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AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
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   For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma net earnings and earnings per share were as follows:

                                                For the Years    For the Period
                                                    Ended        from January 1,
                                                December 31,          1998
                                               ----------------  to November 5,
                                                1996     1997         1998
                                               -------  -------  ---------------
<S>                                            <C>      <C>      <C>
Net (Loss) as reported........................ $(8,256) $(4,358)    $(10,534)
Net (Loss) pro forma..........................  (8,256)  (4,373)     (10,174)
Basic (Loss) per share--as reported...........   (1.20)   (0.63)       (1.45)
Basic (Loss) per share--pro forma.............   (1.20)   (0.64)       (1.48)
Diluted (Loss) per share--as reported.........   (1.20)   (0.63)       (1.45)
Diluted (Loss) per share--pro forma...........   (1.20)   (0.64)       (1.48)

   In November 1996, the C-TEC shareholders approved a stock purchase plan for
certain key executives (the "Executive Stock Purchase Plan" or "C-TEC ESPP").
Under the C-TEC ESPP, participants may purchase shares of C-TEC Common Stock in
an amount of between 1% and 20% of their annual base compensation and between
1% and 100% of their annual bonus compensation and provided, however, that in
no event shall the participant's total contribution exceed 20% of the sum of
their annual compensation, as defined by the C-TEC ESPP. Participant's accounts
are credited with the number of share units derived by dividing the amount of
the participant's contribution by the average price of a share of C-TEC Common
Stock at approximately the time such contribution is made. The share units
credited to participant's account do not give such participant any rights as a
shareholder with respect to, or any rights as a holder or record owner of, any
shares of C-TEC Common Stock. Amounts representing share units that have been
credited to a participant's account will be distributed, either in a lump sum
or in installments, as elected by the participant, following the earlier of the
participant's termination of employment with the Company or three calendar
years following the date on which the share units were initially credited to
the participant's account. It is anticipated that, at the time of distribution,
a participant will receive one share of C-TEC Common Stock for each share unit
being distributed.
   Following the crediting of each share unit to a participant's account, a
matching share of Common Stock is issued in the participant's name. Each
matching share is subject to forfeiture as provided in the C-TEC ESPP. The
issuance of matching shares will be subject to the participant's execution of
an escrow agreement. A participant will be deemed to be the holder of, and may
exercise all the rights of a record owner of, the matching shares issued to
such participant while such matching shares are held in escrow. Shares of
restricted C-TEC Common Stock awarded under the C-TEC ESPP and share units
awarded under the C-TEC ESPP that relate to C-TEC Common Stock were adjusted so
that following the Distribution, each such participant was credited with an
aggregate equivalent value of restricted shares of common stock of CTE, the
Company and RCN. In September 1997, the Board approved the Cable Michigan, Inc.
Executive Stock Purchase Plan, ("the "Cable Michigan ESPP"), with terms
substantially the same as the C-TEC ESPP. The number of shares which may be
distributed under the Cable Michigan ESPP as matching shares or in payment of
share units is 30,000.
10. Pensions and Employee Benefits
   Prior to the Distribution, the Company's financial statements reflect the
costs experienced for its employees and retirees while included in the C-TEC
   Through December 31, 1996, substantially all employees of the Company were
included in a trusteed noncontributory defined benefit pension plan, maintained
by C-TEC. Upon retirement, employees are provided a monthly pension based on
length of service and compensation. C-TEC funds pension costs to the extent