2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information; and (ii) the guidance of Rule 10-01 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). They reflect the historical Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Parent Company Equity and Condensed Consolidated Statements of Cash Flows of the Company for the periods presented. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the six months ended June 30, 2015 and 2014 may not be indicative of the Company’s future results. These Condensed Consolidated Financial Statements are unaudited and should be read in conjunction with the Company’s audited financial statements and the notes thereto included in our Registration Statement on Form 10.

The accompanying Condensed Consolidated Financial Statements were derived from the condensed consolidated financial statements and accounting records of GHC. These Condensed Consolidated Financial Statements have been prepared solely to present the Company’s historical results of operations, financial position and cash flows for the indicated periods as it was historically managed. The impact of transactions between the Company and the Parent has been included in these Condensed Consolidated Financial Statements and is considered to be effectively settled for cash in the Condensed Consolidated Financial Statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Additional Parent Company Investment (Deficit).

During the periods presented, the Company functioned as part of the larger group of companies controlled by the Parent and accordingly, the Parent provided certain support and overhead functions to the Company. These functions include finance, human resources, legal, information technology, general insurance, risk management and other corporate functions. The costs of such services have been allocated to the Company based on the most relevant allocation methods to the service provided. Management believes such allocations are reasonable and were consistently applied; however, they may not be indicative of the actual expense that would have been incurred had the Company been operating on a stand-alone basis. Refer to Note 10 for details on these allocations.

During the periods presented, the Company participated in a centralized approach to cash management and in financing its operations managed by the Parent. Cash was transferred to the Parent and the Parent funded the Company’s operating and investing activities as needed. Accordingly, cash and cash equivalents at the Parent level were not allocated to the Company in the Condensed Consolidated Financial Statements. Cash transfers to and from the Parent’s cash management accounts were included within net transfers to and from the Parent in the Condensed Consolidated Statements of Parent Company Equity. Parent third-party debt, and the related interest expense, were not allocated to the Company for any of the periods presented as the Company was not the legal obligor on the debt and the Parent borrowings were not directly attributable to the Company’s business.

Certain of the Company’s employees participated in defined benefit pension plans and incentive savings plans (the “Plans”) sponsored by GHC. For the employees that participated in the Plans sponsored by GHC, the Company did not record an asset or liability to recognize the funded status of the Plans in accordance with generally accepted accounting principles for multiemployer benefit plans. Pension expense was allocated to the Company based on the actual participating employees in the Plans and reported within operating and selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. See Note 10 for more information.

The Company’s income taxes have been prepared on a separate return basis as if the Company was a stand-alone entity. The results from being included in the consolidated tax returns are included in Additional Parent Company Investment (Deficit). The Company’s operations have historically been included in GHC’s consolidated U.S. Federal and state tax returns. The Company did not maintain taxes payable to/from Parent and was deemed to settle the annual current tax balances immediately with the legal tax-paying entities in respective jurisdictions. These settlements are reflected as net transfer to/from Parent within Additional Parent Company Investment (Deficit).

As the Company did not operate as a stand-alone entity during the periods presented, the Condensed Consolidated Financial Statements included herein may not necessarily be indicative of the Company’s future performance and may not necessarily reflect what its financial position, results of operations or cash flows would have been had it operated as a stand-alone entity during the periods presented.

Principles of Consolidation.

The accompanying Condensed Consolidated Financial Statements include the accounts of Cable One, Inc. and its wholly owned subsidiary, Cable One VoIP LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates in the Preparation of the

Condensed Consolidated

Fina

ncial Statements

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates.

Recently Adopted and Iss

ued Accounting Pronouncements.

In May 2014, the FASB issued comprehensive new guidance that supersedes all existing revenue recognition guidance. The new guidance requires revenue to be recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new guidance also significantly expands the disclosure requirements for revenue recognition. This guidance, as amended, is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is not permitted. The standard permits two implementation approaches, one requiring retrospective application of the new guidance with a restatement of prior years and one requiring prospective application of the new guidance with disclosure

of results under the old guidance. The Company is in the process of evaluating the impact of this new guidance

on its financial statements, and believes such evaluation will extend over several future periods due to the significance of the changes to the Company’s policies and business processes.

In August 2014, the FASB issued new guidance that requires management to assess the Company’s ability to continue as a going concern, and to provide related disclosures in certain circumstances. This guidance is effective for interim and fiscal years ending after December 15, 2016, with early adoption permitted. The Company does not expect this guidance to have an impact on its financial statements.

In April 2015, the FASB issued new guidance to simplify the presentation of debt issuance costs. This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this guidance. The new guidance should be applied on a full retrospective basis to all periods presented. This guidance is effective for interim and fiscal years beginning after December 15, 2015, with early adoption permitted. The Company is in the process of evaluating the financial statement impact of adopting this guidance.