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax,
assessment or other governmental charge or excise tax imposed on the transfer of Notes;
(7) to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of
principal of or interest on any Note, if such payment can be made without such withholding by at least one other paying
agent;
(8) to the extent any tax, assessment or other governmental charge that would not have been imposed but for the presentation
by the holder of any Note, where presentation is required, for payment on a date more than 30 days after the date on
which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs
later;
(9) to any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the beneficial owner
being a bank (i) purchasing the Notes in the ordinary course of its lending business or (ii) that is neither (A) buying the
Notes for investment purposes only nor (B) buying the Notes for resale to a third party that either is not a bank or
holding the Notes for investment purposes only;
(10) to any tax, assessment or other governmental charge imposed under Sections 1471 through 1474 of the Code (or any
amended or successor provisions), any current or future regulations or official interpretations thereof, any agreement
entered into pursuant to Section 1471(b) of the Code or any fiscal or regulatory legislation, rules or practices adopted
pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the
Code whether currently in effect or as published and amended from time to time; or
(11) in the case of any combination of items (1) through (10) above.
If the Issuer is required to pay additional amounts with respect to the Notes, the Issuer will notify the Trustee and paying
agent pursuant to an officer’s certificate that specifies the amount of such additional amounts payable and the time when such
amounts are payable. If the Trustee and the paying agent do not receive such an officer’s certificate from us, the Trustee and
paying agent may rely on the absence of such an officer’s certificate in assuming that no such additional amounts are payable.
The Notes are also subject to redemption prior to maturity if certain events occur involving U.S. taxation. If any of these
special tax events occur, the Notes may be redeemed at a redemption price of 100% of their principal amount plus accrued and
unpaid interest to the date fixed for redemption. See “—Redemption for Tax Reasons.”
The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation
applicable to the Notes. Except as specifically provided under this heading “—Payment of Additional Amounts,” the Issuer will
not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a
political subdivision or taxing authority of or in any government or political subdivision.
As used under this heading “—Payment of Additional Amounts” and under the heading “—Redemption for Tax
Reasons,” the term “United States” means the United States of America, the states of the United States, and the District of
Columbia, and the term “United States person” means any individual who is a citizen or resident of the United States for U.S.
federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United
States, any state of the United States or the District of Columbia, or any estate or trust the income of which is subject to U.S.
federal income taxation regardless of its source.
Redemption for Tax Reasons
If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of
the United States (or any taxing authority in the United States), or any change in, or amendment to, an official position regarding
the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes
effective on or after the date of this prospectus supplement, the Issuer becomes or, based upon a written opinion of independent
counsel selected by us, will become obligated to pay additional amounts as described under the heading “—Payment of
Additional Amounts” with respect to the Notes, then the Issuer may at any time at its option redeem, in whole, but not in part, the
Notes on not less than 15 nor more than 30 days’ prior notice, at a redemption price equal to 100% of their principal amount,
together with accrued and unpaid interest on the Notes to, but not including, the date fixed for redemption.
No Mandatory Redemption or Sinking Fund
There will be no mandatory redemption prior to maturity or sinking fund payments for the Notes.
Additional Debt
The Indenture does not limit the amount of debt the Issuer may issue under the Indenture or otherwise.
Certain Covenants
The Issuer and the Guarantors have agreed to some restrictions on their activities for the benefit of holders of all series of
the Notes issued under the Indenture. The restrictive covenants summarized below will apply, unless the covenants are waived or
amended, so long as any of the Notes are outstanding.
The Indenture does not contain any financial covenants other than those summarized below and does not restrict the
Issuer or the Issuer’s subsidiaries from paying dividends or incurring additional debt. In addition, the Indenture will not protect
holders of Notes issued under it in the event of a highly leveraged transaction or a change in control.
Limitation on Liens Securing Indebtedness
With respect to the Notes of each series, each Obligor will covenant under the Indenture not to create or incur any Lien on
any of its Properties, whether owned at the time the Indenture is executed or acquired afterward, in order to secure any of its
Indebtedness, without effectively providing that the Notes of such series shall be equally and ratably secured until such time as
such Indebtedness is no longer secured by such Lien, except:
(a) Liens existing as of the date of initial issuance of the Notes of such series;
(b) Liens granted after the date of initial issuance of the Notes of such series, created in favor of the registered holders of
the Notes of such series;
(c) Liens securing such Obligor’s Indebtedness which are incurred to extend, renew or refinance Indebtedness which is
secured by Liens permitted to be incurred under the lien restriction covenant of the Indenture, so long as such Liens are
limited to all or part of substantially the same Property which secured the Liens extended, renewed or replaced and the
amount of Indebtedness secured is not increased (other than by the amount equal to any costs and expenses (including any
premiums, fees or penalties) incurred in connection with any extension, renewal or refinancing); and
(d) Permitted Liens.
Notwithstanding the restrictions above, any Obligor may, without securing the Notes of any series, create or incur Liens
which would otherwise be subject to the restrictions set forth above, if after giving effect to those Liens, the Obligor’s Aggregate
Debt together with the Aggregate Debt of each other Obligor does not exceed the greater of (i) 15% of the Issuer’s Consolidated
Net Worth calculated as of the date of the creation or incurrence of the Lien and (ii) 15% of the Issuer’s Consolidated Net Worth
calculated as of the date of initial issuance of the Notes of such series; provided that Liens created or incurred pursuant to the
terms described in this paragraph may be extended, renewed or replaced so long as the amount of Indebtedness secured by such
Liens is not increased (other than by the amount equal to any costs and expenses (including any premiums, fees or penalties)
incurred in connection therewith) and such refinancing Indebtedness, if then outstanding, is included in subsequent calculations
of Aggregate Debt of such Obligor.
Limitation on Sale and Lease-Back Transactions
With respect to the Notes of each series, each Obligor will covenant under the Indenture not to enter into any sale and
lease-back transaction for the sale and leasing back of any Property, whether owned at the time the Indenture is executed or
acquired afterward, unless:
•
•
•
•
•
such transaction was entered into prior to the date of the initial issuance of the Notes of such series;
such transaction was for the sale and leasing back to such Obligor of any Property by one of its Subsidiaries;
such transaction involves a lease for less than three years;
such Obligor would be entitled to incur Indebtedness secured by a mortgage on the Property to be leased in an amount
equal to the Attributable Liens with respect to such sale and lease-back transaction without equally and ratably securing
the Notes of such series pursuant to the first paragraph of “—Limitation on Liens Securing Indebtedness” above; or
such Obligor applies an amount equal to the fair value of the Property sold to the purchase of Property or to the retirement
of its long-term Indebtedness within 365 days of the effective date of any such sale and lease-back transaction. In lieu of
applying such amount to such retirement, such Obligor may deliver the Notes to the Trustee therefor for cancellation,
such Notes to be credited at the cost thereof to the Obligor.
Notwithstanding the previous paragraph (including the bulleted list), any Obligor may enter into any sale and lease-back
transaction which would otherwise be subject to the foregoing restrictions with respect to the Notes of any series if after giving
effect thereto and at the time of determination, its Aggregate Debt together with the Aggregate Debt of all other Obligors does
not exceed the greater of (i) 15% of the Issuer’s Consolidated Net Worth calculated as of the closing date of the sale and lease-
back transaction and (ii) 15% of the Issuer’s Consolidated Net Worth calculated as of the date of initial issuance of the Notes of
such series.
“Aggregate Debt” means, with respect to an Obligor, the sum of the following as of the date of determination:
(1) the aggregate principal amount of such Obligor’s Indebtedness incurred after the date of initial issuance of the Notes
and secured by Liens not permitted by the first paragraph (including the bulleted list) under “—Limitation on Liens Securing
Indebtedness” above; and
(2) such Obligor’s Attributable Liens in respect of sale and lease-back transactions entered into after the date of the initial
issuance of the Notes pursuant to the last paragraph under “—Limitation on Sale and Lease-Back Transactions” above.
“Attributable Liens” means in connection with a sale and lease-back transaction of an Obligor the lesser of:
(1) the fair market value of the assets subject to such transaction (as determined in good faith by the board of directors (in
the case of the Issuer) or the equivalent governing body (in the case of any Guarantor)); and
(2) the present value (discounted at a rate per annum equal to the average interest borne by all outstanding Notes of each
series issued under the Indenture determined on a weighted average basis and compounded semi-annually) of the obligations of
the lessee for rental payments during the term of the related lease.
“Capital Lease” means any Indebtedness represented by a lease obligation of a Person incurred with respect to real
property or equipment acquired or leased by such Person and used in its business that would be required to be recorded as a
capital lease in accordance with GAAP as in effect as of the date of the Indenture, whether entered into before or after the date of
the Indenture.
“Consolidated Net Worth” of any Person means, as of any date of determination, the stockholders’ equity or members’
capital of such Person as reflected on the most recent consolidated balance sheet of such Person and prepared in accordance with
GAAP.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of
the accounting profession, which are in effect in the United States as of (i) the date of the Indenture, for purposes of the definition
of “Capital Lease” and (ii) the date of determination, for all other purposes under the Indenture.
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements,
interest rate lock agreements and interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk;
(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or
commodity prices; and
(4) other agreements or arrangements designed to protect such Person against fluctuations in equity prices.
“Indebtedness” of any specified Person means, without duplication, any indebtedness in respect of borrowed money or
that is evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements with
respect thereto) or representing the balance deferred and unpaid of the purchase price of any Property (including pursuant to
Capital Leases), except any such balance that constitutes an accrued expense, trade payable or other payable in the ordinary
course, if and to the extent any of the foregoing indebtedness would appear as a liability upon an unconsolidated balance sheet of
such Person (but does not include contingent liabilities which appear only in a footnote to a balance sheet).
“Lien” means any lien, security interest, charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give any security interest).
“Obligor” means each of the Issuer and each Guarantor.
“Permitted Liens” means, with respect to an Obligor:
(1) Liens on any of the applicable Obligor’s assets, created solely to secure obligations incurred to finance the
refurbishment, improvement or construction of such asset, which obligations are incurred no later than 24 months after
completion of such refurbishment, improvement or construction, and all renewals, extensions, refinancings, replacements or
refundings of such obligations;
(2)(a) Liens given to secure the payment of the purchase price incurred in connection with the acquisition (including
acquisition through merger or consolidation) of Property (including shares of stock), including Capital Lease transactions in
connection with any such acquisition; provided that with respect to this clause (a) the Liens shall be given within 24 months after
such acquisition and shall attach solely to the Property acquired or purchased and any improvements then or thereafter placed
thereon, (b) Liens existing on Property at the time of acquisition thereof or at the time of acquisition by such Obligor of any
Person then owning such Property whether or not such existing Liens were given to secure the payment of the purchase price of
the Property to which they attach and (c) all renewals, extensions, refinancings, replacements or refundings of such obligations
under this clause (2);
(3) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(4) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on such Obligor’s books in conformity with GAAP;
(5) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other Property
relating to such letters of credit and the products and proceeds thereof;
(6) Liens encumbering customary initial deposits and margin deposits and other Liens in the ordinary course of business,
in each case securing Hedging Obligations and forward contracts, options, futures contracts, futures options, swaps, equity
hedges or similar agreements or arrangements designed to protect such Obligor from fluctuations in interest rates, currencies,
equities or the price of commodities;
(7) Liens in favor of the Issuer or any Guarantor;
(8) inchoate Liens incident to construction or maintenance of real property, or Liens incident to construction or
maintenance of real property, now or hereafter filed of record for sums not yet delinquent or being contested in good faith, if
reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made therefor;
(9) statutory Liens arising in the ordinary course of business with respect to obligations which are not delinquent or are
being contested in good faith, if reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been
made therefor;
(10) Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently dischargeable;
(11) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made
in the ordinary course of business to which such Obligor is a party as lessee, provided the aggregate value of all such pledges and
deposits in connection with any such lease does not at any time exceed 16 2⁄3% of the annual fixed rentals payable under such
lease;
(12) Liens consisting of deposits of Property to secure such Obligor’s statutory obligations in the ordinary course of its
business;
(13) Liens consisting of deposits of Property to secure (or in lieu of) surety, appeal or customs bonds in proceedings to
which such Obligor is a party in the ordinary course of its business, but not in excess of $25,000,000;
(14) Liens on “margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System);
(15) Liens permitted under sale and lease-back transactions, and any renewals or extensions thereof, so long as the
Indebtedness secured thereby does not exceed $300,000,000 in the aggregate;
(16) Liens arising in connection with asset securitization transactions, so long as the aggregate outstanding principal
amount of the obligations of all Obligors secured thereby does not exceed $300,000,000 at any one time;
(17) Liens securing Specified Non-Recourse Debt;
(18) Liens (i) of a collection bank on the items in the course of collection, (ii) in favor of a banking or other financial
institution arising as a matter of law encumbering deposits or other funds maintained with a financial institution (including the
right of set off) and which are
customary in the banking industry and (iii) attaching to other prepayments, deposits or earnest money in the ordinary course of
business; and
(19) Take-or-pay obligations arising in the ordinary course of business.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, or any other entity, including any government or any agency or political subdivision
thereof.
“Property” means with respect to any Person any property or asset, whether real, personal or mixed, or tangible or
intangible, including shares of capital stock.
“Specified Non-Recourse Debt” means any account or trade receivable factoring, securitization, sale or financing
facility, the obligations of which are non-recourse (except with respect to customary representations, warranties, covenants and
indemnities made in connection with such facility) to the applicable Obligor.
“Subsidiary” of any specified Person means any corporation, limited liability company, limited partnership, association
or other business entity of which more than 50% of the total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof.
Consolidation, Merger and Sale of Assets
The Issuer will not consolidate or combine with or merge with or into or, directly or indirectly, sell, assign, convey, lease,
transfer or otherwise dispose of all or substantially all of the Issuer’s assets to any Person or Persons (other than a transfer or
other disposition of assets to any of the Issuer’s wholly owned Subsidiaries), in a single transaction or through a series of
transactions, unless:
•
•
•
•
the Issuer shall be the continuing Person or, if the Issuer is not the continuing Person, the resulting, surviving or transferee
Person (the “surviving entity”) is a company or limited liability company organized (or formed in the case of a limited
liability company) and existing under the laws of the United States or any State or territory thereof or the District of
Columbia;
the surviving entity will expressly assume all of the Issuer’s obligations under the Notes and the Indenture and will
execute a supplemental indenture, in a form satisfactory to the Trustee, which will be delivered to the Trustee;
immediately after giving effect to such transaction or series of transactions on a pro forma basis, no default has occurred
and is continuing; and
the Issuer or the surviving entity will have delivered to the Trustee an officer’s certificate and opinion of counsel stating
that the transaction or series of transactions and a supplemental indenture, if any, complies with this covenant and that all
conditions precedent in the Indenture relating to the transaction or series of transactions have been satisfied.
The restrictions in the third bullet above shall not be applicable to:
•
•
the merger or consolidation of the Issuer with an affiliate if the Issuer’s board of directors, determines in good faith that
the purpose of such transaction is principally to change the Issuer’s state of incorporation or convert the Issuer’s form of
organization to another form; or
the merger of the Issuer with or into a single direct or indirect wholly owned subsidiary pursuant to Section 1924(b)(4) (or
any successor provision) of the Business Corporation Law of the State of Pennsylvania or Section 251(g) (or any
successor provision) of the General Corporation Law of the State of Delaware (or similar provision of the Issuer’s state of
incorporation).
If any consolidation or merger or any sale, assignment, conveyance, lease, transfer or other disposition of all or
substantially all of the Issuer’s assets occurs in accordance with the Indenture, the successor person will succeed to, and be
substituted for, and may exercise every right and power of ours under the Indenture with the same effect as if such successor
person had been named in the Issuer’s place in the Indenture. The Issuer will (except in the case of a lease) be discharged from all
obligations and covenants under the Indenture and any debt securities issued thereunder (including the Notes).
Existence. Except as permitted under “—Consolidation, Merger and Sale of Assets,” the Indenture requires the Issuer to
do or cause to be done all things necessary to preserve and keep in full force and effect the Issuer’s existence, rights and
franchises; provided, however, that the Issuer shall not be required to preserve any right or franchise if the Issuer determines that
its preservation is no longer desirable in the conduct of business.
Information. The Issuer will furnish to the Trustee any document or report the Issuer is required to file with the SEC
pursuant to Section 13 or Section 15(d) of the Exchange Act within 15 days after such document or report is filed with the SEC;
provided that in each case the delivery of materials to the Trustee by electronic means or filing documents pursuant to the SEC’s
“EDGAR” system (or any successor electronic filing system) shall be deemed to constitute “filing” with the Trustee for purposes
of this covenant. Delivery of the reports, information and documents required by this section to be delivered to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein.
Modification and Waiver
The Issuer, the Guarantors and the Trustee may amend or modify the Indenture or the Notes of any series without notice
to or the consent of any holder in order to:
•
cure any ambiguities, omissions, defects or inconsistencies in the Indenture in a manner that does not adversely affect the
interests of the holders in any material respect;
• make any change that would provide any additional rights or benefits to the holders of the Notes;
•
•
•
•
provide for or add guarantors with respect to the Notes;
secure the Notes of any series;
establish the form or terms of Notes of any series;
provide for uncertificated Notes in addition to or in place of certificated Notes;
•
•
•
•
evidence and provide for the acceptance of appointment by a successor trustee;
provide for the assumption by the Issuer’s successor, if any, to the Issuer’s or their obligations to holders of any
outstanding Notes in compliance with the applicable provisions of the Indenture;
qualify the Indenture under the Trust Indenture Act;
conform any provision in the Indenture or the terms of the securities of any series to the prospectus, offering
memorandum, offering circular or any other document pursuant to which the securities of such series were offered; or
• make any change that does not adversely affect the rights of any holder in any material respect.
Other amendments and modifications of the Indenture or the Notes of any series may be made with the consent of the
holders of not less than a majority in aggregate principal amount of the Notes of all series and the debt securities of all other
series outstanding under the Indenture that are affected by the amendment or modification (voting together as a single class), and
the Issuer’s compliance with any provision of the Indenture with respect to the debt securities of any series issued under the
Indenture (including the Notes) may be waived by written notice to the Issuer and the Trustee by the holders of a majority in
aggregate principal amount of the debt securities of all series outstanding under the Indenture that are affected by the waiver
(voting together as a single class). However, no modification or amendment may, without the consent of the holder of such
affected senior debt security:
•
•
•
•
•
reduce the principal amount, or extend the fixed maturity, of the Notes of such series or alter or waive the redemption
provisions of the Notes of such series;
impair the right of any holder of the Notes of such series to receive payment of principal or interest on the Notes of such
series on and after the due dates for such principal or interest;
change the currency in which principal, any premium or interest is paid;
reduce the percentage in principal amount outstanding of Notes of such series which must consent to an amendment,
supplement or waiver or consent to take any action;
impair the right to institute suit for the enforcement of any payment on the Notes of such series;
• waive a payment default with respect to the Notes of such series;
•
•
reduce the interest rate or extend the time for payment of interest on the Notes of such series; or
adversely affect the ranking of the Notes of such series.
An amendment, supplemental indenture or waiver which changes, eliminates or waives any covenant or other provision of
the Indenture which has expressly been included solely for the benefit of one or more particular series of the Notes, or which
modifies the rights of the holders of the Notes of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the holders of debt securities of any other series.
Events of Default
Each of the following will constitute an event of default in the Indenture with respect to the Notes of any series:
(a) default in paying interest on the Notes of such series when it becomes due and the default continues for a period of 30
days or more;
(b) default in paying principal on the Notes of such series when due;
(c) default by any Obligor in the performance, or breach, of any covenant in the Indenture (other than defaults specified in
clause (a) or (b) above) and the default or breach continues for a period of 90 days or more after the Issuer receives
written notice from the Trustee or the Issuer and the Trustee receive notice from the holders of at least 25% in aggregate
principal amount of the Notes of all affected series and the debt securities of all other affected series outstanding under the
Indenture (voting together as a single class);
(d) certain events of bankruptcy, insolvency, reorganization, administration or similar proceedings with respect to the Issuer
or any Obligor have occurred; or
(e) any Guarantee shall not be (or shall be claimed by the relevant Guarantor not to be) in full force and effect.
If an event of default (other than an event of default specified in clause (d) above) under the Indenture occurs and is
continuing, then the Trustee may and, at the direction of the holders of at least 25% in aggregate principal amount of the Notes of
all affected series and the debt securities of all other affected series outstanding under the Indenture (voting together as a single
class), will by written notice, require the Issuer to repay immediately the entire principal amount of the outstanding debt
securities of each affected series, together with all accrued and unpaid interest.
If an event of default under the Indenture specified in clause (d) occurs and is continuing, then the entire principal amount
of the outstanding Notes will automatically become due immediately and payable without any declaration or other act on the part
of the Trustee or any holder.
After a declaration of acceleration or any automatic acceleration under clause (d) described above, the holders of a
majority in principal amount of the outstanding Notes of any series (each such series voting as a separate class) may rescind this
accelerated payment requirement with respect to the Notes of such series if all existing events of default with respect to the Notes
of such series, except for nonpayment of the principal and interest on the Notes of such series that have become due solely as a
result of the accelerated payment requirement, have been cured or waived and if the rescission of acceleration would not conflict
with any judgment or decree and if all sums paid or advanced by the Trustee under the Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents and counsel have been paid.
The holders of a majority in principal amount of the Notes of all affected series and the debt securities of all other affected
series outstanding under the Indenture (voting together as a single class) may, by written notice to the Issuer and the Trustee, also
waive past defaults, except a default in paying principal or interest on any outstanding senior debt security of such series, or in
respect of a covenant or a provision that cannot be modified or amended without the consent of all affected holders of the Notes
of such series.
The holders of at least 25% in aggregate principal amount of the Notes of all affected series and the debt securities of all
other affected series outstanding under the Indenture (voting together as a single class) may seek to institute a proceeding only
after they have made written request, and offered indemnity reasonably satisfactory to the Trustee, to the Trustee to institute a
proceeding and the Trustee has failed to do so within 60 days after it received this request and offer of indemnity. In addition,
within this 60-day period the Trustee must not have received directions inconsistent with this written request by holders of a
majority in principal amount of the Notes of all affected series and the debt securities of all other affected series then outstanding.
These limitations do not apply, however, to a suit instituted by a holder of the Notes of any affected series for the enforcement of
the payment of principal or interest on or after the due dates for such payment.
During the existence of an event of default of which a responsible officer of the Trustee has actual knowledge or has
received written notice from the Issuer or any holder of the Notes, the Trustee is required to exercise the rights and powers vested
in it under the Indenture, and use the same degree of care and skill in its exercise, as a prudent person would under the
circumstances in the conduct of that person’s own affairs. If an event of default has occurred and is continuing, the Trustee is not
under any obligation to exercise any of its rights or powers at the request or direction of any of the holders unless the holders
have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee. Subject to certain provisions, the holders
of a majority in aggregate principal amount of the Notes of all affected series and the debt securities of all other affected series
outstanding under the Indenture (voting together as a single class) have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust, or power conferred on the Trustee.
The Trustee will, within 90 days after any default occurs with respect to the Notes of any series, give notice of the default
to the holders of the Notes of such series, unless the default was already cured or waived. Unless there is a default in paying
principal or interest when due, the Trustee can withhold giving notice to the holders if it determines in good faith that the
withholding of notice is in the interest of the holders.
The Issuer is required to furnish to the Trustee an annual statement as to compliance with all conditions and covenants
under the Indenture within 120 days of the end of each fiscal year.
Exhibit 10.2
AMENDMENT NO. 1 dated as of December 31, 2021 (this “Amendment”) among Comcast Corporation, a Pennsylvania
corporation (the “Company”) and JPMorgan Chase Bank, N.A. (“JPMCB”), as administrative agent (in such capacity, the
“Administrative Agent”). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement (as defined below).
AMENDMENT NO. 1
RECITALS:
WHEREAS, the Company is party to that certain Credit Agreement dated as of March 30, 2021, by and among the
Company, the lenders from time to time party thereto (the “Lenders”) and JPMCB, as administrative agent for the Lenders (the
“Existing Credit Agreement” and as amended by this Amendment and as further amended, restated, modified or supplemented
from time to time, the “Credit Agreement”);
WHEREAS, certain loans, commitments and/or other extensions of credit (the “Loans”) under the Existing Credit
Agreement denominated in Sterling (the “Affected Currency”) incur or are permitted to incur interest, fees or other amounts
based on the London Interbank Offered Rate as administered by the ICE Benchmark Administration (“LIBOR”) in accordance
with the terms of the Existing Credit Agreement; and
WHEREAS, the Administrative Agent, in consultation with the Company, has elected to enter into a Benchmark
Replacement Conforming Changes amendment with respect to the Affected Currency and pursuant to Section 3.03(d) of the
Existing Credit Agreement, the Administrative Agent and the Company have determined in accordance with the Existing Credit
Agreement that LIBOR for the Affected Currency should be replaced with the applicable Benchmark Replacement for all
purposes under the Credit Agreement and any Loan Document.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and
sufficiency of all of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Existing Credit Agreement. Effective as of the Amendment No. 1 Effective Date (as
defined below), the Existing Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same
manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as
the following example: double-underlined text) as set forth in the pages of the Existing Credit Agreement attached as Annex A
hereto.
SECTION 2. Conditions Precedent to Effectiveness of the Amendment. This Amendment shall become effective as of
the first date (the “Amendment No. 1 Effective Date”) that the following conditions precedent are satisfied:
Administrative Agent.
(a)
Amendment. This Amendment shall have been executed and delivered by the Company and the
(b)
Fees. The Administrative Agent shall have received, to the extent invoiced two (2) Business Days prior to
the Amendment No, 1 Effective Date, all other amounts due and payable pursuant to the Loan Documents on or prior to the
Amendment No. 1 Effective Date, including reimbursement or payment of all reasonable and documented out-of-pocket expenses
(including reasonable fees, charges and disbursements of Simpson Thacher & Bartlett LLP) required to be reimbursed or paid by
the Loan Parties hereunder or under any Loan Document.
The Administrative Agent shall notify the Company and the Lenders of the Amendment No. 1 Effective Date upon the
occurrence thereof, and such notice and the effectiveness of this Amendment and the Credit Agreement shall be conclusive and
binding upon all of the Lenders and all of the other parties to the Loan Documents and each of their successors and assigns;
provided that, failure to give any such notice shall not affect the effectiveness, validity or enforceability of this Amendment and
the Credit Agreement.
SECTION 3. Reference to and Effect on the Existing Credit Agreement and the other Loan Documents.
(a)
On and after the Amendment No. 1 Effective Date, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof” or words of like import referring to the Existing Credit Agreement shall mean and be a reference to the
Existing Credit Agreement, as amended by this Amendment. The Existing Credit Agreement and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed.
(b)
Other than as specifically provided herein or in the Credit Agreement, this Amendment shall not operate as a
waiver or amendment of any right, power or privilege of the Lenders under the Existing Credit Agreement or any other Loan
Document or of any other term or condition of the Existing Credit Agreement or any other Loan Document nor shall the entering
into of this Amendment preclude the Lenders from refusing to enter into any further waivers or amendments with respect to the
Existing Credit Agreement. This Amendment shall not constitute a novation of the Existing Credit Agreement or any of the Loan
Documents. This Amendment shall be a Loan Document for all purposes under the Credit Agreement and the other Loan
Documents.
SECTION 4. Acknowledgments. The Company hereby acknowledges that it has read this Amendment and consents to its
terms, and further hereby affirms, confirms, represents, warrants and agrees that notwithstanding the effectiveness of this
Amendment, the obligations of the Company under each of the Loan Documents shall not be impaired and each of the Loan
Documents is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.
SECTION 5. Execution in Counterparts. This Amendment may be executed in one or more counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf.
or electronic mail that reproduces an image of the actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in
or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be
deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-
based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
2
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 6. Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial, Etc.
This Amendment shall be construed in accordance with and governed by the law of the State of New York,
without regard to conflict of laws principles thereof to the extent such principles would cause the application of the law of
another state; and
(a)
Credit Agreement are incorporated herein by reference mutatis mutandis.
(b)
The jurisdiction and waiver of right to trial by jury provisions in Sections 10.22 and 10.23 of the Existing
SECTION 7. Amendment; Headings; Severability. This Amendment may not be amended nor may any provision hereof
be waived except pursuant to a writing signed by the Company, the other Loan Parties and the Administrative Agent. The Section
headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction
of, or to be taken into consideration in interpreting this Amendment. Any provision of this Amendment held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. Notices. All notices hereunder shall be given in accordance with the provisions of Section 10.02(a) of the
Credit Agreement.
[Signature Pages Follow]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
COMPANY:
COMCAST CORPORATION, a Pennsylvania corporation
By:
/s/ Elizabeth Wideman
Name: Elizabeth Wideman
Title: Senior Vice President, Senior
Deputy General Counsel and
Assistant Secretary
[Signature Page to Amendment No. 1]
JPMORGAN CHASE BANK, N.A., as Administrative Agent
By: /s/ Ryan Zimmerman
Name: Ryan Zimmerman
Title: Vice President
[Signature Page to Amendment No. 1]
ANNEX A
Amended Credit Agreement
[See attached.]
Execution VersionAnnex A
_____________________________________________________________________________________
CREDIT AGREEMENT
(as amended by Amendment No. 1, dated December 31, 2021)
among
COMCAST CORPORATION
The Financial Institutions Party Hereto
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
CITIBANK, N.A.,
as Syndication Agent
and
BANK OF AMERICA, N.A.,
MIZUHO BANK, LTD.,
MORGAN STANLEY MUFG LOAN PARTNERS, LLC and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Co-Documentation Agents
_____________________________________________________________________________________
Dated as of March 30, 2021
JPMORGAN CHASE BANK, N.A.,
CITIBANK, N.A.,
BOFA SECURITIES, INC.,
MORGAN STANLEY MUFG LOAN PARTNERS, LLC,
WELLS FARGO SECURITIES, LLC and
MIZUHO BANK, LTD.,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms
1.02 Use of Certain Terms.
1.03 Accounting Terms
1.04 Rounding
1.05 Exhibits and Schedules
1.06 References to Agreements and Laws
1.07 Pro Forma Calculations
1.08 Interest Rates; LIBOR Notification.
SECTION 2 THE REVOLVING COMMITMENTS AND EXTENSIONS OF CREDIT
2.01 Amount and Terms of Revolving Commitments
2.02 Procedure for Revolving Loan Borrowings
2.03 Letters of Credit
2.04 Competitive Bid Procedure
2.05 Reduction or Termination of Revolving Commitments
2.06 Prepayments
2.07 Documentation of Loans
2.08 Continuation and Conversion Option
2.09 Interest
2.10 Fees
2.11 Computation of Interest and Fees
2.12 Making Payments
2.13 Funding Sources
2.14 Defaulting Lenders
2.15 Currency Equivalents
SECTION 3 TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes
3.02 Illegality
3.03 Alternate Rate of Interest
3.04 Increased Cost and Reduced Return; Capital Adequacy
3.05 Breakfunding Costs
3.06 Matters Applicable to all Requests for Compensation
3.07 Survival
SECTION 4 CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT
4.01 Conditions Precedent to Effective Date
4.02 Conditions to all Extensions of Credit
SECTION 5 REPRESENTATIONS AND WARRANTIES
5.01 Existence and Qualification; Power; Compliance with Laws
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5.02 Power; Authorization; Enforceable Obligations
5.03 No Legal Bar
5.04 Financial Statements; No Material Adverse Effect
5.05 Litigation
5.06 Use of Proceeds
5.07 Anti-Corruption Laws and Sanctions
5.08 ERISA.
SECTION 6 AFFIRMATIVE COVENANTS
6.01 Financial Statements
6.02 Certificates, Notices and Other Information
6.03 Payment of Taxes
6.04 Preservation of Existence
6.05 Compliance With Laws
6.06 Inspection Rights
6.07 Keeping of Records and Books of Account
6.08 Designation of Unrestricted Subsidiaries
6.09 [Reserved]
6.10 Guarantors
SECTION 7 NEGATIVE COVENANTS
7.01 Liens
7.02 Non-Guarantor Subsidiary Indebtedness
7.03 Fundamental Changes
7.04 Anti-Corruption Laws and Sanctions
7.05 Financial Covenant
SECTION 8 EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default
8.02 Remedies Upon Event of Default
SECTION 9 THE AGENTS
9.01 Appointment
9.02 Delegation of Duties
9.03 Exculpatory Provisions
9.04 Reliance by Administrative Agent
9.05 Notice of Default
9.06 Acknowledgements of Lenders and Issuing Lenders
9.07 Indemnification
9.08 Agent in Its Individual Capacity
9.09 Successor Administrative Agent
9.10 Co-Documentation Agents and Syndication Agent
9.11 Certain ERISA Matters.
SECTION 10 MISCELLANEOUS
10.01 Amendments; Consents
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10.02 Requisite Notice; Electronic Communications
10.03 Attorney Costs and Expenses
10.04 Binding Effect; Assignment
10.05 Set-off
10.06 Sharing of Payments
10.07 No Waiver; Cumulative Remedies
10.08 Usury
10.09 Counterparts
10.10 Integration
10.11 Nature of Lenders’ Obligations
10.12 Survival of Representations and Warranties
10.13 Indemnity by Borrower
10.14 Nonliability of Lenders
10.15 No Third Parties Benefitted
10.16 Severability
10.17 Confidentiality
10.18 Headings
10.19 Time of the Essence
10.20 Status of Lenders
10.21 Removal and Replacement of Lenders
10.22 Governing Law; Submission to Jurisdiction; Waivers
10.23 Waiver of Right to Trial by Jury
10.24 USA PATRIOT Act
10.25 Judgment Currency
10.26 Acknowledgement and Consent to Bail-In of Affected Financial Institutions
10.27 Acknowledgement Regarding Any Supported QFCs
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EXHIBITS
A Form of Guarantee Agreement
B Form of Request for Extension of Credit
C Form of Compliance Certificate
D Form of Assignment and Assumption
E-1 Form of New Lender Supplement
E-2 Form of Increased Revolving Commitment Activation Notice
F Form of U.S. Tax Compliance Certificate
SCHEDULES
2.01 Revolving Commitments
2.03 Letter of Credit Commitments; Issuers of Existing Letters of Credit
6.08 Unrestricted Subsidiaries
10.02 Addresses for Notices
iv
This CREDIT AGREEMENT is entered into as of March 30, 2021, by and among COMCAST CORPORATION, a
Pennsylvania corporation (“Borrower”), each lender from time to time party hereto (collectively, “Lenders” and individually, a “Lender”) and
JPMORGAN CHASE BANK, N.A., as Administrative Agent.
CREDIT AGREEMENT
RECITALS
WHEREAS, Borrower has requested that the Lenders, the Issuing Lenders and Administrative Agent provide the Revolving
Facility (as defined below), and the Lenders, the Issuing Lenders and Administrative Agent are willing to do so on the terms and conditions
set forth herein; and
NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree as follows:
1.01
Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1
“Acquisition” means (a) any purchase or other acquisition of assets or series of related purchases or other acquisitions of
assets by Borrower or any Restricted Subsidiary (including by way of asset or stock purchase, swap or merger) other than from Borrower or
any Restricted Subsidiary or (b) the designation by Borrower of an Unrestricted Subsidiary as a Restricted Subsidiary.
“Acquisition Debt” means any Indebtedness of Borrower or any of its Restricted Subsidiaries (or an Unrestricted Subsidiary,
so long as, in the good faith determination of Borrower, such Unrestricted Subsidiary is expected to become a Restricted Subsidiary in
connection with the consummation of the applicable Material Acquisition) that has been issued for the purpose of financing, in whole or in
part, any acquisition that is a Material Acquisition in accordance with clause (ii) of the definition thereof and any related transactions or
series of related transactions in respect of any acquisition that is a Material Acquisition in accordance with clause (ii) of the definition thereof
(including for the purpose of refinancing or replacing all or a portion of any pre-existing Indebtedness of the Person(s) or assets to be
acquired); provided that (a) the release of the proceeds thereof to Borrower and its Restricted Subsidiaries (or an Unrestricted Subsidiary, so
long as, in the good faith determination of Borrower, such Unrestricted Subsidiary is expected to become a Restricted Subsidiary in
connection with the consummation of such Material Acquisition) is contingent upon the consummation of such Material Acquisition and,
pending such release, such proceeds are held in escrow (and, if the definitive agreement (or, in the case of a tender offer or similar
transaction, the definitive offer document) for such Material Acquisition is terminated prior to the consummation thereof or if such Material
Acquisition is otherwise not consummated by the date specified in the definitive documentation relating to such Indebtedness, such proceeds
shall be promptly applied to satisfy and discharge all obligations of Borrower and its Restricted Subsidiaries (or an Unrestricted Subsidiary,
so long as, in the good faith determination of Borrower, such Unrestricted Subsidiary is expected to become a Restricted Subsidiary in
connection with the consummation of such Material Acquisition) in respect of such Indebtedness) or (b) such Indebtedness contains a
“special mandatory redemption” provision (or other similar provision) or otherwise permits such Indebtedness to be redeemed or prepaid if
such Material Acquisition is not consummated by the date specified in the definitive documentation relating to such Indebtedness (and if the
definitive agreement (or, in the case of a tender offer or similar transaction, the definitive offer document) for such Material Acquisition is
terminated in accordance with its terms prior to the consummation of such Material Acquisition or such Material Acquisition is otherwise not
consummated by the date specified in the definitive documentation relating to such Indebtedness, such Indebtedness is so redeemed or
prepaid within 90 days of such termination or such specified date, as the case may be).
interest rate per annum equal to (a) Daily Simple SONIA, plus (b)
“Adjusted Daily Simple SONIA Rate” means, with respect to any Floating Rate Borrowing denominated in Sterling, an
1
0.0326%; provided that if the Adjusted Daily Simple SONIA Rate as so determined would be less than zero, such rate shall be deemed to be
equal to zero for the purposes of this Agreement.
Period, an interest rate per annum equal to (a) the EURIBOR Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Adjusted EURIBOR Rate” means, with respect to any Floating Rate Borrowing denominated in Euros for any Interest
“Adjusted LIBO Rate” means, with respect to any Floating Rate Borrowing denominated in Dollars or Sterling for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
interest rate per annum equal to (a) the TIBOR Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Adjusted TIBOR Rate” means, with respect to any Floating Rate Borrowing denominated in Yen for any Interest Period, an
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent under any of the Loan
Documents, or any successor administrative agent permitted under the Loan Documents; provided that for purposes of Borrowings,
Continuations or Conversions denominated in Canadian Dollars, Euros, Sterling or Yen, Administrative Agent shall be J.P. Morgan Europe
Limited.
has designated by written notice to Borrower and Lenders.
“Administrative Agent’s Office” means Administrative Agent’s address and, as appropriate, account as Administrative Agent
Affiliates and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.
“Administrative Agent-Related Persons” means Administrative Agent (including any successor agent), together with its
Administrative Agent and submitted to Administrative Agent (with a copy to Borrower) duly completed by such Lender.
“Administrative Questionnaire” means, with respect to each Lender, an administrative questionnaire in the form prepared by
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
direct or indirect common Control with, such Person.
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by, or is under
“Agents” means the collective reference to Administrative Agent, Syndication Agent and Co-Documentation Agents.
“Agent Parties” has the meaning set forth in Section 10.02(e)(ii).
“Aggregate Exposure” means, with respect to any Lender at any time, an amount equal to the amount of such Lender’s
Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Outstanding
Revolving Obligations.
such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.
“Aggregate Exposure Percentage” means, with respect to any Lender at any time, the ratio (expressed as a percentage) of
“Agreed Currencies” means Dollars and each Alternative Currency.
from time to time.
“Agreement” means this Credit Agreement, as amended, restated, extended, supplemented or otherwise modified in writing
2
“Agreement Currency” has the meaning set forth in Section 10.25(b).
“Alternative Currency” means (x) with respect to any Letter of Credit, (a) Euros, (b) Yen, (c) Sterling, (d) Canadian Dollars
and (e) any currency other than Dollars, Euros, Yen, Sterling, or Canadian Dollars in which an Issuing Lender is willing to issue a Letter of
Credit and (y) with respect to any Loan, (a) Euros, (b) Yen, (c) Sterling, (d) Canadian Dollars and (e) any currency other than Dollars, Euros,
Yen, Sterling, or Canadian Dollars in which each Lender has agreed to make Loans.
“Ancillary Documents” has the meaning set forth in Section 10.09(b).
recently ended times two (2).
“Annualized EBITDA” means, at any date of determination, EBITDA for the two (2) fiscal quarter periods then most
Subsidiaries from time to time concerning or relating to bribery or corruption.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to Borrower or any of its
upon the applicable Debt Ratings:
“Applicable Amount” means the rate per annum, in basis points, set forth under the relevant column heading below based
Pricing Level
Debt Ratings
S&P/Moody’s
Commitment
Fee
Base Rate
Floating Rate / Letters
of Credit
1
2
3
4
5
≥A+/A1
A/A2
A-/A3
BBB+/Baa1
≤BBB/Baa2
5.0
7.0
8.0
10.0
12.5
0.0
0.0
0.0
12.5
25.0
62.5
75.0
100.0
112.5
125.0
As used in this definition, “Debt Rating” means, as of any date of determination, the rating as determined by either S&P or
Moody’s (collectively, the “Debt Ratings”) of Borrower’s senior unsecured non-credit-enhanced long-term Indebtedness for borrowed money
(the “Subject Debt”); provided that, solely for purposes of determining the Applicable Amount, if a Debt Rating is issued by each of S&P
and Moody’s, then the higher of such Debt Ratings shall apply (with Pricing Level 1 being the highest and Pricing Level 5 being the lowest),
unless there is a split in Debt Ratings of more than one level, in which case the level that is one level lower than the higher Debt Rating shall
apply. The Debt Ratings shall be determined from the most recent public announcement of any Debt Ratings or changes thereto. Any change
in the Applicable Amount shall become effective on and as of the date of any public announcement of any Debt Rating that indicates a
different Applicable Amount. If the rating system of S&P or Moody’s shall change, Borrower and Administrative Agent shall negotiate in
good faith to amend this definition to reflect such changed rating system and, pending the effectiveness of such amendment (which shall
require the approval of Required Lenders), the Debt Rating shall be determined by reference to the rating most recently in effect prior to such
change. If and for so long as either S&P or Moody’s (but not both) has ceased to rate the Subject Debt, then (x) if such rating agency has
ceased to issue debt ratings generally, or if Borrower has used commercially reasonable efforts to maintain ratings from both S&P and
Moody’s, the Debt Rating shall be deemed to be the Remaining Debt Rating and (y) otherwise, the Debt Rating shall be deemed to be one
Pricing Level below the Remaining Debt Rating. If and for so long as both S&P and Moody’s have ceased to rate the Subject Debt, then (x) if
S&P and Moody’s have ceased to issue debt ratings generally, the Debt Rating shall be the Debt Rating most recently in effect prior to such
event and (y) otherwise, the Debt Rating will be the Debt Rating at Pricing Level 5. For the purpose of the foregoing, “Remaining Debt
Rating” means, at any time that one of S&P or Moody’s, but not both, is rating the Subject Debt, the rating assigned by such rating agency
from time to time.
of the relevant Interest Period, any date that such Loan is
“Applicable Payment Date” means, (a) as to any Floating Rate Loan (other than a Floating SONIA Rate Loan), the last day
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prepaid or Converted in whole or in part and the maturity date of such Loan; provided, however, that if any Interest Period for a Floating
Rate Loan exceeds three months, interest shall also be paid on the Business Day which falls every three months after the beginning of such
Interest Period; (b) as to any Floating SONIA Rate Loan, (i) each date that is on the numerically corresponding day in each calendar month
that is three months after the borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day
of such month), (ii) any date that such Loan is prepaid or Converted in whole or in part and (iii) the maturity date of such Loan; (c) with
respect to any Fixed Rate Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of
a Fixed Rate Loan with an Interest Period of more than 90 days’ duration (unless otherwise specified in the applicable Competitive Bid
Request), each day prior to the last day of such Interest Period that occurs at intervals of 90 days’ duration after the first day of such Interest
Period, and any other dates that are specified in the applicable Competitive Bid Request as Applicable Payment Dates with respect to such
Borrowing; and (cd) as to any other Obligations, the last Business Day of each calendar quarter and the maturity date of such Obligation,
except as otherwise provided herein.
“Applicable Time” means New York time.
“Asset Monetization Transactions” has the meaning set forth in the definition of Consolidated Total Indebtedness.
“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit D or, to the extent
applicable, an agreement (in form and substance reasonably acceptable to the Borrower) incorporating an Assignment and Assumption by
reference pursuant to a Platform as to which Administrative Agent and the parties to the Assignment and Assumption are participants.
“Attorney Costs” means the reasonable and documented fees and disbursements of a law firm or other external counsel.
“Attributable Indebtedness” means, with respect to any Sale-Leaseback Transaction, the present value (discounted at the rate
set forth or implicit in the terms of the lease included in such Sale-Leaseback Transaction) of the total obligations of the lessee for rental
payments (other than amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments, utilities, operating and
labor costs and other items that do not constitute payments for property rights) during the remaining term of the lease included in such Sale-
Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease that is terminable by the lessee
upon payment of a penalty, the Attributable Indebtedness shall be the lesser of the Attributable Indebtedness determined assuming
termination on the first date such lease may be terminated (in which case the Attributable Indebtedness shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date on which it may be so terminated)
or the Attributable Indebtedness determined assuming no such termination.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any
tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used
for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any
tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (f) of Section 3.03.
respect of any liability of an Affected Financial Institution.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU
of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA
Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom,
Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the
United Kingdom relating to the resolution of unsound or failing
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banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency
proceedings).
“Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day
is not a Business Day, the immediately preceding Business Day) plus 1%; provided that for the purpose of this definition, the Adjusted LIBO
Rate for any day shall be based on the Screen Rate (or if the Screen Rate is not available for such one month Interest Period, the LIBO
Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any change in the Base Rate due to a change in the Prime Rate, the
NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the
NYFRB Rate or the Adjusted LIBO Rate, respectively. If the Base Rate is being used as an alternate rate of interest pursuant to Section 3.03
(for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 3.03(b)), then the Base Rate
shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.
such Borrowing, bear interest based upon the Base Rate.
“Base Rate Loan”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
“Benchmark” means, initially, the Relevant Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition
Event, a Term ESTR Transition Event, a Term TONA Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark
Replacement Date have occurred with respect to Relevant Rate or the then-current Benchmark, then “Benchmark” means the applicable
Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) or
clause (c) of Section 3.03.
“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be
determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that, in the case of any Loan
denominated in an Other Agreed Currency, “Benchmark Replacement” shall mean the alternative set forth in (3) below:
(1)
Adjustment,
(A) in the case of any Loan denominated in Dollars, the sum of: (a) Term SOFR and (b) the related Benchmark Replacement
Replacement Adjustment,[reserved],
(B) in the case of any Loan denominated in Sterling, the sum of (a) Daily Simple SONIA and (b) the related Benchmark
Adjustment, and
(C) in the case of any Loan denominated in Euros, the sum of (a) Term ESTR and (b) the related Benchmark Replacement
Adjustment;
(D) in the case of any Loan denominated in Yen, the sum of (a) Term TONA and (b) the related Benchmark Replacement
(2)
Replacement Adjustment,
(A) in the case of any Loan denominated in Dollars, the sum of: (a) Daily Simple SOFR and (b) the related Benchmark
(B) [reserved],
Replacement Adjustment, and
(C) in the case of any Loan denominated in Euros, the sum of (a) Daily Simple ESTR and (b) the related Benchmark
Replacement Adjustment; and
(D) in the case of any Loan denominated in Yen, the sum of (a) Daily Simple TONA and (b) the related Benchmark
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(3) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the
replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or
recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii)
any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for
syndicated credit facilities denominated in the applicable Agreed Currency at such time and (b) the related Benchmark Replacement
Adjustment;
provided that, in the case of clause (1)(A), (1)(C) or (1)(D), such Unadjusted Benchmark Replacement is displayed on a
screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable
discretion; provided further that, (x) with respect to a Loan denominated in Dollars, notwithstanding anything to the contrary in this
Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice,
on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term
SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1)(A) of this definition (subject to the preceding
proviso), (y) with respect to a Loan denominated in Euros, notwithstanding anything to the contrary in this Agreement or in any other Loan
Document, upon the occurrence of a Term ESTR Transition Event, and the delivery of a Term ESTR Notice, on the applicable Benchmark
Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term ESTR and (b) the related
Benchmark Replacement Adjustment, as set forth in clause (1)(C) of this definition (subject to the preceding proviso) and (z) with respect to
a Loan denominated in Yen, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence
of a Term TONA Transition Event, and the delivery of a Term TONA Notice, on the applicable Benchmark Replacement Date the
“Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term TONA and (b) the related Benchmark Replacement
Adjustment, as set forth in clause (1)(D) of this definition (subject to the preceding proviso).
Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an
Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark
Replacement:
order below that can be determined by the Administrative Agent:
(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the
(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or
negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or
recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark
Replacement for the applicable Corresponding Tenor; and
(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark
Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA
Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and
(2) for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for
calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the
Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or
recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark
Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for
calculating or
6
determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for
syndicated credit facilities denominated in the applicable Agreed Currency at such time;
provided that (x) in the case of clause (1) above, such adjustment is displayed on a screen or other information service that
publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion
and (y) each Benchmark Replacement Adjustment shall be determined by the Administrative Agent in consultation with the Borrower.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical,
administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the
definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or
prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical,
administrative or operational matters) that the Administrative Agent decides (in consultation with the Borrower) may be appropriate to reflect
the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a
manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market
practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such
Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary (in
consultation with the Borrower) in connection with the administration of this Agreement and the other Loan Documents, so long as
consistent with the treatment of similar syndicated credit facilities denominated in the applicable Agreed Currency at such time for
investment-grade companies similar to the Borrower in respect of which the Administrative Agent acts as administrative agent).
respect to such then-current Benchmark:
“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public
statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published
component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such
component thereof);
of information referenced therein;
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication
(3) in the case of a Term SOFR Transition Event, a Term ESTR Transition Event or a Term TONA Transition Event, as
applicable, the date that is thirty (30) days after the date a Term SOFR Notice, a Term ESTR Notice or a Term TONA Notice, as applicable,
is provided to the Lenders and the Borrower pursuant to Section 3.03(c); or
(4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is
provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business
Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election
from Lenders comprising the Required Lenders.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but
earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to
the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause
(1) or (2) with respect to any Benchmark only upon the occurrence of the applicable event or events set forth therein with respect to all then-
current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
7
with respect to such then-current Benchmark:
“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published
component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of
such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is
no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or
the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, an insolvency official with jurisdiction
over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such
Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such
Benchmark (or such component), in each case which states that the administrator of such Benchmark (or such component) has ceased or will
cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time
of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or
such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or
the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component
thereof) are no longer representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any
Benchmark only if a public statement or publication of information set forth above has occurred with respect to each then-current Available
Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that
a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has
replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.03 and (y)
ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan
Document in accordance with Section 3.03.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of
ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets
include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of
any such “employee benefit plan” or “plan”.
U.S.C. 1841(k)) of such party.
“BHC Act Affiliate” of a party means an “affiliate’ (as such term is defined under, and interpreted in accordance with, 12
“BLR Group” means: (i) Brian L. Roberts (“BLR”); (ii) his wife; (iii) a lineal descendant of BLR; (iv) the estate of BLR; (v)
any trust of which at least one of the trustees is any one or more of BLR, his wife and his lineal descendants, or the principal beneficiaries of
which are any one or more of BLR, his wife and his lineal descendants; (vi) any Person which is Controlled by any one or more of the
foregoing; and (vii) any group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of which any of the foregoing is a member.
of a transaction that results in a Successor Entity, shall mean such Successor Entity.
“Borrower” (a) initially has the meaning set forth in the introductory paragraph hereto and (b) following the consummation
8
“Borrowing” and “Borrow” each mean a borrowing of Loans hereunder.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New
York are authorized or required by law to close, and, if the applicable Business Day relates to a Floating Rate Loan, any such day on which
dealings are carried out in the applicable offshore Dollar market; provided that the term “Business Day”, when used in connection with (i)
any Floating Rate Loan (or Base Rate Loan the rate of which is based on the Adjusted LIBO Rate), shall also exclude any day on which
banks are not open for dealings in Dollar, Euro or Sterling deposits in the London interbank market, (ii) any Loan denominated in Euros shall
also exclude any day on which commercial banks in London are authorized or required by law to remain closed, (iii) any Loan denominated
in Sterling shall also exclude any day on which commercial banks in London are authorized or required by law to remain closed, (iv) any
Loan denominated in Yen shall also exclude any day on which commercial banks in Tokyo, Japan are authorized or required by law to remain
closed and (v) any Loan denominated in Canadian Dollars shall also exclude any day on which commercial banks in Toronto, Canada are
authorized or required by law to remain closed.
purpose is to directly or indirectly own or hold an investment in another Person that operates a cable communications business.
“Cable Subsidiary” means a Subsidiary of Borrower (a) that operates a cable communications business or (b) whose sole
“Canadian Dollar” and “C$” means lawful money of Canada.
“Canadian Prime Rate” means, on any day, the rate determined by the Administrative Agent to be the higher of (i) the rate
equal to the PRIMCAN Index rate that appears on the Bloomberg screen at 10:15 a.m. Toronto time on such day (or, in the event that the
PRIMCAN Index is not published by Bloomberg, any other information services that publishes such index from time to time, as selected by
the Administrative Agent in its reasonable discretion) and (ii) the average rate for thirty (30) day Canadian Dollar bankers’ acceptances that
appears on the Reuters Screen CDOR Page (or, in the event such rate does not appear on such page or screen, on any successor or substitute
page or screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time,
as selected by the Administrative Agent in its reasonable discretion) at 10:15 a.m. Toronto time on such day, plus 1% per annum; provided,
that if any the above rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. Any change in the
Canadian Prime Rate due to a change in the PRIMCAN Index or the CDOR shall be effective from and including the effective date of such
change in the PRIMCAN Index or CDOR, respectively.
“CBR Loan” shall mean a Loan that bears interest at a rate determined by reference to the Central Bank Rate.
“CBR Spread” shall mean the Applicable Amount applicable to such Loan that is replaced by a CBR Loan.
“CDOR Screen Rate” means, with respect to any Floating Rate Borrowing denominated in Canadian Dollars for any Interest
Period, on any day for the relevant Interest Period, the annual rate of interest equal to the average rate applicable to Canadian Dollar
Canadian bankers’ acceptances for the applicable period that appears on the “Reuters Screen CDOR Page” as defined in the International
Swap Dealer Association, Inc. definitions, as modified and amended from time to time (or, in the event such rate does not appear on such
page or screen, on any successor or substitute page or screen that displays such rate, or on the appropriate page of such other information
service that publishes such rate from time to time, as selected by the Administrative Agent in its reasonable discretion), rounded to the
nearest 1/100 of 1% (with .005% being rounded up), as of 10:15 a.m. Toronto local time on the first day of such Interest Period and, if such
day is not a business day, then on the immediately preceding business day (as adjusted by Administrative Agent after 10:15 a.m. Toronto
local time to reflect any error in the posted rate of interest or in the posted average annual rate of interest). If the CDOR Screen Rate shall be
less than zero, the CDOR Screen Rate shall be deemed to be zero for purposes of this Agreement.
th
“Bank Rate” as published by the Bank of England (or any
“Central Bank Rate” shall mean, for any Loan denominated in Sterling, (i) the Bank of England’s (or any successor thereto’s)
9
successor thereto) from time to time, plus (ii) the applicable Central Bank Rate Adjustment; provided that, if the Central Bank Rate shall be
less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“Central Bank Rate Adjustment” shall mean, for any day, for any Loan denominated in, Sterling, a rate equal to the
difference (which may be a positive or negative value or zero) of (i) the average of Daily Simple SONIA for the five most recent SONIA
Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest such Daily
Simple SONIA applicable during such period of five SONIA Business Days) minus (ii) the Central Bank Rate in respect of Sterling in effect
on the last SONIA Business Day in such period. For purposes of this definition, the term Central Bank Rate shall be determined disregarding
the proviso in the definition of such term.
“Change of Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder, as in
effect on the date hereof), other than the BLR Group, of Equity Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of Borrower; or (b) the occupation of a majority of the seats (other than vacant
seats) on the board of directors of Borrower by Persons who were not directors of Borrower on the date of this Agreement or nominated or
appointed or approved by the board of directors of Borrower (or by the Nominating Committee of such board).
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
Partners, LLC (acting through Morgan Stanley Senior Funding, Inc. and MUFG Bank Ltd.) and Wells Fargo Bank, National Association.
“Co-Documentation Agents” means, collectively, Bank of America, N.A., Mizuho Bank, Ltd., Morgan Stanley MUFG Loan
“Communications” means, collectively, any notice, demand, communication, information, document or other material
provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by
Administrative Agent, any Lender or any Issuing Lender by means of electronic communications pursuant to Section 10.02(e), including
through an Electronic System.
“Competitive Bid” means an offer by a Lender to make a Competitive Loan in accordance with Section 2.04.
the Lender making such Competitive Bid.
“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by
“Competitive Bid Request” means a request by Borrower for Competitive Bids in accordance with Section 2.04.
date and as to which a single Interest Period is in effect.
“Competitive Borrowing” means a Competitive Loan or group of Competitive Loans of the same Type made on the same
“Competitive Loan” means a Loan made pursuant to Section 2.04.
Responsible Officer of Borrower.
“Compliance Certificate” means a certificate substantially in the form of Exhibit C, properly completed and signed by a
“Consolidated Net Worth” means, as of any date of determination, the stockholders’ equity or members’ capital of the
Borrower and its consolidated Subsidiaries, as reflected on the most recent consolidated balance sheet of the Borrower and its consolidated
Subsidiaries and prepared in accordance with GAAP.
10
“Consolidated Total Indebtedness” means, as of any date of determination, the total Indebtedness for borrowed money of
Borrower and its Restricted Subsidiaries and Guaranty Obligations of Borrower and its Restricted Subsidiaries in respect of Indebtedness for
borrowed money, determined on a consolidated basis in accordance with GAAP, but excluding, to the extent constituting Indebtedness for
borrowed money or Guaranty Obligations in respect of Indebtedness for borrowed money, Indebtedness of Borrower and its Restricted
Subsidiaries arising from any asset monetization transactions which are recourse only to the assets so monetized (collectively, “Asset
Monetization Transactions”).
continuation of such Floating Rate Loan as a Floating Rate Loan on the last day of the Interest Period for such Loan.
“Continuation” and “Continue” mean, with respect to any Floating Rate Loan (other than a Floating SONIA Rate Loan), the
instrument or undertaking to which such Person is a party or by which it or any of its property is bound.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement,
management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.
“Control” or “Controlled” means the possession, directly or indirectly, of the power to direct or cause the direction of the
Loan.
“Conversion” and “Convert” mean, with respect to any Loan, the conversion of such Loan from or into another Type of
interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an
“Covered Entity” means any of the following:
(i)
(ii)
a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii)
a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” has the meaning set forth in Section 10.27.
“Daily Simple ESTR” means, for any day, ESTR, with the conventions for this rate (which will include a lookback) being
established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant
Governmental Body for determining “Daily Simple ESTR” for business loans; provided that, if the Administrative Agent decides that any
such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another
convention in its reasonable discretion with the consent of the Borrower.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being
established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant
Governmental Body for determining “Daily Simple SOFR” for business loans; provided that, if the Administrative Agent decides that any
such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another
convention in its reasonable discretion with the consent of the Borrower.
“Daily Simple SONIA” means, for any day; (a “SONIA, with the conventions for this rate (which will include a lookback)
being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant
Governmental Body for
11
determining “Daily Simple SONIA” for business loans; provided that, if the Administrative Agent decides that any such convention is not
administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable
discretion with the consent of the Borrower. Interest Day”), an interest rate per annum equal to the SONIA Rate for the day that is five
Business Days prior to (a) if such SONIA Interest Day is a Business Day, such SONIA Interest Day or (b) if such SONIA Interest Day is not
a Business Day, the Business Day immediately preceding such SONIA Interest Day.
“Daily Simple TONA” means, for any day, TONA, with the conventions for this rate (which will include a lookback) being
established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant
Governmental Body for determining “Daily Simple TONA” for business loans; provided that, if the Administrative Agent decides that any
such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another
convention in its reasonable discretion with the consent of the Borrower.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or
similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect affecting the rights of
creditors generally.
“Debt Rating” has the meaning set forth in the definition of Applicable Amount.
“Declining Lender” has the meaning set forth in Section 2.01(e).
“Default” means any event that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate equal to (i) in the case of overdue principal of any Loan, 2% per annum plus the rate
otherwise applicable to such Loan as provided in Section 2.09(a) or (ii) in the case of any other overdue amount, 2% per annum plus the rate
applicable to Base Rate Loans, in each case to the fullest extent permitted by applicable Laws.
47.2 or 382.1, as applicable.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81,
“Defaulting Lender” means any Lender that has (a) failed to fund its portion of any Borrowing, or any portion of its
participation in any Letter of Credit, within three Business Days of the date on which it shall have been required to fund the same (or, in the
case of any Borrowing on the Effective Date, on the Effective Date), (b) notified Borrower, Administrative Agent, any Issuing Lender or any
other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under agreements in
which it commits to extend credit, (c) failed, within three Business Days after written request by Administrative Agent (which request shall,
in any event, be made promptly upon request by Borrower), to confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding Letters of Credit; provided that any such Lender shall cease to be
a Defaulting Lender under this clause (c) upon receipt of such confirmation by Administrative Agent, (d) otherwise failed to pay over to
Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when
due, unless the subject of a good faith dispute, (e) (i) been (or has a parent company, including any intermediate parent company, that has
been) adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be,
insolvent or (ii) become the subject of a Bail-in Action or a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian,
appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company, including any intermediate parent company, that has become the subject of a Bail-in Action or a
bankruptcy or insolvency proceeding, or has had a receiver,
12
conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its
business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such Bail-in Action or bankruptcy proceeding or appointment, unless in the case of any Lender referred to in this clause (e) Borrower,
Administrative Agent and each Issuing Lender shall be satisfied that such Lender intends, and has all approvals required to enable it, to
continue to perform its obligations as a Lender hereunder or (f) has otherwise become a “defaulting” lender generally in credit agreements to
which it is a party (as reasonably determined by Administrative Agent in consultation with Borrower). For the avoidance of doubt, a Lender
shall not be deemed to be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in such Lender or its
parent by a Governmental Authority.
“Disposition” means (a) any sale, transfer or other disposition of assets or series of sales, transfers or other disposition of
assets by Borrower or any Restricted Subsidiary (including by way of asset or stock sale, swap or merger) other than to Borrower or any
Restricted Subsidiary or (b) the designation by Borrower of a Restricted Subsidiary as an Unrestricted Subsidiary.
“Dollar” and “$” means lawful money of the United States of America.
denominated in an Alternative Currency, the amount thereof converted to Dollars in accordance with Section 2.15.
“Dollar Amount” means, at any time, for any amount, (i) if denominated in Dollars, the amount thereof and (ii) if
“Early Opt-in Election” means, with respect to any Agreed Currency, the occurrence of:
(1) a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify)
each of the other parties hereto that at least five currently outstanding syndicated credit facilities for investment grade companies
denominated in the applicable Agreed Currency at such time contain (as a result of amendment or as originally executed) a new benchmark
interest rate to replace the Relevant Rate (and such syndicated credit facilities for investment grade companies are identified in such notice
and are publicly available for review), and
(2) the joint election by the Administrative Agent and the Borrower to declare that an Early Opt-in Election for such
Agreed Currency has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the
Borrower and the Lenders.
“EBITDA” means, with respect to any Person or any income generating assets, for any period, an amount equal to (a) the
operating income of such Person or generated by such assets calculated in accordance with GAAP adjusted to exclude gains and losses from
unusual or extraordinary items, plus (b) depreciation, amortization and other non-cash charges to operating income, in each case for such
period, minus (c) any cash payments made during such period in respect of any non-cash charges to operating income accrued during a prior
period and added back in determining EBITDA during such prior period pursuant to clause (b) above, plus (d) corporate overhead expenses
incurred by Borrower in an aggregate amount not to exceed $100,000,000 for any fiscal year of Borrower.
and dissemination of documents submitted to the U.S. Securities and Exchange Commission in electronic format.
“EDGAR” means the Electronic Data Gathering, Analysis and Retrieval computer system for the receipt, acceptance, review
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
13
authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative
which date is March 30, 2021.
“Effective Date” means the date upon which all the conditions precedent in Section 4.01 have been satisfied or waived,
record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other
“Electronic System” means any electronic system, including e-mail, e-fax, Intralinks ClearPar®, Debt Domain, Syndtrak
and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by Administrative Agent or any
other Person, providing for access to data protected by passcodes or other security system.
®,
“Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of $5,000,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having total assets in excess of $5,000,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow or of the
Cayman Islands, or a political subdivision of any such country, and having total assets in excess of $5,000,000,000 so long as such bank is
acting through a branch or agency located in the United States or in the country in which it is organized or another country that is described
in this clause (v); (vi) the central bank of any country that is a member of the Organization for Economic Cooperation and Development; or
(vii) any other Person approved by Administrative Agent and Borrower; provided, however, that no Defaulting Lender shall qualify as an
Eligible Assignee.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any such equity interest.
amended from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto, as
“ERISA Affiliate” means any person that for purposes of Title IV of ERISA or Section 412 of the Code would be deemed at
any relevant time to be a “single employer” with Borrower under Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) of
ERISA.
“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure of Borrower or any ERISA Affiliate
to make by its due date a required installment under Section 430(j) of the Code with respect to any Plan or any failure by any Plan to satisfy
the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether
or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Plan or the incurrence by Borrower
or any ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by Borrower or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee
to administer any Plan; (f) the incurrence by Borrower or any ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Borrower or any ERISA Affiliate of any notice, concerning the imposition of withdrawal liability or a
determination
14
that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Title IV of ERISA), in “endangered” or “critical” status
(within the meaning of Section 432 of the Code or Section 305 of ERISA), or terminated (within the meaning of Section 4041A of ERISA).
Day published by the ESTR Administrator on the ESTR Administrator’s Website.
“ESTR” means, with respect to any Business Day, a rate per annum equal to the Euro Short Term Rate for such Business
“ESTR Administrator” means the European Central Bank (or any successor administrator of the Euro Short Term Rate).
successor source for the Euro Short Term Rate identified as such by the ESTR Administrator from time to time.
“ESTR Administrator’s Website” means the European Central Bank’s website, currently at http://www.ecb.europa.eu, or any
(or any successor Person), as in effect from time to time.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association
“EURIBOR Interpolated Rate” means, at any time, with respect to any Floating Rate Borrowing denominated in Euros and
for any Interest Period, the rate per annum (rounded to the same number of decimal places as the EURIBOR Screen Rate) determined by the
Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the EURIBOR Screen Rate for the longest period (for which the EURIBOR Screen Rate is
available for Euros) that is shorter than the Impacted EURIBOR Rate Interest Period; and (b) the EURIBOR Screen Rate for the shortest
period (for which the EURIBOR Screen Rate is available for Euros) that exceeds the Impacted EURIBOR Rate Interest Period, in each case,
at such time; provided that, if any EURIBOR Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for the purposes
of this Agreement.
“EURIBOR Rate” means, with respect to any Floating Rate Borrowing denominated in Euros and for any Interest Period, the
EURIBOR Screen Rate at approximately 11:00 a.m., Brussels time, two TARGET Days prior to the commencement of such Interest Period;
provided that, if the EURIBOR Screen Rate shall not be available at such time for such Interest Period (an “Impacted EURIBOR Rate
Interest Period”) with respect to Euros then the EURIBOR Rate shall be the EURIBOR Interpolated Rate.
“EURIBOR Screen Rate” means the euro interbank offered rate administered by the European Money Markets Institute (or
any other person which takes over the administration of that rate) for the relevant period displayed (before any correction, recalculation or
republication by the administrator) on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which
displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of
Thomson Reuters as of 11:00 a.m. Brussels time two TARGET Days prior to the commencement of such Interest Period. If such page or
service ceases to be available, the Administrative Agent may specify another page or service displaying the relevant rate after consultation
with the Borrower. If the EURIBOR Screen Rate shall be less than zero, the EURIBOR Screen Rate shall be deemed to be zero for purposes
of this Agreement.
“Euro” and “€” means lawful money of the European Union.
“Event of Default” means any of the events specified in Section 8.
“Exchange Rate” means on any day with respect to any currency other than Dollars, the rate at which such currency may be
exchanged into Dollars, as set forth at approximately 11:00 a.m. (London time) on such day on the Reuters World Currency Page for such
currency; in the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by
reference to such other publicly available service for displaying exchange rates as may be agreed upon by Administrative Agent and
Borrower, or, in the absence of such agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of
Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at
15
or about 10:00 a.m. (New York City time) on such date for the purchase of Dollars for delivery two (2) Business Days later; provided,
however, that if at any time of any such determination, for any reason, no such spot rate is being quoted, Administrative Agent may use any
reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
the lenders and issuing lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, as amended.
“Existing Comcast Credit Agreement” means the Credit Agreement, dated as of May 26, 2016, among Comcast Corporation,
“Existing Credit Agreements” means, collectively, (i) the Existing Comcast Credit Agreement and (ii) the Credit Agreement,
dated as of May 26, 2016, among NBCUniversal Enterprise, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent, as amended.
“Existing Letters of Credit” means the letters of credit that have been issued prior to the Effective Date pursuant to the
Existing Comcast Credit Agreement or that certain continuing agreement for standby letters of credit dated as of December 2, 2011 between
Borrower and JPMorgan Chase Bank, N.A. (as amended by that certain amendment to letter of credit agreement dated as of March 14, 2013
between Borrower and JPMorgan Chase Bank, N.A.) and that are outstanding on the Effective Date.
“Extended Revolving Termination Date” has the meaning set forth in Section 2.01(e).
“Extending Lender” has the meaning set forth in Section 2.01(e).
“Extension Effectiveness Date” has the meaning set forth in Section 2.01(e).
“Extension of Credit” means (a) a Borrowing, Conversion or Continuation of Loans and (b) a Letter of Credit Action
whereby a new Letter of Credit is issued or which has the effect of increasing the amount of, extending the maturity of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of drawings thereunder (collectively, the “Extensions of Credit”).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor
version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any law, regulation, rule, promulgation,
or official agreement implementing an official intergovernmental agreement with respect to such Sections.
“FCA” has the meaning set forth in Section 1.08.
“Federal Funds Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions
by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on
the next succeeding Business Day by the NYFRB as the effective federal funds rate. If the Federal Funds Rate shall be less than zero, such
rate shall be deemed to be zero for purposes of this Agreement.
fixed rate of interest per annum specified by the Lender making such Competitive Loan in its related Competitive Bid.
“Fixed Rate” means, with respect to any Competitive Loan (other than a Competitive Loan that is a Floating Rate Loan), the
“Fixed Rate Loan” means a Competitive Loan bearing interest at a Fixed Rate.
“Floating Rate”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate, the Floating SONIA Rate, the Adjusted
EURIBOR Rate, the Adjusted TIBOR Rate or the CDOR Screen Rate (or, in the case of a Competitive Loan, the LIBO Rate).
16
comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Daily Simple SONIA Rate.
“Floating SONIA Rate”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement,
the modification, amendment or renewal of this Agreement or otherwise) with respect to the LIBO Rate, the SONIA Rate, the EURIBOR
Rate, the TIBOR Rate or the CDOR Screen Rate, as applicable.
Borrower’s independent certified public accountants).
“GAAP” means generally accepted accounting principles applied on a consistent basis (but subject to changes approved by
“Governmental Authority” means (a) any international, foreign, federal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality,
central bank or public body, including the Federal Communications Commission, (c) any state public utilities commission or other authority
and any federal, state, county, or municipal licensing or franchising authority or (d) any court or administrative tribunal.
the form of Exhibit A.
“Guarantee Agreement” means the Guarantee Agreement to be executed and delivered by each Guarantor, substantially in
“Guarantors” means Comcast Cable Communications, LLC, NBCUniversal Media, LLC and each Restricted Subsidiary that
becomes a party to the Guarantee Agreement pursuant to Section 6.10 (in each case to the extent not released as contemplated by this
Agreement).
“Guaranty Obligation” means, as to any Person, any (a) guaranty by such Person of Indebtedness of any other Person or (b)
legally binding obligation of such Person to purchase or pay (or to advance or supply funds for the purchase or payment of) Indebtedness of
any other Person, or to purchase property, securities, or services for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness or to maintain working capital, equity capital or other financial statement condition of such other Person so as to enable
such other Person to pay such Indebtedness; provided, however, that the term Guaranty Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, covered by such Guaranty Obligation
or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Person in good faith.
“Impacted EURIBOR Rate Interest Period” has the meaning assigned to such term in the definition of “EURIBOR Rate.”
“Impacted LIBO Rate Interest Period” has the meaning assigned to such term in the definition of “LIBO Rate.”
“Impacted TIBOR Rate Interest Period” has the meaning assigned to such term in the definition of “TIBOR Rate.”
“Increased Revolving Commitment Activation Notice” means a notice substantially in the form of Exhibit E-2.
Commitment Activation Notice.
“Increased Revolving Commitment Closing Date” means any Business Day designated as such in an Increased Revolving
“Indebtedness” means, as to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to property or assets purchased by such Person, (d) all obligations of such Person
17
issued or assumed as the deferred purchase price of property or services, (e) all Indebtedness of others secured by any Lien on property
owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (f) all Guaranty Obligations of such
Person with respect to Indebtedness of others, (g) all capital lease obligations of such Person, (h) all Attributable Indebtedness under Sale-
Leaseback Transactions under which such Person is the lessee and (i) all obligations of such Person as an account party in respect of
outstanding letters of credit (whether or not drawn) and bankers’ acceptances; provided, however, that Indebtedness shall not include (i) trade
accounts payable arising in the ordinary course of business and (ii) deferred compensation; provided, further, that in the case of any
obligation of such Person which is recourse only to certain assets of such Person, the amount of such Indebtedness shall be deemed to be
equal to the lesser of the amount of such Indebtedness or the value of the assets to which such obligation is recourse as reflected on the
balance sheet of such Person at the time of the incurrence of such obligation; and provided, further, that the amount of any Indebtedness
described in clause (e) above shall be the lesser of the amount of the Indebtedness or the fair market value of the property securing such
Indebtedness.
“Indemnified Liabilities” has the meaning set forth in Section 10.13.
“Indemnitees” has the meaning set forth in Section 10.13.
“Interest Expense” means, with respect to any Person or any income generating assets, for any period, an amount equal to,
without duplication, (a) all interest on Indebtedness (other than Indebtedness arising from Asset Monetization Transactions) of such Person or
properly allocable to such assets, and commitment and facility fees in respect thereof, accrued (whether or not actually paid) during such
period, (b) plus the net amount accrued (whether or not actually paid) by such Person or properly allocable to such assets pursuant to any
interest rate protection agreement during such period (or minus the net amount receivable (whether or not actually received) by such Person
or properly allocable to such assets during such period), (c) minus the amortization of deferred financing fees recorded during such period
and (d) minus the amortization of any discount or plus the amortization of any premium (determined as the difference between the present
value and the face amount of the subject Indebtedness) recorded during such period.
“Interest Period” means (a) for each Floating Rate Loan (other than a Floating SONIA Rate Loan), (i) initially, the period
commencing on the date such Floating Rate Loan is disbursed or Continued as, or Converted into, such Floating Rate Loan and (ii) thereafter,
the period commencing on the last day of the preceding Interest Period, and ending, in each case, on the earlier of (A) the scheduled maturity
date of such Loan, or (B) one, three, six, or, if agreed to by each Lender, 12 months or periods less than one month, thereafter and (b) with
respect to any Borrowing of Fixed Rate Loans, the period (which shall not be less than seven days or more than 360 days) commencing on
the date of such Borrowing and ending on the date specified in the applicable Competitive Bid Request; provided that:
(i)
any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day;
(ii)
any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii)
unless Administrative Agent otherwise consents, there may not be more than ten (10) Interest Periods for Floating
Rate Loans (other than Floating SONIA Rate Loans) in effect at any time.
“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal
places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest
error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period for
18
which the Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period; and (b) the Screen Rate for
the shortest period (for which that Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each
case, at such time.
“IRS” means the United States Internal Revenue Service.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association,
Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate
derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“Issuing Lender” means each Lender with a Letter of Credit Commitment and, only as to the Existing Letters of Credit, each
financial institution listed as an issuer of an Existing Letter of Credit on Schedule 2.03 in its capacity as an issuer of such Letters of Credit
hereunder, and any other Lender that may agree with Borrower to issue Letters of Credit hereunder, or any successor issuing lender
hereunder. Any Lender that becomes an Issuing Lender after the Effective Date agrees to give Administrative Agent prompt notice thereof.
“JPMorgan Chase” means JPMorgan Chase Bank, N.A.
“Judgment Currency” has the meaning set forth in Section 10.25(b).
“Laws” or “Law” means all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including, if consistent therewith, the interpretation or administration thereof
by any Governmental Authority charged with the enforcement, interpretation or administration thereof.
“Lender” means each lender from time to time party hereto and, as the context requires, each Issuing Lender, each New
Lender and each New Extending Lender, and, subject to the terms and conditions of this Agreement, their respective successors and assigns
(but not any purchaser of a participation hereunder unless otherwise a party to this Agreement).
“Lender Party” means any Agent, any Issuing Lender or any Lender.
Questionnaire, or such other office or offices as such Lender may from time to time notify Administrative Agent and Borrower.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such on its Administrative
Credit.
“Letter of Credit” means any letter of credit issued or deemed to be issued hereunder, including the Existing Letters of
relating to a Letter of Credit hereunder.
“Letter of Credit Action” means the issuance, supplement, amendment, renewal, extension, modification or other action
Lender.
“Letter of Credit Application” means an application for a Letter of Credit Action from time to time in use by an Issuing
“Letter of Credit Cash Collateral Account” means a blocked deposit account at JPMorgan Chase in which Borrower hereby
grants a security interest to Administrative Agent, for the benefit of the Lenders and the Issuing Lenders (in each case with respect to each
such Person’s interest in the applicable Letter of Credit), as security for Letter of Credit Usage and with respect to which Borrower agrees to
execute and deliver from time to time such documentation as Administrative Agent may reasonably request to further assure and confirm
such security interest.
Commitment” opposite such Lender’s name on Schedule 2.03 as such
“Letter of Credit Commitment” means, for each Issuing Lender, the amount set forth under the heading “Letter of Credit
19
Schedule may be modified from time to time, and as such amount may be reduced or adjusted from time to time in accordance with the terms
of this Agreement.
“Letter of Credit Expiration Date” means the date that is five Business Days prior to the Revolving Termination Date.
“Letter of Credit Sublimit” means, at any date of determination, an amount equal to the lesser of (a) the combined Revolving
Commitments minus the aggregate amount of all outstanding Loans and (b) $1,000,000,000, as such amount may be reduced from time to
time in accordance with the terms of this Agreement.
“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn face or available Dollar Amount of
outstanding Letters of Credit plus the aggregate Dollar Amount of all drawings under the Letters of Credit not reimbursed by Borrower or
converted into Revolving Loans.
“Leverage Ratio” means, at any date of determination, the ratio of (a) Consolidated Total Indebtedness as of such date minus
up to $1,000,000,000 of unrestricted cash and cash equivalents on the balance sheet of Borrower and its Restricted Subsidiaries on or as of
such date to (b) Annualized EBITDA of Borrower and its Restricted Subsidiaries, on a consolidated basis; provided that, at any time after (x)
with respect to any acquisition that is a Material Acquisition in accordance with clause (ii) of the definition thereof to which the United
Kingdom City Code on Takeovers and Mergers (or any comparable laws, rules or regulations in any other jurisdiction) applies, the date on
which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of a target of such Material Acquisition (or the equivalent
notice under such comparable laws, rules or regulations in such other jurisdiction) is issued or (y) in connection with any acquisition that is a
Material Acquisition in accordance with clause (ii) of the definition thereof, the date a definitive agreement for such Material Acquisition
shall have been executed (or, in the case of a Material Acquisition in the form of a tender offer or similar transaction, after the offer shall
have been launched) and prior to the consummation of such Material Acquisition (or termination of the definitive documentation in respect
thereof (or such later date as such indebtedness ceases to constitute Acquisition Debt as set forth in the definition of “Acquisition Debt”)),
any Acquisition Debt to the extent the proceeds of such Acquisition Debt are held in escrow or held on the balance sheet of the Borrower or
any of its Restricted Subsidiaries (or an Unrestricted Subsidiary, so long as, in the good faith determination of Borrower, such Unrestricted
Subsidiary is expected to become a Restricted Subsidiary in connection with the consummation of such Material Acquisition) shall be
excluded from the determination of the Leverage Ratio.
“LIBO Interpolated Rate” means, at any time, with respect to any Floating Rate Borrowing denominated in Dollars or
Sterling and for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined
by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results
from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available
for the applicable Agreed Currency) that is shorter than the Impacted LIBO Rate Interest Period; and (b) the LIBO Screen Rate for the
shortest period (for which the LIBO Screen Rate is available for the applicable Agreed Currency) that exceeds the Impacted LIBO Rate
Interest Period, in each case, at such time; provided that if any LIBO Interpolated Rate shall be less than zero, such rate shall be deemed to be
zero for the purposes of this Agreement.
“LIBO Rate” means, with respect to any Floating Rate Borrowing denominated in Dollars or Sterling and for any Interest
Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest
Period; provided that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted LIBO Rate Interest
Period”) with respect to such Agreed Currency then the LIBO Rate shall be the LIBO Interpolated Rate.
“LIBO Screen Rate” means, for any day and time, with respect to any Floating Rate Borrowing denominated in Dollars or
Sterling and for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other
Person that takes over the administration of such rate) for such Agreed Currency for a period equal in length to such Interest Period
20
as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate
does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable
discretion); provided that if the LIBO Screen Rate as so determined would be less than zero, such rate shall be deemed to be zero for the
purposes of this Agreement.
“LIBOR” has the meaning set forth in Section 1.08.
“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), charge or other
security interest (including any conditional sale or other title retention agreement, any financing lease or Sale-Leaseback Transaction having
substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial
Code or comparable Laws of any jurisdiction), including the interest of a purchaser of accounts receivable; provided that Liens shall not
include ordinary and customary contractual set off rights.
“Loan” means any advance made by any Lender to Borrower as provided in Section 2 (collectively, the “Loans”).
“Loan Documents” means this Agreement, the Guarantee Agreement, each Note, each Letter of Credit Application, each
Request for Extension of Credit, each Compliance Certificate, each fee letter and each other instrument or agreement from time to time
delivered by any Loan Party pursuant to this Agreement.
“Loan Parties” means Borrower and each of its Subsidiaries that is a party to a Loan Document.
“Margin” means, with respect to any Competitive Loan bearing interest at a rate based on the Floating Rate (other than the
Floating SONIA Rate), the marginal rate of interest, if any, to be added to or subtracted from the Floating Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.
“Material Acquisition” means any Acquisition (the “Subject Acquisition”) (i) made at a time when the Leverage Ratio is in
excess of 4.5 to 1.0 or (ii) that has an Annualized Acquisition Cash Flow Value (as defined below) for the period ended on the last day of the
fiscal quarter most recently ended that is greater than five percent (5%) of the Annualized EBITDA of Borrower and its Restricted
Subsidiaries, on a consolidated basis, for the same period. The “Annualized Acquisition Cash Flow Value” is an amount equal to (a) the
Annualized EBITDA of the assets comprising the Subject Acquisition less (b) the Annualized EBITDA of any assets disposed of by
Borrower or any Restricted Subsidiary (other than to Borrower or any Restricted Subsidiary) in connection with the Subject Acquisition.
“Material Adverse Effect” means any set of circumstances or events which (a) has or would reasonably be expected to have a
material adverse effect upon the validity or enforceability against Borrower or any Guarantor that is a Significant Subsidiary of any Loan
Document or (b) has had or would reasonably be expected to have a material adverse effect on the ability of Borrower and Guarantors, taken
as a whole, to perform their payment obligations under any Loan Document.
equal to or greater than $500,000,000.
“Material Debt” means Indebtedness for borrowed money incurred or issued by Borrower in an aggregate principal amount
“Material Disposition” means any Disposition (the “Subject Disposition”) (i) made at a time when the Leverage Ratio is in
excess of 4.5 to 1.0 or (ii) that has an Annualized Disposition Cash Flow Value (as defined below), for the period ended on the last day of the
fiscal quarter most recently ended that is greater than five percent (5%) of the Annualized EBITDA of Borrower and its Restricted
Subsidiaries, on a consolidated basis, for the same period. The “Annualized Disposition Cash Flow Value” is an amount equal to (a) the
Annualized EBITDA of the assets comprising the Subject Disposition less (b) the Annualized EBITDA of any assets acquired by Borrower
or any Restricted
21
Subsidiary (other than from Borrower or any Restricted Subsidiary) in connection with the Subject Disposition.
thereof set forth opposite such action:
“Minimum Amount” means, with respect to each of the following actions, the minimum amount and any multiples in excess
Type of Action
Minimum Amount
Multiples in excess thereof
Borrowing or prepayment of, or Conversion
into, Base Rate Loans
Borrowing, prepayment or Continuation of,
or Conversion into, Floating Rate Loans
Borrowing of Competitive Loans
Letter of Credit Action
Reduction in Revolving Commitments
Assignments
$10,000,000
$1,000,000
$10,000,000
and, in the case of Loans denominated in a
currency other than Dollars, as applicable:
C$10,000,000
€10,000,000
£10,000,000
¥1,000,000,000
$10,000,000
$5,000
$25,000,000
$5,000,000
and, in the case of Loans denominated in a
currency other than Dollars, as applicable:
C$5,000,000
€5,000,000
£5,000,000
¥500,000,000
$1,000,000
and, in the case of Loans denominated in a
currency other than Dollars, as applicable:
C$1,000,000
€1,000,000
£1,000,000
¥100,000,000
$1,000,000
None
$5,000,000
None
“Moody’s” means Moody’s Investors Service, Inc., or its successor, or if it is dissolved or liquidated or no longer performs
the functions of a securities rating agency, such other nationally recognized securities rating agency agreed upon by Borrower and
Administrative Agent and approved by Required Lenders.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA.
“New Extending Lender” has the meaning set forth in Section 2.01(e).
“New Lender” has the meaning set forth in Section 2.01(c).
“New Lender Supplement” has the meaning set forth in Section 2.01(c).
“Non-Excluded Taxes” has the meaning set forth in Section 3.01(a).
“Notes” means the collective reference to any promissory note evidencing Loans.
“Notice Date” has the meaning set forth in Section 2.01(e).
“NYFRB” means the Federal Reserve Bank of New York.
22
“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Rate in effect on such day and (b) the Overnight
Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided
that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds
transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing
selected by it.
“Obligations” means all advances to, and debts, liabilities, and payment obligations of, Borrower arising under any Loan
Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing
or hereafter arising and including interest that accrues after the commencement of any proceeding under any Debtor Relief Laws by or
against Borrower.
Canadian Dollars in which each Lender has agreed to make Loans.
“Other Agreed Currency” means (i) Canadian Dollars and (ii) any currency other than Dollars, Euros, Yen, Sterling, or
“Other Taxes” has the meaning set forth in Section 3.01(b).
“Outstanding Revolving Obligations” means, as of any date, and giving effect to making any Extension of Credit requested
on such date and all payments, repayments and prepayments made on such date, (a) when reference is made to all Lenders, the sum of (i) the
aggregate outstanding principal amount of all Revolving Loans and (ii) all Letter of Credit Usage, and (b) when reference is made to one
Lender, the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Lender and (ii) such Lender’s ratable
participation in all Letter of Credit Usage.
“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight
Adjusted LIBO Rate borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by
the NYFRB as set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as
an overnight bank funding rate.
“Payment” has the meaning assigned to it in Section 9.06(c).
“Payment Notice” has the meaning assigned to it in Section 9.06(c).
“Participant Register” has the meaning set forth in Section 10.04(d).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto established under ERISA.
stock company, trust, unincorporated organization, bank, business association, firm, joint venture or Governmental Authority.
“Person” means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint
time to time.
“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from
“Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Borrower or any ERISA Affiliate or to which
Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.
23
“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.
“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall
Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar
rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the
Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or
quoted as being effective.
be amended from time to time.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may
U.S.C. 5390(c)(8)(D).
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12
“QFC Credit Support” has the meaning set forth in Section 10.27.
“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is LIBO Rate,
11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, (2) if such Benchmark is SONIA
Rate, 11:00 a.m. (London time) on the day that is four London banking days preceding the date of such setting, (3) if such Benchmark is
EURIBOR Rate, 11:00 a.m. Brussels time two TARGET Days preceding the date of such setting, (34) if such Benchmark is TIBOR Rate,
11:00 a.m. Japan time two Business Days preceding the date of such setting, and (45) if such Benchmark is none of the LIBO Rate, SONIA
Rate, the EURIBOR Rate or the TIBOR Rate, the time determined by the Administrative Agent in its reasonable discretion.
year ended December 31, 2020 (filed on Form 10-K on February 4, 2021).
“Reference Statements” means the audited consolidated financial statements of Borrower and its Subsidiaries for the fiscal
“Refund Repayment Requirement” has the meaning set forth in Section 3.01(e).
“Register” has the meaning set forth in Section 2.07(b).
“Relevant Governmental Body” means (i) with respect to a Benchmark Replacement in respect of Loans denominated in
Dollars, the Federal Reserve Board and/or the NYFRB, or a committee officially endorsed or convened by the Federal Reserve Board and/or
the NYFRB or, in each case, any successor thereto, (ii) with respect to a Benchmark Replacement in respect of Loans denominated in
Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto,
(iii) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee
officially endorsed or convened by the European Central Bank or, in each case, any successor thereto, (iv) with respect to a Benchmark
Replacement in respect of Loans denominated in Yen, the Bank of Japan, or a committee officially endorsed or convened by the Bank of
Japan or, in each case, any successor thereto, and (v) with respect to a Benchmark Replacement in respect of Loans denominated in any
Other Agreed Currency, (a) the central bank for the currency in which such Benchmark Replacement is denominated or any central bank or
other supervisor which is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark
Replacement or (b) any working group or committee officially endorsed or convened by (1) the central bank for the currency in which such
Benchmark Replacement is denominated, (2) any central bank or other supervisor that is responsible for supervising either (A) such
Benchmark Replacement or (B) the administrator of such Benchmark Replacement, (3) a group of those central banks or other supervisors or
(4) the Financial Stability Board or any part thereof.
“Relevant Rate” means (i) with respect to any Floating Rate Borrowing denominated in Dollars or Sterling, the LIBO Rate,
(ii) with respect to any Floating Rate Borrowing denominated in EurosSterling, the EURIBORSONIA Rate, (iii) with respect to any Floating
Rate Borrowing denominated
24
in Euros, the EURIBOR Rate, (iv) with respect to any Floating Rate Borrowing denominated in Yen, the TIBOR Rate, as applicable or (ivv)
with respect to any Borrowing denominated in Canadian Dollars, the CDOR Screen Rate, as applicable.
“Relevant Screen Rate” means (i) with respect to any Floating Rate Borrowing denominated in Dollars or Sterling, the LIBO
Screen Rate, (ii) with respect to any Floating Rate Borrowing denominated in Euros, the EURIBOR Screen Rate, (iii) with respect to any
Floating Rate Borrowing denominated in Yen, the TIBOR Screen Rate, as applicable or (iv) with respect to any Borrowing denominated in
Canadian Dollars, CDOR Screen Rate, as applicable.
“Request for Extension of Credit” means, unless otherwise specified herein, (a) with respect to a Borrowing, Conversion or
Continuation of Loans (other than Competitive Loans), a written request substantially in the form of Exhibit B, (b) with respect to a Letter of
Credit Action, a Letter of Credit Application, duly completed and signed by a Responsible Officer of Borrower and delivered by Requisite
Notice and (c) with respect to a Borrowing of Competitive Loans, a Competitive Bid Request, duly completed and signed by a Responsible
Officer of Borrower and delivered by Requisite Notice.
“Required Lenders” means, as of any date of determination, Lenders (excluding any Lender that is a Defaulting Lender, until
all matters that caused such Lender to be a Defaulting Lender have been remedied) holding more than 50% of: (a) the combined Revolving
Commitments (excluding the Revolving Commitment of any Lender that is a Defaulting Lender, until all matters that caused such Lender to
be a Defaulting Lender have been remedied) then in effect and (b) if the Revolving Commitments have then been terminated and there are
Outstanding Revolving Obligations, the Outstanding Revolving Obligations.
“Requisite Notice” means a notice delivered in accordance with Section 10.02.
action:
“Requisite Time” means, with respect to any of the actions listed below, the time and date set forth below opposite such
Type of Action
Delivery of Request for Extension of Credit
for, or notice for, or determination of any
Screen Rate related to:
Borrowing or prepayment of Base Rate
Loans
Conversion into Base Rate Loans
Borrowing, prepayment or Continuation of,
or Conversion into, Floating Rate Loans
(other than Competitive Loans) denominated
in Canadian Dollars, and CDOR
Borrowing, prepayment or Continuation of,
or Conversion into, Floating Rate Loans
(other than Competitive Loans) denominated
in Dollars
Borrowing, prepayment or Continuation of,
or Conversion into, Floating Rate Loans
(other than Competitive Loans) denominated
in Euros, and EURIBOR
Applicable Time
Date of Action
Same Business Day as such Loans
Borrowing or prepayment
Same Business Day as such Conversion
3 Business Days prior to such prepayment,
Borrowing, Continuation or Conversion
3 Business Days prior to such prepayment,
Borrowing, Continuation or Conversion
3 Business Days prior to such prepayment,
Borrowing, Continuation or Conversion
11:00 a.m.
11:00 a.m.
10:00 a.m.
11:00 a.m.
10:00 a.m.
25
Borrowing, prepayment or Continuation of, or
Conversion into, Floating Rate Loans (other
than Competitive Loans) denominated in
Sterling
Borrowing, prepayment or Continuation of,
or Conversion into, Floating Rate Loans
(other than Competitive Loans) denominated
in Yen
Letter of Credit Action
Voluntary reduction in or termination of
Revolving Commitments
Payments by Lenders or Borrower to
Administrative Agent (other than Payments
by Lenders to Administrative Agent of Base
Rate Loans)
Payments by Lenders to Administrative
Agent of Base Rate Loans
Borrowing of Fixed Rate Loans
Borrowing of Competitive Loans that are
Floating Rate Loans
10:0011:00 a.m.
35 Business Days prior to such prepayment,
Borrowing, Continuation or Conversion
10:00 a.m.
11:00 a.m.
11:00 a.m.
1:00 p.m.
2.00 p.m.
11:00 a.m.
11:00 a.m.
4 Business Days prior to such prepayment,
Borrowing, Continuation or Conversion
2 Business Days prior to such action (or such
lesser time as is acceptable to an Issuing
Lender)
3 Business Days prior to such reduction or
termination
On the date payment is due
On the date payment is due
1 Business Days prior to such Borrowing
4 Business Days prior to such Borrowing
Resolution Authority
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK
“Responsible Officer” means, as to any Person, the president, any vice president, the controller, the chief financial officer,
the treasurer or any assistant treasurer of such Person. Any document or certificate hereunder that is signed by a Responsible Officer of a
particular Loan Party shall be conclusively presumed to have been authorized by all necessary corporate action on the part of such Loan Party
and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Group” means, collectively, Borrower and the Restricted Subsidiaries.
“Restricted Subsidiary” means each Subsidiary of Borrower that is not an Unrestricted Subsidiary.
