3	Acquisitions

AETN

A&E Television Networks LLC (AETN) operates multiple cable programming services and was owned 42.1% by the Company, 42.1% by the Hearst Corporation (Hearst) and 15.8% by NBCUniversal. On August 22, 2012, AETN redeemed NBCUniversal’s entire 15.8% equity interest for approximately $3.0 billion. Approximately $2.5 billion represents the enterprise value of NBCUniversal’s equity interest in AETN, and the balance of approximately $0.5 billion represents the value of tax benefits expected to be generated as a result of the transaction, which was paid to NBCUniversal in accordance with the amended and restated limited liability company agreement of AETN. The redemption of NBCUniversal’s interest was financed with third-party borrowings and equity contributions of $300 million each from the Company and Hearst. As a result of the transaction, the Company’s and Hearst’s ownership interest each increased to 50%. The Company will continue to account for its interest in AETN 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 fiscal 2012 Consolidated Statement of Income. 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 has performed a final allocation of 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 amortizable for tax purposes. The goodwill reflects the synergies and increased Indian market penetration expected from combining the operations of UTV and the Company.

In accordance with Indian securities regulation, the Company can be required to purchase any outstanding UTV shares at the election of each remaining UTV shareholder for 1,100 Indian rupees per share until March 16, 2013. To date, the Company has paid $63 million to acquire an incremental 6% interest bringing its ownership percentage to 99%.

Seven TV

On November 18, 2011, the Company acquired a 49% ownership interest in Seven TV, a broadcast television network in Russia, for $300 million. Following the acquisition, this network was converted to an ad-supported, free-to-air Disney Channel. The Company accounts for its interest in Seven TV as an equity method investment.

Playdom

On August 27, 2010, the Company acquired Playdom, Inc. (Playdom), a company that develops online social games. This acquisition is designed to strengthen the Company’s interactive game portfolio and provide access to a new customer base. Total consideration was approximately $563 million, subject to certain conditions and adjustments, of which approximately $108 million is subject to vesting conditions and recognized as post-close compensation expense. Additional consideration of up to $200 million may be paid if Playdom achieves predefined revenues and earnings targets for calendar year 2012. The Company initially recognized the fair value (determined by a probability weighting of the potential payouts) of the additional consideration as a liability. Subsequent changes in the estimate of fair value, up to the ultimate amount to be paid, if any, are recognized in earnings. We do not anticipate making any significant payments in respect of the additional consideration.

The Disney Store Japan

On March 31, 2010, the Company acquired all of the outstanding shares of Retail Networks Company Limited (The Disney Store Japan) in exchange for a $17 million note. At the time of the acquisition, The Disney Store Japan had a cash balance of $13 million. In connection with the acquisition, the Company recognized a $22 million non-cash gain from the deemed termination of the existing licensing arrangement. The gain is reported in “Other income /(expense), net” in the fiscal 2010 Consolidated Statements of Income.

Marvel

On December 31, 2009, the Company completed a cash and stock acquisition for the outstanding capital stock of Marvel Entertainment, Inc. (Marvel), a character-based entertainment company. This acquisition is consistent with the Company’s strategic value creation through utilization of intellectual properties across Disney’s multiple platforms and territories.

The acquisition purchase price totaled $4.2 billion. In accordance with the terms of the acquisition, Marvel shareholders received $30 per share in cash and 0.7452 Disney shares for each Marvel share they owned. In total, the Company paid $2.4 billion in cash and distributed shares valued at $1.9 billion (approximately 59 million shares of Disney common stock at a price of $32.25).

The Company is required to allocate the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values. The excess of the purchase price over those fair values is recorded as goodwill.

The following table summarizes our allocation of the purchase price:


	Estimated Fair Value
Cash and cash equivalents	$	105
Accounts receivable and other assets		137
Film costs		304
Intangible assets		2,870
Goodwill		2,269

Total assets acquired		5,685

Accounts payable and other liabilities		(320)
Deferred income taxes		(1,033)
Noncontrolling interests		(90)

	$	4,242

Intangible assets primarily consist of character-based intellectual property with an estimated useful life of approximately 40 years.

The goodwill reflects the value to Disney from leveraging Marvel intellectual property across our distribution channels, taking advantage of Disney’s established global reach. The goodwill recorded as part of this acquisition is not amortizable for tax purposes.

Goodwill

The changes in the carrying amount of goodwill for the years ended September 29, 2012 and October 1, 2011 are as follows:


	Media Networks			Parks and Resorts		Studio Entertainment			Consumer Products			Interactive			Total
Balance at October 2, 2010	$	15,737		$	171	$	5,268		$	1,805		$	1,119		$	24,100
Acquisitions		9			—		—			—			10			19
Dispositions		(17	)		—		—			—			—			(17	)
Other, net		(1	)		1		16			(8	)		35			43

Balance at October 1, 2011	$	15,728		$	172	$	5,284		$	1,797		$	1,164		$	24,145
Acquisitions		434			—		431			—			179			1,044
Dispositions		—			—		(1	)		(3	)		—			(4	)
Other, net		(31	)		—		(34	)		—			(10	)		(75	)

Balance at September 29, 2012	$	16,131		$	172	$	5,680		$	1,794		$	1,333		$	25,110

The carrying amount of goodwill at September 29, 2012, October 1, 2011, and October 2, 2010 includes accumulated impairments of $29 million at Interactive.