Comcast 2007 Annual Report Download - page 45

Notes to Consolidated Financial Statements
Note 1: Organization and Business
We are a Pennsylvania corporation and were incorporated in
December 2001. Through our predecessors, we have developed,
managed and operated cable systems since 1963. We classify our
operations in two reportable segments: Cable and Programming.
Our Cable segment is primarily involved in the management and
operation of cable systems in the United States. As of December 31,
2007, we served approximately 24.1 million video subscribers,
13.2 million high-speed Internet subscribers and 4.6 million phone
subscribers. Our regional sports and news networks are also included
in our Cable segment.
Our Programming segment operates our consolidated national
programming networks, including E!, The Golf Channel, VERSUS,
G4 and Style.
Our other businesses consist primarily of Comcast Spectacor and
Comcast Interactive Media. Comcast Spectacor owns the Phila-
delphia Flyers, the Philadelphia 76ers and two large, multipurpose
arenas in Philadelphia, and manages other facilities for sporting
events, concerts and other events. Comcast Interactive Media
develops and operates Comcast’s Internet businesses focused
on entertainment, information and communication, including
Comcast.net, Fancast, thePlatform and Fandango. We also own
equity method investments in other programming networks.
Note 2: Summary of Significant
Accounting Policies
Basis of Consolidation
The accompanying consolidated financial statements include (i) all
of our accounts, (ii) all entities in which we have a controlling voting
interest (“subsidiaries”) and (iii) variable interest entities (“VIEs”)
required to be consolidated in accordance with generally accepted
accounting principles in the United States (“GAAP”). We have
eliminated all significant intercompany accounts and transactions
among consolidated entities.
Our Use of Estimates
We prepare our consolidated financial statements in conformity
with GAAP, which requires us to make estimates and assump-
tions that affect the reported amounts and disclosures. Actual
results could differ from those estimates. Estimates are used when
accounting for various items, such as allowances for doubtful
accounts, investments, derivative financial instruments, asset
impairment, nonmonetary transactions, certain acquisition-related
liabilities, programming-related liabilities, pensions and other post-
retirement benefits, revenue recognition, depreciation and amor-
tization, income taxes and legal contingencies.
Fair Values
We have determined the estimated fair value amounts presented in
these consolidated financial statements using available market
information and appropriate methodologies. However, consid-
erable judgment is required in interpreting market data to develop
the estimates of fair value. The estimates presented in these con-
solidated financial statements are not necessarily indicative of the
amounts that we could realize in a current market exchange. The
use of different market assumptions and/or estimation method-
ologies may have a material effect on the estimated fair value
amounts. We base these fair value estimates on pertinent informa-
tion available to us as of the end of each reporting period or at the
time such amounts are recorded.
Cash Equivalents
The carrying amounts of our cash equivalents approximate their
fair value. Our cash equivalents primarily consist of commercial
paper, money market funds, U.S. government obligations and cer-
tificates of deposit with maturities of less than three months when
purchased.
Investments
We classify unrestricted publicly traded investments as avail-
able-for-sale (“AFS”) or trading securities and record them at fair
value. For AFS securities, we record unrealized gains or losses
resulting from changes in fair value between measurement dates
as a component of other comprehensive income (loss), except
when we consider declines in value to be other than temporary.
These other than temporary declines are recognized as a compo-
nent of investment income (loss), net. For trading securities, we
record unrealized gains or losses resulting from changes in fair
value between measurement dates as a component of investment
income (loss), net. We recognize realized gains and losses asso-
ciated with our fair value method investments using the specific
identification method. Purchases of, or proceeds from, the sale of
trading securities are classified as cash flows from operating activ-
ities, while cash flows from all other investment securities are
classified as cash flows from investing activities. Upon adoption of
Statement of Financial Accounting Standards (“SFAS”) No. 159,
“The Fair Value Option for Financial Assets and Financial Liabilities”
(“SFAS No. 159”), the classification of purchases of, or proceeds
from, the sale of trading securities will change to cash flows from
investing activities based upon our intent with respect to these
securities (see Note 3).
43 Comcast 2007 Annual Report on Form 10-K