“Revolving Commitment” means, for each Lender, the amount set forth under the heading “Revolving Commitment”
opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption or New Lender Supplement pursuant to which such
Lender became a party to this Agreement, as such amount may be reduced or adjusted from time to time in accordance with the terms of this
Agreement (collectively, the “combined Revolving Commitments”). As of the Effective Date, the amount of the Revolving Commitments of
all Lenders is $11,000,000,000.
Date, the Extended Revolving Termination Date or the Second Extended Revolving Termination Date, as applicable.
“Revolving Commitment Period” means the period from and including the Effective Date to the Revolving Termination
26
“Revolving Facility” means the Revolving Commitments and the Extensions of Credit made thereunder.
“Revolving Loans” has the meaning set forth in Section 2.01.
“Revolving Percentage” means, as to any Lender at any time, the percentage which such Lender’s Revolving Commitment
then constitutes of the combined Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Loans then outstanding.
“Revolving Termination Date” means (a) the fifth anniversary of the Effective Date; provided that with respect to the
Revolving Commitments, if any, that are extended pursuant to Section 2.01(e), the Revolving Termination Date shall mean the Extended
Revolving Termination Date or the Second Extended Revolving Termination Date, as applicable, or (b) such earlier date upon which the
combined Revolving Commitments may be terminated in accordance with the terms of this Agreement.
“S&P” means Standard & Poor’s Ratings Services, a division of S&P Global, Inc., or its successor, or if it is dissolved or
liquidated or no longer performs the functions of a securities rating agency, such other nationally recognized securities rating agency agreed
upon by Borrower and Administrative Agent and approved by Required Lenders.
“Sale-Leaseback Transaction” means any arrangement whereby Borrower or any Restricted Subsidiary shall sell or transfer
any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease property
that it intends to use for substantially the same purpose or purposes as the property sold or transferred.
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to
time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the
Treasury (“OFAC”) or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s
Treasury of the United Kingdom.
(at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained
by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations
Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom (b) any Person located, organized or resident in a
Sanctioned Country (except any U.S. Person with a location in a Sanctioned Country pursuant to an OFAC license) or (c) any Person owned
fifty percent or more or Controlled by any Person or Persons described in clause (a) or (b).
“Second Extended Revolving Termination Date” has the meaning set forth in Section 2.01(e).
“Significant Subsidiary” means (i) for so long as each shall remain a Guarantor hereunder, Comcast Cable Communications,
LLC and NBCUniversal Media, LLC and (ii) any other Restricted Subsidiary whose Annualized EBITDA was greater than 5% of the
Annualized EBITDA of Borrower and its Restricted Subsidiaries, on a consolidated basis, for the period of two fiscal quarters ended on the
last day of the fiscal quarter most recently ended, or whose assets comprised more than 5% of the total assets of Borrower and its Restricted
Subsidiaries, on a consolidated basis, as of the last day of the fiscal quarter most recently ended.
“Sky” means Sky Ltd, incorporated in England and Wales with registered number 02247735.
27
“Sky Acquisition” means the acquisition by Borrower or one of its Subsidiaries of a majority of the share capital of Sky.
“Sky Closing Date” means October 9, 2018.
“Sky Group” means Sky and its Subsidiaries.
Business Day published by the SOFR Administrator on the SOFR Administrator’s Website.
“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such
“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Administrator’s Website” means the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor
Business Day published by the SONIA Administrator on the SONIA Administrator’s Website.
“SONIA” means, with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such
Average).
“SONIA Administrator” means the Bank of England (or any successor administrator of the Sterling Overnight Index
any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SONIA Administrator’s Website” means the Bank of England’s website, currently at http://www.bankofengland.co.uk, or
“SONIA Interest Day” has the meaning assigned to it in the definition of “Daily Simple SONIA”.
such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website.
“SONIA Rate” means, with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the Federal Reserve Board to which the Administrative Agent is
subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation
D). Such reserve percentage shall include those imposed pursuant to Regulation D. Adjusted LIBO Rate Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may
be available from time to time to any Lender under Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage.
“Sterling” and “£” means lawful money of the United Kingdom.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of
which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing
body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially
owned, directly or indirectly, through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Borrower.
28
“Supported QFC” has the meaning assigned to it in Section 10.27.
“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any
combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
“Syndication Agent” means Citibank, N.A.
utilizes a single shared platform and which was launched on November 19, 2007.
“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which
system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“TARGET Day” means any day on which TARGET2 (or, if such payment system ceases to be operative, such other payment
rate based on ESTR that has been selected or recommended by the Relevant Governmental Body.
“Term ESTR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term
a Term ESTR Transition Event.
“Term ESTR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of
“Term ESTR Transition Event” means the determination by the Administrative Agent that (a) Term ESTR has been
recommended for use by the Relevant Governmental Body, (b) the administration of Term ESTR is administratively feasible for the
Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a
Benchmark Replacement in accordance with Section 3.03 that is not Term ESTR.
rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term
a Term SOFR Transition Event.
“Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of
“Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been
recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the
Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a
Benchmark Replacement in accordance with Section 3.03 that is not Term SOFR.
term rate based on TONA that has been selected or recommended by the Relevant Governmental Body.
“Term TONA” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking
of a Term TONA Transition Event.
“Term TONA Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence
“Term TONA Transition Event” means the determination by the Administrative Agent that (a) Term TONA has been
recommended for use by the Relevant Governmental Body, (b) the administration of Term TONA is administratively feasible for the
Administrative Agent and (c) a
29
Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in
accordance with Section 3.03 that is not Term TONA.
“TIBOR Interpolated Rate” means, at any time, with respect to any Floating Rate Borrowing denominated in Yen and for any
Interest Period, the rate per annum (rounded to the same number of decimal places as the TIBOR Screen Rate) determined by the
Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the TIBOR Screen Rate for the longest period (for which the TIBOR Screen Rate is available for
Yen) that is shorter than the Impacted TIBOR Rate Interest Period; and (b) the TIBOR Screen Rate for the shortest period (for which the
TIBOR Screen Rate is available for Yen) that exceeds the Impacted TIBOR Rate Interest Period, in each case, at such time; provided that, if
any TIBOR Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“TIBOR Rate” means, with respect to any Floating Rate Borrowing denominated in Yen and for any Interest Period, the
TIBOR Screen Rate at approximately 11:00 a.m., Japan time, two Business Days prior to the commencement of such Interest Period;
provided that, if the TIBOR Screen Rate shall not be available at such time for such Interest Period (an “Impacted TIBOR Rate Interest
Period”) with respect to Yen then the TIBOR Rate shall be the TIBOR Interpolated Rate.
“TIBOR Screen Rate” means the Tokyo interbank offered rate administered by the Ippan Shadan Hojin JBA TIBOR
Administration (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on page
DTIBOR01 of the Reuters screen (or, in the event such rate does not appear on such Reuters page or screen, on any successor or substitute
page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as selected
by the Administrative Agent from time to time in its reasonable discretion) as of 11:00 a.m. Japan time two Business Days prior to the
commencement of such Interest Period. If the TIBOR Screen Rate shall be less than zero, the TIBOR Screen Rate shall be deemed to be zero
for purposes of this Agreement.
“Threshold Amount” means $750,000,000.
Business Day published by the TONA Administrator on the TONA Administrator’s Website.
“TONA” means, with respect to any Business Day, a rate per annum equal to the Tokyo Overnight Average Rate for such
“TONA Administrator” means the Bank of Japan (or any successor administrator of the Tokyo Overnight Average Rate).
source for the Tokyo Overnight Average Rate identified as such by the TONA Administrator from time to time.
“TONA Administrator’s Website” means the Bank of Japan’s website, currently at http://www.boj.or.jp, or any successor
“Type” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Adjusted Daily Simple SONIA Rate, the Adjusted
EURIBOR Rate, the Adjusted TIBOR Rate, the CDOR Screen Rate, the Alternate Base Rate, the Canadian Prime Rate or, in the case of a
Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
“UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended
from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the
FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain
credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
the resolution of any UK Financial Institution.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for
30
Replacement Adjustment.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark
in accordance with Section 6.08. Until so designated, each Subsidiary of Borrower shall be a Restricted Subsidiary.
“Unrestricted Subsidiary” means any Subsidiary of Borrower designated as an “Unrestricted Subsidiary” from time to time
“U.S. Tax Compliance Certificate” has the meaning set forth in Section 10.20(a).
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and
conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United
Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a
liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability
into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a
right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation
that are related to or ancillary to any of those powers.
“Yen” and “¥” means lawful money of Japan.
1.02
Use of Certain Terms.
made or delivered pursuant hereto or thereto, unless otherwise defined therein.
(a)
All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document
and plural include one another.
(b)
As used herein, unless the context requires otherwise, the masculine, feminine and neuter genders and the singular
(c)
The words “herein” and “hereunder” and words of similar import when used in any Loan Document shall refer to the
applicable Loan Document as a whole and not to any particular provision thereof. The term “including” is by way of example and not
limitation. References herein to a Section, subsection or clause shall, unless the context otherwise requires, refer to the appropriate Section,
subsection or clause in this Agreement.
permissive.
(d)
The term “or” is disjunctive; the term “and” is conjunctive. The term “shall” is mandatory; the term “may” is
1.03
Accounting Terms. All accounting terms not specifically or completely defined in this Agreement shall be construed
in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time in the United States; provided that if Borrower notifies Administrative Agent that Borrower
requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the
application thereof on the operation of such provision, then (a) regardless of whether such any such notice is given before or after such
change in GAAP or the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in
accordance herewith and (b) Administrative Agent and Borrower shall negotiate in good faith to determine such adjustments and
amendments to the applicable terms and definitions as to make them consistent with the intent hereof, and promptly upon Borrower and
Administrative Agent reaching such agreement, Administrative Agent shall notify Lenders of such adjustments and amendments, which shall
be conclusive and effective as amendments hereunder, unless Required Lenders object to such adjustments within 30 days of receipt of
notice.
Subsidiaries from the calculations therein. Notwithstanding
Each Compliance Certificate shall be prepared in accordance with this Section 1.03, except for the exclusion of Unrestricted
31
anything to the contrary contained herein, references herein to “Borrower and its Restricted Subsidiaries on a consolidated basis” shall be
deemed to refer to Borrower and its Restricted Subsidiaries without taking into account the results or financial position of any Unrestricted
Subsidiary and without taking into account any interest of Borrower or any of its Restricted Subsidiaries in any Unrestricted Subsidiary.
Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial
Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of Borrower or any Subsidiary at “fair value”, as defined therein.
For purposes of determining compliance with any provision of this Agreement and any related definitions, the determination
of whether a lease is to be treated as an operating lease, as opposed to a capital lease or financing lease, shall be made without giving effect to
any change in accounting for leases pursuant to GAAP that became effective after December 31, 2015, including resulting from the adoption
of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”) or any successor or
similar proposal, in each case to the extent such adoption would require treating any lease (or similar arrangement conveying the right to use)
as a capital lease or financing lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as
in effect on December 31, 2015. In the foregoing circumstances, such lease shall not be considered a capital lease or financing lease, and all
calculations and related deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in
accordance herewith (and, for the avoidance of doubt, operating leases (as determined after giving effect to this Section 1.03), shall not be
considered “Indebtedness” for any purpose under this Agreement).
1.04
Rounding. Any financial ratios required to be maintained by Borrower pursuant to this Agreement shall be
calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by
which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this Agreement.
Exhibits and Schedules. All exhibits and schedules to this Agreement, either as originally existing or as the same
may from time to time be supplemented, modified or amended, are incorporated herein by this reference. A matter disclosed on any Schedule
shall be deemed disclosed on all Schedules.
1.05
1.06
References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to agreements
(including the Loan Documents) and other contractual instruments shall include all amendments, restatements, extensions, supplements and
other modifications thereto (unless prohibited by any Loan Document), and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
1.07
Pro Forma Calculations. For the purposes of calculating Annualized EBITDA of Borrower and its Restricted
Subsidiaries, on a consolidated basis, for any period (a “Test Period”), (i) if at any time from the period commencing on the first day of such
Test Period and ending on the last day of such Test Period (or, in the case of any pro forma calculation required to be made pursuant hereto in
respect of the designation of a Restricted Subsidiary as an Unrestricted Subsidiary that is a Material Disposition or the designation of an
Unrestricted Subsidiary as a Restricted Subsidiary that is a Material Acquisition, ending on the date such Material Disposition or Material
Acquisition is consummated after giving effect thereto), Borrower or any Restricted Subsidiary shall have made any Material Disposition, the
Annualized EBITDA for such Test Period shall be reduced by an amount equal to the Annualized EBITDA (if positive) for such Test Period
attributable to the assets which are the subject of such Material Disposition or increased by an amount equal to the Annualized EBITDA (if
negative) for such Test Period attributable to such assets; (ii) if during such Test Period Borrower or any Restricted Subsidiary shall have
made a Material Acquisition, Annualized EBITDA of Borrower and its Restricted Subsidiaries, on a consolidated basis, for such Test Period
shall be calculated after giving pro forma effect thereto (including the incurrence or assumption of any Indebtedness in connection therewith)
as if such Material
32
Acquisition (and the incurrence or assumption of any such Indebtedness) occurred on the first day of such Test Period; and (iii) if during such
Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Borrower or any Restricted Subsidiary
since the beginning of such Test Period shall have entered into any Material Disposition or Material Acquisition that would have required an
adjustment pursuant to clause (i) or (ii) above if made by Borrower or a Restricted Subsidiary during such Test Period, Annualized EBITDA
of Borrower and its Restricted Subsidiaries, on a consolidated basis, for such Test Period shall be calculated after giving pro forma effect
thereto as if such Material Disposition or Material Acquisition occurred on the first day of such Test Period. For the purposes of this section,
whenever pro forma effect is to be given to a Material Disposition or Material Acquisition and the amount of income or earnings related
thereto, the pro forma calculations shall be determined in good faith by a Responsible Officer of Borrower. Comparable adjustments shall be
made in connection with any determination of Annualized EBITDA.
1.08
Interest Rates; LIBOR Notification. The interest rate on a Loan denominated in Dollars or an Alternative Currency
may be derived from an interest rate benchmark that is, or may in the future become, the subject of regulatory reform. Regulators have
signaled the need to use alternative benchmark reference rates for some of these interest rate benchmarks and, as a result, such interest rate
benchmarks may cease to comply with applicable laws and regulations, may be permanently discontinued, and/or the basis on which they are
calculated may change. The London interbank offered rate (“LIBOR”) is intended to represent the rate at which contributing banks may
obtain short-term borrowings from each other in the London interbank market. On March 5, 2021, the U.K. Financial Conduct Authority
(“FCA”) publicly announced that: (a) immediately after December 31, 2021, publication of all seven euro LIBOR settings, the spot next, 1-
week, 2-month and 12-month Japanese Yen LIBOR settings, the overnight, 1-week, 2-month and 12-month British Pound Sterling LIBOR
settings, and the 1-week and 2-month U.S. Dollar LIBOR settings will permanently cease; immediately after June 30, 2023, publication of
the overnight and 12-month U.S. Dollar LIBOR settings will permanently cease; immediately after December 31, 2021, the 1-month, 3-
month and 6-month Japanese Yen LIBOR settings and the 1-month, 3-month and 6-month British Pound Sterling LIBOR settings will cease
to be provided or, subject to consultation by the FCA, be provided on a changed methodology (or “synthetic”) basis and no longer be
representative of the underlying market and economic reality they are intended to measure and that representativeness will not be restored;
and immediately after June 30, 2023, the 1-month, 3-month and 6-month U.S. Dollar LIBOR settings will cease to be provided or, subject to
the FCA’s consideration of the case, be provided on a synthetic basis and no longer be representative of the underlying market and economic
reality they are intended to measure and that representativeness will not be restored. There is no assurance that dates announced by the FCA
will not change or that the administrator of LIBOR and/or regulators will not take further action that could impact the availability,
composition, or characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published. Each party to this agreement should
consult its own advisors to stay informed of any such developments. Public and private sector industry initiatives are currently underway to
identify new or alternative reference rates to be used in place of LIBOR. Upon the occurrence of a Benchmark Transition Event, a Term
SOFR Transition Event, a Term ESTR Transition Event, a Term TONA Transition Event or an Early Opt-In Election, Section 3.03(b) and (c)
provide a mechanism for determining an alternative rate of interest. The Administrative Agent will promptly notify the Borrower, pursuant to
Section 3.03(e), of any change to the reference rate upon which the interest rate on Floating Rate Loans is based. However, the
Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration,
submission or any other matter related to LIBOR or other rates in the definition of “LIBO Rate” (or “EURIBOR Rate”, or “TIBOR Rate”, as
applicable) or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such
alternative, successor or replacement rate implemented pursuant to Section 3.03(b) or (c), whether upon the occurrence of a Benchmark
Transition Event, a Term SOFR Transition Event, a Term ESTR Transition Event, a Term TONA Transition Event or an Early Opt-in
Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 3.03(d)), including without
limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or
produce the same value or economic equivalence of, the LIBO Rate (or the EURIBOR Rate, or the TIBOR Rate, as applicable) or have the
same volume or liquidity as did the London interbank offered rate (or the euro interbank offered rate, as applicable) prior to its
discontinuance or unavailability.
33
THE REVOLVING COMMITMENTS AND EXTENSIONS OF CREDIT
SECTION 2
2.01
Amount and Terms of Revolving Commitments.
(a)
Subject to the terms and conditions set forth in this Agreement, during the Revolving Commitment Period, each
Lender severally agrees to make, Convert and Continue revolving credit loans (“Revolving Loans”) in Dollars or any Alternative Currency in
such amounts as Borrower may from time to time request; provided, however, that (i) the Dollar Amount of the Outstanding Revolving
Obligations of each Lender shall not exceed such Lender’s Revolving Commitment at any time, (ii) the Dollar Amount of the Outstanding
Revolving Obligations of all Lenders plus the aggregate principal amount of all outstanding Competitive Loans shall not exceed the
combined Revolving Commitments at any time. The Revolving Facility is a revolving credit and, subject to the foregoing and the other terms
and conditions hereof, Borrower may borrow, Convert, Continue, prepay and reborrow Revolving Loans as set forth herein without premium
or penalty.
(b)
At any time after the Effective Date, Borrower and any one or more Lenders (including any New Lender) may agree
that such Lender or Lenders shall make or increase the amount of their Revolving Commitments by executing and delivering to
Administrative Agent an Increased Revolving Commitment Activation Notice specifying the amount of such increase or new Revolving
Commitment and the applicable Increased Revolving Commitment Closing Date. Notwithstanding the foregoing, (i) at no time may the
combined Revolving Commitments exceed $14,000,000,000, (ii) Revolving Commitments may not be made or increased after the occurrence
of an Event of Default that is continuing, including after giving effect to the incremental Revolving Commitments in question, and (iii) any
increase effected pursuant to this Section 2.01(b) shall be in a minimum amount of at least $25,000,000. No Lender shall have any obligation
to participate in any increase described in this Section 2.01(b) unless it agrees to do so in its sole discretion.
(c)
Any additional bank or financial institution (each, a “New Lender”) that, in the case of an institution that is not an
Affiliate of a then-existing Lender, with the consent of Administrative Agent and each Issuing Lender (which consent, in each case, shall not
be unreasonably withheld), elects to become a “Lender” under this Agreement in connection with an increase described in Section 2.01(b)
shall execute a New Lender Supplement (each, a “New Lender Supplement”), substantially in the form of Exhibit E-1, whereupon such bank
or financial institution shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement.
(d)
On each Increased Revolving Commitment Closing Date on which there are Revolving Loans outstanding, each
Lender (including any New Lender) that has made or increased its Revolving Commitment shall make a Revolving Loan, the proceeds of
which will be used to prepay the Revolving Loans of other Lenders, so that, after giving effect thereto, the resulting Revolving Loans
outstanding are allocated among the Lenders on a pro rata basis based on the respective Revolving Percentages of the Lenders after giving
effect to the increase of Revolving Commitments pursuant to Section 2.01(b) on such Increased Revolving Commitment Closing Date.
(e)
Borrower shall repay (i) all outstanding Revolving Loans made to it and all amounts funded by the Lenders as cash
collateral pursuant to Section 2.03(d) on the Revolving Termination Date, the Extended Revolving Termination Date or the Second Extended
Revolving Termination Date, as applicable, and (ii) the then unpaid principal amount of each Competitive Loan made to it on the last day of
the Interest Period applicable to such Loan. Borrower may request that the Revolving Commitments and Letter of Credit Commitments be
extended for additional one-year periods by providing written notice to Administrative Agent (“Notice Date”) not more than two times prior
to the Revolving Termination Date or the Extended Revolving Termination Date, as applicable. If a Lender or a New Lender agrees, in its
individual and sole discretion, to extend its Revolving Commitments and/or Letter of Credit Commitments (such Lender or New Lender, an
“Extending Lender” or “New Extending Lender”, as the case may be), it will notify Administrative Agent in writing of its decision to do so
and the maximum amount of Revolving Commitments and, if applicable, Letter of Credit Commitments it
34
agrees to so extend no later than 30 days after the applicable Notice Date, which notice shall be irrevocable. Administrative Agent will notify
Borrower, in writing, of the Lenders’ decisions no later than 35 days after the applicable Notice Date (“Extension Effectiveness Date”). As of
the Extension Effectiveness Date, the Extending Lenders’ and the New Extending Lenders’ Revolving Commitments and Letter of Credit
Commitments will be extended for an additional year from the Revolving Termination Date (the “Extended Revolving Termination Date”) or
the Extended Revolving Termination Date (the “Second Extended Revolving Termination Date”), as applicable; provided that (i) more than
50% of the aggregate Revolving Commitments outstanding on the applicable Extension Effectiveness Date are extended or otherwise
committed to by Extending Lenders and any New Extending Lenders (ii) no Default or Event of Default shall have occurred and be
continuing on the applicable Extension Effectiveness Date after giving effect to the requested extension and (iii) the remaining tenor of
Revolving Commitments of any Extending Lender and any New Extending Lender shall not exceed five years from the applicable Extension
Effectiveness Date after giving effect to the requested extension. No Lender shall be required to consent to any such extension request, and
any Lender that declines or does not respond in writing to Borrower’s request for commitment renewal (a “Declining Lender”) will have its
Revolving Commitments and Letter of Credit Commitment terminated on the then-existing Revolving Termination Date or Extended
Revolving Termination Date, as applicable (without regard to any renewals by other Lenders). Borrower will have the right to remove or
replace any Declining Lenders in accordance with Section 10.21.
2.02
Procedure for Revolving Loan Borrowings.
(a)
Borrower may irrevocably request a Borrowing of Revolving Loans on any Business Day in a Minimum Amount
therefor by delivering a Request for Extension of Credit therefor by Requisite Notice to Administrative Agent not later than the Requisite
Time therefor. All Borrowings denominated in Dollars shall constitute Base Rate Loans unless properly and timely otherwise designated as
set forth in the prior sentence. All Borrowings denominated in any Alternative Currency shall constitute Floating Rate Loans. Each
Competitive Loan shall be made in accordance with the procedures set forth in Section 2.04.
(b)
Following receipt of a Request for Extension of Credit, Administrative Agent shall promptly notify each Lender by
Requisite Notice of its Revolving Percentage thereof. Each Lender (subject to clause (d) below) shall make the funds for its Revolving Loan
available to Administrative Agent in the requested currency at Administrative Agent’s Office not later than the Requisite Time therefor on the
Business Day specified in such Request for Extension of Credit. Upon satisfaction of the applicable conditions set forth in Section 4.02, all
funds so received shall be made available to Borrower in like funds received.
(c)
The failure of any Lender to make any Revolving Loan on any date shall not relieve any other Lender of any
obligation to make a Revolving Loan on such date, but the Revolving Commitments and Competitive Bids of the Lenders are several and no
Lender shall be responsible for the failure of any other Lender to so make its Revolving Loan. Borrower shall have the right to replace any
Lender which fails to make a Revolving Loan when obligated to do so in accordance with Section 10.21.
(d)
Each Lender may, at its option, make any Loan available to Borrower by causing any foreign or domestic branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of Borrower to repay
such Loan in accordance with the terms of this Agreement; provided that, for the avoidance of doubt, Borrower shall not be required to pay a
greater amount under the increased costs provisions (including yield protection and taxes) of Section 3 hereof than it would have paid in the
absence of the exercise of such option.
2.03
Letters of Credit.
(a)
Subject to the terms and conditions set forth in this Agreement, during the period from and including the Effective
Date to, but not including the Letter of Credit Expiration Date, each Issuing Lender shall take such Letter of Credit Actions denominated in
Dollars or any Alternative Currency as Borrower may from time to time request; provided, however, that (i) the Outstanding Revolving
Obligations of each Lender shall not exceed such Lender’s Revolving Commitment at any
35
time, (ii) the Outstanding Revolving Obligations of all Lenders plus the aggregate principal amount of all outstanding Competitive Loans
shall not exceed the combined Revolving Commitments at any time, (iii) the Letter of Credit Usage shall not exceed the Letter of Credit
Sublimit at any time and (iv) the Letter of Credit Usage in respect of Letters of Credit issued by each Issuing Lender shall not exceed the
Letter of Credit Commitment of such Issuing Lender at any time. All Existing Letters of Credit shall be deemed to be Letters of Credit issued
hereunder on the Effective Date for the account of Borrower, and the participations therein created pursuant to the Existing Comcast Credit
Agreement shall be superseded by participations created by Section 2.03(b) hereof. Subject to subsection (f) below and unless consented to
by the applicable Issuing Lender and Administrative Agent, and except for any Existing Letter of Credit which expires more than 12 months
after the date of its issuance or last renewal, no Letter of Credit may expire more than 12 months after the date of its issuance or last renewal;
provided, however, that (x) subject to clause (y), no Letter of Credit shall expire after the Business Day which is at least five days prior to the
Revolving Termination Date (as it may be extended) and (y) a Letter of Credit may expire up to the date that is one year after the Revolving
Termination Date (as it may be extended) with the consent of the Issuing Lender in respect thereof (which consent shall not be unreasonably
withheld) so long as Borrower shall, at least 15 days prior to the Revolving Termination Date (as it may be extended) (or for any Letters of
Credit issued after such date, the date of issuance) deposit cash in the Dollar Amount equal to the Letter of Credit Usage applicable to it in a
Letter of Credit Cash Collateral Account. In the event that any Lender’s Commitment terminates prior to an extended Revolving Termination
Date as contemplated by Section 2.01(e), the respective participations of the other Lenders in all outstanding Letters of Credit shall be
redetermined on the basis of their respective Commitments after giving effect to such termination, and the participation therein of the Lender
whose Commitment is terminated shall terminate; provided that Borrower shall, if and to the extent necessary to permit such redetermination
of participations in Letters of Credit within the limits of the Commitments which are not terminated, prepay on such date all or a portion of
the outstanding Revolving Loans, and such redetermination and termination of participations in outstanding Letters of Credit shall be
conditioned upon their having done so. If any Letter of Credit Usage remains or is expected to remain outstanding on the Revolving
Termination Date (as it may be extended), Borrower shall, at least 15 days prior to the Revolving Termination Date (as it may be extended),
deposit cash in an amount equal to the Letter of Credit Usage applicable to it in a Letter of Credit Cash Collateral Account.
(b)
Borrower may irrevocably request a Letter of Credit Action in a Minimum Amount therefor (or, if such Letter of
Credit Action is in respect of a Letter of Credit denominated in an Alternative Currency, a Dollar Amount which is in a Minimum Amount
therefor) by delivering a Letter of Credit Application therefor to the applicable Issuing Lender, with a copy to Administrative Agent, not later
than the Requisite Time therefor. Each Letter of Credit Action shall be in a form acceptable to the applicable Issuing Lender in its sole
discretion. Each such request for a Letter of Credit Action shall, if Sections 4.02(a) and (b) are applicable to such Letter of Credit Action,
constitute a representation and warranty by Borrower that the conditions set forth in Sections 4.02(a) and (b) are satisfied. Unless
Administrative Agent notifies the applicable Issuing Lender that such Letter of Credit Action is not permitted hereunder, or the applicable
Issuing Lender notifies Administrative Agent that it has determined that such Letter of Credit Action is contrary to any Laws or policies of
such Issuing Lender, the applicable Issuing Lender shall effect such Letter of Credit Action. This Agreement shall control in the event of any
conflict with any Letter of Credit Application. Upon the issuance of a Letter of Credit (or, with respect to the Existing Letters of Credit, on
the Effective Date), each applicable Issuing Lender shall be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed to have purchased from each applicable Issuing Lender, a participation therein in an amount equal to such Lender’s Revolving
Percentage times the Dollar Amount of such Letter of Credit. Each applicable Issuing Lender represents and warrants to each Lender that it
has all necessary power and authority to sell and transfer such participation to each Lender, without breach of any Contractual Obligation to
any other Person, and that such participation is free and clear of any adverse claim. Notwithstanding anything herein to the contrary, Morgan
Stanley Bank, N.A. as an Issuing Lender, shall only be obligated to issue standby Letters of Credit, and shall only be obligated to do so upon
at least 3 Business Days’ prior written notice (or such shorter period of time as Morgan Stanley Bank, N.A. shall approve in its sole
discretion).
Borrower shall reimburse each Issuing Lender through Administrative Agent for any payment that such Issuing
Lender makes under a Letter of Credit within one Business Day following demand by Administrative Agent or such Issuing Lender in
Dollars or in the applicable Alternative
(c)
36
Currency in which such payment was made; provided, however, that if the conditions precedent set forth in Section 4.02 can be satisfied
(except for the giving of a Request for Extension of Credit), Borrower may request a Borrowing of Base Rate Loans in the Dollar Amount
necessary to reimburse such Issuing Lender for such payment pursuant to Section 2.02 (without regard to the Minimum Amount
requirements thereof). If Borrower’s reimbursement of, or obligation to reimburse, any amounts in any Alternative Currency would subject
Administrative Agent, the applicable Issuing Lender or any Lender to any stamp duty, ad valorem charge or similar tax that would not be
payable if such reimbursement were made or required to be made in Dollars, Borrower shall pay the amount of any such tax requested by
Administrative Agent, the relevant Issuing Lender or Lender. If Borrower fails to make such payment when due, then if such payment relates
to a Letter of Credit denominated in an Alternative Currency, automatically and with no further action required, Borrower’s obligation to
reimburse the applicable payment by the applicable Issuing Lender shall be permanently converted into an obligation to reimburse the Dollar
Amount of such payment.
(d)
Upon any drawing under a Letter of Credit, the applicable Issuing Lender shall notify Administrative Agent and
Borrower. If Borrower fails to timely make the payment required pursuant to subsection (c) above or to provide cash collateral as required in
subsection (a) above, such Issuing Lender shall notify Administrative Agent of such fact and the Dollar Amount of such unreimbursed
payment or required cash collateral, as applicable. Administrative Agent shall promptly notify each Lender of its Revolving Percentage of
such Dollar Amount by Requisite Notice. Each Lender shall make funds in an amount equal to its Revolving Percentage of such Dollar
Amount available to Administrative Agent at Administrative Agent’s Office not later than the Requisite Time therefor on the Business Day
specified by Administrative Agent. Administrative Agent shall remit the funds so received to such Issuing Lender in the case of
reimbursement of a Letter of Credit drawing or to Administrative Agent for deposit in a Letter of Credit Cash Collateral Account, as
applicable. The obligation of each Lender to so reimburse such Issuing Lender and fund such Letter of Credit Cash Collateral Account shall
be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default or any other occurrence or event;
provided that such Issuing Lender shall not have a right to be so reimbursed in respect of a Letter of Credit if such Issuing Lender issued such
Letter of Credit after being notified by Administrative Agent that such issuance was not permitted hereunder. Any such reimbursement shall
not relieve or otherwise impair the obligation of Borrower to reimburse each Issuing Lender for the amount of any payment made by such
Issuing Lender under any Letter of Credit, together with interest as provided herein, or to provide cash collateral.
(e)
If the conditions precedent set forth in Section 4.02 can be satisfied (except for the giving of a Request for Extension
of Credit) on any date Borrower is obligated to, but fails to, reimburse an Issuing Lender for a drawing under a Letter of Credit or to provide
cash collateral as required in subsection (a) above, the funding by Lenders pursuant to subsection (d) above shall be deemed to be a
Borrowing of Base Rate Loans (without regard to the Minimum Amount therefor). If the conditions precedent set forth in Section 4.02
(except for the giving of a Request for Extension of Credit) cannot be satisfied on the date Borrower is obligated to, but fails to, reimburse an
Issuing Lender for a drawing under a Letter of Credit or to provide cash collateral in respect of a Letter of Credit, the funding by Lenders
pursuant to the previous subsection shall be deemed to be a funding by each Lender of its participation in such Letter of Credit, and each
Lender making such funding shall thereupon acquire a pro rata participation, to the extent of its payment, in the claim of such Issuing Lender
against Borrower in respect of such payment or obligation to provide cash collateral and shall share, in accordance with that pro rata
participation, in any payment made by Borrower with respect to such claim. Any amounts made available by a Lender under its participation
shall be payable by Borrower upon demand of Administrative Agent (or, if earlier, on the Revolving Termination Date, the Extended
Revolving Termination Date or the Second Extended Revolving Termination Date, as applicable), and shall bear interest at a rate per annum
equal to the Default Rate.
(f)
Borrower may request Letters of Credit that have automatic extension or renewal provisions (“evergreen” Letters of
Credit), so long as the applicable Issuing Lender consents thereto and has the right not to permit any such extension or renewal at least
annually within a notice period to be agreed upon at the time each such Letter of Credit is issued. Once an evergreen Letter of Credit
(including any Existing Letter of Credit) is issued, unless Administrative Agent has notified the applicable Issuing Lender that Required
Lenders have elected not to permit such extension or renewal,
37
Borrower, Administrative Agent and Lenders shall be deemed to have authorized (but may not require) such Issuing Lender to permit the
renewal of such evergreen Letter of Credit at any time to a date not later than five Business Days prior to the Revolving Termination Date (as
it may be extended) or such later date as may be permitted pursuant to clause (y) of the second proviso of Section 2.03(a). Such Issuing
Lender may elect not to permit an evergreen Letter of Credit to be extended or renewed at any time. If such Issuing Lender so elects, it will
promptly give Administrative Agent notice of such election. Administrative Agent will promptly notify Lenders of the non-extension or non-
renewal of any evergreen Letter of Credit.
The obligation of Borrower to pay to each Issuing Lender the amount of any payment made by such Issuing Lender
under any Letter of Credit shall be absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrower’s obligations shall not
be affected by any of the following circumstances:
(g)
(i)
Any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii)
Any amendment or waiver of or any consent to departure from such Letter of Credit, this Agreement or any
other agreement or instrument relating hereto or thereto;
(iii)
The existence of any claim, setoff, defense or other rights which Borrower may have at any time against such
Issuing Lender, Administrative Agent or any Lender, any beneficiary of such Letter of Credit (or any persons or entities for
whom any such beneficiary may be acting) or any other Person, whether in connection with such Letter of Credit, this
Agreement or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) Any demand, statement or any other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect
whatsoever so long as any such document appeared to comply with the terms of such Letter of Credit;
(v)
Any payment by such Issuing Lender in good faith under such Letter of Credit against presentation of a draft
or any accompanying document which does not strictly comply with the terms of such Letter of Credit, or any payment made
by such Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-
possession, assignee for the benefit of creditors, liquidation, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any
Debtor Relief Laws;
(vi) Any error in the transmission of any message relating to such Letter of Credit not caused by such Issuing
Lender, or any delay or interruption in any such message;
(vii) Any error, neglect or default of any correspondent of such Issuing Lender in connection with such Letter of
Credit;
(viii) Any consequence arising from acts of God, wars, insurrections, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of such Issuing Lender;
(ix)
So long as such Issuing Lender in good faith determines that the document appears to comply with the terms
of such Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any
document submitted to such Issuing Lender in connection with such Letter of Credit; and
38
(x)
Any other circumstances whatsoever where such Issuing Lender has acted in good faith.
In addition, Borrower will promptly examine a copy of each Letter of Credit and amendments thereto delivered to it and, in
the event of any claim of noncompliance with Borrower’s instructions or other irregularity, Borrower will immediately notify the applicable
Issuing Lender in writing. Borrower shall be conclusively deemed to have waived any such claim against such Issuing Lender and its
correspondents unless such notice is given as aforesaid.
(h)
Each Lender and Borrower agree that, in paying any drawing under a Letter of Credit, no Issuing Lender shall have
any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
document. No Issuing Lender, Administrative Agent-Related Person or any of the respective correspondents, participants or assignees of any
Issuing Lender shall be liable to any Lender for any action taken or omitted in connection herewith at the request or with the approval of
Lenders or Required Lenders, as applicable, any action taken or omitted in the absence of gross negligence or willful misconduct or the due
execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit. Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee relative to any Issuing Lender, any Lender or any Administrative Agent-
Related Person with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not,
preclude Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other
agreement. No Issuing Lender, Administrative Agent-Related Person or any of the respective correspondents, participants or assignees of any
Issuing Lender shall be liable or responsible for any of the matters described in subsection (g) above in the absence of such Person’s gross
negligence or willful misconduct. In furtherance and not in limitation of the foregoing, any Issuing Lender may accept documents that appear
on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such
Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
(i)
Unless otherwise expressly agreed by the applicable Issuing Lender and Borrower when a Letter of Credit is issued
and subject to applicable Laws, performance under Letters of Credit by each Issuing Lender, its correspondents, and beneficiaries will be
governed by, as applicable, the rules of the International Standby Practices 1998, or such later revision as may be published by the Institute of
International Banking Law & Practice, or the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce
Publication No. 600, as the same may be revised from time to time.
(j)
Borrower shall pay to Administrative Agent on each Applicable Payment Date in arrears, for the account of each
Lender in accordance with its Revolving Percentage, a Letter of Credit fee in Dollars at a rate equal to the Applicable Amount times the
actual daily maximum Dollar Amount available to be drawn under each Letter of Credit requested by Borrower since the later of the
Effective Date and the previous Applicable Payment Date. Borrower shall pay directly to each Issuing Lender of an Existing Letter of Credit
any fees and expenses payable in respect of such Existing Letter of Credit for any period prior to the Effective Date. If there is any change in
the Applicable Amount during any quarter, the actual daily Dollar Amount shall be computed and multiplied by the Applicable Amount
separately for each period during such quarter that such Applicable Amount was in effect.
(k)
Borrower shall pay directly to each Issuing Lender, for its sole account, a fronting fee for each Letter of Credit
requested by Borrower in such amount and at such times as may be set forth in a separate letter agreement between Borrower and such
Issuing Lender. In addition, Borrower shall pay directly to each Issuing Lender, upon demand, for its sole account, its customary
documentary and processing charges in accordance with its standard schedule, as from time to time in effect, for any Letter of Credit Action
or other occurrence relating to a Letter of Credit requested by Borrower for which such charges are customarily made. Such fees and charges
are nonrefundable.
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(l)
Each Issuing Lender shall deliver to Administrative Agent, not later than the 20th day after each calendar quarter
ending after the Effective Date, a written report, in form reasonably satisfactory to Administrative Agent, setting forth the Letters of Credit
issued by such Issuing Lender and outstanding as of the last day of such calendar quarter, any Letter of Credit Actions effected during such
calendar quarter, and any draws made under such Letters of Credit during such calendar quarter.
(m)
Each Issuing Lender may, at its option, issue any Letter of Credit and make any funds available in connection with
any Letter of Credit by causing any foreign or domestic branch or Affiliate of such Issuing Lender to take such action; provided that any
exercise of such option shall not affect any obligation of Borrower; provided that, for the avoidance of doubt, Borrower shall not be required
to pay a greater amount under the increased costs provisions (including yield protection and taxes) of Section 3 hereof than it would have
paid in the absence of the exercise of such option.
2.04
Competitive Bid Procedure. (a) Subject to the terms and conditions set forth herein, during the period from and
including the Effective Date to, but not including, the Revolving Termination Date (as it may be extended), Borrower may request
Competitive Bids and may (but shall not have any obligation to) accept Competitive Bids and borrow Competitive Loans; provided that
Outstanding Revolving Obligations of all Lenders plus the aggregate principal amount of outstanding Competitive Loans at any time shall
not exceed the combined Revolving Commitments. To request Competitive Bids, Borrower shall notify Administrative Agent of such request
by telephone not later than the Requisite Time therefor; provided that Borrower may submit up to (but not more than) two Competitive Bid
Requests on the same day, but no Competitive Bid Request or Requests shall be made within five Business Days after the date of any
previous Competitive Bid Request or Requests, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic Competitive Bid Request shall be confirmed promptly by hand
delivery or telecopy to Administrative Agent of a written Competitive Bid Request in a form approved by Administrative Agent and signed
by Borrower. Each such telephonic and written Competitive Bid Request shall specify the following information:
(i)
the aggregate amount of the requested Borrowing (which shall be at least the Minimum Amount therefor);
(ii)
the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Borrowing of Floating Rate Loans (other than Floating SONIA Rate
Loans) or of Fixed Rate Loans (it being understood and agreed that each Borrowing of Competitive Loans shall be
comprised entirely of Floating Rate Loans (other than Floating SONIA Rate Loans) or Fixed Rate Loans); and
(iv)
the Interest Period to be applicable to such Borrowing, which shall be a period contemplated by the definition
of the term “Interest Period”.
Promptly following receipt of a Competitive Bid Request in accordance with this Section, Administrative Agent shall notify the Lenders of
the details thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b)
Each Lender may (but shall not have any obligation to) make one or more Competitive Bids to Borrower in response
to a Competitive Bid Request. Each Competitive Bid by a Lender must be in a form approved by Administrative Agent and must be received
by Administrative Agent by telecopy, in the case of a Competitive Borrowing of Floating Rate Loans, not later than 9:30 a.m., New York
City time, three Business Days before the proposed date of such Competitive Borrowing, and in the case of a Borrowing of Fixed Rate
Loans, not later than 9:30 a.m., New York City time, on the proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the form approved by Administrative Agent may be rejected by Administrative Agent, and Administrative Agent
shall notify the applicable Lender as promptly as practicable. Each Competitive Bid shall specify (i) the principal amount (which shall be a
minimum of $10,000,000 and an integral multiple of $1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by Borrower) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid
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Rate or Rates at which the Lender is prepared to make such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Interest Period applicable to each such Loan and the last day thereof.
amount specified in each Competitive Bid and the identity of the Lender that shall have made such Competitive Bid.
(c)
Administrative Agent shall promptly notify Borrower by telecopy of the Competitive Bid Rate and the principal
(d)
Subject only to the provisions of this paragraph, Borrower may accept or reject any Competitive Bid. Borrower shall
notify Administrative Agent by telephone, confirmed by telecopy in a form approved by Administrative Agent, whether and to what extent it
has decided to accept or reject each Competitive Bid, in the case of a Competitive Borrowing of Floating Rate Loans, not later than 10:30
a.m., New York City time, three Business Days before the date of the proposed Competitive Borrowing, and in the case of a Borrowing of
Fixed Rate Loans, not later than 10:30 a.m., New York City time, on the proposed date of the Competitive Borrowing; provided that (i) the
failure of Borrower to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) Borrower shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate with
respect to the same Competitive Bid Request, (iii) the aggregate amount of the Competitive Bids accepted by Borrower shall not exceed the
aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to
comply with clause (iii) above, Borrower may accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the
case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; provided further that if a
Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above, such Competitive Loan may be
for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral multiples of
$1,000,000 in a manner determined by Borrower. A notice given by Borrower pursuant to this paragraph shall be irrevocable.
Administrative Agent shall promptly notify each bidding Lender by telecopy whether or not its Competitive Bid has
been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound,
subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive Bid has been accepted.
(e)
If Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to Borrower at least one quarter of an hour earlier than the time by which the other Lenders are required to submit
their Competitive Bids to Administrative Agent pursuant to paragraph (b) of this Section.
(f)
2.05
Reduction or Termination of Revolving Commitments. Upon Requisite Notice to Administrative Agent not later than
the Requisite Time therefor, Borrower may at any time and from time to time, without premium or penalty, permanently and irrevocably
reduce the Revolving Commitments, in a Minimum Amount therefor to an amount not less than the sum of the Outstanding Revolving
Obligations at such time plus the aggregate principal amount of outstanding Competitive Loans at any time, or terminate the Revolving
Commitments. Any such reduction or termination shall be accompanied by payment of all accrued and unpaid commitment fees with respect
to the portion of the Revolving Commitments being reduced or terminated. Administrative Agent shall promptly notify Lenders of any such
request for reduction or termination of the Revolving Commitments. Each Lender’s Revolving Commitment shall be reduced pro rata by the
amount of such reduction.
2.06
Prepayments.
Upon Requisite Notice to Administrative Agent not later than the Requisite Time therefor, Borrower may at any time
and from time to time voluntarily prepay Loans made to it in part in the Minimum Amount therefor or in full without premium or penalty;
provided that Borrower may not
(a)
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prepay any Competitive Loan without the prior written consent of the Lender thereof. Administrative Agent will promptly notify each
relevant Lender thereof and of such Lender’s percentage of such prepayment. Any prepayment of a Floating Rate Loan shall be accompanied
by all accrued interest thereon, together with (other than in the case of Floating SONIA Rate Loans) the costs set forth in Section 3.05.
(b)
If for any reason (other than as a result of currency fluctuation, which prepayment requirement shall be governed by
Section 2.15) the Dollar Amount of the Outstanding Revolving Obligations of all Lenders plus the aggregate principal amount of outstanding
Competitive Loans at any time exceeds the combined Revolving Commitments from time to time in effect, Borrower shall immediately
prepay Revolving Loans and/or deposit cash in a Letter of Credit Cash Collateral Account in an aggregate amount equal to such excess.
2.07
Documentation of Loans.
(a)
Upon the request of any Lender made through Administrative Agent, a Lender’s Loans may be evidenced by one or
more Notes of Borrower, instead of or in addition to its loan accounts or records. Each such Lender may attach schedules to its Notes and
endorse thereon the date, amount and maturity of its Loans and payments with respect thereto. Any failure so to record or any error in doing
so shall not, however, limit or otherwise affect the obligation of Borrower to pay any amount owing with respect to the Obligations.
(b)
Administrative Agent shall maintain, at Administrative Agent’s Office, a register for the recordation of the names
and addresses of Lenders and the Revolving Commitments and Extensions of Credit of each Lender from time to time (the “Register”). The
Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall maintain the Register, acting, solely for this administrative purpose only, as a non-fiduciary agent for
Borrower (it being acknowledged and agreed that Administrative Agent and each Administrative Agent-Related Person, in such capacity,
shall constitute Indemnitees under Section 10.13).
(c)
Administrative Agent shall record in the Register the Revolving Commitment and Extensions of Credit from time to
time of each Lender, and each repayment or prepayment in respect thereof. Any recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided, however, that the failure to make any such recordation, or any error in such recordation, shall
not affect any Lender’s Revolving Commitment or Outstanding Revolving Obligations or outstanding Competitive Loans.
(d)
Each Lender shall record on its internal loan accounts or records (and may record on the Note(s) held by such
Lender) the amount of each Extension of Credit made by it and each payment in respect thereof; provided that the failure to make any such
recordation, or any error in such recordation, shall not affect any Lender’s Revolving Commitment or Outstanding Revolving Obligations or
outstanding Competitive Loans; and provided, further, that in the event of any inconsistency between the Register and any Lender’s records,
the recordations in the Register shall govern, absent manifest error.
(e)
Borrower, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the
holders of the corresponding Revolving Commitments and Extensions of Credit listed therein for all purposes hereof, and no assignment or
transfer of any such Revolving Commitment or Extensions of Credit shall be effective, in each case, unless and until an Assignment and
Assumption effecting the assignment or transfer thereof shall have been accepted by Administrative Agent and recorded in the Register. Prior
to such recordation, all amounts owed with respect to the applicable Revolving Commitment or Outstanding Revolving Obligations or
outstanding Competitive Loans shall be owed to the Lender listed in the Register as the owner thereof, and any request, authority or consent
of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Revolving Commitments or Outstanding
Revolving Obligations or outstanding Competitive Loans.
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2.08
Continuation and Conversion Option.
