Charter 2015 Annual Report Download - page 112

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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- 15
cash flows associated with the customer relationships. No impairment of customer relationships was recorded in the years ended
December 31, 2015, 2014 or 2013.
The fair value of trademarks is determined using the relief-from-royalty method, a variation of the income approach, which applies
a fair royalty rate to estimated revenue derived under the Company's trademarks. The fair value of the intangible is estimated to
be the present value of the royalty saved because the Company owns the trademarks. 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 using either a
qualitative analysis or quantitative analysis as elected by management. As with the Company’s franchise impairment testing, in
2015 the Company elected to perform a qualitative trademark impairment assessment and concluded that trademarks are not
impaired.
As of December 31, 2015 and 2014, indefinite lived and finite-lived intangible assets are presented in the following table:
December 31,
2015 2014
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Indefinite lived intangible assets:
Franchises $ 6,006 $ — $ 6,006 $ 6,006 $ — $ 6,006
Goodwill 1,168 — 1,168 1,168 — 1,168
Trademarks 159 — 159 159 — 159
Other intangible assets 4 — 4 4 — 4
$ 7,337 $ — $ 7,337 $ 7,337 $ — $ 7,337
Finite-lived intangible assets:
Customer relationships $ 2,616 $ 1,760 $ 856 $ 2,616 $ 1,511 $ 1,105
Other intangible assets 173 82 91 151 60 91
$ 2,789 $ 1,842 $ 947 $ 2,767 $ 1,571 $ 1,196
Amortization expense related to customer relationships and other intangible assets for the years ended December 31, 2015, 2014
and 2013 was $271 million, $299 million and $299 million, respectively.
The Company expects amortization expense on its finite-lived intangible assets will be as follows.
2016 $ 237
2017 204
2018 169
2019 133
2020 95
Thereafter 109
$ 947
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.