Print Page  Close Window

SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
Entire Document
 
<PAGE>   410
                            INTERMEDIA CABLE SYSTEMS
              (COMPRISED OF COMPONENTS OF INTERMEDIA PARTNERS AND
                     INTERMEDIA CAPITAL PARTNERS IV, L.P.)
 
                     NOTES TO CONDENSED COMBINED FINANCIAL
                     STATEMENTS (UNAUDITED) -- (CONTINUED)
                             (DOLLARS IN THOUSANDS)
 
Excluded Systems from the condensed combined financial statements, management
has estimated the revenues, expenses, assets and liabilities associated with
each Excluded System based on the ratio of each Excluded System's basic
subscribers to the total basic subscribers served by the Marion, North Carolina
and western Tennessee systems, respectively. Management believes the basis used
for these allocations is reasonable. The Systems' results of operations are not
necessarily indicative of future operating results or the results that would
have occurred if the Systems were a separate legal entity.
 
     Management and consulting fees represent an allocation of management fees
charged to IP-I and ICP-IV by InterMedia Capital Management, a California
limited partnership ("ICM") and InterMedia Management, Inc. ("IMI"),
respectively. ICM is a limited partner of IP-I. IMI is the managing member of
each of the general partners of IP-I and ICP-IV. These fees are charged at a
fixed amount per annum and have been allocated to the Systems based upon the
allocated contributed capital of the individual systems as compared to the total
contributed capital of InterMedia's subsidiaries.
 
     As more fully described in Note 4 -- "Related Party Transactions," certain
administrative services are also provided by IMI and are charged to all
affiliates based on relative basic subscriber percentages.
 
CASH AND INTERCOMPANY ACCOUNTS
 
     Under InterMedia's centralized cash management system, cash requirements of
its individual operating units were generally provided directly by InterMedia
and the cash generated or used by the Systems was transferred to/from
InterMedia, as appropriate, through intercompany accounts. The intercompany
account balances between InterMedia and the individual operating units, except
RMG's intercompany note payable to InterMedia Partners IV, L.P. ("IP-IV"), as
described in Note 3 -- "Note Payable to InterMedia Partners IV, L.P.," are not
intended to be settled. Accordingly, the balances, other than RMG's note payable
to IP-IV, are included in equity and all net cash generated from operations,
investing activities and financing activities have been included in the Systems'
net (distributions) contributions to/from parent in the combined statements of
cash flows.
 
     IP-I and ICP-IV or its subsidiaries maintain all external debt to fund and
manage InterMedia's operations on a centralized basis. The condensed combined
financial statements present only the debt and related interest expense of RMG,
which is assumed and repaid by Charter pursuant to the Charter Transactions. See
Note 3 -- "Note Payable to InterMedia Partners IV, L.P." Debt, unamortized debt
issue costs and interest expense related to the financing of the cable systems
not owned by RMG have not been allocated to the InterMedia Cable Systems. As
such, the level of debt, unamortized debt issue costs and related interest
expense presented in the condensed combined financial statements are not
representative of the debt that would be required or interest expense incurred
if InterMedia Cable Systems were a separate legal entity.
 
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported
                                      F-266