Acquisitions

Maker Studios

On May 7, 2014, the Company acquired Maker Studios, Inc. (Maker), a leading network of online video content, for approximately $500 million of cash consideration. Maker shareholders may also receive up to $450 million of additional cash upon final determination of Maker’s achievement of certain performance targets for calendar years 2014 and 2015. The Company recognized a $198 million liability for the fair value of the contingent consideration (determined by a probability weighting of potential payouts), of which approximately $100 million was paid in fiscal 2015 for calendar year 2014. Subsequent changes in the estimated fair value, if any, will be recognized in earnings. The majority of the purchase price has been allocated to goodwill, which is not deductible for tax purposes. Goodwill reflects the synergies expected from enhancing the presence of Disney’s franchises and brands through the use of Maker’s distribution platform, advanced technology and business intelligence capability. The revenue and net income of Maker included in the Company’s Consolidated Statements of Income for fiscal years 2015 and 2014 were not material.

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 $50.00 per share closing price of Disney shares on December 21, 2012, the transaction had a value of $4.1 billion.

The following table summarizes our allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the purchase price over those fair values and the related deferred income tax liability was allocated to goodwill, which is not deductible for tax purposes.



(in billions)	Estimated Fair Value
Intangible assets	$	2.6
Goodwill	2.3
Deferred income tax liability	(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.

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 and borrowed $338 million under a five-year term loan, which was guaranteed by the Company and the other partners. The Company’s share of the charge totaled $55 million and was recorded in equity in the income of investees in fiscal 2013.

In July 2013, Fox Entertainment Group, NBCUniversal and the Company agreed to provide Hulu with $750 million in cash to fund Hulu’s operations and investments for future growth. As of October 3, 2015, the Company has contributed its $257 million share, which increased its ownership to 33%. The Company will continue to guarantee its share of Hulu’s $338 million term loan.

The Company accounts for its interest in Hulu as an equity method investment.

Goodwill

The changes in the carrying amount of goodwill for the years ended October 3, 2015 and September 27, 2014 are as follows:



	Media Networks			Parks and Resorts		Studio Entertainment			Consumer Products			Interactive			Total
Balance at Sept. 28, 2013	$	16,071		$	253	$	6,591		$	2,942		$	1,467		$	27,324
Acquisitions	270			15		219			4			39			547
Dispositions	—			—		—			—			—			—
Other, net ⁽¹⁾	37			23		46			21			(117		)	10
Balance at Sept. 27, 2014	$	16,378		$	291	$	6,856		$	2,967		$	1,389		$	27,881
Acquisitions	3			—		2			—			—			5
Dispositions	—			—		—			(1		)	—			(1		)
Other, net	(27		)	—		(22		)	—			(10		)	(59		)
Balance at Oct. 3, 2015	$	16,354		$	291	$	6,836		$	2,966		$	1,379		$	27,826

⁽¹⁾ Includes the reallocation of $120 million of goodwill from the Interactive segment to other operating segments as a result of restructuring the Interactive segment.