(a)
Subject to Section 2.08(d), Borrower may irrevocably request a Conversion or Continuation of Loans on any
Business Day in a Minimum Amount therefor by delivering a Request for Extension of Credit therefor by Requisite Notice to Administrative
Agent not later than the Requisite Time therefor. All Conversions and Continuations of Loans denominated in Dollars shall constitute Base
Rate Loans unless properly and timely otherwise designated as set forth in the prior sentence.
(b)
Unless Borrower pays all amounts due under Section 3.05, if any, a Floating Rate Loan (other than a Floating
SONIA Rate Loan) may be Continued or Converted only on the last day of the Interest Period for such Floating Rate Loan. During the
existence of an Event of Default, Administrative Agent may (and upon the request of the Required Lenders shall) prohibit Loans (other than
Floating SONIA Rate Loans) from being requested as, Converted into, or Continued as Floating Rate Loans, and Required Lenders may
demand that any or all of the then outstanding Floating Rate Loans (other than Floating SONIA Rate Loans) be Converted immediately into
Base Rate Loans.
Administrative Agent shall promptly notify Borrower and Lenders of the interest rate applicable to any Floating Rate
Loan upon determination of the same. Administrative Agent shall from time to time notify Borrower and Lenders of any change in JPMorgan
Chase’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(c)
(d)
Notwithstanding anything to the contrary contained herein, Competitive Loans may not be Converted or Continued.
2.09
Interest.
(a)
Subject to subsection (b) below, and unless otherwise specified herein, Borrower hereby promises to pay interest on
the unpaid principal amount of each Loan made to it (before and after default, before and after maturity, before and after judgment and before
and after the commencement of any proceeding under any Debtor Relief Laws) from the date borrowed until paid in full (whether by
acceleration or otherwise) on each Applicable Payment Date at a rate per annum equal to:
(i) in the case of Base Rate Loans, the Base Rate plus the Applicable Amount for such Type of Loan;
(ii) in the case of Floating Rate Loans (other than Floating SONIA Rate Loans and Competitive Loans) at the Adjusted
LIBO Rate, the Adjusted EURIBOR Rate, the Adjusted TIBOR Rate or the CDOR Screen Rate, as applicable, for the Interest Period in effect
for such Borrowing plus the Applicable Amount for such Type of Loan;
such Type of Loan;
(iii) in the case of Floating SONIA Rate Loans, the Adjusted Daily Simple SONIA Rate plus the Applicable Amount for
Rate for the Interest Period in effect for such Borrowing plus (or minus, as the case may be) Margin applicable to such Loan; and
(iiiiv) in the case of Competitive Loans that are Floating Rate Loans (other than Floating SONIA Rate Loans), the Floating
(ivv) in the case of Fixed Rate Loans, at the Fixed Rate applicable to such Loan.
(b)
If any amount payable by Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), Borrower hereby promises to pay interest (after as well as before entry of judgment thereon to the extent permitted
by law) on such amount at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be payable upon demand.
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On any Business Day, Borrower may call Administrative Agent and request information as to the then current
Adjusted LIBO Rate, the Adjusted Daily Simple SONIA Rate, Adjusted EURIBOR Rate, Adjusted TIBOR Rate, CDOR Screen Rate or Base
Rate, and Administrative Agent shall provide such information.
(c)
2.10
Fees.
(a)
Commitment Fee. Borrower shall pay to Administrative Agent, for the account of each Lender pro rata according to
its Revolving Percentage, a commitment fee equal to the Applicable Amount times the average daily amount of the excess, if any, of its
Revolving Commitment over its Outstanding Revolving Obligations (it being understood, for avoidance of doubt, that for purposes of the
calculation of the commitment fee, Competitive Loans shall not be deemed to be a utilization of the Revolving Facility). The commitment fee
shall accrue at all times from the Effective Date until the Revolving Termination Date (as it may be extended) and shall be payable quarterly
in arrears on each Applicable Payment Date. If there is any change in the Applicable Amount during any quarter, the actual daily amount
shall be computed and multiplied by the Applicable Amount separately for each period during such quarter that such Applicable Amount was
in effect. The commitment fee shall accrue at all applicable times, including at any time during which one or more conditions in Section 4 are
not met.
Other Fees. Borrower agrees to pay to Administrative Agent and the other parties hereto (and their respective
Affiliates) the fees in the amounts and on the dates previously agreed to in writing by Borrower and such parties (or their respective
Affiliates).
(b)
2.11
Computation of Interest and Fees. All interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the LIBOSONIA Rate (with respect to Sterling Loans only), the TIBOR Rate or the Base Rate at times
when the Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Computation of all other types
of interest and all fees shall be calculated on the basis of a year of 360 days or, in the case of any amount denominated in Sterling or
Canadian Dollars, 365 days and the actual number of days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall bear interest for one day.
2.12 Making Payments.
(a)
Except as otherwise provided herein, all payments by Borrower or any Lender hereunder shall be made to
Administrative Agent at Administrative Agent’s Office not later than the Requisite Time for such type of payment. All payments received
after such Requisite Time shall be deemed received on the next succeeding Business Day for purposes of the calculation of interest and fees,
but not for purposes of determining whether a Default has occurred. All payments of principal and interest shall be made in immediately
available funds in Dollars. All payments by Borrower shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.
(b)
Upon satisfaction of any applicable terms and conditions set forth herein, Administrative Agent shall promptly make
any amounts received in accordance with Section 2.12(a) available in like funds received as follows: (i) if payable to Borrower, by crediting a
deposit account designated from time to time by Borrower to Administrative Agent by Requisite Notice, and (ii) if payable to any Lender, by
wire transfer to such Lender at its Lending Office. If such conditions are not so satisfied, Administrative Agent shall return any funds it is
holding to the Lenders making such funds available, without interest.
Subject to the definition of “Interest Period,” if any payment to be made by Borrower shall come due on a day other
than a Business Day, payment shall instead be considered due on the next succeeding Business Day, and such extension of time shall be
reflected in computing interest and fees.
(c)
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(d)
Unless Borrower or any Lender has notified Administrative Agent, prior to the Requisite Time any payment to be
made by it is due, that it does not intend to remit such payment, Administrative Agent may, in its sole and absolute discretion, assume that
Borrower or such Lender, as the case may be, has timely remitted such payment and may, in its sole and absolute discretion and in reliance
thereon, make such payment available to the Person entitled thereto. If such payment was not in fact remitted to Administrative Agent in
immediately available funds, then:
(i)
If Borrower failed to make such payment, each Lender shall forthwith on demand repay to Administrative
Agent the amount of such assumed payment made available to such Lender, together with interest thereon in respect of each
day from and including the date such amount was made available by Administrative Agent to such Lender to the date such
amount is repaid to Administrative Agent at the Federal Funds Rate; and
(ii)
If any Lender failed to make such payment, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount upon
Administrative Agent’s demand therefor, Administrative Agent promptly shall notify Borrower, and Borrower shall pay such
corresponding amount to Administrative Agent. Administrative Agent also shall be entitled to recover interest on such
corresponding amount in respect of each day from the date such corresponding amount was made available by
Administrative Agent to Borrower to the date such corresponding amount is recovered by Administrative Agent, (A) from
such Lender at a rate per annum equal to the Federal Funds Rate, and (B) from Borrower, at a rate per annum equal to the
interest rate applicable to such Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill
its Revolving Commitment or to prejudice any rights which Administrative Agent or Borrower may have against any Lender
as a result of any default by such Lender hereunder.
(e)
If Administrative Agent or any Lender is required at any time to return to Borrower, or to a trustee, receiver,
liquidator, custodian or any official under any proceeding under Debtor Relief Laws, any portion of a payment made by Borrower, each
Lender shall, on demand of Administrative Agent, return its share of the amount to be returned, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate.
Funding Sources. Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for any
Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any
Loan in any particular place or manner.
2.13
Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
2.14
Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a
(a)
Defaulting Lender;
Fees set forth in Section 2.10(a) shall cease to accrue on the unfunded portion of the Commitments of such
(b)
To the extent permitted by applicable Law, any voluntary prepayment of Revolving Loans shall, if Borrower so
directs at the time of making such voluntary prepayment, be applied to the Revolving Loans of other Lenders as if such Defaulting Lender
had no Revolving Loans outstanding and the Aggregate Exposure of such Defaulting Lender in respect of its Revolving Commitment were
zero;
(c)
The Aggregate Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or
Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or modification pursuant to
Section 10.01), provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender and in any event,
no such amendment, modification, or waiver shall increase the
45
Revolving Commitments or reduce the principal amount of any Loans of such Defaulting Lender, extend the maturity date applicable thereto
or decrease the rate of interest (including any commitment fees) payable in respect thereof without the consent of such Defaulting Lender;
(d)
If any Letter of Credit Usage exists at the time a Lender becomes a Defaulting Lender then:
(i)
all or any part of such Letter of Credit Usage shall be reallocated among the Lenders that are not Defaulting
Lenders in accordance with their respective Revolving Percentages but, in any case, only to the extent the sum of the
Outstanding Revolving Obligations of all Lenders that are not Defaulting Lenders plus such Defaulting Lender’s ratable
participation in all Letter of Credit Usage does not exceed the total of the Revolving Commitments of all Lenders that are not
Defaulting Lenders;
(ii)
if the reallocation described in clause (i) above cannot, or can only partially, be effected, Borrower shall
within one Business Day following notice by Administrative Agent, either (x) cash collateralize such Defaulting Lender’s
participation in all Letter of Credit Usage (after giving effect to any partial reallocation pursuant to clause (i) above) in a
Letter of Credit Cash Collateral Account for so long as such Letter of Credit is outstanding or (y) backstop such Letter of
Credit Usage with a letter of credit reasonably satisfactory to the Issuing Lender;
(iii)
if Borrower cash collateralizes or backstops any portion of such Defaulting Lender’s Letter of Credit Usage
pursuant to this subsection (d), Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section
2.03(j) with respect to such Defaulting Lender’s Letter of Credit Usage during the period such Defaulting Lender’s Letter of
Credit Usage is cash collateralized or backstopped;
(iv)
if the Letter of Credit Usage attributable to the Defaulting Lenders is reallocated pursuant to this subsection
(d), then the fees payable to the non-Defaulting Lenders pursuant to Section 2.03(j) and Section 2.10(a) shall be adjusted in
accordance with the non-Defaulting Lenders’ respective Revolving Percentages to account for such reallocation; and
(v)
if any Defaulting Lender’s participation in all Letter of Credit Usage is neither cash collateralized,
backstopped nor reallocated pursuant to this subsection (d), then, without prejudice to any rights or remedies of Issuing
Lenders or any Lender hereunder, all Letter of Credit fees payable under Section 2.03(j) with respect to such Defaulting
Lender’s remaining participation in all Letter of Credit Usage shall be payable to the applicable Issuing Lenders until such
participation in all Letter of Credit Usage is backstopped, cash collateralized and/or reallocated
(e)
So long as any Lender is a Defaulting Lender, no Issuing Lender shall be required to issue, amend or increase any
Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Commitments of the non-Defaulting
Lenders and/or cash collateral or backstop letters of credit will be provided by Borrower in accordance with subsection (d) of this Section,
and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders that are
Lenders in a manner consistent with subsection (d)(i) of this Section (and Defaulting Lenders shall not participate therein).
(f)
In the event that each of Administrative Agent, Borrower and Issuing Lenders agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Letter of Credit Usage of the Lenders shall be
readjusted to reflect the inclusion of such formerly Defaulting Lender’s Revolving Commitment and on such date such formerly Defaulting
Lender shall purchase at par such of the Revolving Loans of the other Lenders as Administrative Agent shall determine may be necessary in
order for such formerly Defaulting Lender to hold such Revolving Loans in accordance with its Revolving Percentage.
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2.15
Currency Equivalents.
(a)
Administrative Agent shall determine the Dollar Amount of (i) the Letter of Credit Usage in respect of Letters of
Credit denominated in an Alternative Currency based on the Exchange Rate (A) on or about the date of the related notice requesting the
issuance of such Letter of Credit and (B) at such other times as Administrative Agent may elect in its discretion (but in no case more
frequently than monthly), (ii) the Loans denominated in an Alternative Currency based on the Exchange Rate (A) on or about the date of the
related notice requesting any Borrowing, Continuation or Conversion and (B) at such other times as Administrative Agent may elect in its
discretion (but in no case more frequently than monthly) and (iii) any other amount to be converted into Dollars in accordance with the
provisions hereof at the time of such conversion.
(b)
If after giving effect to any such determination of a Dollar Amount, the Letter of Credit Usage exceeds 105% of the
Letter of Credit Sublimit, Borrower shall, within five Business Days of receipt of notice thereof from Administrative Agent setting forth such
calculation in reasonable detail, deposit cash collateral in a Letter of Credit Cash Collateral Account in an amount equal to such excess. If
after giving effect to any such determination of a Dollar Amount, the Dollar Amount of the Outstanding Revolving Obligations of all Lenders
plus the aggregate principal amount of outstanding Competitive Loans at any time exceeds the combined Revolving Commitments from time
to time in effect by more than 105%, Borrower shall, immediately upon receipt of notice thereof from Administrative Agent setting forth
such calculation in reasonable detail, prepay Revolving Loans and/or deposit cash in a Letter of Credit Cash Collateral Account in an
aggregate amount equal to such excess in accordance with Section 2.06(b).
SECTION 3
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01
Taxes.
(a)
To the extent permitted by Law, any and all payments by or on account of Borrower to or for the account of any
Lender Party under any Loan Document shall be made free and clear of and without deduction or withholding for or on account of any and
all present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, now
or hereafter imposed, levied, collected, withheld or assessed and all interest, additions to tax, or penalties with respect thereto, excluding, (w)
in the case of a Lender Party, taxes imposed on or measured by its net income, branch profits taxes, and franchise taxes (imposed in lieu of
net income taxes) imposed on it, (I) by the jurisdiction (or any political subdivision thereof) under the Laws of which the Lender Party is
organized or maintains a Lending Office, or (II) by reason of any present or former connection between such Lender Party and the
jurisdiction imposing such taxes, other than solely as a result of this Agreement or any Note or any transaction contemplated thereby, (x) with
respect to each Lender Party, taxes imposed by reason of any present or former connection between such Lender Party and the jurisdiction
imposing such taxes, other than solely as a result of this Agreement or any Note or any transaction contemplated hereby, (y) in the case of a
Lender Party organized under the Laws of a jurisdiction outside the United States (other than an assignee pursuant to a request by Borrower
under Section 3.06(b)), any withholding tax that is imposed on amounts payable to such Lender Party at the time such Lender Party becomes
a party to this Agreement (or designates a new lending office) or is attributable to such Lender Party’s failure to comply with Section 10.20,
except to the extent that such Lender Party (or its assignor, if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from Borrower with respect to such withholding tax pursuant to this Section and (z) withholding
taxes imposed pursuant to FATCA (all non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any
Loan Document being hereinafter referred to as “Non-Excluded Taxes”). If Borrower or Administrative Agent shall be required by any Laws
to deduct any Non-Excluded Taxes from or in respect of any sum payable under any Loan Document to any Lender Party, (i) the sum payable
shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under
this Section), such Lender Party receives an amount equal to the sum it would have
47
received had no such deductions been made, (ii) Borrower or Administrative Agent shall make such deductions or withholdings, (iii)
Borrower or Administrative Agent shall pay the full amount deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable Laws and (iv) with respect to all withholding taxes, within 30 days after the date of such payment by Borrower,
Borrower shall furnish to Administrative Agent (who shall forward the same to such Lender Party) the original or a certified copy of a receipt
evidencing payment thereof.
(b)
In addition, Borrower agrees to pay, or at the option of Administrative Agent timely reimburse it for the payment of,
any and all present or future stamp, court, documentary, intangible, recording, filing or other similar taxes, charges or levies which arise from
any payment made by it under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Loan Document except any such taxes that are imposed with respect to an assignment by the Lender (hereinafter referred
to as “Other Taxes”).
(c)
Borrower agrees to indemnify each Lender Party for the full amount of Non- Excluded Taxes and Other Taxes
(including any Non-Excluded Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by
such Lender Party with respect to any Loan or Loan Document and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto; provided, however, that the Borrower shall not be obligated to indemnify such Recipient pursuant to this Section 3.01
in respect of interest, penalties and other liabilities attributable to any Non-Excluded Taxes or Other Taxes, if such interest, penalties and
other liabilities are attributable to the gross negligence or willful misconduct of such Lender Party. After a Lender Party learns of the
imposition of Non-Excluded Taxes or Other Taxes, such Lender will act in good faith to promptly notify the Borrower of its obligations
hereunder. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
Notwithstanding anything to the contrary contained in this Section 3.01, all obligations of Borrower to any Lender
under such Section 3.01 shall be subject to, and conditioned upon such Lender’s compliance with its obligations, if any, under Section 10.20.
(d)
(e)
If any Lender Party determines, in its sole discretion exercised in good faith, that it has received a refund from a
relevant taxing or governmental authority in respect of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by
Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay over such refund to
Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by Borrower under this Section 3.01 with respect
to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Lender Party and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that in the event such
Lender Party is required to repay any or all of such refund to such Governmental Authority (a “Refund Repayment Requirement”), Borrower,
upon the request of such Lender Party, agrees to repay to such Lender Party the full amount of such Refund Repayment Requirement (plus
any penalties, interest or other charges imposed by the relevant Governmental Authority). This subsection shall not be construed to require
any Lender Party to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Borrower or
any other Person.
3.02
Illegality. If any Lender determines that any Laws have made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Floating Rate Loans, or materially
restricts the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable offshore interbank market, or to
determine or charge interest rates based upon the applicable Floating Rate, then, on notice thereof by such Lender to Borrower through
Administrative Agent, the obligation of such Lender to make Floating Rate Loans shall be suspended until such Lender notifies
Administrative Agent and Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice,
Borrower shall, upon demand from such Lender (with a copy to Administrative Agent), prepay or Convert all Floating Rate Loans of such
Lender, either on the last day of the Interest Period thereof, if (a) such Loans are not Floating SONIA Rate Loans and (b) such Lender may
lawfully continue to maintain such Floating
48
Rate Loans to such day, or immediately, if (i) such Loans are Floating SONIA Rate Loans or (ii) such Lender may not lawfully continue to
maintain such Floating Rate Loans. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for
such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.
commencement of any Interest Period for a Floating Rate Borrowing:
3.03
Alternate Rate of Interest . Subject to clauses (b), (c), (d), (e), (f) and (g) of this Section 3.03, if prior to the
(i)
the Administrative Agent determines (which determination shall be conclusive absent manifest error), (A)
prior to the commencement of any Interest Period for a LIBOR Borrowing, a EURIBOR Borrowing, TIBOR Borrowing or a
CDOR Borrowing that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the LIBO Rate,
the Adjusted EURIBOR Rate, the EURIBOR Rate, the Adjusted TIBOR Rate, the TIBOR Rate or the CDOR Screen Rate, as
applicable (including because the Relevant Screen Rate is not available or published on a current basis), for the applicable
Agreed Currency and such Interest Period, or (B) at any time, that adequate and reasonable means do not exist for
ascertaining the Daily Simple SONIA with respect to any Borrowing denominated in Sterling; provided that no Benchmark
Transition Event shall have occurred at such time; or
(ii)
the Administrative Agent is advised by the Required Lenders (or, in the case of a Floating Rate Competitive
Loan, the Lender that is required to make such Loan) (A) prior to the commencement of any Interest Period for a LIBOR
Borrowing, a EURIBOR Borrowing or a CDOR Borrowing, that the Adjusted LIBO Rate, the LIBO Rate, the Adjusted
EURIBOR Rate, the EURIBOR Rate, the Adjusted TIBOR Rate, the TIBOR Rate or the CDOR Screen Rate, as applicable,
for the applicable Agreed Currency and such Interest Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for the applicable Agreed Currency
and such Interest Period or (B) at any time, that the Adjusted Daily Simple SONIA with respect to any Borrowing
denominated in Sterling will not adequately and fairly reflect the cost to such Lenders of making or maintaining the Loans
included in such Borrowing;
then the Administrative Agent shall give written notice thereof to the Borrower and the Lenders by hand delivery, facsimile or electronic mail
as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (A) any Conversion or Continuation of Loans that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Floating Rate Borrowing that is affected by the foregoing circumstances shall be ineffective, (B) if any
Request for Extension of Credit requests a Floating Rate Borrowing that is affected by the foregoing circumstances in Dollars, such
Borrowing shall be made as a Base Rate Borrowing, (C) if any Request for Extension of Credit requests a Floating Rate Borrowing that is
affected by the foregoing circumstances in Canadian Dollars, such Borrowing shall be made as a Canadian Prime Rate Borrowing, (D) if any
Request for Extension of Credit requests a Floating Rate Borrowing in an Alternative Currency (other than Canadian Dollars or Sterling) that
is affected by the foregoing circumstances, then such request shall bear interest by reference to an acceptable alternative rate mutually
established by Borrower, the Administrative Agent and the applicable Lenders (for so long as no such alternative rate is established, or if no
such alternative rate can be established, such request shall be ineffective), and (E) any request by the Borrower for a Floating Rate
Competitive Borrowing shall be ineffective, (F) if any Request for Extension of Credit requests a Floating Rate Borrowing that is affected by
the foregoing circumstances in Sterling, such request shall be ineffective; provided that if the circumstances giving rise to such notice do not
affect all the Lenders, then requests by the Borrower for Floating Rate Competitive Borrowings may be made to Lenders that are not affected
thereby; provided, further, however, that, in each case, Borrower may revoke any Request for Extension of Credit that is pending when any
such notice is received. Furthermore, if any Floating Rate Loan in any Agreed Currency is outstanding on the date of the Borrower’s receipt
of the notice from the Administrative Agent referred to in this Section 3.03(a) with respect to a Relevant Rate applicable to such Floating
Rate Loan, then until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist (which it shall do promptly after such circumstances no longer exist),
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(i) if such Floating Rate Loan is denominated in Dollars, then on the last day of the Interest Period applicable to such Loan (or the next
succeeding Business Day if such day is not a Business Day), such Loan shall be converted by the Administrative Agent to, and shall
constitute, a Base Rate Loan denominated in Dollars on such day, (ii) if such Floating Rate Loan is denominated in Canadian Dollars, then on
the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), such Loan
shall be converted by the Administrative Agent to, and shall constitute, a Canadian Prime Rate Loan denominated in Canadian Dollars on
such day, and (iii) if such Floating Rate Loan is denominated in Sterling, then on the next succeeding Business Day after the Borrower’s
receipt of such notice if such notice is delivered in connection with the circumstances contemplated by Section 3.03(a)(i), or on the third
succeeding Business Day after the Borrower’s receipt of such notice if such notice is delivered in connection with the circumstances
contemplated by Section 3.03(a)(ii), such Loan shall, at the Borrower’s election (it being understood that if the Borrower does not
affirmatively make an election by the next succeeding Business Day or third succeeding Business Day, as applicable, the Borrower will be
deemed to have elected option (3)), either (1) be prepaid (including interest that accrues after the date of notice), (2) be converted by the
Administrative Agent to, and shall constitute, a Base Rate Loan denominated in Dollars (in an amount equal to the Dollar Amount thereof) or
(3) be converted by the Administrative Agent to, and shall constitute, a Loan bearing interest at the Central Bank Rate for Sterling plus the
CBR Spread; provided that the Central Bank Rate for Sterling can be determined by the Administrative Agent and (iv) if such Floating Rate
Loan is denominated in any Agreed Currency other than Dollars, Sterling or Canadian Dollars, then such Loan shall, on the last day of the
Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), at the Borrower’s election
prior to such day: (A) be prepaid by the Borrower on such day, (B) solely for the purpose of calculating the interest rate applicable to such
Floating Rate Loan, such Floating Rate Loan denominated in any Agreed Currency other than Dollars shall be deemed to be a Floating Rate
Loan denominated in Dollars and shall accrue interest at the same interest rate applicable to Floating Rate Loans denominated in Dollars at
such time or (C) if an interest rate is mutually established by Borrower, the Administrative Agent and the applicable Lenders, bear interest at
such rate.
(b)
Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event
or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect
of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the
definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark
for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without
any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark
Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement
Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any
Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark
Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any
other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark
Replacement from Lenders comprising the Required Lenders.
(c)
Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in
this paragraph, (x) with respect to a Loan denominated in Dollars, if a Term SOFR Transition Event and its related Benchmark Replacement
Date, (y) with respect to a Loan denominated in Euros, if a Term ESTR Transition Event and its related Benchmark Replacement Date, or (z)
with respect to a Loan denominated in Yen, if a Term TONA Transition Event and its related Benchmark Replacement Date, as applicable,
have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark
Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark
setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or
any other Loan Document; provided that, this clause (c) shall not be effective unless the Administrative Agent has delivered to the Lenders
and the Borrower a Term SOFR Notice, a Term ESTR Notice or a Term TONA Notice, as applicable. For the avoidance of doubt, the
Administrative Agent shall not be required to deliver any (x) Term SOFR Notice after the
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occurrence of a Term SOFR Transition Event, (y) Term ESTR Notice after the occurrence of a Term ESTR Transition Event or (z) Term
TONA Notice after the occurrence of a Term TONA Transition Event, and may do so in its sole discretion.
(d)
In connection with the implementation of a Benchmark Replacement, the Administrative Agent (in consultation with
the Borrower) will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to
the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will
become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(e)
The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark
Transition Event or an Early Opt-in Election, as applicable, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of
any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f)
below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may
be made by the Administrative Agent and/or Borrower or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.03,
including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or
date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may
be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in
each case, as expressly required pursuant to this Section 3.03.
(f)
Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in
connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR,
Daily Simple SONIA, Term ESTR, Term TONA, LIBO Rate, EURIBOR Rate or TIBOR Rate) and either (A) any tenor for such Benchmark
is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in
its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or
publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative
Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-
representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or
information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it
is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the
definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(g)
Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower
may revoke any request for a Floating Rate Borrowing of, conversion to or continuation of Floating Rate Loans to be made, converted or
continued during any Benchmark Unavailability Period and, failing that, either (x) the Borrower will be deemed to have converted any
request for a Floating Rate Borrowing denominated in Dollars into a request for a Borrowing of or conversion to Base Rate Loans, (y) the
Borrower will be deemed to have converted any request for a Floating Rate Borrowing denominated in Canadian Dollars into a request for a
Borrowing of or conversion to Canadian Prime Rate Loans or (z) any request for a Floating Rate Borrowing denominated in an Alternative
Currency (other than Canadian Dollars) shall be ineffective. During any Benchmark Unavailability Period or at any time that a tenor for the
then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for
such Benchmark, as applicable, will not be used in any determination of the Base Rate. Furthermore, if any Floating Rate Loan in any
Agreed Currency is outstanding on the date of the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period
with respect to a Relevant Rate applicable to such Floating Rate Loan, then until such time as a Benchmark Replacement for such Agreed
Currency is implemented pursuant to this Section 3.03, (i) if such Floating Rate Loan is denominated in Dollars, then on the last day of the
Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), such Loan shall be
converted by the Administrative Agent to, and shall
51
constitute, a Base Rate Loan denominated in Dollars on such day, or (ii) if such Floating Rate Loan is denominated in Sterling, then on the
next succeeding Business Day after the Borrower’s receipt of such notice, such Loan shall, at the Borrower’s election (it being understood
that if the Borrower does not affirmatively make an election by the next succeeding Business Day, the Borrower will be deemed to have
elected option (3)), either (1) be prepaid (including interest that accrues after the date of such notice), (2) be converted by the Administrative
Agent to, and shall constitute, a Base Rate Loan denominated in Dollars (in an amount equal to the Dollar Amount thereof) or (3) be
converted by the Administrative Agent to, and shall constitute, a Loan bearing interest at the Central Bank Rate for Sterling plus the CBR
Spread; provided that the Central Bank Rate for Sterling can be determined by the Administrative Agent or (iii) if such Floating Rate Loan is
denominated in any Agreed Currency other than Dollars and Sterling, then such Loan shall, on the last day of the Interest Period applicable to
such Loan (or the next succeeding Business Day if such day is not a Business Day), at the Borrower’s election prior to such day: (A) be
prepaid by the Borrower on such day or (B) solely for the purpose of calculating the interest rate applicable to such Floating Rate Loan, such
Floating Rate Loan denominated in any Agreed Currency other than Dollars shall be deemed to be a Floating Rate Loan denominated in
Dollars and shall accrue interest at the same interest rate applicable to Floating Rate Loans denominated in Dollars at such time.
3.04
Increased Cost and Reduced Return; Capital Adequacy.
(a)
thereof effective after the date hereof:
If any Lender Party determines that the adoption of any Law or any change in any Law or in the interpretation
(i)
Subjects such Lender Party to any tax (excluding taxes described in clauses (w), (y) and (z) of Section
3.01(a), Non-Excluded Taxes and Other Taxes) on its loans, loan principal, letters of credit, commitments, or other
obligations, or its deposits, reserves, other liabilities or capital attributable thereto with respect to any Floating Rate Loans or
Fixed Rate Loans or its obligation to make Floating Rate Loans or Fixed Rate Loans;
(ii)
Imposes or modifies any reserve, special deposit, compulsory loan, insurance charge, or similar requirement
(other than the reserve requirement utilized in the determination of the Adjusted LIBO Rate, the Adjusted EURIBOR Rate or
the Adjusted TIBOR Rate, as applicable) relating to any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender Party (including its Revolving Commitment); or
(iii)
Imposes on such Lender Party or on the offshore interbank market any other condition, cost or expense (other
than taxes) affecting this Agreement or any of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender Party of making, Converting into, Continuing, or maintaining any
Floating Rate Loans or Fixed Rate Loans or issuing or participating in Letters of Credit or to reduce any sum received or receivable by such
Lender Party under this Agreement with respect to any Floating Rate Loans or Fixed Rate Loans or Letter of Credit, then from time to time
upon demand of such Lender Party (with a copy of such demand to Administrative Agent), Borrower shall pay to such Lender Party such
additional amounts as will compensate such Lender Party for such increased cost or reduction.
(b)
If any Lender Party determines that the adoption of any Law or any change in any Law or in the interpretation
thereof effective after the date hereof, including in regard to capital adequacy and liquidity, has the effect of reducing the rate of return on the
capital of such Lender Party or compliance by such Lender Party (or its Lending Office) or any corporation controlling such Lender Party as
a consequence of such Lender Party’s obligations hereunder (taking into consideration its policies with respect to capital adequacy and
liquidity and such Lender Party’s desired return on capital and desired liquidity levels), then from time to time upon demand of such Lender
Party (with a copy to Administrative Agent), Borrower shall pay to such Lender Party such additional amounts as will compensate such
Lender Party for such reduction.
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(c) Notwithstanding the foregoing provisions of this Section, a Lender Party shall not be entitled to compensation pursuant to
this Section in respect of any Competitive Loan if the adoption of or change in Law or in the interpretation thereof that would otherwise
entitle it to such compensation shall have been publicly announced prior to submission of the Competitive Bid pursuant to which such Loan
was made.
(d) Notwithstanding anything herein to the contrary (i) all requests, rules, guidelines, requirements and directives
promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority)
or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in
implementation thereof, shall in each case be deemed to be a change in Law, regardless of the date enacted, adopted, issued or implemented.
3.05
Breakfunding Costs. Subject to Section 3.06(a), upon demand of any Lender (with a copy to Administrative Agent)
from time to time, Borrower shall promptly compensate such Lender for and hold such Lender harmless from any actual loss, cost or expense
incurred by it as a result of:
Any Continuation, Conversion, payment or prepayment by Borrower of any Floating Rate Loan (other than a
Floating SONIA Rate Loan) or Fixed Rate Loan on a day other than the last day of the Interest Period for such Floating Rate Loan or Fixed
Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration or otherwise);
(a)
Any failure by Borrower (for a reason other than the failure of such Lender to make a Floating Rate Loan or Fixed
Rate Loan) to prepay, borrow, Continue or Convert any Floating Rate Loan (other than a Floating SONIA Rate Loan) or Fixed Rate Loan on
the date or in the amount notified by Borrower; or
(b)
or
(c)
Any failure by Borrower to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan;
(d)
In the event of (A) the payment of any principal of any Floating SONIA Rate Loan other than on the Applicable
Payment Date (including as a result of an Event of Default), (B) the failure (for a reason other than the failure of such Lender to make a
Floating SONIA Rate Loan) to borrow or prepay any Floating SONIA Rate Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked under Section 3.03 and is revoked in accordance therewith) or (C) the assignment
of any Floating SONIA Rate Loan other than on the Applicable Payment Date applicable thereto as a result of a request by the Borrower
pursuant to Section 10.04, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense (but not for any
lost profit) attributable to such event (it being understood that a certificate of such Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section 3.05(d) shall be delivered to the Borrower);
excluding any loss of anticipated profits but including any loss or expense arising from the liquidation or reemployment of funds obtained by
it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.
3.06 Matters Applicable to all Requests for Compensation.
(a)
A certificate of Administrative Agent or any Lender claiming compensation under this Section 3 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of clearly demonstrable error; provided that such
certificate (i) sets forth with reasonable specificity the calculation of the amount to be paid, (ii) states that Administrative Agent or such
Lender, as applicable, is treating substantially all similarly situated borrowers in a manner that is consistent with the treatment afforded
Borrower hereunder, (iii) is delivered within 90 days of the later of the date of the event giving rise to such compensation and the date
Administrative Agent or such Lender knew or, with the exercise of reasonable care, should have known of the requirements for such
53
compensation, and (iv) confirms (in the case of a claim for compensation under Section 3.01 or Section 3.04) that either a change in
Administrative Agent’s Office or Lending Office, as the case may be, of Administrative Agent or such Lender, as the case may be, would not
have eliminated the request for compensation or that such change would have been otherwise disadvantageous to Administrative Agent or
such Lender, as the case may be. In determining the amount of such compensation, Administrative Agent or any Lender may use any
reasonable averaging and attribution methods.
Upon any Lender becoming prohibited from making, maintaining or funding Floating Rate Loans pursuant to
Section 3.02, or upon any Lender making a claim for compensation under Section 3.01 or Section 3.04, Borrower may remove or replace
such Lender in accordance with Section 10.21.
(b)
Commitments and payment in full of all Obligations.
3.07
Survival. All of Borrower’s obligations under this Section 3 shall survive termination of the Revolving
SECTION 4
CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT
4.01
Conditions Precedent to Effective Date. The agreement of each Lender to make the initial Extension of Credit
requested to be made by it is subject to the satisfaction, on or before May 28, 2021, of the conditions precedent set forth in this Section 4.01
(all of which have been irrevocably satisfied or waived as of March 30, 2021):
Receipt by Administrative Agent of each of the following, each of which shall be originals, facsimiles or pdf copies
unless otherwise specified, each properly executed by a Responsible Officer of the applicable Loan Party, each dated on, or in the case of
third party certificates, recently before, the Effective Date and each in form and substance reasonably satisfactory to Administrative Agent:
(a)
(i)
Executed counterparts of (a) this Agreement, executed and delivered by Borrower, Administrative Agent and
each Person listed on Schedule 2.01 and (b) the Guarantee Agreement, executed and delivered by each Guarantor (provided
that the requirements of this clause (i) may be satisfied by customary written evidence reasonably satisfactory to
Administrative Agent (which may include electronic transmission of a signed signature page) that such party has signed a
counterpart to this Agreement or the Guarantee Agreement (as applicable));
(ii)
Administrative Agent shall have received a certificate of each Loan Party, dated the Effective Date and
executed by a secretary, assistant secretary or Responsible Officer thereof, which shall (A) certify that attached thereto are
(x) a true and complete copy of the certificate or articles of incorporation, formation or organization of such Loan Party
certified by the relevant authority of its jurisdiction of organization, which certificate or articles of incorporation, formation
or organization of such Loan Party attached thereto have not been amended (except as attached thereto) since the date
reflected thereon, (y) a true and correct copy of the by-laws or operating, management, partnership or similar agreement of
such Loan Party, together with all amendments thereto as of the Effective Date and such by-laws or operating, management,
partnership or similar agreement are in full force and effect and (z) a true and complete copy of the resolutions or written
consent, as applicable, of its board of directors, board of managers, sole member or other applicable governing body
authorizing the execution, delivery and performance of the Loan Documents, and, in the case of Borrower, the borrowings
and other obligations thereunder, which resolutions or consent have not been modified, rescinded or amended (other than as
attached thereto) and are in full force and effect, and (B) identify by name and title and bear the signatures of the officers,
managers, directors or authorized signatories of such Loan Party authorized to sign the Loan Documents to which such Loan
Party is a party on the Effective Date;
54
(iii) A certificate signed by a Responsible Officer of Borrower certifying (A) that the conditions specified in
Sections 4.01(e) and (f) have been satisfied and (B) that there has been no event or circumstance since the date of the
Reference Statements which has a Material Adverse Effect;
(iv) An opinion of counsel to Borrower in form and substance reasonably satisfactory to Administrative Agent;
and
(v)
All information requested by any Lender in writing at least ten Business Days prior to the Effective Date, to
the extent necessary to enable such Lender to identify Borrower and Guarantors to the extent required for compliance with
the PATRIOT Act or other “know your customer” rules and regulations (which requested information shall have been
received at least two Business Days prior to the Effective Date).
(b)
Any fees required to be paid on or before the Effective Date shall have been paid.
Administrative Agent shall have received notice that substantially simultaneously with the Effective Date, the
Existing Credit Agreements shall have been terminated in accordance with the terms of the Existing Credit Agreements, and all principal,
interest and fees owing thereunder shall have been paid.
(c)
(d)
[Reserved.]
The representations and warranties made by Borrower herein, or which are contained in any certificate, document or
financial or other statement furnished at any time under or in connection herewith or therewith, shall be correct in all material respects on and
as of the Effective Date.
(e)
(f)
No Default or Event of Default shall have occurred and be continuing.
extent invoiced prior to or on the Effective Date.
(g)
Unless waived by Administrative Agent, Borrower shall have paid all Attorney Costs of Administrative Agent to the
(including the initial Extension of Credit, but other than a Conversion or Continuation) is subject to the following conditions precedent:
4.02
Conditions to all Extensions of Credit. The obligation of each Lender to honor any Request for Extension of Credit
(a)
The representations and warranties of Borrower contained in Section 5 (other than Sections 5.04(b) and 5.05) of this
Agreement shall be correct in all material respects on and as of the date of such Extension of Credit as if made on and as of such date, except
to the extent any such representation and warranty specifically relates to any earlier date, in which case such representation and warranty
shall have been true and correct in all material respects on and as of such earlier date.
(b)
No Default or Event of Default exists, or would result from such Extension of Credit or the use thereof.
specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of such Extension of Credit.
Each Request for Extension of Credit by Borrower shall be deemed to be a representation and warranty that the conditions
4.03 Determinations Under Section 4.01. For purposes of determining compliance with the conditions specified in Section
4.01, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders. Administrative
Agent (or its counsel) shall promptly notify the Lenders and Borrower in writing of the occurrence of the Effective Date, which writing shall
be irrevocable and conclusive.
55
SECTION 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and Lenders that:
5.01
Existence and Qualification; Power; Compliance with Laws. Each of Borrower and each Guarantor (a) is a
corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the
state of its organization, and (b) is in compliance with all Laws, except to the extent that noncompliance does not have a Material Adverse
Effect.
5.02
Power; Authorization; Enforceable Obligations. Each Loan Party has the power and authority and the legal right to
execute, deliver and perform each Loan Document to which it is a party, and has taken all necessary organizational action to authorize the
execution, delivery and performance of each Loan Document to which it is a party. Except for such consents, authorizations, filings or other
acts which have been duly made or obtained and are in full force and effect, no consent or authorization of, filing with, or other act by or in
respect of any Governmental Authority is required for the due execution, delivery or performance of this Agreement or any of the other Loan
Documents, except as would not reasonably be expected to have a material adverse effect on the validity or enforceability of this Agreement
or the Guarantee Agreement. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto, and
constitutes a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
5.03
No Legal Bar. The execution, delivery, and performance by each Loan Party of the Loan Documents to which it is a
party do not and will not (a) violate or conflict with, or result in a breach of, or require any consent under (i) such Loan Party’s organizational
documents, (ii) any applicable Laws which has a Material Adverse Effect, or (iii) any Contractual Obligation, license or franchise of any
Loan Party or by which any Loan Party or its property is bound or subject, in each case with respect to this clause (iii), which has a Material
Adverse Effect or (b) constitute a default under any such Contractual Obligation, license or franchise which has a Material Adverse Effect.
5.04
Financial Statements; No Material Adverse Effect.
The Reference Statements fairly present, in all material respects, the financial condition of Borrower and its
consolidated Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.
(a)
Adverse Effect.
(b)
From December 31, 2020 to the Effective Date, there has been no event or circumstance which has a Material
5.05
Litigation. Except as disclosed in Borrower’s public filings prior to the Effective Date, no litigation, investigation or
proceeding of or before an arbitrator or Governmental Authority is pending or, to the knowledge of Borrower, threatened by or against
Borrower or any of its Restricted Subsidiaries or against any of their properties or revenues that has a Material Adverse Effect.
5.06
Use of Proceeds. Borrower will use the proceeds of the Extensions of Credit for general corporate purposes. No part
of the proceeds of any Extensions of Credit hereunder will be used for “purchasing” or “carrying” “margin stock” as so defined in a manner
which violates, or which would be inconsistent with, the provisions of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System.
reasonably designed to promote compliance by Borrower, its
5.07
Anti-Corruption Laws and Sanctions. Borrower has implemented and maintains in effect policies and procedures
56
Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and
Borrower, its Subsidiaries and to the knowledge of Borrower its officers, directors, employees and agents, are in compliance with Anti-
Corruption Laws and applicable Sanctions in all material respects. None of (a) Borrower, any Subsidiary or, to the knowledge of Borrower or
such Subsidiary, any of their respective directors, officers or employees, or (b) to the knowledge of Borrower, any agent of Borrower or any
Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.
a Material Adverse Effect.
5.08
ERISA. No ERISA Event has occurred or is reasonably expected to occur that would reasonably be expected to have
SECTION 6
AFFIRMATIVE COVENANTS
shall, and shall (except in the case of Borrower’s reporting covenants), cause each Restricted Subsidiary to:
So long as any Obligation remains unpaid, or any portion of the Revolving Commitments remains outstanding, Borrower
Agent:
6.01
Financial Statements. Deliver to Administrative Agent and Lenders, in form and detail satisfactory to Administrative
(a)
As soon as available but in any event within 105 days after the end of each fiscal year of Borrower, consolidated
balance sheets as at the end of such fiscal year and related consolidated statements of income and cash flows for such fiscal year of Borrower
and its consolidated Subsidiaries and certified by a Responsible Officer of Borrower, setting forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, audited and accompanied by a report and opinion of independent certified public accountants of
nationally recognized standing reasonably acceptable to Administrative Agent, which report and opinion shall not be subject to any “going
concern” qualification or qualifications as to the scope of the audit.
(b)
As soon as available, but in any event within 60 days after the end of each of the first three fiscal quarters of each
fiscal year of Borrower ending after the Effective Date, consolidated balance sheets as at the end of such fiscal quarter, and related
consolidated statements of income and cash flows for such fiscal quarter and for the portion of Borrower’s fiscal year then ended, of
Borrower and its consolidated Subsidiaries, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of
the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of Borrower and
its consolidated Subsidiaries in accordance with GAAP, subject only to pro forma adjustments and normal year-end audit adjustments.
(c)
Financial statements and other documents required to be delivered pursuant to this Section 6.01 or Section 6.02(b)
may be delivered electronically and if so delivered, shall be deemed to have been delivered (i) to the extent such documents are included in
materials otherwise filed with the U.S. Securities and Exchange Commission, when such filing is available to the Lenders on EDGAR or (ii)
in any case, on the date on which such documents are posted on Borrower’s behalf on an Internet website to which each Lender and
Administrative Agent has access.
Administrative Agent:
6.02
Certificates, Notices and Other Information. Deliver to Administrative Agent in form and detail satisfactory to
(a)
No later than the date required for the delivery of the financial statements referred to in Sections 6.01(a) and (b), a
duly completed Compliance Certificate (which shall include reconciliation of certain financial information with respect to the Restricted
Group) signed by a Responsible Officer of Borrower, which Compliance Certificate shall set forth the necessary adjustments to exclude the
Indebtedness and EBITDA attributed to Unrestricted Subsidiaries from the calculations set
57
forth therein and shall give pro forma effect to Material Acquisitions and Material Dispositions in accordance with Section 1.07;
Promptly after the same are available, copies of all annual, regular, periodic and special reports and registration
statements which Borrower may file with the Securities and Exchange Commission under Sections 13 or 15(d) of the Securities Exchange
Act of 1934, and not otherwise required to be delivered to Administrative Agent pursuant hereto;
(b)
Promptly after a Responsible Officer of Borrower obtaining actual knowledge of the occurrence thereof, notice of
any Default or Event of Default specifying the nature thereof and what action Borrower has taken, is taking or proposes to take with respect
thereto;
(c)
any ERISA Event that has a Material Adverse Effect; and
(d)
Promptly after a Responsible Officer of Borrower obtaining actual knowledge of the occurrence thereof, notice of
(e)
Promptly after such request, such other data and information as from time to time may be reasonably requested by
Administrative Agent or any Lender through Administrative Agent (it being understood that Borrower and its Subsidiaries shall not be
required to provide any information or documents that are subject to confidentiality provisions, the nature of which prohibit such disclosure,
or would violate any attorney-client privilege).
6.03
Payment of Taxes. Pay and discharge when due all taxes, assessments and governmental charges or levies imposed
on it or on its income or profits or any of its property, except for any such tax, assessment, charge or levy which is being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on its books in accordance with GAAP, and
except for such payments which, if not paid, do not in the aggregate, have a Material Adverse Effect.
Preservation of Existence. Preserve and maintain its existence, licenses, permits, rights, franchises and privileges
necessary or desirable in the normal conduct of its business, except where failure to do so does not have a Material Adverse Effect, and
except that nothing in this Section 6.04 shall prohibit any transaction permitted by Section 7.03.
6.04
Authority, noncompliance with which has a Material Adverse Effect.
6.05
Compliance With Laws. Comply with the requirements of all applicable Laws and orders of any Governmental
6.06
Inspection Rights. At any time during regular business hours, upon reasonable notice, and as often as reasonably
requested, but subject to Section 10.17, permit Administrative Agent or any Lender, or any employee, agent or representative thereof, to
examine (and during the existence of an Event of Default, make copies and abstracts from) the records and books of account of Borrower and
its Restricted Subsidiaries and to visit and inspect their properties and to discuss their affairs, finances and accounts with any of their officers
and key employees; provided that, other than during the continuance of an Event of Default, no more than one such examination, visit or
inspection shall occur during any calendar year. Notwithstanding the foregoing, it is understood and agreed that Borrower and its Subsidiaries
shall not be required to provide or otherwise allow access to any information or documents that are subject to confidentiality provisions, the
nature of which prohibit such disclosure, or would violate any attorney-client privilege.
which entries shall be made sufficient to permit the preparation of consolidated financial statements in accordance with GAAP.
