Cablevision 2014 Annual Report Download - page 122

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
F-33
In October 2012, the Company and AMC Networks settled the litigation with DISH Network. Pursuant to the settlement agreement,
DISH Network paid $700,000 to a joint escrow account for the benefit of the Company and AMC Networks. On April 8, 2013,
the Company and AMC Networks reached agreement, pursuant to the VOOM Litigation Agreement, on the final allocation of the
proceeds of the settlement. The parties agreed that (a) the Company would be allocated a total of $525,000 of the cash settlement
payment; and (b) AMC Networks would retain $175,000 of the cash settlement payment (in addition to the long-term affiliation
agreements entered into with DISH Network as part of the settlement). The final allocation was approved by independent
committees of the Boards of Directors of the Company and AMC Networks. On April 9, 2013, the Company received $175,000
from AMC Networks (in addition to the $350,000 initially distributed to the Company from the joint escrow account in December
2012). The proceeds of $175,000 and $350,000 was recorded as a gain in discontinued operations for the years ended December 31,
2013 and 2012, respectively.
NOTE 6. PROPERTY, PLANT AND EQUIPMENT
Costs incurred in the construction of the Company's cable systems, 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 the Company's 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, 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-grade and down-grade, repair and maintenance, and disconnection activities
are expensed as incurred.
Property, plant and equipment (including equipment under capital leases) consist of the following assets, which are depreciated
or amortized on a straight-line basis over the estimated useful lives shown below:
December 31, Estimated
2014 2013 Useful Lives
Customer equipment........................................................................................ $ 1,954,512 $ 2,104,305 3 to 5 years
Headends and related equipment ..................................................................... 1,437,681 1,276,819 4 to 25 years
Central office equipment.................................................................................. 811,320 758,691 5 to 10 years
Infrastructure.................................................................................................... 5,695,519 5,651,633 3 to 25 years
Equipment and software .................................................................................. 1,507,500 1,386,848 3 to 10 years
Construction in progress (including materials and supplies)........................... 97,955 113,260
Furniture and fixtures....................................................................................... 94,265 92,631 5 to 12 years
Transportation equipment................................................................................ 217,486 201,806 5 to 18 years
Buildings and building improvements............................................................. 303,344 279,614 10 to 40 years
Leasehold improvements ................................................................................. 345,942 362,932 Term of lease
Land ................................................................................................................. 14,538 14,662
12,480,062 12,243,201
Less accumulated depreciation and amortization ............................................ (9,454,315)(9,264,848)
$ 3,025,747 $ 2,978,353
During the years ended December 31, 2014 and 2013, the Company capitalized certain costs aggregating $153,675 and $127,390,
respectively, related to the acquisition and development of internal use software, which are included in the table above.