Morning, everyone. We're gonna get started here with our first presentation. I guess first I'd like to welcome everyone to Deutsche Bank's Media, Internet and Telecom Conference. Thanks everyone for joining us. I'm really pleased to introduce our first speaker of the day, Jason Armstrong, who's the newly appointed CFO of Comcast. Welcome, Jason.
Bryan, thank you.
Maybe get started. 2022 is a year that certainly presented challenges across the TMT space from a financial performance perspective, geopolitical, we had pandemic related still in Asia. You saw in your parks business, tougher domestic broadband market, Peacock investments, yet Comcast still grew consolidated revenue and EBITDA in mid-single digits. Can you just talk about, you know, maybe reflect on how you were able to achieve those results and talk about the 2023 outlook and what are some of the challenges and opportunities you see for this year?
Thanks, Bryan, and thanks for having us at the conference. It's always a pleasure to be here. You're right about 2022. I mean, 2022, I would characterize it as very strong execution from, you know, the variety of teams that we have in a, you know, an environment that brought some challenges. You're right, broadband got more competitive over the course of 2022 with some new entrants. The advertising market, you know, was sort of weaker towards the back end of the year as we saw some, you know, compression there. Our theme parks, mostly strong, but, you know, internationally, that's still dealing with COVID impacts, which we're shutting parks and then reopening parks, so sort of inconsistency there.
Yet we made our way through all of that, and as you said, grew revenue 4%, we grew EBITDA 5%, we grew earnings per share 13%, and we returned $18 billion of capital to shareholders. That's the highest amount in the company's history by a pretty wide margin. I think, you know, the company's long been characterized by balance of reinvesting in the business, balance of driving growth. You saw that in 2022, and I think that sets up well for 2023. Priorities for 2023 are, you know, continuing to enhance our position as a leading globally integrated content and distribution company, and to find and support avenues for growth within that. If you think about the different sort of growth categories broadly, you know, I'd sort of put four out there.
There's connectivity, which is the largest, and that's broadband, wireless, and business services. There's sort of a separate category, which is platforms. Obviously, the video market is changing quite a bit and consumption patterns. We wanna be the aggregation layer. We wanna serve customers. Customers are looking for a way to sort of organize the video that's coming into their households, so we wanna be the aggregation layer. We're investing in Sky Glass, X1, Flex, the Xumo JV with Charter, so we've got a lot of investments sort of pointing in that direction. Then there's content, right? Which you mentioned pretty big streaming pivot that we're undergoing, you know, with Peacock and getting the linear to streaming transition right, which is a delicate balance.
You know, it's clearly a priority for the company, but we're investing pretty heavily to get that right and to drive a successful streaming product. Final category I'd sort of put out there is experiences, largely our theme parks, where we've had a bunch of investments going back into the system. We try to refresh our parks, you know, almost on an annual basis with new attractions to try to drive attendance. I think we've been fairly successful in that. We've got a lot of new attractions sort of launching this year in the pipeline, especially a big one, you know, around Epic Universe, which is our new park in Orlando. You put it all together, we've got, you know, a number of growth drivers.
Along these lines, we are gonna start to report differently in 2023 and have buckets sort of along these lines. Traditional segmentation and business units that were more siloed around cable, Sky, and NBC will now become sort of two reportable business units, connectivity and platforms, which I'll get into, and then content and experiences. Connectivity and platforms, I would think about that at the highest level as that's the U.S. cable business plus Sky's direct to consumer business. Then content and experiences, think about that as the traditional NBC business plus Sky's content creation engines and Sky Studios. To unpack that a little bit more content or connectivity and platforms, think of connectivity as U.S. residential broadband, U.S. residential wireless, Sky's connectivity business as well.
The first two, you have total up to about a $28 billion revenue stream that's growing high single digits. Sky's connectivity business, you have a $3 billion revenue stream. That's where in markets where they can serve broadband and/or wireless, which is the U.K. and Italy. It's a $3 billion revenue stream growing on a constant currency basis mid-teens. Very healthy categories there. Something new grown that business from, you know, a starting point of zero, you know, 12, 13 years ago to now eclipsing a $10 billion business. We've always said within that this is a very healthy margin business. We're serving the consumer in the right way, that the margin afforded on the back of that is strong. We'll break out for the first time what that actually looks like.