6.07
Keeping of Records and Books of Account. Keep, in all material respects, proper books of record and account, in
6.08
Designation of Unrestricted Subsidiaries. So long as no Default or Event of Default exists or arises as a result thereof
and subject to the next succeeding sentence, Borrower may from time to time designate a Restricted Subsidiary as an Unrestricted Subsidiary
or designate an Unrestricted Subsidiary as a Restricted Subsidiary; provided that Borrower shall (a) provide Administrative Agent written
notification of such designation prior to or concurrently therewith (which written notification Administrative Agent will promptly forward to
Lenders), (b) if such designation is a
58
Material Acquisition (in the case of the designation of an Unrestricted Subsidiary as a Restricted Subsidiary) or a Material Disposition (in the
case of the designation of a Restricted Subsidiary as an Unrestricted Subsidiary), within 10 Business Days after such notification, deliver to
Administrative Agent a certificate, in form reasonably acceptable to Administrative Agent, demonstrating pro-forma compliance (in
accordance with Section 1.07) with Section 7.05 immediately prior to and after giving effect to such designation and (c) not designate as an
Unrestricted Subsidiary any Guarantor that is a Significant Subsidiary and that guarantees Material Debt unless such Guarantor is
simultaneously released from its guarantee of such Material Debt. Notwithstanding anything to the contrary contained herein, (x) each
Guarantor shall at all times be a Restricted Subsidiary for all purposes hereunder unless such Guarantor is simultaneously released as a
Guarantor upon such designation as contemplated pursuant to Section 6.10, (y) unless designated as an Unrestricted Subsidiary in compliance
with clause (z) below, each Cable Subsidiary shall at all times be a Restricted Subsidiary for all purposes hereunder, and (z) Borrower may
designate a Cable Subsidiary as an Unrestricted Subsidiary at any time when the Leverage Ratio (calculated after giving pro forma effect to
such designation) is less than or equal to 4.50 to 1.00. Borrower hereby designates the Subsidiaries listed on Schedule 6.08 as Unrestricted
Subsidiaries.
6.09
[Reserved].
6.10
Guarantors. Any time after the Effective Date, Borrower may cause any of its Subsidiaries to guarantee the
Obligations of Borrower hereunder by delivering to Administrative Agent an Assumption Agreement to the Guarantee Agreement, in form
set forth on Annex 1 to the Guarantee Agreement and executed by such proposed Guarantor. If, at any time following the Effective Date, a
Guarantor ceases to be a Restricted Subsidiary (including as a result of a redesignation of such Restricted Subsidiary as an Unrestricted
Subsidiary) or ceases to be a Subsidiary, in each case as a result of a transaction not otherwise prohibited hereunder, then such Guarantor’s
guarantee of the Obligations shall be automatically released and such Guarantor shall be automatically released from its obligations under the
Guarantee Agreement. In addition, if Borrower elects by notice in writing to Administrative Agent to cause such Guarantor to be released
from its guarantee of the Obligations, and a Responsible Officer of Borrower certifies in writing that immediately after giving effect to such
release, no Default or Event of Default shall have occurred and be continuing, then immediately upon the delivery of such notice and
certification to Administrative Agent such Guarantor’s guarantee of the Obligations shall be automatically released and such Guarantor shall
be automatically released from its obligations under the Guarantee Agreement. Notwithstanding the foregoing, no Guarantor that is a
Significant Subsidiary and that guarantees any Material Debt may be released from the Guarantee Agreement and its Guarantee Obligation
thereunder, including as a result of being designated as an Unrestricted Subsidiary, unless such Guarantor is simultaneously released from its
guarantee of such Material Debt. Administrative Agent shall execute such documents as Borrower shall reasonably request to evidence the
release contemplated by this Section 6.10.
SECTION 7
NEGATIVE COVENANTS
So long as any Obligations remain unpaid, or any portion of the Revolving Commitments remains outstanding:
Liens. Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly, incur, assume or
suffer to exist, any Lien securing Indebtedness for borrowed money (including without duplication Guaranty Obligations in respect thereof)
upon any of its property, assets or revenues, whether now owned or hereafter acquired, except:
7.01
(a)
Liens pursuant to any Loan Document;
Liens existing on the date hereof securing Indebtedness for borrowed money (including without duplication
Guaranty Obligations in respect thereof) that does not exceed $1,000,000,000 in the aggregate, and any renewals or extensions thereof,
provided that such Liens are not extended to cover any other property, assets or revenues;
(b)
(c)
Liens in favor of Borrower or any Restricted Subsidiary;
59
(d)
Liens on “margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System);
(e)
Liens on property acquired (by purchase, merger or otherwise) after the date hereof, existing at the time of
acquisition thereof (but not created in anticipation thereof), or placed thereon (at the time of such acquisition or within 180 days of such
acquisition to secure a portion of the purchase price thereof), and any renewals or extensions thereof, so long as the Indebtedness secured
thereby is permitted hereby; provided that such Liens do not and are not extended to cover any other property;
To the extent constituting Liens securing Indebtedness for borrowed money (including without duplication Guaranty
Obligations in respect thereof), Liens under Sale-Leaseback Transactions, and any renewals or extensions thereof, so long as the
Indebtedness secured thereby does not exceed $1,500,000,000 in the aggregate;
(f)
amount of the obligations secured thereby does not exceed $2,000,000,000 at any one time;
(g)
Liens arising in connection with asset securitization transactions, so long as the aggregate outstanding principal
Transactions;
(h)
Liens not otherwise permitted hereby which secure Indebtedness incurred pursuant to Asset Monetization
(i)
(A) Liens on any assets of the Sky Group which Liens (i) were existing as of the Sky Closing Date, (ii) were not
incurred to secure indebtedness financing the Sky Acquisition and (iii) do not extend to other assets other than (x) after acquired property that
is automatically subject to such Lien and (y) proceeds and products of such property and any replacement, improvement, accessions or
additions thereto and (B) any modification, replacement, refinancing, renewal or extension of such Lien (including prior to the date hereof);
and
(j)
other Liens, so long as the aggregate outstanding principal amount of the Indebtedness for borrowed money
(including without duplication Guaranty Obligations in respect thereof) secured thereby does not exceed at any time an amount equal to (x)
15% of Consolidated Net Worth minus (y) the amount, if any, of any unsecured Indebtedness incurred by any Restricted Subsidiary that is
not a Guarantor pursuant to Section 7.02(d).
Guarantors to create, incur, assume or permit to exist any Indebtedness, except:
7.02
Non-Guarantor Subsidiary Indebtedness. Borrower shall not permit any of its Restricted Subsidiaries that are not
renewals and replacements of such Indebtedness that do not increase the outstanding principal amount thereof;
(a)
Indebtedness existing on the date hereof, in an aggregate amount not in excess of $2,000,000,000, and all extensions,
(b)
Indebtedness of any Restricted Subsidiary to Borrower or any other Restricted Subsidiary;
(A) Indebtedness of the Sky Group that (i) was existing as of the Sky Closing Date and (ii) was not incurred to
finance the Sky Acquisition and (B) any modification, replacement, refinancing, renewal or extension of such Indebtedness (including prior
to the date hereof); and
(c)
Indebtedness in an aggregate principal amount for all such Restricted Subsidiaries that are not Guarantors not
exceeding at any time (x) 15% of Consolidated Net Worth minus (y) the amount, if any, of Indebtedness for borrowed money (including
without duplication Guaranty Obligations in respect thereof) of any Loan Party secured pursuant to Section 7.01(j).
(d)
up or dissolve itself or (C) sell, transfer or dispose of all or substantially
7.03
Fundamental Changes. Borrower shall not (A) merge or consolidate with or into any Person or (B) liquidate, wind-
60
all of its assets, provided that nothing in this Section 7.03 shall be construed to prohibit Borrower from reincorporating in another jurisdiction
permitted by clause (iii) below, changing its form of organization or merging or consolidating with or into, or selling or transferring all or
substantially all of its assets to, another Person so long as:
(i) either (x) Borrower shall be the surviving entity with substantially the same assets immediately following the
reincorporation or reorganization or (y) the surviving entity or transferee (the “Successor Entity”) shall, immediately following the
merger or transfer, as the case may be, (A) have substantially all of the assets of Borrower immediately preceding the merger or
transfer, as the case may be, (B) have duly assumed all of Borrower’s obligations hereunder and under the other Loan Documents
(and become the “Borrower” hereunder or thereunder) in form and substance satisfactory to Administrative Agent (and, if requested
by Administrative Agent, the Successor Entity shall have delivered an opinion of counsel as to the assumption of such obligations)
and (C) either (I) have then-effective ratings (or implied ratings) published by Moody’s or S&P applicable to such Successor Entity’s
senior, unsecured, non-credit-enhanced, long term indebtedness for borrowed money, which ratings shall be either Baa3 or higher (if
assigned by Moody’s) or BBB- or higher (if assigned by S&P) or (II) be acceptable to Required Lenders;
(ii) immediately after giving effect to such transaction no Default or Event of Default shall have occurred and be
continuing; and
(iii) the Borrower or a Successor Entity’s jurisdiction of organization shall be a state within the United States of America or
the District of Columbia.
7.04
Anti-Corruption Laws and Sanctions. Borrower will not request any Borrowing or Letter of Credit, and Borrower
shall not use, and shall not make available to its Subsidiaries and its or their respective directors, officers, employees and agents, the proceeds
of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or
facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent
permitted for a Person required to comply with Sanctions, or (C) in any manner that, to the knowledge of the Borrower, would result in the
violation of any Sanctions applicable to any party hereto in any material respect.
be greater than 5.75 to 1.00.
7.05
Financial Covenant. Borrower shall not permit the Leverage Ratio as of the end of any fiscal quarter of Borrower to
SECTION 8
EVENTS OF DEFAULT AND REMEDIES
8.01
Events of Default. Any one or more of the following events shall constitute an Event of Default:
(a)
than fees) on the date when due; or
Borrower fails to pay any principal on any of its Outstanding Revolving Obligations or Competitive Loans (other
Borrower fails to pay any interest on any of its Outstanding Revolving Obligations or Competitive Loans, or any
commitment fees, within five days after the date when due; or fails to pay any other fees or amount payable to Administrative Agent or any
Lender under any Loan Document within five days after the date when due or, if applicable, after demand is made for the payment thereof; or
(b)
(c)
Any default occurs in the observance or performance of any agreement contained in Section 6.02(c), 7.03 or 7.05; or
(c) above) contained in any Loan Document on its part to be performed
(d)
Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsections (a), (b) or
61
or observed and such failure continues for 30 days after notice thereof to Borrower from Administrative Agent or any Lender; or
Compliance Certificate proves to have been incorrect in any material respect when made or deemed made; or
(e)
Any representation or warranty by any Loan Party in this Agreement or any other Loan Document or any
(f)
(i) Borrower or any Restricted Subsidiary (x) defaults in any payment when due (giving effect to any stated grace
periods) of principal of or interest on any Indebtedness (other than the Obligations) having an aggregate principal amount in excess of the
Threshold Amount or (y) defaults in the observance or performance of any other agreement or condition relating to any Indebtedness (other
than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, and as a consequence,
Indebtedness having an aggregate principal amount in excess of the Threshold Amount shall have become due (automatically or otherwise)
or shall have been required to be redeemed prior to its stated maturity (provided that to the extent that any acceleration referred to in the
preceding provisions of this Section 8.01(f) is duly rescinded by the required holders of the applicable Indebtedness, such acceleration shall
cease to be an Event of Default hereunder, unless and except to the extent that Administrative Agent has theretofore exercised remedies
hereunder pursuant to Section 8.02), or (ii) Borrower or any Guarantor shall generally not pay its debts as they become due or shall admit in
writing its inability to pay its debts as they mature; provided that (1) clause (y) above shall not apply to any prepayment, redemption, purchase or
defeasance of any such Indebtedness incurred for the purpose of financing, in whole or in part, any acquisition if such prepayment, redemption,
purchase or defeasance is required to be made (A) as a result of such acquisition failing to be consummated or (B) with the proceeds of any sale or
other disposition of assets, any incurrence of any other Indebtedness or any issuance of any equity interests by the Borrower or any Restricted
Subsidiary and (2) clause (y) above shall not apply to any prepayment, redemption, purchase or defeasance of any such Indebtedness of any Person
acquired by the Borrower or any of its Subsidiaries after the date hereof if such prepayment, redemption, purchase or defeasance is required to be
made as a result of the consummation of such acquisition; or
(g)
Except as permitted by Section 6.10, the Guarantee Agreement, at any time after its execution and delivery and for
any reason other than the agreement of Required Lenders or all Lenders, as may be required hereunder, or satisfaction in full of all the
Obligations, ceases to be in full force and effect or is declared by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any material respect; or Borrower denies in writing that it has any or further liability or obligation under the Guarantee
Agreement, or purports to revoke, terminate or rescind the Guarantee Agreement in writing; or
A final non-appealable judgment against Borrower or any of its Significant Subsidiaries is entered for the payment
of money (which is not covered by insurance) in excess of the Threshold Amount if such judgment remains unsatisfied without procurement
of a stay of execution for 60 calendar days after the date of entry of such judgment; or
(h)
(i)
Borrower or any of its Significant Subsidiaries institutes or consents to the institution of any proceeding under
Debtor Relief Laws, or makes a general assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of that Person and
the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under Debtor Relief Laws relating to any such
Person or to all or any part of its property is instituted without the consent of that Person and continues undismissed or unstayed for 60
calendar days, or an order for relief is entered in any such proceeding; or
(j)
There occurs any Change of Control.
provided for elsewhere in this Agreement, or the other Loan Documents, or by applicable Law, or in equity, or otherwise:
8.02
Remedies Upon Event of Default. Without limiting any other rights or remedies of Administrative Agent or Lenders
62
(a)
in Section 8.01(i):
Upon the occurrence, and during the continuance, of any Event of Default other than an Event of Default described
(i)
Administrative Agent may, with the consent of the Required Lenders, and (subject to the terms of Section 9)
shall, upon the request of Required Lenders, terminate the Revolving Commitments and/or declare all or any part of the
unpaid principal of all Loans, all interest accrued and unpaid thereon and all other amounts payable under the Loan
Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable,
without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by
Borrower; and
(ii)
Administrative Agent may, with the consent of the Required Lenders, and (subject to the terms of Section 9)
shall, upon the request of Required Lenders, demand immediate payment by Borrower of an amount equal to the aggregate
amount of all outstanding Letter of Credit Usage to be held in a Letter of Credit Cash Collateral Account.
(b)
Upon the occurrence of any Event of Default described in Section 8.01(i):
(i)
The Revolving Commitments and all other obligations of Administrative Agent or Lenders shall
automatically terminate without notice to or demand upon Borrower, which is expressly waived by Borrower;
(ii)
The unpaid principal of all Loans, all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents shall be immediately due and payable, without protest, presentment, notice of dishonor, demand
or further notice of any kind, all of which are expressly waived by Borrower; and
(iii) An amount equal to the aggregate amount of all outstanding Letter of Credit Usage shall be immediately due
and payable to Administrative Agent without notice to or demand upon Borrower, which is expressly waived by Borrower, to
be held in a Letter of Credit Cash Collateral Account.
(c)
Upon the occurrence of any Event of Default, Administrative Agent may, with the consent of the Required Lenders,
and (subject to the terms of Section 9) shall, upon the request of Required Lenders, protect, exercise and enforce against Borrower the rights
and remedies of Administrative Agent and Lenders under the Loan Documents and such other rights and remedies as are provided by Law or
equity.
(d)
The order and manner in which Administrative Agent’s and Lenders’ rights and remedies are to be exercised shall be
determined by Administrative Agent or Required Lenders in their sole and absolute discretion. Regardless of how a Lender may treat
payments for the purpose of its own accounting, for the purpose of computing the Obligations hereunder, payments received during the
existence of an Event of Default shall be applied first, to costs and expenses (including Attorney Costs) incurred by Administrative Agent
and each Lender (to the extent that each Lender has a right to reimbursement thereof pursuant to the Loan Documents), second, to the
payment of accrued and unpaid interest on the Obligations to and including the date of such application, third, to the payment of, or as cash
collateral for, the unpaid principal of the Obligations, and fourth, to the payment of all other amounts (including fees) then owing to
Administrative Agent and Lenders under the Loan Documents, in each case paid pro rata to each Lender in the same proportions that the
aggregate Obligations owed to each Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to
all Lenders, without priority or preference among Lenders, subject to the last parenthetical of Section 2.01(a) of the Guarantee Agreement.
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SECTION 9
THE AGENTS
9.01
Appointment. Each Lender hereby irrevocably designates and appoints Administrative Agent as the agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes Administrative Agent, in such
capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers
and perform such duties as are expressly delegated to Administrative Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative Agent.
9.02
Delegation of Duties. Administrative Agent may execute any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
9.03
Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any
officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agents under or in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any
Loan Party a party thereto to perform its obligations hereunder or thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan Party.
9.04
Reliance by Administrative Agent. (a) Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to Borrower), independent accountants and other experts
selected by Administrative Agent. Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto
shall be binding upon all Lenders and all future holders of the Loans.
(b) For purposes of determining compliance with the conditions specified in Section 4.01, absent Requisite Notice by such
Lender to Administrative Agent to the contrary, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by Administrative Agent to each Lender for consent, approval, acceptance or
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satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender.
9.05
Notice of Default. Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless Administrative Agent has received notice from a Lender or Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that Administrative Agent
receives such a notice, Administrative Agent shall give notice thereof to Lenders. Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable
in the best interests of Lenders.
9.06
Acknowledgements of Lenders and Issuing Lenders. Each Lender and each Issuing Lender represents and
warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding
commercial loans and in providing other facilities set forth herein as may be applicable to such Lender or Issuing Lender, in each case in the
ordinary course of business and is making the Loans hereunder as commercial loans in the ordinary course of its business, and not for the
purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender and each Issuing Lender agrees not to
assert a claim in contravention of the foregoing), (iii) it has, independently and without reliance upon the Administrative Agent, any Person
identified on the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner, any Syndication Agent, any Co-
Documentation Agent or any other Lender or Issuing Lender, or any of the Affiliates and directors, officers, employees, agents and advisors
of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder and (iv) it is sophisticated with respect to
decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender
or such Issuing Lender, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial
loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other
facilities. Each Lender and each Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative
Agent, any Person identified on the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner, any Syndication Agent,
any Co-Documentation Agent or any other Lender or Issuing Lender, or any of the Affiliates and directors, officers, employees, agents and
advisors of any of the foregoing, and based on such documents and information (which may contain material, non-public information within
the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.
(b)
Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature
page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed
to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to,
or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date.
(c)
Each Lender and Issuing Lender hereby agrees that (x) if the Administrative Agent notifies such Lender or Issuing
Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender or Issuing Lender from the
Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise;
individually and collectively, a “Payment”) were erroneously transmitted to such Lender or Issuing Lender (whether or not known to such
Lender or Issuing Lender), and demands the return of such Payment (or a portion thereof), such Lender or Issuing Lender shall promptly, but
in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as
to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such
Payment (or portion
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thereof) was received by such Lender or Issuing Lender to the date such amount is repaid to the Administrative Agent at the greater of the
NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from
time to time in effect, and (y) to the extent permitted by applicable law, such Lender or Issuing Lender shall not assert, and hereby waives, as
to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or
counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on
“discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender or Issuing Lender under this Section
9.06(c) shall be conclusive, absent manifest error.
(ii)
Each Lender and Issuing Lender hereby further agrees that if it receives a Payment from the Administrative Agent or
any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the
Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or
accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment.
Each Lender and Issuing Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may
have been sent in error, such Lender or Issuing Lender shall promptly notify the Administrative Agent of such occurrence and, upon
demand from the Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter, return to the
Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds,
together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by
such Lender or Issuing Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a
rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time
in effect.
(iii)
In the event that an erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any
reason, after demand therefor by the Administrative Agent in accordance with immediately preceding clause (i), from any Lender or
Issuing Bank that has received such erroneous Payment (or portion thereof) (such unrecovered amount, an “Erroneous Payment
Return Deficiency”), upon the Administrative Agent’s notice to such Lender or Issuing Lender at any time, (i) such Lender or Issuing
Bank shall be deemed to have assigned its Loans (but not its Revolving Commitments or Letter of Credit Commitments) with respect
to which such Erroneous Payment was made (the “Erroneous Payment Impacted Loan”) in an amount equal to the Erroneous Payment
Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Revolving
Commitments or Letter of Credit Commitments) of the Erroneous Payment Impacted Loans, the “Erroneous Payment Deficiency
Assignment”) at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such
instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Assumption with respect to
such Erroneous Payment Deficiency Assignment, and such Lender or Issuing Bank shall deliver any Notes evidencing such Loans to
the Borrower or the Administrative Agent, (ii) the Administrative Agent as the assignee Lender shall be deemed to acquire the
Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender
shall become a Lender or Issuing Bank, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and
the assigning Lender or assigning Issuing Bank shall cease to be a Lender or Issuing Bank, as applicable, hereunder with respect to
such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification
provisions of this Agreement and its applicable Revolving Commitments and Letter of Credit Commitments which shall survive as to
such assigning Lender or assigning Issuing Bank and (iv) the Administrative Agent may reflect in the Register its ownership interest
in the Loans subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency
Assignment will reduce the Revolving Commitments or Letter of Credit Commitments of any Lender or Issuing Bank and such
Revolving Commitments and Letter of Credit Commitments shall remain available in accordance with the terms of this Agreement.
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(iv)
The Borrower and each other Loan Party hereby agrees that an erroneous Payment shall not pay, prepay, repay,
discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party; provided that clause (iii) (above) and
this clause (iv) shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the
due date for), the Obligations of the Loan Parties relative to the amount (and/or timing for payment) of the Obligations that would
have been payable had such erroneous Payment not been made by the Administrative Agent; provided, further, that for the avoidance
of doubt, clause (iii) (above) and this clause (iv) shall not apply to the extent any such Payment is, and solely with respect to the
amount of such Payment that is, comprised of funds received by the Administrative Agent from the Borrower or any other Loan Party
for the purpose of making such Payment.
(v)
Each party’s obligations under this Section 9.06(c) shall survive the resignation or replacement of the Administrative
Agent or any transfer of rights or obligations by, or the replacement of, a Lender or Issuing Lender, the termination of the
Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.
9.07
Indemnification. Lenders agree to indemnify each Agent and Issuing Lender in its capacity as such (to the extent not
reimbursed by the Loan Parties and without limiting the obligation of any Loan Party to do so), ratably according to their respective
Aggregate Exposure Percentage in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Revolving Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentage immediately prior to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before
or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of, the
Revolving Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent’s gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
9.08
Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party and its affiliates as though such Agent were not an Agent. With respect to its Loans made
or renewed by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms
“Lender” and “Lenders” shall include each Agent in its individual capacity.
9.09
Successor Administrative Agent. Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
Lenders and Borrower. If Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents,
then the Required Lenders shall appoint from among Lenders a successor agent for Lenders, which successor agent shall (unless an Event of
Default under Section 8.01(a), Section 8.01(b) or Section 8.01(i) with respect to Borrower shall have occurred and be continuing) be subject
to approval by Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to
the rights, powers and duties of Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement
or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective, and Lenders shall assume and perform all of the duties of Administrative Agent hereunder until such time, if any, as the
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Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Loan Documents.
9.10
Co-Documentation Agents and Syndication Agent. None of Co-Documentation Agents nor Syndication Agent nor
any Person identified on the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner shall have any right, power,
obligation, liability, responsibility or duty hereunder in its capacity as such. Without limiting the foregoing, none of Co-Documentation
Agents or Syndication Agent in its capacity as such shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of Co-Documentation Agents or Syndication Agent in deciding to enter into this
Agreement or in taking or not taking action hereunder.
9.11
Certain ERISA Matters. Each Lender (x) represents and warrants, as of the date such Person became a Lender party
hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party
hereto, for the benefit of, the Administrative Agent, each Co-Documentation Agent, the Syndication Agent, any of the Persons identified on
the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner and their respective Affiliates, and not, for the avoidance of
doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:
(i)
such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more
Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,
(ii)
the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain
transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving
insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset
managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of
the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii)
(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the
meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf
of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and
this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit,
the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and
(D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect
to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement, or
(iv)
such other representation, warranty and covenant as may be agreed in writing between the Administrative
Agent, in its sole discretion, and such Lender.
(b)
In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such
Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a),
such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date
such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative
Agent, each Co-Documentation Agent, the Syndication
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Agent, each Person identified on the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner and their respective
Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that none of the Administrative
Agent, the Co-Documentation Agents, the Syndication Agent, the Persons identified on the cover page of this Agreement as a Joint Lead
Arranger and Joint Bookrunner or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in
connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any
documents related to hereto or thereto).
(c)
The Administrative Agent, each Co-Documentation Agent, the Syndication Agent, and each Person identified on the
cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner hereby informs the Lenders that each such Person is not
undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby,
and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive
interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Agreement and any other Loan Documents
(ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid
for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in
connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees,
arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees,
utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing
fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.
SECTION 10
MISCELLANEOUS
10.01 Amendments; Consents. Subject to Section 3.03(b), (c), (d), (e), (f) and (g), no amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent
thereunder, and no consent to any departure by any Loan Party therefrom shall be effective unless in writing signed by each Loan Party party
thereto and Required Lenders and acknowledged by Administrative Agent (or signed by Administrative Agent with the prior written consent
of Required Lenders), and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. Notwithstanding the foregoing sentence, without the approval in writing of Borrower, Administrative Agent and each Lender directly
and adversely affected thereby, no amendment, modification, supplement, termination, waiver, approval, or consent may be effective to:
Lender;
(a)
Reduce the amount of principal of any Outstanding Revolving Obligations or Competitive Loans owed to such
Reduce the rate of interest payable on any Outstanding Revolving Obligations or Competitive Loans owed to such
Lender or the amount or rate of any fee or other amount payable to such Lender under the Loan Documents, except that Required Lenders
may waive or defer the imposition of the Default Rate;
(b)
fee, or any other amount payable to such Lender under the Loan Documents;
(c)
Waive an Event of Default consisting of the failure of Borrower to pay when due principal, interest, any commitment
(d)
Postpone any date scheduled for the payment of principal of, or interest on, any Loan or any Letter of Credit
reimbursement obligation or for the payment of any commitment fee or for the payment of any other amount, in each case payable to such
Lender under the Loan Documents, or extend the term of, or increase the amount of, such Lender’s Revolving Commitment (it being
understood that a waiver of any Event of Default not referred to in subsection (c) above shall require only the consent
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of Required Lenders) or modify such Lender’s share of the Revolving Commitments (except as contemplated hereby);
manner that would alter the “pro rata sharing” provisions thereof); or
(e)
Amend or waive the definition of “Required Lenders” or the provisions of this Section 10.01 or Section 10.06 (in a
(f)
Amend or waive any provision of this Agreement that expressly requires the consent or approval of such Lender;
provided, however, that (i) no amendment, waiver or consent shall, unless in writing and signed by the affected Issuing Lender in addition to
Required Lenders or each affected Lender, as the case may be, affect the rights or duties of such Issuing Lender, (ii) no amendment, waiver or
consent shall, unless in writing and signed by Administrative Agent in addition to Required Lenders or each affected Lender, as the case may
be, affect the rights or duties of Administrative Agent, (iii) any fee letters may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto, (iv) any amendment, waiver, or consent to a Letter of Credit Application which is not inconsistent
with Section 2.03 shall require only the written approval of Borrower, Administrative Agent and the applicable Issuing Lender, (v) except as
otherwise contemplated hereunder (including by Section 6.10), without the written consent of all Lenders, no amendment, waiver or consent
shall release all or substantially all of Guarantors from their obligations under the Guarantee Agreement and (vi) without the written consent
of all Lenders, no amendment, waiver or consent shall add an Alternative Currency or change the currency of any Loan or other amount
outstanding hereunder. Notwithstanding anything to the contrary contained in this Section 10.01 or any other provision of this Agreement or
any provision of any other Loan Document (1) the Borrower and the Administrative Agent may, without the input or consent of any other
Person, effect amendments to this Agreement and the other Loan Documents as may be necessary or advisable, in the reasonable opinion of
the Administrative Agent and the Borrower, to effect the provisions of Sections 3.03(b), (c), (d), (e), (f) and (g) and/or Section 7.03, and (2)
without limiting the preceding clause (1), any provision of this Agreement may be amended by an agreement in writing entered into by the
Borrower and the Administrative Agent to cure any ambiguity, omission, defect or inconsistency, or to make changes solely of a technical or
administrative nature, so long as, in each case of this clause (2), the Lenders and the Issuing Banks shall have received at least ten Business
Days’ prior written notice thereof and the Administrative Agent shall not have received, within ten Business Days of the date of such notice
to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.
In the event that any Lender does not consent to any proposed amendment, supplement, modification (including the addition of an
Alternative Currency), consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of each of
the Lenders or each of the Lenders directly and adversely affected thereby, so long as the consent of Required Lenders has been obtained,
Borrower shall be permitted to remove or replace such Lender in accordance with Section 10.21.
Any amendment, modification, supplement, termination, waiver or consent pursuant to this Section shall apply equally to, and shall be
binding upon, all Lenders and Administrative Agent.
For the avoidance of doubt, the Letter of Credit Commitment of any Issuing Lender may be amended with the consent of Borrower and such
Issuing Lender without the need to obtain the consent of the other Lenders.
10.02 Requisite Notice; Electronic Communications.
(a)
Requisite Notice. Notices given in connection with any Loan Document shall be delivered to the intended recipient
at the number and/or address (including email address) set forth in the case of Borrower, Administrative Agent and Issuing Lenders on
Schedule 10.02, and in the case of Lenders, on the Administrative Questionnaire (or as otherwise specified from time to time by such
recipient in writing to Administrative Agent) and shall be given by (i) irrevocable written notice or (ii) except as otherwise provided,
irrevocable telephonic (not voicemail) notice. Such notices may be delivered and shall be effective as follows:
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Mode of Delivery
Mail
Courier or hand delivery
Telephone (not voicemail)
Facsimile
Electronic Mail
Effective on earlier of actual receipt and fourth Business Day after
deposit in U.S. Mail, first class postage pre-paid
When received
When conversation completed (must be confirmed in writing)
When sent (except that, if not given during normal business hours
for the recipient, shall be deemed to be giving at opening of
business on next Business Day for recipient)
When delivered (usage subject to subsection (b) below)
(b)
Usage of Electronic Communications. Notices and other communications to Administrative Agent, the Lenders and
the Issuing Lender hereunder may be delivered or furnished by using Electronic Systems pursuant to procedures approved by Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 if such Lender has notified Administrative Agent and
Borrower that it is incapable of receiving notices under such Section by Electronic Communications. Administrative Agent or Borrower may,
in its discretion, agree to accept notices and other communications to it hereunder by Electronic Communications pursuant to procedures
approved by it; provided that approval of such procedures may be limited to particular notices or communications.
Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an email address shall be
deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return email or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both
clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
notice to the other parties hereto.
(c)
Any party hereto may change its address or telecopy number for notices and other communications hereunder by
(d)
Reliance by Administrative Agent and Lenders. Administrative Agent and Lenders shall be entitled to rely and act
upon any notices purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other notice specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Borrower shall indemnify Administrative Agent-Related Persons and Lenders from any loss, cost,
expense or liability as a result of relying on any notices purportedly given by or on behalf of Borrower absent the gross negligence or willful
misconduct of the Person seeking indemnification.
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(e)
Electronic Systems.
(i)
Each Loan Party agrees that Administrative Agent may, but shall not be obligated to, make Communications
available to the Issuing Lenders and the other Lenders by posting the Communications on Debt Domain, Intralinks,
Syndtrak, ClearPar or a substantially similar Electronic System.
(ii)
Any Electronic System used by Administrative Agent is provided “as is” and “as available.” The Agent
Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of
merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code
defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall
Administrative Agent or any of its Affiliates and its and their respective directors, officers, employees, agents and advisors
(collectively, the “Agent Parties”) have any liability to Borrower or the other Loan Parties, any Lender, the Issuing Lender or
any other Person or entity for damages of any kind arising out of Borrower’s, any Loan Party’s or Administrative Agent’s
transmission of Communications through an Electronic System, except to the extent such damages arise from bad faith, gross
negligence or willful misconduct on the part of any Agent Party as determined by a final non-appealable judgment of a court
of competent jurisdiction, provided that in no event shall any Agent Party be liable for any indirect, special, incidental or
consequential damages, losses or expenses (whether in tort, contract or otherwise).
10.03 Attorney Costs and Expenses. Borrower agrees (a) to pay or reimburse Administrative Agent, each Issuing Lender
and Syndication Agent for all reasonable and documented costs and expenses incurred in connection with the development, preparation,
negotiation and execution of the Loan Documents, and to pay or reimburse Administrative Agent for all reasonable and documented costs
and expenses incurred in connection with the development, preparation, negotiation and execution of any amendment, waiver, consent,
supplement or modification to, any Loan Documents, and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs of one counsel to
Administrative Agent, each Issuing Lender and Syndication Agent and (b) to pay or reimburse Administrative Agent, each Issuing Lender
and each Lender for all reasonable and documented costs and expenses incurred in connection with any restructuring, reorganization
(including a bankruptcy reorganization) or enforcement or attempted enforcement of, or preservation of any rights under, any Loan
Documents, and any other documents prepared in connection herewith or therewith, or in connection with any refinancing or restructuring of
any such documents in the nature of a “workout” or of any insolvency or bankruptcy proceeding, including Attorney Costs of one counsel to
Administrative Agent, each Issuing Lender and each Lender (and, if representation of Administrative Agent, each Issuing Lender and each
Lender in such matter by a single counsel would be inappropriate based on the advice of legal counsel due to the existence of an actual or
potential conflict of interest, of another firm of counsel for such affected Person(s) (taken as a whole) and, if necessary, one firm of local
counsel in any relevant local jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for such affected
Person(s)). The agreements in this Section shall survive repayment of all Obligations.
10.04 Binding Effect; Assignment.
(a)
This Agreement and the other Loan Documents to which Borrower is a party will be binding upon and inure to the
benefit of Borrower, Administrative Agent, Lenders and their respective successors and assigns, except that, Borrower may not, except as
permitted by Section 7.03, assign its rights hereunder or thereunder or any interest herein or therein without the prior written consent of all
Lenders and any such attempted assignment shall be void. Any Lender may at any time pledge a Note or any other instrument evidencing its
rights as a Lender under this Agreement (including to a Federal Reserve Bank or other central bank having jurisdiction over such Lender or,
if such Lender is a fund, to any trustee or to any other representative of holders of obligations owed or securities issued by such fund as
security for such obligations or securities) but no such pledge shall release such Lender from its
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obligations hereunder or grant to any such pledgee the rights of a Lender hereunder absent foreclosure of such pledge, and any transfer to any
Person upon the enforcement of such pledge shall be subject to this Section 10.04.
(b)
From time to time following the date of this Agreement, each Lender may assign all or any portion of its rights and
obligations under this Agreement and the other Loan Documents to one or more Eligible Assignees, other than (i) Borrower and its
Subsidiaries and (ii) natural persons; provided that such assignment shall be subject to Borrower’s consent (which shall not be unreasonably
withheld) at all times other than during the existence of an Event of Default arising under Section 8.01(a), Section 8.01(b) or Section 8.01(i)
and the consent of Administrative Agent and Issuing Lenders (which consents shall not be unreasonably withheld); provided that the consent
of Borrower shall not be required with respect to an assignment to another Lender unless such assignment, would result in the Revolving
Commitment of such assignee and its Affiliates exceeding 15% of the aggregate Revolving Commitments, as applicable, then outstanding.
No such assignment shall become effective unless and until a copy of a duly signed and completed Assignment and Assumption shall be
delivered to Administrative Agent. Except in the case of an assignment (A) to another Lender or (B) of the entire remaining Revolving
Commitment of the assigning Lender, such assignment shall be in an aggregate principal amount not less than the Minimum Amount therefor
without the consent of Borrower and Administrative Agent. The effective date of any assignment shall be as specified in the Assignment and
Assumption, but not earlier than the date which is five Business Days after the date Administrative Agent has received the Assignment and
Assumption. Upon obtaining any consent required as set forth this paragraph, any forms required by Section 10.20 and payment of the
requisite fee described below, the assignee named therein shall be a Lender for all purposes of this Agreement to the extent of the Assigned
Interest (as defined in such Assignment and Assumption), and, except for rights and obligations which by their terms survive termination of
any Revolving Commitments, the assigning Lender shall be released from any further obligations under this Agreement to the extent of such
Assigned Interest. Upon request, Borrower shall execute and deliver new or replacement Notes to the assigning Lender and the assignee
Lender to evidence Loans made by them. Administrative Agent’s consent to any assignment shall not be deemed to constitute any
representation or warranty by any Administrative Agent-Related Person as to any matter. Administrative Agent shall record the information
contained in the Assignment and Assumption in the Register.
(c)
After receipt of a completed Assignment and Assumption, and receipt of an assignment fee of $3,500 from such
assignee and/or such assigning Lender (including in the case of assignments to Affiliates of assigning Lenders), Administrative Agent shall
promptly accept such Assignment and Assumption and record the information contained therein in the Register on the effective date
determined pursuant thereto.
(d)
Each Lender may from time to time, without the consent of any other Person, grant participations to one or more
other Persons that are Eligible Assignees (including another Lender but excluding (x) Borrower and its Subsidiaries and (y) natural persons)
in all or any portion of its Loans, Revolving Commitments, Extensions of Credit or any other interest of such Lender hereunder and under the
other Loan Documents; provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating bank or other
financial institution shall not be a Lender hereunder for any purpose except, if the participation agreement so provides, for the purposes of the
increased cost provisions (including yield protection and taxes) of Section 3 (but only to the extent that the cost of such benefits to Borrower
does not exceed the cost which Borrower would have incurred in respect of such Lender absent the participation) and for purposes of Section
10.06, (iv) Borrower, Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement, and (v) the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents; provided, however, that the assigning Lender may, in any
agreement with a participant, give such participant the right to consent (as between the assigning Lender and such participant) to any matter
which (A) extends the Revolving Termination Date as to such participant or any other date upon which any payment of money is due to such
participant, (B) reduces the rate of interest owing to such participant or any fee or any other monetary amount owing to such participant, or
(C) reduces the amount of any scheduled payment of principal owing to such participant. Any Lender that sells a participation to
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any Person that is a “foreign corporation, partnership or trust” within the meaning of the Code shall include in its participation agreement
with such Person a covenant by such Person that such Person will comply with the provisions of Section 10.20 as if such Person were a
Lender and provide that Administrative Agent and Borrower shall be third party beneficiaries of such covenant. Each Lender that sells or
grants a participation shall (a) withhold or deduct from each payment to the holder of such participation the amount of any tax required under
applicable law to be withheld or deducted from such payment and not withheld or deducted therefrom by Borrower or Administrative Agent,
(b) pay the tax so withheld or deducted by it to the appropriate taxing authority in accordance with applicable law and (c) indemnify
Borrower and Administrative Agent for any losses, cost and expenses that they may incur as a result of any failure to so withhold or deduct
and pay such tax.
Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a
register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s
interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a
participant’s interest in any Revolving Commitments, Extensions of Credit or its other obligations under any Loan Document) to any Person
except to the extent that such disclosure is necessary to establish that such Revolving Commitments, Extensions of Credit or other obligation
is in registered form under Section 5f.103-1 (c) of the United States Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of
such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative
Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
10.05 Set-off. In addition to any rights and remedies of Administrative Agent and Lenders or any assignee of any Lender
or any Affiliate thereof (each, a “Proceeding Party”) provided by law, upon the occurrence and during the continuance of any Event of
Default, each Proceeding Party is authorized at any time and from time to time, without prior notice to Borrower, any such notice being
waived by Borrower to the fullest extent permitted by law, to proceed directly, by right of set-off, banker’s lien or otherwise, against any
assets of Borrower which may be in the hands of such Proceeding Party (including all general or special, time or demand, provisional or
other deposits and other indebtedness owing by such Proceeding Party to or for the credit or the account of Borrower) and apply such assets
against the Obligations then due and payable, irrespective of whether such Proceeding Party shall have made any demand therefor. Each
Lender agrees promptly to notify Borrower and Administrative Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of such set-off and application.
10.06 Sharing of Payments. Each Lender severally agrees that if it, through the exercise of any right of setoff, banker’s lien
or counterclaim against Borrower or otherwise, receives payment of the Obligations held by it that is ratably more than any other Lender
receives in payment of the Obligations held by such other Lender, then, subject to applicable Laws, (a) such Lender exercising the right of
setoff, banker’s lien or counterclaim or otherwise receiving such payment shall purchase, and shall be deemed to have simultaneously
purchased, from the other Lender a participation in the Obligations held by the other Lender and shall pay to the other Lender a purchase
price in an amount so that the share of the Obligations held by each Lender after the exercise of the right of setoff, banker’s lien or
counterclaim or receipt of payment shall be in the same proportion that existed prior to the exercise of the right of setoff, banker’s lien or
counterclaim or receipt of payment; and (b) such other adjustments and purchases of participations shall be made from time to time as shall
be equitable to ensure that all Lenders share any payment obtained in respect of the Obligations ratably in accordance with each Lender’s
share of the Obligations immediately prior to, and without taking into account, the payment; provided that, (i) if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of setoff, banker’s lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by Borrower or any Person claiming through or succeeding to the rights of Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be restored to the extent of the recovery, but without interest and (ii) this
Section 10.06 shall not apply to any payments made in accordance with the express provisions of this Agreement or the other Loan
Documents. Each Lender that purchases a
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participation in the Obligations pursuant to this Section shall from and after the purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as
though the purchasing Lender were the original owner of the Obligations purchased. Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in an Obligation so purchased may exercise any and all rights of setoff,
banker’s lien or counterclaim with respect to the participation as fully as if Lender were the original owner of the Obligation purchased.
10.07 No Waiver; Cumulative Remedies.
(a)
No failure by any Lender or Administrative Agent to exercise, and no delay by any Lender or Administrative Agent
in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege under any Loan Document preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
(b)
The rights, remedies, powers and privileges herein or therein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law. Any decision by Administrative Agent or any Lender not to require payment of any
interest (including interest at the Default Rate), fee, cost or other amount payable under any Loan Document or to calculate any amount
payable by a particular method on any occasion shall in no way limit or be deemed a waiver of Administrative Agent’s or such Lender’s right
to require full payment thereof, or to calculate an amount payable by another method that is not inconsistent with this Agreement, on any
other or subsequent occasion.
Lenders.
(c)
Except with respect to Section 9.09, the terms and conditions of Section 9 are for the sole benefit of the Agents and
10.08 Usury. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excessive interest
shall be applied to the principal of the Outstanding Revolving Obligations or, if it exceeds the unpaid principal, refunded to Borrower. In
determining whether the interest contracted for, charged or received by Administrative Agent or any Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate and spread, in equal or
unequal parts, the total amount of interest throughout the contemplated term of the Obligations.
original, but all of which together shall constitute one and the same instrument.
10.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an
(b)
Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or
(z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to
Section 10.02), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the
transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy,
emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a
manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words
“execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or
any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form
(including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page),
each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the
use of a paper-based recordkeeping system, as the case may be;
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provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior
consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative
Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such
Electronic Signature purportedly given by or on behalf of the Borrower or any other Loan Party without further verification thereof and
without any obligation to review the appearance or form of any such Electronic signature and (ii) upon the request of the Administrative
Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart.
10.10
Integration. This Agreement, together with the other Loan Documents and any letter agreements referred to herein,
comprises the complete and integrated agreement of the parties regarding the subject matter hereof and supersedes all prior agreements,
written or oral, on the subject matter hereof. In the event of any conflict between the provisions of this Agreement and those of any other
Loan Document, the provisions of this Agreement shall control and govern; provided that the inclusion of supplemental rights or remedies in
favor of Administrative Agent or Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan
Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any
party, but rather in accordance with the fair meaning thereof. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
SUCH PARTIES.
10.11 Nature of Lenders’ Obligations. Nothing contained in this Agreement or any other Loan Document and no action
taken by Administrative Agent or Lenders or any of them pursuant hereto or thereto may, or may be deemed to, make Lenders a partnership,
an association, a joint venture or other entity, either among themselves or with Borrower or any Subsidiary or Affiliate of Borrower. Each
Lender’s obligation to make any Extension of Credit pursuant hereto is several and not joint or joint and several. A default by any Lender
will not increase the Revolving Commitments attributable to any other Lender.
10.12 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other
Loan Document shall survive the execution and delivery thereof. Such representations and warranties have been or will be relied upon by
Administrative Agent and each Lender, notwithstanding any investigation made by Administrative Agent or any Lender or on their behalf.
10.13
Indemnity by Borrower. Whether or not the transactions contemplated hereby are consummated, Borrower agrees to
indemnify, save and hold harmless each Administrative Agent-Related Person, each other Agent, each Person identified on the cover page of
this Agreement as a Joint Lead Arranger and Joint Bookrunner, each Issuing Lender and each Lender and their respective Affiliates and their
and their Affiliates’ respective directors, officers, agents, attorneys and employees (collectively the “Indemnitees”) from and against: (i) any
and all claims, demands, actions or causes of action that are asserted against any Indemnitee by any Person relating directly or indirectly to a
claim, demand, action or cause of action that such Person asserts or may assert against Borrower, any of its Affiliates or any of its officers or
directors; (ii) any and all claims, demands, actions or causes of action arising out of or relating to the Loan Documents, the Revolving
Commitments, the use or contemplated use of the proceeds of any Extension of Credit, or the relationship of Borrower, Administrative Agent
and Lenders under this Agreement; (iii) any administrative or investigative proceeding by any Governmental Authority arising out of or
related to a claim, demand, action or cause of action described in clauses (i) or (ii) above; and (iv) any and all liabilities (including liabilities
under indemnities), losses, costs or expenses (including Attorney Costs (limited to one law firm for Lenders unless Lenders have differing
interests or defenses that preclude the engagement of one law firm to represent Lenders)), that any Indemnitee suffers or incurs as a result of
the assertion of any foregoing claim, demand, action, cause of action or proceeding, or as a result of the preparation of any defense in
connection with any foregoing claim, demand, action, cause of action or proceeding, in all cases, including settlement costs incurred with the
prior written consent of Borrower (which consent shall not be unreasonably withheld), whether or not arising out of the negligence of an
Indemnitee, and whether or not an Indemnitee is a party to such claim, demand, action,
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cause of action or proceeding (all the foregoing, collectively, the “Indemnified Liabilities”); provided that no Indemnitee shall be entitled to
indemnification for any Indemnified Liability to the extent (i) it is found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from (x) the bad faith, willful misconduct or gross negligence of such Indemnitee or (y) a material breach by such
Indemnitee of its express obligations under this Agreement; or (ii) not resulting from an act or omission of Borrower or any of its Affiliates in
respect of a claim, litigation, investigation or proceeding by one Lender against another Lender (in each case, for the avoidance of doubt,
excluding each of the Agents and each Person identified on the cover page of this Agreement as a Joint Lead Arranger and Joint Bookrunner
in each case in its capacity as such). In no event shall any Indemnitee be liable for any damages arising from the use by unauthorized Persons
of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted
by such Persons except to the extent it is found by a final, non-appealable judgment of a court of competent jurisdiction to arise from the bad
faith, willful misconduct or gross negligence of such Indemnitee. This Section 10.13 shall not apply with respect to taxes other than any taxes
that represent losses, claims, damages, etc. arising from any non-tax claim. The agreements in this Section shall survive repayment of all
Obligations.
10.14 Nonliability of Lenders. Borrower acknowledges and agrees that:
Any inspections of any property of Borrower made by or through Administrative Agent or Lenders are for purposes
of administration of the Loan Documents only, and Borrower is not entitled to rely upon the same (whether or not such inspections are at the
expense of Borrower);
(a)
(b)
By accepting or approving anything required to be observed, performed, fulfilled or given to Administrative Agent
or Lenders pursuant to the Loan Documents, neither Administrative Agent nor Lenders shall be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval
thereof shall not constitute a warranty or representation to anyone with respect thereto by Administrative Agent or Lenders;
(c)
The relationship between Borrower and Administrative Agent and Lenders is, and shall at all times remain, solely
that of borrower and lenders; neither Administrative Agent nor any Lender undertakes or assumes any responsibility or duty to Borrower or
its Affiliates to select, review, inspect, supervise, pass judgment upon or inform Borrower or its Affiliates of any matter in connection with
their property or the operations of Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely upon their own judgment with
respect to such matters; and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by
Administrative Agent or any Lender in connection with such matters is solely for the protection of Administrative Agent and Lenders and
neither Borrower nor any other Person is entitled to rely thereon;
(d)
Neither Administrative Agent nor any Lender nor any Person identified on the cover page of this Agreement as a
Joint Lead Arranger and Joint Bookrunner, Syndication Agent or Co-Documentation Agent shall be deemed to be in an advisory, fiduciary or
agency relationship with Borrower and its Affiliates or have a fiduciary or other implied duty to Borrower and its Affiliates with respect to
this Agreement and the transactions contemplated hereby;
Borrower and its Affiliates; and
(e)
Administrative Agent and Lenders, and their Affiliates, may have economic interests that conflict with those of
(f)
Neither Administrative Agent nor any Lender shall be responsible or liable to any Person for any loss, damage,
liability or claim of any kind relating to injury or death to Persons or damage to property caused by the actions, inaction or negligence of
Borrower and/or its Affiliates and Borrower hereby indemnifies and holds Administrative Agent and Lenders harmless from any such loss,
damage, liability or claim.
