Comcast 2006 Annual Report Download - page 59

57 Comcast 2006 Annual Report Notes to Consolidated Financial Statements
$203 million, respectively, have been reported in our balance sheet
as a component of accumulated other comprehensive income
(loss), net of related deferred income taxes of $65 million and $71
million, respectively.
Estimated Fair Value
Our debt had estimated fair values of $28.923 billion and $25.305
billion as of December 31, 2006 and 2005, respectively. The esti-
mated fair value of our publicly traded debt is based on quoted
market values for that debt. Interest rates that are currently avail-
able to us for issuance of debt with similar terms and remaining
maturities are used to estimate fair value for debt issues for which
quoted market prices are not available.
Debt Covenants
Some of our loan agreements require that we maintain financial
ratios based on debt, interest and operating income before depre-
ciation and amortization, as defined in the agreements. We were in
compliance with all financial covenants for all periods presented.
Note 9: Pension, Postretirement and Other Employee
Benefit Plans
We sponsor two pension plans that together provide benefits to
substantially all former employees of a previously acquired com-
pany. As of December 31, 2006, future benefits for both plans have
been frozen. Total pension expense recognized for the years ended
December 31, 2006, 2005 and 2004, was $8 million, $8 million
and $9 million, respectively.
Our postretirement medical benefits cover substantially all of our
employees who meet certain age and service requirements. The
majority of eligible employees participate in the Comcast Postre-
tirement Healthcare Stipend Program (the “Stipend Plan”), and a
small number of eligible employees participate in legacy plans of
acquired companies. The Stipend Plan provides an annual stipend
for reimbursement of healthcare costs to each eligible employee
based on years of service. Based on the benefit design of the Sti-
pend Plan, we are not exposed to the cost of increasing healthcare,
since the amounts under the Stipend Plan are fixed at a predeter-
mined amount. Postretirement expense recognized for the years
ended December 31, 2006, 2005 and 2004, was $29 million, $25
million and $23 million, respectively.
The following table provides condensed information relating to our pension benefits and postretirement benefits for the periods presented:
2006 2005
Pension Postretirement Pension Postretirement
Year Ended December 31 (in millions) Benefits Benefits Benefits Benefits
Benefit obligation $ 184 $ 280 $ 194 $ 247
Fair value of plan assets $ 122 $ — $ 98 $ –
Plan funded status and recorded benefit obligation $ (62) $ (280) $ (96) $ (236)
Portion of benefit obligation not yet recognized as a component
of net periodic benefit cost $ 12 $ (4) $ 18 —
Discount rate 5.75% 6.00% 5.50% 5.75%
Expected return on plan assets 7.00% N/A 7.00% N/A
We sponsor various retirement investment plans that allow eligible
employees to contribute a portion of their compensation through
payroll deductions in accordance with specified guidelines. We
match a percentage of the employees’ contributions up to certain
limits. Expenses related to these plans amounted to $125 million,
$115 million and $100 million for the years ended December 31,
2006, 2005 and 2004, respectively.
We also maintain unfunded, nonqualified deferred compensation
plans, which were created for key executives, other members of
management and nonemployee directors (each a “Participant”).
The amount of compensation deferred by each Participant is based
on Participant elections. Account balances of Participants are cred-
ited with income based generally on a fixed annual rate of interest.
Participants will be eligible to receive distributions of the amounts
credited to their account balance based on elected deferral periods
that are consistent with the plans and applicable tax law. Interest
expense recognized under the plans totaled $50 million, $40 mil-
lion and $33 million for the years ended December 31, 2006, 2005
and 2004, respectively. The unfunded obligation of the plans total
$554 million and $469 million as of December 31, 2006 and 2005,
respectively. We have purchased life insurance policies to fund a
portion of this unfunded obligation. As of December 31, 2006, the
cash surrender value of these policies, which are included in “Other
Assets,” was approximately $40 million.
Note 10: Stockholders’ Equity
Preferred Stock
We are authorized to issue, in one or more series, up to a maxi-
mum of 20 million shares of preferred stock. We can issue the
shares with such designations, preferences, qualifications, privi-
leges, limitations, restrictions, options, conversion rights and other