Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining us on today's call are, Brian Roberts, Mike Cavanagh, Jason Armstrong, and Dave Watson. I will now refer you to Slide 2 of the presentation accompanying this call, which can also be found on our Investor Relations website, which contains our safe harbor disclaimer. This conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I'll turn the call over to Mike.

Jason Armstrong:

Thanks, Mike, and good morning, everybody. I'll start with our consolidated results on Slide 3. Total revenue decreased 2.7% to $29.7 billion. Within these results, our six major growth drivers, including residential broadband, wireless, business services connectivity, theme parks, streaming and premium content at our studios, generated over $16 billion in revenue, well over half of our total company revenue and grew at a mid-single-digit rate over the past 12 months. Keep in mind that in the second quarter of last year, we had one of our most successful quarterly theatrical results in our history, which included two of 2023's top-five grossing films at the worldwide box office, The Super Mario Bros. Movie and Fast X, and as such created a difficult comparison this quarter. If we exclude our studio results, total revenue would have been consistent with the prior year. Total EBITDA was consistent at $10.2 billion, and free cash flow was $1.3 billion. Free cash flow was impacted this quarter by higher-than-usual cash taxes, which were up $2 billion over last year's level and were impacted by a tax payment associated with our Hulu stake and other tax-related matters. As you'll recall, we received a minimum floor payment for Hulu at the end of last year. During the second quarter, we returned $3.4 billion of capital to shareholders, including $2.2 billion in share repurchases, and over the last 12 months, we have reduced our share count by over 6%, contributing to our adjusted EPS growth of 7%. Now, let's go through our business results, starting on Slide 4, with Connectivity & Platforms. As usual, I will refer to our year-over-year growth on a constant-currency basis. Revenue for total Connectivity & Platforms was consistent at $20.2 billion, as strong growth in our connectivity businesses was offset by declines in video and voice revenue. Residential connectivity revenue grew 6%, comprised of 3% growth in domestic broadband, 17% growth in domestic wireless, and 14% growth in international connectivity. Business services connectivity revenue also grew 6%. In domestic broadband, our revenue growth was again driven by strong ARPU growth, which increased 3.6% this quarter, well within our historical range as our team continues to effectively balance rate and volume through customer segmentation. The environment for broadband subscribers remains intensely competitive, which when combined with traditional negative seasonality in the second quarter, led to 120,000 subscriber losses. Related to this, I would like to spend a minute on ACP. It has been well-documented that the government ended all funding for the ACP program in June. Consistent with our approach to normal promotional roll-offs, we were proactive and prepared for this action early in the quarter, communicating with our ACP customer base and migrating many of these customers to different products and price levels. While this had a bit of an impact on ARPU in the quarter, we still feel very comfortable that we will remain well within our historical 3% to 4% ARPU growth range for the remainder of the year. In terms of subscribers, we saw minimal impact from the end of ACP this quarter. Looking ahead, we expect the bulk of our ACP-related subscriber activity to happen in the third quarter, including losses associated with non-pay churn. While it's too early to assess the full impact, we are encouraged with the response we see from these customers to-date. Outside of ACP, we are seeing the same level of competitive intensity and expect an offset from seasonal tailwinds as the third quarter is typically a seasonally stronger quarter compared to the second. Turning to domestic wireless, revenue growth was mainly driven by service revenue, with some modest growth in equipment revenue this quarter as well. Customer lines increased 20% year-over-year, reaching 7.2 million in total, including 322,000 line additions this quarter. The acceleration in line additions compared to the prior several quarters was driven by some early success with new pricing plans launched in April, targeted at multi-line customers, as well as continued traction with our Buy One, Get One line offer. And you will see us continue to test new ways to capitalize on the significant opportunities we see ahead for us in wireless, in terms of both increasing the penetration of our domestic residential broadband customer base, which currently sits at 12%, as well as selling additional lines per account. Wireless continues to be a key growth area for us and one in which we are striking the right balance in delivering exceptional value to our customers, bundling to enhance our opportunities in broadband, and continuing to drive profitability higher. International connectivity revenue was mainly driven by broadband, which accounts for over two-thirds of our international revenue and grew at a mid-teens rate, reflecting strong ARPU growth. The remainder is wireless, which grew due to both additional lines and ARPU growth, but at a lower rate due to the variability in handset sales. Business services connectivity revenue growth of 6% reflects steady growth in small businesses with even faster growth in mid-market and enterprise. While the SMB market remains competitive, we are competing aggressively by delivering best-in-class products and services and growing revenue through ARPU growth, driven by higher adoption of additional products that expand our relationship with our SMB customers, like Mobile, Security Edge, Connection Pro, and WiFi Pro, as well as through targeted rate opportunities. At the mid-market and enterprise level, our revenue growth is primarily fueled by the increase in our customers, driven by the investments we have made in this space to build sales and fulfillment, as well as expanding our capabilities in managed services, wide area networking, and cyber cybersecurity. Finally, video and other revenue declined in the quarter. The high single-digit decline in our video revenue is a function of continued customer losses, coupled with slower domestic ARPU growth versus last year, and the lower other revenue mainly reflects the continued customer losses in wireline voice. Connectivity & Platform's total EBITDA increased 1.6%, with margin up 90 basis points, reflecting a decline in overall expenses driven by the continued mix-shift to our higher-margin connectivity businesses, coupled with ongoing expense management. As I have previously mentioned in prior quarters and think is worth noting here, is that the only expense line item that had a meaningful increase over last year was direct product costs, which are success-based and tied to growth in our connectivity businesses. Breaking out our Connectivity & Platforms EBITDA results further, residential EBITDA increased 1.1%, with margins improving 100 basis points to 39.9%, and business services EBITDA growth rebounded nicely this quarter, returning to a mid-single-digit rate, while margin declined 70 basis points to 57%, reflecting the investments in sales and fulfillment we are making to scale in the mid-market and enterprise space. Now, let's turn to Content & Experiences on Slide 5. Revenue decreased 7.5% to $10.1 billion, and EBITDA decreased 11% to $1.9 billion. I'll detail these results further, starting with theme parks. Revenue decreased 11% and EBITDA declined 24% in the quarter compared to last year's record level for a second quarter. As Mike highlighted, two-thirds of the decline was driven by our domestic parks, due to lower attendance compared to last year, largely reflecting two factors; normalization in demand post-COVID, combined with the timing of our domestic attractions. This is the first full quarter comparison to the highly successful opening of Super Nintendo World in Hollywood early last year, which drove that park's record results in the second quarter of last year. And we haven't launched a major new attraction in Orlando since VelociCoaster in 2021 in anticipation of Epic Universe, which we originally planned to open this year. On the international side, underlying growth at our park in Osaka continues, partially offset by foreign currency as well as some softness at Universal Beijing due to the local macroeconomic environment. To reiterate, we couldn't be more bullish about the long-term trajectory of parks. In addition to Epic Universe, we have a fantastic slate of new attractions and experiences on the horizon, Donkey Kong Country in Osaka and a Fast and Furious Roller Coaster in Hollywood, as well as the Universal Horror Unleashed in Las Vegas and our Universal Kids Resort coming to Texas. Now let's turn to media, where revenue increased 2% and EBITDA was up 9%, driven by Peacock. Peacock revenue grew 28%, with 9% growth in advertising and 61% growth in distribution, driven by the 38% year-over-year increase in our paid subscriber base to 33 million. On a sequential basis, we held subscribers fairly steady. As we noted, during our last earnings call, our focus in the second quarter was on subscriber retention due to the lack of new tentpole content in the quarter. This timing and content also contributed to some relief in our expenses, which helped drive year-over-year Peacock EBITDA improvement of $300 million. We are pleased with the progress we are making, with media EBITDA for the first half of the year up nearly 3% as the improvement at Peacock outweighed the pressure at our TV networks. As we look to the second half of the year, we expect continued modest growth in overall media EBITDA, but with some variation in the degree of year-over-year improvement between the quarters, driven by the timing of sports, entertainment launches and marketing. Beginning in the third quarter, we are loaded with incremental content, including the Olympics, Sunday Night Football, which will have an additional game fall into the third quarter, as well as Peacock's exclusive NFL game from Brazil and the return of Big Ten. Given the timing of this content, EBITDA growth will be skewed to the fourth quarter. At studios, revenue decreased 27% and EBITDA decreased 51%, reflecting both the timing of our film slate and a tough comparison relative to last year's second quarter, which included the tremendously successful Super Mario Bros. movie as well as Fast X. We have said our film slate is weighted to the back-half of the year, which we believe will drive better year-over-year performance, and we're off to a strong start. Despicable Me 4 had a terrific opening weekend earlier this month, making the Despicable Me series of movies the first animated franchise in history to cross the $5 billion mark. And Twisters is off to a strong start, landing at number one at the box office this past weekend. And we're excited about our upcoming titles, including Wild Robot in September and Wicked in November. I'll wrap up with free cash flow and capital allocation on Slide 6. As I mentioned earlier, we generated $1.3 billion in free cash flow this quarter, which includes a $2 billion increase in cash taxes over last year's level. Total capital spending declined 10% compared to last year with the $3.4 billion in spending reflecting the significant investments we continue to make to support our growth drivers, such as expanding our footprint and further strengthening our domestic broadband network, scaling our streaming business and supporting the continued build of our Epic Universe Theme Park ahead of its opening in 2025. Turning to return of capital. For the quarter, we returned a total of $3.4 billion to shareholders. This includes share repurchases of $2.2 billion and dividend payments of $1.2 billion. Notably, since we restarted our buyback program just three years ago, we have reduced our share count by 16% and returned just under $50 billion to shareholders through a combination of buybacks and dividends, prudently balancing investments we've made in the business around our six core growth drivers, protecting a strong balance sheet and providing strong capital returns to shareholders. Now, let me turn it over to Brian for some closing remarks. Brian?

Marci Ryvicker:

Thanks, Brian. Operator, we are ready to open the line for questions, please.

Ben Swinburne:

Thank you. Good morning. And Mike, thanks for all the detail on the NBA contract. Appreciate that. I wanted to ask about parks and broadband. Maybe, Jason, on broadband, you made some comments about ACP and how Dave and the team are managing it, it seems like it's going well. It seems like you were implying third quarter losses might be down from Q2. I don't want to put words in your mouth, but you talked about an offset around seasonality, I was just wondering if maybe you could revisit that in a little bit about how you guys are managing it from a product and marketing point of view in the third quarter. And presumably, that's the end, we can move on beyond 3Q, we can put ACP behind us, so wanted to ask about that. And then, on parks, thank you for all the color. When you guys look at your pacing data, which I imagine you've got months ahead of you that you can see, is there any -- do you see any churn, or should we be thinking about year-on-year pressure on this segment moving at least through the end of the year and into next year as we get ready for Epic? Any more color on sort of what the outlook looks like would be appreciated. Thanks so much.

Jason Armstrong:

Yeah. I think Dave said it perfectly, as you think about third quarter, Ben, I think unpacking it and similar to what we saw in the second quarter, the competitive environment remains intense, but it's stable. It's sort of no worse, no better than we've seen over the past couple of quarters, I think that's the starting point. Second, as we pointed out, it's a quarter where we do get seasonal tailwinds, the same things that were headwinds in the second quarter largely become tailwinds in the third quarter. And then there's ACP that works against that where we will see an impact. As Dave said, the intention is to be largely through the impact by the end of the third quarter between actions we've seen and then a reserve we will take. And so, that's the thing we have to make sure we're executing very well against, but as Dave said, the early trends on that, whether it's voluntary churn or trends we've seen so far in non-pay and building non-pay and reserves around that are encouraging.

Mike Cavanagh:

And, Ben, it's Mike on parks. So, to hit on that again and appreciate the question, I think we covered a lot in the earlier remarks, but I'll start where Brian last finished, which is, we couldn't be more excited about and confident in the long-term trajectory of the parks business, particularly as we look ahead to next year with Epic Universe, which is truly -- looking truly unbelievable. And then, other attractions coming, Hollywood is going to get a Coaster and Donkey Kong Country into Osaka in the latter part of this year. Timing, TBD on both of those. But in the near term, I think the domestic attendance challenge that was -- what drove two-thirds of the poor comparison, the factors causing that, which is really the COVID pull-forward that we talked about and the timing of attractions, particularly in Hollywood lapping Super Nintendo, and in Florida, the fact that we originally planned to have Epic opened this year, but with COVID pushed it back, and so have a lull in the action. We haven't started a new big attraction since VelociCoaster in 2021. So, as a result of that, I think the factors, even though we're excited about Hollywood Horror Nights in the second half of the year and a little bit of moving past the lapping, I think the trends that we are experiencing likely continue until we get to -- until we get to Epic opening up sometime next year.

Marci Ryvicker:

Thanks, Ben. Operator, next question, please.

Craig Moffett:

Hi, thank you. Good morning. A little bit more on ACP, if I could. Mike, could you just give us any early insight you've got on the delinquency rate for people that are 30 days or 60 days past due, just so we can sort of get a sense of what non-pays may look like? And then, presumably, there was some impact, certainly, there was in the first quarter, of just lower gross adds in the category because new enrollments were shut off and somebody moving across the street, for example, would lose it at their old address, but not be able to get it at their new one. Do you have any estimate for how much ACP impact there might have been in the gross add category? And then, just two -- one just simple housekeeping question. You typically report cable margins on the conference call, in the script. I didn't hear it, maybe I missed it, but I'm wondering if you could tell us what cable margins were in the quarter.

Dave Watson:

Hey, Craig, Dave. So, in terms of delinquency rates, there's nothing. We're watching, it's just -- we have a normal process that we manage through based on due dates and voices and it goes anywhere from two to three months. There's nothing at this point to report on at this stage. We watch it closely. Other than to go back to what I said, been very proactive, and I think it we're helped by experience and promotional roles and the fact that we tried to put customers into packages that made sense for them proactively. So, there's a lot of work that went into that ahead of time, but nothing at this stage and we'll give more as we go. In terms of -- the question in terms of lower gross adds impacts on connects, it was not material that we saw in Q2. So maybe just a little bit in terms of things that we said, but yeah, it wasn't a substantial impact in Q2 and we think the bulk of what we're seeing is really going to be on the non-pay side, which will occur in Q3.

Craig Moffett:

Okay. Thanks. Could I squeeze in one more and just [Technical Difficulty] your thinking is right now about BEAD and whether we might see more capital investment on the BEAD side?

Marci Ryvicker:

Operator, we are now ready for the next question.

Jessica Reif Ehrlich:

Thank you. I have an NBA question and also one on advertising. The benefits, as you outlined, are pretty obvious of getting the NBA, but it does come at a significant price. I was hoping if you could walk us through how you expect to make a positive financial return and maybe elaborate a little more on what role Peacock will play since there's a clear benefit there. But how does it affect -- how does this new deal impact programming spend for other areas including general entertainment? And then, as part of Peacock, maybe you could talk about like the StreamSaver, the bundle with Netflix and Apple TV, and the response you've had? And then, on advertising, the upfront is now done. Maybe you can talk about a little bit about the unique selling position you've had relative to others and what the volume is overall on pricing, et cetera, just what you're seeing in the overall market?

Marci Ryvicker:

Thanks, Jessica. Operator, next question, please.

John Hodulik:

Great. Thanks. Maybe on the cable side, a little bit better trends in both video and wireless. On the video side, what's driving the improvement there? Do you expect it to continue? And are you seeing any effects of the launch of the NOW brand? And then, in wireless, you guys talked about some new pricing and promotion, but do you guys think you're benefiting at all from some of the ACP losses on the prepaid side? I don't know if you guys saw yesterday, Verizon announced they sort of turned off 400,000 subscribers. I think we'll see something similar with the rest of the wireless companies. But do you think this underlying growth is sustainable, or do you think that ACP is somehow boosting the growth at this point? Thanks.

Marci Ryvicker:

Thanks, John. Operator, we're ready for the next question.

Jonathan Chaplin:

Thanks, guys. I guess for Jason, two quick ones on content costs in the connectivity business. They came in quite a bit lower than we expected, and I'm wondering if you can give us a little bit more color on what's driving the trend there and how sustainable it is. And then, we're trending a little bit lower than guidance on CapEx so far this year. I'm wondering if that's just timing-related if it picks up in the back half of the year. And then, Mike, I'm not sure if you -- I heard you loud and clear on having sort of said what you can on the NBA deal. I'm wondering if you can just give us a little bit of context around the timing of costs and revenues though. When -- I recognize it's forward-looking, but when should we expect to see the costs from the new contracts start to hit? Thank you.

Dave Watson:

Hey, Jonathan, Dave. So, just on the content cost side of things, that's also timing related. We -- in the sports side, well-known thing in terms of RSNs and -- but there are other timing-related things. Every contract with the programming partner is different, every relationship is different, so won't go into the specifics. But it is key that we focus on, for us flexibility, increasing market choice. We segment the marketplace both video and broadband, and together, and that is important that we're competitive in every segment. And at the end of the day, we're focusing on value. Combining linear streaming considerations on a case-by-case basis, but mostly at this point is timing related.

Brian Roberts:

And this is Brian. Just want to -- just to close out perhaps Mike's opening comments on the NBA. Doesn't -- opportunities like this come along very rarely when there's long-term relationships up for grabs. Inside and we'll have -- when it gets all announced, the detail that Mike described, we have probably more content than anybody and it's all, I think, at a value that we'll be able to, as one of the other questions asked, support and demonstrate. And one of our real advantages here is the way we're running the media business, and Mike created one group with our existing assets like NBC and our growing asset like Peacock, and putting that together is very appealing for the reach, for the consumer access, for the innovation that we'll have in the years ahead, and you'll see some of that innovation during the Olympics. There'll be a lot of content on NBC, but way more content on Peacock, and it allows for the trends that we're seeing in viewing behavior. So, it's a very exciting moment and I think we'll have more to say in the weeks ahead.

Operator:

Certainly. Next question is coming from Michael Ng from Goldman Sachs. Your line is now live.

Dave Watson:

Got it. Thank you. This is Dave. So, a couple of things. Let me start with business. As you said, it is competitive in the small business categories, competitive in every category, but in particular, the small business one. There certainly is some fixed wireless that we've seen, and saw it in the Verizon results, pretty high percentage of the fixed wireless that are in the small business thing, and we're -- we look at that closely. We are intensely focused on our competitive playbooks and we're going to constantly compete for share. But we're also focused on revenue per relationship. And so, in the small business area, before getting into mid-market, we're doing a lot of product upgrades, adding value and speed, WiFi, security. And so, we made good progress and revenue focus around in small business. And it's such a huge opportunity for us and still in terms of small business. But Ed has stepped right in. It's a terrific team in the business services group that he's working with. And there really is, I think, a unique opportunity. When you look at the overall addressable market of $60 billion, less than 20% there, and a huge chunk of this will be mid-market and enterprise. And we're -- and you add on top of that international opportunities that we're beginning to coordinate and work well with Dana and the team at Sky. So, yeah, we really are seeing nice relationship growth in mid-market and enterprise. That's the starting point, but in addition to like all of our strategies, we're adding more products and attaching new products on these relationships, and going beyond just connectivity into a full managed relationship basis. So, Ed is driving that, and we're in a good competitive position for growth, and I think we have a good ability to increase ARPU across an increasing higher-end base of customers. So, on the mobile side of upgrade, it is -- every single upgrade moment pay close attention to that one too, and we're optimistic. We're in good position. We have a great trade-in program for mobile that we've had in place now for a while. And then, in addition to that, we go in and out in terms of subsidies on top of that trade-in program. And then, when good upgrade moments happen, we are the switching provider. So, when people -- we have great core rates and we have good handset offers and good position for it. So, being a switching provider, I think we are -- I think in a unique position to really take advantage of that. And when you look at things going into the optimism for Q3, one of the most important programs that we'll do, along with the handset upgrade initiative on mobile will be the Olympics. And the Olympics are such a unique opportunity for us to showcase the best broadband, the best mobile service offering, combining those two things together in such an attractive offer. On top of that is the greatest UI in the marketplace that helps you find whatever you want. So, really excited about that. Look for that in the next couple of days, but mobile will be front and center along with broadband when that happens.

Marci Ryvicker:

Thanks, Mike. Operator, we have time for one last question.

Steven Cahall:

Thanks. So, with mid-splits now reaching over 40% of the footprint, I was just wondering if you have an updated outlook on when you think you'll be at DOCSIS 4 for most of your broadband passings. And maybe within this you could just update us on where fiber overlap is, but also as you get through this network investment architecture that you laid out earlier this year, when you think about the capital intensity in C&P coming down and we'll start to see that benefit in growing free cash flow. So, timing on that, I think, would be really interesting. And then, how are you thinking about getting to just breakeven on Peacock? You talked about media EBITDA on a total basis growing in the first half and in the second half, too. It seems like if the Peacock losses keep getting better at this pace, you could be close to breakeven this time next year, but I know you've got NBA coming. So, just wondering if we could think about that benchmark quite yet. Thank you.

Jason Armstrong:

Hey, Steven, I would just round that out on the capital intensity question, because I think embedded in that was sort of a long-term capital intensity question. If you look at what we're doing now, the path towards mid-splits, which as Dave mentioned, really good progress there, that kicking off DOCSIS 4.0 and then adding 1.2 million homes passed, which is a record for us in the last 12 months and doing that all within through the existing capital intensity envelope, which is one of, if not, the lowest in the industry. So, very good progress there. As you think about longer term, a lot of people ask this question in the context of is there the next big thing coming in terms of the network upgrade. We feel very comfortable between mid-splits and DOCSIS 4.0, that leading to multi-gig symmetrical speeds that, that is the network for the future. So, we don't see the next big thing coming. The one area that I'd point out, we'd love to do more homes passed. We've accelerated the rate from 800,000 in the past couple of years up to currently 1.2 million. We won't get capital intensity because of that. If those are good returns and things we should be doing, we'd love to do more there.

Marci Ryvicker:

Thanks, Steve. This concludes our second quarter earnings call. Thanks for joining us.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining us on today's call are Brian Roberts, Mike Cavanagh, Jason Armstrong and Dave Watson. I will now refer you to Slide 2 of the presentation accompanying this call, which can also be found on our Investor Relations website and which contains our safe harbor disclaimer.

Michael Cavanagh:

Thanks, Marci, and good morning, everyone. Across the company, our team is managing extremely well in a highly competitive and evolving marketplace. We have a clear vision for how we are going to compete now and into the future, combined with a sharp focus on execution. Equally important, our disciplined capital allocation strategy, coupled with our strong balance sheet, puts us in an enviable position relative to our peers to invest organically and aggressively in our 6 scaled and diverse growth businesses namely

At Studios, the revenue decline of 7% reflects lower content licensing, which was impacted by the timing of deliverables related to our film licensing business, which was partially offset by a modest increase in theatrical revenue, driven by the strong performance of Kung Fu Panda 4 at the box office this quarter. Studio's EBITDA declined 12%, reflecting the difficult comparison to last year's film slate, including the highly successful carryover title, Puss in Boots:

The Last Wish and the timing of licensing deals at film.

Operator:

[Operator Instructions] Our first question today is coming from Ben Swinburne from Morgan Stanley.

Jason Armstrong:

Yes. Great. Thanks. So just to round that out, Ben, just you think your question specifically on ARPU and how do you go through the ACP cycle and have confidence in ARPU growth. I think all these points are relevant and valid. Number one, we continue to see usage grow at a rapid rate. So the value that the consumer is getting is higher. That's a tailwind in general for ARPU growth. I think number two is segmentation that Dave's talked about. We see a lot of competition in a certain segment of our base, the value-conscious segment of our base. The segmentation allows you to keep that from seeping into other segments of the base. And the team has done a nice job executing there.

Michael Cavanagh:

And Ben, I'll just come in on the back of the question about any changes in how we think about capital allocation. I think Jason and team are carrying on a phenomenal tradition. I've been here now close to 10 years. And I think the idea of taking our well-generated capital across our businesses, and first and foremost, investing them back in the business with a very long-term view of what the future can be, where there's expected return. Whether that's the Parks business, whether that's the broadband network, whether that's streaming, whether it's just broad innovation.

Operator:

Your next question is coming from Craig Moffett from MoffettNathanson.

Jason Armstrong:

Craig, so on margins, we said overall connectivity and platforms margins were up 50 basis points and said domestic was an even greater increase. The domestic was up 70 basis year-over-year, sort of continuing the formula of a mix shift in our business to higher-margin businesses. Our connectivity businesses are growing faster than our nongrowth video businesses. So that's a margin favorable trade-off for us as we said historically and then operating efficiencies in the business. I think we gave a stat last call that I'd reiterate, we've taken 50% of our truck rolls out of the system in the last 6 years. We've taken 40% of customer interactions out of the system in the last 6 years. So lot of good progress on expense efficiency. But Craig, the domestic margin's up 70 basis points.

Jessica Reif Cohen:

I have a question on NBCU and also on Comcast Cable. On the Theme Parks, which is clearly one of your growth pillars, can you give us the investment levels you expect over the next 5 years? Obviously, Epic will be in there, so it will be a little elevated. But you have other new parks and you're also investing in the existing parks. And how different is the return on invested capital for Theme Parks versus your other businesses? And then one more on NBCU, are there other areas that NBCU should or you're thinking about investing in like video games?

Michael Cavanagh:

Jessica, it's Mike. So on parks, as we've said, this is a year in 2024, where CapEx in parks and at NBCUniversal overall will sustain at the level it was in '23. So it remain elevated. In '25, when we open Epic, it will begin to step down. And then after that, it will return to a more normal level with adjustments for the Hollywood Hard Nights and the Kids park in Frisco, Texas that we've talked about. But those, as we've said, are not of the same size and scale as a large park like Epic but we do have a bigger footprint of parks than we did, say, 5 years ago.

David Watson:

Jessica, Dave. Just so on your question on renewals and our point of view. Yes, look, from our view, there's not a single approach towards -- we handle it on a case-by-case basis. When you step back for a second though, we evaluate each one in 3 primary areas. One, the overall cost relative to the content, flexibility that's required in a very fast-changing environment and the overall consumer value. And so -- and we're going to look at this significant transition that has been going on. We'll continue to go on between linear and streaming. And so that is something that we think we can play a unique role in, in terms of win-win opportunities between the content providers and distribution.

Operator:

Our next question is coming from John Hodulik from UBS.

Brian Roberts:

And just -- Brian. One -- just again, just as we talked about in the residential market, the long-term opportunity where we're only just getting started is that large enterprise and medium-sized business. And as you think about cybersecurity and other data reliability and just consumption behavior of businesses and think of your own businesses and where that might lead to the use of new tools and video and everything else, you want to have the best network. And once again, we have a really exciting team and road map on that front. So again, we're battling the reality in one segment with great opportunity in others and long-term love our situation.

Steven Cahall:

Maybe first just on broadband trends. I think you've been pursuing a line extension strategy for, at least, 18 months and that will continue. So is it correct to assume that your gross adds on broadband are starting to pick up just as you add more passings in the market? And if that's true, can you give us any color on within the deactivations where they're headed? I think you've always said that you view fiber as the bigger competitive threat. And so does that kind of help us understand what's going on between gross adds and net adds?

David Watson:

Steven, this is Dave. Let me start with footprint and then go to competition views. So let me -- in terms of overall footprint expansion, the vast majority of our new passings each quarter are fill-ins within our existing footprint. The balance of the growth is mostly from our organic edge-outs into adjacent areas. And so with some government subsidized builds representing a much smaller, albeit increasing portion. So it's really the kind of 3 different components of it that we're looking at.

Michael Cavanagh:

And so on Peacock. I mean we're very pleased as we split -- both Jason and I said earlier, with a quarter where we ended at 33.5 million subs, 3.5 years in. We are at a place now where we really are seeing traction in our approach to providing a service for consumers that is a combination of both entertainment and sports and how those 2 go together.

And when you look ahead from where we started the year, we are now in continue to focus hard on retaining the growth in subs we had. Second quarter will be a little lighter in terms of the cadence of our content. But when you look to the middle of the year, we've got Olympics. Right after that, we've got the return of NFL, Big Ten and our exclusive NFL game in São Paulo, Brazil, along with the tremendous movie slate:

Fall Guy, Twisters, Despicable Me 4, in addition to Kung Fu Panda 4.

Marci Ryvicker:

Thanks, Steve. Operator, we have time for one last question.

Jonathan Chaplin:

One for Dave and one for Jason. Dave, taking a step back from the sort of the increased competitive intensity you're seeing in the broadband market, I would love your perspectives on how the overall market is trending. As we tally up all the ads from the quarter, it looks like we're sort of trending to somewhere around half of what we normally see for the industry in the first quarter. Everybody's adds are down. And I'm wondering if you've got any thoughts as to what might be driving that?

David Watson:

Jonathan, Dave. Let me start with the broadband in its entirety, the whole market and a viewpoint. So let me begin with the broadband market as a whole is still growing, maybe at a slower pace than it was last year and the year before, but there's still going to be a pretty healthy amount of net adds in 2024 and likely beyond. The right way, though, in addition to that, I think you got it. Everything we've talked about before, the right way we think to look about it is it's holding our own, growing relationships responsibly, but it's also where the market is going and how broadband is being used.

Operator:

Thank you. That concludes the question-and-answer session and today's conference call. A replay of the call will be available starting at 11:30 a.m. Eastern Time today on Comcast Investor Relations website. Thank you for participating. You may all disconnect.

Marci Ryvicker:

Thank you Operator, and welcome everyone. Joining us on today’s call are Brian Roberts, Mike Cavanagh, Jason Armstrong, and Dave Watson. I will now refer you to Slide 2 of the presentation accompanying this call, which can also be found on our Investor Relations website and which contains our Safe Harbor disclaimer. This conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I’ll turn the call over to Mike.