10.15 No Third Parties Benefitted. This Agreement is made for the purpose of defining and setting forth certain
obligations, rights and duties of Borrower, Administrative Agent and Lenders in connection with the Extensions of Credit, and is made for
the sole benefit of Borrower, Administrative
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Agent and Lenders, Administrative Agent’s and Lenders’ successors and permitted assigns. Except as provided in Section 10.04, no other
Person shall have any rights of any nature hereunder or by reason hereof.
10.16 Severability. Any provision of the Loan Documents that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective and severable to the extent of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. Administrative Agent, Lenders and Borrower agree to negotiate, in good faith, the terms of a replacement
provision as similar to the severed provision as may be possible and be legal, valid, and enforceable.
10.17 Confidentiality. Administrative Agent and each Lender shall use any confidential non-public information concerning
Borrower and its Subsidiaries and Affiliates that is furnished to Administrative Agent or such Lender by or on behalf of Borrower and its
Subsidiaries in connection with the Loan Documents or the Existing Credit Agreements (collectively, “Confidential Information”) solely for
the purpose of administering and enforcing the Loan Documents, and it will hold the Confidential Information in confidence and will not
disclose, directly or indirectly, such information to any Person, except (a) to their affiliates or any of their or their affiliates’ directors,
officers, employees, auditors, credit insurance companies, counsel, advisors, or representatives (collectively, the “Representatives”) who need
to know such information for the purposes set forth in this Section and who have been advised of and acknowledge their obligation to keep
such information confidential and limit the use of such information in accordance with this Section, (b) to any Eligible Assignee to which
such Lender has assigned or desires to assign an interest or participation in the Loan Documents or the Obligations or to any direct or indirect
contractual counterparties (or the professional advisors thereto) to any swap or derivative transaction relating to Borrower and its obligations,
provided that any such foregoing recipient of such Confidential Information agrees to keep such Confidential Information confidential and
limit the use of such Confidential Information as specified herein, (c) to any governmental agency or regulatory body (including self-
regulatory bodies) having or claiming to have authority to regulate or oversee any aspect of Administrative Agent’s or such Lender’s business
or that of their Representatives in connection with the exercise of such authority or claimed authority (in which case such Lender shall,
except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising
examination or regulatory authority, use reasonable efforts to promptly notify Borrower, in advance, to the extent lawfully permitted to do
so), (d) to the extent necessary or appropriate to enforce any right or remedy or in connection with any claims asserted by or against
Administrative Agent or such Lender or any of their Representatives, (e) pursuant to any subpoena or any similar legal process (in which
case such Lender shall use reasonable efforts to promptly notify Borrower, in advance, to the extent permitted by Law), (f) to other Lenders
and (g) with the consent of Borrower. For purposes hereof, the term “Confidential Information” shall not include information that (w)
pertains to this Agreement (but not any other information concerning Borrower) routinely provided by arrangers to data service providers,
including league table providers, that serve the lending industry, (x) is in Administrative Agent’s or a Lender’s possession prior to its being
provided by or on behalf of Borrower or any of its Subsidiaries or Affiliates, provided that such information is not known by Administrative
Agent or such Lender to be subject to another confidentiality agreement with, or other legal or contractual obligation of confidentiality to,
Borrower or any of its Subsidiaries or Affiliates, (y) is or becomes publicly available (other than through a breach hereof by Administrative
Agent or such Lender), or (z) becomes available to Administrative Agent or such Lender on a nonconfidential basis, provided that the source
of such information was not known by Administrative Agent or such Lender to be bound by a confidentiality agreement or other legal or
contractual obligation of confidentiality with respect to such information.
reference only and are not part of this Agreement or the other Loan Documents for any other purpose.
10.18 Headings. Section headings in this Agreement and the other Loan Documents are included for convenience of
10.19 Time of the Essence. Time is of the essence of the Loan Documents.
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10.20 Status of Lenders. (i) Each Lender that is a U.S. Person shall deliver to Borrower and Administrative Agent on or
prior to the date on which such Lender becomes a party to this Agreement, and from time to time thereafter if requested in writing by
Borrower or Administrative Agent (but only so long as such Lender remains lawfully able to do so), executed originals of IRS Form W-9, or
any successor form prescribed by the IRS, certifying that such Lender is exempt from U.S. federal backup withholding tax; (ii) Each Lender
organized under the Laws of a jurisdiction outside the United States, on or prior to the date of this Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time
to time thereafter if requested in writing by Borrower or Administrative Agent, shall provide Borrower and Administrative Agent with (x)
IRS Form W-8BEN or W-8BEN-E, as appropriate, or any successor form prescribed by the IRS, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest,
IRS Form W-8ECI, or any successor form prescribed by the IRS, certifying that the income receivable pursuant to the Loan Documents is
effectively connected with the conduct of a trade or business in the United States, or IRS Form W-8EXP, or any successor form prescribed by
the IRS, (y) if such Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and intends to claim an exemption from
United States withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest,” IRS Form W-
8BEN or W-8BEN-E, as applicable, or any successor form prescribed by the IRS, and a certificate substantially in the form of Exhibit F-1
representing that such Lender is not a bank for purposes of Section 881(c) of the Code, is not a ten-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of Borrower, and is not a “controlled foreign corporation” described in Section 881(c)(3)(C) (a “U.S.
Tax Compliance Certificate”) or (z) to the extent such Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, or any
successor form prescribed by the IRS, accompanied by IRS Form W-8ECI, W-8BEN or W-8BEN-E, as applicable, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial
owner, as applicable; provided that if the Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are
claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit F-4 on behalf of each such direct and indirect partner. Thereafter and from time to time, each such Person shall (i) promptly submit to
Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and Administrative Agent of any available exemption from or reduction
of, United States withholding taxes in respect of all payments to be made to such Person by Borrower pursuant to this Agreement, (ii)
promptly notify Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or
reduction and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that Borrower make
any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other
documentation, then Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. If any Governmental Authority asserts that
Administrative Agent did not properly withhold any tax or other amount from payments made in respect of such Person, such Person shall
indemnify Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable
to the Agent under this Section, and costs and expenses (including Attorney Costs) of Administrative Agent. The obligation of Lenders under
this Section shall survive the payment of all Obligations and the resignation of Administrative Agent.
(b)
If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed
by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by
Borrower or Administrative Agent as may be necessary for Borrower and Administrative Agent to comply with their
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obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the
amount to deduct and withhold from such payment. Solely for purposes of this Subsection 10.20(b), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any
respect, it shall promptly update and deliver such form or certification to Borrower and Administrative Agent or promptly notify Borrower
and Administrative Agent in writing of its legal ineligibility to do so.
10.21 Removal and Replacement of Lenders.
(a)
In the event that any Lender (i) requests compensation under Section 3.01 or 3.04, (ii) becomes a Defaulting Lender
or (iii) (x) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or
any other Loan Document that requires the consent of each of the Lenders or each of the Lenders (including, for the avoidance of doubt, any
extension permitted by Section 2.01(e) with the consent of each Lender) affected thereby or (y) does not agree to make Loans in any
proposed Alternative Currency (in the case of this clause (iii), so long as the consent of the Required Lenders to such amendment,
supplement, modification, consent, waiver or proposed Alternative Currency has been obtained), Borrower may, upon notice to such Lender
and Administrative Agent, remove or replace such Lender by (A) non-ratably terminating such Lender’s Revolving Commitment and/or (B)
causing such Lender to assign its rights and obligations under this Agreement pursuant to Section 10.04(b) to one or more other Lenders or
eligible assignees procured by Borrower and otherwise reasonably acceptable to Administrative Agent and Issuing Lenders; provided that
such assigning Lender shall have received payment of an amount equal to 100% of the outstanding principal, interest and fees owed to such
Lender from the assignee Lender or Borrower or such lesser amount as may be agreed with such Lender. Borrower shall, in the case of a
termination of such Lender’s Revolving Commitment and prepayment of its Loans pursuant to clause (A) preceding, (x) pay in full all
principal, interest, fees and other amounts owing to such Lender (other than with respect to any outstanding Competitive Loan held by it)
through the date of termination and prepayment (including any amounts payable pursuant to Section 3), except as may otherwise be agreed
with such Lender, (y) provide appropriate assurances and indemnities (which may include letters of credit) to such Lender and the Issuing
Lender as each may reasonably require with respect to any continuing risk participation interest in any Letters of Credit then outstanding and
(z) release such Lender from its obligations under the Loan Documents from and after the date of termination. Borrower shall, in the case of
an assignment pursuant to clause (B) preceding, cause to be paid the assignment fee payable to Administrative Agent pursuant to Section
10.04(c). Any such Lender whose Revolving Commitment is being assigned shall, upon payment of (i) all amounts owed to it pursuant to the
proviso in clause (B) preceding and (ii) the assignment fee as described in the preceding sentence, be deemed to have executed and delivered
an Assignment and Assumption covering such Lender’s Revolving Commitment. Administrative Agent shall distribute an amended Schedule
2.01, which shall be deemed incorporated into this Agreement, to reflect adjustments to the Lenders and their Revolving Commitments.
If fees cease to accrue on the unfunded portion of the Revolving Commitments of a Defaulting Lender pursuant to
Section 2.14(a), such fees shall not be paid to the non-Defaulting Lenders (or replacement Lenders in respect of any fees accruing prior to
such replacement Lender becoming a Lender hereunder).
(b)
(c)
This Section shall supersede any provisions in Section 10.01 to the contrary.
10.22 Governing Law; Submission to Jurisdiction; Waivers.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
(a)
(b)
Each party to this Agreement irrevocably and unconditionally:
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(i) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party to the exclusive jurisdiction of the United States District Court for the Southern District of New York sitting
in the Borough of Manhattan (or if such court lacks subject matter jurisdiction, the Supreme Court of the State of New York sitting in the
Borough of Manhattan), and appellate courts from any thereof;
court to whose jurisdiction the applicable party is or may be subject, by suit upon judgment;
(ii) agrees that a final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other
(iii) consents that any such action or proceeding may only be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address provided for in Section 10.02;
(iv) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered
(v) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law; and
(vi) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.22 any special, exemplary, punitive or consequential damages; provided the waiver set forth in this
clause (vi) shall not affect any obligation of Borrower under Section 10.13.
10.23 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.24 USA PATRIOT Act. Each Lender hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that
identifies Borrower and Guarantors, which information includes the name and address of Borrower and Guarantors and other information
that will allow such Lender to identify Borrower and Guarantors in accordance with the Act.
10.25
Judgment Currency.
(a)
If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency
into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures Administrative Agent could purchase the first currency with such other currency in
the city in which it normally conducts its foreign exchange operation for the first currency on the Business Day preceding the day on which
final judgment is given.
The obligation of Borrower in respect of any sum due from it to any Lender or Agent hereunder shall,
notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement
(b)
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(the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by such Lender of any sum
adjudged to be so due in the Judgment Currency such Lender may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency; if the amount of Agreement Currency so purchased is less than the sum originally due to such Lender
in the Agreement Currency, Borrower agrees notwithstanding any such judgment to indemnify such Lender against such loss, and if the
amount of the Agreement Currency so purchased exceeds the sum originally due to any Lender, such Lender agrees to remit to Borrower
such excess.
10.26 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the
contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto
acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down
and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(a)
the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such
(b)
the effects of any Bail-In Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such
Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Agreement or any other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion
Powers of the applicable Resolution Authority.
10.27 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support,
through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support “QFC Credit
Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the
Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such
Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported
QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United
States).
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest
and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S.
Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property)
were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a
Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that
might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to
be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported
QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the
foregoing, it is understood and agreed that rights and remedies of the parties
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with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC
Credit Support.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
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Exhibit 10.3
COMCAST SELECT
DEFERRED COMPENSATION PLAN
Amended and Restated, Effective October 12, 2021
COMCAST SELECT
DEFERRED COMPENSATION PLAN
(Amended and Restated, Effective October 12, 2021)
ARTICLE I - PURPOSE; EFFECTIVE DATE
1.1. Purpose.
a) The purpose of this Comcast Select Deferred Compensation Plan (formerly known as the “NBCUniversal Deferred
Compensation Plan,” hereinafter, the “Plan”) is to permit a select group of highly compensated employees of
NBCUniversal Media, LLC, Universal City Development Partners, Ltd., and their selected subsidiaries and/or
affiliates to defer the receipt of income which would otherwise become payable to them. The Plan, effective as of
January 1, 2021, is an amendment and restatement of the NBCUniversal Deferred Compensation Plan (the “NBCU
DCP”) and the Post-2004 Universal City Development Partners, Ltd. Variable Deferred Compensation Plan for
Executives (the “UO DCP”) and reflects the merger of the UO DCP with and into the NBCU DCP, effective as of
January 1, 2021. It is intended that this Plan, by providing these eligible individuals an opportunity to defer the receipt
of income, will assist in retaining and attracting individuals of exceptional ability.
b) The Plan is amended and restated, effective October 12, 2021, to provide for Comcast Corporation to serve as the
sponsor of the Plan for the benefit of eligible employees of its participating affiliates, as provided in the Plan. No other
substantive changes from the Plan as previously in effect have been adopted as part of the amendment and restatement
of the Plan effective October 12, 2021.
1.2. Effective Date. This Plan was originally effective on January 30, 2011. This amendment and restatement of the Plan is
effective as of October 12, 2021.
1.3. Plan Type. For purposes of Section 409A, the portion of the amounts deferred by the Participants and benefits attributable
thereto, shall be considered an elective account balance plan as defined in Treas. Reg. Section 1.409A -1(c)(2)(i)(A), or as
otherwise provided by the Code; the portion of the amounts deferred as employer contributions and benefits attributable
thereto, shall be considered a non-elective account balance plan as defined in Treas. Reg. Section 1.409A -1(c)(2)(i)(B), or as
otherwise provided by the Code.
ARTICLE II - DEFINITIONS
For the purpose of this Plan, the following terms shall have the meanings indicated, unless the context clearly indicates
otherwise:
2.1. Account(s). “Account(s)” means the account or accounts maintained on the books of the Participating Company used solely
to calculate the amount payable to each Participant under this Plan and shall not constitute a separate fund of assets.
Account(s) shall be deemed to exist from the time amounts are first credited to such Account(s) until such time that the entire
Account Balance has been distributed in accordance with this Plan. The Accounts available for each Participant shall be
identified as:
a)
“Grandfathered Accounts” means the Retirement and In-Service Accounts carried forward from the Legacy Deferred
Compensation Plans, as follows:
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i) “Grandfathered Retirement Account,” to which are credited employee contributions directed to the Retirement
Account with respect to Compensation earned before January 1, 2021, and Interest attributable to such employee
contributions.
ii) “Grandfathered In-Service Account – 1,” to which are credited employee contributions directed to the first of two
In-Service Accounts with respect to Compensation earned before January 1, 2021, and Interest attributable to such
employee contributions.
iii) “Grandfathered In-Service Account – 2,” to which are credited employee contributions directed to the second of
two In-Service Accounts with respect to Compensation earned before January 1, 2021, and Interest attributable to
such employee contributions.
b)
“New Plan Accounts” means the class-year accounts established under the Plan, to which are credited employee
elective contributions and Discretionary Contributions and Restoration Contributions, and Interest attributable to such
contributions, for periods beginning on and after January 1, 2021. With respect to each class-year New Plan Account, for
each year, a Participant may elect a different time and form of distribution as part of the Participant’s Deferral
Commitment.
i) “Base Salary Account,” to which are credited employee contributions credited with respect to base salary earned on
and after January 1, 2021, and Interest attributable to such employee contributions.
ii) “Bonus Account,” to which are credited employee contributions credited with respect to bonus earned on and after
January 1, 2021, and Interest attributable to such employee contributions.
iii)“Company Contribution Account,” to which are credited employer contributions described in Section 4.4 on and
after January 1, 2021, and Interest attributable to such employer contributions.
2.2. Actual Matching Contribution. “Actual Matching Contribution” means, for any calendar year, the employer matching
contribution that is creditable to a Participant’s account under the 401(k) Plan in which such Participant is eligible to
participate during such calendar year.
2.3. Affiliate. “Affiliate” means, with respect to any Person, any other person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes of this definition, the term “control,” including its
correlative terms “controlled by” and “under common control with,” mean, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
2.4. Beneficiary. “Beneficiary” means the Person(s) designated by the Participant, entitled under Article VI to receive any Plan
benefits payable after the Participant’s death. If the Participant has designated one or more Beneficiaries under a Legacy
Deferred Compensation Plan, such designation shall continue in effect until superseded by a later designation.
2.5. Board. “Board” means the Board of Directors of the Company.
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2.6. Change of Control. “Change of Control” means any transaction or series of transactions that constitutes a change in the
ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company, within the
meaning of Section 409A.
2.7. Comcast DCP. “Comcast DCP” means the Comcast Corporation 2005 Deferred Compensation Plan as in effect from time to
time.
2.8. Comcast DCP Eligible Employee. “Comcast DCP Eligible Employee” means an employee of a Participating Company
who is an “Eligible Employee,” as such term is defined in the Comcast DCP.
2.9. Code. “Code” means the Internal Revenue Code of 1986, as may be amended from time to time. Any reference in this Plan
to “applicable guidance,” “further guidance” or other similar term shall include any proposed, temporary or final regulations,
or any other guidance, promulgated with respect to or in connection with Section 409A by the U.S. Department of Treasury
or the Internal Revenue Service.
2.10. Committee. “Committee” means the Compensation Committee of the Board. The Committee may delegate its authority
under the Plan, in whole or in part, to a person, persons or committee, and such delegate shall have the authority of the
Committee to the extent of such delegation.
2.11. Company. “Company” means Comcast Corporation, a Pennsylvania corporation, including any successor thereto by merger,
consolidation, acquisition of all or substantially all the assets thereof, or otherwise, including any successor thereto by
merger, consolidation, acquisition of all or substantially all the assets thereof, or otherwise, and its subsidiaries that are
Affiliates of the Company.
2.12. Compensation. “Compensation” means:
a) For Participants whose compensation is administered under NBCU’s common Payroll System, the Participant’s base
salary plus target bonus plus incentive compensation plus commissions.
b) For Participants whose compensation is administered under UO’s common Payroll System, the Participant’s base salary
plus incentive compensation earned under UO’s Annual Incentive Plan.
For purposes of this Plan only, Compensation shall be calculated before reduction for any amounts deferred by the
Participant pursuant to the Participating Company’s tax qualified plans which may be maintained under Section 401(k) or
Section 125 of the Code, or pursuant to this Plan or any other non-qualified plan which permits the voluntary deferral of
compensation. Inclusion of any other forms of compensation is subject to Committee approval, made prior to the time that
any Deferral Commitment is required to be filed under this Plan.
2.13. Deferral Commitment. “Deferral Commitment” means a commitment made by a Participant to defer a portion of
Compensation as set forth in Article III, and as permitted by the Committee in its sole discretion. The Deferral Commitment
shall apply to each payment of Compensation payable to a Participant, and the Committee is empowered to group the various
types of Compensation together for purposes of effecting the election to defer. The Committee shall apply the election to
defer “salary” to salary and any other regularly occurring form of compensation, which shall be credited to the Base Salary
Account. The
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Committee may apply the election to defer “bonus” to annual bonuses, short-term bonus, long-term bonus arrangements,
commissions, and other forms of incentive based compensation, unless specifically identified, which shall be credited to the
Bonus Account. Such designation shall be made in the form of whole percentages, as limited by Section 3.2(b) and (d)
below. A Deferral Commitment with respect to any bonus or incentive compensation which is determined by the Committee
to be Performance-Based Compensation within the meaning of Section 409A of the Code shall be made as provided by the
Committee, but no later than six (6) months prior to the end of such performance period. Any Deferral Commitment shall be
made in a form and at a time deemed acceptable to the Committee.
2.14. Deferral Period. “Deferral Period” means each calendar year.
2.15. Determination Date. “Determination Date” means each calendar day.
2.16. Disability. “Disability” means:
a)
an individual’s inability to engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months; or
b) Circumstances under which, by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, an
individual is receiving income replacement benefits for a period of not less than three (3) months under an accident or
health plan covering employees of the individual’s employer.
2.17. Discretionary Contribution. “Discretionary Contribution” means the employer contribution credited to a Participant’s
Company Contribution Account under Section 4.4(a), below.
2.18. Distribution Election. “Distribution Election” means the form prescribed by the Committee and completed by the
Participant, indicating the chosen time and form of payment for benefits payable from each Account under this Plan, as
elected by the Participant as part of the Election.
2.19. Election. “Election” means a Deferral Commitment or a Distribution Election.
2.20. Financial Hardship. “Financial Hardship” means a severe financial hardship to the Participant resulting from an illness or
accident of the Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the
Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the participant.
2.21. 401(k) Plan. “401(k) Plan” means the Comcast Corporation Retirement-Investment Plan (the “Comcast RIP”), the
NBCUniversal Capital Accumulation Plan (“CAP”), the Universal Orlando 401(k) Retirement Plan or any other successor
defined contribution plan maintained for the benefit of employees of the Participating Company that qualifies under Section
401(a) of the Code and satisfies the requirements of Section 401(k) of the Code.
2.22. Hypothetical Matching Contribution. “Hypothetical Matching Contribution” means, for any calendar year, the employer
matching contribution that would have been creditable to a Participant’s account under the 401(k) Plan in which such
Participant is eligible to
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participate during such calendar year if the Participant had not made a Deferral Commitment for such calendar year.
2.23. Interest. “Interest” means the amount credited to or charged against a Participant’s Account(s) on each Determination Date,
which shall be based on the Valuation Funds chosen by the Participant as provided in Section 2.40, below and in a manner
consistent with Section 4.3, below. Such credits or charges to a Participant’s Account may be either positive or negative to
reflect the increase or decrease in value of the Account in accordance with the provisions of this Plan.
2.24. Legacy Deferred Compensation Plans. “Legacy Deferred Compensation Plans” means the NBCU DCP and the UO DCP.
2.25. NBCU. “NBCU” means NBCUniversal, LLC, a Delaware limited liability company, including any successor thereto by
merger, consolidation, acquisition of all or substantially all the assets thereof, or otherwise, and its subsidiaries that are
Affiliates of NBCU, provided that the term “NBCU” shall not include any entity that falls within the definition of the term
“UO.”
2.26. NBCU DCP. “NBCU DCP” means the NBCUniversal Deferred Compensation, as in effect immediately before January 1,
2021.
2.27. Participant. “Participant” means any individual who is eligible, pursuant to Section 3.1, below, to participate in this Plan,
and who either, has elected to defer Compensation under this Plan in accordance with Article III, below, or who is
determined by the Committee in their sole discretion as being eligible to receive a Discretionary Contribution, or for whom
an Account Balance is maintained under this Plan. Such individual shall remain a Participant in this Plan for the period of
deferral, or credit, and until such time as all benefits payable under this Plan have been paid in accordance with the
provisions hereof.
2.28. Participating Company. “Participating Company” means the entities whose employees are Participants under this Plan, and
except as otherwise provided by the Committee:
a) Effective January 1, 2021, UO; and
b) Effective January 1, 2021, NBCUniversal, LLC.
2.29. Payroll System. “Payroll System” means:
a) With respect to Participants who are employees of NBCUniversal, NBCU’s common payroll system other than payroll
processed through SAP; and
b) With respect to Participants who are employees of UO, UO’s common payroll system.
Whether a Participant’s compensation is administered under the Payroll System shall be determined by the Committee in its
sole discretion.
2.30. Performance-Based Compensation. “Performance-Based Compensation” means the portion of Compensation determined
by the Committee to satisfy the requirements set forth in Treas. Reg. §1.409A-1(e), and such Performance-Based
Compensation may be determined on a fiscal or calendar year basis.
2.31. Person. “Person” means an individual, a corporation, a partnership, an association, a trust or any other entity or organization.
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2.32. Plan. “Plan” means this Comcast Select Deferred Compensation Plan, as amended and restated effective January 1, 2021,
and as amended thereafter from time to time.
2.33. Qualified Plan Matching Account. “Qualified Plan Matching Account” means:
a) For Participants who are employees of NBCU and who are eligible to participate in the Comcast Corporation
Retirement-Investment Plan, the Participant’s matching contribution account under the Comcast Corporation
Retirement-Investment Plan.
b) For Participants who are employees of NBCU and are not eligible to participate in the Comcast Corporation Retirement-
Investment Plan, the NBCUniversal Capital Accumulation Plan.
c) For Participants who are employees of UO, the Participant’s matching contribution account under the Universal Orlando
401(k) Retirement Plan.
2.34. Restoration Contribution. “Restoration Contribution” means the employer contribution credited to a Participant’s
Company Contribution Account under Section 4.4(c), below.
2.35. Retirement. “Retirement means the Termination of a Participant’s employment with a Participating Company for reasons
other than death or Disability, on or after attainment of age sixty (60) with at least five (5) years of continuous service with a
Participating Company.
2.36. Section 409A. “Section 409A” means section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the
various Notices, Announcements, and Final Regulations issued thereunder.
2.37. Termination. “Termination”, “terminates employment” or any other similar such phrase means a Participant’s “separation
from service” with a Participating Company, for any reason, within the meaning of Section 409A of the Code, and Treas.
Reg. §1.409A-1(h) and other applicable guidance, including but not limited to circumstances under which a Participant is no
longer providing active service to the Participating Company or an Affiliate of the Participating Company.
2.38. UO. “UO” means Universal City Development Partners, Ltd, including any successor thereto by merger, consolidation,
acquisition of all or substantially all the assets thereof, or otherwise, and its subsidiaries that are Affiliates of UO.
2.39. UO DCP. “UO DCP” means the Post-2004 Universal City Development Partners, Ltd. Variable Deferred Compensation
Plan for Executives, as in effect immediately before January 1, 2021.
2.40. Valuation Funds. “Valuation Funds” means one or more of the independently established funds or indices that are identified
and listed by the Committee. These Valuation Funds are used solely to calculate the Interest that is credited to each
Participant’s Account(s) in accordance with Article IV, below, and do not represent, nor should it be interpreted to convey
any beneficial interest on the part of the Participant in any asset or other property of any Participating Company. The
determination of the increase or decrease in the performance of each Valuation Fund shall be made by the Committee in its
reasonable discretion. The Committee shall select the various Valuation Funds available to the Participants with respect to
this Plan, which may be change from time to time in the discretion of the Committee.
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ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.1. Eligibility and Participation. The following rules relating to eligibility and participation apply with respect to
Compensation earned on and after January 1, 2021.
a) Eligibility. Eligibility to participate in the Plan shall be limited to those non-union, select key employees of a
Participating Company, whose Compensation is administered under the applicable Payroll System, who are otherwise
eligible for U.S. benefits, and who meet at least one of the following criteria (as determined by the Committee):
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i) NBCU. Effective January 1, 2021, and each January 1 thereafter, any employee of NBCUniversal who, as of the
September 30 preceding the first day of the applicable calendar year, has annualized Compensation (including
base salary plus target bonus plus incentive compensation plus commissions) in excess of the annual compensation
limit set forth in Section 401(a)(17) of the Code determined by the Committee for the current calendar year, other
than an employee of NBCU who is a Comcast DCP Eligible Employee.
ii) UO. Effective January 1, 2021, and each January 1 thereafter, (A) any full-time, non-seasonal employee of UO
who, as of the September 30 preceding the first day of the applicable calendar year, with annualized
Compensation (including base salary plus target bonus) of $250,000 or more, and (B) any employee of UO who is
a party to an agreement with UO that provides for participation in the Plan or the UO Plan.
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iii) Any employee of a Participating Company designated by the Committee from time to time, and approved for
participation in this Plan.
iv) Employees of a Participating Company who have met the applicable eligibility requirements of Section 3.1(a)(i),
3.1(a)(ii), or 3.1(a)(iii) for a previous year, and who continue in service as a full-time employee of a Participating
Company shall continue to be eligible to participate until they cease service as a full-time employee of a
Participating Company, either because of a termination of employment or a change to part-time employment.
Employees of a Participating Company who do not meet the applicable eligibility requirements of this Section
3.1(a) but who have an undistributed account balance based on credits to accounts from previous years shall be
treated as Participants until their account is distributed in full.
b) Participation. An individual’s participation in the Plan shall be effective upon the individual first becoming eligible to
participate, and the earlier of a contribution under this Plan being made on behalf of the Participant by the Participating
Company or the completion and submission of a Deferral Commitment, a Distribution Election, and an Allocation Form
to the Committee at a time and in a form determined by the Committee.
3.2. Form of Deferral Commitment. A Participant may elect to make a Deferral Commitment at such other time and in such
form as determined by the Committee, but in no event later than the date on which the election is required to become
irrevocable as set forth in this Article or otherwise required by Section 409A of the Code and applicable guidance, and the
latest election on file as of that time shall control. The Deferral Commitment shall specify the following:
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a) Timing of Deferral Election. The Participant shall make an election to defer Compensation by filing a Deferral
Commitment with the Committee during such enrollment period established by the Committee in its sole discretion, and
such election shall become irrevocable no later than the last day of such enrollment period. In addition, notwithstanding
anything to the contrary, a Deferral Commitment with respect to Performance-Based Compensation may be filed with
the Committee and such election shall become irrevocable no later than six months before the end of the performance
period on which such Performance-Based Compensation is based, provided such Participant has been continuously
employed with the Participating Company from the later of the beginning of the performance period or the date on
which the performance criteria for such Performance-Based Compensation was established.
b) Deferral Amounts; Accounts. Grandfathered Accounts have been credited with contributions, income, gains, and
losses under the rules of the Legacy Plans, and shall be held for distribution in accordance with the rules of such Legacy
Plans. Effective on and after January 1, 2021, a Deferral Commitment shall be made with respect to base salary payable
by a Participating Company to a Participant during the Deferral Period, bonus earned by a Participant during the
Deferral Period, and Discretionary Contributions and Restoration Contributions earned by a Participant during the
Deferral Period, and shall designate the time and form of payment. The Participant shall set forth the amount to be
deferred and the time and form that payment shall be made in the manner provided by the Committee, provided that:
i) Base Salary Account. The earliest date on which a deferred amount credited to a Base Salary Account may be paid
shall be in January of the second calendar year beginning after the calendar year in which the Compensation would
be paid but for the Base Salary Account Deferral Commitment, and the latest date on which a deferred amount
credited to a Base Salary Account may be paid shall be in January of the tenth calendar year beginning after the
calendar year in which the Compensation would be paid but for the Base Salary Account Deferral Commitment.
ii) Bonus Account, Discretionary Contributions, and Restoration Contributions. The earliest date on which a deferred
amount credited to a Bonus Account or a Company Contribution Account may be paid shall be in January of the third
calendar year beginning after the calendar year to which the Deferral Commitment applies, and the latest date on
which a deferred amount credited to a Bonus Account or a Company Contribution Account may be paid shall be in
January of the eleventh calendar year beginning after the calendar year to which the Deferral Commitment applies.
c) Allocation to Valuation Funds. The Participant shall specify in a separate form (known as the “Allocation Form”) filed
with the Committee, the Participant’s initial allocation of the amounts deferred into each Account among the various
available Valuation Funds.
d)
Maximum Deferral. The maximum amount of salary that may be deferred shall be seventy-five percent (75%); the
maximum amount of commissions, bonus or incentive compensation that may be deferred shall be eight-five percent
(85%). Notwithstanding the foregoing, the maximum amount of base salary, bonus, or incentive compensation available
for deferral shall be determined net of required withholdings and deductions as determined by the Committee in its sole
discretion.
3.3. Period of Commitment. A Deferral Commitment applicable to a Participant with respect to Compensation under a Legacy
Deferred Compensation Plan for the 2020 Plan Year shall
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remain in effect under the Plan for the 2021 Plan Year unless revoked or amended in writing by the Participant. To
participate for Plan Years beginning after 2021, a Participant must file a new Deferral Commitment and Distribution Election
for each Plan Year. A Deferral Commitment and Distribution Election, revocation, or amendment of such Elections, as
applicable, must be delivered to the Committee prior to the time determined by the Committee but in no event later than the
date on which the election is required to become irrevocable as set forth in this Article or otherwise required by Section
409A of the Code and applicable guidance. Notwithstanding the foregoing, if a Participant suffers a Disability or
Termination prior to the end of the Deferral Period, the Deferral Period shall end as of the date of Disability or Termination.
3.4. Irrevocability of Deferral Commitment. Except as provided in Section 3.3, above, a Deferral Commitment and
Distribution Election shall become irrevocable by the Participant as of the last day on which an election may be made under
the terms of this Plan.
3.5. Change in Status. If the Committee determines that a Participant’s employment performance is no longer at a level that
warrants reward through participation in this Plan, but does not terminate the Participant’s employment with the Participating
Company, the Participant’s existing Deferral Commitment shall terminate at the end of the current Deferral Period, and no
new Deferral Commitment may be made by such Participant after notice of such determination is given by the Committee,
unless the Participant later satisfies the requirements of Section 3.1.
3.6. Defaults in Event of Incomplete or Inaccurate Deferral Documentation. The Committee shall be authorized to reject a
Deferral Commitment, Allocation Form, or Distribution Election submitted by a Participant if in the sole discretion of the
Committee, the Committee determines is missing, incomplete or inaccurate, and treat such forms as if they had not been
submitted.
ARTICLE IV - DEFERRED COMPENSATION ACCOUNTS
4.1. Accounts.
a) Grandfathered Accounts. Amounts credited to Grandfathered Accounts as of January 1, 2021 shall continue to be
credited with Interest on and after January 1, 2021 through the date of payment as determined under the applicable
Legacy Deferred Compensation Plan.
b) New Plan Accounts. Effective on and after January 1, 2021, the Compensation deferred by a Participant under the Plan,
any Discretionary Contributions and Interest, and any Restoration Contributions and Interest shall be credited to the
Participant’s Company Contribution Account as selected by the Participant, or as otherwise provided in this Article.
Separate accounts may be maintained on the books of the Participating Company to reflect the different Accounts
chosen by the Participant, and the Participant shall designate time and form of distribution of each deferral that will be
credited to each Account as set forth in Section 3.2(b), above. These Accounts shall be used solely to calculate the
amount payable to each Participant under this Plan and shall not constitute a separate fund of assets.
4.2. Timing of Credits; Withholding. A Participant’s deferred Compensation shall be credited to each New Plan Account
designated by the Participant as soon as reasonably practical after the date the Compensation deferred would have otherwise
been payable to the Participant. Any Discretionary Contributions shall be credited to the appropriate Account(s) as provided
by the Committee. Any withholding of taxes or other amounts with respect to deferred
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Compensation or other amounts credited under this Plan that is required by federal, state, or local law shall be withheld from
the Participant’s corresponding non-deferred portion of the Compensation to the maximum extent possible, and any
remaining amount shall reduce the amount credited to the Participant’s Account in a manner specified by the Committee.
4.3. Valuation Funds. A Participant shall designate, at a time and in a manner acceptable to the Committee, one or more
Valuation Funds for each Account for the sole purpose of determining the amount of Interest to be credited or debited to such
Account. Such election shall designate the portion of each deferral of Compensation made into each Account that shall be
allocated among the available Valuation Fund(s), and such election shall apply to each succeeding deferral of Compensation
until such time as the Participant shall file a new election with the Committee. Upon notice to the Committee, the Participant
shall also be permitted to reallocate the balance in each Valuation Fund among the other available Valuation Funds as
determined by the Committee. The manner in which such elections shall be made, the frequency with which such elections
may be changed, and the manner in which such elections shall become effective shall be determined in accordance with the
procedures to be adopted by the Committee from time to time. Such elections may be made on a daily basis electronically,
and such elections shall become effective on the date made or the next available Determination Date. The election of deemed
investments among the options provided shall be the sole responsibility of each Participant. A Participating Company and
Committee members are not authorized to make any recommendation to any Participant with respect to such election. Each
Participant assumes all risk connected with any adjustment to the value of his or her Account. Neither the Committee nor
any Participating Company in any way guarantees against loss or depreciation.
4.4. Company Contributions.
a) Grandfathered Accounts. No contributions shall be made to a Grandfathered Account with respect to any period
beginning on or after January 1, 2021.
b) Discretionary Contributions. In its sole discretion, a Participating Company may make Discretionary Contributions to a
Participant’s Company Contribution Account. Discretionary Contributions shall be credited at such times and in such
amounts as approved by the Board or the Committee, in its sole discretion.
c) Restoration Contributions. Each Participating Company shall make Restoration Contributions to Participants’ Company
Contribution Accounts. Restoration Contributions shall be calculated as the excess, if any, of (i) a Participant’s
Hypothetical Matching Contribution that would have been credited with respect to such Participant, over (ii) the
Participant’s Actual Matching Contribution. Such Restoration Contribution shall be credited to the Participant’s
Company Contribution Account as of March 31 of the calendar year next following the calendar year for which the
Restoration Contribution is made.
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4.5. Determination of Accounts. Each Participant’s Account as of each Determination Date shall consist of the balance of the
Account as of the immediately preceding Determination Date, adjusted as follows:
a) New Deferrals. Each New Plan Account shall be increased by any deferred Compensation credited since such prior
Determination Date in the proportion chosen by the Participant.
b) Company Contributions. Each New Plan Account shall be increased by any Discretionary Contributions and
Restoration Contributions credited since such prior
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Determination Date as set forth in Section 4.4, above, or as otherwise directed by the Committee.
c) Distributions. Each Account shall be reduced by the amount of each benefit payment made from that Account since the
prior Determination Date, as determined on a class-year basis. Distributions shall be deemed to have been made
proportionally from each of the Valuation Funds maintained with respect to the class-year allocation attributable to such
Account based on the proportion that such Valuation Fund bears to the sum of all Valuation Funds maintained with
respect to the class-year allocation attributable to such Account for that Participant as of the Determination Date
immediately preceding the date the distribution request is transmitted to the Committee for payment and processing,
provided that payment with respect to such distribution shall be made as soon as reasonably practicable following the
date the distribution request is transmitted to the Committee.
d)
Interest. Each Account shall be increased or decreased by the Interest credited to such Account since such
Determination Date as though the balance of that Account as of the prior Determination Date had been invested in the
applicable Valuation Funds chosen by the Participant.
4.6. Vesting of Accounts. Each Participant shall be vested in the amounts credited to such Participant’s Account and Interest
thereon as follows:
a) Amounts Deferred. Unless otherwise expressly provided by the Committee, a Participant shall be one hundred percent
(100%) vested at all times in the amount of Compensation elected to be deferred under this Plan, including any Interest
thereon.
b) Company Contributions. A Participant’s Discretionary Contributions, Restoration Contributions, and Interest thereon
shall be vested to the same extent as the Participant’s Qualified Plan Matching Account, provided that a Participant’s
Discretionary Contributions, Restoration Contributions, and Interest thereon shall become one hundred (100%) vested as
of the Participant’s death or Disability, and provided further that a Participant’s vested interest shall not be reduced under
any circumstances.
4.7. Statement of Accounts. To the extent that the Participating Company does not arrange for Account balances to be
accessible online by the Participant, the Committee shall provide to each Participant a statement showing the balances in the
Participant’s Account no less frequently than annually.
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ARTICLE V - PLAN BENEFITS
5.1. Required Suspension of Payment of Benefits. To the extent compliance with the requirements of Treasury Regulation §
1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A to
payments due to a Participant upon or following his separation from service, then notwithstanding any other provision of this
Plan, any such payments that are otherwise due within six months following the Participant’s separation from service will be
deferred and paid to the Participant in a lump sum immediately following that six-month period.
5.2. Grandfathered Account. The vested portion of a Participant’s Grandfathered Account shall be distributed in accordance
with the rules of the applicable Legacy Plan.
5.3. New Plan Account. The vested portion of a Participant’s New Plan Account shall generally be distributed to the Participant
upon the date specified by the Participant, as provided in this Section 5.3. If a Participation’s Deferral Commitment under a
Legacy Deferred Compensation Plan applies to the 2021 Plan Year (as provided in Section 3.3) but the Participant does not
timely deliver a Distribution Election with respect that Deferral Commitment, such Participant shall be treated as having
timely filed a Distribution Election for the 2021 Plan Year which provides for payment in the form of a lump sum in January
of the second Plan Year beginning after the Compensation subject to the Deferral Commitment would have been paid to the
Participant but for such Deferral Commitment. (For avoidance of doubt, the default scheduled lump sum distribution date
with respect to base salary earned in 2021 shall be January 2023, and the default scheduled lump sum distribution date with
respect to other Compensation earned in 2021 but payable but for such Deferral Commitment in 2022 shall be January 2024.
Such default scheduled lump sum distribution dates are subject to change pursuant to Section 5.4.)
a) Timing of Payment.
i) In General. Except as otherwise provided in this Article V, benefits payable from the New Plan Account shall
commence in January of the year specified in the Participant’s Election.
ii) Termination. If the Participant has a Termination other than because of death or Disability, the benefits under this
Section 5.3(a) shall commence on the date specified in the Participant’s Distribution Election.
b) Form of Payment. The form of benefit payment from the New Plan Account shall be that form selected by the
Participant pursuant to Section 5.8, below, except that if the Participant terminates employment with a Participating
Company prior to the year specified for benefit payment, then the New Plan Account shall be paid in a lump sum. If the
form of payment selected provides for subsequent payments, subsequent payments shall be made on or about the
anniversary of the initial payment.
5.4. Change of Time and/or Form of Payment. The Participant may amend the form of payment or the intended date of
payment all or any part of a New Plan Account to a date later than that date of payment in force immediately prior to the
filing of such request, by filing such amendment with the Committee no later than twelve (12) months prior to the current
date of payment. The Participant may file this amendment, provided that each amendment must provide for a payout as
otherwise permitted under this paragraph at a date no earlier than five (5) years after the date of payment in force
immediately prior to the filing of such request, and the amendment may not take effect for twelve (12) months after
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the request is made. For purposes of this Article, a payment of amounts under this Plan, including the payment of annual
installments over a number of years, shall be treated as a single payment, as provided in Treas. Reg. Section 1-409A-2(b)(2)
(iii).
5.5. Death Benefit. Upon the death of a Participant prior to the commencement of benefits attributable to Grandfathered
Accounts, distributions shall be made in accordance with the applicable Legacy Plan. Upon the death of a Participant prior to
the commencement of benefits under this Plan from a New Plan Account, Company shall pay to the Participant’s Beneficiary
an amount equal to the vested Account balance in that Account in the form of a lump sum payment in January of the
calendar year beginning after the Participant’s death. In the event of the death of the Participant after the commencement of
benefits under this Plan from any Account, the benefits from that Account shall be paid to the Participant’s designated
Beneficiary from that Account in a lump sum payment in January of the calendar year beginning after the Participant’s death.
5.6. Hardship Distributions. Upon a finding that a Participant has suffered a Financial Hardship, the Committee may, in its sole
discretion, terminate the existing Deferral Commitment, and/or make distributions from any or all of the Participant’s
Accounts. The amount of such distribution shall be limited to the amount reasonably necessary to meet the Participant’s
needs resulting from the Financial Hardship plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such Financial Hardship is or may be relieved through the
reimbursement or compensation by insurance, or otherwise or by liquidation of the Participant’s assets (to the extent that
liquidation of such assets would not itself cause severe financial hardship). The amount of such distribution will not exceed
the Participant’s vested Account balances. If payment is made due to Financial Hardship, the Participant’s deferrals under
this Plan shall cease for the period of the Financial Hardship and for twelve (12) months thereafter. If the Participant is again
eligible to participate, any resumption of the Participant’s deferrals under the Plan after such twelve (12) month period shall
be made only at the election of the Participant in accordance with Article III herein.
5.7. Disability Distributions. With respect to a Participant’s Grandfathered Accounts, upon a finding that a Participant has
suffered a disability, within the meaning of the applicable Legacy Plan, the Committee shall make a distribution of the
Participant’s Grandfathered Accounts as provided in the applicable Legacy Plan. Upon a finding that a Participant has
suffered a Disability prior to the commencement of benefits under this Plan from a New Plan Account, the Committee shall
pay to the Participant an amount equal to the vested Account balance in that Account in the form of a lump sum payment in
January of the calendar year beginning after the Participant’s Disability. In the event of the Disability of the Participant after
the commencement of benefits under this Plan from any Account, the benefits from that Account shall be paid to the
Participant from that Account in a lump sum payment in January of the calendar year beginning after the Participant’s
disability.
5.8. Form of Payment. Grandfathered Accounts shall be distributed in the form provided in the applicable Legacy Plan. New
Plan Accounts shall be distributed in the form provided in this Section 5.8.
a) Unless otherwise specified in this Article, the benefits payable from any Account under this Plan shall be paid in the
form of benefit as provided in this Section 5.7, and specified by the Participant in the Distribution Election applicable to
that Account at the time of the initial deferral or credit to that Account. The permitted forms of benefit payments are:
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b) A lump sum amount which is equal to the vested Account balance; and
c) Annual installments for a period of either five (5) years or ten (10) years where the annual payment shall be equal to the
vested balance of the Account immediately prior to the payment, multiplied by a fraction, the numerator of which is one
(1) and the denominator of which commences at the number of annual payments initially chosen and is reduced by one
(1) in each succeeding year. Interest on the unpaid balance shall be based on the most recent allocation among the
available Valuation Funds chosen by the Participant, made in accordance with Section 4.3, above.
5.9. Small Account. If the Participant’s vested, unpaid balance of any Account as of the time the payments are to commence
from such Account is less than $25,000, then the Participating Company may cause the remaining unpaid, vested portion of
such Account to be paid in a lump sum, notwithstanding any election by the Participant to the contrary.
5.10. Withholding; Payroll Taxes. The Participating Company shall withhold from any payment made pursuant to this Plan any
taxes required to be withheld from such payments under federal, state, or local law, as determined by the Participating
Company in its sole discretion.
5.11. Payments in Connection with a Domestic Relations Order. Notwithstanding anything to the contrary, a Participating
Company may make distributions to someone other than the Participant if such payment is necessary to comply with a
domestic relations order, as defined in Section 414(p)(1)(B) of the Code, involving the Participant. Where the domestic
relations order permits discretion on the part of the non-Participant spouse and such discretion has not been exercised, the
Participating Company shall distribute to the non-Participant spouse the amounts subject to the order as soon as
administratively practicable following the date such order becomes final and non-appealable.
5.12. Payment to Guardian. If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of
handling the disposition of the property, the Committee shall direct payment to the guardian, legal representative or person
having the care and custody of such minor, incompetent or person. The Committee shall require proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to distribution. Such distribution shall completely
discharge the Committee and Company or any Participating Company from all liability with respect to such benefit.
5.13. Effect of Payment. The full payment of the applicable benefit under this Article V shall completely discharge all obligations
on the part of the Company or any Participating Company to the Participant (and the Participant’s Beneficiary) with respect
to the operation of this Plan, and the Participant’s (and Participant’s Beneficiary’s) rights under this Plan shall terminate.
5.14. Permissible Acceleration of Payments. To the extent permitted by Section 409A of the Code, the Committee may, in its
sole discretion, accelerate the time or schedule of a payment under the Plan as permitted and set forth in Treas. Reg. §1-
409A-3(j)(4), or as may otherwise be provided by the Treasury or the Internal Revenue Service from time to time.
5.15. Discretion to Provide for Distribution in Full Upon or Following a Change of Control. To the extent permitted by
Section 409A, in connection with a Change of Control, and for the 12-month period following a Change of Control, the
Committee may exercise its discretion to terminate the Plan and, notwithstanding any other provision of the Plan or the terms
of any Election, distribute the Account balance of each Participant in full and thereby effect the revocation of any
outstanding Election.
