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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 THE UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

          NOTE A: Pro forma operating results for Charter Communications, Inc.
including the acquisition of us on December 23, 1998 by Mr. Allen and the
acquisition of Sonic Communications, Inc. (Sonic), consist of the following
(dollars in thousands):



<TABLE>
<CAPTION>


                                    12/24/98                                                1/1/98
                                    THROUGH                                                 THROUGH
                                    12/31/98            1/1/98 THROUGH 12/23/98             5/20/98
                                    --------            -----------------------             -------
                                                                              CHARTER
                                    CHARTER                                COMMUNICATIONS                                        
                                 COMMUNICATIONS,   CCA       CHARTERCOMM     HOLDINGS
                                      INC.        GROUP        HOLDINGS       COMPANY        SONIC    ELIMINATIONS   SUBTOTAL    
                                   ---------    ----------    ----------    ----------    ----------  ------------  ----------   
<S>                                <C>          <C>           <C>           <C>           <C>           <C>         <C>          
Revenues.......................... $  13,713    $  324,432    $  196,801    $   49,731    $   17,276    $     -     $  601,953   
                                   ---------    ----------    ----------    ----------    ----------    -------     ----------   
Operating expenses:              
   Operating, general and              
    administrative................     7,134       164,145        98,331        25,952         8,993          -        304,555   
   Depreciation and amortization..     8,318       136,689        86,741        16,864         2,279          -        250,891   
   Stock option compensation 
    expense.......................       845             -             -             -             -          -            845   
   Management fees/corporate 
    expense charges...............       473        17,392        14,780         6,176             -          -         38,821   
                                   ---------    ----------    ----------    ----------    ----------    -------     ----------   
    Total operating expenses......    16,770       318,226       199,852        48,992        11,272          -        595,112   
Income (loss) from operations.....    (3,057)        6,206        (3,051)          739         6,004          -          6,841   
Interest expense..................    (2,353)     (113,824)      (66,121)      (17,277)       (2,624)     1,900 (c)   (200,299)  
Other income (expense)............       133         4,668        (1,684)         (684)          (15)    (1,900)(c)        518   
Income (loss) before income taxes
    and minority interest.........    (5,277)     (102,950)      (70,856)      (17,222)        3,365          -       (192,940)  
Provision for income taxes........         -             -             -             -         1,346          -          1,346   
                                   ---------    ----------    ----------    ----------    ----------    -------     ----------   
Income (loss) before minority
    interest......................    (5,277)     (102,950)      (70,856)      (17,222)        2,019          -       (194,286)  
Minority interest.................     5,275             -             -             -             -          -          5,275   
                                   ---------    ----------    ----------    ----------    ----------    -------     ----------   
Income (loss) before extraordinary 
    item.......................... $      (2)   $ (102,950)   $  (70,856)   $  (17,222)   $    2,019    $     -     $ (189,011)  
                                   =========    ==========    ==========    ==========    ==========    =======     ==========   

<CAPTION>



                                          PRO FORMA
                                 ----------------------------

                                 ADJUSTMENTS         TOTAL
                                 -----------      -----------
<S>                                <C>            <C>        
Revenues........................   $      -       $   601,953
                                   --------       -----------
Operating expenses:             
   Operating, general and          
    administrative..............          -           304,555
   Depreciation and 
    amortization................    119,515 (a)       370,406
   Stock option compensation
    expense.....................          -               845
   Management fees/corporate
    expense charges.............    (22,328)(b)        16,493
                                   --------       -----------
    Total operating expenses....     97,187           692,299
Income (loss) from operations...    (97,187)          (90,346)
Interest expense................       (495)(d)      (200,794)
Other income (expense)..........          -               518
Income (loss) before income taxes
    and minority interest.......    (97,682)         (290,622)
Provision for income taxes......     (1,346)(e)             -
                                   --------       -----------
Income (loss) before minority
    interest....................    (96,336)         (290,622)
Minority interest...............          -             5,275
                                   --------       -----------
Income (loss) before extraordinary
    item........................   $(96,336)      $  (285,347)
                                   ========       ===========
</TABLE>



(a)      Represents additional depreciation and amortization as a result of the
         acquisition of us by Mr. Allen. A large portion of the purchase price
         was allocated to franchises ($3.6 billion) that are amortized over 15
         years. The adjustment to depreciation and amortization expense
         consists of the following (dollars in millions):





<TABLE>
<CAPTION>
                                                                                    WEIGHTED AVERAGE         DEPRECIATION/
                                                                 FAIR VALUE      USEFUL LIFE (IN YEARS)      AMORTIZATION
                                                                 ----------      ----------------------      -------------


         <S>                                                    <C>              <C>                         <C>         
         Franchises............................................ $     3,600.0                     15          $      240.0
         Cable distribution systems............................       1,439.2                     12                 115.3
         Land, buildings and improvements......................          41.3                     11                   3.5
         Vehicles and equipment................................          61.2                      5                  11.6
                                                                                                              ------------
                Total depreciation and amortization............                                                      370.4
                Less-historical depreciation and amortization..                                                     (250.9)
                                                                                                              ------------
                     Adjustment................................                                               $      119.5
                                                                                                              ============
</TABLE>


(b)      Reflects the reduction in corporate expense charges of approximately
         $7.9 million to reflect the actual costs incurred. Management fees
         charged to CCA Group and CharterComm Holdings, L.P., companies not
         controlled by Charter Investment, Inc. at that time, exceeded the
         allocated costs incurred by Charter Investment, Inc. on behalf of those
         companies by $7.9 million. Also reflects the elimination of
         approximately $14.4 million of change of control payments under the
         terms of the then-existing equity appreciation rights plans. Such
         payments were triggered by the acquisition of us by Mr. Allen. Such
         payments were made by Charter Investment, Inc. and were not subject to
         reimbursement by us, but were allocated to us for financial reporting
         purposes. The equity appreciation rights plans were terminated in
         connection with the acquisition of us by Mr. Allen, and these costs
         will not recur.

(c)      Represents the elimination of intercompany interest on a note payable
         from Charter Holdings to CCA Group.

(d)      Reflects additional interest expense on $228.4 million of borrowings
         under our previous credit facilities used to finance the Sonic
         acquisition offset by a reduction of interest expense related to the
         extinguishment of substantially all of our long-term debt in March
         1999, excluding borrowings of our previous credit facilities, and the
         refinancing of all previous credit facilities.



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