Business services is a $5 billion EBITDA business for us at this point. It's growing business services category. Over on the content and experiences side, we've got I think what will be sort of traditional segmentation under that, similar to what you've seen in NBC before with studios, media, and then parks. Within media, you know, I think we and investors probably want more detail on Peacock. We're putting a lot of investment into it. Within the media category, we'll break out Peacock sort of between advertising and distribution revenue. We'll break out different expense categories to sort of get people to a more informed answer, you know, and more and more transparency. I think, you know, good start to 2023.
We'll be out in the next couple weeks with an 8-K and new trending schedules that sort of map this all out for folks. I think at the end of the day, it's more disclosure, it's more reflective of globally integrated content and distribution company, and it's more disclosure around the parts people, you know, really try to dig into and, and this is more information coming their way, especially around business services and Peacock.
No, I'm sure everyone will appreciate that additional disclosure, particularly in those areas. That's great. Maybe to move on to cable a little bit. Broadband market obviously became more challenging as we came out of the pandemic period, just given high penetration levels in the market, less move activity and increased competition. Can you just talk about those challenges and how they've shaped your approach to managing the cable business going forward, you know, particularly as it relates to volume versus monetizing the base?
Yeah. I think you're right. It's become a more competitive environment and certainly happy to get into that. It's, you know, it's one part move activity, one part fiber, you know, one part fixed wireless, maybe a couple other factors in there as well, but those are sort of the main ones. I think, you know, expect us to stick to our knitting, which is we're a large company with over 30 million high value broadband subscribers that are doing more on our network. Consumption patterns are up. Average usage is, you know, for a standalone broadband customer is 700+ gigs .
Yeah.
That's, you know, double where it was four or five years ago. We, we want people doing more on our network. That's what we're seeing from our base. We're also seeing our base hang more devices onto our network consistently. Our priority here is we've got to protect the base that we have. We've got to be able to protect and grow our ARPU, which we're committed to doing. We did it last year. We'll do it again this year at a healthy clip. We've got to compete appropriately, but not irresponsibly, to just try to drive subscriber volumes. I think within that, you know, Dave Watson on the fourth quarter call, said, you know, it's a, it's a challenging environment to add broadband subscribers.
I think that's, as I sit here today, that's probably the right assumption. It's probably the right assumption for the first quarter, by the way. I think there's a number of analysts that have us losing subscribers in the first quarter. As I sit here right now, that's probably the right assumption. If you step back, much like the fourth quarter, where we grew ARPU 4%, we grew EBITDA 6% in our cable business and grew net cash flow to an even greater extent, that's the formula, right? We have plenty of growth runners between broadband rate, business services and wireless that overall in the connectivity bucket, we're comfortable with our ability to grow revenue and comfortable with our ability to expand margins. We're not gonna do anything irrational to disrupt that.
Yeah. You mentioned competition. I mean, would you provide an update on what you're seeing in your footprint in terms of competitive fiber build activity? I don't know, any other market observations regarding with fixed wireless that you could share?
Yeah. I think I'd start with, we feel great about our positioning in broadband. Yes, there's more competition all of a sudden. If you take a long term view, both currently and into the future, you know, you look at what we offer currently, it is a terrific combination of really good speed, high reliability, ubiquity for home, where one home doesn't, you know, look completely different than the next home down the block. Doing that at a pretty good value to the consumer with a big loyal base. I think long term, you'd say the consumer's gonna do more and more on our network. We expect that. We want that.
Yeah.
Do you have a low cost to upgrade and, you know, a marginal cost structure that's better than your peers, and a path to get there that doesn't require you to go dig everything up and spend, you know, thousands of dollars per home to get to the next iteration of the network? I think we're completely comfortable in a network strategy that is capital light, capital efficient, but at the end state is multi-gig symmetrical. You take that and surround it with, you know, connectivity broadly. You'd say, what's our convergence product? We've got a wireless offering that's on a great network with a great partner along with Charter driving sort of scale forward in the cable MVNO space, and doing it at really attractive rates for the customer, where the customer can save a lot of money coming our way.