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ARTICLE VI - BENEFICIARY DESIGNATION
6.1. Beneficiary Designation. Each Participant shall have the right, at any time, to designate one (1) or more persons or entity as
Beneficiary (both primary as well as secondary) to who benefits under this Plan shall be paid in the event of Participant’s
death prior to complete distribution of the Participant’s vested Account balance. Each Beneficiary designation shall be in a
written form prescribed by the Committee and shall be effective only when filed with the Committee during the Participant’s
lifetime.
6.2. Changing Beneficiary. Any Beneficiary designation may be changed by a Participant without the consent of the previously
named Beneficiary by the filing of a new Beneficiary designation with the Committee.
6.3. No Beneficiary Designation. If any Participant fails to designate a Beneficiary in the manner provided above, if the
designation is void, or if the Beneficiary designated by a deceased Participant dies before the Participant or before complete
distribution of the Participant’s benefits, the Participant’s Beneficiary shall be the person in the first of the following classes
in which there is a survivor:
a) The Participant’s surviving spouse;
b) The Participant’s children in equal shares, except that if any of the children predeceases the Participant but leaves
surviving issue, then such issue shall take by right of representation the share the deceased child would have taken if
living, (divided in equal shares among such surviving issue);
c) The Participant’s estate.
6.4. Effect of Payment. Payment to the Beneficiary shall completely discharge the Company’s and each Participating Company’s
obligations under this Plan.
ARTICLE VII - ADMINISTRATION
7.1. Committee; Duties. This Plan shall be administered by the Committee. The Committee shall have the authority to make,
amend, interpret and enforce all appropriate rules and regulations for the administration of the Plan and decide or resolve any
and all questions, including interpretations of the Plan, as they may arise in such administration.
7.2. Compliance with Section 409A of the Code. It is intended that the Plan comply with the provisions of Section 409A of the
Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the
taxable year or years in which such amounts would otherwise actually be paid or made available to Participants or
Beneficiaries. This Plan shall be construed, administered, and governed in a manner that effects such intent, and the
Committee shall not take any action that would be inconsistent with such intent. Although the Committee shall use its best
efforts to avoid the imposition of taxation, interest and penalties under Section 409A of the Code, the tax treatment of
deferrals under this Plan is not warranted or guaranteed. Neither the Company, any Participating Company, the Board, any
director, officer, employee and advisor, the Board nor the Committee (or any delegate thereof) shall be held liable for any
taxes, interest, penalties or other monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the
Plan. For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words or phrases of similar import,
shall mean that the event or circumstance
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shall only be permitted to the extent it would not cause an amount deferred or payable under the Plan to be includible in the
gross income of a Participant or Beneficiary under Section 409A(a)(1) of the Code.
7.3. Agents. The Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with counsel who may be counsel to the Company or a Participating Company.
7.4. Binding Effect of Decisions. The decision or action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated
hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.
7.5. Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee against any and
all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan on account of
such member’s service on the Committee, except in the case of gross negligence or willful misconduct.
ARTICLE VIII - CLAIMS PROCEDURE
8.1. Claim. Any person or entity claiming a benefit, requesting an interpretation or ruling under the Plan (hereinafter referred to
as “Claimant”), or requesting information under the Plan shall present the request in writing to the Committee, which shall
respond in writing as soon as practical, but in no event later than ninety (90) days after receiving the initial claim (or no later
than forty-five (45) days after receiving the initial claim regarding a Disability under this Plan).
8.2. Denial of Claim. If the claim or request is denied, the written notice of denial shall state:
a) The reasons for denial, with specific reference to the Plan provisions on which the denial is based;
b) A description of any additional material or information required and an explanation of why it is necessary, in which
event the time frames listed in section 8.1 shall be one hundred and eighty (180) and seventy-five (75) days from the
date of the initial claim respectively; and
c) An explanation of the Plan’s claim review procedure.
8.3. Review of Claim. Any Claimant whose claim or request is denied or who has not received a response within ninety (90)
days (or forty-five (45) days in the event of a claim regarding a Disability) may request a review by notice given in writing to
the Committee. Such request must be made within sixty (60) days (or one hundred and eighty (180) days in the event of a
claim regarding a Disability) after receipt by the Claimant of the written notice of denial, or in the event Claimant has not
received a response sixty (60) days (or one hundred and eighty (180) days in the event of a claim regarding a Disability) after
receipt by the Committee of Claimant’s claim or request. The claim or request shall be reviewed by the Committee which
may, but shall not be required to, grant the Claimant a hearing. On review, the claimant may have representation, examine
pertinent documents, and submit issues and comments in writing.
8.4. Final Decision. The decision on review shall normally be made within sixty (60) days (or forty-five (45) days in the event of
a claim regarding a Disability) after the Committee’s
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receipt of claimant’s claim or request. If an extension of time is required for a hearing or other special circumstances arise,
the Claimant shall be notified and the time limit shall be one hundred twenty (120) days (or ninety (90) days in the event of a
claim regarding a Disability). The decision shall be in writing and shall state the reasons and the relevant Plan provisions. All
decisions on review shall be final and bind all parties concerned.
ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN
9.1. Amendment. The Board or the Committee may at any time amend the Plan by written instrument, notice of which is given
to all Participants and to Beneficiary receiving installment payments, provided however, that no amendment shall reduce the
amount vested or accrued in any Account as of the date the amendment is adopted. Notwithstanding the foregoing or any
provision of the Plan to the contrary, the Board or the Committee may at any time (in its sole discretion and without the
consent of any Participant) modify, amend or terminate any or all of the provisions of this Plan or take any other action, to
the extent necessary or advisable to conform the provisions of the Plan with Section 409A of the Code, the regulations issued
thereunder or an exception thereto, regardless of whether such modification, amendment or termination of this Plan or other
action shall adversely affect the rights of a Participant under the Plan. Termination of this Plan shall not be a distribution
event under the Plan unless otherwise permitted under Section 409A. In addition, any amendment which adds a distribution
event to the Plan shall not be effective with respect to Accounts already established as of the time of such amendment.
9.2. Company’s Right to Terminate. The Board or the Committee may, in its sole discretion, terminate the entire Plan, or
terminate a portion of the Plan that is identified as an elective account balance plan as defined in Treas. Reg. §1.409A -1(c)
(2)(i)(A), or as a non-elective account balance plan as defined in Treas. Reg. §1.409A -1(c)(2)(i)(B), and require distribution
of all benefits due under the Plan or portion thereof, in accordance with the applicable requirements of Treas. Reg. §1.409A-
3(j)(4)(ix).
ARTICLE X - MISCELLANEOUS
10.1. Unfunded Plan. This plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select
group of “management or highly-compensated employees” within the meaning of Sections 201, 301, and 401 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore is exempt from the provisions of
Parts 2, 3 and 4 of Title I of ERISA.
10.2. Unsecured General Creditor. Notwithstanding any other provision of this Plan, Participants and Participants’ Beneficiaries
shall be unsecured general creditors, with no secured or preferential rights to any assets of Company or any other party for
payment of benefits under this Plan. Any property held by Company for the purpose of generating the cash flow for benefit
payments shall remain its general, unpledged and unrestricted assets. Company’s obligation under the Plan shall be an
unfunded and unsecured promise to pay money in the future.
10.3. Trust Fund. Each Participating Company shall be responsible for the payment of benefits provided under the Plan. At its
discretion, the Participating Company may establish one (1) or more trusts, with such trustees as the Committee may
approve, for the purpose of assisting in the payment of such benefits. The assets of any such trust shall be held for payment
of all of the Participating Company’s general creditors in the event of insolvency. To the extent any benefits provided under
the Plan are paid from any such trust, the
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Participating Company shall have no further obligation to pay them. If not paid from the trust, such benefits shall remain the
obligation of the Participating Company.
10.4. Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-
transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
10.5. Not a Contract of Employment. This Plan shall not constitute a contract of employment between Company or any
Participating Company and the Participant. Nothing in this Plan shall give a Participant the right to be retained in the service
of Company or any Participating Company or to interfere with the right of the Company or any Participating Company to
discipline or discharge a Participant at any time.
10.6. Protective Provisions. A Participant will cooperate with the Participating Company by furnishing any and all information
requested by the Participating Company, in order to facilitate the payment of benefits hereunder, and by taking such physical
examinations as Company may deem necessary and taking such other action as may be requested by the Participating
Company.
10.7. Governing Law. The provisions of this Plan shall be construed and interpreted according to the laws of the Commonwealth
of Pennsylvania, except as preempted by federal law.
10.8. Validity. If any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision had
never been inserted herein.
10.9. Notice. Any notice required or permitted under the Plan shall be sufficient if in writing and hand delivered or sent by
registered or certified mail. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of
the date shown on the postmark on the receipt for registration or certification. Mailed notice to the Committee shall be
directed to the following address:
Comcast Corporation
One Comcast Center
1701 John F. Kennedy Boulevard
Philadelphia, PA 19103
Attention: General Counsel
Mailed notice to a Participant or Beneficiary shall be directed to the individual’s last known address in Company’s records.
10.10. Successors. The provisions of this Plan shall bind and inure to the benefit of the Company, the Participating Companies, and
their successors and assigns. The term successors as used herein shall include any corporate or other business entity which
shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets
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of the Company or a Participating Company, and successors of any such corporation or other business entity.
Executed on the 12 day of October, 2021
th
COMCAST CORPORATION
BY: /s/ Michael Cavanagh
Michael Cavanagh
Chief Financial Officer
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Exhibit 10.6
COMCAST CORPORATION
2005 DEFERRED COMPENSATION PLAN
ARTICLE 1 – BACKGROUND AND COVERAGE OF PLAN
1.1. Background and Adoption of Plan.
1.1.1. Amendment and Restatement of the Plan. In recognition of the services provided by certain key
employees and in order to make additional retirement benefits and increased financial security available on a tax-favored basis to
those individuals, the Board of Directors of Comcast Corporation, a Pennsylvania corporation (the “Board”), hereby amends and
restates the Comcast Corporation 2005 Deferred Compensation Plan (the “Plan”), effective July 13, 2021. The Plan has
previously been amended and restated from time to time, in light of the enactment of section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”) as part of the American Jobs Creation Act of 2004, and the issuance of various Notices,
Announcements, Proposed Regulations and Final Regulations thereunder (collectively, “Section 409A”), and to make desirable
changes to the rules of the Plan.
1.1.2. Prior Plan. Prior to January 1, 2005, the Comcast Corporation 2002 Deferred Compensation Plan
(the “Prior Plan”) was in effect. In order to preserve the favorable tax treatment available to deferrals under the Prior Plan in light
of the enactment of Section 409A, the Board has prohibited future deferrals under the Prior Plan of amounts earned and vested on
and after January 1, 2005. Amounts earned and vested prior to January 1, 2005 are and will remain subject to the terms of the
Prior Plan. Amounts earned and vested on and after January 1, 2005 will be available to be deferred pursuant to the Plan, subject
to its terms and conditions.
1.2. Reservation of Right to Amend to Comply with Section 409A. In addition to the powers reserved to the
Board and the Committee under Article 10 of the Plan, the Board and the Committee reserve the right to amend the Plan, either
retroactively or prospectively, in whatever respect is required to achieve and maintain compliance with the requirements of
Section 409A.
1.3. Plan Unfunded and Limited to Outside Directors, Directors Emeriti and Select Group of Management or
Highly Compensated Employees. The Plan is unfunded and is maintained primarily for the purpose of providing Outside
Directors, Directors Emeriti and a select group of management or highly compensated employees the opportunity to defer the
receipt of compensation otherwise payable to such Outside Directors, Directors Emeriti and eligible employees in accordance
with the terms of the Plan.
1.4. References to Written Forms, Elections and Notices. Any action under the Plan that requires a written form,
election, notice or other action shall be treated as completed if taken via electronic or other means, to the extent authorized by the
Administrator.
2.1.
“Account” means the bookkeeping accounts established pursuant to Section 5.1 and maintained by the
Administrator in the names of the respective Participants, to which all amounts deferred, and earnings allocated under the Plan
shall be credited, and from which all amounts distributed pursuant to the Plan shall be debited.
ARTICLE 2 – DEFINITIONS
2.2.
“Active Participant” means:
(a)
(b)
Each Participant who is in active service as an Outside Director or a Director Emeritus; and
Each Participant who is actively employed by a Participating Company as an Eligible Employee.
2.3.
“Administrator” means the Committee or its delegate.
2.4.
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control,” including its
correlative terms “controlled by” and “under common control with,” mean, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
2.5.
“Annual Rate of Pay” means, as of any date, an employee’s annualized base pay rate. An employee’s
Annual Rate of Pay shall not include sales commissions or other similar payments or awards, including payments earned under
any sales incentive arrangement for employees of NBCUniversal.
2.6.
“Applicable Interest Rate.”
(a)
Active Participants.
Protected Account Balances. Except as otherwise provided in Section 2.6(b), with respect to
Protected Account Balances, the term “Applicable Interest Rate,” means the interest rate that, when compounded daily pursuant
to rules established by the Administrator from time to time, is mathematically equivalent to 12% (0.12) per annum, compounded
annually.
(i)
(ii)
Crediting Rate. Except as otherwise provided in Section 2.6(b), for amounts (other than
Protected Account Balances) credited with respect to Initial Elections or pursuant to Section 3.8, and for amounts credited
pursuant to Subsequent Elections that are attributable to such amounts, the term “Applicable Interest Rate,” means the interest
rate that, when compounded daily pursuant to rules established by the Administrator from time to time, is mathematically
equivalent to 9% (0.09) per annum, compounded annually.
(b)
Termination or Transition of Service. Effective for the period beginning as soon as administratively
practicable following (i) a significant reduction in a Participant’s compensation and services to the Company, as determined by
the Administrator in its sole discretion, and (ii) a Participant’s employment termination date, in each case, to the date the
Participant’s Account is distributed in full, the Administrator, in its sole discretion, may designate the term “Applicable Interest
Rate” for such Participant’s Account to mean the lesser of (x) the rate in effect under Section 2.6(a) or (y) the Prime Rate plus
one percent. A Participant’s re-employment by a Participating Company following an employment termination date shall not
affect the Applicable Interest Rate that applies to the part of the Participant’s Account (including interest credited with respect to
such part of the Participant’s Account) that was credited before such employment termination date. Notwithstanding the
foregoing, the
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Administrator may delegate its authority to determine the Applicable Interest Rate under this Section 2.6(b) to an officer of the
Company or committee of two or more officers of the Company.
2.7.
“Beneficiary” means such person or persons or legal entity or entities, including, but not limited to, an
organization exempt from federal income tax under section 501(c)(3) of the Code, designated by a Participant or Beneficiary to
receive benefits pursuant to the terms of the Plan after such Participant’s or Beneficiary’s death. If no Beneficiary is designated
by the Participant or Beneficiary, or if no Beneficiary survives the Participant or Beneficiary (as the case may be), the
Participant’s Beneficiary shall be the Participant’s Surviving Spouse if the Participant has a Surviving Spouse and otherwise the
Participant’s estate, and the Beneficiary of a Beneficiary shall be the Beneficiary’s Surviving Spouse if the Beneficiary has a
Surviving Spouse and otherwise the Beneficiary’s estate.
2.8.
“Board” means the Board of Directors of the Company.
2.9.
“Change of Control” means any transaction or series of transactions that constitutes a change in the
ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company, within the
meaning of Section 409A.
2.10. “Code” means the Internal Revenue Code of 1986, as amended.
2.11. “Comcast Spectacor” means Comcast Spectacor, L.P.
2.12. “Committee” means the Compensation Committee of the Board of Directors of the Company.
merger, consolidation, acquisition of all or substantially all the assets thereof, or otherwise.
2.13. “Company” means Comcast Corporation, a Pennsylvania corporation, including any successor thereto by
2.14. “Company Stock” means with respect to amounts credited to the Company Stock Fund pursuant to (i)
deferral elections by Outside Directors or Directors Emeriti made pursuant to Section 3.1(a), or (ii) deemed transfers pursuant to
Article 5, Comcast Corporation Class A Common Stock, par value $0.01, and such other securities issued by the Company as
may be subject to adjustment in the event that shares of Company Stock are changed into, or exchanged for, a different number or
kind of shares of stock or other securities of the Company, whether through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split-up or other substitution of securities of the Company. In such event, the Committee
shall make appropriate equitable anti-dilution adjustments to the number and class of hypothetical shares of Company Stock
credited to Participants’ Accounts under the Company Stock Fund. The number of hypothetical shares of Company Stock
credited to a Participant’s Account shall be rounded down to the next lower share, and the value of fractional shares that
otherwise have been credited to the Company Stock Fund shall be credited to the Income Fund. Any reference to the term
“Company Stock” in the Plan shall be a reference to the appropriate number and class of shares of stock as adjusted pursuant to
this Section 2.14. The Committee’s adjustment shall be effective and binding for all purposes of the Plan.
2.15. “Company Stock Fund” means a hypothetical investment fund pursuant to which income, gains and losses
are credited to a Participant’s Account as if the Account, to the extent deemed invested in the Company Stock Fund, were
invested in hypothetical shares of
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Company Stock, and, except as otherwise provided in Section 2.14 with respect to fractional shares, all dividends and other
distributions paid with respect to Company Stock shall be credited to an Other Investment Fund as a hypothetical purchase on the
applicable dividend or distribution payment date, provided that (a) with respect to Company Stock credited to the Accounts of
Outside Directors, dividends and other distributions shall be credited to the Company Stock Fund as a hypothetical purchase of
Company Stock at Fair Market Value on the applicable dividend or distribution payment date and (b) with respect to Company
Stock credited to the Accounts of Covered Participants, dividends and other distributions paid after February 28, 2021 shall be
credited to one or more Other Investment Funds as a hypothetical purchase on the applicable dividend or distribution payment
date. Except to the extent provided by Section 5.2(b)(i)(C) with respect to Section 16 Officers or by the Administrator with
respect to Participants who are not Section 16 Officers, amounts credited to the Company Stock Fund may not thereafter be
transferred to the Income Fund or another Other Investment Fund.
2.16. “Compensation” means:
(a)
In the case of an Outside Director, the total remuneration payable in cash or payable in Company
Stock (as elected by an Outside Director pursuant to the Comcast Corporation 2002 Non-Employee Director Compensation Plan)
for services as a member of the Board and as a member of any Committee of the Board and in the case of a Director Emeritus,
the total remuneration payable in cash for services to the Board.
(b)
In the case of an Eligible Employee, the total cash remuneration for services payable by a
Participating Company, excluding (i) Severance Pay, (ii) sales commissions or other similar payments or awards other than cash
bonus arrangements described in Section 2.16(c), (iii) bonuses earned under any program designated by the Company’s
Programming Division as a “long-term incentive plan” and (iv) cash bonuses earned under any long-term incentive plan for
employees of NBCUniversal, provided that for Plan Years beginning after 2021, the term “Compensation” shall not include cash
remuneration for services payable by a Participating Company for services performed outside of the United States or the United
Kingdom.
(c)
Except as otherwise provided by the Administrator, with respect to any Eligible Employee who is
employed by NBCUniversal or any cash bonus arrangement maintained for the benefit of employees of NBCUniversal under
which there is a defined sales incentive target goal and target payout that provides for payment on a quarterly, semi-annual or
annual basis, the term “Compensation” shall include cash bonuses earned under any such sales incentive arrangement for
employees of NBCUniversal, provided that such cash bonus arrangement is the exclusive cash bonus arrangement in which such
Eligible Employee is eligible to participate and provided further that for cash bonuses earned in Plan Years beginning after 2021,
such cash bonus is attributable to services performed by an Eligible Employee in the United States or the United Kingdom.
2.17. “Contribution Limit” means:
(a)
For Plan Years beginning on and after January 1, 2022, the product of (i) five (5) times (ii) Total
Compensation.
Compensation.
(b)
For Plan Years beginning before December 31, 2021, the product of (i) seven (7) times (ii) Total
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2.18. “Covered Participant” means, as of any relevant date of determination, (i) any Section 16 Officer for whom
disclosure was required pursuant to Item 402 of SEC Regulation S-K in the Company’s most recent filing with the SEC under the
Securities Exchange Act of 1934, as amended, and (ii) any individual, as determined by the Committee in its discretion.
2.19. “Death Tax Clearance Date” means the date upon which a Deceased Participant’s or a deceased
Beneficiary’s Personal Representative certifies to the Administrator that (i) such Deceased Participant’s or deceased Beneficiary’s
Death Taxes have been finally determined, (ii) all of such Deceased Participant’s or deceased Beneficiary’s Death Taxes
apportioned against the Deceased Participant’s or deceased Beneficiary’s Account have been paid in full and (iii) all potential
liability for Death Taxes with respect to the Deceased Participant’s or deceased Beneficiary’s Account has been satisfied.
2.20. “Death Taxes” means any and all estate, inheritance, generation-skipping transfer, and other death taxes as
well as any interest and penalties thereon imposed by any governmental entity (a “taxing authority”) as a result of the death of the
Participant or the Participant’s Beneficiary.
2.21. “Deceased Participant” means a Participant whose employment, or, in the case of a Participant who was an
Outside Director or Director Emeritus, a Participant whose service as an Outside Director or Director Emeritus, is terminated by
death.
2.22. “Director Emeritus” means an individual designated by the Board, in its sole discretion, as Director
Emeritus, pursuant to the Board’s Director Emeritus Policy.
2.23. “Disability” means:
an individual’s inability to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months; or
(a)
circumstances under which, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months,
an individual is receiving income replacement benefits for a period of not less than three months under an accident or health plan
covering employees of the individual’s employer.
(b)
2.24. “Disabled Participant” means:
A Participant whose employment or, in the case of a Participant who is an Outside Director or
Director Emeritus, a Participant whose service as an Outside Director or Director Emeritus, is terminated by reason of Disability;
(a)
such individual.
(b)
The duly-appointed legal guardian of an individual described in Section 2.24(a) acting on behalf of
settlement agreement) which:
2.25. “Domestic Relations Order” means any judgment, decree or order (including approval of a property
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or former spouse of a Participant; and
(a)
Relates to the provision of child support, alimony payments or marital property rights to a spouse
(b)
Is made pursuant to a State domestic relations law (including a community property law).
2.26. “Eligible Comcast Employee” means an employee of a Participating Company described in Section 2.26(a)
through 2.26(e), provided that except as otherwise designated by the Administrator, in the case of an employee of the Company
or a subsidiary of the Company (other than NBCUniversal), such individual’s Compensation is administered under the
Company’s common payroll system, and in the case of an employee of NBCUniversal, such individual’s Compensation is
administered under NBCUniversal’s common payroll system:
For the 2012 Plan Year, each employee of a Participating Company who was an Eligible Employee
under the rules of the Plan as in effect on December 31, 2011, including employees who are Comcast-legacy employees of
NBCUniversal.
(a)
(b)
For the 2013 Plan Year, (i) each employee of a Participating Company other than NBCUniversal
and (ii) each employee of NBCUniversal described in Section 2.26(a), provided that in each case, such employee has an Annual
Rate of Pay of $200,000 or more as of both (iii) the date on which an Initial Election is filed with the Administrator for the 2013
Plan Year and (iv) January 1, 2013.
(c)
For the period extending from January 1, 2014 through December 31, 2018, (i) each employee of a
Participating Company other than NBCUniversal and (ii) each employee of NBCUniversal described in Section 2.26(a) whose
Compensation was administered under NBCUniversal’s common payroll system as of December 31, 2013, provided that in each
case, such employee has an Annual Rate of Pay of $250,000 or more as of both the date on which an Initial Election is filed with
the Administrator and the first day of the calendar year in which such Initial Election is filed.
Effective on and after January 1, 2019, each employee of a Participating Company other than
NBCUniversal, provided that such employee has an Annual Rate of Pay of $350,000 or more as of the date on which an Initial
Election is filed with the Administrator.
(d)
NBCUniversal.
NBCUniversal.
(e)
Each Grandfathered Employee who is an employee of a Participating Company other than
(f)
Each New Key Employee who is an employee of a Participating Company other than
(g)
Each Eligible Comcast Spectacor Employee.
2.27. “Eligible Comcast Spectacor Employee” means:
secondment arrangement between the Company and Comcast Spectacor.
(a)
Each Eligible Comcast Employee who is providing services to Comcast Spectacor under a
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(b)
Each employee of Comcast Spectacor, provided that such employee (i) has been designated as an
Eligible Comcast Spectacor Employee by the Administrator or its delegate and (ii) has an Annual Rate of Pay of $350,000 or
more as of both (x) the date on which an Initial Election is filed with the Administrator and (y) the first day of the calendar year
in which such Initial Election is filed.
2.28. “Eligible Employee” means:
(a)
(b)
Each Eligible Comcast Employee;
Each Eligible NBCU Employee; and
discretion, as an Eligible Employee.
(c)
Each other employee of a Participating Company who is designated by the Administrator, in its
2.29. “Eligible NBCU Employee” means:
Effective for the period extending from January 1, 2013 through December 31, 2018, an employee
of NBCUniversal described in Section 2.29(a)(i) through 2.29(a)(v), provided that, in each case, except as otherwise designated
by the Administrator, such individual’s Compensation is administered under NBCUniversal’s common payroll system.
(a)
Each employee of NBCUniversal who has been designated as a member of NBCUniversal’s
Executive Committee, Management Committee or Operating Committee by the Chief Executive Officer of NBCUniversal and
approved by the Administrator, other than an employee who is described in Section 2.26.
(i)
who, for the 2013 Plan Year:
(ii)
Each employee of NBCUniversal, other than an employee who is described in Section 2.26,
Committee or Operating Committee;
2011 or 2012;
(A)
Is not a member of NBCUniversal’s Executive Committee, Management
(B)
Transferred employment directly from the Company to NBCUniversal in
immediately before transferring employment from the Company to NBCUniversal;
(C) Was an Eligible Employee under the rules of the Plan as in effect
following the transfer of employment directly from the Company to NBCUniversal;
(D)
Elected to waive the opportunity to continue to be an Eligible Employee
which an Initial Election is filed with the Administrator for the 2013 Plan Year and (iv) January 1, 2013; and
(E)
Has an Annual Rate of Pay of $200,000 or more as of both (iii) the date on
(F)
Files an Initial Election with the Administrator for the 2013 Plan Year.
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(iii)
Each employee of NBCUniversal, other than an employee who is described in Section 2.26,
who, for the 2013 Plan Year:
Committee or Operating Committee;
(A)
Is not a member of NBCUniversal’s Executive Committee, Management
the period extending from January 29, 2011 through December 31, 2012;
(B)
Has been a participant in the NBCUniversal Supplementary Pension Plan for
which an Initial Election is filed with the Administrator for the 2013 Plan Year and (iv) January 1, 2013; and
(C)
Has an Annual Rate of Pay is $200,000 or more as of both (iii) the date on
(D)
Files an Initial Election with the Administrator for the 2013 Plan Year.
(iv)
Each Grandfathered Employee who is an employee of NBCUniversal.
(v)
Each New Key Employee who is an employee of NBCUniversal.
Effective on and after January 1, 2019, an employee of NBCUniversal described in Section
2.29(b)(i) through 2.29(b)(iii), provided that, in each case, except as otherwise designated by the Administrator, such individual’s
Compensation is administered under NBCUniversal’s common payroll system.
(b)
Each employee of NBCUniversal who has been designated as a member of NBCUniversal’s
Executive Committee or Management Committee by the Chief Executive Officer of NBCUniversal and approved by the
Administrator, other than an employee who is described in Section 2.26.
(i)
(ii)
Each Grandfathered Employee who is an employee of NBCUniversal.
(iii)
Each New Key Employee who is an employee of NBCUniversal.
2.30. “Fair Market Value”
If shares of any Other Investment Fund are listed on a stock exchange, Fair Market Value shall be
determined based on the last reported sale price of a share on the principal exchange on which shares are listed on the date of
determination, or if such date is not a trading day, the next trading date.
(a)
If shares of any Other Investment Fund are not so listed, but trades of shares are reported on a
quotation system, Fair Market Value shall be determined based on the last quoted sale price of a share on the quotation system on
the date of determination, or if such date is not a trading day, the next trading date.
(b)
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Market Value shall be determined by the Committee in good faith.
(c)
If shares of any Other Investment Fund are not so listed nor trades of shares so reported, Fair
2.31. “Grandfathered Employee” means:
(a)
Effective before January 1, 2014:
Each employee of a Participating Company other than NBCUniversal who, as of December
31, 1989, was eligible to participate in the Prior Plan and who has been in continuous service to the Company or an Affiliate
since December 31, 1989.
(i)
Each employee of a Participating Company other than NBCUniversal who was, at any time
before January 1, 1995, eligible to participate in the Prior Plan and whose Annual Rate of Pay was $90,000 or more as of both
(A) the date on which an Initial Election is filed with the Administrator and (B) the first day of each calendar year beginning after
December 31, 1994.
(ii)
Each employee of a Participating Company other than NBCUniversal who was an employee
of an entity that was a Participating Company in the Prior Plan as of June 30, 2002 and who had an Annual Rate of Pay of
$125,000 as of each of (i) June 30, 2002; (ii) the date on which an Initial Election was filed with the Administrator and (iii) the
first day of each calendar year beginning after December 31, 2002.
(iii)
(iv)
Each employee of a Participating Company other than NBCUniversal who (i) as of
December 31, 2002, was an “Eligible Employee” within the meaning of Section 2.34 of the AT&T Broadband Deferred
Compensation Plan (as amended and restated, effective November 18, 2002) with respect to whom an account was maintained,
and (ii) for the period beginning on December 31, 2002 and extending through any date of determination, has been actively and
continuously in service to the Company or an Affiliate.
(b)
Effective for the period extending from January 1, 2014 through December 31, 2018:
Section 2.31(a)(i)-(iv).
(i)
Each employee of a Participating Company other than NBCUniversal who is described in
Each employee of a Participating Company other than NBCUniversal who is a Participant
and who has an Annual Rate of Pay of $200,000 or more as of each of (A) December 31, 2013; (B) the date on which an Initial
Election is filed with the Administrator and (C) the first day of each calendar year beginning after December 31, 2013.
(ii)
Each employee of NBCUniversal described in Section 2.29(a)(ii) or 2.29(a)(iii) who is a
Participant and who has an Annual Rate of Pay of $200,000 or more as of each of (A) December 31, 2013; (B) the date on which
an Initial Election is filed with the Administrator and (C) the first day of each calendar year beginning after December 31, 2013.
(iii)
Effective for the period extending from January 1, 2019 through December 31, 2020, each
employee of a Participating Company who either has a balance credited to his Account as of December 31, 2018, or has filed an
Initial Election to defer bonus earned for the 2018 Plan Year and who:
(c)
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is an employee of NBCUniversal described in Section 2.26(a) whose Compensation was
administered under NBCUniversal’s common payroll system as of December 31, 2013, has an Annual Rate of Pay of $250,000 or
more as of both the date on which an Initial Election is filed with the Administrator and the first day of the calendar year in which
such Initial Election is filed;
(i)
Committee (but not NBCUniversal’s Executive Committee or Management Committee); or
(ii)
is described in Section 2.29(a)(i), and who is a member of NBCUniversal’s Operating
(iii)
is described in Section 2.31(b).
2.32. “Hardship” means an “unforeseeable emergency,” as defined in Section 409A. The Committee shall
determine whether the circumstances of the Participant constitute an unforeseeable emergency and thus a Hardship within the
meaning of this Section 2.32. Following a uniform procedure, the Committee’s determination shall consider any facts or
conditions deemed necessary or advisable by the Committee, and the Participant shall be required to submit any evidence of the
Participant’s circumstances that the Committee requires. The determination as to whether the Participant’s circumstances are a
case of Hardship shall be based on the facts of each case; provided however, that all determinations as to Hardship shall be
uniformly and consistently made according to the provisions of this Section 2.32 for all Participants in similar circumstances.
2.33. “High Balance Participant” means:
than or equal to the Income Fund Limit, as determined by the Administrator;
(a)
a Participant the value of whose Account that is deemed invested in the Income Fund is greater
Director; and
Covered Participant.
(b)
effective July 31, 2020, a Participant who is, as of any relevant date of determination, an Outside
(c)
Effective February 28, 2021, a Participant who is, as of any relevant date of determination, a
2.34. “High-Water Mark” means:
With respect to amounts credited to the Income Fund pursuant to an Eligible Comcast Employee’s
Initial Elections on account of Compensation earned in 2014, the highest of the sum of the amounts described in Section 2.34(a)
(i), (ii) and (iii) as of the last day of any calendar quarter beginning after December 31, 2008 and before October 1, 2013:
(a)
Income Fund; plus
(i)
An Eligible Comcast Employee’s Account to the extent such Account is credited to the
(ii)
credited to the Income Fund; plus
Such Eligible Comcast Employee’s Account in the Prior Plan to the extent such Account is
Account is credited to the “Income Fund.”
(iii)
Such Eligible Comcast Employee’s Account in the Restricted Stock Plan to the extent such
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With respect to amounts credited to the Income Fund pursuant to an Eligible Comcast Employee’s
Initial Elections on account of Compensation earned after 2014, the sum of (x) plus (y) where (x) equals the highest of the sum of
the amounts described in Section 2.34(a)(i), (ii) and (iii) as of the last day of any calendar quarter beginning after December 31,
2008 and before January 1, 2014, and (y) equals the sum of:
(b)
The amount credited to the Income Fund with respect to an Eligible Comcast Employee’s
Account pursuant to Section 3.8 after December 31, 2013 and on or before September 30, 2014 that is contractually committed
pursuant to an employment agreement entered into on or before December 31, 2013; plus
(i)
The deferred portion of an Eligible Comcast Employee’s cash bonus award earned for 2013
to the extent credited to the Income Fund and payable, but for the Eligible Comcast Employee’s Initial Election, after December
31, 2013 and on or before September 30, 2014; plus
(ii)
The amount credited to the Eligible Comcast Employee’s “Income Fund” under the
Restricted Stock Plan pursuant to a “Diversification Election” made by an Eligible Comcast Employee before January 1, 2014
with respect to restricted stock units that vest under the Restricted Stock Plan after December 31, 2013 and on or before
September 30, 2014.
(iii)
2.35. “Inactive Participant” means each Participant (other than an Outside Director or Section 16 Officer
described in Section 3.5(a), Retired Participant, Deceased Participant or Disabled Participant) who is not in active service as an
Outside Director or Director Emeritus and is not actively employed by a Participating Company.
2.36. “Income Fund” means a hypothetical investment fund pursuant to which income, gains and losses are
credited to a Participant’s Account as if the Account, to the extent deemed invested in the Income Fund, were credited with
interest at the Applicable Interest Rate. The “9% Fund” means that portion of the Income Fund with respect to which the
Applicable Interest Rate is 9%. The “12% Fund” means that portion of the Income Fund with respect to which the Applicable
Interest Rate is 12%. The “Prime Plus One Fund” means that portion of the Income Fund with respect to which the Applicable
Interest Rate is described in Section 2.6(b). For purposes of this Section 2.36, the Income Fund shall include amounts credited to
the Income Fund under the Prior Plan and the Restricted Stock Plan.
2.37. “Income Fund Limit” means:
(a)
With respect to Participants other than Participants described in Section 2.37(b), Section 2.37(c),
or Section 2.37(d), $100 million, provided that if the amount credited to a Participant’s Income Fund is greater than $100 million
as of December 31, 2019, the Income Fund Limit applicable to such Participant for any applicable Plan Year shall be equal to the
amount credited to a Participant’s Income Fund as of the December 31 immediately preceding such applicable Plan Year until
such balance is equal to or less than $100 million.
dollars).
(b)
Effective as of July 31, 2020, with respect to Participants who are Outside Directors, $0 (zero
such date, $0 (zero dollars).
(c)
Effective as of February 28, 2021, with respect to Participants who are Covered Participants as of
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Following July 31, 2020 (in the case of Outside Directors) and February 28, 2021 (in the case of
Covered Participants), effective as of the last day of the month following the date a Participant first becomes an Outside Director
or a Covered Participant, $0 (zero dollars).
(d)
The Administrator may waive or modify downward the Income Fund Limit applicable to one or more High Balance Participants
in its discretion. For purposes of this Section 2.37, the Income Fund shall include amounts credited to the Income Fund under the
Prior Plan and the Restricted Stock Plan.
2.38. “Initial Election.”
Outside Directors and Directors Emeriti. With respect to Outside Directors and Directors Emeriti,
the term “Initial Election” means one or more written elections on a form provided by the Administrator and filed with the
Administrator in accordance with Article 3, pursuant to which an Outside Director or Director Emeritus may:
(a)
Elect to defer any portion of the Compensation payable for the performance of services as
an Outside Director or a Director Emeritus, net of required withholdings and deductions as determined by the Administrator in its
sole discretion; and
(i)
Election relates.
(ii)
Designate the time of payment of the amount of deferred Compensation to which the Initial
the Administrator and filed with the Administrator in accordance with Article 3 pursuant to which an Eligible Employee may:
(b)
Eligible Employees. The term “Initial Election” means one or more written elections provided by
payable for the performance of services as an Eligible Employee following the time that such election is filed; and
(i)
Subject to the limitations described in Section 2.38(b)(iii), elect to defer Compensation
Election relates.
(ii)
Designate the time of payment of the amount of deferred Compensation to which the Initial
(iii)
The following rules shall apply to Initial Elections:
2.38(b)(iii)(B) and Section 2.38(b)(iii)(C):
(A)
Subject to the limits on deferrals of Compensation described in Section
the maximum amount of base salary available for deferral shall be
determined net of required withholdings and deductions as determined by the Administrator in its sole discretion, but shall in no
event be less than 85% of the Participant’s base salary and
(1)
the maximum amount of a Signing Bonus available for deferral
pursuant to an Initial Election shall not exceed 50%, except as otherwise determined by the Administrator or its delegate in its
discretion on an exceptions basis for Participants who are not Section 16 Officers.
(2)
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The maximum amount subject to Initial Elections for any Plan Year shall not
exceed 35% of Total Compensation, except as otherwise determined by the Administrator or its delegate in its discretion on an
exceptions basis for Participants who are not Section 16 Officers.
(B)
No Initial Election with respect to Compensation expected to be earned in a
Plan Year shall be effective if the sum of (x) the value of the Eligible Employee’s Account in the Plan, plus (y) the value of the
Eligible Employee’s Account in the Prior Plan, plus (z) the value of the Eligible Employee’s Account in the Restricted Stock Plan
to the extent such Account is credited to the “Income Fund” thereunder, exceeds the Contribution Limit with respect to such Plan
Year, determined as of September 30 immediately preceding such Plan Year.
(C)
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2.39.
[RESERVED]
2.40.
“NBCUniversal” means NBCUniversal, LLC and its subsidiaries.
2.41.
“New Key Employee” means:
(a)
Employees of Comcast.
Effective for the period extending from January 1, 2014 through December 31, 2018, and
except as provided in Section 2.41(d), each employee of a Participating Company other than NBCUniversal and Comcast
Spectacor:
(i)
Annual Rate of Pay of $250,000 or more as of his employment commencement date, or
(A)
who (x) becomes an employee of a Participating Company and (y) has an
(y) immediately preceding such increase, was not an Eligible Employee.
(B)
who (x) has an Annual Rate of Pay that is increased to $250,000 or more and
employee of a Participating Company other than NBCUniversal and Comcast Spectacor:
(ii)
Effective on and after January 1, 2019, and except as provided in Section 2.41(d), each
Annual Rate of Pay of $350,000 or more as of his employment commencement date, or
(A)
who (x) becomes an employee of a Participating Company and (y) has an
(y) immediately preceding such increase, was not an Eligible Employee.
(B)
who (x) has an Annual Rate of Pay that is increased to $350,000 or more and
(b)
Employees of NBCUniversal.
Effective for the period extending from January 1, 2013 through December 31, 2018, and
except as provided in Section 2.41(d), each employee of NBCUniversal who (x) first becomes a member of the NBCUniversal
Executive Committee, Management Committee or Operating Committee, and approved by the Administrator during a
(i)
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Plan Year and (y) immediately preceding the effective date of such membership, was not an Eligible Employee.
Effective on and after January 1, 2019, and except as provided in Section 2.41(d), each
employee of NBCUniversal who (x) first becomes a member of the NBCUniversal Executive Committee or the NBCUniversal
Management Committee and approved by the Administrator during a Plan Year and (y) immediately preceding the effective date
of such membership, was not an Eligible Employee.
(ii)
Comcast Spectacor:
(c)
Effective on and after May 20, 2014, and except as provided in Section 2.41(d), each employee of
who (x) becomes an employee of Comcast Spectacor, (y) has an Annual Rate of Pay of
$350,000 or more as of his employment commencement date and (z) is designated as an Eligible Comcast Spectacor Employee
by the Administrator or its delegate, or
(i)
who (x) is designated as an Eligible Comcast Spectacor Employee by the Administrator or
its delegate, (y) has an Annual Rate of Pay that is increased to $350,000 or more and (z) immediately preceding such increase,
was not an Eligible Employee.
(ii)
Key Employee with respect to any Plan Year under this Section 2.41 if:
(d)
Notwithstanding Section 2.41(a), (b), or (c) to the contrary, no employee shall be treated as a New
Such employee was eligible to participate in another plan sponsored by the Company or an
Affiliate of the Company which is considered to be of a similar type as defined in Treasury Regulation Section 1.409A-1(c)(2)(i)
(A) or (B) with respect to such Plan Year; or
(i)
Such employee has been eligible to participate in the Plan or any other plan referenced in
Section 2.41(d)(i) (other than with respect to the accrual of earnings) at any time during the 24-month period ending on the date
such employee would, but for this Section 2.41(d), otherwise become a New Key Employee.
(ii)
2.42.
“Normal Retirement” means:
For a Participant who is an employee of a Participating Company immediately preceding his
termination of employment, a termination of employment that is treated by the Participating Company as a retirement under its
employment policies and practices as in effect from time to time; and
(a)
termination of service, the Participant’s normal retirement from the Board.
(b)
For a Participant who is an Outside Director or Director Emeritus immediately preceding his
2.43.
“Other Investment Fund” means the Company Stock Fund and such other hypothetical investment funds
designated by the Administrator, pursuant to which income, gains, and losses are credited to a Participant’s Account as if the
Account, to the extent deemed invested in such Other Investment Fund, were credited with income, gains, and losses as if
actually invested in such Other Investment Fund. Unless otherwise specified by the
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Administrator, the Participant shall designate the Other Investment Funds in which the Participant’s Account shall be invested in
accordance with rules established by the Administrator.
Company.
2.44.
“Outside Director” means a member of the Board who is not an Eligible Employee of a Participating
“Participant” means each individual who has made an Initial Election, or for whom an Account is
established pursuant to Section 5.1, and who has an undistributed amount credited to an Account under the Plan, including an
Active Participant, a Deceased Participant, a Retired Participant, a Disabled Participant, and an Inactive Participant.
2.45.
2.46.
“Participating Company” means the Company and each Affiliate of the Company in which the Company
owns, directly or indirectly, 50 percent or more of the voting interests or value, other than such an affiliate designated by the
Administrator as an excluded Affiliate. Notwithstanding the foregoing, the Administrator may delegate its authority to designate
an eligible Affiliate as an excluded Affiliate under this Section 2.46 to an officer of the Company or committee of two or more
officers of the Company.
Section 409A.
2.47.
“Performance-Based Compensation” means “Performance-Based Compensation” within the meaning of
2.48.
“Performance Period” means a period of at least 12 months during which a Participant may earn
Performance-Based Compensation. Effective for Comcast Spectacor’s fiscal years beginning on and after July 1, 2014, the
Performance Period for annual incentive bonuses earned by Eligible Comcast Spectacor Employees shall be Comcast Spectacor’s
fiscal year ending June 30.
organization.
2.49.
“Person” means an individual, a corporation, a partnership, an association, a trust or any other entity or
amended from time to time.
2.50.
“Plan” means the Comcast Corporation 2005 Deferred Compensation Plan, as set forth herein, and as
2.51.
“Plan Year” means the calendar year.
2.52.
“Prime Rate” means, for any calendar year, the interest rate that, when compounded daily pursuant to rules
established by the Administrator from time to time, is mathematically equivalent to the prime rate of interest (compounded
annually) as published in the Eastern Edition of The Wall Street Journal on the last business day preceding the first day of such
calendar year, and as adjusted as of the last business day preceding the first day of each calendar year beginning thereafter.
2.53.
“Prior Plan” means the Comcast Corporation 2002 Deferred Compensation Plan.
2.54.
“Protected Account Balance” means:
Director Emeritus pursuant to:
(a)
The amount credited to the Account of an Eligible Comcast Employee, an Outside Director or a
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(i)
Initial Elections with respect to Compensation earned before January 1, 2014;
Company Credits described in Section 3.8 that were credited before January 1, 2014 or were
made pursuant to an employment agreement entered into on or before December 31, 2013, including amounts attributable to
Subsequent Elections filed with respect to such amounts before January 1, 2021; and
(ii)
Participant’s Accounts attributable to amounts credited pursuant to this Section 2.54(a);
(iii)
Subsequent Elections filed before January 1, 2021 with respect to the portion of such
including interest credits attributable to such amounts.
2015, if, as of the September 30th immediately preceding the Plan Year to which the Initial Election applied, the sum of:
(b)
The amount credited pursuant to Initial Elections with respect to Compensation earned in 2014 or
(i)
(ii)
An Eligible Comcast Employee’s Account; plus
Such Eligible Comcast Employee’s Account in the Prior Plan; plus
Account was credited to the Income Fund;
(iii)
Such Eligible Comcast Employee’s Account in the Restricted Stock Plan to the extent such
is less than the High-Water Mark.
(c)
The amount credited pursuant to Initial Elections with respect to Compensation earned on and after
January 1, 2016 and before January 1, 2021, and the amount credited to an Eligible Comcast Employee’s Account attributable to
Company Credits described in Section 3.8 after May 20, 2015 and before January 1, 2021 (other than Company Credits described
in Section 2.54(b)), if, as of the September 30 immediately preceding the Plan Year in which such amounts are creditable, the
sum of:
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(i)
An Eligible Comcast Employee’s Account to the extent such Account is credited to the
Income Fund; plus
(ii)
credited to the Income Fund; plus
Such Eligible Comcast Employee’s Account in the Prior Plan to the extent such Account is
Account is credited to the Income Fund;
(iii)
Such Eligible Comcast Employee’s Account in the Restricted Stock Plan to the extent such
is less than the High-Water Mark.
The amount credited pursuant to Subsequent Elections filed after December 31, 2013 and before
January 1, 2021 that are attributable to any portion of an Eligible Comcast Employee’s Account described in Section 2.54(a)-(d).
(d)
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Notwithstanding Sections 2.53(a)-(d), except as otherwise provided by the Administrator, the Protected Account Balance of an
Eligible Comcast Employee who is re-employed by a Participating Company following an employment termination date that
occurs after December 31, 2013 shall be zero.
plan).
2.55.
“Restricted Stock Plan” means the Comcast Corporation 2002 Restricted Stock Plan (or any successor
2.56.
“Retired Participant” means a Participant who has terminated service pursuant to a Normal Retirement.
Securities Exchange Act of 1934, as amended.
2.57.
“Section 16 Officer” means an “officer” of the Company, as defined pursuant to Rule 16a-1(f) under the
“Severance Pay” means any amount that is payable in cash and is identified by a Participating Company as
severance pay, or any amount which is payable on account of periods beginning after the last date on which an employee (or
former employee) is required to report for work for a Participating Company.
2.58.
“Signing Bonus” means Compensation payable in cash and designated by the Administrator as a special
bonus intended to induce an individual to accept initial employment (or re-employment) by a Participating Company or to
execute an employment agreement, or an amount payable in connection with a promotion.
2.59.
2.60.
“Subsequent Election” means one or more written elections on a form provided by the Administrator, filed
with the Administrator in accordance with Article 3, pursuant to which a Participant or Beneficiary may elect to defer the time of
payment of amounts previously deferred in accordance with the terms of a previously filed Initial Election or Subsequent
Election.
Deceased Beneficiary (as applicable).
2.61.