Jason Armstrong:

Thanks Mike, and good morning everyone. I’ll begin on Slides 4 and 5 with our consolidated results. Total revenue increased 2% to $31.3 billion for the fourth quarter and was consistent at $121.6 billion for the full year. On a reported basis, EBITDA was consistent at $8 billion for the fourth quarter and up 3% to $37.6 billion for the full year. Our EBITDA results include severance and other in this quarter, as well as in last year’s fourth quarter. Excluding these items totaling $527 million this quarter and $638 million in last year’s quarter, adjusted EBITDA decreased 1% in the fourth quarter and remained at 3% growth for the full year. Adjusted EPS was up 2% to $0.84 a share for the fourth quarter and increased 9% to $3.98 for the full year. We generated $1.7 billion of free cash flow for the quarter and $13 billion for the full year, which translates into $3.13 in free cash flow per share, which was up 10% year-over-year, and we returned over 100% of this to shareholders, with $4.7 billion of capital returned to shareholders in the quarter and $15.8 billion for the full year. Our strong level of free cash flow includes the significant investments we’re making to support and grow our business in six broad and diversified growth categories, including residential broadband, wireless, and business services connectivity, along with theme parks, streaming and premium content at our studios. Taken together, these growth areas generated more than half of our total company revenue and grew at a high single digit rate during the quarter and for the full year. Now let’s turn to our business results, starting on Slide 6 with connectivity and platforms. As a reminder, our largest foreign exchange exposure is to the British pound, which was up nearly 6% year-over-year. As usual, in order to highlight the underlying performance of the connectivity and platforms business, I will refer to year-over-year growth on a constant currency basis. Revenue for total connectivity and platforms was flat at $20.4 billion. Unpacking that, revenue in our core connectivity business - domestic broadband, domestic wireless, international connectivity, and business services connectivity, increased 7% to $11 billion, while video, advertising and other revenue declined 8% to $9 billion. Our strategy is to invest to drive growth in our core connectivity businesses while at the same time carefully managing businesses that are important, but face secular headwinds. On balance, this is a favorable mix shift for the profitability of our overall connectivity and platform segment, as reflected in our results. EBITDA for total connectivity and platforms increased 3% with EBITDA margins improving 130 basis points year-over-year. This includes severance and other of $422 million in the quarter and $456 million of charges in last year’s fourth quarter. Excluding these items in both periods, EBITDA increased 2% to $8 billion and EBITDA margins improved by 110 basis points. Margins for our domestic legacy cable business improved 70 basis points to 46.2%. In terms of how our underlying performance in connectivity and platforms breaks out between residential and business, on the same basis excluding severance and other from both periods, residential EBITDA grew 2% with margins improving 120 basis points, and business services EBITDA increased 5% with margins nearly unchanged at an impressive 57%. Now let’s get further into the details, starting with our connectivity growth drivers. Residential connectivity revenue grew 7% driven by 4% growth in domestic broadband, 15% growth in domestic wireless and 19% growth in international connectivity, while business services connectivity revenue grew 6%. Domestic broadband was once again driven by very strong ARPU growth of 3.9% for the quarter and for the year, landing at the high end of our historical 3% to 4% range while our base of 32 million broadband subscribers remained stable over the past year, including the 34,000 subscriber loss this quarter. We remain focused on competing aggressively but in a financially balanced way, as evidenced by this quarter and past years’ results. With the broadband marketplace remaining extremely competitive, we will continue to manage this balance and expect ARPU growth will remain strong within our historical range and continue to be the driver of our residential broadband revenue growth in 2024. While we do not expect subscriber trends to improve in the coming quarters, we do expect them to improve over time. At the macro level, customers are consuming more, connecting more devices in their homes, and are using them for applications that collectively require either faster speeds, lower latency, and higher reliability over time. These secular trends are all moving in our favor, and we believe our marginal cost to add capacity to our network is unrivalled. This is why we are investing in our fiber-fed network to further increase capacity and offer multi-gig symmetrical speeds ubiquitously across our footprint and ensure that we stay way ahead of consumer demand with the best broadband offering and experience. We have deployed mid-splits to about 35% of our footprint and expect that to reach around 50% by the end of 2024. On the back of this, we launched our first DOCSIS 4.0 market during the fourth quarter and will continue to launch additional markets this year. We are focused on what we can control - that means segmenting our customer base by offering our customers the right price, including value options at different speed tiers and driving ARPU ahead in an environment where broadband subscriber growth remains challenged, and we’re doing this in the context of aggressive network upgrades and expansion, putting us in a great position to eventually return to subscriber growth. Speaking of network expansion, we exceeded our goal of passing 1 million new homes and businesses in 2023, landing at nearly 1.1 million, and we plan to replicate this in 2024 with this level, or potentially even greater footprint expansion. Switching to wireless, we hit a great milestone, eclipsing $1 billion in quarterly revenue for the first time this quarter. With the year-over-year increase due to higher service revenue driven by continued strong momentum in customer lines, which were up 1.3 million or 24% year-over-year to 6.5 million in total. This includes 310,000 lines we just added in the quarter. We’ve had a healthy run rate generating around 300,000 net additional lines per quarter for the last two years, and we’re consistently in the market testing new offers and will continue to do that throughout the coming year, with the goal that some of these offers will translate into accelerated line additions as the year progresses. With only 11% penetration of our domestic residential broadband customer accounts, we still have a big opportunity and a long runway ahead for growth in wireless. International connectivity revenue increased 19% driven by steady mid-teens growth in broadband along with strong growth in wireless, which had healthy growth in both device sales and service revenue. Finally, business services connectivity revenue increased 6% driven by consistent growth in our small business category as we grew ARPU through rate and higher penetration of additional products like Security Edge, and from strong growth in midmarket and enterprise. The revenue growth in our connectivity businesses was offset by declines in video, advertising, and other revenue. The video revenue decline was driven by continued customer losses. The lower other revenue reflects similar dynamics in wire line voice, and advertising was impacted by a tough comparison to last year, which benefited from higher political revenue in our domestic markets. As I mentioned earlier, excluding severance and other, connectivity and platforms’ total EBITDA increased 2% with adjusted margin of 110 basis points. To unpack this improvement, the main driver is the mix shift to our high margin connectivity businesses, a transition you’ve seen for the last few years and that we expect to continue. In addition to the mix shift, we are benefiting from ongoing cost discipline. For every quarter this year, including the fourth quarter, five out of six categories of expenses we report have decreased. The only category that grew is direct product costs, which are success-based and directly associated with the significant growth in our connectivity businesses. In addition, we continue to get more efficient with better tools and technology. Compared to 2017, we reduced our domestic truck rolls by nearly 50% and customer interactions are down nearly 40%, even while we increased our domestic relationships by nearly 5 million over this same time period. The investment we are making in our network, including virtualization and using technology to enhance the customer experience, not only makes us more competitive, it makes us more cost efficient. Together, the mix shift, the cost discipline and the technology advances we’ve made in customer service are all structural, and we expect them to continue, positioning us to drive higher profitability and further margin expansion in 2024 and for the foreseeable future. Now let’s turn to content and experiences on Slide 7. Revenue increased 6% to $11.5 billion and EBITDA increased 2% to $923 million. Excluding severance at $101 million this quarter and $186 million in last year’s fourth quarter, adjusted EBITDA decreased 6%, reflecting a decrease in media partially offset by strong growth at studios and record results at parks. Now let’s take a closer look at content and experiences, starting with media. Media revenue increased 3% driven by strong growth at Peacock, which was up 57% and, similar to wireless, crossed the $1 billion in quarterly revenue mark for the first time. Domestic distribution increased 9% driven by Peacock subscription revenue growth of 88% fueled by the continuation of solid growth in our paid subscriber base. We ended the quarter with 31 million Peacock paid subscribers, up 10 million over the past year, including 3 million net additions in the quarter driven by sports, including the NFL and the Big 10, and movies, notably the day and date movie, Five Nights at Freddy’s, and a variety of originals and other entertainment programming. International networks revenue, which is mainly distribution revenue for Sky Sports, increased 17% primarily due to the increase in sports content this year as well as the positive impact of foreign currency translation. Finally, domestic advertising declined 7% due to a tough comparison to last year, which included a significant incremental contribution in advertising from Telemundo’s broadcast of the FIFA World Cup. Excluding the World Cup, advertising increased nearly 3% driven by strong Peacock advertising and from our strong sports line-up. Peacock advertising increased 50%, again excluding the World Cup, and hit an all-time high. Media EBITDA decreased 50% mainly due to higher sports costs, reflecting a full quarter of a contractual rate increase in our NFL programming, the addition of Big 10 to our sports programming line-up this year, and higher Premier League costs compared to last year when games were paused for four weeks to accommodate the timing of the World Cup. At Peacock, EBITDA losses continued to moderate in the fourth quarter with nice year-over-year improvement resulting in full year losses for Peacock of $2.7 billion, which was slightly better than the expectation we had previously communicated. 2023 marked the peak in annual losses at Peacock, and for 2024 we expect to show meaningful improvement in losses versus 2023. Turning to studios, revenue increased 4% driven by theatrical revenue growth of 59% due to our performance at the box office this quarter with Five Nights at Freddy’s, Trolls Band Together, The Exorcist, and Migration. In fact, Five Nights at Freddy’s was the highest grossing horror film of 2023 and also set a record on Peacock as the most watched title of all time in the first five days of its release. In addition to the films this quarter, we benefited from prior period titles moving through profitable licensing windows, driving EBITDA growth of 83% to $308 million. At theme parks, revenue increased 12% and EBITDA also increased 12% to $872 million for the quarter. These strong results were again driven by growth at our international parks, especially as Osaka continues to benefit from strong demand from Super Nintendo World driving higher attendance and per-cap spending relative to both last year and pre-pandemic levels. In Hollywood, we also continued to benefit from the positive consumer reaction to Super Nintendo World, which opened earlier in 2023, driving strong attendance and growth in per-caps and resulting in Hollywood’s best fourth quarter EBITDA in its history. In Orlando, our results were also strong with attendance in line with 2019 pre-pandemic levels and revenue substantially ahead. Now I’ll wrap up with free cash flow and capital allocation on Slide 8. As I mentioned previously, we generated $1.7 billion in free cash flow this quarter and $13 billion for the year, and we achieved this while absorbing meaningful capital investments to expand our footprint and further strengthen our domestic broadband network, scale our streaming business, and support the continued build of our Epic Universe park ahead of its 2025 opening. As a result, total capital spending increased 13% for the year driven by higher capex. At connectivity and platforms, capex increased 1.5% for the full year, with capex intensity coming in at 10.1% primarily driven by investments to further strengthen and extend our network. In 2024, we expect capex intensity to be in the same range as we continue to transition our U.S. network to DOCSIS 4.0 and accelerate our growth in homes passed. I’ll just note that while our capex intensity at connectivity and platforms has been around 10% for the past few years, this is not a specific internal target for us, rather it’s an output. Our teams are going as fast as possible; however, if for example we have an opportunity to accelerate further our growth in homes passed at accretive economics, then we’d welcome that opportunity. But right now, the envelope has been right around 10% and we’re very happy with the pace that we are on and the progress we’re making. Content and experiences capex increased by $1.2 billion for the full year, driven by parks with Epic accounting for the majority of the increase in spend. In 2024, we expect parks capex to remain elevated and then decrease in 2025 when we open Epic. Working capital was $2 billion for the year, which was better than we expected, improving a billion over last year’s level. Our 2023 results included benefits from the pause in production during the work stoppages associated with the writers and actors strikes during the year. Turning to return of capital on our balance sheet, for the full year we returned a total of $15.8 billion to shareholders - this includes share repurchases of $11 billion, including $3.5 billion in the fourth quarter. In addition, dividend payments totaled $4.8 billion. As we announced this morning, we are raising our dividend by $0.08 a share to $1.24 per share - that’s our 16th consecutive annual increase. We ended the year with net leverage of 2.3 times, in line with our target leverage of around 2.4 times, and we expect to remain at this target level in 2024. Wrapping up, we had a very solid quarter and a great year, and we’re focused on continuing to execute our long term growth strategy supported by our balanced and disciplined approach to capital allocation. I’m proud of the steady and consistent framework which guides our decision-making. We’re going to invest aggressively for organic growth across our six key areas. We’ll protect our balance sheet and cash flow position and return capital to shareholders. Now I’ll turn it over to Brian for a few remarks before we turn to Q&A.

Marci Ryvicker:

Thanks Brian. Operator, let’s open the call for Q&A please.

Ben Swinburne:

Thanks, good morning. Brian, thanks for those clear comments. I wanted to ask you guys about broadband and separately about Peacock. I guess Jason, you talked about and Mike talked about sort of the consumer trends that you think play to your strengths, but you guys are doing a lot at the network level, including in ’24 you talked about your converged offers that you’re testing maybe getting more aggressive. I know you’re not going to put a timeline on it, but can you talk a little bit about the opportunity to re-accelerate broadband customer trends, because the product you are bringing to the marketplace is seemingly getting better even this year, and I realize you’re talking long term, but I just wanted to hear more from you on the things you’re doing and the business and product today, and how that may or may not translate into better trends on the customer front over the course of the next 12 to 24 months. Then on Peacock, I guess maybe for Mike, how much more investment does this business need? I think you guys had talked a while ago about getting to $5 billion of programming investment. If you look at the fourth quarter anyway, you’re basically there now, you’ve got good revenue momentum. I’m trying to think about the path to getting this business to breakeven, so I’d love to hear what you think the business needs in terms of incremental investment from here. Thanks a lot.

Mike Cavanagh:

Hey, it’s Mike, Ben. Thanks for the question on Peacock. I’ll expand a little bit on the question but get to it in terms of where we see programming going in the end. I’ve got to say, we couldn’t be prouder of what we accomplished with Peacock in 2023. To end the year with paying subs at 31 million, up 50% year-over-year, and that’s only three years in, we’re achieving a level of scale with paying subs that’s about 60% of the level of the streamers that have been out there for many years domestically, ex-Netflix. We’re holding a very strong ARPU at $10 per sub, so while it’s not the scale we ultimately plan to get to, I’ve got to say the team has done a fantastic job when lots questioned, could we even get this far. From here, it’s really a matter of continuing to execute against the strategy that’s gotten us here, and that is expected, as we said earlier, to drive improvement in Peacock’s bottom line from the peak losses that we saw in 2023. When you really think about what that strategy is, it’s to manage Peacock and our linear TV businesses as one. The strategy really is to leverage the great relevant content properties we have, both at NBC which is news and sports and entertainment, obviously Bravo and some of the other assets we have in the cable business, and Universal with the Pay-1 window, so when you put it all together, continuing to execute against that. We’re going to look to get more scale, and the things we’re doing are both to drive more scale, more subs, but also get more engagement with the subs we have and drive improvements in churn, which we’ve been pretty pleased with. To ultimately your question, where are we relative to--you know, leveling off a little bit of the growth rate of programming spend as we get to this level is clearly part of the improvement in Peacock losses standalone, that will be a factor as we see continued strong growth on the revenue side, given the higher level of subs and the expectation for continuing to add. But again, I would just say I’m less focused on what standalone Peacock losses are doing than I am on doing what’s right for the long term, for the totality of the media business, which is linear and streaming. I think we’ve navigated a very good path for us, so really pleased with what we’ve done.

Marci Ryvicker:

Thanks Ben. Operator, next question, please.

Craig Moffett:

Hi, thank you. I wonder if you could do an early post mortem on the Chiefs-Dolphins playoff game, what kind of subscription growth it drove at Peacock and what kind of early churn impact you’ve had on that. I know there was some chatter that you guys tried to play down about whether that amount of traffic load on the internet would have some impact on fixed wireless, but I’m wondering if you just have any observations about how other platforms handled the kind of the volume that that game drove in terms of traffic.

Brian Roberts:

I just want to say that we thank the NFL for having the confidence in picking our total company to carry this out. The entire industry cooperated and participated, and it was a very proud moment for, I think, the U.S. internet industry. It worked flawlessly, and I think it’s just another proof point of all the investments that have been made. Thank you again, we’ll see how the results all turn out, but we’re really, really pleased.

Operator:

Thank you. Our next question today is coming from Jessica Reif Ehrlich from Bank of America Securities. Your line is now live.

Mike Cavanagh:

Hey Jessica, thanks. On Peacock in particular, let’s take video in a couple of pieces. On our streaming ambitions, clearly we view it, and we’ve talked about it for a long time, we want our existing media assets to have a strong future in a world where consumer behavior is taking people more to streaming, because that’s the way they want to experience it, so our strength, obviously in video distribution from the NBC side, has been U.S. focused, and I think we are focused--very focused on getting domestic scale. What we’ve done internationally and what we might do one day is a separate story, but for now, we have been focused on making sure through partnerships, JVs, whether it’s Sky Showtime, whether it’s Peacock-type content that makes its way onto Sky platforms, we’ve got a venture partner in MultiChoice in Africa, so we’re looking for ways and a rational approach economically to scale up Peacock domestically while not giving up too much in terms of economics that a lot of people talk about as having global scale. We want to win here first and get to the place we need to go, and that’s really where we’re most focused. In terms of what’s happening on the domestic side through video distribution, I think we continue to be a big player in the space with our own content from NBC, but also I think the best partner given the scale of our reach in broadband for both traditional linear, but at the same time streaming partners. We’ve seen a lot of progress and a lot of collaboration with players and partners that want to reach the kind of customer base we have with our broadband customer base, the natural point of engagement with them, aggregating content and acquiring new content if they don’t have it through Xumo, X1 and the platform that Dave and team have built. I think we’re really well positioned to play a part in that as well.

Brian Roberts:

One thing I would add - it’s Brian - on Epic, just to touch on that part of the question. It’s completely original. It maybe the most exciting project, I’ve seen since we bought NBC-Universal getting built. I think it’s the first new entire theme park in decades in the U.S., and we’re so excited, we’re taking the board of directors to see the construction in the next couple of weeks, which is something we haven’t ever done before. So, I think you’ll all want to be there. Sometime, I think ’23 and ’24, are the peak CapEx years for the construction. We expect to open in ’25, and I give Mark Woodbury and the entire team at Universal incredible kudos to coordinate something of this scale and magnitude that’s being built.

Operator:

Our next question is coming from John Hodulik from UBS. Your line is now live.

Dave Watson:

Hey John, it’s Dave. Let me start with ACP. To specifically answer your question, we have 1.4 million customers that have benefited from this program which we obtained through the national verifier program, so feel good about the credentials of these customers. Most of these customers in this customer base were already our customers prior to the ACP program. We’ve been very consistent on this. We want the program to continue, but I think we’re very well positioned to support these customers if it does not. We have a good business and model in place and a history with knowing how to segment our customer base and have products and packages at a variety of price points to serve our customers well, including well over for a decade and that would include internet essentials. We’ll evaluate this as it plays out. It may be a risk, but one we feel is very manageable for us, given how we work with this program and how we manage our customer base in general.

Marci Ryvicker:

Thanks John. Operator, next question please.

Jonathan Chaplin:

Thanks. Two for Jason. You mentioned that if you saw opportunities to expand your footprint with good economics, you’d do it in a heartbeat. Are you referring to the opportunity in BEAD, and is that something that you expect could potentially hit later this year, or is that more of a 2025 impact? Then on repurchases, we saw the reauthorization of $15 billion. You’re going at a pace of $3.5 billion a quarter at the moment. Should we expect that to continue through 2024?

Dave Watson:

This is Dave. I would only add that when you do these programs, and we have started and we are aggressively pursuing opportunities, as Jason said, at this stage mostly self-funded, but we are working with local governments on programs like ARPA and others. We are going for opportunities where it makes sense. The great part, and a little bit what Brian mentioned right from the get go, there’s just been terrific execution as we scaled operationally, getting ready for this, so the 1.1 million that we did this past year, looking to do that or more into ’24, we are on it and this is a real opportunity for us. Having said that, the nature of these projects, it takes a while to build them up and then driving penetration, and I would look for more of the benefit in ’25. BEAD, we plan to participate where it is consistent with our business goals, but the process, quite frankly, with BEAD is still in flux.

Operator:

Certainly. Our next question is coming from Steven Cahall from Wells Fargo. Your line is now live.

Dave Watson:

Steven, this is Dave. Let me start with wireless. I think we’ve been consistent on this one, too - the wireless is one of the key long term growth drivers for us, and pointed out in the six that the team has talked about. It is absolutely a great companion to broadband. It has good standalone economics and a great runway ahead for penetration mobile to the broadband base. You know, it’s performing well - our domestic revenue was up over 15, we have over 6 million lines, including the 310,000 that we added in the quarter, and we’re only at 11% penetration, as Jason said, to the broadband base, so a lot of runway ahead. It is absolutely a key part of all our go-to-market activity, whether it’s acquisition, case management, upgrade activity to the base, as you noted, Steven. We have been very focused on upgrade activity and retention, so our results have been consistent right around 300,000 new lines per quarter - pretty healthy run rate for a considerable period of time. Having said that, I think we can improve on these results. We are consistently in the market trying new offers, both in terms of broadband and mobile together, and we segment the opportunity, so we do have unique opportunities that we evaluate. We continue to be hopeful that some of these offers will accelerate our line additions over time and as the year progresses. We have a great road map in terms of innovation and offers between Wi-Fi and mobile, and we want to leverage both and continue to build a better product and service. Our mobile service, our core service offering delivers better value day in and day out. We really like, though, our capital-light approach with the MVNO, and I think we’re in a great position to win in convergence, so I think we have a leg up on the competition with this capital-light strategy that doesn’t have to involve customer and/or network trade-offs. We’ll continue to be opportunistic in evaluating progress, but I think there’s upside.

Marci Ryvicker:

Thanks Steve. Operator, we have time for one last question.

Sebastiano Petti:

Hi, thank you for the question. Just wanted to see if you could provide additional color on perhaps the content and experiences segment capex expectations as we look beyond Epic. I think Jason, you did say in ’25, capital intensity in content and experiences should tick down as the Epic build finishes, but as we think about your plans for regional parks in the U.S., headlines about a U.K. park construction perhaps over the next several years as well, any color on how we should be thinking about is there a parks capex holiday before a reacceleration? Then just a housekeeping question on Peacock - obviously very strong net adds inside of 2023. Mike, you did say that you do expect sub growth beyond that to kind of continue, but could you perhaps quantify what the benefit of the conversion from Comcast bundle subs from free to paid was within the year and as we’re kind of thinking about organic or underlying growth that will benefit from the NFL playoff game, Oppenheimer, and some of the other stuff you listed? Thank you.

Marci Ryvicker:

Thanks Sebastiano. That concludes our call. We appreciate all of you joining us this morning.

Marci Ryvicker:

Thank you, operator. And welcome, everyone. Joining me on today's call are Brian Roberts, Mike Cavanagh, Jason Armstrong, and Dave Watson. I will now refer you to slide 2 of the presentation accompanying this call which can also be found on our Investor Relations website and which contains our Safe Harbor disclaimer. This conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I'll turn the call over to Mike.

Jason Armstrong:

Thanks, Mike. And good morning, everyone. I'll take you through our strong third quarter and we'll begin with our consolidated financials on slide 4. Revenue increased 1% to $30.1 billion, while adjusted EBITDA grew 5% to $10 billion. Our results were driven by six key growth areas we have highlighted this year

Operator:

Operator

Jason Armstrong:

It's Jason. Let me start with the margin and expense question on the connectivity side. I think you're right, we've been sort of consistently expanding margins. A large part of that is we had yet another quarter, as we mentioned in the upfront remarks, where every expense line item went backwards or declined year-over-year, which is a positive outside of direct network costs. And just as a reminder, those are costs that directly feed into our key growth businesses like broadband and wireless. So as we look forward, I think the construct is, and you sort of laid this out appropriately, we've got several revenue growth drivers within our connectivity business, namely residential broadband, wireless, and business services, and those are the higher margin businesses within all of Connectivity & Platforms. So the mix shift that we're seeing and undergoing, where those are the businesses that are growing against businesses that are not growing, has been a favorable mix shift for us and we expect it to continue to be a favorable mix shift. So I would look for continued opportunities in both expense and margin.

David Watson:

Ben, this is Dave. So – and as both Jason and Mike said, it does start when you talk about margins with the top line, and so a real focus around healthy ARPU, total revenue growth in connectivity, so all of those things really I think are sustainable. And you go through a competitive phase like we are, but you've still got to keep your eye on the ball and we believe that, over time, in addition to driving good, healthy, making financially disciplined calls along the way, we will return to subscriber growth over time. And so, I think you add all that up, it's – that's the beginning part. Then your question on mobile, it's such an important part of our strategy and it has been. We've built up the business, had consistent performance, and believe strongly we've got a long runway ahead. And one of the things that we're doing just to showcase kind of the focus for us is we are rolling out a buy one, get one offer. It's scaled up at the very end of Q3. It's really kicking off in earnest in Q4. It's a straightforward, good, solid offer that will be accretive and will drive broadband benefits in doing so. We're starting with the base and that's – but it's just an example that in both residential and in small business, we'll continue to be very – I think very aggressive in mobile over time. So a lot more to come on mobile, but we're encouraged and really like the runway ahead. Operator

Brian Roberts:

Great question. We're really excited about Xumo and the progress that we've made – we're making together now with Charter, and it's an amazing platform that started with X1, but now will be in televisions, it will be in devices, and it will be all over the nation and frankly all over the world. The heart and soul of it is our entertainment operating system which is global that includes Sky, all of Canada, Cox, and a number of other distributors that we now gradually build up to, all be helping to finance and help the innovation roadmap. So what is that innovation roadmap? It's really like you're suggesting, what do customers really want? They want a great platform, a great pipe. There want world-class content that they customize. And they want someone to make it really simple for them and do the heavy lifting as you bounce in between services, and that is what we really built our company on all these years and this industry on. So it is somewhat ironic that we've unbundled to rebundle to unbundle to rebundle and everybody has a different version of that and we're at a moment in time, but a lot of it is having one great platform that now the entire industry has and thankfully all of you on this phone who do not live in a Comcast market, which is many, are now soon going to be able to get these products, talk to your voice remote, and see how fantastic the experience is, whether you buy the cable bundle or not. And that's a big point. As most of our sales now are broadband only, we want to make sure we are the best aggregator for streaming. And then a logical next step will be us or others beginning to try to make it even easier for consumers to purchase and to switch packages. So it's an important part of the roadmap and this was a big week in the Charter announcement. And I'm sure, in their call, they'll talk about their commitment to the JV as well. Operator

David Watson:

You got it, Phil. So as we've said, and it's – everybody has seen, it's a pretty competitive environment. And so, when you – we have some continuation of some of the macro issues that we talked about, but we've also – as you brought up, we've also continued to see the expansion of both fiber and fixed wireless footprint. So we've gone through several competitive cycles where there's – it's really noted by a lot of new footprint that's been added, and so we did start in the beginning of the year, made some adjustments in terms of offers that were really focused more on the lower end of the market, but part of our game plan is to – we're going to continue to invest in a better network, better products, and compete aggressively, but we're going to maintain financial discipline, and that means making certain decisions when it comes to balancing rate and volume. And so, after the first half, we did make the decision to pull back on some of our more aggressive offers which resulted in lower connect activity. So that is the changes that we've had. I think our voluntary churn rate is very healthy. A key part of that that's continued and the real issue that we see at this point is, as we manage things, is just lower connect volume. So – but, net-net, we're growing revenue as we talked about earlier, Jason did and I did, and we're going to focus on multiple drivers of revenue growth. And we'll make our playbook, we make changes throughout. So – and then to wireless, your point, we are continuing to test in terms of the CBRS roll-offs where we've picked up the pace on that, staying close to what Charter is doing. We've seen good progress in the ability to off-load traffic and encouraged by the opportunity in terms of just such a small geographic part of your footprint contributes so much volume of wireless traffic. So we are in position, if we so choose to do it, but we like where we're at with that, no new news in terms of scaling up on that point, but we're in a good position. Operator

Brian Roberts:

Okay. Well, this is Brian. Let me start and kick it over to Mike because I think your industry question on sports is really profound and important. I think our company has had a long, deep, rich history in sports, both parts of the company. The best way to consume an NFL game or the Olympics is to have our entertainment operating system I just talked about in Craig's question, and you'll see that in the Olympics. There will be nothing like it. The same goes for I think NBC Sports which is the number one show in television on Sunday Night Football. We've got a great team and a culture of big events, whether it goes from the Kentucky Derby, which the ratings are much higher when it's been on NBC than any previous platform, and then on and on. And with Peacock now, we have the most live sports of any of the streaming services. And I believe that that's a surprise to many people when they learn that and believe that to be the case, and that's a commitment we made when we had things like English Premier League or Tour de France or golf or events that went on for longer periods of time than were typically on a network where you wanted more camera angles or more feeds and more games, and that sets us up for being relevant in the transition that we're all talking about. How do we go from analog to digital in a way that helps the leagues? And so, yeah, I can't speculate on what might happen to ESPN, but what I could speculate is we meet with the leagues which we do frequently, we think we present a somewhat unique ability to help get the maximum engagement now with broadcast and cable, particularly our broadcast platform, as well as having a robust streaming service and a super quarter here regarding the kind of momentum that we've garnered. A lot of that is driven by sports on Peacock. And that sets you up to answer your advertising question, which I'll let Mike go into a bit, but at the highest level, we're creating the digital capability on Peacock in the most relevant content. That looks like a very winning combination for us as a strategy.

Brian Roberts:

One last point I just wanted to add that one of the great things about sports that we're very excited about is streaming sports and what that means for our broadband network strategy that Dave was just talking about. Dave and the team I think have found a great balance in how we're running the operation, but a big part of that is a commitment and a belief that we see all sports finding a way over the next many years or maybe not so many years to be more and more streamed, and that's going to require more bandwidth and that's going to require and create an opportunity for us to have the superior product in the market. So that's our strategy, and so sports really, back to your first question, Jessica, is at the heart and soul of a lot of what we do. Operator

David Watson:

Hey, Brett, Dave. So let me start. Overall, business services had a very good quarter. Revenue accelerated a little, reflecting stronger growth in enterprise and mid-market, so we've been very focused on growing all categories. So your point on the sales investment, let me provide some context. We have been for some time working with partners. And most certainly, with the acquisition of Masergy, we've been expanding our capability to go into other areas and now we have global opportunity to be able to handle customers. The key here is to be able to take care of customers' needs wherever they are, so this particular investment is just adding some folks, it's not infrastructure that we're building out there. We will leverage the partnerships that we have, but certainly we'll deliver products that meets the customers' needs out. But it's sales force and adding some people that can drive mid-market and enterprise where the customers' locations are. But we'll continue to partner, we have great partnerships with Charter, Cox, many others, and we'll continue to do that. It's not really an infrastructure moment. And in terms of wireless, it's a very important part of business services and it's – clearly, this phase is centered on SMB and we're getting going on that. We've picked up the pace on that. It's not a major driver yet in overall mobile activity at this point, but we expect that pace to pick up. That is an important one for us. And let me – just one last point, if I could, Brett. While you're talking about business services, I'd be remiss if I didn't thank Bill Stemper as he transitions to Chairman Emeritus. Bill has been a spectacular teammate and driver of this business over a long stretch, really. And one of the great things that Bill did is build a world class team. I think they've set the bar in terms of performance. We continue to do that. And part of that team is a wonderful executive, Ed Zimmerman, who has now taken over the – running business services for us, so congratulations to both. Operator

David Watson:

I think Mike and Brian talked about Charter Disney, so that to me – I think that is the – they provided the point of view. From my perspective, I think every situation is unique. I think we are in a very unique position because of the platform that we have and the fact that we are in the streaming business as a company, that we have great relationships with content providers and we have a way of figuring things out. But it will be case by case as they come up and we'll see – but a big part of it, one of the things we talked about is value, value of the content and how that model evolves, we'll figure it out. But I think we are in a good position to be a bridge builder as we go, consider each one of these options in the marketplace. In terms of the network and DOCSIS, let me give you a sense, John, where we're at. So we're about 30% in terms of mid-splits and really focused on this seamless integration that connects HFC to fiber. And we'll be at 40% next year. So – and then we started – you've seen the announcement and we talked about the deployment of DOCSIS 4.0 [Technical Difficulty] and so we're going to continue to drive the mid-split upgrade areas. DOCSIS 4.0 follows that mid-split trajectory. And that is our focus, continued focus is just providing leadership of where the market's going. The reason why, to answer your question, in terms of where do we see the benefits, it's that point, that the market is going to continue, whether it's the sports discussion we talked about earlier, as more and more things start to perhaps go to streaming, there will be more simultaneous contention at peak moments and we're in a great position with the networks. So having that, the ability to have faster speeds, ubiquitous network coverage at scale, the most efficient network and effectively delivering, we've got [Technical Difficulty] customers that are 1 gig today, 70% of our customers are 400 megabits or higher, and we see where things are going. So I think the answer is both. I think, over time, it's customer relationship as it's going to become increasingly harder for some of the competition to keep up in terms of – they have to make network trade-offs in fixed wireless, in particular, and so that to me is both rate and volume. And on – the last point is just on the lower end, it was a lot of activity in the lower end. We did respond in the first quarter but made adjustments for the second half, so that – I talked about that.

Jonathan Chaplin:

Maybe for Dave, just a small question following on from Phil's. In terms of the CBRS trials, is the benefit that you're seeing there that you're sort of more enthusiastic about primarily on the cost side from being able to off-load traffic, or is there a product benefit as well? And then with the sale of the 600 megahertz spectrum, does that sort of suggest that you're not really interested in owning any spectrum besides 600 megahertz, or was there some sort of something – sorry, besides CBRS, was there something specific about 600 megahertz in the portfolio that you had that made it non-strategic? And then if you can give us just a quick update on where your sort of average usage is on broadband, that would be helpful as well. Thanks.

Steven Cahall:

So just first on the residential broadband ARPU, wondering if you could unpack a little bit of the sequential change? I know the big components are double play going to single play from cord cutting as well as just tiering and pricing, so with a little bit of slowdown sequentially. Should we attribute a lot of that to the slowdown in video losses that you saw, or anything else going on in there? And then, Brian, you talked a lot about how effectively you've deleveraged the balance sheet, taking down by a full turn over the last couple of years. Also that a lot of your competitors, especially on the media side, are going to be more challenged. So I know you'll be disciplined in anything that you do, but as you look ahead and think about competing against some companies that aren't challenged, like Netflix and Apple and Amazon, how do you think about some of the availability of some of those distressed content creators that might be out there at some future point? Thank you.

Jason Armstrong:

Steven, I would add on to that, just if you look at the historical context here, we've typically grown broadband ARPU 3% to 4% in any given year. We've been operating at the very high end of that for the first three-quarters this year. Things that contribute to that over the long term, you mentioned sort of the tactical components of that that really, really – we want to see broadband usage growth, we want to see customers hanging more devices off their network, we want to see them taking higher speeds, and that's exactly what they're doing. So those are sort of the foundational pillars for driving ARPU growth over time, and that's exactly what we're seeing.

Michael Cavanagh:

So I think if you zoom out, it's much of what I said earlier, Steven, which is I think the strength of our financial position broadly, if you think about across all the businesses we're in, I think of us as having leading positions for the customer but also strong margins benchmarked against any period you can look at, that together with the strong balance sheet, I think the company couldn't be in better shape financially. And I think on the execution side, Dave and his team and the NBC team that works with me are – they know what they're doing and I think we're not giving anybody any quarter in terms of operating the businesses we have. Our priorities, though, in how to use that financial strength is very strategic. So I think we think about the businesses we're in and investing in them appropriately for return and growth and drive growth in those businesses over the long term, hence the way Jason talks about the half the company that's got strong revenue growth. We're trying to find ways to put resources into our own businesses. So that's the priority. As Brian said, the bar is really high for us to consider anything inorganic, but it's our job to look at these things. But if you think about – what you call the potentially distressed media assets, I'm not sure which ones you're referring to, but many of them are pretty small and wouldn't change the arc of what our company's all about. So I think our focus is on the total picture what Comcast looks like and we're proud of the company we have.

