Comcast 2014 Annual Report Download - page 172

Table of Contents
NBCUniversal Media, LLC
Note 11: Fair Value Measurements
The accounting guidance related to financial assets and financial liabilities (“financial instruments”)
establishes a hierarchy that
prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach,
income approach and cost approach). Our assessment of the significance of a particular input to the fair value measurement
requires judgment and may affect the valuation of financial instruments and their classification within the fair value hierarchy.
Our financial instruments that are accounted for at fair value on a recurring basis were not material for all periods presented, except
for liabilities associated with our contractual obligations. The fair values of the contractual obligations in the table below are
primarily based on certain expected future discounted cash flows, the determination of which involves the use of significant
unobservable inputs. As the inputs used are not quoted market prices or observable inputs, we classify these contractual
obligations as Level 3 financial instruments.
The most significant unobservable inputs we use are our estimates of the future revenue we expect to generate from certain of our
businesses. The discount rates used in the measurements of fair value as of December 31, 2014 were between 12% and 13% and
are based on the underlying risk associated with our estimate of future revenue and the terms of the respective contracts. The fair
value adjustments to contractual obligations are sensitive to the assumptions related to future revenue, as well as to current interest
rates, and therefore the adjustments are recorded to other income (expense), net in our consolidated statement of income.
Changes in Contractual Obligations
Nonrecurring Fair Value Measures
We have assets and liabilities that are required to be recorded at fair value on a nonrecurring basis when certain circumstances
occur. In the case of film, television or stage play production costs, upon the occurrence of an event or change in circumstance that
may indicate that the fair value of a production is less than its unamortized costs, we determine the fair value of the production and
record an adjustment for the amount by which the unamortized capitalized costs exceed the production’
s fair value. The estimated
fair value of a production is based on Level 3 inputs that primarily use an analysis of future expected cash flows. Adjustments to
capitalized film and stage play production costs of $26 million, $167 million and $161 million were recorded in 2014, 2013 and
2012, respectively.
(in millions)
Balance, December 31, 2013
$
747
Fair value adjustments
208
Payments
(72
)
Balance, December 31, 2014
$
883
167
Comcast 2014 Annual Report on Form 10-
K