Avalon Cable of Michigan, Inc. in exchange for 100 shares of common stock.
On March 26, 1999, the Company completed a series of transactions to
facilitate certain aspects of its financing between affiliated companies under
common control. As a result of these transactions:
AVALON CABLE, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except per share data)
. Avalon Cable of Michigan Inc. contributed its assets and liabilities,
excluding deferred tax liabilities, net to the Company in exchange for
an approximate 88% voting interest in the Company, which then
transferred those assets and liabilities to its wholly-owned subsidiary
. Avalon Michigan now operates the Michigan cluster, replacing Avalon
Cable of Michigan, Inc;
. Avalon Cable of Michigan Holdings, Inc. ceased to be an obligor on the
senior discount notes and together with Avalon Cable of Michigan,
Inc. became a guarantor of the obligations of the Company under the
senior discount notes;
. Avalon Michigan became an additional obligor on the Senior Subordinated
Notes replacing Avalon Cable of Michigan, Inc.; and
. Avalon Cable of Michigan, Inc. ceased to be an obligor on the Senior
Subordinated Notes and the credit facility and became a guarantor of the
obligations of Avalon Michigan under the Senior Subordinated Notes and
the credit facility.
As a result of the reorganization between entities under common control, the
Company accounted for the reorganization similar to a pooling-of-interests.
Under the pooling-of-interests method, the results of operations for the Company
include the results of operations from the date of inception (September 4, 1998)
of Avalon New England and the date of acquisition of the completed acquisitions.
Avalon New England and Avalon Michigan provide cable service to the western
New England area and the state of Michigan, respectively. Avalon New England
and Avalon Michigan's cable systems offer customer packages of basic and premium
cable programming services which are offered at a per channel charge or are
packaged together to form a tier of services offered at a discount from the
combined channel rate. Avalon New England and Avalon Michigan's cable systems
also provide premium cable services to their customers for an extra monthly
charge. Customers generally pay initial connection charges and fixed monthly
fees for cable programming and premium cable services, which constitute the
principle sources of revenue for Avalon New England and Avalon Michigan.
Avalon Holdings Finance was formed for the sole purpose of facilitating
financings associated with the acquisitions of various cable operating
companies. Avalon Holdings Finance conducts no other activities.
2. Basis of Presentation
Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in financial statements prepared in accordance with generally
accepted accounting principles.
The consolidated financial statements herein include the accounts of the
Company and its wholly-owned subsidiaries.
These condensed financial statements should be read in conjunction with the
Company's audited financial statements as of December 31, 1998 and notes thereto
as included in the Company's Registration Statement on Form S-4 filed with the