Comcast 2014 Annual Report Download - page 176

Table of Contents
NBCUniversal Media, LLC
The cost associated with Comcast’s share-based compensation is based on an award’
s estimated fair value at the date of grant
and is recognized over the period in which any related services are provided. Comcast uses the Black-
Scholes option pricing model
to estimate the fair value of stock option awards. RSUs are valued based on the closing price of Comcast Class A common stock
on the date of grant and are discounted for the lack of dividends, if any, during the vesting period. The table below presents the
weighted
-average fair value on the date of grant of RSUs and Class A common stock options awarded under Comcast’
s various
plans to employees of NBCUniversal and the related weighted-average valuation assumptions.
Note 14: Income Taxes
Components of Income Tax Expense
We are a limited liability company, and our company is disregarded for U.S. federal income tax purposes as an entity separate from
NBCUniversal Holdings, a tax partnership. NBCUniversal and our subsidiaries are not expected to incur any significant current or
deferred U.S. domestic income taxes. Our tax liability is comprised primarily of withholding tax on foreign licensing activity and
income taxes on foreign earnings. As a result of our tax status, the deferred tax assets and liabilities included in our consolidated
balance sheet at December 31, 2014 and 2013 were not material.
In jurisdictions in which we are subject to income taxes, we base our provision for income taxes on our current period income,
changes in our deferred income tax assets and liabilities, income tax rates, changes in estimates of our uncertain tax positions, and
tax planning opportunities available in the jurisdictions in which we operate. We recognize deferred tax assets and liabilities when
there are temporary differences between the financial reporting basis and tax basis of our assets and liabilities and for the expected
benefits of using net operating loss carryforwards. When a change in the tax rate or tax law has an impact on deferred taxes, we
apply the change based on the years in which the temporary differences are expected to reverse. We record the change in our
consolidated financial statements in the period of enactment.
We classify interest and penalties, if any, associated with our uncertain tax positions as a component of income tax expense.
Year ended December 31
2014
2013
2012
RSUs fair value
$
48.04
$
37.79
$
27.51
Stock options fair value
$
11.09
$
8.86
$
7.42
Stock Option Valuation Assumptions:
Dividend yield
1.8
%
1.9
%
2.2
%
Expected volatility
24.0
%
25.2
%
29.0
%
Risk-free interest rate
2.2
%
1.3
%
1.7
%
Expected option life (in years)
6.5
7.0
7.0
Year ended December 31 (in millions)
2014
2013
2012
Foreign
Current income tax expense
$
33
$
77
$
69
Deferred income tax expense
(8
)
(16
)
16
Withholding tax expense
108
123
103
U.S. domestic tax expense
10
22
9
Income tax expense
$
143
$
206
$
197
171
Comcast 2014 Annual Report on Form 10-
K