Charter 2002 Annual Report Download - page 90

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002, 2001 and 2000
(dollars in millions, except where indicated)
not permit the recognition of the customer relationship asset not previously recognized. Accordingly, the
analysis of the impairment could not include approximately $373 million and $2.9 billion attributable to
customer relationship values as of January 1, 2002 and October 1, 2002, respectively.
In determining whether its franchises have an indeÑnite life, the Company considered the exclusivity of
the franchise, its expected costs of franchise renewals, and the technological state of the associated cable
systems with a view to whether or not the Company is in compliance with any technology upgrading
requirements. Certain franchises did not qualify for indeÑnite-life treatment due to technological or
operational factors that limit their lives. These franchise costs will be amortized on a straight-line basis over
10 years.
The eÅect of the adoption of SFAS No. 142 as of December 31, 2002 and 2001 is presented in the
following table (in millions):
December 31,
2002 2001 2000
Gross Net Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount Amount Amortization Amount
IndeÑnite-lived intangible
assets:
Franchises with indeÑnite
lives ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $17,076 $3,428 $13,648 $22,255 $3,428 $18,827 $20,742 $2,000 $18,742
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 54 Ì 54 Ì Ì Ì Ì Ì Ì
$17,130 $3,428 $13,702 $22,255 $3,428 $18,827 $20,742 $2,000 $18,742
Finite-lived intangible assets:
Franchises with Ñnite lives ÏÏ $ 103 $ 24 $ 79 $ 99 $ 15 $ 84 $ 99 $ 6 $ 93
Franchise amortization expense for the year ended December 31, 2002 was $9 million, which represents
the amortization relating to franchises that did not qualify for indeÑnite-life treatment under SFAS No. 142,
including costs associated with franchise renewals. For each of the next Ñve years, amortization expense
relating to these franchises is expected to be approximately $8 million. Franchise amortization expense for the
years ended December 31, 2001 and 2000 was $1.4 billion and $1.4 billion, respectively.
F-22