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S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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                          FALCON COMMUNICATIONS, L.P.
                   (SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
outside their interests in the Partnership, nor to any obligations, including
income taxes, of the partners.
 
     On July 12, 1996, the Partnership acquired the assets of Falcon Cable
Systems Company ("FCSC"), an Affiliated Partnership. The results of operations
of these cable systems have been included in the consolidated financial
statements from July 12, 1996. Management fees and reimbursed expenses received
by the Partnership from FCSC for the period of January 1, 1996 through July 11,
1996 are also included in the consolidated financial statements and have not
been eliminated in consolidation. See Note 3.
 
CASH EQUIVALENTS
 
     For purposes of the consolidated statements of cash flows, the Partnership
considers all highly liquid debt instruments purchased with an initial maturity
of three months or less to be cash equivalents. Cash equivalents at December 31,
1996, 1997 and 1998 included $4.1 million, $4.5 million and $345,000 of
investments in commercial paper and short-term investment funds of major
financial institutions.
 
INVESTMENTS IN AFFILIATED PARTNERSHIPS
 
     Prior to closing the TCI Transaction, the Partnership was the general
partner of certain entities, which in turn acted as general partner of the
Affiliated Partnerships. The Partnership's effective ownership interests in the
Affiliated Partnerships were less than one percent. The Affiliated Partnerships
were accounted for using the equity method of accounting. Equity in net losses
were recorded to the extent of the investments in and advances to the
partnerships plus obligations for which the Partnership, as general partner, was
responsible. The liabilities of the Affiliated Partnerships, other than amounts
due the Partnership, principally consisted of debt for borrowed money and
related accrued interest. The Partnership's ownership interests in the
Affiliated Partnerships were eliminated in 1998 with the acquisition of Falcon
Video and Falcon Classic and the retention by FHGLP of its interests in the
Enstar partnerships.
 
PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION AND AMORTIZATION
 
     Property, plant and equipment are stated at cost. Direct costs associated
with installations in homes not previously served by cable are capitalized as
part of the distribution system, and reconnects are expensed as incurred. For
financial reporting, depreciation and amortization is computed using the
straight-line method over the following estimated useful lives.
 

<TABLE>
<S>                                                     <C>
CABLE TELEVISION SYSTEMS:
  Headend buildings and equipment.....................    10-16 years
  Trunk and distribution..............................     5-15 years
  Microwave equipment.................................    10-15 years
OTHER:
  Furniture and equipment.............................      3-7 years
  Vehicles............................................     3-10 years
  Leasehold improvements..............................  Life of lease
</TABLE>

 
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