I think we feel great about the convergence products sort of now and into the future. As I mentioned earlier, we're focused on aggregation. We're focused on other things that you can package and sort of surround the consumer with that sort of make our value proposition a terrific value proposition. Now to the competition we're seeing in the market, fiber overbuilding, you know, I think as you mentioned, has picked up. Saying that, fiber's nothing new. You know, we went from a starting point 15, 20 years ago where we didn't compete against fiber to now fiber is in 45% of our markets. We see it across, you know, 45% of our homes passed as the competitor.
That 45 is going to 60 in the next few years. It probably goes against fiber for a very long period of time. I think from a network perspective, we're sort of right there with fiber both now and into the future. From a convergence perspective, I like our hand relative to fibers. That's a known competitor. It's a, you know, costly upgrade to put fiber into the ground. What that tells you is hopefully you understand there's rational economics on the back of that, where there's got to be a certain ARPU that comes out of that to justify a return on fiber investment. That's very much a known competitor that we've competed against for a long period of time and feel great about. Fixed wireless is the newer competitor.
They are clearly having their moment right now, you know, adding close to 1 million subs per quarter. Maybe that degrades, maybe it doesn't in the near future, but I think that, you know, there is a limited runway for that to go penetrate. I think if you step way back and say, take it from the consumer's perspective. Is the consumer, where do they put home broadband in their pecking order of utility and what's relevant to them? Is that gonna increase or decrease in the future in terms of relevance? I can tell you, in my house, it's increasing, and we think in general it's increasing in terms of how relevant that is.
Taking a customer base and saying, "Who's gonna suffer, you know, less reliability, higher latency, you know, deprioritization on a network when wireless traffic takes over, and who's gonna be willing to tolerate that?" We think that's probably a shrinking pool over time. Not to say it's not having its moment right now, but it's a real finite base you can sell into. It's disrupting us a little bit at the lower end of the market. Back to, you know, your prior question, we're gonna go out of our way to protect the existing base, move the existing base forward, and compete rationally in certain segments where we're seeing some disruption.
The core part of your strategy to maintain your network leadership, long term is to invest in upgrading to DOCSIS 4.0. Can you talk about the upgrade plans in more detail in terms of the scope of the project, the time period over which you're gonna execute it, and also the benefits that you see to the business and to your customers?
Yeah. I think we, you know, we laid out a strategy late last year, that probably no update to that. We'll just reiterate it, which was, you know, the network had sort of different iterations and cycles around it. The most recent one is we're gonna go, you know, mid-split, which is, we're taking fiber further into the home. We're virtualizing a lot of the network. The next layer of sort of network infrastructure CapEx, if you will, which has already kicked off, will, in the near term, serve 10 million of our homes. By the end of 2025, we'll serve over 50 million of our homes.
It's a vast majority of our footprint, with a basically a 2 gig product down several hundred megs on the way up, which is multiples of the current offering, at least upstream. You have much higher speeds coming our way, and then that sets up as sort of a foundational layer for DOCSIS 4.0 point O, which we're actually starting to launch in the market this year. We'll have sort of rolling out right on the back of the mid-splits. That is a path towards multi-gig symmetrical in our markets, which will compete against anything out there. Then it's a matter of what do we surround that with, whether it's wireless or whether it's what we're doing in-home to penetrate walls, buildings, et cetera.
Yeah.
I think we feel very good about the network architecture and where we're headed, and we said we can do it in a capital-efficient way. You know, 'cause at all in, this is less than $200 per homes passed to go mid-split virtualization and DOCSIS 4.0 as sort of intensity for the cable business overall for the next few years. Are those investment levels likely to be lumpy from year to year, or should we expect it to be fairly smooth? Yeah. We've guided for 2023 at least, and, you know, we've seen 11% capital intensity in that business for the past couple years. That's the guidance for this year as well.
