Time Warner Cable 2006 Annual Report Download - page 131

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As of December 31, 2006 and 2005, the Company’s other intangible assets and related accumulated
amortization included the following (in millions):
Gross
Accumulated
Amortization Net Gross
Accumulated
Amortization Net
December 31, 2006 December 31, 2005
Other intangible assets
subject to amortization:
Customer relationships ..... $ 1,128 $ (323) $ 805 $ 246 $ (169) $ 77
Renewal of cable
franchises ............. 134 (100) 34 122 (94) 28
Other .................. 101 (64) 37 74 (36) 38
Total ................ $ 1,363 $ (487) $ 876 $ 442 $ (299) $ 143
Other intangible assets not
subject to amortization:
Cable franchises .......... $39,342 $(1,294) $38,048 $28,939 $(1,378) $27,561
Other .................. 3 — 3 3 — 3
Total ................ $39,345 $(1,294) $38,051 $28,942 $(1,378) $27,564
The Company recorded amortization expense of $167 million in 2006 and $72 million in each of 2005 and
2004. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense
is expected to be $250 million in 2007, $233 million in 2008, $231 million in 2009, $136 million in 2010 and
$6 million in 2011. As acquisitions and dispositions occur in the future and as purchase price allocations are
finalized, these amounts may vary.
The Company recorded the following intangible assets in conjunction with the Transactions (in millions):
Depreciation/
Amortization
Periods
Customer relationships and other ............................. $ 882 4years
Cable franchises ......................................... 10,487 non-amortizable
Goodwill, net of adjustments
(a)
.............................. 312 non-amortizable
Total ................................................. $11,681
(a)
Includes goodwill recorded as a result of the preliminary purchase price allocation for the Adelphia Acquisition and the Exchange of
$1.050 billion, partially offset by a $738 million adjustment to goodwill related to the excess of the carrying value of the Comcast
minority interests in TWC and TWE acquired over the total fair value of the Redemptions. Of the $738 million adjustment to
goodwill, approximately $719 million is associated with the TWC Redemption and approximately $19 million is associated with the
TWE Redemption. Refer to Note 5 for additional information regarding the Transactions.
8. INVESTMENTS AND JOINT VENTURES
The Company had investments of $2.072 billion and $1.967 billion as of December 31, 2006 and 2005,
respectively. These investments are comprised almost entirely of equity method investees.
As of December 31, 2006, investments accounted for using the equity method primarily consisted of TKCCP
(50% owned, of which the Company recognized 100% of the operations of the Kansas City Pool, which TWC began
consolidating beginning January 1, 2007) and SpectrumCo, LLC, a wireless joint venture in which TWC and
several other cable companies and Sprint are participants (the “Wireless Joint Venture”) (26.6% owned), to which
TWC contributed $633 million in 2006. In addition, at December 31, 2006, the Company expects to record a pretax
126
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)