Marci Ryvicker:

Thank you, operator, and welcome to our second quarter 2023 earnings call. You'll first hear from Mike Cavanagh and Jason Armstrong. Then Brian Roberts and Dave Watson will join us and be available for Q&A. I will now refer you to slide two of the presentation accompanying this call, which can also be found on our Investor Relations Web site, which contains our Safe Harbor disclaimer. This conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I'll turn the call over to Mike.

Jason Armstrong:

Thanks, Mike, and good morning, everyone. We had a really strong second quarter. And to take you through it, I'll start with our consolidated results on slide four. Revenue increased 2% to $30.5 billion, while adjusted EBITDA grew 4% to $10.2 billion, a record level driven by continued operating leverage at our high-margin Connectivity & Platforms business, as well as strong growth at Studios and Theme Parks. We grew adjusted earnings per share by 12% to $1.13, and generated $3.4 billion of free cash flow, while returning $3.2 billion of capital to shareholders. Our healthy level of free cash flow in the quarter includes the significant investments we're making to support and grow our businesses in six key growth areas; our connectivity businesses including Residential Broadband, Wireless, and Business Services Connectivity, Theme Parks, Streaming, and premium content in our studios. Taken together, these areas generated more than half of our total company revenue in the quarter, and grew nearly 10% year-over-year, consistent with the first quarter. Now, let's turn to our individual business results, starting on slide five, with Connectivity & Platforms. As I get into these results, I'll refer to year-over-year growth on a constant currency basis. Revenue for total Connectivity & Platforms was flat at $20.4 billion. Our core connectivity businesses, domestic broadband, domestic wireless, international connectivity, and Business Services Connectivity increased 7% to over $10 billion in revenue, while video, advertising, and other revenue declined 7% to $9.8 billion. Our strategy continues to incorporate a strong focus on investing in and driving growth in high-margin businesses while protecting profitability in businesses with secular headwinds through disciplined cost management. This resulted in 170 basis points of margin expansion for Connectivity & Platforms in the second quarter, while margins for our domestic legacy cable business improved 240 basis points, reaching a record high of 47.3%. Diving deeper into the details, first, I'll unpack connectivity revenue growth. Residential Connectivity revenue grew by 8%, reflecting 4% growth in domestic broadband, 20% growth in wireless, and 26% growth in international, while revenue for Business Services Connectivity grew 4%. Domestic broadband continued to be led by very strong ARPU growth, which increased 4.5% for the second consecutive quarter. As we have said before, our goal is to protect ARPU by retaining the appropriate balance between rate and volume, and to serve our customers' constant demand for more from our network. We continue to see the use cases for better and faster Internet increase. Demand for higher speeds is increasing, as is average network consumption, and our customers are hanging more devices off our network in their homes. The average monthly data usage for a broadband customer that doesn't take video from us is nearly 700 gigabytes, and continues to grow. In fact, this is nearly 70% more than the average usage from the comparable quarter in 2019, pre-pandemic. Additionally, nearly three quarters of our broadband customers are now in speed plans of 400 megs and above. That's up from less than 50% last year and less than 20% in 2020. We plan for our network and product capabilities to stay far ahead of demand, so that we maintain our position as the market leader, delivering the best broadband possible. To that end, our transition to DOCSIS 4.0 is progressing well. We are more than halfway through the year, and have implemented on mid-split technology at 25% of our footprint, and are on target to complete one-third of this build by year-end, with the first commercial launch of DOCSIS 4.0 in just a few short months. We are also hard at work when it comes to expanding our footprint. We've grown our homes and businesses past by 1.5% year-over-year to 61.8 million, and we are on pace to meet or exceed our goal of 1 million new homes and businesses past for 2023, with future footprint expansion remaining a high priority. Growth in domestic wireless revenue was due to higher service revenue, driven by continued strong momentum in customer lines, which were up $1.4 million or 30% year-over-year, to $6 million in total, including the 316,000 lines we just added in the quarter. This marked the seventh consecutive quarter of more than 300,000 line additions. We continue testing some new converged offers in the quarter, and we are encouraged by an increasing mix of new customers to Comcast. And we will continue to experiment with different offers over time. With just 10% of our domestic residential broadband customers taking our mobile offering, we have a big opportunity and long runway ahead for growth in wireless. International connectivity revenue grew to $1 billion, a record high, and demonstrates the strength of the Sky brand and the ability to leverage a leadership position in video, and extend that to connectivity with significant success. Broadband, which accounts for two-thirds of international connectivity revenue continue to grow at a mid-teens level, benefiting from both an increase in customers and ARPU, compared to a year ago. The remainder is wireless revenue, which tends to have more variable growth due to handsets, which contributed to the higher growth this quarter. Finally, on Business Services Connectivity, revenue increased 4%, reflecting stronger growth in enterprise and mid-market and a slight deceleration in growth from small business, where we are seeing a bit of macro economic pressure. The strong revenue growth overall in our connectivity businesses was offset by declines in video, due to customer losses since last year, as well as declines in other revenue, reflecting similar dynamics in wireline voice. And finally, in advertising, which was impacted by lower political revenue in our domestic markets and the macro environment. Connectivity in platforms total EBITDA increased 4% to $8.3 billion, and as I mentioned a moment ago, adjusted margin that expanded 170 basis points. This is driven by the mix shift to our high margin connectivity businesses coupled with very strong expense management. In fact every line of expense was down year-over-year, except direct product costs, which are success-based and directly associated with the significant growth in our connectivity businesses. Further on tacking our connectivity and platform's EBITDA results between residential and business, residential EBITDA grew 4% with margin improving 180 basis points to reach 38.9%, again, highlighting our favorable mix shift, while business EBITDA grew 5% with margin improving 40 basis points to reach 57.7%. Now, let's turn to Content & Experiences on slide six. Content & Experiences revenue increased 4% to $10.9 billion, and EBITDA increased 7.5% to $2.2 billion, driven by record results at parks and strong growth at studios, fueled by the success of Super Mario Brothers. Taking a closer look at the results, our media segment combines our TV networks and Peacock, matching our holistic approach to managing these businesses. As viewership shifts to streaming, our dual revenue strategy at Peacock, where we are growing advertising and distribution revenue, is offsetting declines in linear revenue. At the same time, we are managing costs at our linear networks, and reallocating some of these resources to Peacock, with the goal of maximizing profitability over the long-term across our media portfolio. You see that in our media results this quarter was stable revenue, a strong growth in Peacock offset the performance at our linear networks. Immediate EBITDA decreased 18%, which included a $651 million EBITDA loss at Peacock. To get a little further into details, domestic advertising declined 5% with underlying trends consistent to prior quarters, reflecting continued softness in the overall market, partially offset by strong growth in advertising at Peacock, which increased over 75% driven by strong demand. We expect these overall results in advertising to continue in the third quarter. Domestic distribution increased 2% driven by Peacock distribution revenue growth of nearly 70%. Peacock paid scribers landed at $24 million compared to $30 million a year ago and $22 million at the end of the first quarter. As Mike mentioned, in June we began an effort to transition Comcast bundle scribers who received Peacock for free to a paid relationship. We've made some nice progress to date as the conversion activity drove Peacock second quarter subscriber growth. And we are bullish on further increasing our Peacock subscriber base through the balance of 2023, driven by both our continued conversion efforts as well as strong programming in the second-half. Some highlights included strong line up of movies exclusively on Peacock in our Pay-One window including Super Mario Bros. coming August 3rd; a day & date movie, Blumhouse, Five Nights at Freddy's coming at the end of October. And continued benefit from our next day broadcast Bravo content along with a strong sports lineup including Sunday Night Football, and for the first time, Big Ten. Turning to Studios, we had a great quarter driven by our film business including the latest installment of the Fast franchise and a tremendous success of Super Mario Bros. While theatrical revenue growth was offset by lower content licensing at our television studios due the timing of when we deliver content, the momentum in our film business led by the success of Mario fueled nearly $260 million in year-over-year growth in studio EBITDA. At Theme Parks, revenue increased 22% and EBITDA increased 32% to $833 million, a record level. Our park in Hollywood continued momentum from opening Super Nintendo World last quarter. The positive consumer reaction drove strong attendance and per cap growth, helping Hollywood to deliver its best quarter EBITDA in its history. Our international parks are both experiencing nice rebound post COVID. Our park in Osaka delivered a record level of EBITDA for a second quarter as it continues to benefit from strong demand from Super Nintendo World. And our park in Beijing enjoyed its most profitable quarter to date, resulting in strong improvement compared to last year when the park was largely closed due to COVID. In Orlando, our comparisons were impacted by unprecedented levels of visitation last year. But underlying momentum remains healthy as attendance was relatively in line with 2019 pre-pandemic levels while revenue was substantially ahead of 2019 levels. I'll now wrap up with free cash flow and capital allocation on Slide 7. As I mentioned previously, we generated $3.4 billion in free cash flow this quarter, and achieved this while absorbing meaningful investments in our network and theme parks. These investments drove a 20% increase in total capital spending, primarily driven by higher CapEx which was consistent with the outlook that we provided on our last quarter call. At Connectivity & Platforms, CapEx increased to 11% with CapEx intensity coming in at 10.4%, primarily driven by investments to accelerate our home passed as well as transition our U.S. network to DOCSIS 4.0. Content & Experiences CapEx increased by $344 million, driven by parks, with Epic accounting for the majority of this quarter's increase in spend. Turning to return on capital and our balance sheet, we repurchased $2 billion worth of shares in the quarter. In addition, dividend payments totaled $1.2 billion for a total return on capital in the second quarter of $3.2 billion. We ended the quarter with net leverage of 2.4 times, in line with our target leverage. With that, let me turn it over to Brian for a few words before we turn the call back to Marci.

Marci Ryvicker:

Thanks, Brian. Operator, let's open up the call please.

Ben Swinburne:

Thank you, good morning. Question on broadband, and then one on NBC, maybe for Mike and Dave, when you think about the converged offers you have in the market, I know you've been testing more the investments in the network. Those tailwinds, again the headwinds around competition and housing, fixed wireless, when you put that all together, how are you feeling about the ability for the company to return to consistent broadband customer growth, particularly when you look into maybe the seasonally stronger back-half or into next year? And then, Mike, you mentioned the strikes. There's a lot of different ways that those could impact your business depending on how long it lasts. But I'm particularly interested in free cash flow for the company, and also Peacock, where there's a lot of expectations around Peacock profitability improving or losses coming down, and continued growth. When you put the strike into context for us, how should we be thinking about the impact should this last longer than expected? Thank you.

Michael Cavanagh:

Thanks, Dave, so, hey, good morning, Ben. So, I think I'd just add a point, that if you look back at the first-half of the year, what Dave and his team have been doing and continue to do in terms of setting the broadband business, which is obviously extremely important to the future of the company, up for long-term success by continuing to improve our product, add innovation around it, segment the base, extend the footprint, all the things that you want to see happen, and while protecting pricing are all outstanding work in a competitive moment in time. But I think as you know, we here and Dave and his team, in particular, are thinking what are the implications for the long-term as we think about how to compete in the short-term. Going to your question on the NBC side on strikes, I'll just repeat what I said earlier, which is that we are committed to reaching a fair deal with the guilds as soon as possible. Beyond that, I'd just it's really for all involved in the industry broadly, a prolonged work stoppage and the longer it goes the worse it'll be. It's obviously going to have a negative impact all around. To your question about free cash flow, nothing to quantify in the context of our company, I mean it's all manageable. But it will shift studio working capital out of the near-term and into the future, so probably for 2023 a little bit of lower working capital, higher free cash flow, and the flipside of that in 2024. As you look at Peacock, I wouldn't point out anything in particular related to strikes and its effect in 2023 or second-half of the year. Obviously, the longer the strike the more that could have an affect as you look into 2024 and beyond, and that would be for ourselves and others, obviously. So, it's a level playing field. But to comment on Peacock in particular in the second-half, we've got a lot of strong content coming. So, we've got NFL coming back. Obviously then on top of that we have an exclusive NFL wild-card game. We're going to have Big Ten for the first time, which is fantastic on Saturday nights. In the movie slates, we've got Super Mario Bros. coming to Peacock shortly, we've got Exorcist, Five Nights at Freddy's, as Jason pointed out, coming from Blumhouse. And then on TV side, some originals, including Continental, which is related to the John Wick franchise. So, we feel very good about the strength of what we have coming in the second-half of the year content-wise. And then beyond that, on Peacock, I think there'll be a continuation of the good work that we've done inside the company to convert Comcast subscribers over to a paying subscriber status, which we're not quite halfway through that as we only got started in June on that score. So, over the remainder of the year that will also be happening. So, when you look at the doubling of Peacock subs year-over-year, and I'm optimistic about what the second-half of the year brings, feel pretty good about Peacock.

Marci Ryvicker:

Thanks, Ben. Operator, next question please.

Craig Moffett:

Hi. Two questions, if I could, regarding your wireless business. One, there's been some talk in the market, and there was some discussion on the Verizon call yesterday, calling, if not fully into question, at least raising some eyebrows with respect to the permanence of that contract. So, I'm just wondering if there was anything that you can say about the durability of that relationship and your confidence that that is, in fact, an irrevocable contract? And then second, you've obviously now started to subsidize handsets more frequently in line with the way the whole market really operates. I wonder if you could just talk about that a bit and talk about your views on customer lifetime value that you're seeing with new customer acquisitions given the handset subsidies and expected churn?

Marci Ryvicker:

Thanks, Craig. Operator, next question please?

Brett Feldman:

Yes, thanks for taking the question. Disney has said that they are looking for, potentially, a partner to help them transition ESPN to a more direct-to-consumer model. You have a really big sports franchise as well. How are you thinking about further transitioning NBC Sports to a business that is mostly streaming? Is it something you think you would need a partner for? And maybe broadly speaking, do you think as sports businesses become more streaming-centric, there is an opportunity or need for consolidation among those platforms? Thank you.

Brett Feldman:

Thank you.

Marci Ryvicker:

Thanks, Brett. Operator, next question please.

Philip Cusick:

Hi, guys, thank you. Lots to talk about, one follow-up on Brett, do you think that you have the right sports rights next, or can you stretch your lead and Peacock's lead by taking more over time? And then, second, can you dig into the strong Hollywood and the weaker Orlando numbers? It looks like Orlando, just in general is little bit softer year-over-year, but we think you have been taking share, do you agree with that? And how do you see that going forward? Thanks very much.

Brian Roberts:

I just want to add that, you know, really bullish on the parks is one of the six areas, Jason mentioned that we feel are the growth driver of the company in the years ahead. We were just down in Orlando recently looking at Epic Universe, progress, and it's spectacular. What's coming in 2025, we have the two parks, the smaller parks in Vegas and outside Dallas. So, we are looking for growth in this area. We are pretty excited about the results that Jason and Mike have talked about, and I just draw your attention that the opportunity in Orlando with Epic is pretty massive, we believe.

Philip Cusick:

Thanks, guys.

Operator:

Our next question is coming from Jessica Reif Ehrlich from BofA Securities. Please go ahead.

Brian Roberts:

So, in terms of content, I'm really pleased, Jessica, with the elevation of couple of my partners at NBC; one of them being Donna Langley, who is one of the most respected people in Hollywood, along with -- we have great leader, Pearlena Igbokwe, who runs our TV Studios. So, I think giving them a sort of content vertical that's going to work closely with Mark Lazarus on the TV side and platform side, and Cesar Conde, our News and Telemundo, I think is going to really take advantage of the company that we have. We are going to obviously be very much focused on creating great content, but we already do create great content, I think when you look at the movie slates we've had and the TV that we produce for ourselves and others, and I think that strategy is going to continue. We are not going to be creating content exclusively for ourselves, but I think it's a great advantage for our studios to actually have platforms that can take a substantial amount, though not all, of the content that we can create, which puts us in a great position to work with all sorts of talent and creators in Hollywood and elsewhere can come work with our great leadership in our studios, and we help bring their ideas to life. In terms of cost and strategy and so forth, that's a -- we will work in the context of the industry and the buyers, and what they're looking for, and be responsive to that. But I feel very good about the way our studio businesses are set up. In terms of advertising, the ad market softened versus last year, stabilized as it came into this year and has stayed stable, and I think that would be on the back of just uncertainty about economic outlook looking forward. And I think, Jason's comments are, we don't see that condition changing as we are looking into the third quarter and second-half of the year. As you know, I think we feel good about our upfronts, despite those headwinds, our total cash and pricing levels was roughly in line with last year, and really strong related to Peacock in particular. A lot of that comes from the strength of our portfolio, as I have mentioned earlier, where we see strength around Big Ten, Sunday Night Football, Peacock, one platform and alike all things that are helpful us out quite a bit.

Operator:

Our next question comes from Stephen Kale from Wells Fargo. Your line is now live.

Brian Roberts:

Got it. So, let me start with ARPU, and you hit on a couple of the key points. First off, pretty strong performance in the quarters we have said and seen 4.5%. And there are multiple drivers. There was a little bit more rate that we took early on, not why we are different, but a little bit more that we did in the beginning of the year. I think a critical one for us is pyramids. And we have third of our base, that said, a gigabit plus and that's 75%, 400 megabits are higher. That definitely impacts the overall ARPU. I think one that maybe not is understood as much is maybe as it should be, but we have a wonderful product called xFi Complete, 25% of our base has that. And let me take one sec and describe what's in it, it's a gateway, it's a great gateway that's included in the tier, with a pass to upgrading the gateway over time, you have an opportunity to do that, and advance security is included in that, unlimited is included in that, and then a coverage plan making sure your whole house is covered. So, xFi Complete is a great tier, good value to customers, and we have 25% of the base. And then, there is the bundled discount that you mentioned that when customers go to HSD-only, you use the bundled discounts, and so, all of those things factor in. So, I think it's a positive, there are multiple drivers that are helping, and the thing, Stephen, that starts with is just where the market is going, and I mentioned that before, and you have this very stable group of customers that are just using more, and over time that continues to trend up, and we have this balance of stable base and healthy ARPU growth. On international connectivity, and the margin side, so this is a great growth area for us. And you look at the -- from a revenue perspective, just starting with that, because that impacts margin. The revenue increased 26% this quarter, as Jason said in the call, and the two-thirds of that revenue comes from broadband, which continues to grow at mid-teen level, and was driven by higher level of customers and ARPU, compared to a year-ago. Remaining third is wireless, which tends to have more variable growth quarter-to-quarter due to handsets. And so, this is a solid quarter growth rate. And it will impact margins. But normalizing for mobile side of things, revenue growth, I think maybe the right level to focus on is more closer to 20% level for international connectivity. So, I think this is a strong part of the portfolio, and a definite contributor towards, as Jason as said, one of the main killers of not only just domestic broadband and mobile, but also the international broadband and mobile. Jason?

Stephen Kale:

Thank you.

Operator:

Our next question is coming from John Hodulik from UBS. Please go ahead.

Jason Armstrong:

Yes, thanks, John; good question. So, on mix and margins in the connectivity business, I think we have had a fairly consistent track record if you look at the last several years of margin expansion. If you look at the core sort of legacy cable business, as we mentioned this quarter, record margin over 47%. And the factors that have contributed to that historically are in place as we look forward. I think Mike's comment upfront about being able to grow revenue, being able to grow margins; that's a key part of it. So, to your question specifically on connectivity, there is a mix shift going on, when we talk about sort of the six key growth drivers across the company, three are sort of core connectivity growth drivers, whether it's residential broadband, business services, or wireless, this is an accretive mix shift for us, as we think about the way the categories are sort of shifting and what's growing versus what's not growing. So, I would look for more of the same. I think also importantly for the team for the second consecutive quarter, every expense line in connectivity and platforms was down year-over-year, except for direct product costs, and those are the costs that directly support the connectivity and platforms, revenue growth and the categories we talked about. So, our outlook for more of the same in continued margin expansion out of the business. I think on Peacock, you are right, we came into the year, and gave guidance for roughly $3 billion in losses, no change to that. And as you see, we are pacing to that over the first couple of quarters. We've got a lot of incremental content as we think in the back-half of the year, as Mike said, so no change to that guidance.

Marci Ryvicker:

Thanks, John. Operator, next question please.

Vijay Jayant:

Good morning. So, I think Jason talked about future expansion of this footprint being a high priority, and the bid dollars by state have been sort of allocated. Can you just talk about, is that really going to be a big opportunity in terms of product stating in that, and driving that footprint? Thanks.

Operator:

Our last question today is coming from Jonathan Chaplin from New Street. Please go ahead.

David Watson:

So, look -- this is David. Let me start on the broadband part and a little bit on wireless. So, as we saw the base is stable 32 million. And this is sequentially and year over year for this quarter. We also flagged -- we talked about this last quarter. We expected more normal seasonal activity so that net ads would be lower than Q1. But we also expected a more muted step down in net ads from Q1 to Q2. This is a combination of lower overall move activity. The overall macro issues that we have experienced over the past year in the market. At the same time, we did as you brought up we go in and out in terms offers. We had some offers really targeted in the multiple segments that we served, more in the lower end. And we had some traction on some of that. So, that did help. And so, we'll continue to be opportunistic throughout the year. And as I mentioned before to your point on wireless, we absolutely aggressively package mobile with broadband. And this is for new and existing customers. So, mobile is a great extension of the relationship and really profitable way to existing customers that are HSD only, so, one of the key things that we do. And I think over time, we've got to continue to stay focused on that. I think this is much of an opportunity to grow the mobile business and really help broadband. It is going to the base as well as attracting new customer. So, it's a double wind from our perspective. Jason?

Marci Ryvicker:

Thank you, Jonathan, and thank you everyone for joining us on our second quarter call.

Marci Ryvicker:

Thank you, operator, and welcome to our first quarter 2023 earnings call. You'll first hear from Brian Roberts, Mike Cavanagh and Jason Armstrong, then Dave Watson will join us and be available for Q&A. As a reminder, beginning this first quarter we have changed our presentation of segment operating results around two primary businesses; Connectivity & Platforms and Content & Experiences. For additional details please refer to our 8-K issued on March 13, which can be found on our Investor Relations website at www.cmcsa.com. I will now refer you to Slide 2 of the presentation accompanying this call, which can also be found on our investor relations website on which contains our Safe Harbor disclaimer. This conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I'll turn the call over to Brian.

Michael Cavanagh:

Thanks Brian. We had a great start to 2023 and have set ourselves up for another strong year. We have amazing talent at all levels of our company and DNA that fosters creativity and collaboration, resulting in operational excellence that is second to none. Couple that with our position as a scaled leader in very large and profitable markets with tens of millions of customers paying us over a $100 per month, as well as hundreds of millions of TV and streaming viewers, and we have an extremely healthy balance sheet enabling us to invest in all of our strategic opportunities and for great returns, while also returning a healthy amount of capital to shareholders. As pleased as we are with our results in the first quarter, any company's performance in a quarter is just a milestone of progress against a longer term strategy and plan. And so before we dive deeper into the details of the last few months, I'd like to spend a few minutes talking about the drivers of our growth over the longer term and where we're focusing most of our time and resources. I put these in four buckets, residential connectivity, business services connectivity, our theme parks and experiences and our premium content creation. I'll start with residential connectivity, which is comprised of domestic broadband, domestic wireless and international connectivity. Broadband is a fantastic business. It's a great product for the consumer and demand continues to rise. People are connecting more and more devices to our network and they're consuming a tremendous amount of data. Right now, the average monthly data usage for a broadband customer that doesn't take video from us is nearly 700 gigabytes, and there is a related increase in the importance of reliability and speed with roughly one third of our customers at one gigabit or higher and nearly three quarters at or above 400 megabits. For us, the consumer's already high and increasing level of expectation for their broadband experience is an important trend. And while the marketplace is competitive, such that adding subs in the near-term is likely to be a challenge. I fully expect we will eventually return to subscriber growth. We have the best handout there to win against all the competing technologies, whether it's fiber or fixed wireless. We view fiber as our long-term competitor. We've been successfully competing against fiber for about 20 years, yet still built a base of 32 million broadband customers over this time period.

Jason Armstrong:

Thanks Mike and good morning everyone. In late February we announced that starting this quarter we will be reporting our results in two reportable business units; Connectivity & platforms and Content & Experiences, more closely align our like-minded businesses, reflect how we run our company and highlight our opportunities for growth as a globally integrated content distribution company. We're also providing more disclosure around areas that have become increasingly important to our overall results, namely Business Services and Peacock. Let's start with our consolidated first quarter results on Slide 4. Total company revenue of $29.7 billion declined 4% due to the tough comparison to last year's Winter Olympics and Super Bowl, as well as the negative impact of foreign currency. While our total company adjusted EBITDA grew 3% thanks to continued strong operating leverage at our high margin Connectivity & Platforms business. Excluding the impacts of the Winter Olympics and Super Bowl and adjusting for constant currency, total company revenue increased 1.5%. We grew adjusted earnings per share by 7% to $0.92 and generated $3.8 billion of free cash flow while returning $3.2 billion of capital to shareholders in the first quarter. This is in addition to significant investments to support and grow our businesses, including our transition to DOCSIS 4.0 and footprint expansion in broadband, the construction of Epic, as well as consistent flow of new lands and attractions at our theme parks, and content production at our studios, which feeds into Peacock, a robust third party licensing opportunity and a really successful film business. When taken together, these investment areas generated over half of total company revenue in the first quarter with growth of 10% year-over-year. Now let's turn to our business results starting on Slide 5 with Connectivity & Platforms. As a reminder, our largest foreign exchange exposure is the British pound, which was down over 9% year-over-year. So in order to highlight the underlying performance of the business, I'll speak to our results at Connectivity & Platforms on a constant currency basis. Revenue was flat this quarter, but this is worth unpacking. Our core connectivity revenues, residential and business grew over 7% to $10 billion, while video, advertising and other revenues declined 7% to $9.8 billion. Year-over-year we generated 160 basis points of margin expansion for Connectivity & Platforms on a total basis. This is reflective of our strategy of investing in and driving growth in high margin businesses while protecting profitability in businesses with secular headwinds through disciplined cost control. To get into more detail, residential connectivity revenue grew by 8% with 5% growth in domestic broadband, 27% growth in wireless, and 18% growth in international. In business services connectivity revenue continued to grow at a healthy mid-single digit pace. Our domestic residential broadband customer base this quarter remained stable over both the last year and in the quarter with churn remaining below pre-pandemic levels. While we had some success towards the end of the quarter with a couple of offers targeting the lower end of the market, the broadband environment remains highly competitive right now, particularly at the lower end. And as such, our view remains that 2023 will be a challenging period for us to add subs. Our outlook for growth and our strategy has been consistent. We will compete aggressively, but do so in a financially disciplined way. While we expect to return to growth in broadband subscribers over time, during this interim period as well as over the longer-term, we will focus on protecting and growing broadband ARPU and we're pleased with the 4.5% year-over-year increase in ARPU in the quarter. We expect continued strong revenue growth over the course of 2023 and expect ARPU will be the primary driver. Growth in domestic wireless revenue was a function of higher service revenue, driven by continued strong momentum in customer lines, which are up 1.4 million or 32% year-over-year to 5.7 million in total, including the 355,000 lines we just added, which was a record high for a first quarter. There is clearly demand for a converged offering that delivers reliable and fast speeds both in and out of the home. We are extremely well positioned to take advantage of this trend and have a long runway for growth as less than 10% of our broadband accounts currently take our mobile offering. A new disclosure category for us is international connectivity. Roughly two two-thirds of international connectivity revenue is broadband growing at mid-teens levels. The remaining one-third is wireless, of which a big portion comes from device sales and therefore tends to fluctuate with the timing of device launches. The rest of wireless is service revenue, which is growing nicely due to additional customer lines and healthy ARPU growth. The strong revenue growth in our connectivity businesses was offset by declines in video due to customer losses relative to last year. In other revenue reflecting similar dynamics in wire line voice and in advertising, which was impacted by a tough macro environment in addition to lower political revenue in our domestic markets. On the expense side, every expense line item declined in the first quarter with the exception of direct product costs, which are success based and directly associated with the significant growth in our connectivity businesses. The strong execution by the team to deliver sustainable operating efficiencies coupled with solid growth in our high margin connectivity businesses, resulted in Connectivity & Platforms EBITDA growth of 4% to $8.1 billion and as I mentioned a moment ago, an adjusted margin expanding 160 basis points year-over-year. And that is despite some temporary margin headwinds in our international business associated with some pressure on revenue due to a challenging macro environment and higher programming costs for sports channels, which were up this year given the timing of events. Margin for our domestic legacy cable business improved 250 basis points reaching a record high of 46.5%. We've added disclosure this quarter and going forward to break down profitability between residential and business services, residential Connectivity & Platforms EBITDA grew 3% with margin improving 140 basis points to reach 37.8% highlighting favorable revenue mix shifts. Business services connectivity EBITDA grew 8% with margin expanding 150 basis points to reach 58.3%. Over the years we've talked about business services as a driver of margin accretive growth, and we're excited to augment our disclosure in this area for the first time. Our results in the quarter and our new reporting structure clearly show that. This is a business that generated over $5 billion of EBITDA in 2022 with substantial growth ahead and should be a material contributor to our growth profile in Connectivity & Platforms and overall. Wrapping up on Connectivity & Platforms, I'm proud of the team successfully navigating a transition in which we're managing businesses that have secular headwinds with an appropriately high level of cost discipline, while investing in others that clearly have strong revenue growth and margin characteristics. Now let's turn to Content & Experiences on Slide 6. Content & Experiences revenue decreased nearly 10%, reflecting the difficult comparison to last year, which included $1.5 billion of revenue from the Winter Olympics and the Super Bowl reported in our Media segment. And EBITDA decreased 1%, as a record first quarter at parks and strong studio growth driven by a successful film slate was offset by the planned increase in our Peacock investment as well as lower linear advertising sales. Unpacking these results further Media revenue decreased 21% on an as reported basis and 2% when excluding the Olympics and Super Bowl, primarily due to 6% decline in domestic advertising reflecting softness in the overall ad market, which appears to have stabilized, offset somewhat by strong growth in Peacock advertising revenue. When you exclude Olympics and Super Bowl, Peacock advertising increased an impressive 90%. Domestic distribution revenue decreased 8%, but was up 4%, excluding the Olympics driven by Peacock with distribution revenue up 83%. In total Peacock revenue increased by 45% to $685 million led by strong growth in paid subscribers, which were up over 60% year-over-year, ending the quarter with nearly 22 million paid subs, which marked another terrific milestone on our path to scaling the service. We're encouraged with the trends we're seeing at Peacock. While we've proven that special content and major events like the World Cup at the end of last year can be significant acquisition drivers, perhaps equally or even more important is sustaining engagement following this type of acquisition content and delivering on retention. We saw that in the first quarter and we look forward to reporting further momentum in the enhanced disclosures we're now providing for Peacock, including the revenue breakdown between advertising and distribution and costs separated by programming and production versus marketing promotion and other. Another new category that we added to our Media disclosure is international networks. This is mainly distribution revenue for Sky Sports and the low single digit revenue increase in the quarter was driven by higher distribution revenue, partially offset by the negative impact of foreign currency translation. Other revenue decreased 21% due to lower content licensing. Media EBITDA decreased 26%, including a $704 million EBITDA loss at Peacock. We view Media as one business, and while we have made cost reductions at our linear networks, we reallocated some of these resources to Peacock with the goal of maximizing profitability over the short and long-term across streaming and linear. We continue to expect Peacock losses for the year to be around $3 billion, which we believe will be peak losses for Peacock and then begin to steadily improve. At Studios, this was a great quarter for our film slate with strong theatrical revenue growth, driven by the successful carryover from Puss in Boots Last Wish, which launched at the end of the fourth quarter, as well as new releases such as Megan and Cocaine Bear. While revenue growth was partially offset by lower content licensing at our television studios, the momentum in our film business drove a 13% increase in Studio EBITDA, which also included marketing and promotion expense associated with the April 5th release of Super Mario Bros., which is fueling a strong start to our second quarter. At Theme Parks, revenue grew 25% and EBITDA 46% to $658 million, thanks to a continued rebound following the lift of COVID restrictions and a testament to the significant investments we've made at our parks. While demand and financial results were strong across the board, our international parks drove most of the growth this quarter. With Japan no longer impacted by COVID restrictions, our park in Osaka continued to rebound and we are seeing significant demand for Super Nintendo World, which we opened in early 2021. But given the COVID-related restrictions that were in place, many people couldn't visit the park. Our park in Beijing was also impacted by COVID-related restrictions last year and is now growing at a very healthy rate. Beijing showed strong year-over-year improvement and was profitable in the quarter despite normal winter seasonal headwinds. On the domestic side Hollywood enjoyed record first quarter results due to the very successful opening of Super Nintendo World, while Orlando continues to trend above pre-pandemic levels. I'll now wrap up with free cash flow and capital allocation on Slide 7. As I mentioned previously, we generated $3.8 billion in free cash flow this quarter and achieved this while absorbing a high level of working capital and making meaningful investments in our network and theme parks. These investments drove a 37% increase in total capital spending, primarily driven by higher CapEx.

