Cablevision 2011 Annual Report Download - page 54

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Plant and Equipment:
Costs incurred in the construction of the Company's cable television system, including line extensions to,
and upgrade of, the Company's hybrid fiber-coaxial infrastructure and headend facilities are capitalized.
These costs consist of materials, subcontractor labor, direct consulting fees, and internal labor and related
costs associated with the construction activities. The internal costs that are capitalized consist of salaries
and benefits of Company employees and the portion of facility costs, including rent, taxes, insurance and
utilities, that supports the construction activities. These costs are depreciated over the estimated life of
the plant (10 to 25 years) and headend facilities (4 to 25 years). Costs of operating the plant and the
technical facilities, including repairs and maintenance, are expensed as incurred.
Costs incurred to connect businesses or residences that have not been previously connected to the
infrastructure or digital platform are also capitalized. These costs include materials, subcontractor labor,
internal labor to connect, provision and provide on-site and remote technical assistance and other related
costs associated with the connection activities. In addition, on-site and remote technical assistance during
the provisioning process for new digital product offerings are capitalized. The departmental activities
supporting the connection process are tracked through specific metrics, and the portion of departmental
costs that is capitalized is determined through a time weighted activity allocation of costs incurred based
on time studies used to estimate the average time spent on each activity. New connections are amortized
over the estimated useful lives of 5 years or 12 years for residence wiring and feeder cable to the home,
respectively. The portion of departmental costs related to reconnection, programming service up- and
down- grade, repair and maintenance, and disconnection activities are expensed as incurred.
The estimated useful lives assigned to our property, plant and equipment are reviewed on an annual basis
or more frequently if circumstances warrant and such lives are revised to the extent necessary due to
changing facts and circumstances. Any changes in estimated useful lives are reflected prospectively.
Refer to Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K for
a discussion of our accounting policies with respect to the policies discussed above and other items.
Legal Contingencies
The Company is party to various lawsuits and proceedings and is subject to other claims that arise in the
ordinary course of business, some involving claims for substantial damages. The Company records an
estimated liability for these claims when management believes the loss from such matters is probable and
reasonably estimable. The Company reassesses the risk of loss as new information becomes available and
adjusts liabilities as necessary. The actual cost of resolving a claim may be substantially different from
the amount of the liability recorded. Refer to Note 18 to our consolidated financial statements included in
this Annual Report on Form 10-K for a discussion of our legal contingencies.
Certain Transactions
The following transactions occurred during the periods covered by this Management's Discussion and
Analysis of Financial Condition and Results of Operations:
2011 Transactions
On June 30, 2011, Cablevision completed the AMC Networks Distribution. As a result of the AMC
Networks Distribution, the Company no longer consolidates the financial results of AMC Networks for
the purpose of its own financial reporting and the historical financial results of AMC Networks have been
reflected in the Company's consolidated financial statements as discontinued operations for all periods
presented through the AMC Networks Distribution date.