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S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
Entire Document
 
<PAGE>   536
    THE COMBINED OPERATIONS OF PEGASUS CABLE TELEVISION OF CONNECTICUT, INC.
       AND THE MASSACHUSETTS OPERATIONS OF PEGASUS CABLE TELEVISION, INC.
 
             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
and reflect the application of Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS 109").
 
  Concentration of Credit Risk:
 
     Financial instruments which potentially subject the Combined Operations to
concentrations of credit risk consist principally of trade receivables.
Concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising the Combined Operation's customer
base.
 
3. PROPERTY AND EQUIPMENT:
 
     Property and equipment consist of the following:
 

<TABLE>
<CAPTION>
                                          DECEMBER 31,    DECEMBER 31,     JUNE 30,
                                              1996            1997           1998
                                          ------------    ------------    -----------
<S>                                       <C>             <C>             <C>
Land....................................  $     8,000     $     8,000     $     8,000
Reception and distribution facilities...    8,233,341       9,009,179       9,123,402
Building and improvements...............      242,369         250,891         250,891
Equipment, furniture and fixtures.......      307,844         312,143         312,143
Vehicles................................      259,503         287,504         287,504
Other equipment.........................      139,408          79,004          79,004
                                          -----------     -----------     -----------
                                            9,190,465       9,946,721      10,060,944
Accumulated depreciation................   (5,025,920)     (6,381,124)     (7,055,899)
                                          -----------     -----------     -----------
Net property and equipment..............  $ 4,164,545     $ 3,565,597     $ 3,005,045
                                          ===========     ===========     ===========
</TABLE>

 
     Depreciation expense amounted to $1,059,260, $1,267,831, $1,290,217 and
$674,775 for the years ended December 31, 1995, 1996 and 1997 and for the six
months ended June 30, 1998, respectively.
 
4. INTANGIBLES:
 
     Intangible assets consist of the following:
 

<TABLE>
<CAPTION>
                                            DECEMBER 31,    DECEMBER 31,     JUNE 30,
                                                1996            1997           1998
                                            ------------    ------------    ----------
<S>                                         <C>             <C>             <C>
Deferred franchise costs..................   $4,367,594     $  4,486,016    $4,486,333
Deferred financing costs..................    1,042,079        1,156,075     1,159,027
Organization and other costs..............      439,188          389,187       389,187
                                             ----------     ------------    ----------
                                              5,848,861        6,031,278     6,034,547
                                             ----------     ------------    ----------
Accumulated amortization..................   (3,674,777)      (3,934,505)   (4,094,643)
                                             ----------     ------------    ----------
Net intangible assets.....................   $2,174,084     $  2,096,773    $1,939,904
                                             ==========     ============    ==========
</TABLE>

 
     Amortization expense amounted to $599,195, $401,276, $274,851 and $160,138
for the years ended December 31, 1995, 1996 and 1997 and for the six months
ended June 30, 1998, respectively.
 
                                      F-392