Marci Ryvicker:

Thanks, Jason. Operator, let's open up the call for questions please.

Benjamin Swinburne:

Thank you. Good morning. Two questions, one on NBC and one on wireless. This is probably for Mike. Mike, when you look at NBCUniversal, you got probably businesses that are doing better than ever when you look at parks and your studio, and obviously there's a lot of disruption in the media business, and I'm just wondering, given the management change and sort of your broader role, is this an opportunity to revisit that business strategically, operationally, from a cost structure point of view, just with fresh eyes? I realize you've been obviously President and watching that business for some time, but just wanted to hear your thoughts just given all that's going on at NBC? And then maybe for Dave, the wireless business is continuing to scale. You talked about demand for current converged offers being clear and strong. What are your ambitions here as you look through the rest of 2023 to continue to accelerate the growth in that business? How do you guys drive that penetration of your broadband base meaningfully higher? Thanks everybody.

David Watson:

Thank you Mike, and hello Ben. So on wireless, wireless continues to be a key part of our overall strategy. Stepping back for a second, we really like the start to the year in our trajectory. This quarter we set another first quarter record in net line additions of 355,000 and so this puts us at the 5.7 million line. So good start to the year, and we're still less than 10% penetrated to broadband. So it gives us a long runway ahead and to your point of looking out to 2023. But our strategy is to focus very much on our core service offerings of, by the gig which we still have and use, unlimited tiers, and it gives us a strong, real strong value proposition to all segments that we serve. So it's important to note that we leverage mobile in all aspects of how we go to market, in acquisition, base management and retention. And so mobile does very well in all three, but as Connects are a little bit softer through this cycle, base management has been very strong as we go to existing customers and provide a great upgrade opportunity for them. So our pricing focus is our core services, but we do go in and out in terms of promotions with gift cards, some device subsidies that we've historically done, really no different there, but we also had a $50 combined broadband mobile offering that all helped. There was a little bit of a lift there and a great value message to the existing base. So yes, long-term, less than 10 10% penetration. Lot of upside for us in wireless and a large revenue pool that we have that I think a unique position given our broadband network is ubiquitous. Our go-to market mobile opportunity is ubiquitous within our footprint. And so you look at it, there's upside in residential and commercial, there's domestic and international upside with mobile. There's an opportunity for us to consider long-term cost side with offloading traffic.

Benjamin Swinburne:

Thanks everybody.

Operator:

We'll take our next question from Craig Moffett with MoffettNathanson.

Jason Armstrong:

Hey thanks Craig. It's Jason. Let me start with the margin question and I'll turn it over to Dave after that for some follow up and then over to Mike on the NBA question. So on margins overall, I'm pleased with the quarter. Obviously we grew connectivity margins broadly by 160 basis points year-over-year. We've said in the domestic cable business margins are up 250 basis points to a record 46.5%. So really strong margin performance. I think when we look at the drivers of that, number one, mix shift high margin businesses, i.e. the connectivity businesses, broadband, business services, wireless, sort of in that category, say $10 billion book of business growing at 7% and it's margin accretive. In addition to that really strong expense management by Dave and the team, if you look at every expense category outside of direct product costs, which are the costs that go in to feed the connectivity business growth, every single category down year-over-year. So I think really strong performance on margins in general. As we look at wireless in particular, I put it in the broad bucket of the connectivity category. It obviously supports and augments broadband, which is one of our, if not highest margin products, and so wireless is a contributor to that.

Michael Cavanagh:

And Craig, it's Mike. On NBA obviously a tremendous product and the playoffs are great. I think the negotiations there, that's ways out, but obviously NBC Sports does a great job partnering with the leagues we partner with, broadcast, streaming and otherwise. So time will tell, but as we look at things we always look at an overall financial envelope what's the right portfolio of overall sports rights we want to have and do that in a way that, as we've said, and Jason said earlier, we manage our linear and broadcast and Peacock as one business. So that's the way we would look at any of the rights that are out there in the future.

Operator:

Our next question comes from Doug Mitchelson from Credit Suisse. Please go ahead.

David Watson:

Well, thanks Doug. So starting with competition and churn, so the overall, the environment is, there's still, as I mentioned, overall transactional activity in general is down and there's two parts of that. One is, as you brought up, there's, it continues to be pretty intense competitively. That's been the case for a while, but also there's just less activity period with less moves. And so the thing that it really stands out, continues to be the case that our churn is near record lows in terms of compared to pre-pandemic period. So we're not seeing in terms of churn, any material spikes when it comes to competition. We are seeing an impact in terms of connects. And so, some of that is the transactional activity, some of it is competitive pressure, but it's more felt on the connect side of things and a little bit more on video as we have less video attachment on that side. But broadband, you look at our broadband base, we have a very stable base, 32 million residential broadband customers, churn, very healthy and certainly lower than pre-pandemic period times. We watch the competitive landscape every day. And so while certain fixed wireless, the fiber group, but we continue to fare well in terms of the kind of all tiers and in terms of churn. So it's not -- we haven't seen a spike in voluntary or the non-pay in regards to the economy.

Doug Mitchelson:

Thank you.

Marci Ryvicker:

Thanks Doug. Operator, next question please.

Jessica Reif Ehrlich:

Oh, thank you. I have a bigger NBCU question and smaller cable. But Mike, you're the President of Comcast and the Head of NBCU, so two giant jobs. Is this a permanent solution? And in the meantime, obviously, the media landscape has changed drastically since you guys bought NBCU over a decade ago. So can you address the cyclical and secular challenges as well as opportunities, including, but I'm certainly not limiting it to a pending WGA strike, Disney's battle in Florida with Governor DeSantis that might affect Universal theme parks, the scale needed to compete in direct-to-consumer and the range of Hulu outcomes that would significantly affect your business, whether it's scaling up or cash coming in the door? And then the smaller cable question, sorry, is the video loss is accelerating? Do you have a point of view -- does this trend continue or is there a level of stability that you expect?

David Watson:

You got it. Hey Jessica, Dave here. So on video, we continue to segment the marketplace. We have a lot of options. But the main point that has really developed is the video attachment being down. And so there -- and our rate approach is to not subsidize unprofitable video relationships. And I've shifted some time ago anticipating how things evolve that are focusing on the overall relationship and the connectivity opportunity. So the main -- one of the key points, though, that to make sure that folks understand, we did see certainly an uptick in customers dropping video. But we've also seen these customers that are retaining broadband. And so our full disconnect churn, video and broadband, remains at record low levels and is down nearly 25% since the pre-pandemic period. So we're able to have managed through the cycle and still there's some video packaging that we're going to be very focused on and based on the segment and we'll fight hard, whether it's acquisition, base management or retention. So it's important to us, but we have figured out a way to manage it financially. And if you look at broadband, the net result is broadband is faring well and holding the line in terms of the base. And so as things continue to and evolve more towards streaming, I think we're in a great position there. And we also have invested in our platforms. So we have the platforms of Flex. We have X1 and the new Charter JV with Xumo that we feel great about long-term. So yes, the video losses did a bit of an uptick, but we did offset it with some of these platform relationships that I think long-term are going to be very important.

Operator:

Our next question comes from Brett Feldman from Goldman Sachs. Please go ahead.

Jason Armstrong:

Brett, it's Jason. I'll start out with the CapEx question and then tag team with Dave on mobile offloading. So on CapEx, we guided for the year to 10% capital intensity. That's flat year-over-year last year for Connectivity & Platforms. We rounded out the year at 10%, so flat year-over-year. If you think about the big categories that sort of contribute to capital intensity in that business, it's customer premise equipment, scalable infrastructure and line extensions. Customer premise equipment is actually an area we're getting some relief from. Scalable infrastructure, that's where our DOCSIS -- that's basically existing infrastructure where we're augmenting capabilities. That's where DOCSIS 4.0 and our mid-splits. That's an area where, obviously, we're doing a lot more in the next couple of years. And then line extensions, I think you got it right. That's where we're extending our footprint to go serve new geographies, whether it's residential or business services. Within that, we've guided for the year 850,000 new builds last year, goes up to 1 million this year. So that's a 20% increase in what we're doing there, all accommodated for -- with similar capital intensity year-over-year. So I think we're really operating the business at an efficient level, given everything that's going on surrounding the network. I think to your question on doing even more as we look at some of the programs that are coming our way, if you look at prior programs and sort of our distinct advantages in the market, I would step back and say, as you look at product technology, management and cost of capital, those are things that should define an advantage for us in economics of new builds or overbuilds. It was a little bit muted in the prior cycle if you look at sort of the economic cycle we were in and low cost of capital, which created, we think, a pretty frothy capital markets environment, which led a lot of companies to stare at economics that may have been better temporarily than they might be over the longer term as well as newer government programs that were sort of, in our view, unseasoned in terms of the process. So it kept us out of a lot of the prior programs. As we look at this going forward with capital markets activity, cost of capital going up a little bit, I think everything sort of plays to our strengths. So the 850,000 going to 1 million this year, we'd welcome it probably going higher over time.

David Watson:

This is Dave. So Brett, we like the trajectory. Both Jason and Mike mentioned the 1 million. It's early, but off to a good start. I feel good about that. And really, the three buckets, the existing footprint within existing cable footprint and as things pick up in terms of housing and new construction, then we'll be right there, the hyper builds for commercial and then these edge outs, which is where some of the subsidies are there. So we're -- we feel good about it, very focused. And we'll take a disciplined approach, and it's been great, the support that we have in terms of every opportunity, we'll go for it and -- but we'll expect historical returns. On the mobile offload, we think this is a really interesting and good opportunity potentially based on how things are. We've said, I think, 60%, the traffic around 3% of our footprint. And that is -- we're staring at that constantly. So we're testing. We have a -- we go arm in arm with Charter looking at some of these results in terms of how things are going. We do have a fantastic capital light MVNO that serves us very well. I think great for the partner, good for us long-term. But we'll continue to stare at the marginal cost improvements of offloading these dense traffic areas. So we're staying on it, and we'll -- more to come on that, but we will be testing that throughout the year.

Operator:

We'll go next to Phil Cusick with JPMorgan.

David Watson:

Phil, Dave. Let me start with kind of the offer approach and then the impact as we go into Q2, just providing overall perspective. But when you take a step back, we are still in the environment that I've mentioned, still the base, overall broadband base very stable in terms of the turn, less the connect pressure that we've seen. So -- but overall, it's tied to a better churn than where we were pre-pandemic. So -- but we take a very disciplined approach. We segment the market, and we go in and out with offers. So we did have an offer that was available in the marketplace where, for broadband only, at $25 and then a $50 combined mobile. And so we saw an uptick. It was positive. And so it's something that we constantly are doing coming in and out in terms of service offerings. We also remain very focused, what we talked about earlier around the high end and never losing sight that there's a mix of tiers that are really important to the base. And so we're just focused on 1 gig, and we do -- with part of the segmentation approach is going to the marketplace and one third of our customers do take that 70 -- almost 75% of our customers take 400 megabits and above. So there's a blend that ends up happening, and that's why you saw a pretty good ARPU growth in terms of broadband. But we'll go in and out with offers in terms of things. We'll be nimble, respond competitively to every single segment. I think there's more action with fixed wireless on the low end and that -- the offer served us well. As you go into seasonality and you look at the second quarter, we are seeing typical seasonality, especially in regions like Florida. So you're going to see a step down in net adds from Q1 to Q2. And -- but I don't think you can extrapolate exact performance from historical levels. But directionally, net adds will be lower in Q2, so just to be clear.

Michael Cavanagh:

And it's a nice feel to finish on parks because the business overall is really rocking, as you can tell. It would be -- I'd be remiss in not calling out first the quarter that the international side had. USJ had all-time highs for attendance, per caps revenue and EBITDA. And that's since it opened -- for a first quarter. That's since it opened in 2001. And likewise, in China, we generated significant profitability in a tougher season and the highest ever quarterly attendance despite it being wintertime. So that's the international side. And on the domestic side, things continue to perform really well. Hollywood, we had Super Nintendo World open, so driving really strong attendance and per caps that are way ahead of last year and pre-pandemic levels on the back of excellent guest feedback. And in Orlando, really solid results in the quarter. We had, as you know, unprecedented visitation last year way ahead of 2019 pre-COVID. So as expected, growth rates have slowed down, but performance continues to be solid. And go-forward booking again still looks solid, similar pattern to Q1 of last year. So, so far, things continue to look good as we look ahead in the domestic side.

Marci Ryvicker:

Thanks, Phil. That concludes our earnings call, and thank you all for joining us.

Jason Armstrong:

Thank you.

Marci Ryvicker :

Thank you, operator, and welcome, everyone. On this morning's call are Brian Roberts, Mike Cavanagh and Jason Armstrong, who are also joined by Dave Watson, Jeff Shell and Dana Strong, Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our safe harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Mike Cavanagh:

Thanks, Brian. And good morning, everyone. First, I'd like to just say that it's been a pleasure serving as CFO of Comcast for the last seven plus years. And I couldn't be prouder to have Jason be my successor. Knowing that with Jason, the financial leadership of our company is in proven and expert hands. Since Jason didn't take over as CFO until early in the new year, I will handle the CFO portion of this call and hand it over to Jason for the first quarter call in April. So now I'll begin on Slides four and five to discuss our consolidated 2022 financial results. Revenue increased just under 1% to $30.6 billion for the fourth quarter and 4.3% to $121.4 billion for the full year. Adjusted EBITDA decreased 4.9% to $8 billion for the fourth quarter, and increased 5% to $36.5 billion for the full year. The quarterly results include severance expenses booked in each of our businesses, totaling $638 million, which is $541 million higher than the prior year period. Including this increase, adjusted EBITDA increased 1.5% in the fourth quarter, and 6.6% for the full year. Adjusted EPS increased 6.5% to $0.82 of share for the fourth quarter and 13% to $3.64 for the full year. And we generated $1.3 billion of free cash flow for the fourth quarter and $12.6 billion for the full year, while absorbing increased investments in Peacock and theme parks, as well as higher working capital as content creation normalizes post COVID. Now let's turn to our business segment results starting with Cable Communications on Slide six. Cable revenue increased 1.4% to $16.6 billion, EBITDA increased 1.5% to $7.2 billion and cable EBITDA margins improved 10 basis points year-over-year to 43.5%. These results include $345 million of severance expense, which is $305 million higher compared to last year's fourth quarter, excluding severance cable EBITDA increased 5.8% and cable EBITDA margin improved by 190 basis points to a record high of 45.3%. These strong results also included the impact of Hurricane Ian in Southwest Florida, which resulted in the loss or severe damage to many homes we serve in this market. Excluding the hurricane impacts, we would have added approximately 4000 broadband customers versus the 26,000 loss we reported. And we estimate that we would have lost approximately 36,000 customer relationships versus the 71,000 we reported. Overall, our broadband customer results in the fourth quarter were fairly consistent with the prior two quarters, reflecting lower levels of new customer connections, offset by churn which remained well below 2019 levels. Now let's discuss cable financials in more detail. Cable revenue growth of 1.4% was driven by higher broadband wireless business services and advertising revenue, partially offset by lower video and voice revenue. Broadband revenue increased 5.4% driven by growth in ARPU and in our customer base when compared to last year. Broadband ARPU increased 3.8% year-over-year, when adjusting for some COVID related customer credits last year. This organic ARPU growth is similar to the growth we've generated over the last couple of quarters and is consistent with our strategy. We are focused on optimizing our customer relationships by consistently adding more capabilities, services and value, so as to provide the best broadband experience, which has and should continue to deliver broadband ARPU growth. The elements of growth this quarter include increased rate, attaching more customers to higher tiers, as well as other services. We expect ARPU growth will continue to be the primary driver of our residential broadband revenue growth in 2023. Wireless revenue increased 25%, mainly driven by service revenue, which was fueled by growth in customer lines. We added 1.3 million lines in 2022, including 365,000 lines in the fourth quarter, which is our highest number of net additions for any quarter on record. Business Services revenue increased 4.6%, which includes the results of Masergy in both this quarter and in the prior year period, as we lap the closing of this acquisition at the beginning of the quarter. Revenue growth was primarily driven by rate, including customers taking faster data speeds, higher attach rates of our advanced products, and rate increases on some of our services. Advertising revenue increased 9.1% driven by strong political revenue, partially offset by the absence of advertising revenue that is now part of XUMO, our joint venture with Charter. Adjusting for those items, cable advertising revenue decreased 1.6%, reflecting decline in our local core advertising business, partially offset by solid growth at our advanced advertising business. Video revenue declined 5.6% driven by year-over-year customer net losses, partially offset by ARPU growth of 5.8%, due to a residential rate increase we implemented at the beginning of 2022. And last, voice revenue declined 13% primarily reflecting year-over-year customer losses. Turning to expenses. Cable Communications fourth quarter expenses increased 1.4%, reflecting higher non-programming expenses, which included the $305 million in higher severance costs, partially offset by lower programming expenses. Programming expenses decreased 5.9%, reflecting the year-over-year decline in video customers partially offset by higher contractual rates. Non-programming expenses, which again include $305 million and higher severance costs, increased 5.6%. Excluding severance, these expenses were flat compared to last year, reflecting an increase in bad debt as we return to more normalized pre pandemic levels an increased technical and product support expenses driven by growth in our wireless business. These were offset by a decline in marketing and promotion and customer service expenses due to lower activity levels, efficiencies in running the business, and improvements we continue to make in our customer experience. Our focus on growing our high margin connectivity businesses, coupled with our focus on increasing operating efficiency and cost controls, drove strong EBITDA growth and margin expansion in 2022, excluding the higher severance expense, we grew full year EBITDA by 5.7% and increased EBITDA margins by 110 basis points to 44.8%. We believe that our disciplined approach to running the business, including the benefits from our cost reduction efforts this quarter, positioned us to drive higher profitability, and further expand margins, both in 2023 and thereafter. Now, let's turn to Slide seven for NBCUniversal. Starting with total NBCUniversal results, fourth quarter revenue increased 5.9% to $9.9 billion, and EBITDA decreased 36% to $817 million, including $182 million of severance expense in the quarter, excluding severance EBITDA decreased 22%. Media revenue increased 2.6% to $6 billion, mainly driven by Peacock, which nearly doubled its revenue to $660 million and Telemundos broadcast of the World Cup. Advertising revenue increased 4%, reflecting an incremental $263 million from the World Cup, as well as strong growth at Peacock and a healthy contribution of political advertising, partially offset by a decline in linear advertising. If we exclude the World Cup, advertising revenue declined 5.6% reflecting softening in the overall advertising market, distribution revenue increased 3.8% reflecting growth at Peacock driven by increases in paid subscribers, which more than doubled compared to last year, as well as higher contractual rates at our networks partially offset by linear subscriber declines. Media EBITDA was $132 million in the fourth quarter including a $978 million EBITDA loss at Peacock, reflecting the cost of new content, such as our exclusive next-day broadcast and Bravo content, our robust lineup of Pay-One titles, day and date releases like Halloween, NFL Premier League and the World Cup. Peacock's full year EBITDA loss of $2.5 billion was in line with the outlook we provided a year ago. And for 2023, we expect Peacock losses to be up modestly to around $3 billion. As we've said previously, we believe 2023 will be peak losses for Peacock and, from there, steadily improve. Excluding Peacock, Media EBITDA in the fourth quarter decreased 13%, reflecting the lower revenue and fairly flat expenses despite the higher costs associated with broadcasting the World Cup. Looking to the first quarter. While we remain focused on managing costs, we expect underlying Media EBITDA, excluding Peacock, to continue to be impacted by the top line pressures at our linear networks. Moving to Studios. Revenue increased 13% to $2.7 billion driven by growth in content licensing and theatrical revenue. Content licensing was up 16% driven by the benefit of our carryover titles and the acceleration in film windows as well as healthy growth in television licensing. Theatrical revenue increased 47% due to the success of recent releases, including Ticket to Paradise, Puss in Boots, Violent Night and Halloween Ends. EBITDA increased $109 million to $160 million for the quarter, reflecting the higher revenue partially offset by an increase in marketing and promotion expense, reflecting the size and timing of this quarter's theatrical slate as well as the corresponding higher programming and production costs. At Theme Parks, revenue increased 12% to $2.1 billion, while EBITDA increased 16% to $782 million, our highest level of EBITDA on record for our fourth quarter. These results were driven by growth at our parks in the U.S. and Japan partially offset by our park in Beijing, which was negatively impacted by COVID-related restrictions. At our U.S. parks, we continue to see strong demand with attendance and guest spending up year-over-year and with Orlando and Hollywood both delivering record high EBITDA for the fourth quarter. Universal Japan continued to rebound since capacity restrictions were lifted at the end of March and delivered strong year-over-year EBITDA growth in the quarter. Now let's turn to Slide 8 for Sky. Reported results were meaningfully impacted by currency translation due to the strengthening dollar, but I will speak to Sky's results on a constant currency basis. For the fourth quarter, Sky revenue was relatively consistent compared to last year at $4.4 billion. Direct-to-consumer revenue was also consistent compared to last year, reflecting growth in the U.K. driven by wireless and broadband revenue offset by declines in Germany and Italy. On a customer basis, we added 129,000 customer relationships in the quarter with positive additions across all three territories, the U.K., Italy and Germany. These net additions were driven by streaming, broadband and wireless customer additions and reflect our team's strong execution in a challenging macroeconomic environment across Europe. Rounding out the rest of Sky revenue, content revenue increased 6.5% driven by licensing our entertainment content, and advertising revenue decreased 9.6% primarily driven by lower revenue in the U.K., reflecting the timing of the World Cup and the macro environment. Turning to EBITDA. Sky's EBITDA decreased 15% to $340 million, including $89 million of severance expense, which is $53 million higher compared to last year's fourth quarter. Excluding severance, EBITDA declined 2% compared to last year, reflecting an increase in direct network costs driven by growth in our residential mobile and broadband businesses and higher other expenses, which were mostly offset by lower programming costs due to the timing of sports programming as four weeks of EPL games were paused during the fourth quarter to accommodate the World Cup. However, we will incur higher sports costs in the first half of 2023, reflecting the higher number of games as the season is extended and the remainder of the games which were paused are now played. Now I'll wrap up with free cash flow and capital allocation on Slide 9. As I mentioned previously, in 2022, we generated around $12.6 billion in free cash flow while absorbing increased investments in Peacock and Theme Parks as well as higher working capital as content creation normalizes post COVID. Full year consolidated total capital investment increased 14.2% or $1.7 billion to $13.8 billion due to increased spending at NBCUniversal and Cable partially offset by a decrease at Sky. At Cable, total capital spending increased 8.3% or $695 million with CapEx intensity coming in at 11.4% primarily driven by investments to further strengthen and extend our network. In 2023, we expect CapEx intensity to stay at around 11%, similar to 2022 levels as we aim to accelerate our homes passed growth to about 1 million and continue to transition our entire broadband network to DOCSIS 4.0 over the next few years. NBCUniversal total capital spending increased $1.4 billion driven by parks CapEx increasing $1.1 billion, of which Epic was around $800 million and reflects our continued investment in new attractions like Super Nintendo World at Hollywood and Donkey Kong at Japan. In 2023, we expect parks CapEx to increase by around $1.2 billion over last year as we continue to build Epic, which we plan to open in 2025 and begin work on our recently announced park extensions mentioned earlier. The required investment to develop these extensions is nowhere near the scale of Epic or Universal Beijing but rather enable us to leverage our already large market opportunity and can serve as a model that contributes to even higher growth at Theme Parks in the future. Working capital was $3 billion for the year, a $1.5 billion increase over last year's level, reflecting a post-COVID ramp of investment in content creation. Turning to capital allocation. We ended the year with net leverage at 2.4 times and returned a total of $17.7 billion to shareholders, including $4.7 billion in dividend payments and $13 billion in share repurchases. For 2023, we expect to continue to maintain leverage at around current levels, which I expect will support continued strong capital returns. As we announced this morning, we are raising the dividend by $0.08 a share to $1.16 per share, our 15th consecutive annual increase. This reflects our long-standing balanced capital allocation policy. We're committed to investing organically in the businesses while maintaining a strong balance sheet and also returning a very healthy amount of capital to shareholders. Thanks for joining us on the call this morning. I'll turn it back to Marci, who will lead the question-and-answer portion of the call.

Operator:

[Operator Instructions] Our first question comes from Doug Mitchelson with Credit Suisse. Please go ahead.

Mike Cavanagh:

Thanks, Doug. It's Mike. So maybe I'll take a first crack, and then Brian can pile on if he likes. So vision in the next few years, it's -- I think how you think about that requires a little bit of a reflection of where we stand at the moment. So if I look at 2022 and you really reflect on what are truly excellent operating results. So kudos to the people running the businesses deep down into the organization to produce the kind of results we had, record revenues and record adjusted EBITDA. And that's fundamentally great management discipline, operating discipline, financial discipline in the day-to-day. When you zoom out a little bit, it puts us in a position where we are returning record capital in our industry at 2.4 times leverage, so it allows us the opportunity both of those things in good balance. To then go at your real question, which is what is our opportunity, what are our challenges and do we have the resources to go after them. And so I'd say there, you heard it in the call, but I'll recount them, we've got an excellent number of organic investments that are going after all the opportunities and challenges that we currently see. Obviously, as others emerge, we'll go after it the way we usually do. But those are you take the network and Dave can pile in. But we're on a path to 10G. So DOCSIS 4.0 is going to get us, as we've talked about, in a very capital-efficient way to a network that's going to have symmetrical upstream, downstream in a few short years. We're going to start rolling that out at the back end of this year. So I think our commitment is to have the best network out there and to put a tremendous amount of services surrounding that network, whether it be WiFi or Flex and the like, as you've heard us talk about before. You heard about the tech platform. Brian mentioned it. We're going to get to a single global tech platform, integrating all of the build of glass in the U.K., X1 here in the U.S., what we do in Peacock behind a single scaled global tech platform that we can use in many ways. You know about the XUMO partnership that we have with Charter, for example, to take that capability outside of our footprint. And then finally, on the Cable side, it's a wireless. Wireless, we've been at it for five years, have 5 million lines now. We put the investment in along the way, and we continue to do it, but it's a capital-light approach. And I think that totality is a great set of strategies for how we're going to drive growth in the cable business looking ahead. And so I'd say, expect us to continue to keep driving along those lines. On the Media side, we think Peacock is absolutely the right strategy for our company. And Jeff has repeatedly said, we're not going to place somebody else's hand. We have an excellent business in NBC and our cable networks. We spend quite a bit of money creating content and so migrating some of that content as eyeballs move to a more streaming universe. We like what we're doing. And we had a phenomenal year getting paid subs to 20 million paid subs from less than 10 a year ago. And we see this coming year as the peak year in investment there, but we'll keep on that plan. And then finally, I'll mention parks. Parks, we've got Nintendo opening in Hollywood in February. We're ramping the build of what's going to be a phenomenal theme park, Epic universe in Orlando, opening in 2025. And as I said earlier, we'll increase our spend this year in '24 to sort of peak levels there ahead of that opening. And then we're leveraging the great product that we have with some new ideas, some innovation around that with a kids-based theme park, smaller scale in Dallas and Hollywood Hard Nights in Las Vegas. So these are big investment agendas that go out all the issues that I think are out there across our different businesses. So I think we're well positioned to continue to drive primarily an organic investment agenda and drive growth across our businesses in the years ahead. Obviously, it's our job to consider inorganic things as they come up. But as I've said before, the bar is very high. It's our job to make sure that we are looking at organic opportunities and executing well against them, and I think we are. So Brian, you got anything to add?

Marci Ryvicker:

Thanks, Doug. Operator, we’ll take the next question.

Ben Swinburne:

Good morning. Thank you. I want to ask Jeff about the NBC outlook, both sort of some of the key trends you're seeing in '23 but also longer term. I mean I think the business did over $8.5 billion of EBITDA back in 2019. I think $23 million will probably be down from 22 just given the Peacock losses and the pressure on the Media business. But can you just talk about your long-term opportunity at the NBCUniversal? Do you think you can climb back to those EBITDA levels over any sort of reasonable investment horizon? And what are you -- how are you feeling about sort of things like advertising and parks sitting here today given all the macro concerns? And then I just had one question for Mike on cash flow. You mentioned the $3 billion net working capital drag in '22. Any help on that for 2023, if you have any visibility there? Thank you, both.

Mike Cavanagh:

And then the -- on working capital, we said a year ago that it was going to be spiked to a higher than typical run rate level just on the back of the disruptions caused by COVID in getting content creation in the phase we're in up to normalized levels. So expect to just ease back off of the levels we saw in 2022. It's a hard number to predict, but I think we are past peak there.

Operator:

Our next question comes from Craig Moffett with MoffettNathanson. Please go ahead.

Dave Watson:

Craig, Dave. So I think the good news is we have a great portfolio of opportunities and business lines. So as you said, we have real strength in broadband and not only just solid broadband relationships with the ability to drive revenue in a healthy way. So resi broadband, I believe, will continue to be accretive not just revenue but margin. And business services is a real long-term opportunity has been, will continue to be. So when you look at top line margin impact, including mobile, I think it's a good -- and video slowing down. On the top line, it contributes towards margin. The second thing clearly are the expenses. And just lower activity levels, our constant focus around the two big buckets of the transactional activity, the experience improvements that we have that really drive things like self-install and the apps that help people resolve issues independently. And then our focus around cost, just fixed cost, ongoing. And so that all those things, I think, shows that it's not a singular moment. This has been steady progress over a long period of time around margin. So I think we still have a good runway.

Operator:

Our next question comes from Jessica Ehrlich with BofA Securities. Please go ahead.

Brian Roberts:

Operator?

Brian Roberts:

Jessica sorry about that. We're back.

Jeff Shell:

Thanks. Jeff again. Sorry about the delay here. So let me -- this is Jeff. So let me start with parks. So parks we are always looking to invest in our parks, given how well we've done. And during the pandemic, we took share. We've had pretty solid growth. And we -- it's a business that we want to deploy capital to, as Brian said, we're really excited about Epic. It's coming out of the ground. It looks great and our timing couldn't be better for that. But we always want to have things that we're investing in, both domestically and internationally. The concept that we're going to build in Dallas, which is a design for a younger audience, less investment, if it's successful, which we're pretty confident it will be, it's a concept that will work in a lot of places around the world that may not support a full-scale theme park like we have in Orlando or Beijing, but it could support something else. So that -- we're excited about that concept. And then the Halloween horror nights experience in Vegas, which I'm really excited about, could also be expanded to a number of different places around the world. So we're definitely having our eye towards places expanding internationally not just domestically with a number of markets kind of on the docket. And they won't all be places for a big giant primary theme park that we might look at different concepts for different markets. And as far as peak spending, I think Epic, I think we expect our peak spend probably to be this year, although '23 and '24 will be comparable as we ramp down at the beginning of '25 prior to opening. So that's the parks. Peacock, we are could not be more positive about our trajectory so far. We're right where we expected to be as far as investment, and we're well above where we expected to be as far as paid subs, which was going to pay off. We will hit our peak spend, as I think Mike or Brian said in the opening, this year and then improve steadily from there. And we wouldn't be making the investment if we do see the investment in Peacock alone delivering return over time. As I said, in my prior answer that I'm more confident now that we're going to get to that, and it's going to be a good return just on that investment alone and the overall Media segment. And based on how we're doing so far, I'm more and more confident that that we made the right choice of business model and that our investment is appropriate for that business. So I don't know, Mike, if you want to talk about acquisitions.

Jeff Shell:

And I would just add that we're always looking for bolt-on acquisitions that bolster our business. And I'll give two examples. We bought DreamWorks. We talked about that in the past, and it's been paying off steadily since our acquisition and just now, with Puss in Boots, which is a big hit at the box office really our entry back into the Shrek Universe, continues to make that acquisition look really favorable. And we've invested in our Blumhouse investment over time. We're a partner with Jason Blum, and we have a big hit, M3GAN, this month, which is coming out of that investment. So we're always looking at bolt-on acquisitions. Don't necessarily involve big industry consolidation questions.

Operator:

Our next question comes from Brett Feldman with Goldman Sachs. Please go ahead.

