Comcast 2008 Annual Report Download - page 54

Other. The aggregate purchase price of these other 2008 acquis-
itions was approximately $610 million. None of these acquisitions
were material to our consolidated financial statements for the year
ended December 31, 2008.
2007 Acquisitions
The Houston Transaction
In July 2006, we initiated the dissolution of Texas and Kansas City
Cable Partners (the “Houston transaction”), our 50%-50% cable
system partnership with Time Warner Cable. On January 1, 2007,
the distribution of assets by Texas and Kansas City Cable Partners
was completed and we received the cable system serving Hous-
ton, Texas (the “Houston asset pool”) and Time Warner Cable
received the cable systems serving Kansas City, south and west
Texas, and New Mexico (the “Kansas City asset pool”). We
accounted for the distribution of assets by Texas and Kansas City
Cable Partners as a sale of our 50% interest in the Kansas City
asset pool in exchange for acquiring an additional 50% interest in
the Houston asset pool. This transaction resulted in an increase of
approximately 700,000 video customers. The estimated fair value
of the 50% interest of the Houston asset pool we received was
approximately $1.1 billion and resulted in a pretax gain of approx-
imately $500 million, which is included in other income (expense).
We recorded our 50% interest in the Houston asset pool as a step
acquisition in accordance with SFAS No. 141.
The results of operations for the cable systems acquired in the
Houston transaction have been reported in our Cable segment
since August 1, 2006 and in our consolidated financial statements
since January 1, 2007 (the date of the distribution of assets). The
weighted-average amortization period of the franchise-related
customer relationship intangible assets acquired was 7 years. As a
result of the Houston transaction, we reversed deferred tax
liabilities of approximately $200 million, which were primarily
related to the excess of tax basis of the assets acquired over the
tax basis of the assets exchanged, and reduced the amount of
goodwill that would have otherwise been recorded in the acquis-
ition. Substantially all of the goodwill recorded is expected to be
amortizable for tax purposes.
The table below presents the purchase price allocation to assets
acquired and liabilities assumed as a result of the Houston
transaction.
(in millions)
Property and equipment $ 870
Franchise-related customer relationships 266
Cable franchise rights 1,954
Goodwill 426
Other assets 267
Total liabilities (73)
Net assets acquired $3,710
Other 2007 Acquisitions
In April 2007, we acquired Fandango, an online entertainment site
and movie-ticket service. The results of operations of Fandango
have been included in our consolidated financial statements since
the acquisition date and are reported in Corporate and Other. In
June 2007, we acquired Rainbow Media Holdings LLC’s 60%
interest in Comcast SportsNet Bay Area (formerly known as Bay
Area SportsNet) and its 50% interest in Comcast SportsNet New
England (formerly known as Sports Channel New England),
expanding our regional sports networks. The completion of this
transaction resulted in our 100% ownership in Comcast SportsNet
New England and 60% ownership in Comcast SportsNet Bay
Area. In August 2007, we acquired the cable system of Patriot
Media serving approximately 81,000 video customers in central
New Jersey. The results of operations of Patriot Media, Comcast
SportsNet Bay Area and Comcast SportsNet New England have
been included in our consolidated financial statements since their
acquisition dates and are reported in our Cable segment. The
aggregate purchase price of these other 2007 acquisitions was
approximately $1.288 billion. None of these acquisitions were
material to our consolidated financial statements for the year
ended December 31, 2007.
2006 Acquisitions
The Adelphia and Time Warner Transactions
In April 2005, we entered into an agreement with Adelphia
Communications (“Adelphia”) in which we agreed to acquire cer-
tain assets and assume certain liabilities of Adelphia (the “Adelphia
acquisition”). At the same time,weandTimeWarnerCableInc.
and certain of its affiliates (“TWC”) entered into several agreements
in which we agreed to (i) have our interest in Time Warner
Entertainment Company, L.P. (“TWE”) redeemed, (ii) have our
interest in TWC redeemed (together with the TWE redemption, the
“redemptions”) and (iii) exchange certain cable systems acquired
from Adelphia and certain Comcast cable systems with TWC (the
“exchanges”). On July 31, 2006, these transactions were com-
pleted. We collectively refer to the Adelphia acquisition, the
redemptions and the exchanges as the “Adelphia and Time
Warner transactions.” Also in April 2005, Adelphia and TWC
entered into an agreement for the acquisition of substantially all of
the remaining cable system assets and the assumption of certain
of the liabilities of Adelphia.
The Adelphia and Time Warner transactions resulted in a net
increase of 1.7 million video customers, a net cash payment by us
of approximately $1.5 billion and the disposition of our ownership
interests in TWE and TWC and the assets of two cable system
partnerships.
Comcast 2008 Annual Report on Form 10-K 52