Charter 2007 Annual Report Download - page 110

Company’s consolidated financial condition, results of operations
or liquidity.
Charter is a party to lawsuits and claims that arise in the
ordinary course of conducting its business. The ultimate outcome
of these other legal matters pending against the Company or its
subsidiaries cannot be predicted, and although such lawsuits and
claims are not expected individually to have a material adverse
effect on the Company’s consolidated financial condition, results
of operations or liquidity, such lawsuits could have, in the
aggregate, a material adverse effect on the Company’s consoli-
dated financial condition, results of operations or liquidity.
Regulation in the Cable Industry
The operation of a cable system is extensively regulated by the
Federal Communications Commission (“FCC”), some state gov-
ernments and most local governments. The FCC has the author-
ity to enforce its regulations through the imposition of
substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the
revocation of FCC licenses needed to operate certain transmis-
sion facilities used in connection with cable operations. The 1996
Telecom Act altered the regulatory structure governing the
nation’s communications providers. It removed barriers to com-
petition in both the cable television market and the telephone
market. Among other things, it reduced the scope of cable rate
regulation and encouraged additional competition in the video
programming industry by allowing telephone companies to pro-
vide video programming in their own telephone service areas.
Future legislative and regulatory changes could adversely
affect the Company’s operations, including, without limitation,
additional regulatory requirements the Company may be
required to comply with as it offers new services such as
telephone.
25. EMPLOYEE BENEFIT PLAN
The Company’s employees may participate in the Charter Com-
munications, Inc. 401(k) Plan. Employees that qualify for partic-
ipation can contribute up to 50% of their salary, on a pre-tax
basis, subject to a maximum contribution limit as determined by
the Internal Revenue Service. The Company matches 50% of the
first 5% of participant contributions. The Company made contri-
butions to the 401(k) plan totaling $7 million, $8 million, and
$6 million for the years ended December 31, 2007, 2006, and
2005, respectively.
26. RECENTLY ISSUED ACCOUNTING STANDARDS
In September 2006, the FASB issued SFAS 157, Fair Value
Measurements, which establishes a framework for measuring fair
value and expands disclosures about fair value measurements.
SFAS 157 is effective for fiscal years beginning after November 15,
2007 and interim periods within those fiscal years. The Company
will adopt SFAS 157 effective January 1, 2008. In February 2008,
the FASB issued FASB Staff Position (FSP) 157-2, Effective Date
of FASB Statement No. 157, which deferred the effective date of
SFAS 157 to fiscal years beginning after November 15, 2008 for
nonfinancial assets and nonfinancial liabilities. The Company
does not expect that the adoption of SFAS 157 will have a
material impact on its financial statements.
In February 2007, the FASB issued SFAS 159, The Fair
Value Option for Financial Assets and Financial Liabilities – Includ-
ing an amendment of FASB Statement No. 115, which allows
measurement at fair value of eligible financial assets and liabilities
that are not otherwise measured at fair value. If the fair value
option for an eligible item is elected, unrealized gains and losses
for that item shall be reported in current earnings at each
subsequent reporting date. SFAS 159 also establishes presentation
and disclosure requirements designed to draw comparison
between the different measurement attributes the company elects
for similar types of assets and liabilities. SFAS 159 is effective for
fiscal years beginning after November 15, 2007. The Company
does not expect that the adoption of SFAS 159 will have a
material impact on its financial statements.
In December 2007, the FASB issued SFAS 141R, Business
Combinations: Applying the Acquisition Method, and SFAS 160,
Consolidations, which provide guidance on the accounting and
reporting for business combinations and minority interests in
consolidated financial statements. SFAS 141R and SFAS 160 are
effective for fiscal years beginning after December 15, 2008. Early
adoption is prohibited. The Company is currently assessing the
impact of SFAS 141R and SFAS 160 on its financial statements.
Charter does not believe that any other recently issued, but
not yet effective accounting pronouncements, if adopted, would
have a material effect on the Company’s accompanying financial
statements.
27. PARENT COMPANY ONLY FINANCIAL STATEMENTS
As the result of limitations on, and prohibitions of, distributions,
substantially all of the net assets of the consolidated subsidiaries
are restricted from distribution to Charter, the parent company.
The following condensed parent-only financial statements of
Charter account for the investment in Charter Holdco under the
equity method of accounting. The financial statements should be
read in conjunction with the consolidated financial statements of
the Company and notes thereto.
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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2007 FORM 10-K
Notes to Consolidated Financial Statements (continued)