I think if the, if the root of the question is, do we see some big bubble coming our way, where either we say, "This isn't enough, and we gotta take fiber into the home," or, "We gotta do this more aggressively and come up with the next iteration because multi-gig symmetrical is not enough," the answer is no, right. We are completely comfortable in the path we have in multi-gig symmetrical in the next few years, you know, along a timeline that's gonna be very competitive with everybody else out there. We also have, since we're all kind of ending up at the same point, which is multi-gig symmetrical DOCSIS 4.0. It's where we are, where Charter is. We've got the vendor community pointed towards that, and we'll get there at scale, which I think is, you know, is great and helpful.
I think if you unpack our capital intensity, you know, a little bit more, we sort of have three categories, right? There's CPE going into the home, so customer premise equipment, which has actually been flat to, you know, declining, as a percentage of revenue. We've got our scalable infrastructure component, which is existing footprint, but augmenting speeds in the existing footprint, which is a lot of what we're talking about. Then we have a more sort of short core offensive category, which is line extensions, and that's putting, you know, new network into homes and locations, businesses, et cetera, that we don't currently serve. Those are brand-new opportunities to go serve. I would say of those buckets, you know, CPE, we probably get relief from. The scalable infrastructure part is where a lot of this investment's taking place.
If you further unpack that, you'd say this is a continuum. Historically, every single year, we're splitting nodes. We're taking fiber further into our network. We have at this point hundreds of thousands of route miles of fiber in our network, where vast majority of traffic is actually traveling over fiber in our network. That piece has always been there. It will continue to be there with mid-splits. DOCSIS 4.0, think about it, you know, it largely takes over from we've had DOCSIS 3.0 moving into the system. We had DOCSIS 3.1 moving into the system. Now it's DOCSIS 4.0. Largely a continuum, which gets to your, you know, do you have a bubble question, and is that coming, you know, and the answer being no.
Line extensions, you know, that's an area where we'd probably like to do more. We're doing a little bit more this year. 850,000 homes passed last year. We said we guided to, you know, 1 million this year, which is a pretty healthy uptick. I'd kinda like to see that number move even higher if we have the right opportunity and economically advantageous to do so.
Yeah. Which I think, you know, brings us to the question around the government subsidy programs. You know, what's the opportunity that you envision from footprint expansion through those subsidies, you know, as well as, I guess, through edge outs and line extension that may be outside of those programs?
Yeah. I think that's, you know, it's gonna be a bigger part of what we do, you know, already starting a little bit this year. That's why we guided, you know, 850,000 homes goes up to, you know, 1 million, and that's accommodated for in the 11% capital intensity. I think if you rewind the clock, a lot of the RDOF is, you know, money starting to get deployed now and you're seeing, you know, others. We didn't really participate to a great extent in RDOF, but you're seeing others sort of executing on that now. You could sort of turn that question around on us, say why didn't you participate to a greater extent in RDOF, and why isn't that you at this point? I think, you know, that was a newer program.
It was untested, it was a pretty frothy capital markets environment, which meant there were, you know, a lot of companies in there that actually, you know, some of the bigger winners in RDOF haven't been able to fulfill commitments. None of the remaining winners got a discount as a result, we've got to go back to the drawing board. We sort of saw that as not the best risk reward. I think as we get further into this some of the froth has disappeared, you start to get into a more seasoned process, whether it's just state level or leading into BEAD or other iterations of that afterwards, I would expect us to be a bigger participant.
Okay. maybe shift to mobile here. Xfinity Mobile net adds have accelerated really every year since you launched it in 2017. I think you're at about 9% penetration of your broadband base. what do you think the long-term growth opportunity is in mobile? do you need to be more active in device subsidies or in premium plans? You know, I mean, non-throttle unlimited. you know, what do you have to do in order to continue that momentum?
I think we're really happy with our momentum in mobile. Fourth quarter was a record quarter of net adds for us. We sort of had building momentum throughout the year, which was great to see. We tended to compete more on service plan pricing. We kind of come in and out of the market with different device promotions. I wouldn't say that's sort of the core way we compete. Instead, it's a very good value to the consumer if you look at our service plan pricing. You know, attached obviously to compelling broadband proposition as well. I think for the, you know, the category in general, we're very happy with the underlying MVNO that we have.
