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SEC Filings

S-4
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
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               AVALON CABLE HOLDINGS FINANCE, INC. AND SUBSIDIARY
 

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (in thousands)
 
1. Basis of Presentation and Description of Business
 
   Avalon Cable Holdings Finance, Inc. (the "Company") was formed in October
1998, pursuant to the laws of Delaware, as a wholly owned subsidiary of Avalon
Cable Holdings LLC, for the sole purpose of facilitating financings associated
with the acquisitions of various cable television companies. The Company
conducts no other activities.
 
2. Summary of Significant Accounting Policies
 
 Principles of consolidation
 
   The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, Avalon Cable Finance, Inc. ("Avalon Finance").
All significant transactions between the Company and its subsidiary have been
eliminated.
 
 Use of estimates
 
   The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and use assumptions that affect the reported amounts of assets and liabilities
and the disclosure for contingent assets and liabilities at the date of the
consolidated financial statements as well as the reported amounts of revenues
and expenses during the reported period. Actual results may vary from estimates
used.
 
 Financial instruments
 
   The Company estimates that the fair value of all financial instruments at
December 31, 1998 does not differ materially from the aggregate carrying values
of its financial instruments recorded in the accompanying balance sheet. The
fair value of the notes payable-affiliate are considered to be equal to
carrying values since the Company believes that its credit risk has not changed
from the time this debt instrument was executed and therefore, would obtain a
similar rate in the current market.
 
 Accounting for income taxes
 
   The Company has prepared its income tax provision using the liability method
in accordance with Financial Accounting Standards Board statement 109,
"Accounting for Income Taxes". Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
reporting and tax basis of assets and liabilities and are measured using tax
rates that will be in effect when the differences are expected to reverse. As
of December 31, 1998 the Company has no deferred tax assets or liabilities and
no tax provision to record.
 
3. Related Party Transactions
 
   In November 1998, Avalon Finance received $33,200 from Avalon Cable of New
England LLC ("Avalon New England"). In consideration for this amount, Avalon
Finance executed a note payable to Avalon New England. The note matures on
December 31, 2001. Interest accrues at a rate of 4.47% per year, and is payable
in arrears on December 31, 2001. This note is recorded as note payable--
affiliate on the consolidated balance sheet at December 31, 1998. Avalon
Finance has recorded accrued interest payable on this note of $102 at December
31, 1998.
 
   In November 1998, the Company loaned $33,200 to Avalon Cable of Michigan,
Inc. ("Avalon Michigan") in order to assist Avalon Michigan in consummating its
acquisition of Cable Michigan, Inc. The note matures on December 31, 2001.
Interest accrues at a rate of 4.47% per year, and is payable in arrears on
December 31, 2001. This note is recorded as note receivable--affiliate on the
consolidated balance sheet at December 31, 1998. Accrued interest receivable of
$102 has been recorded in connection with this note at December 31, 1998.
 
 
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