Dave Watson:

Brett, Dave here. So let me start with kind of your first point on the overall environment and pointing towards our results in broadband. So starting with Q4, clearly, excluding the impact of the hurricane, we reported net adds, broadband net adds of 4,000. And this has been consistent, consistent the last couple of quarters, reflecting the continued impact of lower move activity, increased competition. But what's different has been the near record low churn. So this -- the current environment is similar. Macro -- the macro environment still reflects depressed move activity. Competition continues to be very strong, and we're seeing some normalization in non-pay activity and churn. So it remains a challenging environment to add subscribers right now. However, as our record high revenue, adjusted EBITDA and margins in 2022 show, we have a successful model. We're driving revenue, EBITDA and cash flow rather than just chasing units. And so you look at our ARPU growth, holding the line on the relationships, but our ARPU growth was 3.8% in terms of broadband. So we're protecting ARPU growth, constantly adding more value, investing in our network, all within the parameters that we've talked about. And so -- and it -- results within the mix of the base is showing. As Brian said, you know, the one-third of our customers, broadband customers that get our Gigabit Plus products. So this is only just 5% that number just three years ago. So you look at usage. You look at the entire long-term opportunity, I think as Brian said, whether it's a couple more sporting events that go towards streaming, it just points towards you need better broadband. So from our competitive situation that we see, as I said, it's going to continue, but I think we're going to focus on our great network, ubiquitous network. We're going to continue to invest in that. We will constantly segment the marketplace and address each competitor. And so I think it's a similar environment, but we're very focused on being in position to drive results. But yes, we're going to do both. We're going to balance rate and volume.

Operator:

Our next question comes from Michael Rollins with Citi. Please go ahead.

Dave Watson:

Let me start -- Michael, this is Dave. I'll start with XUMO. It's really early. Excited about the opportunity. Early discussions are positive and just a variety of partners. So we're excited about the relationship with Charter. And so -- but it's really early at this point in terms of XUMO, but I expect more to come, and we'll keep you posted along the way. Mike?

Marci Ryvicker:

Thanks, Mike. Operator next question, please.

Philip Cusick:

Thanks, guys. Two follow-ups, if I can. Your tone around new footprint expansion and broadband efforts has -- there's no change. Does bead funding or state subsidies going forward, accelerate that further? Or do you think the $1 million annually is the right figure to think about going forward? For Jeff, any update on trends in advertising since your comments in early December? And then finally, I wonder if you guys can talk about the $500 million in severance this quarter. Is there more to come? And Mike, I heard you say that margins in Cable should continue higher. What impact do you expect on cost going forward? Thanks very much.

Jeff Shell:

Thanks, Dave, and thanks, Phil. So on the ad market, I think in prior calls, the market -- the ad market steadily worsened over the course of last year. It kind of feels like it bottomed out around late November, early December. And really since then, it hasn't gotten worse and maybe even a little bit better. I describe it really as shallow. There's parts of the market that are actually doing really well, Pharma, entertainment. Travel is on fire. There's parts of the market that feels uncertain, tech, auto, financial services, all are weak. It feels like the weakness is due less to businesses not doing well and more to just macro uncertainty. I mean none of us really know where the economy is headed, and I think some advertisers in those segments are really holding back. And when they do advertise, they're coming in later than usual. So I think we have -- we're doing a little bit better than our peers for a couple of reasons. One is Peacock's growth is really helping to offset the linear weakness, which is fortuitous for us. And I think, secondly, we've made big investments in data and measurement, and we have the best team, and that's really helping. But I guess I would just summarize it by saying the ad market feels to me like it stabilized a bit. And we're assuming it's going to stay weak for the first half of this year and then recover. But who really knows based on the macro economy?

Marci Ryvicker:

Thanks, Phil. Operator, we’ll take our last question.

John Hodulik:

Great. Thank you. Maybe a couple of questions for Dave on wireless and on video. On wireless, you talked about the 9% penetration. I mean are you seeing the positive impact on the broadband base from selling wireless into that? And then do you expect to continue to lean in? I think you guys don't really look at that as a separate profit pool but just sort of supporting the broadband business. And is that unlikely to change? That's number one. You also -- Dave talked about selling into the business segments. Just anything, sort of any color on how you're doing that or what that opportunity is? And then lastly, on video losses, just they were little better than what we expected. Anything different there in terms of maybe selling of skinny bundles or how we should expect that to trend as we look into '23? Thanks.

Marci Ryvicker:

Thanks, John, and thanks, everyone, for joining our call.

Marci Ryvicker:

Thank you operator, and welcome everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell and Dana Strong. Brian and Mike will make formal remarks while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our Safe Harbor disclaimer. I remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that let me turn the call over to Brian Roberts for his comments. Brian?

Mike Cavanagh:

Thanks, Brian. I look forward to the new role. It's quite an honor, and I appreciate the trust that you and the Board continue to have in me. I'm excited to work with the leaders on this call, Dana, Dave and Jeff and all of our colleagues to take advantage of the great opportunities for Comcast's future. So now I'll begin on slide 4 with our third quarter consolidated 2022 financial results. Revenue decreased 1.5% to $29.8 billion, reflecting the comparison to last year's quarter, which included the Tokyo Summer Olympics as well as a headwind from currency translation at Sky and our international theme parks due to the strengthening dollar. After adjusting for both of these items, our revenue was up about 7% year-over-year. Adjusted EBITDA increased 5.9% to $9.5 billion and on a constant currency basis increased about 8%. We generated $3.4 billion of free cash flow and we reported an EPS loss of $1.05 per share, which was mainly impacted by an impairment charge at Sky. We test goodwill annually across the company in the third quarter. Challenging economic conditions in the UK and other European markets have resulted in a significant increase in discount rates used in the annual impairment analysis and reduced estimated future cash flows at Sky. As a result, we have taken an impairment charge related to Sky goodwill and intangible assets totaling $8.6 billion. On an adjusted basis EPS increased 10% to $0.96 per share. And on a constant currency basis, adjusted EPS increased about 12%. Now let's turn to our business segment results starting with Cable Communications on slide 5. Cable revenue increased 2.6% to $16.5 billion, driven by higher rate and volume in residential broadband as well as growth in business services, wireless and advertising. The strong growth in these businesses was partially offset by lower revenue in video and voice. Total customer relationships were up 315,000 compared to last year and down 21,000 sequentially in the third quarter. Diving further into the details, first our revenue growth drivers. Broadband revenue increased 5.7% driven by growth in ARPU and in our customer base compared to last year. Broadband ARPU increased 3.7% year-over-year consistent with the growth rate in the second quarter. We expect ARPU growth will continue to be the primary driver of our residential broadband revenue growth in the near term. Wireless revenue increased 31% mainly driven by service revenue, which was fueled by growth in customer lines. We added 1.3 million lines over the last year including 333,000 lines in the quarter, which is our highest number of net additions for any quarter on record and marks the fourth consecutive quarter of adding more than 300,000 lines. Business services revenue increased 9.4% or approximately 5% excluding the acquisition of Masergy, which closed at the beginning of last year's fourth quarter. This healthy organic growth was driven by increases in both ARPU and our customer base. We continue to see healthy performance across our diverse customer segments including SMB, mid-market and enterprise with this quarter's organic growth driven by a mix shift to a higher data speeds and increased sales of our advanced services, as well as rate increases and growth in our customer base. Advertising revenue increased 7.2% primarily driven by political and our advanced advertising business FreeWheel partially offset by a decline in our local core advertising business and the absence of our streaming business XUMO. As we previously announced XUMO is now part of our joint venture with Charter with those results reported in Corporate and Other. If we exclude the impact of XUMO, cable advertising revenue would have increased 12%. Partially offsetting the growth from these revenue drivers was video revenue, which declined 4.4%, driven by year-over-year customer net losses partially offset by 6% ARPU growth due to a residential rate increase at the beginning of this year. And last, voice revenue declined 12.5% primarily reflecting year-over-year customer losses. Turning to expenses. Cable Communications third quarter expenses increased 0.5%, reflecting higher non-programming expenses mostly offset by lower programming expenses. Programming expenses decreased 2.8% reflecting the year-over-year decline in video customer’s, partially offset by higher contractual rates. Non-programming expenses increased 2.5% driven by growth in other expenses due to an increase in bad debt compared to last year, reflecting a return to more normalized levels and increased technical and product support expenses driven by growth in our wireless business as well as the addition of Masergy. These higher costs were partially offset by a decline in advertising marketing and promotion expenses partly due to the comparison to last year, which included some Olympic sponsorship spending as well as lower activity levels. The lower activity levels coupled with the improvements we continue to make in our customer experience also contributed to the decrease in customer service expenses. Cable EBITDA increased 5.4% to $7.5 billion in the quarter with Cable EBITDA margins improving 120 basis points year-over-year, reaching a record high of 45.1%. And on a per customer relationship basis, we grew EBITDA 4% as we focus on monetizing these relationships over their lifetime. Before moving to NBCUniversal, Hurricane Ian has impacted our footprint in Southwest Florida causing outages and damage to our cable network that our cable team is still repairing. Many of our customers' homes and commercial locations were severely damaged or destroyed. While our third quarter results were not impacted by the storm, we expect to report an impact in the fourth quarter including net losses of broadband customers. Now let's turn to slide 6 for NBCUniversal. Starting with total NBCUniversal results, revenue decreased 4.3% to $9.6 billion, reflecting the difficult comparison to last year, which included $1.8 billion from the Tokyo Olympics included in our media segment. EBITDA increased to 24.6% to $1.7 billion. Media revenue decreased 23% to $5.2 billion, again reflecting the comparison to the revenue associated with the Tokyo Olympics last year. Excluding the Olympics, Media revenue increased 4.4% driven by Peacock with revenue of $506 million, which more than doubled compared to last year. Distribution revenue increased 4.6% reflecting growth at Peacock driven by increases in paid subscribers compared to last year, as well as higher contractual rates at our networks partially offset by linear subscriber declines that accelerated sequentially. Advertising revenue increased 4.7% reflecting strong increases from Peacock, partially offset by a decline in linear advertising. Media EBITDA decreased 41.5% to $583 million in the third quarter, including a $614 million EBITDA loss at Peacock. We continue to expect Peacock's EBITDA loss will be roughly $2.5 billion for the year, with the fourth quarter's loss reflecting the cost of new content. Excluding Peacock Media EBITDA in the third quarter decreased 21% reflecting the difficult comparison to last year's Tokyo Olympics, as well as revenue pressure at our linear networks. Looking to the fourth quarter, we expect Media growth ex-Peacock to be impacted by a gradual acceleration in pay TV cord cutting, as well as some deterioration in the ad market reflecting broader economic uncertainty, as well as higher costs associated with the broadcast of the World Cup on Telemundo. Moving to Studios. Revenue increased 31% to $3.2 billion driven by strong theatrical and content licensing revenue. Theatrical revenue more than doubled compared to last year, driven by the success of our summer film slate including Jurassic World

Ben Swinburne:

Thank you. Good morning. Brian, I'd love to hear from you, how you're thinking about capital allocation given just we've had this significant increase in cost of capital and investors are highly focused on where you guys are making your big bet in the business. How are you thinking about priorities, including M&A, just given the backdrop we're in right now and some of the macro concerns we see ahead of us? And along those lines, one of the big announcements you guys and you talked about in your prepared remarks is into the cable network around DOCSIS 4. So, I'd love to hear from Dave, sort of what are the capital needs to get where you want to go over the next few years? Is that going to drive up CapEx? Is there an argument to spend the money faster to help the business differentiate better in the market, or how do you think about the benefits to the business from getting to DOCSIS 4.0 over the next few years? Thank you.

Mike Cavanagh:

Sure, Ben. Thanks. Good morning. So, I'd just step back a little bit and think about what we do with capital through the lens of start with how we generate capital. So, if you look at this quarter, you see we had record margins in the Cable business, 45%. We had record profits in the Theme Parks business and record profits in the Studio businesses, so just to call out a few examples. And those are the result of us putting tremendous energy and effort and capital back in our businesses. So, when we talk about the formula that we've got, it's always with the view to have growth opportunities in our existing businesses, so we can put capital to work and in the future get the kind of results we've had now on the back of the investments that we have had in the past. So, priority one right now is to invest in the network. I'll let Dave expand on that. But we've got a great path to symmetrical multi-gig through DOCSIS 4.0 in a reasonable time frame at reasonable cost inside the envelope that we talked about of about 11% CapEx intensity. We've got Theme Parks with Epic Universe well underway. We've got investment in streaming with Peacock that Jeff will talk about. So, we're excited about putting money first and foremost back into our businesses to drive great results for years to come. And so that's the virtuous cycle that you see. So that's step one, put money back in the business. Two, keep a strong balance sheet. We get asked a lot about that. But I think, when you look at the environment we're in, I think we're happy to have what I would say is the best strongest balance sheet in the business period. So, I think that's piece two. And then piece three and I'm very happy with the results Brian talked about $9.5 billion of buybacks year-to-date, $5 billion-ish run rate of dividends for the year. We were asked the questions over the last several years, are we committed? And when we got back to leverage targets would we be able to -- would we be committed, are we committed to returning capital to shareholders? And we said all along that it was our highest priority to get back to that place, but to do it in the context of the formula I just described. So, I think, hopefully, everybody has confidence that we understand that formula and you all understand that formula. So as you look ahead on capital return, I think, we're going to be guided as we've been in the recent past by our leverage. We'll stay around 2.4 times leverage while doing all the things I just described and that will dictate ample amount of return to shareholders. So that's that. And then, I think, on the M&A side of things, it's -- we like the business we have. With all the opportunities we have in the businesses and the stock where it is, I see us very focused on the opportunities in the business and as I just described. So I'll give Dave -- over to Dave for DOCSIS 4.0.

Ben Swinburne:

Thanks, everyone.

Operator:

Our next question comes from Doug Mitchelson from Credit Suisse. Please go ahead.

Mike Cavanagh:

Thanks Doug. I'll let Dave really chime in. It's his team that's doing amazing work to get the network back up in Southwest Florida those are our markets. They were -- like Brian said earlier, our plant was the one hit hardest. It will be in the tens of thousands, but we're still working on the numbers in terms of homes that -- residences that won't turn back on, but we'll tell you what the number is when we get through it during the course of this quarter. And you can look back at some hurricane experiences, it's typically tens and tens of thousands.

Marci Ryvicker:

Thanks Doug. Operator, next question please.

Craig Moffett :

Yes. Hi. Let's talk about wireless if we could a bit. There have been reports that you've been pretty aggressively deploying strand-mounted small cells to offload traffic. I'm wondering if you could just talk a little bit about your experience thus far with traffic offload. It's still today mostly on Wi-Fi. But what you're thinking in terms of how much traffic can be offloaded? And is there the potential for something broader than just the CBRS strategy with getting some of your own mid-band spectrum to try to offload significantly more traffic? And just what do you think the margins of that business could ultimately look like?

Marci Ryvicker:

Thanks, Craig. Operator, next question, please.

Brett Feldman:

Yes. Thanks for taking the question. So you mentioned during your prepared remarks that for now you would expect that broadband ARPU growth would be the primary driver of overall broadband revenue growth. We've definitely gotten a little pushback from investors on that. They look at a more competitive market and households having lots of other pressures in their budgets in an inflationary environment. And so what gives you confidence that you can sustain a profile of ARPU growth? How do you think that's going to break down between rate increases or upselling or maybe something else? Thank you.

Brian Roberts:

And just one other point to add, you know, long-term or longer term, I continue to believe broadband is so critical. It's such an important dynamic part of our society and it's changing all the time, and people want the best. And the best is experience. It's speed, it's innovation, it's service and that's what we're really focused on and we've been that way. And I think it's why we have the number one position today and we want to retain that.

Marci Ryvicker:

Thanks, Brett. Operator, next question please.

Michael Rollins:

Thanks and good morning. Just sticking in the Cable business. If you look at the pace of video revenue, would you expect the current pace of video cord cutting to continue at this level? And how much of the video losses that you're experiencing are simply a function of changing customer preferences for consumption relative to the elasticity from the pricing initiatives to offset the higher programming costs?

Marci Ryvicker:

Thanks, Mike. Operator, next question, please.

Jessica Reif Ehrlich:

Questions. One on Cable and one on NBCU. On Cable you talked like I guess it was about nine years ago when you introduced or announced the Comcast Technology Center. Can you talk about the progress you've made in making Comcast a leading hub of innovation how your view of Comcast position I think you called it like unique cross-section of media and technology. How has that changed over time or evolved? And then on NBCU I can't believe you haven't gotten questions really. But what are the long-term aspirations for Peacock let's say over the next three to 4 five years what do you think it will look like? And can you talk about on Theme Parks the advanced bookings or visibility? Are international visitors coming back yet?

Brian Roberts:

Okay. Dave, why don't you start on innovation and I'll add at the end? I think it's a great question.

Brian Roberts:

I'll just quickly add that post the pandemic, it's pretty exciting to walk through the technology center and see people back at work and the energy and buzz. But I think of ourselves as a unique media and technology company and we're focused on this sector. We view the competition has changed. It includes the tech companies on the West Coast and we have been looking to add to that scale. And I think we made real progress in the last 12 months for things like our voice remote which for those who have it, whether you're using it for a streaming service or for a video bundle, were to now do other things and look up your account and many other aspects of how voice is deeply embedded in all of our products on Sky Glass globally. We now have between Sky, the new Charter arrangement previous deals with Cox and all of Canadian operators are virtually all a roadmap for innovation. And I think as we look forward to the company that's what's going to keep powering what Mike was talking about the virtuous cycle of investment and return. So, we're all mindful of the economy and the world that we live in, but we have a pretty unique company. And this is a big part of what I think will make it more unique in the future is to continue to try to innovate. So, glad you asked that question.

Operator:

Our next question comes from Philip Cusick with JPMorgan.

Brian Roberts:

Very fair. I think let me just start and I'll let my colleagues join in. The way we're trying to manage the company and we said this several years ago, which was a shift was we saw a change coming and we tried to think like a customer and think like the consumer. And we've learned I -- at least think I've tried to learn from other successes with that mentality. And the consumers many consumers didn't want the big video package. And so what -- we can fight that or we can try to embrace it. And so our leadership in broadband was the first evidence of okay let's try to embrace it. Let's put Netflix on X1 going back several years. And more people I think in a Comcast market view Netflix via X1 than any other device. I think that's still relatively true, Dave you can comment on that. Our voice remote integrated all of Netflix's content and along came many others. Let's just jump to Apple most recently. I think we have the best integration in the world of Apple TV+ on our consumer devices. Over on the content side at NBCUniversal that create -- that change allowed us to create content for Netflix or Amazon or Apple many others. We own one-third of Hulu. So when we bought the company, all of our content was committed to Hulu in the streaming -- much of our content. As we've discussed that relationship's in -- changed and much of it is now back on Peacock. And Peacock has only been out there for a couple of years and super successful and a great quarter. And congratulations to all of NBCUniversal and the Peacock team for the results this quarter in my opinion. And we came up with a different model since we were starting at a different time and ad-centric low cost to the consumer. So again it's back thinking from the consumer's perspective, how do we fit in and how do we do so on a profitable long-term value-creating way. And so the results you're seeing this quarter, I mean if you look at last year, last year was our best year in EBITDA and our best year in EPS in the 60 years Comcast has been in business. And we're on pace to do better in this year than last year. So I think we have a good model, but it starts with thinking from the customer. And so the shift in video, we got to a place where we're actually somewhat indifferent. What the consumer prefers we want to be for the customer. And then if they're now taking our mobile product, they're getting an even better value. And if they're taking Peacock, they're getting an even continued relationship with NBC if they've changed how they're consuming. So I think we're in a very unique playing offense in a very changing world in a way that continues to yield great results for the company.

Marci Ryvicker:

Thanks Phil. Operator, we have time for one last question.

John Hodulik:

Hey, thank you. Maybe last one for Dave, back on the Cable side. The business market certainly emerged as one of the drivers of revenue growth in that segment. And it sounds like you guys are having some real success across small, medium and enterprise markets. I mean just any commentary on sort of penetration levels in those markets give us a sense of how much runway you have? And then commentary on sort of the profitability of that business segment versus say the rest of the Cable business? Thanks.

Operator:

That concludes the question-and-answer session and today's conference call. A replay of the call will be available starting at 11:30 a.m. Eastern Time today on Comcast Investor Relations website. Thank you for participating. You may all disconnect.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

DOCSIS 4.0,:

I’m also confident and frankly more excited in our ability to drive revenue and EBITDA growth even through our existing subscriber base alone. We’ve had a history of generating strong and steady ARPU growth as we continue to add tremendous value and improvement to the customer experience. Our margins are some of the highest in the industry which highlights the stability and operating leverage of our business, the diversification of our revenue streams, and the strength of our other important growth drivers in Cable. In particular, business services and wireless have been two substantial contributors to Cable’s financial strength and each still has lots of runway ahead. Business Services had another strong quarter of revenue growth and in just over a decade we’ve grown this to nearly $10 billion in high-margin annual revenue including the addition of almost $1 billion in the last 12 months alone. In Wireless, we added 317,000 customers this quarter and similarly have added over $700 million in incremental revenue in the past 12 months and we’ve barely scratched the surface of the opportunity here at only 8% penetration of our residential broadband customers. Wrapping up on Cable, we are in a unique environment with some headwinds, but move activity should return to some level of normalcy. Mobile substitution will eventually stabilize and we believe fixed wireless has inherent performance and capacity limitations that sharply limit the number of people on a network using a given amount of spectrum, which should provide a natural cap on their overall industry penetration. Moreover, we believe that our path to deliver multi-gigabit speeds together with the other features and functionality we offer will make our broadband experience superior to any of our competitors over the long-term. In the meantime we will maintain the discipline we’ve always had and I am confident that we will strike the right balance between subscriber acquisition, our long-term profitability, and we all believe we have a very bright future in this business. Moving to NBCUniversal, we had a very strong quarter with EBITDA growth of 20% year-over-year. Our Parks segment continued its momentum generating record EBITDA for the second quarter and this is without much contribution from Beijing which was closed for nearly two months. Domestic park attendance and per caps continue to be above pre-pandemic levels and we are moving full steam ahead in building Epic Universe. I cannot be more excited for how this park will bring new experiences to our visitors and additional runway for growth. NBCU Media remains a very healthy business. We just completed the highest-grossing upfront in our history, a testament to our content and a superb team, and the unique data and technology innovation we deliver through one platform. This year we secured more than $7 billion in commitments including $1 billion at Peacock, double what we did in the 2021, 2022 season along with strong pricing.

Hulu:

At Sky we are operating well in an increasingly difficult macro environment reporting our highest ever second quarter EBITDA. We grew revenue and EBITDA in the UK, which is our largest European market and the primary driver of our future growth. Calling out a couple of highlights, we are particularly pleased with the consumer response to Glass which resulted in Sky being the third largest ultra-high definition television selling brand in the second quarter. And we also recorded our highest ever Premier League final day viewership, taking 30% audience share. In addition, we're seeing the benefit of our disciplined approach to sports rights in both Italy and Germany, where EBITDA also improved year-over-year. In reflecting on the last 24 months, which has been wrought with uncertainty, we have performed extremely well and continued to make progress against key initiatives. Our Cable business has achieved some of the highest margins in the industry while also delivering healthy top line growth. At NBCUniversal and Sky, they've shown resilience and continue to recover despite unique challenges from the pandemic. Together, we've generated nearly $30 billion in free cash flow. We're returning a record amount of capital to shareholders and our balance sheet is in a great place. We have also continued to invest in strategically important growth opportunities, including enhancing our world class broadband network, scaling Xfinity mobile, increasing our capabilities at Business Services, launching Peacock, completing Universal Beijing and starting construction at Epic, just to name a few. With substantial cash flow generation and a strong foundation for innovation, Comcast is in a wonderful position. Mike, over to you.

Marci Ryvicker:

Thanks Mike. Operator, let's open the call for Q&A please.

Benjamin Swinburne:

Thank you, good morning. Maybe this is a strategic question for Brian, and then I wanted to ask a follow up to Jeff. Brian, your balance sheet and cash flow generation is a real asset in markets that are tough and creates opportunity for the company. And obviously in the backdrop of broadband slowing and concerns around the future of streaming, and also some press reports about Comcast considering different strategic structures, just wondering if you could talk about the portfolio and how -- your level of confidence that you've got growth opportunities and the opportunity to create value. And if you're thinking about ways to deploy that balance sheet and capacity to change things or take advantage of opportunities in the market that may be there for you now that weren't there maybe over the last few years? And then Jeff, just on the Parks business, I guess with the GDP result this morning, we're officially in a recession, but it doesn't sound like that's the case at the Theme Park business. So can you talk a little bit about your visibility into the second half of the year and into next year, both in the U.S. and overseas and whether you have confidence you can continue to kind of deliver these record results at the Theme Park business despite what seems to be a weakening macro? Thank you, guys.

Jeffrey Shell:

Thanks, Brian. Ben, I'll just take the Parks one really quickly. So, obviously the Parks business historically has been subject to macro trends and there's no reason to think that that won't be the case in the future. When we look at our business we’re just not seeing it yet in our numbers and our performance. And if you kind of look at the -- we're putting up these numbers despite the fact that our international visitation domestically is about half of what it has historically been. So we expect that to increase over time back to where it should be. We have a lot of attractions. We continued building attractions during the pandemic. Brian talked about Epic in the opening. We have those attractions continuing. Internationally Japan has been steadily improving quarter-to-quarter-to-quarter, still not back to where it was pre-pandemic, but the trend line is really good. And Beijing, which was closed two of the three months of this quarter opened in the third month and is doing really well, much better than we expected despite COVID constraints still on capacity. So, and all that international performance is subject obviously to the strong dollar and that is a headwind for us. So I think we feel really good about the Parks and feel like there's a lot of growth ahead of us despite what could be macro challenges that we could or might face. We're just not seeing it yet.

Marci Ryvicker:

Thanks, Ben. Operator, next question please?

Philip Cusick:

Hi guys, thank you. I wonder if we can dig in to the level of your promotion and competition in the Cable business. We've anecdotally seen some pretty aggressive promotions. It's hard to tell whether those are sort of limited or widespread. Are you pushing harder on average than you were a year ago? And when you compete with wireless, since you expect to fixed wireless to have a cap on penetration, does it make sense to push back with that on price or do you sort of just let it come in and take those customers? How do you address that? Thank you.

Philip Cusick:

Thanks, Dave.

Operator:

And our next question will come from Craig Moffett with MoffettNathanson. Please go ahead.

Brian Roberts:

Well, actually let me start with fiber Craig. And, there we've been at it for a long period of time. You know, we've gone from zero to over 15-year period from 0% to 40% overbuild. And so that is we have good visibility to where fiber is and that's all over the place, at this point between multiple fiber providers. And important to note whether it's fiber or any other form of competition, we’re growing in every single geographic area. With fixed wireless, you're right in that, there appears to be two things. One, they are adding some small business, new, maybe even expanding the marketplace a bit with small business, watching that closely. They're a little bit more rural which we have been watching, but it's kind of across the board. When you have again, this launch phase of somebody doing it at scale like this, you see it a little bit all over. But again, the difference here is our churn versus fiber back in the day where we saw churn go up. We’re not seeing that here. We are seeing a little bit of pressure on connects, and it's kind of all over, which points towards more of the main drivers being what I mentioned earlier. It's the move activity plus the mobile search. So that is really the key thing, but we watch it. One of our great strengths is local competition. We stay on it in a very granular basis. We watch this very closely. So your point is a good one.

Operator:

Our next question comes from Doug Mitchelson from Credit Suisse. Please go ahead.

Michael Cavanagh:

So Mike, it’s Doug. I'll jump in. I think across the board we're generally -- we're not seeing slowdown. Dave can comment or add on payments on the consumer side and I'll let Jeff comment on advertising, but versus some of the commentary you've seen, I think we're able to deal with some of the macro stuff impact on consumer and impact on cost in our expense base. Brian already mentioned the interest rate side of it, and 85% fixed at the grade levels we -- he mentioned. And then on our expense base, very small part of it is energy related through fuel rolling trucks. Others -- other areas, labor and the like, we have pressures like all others. But I think we know how to manage our way through these kind of challenges. So I wouldn't call out as we look to the second half of the year that macro is a particularly big issue. I'll let Jeff jump in.

Michael Cavanagh:

And I'll just jump in one more time, and Dave can follow up. But I mean, when we -- across all the businesses, budget exercise and the like, I mean, our job and the way we think about it is to really think about optimizing for the long-term. So last thing you're going to see us doing is -- and it goes back to the strength of balance sheet, strength of cash flow, we won't be cutting muscle. We're very focused on in tougher times trimming some fat, but it will be very, very long-term minded in how we think about investment priorities, which are substantial to drive future growth and so fortunately, we're in a position where we don't have to sacrifice that. That doesn't mean there won't be tactical adjustments and belt tightening, but I'll throw it over to Dave.

Douglas Mitchelson:

Thank you.

Operator:

Our next question comes from Jessica Reif Ehrlich from BofA Securities. Please go ahead.

Jeffrey Shell:

Yes. Hi, Jessica, thanks. So what I mean by choppy is that there is -- it's not a broad decline or increase. So if you look at our business, first of all in the quarter, as Mike said in the opening, if you take out the NHL playouts from last year, we were actually up in the quarter, which I think is better than some of the other companies that have reported so far. So up year-on-year is a pretty good thing. And if you look at kind of what we're seeing in the scatter market, what we saw in the upfront, you have things like auto, which is down, but that's related to the fact that -- saw in GM's earnings yesterday, you just don't have a lot of cars on lots, therefore, they're not advertising. So that's why their advertising is down there. And then pharma and the upfront was up significantly as you have a backlog of drugs that weren't approved in the last couple of years by the FDA are expected to be approved. So what I mean by choppy is just segment by segment different things are going on, both up and down and there's no kind of macro overall ups and downs. On Peacock, look, we had the benefit of studying the market before we came in and we think we picked the right business strategy, which is kind of an extension of our existing business, not a new business based on dual revenue stream of subscription and advertising. And I think everybody kind of moving in that direction is the validation of that business model. And as far as advertising in general, our business, linear and Peacock, we're one of the largest advertisers out there, over $10 billion of advertising. So people coming in at the levels that are coming in, we don't expect it to have any material impact on what we sell and how we do it. If anything, our scale gives us an increasing advantage. And then you mentioned political in the next one we do, we don't want to count our chickens before they hatch, but we expect a pretty strong political, kind of season coming up. And I think our company, speaking now broadly, the entire company, not just our linear businesses, but our local TV stations and Dave's business and Cable, we're kind of uniquely positioned and now with Peacock to take advantage of whatever a candidate wants to advertise and where. So we expect some pretty strong results from Peacock in the coming fall in addition to the advertising across our whole company. Dave, if you want to add anything?

Jessica Reif Ehrlich:

Thank you.

Operator:

Our next question comes from Brett Feldman from Goldman Sachs. Please go ahead.

Brian Roberts:

Yes. Mike, you may want to jump in on this or Dave. This is Brian. The -- absolutely like the communications business that we're in, that’s certainly my roots in life. And the most recent acquisition we made, we call these kind of tuck-in acquisitions, would be Masergy. And that's in the Business Services Group, and it's off to a really good start and allows us, just like you said, more capabilities. I think that's probably more what our focus is, how do we look for new revenue sources and new growth avenues and do people who've either started a company or built a company have something that we can then scale faster and that's been a good pattern. So Dave's team looks at that all the time, Mike and the business development team. So you guys want to add to that? I think it's pretty...

David Watson:

I think two things. One, just following on Masergy, it is a great example. It's an opportunity to grow. It's one of our most important areas, mid-market and enterprise just an example of making the right kind of bet on that and it's off to a really good start. The teams are working really well together. Masergy, our business services teams, and doing exactly what we'd hoped for in the early days of integration. Second point is APCO in a joint venture with Charter, another great example of an opportunity to grow. And having a scaled platform like that, investing in that future, I think, is the right kind of bet to make. We'll continue to look for those opportunities.

Marci Ryvicker:

Thanks, Brett. Operator next question please?

Jonathan Chaplin:

Thanks for taking the questions. So you've been willing to run leverage higher than 2.4 times in the past. It feels like at this point the market isn't giving you full credit for the strength that you see longer term in the Cable business and in this combination of assets and I'm wondering if now is a great time to sort of take advantage of that. Was the reason for not pushing leverage higher and buying back more of your stock just be the macro environment? Is that what's sort of holding you back on leverage is macro uncertainty?

Marci Ryvicker:

Thanks, Jonathan. Operator we’ll take our last question please.

John Hodulik:

Great, thank you. Just following up on some of the commentary on high-speed data competition, maybe for Dave. Can you give us a sense of what the fiber overlap is these days and maybe how that's changed over the last 12 months? And then on the ARPU, I thought there was some good commentary about rate and tier mix. Are you seeing any -- I mean, I know, Dave, you said you wouldn't chase rate to reaccelerate growth on the sub side, but do you still think you have the same pricing power that you've had, given the changes in competition? That's A. And then B, on the tier mix, have you seen any -- especially given the pressure that the consumer is seeing, have you seen any change in trends in terms of up-tiering and potential signs that consumers may look to save money on broadband and down tier? Thanks.

