Charter Communications Inc. (CHTR)

Additions to property, plant and equipment are recorded at cost, including all material, labor and certain indirect costs associated with the construction of cable transmission and distribution facilities. While Charter’s capitalization is based on specific activities, once capitalized, costs are tracked on a composite basis by fixed asset category at the cable system level and not on a specific asset basis. For assets that are sold or retired, the estimated historical cost and related accumulated depreciation is removed. Costs associated with the initial placement of the customer drop to the dwelling and the initial placement of outlets within a dwelling along with the costs associated with the initial deployment of customer premise equipment necessary to provide video, Internet or voice services are capitalized. Costs capitalized include materials, direct labor and certain indirect costs. Indirect costs are associated with the activities of Charter’s personnel who assist in installation activities and consist of compensation and other costs associated with these support functions. Indirect costs primarily include employee benefits and payroll taxes, vehicle and occupancy costs, and the costs of sales and dispatch personnel associated with capitalizable activities. The costs of disconnecting service and removing customer premise equipment from a dwelling and the costs to reconnect a customer drop or to redeploy previously installed customer premise equipment are charged to operating expense as incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while plant and equipment replacement, including replacement of certain components, betterments, including replacement of cable drops and outlets, are capitalized.

Depreciation is recorded using the straight-line composite method over management’s estimate of the useful lives of the related assets as follows:

Cable distribution systems	8-20 years
Customer premise equipment and installations	3-8 years
Vehicles and equipment	4-9 years
Buildings and improvements	15-40 years
Furniture, fixtures and equipment	7-10 years

Source: 10-K (filing date: 2018-02-02).

Charter Communications Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

Item	Description	The company
Property, plant and equipment, gross	Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	Charter Communications Inc.’s property, plant and equipment, gross increased from 2015 to 2016 and from 2016 to 2017.
Property, plant and equipment, net of accumulated depreciation	Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	Charter Communications Inc.’s property, plant and equipment, net of accumulated depreciation increased from 2015 to 2016 and from 2016 to 2017.

Charter Communications Inc., Property, Plant and Equipment Ratios

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.	Charter Communications Inc.’s average age of depreciable property, plant and equipment improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.	Charter Communications Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Estimated time elapsed since purchase	The approximate age in years of a company’s fixed assets. Useful for comparison purposes.	Charter Communications Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.
Estimated remaining life		Charter Communications Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

2017 Calculations

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.	Charter Communications Inc.’s average age of depreciable property, plant and equipment improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

2017 Calculations

Ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.	Charter Communications Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

2017 Calculations

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company’s fixed assets. Useful for comparison purposes.	Charter Communications Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.

Based on: 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-21).

2017 Calculations

Ratio	Description	The company
Estimated remaining life		Charter Communications Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.