Comcast 2014 Annual Report Download - page 75

Table of Contents
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. The change in equity in net income (loss), net in 2013 was primarily due to $876 million of income that was recorded in 2012
related to our portion of a gain on the sale of advanced wireless services spectrum licenses through our investment in SpectrumCo,
as well as $142 million of total equity losses recorded in 2013 attributable to our investment in Hulu.
Other Income (Expense), Net
The change in other income (expense), net in 2014 was primarily due to the net impact of an impairment of $236 million of our
equity method investment in, and loans with, a regional sports cable network based in Houston, Texas and a $108 million gain
related to our sale of wireless communications spectrum licenses in 2013, as well as a $27 million favorable settlement of a
contingency recorded in 2014 related to the AT&T Broadband transaction in 2002. The change in other income (expense), net in
2013 was primarily due to a $1 billion gain recorded in 2012 related to the sale of our investment in A&E Television Networks LLC
(“A&E Television Networks”),
as well as the net impact of the $236 million impairment related to our equity method investment in a
regional sports cable network and a $108 million gain related to our sale of wireless communications spectrum licenses in 2013.
Consolidated Income Tax Expense
Income tax expense reflects federal and state income taxes, adjustments associated with uncertain tax positions and, until we
acquired General Electric Company’s (“GE”)
49% common equity interest in NBCUniversal Holdings that we did not already own in
March 2013 (the “NBCUniversal redemption transaction”),
the partnership structure of NBCUniversal Holdings whereby income tax
expense was not recorded on the portion of its consolidated income that was attributable to GE’
s noncontrolling interest. Our
effective income tax rate in 2014, 2013 and 2012 was 31.1%, 35.8% and 32.3%, respectively.
In September 2014, we reduced our accruals for uncertain tax positions and the related accrued interest on these tax positions and,
as a result, our income tax expense decreased by $724 million. See Note 15 to Comcast’
s consolidated financial statements for
additional information on the changes in our accruals for uncertain tax positions and related interest on these tax positions. In 2013,
our effective income tax rate increased compared to 2012 due to the NBCUniversal redemption transaction, following which we
recorded income tax expense on all of NBCUniversal’
s consolidated income. In addition, our 2013 income tax expense was
reduced by $158 million due to the nontaxable portion of the increase in tax basis associated with the redemption of Liberty Media
Series A common stock in October 2013.
Our income tax expense in the future may continue to be impacted by adjustments to uncertain tax positions and related interest,
and changes in tax laws. We expect our 2015 annual effective tax rate to be in the range of 37% to 39%, absent changes in tax
laws or significant changes in uncertain tax positions. In addition, the Time Warner Cable merger and the divestiture transactions
may result in changes to our existing deferred income tax liabilities due to changes in the apportionment factors related to state
income taxes. Any such changes will be reflected in income tax expense as of the respective closing dates.
Consolidated Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Subsidiary Preferred Stock
The decreases in net income attributable to noncontrolling interests and redeemable subsidiary preferred stock in 2014 and 2013
were primarily due to the NBCUniversal redemption transaction.
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