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SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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                    UNAUDITED PRO FORMA FINANCIAL STATEMENTS
 
     The following Unaudited Pro Forma Financial Statements of CCI are based on
the pro forma financial statements of Charter Holdco. Prior to the issuance and
sale by CCI of Class A common stock in the offering, CCI is a holding company
with no material assets or operations. The net proceeds from the initial public
offering will be used to purchase membership units in Charter Holdco, including
a controlling voting interest. As a result, CCI will consolidate the financial
statements of Charter Holdco. Charter Holdco has recently closed several
acquisitions and has numerous pending acquisitions. Charter Holdco's financial
statements are adjusted on a pro forma basis to illustrate the estimated effects
of its recently completed and pending acquisitions as if such transactions had
occurred on March 31, 1999 for the Unaudited Pro Forma Balance Sheet and to
illustrate the estimated effects of the following transactions as if they had
occurred on January 1, 1998 for the Unaudited Pro Forma Statements of
Operations:
 
     (1) the acquisition of Charter Holdco on December 23, 1998 by Mr. Allen;
 
     (2) the acquisition of Sonic Communications Inc. on May 20, 1998 by Charter
         Holdco;
 
     (3) the acquisition of Marcus Holdings on April 23, 1998 by an affiliate of
         Mr. Allen;
 
     (4) the acquisitions and dispositions during 1998 by Marcus Holdings;
 
     (5) Charter Holdco's merger with Marcus Holdings;
 
     (6) Charter Holdco's recently completed and pending acquisitions; and
 
     (7) the refinancing of all debt of our subsidiaries.
 
     The Unaudited Pro Forma Financial Statements also illustrate the estimated
effects of the issuance and sale by CCI of the shares of Class A common stock,
after deducting underwriting discounts and estimated offering expenses, and the
equity contribution of the net proceeds to Charter Holdco. We have assumed the
net proceeds would purchase a 25% economic interest in Charter Holdco. As such,
the consolidated pro forma financial statements of CCI show a minority interest
equal to the equity of Charter Holdco prior to the investment by CCI and show
75% of the net losses of Charter Holdco being allocated to the minority
interest.
 
     The Unaudited Pro Forma Financial Statements reflect the application of the
principles of purchase accounting to the transactions listed in items (1)
through (4) and (6). The allocation of purchase price is based, in part, on
preliminary information which is subject to adjustment upon obtaining complete
valuation information of intangible assets. We believe that finalization of the
purchase price allocation will not have a material impact on the results of
operations or financial position of CCI or Charter Holdco.
 
     The unaudited pro forma adjustments are based upon available information
and certain assumptions that we believe are reasonable. In particular, we assume
that the sellers of Rifkin will elect all cash for payment of the Rifkin
purchase price. The Rifkin sellers may elect to take a portion of the purchase
price in Charter Holdco membership units. In addition, we assume that we will
raise an additional $1.1 billion of equity to fund in part the closing of the
Bresnan transaction. We also assume that specified sellers in the Falcon
acquisition elect to receive the maximum of the $450-$550 million range of the
purchase price payable in Charter Holdco membership units. We may choose to fund
the Bresnan transaction with debt. The estimated impact of such items is
disclosed in the notes.
 
     In addition, Charter Holdco membership units not held by CCI are
exchangeable for common stock of CCI. We assume no such equity interests are
exchanged. The impact of such is disclosed in the notes set out below. The
Unaudited Pro Forma Financial Statements and accompanying notes should be read
in conjunction with the historical financial statements and other financial
information appearing elsewhere in this prospectus, including "Capitalization"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations".
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