“Surviving Spouse” means the widow or widower, as the case may be, of a Deceased Participant or a
Party” shall not include the Company or an Affiliate of the Company.
2.62.
“Third Party” means any Person, together with such Person’s Affiliates, provided that the term “Third
2.63.
“Total Compensation” means:
(a)
The sum of an Eligible Employee’s Annual Rate of Pay, plus Company Credits described in
Section 3.8, plus any target bonus amount under a cash bonus award that is includible as “Compensation” under Section 2.16,
plus the grant date value of any annual long-term incentive award granted in the immediately preceding Plan Year, all as
determined by the Administrator in its sole discretion, as of the September 30th immediately preceding the Plan Year.
(b)
For the purpose of determining Total Compensation under the Plan, the Administrator, in its sole
discretion, may determine the applicable value of an Eligible Employee’s annual long-term incentive award in appropriate
circumstances, such as where the Eligible Employee’s actual annual long-term incentive award (if any) reflects a new hire’s short
period of service, or other similar circumstances.
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ARTICLE 3 – INITIAL AND SUBSEQUENT ELECTIONS
3.1. Elections.
(a)
Initial Elections. Subject to any applicable limitations or restrictions on Initial Elections, each
Outside Director, Director Emeritus and Eligible Employee shall have the right to defer Compensation by filing an Initial
Election with respect to Compensation that he would otherwise be entitled to receive for a calendar year or other Performance
Period at the time and in the manner described in this Article 3. Notwithstanding the foregoing, an individual who is expected to
become a New Key Employee on a specific date shall be treated as an “Eligible Employee” for purposes of this Section 3.1(a)
and may file an Initial Election before the date on which such individual becomes a New Key Employee. The Compensation of
such Outside Director, Director Emeritus or Eligible Employee for a calendar year or other Performance Period shall be reduced
in an amount equal to the portion of the Compensation deferred by such Outside Director, Director Emeritus or Eligible
Employee for such period of time pursuant to such Outside Director’s, Director Emeritus’s or Eligible Employee’s Initial
Election. Such reduction shall be effected on a pro rata basis from each periodic installment payment of such Outside Director’s,
Director Emeritus’s or Eligible Employee’s Compensation for such period of time (in accordance with the general pay practices
of the Participating Company), and credited, as a bookkeeping entry, to such Outside Director’s, Director Emeritus’s or Eligible
Employee’s Account in accordance with Section 5.1. Amounts credited to the Accounts of Outside Directors in the form of
Company Stock shall be credited to the Company Stock Fund and credited with income, gains and losses in accordance with
Section 5.2(c).
(b)
Subsequent Elections. Each Participant or Beneficiary shall have the right to elect to defer the time
of payment or to change the manner of payment of amounts previously deferred in accordance with the terms of a previously
made Initial Election pursuant to the terms of the Plan by filing a Subsequent Election at the time, to the extent, and in the
manner described in this Article 3.
3.2.
Filing of Initial Election: General. An Initial Election shall be filed on the form provided by the
Administrator for this purpose. Except as provided in Section 3.3:
No such Initial Election shall be effective with respect to Compensation other than Signing
Bonuses or Performance-Based Compensation unless it is filed with the Administrator on or before December 31 of the calendar
year preceding the calendar year to which the Initial Election applies.
(a)
No such Initial Election shall be effective with respect to Performance-Based Compensation unless
it is filed with the Administrator at least six months before the end of the Performance Period during which such Performance-
Based Compensation may be earned.
(b)
(c)
No such Initial Election shall be effective with respect to a Signing Bonus for an Eligible
Employee other than a New Key Employee unless (i) such Signing Bonus is forfeitable if the Participant fails to continue in
service to a specified date (other than as the result of the Participant’s termination of employment because of death, Disability or
Company-initiated termination without cause, as determined by the Administrator), and (ii) the Initial Election is filed with the
Administrator on or before the 30 day following the date of grant of such Signing Bonus and at least one year before such
specified date.
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3.3. Filing of Initial Election by New Key Employees and New Outside Directors.
an Initial Election:
(a)
New Key Employees. Notwithstanding Section 3.1 and Section 3.2, a New Key Employee may file
To defer Compensation payable for services to be performed after the date of such Initial
Election. An Initial Election to defer Compensation payable for services to be performed after the date of such Initial Election
must be filed with the Administrator within 30 days of the date such New Key Employee first becomes eligible to participate in
the Plan.
(i)
To defer Compensation payable as a Signing Bonus. An Initial Election to defer
Compensation payable as a Signing Bonus must be filed with the Administrator before such New Key Employee commences
service as an Eligible Employee.
(ii)
An Initial Election by such New Key Employee for succeeding calendar years or applicable Performance Periods shall be made
in accordance with Section 3.1 and Section 3.2.
(b)
New Outside Directors. Notwithstanding Section 3.1 and Section 3.2, an Outside Director may
elect to defer Compensation by filing an Initial Election with respect to his Compensation attributable to services provided as an
Outside Director in the calendar year in which an Outside Director’s election as a member of the Board becomes effective
(provided that such Outside Director is not a member of the Board immediately preceding such effective date), beginning with
Compensation earned following the filing of an Initial Election with the Administrator and before the close of such calendar year.
Such Initial Election must be filed with the Administrator within 30 days of the effective date of such Outside Director’s election.
Any Initial Election by such Outside Director for succeeding calendar years shall be made in accordance with Section 3.1 and
Section 3.2
3.4. Years to which Initial Election May Apply.
(a)
Separate Initial Elections for Each Calendar Year or Applicable Performance Period. A separate
Initial Election may be filed for each calendar year or other applicable Performance Period as to which an Outside Director,
Director Emeritus or Eligible Employee desires to defer such Outside Director’s, Director Emeritus’s or Eligible Employee’s
Compensation. The failure of an Outside Director, Director Emeritus or Eligible Employee to make an Initial Election for any
calendar year or other applicable Performance Period shall not affect such Outside Director’s or Eligible Employee’s right to
make an Initial Election for any other calendar year or other applicable Performance Period.
(b)
Initial Election of Distribution Date. Each Outside Director, Director Emeritus or Eligible
Employee shall, contemporaneously with an Initial Election, also elect the time of payment of the amount of the deferred
Compensation to which such Initial Election relates; provided, however, that, except as otherwise specifically provided by the
Plan, no distribution may commence earlier than January 2nd of the second calendar year beginning after the date the
compensation subject to the Initial Election would be paid but for the Initial Election, nor later than:
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year beginning after the date the compensation subject to the Initial Election would be paid but for the Initial Election; and
(i)
for Initial Elections filed on or before December 31, 2020, January 2nd of the tenth calendar
beginning after the date the compensation subject to the Initial Election would be paid but for the Initial Election.
(ii)
for Initial Elections filed after December 31, 2020, January 2nd of the seventh calendar year
Further, each Outside Director, Director Emeritus or Eligible Employee may select with each Initial Election the manner of
distribution in accordance with Article 4.
3.5. Subsequent Elections. No Subsequent Election shall be effective until 12 months after the date on which
such Subsequent Election is filed.
(a)
Active Participants, Outside Directors, and Section 16 Officers. Each Active Participant, and each
Participant designated by the Administrator who has served as an Outside Director or Section 16 Officer at any time on or after
January 1, 2019 (whether or not such individual is an Active Participant), who has filed an Initial Election, or who has filed a
Subsequent Election, may elect to defer the time of payment of any part or all of such Participant’s Account--
of five (5) and a maximum of ten (10) additional years from the previously-elected payment date;
(i)
With respect to Subsequent Elections filed on or before December 31, 2020, for a minimum
(5) and a maximum of seven (7) additional years from the previously-elected payment date;
(ii) With respect to Subsequent Elections filed after December 31, 2020, for a minimum of five
by filing a Subsequent Election with the Administrator at least 12 months before the lump-sum distribution or initial installment
payment would otherwise be made. The number of Subsequent Elections under this Section 3.5(a) shall not be limited. The
Administrator may designate the specific Other Investment Fund or Funds to which the Account of any individual who has
terminated service to the Company shall be deemed invested.
Inactive Participants. Except as otherwise provided in Section 3.5(a), the Committee may, in its
sole and absolute discretion, permit an Inactive Participant to make a Subsequent Election defer the time of payment of any part
or all of such Inactive Participant’s Account—
(b)
of five (5) years and a maximum of ten (10) additional years from the previously-elected payment date; and
(i)
With respect to Subsequent Elections filed on or before December 31, 2020, for a minimum
(5) years and a maximum of seven (7) additional years from the previously-elected payment date,
(ii) With respect to Subsequent Elections filed after December 31, 2020, for a minimum of five
by filing a Subsequent Election with the Administrator at least 12 months before the lump-sum distribution or initial installment
payment would otherwise be made. The number of Subsequent
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Elections under this Section 3.5(b) shall be determined by the Committee in its sole and absolute discretion.
(c)
Surviving Spouses – Subsequent Election. A Surviving Spouse who is a Deceased Participant’s
Beneficiary may elect to defer the time of payment of any part or all of such Deceased Participant’s Account the payment of
which would be made more than 12 months after the date of such election. Such election shall be made by filing a Subsequent
Election with the Administrator in which the Surviving Spouse shall specify the change in the time of payment, which—
than five (5) years nor more than ten (10) years from the previously-elected payment date;
(i)
With respect to Subsequent Elections filed on or before December 31, 2020, shall be no less
five (5) years nor more than seven (7) years from the previously-elected payment date; or
(ii) With respect to Subsequent Elections filed after December 31, 2020, shall be no less than
Spouse may elect to defer payment until such Surviving Spouse’s death.
(iii) With respect to Subsequent Elections filed on or before December 31, 2020, such Surviving
A Surviving Spouse may make a total of two (2) Subsequent Elections under this Section 3.5(c), with respect to all or any part of
the Deceased Participant’s Account. Subsequent Elections pursuant to this Section 3.5(c) may specify different changes with
respect to different parts of the Deceased Participant’s Account.
(d)
Beneficiary of a Deceased Participant Other Than a Surviving Spouse – Subsequent Election. A
Beneficiary of a Deceased Participant other than a Surviving Spouse may elect to defer the time of payment, of any part or all of
such Deceased Participant’s Account the payment of which would be made more than 12 months after the date of such election.
Such election shall be made by filing a Subsequent Election with the Administrator in which the Beneficiary shall specify the
deferral of the time of payment, which—
than five (5) years nor more than ten (10) years from the previously-elected payment date; and
(i)
With respect to Subsequent Elections filed on or before December 31, 2020 shall be no less
five (5) years nor more than seven (7) years from the previously-elected payment date.
(ii) With respect to Subsequent Elections filed after December 31, 2020 shall be no less than
A Beneficiary may make one (1) Subsequent Election under this Section 3.5(d), with respect to all or any part of the Deceased
Participant’s Account. Subsequent Elections pursuant to this Section 3.5(d) may specify different changes with respect to
different parts of the Deceased Participant’s Account.
Retired Participants and Disabled Participants. The Committee may, in its sole and absolute
discretion, permit a Retired Participant or a Disabled Participant to make a Subsequent Election to defer the time of payment of
any part or all of such Retired or
(e)
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Disabled Participant’s Account that would not otherwise become payable within twelve (12) months of such Subsequent Election
—
of five (5) years and a maximum of ten (10) additional years from the previously-elected payment date; and
(i)
With respect to Subsequent Elections filed on or before December 31, 2020, for a minimum
(5) years and a maximum of seven (7) additional years from the previously-elected payment date
(ii) With respect to Subsequent Elections filed after December 31, 2020, for a minimum of five
by filing a Subsequent Election with the Administrator on or before the close of business on the date that is at least twelve (12)
months before the date on which the lump-sum distribution or initial installment payment would otherwise be made. The number
of Subsequent Elections under this Section 3.5(f) shall be determined by the Committee in its sole and absolute discretion.
(f)
Most Recently Filed Initial Election or Subsequent Election Controlling. Except as otherwise
specifically provided by the Plan, no distribution of the amounts deferred by a Participant shall be made before the earlier of the
Participant’s death or the payment date designated by the Participant or Beneficiary on the most recently filed Initial Election or
Subsequent Election with respect to each deferred amount.
3.6. Discretion to Provide for Distribution in Full Upon or Following a Change of Control. To the extent
permitted by Section 409A, in connection with a Change of Control, and for the 12-month period following a Change of Control,
the Committee may exercise its discretion to terminate the Plan and, notwithstanding any other provision of the Plan or the terms
of any Initial Election or Subsequent Election, distribute the Account balance of each Participant in full and thereby effect the
revocation of any outstanding Initial Elections or Subsequent Elections.
3.7. Withholding and Payment of Death Taxes.
(a)
Notwithstanding any other provisions of this Plan to the contrary, including but not limited to the
provisions of Article 3 and Article 7, or any Initial or Subsequent Election filed by a Deceased Participant or a Deceased
Participant’s Beneficiary (for purposes of this Section, the “Decedent”), and to the extent permitted by Section 409A, the
Administrator shall apply the terms of Section 3.7(b) to the Decedent’s Account unless the Decedent affirmatively has elected, in
writing, filed with the Administrator, to waive the application of Section 3.7(b).
Section 3.7(b) not apply, but only to the extent permitted under Section 409A:
(b)
Unless the Decedent affirmatively has elected, pursuant to Section 3.7(a), that the terms of this
The Administrator shall prohibit the Decedent’s Beneficiary from taking any action under
any of the provisions of the Plan with regard to the Decedent’s Account other than the Beneficiary’s making of a Subsequent
Election pursuant to Section 3.5;
(i)
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Death Tax Clearance Date and the payment date designated in the Decedent’s Initial Election or Subsequent Election;
(ii)
The Administrator shall defer payment of the Decedent’s Account until the later of the
(iii)
The Administrator shall withdraw from the Decedent’s Account such amount or amounts as
the Decedent’s Personal Representative shall certify to the Administrator as being necessary to pay the Death Taxes apportioned
against the Decedent’s Account; the Administrator shall remit the amounts so withdrawn to the Personal Representative, who
shall apply the same to the payment of the Decedent’s Death Taxes, or the Administrator may pay such amounts directly to any
taxing authority as payment on account of Decedent’s Death Taxes, as the Administrator elects;
(iv)
If the Administrator makes a withdrawal from the Decedent’s Account to pay the
Decedent’s Death Taxes and such withdrawal causes the recognition of income to the Beneficiary, the Administrator shall pay to
the Beneficiary from the Decedent’s Account, within thirty (30) days of the Beneficiary’s request, the amount necessary to enable
the Beneficiary to pay the Beneficiary’s income tax liability resulting from such recognition of income; additionally, the
Administrator shall pay to the Beneficiary from the Decedent’s Account, within thirty (30) days of the Beneficiary’s request, such
additional amounts as are required to enable the Beneficiary to pay the Beneficiary’s income tax liability attributable to the
Beneficiary’s recognition of income resulting from a distribution from the Decedent’s Account pursuant to this Section 3.7(b)(iv);
Amounts withdrawn from the Decedent’s Account by the Administrator pursuant to
Sections 3.7(b)(iii) and 3.7(b)(iv) shall be withdrawn from the portions of Decedent’s Account having the earliest distribution
dates as specified in Decedent’s Initial Election or Subsequent Election; and
(v)
(vi) Within 30 days after the Death Tax Clearance Date or upon the payment date designated in
the Decedent’s Initial Election or Subsequent Election, if later, the Administrator shall pay the Decedent’s Account to the
Beneficiary.
3.8. Company Credits.
(a)
Except as provided in Section 3.8(b), in addition to the amounts credited to Participants’ Accounts
pursuant to Initial Elections with respect to Compensation, the Committee may provide for additional amounts to be credited to
the Accounts of one or more designated Eligible Employees (“Company Credits”) for any year. A Participant whose Account is
designated to receive Company Credits may not elect to receive any portion of the Company Credits as additional Compensation
in lieu of deferral as provided by this Section 3.8. The total amount of Company Credits designated with respect to an Eligible
Employee’s Account for any Plan Year shall be credited to such Eligible Employee’s Account as of the time or times designated
by the Administrator, as a bookkeeping entry to such Eligible Employee’s Account in accordance with Section 5.1. From and
after the date Company Credits are allocated as designated by the Administrator, Company Credits shall be credited to the
Income Fund. Company Credits and income, gains and losses credited with respect to Company Credits shall be distributable to
the Participant on the same basis as if the Participant had made an Initial Election to receive a lump sum distribution of such
amount on January 2 of the third calendar year beginning after the later of Plan Year with respect to which the Company Credits
were authorized or the Plan Year in which such Company Credits are free of a substantial risk of forfeiture, unless the Participant
timely designates a later time and form of payment that is a
nd
-23-
permissible time and form of payment for amounts subject to an Initial Election under Section 3.4(b) and Section 4.1. In addition,
the Participant may make one or more Subsequent Elections with respect to such Company Credits (and income, gains and losses
credited with respect to Company Credits) on the same basis as all other amounts credited to such Participant’s Account.
authorized or credited after such date.
(b)
Except for Company Credits approved on or before March 1, 2021, no Company Credits shall be
3.9. Separation from Service.
(a)
Required Suspension of Payment of Benefits. To the extent compliance with the requirements of
Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section
409A to payments due to a Participant upon or following his separation from service, then notwithstanding any other provision of
this Plan, any such payments that are otherwise due within six months following the Participant’s separation from service will be
deferred and paid to the Participant in a lump sum immediately following that six-month period.
(b)
Termination of Employment. For purposes of the Plan, a transfer of an employee between two
employers, each of which is the Company or an Affiliate, shall not be deemed a termination of employment. A Participant who is
an Outside Director shall be treated as having terminated employment on the Participant’s termination of service as an Outside
Director, provided that if such a Participant is designated as a Director Emeritus upon termination of service as an Outside
Director, such Participant shall not be treated as having terminated employment until the Participant’s termination of service as a
Director Emeritus.
ARTICLE 4 – MANNER OF DISTRIBUTION
4.1. Manner of Distribution.
Election in either
(a)
Amounts credited to an Account shall be distributed, pursuant to an Initial Election or Subsequent
(i)
a lump sum payment; or
2020, substantially equal monthly or annual installments over a five- (5), ten- (10) or fifteen- (15) year period; or
(ii) With respect to Initial Elections and Subsequent Elections filed on or before December 31,
substantially equal monthly or annual installments over a five- (5) or ten- (10) year period.
(iii) With respect to Initial Elections and Subsequent Elections filed after December 31, 2020,
Installment distributions payable in the form of shares of Company Stock shall be rounded to the next lower whole share. Except
for amounts described in Section 5.2(c), all distributions shall be made in cash.
(b)
or any other provision of the Plan to the contrary:
To the extent permitted by Section 409A, notwithstanding any Initial Election, Subsequent Election
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distributions pursuant to Initial Elections or Subsequent Elections shall be made in one
lump sum payment unless the portion of a Participant’s Account subject to distribution, as of both the date of the Initial Election
or Subsequent Election and the benefit commencement date, has a value of more than $10,000;
(i)
(ii)
following a Participant’s termination of employment for any reason, if the amount credited
to the Participant’s Account has a value of $10,000 or less, the Administrator may, in its sole discretion, direct that such amount
be distributed to the Participant (or Beneficiary, as applicable) in one lump sum payment, provided that the payment is made on
or before the later of (i) December 31 of the calendar year in which the Participant terminates employment or (ii) the date two
and one-half months after the Participant terminates employment.
4.2. Determination of Account Balances for Purposes of Distribution. The amount of any distribution made
pursuant to Section 4.1 shall be based on the balances in the Participant’s Account on the date the recordkeeper appointed by the
Administrator transmits the distribution request for a Participant to the Administrator for payment and processing, provided that
payment with respect to such distribution shall be made as soon as reasonably practicable following the date the distribution
request is transmitted to the Administrator. For this purpose, the balance in a Participant’s Account shall be calculated by
crediting income, gains and losses under the Other Investment Fund and Income Fund, as applicable, through the date
immediately preceding the date on which the distribution request is transmitted from the recordkeeper.
4.3. Plan-to-Plan Transfers; Change in Time and Form of Election Pursuant to Special Section 409A Transition
Rules. The Administrator may delegate its authority to arrange for plan-to-plan transfers or to permit benefit elections as
described in this Section 4.3 to an officer of the Company or committee of two or more officers of the Company.
(a)
The Administrator may, with a Participant’s consent, make such arrangements as it may deem
appropriate to transfer the Company’s obligation to pay benefits with respect to such Participant which have not become payable
under this Plan, to another employer, whether through a deferred compensation plan, program or arrangement sponsored by such
other employer or otherwise, or to another deferred compensation plan, program or arrangement sponsored by the Company or an
Affiliate. Following the completion of such transfer, with respect to the benefit transferred, the Participant shall have no further
right to payment under this Plan.
(b)
The Administrator may, with a Participant’s consent, make such arrangements as it may deem
appropriate to assume another employer’s obligation to pay benefits with respect to such Participant which have not become
payable under the deferred compensation plan, program or arrangement under which such future right to payment arose, to the
Plan, or to assume a future payment obligation of the Company or an Affiliate under another plan, program or arrangement
sponsored by the Company or an Affiliate. Upon the completion of the Plan’s assumption of such payment obligation, the
Administrator shall establish an Account for such Participant, and the Account shall be subject to the rules of this Plan, as in
effect from time to time.
5.1. Deferred Compensation Account. A Deferred Compensation Account shall be established for each Outside
Director, Director Emeritus and Eligible Employee when
ARTICLE 5 – BOOK ACCOUNTS
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such Outside Director, Director Emeritus or Eligible Employee becomes a Participant. Compensation deferred pursuant to the
Plan shall be credited to the Account on the date such Compensation would otherwise have been payable to the Participant.
5.2. Crediting of Income, Gains, and Losses on Accounts.
(a)
In General. Except for amounts credited to the Accounts of Participants who are:
form of Company Stock,
to Section 5.2(b)(1)(B)(3);
(i)
Outside Directors who have elected to defer the receipt of Compensation payable in the
(ii)
Outside Directors whose Account has been credited to an Other Investment Fund pursuant
pursuant to Section 5.2(b)(1)(B)(4);
(iii)
Covered Participants whose Account has been credited to an Other Investment Fund
(iv)
Participants subject to the Income Fund Limit; and
Section 16 Officers who, pursuant to rules established by the Administrator or its delegate,
have elected to transfer amounts credited to their Accounts that are deemed to be invested in the Income Fund to an Other
Investment Fund; and
(v)
(vi)
Elections permitted to be made after their termination of service;
Outside Directors and Section 16 Officers, with respect to amounts subject to Subsequent
all amounts credited to Participants’ Accounts shall be credited with income, gains and losses as if they were invested in the
Income Fund.
(b)
Crediting of Income, Gains, and Losses on Accounts Subject to Investment Restrictions.
(i)
Credits to Other Investment Funds.
Post-Termination Elections. The Accounts of Outside Directors and Section
16 Officers whose Subsequent Elections are made after their termination of service in accordance with Section 3.5(a) shall be
credited to an Other Investment Fund.
(A)
(B)
Participants Whose Income Fund Exceeds the Income Fund Limit.
Subsequent Election. Amounts subject to a Subsequent Election that
takes effect when the amount credited to the Income Fund with respect to a Participant exceeds $100 million shall be deemed
invested in an Other Investment Fund.
(1)
Year-End Adjustments. Except with respect to Participants who are
subject to Section 5.2(b)(i)(B)(3) or Section 5.2(b)(i)(B)(4), if the amount credited to the Income Fund with respect to a
Participant exceeds $100 million as of the
(2)
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last day of a Plan Year, the lesser of (x) the amount credited to the Income Fund with respect to such Participant for such Plan
Year or (y) the excess of (I) the amount credited to the Income Fund with respect to such Participant as of the last day of such
Plan Year over (II) $100 million shall be transferred to an Other Investment Fund as of such last day.
(3)
Outside Directors. If an Outside Director’s Income Fund exceeds the
Income Fund Limit as of July 31, 2020 and such Outside Director has consented to waive his or her rights with respect to (i) the
Applicable Interest Rate applicable to such Outside Director’s Account (including the Protected Account Balance) for purposes
of any current or future Initial Elections and Subsequent Elections while such individual is an Outside Director and (ii) the
application of Section 10.2 to such Outside Director’s Account, the amount credited to the Outside Director’s Income Fund shall
be transferred to an Other Investment Fund as of August 1, 2020, and all amounts credited to the Outside Director’s Account on
and after August 1, 2020 shall be deemed invested in an Other Investment Fund. The amount credited to the Income Fund with
respect to an individual who has an Account under the Plan and who becomes an Outside Director after August 1, 2020 shall be
transferred to an Other Investment Fund as of the first day of the month next following the date such individual becomes an
Outside Director, and all amounts credited to the Outside Director’s Account on and after such date shall be deemed invested in
an Other Investment Fund (provided that such Outside Director has consented to waive his or her rights with respect to (i) the
Applicable Interest Rate applicable to such Outside Director’s Account (including the Protected Account Balance) for purposes
of any current or future Initial Elections and Subsequent Elections while such individual is an Outside Director and (ii) the
application of Section 10.2 to such Outside Director’s Account).
(4)
Covered Participants. If a Covered Participant’s Income Fund
exceeds the Income Fund Limit as of February 28, 2021 and such Covered Participant has consented to waive his or her rights
with respect to (i) the Applicable Interest Rate applicable to such Covered Participant’s Account (including the Protected
Account Balance) for purposes of any current or future Initial Elections and Subsequent Elections while such individual is a
Covered Participant and (ii) the application of Section 10.2 to such Covered Participant’s Account, the amount credited to the
Covered Participant’s Income Fund shall be transferred to an Other Investment Fund as of March 1, 2021, and all amounts
credited to the Covered Participant’s Account on and after March 1, 2021 shall be deemed invested in an Other Investment Fund.
The amount credited to the Income Fund with respect to an individual who has an Account under the Plan and who becomes a
Covered Participant after February 28, 2021 shall be transferred to an Other Investment Fund as of the first day of the month next
following the date such individual becomes a Covered Participant, and all amounts credited to the Covered Participant’s Account
on and after such date shall be deemed invested in an Other Investment Fund (provided that such Covered Participant has
consented to waive his or her rights with respect to (i) the Applicable Interest Rate applicable to such Covered Participant’s
Account (including the Protected Account Balance) for purposes of any current or future Initial Elections and Subsequent
Elections while such individual is a Covered Participant and (ii) the application of Section 10.2 to such Covered Participant’s
Account).
Section 16 Officers. Pursuant to rules established by the Administrator or its
delegate, a Section 16 Officer may elect to (x) transfer amounts credited to their Account that are deemed to be invested in the
Income Fund to an Other Investment Fund, or (y) transfer amounts credited to their Account that are deemed to be invested in an
Other Investment Fund to the Income Fund to the extent that immediately after
(C)
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such transfer, the amount credited to such Section 16 Officer’s Income Fund does not exceed the Income Fund Limit.
(ii)
Protocol for Deemed Transfers between Income Fund and an Other Investment Fund. As
provided in Article III, the timing of distributions of amounts credited to a Participant’s Account is established pursuant to Initial
Elections and Subsequent Elections, and a Participant may elect various distribution dates for amounts subject to Initial Elections
and Subsequent Elections. Amounts deemed transferred from the Income Fund to Other Investment Funds as a result of the
application of the Income Fund Limit or pursuant to elective transfers described in Section 5.2(b)(i)(C), and amounts deemed
transferred from an Other Investment Fund to the Income Fund pursuant to elective transfers described in Section 5.2(b)(i)(C)
shall be sourced and allocated on a uniform and consistent basis as determined by the Administrator, provided that amounts
transferred among Funds, and any income, gains, or losses credited with respect to such transferred amounts, shall continue to be
subject to the distribution timing and manner of distribution election to which such amounts were subject immediately before the
deemed transfer.
(c)
Stock Fund Credits. Amounts credited to the Accounts of Outside Directors, Covered
Participants, and High Balance Participants in the form of Company Stock shall be credited with income, gains, and losses as if
they were invested in the Company Stock Fund. Except as otherwise provided with respect to Section 16 Officers pursuant to
Section 5.2(b)(i)(C) or by the Administrator with respect to Participants who are not Section 16 Officers, no portion of such
Participant’s Account may be deemed transferred from the Company Stock Fund to the Income Fund or to an Other Investment
Fund. Amounts credited in the form of Company Stock at the time of distribution to the Accounts of (i) Outside Directors and (ii)
Participants under circumstances described in Section 5.2(a)(vi) shall be distributed in the form of Company Stock, rounded to
the nearest lower whole share.
(d)
Timing of Credits. Except as otherwise provided in this Section 5.2, Compensation deferred
pursuant to the Plan shall be deemed invested in the Income Fund on the date such Compensation would otherwise have been
payable to the Participant, provided that if (i) Compensation would otherwise have been payable to a Participant on a Company
payroll date that falls within five (5) days of the end of a calendar month, and (ii) based on the Administrator’s regular
administrative practices, it is not administratively practicable for the Administrator to transmit the deferred amount of such
Compensation to the Plan’s recordkeeper on or before the last day of the month, such deferred amount shall not be deemed
invested in the Income Fund until the first day of the calendar month next following such Company payroll date. Accumulated
Account balances subject to an investment fund election under Section 5.2(b) shall be deemed invested in the applicable
investment fund as of the effective date of such election. The value of amounts deemed invested in an Other Investment Fund
shall be based on hypothetical purchases and sales of such Other Investment Fund at Fair Market Value as of the effective date of
the applicable investment election.
5.3.
Status of Deferred Amounts. Regardless of whether or not the Company is a Participant’s employer, all
Compensation deferred under this Plan shall continue for all purposes to be a part of the general funds of the Company.
5.4.
Participants’ Status as General Creditors. Regardless of whether or not the Company is a Participant’s
employer, an Account shall at all times represent a general obligation of the Company. The Participant shall be a general creditor
of the Company with respect to this obligation, and shall not have a secured or preferred position with respect to the Participant’s
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Accounts. Nothing contained herein shall be deemed to create an escrow, trust, custodial account or fiduciary relationship of any
kind. Nothing contained herein shall be construed to eliminate any priority or preferred position of a Participant in a bankruptcy
matter with respect to claims for wages.
ARTICLE 6 – NO ALIENATION OF BENEFITS; PAYEE DESIGNATION
6.1. Non-Alienation. Except as otherwise required by applicable law, or as provided by Section 6.2, the right of
any Participant or Beneficiary to any benefit or interest under any of the provisions of this Plan shall not be subject to
encumbrance, attachment, execution, garnishment, assignment, pledge, alienation, sale, transfer, or anticipation, either by the
voluntary or involuntary act of any Participant or any Participant’s Beneficiary or by operation of law, nor shall such payment,
right, or interest be subject to any other legal or equitable process.
6.2. Domestic Relations Orders. Notwithstanding any other provision of the Plan or the terms of any Initial
Election or Subsequent Election, the Plan shall honor the terms of a Domestic Relations Order if the Administrator determines
that it satisfies the requirements of the Plan’s policies relating to Domestic Relations Orders as in effect from time to time,
provided that a Domestic Relations Order shall not be honored unless (i) it provides for payment of all or a portion of a
Participant’s Account under the Plan to the Participant’s spouse or former spouse and (ii) it provides for such payment in the form
of a single cash lump sum that is payable as soon as administratively practicable following the determination that the Domestic
Relations Order meets the conditions for approval.
6.3. Payee Designation. Subject to the terms and conditions of the Plan, a Participant or Beneficiary may direct
that any amount payable pursuant to an Initial Election or a Subsequent Election on any date designated for payment be paid to
any person or persons or legal entity or entities, including, but not limited to, an organization exempt from federal income tax
under section 501(c)(3) of the Code, instead of to the Participant or Beneficiary. Such a payee designation shall be provided to
the Administrator by the Participant or Beneficiary in writing on a form provided by the Administrator, and shall not be effective
unless it is provided immediately preceding the time of payment. The Company’s payment pursuant to such a payee designation
shall relieve the Company and its Affiliates of all liability for such payment.
ARTICLE 7 – DEATH OF PARTICIPANT
7.1. Death of Participant. Except as otherwise provided in Section 3.5, a Deceased Participant’s Account shall
be distributed in accordance with the last Initial Election or Subsequent Election made by the Deceased Participant before the
Deceased Participant’s death.
7.2. Designation of Beneficiaries. Each Participant (and Beneficiary) shall have the right to designate one or
more Beneficiaries to receive distributions in the event of the Participant’s (or Beneficiary’s) death by filing with the
Administrator a Beneficiary designation on a form that may be prescribed by the Administrator for such purpose from time to
time. The designation of a Beneficiary or Beneficiaries may be changed by a Participant (or Beneficiary) at any time prior to such
Participant’s (or Beneficiary’s) death by the delivery to the Administrator of a new Beneficiary designation form. The
Administrator may require that only the Beneficiary or Beneficiaries identified on the Beneficiary designation form prescribed by
the Administrator be recognized as a Participant’s (or Beneficiary’s) Beneficiary or Beneficiaries under the Plan, and that absent
the completion of the currently prescribed Beneficiary designation form, the
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Participants (or Beneficiary’s) Beneficiary designation shall be the Participant’s (or Beneficiary’s) estate.
ARTICLE 8 – HARDSHIP AND OTHER ACCELERATION EVENTS
8.1. Hardship. Notwithstanding the terms of an Initial Election or Subsequent Election, if, at the Participant’s
request, the Committee determines that the Participant has incurred a Hardship, the Board may, in its discretion, authorize the
immediate distribution of all or any portion of the Participant’s Account.
Election or Subsequent Election, distribution of all or part of a Participant’s Account may be made:
8.2. Other Acceleration Events. To the extent permitted by Section 409A, notwithstanding the terms of an Initial
permitted by Treasury Regulations section 1.409A-3(j)(4)(ii) or any successor provision of law).
(a)
To fulfill a domestic relations order (as defined in section 414(p)(1)(B) of the Code) to the extent
provided in Treasury Regulation section 1.409A-3(j)(4)(iii) (or any successor provision of law).
(b)
To the extent necessary to comply with laws relating to avoidance of conflicts of interest, as
(vi) (or any successor provision of law).
(c)
To pay employment taxes to the extent permitted by Treasury Regulation section 1.409A-3(j)(4)
409A, to the extent permitted by Treasury Regulation section 1.409A-3(j)(4)(vii) (or any successor provision of law).
(d)
In connection with the recognition of income as the result of a failure to comply with Section
(e)
3(j)(4)(xi) (or any successor provision of law).
To pay state, local or foreign taxes to the extent permitted by Treasury Regulation section 1.409A-
In satisfaction of a debt of a Participant to a Participating Company where such debt is incurred in
the ordinary course of the service relationship between the Participant and the Participating Company, to the extent permitted by
Treasury Regulation section 1.409A-3(j)(4)(xiii) (or any successor provision of law).
(f)
permitted by Treasury Regulation section 1.409A-3(j)(4)(xiv) (or any successor provision of law).
(g)
In connection with a bona fide dispute as to a Participant’s right to payment, to the extent
ARTICLE 9 – INTERPRETATION
9.1. Authority of Committee. The Committee shall have full and exclusive authority to construe, interpret and
administer this Plan and the Committee’s construction and interpretation thereof shall be binding and conclusive on all persons
for all purposes.
9.2. Claims Procedure. If an individual (hereinafter referred to as the “Applicant,” which reference shall include
the legal representative, if any, of the individual) does not receive timely payment of benefits to which the Applicant believes he
is entitled under the Plan, the Applicant may make a claim for benefits in the manner hereinafter provided.
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Administrator wholly or partially denies a claim, the Administrator shall provide the Applicant with a written notice stating:
An Applicant may file a claim for benefits with the Administrator on a form supplied by the Administrator. If the
(a)
(b)
The specific reason or reasons for the denial;
Specific reference to pertinent Plan provisions on which the denial is based;
claim and an explanation of why such material or information is necessary; and
(c)
A description of any additional material or information necessary for the Applicant to perfect the
(d)
Appropriate information as to the steps to be taken in order to submit a claim for review.
Written notice of a denial of a claim shall be provided within 90 days of the receipt of the claim, provided that if special
circumstances require an extension of time for processing the claim, the Administrator may notify the Applicant in writing that an
additional period of up to 90 days will be required to process the claim.
If the Applicant’s claim is denied, the Applicant shall have 60 days from the date of receipt of written notice of the
denial of the claim to request a review of the denial of the claim by the Administrator. Request for review of the denial of a claim
must be submitted in writing. The Applicant shall have the right to review pertinent documents and submit issues and comments
to the Administrator in writing. The Administrator shall provide a written decision within 60 days of its receipt of the Applicant’s
request for review, provided that if special circumstances require an extension of time for processing the review of the
Applicant’s claim, the Administrator may notify the Applicant in writing that an additional period of up to 60 days shall be
required to process the Applicant’s request for review.
It is intended that the claims procedures of this Plan be administered in accordance with the claims procedure
regulations of the Department of Labor set forth in 29 CFR § 2560.503-1.
Claims for benefits under the Plan must be filed with the Administrator at the following address:
Comcast Corporation
One Comcast Center
1701 John F. Kennedy Boulevard
Philadelphia, PA 19103
Attention: General Counsel
ARTICLE 10 – AMENDMENT OR TERMINATION
10.1. Amendment or Termination. Except as otherwise provided by Section 10.2, the Company, by action of the
Board or by action of the Committee, shall have the right at any time, or from time to time, to amend or modify this Plan. The
Company, by action of the Board, shall have the right to terminate this Plan at any time.
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10.2. Amendment of Rate of Credited Earnings. No amendment shall change the Applicable Interest Rate with
respect to the portion of a Participant’s Account that is attributable to an Initial Election or Subsequent Election made with
respect to Compensation and filed with the Administrator before the date of adoption of such amendment by the Board or the
Committee without the consent of the Participant. For purposes of this Section 10.2, a Subsequent Election to defer the payment
of part or all of an Account for an additional period after a previously-elected payment date (as described in Section 3.5) shall be
treated as a separate Subsequent Election from any previous Initial Election or Subsequent Election with respect to such Account.
ARTICLE 11 – WITHHOLDING OF TAXES
Whenever the Participating Company is required to credit deferred Compensation to the Account of a Participant,
the Participating Company shall have the right to require the Participant to remit to the Participating Company an amount
sufficient to satisfy any federal, state and local withholding tax requirements prior to the date on which the deferred
Compensation shall be deemed credited to the Account of the Participant, or take any action whatever that it deems necessary to
protect its interests with respect to tax liabilities. The Participating Company’s obligation to credit deferred Compensation to an
Account shall be conditioned on the Participant’s compliance, to the Participating Company’s satisfaction, with any withholding
requirement. To the maximum extent possible, the Participating Company shall satisfy all applicable withholding tax
requirements by withholding tax from other Compensation payable by the Participating Company to the Participant, or by the
Participant’s delivery of cash to the Participating Company in an amount equal to the applicable withholding tax.
ARTICLE 12 – MISCELLANEOUS PROVISIONS
12.1. No Right to Continued Employment. Nothing contained herein shall be construed as conferring upon any
Participant the right to remain in service as an Outside Director or Director Emeritus or in the employment of a Participating
Company as an executive or in any other capacity.
12.2. Expenses of Plan. All expenses of the Plan shall be paid by the Participating Companies.
12.3. Gender and Number. Whenever any words are used herein in any specific gender, they shall be construed as
though they were also used in any other applicable gender. The singular form, whenever used herein, shall mean or include the
plural form, and vice versa, as the context may require.
12.4. Law Governing Construction. The construction and administration of the Plan and all questions pertaining
thereto, shall be governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and other
applicable federal law and, to the extent not governed by federal law, by the laws of the Commonwealth of Pennsylvania.
12.5. Headings Not a Part Hereof. Any headings preceding the text of the several Articles, Sections, subsections,
or paragraphs hereof are inserted solely for convenience of reference and shall not constitute a part of the Plan, nor shall they
affect its meaning, construction, or effect.
-32-
12.6. Severability of Provisions. If any provision of this Plan is determined to be void by any court of competent
jurisdiction, the Plan shall continue to operate and, for the purposes of the jurisdiction of that court only, shall be deemed not to
include the provision determined to be void.
-33-
adopted on July 13, 2021 shall be effective July 13, 2021.
The original effective date of the Plan is January 1, 2005. The amended and restated Plan document approved and
ARTICLE 13 – EFFECTIVE DATE
thereunto duly authorized, and its corporate seal to be affixed hereto, on the 13 day of July, 2021.
th
IN WITNESS WHEREOF, COMCAST CORPORATION has caused this Plan to be executed by its officers
COMCAST CORPORATION
BY: /s/ Thomas J. Reid
Thomas J. Reid
-34-
Exhibit 21
Legal Name
State/Country of
Organization
Beijing International Resort Co., Ltd.
Bravo Media LLC
CNBC LLC
Comcast ABB Note Consolidation, Inc.
Comcast AG Holdings, LLC
Comcast Bidco Holdings Limited
Comcast Bidco Limited
Comcast Broadband Security, LLC
Comcast Business Communications, LLC
Comcast Cable Communications Management, LLC
Comcast Cable Communications, LLC
Comcast Holdings Corporation
Comcast Hulu Holdings, LLC
Comcast Interactive Media, LLC
Comcast IP Phone, LLC
Comcast of Alabama, LLC
Comcast of Arkansas/Louisiana/Minnesota/Mississippi/Tennessee, LLC
Comcast of Baltimore City, LLC
Comcast of Boston, Inc.
Comcast of California II, LLC
Comcast of California III, Inc.
Comcast of California IX, Inc.
Comcast of California/Colorado, LLC
Comcast of California/Colorado/Florida/Oregon, Inc.
Comcast of California/Colorado/Illinois/Indiana/Michigan, LLC
Comcast of California/Maryland/Pennsylvania/Virginia/West Virginia, LLC
Comcast of California/Massachusetts/Michigan/Utah, LLC
Comcast of Chicago, Inc.
Comcast of Colorado IX, LLC
Comcast of Colorado/Pennsylvania/West Virginia, LLC
Comcast of Connecticut, Inc.
Comcast of Connecticut/Georgia/Massachusetts/New Hampshire/New York/North Carolina/Virginia/Vermont,
LLC
Comcast of Delmarva, LLC
Comcast of Florida/Michigan/New Mexico/Pennsylvania/Washington, LLC
Comcast of Fresno, Inc.
Comcast of Garden State, L.P.
Comcast of Georgia/Illinois/Michigan, LLC
Comcast of Georgia/Massachusetts, LLC
Comcast of Georgia/South Carolina, LLC
Comcast of Houston, LLC
Comcast of Illinois IV, Inc.
Comcast of Illinois VI, LLC
Comcast of Illinois XI, LLC
China
NY
DE
DE
DE
United Kingdom
United Kingdom
DE
PA
DE
DE
PA
DE
DE
PA
AL
DE
CO
NY
DE
PA
PA
DE
PA
DE
DE
DE
IL
DE
DE
OK
DE
DE
CO
CA
DE
FL
DE
CO
DE
IL
DE
DE
Comcast of Illinois XIII, L.P.
Comcast of Illinois/Indiana/Michigan, LLC
Comcast of Illinois/Indiana/Ohio, LLC
Comcast of Illinois/Ohio/Oregon, LLC
Comcast of Illinois/West Virginia, LLC
Comcast of Indiana/Kentucky/Utah, LLC
Comcast of Indianapolis, L.P.
Comcast of Maine/New Hampshire, Inc.
Comcast of Maryland Limited Partnership
Comcast of Maryland, LLC
Comcast of Massachusetts II, Inc.
Comcast of Massachusetts III, Inc.
Comcast of Massachusetts/Virginia, Inc.
Comcast of Minnesota, Inc.
Comcast of Minnesota/Wisconsin, Inc.
Comcast of Nashville I, LLC
Comcast of Nashville II, LLC
Comcast of New Jersey II, LLC
Comcast of New Mexico, LLC
Comcast of New Mexico/Pennsylvania, LLC
Comcast of Oregon II, Inc.
Comcast of Philadelphia II, LLC
Comcast of Potomac, LLC
Comcast of Sacramento I, LLC
Comcast of Sacramento II, LLC
Comcast of South Jersey, LLC
Comcast of Southeast Pennsylvania, LLC
Comcast of Southern New England, Inc.
Comcast of the South
Comcast of Utah II, Inc.
Comcast of Virginia, LLC
Comcast OTR1, LLC
Comcast Spectacor Ventures, LLC
Comcast Ventures, LP
DreamWorks Animation L.L.C.
DWA Holdings, LLC
E! Entertainment Television, LLC
MSNBC Cable L.L.C.
NBC Olympics LLC
NBC Sports Network, L.P.
NBC Sports Ventures LLC
NBC Stations Management LLC
NBC Subsidiary (WTVJ-TV) LLC
NBC West, LLC
AZ
DE
DE
DE
DE
CA
DE
NH
MD
CO
DE
DE
VA
PA
PA
DE
DE
DE
CO
DE
OR
DE
DE
CA
CA
DE
DE
MA
CO
PA
CO
DE
PA
DE
DE
DE
DE
DE
DE
DE
DE
CO
DE
DE
NBCU Television Holding LLC
NBCUniversal Enterprise, Inc.
NBCUniversal Media, LLC
NBCUniversal Shared Services, LLC
NBCUniversal, LLC
Open 4 Business Productions LLC
Sky CP Limited
Sky Deutschland Fernsehen GmbH & Co KG
Sky German Holdings GmbH
Sky International Operations Limited
Sky Italia S.r.l.
Sky Italian Holdings S.p.A.
Sky Limited
Sky Subscribers Services Limited
Sky Telecommunications Services Limited
Sky UK Limited
Telemundo Media LLC
Telemundo Network Group LLC
Universal City Development Partners, Ltd.
Universal City Studios LLC
Universal City Studios Productions LLLP
Universal Content Productions LLC
Universal Film Exchanges LLC
Universal Studios International B.V.
Universal Studios Limited
Universal Studios LLC
Universal Television LLC
Universal Television Networks
USJ LLC
DE
DE
DE
DE
DE
DE
United Kingdom
Germany
Germany
United Kingdom
Italy
Italy
United Kingdom
United Kingdom
United Kingdom
United Kingdom
DE
DE
FL
DE
DE
DE
DE
The Netherlands
United Kingdom
DE
NY
NY
Japan
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statement No. 333-232941 on Form S-3 and Registration Statement Nos. 333-101295, 333-
104385, 333-121082, 333-123059, 333-130844, 333-130845, 333-130847, 333-150976, 333-161468, 333-174416, 333-174417, 333-179638, 333-183008,
333-193903, 333-210085, 333-212716, 333-224455, 333-224456, 333-232416, 333-239814 and 333-253621 on Form S-8 of our report dated February 2,
2022, relating to the financial statements of Comcast Corporation and the effectiveness of Comcast Corporation's internal control over financial reporting
appearing in this Annual Report on Form 10-K for the year ended December 31, 2021.
Exhibit 23
/s/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
February 2, 2022
Exhibit 31
I, Brian L. Roberts, certify that:
CERTIFICATIONS
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of Comcast Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
a)
b)
c)
d)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
b)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 2, 2022
/s/ BRIAN L. ROBERTS
Name: Brian L. Roberts
Title: Chief Executive Officer
Exhibit 31
I, Michael J. Cavanagh, certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of Comcast Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
a)
b)
c)
d)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
b)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 2, 2022
/s/ MICHAEL J. CAVANAGH
Name: Michael J. Cavanagh
Title: Chief Financial Officer
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
Exhibit 32
February 2, 2022
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Ladies and Gentlemen:
The certification set forth below is being submitted in connection with the Annual Report on Form 10-K of Comcast Corporation (the “Report”) for the
purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter
63 of Title 18 of the United States Code.
Brian L. Roberts, the Chief Executive Officer and Michael J. Cavanagh, the Chief Financial Officer of Comcast Corporation, each certifies that, to the best
of his knowledge:
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Comcast
Corporation.
/s/ BRIAN L. ROBERTS
Name: Brian L. Roberts
Title: Chief Executive Officer
/s/ MICHAEL J. CAVANAGH
Name: Michael J. Cavanagh
Title: Chief Financial Officer