Charter 2011 Annual Report Download - page 99

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 15
fair value of the customer relationships. Customer relationships are amortized on an accelerated method over useful lives of 11-15
years based on the period over which current customers are expected to generate cash flows. Customer relationships are evaluated
upon the occurrence of events or changes in circumstances indicating that the carrying amount of an asset may not be recoverable.
The fair value of trademarks is determined using the relief-from-royalty method which applies a fair royalty rate to estimated
revenue. Royalty rates are estimated based on a review of market royalty rates in the communications and entertainment industries.
As the Company expects to continue to use each trademark indefinitely, trademarks have been assigned an indefinite life and are
tested annually for impairment, or more frequently as warranted by events or changes in circumstances. The Company’s 2011
and 2010 impairment analyses did not result in any trademark impairment charges.
As of December 31, 2011 and 2010, indefinite lived and finite-lived intangible assets are presented in the following table:
Indefinite lived intangible assets:
Franchises
Goodwill
Trademarks
Finite-lived intangible assets:
Customer relationships
Other intangible assets
Successor
December 31,
2011
Gross
Carrying
Amount
$ 5,288
954
158
$ 6,400
$ 2,368
79
$ 2,447
Accumulated
Amortization
$ —
—
—
$ —
$ 664
16
$ 680
Net
Carrying
Amount
$ 5,288
954
158
$ 6,400
$ 1,704
63
$ 1,767
2010
Gross
Carrying
Amount
$ 5,257
951
158
$ 6,366
$ 2,358
53
$ 2,411
Accumulated
Amortization
$ —
—
$ —
$ 358
7
$ 365
Net
Carrying
Amount
$ 5,257
951
158
$ 6,366
$ 2,000
46
$ 2,046
Amortization expense related to customer relationships and other intangible assets for the years ended December 31, 2011 and
2010 (Successor), one month ended December 31, 2009 (Successor) and eleven months ended November 30, 2009 (Predecessor)
was $315 million, $337 million, $28 million and $5 million, respectively. Franchises, customer relationships and goodwill increased
by $31 million, $10 million and $3 million, respectively, as a result of cable system acquisitions completed during the year ended
December 31, 2011 (Successor). During the year ended December 31, 2010 (Successor), franchises was reduced by $15 million
and customer relationships was reduced by $5 million, related to cable asset sales, net of acquisitions completed in 2010.
The Company expects amortization expense on its finite-lived intangible assets will be as follows.
2012
2013
2014
2015
2016
Thereafter
$ 292
265
239
213
186
572
$ 1,767
Actual amortization expense in future periods could differ from these estimates as a result of new intangible asset acquisitions or
divestitures, changes in useful lives, impairments and other relevant factors.