Comcast 2014 Annual Report Download - page 104

Table of Contents
Comcast Corporation
Liberty Media
In October 2013, Liberty Media Corporation (“Liberty Media”)
redeemed 6.3 million shares of Liberty Media Series A common stock
(“Liberty stock”)
that had been held by us as collateral under certain of our prepaid forward sale agreements in exchange for all of
the equity of a subsidiary of Liberty Media. The fair value of the Liberty stock at the date of the close of the transaction was $937
million. The assets of the subsidiary of Liberty Media included cash of $417 million, Liberty Media’
s interests in one of
NBCUniversal’
s contractual obligations and a wholly owned operating subsidiary, Leisure Arts, Inc. Following the close of this
transaction, we now consolidate the subsidiary transferred to us, and the liability associated with NBCUniversal’
s contractual
obligation is eliminated in consolidation.
Clearwire LLC
In July 2013, in connection with Sprint Communications, Inc.’s (“Sprint”) acquisition of Clearwire Corporation (“Clearwire”),
Sprint
acquired our investment of 89 million Class A shares of Clearwire for $443 million. As a result, we recognized a pretax gain of $443
million in our consolidated statement of income, which represented the recognition of cumulative unrealized gains previously
recorded in accumulated other comprehensive income (loss).
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 (1) our proportionate share of the investee’
s net income or loss after the date of
investment, (2) amortization of the recorded investment that exceeds our share of the book value of the investee’
s net assets,
(3) additional contributions made and dividends received, and (4) 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 our 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 we acquired our interest in it as part of our acquisition of a controlling interest in NBCUniversal Holdings in 2011 (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.
99
Comcast 2014 Annual Report on Form 10-
K