Charter 2010 Annual Report Download - page 125

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                                         
F-0 F-PB
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010, 2009, AND 2008
(dollars in millions, except share or per share data or where indicated)
e cost approach relies on management’s assumptions regarding current material and labor costs required to rebuild and repurchase significant
components of the Company’s property, plant and equipment along with assumptions regarding the age and estimated useful lives of the
Company’s property, plant and equipment.
Intangible Assets — e Company identified the following intangible assets to be valued: (i) franchise marketing rights, (ii) customer
relationships, and (iii) trademarks.
Franchise marketing rights and customer relationships were valued using an income approach and were valued at $5.3 billion and $2.4 billion,
respectively, as of November 30, 2009. See Note 5 to the consolidated financial statements for a description of the methods used to value
intangible assets.
e relief from royalty method was used to value trademarks at $158 million as of November 30, 2009. See Note 5 to the consolidated
financial statements for a description of the methods used to value intangible assets.
Long-Term Debt – Long-term debt was valued at fair value using quoted market prices.
We recorded a pre-tax gain of $5.7 billion resulting from the aggregate changes to the net carrying value of our pre-emergence assets and
liabilities to record their fair values under fresh start accounting. Income tax benefit for the eleven months ended November 30, 2009
(Predecessor) includes $92 million of benefit related to these adjustments and to gains due to Plan effects.
Reorganization items, net is presented separately in the condensed consolidated statements of operations and represents items of income, expense,
gain or loss that are realized or incurred by the Company because it was in reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Reorganization items, net consisted of the following items:
Successor Predecessor
Year Ended
December 31,
2010
One Month Ended
December 31,
2009
Eleven Months Ended
November 30, 2009
Penalty interest, net $ -- $ -- $ 351
Loss on debt at allowed claim amount -- -- 97
Professional fees 6 3 167
Paul Allen management fee settlement – related party -- 11
Other -- -- 18
Total Reorganization Items, Net $ 6 $ 3 $ 644
Reorganization items, net consist of adjustments to record liabilities at the allowed claim amounts, including the write off of deferred
financing fees, and other expenses directly related to the Company’s bankruptcy proceedings. Post-emergence professional fees relate to claim
settlements, plan implementation and other transition costs related to the Plan.
 
In October 2009, the FASB issued guidance included in ASU 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). ASU
2009-13 sets forth requirements that must be met for an entity to recognize revenue from the sale of a delivered item that is part of a multiple-
element arrangement when other items have not yet been delivered. e Company adopted ASU 2009-13 on January 1, 2011. e adoption
did not have a material impact to its consolidated financial statements.