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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2014
Fair Value Measurements | Note 8: 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). Level 1 consists of financial instruments whose values are based on quoted market prices for identical financial instruments in an active market. Level 2 consists of financi al instruments that are valued by using models or other valuation methodologies. These models use inputs that are observable either directly or indirectly. Level 3 consists of financial instruments whose values are determined by using pricing models that use sig nificant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as financial instruments for which the determination of fair value requires significant management judgment or estimation. Our financial inst ruments that are accounted for at fair value on a recurring basis are presented in the table below.
Recurring Fair Value Measures
|  | Fair Value as of
|  | September 30, 2014 |  | December 31, 2013
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |
Trading securities (see Note 6) | $ | 450 | $ | - | $ | - | $ | 450 |  | $ | 3,956
Available-for-sale securities |  | 6 |  | 121 |  | 10 |  | 137 |  |  | 389
Interest rate swap agreements |  | - |  | 81 |  | - |  | 81 |  |  | 110
Other |  | - |  | 67 |  | 1 |  | 68 |  |  | 81
Total | $ | 456 | $ | 269 | $ | 11 | $ | 736 |  | $ | 4,536
Liabilities |  |  |  |  |  |  |  |  |  |  |
Derivative component of prepaid forward sale agreements |  |  |  |  |  |  |  |  |  |  |
| and indexed debt instruments (see Note 6) | $ | - | $ | 288 | $ | - | $ | 288 |  | $ | 2,816
Contractual obligation |  | - |  | - |  | 818 |  | 818 |  |  | 747
Contingent consideration |  | - |  | - |  | 653 |  | 653 |  |  | 684
Other |  | - |  | 8 |  | - |  | 8 |  |  | 16
Total | $ | - | $ | 296 | $ | 1,471 | $ | 1,767 |  | $ | 4,263
Contractual Obligation and Contingent Consideration The estimated fair values of the contractual obligation and contingent consideration in the table above are primarily based on certain expected future discounted cash flows, the determination of which involves the use of significant unobservable inputs. The most significant unobservable inputs we use include our estimates of the future revenue we expect to generate from certain NBCUniversal businesses, which are related to our contractual obligation, an d future net tax benefits that will affect payments to General Electric Company (“GE”), which are related to our contingent consideration. The discount rates used in the measurements of fair value were between 5% and 13% and are based on the underlying risk associated with our estimate of future revenue, the terms of the respective contracts, and the uncertainty in the timing of our payments to GE. The fair value adjustments to contractual obligation and contingent cons ideration are sensitive to th e assumptions related to future revenue and tax benefits, respectively, as well as to current interest rates, and therefore, the adjustments are recorded to other income (expense), net in our condensed consolidated statement of income.
Changes in Contractual Obligation and Contingent Consideration
(in millions) |  | Contractual Obligation |  | Contingent Consideration
Balance, January 1, 2014 | $ | 747 | $ | 684
Fair value adjustments |  | 120 |  | 23
Payments |  | (49) |  | (54)
Balance, September 30, 2014 | $ | 818 | $ | 653
Fair Value of Redeemable Subsidiary Preferred Stock Financial Instrument As of September 30, 2014, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $752 million. The estimated fair value is based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial inst rument.
NBCUniversal Media, LLC [Member] |
Fair Value Measurements | Note 7: 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 clas sification 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 the liability associated with our contractual obligation. The estimated fair value of the contractual obligation is 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 inpu ts, we classify the contractual obligation as a Level 3 financial instrument. The most significant unobservable inputs we use include our estimates of the future revenue we expect to generate from certain of our businesses. The discount rates used in the m easurement of fair value were between 1 2% and 1 3% and are based on the underlying risk associated with our estimate of future revenue and the terms of the respective contract. The fair value adjustments to the contractual obligation are sensitive to the ass umptions related to future revenue, as well as to current interest rates, and therefore, the adjustments are recorded to other income (expense), net in our condensed consolidated statement of income.
Changes in Contractual Obligation
(in millions) |  | Contractual Obligation
Balance, January 1, 2014 | $ | 747
Fair value adjustments |  | 120
Payments |  | (49)
Balance, September 30, 2014 | $ | 818

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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