Comcast 2014 Annual Report Download - page 163

Table of Contents
NBCUniversal Media, LLC
Revenue Recognition
In May 2014, the FASB and the International Accounting Standards Board updated the accounting guidance related to revenue
recognition. The updated accounting guidance provides a single, contract-
based revenue recognition model to help improve
financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of
standards to which entities have to refer. The updated accounting guidance will be effective for us on January 1, 2017, and early
adoption is not permitted. The updated accounting guidance provides companies with alternative methods of adoption. We are
currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial
statements and our method of adoption.
Note 4: Significant Transactions
2013
Redemption Transaction
On March 19, 2013, Comcast acquired GE’
s 49% common equity interest in NBCUniversal Holdings that it did not already own for
approximately $16.7 billion (the “redemption transaction”).
In addition to the redemption transaction, we purchased from GE certain
properties we occupy at 30 Rockefeller Plaza in New York City and CNBC’
s headquarters in Englewood Cliffs, New Jersey for $1.4
billion.
The total consideration for these transactions consisted of $11.4 billion of cash on hand (of which we funded $4.6 billion); $4 billion
of senior debt securities issued by NBCUniversal Enterprise, Inc. (“NBCUniversal Enterprise”),
a holding company whose principal
assets are its interests in NBCUniversal Holdings; $750 million of cash funded through Comcast’
s commercial paper program;
$1.25 billion of borrowings under NBCUniversal Enterprise’
s credit facility, which replaced our credit facility; and $725 million
aggregate liquidation preference of Series A cumulative preferred stock of NBCUniversal Enterprise. After the close of the
transaction, GE sold the interests in NBCUniversal Enterprise’
s senior debt securities and preferred stock it acquired in the
redemption transaction to unaffiliated third parties.
Following the close of the redemption transaction, Comcast owns 96% of NBCUniversal Holdings’
common units and NBCUniversal
Enterprise owns the remaining 4%. NBCUniversal Enterprise is now a consolidated subsidiary of Comcast, but we do not have any
ownership interests in NBCUniversal Enterprise. NBCUniversal Enterprise also owns all of NBCUniversal Holdings’
preferred units
with a $9.4 billion aggregate liquidation preference. NBCUniversal Holdings is required to make quarterly payments to
NBCUniversal Enterprise at an initial rate of 8.25% per annum on the $9.4 billion aggregate liquidation preference of the preferred
units. On March 1, 2018, and thereafter on every fifth anniversary of such date, this rate will reset to 7.44% plus the yield on
actively traded United States Treasury securities having a 5 year maturity. NBCUniversal Holdings has the right to redeem all of the
preferred units during the 30 day period beginning on March 1, 2018, and NBCUniversal Enterprise has the right to cause
NBCUniversal Holdings to redeem 15% of its preferred units during the 30 day period beginning on March 19, 2020. The price and
units in a redemption initiated by either party will be based on the liquidation preference plus accrued but unpaid dividends and
adjusted, in the case of an exercise of NBCUniversal Enterprise’
s right, to the extent the equity value of NBCUniversal Holdings is
less than the liquidation preference. Our cash flows are, and will continue to be, the primary source of funding for the required
payments and for any future redemption of the NBCUniversal Holdings preferred units.
Comcast 2014 Annual Report on Form 10
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