It's a capital light approach to wireless that is the right approach for us, and we think actually gives us a better path in convergence than others have. You know, by the way, nice to see Charter doing really well in wireless as well. You know, they have really scaled that business. They've done, you know, some interesting things in terms of the go-to-market strategy that we're paying attention to. If there's an area to learn there and go replicate some of it 'cause it's working really well, we won't hesitate to do that. I only bring that up because it's nice to have when you have the cable MVNO category scaling the way it is, the better Charter does, the more brand awareness there is to cable MVNO as a category. That's a good thing for all of us.
Yeah. Maybe a question here on margins. Cable margins have improved about 600 basis points over the past four years. How should we think about margin trajectory from here, you know, given the more challenged revenue environment, but what you're doing on the, on the cost side?
Yeah. I think we, you know, rewind to last year, even in a competitive, super competitive environment, you know, still expanded margins over 100 basis points. If you sort of unpack that, You mentioned challenged revenue growth environment. We, we still think we've got between the different layers of connectivity, in particular three of them, broadband rate business services, which we'll now disclose much higher margin than our core margins, and wireless. Yeah, we've got the ability to grow revenues. You, you start there, and we're doing it in categories that are margin accretive, right? That's been the transition you've seen for the last few years. As connectivity grows, video and voice are under pressure a little bit. That is a favorable margin trade-off for the business.
I would expect that to continue to be the formula, which means we've got continued opportunities for margin expansion. You know, the cable team has been all over efficiencies in the system. They've been driving that for several years. There's an outlook for more of that, you know, into this year and beyond. Very tightly managed business, which gives us, you know, even further room for margin expansion.
Yeah. Okay. shift to media. Peacock, I think, had its highest quarterly paid net adds in the fourth quarter. finished a strong 2022 with 11 million net adds for the year. Can you talk about the factors that contributed to this strength? You know, content expansion, you know, seasonality I guess in some quarters, churn, gross adds, you know, just talk about some of those trends.
Yeah. I think we, you know, rewind to the initial decision-making on Peacock and how we wanted to launch this, what we wanted it to be. We leaned heavily into pay AVOD and said, we think there's a big market for pay AVOD. We think that's sort of the right market to launch Peacock into. Credit to the team, they got that right. You know, a lot of others are coming their way at this point. While we were later to the game with streaming, we were sort of early to the market figuring out that that was gonna be a super interesting and large segment to go target. I think we've done really well in sort of market positioning. More recently, Peacock has, you know, had a ton of momentum.
5 million customers added in the fourth quarter. If you unpack that and say it's, you know, largely content success and availability that's driven that. We've had, you know, our pay one rights come back to us, which means movies like Jurassic and Minions are moving into a window on Peacock, which is, you know, helpful. We've had day and date opportunities with Peacock. Halloween's a good example of that, the movie. We've had our Hulu content come back, which is next day broadcast plus Bravo, which is, you know, highly popular. That's been beneficial to Peacock. Sports programming where when we negotiate rights, we're negotiating both for linear and then ultimately streaming rights as well.
You know, we can determine what we put where or, you know, if they have both places. That's been beneficial to Peacock as well when you think about Sunday Night Football and World Cup. Those are sort of the contributors that really drove momentum at the end of 2022. As you fast-forward to 2023, you know, just step down the same pecking order. We got, you know, huge opportunity coming out of the studios. We've got a great slate for this year, with Fast X, Mario. Right now we're in the market with Puss in Boots. That'll obviously roll onto streaming in the not too distant future. Super opportunity there to continue, you know, with sort of the pay one window, impacting and positively benefiting Peacock.