Marci Ryvicker:

Thanks, John. That will end our call and thank you everyone for joining us.

Operator:

We have no further questions at this time. There will be a replay available of today's call starting at 11:30 a.m. Eastern Time. It will run through Thursday, August 4, at 11 a.m. Eastern Time. The dial-in number is (719) 457-0820, and the conference ID number is 1292809. A recording of the conference call will also be available on the company's website beginning at 11:30 a.m. Eastern Time today. That concludes today's teleconference. Thank you for your participation. You may now disconnect.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our safe harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Michael Cavanagh:

Thanks, Brian, and good morning, everyone. I'll begin on Slide 4 with our first quarter consolidated 2022 financial results. Revenue increased 14% to $31 billion; adjusted EBITDA increased 9% to $9.2 billion; adjusted EPS increased 13% to $0.86 per share; and finally, we generated $4.8 billion of free cash flow. Now let's turn to our business segment results, starting with Cable Communications on Slide 5. Cable revenue increased 4.7% to $16.5 billion, adjusted EBITDA increased 6.5% to $7.3 billion and net cash flow grew 8.3% to $5.6 billion. We grew customer relationships by 913,000 over the past 12 months with 194,000 net additions in the first quarter. Overall, customer growth was driven by broadband, where we added 1.1 million net new residential and business customers over the past 12 months and 262,000 in the first quarter. This quarter's results reflect continued low move-related activity compared to historical levels as well as an uptick in the level of competitive activity resulting in lower connect volumes. At the same time, we continue to experience very high levels of customer retention, with this quarter's results yielding the lowest churn rate for any quarter on record. In fact, we had fewer customers disconnect this quarter than the first quarter of 2019 despite a customer base that is almost 17% larger. Throughout the pandemic, we have offered a variety of programs to help our customers stay connected. Some of our customers that participated received our services for free and therefore, were not included in our subscriber totals. At year-end, we ended these COVID-related programs, triggering a benefit in the first quarter. We estimate this change accounted for about 1/3 of our first quarter net additions with such benefit contained to the first quarter. Moving to the financials. Cable's revenue growth of 4.7% was driven by broadband, business services, wireless and advertising revenue, partially offset by lower video and voice revenue. Broadband revenue increased 8%, driven by strong customer additions over the past 12 months and nearly 4% growth in average revenue per customer in the quarter. Business Services revenue increased 10.6% or approximately 6%, excluding the acquisition of Masergy, which closed at the beginning of last year's fourth quarter. This healthy organic growth was driven by increases in both average rates per customer and in our customer base, which grew by 61,000 over the past 12 months with 9,000 additions in the first quarter. Moving to wireless. Revenue increased 32%, mainly driven by service revenue, which was fueled by growth in customer lines. Overall, we added 1.2 million lines over the past 12 months, including 318,000 lines in the quarter, which, for the fifth consecutive quarter, was our best result since launching this business in 2017. Advertising revenue increased 8.6%, reflecting higher political and double-digit growth in Zumo and advanced advertising. For video, revenue declined 1.5%, driven by customer net losses totaling $1.7 million over the past 12 months, including $512,000 in the quarter, partially offset by higher average revenue per customer due to a residential rate increase at the beginning of this year. Last, voice revenue declined 9.8%, primarily reflecting customer losses totaling 725,000 over the past 12 months, including 282,000 net losses in the quarter and reflects our shift to more converged broadband mobile offers. Turning to expenses. Cable Communications' first quarter expenses increased 3.3%. Programming expenses decreased 1.1%, reflecting a decline in video customers, partially offset by higher rates. Nonprogramming expenses increased 6.3%, reflecting investments in our growth businesses, including broadband, wireless and business services; expenses related to our recent acquisition of Masergy; as well as an increase in other expenses, primarily due to bad debt returning to more normalized levels. These higher costs were partially offset by a decline in customer service expenses, reflecting lower activity levels in the business as well as improvement in customer experience initiatives. Cable Communications' EBITDA increased 6.5% to $7.3 billion for the quarter and Cable EBITDA margin reached 44%, reflecting 80 basis points of year-over-year improvement. We believe we are striking the right balance by continuing to invest in our growth businesses, which are driving the top line and proving to be a great return for us, while at the same time, continuing to increase our operating efficiency and remove unnecessary costs. Now let's turn to Slide 6 for NBCUniversal. Starting with total NBCUniversal results, revenue increased 47% to $10.3 billion and EBITDA increased 7.4% to $1.6 billion. Media revenue increased 36% to $6.9 billion, including Peacock revenue, which grew more than 5x year-over-year to $472 million in the quarter. As Brian noted earlier, we aired both the Olympics and Super Bowl, which together contributed an incremental $1.5 billion to Media revenue. Excluding these events, Media revenue increased 6.9% driven by both higher distribution and advertising revenue. Distribution revenue, excluding the contribution from the Olympics, increased 8.5%, reflecting growth at Peacock driven by increases in paid subscribers as well as our networks, reflecting higher contractual rates, partially offset by linear subscriber declines. Advertising revenue, excluding contributions from the Olympics and Super Bowl, increased 4%, reflecting higher pricing and a growing contribution from Peacock, which was partially offset by linear ratings declines. Media EBITDA decreased 21% to $1.2 billion in the first quarter, including a $456 million EBITDA loss at Peacock. Excluding Peacock, Media EBITDA decreased 7.7%, reflecting higher programming and production costs associated with our broadcast of the Beijing Olympics and Super Bowl as well as higher costs driven by the return of our full primetime schedule compared to last year when our schedule was impacted by COVID-19. We continue to expect Peacock's EBITDA loss will be roughly $2.5 billion for the year. However, taking into consideration the timing of content launches, consistent with what Brian mentioned, we would expect losses to be higher in the second half of the year. Moving next to Studios. Revenues increased 15% to $2.8 billion, driven by higher content licensing and theatrical revenue, but EBITDA declined 51% to $245 million. The decline in EBITDA primarily reflects a difficult comparison to last year's first quarter, which benefited from a licensing deal with Peacock, including exclusive streaming rights for The Office with an offsetting adjustment reflected in NBCUniversal's eliminations. The remainder of the EBITDA decline reflects higher marketing costs ahead of numerous film releases planned for the second quarter, including Jurassic World Dominion, Ambulance and Bad Guys. Last, at Theme Parks, revenue increased by $941 million to $1.6 billion, and we generated EBITDA of $451 million, reflecting improved results at each of our parks compared to last year when Orlando and Japan were operating at limited capacity and Hollywood was closed due to COVID-19. We continue to see exceptional demand at our domestic parks, attendance was back to prepandemic levels, and we had strong growth in per caps with Orlando generating its highest EBITDA on record for a first quarter. COVID impacts in the quarter were more pronounced internationally. Universal Studios Japan's results were impacted by capacity restrictions, which were in place for most of the first quarter. These restrictions were lifted at the end of March. And over the last month, we have seen a very strong rebound with attendance currently above pre-pandemic levels. At Universal Beijing, which opened in September of last year, demand from our guests was high, but overall attendance was impacted by COVID and related travel restrictions. Despite that, Beijing only contributed a slight EBITDA loss in the quarter. Now let's turn to Slide 7 for Sky, which I will speak to on a constant currency basis. For the first quarter, Sky revenue of $4.8 billion was consistent with the same period last year as solid growth in the U.K. was offset by our results in Italy, where we continue to transition through the reset in our Syria broadcast rights, which we won't begin to lap until the back half of this year. Direct-to-consumer revenue was also consistent year-over-year, reflecting growth in the U.K., where we continue to have healthy customer additions and grew direct-to-consumer revenue by mid-single digits driven by an increase in video revenue, including higher revenue from pubs and clubs, streaming and premium TV as well as healthy increases in broadband and wireless revenue. This growth in the U.K. was mainly offset by lower revenue in Italy, where we continue to experience both customer losses and lower direct-to-consumer revenue, primarily due to the reset in our Syria broadcast rights. Rounding out the rest of revenue at Sky, content revenue declined 14%, driven by the reset and sports licensing agreements in Italy and Germany. And advertising revenue increased 7.9% and with healthy growth in the U.K., partially offset by a decline in Italy. Turning to EBITDA. Sky's EBITDA increased 71% to $622 million driven by our strong performance in the U.K. and improved results in Italy and Germany, where we benefited from lower sports programming costs due to resets in our sports rights. Next, I'll discuss free cash flow and capital allocation on Slide 8. As I mentioned earlier, we generated $4.8 billion in free cash flow this quarter. Consolidated total capital increased 1.1%, reflecting increases at NBCU due to ramping construction at Epic Universe, a decrease at Sky and a relatively flat capital spending at Cable due to timing. For the year, we continue to expect Cable CapEx intensity to stay around 11% as we increase investment in our broadband network, and NBCUniversal CapEx related to the construction of EPIC universe to be up around $1 billion year-over-year. Turning to capital allocation. As of today, we have repurchased $4 billion worth of our shares year-to-date, including $3 billion in the first quarter. In addition, dividend payments totaled $1.2 billion for a total return of capital in the first quarter of $4.2 billion. And before I wrap up, I also want to spend a minute on the macro environment since inflation and interest rates are topical right now. There are certain areas of expense across each of our businesses that are impacted by inflation. Like other companies in our space, we're not entirely insulated from that. However, the overall impact to our financials has been limited. Overall energy costs make up about 1% of our total company's operating expenses. Also, we are more than offsetting any pressure on wages and other areas of expense through the continuing efforts to implement operational efficiencies, helping us protect the healthy margins across our businesses. Lastly, our balance sheet is very well positioned with about 95% of our debt based on fixed rates, a debt portfolio with a weighted average time to maturity of approximately 18 years and a weighted average interest rate of 3.47%. We ended the quarter with net leverage at 2.3x and still expect to remain around 2.4x leverage going forward. So with that, thanks for joining us on the call this morning. I'll turn it back to Marci, who will lead the question-and-answer portion of the call.

Operator:

[Operator Instructions]. Our first question comes from Ben Swinburne from Morgan Stanley.

Brian Roberts:

So let me start, and thanks, Ben. Look, I think that working with Charter, first of all, they bring terrific markets that we don't operate in. And so taking from the perspective of people who might want to take advantage of our platform that we will together have created, will create and roll out, whether that's a hardware company, a software company or some new creation, they're going to want national scale and frankly, an international platform. That's who the competitive set is, and being able to enable people's businesses to ride on those platforms and create value for our shareholders and Charter shareholders, I think, is the big picture. We've done this work with Charter before. When you go to your question about joint ventures versus doing it alone, obviously, there's pros and cons, but when another party brings something you don't have, that makes it a pro. We've done this successfully, maybe highlight the Mobile business that we both have now jumped started very successfully and was -- is one a real standout this quarter with our best net add quarter. Business services. As we go upmarket to -- ultimately to the enterprise market and to large organizations, it was important that we find ways to have one-stop shopping for those companies. That's -- we've successfully done that with Charter and others. Advertising, same thing with local JVs and national JVs to be able to deliver to advertisers. So we have a long history of successfully finding ways to be catalysts for growth. And then finally, a point that's a little longer than 2 years, but one of the great things about our industry over the last several decades is how we keep reinventing the businesses we're in. And it's pretty important, I think, to continue to find new growth avenues. And so I look at our innovation that we've been doing at Comcast and now with Sky on a global basis to being able to continue to invest to have the reach and to have a continued hope for new revenue sources in the years ahead, these are the kind of steps you have to make now to make -- to see those dividends down the road. Dave?

Operator:

The next question comes from Doug Mitchelson with Credit Suisse.

David Watson:

Let me start, Doug, on Mobile. So I start with -- it was a great quarter, it's had another record in terms of mobile lines. So we absolutely believe our strategy and focus on accelerating growth in wireless is indeed working. And so over the last couple of years, we have evolved our approach, including expanding the MVNO agreement, worked on that, and that's been, I think, a boost. And we're fully integrating Mobile and one of the most important things into everything we do at cable. We're leaning in our marketing. We're playing offense with Mobile in terms of how we talk about it, attracting new customers in consideration and with our customer base. So every single sales channel has been activated at this point. So yes, this year, we're going to continue to make adjustments with Mobile. We're leveraging the -- still the new unlimited pricing. We have a great mix between that and by the gig. And we're converging broadband with Mobile. And when you take both, there's just more value for the customer. And we think that this converged packaging approach, really putting the emphasis in terms of service value, is the key. We come in and out of offers, and there will be, in any given moment where the new product introduction, a offer, a promotional offer around gift cards and different things that we do on handsets. But the main point for us, and I think it's proven with our results having good success that this works, is not to put the emphasis necessarily on the handset. So leaning in, see it in the results, and we also do a nice job with Bring Your Own Device and just have launched small business and business services. So a lot of runway left, I think, in Mobile. And in your point on the onload opportunity down the road, we already have a great network. And the great network, combined with the MVNO with Verizon, I think, is working. And for the majority of our footprint, this capital-light approach to wireless is the right approach. We continue to be opportunistic, though, and we're prepared. We're doing technical trials and leveraging our spectrum in the offload traffic in high-dense areas, where that makes financial sense. So we're running trials, optimizing the approach and turned up our first -- as Brian said, first 5G radios at the beginning of February, fully trials are underway. So we'll be ready when and if this makes sense. But we are in a good position, and we'll just be opportunistic as we look at that down the road. So like our position, like the runway, plenty of upside. Jeff?

Operator:

Our next question comes from Phil Cusick with JPMorgan.

Michael Cavanagh:

Maybe I'll jump in and just Dave just commented on competition and our approach in the market. In terms of the backward-looking stuff, I think we called out that the -- you should think about the normalized level of net adds in the first quarter at about a healthy 180,000. We had a transition impact in the net subs added in the first quarter just as we ended the COVID programs where people would come on, in some cases, free. But you recall what we did during COVID, we wanted to be conservative but appropriate in how we counted subs. So wherever we brought in a sub under some form of COVID relief program with the goal of keeping the population connected, to the extent it was free, we were clear we were not going to count them until they ended being on a free program and then started paying. So consistently throughout COVID, that's the way we did it, and that's the way we ended it. So as the quarter last year ended, we put a stop to those programs. So the only -- the third that came in, in this quarter of folks that were free in the last quarter came on as free but began paying us. So I don't think we have any negative impact going forward. It's simply that there won't be any ongoing roll forward into the second quarter. It's all kind of cleans itself out in this first quarter. And the point I'd like to make just on the quality of the approach that we took is that you can sort of see that in the conservative way we counted subs throughout allow -- the evidence of that quality is both the record low churn that we've demonstrated that Dave already commented on, together with the growth in ARPU throughout the period pre-, during and post-COVID. So I think really the point was just to make it clear that the COVID promotions came to end, and it just had a positive onetime impact in this quarter as you transition back to recover normal ways of counting subs.

Michael Cavanagh:

And then back on buybacks. So I think we're pleased, as we said as we -- almost a year ago now are coming up on a year ago this quarter, when we got our leverage back where we wanted to the commitments to the rating we like and strength of the balance sheet that we're glad to be back. And so this quarter, between buybacks of $3 billion and dividends of $1.2 billion, we were -- had a record quarter in the company's history in terms of dollars of capital return. So I think we're certainly informed as we go forward by where leverage is. And the fact that we ticked down a touch, I wouldn't put anything into that. It's a big -- there's a lot of moving parts as we forecast. And so we're going to stay around 2.4, but around 2.4, it could be 2.3, it could be 2.5, I would say we're sticking with -- we like leverage around that 2.4x level. And obviously, we're partially informed as well by where the stock is. And so that gives us capacity. We stepped it up a little bit in the tail end of the last quarter. And as I said on the remarks, we continued at that pace doing another $1 billion so far in the second quarter.

Operator:

Our next question is from Jessica Reif Ehrlich with BFA Securities.

Brian Roberts:

Well, let me start, Jessica. Nice to hear your voice. I think we have a -- we've anticipated the changes in video pretty well. And on the one side, I think part of NBC's media results are that the decline is actually less because there are new ways for people to get video. And from the Cable side, we have our highest margins, our best quarter in EBITDA and revenues, and the companies continue to grow because we pivoted the strategy. So -- and our satisfaction scores are at all-time highs. So we're giving customers choices, and we found a way to get ourselves to a place of unique and in different, so that we're not trying to push something on to a customer that perhaps is a rock up a hill that we don't want to have to do. So that strategy has worked for us. So as I think forward, I think we believe aggregation is a real opportunity on to see customers who have now so many more choices. And there's -- they just want to get to the content they want really fast and in a seamless way and somebody who makes it work for them. And we're seeing viewing patterns change. And we were just talking before the call about one of our shows on NBC at Peacock, something about PAM. Not only that come out of the dateline franchise inside the NBC IP kind of redefined video, if you will, out of the News business and the Dateline franchise. The first airing, if you just went off a traditional television rating, you might have one conclusion. And as you've watched the show grow, now with on-demand, with Peacock and with NBC Dateline Special, and you put all that together, the show's really successful. So having a company that can do all those things across both on all of the platforms NBCUniversal has positioned us. So I think we now take that, those kind of examples and figure out how, in this new partnership with Charter and across the NBC portfolio, and we find a way to continue to innovate and be relevant to the next generation and existing generation of television viewers. So I'm -- and then you put in place what Sky is doing with Sky Glass, and you see how it can be integrated into without any box right into your television, and that's what XClass can be. So I don't know, I think it's a pretty exciting road map ahead, definitely some change, and that's what I think our company has been pretty good at navigating. Jeff?

Operator:

Our next question comes from Craig Moffett with MoffettNathanson.

David Watson:

Yes. Craig, this is Dave. So yes, on the front end in terms of the real trending of household formations, the thing that we're looking at is literally the change of address data that we stay focused on. And that's what has continued to tick down and even went further down in our footprint in March. So -- and we think there's an impact of household formation as well. So it is a good point in terms of footprint. We're very focused on our opportunities. And I think we've been pretty consistent with one new component to it of the 3 main areas of opportunity. One is just expanding footprint within our -- the traditional cable areas that we serve, and that's high amounts of residential, single-family MDUs and some commercial within our footprint. There's been some starts and some pauses within that in terms of new construction. But in general, we think over time, that works its way, will continue to pick back up. And the second thing are proactive builds, we call hyper builds, which is mostly commercial, but will drag in some opportunities in terms of MDUs and some resi. And the third one is rural edge-outs. And those are the things that we've been focused on. Now there are opportunities to really play offense. And with the -- there are great programs that are available, federal and state, the subsidies that are available. And we're actively evaluating various potential opportunities and submitted a lot of applications where we've determined that this is going to provide a reasonable and economical way for us to serve these new areas. And so it's early, way early on these things, but we're having success, and we're getting some wins on these programs. So I think, yes, this is going to be a constant focus for us to look for opportunities. We want to be the trusted partner for communities, and I think it will be competitive. A lot of people will be looking for these subsidies. But we're going to edge-out our properties and look to build out. When you look at a number, we did last year in '21, approximately a little over 800,000 new passings that we built. I think a safe way to look at it is we're -- at a minimum, we're going to shoot for that again. And hopefully, we'll have upside on that.

Brett Feldman:

I'm actually going to follow up on the comments that Jeff was making earlier on the parks. You noted that you're seeing great performance in Orlando and per capture up considerably. First, I was wondering if you might be willing to quantify that, the extent to which your per caps are stronger now relative to where they had been prior to the pandemic. And then bigger picture, Disney has spent a lot of time talking about steps they've taken over the last 2 years to position their parks business to have a higher yield as we fully emerge from the pandemic. I was hoping maybe you could just elaborate a bit on some of the things you've done. You mentioned you've invested in new attractions. But are there other steps you've taken over the last 2 years or so that would lead you to believe that this improvement in per caps has a degree of durability to it, such that you will indeed be operating a higher-yielding business yourself whenever we're fully out of this?

Operator:

And your last question is from John Hodulik with UBS.

Brian Roberts:

Thank you, John. No, I don't think there's any new things to report today. I think we're here to really focus on a great quarter and a great start to the year. Obviously, the strategy, I think Jeff said it well, that we employed and goes back a number of years that we just -- we have a company that has a lot of opportunities around the world. And I think we are pretty focused on those opportunities. You're always going to look at new things and changes in the situation, just as Jeff also said. But the main focus, and you take something like your last point on the Olympics, I used the one example on a television show, I just can't emphasize, even though the Olympics were really challenged and maybe weren't what we all had hoped for when we bought years ago with all the political activity around the world, the team, the storytelling, the heroes, athletes, this company can do things no other company can do to present that using new technologies. And I think that's what puts us in a very special place. Jeff?

Marci Ryvicker:

Thanks, John, and that will end our first quarter 2022 earnings call. I want to thank everyone for joining us.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell, and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our safe harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Michael Cavanagh:

Thanks, Brian, and good morning everyone. I'll begin on slides 4 and 5 with our consolidated 2021 financial results. Revenue increased 9.5% to $30.3 billion for the fourth quarter and 12% to $116.4 billion for the full year. Adjusted EBITDA increased 17% to $8.4 billion for the fourth quarter and 13% to $34.7 billion for the full year. Adjusted EPS increased 38% to $0.77 per share for the fourth quarter and 24% to $3.23 for the full year. And we generated $3.8 billion of free cash flow for the fourth quarter and $17.1 billion for the year on a reported basis, which includes a $1.3 billion benefit related to the tax impact of the bond exchange we completed in August, $620 million of which fell in the fourth quarter as well as roughly $1 billion from returns on investing activities, most of which occurred in the fourth quarter. Excluding these items, free cash flow was $14.8 billion for the year. Now, let's turn to our business segment results, starting with Cable Communications on Slide 6. For the fourth quarter, Cable revenue increased 4.5% to $16.4 billion, EBITDA increased 7.8% to $7.1 billion, and net cash flow grew 9.2% to $4.5 billion. For the full year, we grew customer relationships by 1.1 million with 169,000 net additions in the fourth quarter. Overall customer growth continues to be driven by broadband where we added 1.3 million net new residential and business customers for the year and 212,000 in the fourth quarter. Our net adds this quarter reflect the continuation of lower overall marketplace activity, particularly move activity compared to historical trends. While this resulted in lower connect volumes, it also contributed to high levels of customer retention with broadband churn improving to the lowest rate for any fourth quarter on record. Broadband was also the largest contributor to our Cable revenue growth with broadband revenue increasing 8.5% in the quarter driven by the strong net additions over the past year, as well as healthy growth in average revenue per customer. Moving to Wireless, revenue increased 40% driven by growth in customer lines and higher device sales. Overall, we added 1.2 million lines for the year and 312,000 lines in the quarter, the best result since launching this business in 2017, bringing total mobile lines to 4 million. As Brian noted, over the past year we have made tremendous strides fully integrating wireless into our core cable operations, achieving standalone profitability of $157 million this year. Now that we've crossed strongly into profitability and the business is deeply integrated into our core cable operations, we won't be disclosing standalone wireless EBITDA going forward. Business Services revenue increased 11.5% or approximately 7% excluding the acquisition of Masergy, which closed at the beginning of the fourth quarter. Our strong organic results were driven by customers taking faster data speeds, higher attach rates of our advanced products and rate increases on some of our services, as well as the continued growth in our customer base, which grew by 63,000 net new customers over the past year with 17,000 additions in the fourth quarter. For Video, revenue declined 1.2% driven by customer net losses totaling 1.7 million over the past year, including 373,000 in the fourth quarter, partially offset by higher average revenue per customer. This higher revenue per customer was driven by the residential rate adjustment we implemented at the beginning of 2021, which we believe was also a driver of video subscriber losses. We implemented a similar rate increase earlier this month, so we expect this trend to continue throughout 2022. Last, advertising revenue decreased to 12.5% reflecting lower political advertising compared to record levels in last year's fourth quarter. Excluding political, advertising was up 9% with modest growth in core and double-digit growth in advanced advertising. Turning to expenses, Cable Communications' fourth quarter expenses increased 2%. Programming expenses decreased one 1.2%, reflecting a decline in video customers, partially offset by higher rates. As we enter 2022, programming expenses should reflect the benefit of fewer contract renewals, combined with the impact from our anticipated decline in overall video customers. Non-programming expenses increased 4.1% and were flat on a per relationship basis, reflecting investment to drive organic growth in the business as well as the expenses related to our recent acquisition of Masergy. The primary driver of the year-over-two-year [ph] change was technical and product support, which increased about 10% largely related to growth in our Wireless business and was partially offset by lower bad debt and customer service expense. Cable Communications EBITDA increased 7.8% to $7.1 billion for the fourth quarter and Cable EBITDA margin reached 43.4%, reflecting 130 basis points of year-over-year improvement. We believe we are striking the right balance by continuing to invest in our growth businesses, which are driving the top line and proving to be a great return for us, while at the same time continuing to increase our operating efficiency and take unnecessary cost out of the business. All of this together should enable us to drive higher profitability and expand margins both in 2022 and thereafter. Cable capital expenditures increased 3.7% in the quarter and 4.9% for the year, resulting in capex intensity of 10.8%, our lowest full year on record and essentially in line with 2020s 11% driven by lower spending on customer premise equipment and support capital, partially offset by higher spending on scalable infrastructure and line extensions. As we noted on our call in July, we expect our cable capex intensity will remain around 11% for the next few years as we continue to increase the number of homes and businesses that we pass and accelerate our investment and the technology that will enhance the overall capacity of our network, both downstream and upstream. This is a direct step to DOCSIS 4.0, which allows for multi-gig symmetrical speeds essentially with the software update providing very little to no disruption to the home in a very capital efficient way. Now, let's turn to Slide 7 for NBCUniversal. Starting with total NBCUniversal results, revenue increased 26% to $9.3 billion and EBITDA decreased 6.8% to $1.3 billion. Media revenue increased 8.4% to $5.8 billion, driven by higher distribution and advertising revenue with a significant contribution from Peacock. Distribution revenue increased 12% reflecting higher rates post the successful completion of several carriage renewals at the end of 2020 and a growing contribution from Peacock due to our growth in paid subscribers, partially offset by subscriber declines at our networks. As a reminder, beginning in the first quarter of 2022, we will lap these carriage renewals. Advertising revenue increased 6% reflecting higher pricing, which benefited from our strong upfront and a growing contribution from Peacock, which was only partially offset by ratings declines and a difficult comparison to record levels of political advertising at our local stations and last year's fourth quarter. Media EBITDA decreased 49% to $721.1 million in the fourth quarter, including a $559 million EBITDA loss at Peacock. Excluding Peacock, Media EBITDA decreased 24% reflecting higher costs associated with more sporting events at our regional sports networks compared to last year when the NBA and NHL delayed the start of their seasons due to COVID-19 as well as higher television programming and marketing costs, driven by the return of our full schedule compared to last year when our schedule was impacted by COVID-19. This difficult cost comparison will continue in the first quarter. Before moving on, I want to build on Brian's comments regarding Peacock. In 2021, Peacock generated revenue of nearly $800 million and an EBITDA loss of $1.7 billion, which includes content spend of over $1.5 billion. Even with a relatively limited programming slate we've achieved a level of success in MAAs, paid subs and engagement that is driving our decision to double our content spend on Peacock in 2022 to over $3 billion with the goal of ramping domestic content spend to $5 billion over the next couple of years, some of which will be incremental and some of which will be a reallocation from linear programming. For 2022, while we expect a significant step up in revenue, the incremental investment we are spending in both content and marketing and service will likely result in an EBITDA loss of roughly $2.5 billion. While the timing of when Peacock breaks even maybe pushed out from where we originally expected, we believe pursuing a dual revenue stream is the right strategy to create long-term value, and given the strength in our Theme Parks and high margin linear businesses, the good news is that we will fund this pivot out of NBCUniversal cash flows. Moving next to Studios, revenue increased 36% to $2.4 billion but EBITDA declined 34% to $51 million. This decline was driven by the timing of our film slate, partially offset by growth in TV content licensing. Film has a multi-year business model with titles monetized over time as they transition through different theatrical and licensing windows. As a result of pausing film releases in 2020 during the pandemic, we had fewer new titles come into the licensing window in the fourth quarter compared to a year ago. And at the same time, marketing costs were higher as we released Sing 2 and Halloween Kills in theaters. This impact of fewer carryover titles and higher year-over-year marketing costs associated with more theatrical releases will begin to diminish as we move forward, but will continue to pressure EBITDA growth for the next few quarters. Last, at Theme Parks, revenue increased by $1.2 billion to $1.9 billion and we generated EBITDA of $674 million, which was our highest on record for any fourth quarter driven by strong momentum in the U.S. and Japan. At our U.S. parks, we benefited from strong domestic attendance and per caps that were above pre-pandemic levels. At Universal Studios Japan we saw improved attendance levels as government-mandated capacity restrictions were eased during the quarter. At our newly opened park Universal Beijing, we are pleased with our first full quarter of operations where the level of demand from our guests was high, but overall attendance was impacted by COVID-related restrictions. Despite that, Beijing's EBITDA was essentially breakeven in the quarter and we anticipate modest profitability in our first full year of operation in 2022. For total Theme Parks, while we have been very pleased with the pace of our recovery, particularly in the U.S., we recognize that the business is subject to variability related to the pandemic, which tends to be more pronounced at our International Parks. Now let's turn to Slide 8 for Sky, which I will speak to on a constant currency basis. For the fourth quarter, Sky revenue decreased 2.5% to $5.1 billion as solid growth in the U.K. was offset by our results in Italy, where we continued transition through the change to our Serie A broadcast rights. Direct-to-Consumer revenue decreased 1% reflecting a modest decline in average revenue per customer relationship and overall customer relationship additions of 61,000 in the fourth quarter. This gain mostly came from a meaningful increase in streaming subscribers, primarily driven by seasonally strong entertainment content as well as a widely viewed sports schedule. The higher level of streaming additions in the quarter, more than offset the level of customer losses we experienced in Italy, which were also better than we had anticipated. In the U.K., Direct-to-Consumer revenue increased mid-single digits, driven by continued healthy customer additions, supported by record low churn and higher average revenue per customer. Revenue growth benefited from growth in broadband and wireless streaming and hospitality as pubs and clubs revenue has recovered back to 2019 levels. This was offset by a decrease in customer relationships and average revenue per customer in Italy both mainly due to the change in our Serie A broadcast rights. Rounding out the rest of revenue, Content revenue declined 23% driven by the change in sports licensing agreements in Italy in Germany. And advertising revenue increased 1% with healthy growth in the U.K. and Germany, mostly offset by a decline in Italy. Turning to our EBITDA results; Sky's EBITDA increased 188% to $464 million, driven by our strong performance in the U.K. and improvements in Germany and Italy. Overall, the results reflect lower sports programming costs due to resets in our sports rights, partially offset by a change in sports rights amortization, which resulted in an increase of $130 million. As a reminder, we announced this change last quarter. It did not impact our full year results but it does impact the quarterly pattern of recognizing sports rights amortization costs with expenses higher in the first and fourth quarters and lower in the second and third quarters. I'll wrap up with free cash flow and capital allocation on Slide 9. As I mentioned previously, in 2021, we generated around $15 billion in organic free cash flow excluding the items I referred to earlier. Consolidated total capital increased 3.6% to $12.1 billion, largely driven by higher investment on our broadband network. Looking ahead to 2022, we expect Cable capex intensity to stay around 11% and NBCUniversal capex related to the construction of Epic Universe to be up around the $1 billion. Working capital was $1.5 billion for the year, a $1.3 billion increase over last year's level, reflecting a post-COVID ramp of investment in studio content and our broadcast of the Summer Olympics. But less than we originally expected, largely due to the timing of content spend at both NBCUniversal and Sky and a faster than expected recovery at Theme Parks. Turning to capital allocation, we ended the year with net leverage at 2.4 times and returned a total of $8.5 billion to shareholders, including $4.5 billion in dividend payments and $4 billion in share repurchases. For 2022 as I said previously, we expect to continue to maintain leverage at around current levels, which I expect will support continued strong capital returns. As we announced this morning, we are raising the dividend by $0.08 to $1.08 per share, our 14th consecutive annual increase and our Board of Directors has increased our share repurchase authorization to $10 billion. This capital allocation policy will allow us to maintain the balance we've talked about, investing organically in the businesses, maintaining a strong balance sheet and returning capital to shareholders. So, thanks for joining us on the call this morning. With that, I'll turn it back to Marci who will lead the question-and-answer portion of the call.

Operator:

Thank you. We'll now begin the question-and-answer session. [Operator Instructions]. Your first question comes from the line of Ben Swinburne with Morgan Stanley.

