Print Page  Close Window

SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
Entire Document
 
<PAGE>   560
                          FALCON COMMUNICATIONS, L.P.
                   (SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The estimated redemption values at December 31, 1997 and December 31, 1998
were $171.4 million and $133 million, respectively, and are reflected in the
consolidated financial statements as redeemable partners' equity. Such amounts
were determined based on management's estimate of the relative fair value of
such interests under current market conditions. Management of the Partnership
will continue to adjust the recorded redemption values based on its estimate of
the relative fair value of the interests subject to redemption. The actual
redemption value of any partnership interests will generally be determined
through the third-party appraisal mechanisms described in the partnership
agreements, and the appraisers will not be bound by management's estimates.
Accordingly, such appraised valuations may be greater than or less than
management's estimates and any such variations could be significant.
 
     While the Partnership has assumed the obligations of FHGLP under the 1993
Incentive Performance Plan (the "Incentive Performance Plan"), FHGLP has agreed
to contribute cash to the Partnership in an amount equal to any payments made by
the Partnership under the Incentive Performance Plan.
 
NOTE 3 -- ACQUISITIONS AND SALES
 
     The Partnership acquired the cable television systems of FCSC on July 12,
1996 through a newly-formed subsidiary operating partnership for a purchase
price of $253 million including transaction costs. The acquisition of FCSC was
accounted for by the purchase method of accounting, whereby the purchase price
of the FCSC assets was allocated based on an appraisal. The excess of purchase
price over the fair value of net assets acquired, or $18.2 million, has been
recorded as goodwill and is being amortized using the straight-line method over
20 years.
 
     In March and July 1998, FHGLP acquired the Falcon Classic Systems for an
aggregate purchase price of $83.4 million. Falcon Classic had revenue of
approximately $20.3 million for the year ended December 31, 1997.
 
     As discussed in Note 1, on September 30, 1998 the Partnership acquired the
TCI Systems and the Falcon Video Systems in accordance with the Contribution
Agreement.
 
     The acquisitions of the TCI Systems, the Falcon Video Systems and the
Falcon Classic Systems were accounted for by the purchase method of accounting,
whereby the purchase prices were allocated to the assets acquired and
liabilities assumed based on their estimated fair values at the dates of
acquisition, as follows:
 

<TABLE>
<CAPTION>
                                                         FALCON VIDEO        FALCON CLASSIC
                                      TCI SYSTEMS          SYSTEMS              SYSTEMS
                                      -----------    --------------------    --------------
                                                     (DOLLARS IN THOUSANDS)
<S>                                   <C>            <C>                     <C>
Purchase Price:
General partnership interests
  issued............................   $234,457            $ 43,073             $    --
Debt assumed........................    275,000             112,196                  --
Debt incurred.......................         --                  --              83,391
Other liabilities assumed...........        955               3,315               2,804
Transaction costs...................      2,879                  --                  --
                                       --------            --------             -------
                                        513,291             158,584              86,195
                                       --------            --------             -------
</TABLE>

 
                                      F-416