Comcast 2013 Annual Report Download - page 100

Table of Contents
Comcast Corporation
Equity Method
We use the equity method to account for investments in which we have the ability to exercise significant influence over the
investee’
s operating and financial policies or where we hold significant partnership or LLC interests. Equity method investments are
recorded at cost and are adjusted to recognize (i) our proportionate share of the investee’
s net income or losses after the date of
investment, (ii) amortization of the recorded investment that exceeds our share of the book value of the investee’
s net assets,
(iii) additional contributions made and dividends received and (iv) impairments resulting from other-than-
temporary declines in fair
value. For some investments, we record our share of the investee’
s net income or loss one quarter in arrears due to the timing of
our receipt of such information. Gains or losses on the sale of equity method investments are recorded to other income (expense),
net. If an equity method investee were to issue additional securities that would change our proportionate share of the entity, we
would recognize the change, if any, as a gain or loss in our consolidated statement of income.
The Weather Channel
In June 2013, we received a distribution from The Weather Channel Holding Corp. (“The Weather Channel”)
of $152 million, of
which $128 million was recorded as a return of its investment in The Weather Channel and included under the caption
“
return of
capital from investees” in our consolidated statement of cash flows.
Hulu
In July 2013, we entered into an agreement to provide capital contributions totaling $247 million to Hulu, LLC (“Hulu”),
which we
had previously accounted for as a cost method investment. This represented an agreement to provide our first capital contribution
to Hulu since our interest was acquired as part of the NBCUniversal transaction, therefore we began to apply the equity method of
accounting for this investment. The change in the method of accounting for this investment required us to recognize our
proportionate share of Hulu’s accumulated losses from the date of the NBCUniversal transaction through July 2013.
Cost Method
We use the cost method to account for investments not accounted for under the fair value method or the equity method.
AirTouch Communications, Inc.
We hold two series of preferred stock of AirTouch Communications, Inc. (“AirTouch”),
a subsidiary of Vodafone, which are
redeemable in April 2020. As of December 31, 2013 and 2012, the estimated fair value of the AirTouch preferred stock was $1.7
billion and $1.8 billion, respectively.
The dividend and redemption activity of the AirTouch preferred stock determines the dividend and redemption payments associated
with substantially all of the preferred shares issued by one of our consolidated subsidiaries, which is a VIE. The subsidiary has
three series of preferred stock outstanding with an aggregate redemption value of $1.75 billion. Substantially all of the preferred
shares are redeemable in April 2020 at a redemption value of $1.65 billion. As of both December 31, 2013 and 2012, the two
redeemable series of subsidiary preferred shares were recorded at $1.5 billion, and those amounts are included in other noncurrent
liabilities. As of December 31, 2013 and 2012, these redeemable subsidiary preferred shares had an estimated fair value of $1.7
billion and $1.8 billion, respectively. The estimated fair values are based on Level 2 inputs using pricing models whose inputs are
derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term
of the financial instrument. The one nonredeemable series of subsidiary preferred shares was recorded at $100 million as of both
December 31, 2013 and 2012, and those amounts are included in noncontrolling interests in our consolidated balance sheet. The
carrying amounts of the nonredeemable subsidiary preferred shares approximate their fair value.
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Comcast 2013 Annual Report on Form 10-
K