We've gotten sports rights, everything I sort of just mentioned, plus some MLB rights, plus Big Ten. We've got, you know, incremental sports rights coming into the equation, and then continuing to drive sort of next day broadcasts, you know, plus Bravo, and then hopefully some, you know, additional success with some of the originals we've put into Peacock. We've had some early success in 2023. If you're not watching it, you should. Both Poker Face and The Traitors are off to a really good start and super interesting. Putting the plug for those. I think, you know, it's content driven, and I think we've had a lot of success more recently with Peacock and will continue to in 2023.
Yeah. How do you think about the economics of Peacock and, you know, how do you balance that with the linear business?
That's the right way to ask the question because that's how we think about it. We're running the business in total, you gotta get the linear business, which is a very good business and a cash flowing business, highly profitable business that you wanna protect, but migrating to streaming. I think first and foremost, how you protect it and think about it is, you know, you make sure you've got content availability for both, and you can make the decisions of what goes where and how things window. That we have, right? Most of our sports rights, if not, you know, almost all are negotiated with both linear and streaming in mind, so we've got the opportunity to sort of pick and choose what we put where.
Most of our content's coming from our own studios, which gives us a lot more flexibility. It's one of the benefits of having the type of studio and content production engine that we do. You know, when you really step back, you'd say you've gotta protect linear, right? Because there's a lot of cash coming out of the business, and even though subscriptions are declining and ratings are declining, we've gotta program that appropriately to sort of preserve the cash flow characteristics of it. Doing so with an eye towards making sure we're migrating to streaming on sort of the right continuum.
The, the same things you mentioned before that were benefit to us, you know, in the back half of 2022 in terms of driving streaming forward and driving subscriptions, you know, gotta have the right amount of content plugged into streaming to get that business off the ground. In streaming, you know, it's obviously a newer business. There's technology costs, there's platform costs, there's, you're building a new brand. It's, it's a costly pivot, and we're right in the middle of that right now. We said this year would be sort of the peak loss year on EBITDA, and then we'd start to rebound beyond 2023. We said roughly $3 billion for this year and then, you know, trajectory beyond this is more favorable as we, you know, head towards breakeven and beyond.
I do think, you know, if you were to think about a guiding principle, you'd say the good news is linear plus streaming is a growth business, right? When you combine those categories, we grew revenues last year. That's true not just for us, it's actually true for the industry as well. That's helpful, right? That means subscriptions in general are growing, engagement is actually growing. You're not losing out to another category, but it's just you gotta manage the pivot from one to the other. What you'd ultimately like to see over time is, you know, last year we added 11 million streaming subscribers. Those were all domestic. That far exceeds the amount of linear subscriber losses that we had. That's a helpful thing.
What you'd like to see is more parity in that trade-off, right? What are the things that would create more parity? You've gotta drive engagement on Peacock. As Jeff said at a conference back in November, I believe, we're seeing 20 hours per month on Peacock at this point. That's actually a pretty high level of engagement. We think we could probably drive that higher. ARPU monetization and churn, you know, loyalty are gonna follow engagement trends. That's the balance we've gotta get right. You wanna make it more of a parity trade-off. You can, you know, you've got a replacement mechanism. You're adding a streaming sub as you lose linear subs, and you've sorta got it covered domestically. Right now, we're sort of in peak expense mode around, you know, funding this transition.
Using that as sort of the guidepost in what you need to aspire to long term, and hence, what the Peacock economics have to turn out to be and what you need a Peacock subscriber to be, I think is instructive in what we're focused on.
Yeah. Would you say that you're looking at EBITDA growth, linear plus streaming, you know, post 2023?
That's right.
on the same basis?
Yep, that's a good way to frame it, looking at the business sort of holistically.
Yeah. All right, great. One thing I wanted to ask you is you recently stopped taking new signups for the free tier on Peacock. I guess two questions on that. First, what are your plans to monetize the existing free user base? Second, is that leading to more signups on Premium or the Premium Plus Tier because people can't get free anymore?
Yeah. I think if you know, what we just talked through and use that as your guide, where we see more engagement is in paid AVOD, right? The better ARPU opportunity over time, the better loyalty opportunity, hence controlling your churn, sits in the paid AVOD category. That's what's behind the move. We think this is, you know, hopefully an accelerant for that category. Within that, we've got the Xfinity sub-base, which is right now on the free tier, but for premium content, and the ability to move that over over time, which should be a boost this year, you know, for paid AVOD sales for Peacock.
