Charter 2015 Annual Report Download - page 106

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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- 9
Valuation of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets to be held and used when events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Such events or changes in circumstances could include such
factors as impairment of the Company’s indefinite life assets, changes in technological advances, fluctuations in the fair value of
such assets, adverse changes in relationships with local franchise authorities, adverse changes in market conditions or a deterioration
of operating results. If a review indicates that the carrying value of such asset is not recoverable from estimated undiscounted
cash flows, the carrying value of such asset is reduced to its estimated fair value. While the Company believes that its estimates
of future cash flows are reasonable, different assumptions regarding such cash flows could materially affect its evaluations of asset
recoverability. No impairments of long-lived assets to be held and used were recorded in 2015, 2014 and 2013.
Revenue Recognition
Revenues from residential and commercial video, Internet and voice services are recognized when the related services are provided.
Advertising sales are recognized at estimated realizable values in the period that the advertisements are broadcast. In some cases,
the Company coordinates the advertising sales efforts of other cable operators in a certain market and remits amounts received
from customers less an agreed-upon percentage to such cable operator. For those arrangements in which the Company acts as a
principal, the Company records the revenues earned from the advertising customer on a gross basis and the amount remitted to
the cable operator as an operating expense.
Fees imposed on Charter by various governmental authorities are passed through on a monthly basis to the Company’s customers
and are periodically remitted to authorities. Fees of $255 million, $248 million and $234 million for the years ended December 31,
2015, 2014 and 2013, respectively, are reported in video, voice and commercial revenues, on a gross basis with a corresponding
operating expense because the Company is acting as a principal. Other taxes, such as sales taxes imposed on the Company's
customers, collected and remitted to state and local authorities, are recorded on a net basis because the Company is acting as an
agent in such situation.
The Company’s revenues by product line are as follows:
Year Ended December 31,
2015 2014 2013
Video $ 4,587 $ 4,443 $ 4,040
Internet 3,003 2,576 2,186
Voice 539 575 644
Residential revenue 8,129 7,594 6,870
Small and medium business 764 676 553
Enterprise 363 317 259
Commercial revenue 1,127 993 812
Advertising sales 309 341 291
Other 189 180 182
$ 9,754 $ 9,108 $ 8,155
Programming Costs
The Company has various contracts to obtain basic, digital and premium video programming from programming vendors whose
compensation is typically based on a flat fee per customer. The cost of the right to exhibit network programming under such
arrangements is recorded in operating expenses in the month the programming is available for exhibition. Programming costs are