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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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<PAGE>   479
            AVALON CABLE OF MICHIGAN HOLDINGS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                               DECEMBER 31, 1998
 
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and liquidated damages thereon, if any, to the date of purchase.
 
  Note Payable
 
     Avalon New England issued a note payable for $500 which is due on May 29,
2003, and bears interest at a rate of 7% per annum (which approximates Avalon
New England's incremental borrowing rate) payable annually. Additionally, Avalon
New England has a $100 non-compete agreement. The agreement calls for five
annual payments of $20, commencing on May 29, 1999.
 
  Mercom debt
 
     In August 1997, the Mercom revolving credit agreement for $2,000 expired.
Mercom had no borrowings under the revolving credit agreement in 1996 or 1997.
 
     On September 29, 1997, Avalon Michigan purchased and assumed all of the
bank's interest in the term credit agreement and the note issued thereunder.
Immediately after the purchase, the term credit agreement was amended in order
to, among other things, provide for less restrictive financial covenants,
eliminate mandatory amortization of principal and provide for a bullet maturity
of principal on December 31, 2002, and remove the change of control event of
default. Mercom's borrowings under the term credit agreement contain pricing and
security provisions substantially the same as those in place prior to the
purchase of the loan. The borrowings are secured by a pledge of the stock of
Mercom's subsidiaries and a first lien on certain of the assets of Mercom and
its subsidiaries, including inventory, equipment and receivables at December 31,
1998, $14,151 of principal was outstanding. The borrowings under the term credit
agreement are eliminated in the Company's consolidated balance sheet.
 
9. MINORITY INTEREST
 
     The activity in minority interest for the year ended December 31, 1998 is
as follows:
 

<TABLE>
<CAPTION>
                                                                 AVALON
                                                                  CABLE
                                                      MERCOM       LLC       TOTAL
                                                      -------    -------    -------
<S>                                                   <C>        <C>        <C>
Issuance of Class A units by Avalon Cable LLC.......       --     45,000     45,000
Issuance of Class B-1 units by Avalon Cable LLC.....       --      4,345      4,345
Allocated to minority interest prior to
  restructuring.....................................       --        365        365
Purchase of Cable Michigan, Inc.....................   13,457         --     13,457
Income (loss) allocated to minority interest........      398     (1,729)    (1,331)
                                                      -------    -------    -------
Balance at December 31, 1998........................  $13,855    $47,981    $61,836
                                                      =======    =======    =======
</TABLE>

 
10. EMPLOYEE BENEFIT PLANS
 
     Avalon Michigan has a qualified savings plan under Section 401(K) of the
Internal Revenue Code. Contributions charged to expense for the period from
November 5, 1998 to December 31, 1998 was $30.
 
                                      F-335