Okay. Maybe talk about the studio for a moment. You mentioned the slate. I think, you know, profit there has been really stable for the past five years, even through the pandemic. What's the outlook for the business going forward given the investments you've made into the slate? You know, will it be more of the same, or do you see growth ahead for the studio?
I think we're optimistic it's, you know, it's growth. I think there's two things that are probably beneficial, and as you look at successful studios and the opportunity everybody has ahead, there's probably an industry level opportunity, which is there are just more ways to monetize at this point. There's different windows you can sell into. There's sort of content on a case-by-case basis, what goes where, and more paths to sell into, which is helpful not just for us. That's sort of an industry level comment. What's more unique to us when you get into who can actually execute on this. You gotta have great content coming out of your studios to really effectively execute on this. We were the number two, you know, in worldwide box office last year.
tremendous success with Jurassic and Minions, M3GAN, you know, Halloween, successful. As we look at the year ahead, I think it's more of the same. You know, we're super excited about the Puss in Boots in the market right now, Mario coming, you know, in roughly a month or so, then Fast X not too far behind. It's another great slate for this year, which means you can get into all those windows, serve them more profitably over time. We're bullish on the studio business.
Yeah. Okay. Let's talk about parks. 2022 you had strong performance. What's the outlook like for 2023 in the domestic parks as well as in international, particularly in light of the COVID restrictions last year, and also the attractions that you're adding this year? Can you maybe as part of that talk about how demand is holding up, you know, given concerns over the macro environment and potential impact on the consumer? You know, are you seeing any slowdown in visitation and per caps?
Yes, our parks are off to an exceptional start in 2023. If you rewind to 2022, as you said, our domestic parks actually did really well. Our international parks, you know, Japan sort of came in and out. There were COVID restrictions in place, but when those were released and some government incentives were put in, you know, parks did incredibly well. Beijing was sort of a different story as the condition or the restrictions around COVID were more severe through most of the year, and then those started to get lifted, you know, as we know, towards the back end of last year. Put that all in context, we had a really good year in 2022.
For three of our parks, attendance levels were above 2019 levels, so two domestic parks plus Japan. As you look towards 2023, off to a really good start at this point, where domestic showing no signs of a consumer slowdown in our parks right now. I think we're all waiting for the phone call if that's happening, but it hasn't happened yet. Yeah, clearly parks and experiences are resonating with customers. I think the newer opportunity we will have is to get back to international visitations in the domestic parks that replicate what we used to see in 2019 and prior years. Historically, that was around 30% of our attendance, and those are guests that are staying in the hotels. You know, they're generally engaging a little bit more, a little bit higher per caps.
That's, you know, that's a good base of customers we want back in our, in our parks at the volumes they were in before. That's an opportunity in 2023 in our domestic parks. Internationally, I think, you know, we're seeing a lot of momentum in Japan at this point. We're seeing a lot of new momentum in Beijing, which even though, you know, we launched a while ago at this point, it's still a brand new park for most people and hadn't been able to visit it, and now all of a sudden the restrictions are lifted. I think we've got a very good outlook for parks. If you think about the new attraction slate, which is ultimately gonna be an incremental driver, we just launched Nintendo in Hollywood. That's off to a very good start.
You know, in many ways, we kinda just launched Nintendo in Japan, even though we actually launched a couple years ago. The restrictions made it such that a lot of people haven't actually experienced it, and so we're getting sort of a brand new wave, you know, around that in the park in Japan. Beijing obviously is a new park, so that's completely refreshed brand new attractions. In Orlando, we have, you know, one of, if not the biggest incremental park to be built domestically for the last potentially 20 years, in Epic Universe, which is coming in 2025. We're super excited about Epic. What that's gonna turn, you know, our Orlando destination into is exactly that.
You know, it'll be three large-scale dry parks, plus a wet park, that, you know, make it a potentially week-long destination, which is different than how we've been before, where it was tacked on to some other visit. This is actually, you know, a destination which for hotels, per caps, et cetera, I think can be a really good thing. We're incredibly bullish on the parks business.
