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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>   693
 
                        BRESNAN COMMUNICATIONS GROUP LLC
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                  (UNAUDITED)
                                 (IN THOUSANDS)
 
(1) BASIS OF PRESENTATION
 
     Bresnan Communications Group LLC and its subsidiaries ("BCG" or the
"Company") are wholly owned by Bresnan Communications Company Limited
Partnership, a Michigan limited partnership ("BCCLP"). BCG is a Delaware limited
liability corporation formed on August 5, 1998 for the purpose of acting as
co-issuer with its wholly-owned subsidiary, Bresnan Capital Corporation ("BCC"),
of $170,000 aggregate principal amount at maturity of 8% Senior Notes and
$275,000 aggregate principal amount at maturity of 9.25% Senior Discount Notes,
both due in 2009 (collectively the "Notes"). Prior to the issuance of the Notes
on February 2, 1999, BCCLP completed the terms of a contribution agreement dated
June 3, 1998, as amended, whereby certain affiliates of Tele-Communications,
Inc. ("TCI") contributed certain cable television systems along with assumed TCI
debt of approximately $708,854 to BCCLP. In addition, Blackstone BC Capital
Partners L.P. and affiliates contributed $136,500 to BCCLP. Upon completion of
the Notes offering on February 2, 1999 BCCLP contributed all of its assets and
liabilities to BCG, which formed a wholly owned subsidiary, Bresnan
Telecommunications Company LLC ("BTC"), into which it contributed all of its
assets and certain liabilities. The above noted contributed assets and
liabilities were accounted for at predecessor cost because of the common
ownership and control of TCI and have been reflected in the accompanying
financial statements in a manner similar to a pooling of interests.
 
     The Company owns and operates cable television systems in small- and
medium-sized communities in the midwestern United States.
 
     The accompanying interim consolidated financial statements are unaudited
but, in the opinion of management, reflect all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of the results of such
periods. The results of operations for the period ended September 30, 1999 are
not necessarily indicative of results for a full year. These consolidated
financial statements should be read in conjunction with the combined financial
statements and notes thereto of the predecessor to the Company contained in the
Bresnan Communications Group Systems financial statements for the year ended
December 31, 1998. The accompanying comparative consolidated financial
statements include the financial information of Bresnan Communications Group
Systems (the predecessor of the Company) prior to February 2, 1999.
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
 
(2) ACQUISITIONS AND DISPOSITIONS
 
     In September 1998, the Company acquired certain cable television assets
located in Minnesota, which were accounted for under the purchase method. The
purchase price was allocated to the cable television assets acquired in relation
to their fair values as increases in property and equipment of $3,396 and
franchise costs of $8,354. In addition, the Company acquired two additional
systems in the first quarter of 1999 which were accounted for under the purchase
method. The purchase prices were allocated to the cable television assets
acquired in relation to their estimated fair values as increases in property and
equipment of $22,200 and franchise costs of $44,600.
                                      F-464