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S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 01/25/2000
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<PAGE>   513
 
                     RIFKIN ACQUISITION PARTNERS, L.L.L.P.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
1.  GENERAL INFORMATION AND TRANSFER OF NET ASSETS
 
     Rifkin Acquisition Partners, L.P. ("RAP L.P.") was formed on December 16,
1988, pursuant to the laws of the State of Colorado, for the purpose of
acquiring and operating cable television (CATV) systems. On September 1, 1995,
RAP L.P. registered as a limited liability limited partnership, Rifkin
Acquisition Partners, L.L.L.P. (the "Partnership"), pursuant to the laws of the
State of Colorado. Rifkin Acquisition Management, L.P., was the general partner
of RAP L.P. and is the general partner of the Partnership ("General Partner").
The Partnership and its subsidiaries are hereinafter referred to on a
consolidated basis as the "Company."
 
     The Partnership operates under a limited liability limited partnership
agreement (the "Partnership Agreement") which establishes contribution
requirements, enumerates the rights and responsibilities of the partners and
advisory committee, provides for allocations of income, losses and
distributions, and defines certain items relating thereto.
 
     These statements have been completed in conformity with the SEC
requirements for unaudited consolidated financial statements for the Company and
does not contain all of the necessary footnote disclosures required for a fair
presentation of the balance sheets, statements of operations, of partners'
capital(deficit), and of cash flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting of normal recurring accruals necessary to present
fairly the Company's consolidated financial position at September 13, 1999 and
December 31, 1998, and its consolidated results of operations and cash flows for
the period January 1, 1999 to September 13, 1999 and for the nine months ended
September 30, 1998. The consolidated financial statements should be read in
conjunction with the Company's annual consolidated financial statements and
notes thereto included on Form 10-K for the year ended December 31, 1998.
 
2.  PURCHASE AGREEMENT
 
     On February 12, 1999, the Company signed a letter of intent for the
partners to sell their partnership interests to Charter Communications, Inc.
("Charter"). On April 26, 1999, the Company signed a definitive Purchase and
Sale Agreement with Charter for the sale of the individual partners' interest.
The sales transaction closed on September 13, 1999. These statements represent
the Company just prior to the transaction and do not reflect any adjustment
related thereto.
 
3.  ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT
 
     Effective January 1, 1999, the Company adopted the Accounting Standards
Executive Committee's Statement of Position (SOP) 98-5 "Reporting on the Costs
of Start-Up Activities," which requires the Company to expense all start-up
costs related to organizing a new business. During the first quarter of 1999,
the Company wrote off the organization costs capitalized in prior years along
with the accumulated amortization, resulting in the recognition of a cumulative
effect of accounting change loss of $111,607.
 
4.  SENIOR SUBORDINATED NOTES
 
     On January 26, 1996, the Company and its wholly-owned subsidiary, Rifkin
Acquisition Capital Corp (RAC), co-issued a $125 million aggregate principal
amount of 11 1/8% Senior Subordinated Notes (the "Notes") to institutional
investors. These Notes were subsequently
 
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