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SEC Filings

8-K/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 8-K/A on 01/26/2000
Entire Document
 
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                  NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

NOTE A: Pro forma operating results for Charter Communications, Inc. consist of
the following (dollars in thousands):



<TABLE>
<CAPTION>

                                                               HISTORICAL
                                                               ----------
                                                         1/1/99
                                                         THROUGH        1/1/99
                                                         9/30/99        THROUGH
                                                         CHARTER        3/31/99
                                                     COMMUNICATIONS,     MARCUS          PRO FORMA
                                                          INC.       HOLDINGS (A)       ADJUSTMENTS            TOTAL
                                                          ----       -----------        -----------            -----

<S>                                                    <C>            <C>           <C>                    <C>          
Revenues.............................................  $   845,182    $    125,180  $          --          $     970,362
                                                       -----------    ------------  -------------          -------------
Operating expenses:
Operating, general and administrative................      436,057          68,984             --                505,041
Depreciation and amortization........................      441,391          51,688         11,980    (b)         505,059
Stock option compensation expense....................       59,288              --             --                 59,288
Corporate expense charges............................       18,309              --             --                 18,309
Management fees......................................           --           4,381         (4,381)   (c)              --
                                                       -----------    ------------  -------------          -------------
   Total operating expenses..........................      955,045         125,053          7,599              1,087,697
                                                       -----------    ------------  -------------          -------------
Income (loss) from operations........................     (109,863)            127         (7,599)              (117,335)
Interest expense.....................................     (288,750)        (27,067)         5,167    (d)        (310,650)
Interest income......................................       18,326             104        (16,146)   (e)           2,284
Other expense........................................         (177)           (158)            --                   (335)
                                                       -----------    ------------  -------------          -------------
Loss before minority interest and
   extraordinary item................................     (380,464)        (26,994)       (18,578)              (426,036)
Minority interest....................................      380,369              --             --                380,369
                                                       -----------    ------------  -------------          -------------
Loss before extraordinary item.......................  $       (95)   $    (26,994) $     (18,578)         $     (45,667)
                                                       ===========    ============  =============          =============
</TABLE>


(a)      Marcus Holdings represents the results of operations of Marcus Cable
         through March 31, 1999, the date of its merger with Charter Holdings.

(b)      As a result of Mr. Allen acquiring a controlling interest in Marcus
         Cable, a large portion of the purchase price was recorded as franchises
         ($2.5 billion) that are amortized over 15 years. This resulted in
         additional amortization for the period from January 1, 1999 through
         March 31, 1999. The adjustment to depreciation and amortization expense
         consists of the following (dollars in millions):


<TABLE>
<CAPTION>

                                                                                          WEIGHTED AVERAGE
                                                                                             USEFUL LIFE     DEPRECIATION/
                                                                               FAIR VALUE    (IN YEARS)      AMORTIZATION
                                                                               ----------    ----------      ------------
         <S>                                                                   <C>           <C>             <C>        
         Franchises...........................................                   $2,500.0          15         $      40.8
         Cable distribution systems...........................                      720.0           8                21.2
         Land, buildings and improvements.....................                       28.3          10                 0.7
         Vehicles and equipment...............................                       13.6           3                 1.0
                                                                                                              -----------
             Total depreciation and amortization..............                                                       63.7    
             Less-historical depreciation and amortization
                of Marcus Holdings............................                                                      (51.7)
                                                                                                              -----------
                   Adjustment.................................                                                $      12.0
                                                                                                              ===========
</TABLE>



(c)      Reflects the elimination of management fees.

(d)      As a result of the acquisition of Marcus Cable by Mr. Allen, the
         carrying value of outstanding debt was recorded at estimated fair
         value, resulting in a debt premium that is to be amortized as an offset
         to interest expense over the term of the debt. This resulted in a
         reduction of interest expense. Interest expense was further reduced by
         the effects of the 









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