Charter 2015 Annual Report Download - page 104

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013
(dollars in millions, except share or per share data or where indicated)
F- 7
1. Organization and Basis of Presentation
Organization
Charter Communications, Inc. (“Charter”) is a holding company whose principal asset is a 100% common equity interest in Charter
Communications Holding Company, LLC (“Charter Holdco”). Charter owns cable systems through its subsidiaries, which are
collectively, with Charter, referred to herein as the “Company.”
The Company is a cable operator providing services in the United States. The Company offers to residential and commercial
customers traditional cable video programming, Internet services, and voice services, as well as advanced video services such as
video on demand, high definition television, and digital video recorder (“DVR”) service. The Company sells its cable video
programming, Internet, voice, and advanced video services primarily on a subscription basis. The Company also sells local
advertising on cable networks and on the Internet and provides fiber connectivity to cellular towers and office buildings.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”).
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant judgments
and estimates include capitalization of labor and overhead costs; depreciation and amortization costs; valuations and impairments
of property, plant and equipment, intangibles and goodwill; income taxes; contingencies and programming expense. Actual results
could differ from those estimates.
Certain prior period amounts have been reclassified to conform with the 2015 presentation. See Note 20 for balance sheet
reclassifications to deferred financing fees and deferred taxes that resulted from the adoption of new accounting standards.
2. Summary of Significant Accounting Policies
Consolidation
The accompanying consolidated financial statements include the accounts of Charter and its wholly owned subsidiaries. The
Company consolidates based upon evaluation of the Company’s power, through voting rights or similar rights, to direct the activities
of another entity that most significantly impact the entity’s economic performance; its obligation to absorb the expected losses of
the entity; and its right to receive the expected residual returns of the entity. All significant inter-company accounts and transactions
among consolidated entities have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. These
investments are carried at cost, which approximates market value. Cash and cash equivalents consist primarily of money market
funds and commercial paper.
Restricted Cash and Cash Equivalents
Proceeds from the issuance of certain long-term debt were deposited into escrow accounts and will be used for acquisition financing
and are contractually restricted as to their withdrawal or use. See Note 8. The amounts held in escrow are classified as noncurrent
restricted cash and cash equivalents in the Company's consolidated balance sheets. The Company's restricted cash and cash
equivalents were primarily invested in money market funds and 90-day or less commercial paper. The changes in restricted cash
and cash equivalents are presented as an investing activity in the Company's consolidated statements of cash flows.