
3.	Acquisitions

Lucasfilm

On December 21, 2012, the Company acquired Lucasfilm Ltd. LLC (“Lucasfilm”), a privately held entertainment company. This acquisition will allow Disney to utilize Lucasfilm's content across our multiple platforms, businesses and markets, which we believe will generate growth as well as significant long-term value.

Under the terms of the merger agreement, Disney issued 37.1 million shares and made a cash payment of $2.2 billion. Based on the closing price of Disney shares on December 21, 2012 of $50.00 per share, the transaction has a value of $4.1 billion.

The Company is required to allocate the purchase price to the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the purchase price over those fair values is recorded as goodwill. The Company is in the process of finalizing the valuation of the assets acquired and liabilities assumed.

The following table summarizes our allocation of the purchase price, which is subject to adjustment once the valuations are completed:



(in billions)	Estimated Fair Value
Intangible assets	$	2.6
Goodwill	2.3
Deferred income taxes	(0.8		)
	$	4.1

Intangible assets primarily consist of intellectual property based on the Star Wars franchise with an estimated useful life of approximately 40 years. The goodwill reflects the value to Disney from leveraging Lucasfilm intellectual property across our distribution channels, taking advantage of Disney's established global reach. The goodwill recorded as part of this acquisition is not deductible for tax purposes.

The amounts of revenue and net loss of Lucasfilm included in the Company's Condensed Consolidated Statement of Income from the closing date through March 30, 2013 are not material.

Hulu

On October 5, 2012, Hulu LLC (Hulu) redeemed Providence Equity Partners' 10% equity interest in Hulu for $200 million, increasing the Company's ownership interest in Hulu from 29% to 32%. In connection with the transaction, Hulu incurred a charge of approximately $174 million primarily related to employee equity-based compensation. The Company's share of the charge totaled $55 million and was recorded in equity in the income of investees in the first quarter of fiscal 2013. The Company has guaranteed $107 million of a $338 million five-year term loan, which was used by Hulu to finance the transaction. The Company will continue to account for its interest in Hulu as an equity method investment.

UTV

Pursuant to a delisting offer process governed by Indian law, on February 2, 2012, the Company purchased publicly held shares and all of the shares held by the founder of UTV Software Communications Limited (UTV), a media and entertainment company headquartered and publicly traded in India, for $377 million. The Company also assumed approximately $300 million of UTV’s borrowings. The purchase increased the Company’s ownership interest to 93% from 50%. As a result, the Company changed its accounting for UTV from an equity method investment to a consolidated subsidiary. The acquisition of UTV supports the Company’s strategic priority of increasing its brand presence and reach in key international markets.

Upon consolidation, the Company recognized a non-cash gain of $184 million ($116 million after tax) as a result of adjusting the carrying value of the Company’s 50% equity investment to its estimated fair value of $405 million. The gain was recorded in “Other income/(expense), net” in the second quarter of fiscal 2012. The fair value was determined based on the Company’s internal valuation of the UTV business using an income approach (discounted cash flow model), which the Company believes provides the most appropriate indicator of fair value.

The Company allocated the purchase price to the estimated fair value of the tangible and intangible assets acquired and liabilities assumed. The majority of the purchase price has been allocated to goodwill, which is not deductible for tax purposes. The goodwill reflects the synergies and increased Indian market penetration expected from combining the operations of UTV and the Company.

To date, the Company has paid $72 million to acquire an incremental 6% interest bringing its ownership percentage to 99%.

Goodwill

The changes in the carrying amount of goodwill for the six months ended March 30, 2013, are as follows:



	Media Networks			Parks and Resorts		Studio Entertainment			Consumer Products		Interactive			Total
Balance at September 29, 2012	$	16,131		$	172	$	5,680		$	1,794	$	1,333		$	25,110
Acquisitions	21			81		960			1,148		152			2,362
Dispositions	—			—		—			—		—			—
Other, net	(22		)	—		(17		)	—		(5		)	(44		)
Balance at March 30, 2013	$	16,130		$	253	$	6,623		$	2,942	$	1,480		$	27,428

The carrying amount of goodwill at March 30, 2013 and September 29, 2012 includes accumulated impairments of $29 million at Interactive.

During the six months ended March 30, 2013, the Company completed the acquisition of Lucasfilm resulting in $2.3 billion of goodwill. See the discussion above on the Lucasfilm acquisition.