Note 4: Related Party Transactions
In the ordinary course of our business, we enter into transactions with Comcast.
We generate revenue from Comcast primarily from the distribution of our cable network programming and, to a lesser extent, the sale of advertising and our owned programming, and we incur expenses primarily related to various support services provided by Comcast to us.
On March 19, 2013, as part of the Comcast cash management process, we and Comcast entered into a revolving credit agreement under which we can borrow up to $3 billion from Comcast and Comcast can borrow up to $3 billion from us. Amounts owed by us to Comcast under the revolving credit agreement, including accrued interest, are presented under the caption “note payable to Comcast” in our consolidated balance sheet. The revolving credit agreements bear interest at floating rates equal to the interest rate under the Comcast and Comcast Cable Communications, LLC revolving credit facility (the “Comcast revolving credit facility”). The interest rate on the Comcast revolving credit facility consists of a base rate plus a borrowing margin that is determined based on Comcast's credit rating. As of December 31, 2013, the borrowing margin for London Interbank Offered Rate based borrowings was 1.00%.
In addition, Comcast is the counterparty to one of our contractual obligations. As of December 31, 2013, the carrying value of the liability associated with this contractual obligation was $383 million. See Note 10 for additional information on this contractual obligation.
The following tables present transactions with Comcast and its consolidated subsidiaries that are included in our consolidated financial statements.
| Consolidated Balance Sheet | |||||||
| Successor | |||||||
| December 31 (in millions) | 2013 | 2012 | |||||
| Transactions with Comcast and consolidated subsidiaries | |||||||
| Receivables, net | $ | 228 | $ | 204 | |||
| Accounts payable and accrued expenses related to trade creditors | $ | 56 | $ | 25 | |||
| Accrued expenses and other current liabilities | $ | 37 | $ | 1 | |||
| Note payable to Comcast | $ | 799 | $ | - | |||
| Other noncurrent liabilities | $ | 383 | $ | - | |||
| Consolidated Statement of Income | |||||||
| Successor | |||||||
| (in millions) | Year Ended December 31, 2013 | Year Ended December 31, 2012 | For the Period January 29, 2011 to December 31, 2011 | ||||
| Transactions with Comcast and consolidated subsidiaries | |||||||
| Revenue | $ | 1,262 | $ | 1,228 | $ | 1,025 | |
| Operating costs and expenses | $ | (190) | $ | (175) | $ | (72) | |
Distributions to NBCUniversal Holdings
In addition to the transactions above, we make distributions to NBCUniversal Holdings on a periodic basis to enable its owners to meet their obligations to pay taxes on taxable income generated by our businesses. We also make quarterly distributions to NBCUniversal Holdings to enable it to make its required quarterly payments to NBCUniversal Enterprise at an initial annual rate of 8.25% on the $9.4 billion aggregate liquidation preference of its preferred units. These distributions are presented under the caption “distributions to member” in our consolidated statement of cash flows. Following the close of the Redemption Transaction, none of these distributions to NBCUniversal Holdings are attributable to GE.
In connection with the Redemption Transaction, we also made a distribution of $3.2 billion to NBCUniversal Holdings to fund a portion of the Redemption Transaction. This distribution is presented separately in our consolidated statement of cash flows.
Transactions with GE
Following the close of the Redemption Transaction and the subsequent sale of NBCUniversal Enterprise's preferred stock and senior notes by GE to unaffiliated third parties in March 2013, we no longer consider GE to be a related party.
In February 2013, Comcast closed an agreement with GE, General Electric Capital Corporation (“GECC”) and LIN TV under which, among other things, we purchased a note held by Station Venture Holdings, LLC (“Station Venture”) from GECC for $602 million, which effectively settled a liability of $482 million that had been recorded in the allocation of purchase price associated with the Joint Venture transaction. Due to the related party nature of this transaction, the excess of the purchase price of the Station Venture note over the recorded amount of the liability was recorded to member's capital. Other than the Station Venture transaction, dividend payments to GE that are included under the caption “dividends” on our consolidated statement of changes in equity and our consolidated statement of cash flows, and the transactions discussed in Note 3, the amounts related to our transactions with GE and its consolidated subsidiaries that occurred prior to the close of the Redemption Transaction were not material.