Comcast 2013 Annual Report Download - page 95

Table of Contents
Comcast Corporation
The NBCUniversal Enterprise preferred stock is now held by unaffiliated third parties and pays dividends at a fixed rate of
5.25% per annum. The holders have the right to cause NBCUniversal Enterprise to redeem their shares at a price equal to the
liquidation preference plus accrued but unpaid dividends for a 30 day period beginning on March 19, 2020 and thereafter on every
third anniversary of such date (each such date, a “put date”).
Shares of preferred stock can be called for redemption by
NBCUniversal Enterprise at a price equal to the liquidation preference plus accrued but unpaid dividends one year following each
put date applicable to such shares. Because certain of these redemption provisions are outside of our control, the NBCUniversal
Enterprise preferred stock is presented outside of equity under the caption “
redeemable noncontrolling interests and redeemable
subsidiary preferred stock”
in our consolidated balance sheet. Its initial value was based on the liquidation preference of the
preferred stock and is adjusted for accrued but unpaid dividends. As of December 31, 2013, the fair value of the redeemable
subsidiary preferred stock was $741 million. The estimated fair value was 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.
We recognized an increase to our deferred tax liabilities of $1.6 billion primarily due to an increase in our financial reporting basis in
the consolidated net assets of NBCUniversal Holdings in excess of the tax basis following the Redemption Transaction. In addition,
our consolidated balance sheet now includes certain tax liabilities of NBCUniversal Enterprise related to periods prior to our
acquisition of the common stock of NBCUniversal Enterprise for which we have been indemnified by GE and have recorded a
related indemnification asset. We also expect to realize additional tax benefits in the future as a result of the Redemption
Transaction, which are expected to increase the amounts we have agreed to share with GE. Our expected future payments to GE
are accounted for as contingent consideration. See Note 10 for additional information on the fair value of this contingent
consideration as of December 31, 2013.
Because we maintained control of NBCUniversal Holdings, the difference between the consideration transferred and the recorded
value of GE’
s 49% redeemable noncontrolling common equity interest, and the related tax impacts, were recorded to additional
paid-in capital.
2011
NBCUniversal Transaction
On January 28, 2011, we closed our transaction with GE in which we acquired a 51% controlling interest in NBCUniversal Holdings.
As part of the NBCUniversal transaction, GE contributed the businesses of NBCUniversal, which is a wholly owned subsidiary of
NBCUniversal Holdings. We contributed our national cable networks, our regional sports and news networks, certain of our Internet
businesses and other related assets (the “Comcast Content Business”).
In addition to contributing the Comcast Content Business,
we also made a cash payment to GE of $6.2 billion, which included transaction
-related costs.
In 2011, we recorded $10.9 billion of goodwill in our allocation of purchase price for the NBCUniversal transaction, which was
allocated to our Cable Networks and Broadcast Television segments. Due to the partnership structure of NBCUniversal Holdings,
goodwill related to the NBCUniversal transaction is not deductible for tax purposes. In addition, we also recorded $576 million of
deferred tax liabilities in connection with the NBCUniversal transaction, as well as an additional $35 million of net deferred income
tax liabilities in the allocation of purchase price. See Note 15 for additional information on the partnership structure of NBCUniversal
Holdings and NBCUniversal and other related income tax matters.
Because we maintained control of the Comcast Content Business, the excess of the fair value received over the historical book
value and the related tax impact were recorded to additional paid-in capital.
Comcast 2013 Annual Report on Form 10-K
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