Print Page  Close Window

SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
Entire Document
 
<PAGE>   599
                              FANCH CABLE SYSTEMS
        (COMPRISED OF COMPONENTS OF TWFANCH-ONE CO. AND TWFANCH-TWO CO.)
 
             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
the franchises and to better reflect industry practice. This change in estimate
resulted in an increase in net income of approximately $20 million for the year
ended December 31, 1998.
 
     Amortization expense was $23,519,373 and $43,094,595 for the years ended
December 31, 1998 and 1997, respectively.
 
3.  DISPOSAL OF ASSETS
 
     During 1998 and 1997, a loss on disposal of assets was recognized on plant
that was replaced to technically upgrade the system and for other operational
purposes. The loss on the disposal of assets is summarized as follows:
 

<TABLE>
<CAPTION>
                                                             1998           1997
                                                          -----------    ----------
<S>                                                       <C>            <C>
Cost....................................................  $ 8,004,258    $3,467,785
Accumulated depreciation................................   (1,532,392)     (293,273)
Proceeds................................................     (225,629)     (427,592)
                                                          -----------    ----------
Loss on disposal........................................  $ 6,246,237    $2,746,920
                                                          ===========    ==========
</TABLE>

 
4.  PURCHASE AND SALE OF SYSTEMS
 
     On March 30, 1997, the Combined Systems acquired cable television systems,
including plant, franchise license and business license, serving communities in
the states of Pennsylvania and Virginia. The purchase price was $1,400,000, of
which $765,000 was allocated to property, plant and equipment and $635,000 was
allocated to intangible assets.
 
     Concurrent with the purchase of the systems in Pennsylvania on March 30,
1997, the Combined Systems sold certain of these assets, including plant,
franchise and business license, for $340,000. No gain or loss on this
transaction was recorded.
 
     The above acquisition was accounted for using the purchase method of
accounting, and accordingly, results of operations of the acquired assets have
been included in the financial statements from the dates of acquisition.
 
5.  RELATED PARTIES
 
     The Partnerships have entered into a management agreement with an entity
(the "Manager") whose sole stockholder is affiliated with several of the
Partnerships' general partners. The Partnerships also entered into a management
agreement with another of the Partnerships' general partners (the "General
Partner"). The agreements provide that the Manager and General Partner will
manage their respective systems and receive annual compensation equal to 2.5% of
the gross revenues from operations for their respective systems. Management fees
for the years ended December 31, 1998 and 1997 were $3,170,784 and $3,012,943,
respectively.
 
     A company affiliated with the Manager provides subscriber billing services
for a portion of the Combined Systems' subscribers. The Combined Systems
incurred fees for monthly billing and related services in the approximate
amounts of $308,943 and $307,368 for the years ended December 31, 1998 and 1997,
respectively.
 
                                      F-455