Brian Roberts:

Thanks so much, and good morning. So I think demand, let me just start higher level with what I think our principles are. And then Dave can get into the specifics of some of the more detail that question. For broadband, just - demand just keeps going up. That's the importance of the product. And I think we're incredibly well-positioned to service our customers and monetize on the investments that we want to make. And the industry penetration has continue to expand. But despite that, we think we have a long runway for growth. We still believe with about 50% penetration in our footprint. That leaves us with the long part of the field to keep going. And we also are expanding the field, because we're able to grow the footprint and grow the addressable market, as I talked about given extensions and government subsidies and some of the investments by the government in broadband. And we're going to evaluate every opportunity we have to accelerate our passings. So from here, I expect the growth is going to be fueled by the strength of the network, focused on innovation and product differentiation. We're going to continue to improve our products to be best-in-class, increase our speeds, and always enhance the customer experience. And so, our ability to compete in segment to customers and do it throughout the entire market, not just regionally, I think these are all the advantages we've gotten where I think we're going to keep growing. But Dave, why don't you go into some of the pricing and volume and some of the questions that Ben asked.

Jeff Shell:

Hey, Ben, it's Jeff. So let me just give a little bit more color on Peacock. So going back to when we did our Investor Day, which is just over two years ago. We believe that the best model for us was an ad supported model. And we plan to offer and we did offer back at that point when we launched three different ways to get Peacock a free AVOD supported model, a light 499 light advertising supported dual revenue stream model with some more premium content. And then we offer - also offer a 999 SVOD product. At the time, we believed that the free AVOD product would kind of be our most popular and our leading product. What we found is that consumers are voting with their feet. And the vast majority of them are choosing the middle model, the 499 model with pretty more premium content, and a light ad load and ad load that's much lighter than linear and much lighter than some of our competitors. And that's resulted in some of the numbers that Brian and Mike laid out. Our MAAs are 24.5%, which is 75% of the way that to where we thought we'd be in '24 back then. We haven't really focused on paid subscribers. And we're already over 9 million people paying us real money. And when you add the fact that in Comcast territory and some other of our distributors, we offer this premium product bundled for free, and over time those will convert to pay. That's a pretty favorable model. And our ARPU has resulted in, has responded. I think in our Investor Day, we expected to get to $6 to $7 in ARPU, and we're already approaching $10 as Mike said in his comments. So this is really favorable for us. And what we've done is we've invested behind this, as Brian said. So we've put some more money into bringing our content back, our Pay-One movies, especially from HBO, which are going to be coming back later this year. And that's resulting in and the greater investment and the greater losses that were laid out. But we think also greater returns because this model is dual revenue stream model really mirrors our existing business. And we think that the peak investment year will probably be '23. Based on our plans, and then the revenue growth will overtake the investment growth and will start turning positive. The most important thing to keep in mind is that we're playing really a different game than our competitors. We've really believe that Peacock is not a separate business for us. It's an extension of our existing business, dual revenue stream. We are organized in our television business so that we run all of them together as one business. We programmed together as one business, picking the right model for each of our pieces of content to maximizes that. And we think over time, that's not just going to lead to good growth on Peacock, but it's going to lead to our TV business once we hit that peak investment period on Peacock returning the growth overall. So that we're as Brian said in the outset, we're number one on NBC. We're number one on news. We're -- our studios really strong. We have, in my opinion, the top content company in the world. And we're using that strength along with our business model to really play a different game in streaming than everybody else's. And we're really pleased with our performance so far.

Marci Ryvicker:

Thanks, Ben. Regina, we'll take the next question, please.

Phil Cusick:

Hey guys, thanks. So one follow-up and then a separate question. First, on the Peacock side, I think you have an opportunity to pull content back from Hulu this year. Does it make sense to do some of that as part of this Peacock investment or is this more organic? And then second, on capital return. You have a $10 billion buyback authorization. You think that's a good guide for 2022 or do you think it could be substantially different? Just given the -- what you've outlined today? Thanks very much.

Jeff Shell:

Yes, thanks. Thanks for the question. So obviously, much of our strong NBC content, as Brian mentioned, premieres on Hulu. And over time, we'd like to bring that back to Peacock. But any discussions that we're having with Hulu, or will have Hulu we're really not going to comment on. So there's nothing really to report at this time.

Michael Cavanagh:

Thanks, Jeff. So and Phil so on capital return, I'd not take the authorization of $10 billion as a guide of anything. Not trying to send a signal there. That's the level that the board last authorized. We use some of that up, and we wanted to top it up as we started the year. And as you know, it's easy for us to go back when called for and quickly get greater authorization. So what I tell you to think about as we talk about capital return and buybacks is, Brian and I and all of us here have been talking about our excitement, and the imperative of getting back into balance where strong capital turn through dividends and buybacks, which has been a hallmark of this company over decades and decades. Would be back on the table, along with keeping the balance sheet strong, and obviously, prioritizing making high returning investments in our business, which we talked a lot about what's going on, on that side on the call earlier. So I think it sets us up to be at the place we're at now back in balance with leverage at 24. And I would point everybody not to number expect us to buyback, but rather the leverage level that I expect us to stay at, which is around this level of 2.4x. I think that is going to set this company up for in 2022 and beyond very strong capital returns. And the number you guys all come up with is really just a function of doing your model for your own growth. I think we're going to grow EBITDA. But there's a variety of views there. And I think we enumerated a lot of the areas from Epic, the park in -- theme park in Orlando, to Jeff's commentary and my commentary on expected losses of a Peacock as we invest there, yet that's to be funded out of cash flows that the business itself NBC media will generate. So we think that's a very thoughtful way of funding the pivot to future growth in the media side to name just a few. So and obviously, capex intensity a cable, maintaining at around the 11% level. I think is an important element for people to think about with Dave, having talked six months ago on this call about what he wanted to do to drive towards DOCSIS 4.0, which I think sets our network up for the future. So that's what I got for you on a capital return. Hopefully that hits it off for everybody.

Phil Cusick:

If I can follow-up on one thing. You mentioned that working capital was a little lower in 2022 than for '21 you expected. How should we think about '22 versus '21? Thank you.

Phil Cusick:

Thanks, Mike.

Operator:

Your next question comes from the line of Doug Mitchelson with Credit Suisse.

Brian Roberts:

Okay, there's a lot in there. And, Dana, I may come to you in a moment, or just had to comment a little bit about Connected in our early days of Sky Glass and just maybe in general, how you see it sets us up for the future. But I think that's the big picture answer that I would give, Doug is that we see people connecting to our network in a variety of ways in the future, and different generations of customers have different needs. So from the great new Wi-Fi device that Dave just talked about to what we can do with a new platform whether that gets you into Telemedicine, gaming, education, above and beyond all the entertainment, that news that we're doing today. And so when you play with Sky Glass or a Connected television, you see the potential opening up, it also creates a potential for partnerships with companies that want to use that platform, when extend their own products to different ways. So it creates relevancy for us with consumers. And our early learnings have been, I think pretty spectacular. So Dana, why don't you take a minute and just what you'll hear about Sky Glass also can relate to eventually XClass TVs, but Dana over to you.

Brian Roberts:

Good, Dana. Thank you, Doug. A couple of things. Just following quickly, on Dana's point, we're very excited that Cable Group in the U.S. focusing on that global tech stack, and being able to pull off connected devices. And over time, we'll be opportunistic with what Dana is doing. And that we're leveraging our organizations just brought over from Sky working both with Sky, with Cable, Fraser Stirling that's looking across at all product innovation. And not only video, but also broadband. And that global tech stack is really important for us, XClass TV, it's early, but every single aggregation point will be converged over time, so that I think that's a real leverage opportunity. On your point of wireless, I think the biggest thing, Doug, is that there's just so much upside for us, the way we look at it, every single broadband home is an opportunity and every single broadband home should have at least a couple of lines. So to me, the addressable market expands. And as we continue to build out and add more homes, just more opportunities. So we go after a converged approach with broadband, and mobile, and it's a real opportunity to drive share in and of itself, mobile is a great product. But when you add it together, it just gives value to every single segment that's unique to us, that we can do differently. So to me, '22 is a year of optimizing that, as I mentioned earlier that we're going to take every single sales channel, simplify the go-to-market approach, with mobile included for every segment, whether it's income constrained right on up, there'll be a mobile component in everything that we do. So I think there's just a really big opportunity over time, and you look at it from an operational standpoint, one bill, one app, converge features in and out, leveraging Wi-Fi. There's a lot of opportunities for us in mobile. And by the way, we just launched it in business services and small business, and we're having great early success there. So mobile, I think will impact us about everything we do. One last thing, just a quick clarification for folks. When I was talking about trending, it was I was talking about not the last quarter of course, I meant worse than 2019-2020. But just to clarify that.

Marci Ryvicker:

Virginia, next question, please.

Jessica Reif Ehrlich:

Thank you. Two NBCU questions, first theme parks is a division which seems to have the most upside for the company. And once demand turns it tends to be this like a pent-up demand for years. So can you give us some color on like, what the underlying, what's going on underneath the surface? Are international visitors coming back yet? How much more leverage do you think you'll have in the parks? And what's the timing of Epic Universe opening? And then the second question, I just want to do a quick follow-up on Peacock. You came as you guys said you came out of the gate with a different strategy. But a lot has happened in the last two years with increasing global competition, can you just talk about your longer-term goals? Do you want to be a global platform, you seem more focused on profit and subs versus some of your competitors. How do you think about I guess, Jeff said you're managing the television business as one unit. So how do you think about differentiating content among your different TV businesses?

Brian Roberts:

And just on that point, if I look back over COVID, one of the things I wish we could redo was slowing down Epic, because I agree with your both with Jeff saying and with your point, Jessi, this is a business that if you build wonderful attractions, there is pent-up demand. And we're going to make a fabulous park at Epic and we're full steam. We're going as fast as we can now to make up for lost time.

Jessica Reif Ehrlich:

Okay, thank you.

Operator:

Our final question will come from the line of Craig Moffett with MoffettNathanson.

Michael Cavanagh:

It's Mike. On the last two, Peacock we kind of covered the color there. The expectation that losses this year with the investment net of what we get reallocated will be a Peacock loss of $2.5 billion is the likely number we think and then on Cable, the 11% CapEx intensity that we talked about is all in for the all the initiatives, Dave has described. So in competition really hasn't been a notable shift in the competitive environment from either fiber or fixed wireless, still very competitive, plenty of activity going on in terms of overbuild. And we've been at it for quite a while. And by the way, including fixed wireless where the earliest market launches, it's almost three years since we've competed against those early launches in fixed wireless. So, our game plan is to anticipate where and how competition happens. We have a constantly evolving playbook. And we're -- the key point is we're growing penetration where we compete against both fiber and non-fiber. So we take it seriously. We look at each one of the areas, all the varieties of overbuild fiber and fixed wireless and our goal and the game plan is to focus on our ubiquitous network advantage that we have not looking at our competitors so often at a very local level, have to make trade-offs on their network decisions. Our DOCSIS 4.0, DOCSIS game plan is a very robust one puts us in position to deliver and capacity in speeds on every application that's out there. Our goal has always been I mentioned earlier to develop a better product and deliver it. That's very different from our competitors where you just add value, and now including mobile, but we just have a different broadband product. It's better in terms of overall speed and coverage and Wi-Fi when you pull it all together, the net of that is a ubiquitous, better product. And we're delivering more passings and so as competition talks about that we're adding passings and did a really nice job the last handful of years and we will continue to do that. So our goal is to stay ahead of every single application that's out there and deliver the best broadband service and we feel like we're in a good position.

Brian Roberts:

Thanks everybody.

Marci Ryvicker:

Thank you, Operator, and welcome everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell, and Dana Strong. Brian and Mike will make formal remarks while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our Safe Harbor disclaimer. I remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to A - Brian Roberts for his comments. Brian.

Mike Cavanagh:

Thanks, Brian. And good morning, everyone. I'll begin on slide four with our third quarter consolidated 2021 results. Revenue increased 19% to $30.3 billion. Adjusted EBITDA increased 18% to $9 billion. Adjusted EPS increased 34% to $0.87 per share. And finally, we generated 3.2 billion of free cash flow. Now let's turn to our business segment results, starting with Cable Communication on slide 5. Cable revenue increased 7.4% to $16.1 billion. EBITDA increased 10% to $7.1 billion and net cash flow grew 16% to $5 billion. As a reminder, comparisons to last year were impacted by adjustments accrued for customer RSN fees. Excluding these adjustments, cable communications revenue increased 6.3% with no corresponding impact to EBITDA. We added 255,000 net new customer relationships in the quarter, once again, driven by broadband, where we added 300,000 net new residential and business customers. We continue to benefit from high levels of customer retention with broadband churn improving to the lowest rate for any third quarter on record. The strong level of net customer additions over the past year, including this third quarter, coupled with higher average revenue per customer, drove broadband revenue growth of 12%. This growth was about a point lower, excluding the RSN fee adjustments in last year's results. Wireless and business services also drove our strong cable revenue growth. Wireless revenue grew 51% driven by growth in customer lines and higher device sales. Overall, we added 285,000 lines in the quarter, the best results since launching this business in 2017, bringing total mobile lines to 3.7 million. Business Services revenue increased 8.7%, reflecting an increase in rates and customers primarily driven by the continued improvement in small businesses. We added 18,000 net new customers in the quarter and 72,000 over the past year. We recently closed on our acquisition of Masergy, which enabled us to offer a broader range of products and solutions to mid-market and enterprise customers and expand s our market opportunity to customers with a global presence. Moving to Video, revenue increased 1.4% and was flat excluding the RSN fee adjustments in last year's third quarter, driven by a residential rate increase at the beginning of the year, mostly offset by a video subscriber, net losses totaling 408,000 this quarter. Last, advertising revenue increased 4.6%, reflecting a strong overall market recovery compared to last year's third quarter which was impacted by COVID, partially offset by lower political advertising. As a reminder, the Q4 year-over-year comparison will be impacted by record levels of political advertising last year. Turning to expenses, cable communications ' third quarter expenses increased 5.3%. Programming expenses increased 7.6%, mainly reflecting the comparison to last year, which benefited from RSN adjustments. Excluding these, programming expenses were up 2.8% as we begin to lap the large number of contract renewals that started to cycle through in 2020. Non expenses increased 3.9% and decreased 0.8% on a per relationship basis, reflecting our investment to drive growth in our core businesses, broadband, wireless, and business services. This resulted in higher technical and product support in advertising, marketing and promotion expenses, which were partially offset by lower bad debt and customer service expense. Cable Communications' EBITDA increased 10% to $7.1 billion, including a contribution of $51 million from our wireless business. Cable EBITDA margin reached 43.9%, reflecting 120 basis points of year-over-year improvement. While the RSN fee adjustments had no impact on EBITDA, they did impact margins last year. Excluding the RSN adjustment impact, our margin expanded a 160-basis points year-over-year. Cable capital expenditures decreased 5.4%, resulting in capex intensity of 10.4% for there is typically some choppiness and Cable capex from quarter-to-quarter, mainly due to timing. Now let's turn to Slide 6 for NBCUniversal. Starting with total NBCUniversal results, revenue increased 58% to $10 billion and EBITDA increased 48% to $1.35 billion. Media revenue increased 48% to $6.8 billion, including $1.8 billion associated with the Tokyo Olympics. Excluding the Olympics, revenue increased 9.2% driven by higher distribution and advertising revenue. Distribution revenue increased over 12%, reflecting higher rates, post the successful completion of several carriage renewals at the end of 2020. And a growing contribution from Peacock, partially offset by subscriber declines, which have been stable for the past few quarters. Advertising revenue increased 7.2%, reflecting an overall market recovery compared to last year, very strong demand and pricing for our Ad inventory. A higher contribution from Peacock, and a solid start to the new fall season, including Strong NFL ratings partially offset by the timing of sporting events compared to last year when several events that shifted from the second quarter to the third quarter. Media EBITDA increased 1.2% to $997 million, including results of Tokyo Olympics. The favorable comparison on the timing of other sporting events and Peacock losses that were impacted by higher costs associated with the day and date release of the Boss Baby

Operator:

Thank you. We will now begin the question-and-answer session. . If you are using a speakerphone, you may need to pick up your handset first before pressing the numbers. . Our first question comes from Benjamin Swinburne with Morgan Stanley. Please go ahead.

Brian Roberts:

Thank you, Ben. Let me start that if you look at where we are today, we -- the global technology platform, we do about 5 billion entertainment streams a week on 75 million devices. So, we have a huge global scale. And one of the great things that we've been working on with Dana and Dave is having a global technology platform and working together on product innovation. So, to specifically talk about the connected TV, streaming TV, which is what Sky Glass and X Class are really all about. I think it's a natural evolution. So, I think it's a beginning of a logical extension. And so, I was in London for the launch of Sky Glass and we've been working on it since the day we bought Sky, taken about 3 years to see it come to fruition. It's a really exciting product to simplify for the consumer so much Dana can talk at a moment a little bit about it. It doesn't really breakthrough idea I think on how people buy it and pay for, but mostly, it's an embodiment of what we do well, which is aggregation. And that we're going to find a way for consumers to get to what they want faster, personalize it, and have fun along the way. And then it's a platform for innovation on go-forward basis for where we think television may evolve and whether it's gaming, whether it's fitness, healthcare, education. And so, having that be part of your relationship with our Company, I think is novel territory for us to do R&D off of in the US, and finally allows us to take it all over Europe, potentially, as you say, in and out of footprint. So, we're starting in the UK but we have ambitions to expand quickly to other countries. And it's great for streamers and streaming services. Our importance to the streaming universe will continue to grow and our relationship and certainly the Apple announcement today is that the latest iteration of that. In the U.S., pretty much locked in sync with our Sky team is the X Class, and Dave can talk a little bit about that. But -- we look at the markets, there's different opportunities, different realities with our partnership with Hisense and with Walmart, where many Americans get their televisions. And so, we're excited to begin. And I think -- so different ends of the market, perhaps. We'll look at this as learnings across the globe. And it follows right on the heels of X1 -Q (ph.) Flex and the progress we've made on innovations. So, I'm really excited by it, and I think it also shows the one Company working well together. Let me start with Dana. Why don't you add a few thoughts on Sky Glass? And then Dave over here and I, we'll get to the question on leverage with Mike.

David Watson:

Hello. This is Dave then, so -- and I think Dana hit it, Brian hit it, it's a -- really is for XClass, we're not starting from scratch because of this constant focus around innovation and working with the Sky team, working together with the cable group. So, we're excited about XClass. It's early days, but it is clearly the smart TV is a really important device to get to. So, we're able to take our software stack working across the board and focus on the right segment that wants very little friction that just wants the smart TV to work and we're able to do two things. One, delivered the world-class UI. So great voice, great data integration, able to add things like the Charter app, our app on top of it. And so, we can -- there's a lot of flexibility that we have in the business model that we have. We can go to market with the TV manufacturers, the retailers in mind, and pull it all together in a unique way, it's because we're coming in a little bit later. So, it's a great product, we're very excited about it within our footprint outside. And we're able to position Peacock as a key part of the offering and a great way, and within the UI. And so overall, very excited early but this is clearly a focus of ours.

Benjamin Swinburne:

Thank you, everyone.

Operator:

Our next question comes from Doug Mitchelson from Credit Suisse.

David Watson:

You got it, Doug. So first off, as you said, we're still clearly in a fluid environment. To be clear though, the fundamentals of the business are very strong. And there is a really long runway of growth in broadband. So, we haven't changed our feeling on that at all. We have a terrific network scaled. It's ubiquitous and it continues to perform exceptionally well. And we're in a good position for the future. So, we haven't changed our view on the long-term trajectory of the Connectivity business. I'm just as confident and optimistic in the prospects for this business as I've ever been. been. So, when you look at the whole year, I think it underscores the strength of broadband. Year-to-date we've added over 1.1 million net additions, and we've been adding over 1 million broadband subscribers each year for the past 20 years. And as you said, while the pace in Q3 was slower than we saw earlier in the year during the height of the pandemic, our broadband net adds are still very healthy and our churn remains at record lows, certainly for Q3. I think it's important to look at the current environment and I think that points a little bit, Doug, to what you're talking about. And just a couple of drivers to call out. One, when you look at the slowdown and Mike talked about this earlier, there have been a slowdown in connects across our footprint and we look very closely at the move activity. There's more activity earlier in the year around moves, slower now, and certainly with the last couple of months. Below 2019 levels in terms of moves. A little bit less college student activity, not alarmingly so, but a little bit less. And just a little bit less switching activity overall. I think you look at other operators, everyone's turn is down. That means some less jump balls where we do well. I think the other thing to call out in terms of drivers, we're seeing less growth from the lower income segment. We're still adding customers in this segment but not at the same rate as earlier. There are new government programs like EBB. We're seeing traditional wireless, not fixed wireless, but traditional wireless participates and be very active in this program. And last point on competition, look, we take it all very seriously and we've been in a very competitive situation for some time. Our focus has not wavered. We innovate, we deliver the best product for each segment. We break the market down in term second -- terms of segments, and we compete at a very local level. We have our granular view literally at the block level geographically. And by each segment from HSV (ph.) is the only -- the multiple product household. So, you add it all up, our turn remains at record lows, whether it's fiber, whether or not. And we look at our competitors' performance overall to ours historically and now. And I think this says it all. So, as for expectations for full-year results, while current visibility and overall activity creates a little bit of modest risk, we still believe full-year net adds will be around 2019 levels. So overall, when you look at this year and you go back to 2019, 2019 was second best year that we've had and -- well over a decade. It's just a terrific year. And so, for us to be at that level and the consistency that we've had has been so strong and you point to the fundamentals. There are some things that were on but like always, you attack them and you break them down, but I really like the fundamentals and the momentum that we have, so I think the runway is absolutely still there. And the last point is Business Services is a very important part of the connectivity story. And in there, I love their momentum as well. So, you add it all up, I like where we're at with connectivity.

Marci Ryvicker:

Thanks, Doug. Operator, next question, please.

Jonathan Chaplin:

Thanks. Dave, I'm wondering if I can follow up on that last question. If the full-year is around 2019 levels which suggests that 4Q is a bit below where you were in 2019, is it your sense that we pulled growth from the fourth quarter earlier into the year and 2022 will be back to that normal trend or do you think the slowdown that we're seeing in 4Q might continue into 2022? And I recognize that it's difficult to have visibility given all of the sort of the puts and takes coming out of the pandemic but any color around the progression of the trend would be -- I think would be really helpful to investors.

Jonathan Chaplin:

And just following on from that, it's presumably the low churn that you're seeing is speeding into the tremendous EBITDA growth that you're seeing in the Cable segment as well. If churn for the industry has to recover for growth in broadband to recover, would that -- is there an offset to growth in EBITDA then as we think -- as we look ahead as well?

Brian Roberts:

That's the one point I just -- this is Brian. Just want to add to Dave, I think gave a very comprehensive and I totally agree with the two questions that got asked he's answered. I think that that last point, I just want to underscore which is where the record low churn suggests to me anyway, very stable business. That's what's so great about the 32 million broadband customers we have. We have a recurring business. So, while maybe there was a pull forward, maybe there's a slowdown, time will tell as your question suggests. Where we're looking at, how do we grow EBITDA, how do we grow margins, how do we maintain and offer more product connectivity? The very first thing we talked about, what else can you do with broadband? What will broadband evolve to over the next 5 years, 10 years? So, we're super focused on minute-to-minute, but we're also -- I think Dave put in context just how good we feel and its certainly business services the same kind of innovation that we've been doing in residential, we're doing in business services. And so, it's not some change in market conditions that really, we've all been reading about. While there may be coming, and maybe there's some of that, I actually think it's personally the disruption from the pandemic coupled with a large percentage of Americans have broadband. So, the question for us go forward is, how do we continue to grow the value of that broadband and obviously therefore grow the value to our shareholders.

Marci Ryvicker:

Thanks, Jonathan. Operator, next question, please.

Jessica Reif:

Thank you. I guess a bigger picture question and that's something really short. You look out towards next year. NBC year, we both clearly have a record year, but the Olympics Super Bowl, record upfront, political looks like there's a lot of money being raised. Hopefully we'll see a return of international theme park visitor and seem to be stabilizing. Sky obviously, you've got this rollout of Sky Glass and Peacock and hopefully benefit from some of the past investments. And Cable as you guys have just discussed, you're going out of footprint with XClass TV, which I loved your comments, but it seems like it would benefit broadband, Peacock, and advertising mobile more aggressive. So, with that long-winded introduction, I just -- could you talk about your priorities for 2022 and beyond? How different will the business look over the next 3 years to 5 years? And then a quick short question, it's just on Peacock, you didn't mention anything about usage or monthly active accounts. So, if you could give some color there.

Jeff Shell:

Yeah, thanks. Thanks, Brian and thanks, Jessica. So, everything on Peacock is heading in the right direction and there's really nothing from a trajectory perspective that's any different than it was last quarter or the quarter before. All metrics are pointed up. Our usage continues to be great. Our mix of users continues to be great. We added a few million more subs, more MAAs. Everything -- advertising, we -- in this quarter, we just at the tailed of the quarter, we started selling advertising beyond sponsorship of which in the fourth quarter, it's all beyond sponsorship and that is going spectacularly well. So, we're really pleased with Peacock. It's way ahead of where we expected to be at this point. And every month, every quarter, it gets further ahead. And as you were talking about the business overall for next year, I was getting excited because we're very excited about next year with everything that we've got coming across NBCUniversal from the Olympics or the Super Bowl, to a spectacular movie slate, to a very strong advertising business, ratings at our linear networks improving. And I think Peacock -- I would add to that, that Peacock is doing really well right now without most of its programming strength. So, if you look at the future, and you look at where we're headed with Peacock, we have -- because of the pandemic we are behind on our original production. So, we're going to start to see a ramp up in originals on Peacock, which is very necessary to continue to grow, to have successful and robust original programming and we're excited about a lot of the things that were making for the service. We decided to buy our first window as we talked about last call of our movies. So, our Pay1 Rights, so to speak. And the first movie in our Pay1 Rights will hit Peacock in the first quarter, and then we'll have a steady supply of movies. We've seen across all streaming platforms that movies move the dial, they move the dial for Peacock in this quarter with Boss Baby, recently with Halloween Kills, which by the way was a huge hit on Peacock and a huge it at the box office. So, it shows that you can play in two different markets. So, we have all of our movies coming to Peacock and we couldn't be more excited about where Peacock is, and we'll continue to invest behind that success. I think it's important to remember too that we launched just over a year ago. We launched in July of last year. So, we've been in business for just over a year, and we're already more than a third of where Hulu is now, which is a service that's been more than decades in the making. So, excited about the year overall in the Company and really excited about where Peacock's going.

Marci Ryvicker:

Thanks, Jessica Operator, next question, please.

Craig Moffett:

Hi, thanks. So, I guess, we -- having talked about broadband and some of the growth initiatives across the Company, let's talk about wireless as the other big growth initiative. I guess, first the way I would question sort of, we've seen some data that suggests that your Wi - Fi is offloading a lot more traffic than we would've expected from the contracts so that the gross margins of that business maybe much more -- much higher than we had previously believed. It makes me wonder, what's the strategic goal for that business? Is it really to drive the business into being the largest, most profitable business it can be or is it still largely to reduce churn on broadband and think of it as more of a defensive product for protecting your existing business. And then if I could just squeeze in a second unrelated question. Can you just update us on your thoughts of Hulu, which, I guess, doesn't necessarily come up until 2024? But is there any opportunity that you might do something with Hulu sooner?

Mike Cavanagh:

Hey, Craig, it's Mike. So, on Hulu, just tremendous increase in value there. Obviously, great business that's participating in one of the hottest areas of value increased streaming. So, we're happy to be along for that ride. Obviously, while we set up our own thing in Peacock. In terms of the deal, it is a couple of years out. But remember, we put this together a couple of years ago and I'm certainly glad we didn't exit at the time, 3-year or so years ago. So, like the deal we have and I think we're always open for business. But it will be fine if we stay to the end because I expect value to keep increasing.

Marci Ryvicker:

Thanks, Craig. Operator, we have time for 1 last question.

Philip Cusick :

Hi, guys, thanks for squeezing me in. I want to ask a couple of follow-ups. First on the broadband trends. The last few quarters, and in September, you've been pretty specific on how you thought the year would come in. Is there just less visibility today compared to where we were in September? And it sounds like this isn't a competition issue, just more of an underlying demand. How also does that make you think about price increases this year for broadband and video with the pandemic still going on in new FCC? And as well on the buyback in the last cycle, you weren't really willing to borrow money to buy back stock, preferring to use cash flow and let leverage drift lower. It sounds like it's different this time. And is that driven by the stock price being really attractive, or you really want to just keep that leverage in that mid-20s range? Thank you.

Brian Roberts:

Okay. I think it's a perfect way to end the call. Phil, with your question, let me again state that I think it was a great quarter. And 1 of the highlights of the quarter was returning after several years to what we have, our target leverage ratio, which Mike talked about. And so -- we sort of separate, at least I do in my mind, the borrowing from the buybacks. They are not linked the way you described; they may appear that way. And I just want to give a complement to our treasury team, Jason Armstrong and the team. During the last 18 months, our Balance sheets have never been in a stronger position. We've done some long-term rollovers and extensions at historically low rates. And so, you put all that together with this operating performance and it does get us back to where we wanted to be, which will then allow us to more aggressively take advantage of what a number of us believe as a great Company. And, therefore, you can put your own value on it as shareholders, but we certainly are looking forward to buying back stock. And I think Mike described the logic well in the ratios. And all-in-all, a really great quarter. So, thank you, team, and thanks for your support on the call to the shareholders. Marci, over to you.

