Time Warner Cable 2012 Annual Report Download - page 98

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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On September 13, 2012, the Company exchanged all of its beneficially owned shares of Class B common stock of
Clearwire Corporation (“Clearwire”) together with all of its beneficially owned Class B common units of Clearwire
Communications LLC (“Clearwire Communications”) for shares of Class A common stock of Clearwire. On September 27,
2012, the Company sold these shares of Class A common stock for $64 million in cash. The sale resulted in a pretax gain of
$64 million, which is included in other income (expense), net, in the consolidated statement of operations for the year ended
December 31, 2012.
In addition, during the year ended December 31, 2012, the Company recorded an income tax benefit of $19 million
primarily related to the sale of Clearwire’s Class A common stock. The income tax benefit included the reversal of a $46
million valuation allowance against a deferred income tax asset associated with the Company’s investment in Clearwire,
which had been established due to the uncertainty of realizing the full benefit of such asset. The Company reversed the
valuation allowance as a result of its ability to fully realize the capital losses from the sale of its Clearwire interests by
offsetting capital gains related to SpectrumCo’s sale of its spectrum licenses.
In early 2012, TWC ceased making its existing wireless service available to new wireless customers. As a result, during
the fourth quarter of 2011, the Company impaired $60 million of assets related to the provision of wireless service that would
no longer be utilized. Of the $60 million noncash impairment, $44 million related to fixed assets and wireless devices and
$16 million related to the remaining value of the wireless wholesale agreements with Sprint Nextel Corporation (“Sprint”)
and Clearwire that were recorded upon TWC’s initial investment in Clearwire Communications in 2008.
7. INTANGIBLE ASSETS AND GOODWILL
As of December 31, 2012 and 2011, the Company’s intangible assets and related accumulated amortization consisted of
the following (in millions):
December 31, 2012 December 31, 2011
Gross
Accumulated
Amortization Net Gross
Accumulated
Amortization Net
Intangible assets subject to
amortization:
Customer relationships ...........$ 530 $ (78) $ 452 $ 50 $ (7) $ 43
Cable franchise renewals and
access rights ................. 269 (110) 159 252 (94) 158
Other ......................... 41 (11) 30 37 (10) 27
Total .........................$ 840 $ (199) $ 641 $ 339 $ (111) $ 228
Intangible assets not subject to
amortization:
Cable franchise rights ............$ 26,933 $ (922) $ 26,011 $ 25,194 $ (922) $ 24,272
The Company recorded amortization expense of $110 million in 2012, $33 million in 2011 and $168 million in 2010.
Based on the remaining carrying value of intangible assets subject to amortization as of December 31, 2012, amortization
expense is expected to be $124 million in 2013, $119 million in 2014, $115 million in 2015, $111 million in 2016 and
$107 million in 2017. These amounts may vary as acquisitions and dispositions occur in the future.
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