Yeah. Can you talk about your plans for investment into the parks business? I mean, you mentioned large-scale expansion in Orlando with Epic. You also recently announced some smaller scale attractions you're planning in Dallas and Las Vegas. How long is the runway for investing in long-term growth in the parks?
You know, we're happy to go invest in parks. It's been, you know, a very high returns for us. We have, you know, in refreshing sort of what's in the parks, it's, you know, translated into strong attendance, translated into strong per caps. We tend to see very strong and immediate payback when we do things like that. We are at an abnormally high part of the cycle right now because we're bringing Epic on. Epic's not an extension of existing park. Epic is a brand new park in Orlando that's, you know, obviously costing us $several billion to bring to the market. This year we said, so 2023, we said parks CapEx will be up another $1.2 billion off of last year's capital, and that we're sort of in peak Epic phase.
I would say we're probably 2023 and 2024 peak CapEx. $1.2 billion up this year. Think about similar levels for 2024, then we'd expect a decline after that. The pipeline beyond Epic's gonna open, you know, middle of 2025. Capital intensity will sort of decline pretty rapidly towards that. What picks up on the back of that are smaller scale projects. We announced one north of Dallas in Frisco. It's gonna be, you know, think about a smaller park leveraging a lot of our kids IP, coming out of our great animation franchises. Clearly a niche of the market that we think is interesting to serve. We think it's complementary to our bigger parks, and we'll act as feeder mechanisms into our bigger parks.
Those are smaller in scale, between Frisco, and then we're, you know, doing something in Las Vegas as well. Both of those in the smaller category, but interesting test and learn using existing IP where we think those will be successful franchises for us.
Yeah. Maybe to wrap up on capital allocation, I think you returned more capital to shareholders last year than any other company in the sector, $18 billion, as you mentioned in dividends and share repurchases. How should we think about capital allocation going forward?
Yeah. I think our priorities here are the same, it's, you know, number one, reinvest in our business. number two, protect the balance sheet, we've sort of been fairly consistent in saying we really like the ratings where we operate, you know, on the credit rating side and wanna protect those. We had a period of time with Sky where we were out of bounds and then got back in bounds and worked really hard to get back in bounds. wanna protect the ratings, and that's roughly 2.4 x net debt to EBITDA. There's a range around that, but if you want a point number, that's sort of what we've guided people to, returning cash to shareholders. As you mentioned, $13 billion in buybacks last year, close to $5 billion in dividends.
We actually just raised the dividend again, sort of high single digits, so really good trajectory and momentum there. I'd go back to the first category. We're investing heavily in the business this year, everything we've just talked about, and we did last year as well in the context of, you know, returning a record amount of capital to shareholders, so really good balance. The investing categories, which, you know, I'm excited about, I'd go back to sort of the, you know, the four things I laid out initially in terms of the buckets where we're investing. Connectivity, we talked through this. We're investing aggressively in the network, right? under the same capital intensity umbrella, but we're gonna take the network pretty aggressively to mid-split DOCSIS 4.0 and multi-gig symmetrical that's gonna keep us competitive versus anybody.
In the platforms business, we're investing in Sky Glass, X1, Xumo, you know, and all these things come together under the global technology platform, which is globally integrated and gives us a real foothold, you know, out to the consumer as their aggregation layer, which we think is incredibly important. On the content side of the business, you know, we obviously wanna fund our studios. You've seen a lot of working capital pick up as we've gotten back to production post-COVID. That's still gonna be a priority for us, getting the streaming pivot right, which we're in investment mode right now because we have to be, but we know what we're pointed to and we know, you know, hopefully what success looks like on the other side. Final category experiences, we just talked through it, right?
We've got a great pipeline both with, you know, additional attractions in existing parks, but then also, you know, a brand new park in Orlando coming in a couple years that we're really excited about.
Yeah. Okay. Great. Well, thanks so much for joining us, that was a great discussion. Thank you.
Great. Thanks, Bryan.