Brian Roberts:

Thanks, everybody.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining me on this morning’s call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements, subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Mike Cavanagh:

Thanks, Brian, and good morning, everyone. I’ll begin on slide 4 with our second quarter consolidated 2021 results, revenue increased to 20% to $28.5 billion. Adjusted EBITDA increased 13% to $8.9 billion. Adjusted EPS increased 22% to $0.84 per share. And finally, we generated $4.8 billion of free cash flow. Now let’s turn to our business segment results starting with Cable Communications on slide 5, Cable revenue increased 11% to $16 billion, EBITDA increased nearly 15% to $7.1 billion and net cash flow grew close to 15% to $5 billion. As a reminder, last year second quarter was most significantly impacted by COVID-19, including adjustments accrued for customer RSN fees. Excluding the impact of these RSN adjustments, Cable Communications’ revenue increased 9.3% with no corresponding impact to EBITDA. We added 294,000 net new customer relationships, up 35% over last year, second quarter and up 93% over the second quarter of 2019. This was the best second quarter on record and was driven by broadband where we added 354,000 net new residential and business customers, up 10% over last year second quarter, and 69% above the second quarter of 2019. These strong results were driven by improved churn and healthy connects relative to both 2020 and 2019. And this was the lowest second quarter broadband churn on record. Looking ahead, as Brian mentioned earlier, based on our strong results through the first half of the year, as well as current trends, we now expect total broadband net additions for 2021 to be up mid-teens from the 1.4 million net adds in 2019. Broadband revenue increased 14% and grew 13% excluding the RSN fee adjustments in last year second quarter. These results were driven by strong growth in volume and rate. Wireless revenue grew 70% due to an increase in both customer lines and higher device sales. We added 280,000 net new lines in the quarter. The best result since launching this business in 2017, bringing us to 3.4 million total lines as of quarter end. We are encouraged by the initial results on our new unlimited plan, which is driving a notable increase in unlimited connects as well as a lift in overall volume. Turning to Video, revenue increased 2.6% or 0.5% excluding RSN fee adjustments in last year second quarter, reflecting healthy growth in rates mostly offset by net video subscriber losses totaling 399,000. While our residential rate adjustment at the beginning of the year was the primary driver of the increase in rates, we believe it was also a contributor to the video subscriber loss in the quarter. Business Services revenue increased 10% primarily driven by higher rates due to comparison to last year when Business Services were significantly impacted by COVID-19. Over the past year, we have bounced back, rates have recovered and customer growth is strong, as we added 17,000 net new customers in the quarter and 70,000 over the past year, primarily driven by continued improvement in small business. Last, advertising revenue increased 59%, reflecting an overall market recovery compared to last year, when we experienced reduced spending from advertisers due to COVID-19. As we move to the second half of the year, we will have difficult comparisons to last year when we’ve benefited from strong political advertising. Turning to expenses, Cable Communications second quarter expenses increased 8.2%, programming expenses increased 12% and were up 5%, excluding the impact of RSN adjustments last year, primarily due to the number of contract renewals that started to cycle through in 2020 combined with annual escalators in existing agreements. Looking to the third quarter, we expect programming expense growth to increase that high single digit levels due to the continued impact of contract renewals, as well as the comparison to last year’s third quarter, which was also favorably impacted by RSN fee adjustments. For the full year, we continue to expect programming expense to increase at high single digit levels. Non-programming expenses increased 5.7%, or 0.5% on a per relationship basis due to higher technical and product support, and advertising, marketing and promotion spend the drive growth in our core broadband in wireless businesses. These higher expenses were partially offset by lower bad debt expense. These trends should continue in the third quarter. Cable Communications’ EBITDA grew nearly 15% to $7.1 billion, including a contribution of $68 million from our wireless business, the best results since launch. Cable EBITDA margins reached 44.2% reflecting 140 basis points of year-over-year improvement. While the RSN fee adjustments had no impact on EBITDA, they did impact margins last year. Moving the RSN adjustment impact margins expanded 200 basis points year-over-year. Cable capital expenditures increased 17% resulting in CapEx intensity of 10.6%, up 50 basis points compared to last year. These results were driven by an increase in scalable infrastructure as we continue to enhance the capacity of our network, as well as increases in broadband related CPE and line extensions. As Brian mentioned, we have decided to move a bit faster to the next phase of DOCSIS using very cost effective technology, allowing us to maintain the CapEx intensity level we achieve in 2020, which was the lowest in our history, and we expect to be at this level for the next few years. Now let’s turn to slide 6 for NBCUniversal. Let’s start with total NBCUniversal results. Revenue increased 39% to $8 billion, and EBITDA increased 13%, $1.6 billion. Media revenue increased 26% driven by higher advertising, distribution and other revenue. Advertising revenue increased 33% reflecting the timing of sports, and overall market recovery compared to last year, and the launch of Peacock. We had significantly more sporting events compared to last year when sports were paused, which benefited our advertising revenue. Excluding this benefit advertising grew at mid-teens levels. Distribution revenue increased 19% or high single digits excluding the RSN fee adjustments that impacted last year’s results. This growth reflects higher rates post the successful completion of several carriage renewals at the end of 2020, partially offset by subscriber declines, which were sequentially flat. Media EBITDA declined 16%, $1.4 billion, including Peacock, which generates revenue of $122 million and an EBITDA loss of $363 million. Excluding Peacock, Media EBITDA was essentially flat, driven by higher sports costs associated with the increase in sporting events this quarter compared to both last year and 2019. As a reminder, our third quarter Media results will be impacted by our broadcast of the Summer Olympics. Studios revenue increased 8.4% driven by higher theatrical revenue, reflecting the success of Fast 9 in theaters. And compared to last year when theaters were mainly closed due to COVID-19 Studios EBITDA decreased to 52% to $156 million as a result of higher expenses associated with our theatrical release compared to last year when releases were paused the timing of content licensing sales and the comparison to last year, which included transactions with Peacock related to our initial launch of the service. In the second half, EBITDA comparisons to last year will remain challenging as we continue to launch new theatrical releases and ramp our TV production. Theme Parks revenue increased by $958 million, $1.1 billion and generated EBITDA of $221 million, which included about $150 million of Universal Beijing preopening costs. This is the first profitable quarter we’ve had since the pandemic began in the first quarter of 2020 and was driven by strong results at our Universal Orlando Resort. Orlando has had exceptionally strong demand, with June attendance exceeding 2019 levels, as well as strong per cap growth. Despite virtually no international guests during the quarter due to COVID related travel constraints. We opened our Jurassic World themed roller coaster, VelociCoaster on June 10, to some of the highest guest satisfaction scores we’ve had. Hollywood has been operating without capacity restrictions since mid-June and has experienced strong demand, aided by the opening of our Secret Life of Pets attraction in April. We’re optimistic that our domestic parks are on a path to return to historic levels of profitability. But we need international visitation to resume which remains dependent on COVID related travel restrictions being lifted. At our Japan Park, results continue to be challenging after closing in late April, we reopened on June 1 with capacity restrictions that are likely to remain in place through the summer. Last, as we prepare to open our newest Park Universal Beijing, we expect overall results will be negatively impacted by up to $250 million in the third quarter. Now let’s turn to slide 7 for Sky, which I’ll speak to on a constant currency basis. For the second quarter, Sky revenue increased 15% to $5.2 billion, largely reflecting strong growth in our UK business. Direct-to-consumer revenue increased 7.7%, primarily reflecting higher average revenue per customer relationship. Results in the UK drove the bulk of the growth and benefited from the comparison to last year when sports subscriptions were paused, as well as a rate increase, higher mobile device sales, improving hospitality revenue as pubs and clubs reopen. While customer relationships grew in the UK, overall customer relationships declined 248,000 primarily driven by customer losses in Italy and Germany to the end of the football season. As we have previously said, we’ve reset our football rights in Germany and Italy. As a result, we anticipate lower programming and production expense, along with continued customer losses in the third and fourth quarters. We believe this disciplined approach to sports related costs is the right long-term financial decision for the business. Advertising revenue increased 79% with results in the UK driving the growth and reflecting the overall market recovery from COVID-19, as well as an increase in a number of sporting events compared to last year when sports were paused. Sky generated $560 million in EBITDA, a 32% decline compared to last year second quarter, primarily reflecting higher sports rights amortization related to more events in the current quarter. These higher expenses were partially offset by lower entertainment costs due to production delays. I’ll wrap up with free cash flow and capital allocation on slide 9. Free cash flow was $4.8 billion in the quarter, a decrease of 20% year-over-year, largely due to the timing of last year’s federal tax payments, which were deferred to the third quarter. While networking capital was a positive contribution to free cash flow in the quarter, we continue to expect it will be a negative drag on our full year results and higher compared to 2019 levels due to an increase in content investments and our broadcast of the Olympics. Consolidated total capital, which includes capital expenditures, as well as software and intangibles, increased 5.2% in second quarter to $2.8 billion reflecting an increase in cable, which was partially offset by the decline at NBCU. For the full year, we now expect capital to be slightly above 2020 levels, reflecting our plan, as I previously mentioned, to accelerate enhancements to our network. In the second quarter, a return of capital to shareholders included dividend payments totaling $1.2 billion, up 9.5% year-over-year. We also resumed our share repurchase activity late in the second quarter, totaling $500 million as of June 30. As previously communicated, we intend to stay at historical buyback levels until we reach our intended target leverage levels, which we currently expect to reach sometime in 2022. With our return to share repurchase in the quarter, we’re happy to get back to our long standing balanced approach to capital allocation, which consists of maintaining a strong balance sheet, investing organically for profitable growth, and returning capital to shareholders. Thanks for joining us on the call this morning. I’ll turn it back to Marci, who will lead the question- and-answer portion of the call.

Operator:

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question will come from the line of Doug Mitchelson with Credit Suisse.

A - Jeff Shell:

So I take the first one. Yes. So hey, Doug, how are you? So on the parks, we are very – first of all, I would start by saying we’re very pleased with not just the quarter, but the trajectory of our opening. As Mike went through, Orlando is on attendance standpoint, pretty close to back where we were in 2019, even though we don’t have any international visitors, and you would expect those international visitors to pick up over time in Hollywood. We’ve only been open a of couple months and we’re already approaching our capacity and we’re excited about the next couple of months and Halloween Horror Nights. So the domestic parks, obviously, with COVID, you just don’t know. It’s – things could be lumpy, things could be non-linear. But so far, the trajectory is really good and we expect that to continue. And I would say the thing we’re most pleased with is the protocols of work. And we’ve been able to keep people safe and keep our workers safe and keep our guests safe. And that I think is driving the confidence in coming to our parks. Internationally, Brian actually – and I actually were in Japan. And even though that country is a little bit behind as far as COVID, we’ve been able to get our park back open, we’re open again, with some capacity constraints. We have a great attraction there that we were able to see Nintendo, which is one of our best attractions that we’ve ever built anywhere on the world to rivals Harry Potter. And I’m very excited for that not only in Japan, but for Epic Universe down the road and our other parks eventually. So Japan is behind, but feels like it’s heading in the right direction. And so that’s going to be great. And then lastly, with Beijing, we’re ready to go in Beijing. The park is ready. It’s awesome. It’s our most technologically advanced park. And we expect – right now, what we’re doing is going through the final approvals of rides and the process you have to go through and that is somewhat indeterminate. But we expect that park to open in the next couple of months. And when it does open, as you mentioned, those pre-operating costs go away and we start getting attendance. And so Beijing should be a good contributor to us remainder of the year when it opens and then on to next year. So overall, our parks are on a good trajectory and it’s hard to see what happens with COVID, but we’re pretty pleased. Dave?

Q - Doug Mitchelson:

Thanks.

Q - Doug Mitchelson:

Thanks so much.

Operator:

Your next question will come from the line of Benjamin Swinburne with Morgan Stanley. Please go ahead.

A - Mike Cavanagh:

So maybe I’ll start Ben, and thanks for the question. I’ll -- I think on non-program expenses OpEx, we still expect low single digit increases compared to 2019 for full year ‘21 here. So that’s all the factors are embedded in there that Dave mentioned. And you’re right; bad debt continues to run low. I think given a feel for what the second half looks like, is the best I’ll do at this stage. I think we are continue to do all of the things in the underlying business, move the business towards more digital, sort of cleaner operations that are low cost, the move to the higher margin, products and broadband Business Services, other things Dave described, are things we’ll work on that will benefit us regardless, I think of what the operating environment normalizes that, but I think that’s the best sense for the second half of the year. And I’ll let David, comment on churn, but it’s a little bit of the same message, which is, we’ll see what normal looks like, but I think, investments in products, investment in network investments in Flex, wireless, you name it, all the things are we’re doing, I think our -- there is at least some element of sustained benefits to churn versus historical levels, at least in my mind. But we’ll see, Dave, over to you.

A - Jeff Shell:

Yes. Thanks, Brian. Hi, Ben, when you talk about scale, with respect to streaming, and Peacock just to get more granular for a second, there really are, no, there really are three elements of the scale. One is the scale of the platform technologically. And as Brian just mentioned, we launched on the back of the Sky platform, and we’ve leveraged our Xfinity and Dave’s team significantly. So I think we have proved that we would have never launched the success technologically with a platform that looks great and works without the scale that we have already at the company. There’s scale with respect to the brand. And that’s why I’m thrilled with today’s announcement that Peacock is going to be in 20 million Sky homes, and eventually we’ll roll it out across the globe. And then the most important by far element of scales for streaming is content. And we are really at the beginning of our content rollout on Peacock that’s why this quarter’s growth is really extraordinary. Because this quarter as Brian went through we had a pretty good movie with Boss Baby 2, we had our first real good drama with Doctor Death. And we had and we have obviously rolled into the Olympics here. We’re halfway through the first week of the Olympics. Looking forward, we as part of our plan, we have another Olympics, we have lots of original programming, which Mike mentioned, we’re ramping up production right now on and we’ll be rolling out over the next year, Brian mentioned our movies, we have the -- what I think is one of the top studios in Hollywood, and we have lots of movies coming directly to Peacock and eventually we’re going to have, the Hulu content coming back. So we have plenty of content coming in this quarter showed that when you put that content on a service, that’s good, you can actually get pretty good growth in the streaming world. And so personally, I don’t think we’ve ever lacked for the capital to do what we need to do to and grow our business. And what I’ll end with is the perfect example that happened in last week, was we at Universal acquired the rights to the next three Exorcist movies. In a pretty unique deal that was done in tandem with Peacock, we wouldn’t have been able to do it if we didn’t have a streaming service that’s where we basically got the rights on the backs of the strength of our studio, where we have Jason Blum and pedigree that’s unmatched and Donna Langley and her team’s ability to market movies. But because we did it with Peacock, we have full optionality going forward, we put the second and third movies direct on Peacock, do we do something hybrid, we can really kind of adapt and be flexible based on how the market works. So we have this scale across our company to do things like that. And I don’t think we’re lacking for scale. Personally, I think we can achieve our success in Peacock, without anything additional. And I think this quarter approved it.

Q - Jessica Ehrlich:

Thanks. I have two questions are directed to two people. Brian, first. And this is such a different color than a year ago, you’ve come out of the pandemic in a stronger position than you were even going in at really all of the businesses Cable, NBCU and Sky in every aspect, whether its share gains, margin growth and developing businesses, et cetera. So, sitting here today, what do you think the biggest ongoing benefits will be from all the changes that have been implemented? And then what are your key longer term goals from here? You’ve talked about the near term goals. And then Jeff, I don’t even know where to start, because there’s so much going on at NBCU. But can you give us a little more color on the upfront and the cross platform benefits? And maybe to drill down a little bit into Peacock, what should we be expecting the next year or so in terms of incremental costs for the international rollout as well as increased content? And then finally, you said in the past that you expect this Olympics to be the most profitable, but you’ve been hit with a little bit of deadlock? I mean, in terms of COVID getting a little bit worse and stuff going on with the athletes. Do you still have that view? Like how do you think about this Olympics and the next one in terms of profitability?

A - Jeff Shell:

Hey, Jessica. Thanks Brian. So on the upfront, let me take kind of in order, Jessica, how you ask the question. So on the upfront; I think we’ve been I think we’ve talked about that in the past. It’s -- as Brian just mentioned, the strength of our platform, combined with Linda’s, and Linda Yaccarino and her team’s approach. One platform approach was the perfect way to approach this red hot upfront and as Brian said, and Mike said double digit increases in both volume and pricing. And we’ll see those results in the years ahead and particularly happy with both the volume on Peacock and the CPM on Peacock. So that could not have been more pleased with how we did the upfront. As far as peacock, I should mention that one of the things I didn’t talk about is we concluded our Amazon and Samsung deals this quarter too, there is a lot going on at NBC, we’re now fully distributed, for Peacock. And that’s going to have benefits as we roll out our additional content. I would say that we look at where we are today and being much further ahead than we expected to be at this point, we’ll probably ramp up our investment modestly over what we’ve done in the past. But as I mentioned, we have so much content coming to Peacock that it doesn’t have to be significant. I will stay with Peacock and say little bit about Olympics, we were learning a lot as consumption happens on the Olympics here at day six, and not to ruin everybody tuning in, but we have big upset that just happened in the last hour. And should watch tonight on NBC to see that but exciting US team. And we’re not -- we’ve had some bad luck. But if you look at the product, it’s fantastic. And it really is impossible. And so what I would say is on Peacock, what we will learn in this Olympics we will take to Beijing and change the product change the offering and each Olympics on our board. And we’re really excited about that. It’s impossible to understate the importance of the Olympics to NBCUniversal, it’s not really financially it’s more operationally across the company; we have 4,000 people literally working on it. Brian and I were in Tokyo, I came back and saw our team in Connecticut, people this is their life work, you go from room to room, and you have experts on surfing and volleyball and gymnastics. And it is an operation that would be very difficult to replicate the talent and the experience that our team brings to it. And they show it every night at NBC. And then of course, the Olympics are the perfect property to show the strength of our platform across not only NBCUniversal but Comcast and Xfinity and Sky. So the Olympics obviously, as you said, Jessica, we had a little bit of bad luck, there was a drumbeat of negativity, we got moved a year and those spectators. And that has resulted a little bit in linear ratings being probably less than we expected. But the flip side of that is the digital strength is kind of offset that. So we look at what’s happening with Peacock that’s directly related to the Olympics. So net-net, with all this bad luck, we’re going to be profitable on the Olympics, which we’re very happy with. And we’re very happy with the product. And then if you watch every night, you’ll see we use this as a fire hose to promote everything else we’re doing at the company, not just across NBCUniversal, but also Comcast. So the Olympics, I think we’re very pleased with the Olympics and very proud of our team and got a ways to go here.

Q - Peter Supino:

Hi, thanks. I have a question about your aggregation business. With Flex is expanding app portfolio. I wonder how you could increase your momentum and aggregation in general. And whether it would make sense to send Flex boxes to all of your internet only subs and maybe even video subs that only have one video box at home, again, in order to drastically increase your scale with a good product.

Operator:

Your next question comes from the line of Philip Cusick with J.P. Morgan.

A - David Watson:

Hey there, Phil. This is Dave. So go on sales momentum side of mobile. One of the things that’s happened is we got through the first pandemic phase that we did shut down last year, retail blow things down. And what we saw the back half of last year just continued through this year as every single sales channel now we focused on. Retail is back and but in addition to that, extremely focused on our call centers, digital tools that are optimized by flows for mobile, and how we go-to-market, that has been a huge chance, just the fact that we lead with mobile is so key, and mobile and broadband being a package. So those fundamentals have emerged and really an important part of our go-to-market strategy. We’ve invested in tools not only for the customer, but for our agents, and how they sell mobile, this improving the experience for customers really key. So a lot of marketing investment around the mobile message, if you live in our footprint, and you’re watching this great Olympics coverage, the Jeff and team are doing, you can’t miss the fact that we are really, really focused around the mobile business. So but I think that natural combination of broadband plus mobile will continue. So the other big addition recently is clearly the unlimited packages that we’ve rolled out. And that is adding to it. We’ve seen a nice shift and mix that we continue to have by the gig. But adding on unlimited really closed and fills the gap that we had in our competitive portfolio, so now with great unlimited of pricing for multi line families. And you can mix and match still between buy the gig and unlimited, we’re in a unique position in our footprint. So like our momentum, the 280,000 lines were just terrific. And set a record for us but we’re continuing to stay focused and we see that this is a real opportunity for us going forward. So on the auction side, I think the last part --

A - Mike Cavanagh:

No comment on status for next auction. We take a look on occasion we like our spectrum portfolio, it gives us optionality for offload. So we’ll -- we often take a look if the price is right, but no comment yet on where we stand with the next talk.

Q - Craig Moffett:

Yes. Hi. And question for Brian and Mike if I could, the free cash flow profile that you guys have over the next few years that you’re -- just given the EBITDA today you’re already running ahead of, would suggest that if you keep your leverage target at something like 2.5x like you’ve talked about, you can be buying back $20 billion a year of stock just to keep your leverage constant. Can you just talk about sort of how high you’re willing to go in terms of share repurchases, and I know you you’ve always talked about keeping your powder dry for optionality. But it would seem like there’s a lot of optionality there. And room for a pretty significant increase in cash returns to shareholders.

End of Q&A:

Operator:

There will be a replay available of today’s call starting at 12 o’clock PM Eastern Time. It will run through Thursday, August 5 at midnight Eastern Time. The dial in number is 855-859-2056 and the conference ID number is 2883365. A recording of the conference call will also be available on the company’s website beginning at 12:30 PM Eastern Time today. This concludes today’s teleconference. Thank you for participating. You may all disconnect.

Marci Ryvicker:

Thank you, operator, and welcome, everyone. Joining me on this morning’s call, are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell, and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff and Dana will also be available for Q&A. Let me now refer you to slide 2, which contains our safe harbor disclaimer, and remind you that this conference call may include forward-looking statements, subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Mike Cavanagh:

Thanks, Brian, and good morning, everyone. I’ll begin on slide 4 with our first quarter consolidated 2021 results. Revenue increased 2.2% to $27.2 billion. Adjusted EBITDA increased 3.5% to $8.4 billion. Adjusted EPS increased 7% to $0.76 per share. And finally, we generated $5.3 billion of free cash flow. Now, let’s turn to our business segment results starting with Cable Communications on slide 5. Cable revenue increased 5.9% to $15.8 billion. EBITDA increased 12% to $6.8 billion and EBITDA less capital grew 16% to $5.1 billion. We added 380,000 net new customer relationships, up 2.4% over last year’s first quarter and up 27% over the first quarter of 2019. This was the best first quarter on record and was driven by broadband, where we added 461,000 net new residential and business customers, only slightly below last year’s first quarter and 23% above the first quarter of 2019. We saw healthy connect activity, and this quarter marked the lowest broadband churn in our history. This positive momentum has continued into the second quarter. And from what we see today, we anticipate total broadband additions for the year to grow by mid-single-digit levels compared to 2019, which, aside from the extraordinary growth we had in an unusual 2020 was the best year in more than a decade. The strong customer additions, coupled with ARPU growth of 4.4%, drove a 12% increase in broadband revenue for the first quarter, the largest driver of overall cable revenue, and we expect this trend will continue. We also saw an acceleration in both, business and wireless. Business services revenue increased 6.1% and delivered 11,000 net new customer additions, primarily driven by continued improvement in small business. Wireless revenue grew 50% and due to an increase in both customer lines and higher device sales. We added 278,000 net new lines in the quarter, the best results since launching this business in 2017, bringing us to 3.1 million total lines as of quarter end. Turning to video. Revenue was consistent with the prior year, reflecting very healthy ARPU growth of 6.8% offset by net video subscriber losses totaling 491,000, which we felt mostly on the connect side as residential churn improved year-over-year. We believe our residential rate adjustment at the beginning of the year was a significant contributor to both the ARPU increase and the video subscriber loss in the quarter, and we expect video losses in the second quarter will remain elevated. We currently anticipate Cable Communications revenue growth in the second quarter to accelerate by a few hundred basis points from the 5.9% we just reported, partly due to the comparison to last year’s second quarter, which was most significantly impacted by COVID-19, as well as our focus on driving growth in our connectivity businesses. Turning to expenses. Cable Communications first quarter expenses increased 1.5%. Programming expenses were up 5.5%, primarily due to the number of contract renewals that started to cycle through in 2020, combined with annual escalators in existing agreements. Looking to the second quarter, we expect programming expense growth to increase at low double-digit levels due to the continued impact of contract renewals as well as the comparison to last year’s second quarter, which was favorably impacted by adjustments accrued for customer RSN fees. For the full year, we continue to expect programming expense to increase at high single-digit levels. Non-programming expenses declined 1.1% on an absolute basis, and 5.9% on a per relationship basis, while our customer relationships grew 5% year-over-year. Non-programming expenses should increase at high single-digit rate in the second quarter due in part to the comparison to last year, which reflected the slowdown in business activity due to COVID-19, as well as our continued focus on driving growth in our core broadband and wireless businesses. Cable Communications EBITDA grew by 12%, with margins reaching 43.2%, reflecting 250 basis points of year-over-year improvement. These results include the important milestone of our wireless business reaching breakeven for the first time since launch. Cable capital expenditures increased 8%, resulting in CapEx intensity of 8.7%, up slightly compared to last year and driven by a 23% increase in scalable infrastructure as we continue to invest to enhance the capacity of our network. This spending was partially offset by lower customer premise equipment and support. Now, let’s turn to slide 6 for NBCUniversal. As you know, we recently issued an 8-K with updated trending schedules and a new reporting format that reflects the way the business is now managed. We moved Peacock, which was previously reported in our corporate results to NBCUniversal. And now we present NBCU in three business segments

Operator:

Thank you. [Operator Instructions] Our first question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.

Brian Roberts:

Well, thank you, Jessica, for those comments. Why don’t we just go around the horn and why don’t we just go from Dave to Dana to Jeff, and everybody give a crack at their view of the business and a chance for them to introduce themselves on the call here.

Dana Strong:

Thanks, Jessica. This is Dana, following up from Dave’s side. From the Sky angle, we’re really, really happy with the fundamentals of the business. I think Q1 -- our Q1 results demonstrate the position that we’re in, subscriber numbers up, that’s in fact, quarter one in about six years, churn is down, revenue is up. All of the fundamental factors of the business position us well to exit COVID. To be more specific on your question in regards to where do we see the most leverage, if I had to boil it down, I would say, the UK, the UK is an extraordinary position for growth. We got a very diverse revenue base with DTH having its best performance in Q1 in six years, streaming is going well, mobile is going very well, broadband is growing well with a lot of innovation potential. And so, I think what we see in the UK is a lot of growth left in that business and a really solid business to build upon in the rest of the portfolio.

Mike Cavanagh:

And maybe -- it’s Mike. I’ll just jump in after the -- and put it all together because I think the ultimate question was what happens with free cash flow over time, what’s our confidence. And I think, as we’ve been saying, pre-COVID for a couple of years, in my tenure, we’ve been investing in -- we love our businesses. We’ve been investing so they stay relevant and strong years into the future. And while free cash flow is always lumpy, as you’re in different periods of time, we’ve been confident that we are going to grow free cash flow in the years ahead on a multiyear basis. COVID got in the way, obviously, of that story, but that’s, as you recall, what we felt pre-COVID, and I continue to feel that way as we sit here now. And as everybody just chimed in, I think we see the light at the end of the tunnel of COVID. And all of the earnings power of our businesses that we felt were there before, COVID, I think these results say that they’re still there and perhaps then some.

Doug Mitchelson:

I guess, maybe there are two quick ones. But Dave, on your side, the new wireless pricing, does that suggest another investment round in wireless, or would you just look at that as consistent with the focus on trying to drive share there? Ultimately, what’s the wireless strategy? And what are you hoping the new pricing levels to accomplish? And Jeff, just path for Peacock monetization with engagement coming in double expectations, my guess is, you haven’t seen much difference relative to your revenue expectations because of limits on advertising. Can you just remind us when does that advertising inventory get opened up to new advertisers? And how will Peacock monetization progress from here? Thank you.

Jeff Shell:

Doug, this is Jeff. So, let me just take the opportunity with your question to maybe spend a minute or two on Peacock and just provide a little bit more granularity and how we’re doing more broadly than your question. So, first of all, we are very pleased with our steady growth on Peacock, and we’re particularly pleased that we chose this business model, which is an ad-supported AVOD model for the business. It was the right decision to pursue that clearly for our Company. Our revenue in that model is a mix of both, subscription revenue and ad revenue. And if you actually break down what drives the ad revenue in the future, it’s really four things we track. The first thing is sign-ups. I think, Brian mentioned in his opening that we reached 42 million sign-ups. This is up 9 million from last quarter. And we’re very pleased not just with that growth, but with a steady growth in that over time as we’ve added things. The second metric is how many of those people who sign up, use the service on a regular basis. We internally use a metric known as MAAs, which I think others in the industry also use, monthly active accounts, that’s how many households actually use it monthly. It’s either -- to be granular, it’s either somebody who pays a household, pays a great subscription fee or somebody who uses it monthly. And by that basis, roughly a third of our sign-ups are by our metrics MAAs. And that -- put that in the context. That is about a third of where Hulu is today. We’ve only been national for less than a year, Hulu’s been 13 years. So, we’re very pleased with how that’s grown steadily. And MAA is the way we track them actually kind of understate the engagement, because there are many people who use it, but just not enough to be an MAA. If you actually made it quarterly assumption, then we’d be up to another $10 million above that number. So, one of the upsides for us is converting those non-MAA sign-ups to MAAs, which we think we’ll do over time. The third metric is usage, which is very strong, double our projections. And to put that in context, the -- an average Peacock MAA is using Peacock more than an average TV viewer is watching NBC. So, we’re very pleased with that. And then finally, how do we monetize those users and usage is the CPM, which gets to your question. We set out, as you mentioned, in the sponsorship model. So, the vast majority of our revenue coming out was set up by 10 charter advertisers. But, we actually are exceeding the guarantees that we made to those advertisers. So, we are already, even this quarter, selling some of the excess inventory on a spot basis. And we’re achieving CPMs that are equal or in some cases, above what we’re getting on NBC Prime, which is our gold standard. That’s very encouraging. And to answer your question, in Q4 of this year, that’s when the sponsorship deals roll off and we start selling all of our inventory on a spot basis, but we’re in early stages of the upfront right now. So, we’re already starting to talk to advertisers about making upfront commitments that include Peacock. Let me just mention one other thing. All of this success is without most of the programming that we anticipated. We anticipated launching with the Olympics. We have not had -- we have two Olympics in the next seven months. We’re going to do some pretty exciting things on Peacock with our Olympics programming. And then, even though we’re back in production, as Mike mentioned or Brian mentioned on 30 shows right now, most of those have not hit Peacock yet. So, the strength of our original programming that we have planned to launch with is really coming in future quarters. So, very encouraged by Peacock going forward, very steady growth so far, and we’re confident about the future.

Ben Swinburne:

One on Cable, one on Sky. Maybe for Dave, or Dave and Brian. Thank you for the comments in the prepared remarks on the network. As you know, there’s a lot of focus on symmetric offers, particularly in Washington. And I’m just wondering, from a business point of view, do you think there’s real demand there? And what kind of timeline should we be thinking about in terms of adding that capability or more of that capability to your network? And can you talk a little bit about what that might mean for capital intensity, which I’m sure is what most investors are focused on. And then, for Dana, there’s been an unbelievable amount of kind of tectonic shifts in the European sports landscape just this year. And you mentioned Sky, you have Serie A. Can you just put all this in context, when you look at the Bundesliga deal, what we’re reading about with EPL, Serie A. Is this helpful to Sky hitting its EBITDA targets of doubling over time, or is this a headwind? Can you maybe just -- because these are obviously massive contracts. Could you just talk a little bit about the soccer background? That would be great for all of us. Thank you.

Dave Watson:

Sure. Hi, Ben. So, this is a focus for us over the next several years. But overall, our approach, our strategy is to continue to enhance broadband completely. And that you want to have the best overall speeds in the marketplace that go from the house of the business, great WiFi coverage within where people are, control streaming, now mobile is part of the overall solution, and making it all seamless. So, it’s the overall experience that we’re focusing on. But, we continue to improve speeds along the way, we got 20 years in a row, we got constant increases in terms of speeds. And we address both, downstream and upstream. Let me put usage in perspective in terms of what we’ve seen pre-pandemic and most certainly through the pandemic where a network met the moment and then some. But putting usage in perspective, upstream is less than a tenth of downstream. And so, name the application, whether it’s video streaming, whether it’s gaming, host of education applications. Our network, I think, really stood up, as Brian talked about earlier. And so, while our competitors are spending heavily to try to catch up to us, we’ve already -- they’re testing, we’re not standing still. We’ve done 2 gigabits of download speed for testing, symmetrical 1 gig. And so, we have an architecture that I think is going to continue to put us in position to do it in an effective and a very efficient, capital-efficient way. So again, not standing still. So, we feel very good about the long-term architecture because of DOCSIS. DOCSIS 3.1 that we have is a very -- is a strong roadmap that we can deliver. And so, right now, as we sit here, we have 1.2 gigabits deployed throughout our entire footprint. We’ve increased the upstream speed. And so, over time, I think we can address symmetrical issues. But in the near term, the midterm, we are in a very good position. And I do not see an incremental need for upgrade in terms of capital. We constantly invest in the network. This is not something that just happened overnight. We invest all the time and we’re making our infrastructure more efficient as we virtualize things like CMTSs, and we’re just taking cost out of how we deliver this, couple that with the great DOCSIS standard. I think, we’re in a pretty good position. So, broadband, commercial and residential is growing. It’s a great business. We’re going to continue to strengthen our lead position. And I think it’s going to continue to be a great return on investment for us. And we decide to accelerate our plans. Our CapEx intensity might be a little bit higher one year versus the other. But, we’re still going to be in the ballpark of what we’ve been doing. And it’s just not going to be uptick by a material amount. So, I feel very good about our position, and I really like our long-term roadmap.

Operator:

Your next question comes from the line of Phil Cusick with JP Morgan. Please go ahead.

Brian Roberts:

So, let me start. Dave, why don’t you also feel free to jump in on -- I think Dave gave pretty complete answers on broadband. We do believe that by having the best product, and I think we have that, you’re in the enviable position. And so, we balance constantly looking at new technologies where competitors might be coming over the last, I don’t know, 15 years. We’ve had lots and lots of fiber competition. We’ve had lots of overbuild competition, DSL competition, we’ve added 20 million broadband, it’s an -- over a consistent period of time. And so, I think we know how to compete. We go from market share, and we do that while we’re able to increase the EBITDA and free cash flow from the business. We really focused on the business sector, haven’t talked a lot about that today. They had a great quarter and real momentum as all businesses are reopening. People are rethinking their relationships. And we have the latest, greatest, best technology. And you’ll be hearing a lot, or I think, from our business services unit. In wireless, just to add to all the points Dave made about our focus on mobile, while, yes, we bought some spectrum and we’ll be doing some trials to see how we can offload, and that really will prove to be a cost savings. If we get it right. In dense areas, that whole relationship requires a healthy partnership with a wireless MNO. And in the case of Verizon, we’re really pleased with the partnership restructured it so that we’re able to make these unlimited offerings in a way that continues our profitability March and real value for consumers, and in a way that Verizon is happy that their network is getting used. So, good work to our team that worked hard, and to Verizon’s team who are bringing great offerings to the market with expanding mobile. So, net-net, I think both of those important two products and we now bundle them together, put us in a position to continue to grow and be able to compete with where the world evolves itself.

Craig Moffett:

Yes. Hi. A question for Dave, if I could - -two actually. First, can you talk about how your Cable segment is preparing for federal stimulus? And how you think that -- what impact that’s likely to have on your business? Can you quantify at all what you expect to come from stimulus, including how many essentials customers you have and whether you expect those customers to now generate higher ARPU under the stimulus plan? And then on the wireless business, I just want to drill down on a question that was asked before. With the new pricing, do you think that you can still be EBITDA positive in that business, even with the new pricing, which presumably will mean at least somewhat lower ARPU going forward?