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S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 01/25/2000
Entire Document
 
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                              FANCH CABLE SYSTEMS
        (COMPRISED OF COMPONENTS OF TWFANCH-ONE CO. AND TWFANCH-TWO CO.)
 
                     NOTES TO COMBINED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                                 JUNE 30, 1999
 
1.  BASIS OF PRESENTATION
 
ACQUISITION BY CHARTER COMMUNICATIONS, INC. AND BASIS OF PRESENTATION
 
     TWFanch-one Co. and TWFanch-two Co. (collectively the "Partnerships"), both
of which are Delaware general partnerships, are affiliated through common
control and management. Pursuant to a purchase agreement, dated May 21, 1999
between certain partners of TWFanch-one Co. and TWFanch-two Co. and Charter
Communications, Inc. ("Charter"), the partners of the Partnership entered into a
distribution agreement whereby the partnerships will distribute and/or sell
certain of their cable systems ("Combined Systems") to certain of their
respective partners. These partners will then sell the Combined Systems through
a combination of asset sales and sale of equity and partnership interests to
Charter.
 
     Accordingly, these combined financial statements of the Combined Systems
reflect "carved out" historical financial position, results of operations, cash
flows and changes in net assets of the operations of the Combined Systems as if
they had been operating as a separate company. For purposes of determining the
financial statement amounts of the Combined Systems, management excluded certain
systems (the "Excluded Systems"). In order to exclude the results of operations
and financial position of the Excluded Systems from the combined financial
statements, management has estimated certain revenues, expenses, assets and
liabilities that are not specifically identified to systems based on the ratio
of each Excluded System's basic subscribers to the total basic subscribers
served by the respective partnerships. Management believes the basis used for
these allocations is reasonable. The Combined Systems' results of operations are
not necessarily indicative of future operating results or the results that would
have occurred if the Combined Systems were a separate legal entity.
 
     The accompanying combined financial statements as of and for the periods
ended June 30, 1999 and 1998 are unaudited. However, in the opinion of
management, the financial statements reflect all adjustments, consisting of
normal recurring adjustments, necessary for fair presentation in accordance with
generally accepted accounting principles applicable to interim periods. Interim
results of operations are not indicative of results for the full year. The
accompanying financial statements should be read in conjunction with the audited
combined financial statements of Fanch Cable Systems (comprised of components of
TWFanch-one Co. and TWFanch-two Co.).
 
DESCRIPTION OF BUSINESS
 
     The Combined Systems, operating in various states throughout the United
States, are principally engaged in operating cable television systems and
related activities under non-exclusive franchise agreements.
 
PRINCIPLES OF COMBINATION
 
     The accompanying combined financial statements include the accounts of the
Combined Systems, as if the Combined Systems were a single company. All material
intercompany balances and transactions have been eliminated.
 
CASH, INTERCOMPANY ACCOUNTS AND DEBT
 
     Under the Partnerships' centralized cash management system, cash
requirements of its individual operating units were generally provided directly
by the Partnerships and the cash
 
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