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S-4/A
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4/A on 08/27/1999
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<PAGE>   45
 
            NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
 
   
     NOTE A:  Pro forma operating results for Charter Holdings, including the
acquisition of us on December 23, 1998 by Paul G. Allen and the Sonic
acquisition, consist of the following (dollars in thousands):
    
   

<TABLE>
<CAPTION>
                                                                       12/24/98   1/1/98
                                                                       THROUGH    THROUGH
                                       1/1/98 THROUGH 12/23/98         12/31/98   5/20/98
                                  ----------------------------------   --------   -------
                                     CCA      CHARTERCOMM
                                    GROUP      HOLDINGS      CHARTER HOLDINGS      SONIC    ELIMINATIONS    SUBTOTAL
                                  ---------   -----------   -------------------   -------   ------------    ---------
<S>                               <C>         <C>           <C>        <C>        <C>       <C>             <C>
Revenues........................  $ 324,432    $196,801     $ 49,731   $13,713    $17,276    $      --      $ 601,953
                                  ---------    --------     --------   -------    -------    ---------      ---------
Operating expenses:
  Operating, general and
    administrative..............    164,145      98,331       25,952     7,134      8,993           --        304,555
  Depreciation and
    amortization................    136,689      86,741       16,864     8,318      2,279           --        250,891
  Stock option compensation
    expense.....................         --          --           --       845         --           --            845
  Management fees/corporate
    expense charges.............     17,392      14,780        6,176       473         --           --         38,821
                                  ---------    --------     --------   -------    -------    ---------      ---------
    Total operating expenses....    318,226     199,852       48,992    16,770     11,272           --        595,112
                                  ---------    --------     --------   -------    -------    ---------      ---------
Income (loss) from operations...      6,206      (3,051)         739    (3,057)     6,004           --          6,841
Interest expense................   (113,824)    (66,121)     (17,277)   (2,353)    (2,624)       1,900(c)    (200,299)
Other income (expense)..........      4,668      (1,684)        (684)      133        (15)      (1,900)(c)        518
                                  ---------    --------     --------   -------    -------    ---------      ---------
Income (loss) before income
  taxes.........................   (102,950)    (70,856)     (17,222)   (5,277)     3,365           --       (192,940)
Provision for income taxes......         --          --           --        --      1,346           --          1,346
                                  ---------    --------     --------   -------    -------    ---------      ---------
Income (loss) before
  extraordinary item............  $(102,950)   $(70,856)    $(17,222)  $(5,277)   $ 2,019    $      --      $(194,286)
                                  =========    ========     ========   =======    =======    =========      =========
 
<CAPTION>
 
                                         PRO FORMA
                                  ------------------------
 
                                  ADJUSTMENTS      TOTAL
                                  -----------    ---------
<S>                               <C>            <C>
Revenues........................   $      --     $ 601,953
                                   ---------     ---------
Operating expenses:
  Operating, general and
    administrative..............                   304,555
  Depreciation and
    amortization................     119,515(a)    370,406
  Stock option compensation
    expense.....................          --           845
  Management fees/corporate
    expense charges.............     (22,328)(b)    16,493
                                   ---------     ---------
    Total operating expenses....      97,187       692,299
                                   ---------     ---------
Income (loss) from operations...     (97,187)      (90,346)
Interest expense................      (4,471)(d)  (204,770)
Other income (expense)..........          --           518
                                   ---------     ---------
Income (loss) before income
  taxes.........................    (101,658)    (294,598)
Provision for income taxes......      (1,346)(e)        --
                                   ---------     ---------
Income (loss) before
  extraordinary item............   $(100,312)    $(294,598)
                                   =========     =========
</TABLE>

    
 
-------------------------
   
(a) Represents additional amortization of franchises as a result of the
    acquisition of us by Mr. Allen. A large portion of the purchase price was
    allocated to franchises ($3.6 billion) that are amortized over 15 years. The
    adjustment to depreciation and amortization expense consists of the
    following (dollars in millions):
    
 
   

<TABLE>
<CAPTION>
                                                                         WEIGHTED AVERAGE      DEPRECIATION/
                                                        FAIR VALUE    USEFUL LIFE (IN YEARS)   AMORTIZATION
                                                        ----------    ----------------------   -------------
<S>                                                     <C>           <C>                      <C>
Franchises..........................................     $3,600.0               15                $240.0
Cable distribution systems..........................      1,439.2               12                 115.3
Land, buildings and improvements....................         41.3               11                   3.5
Vehicles and equipment..............................         61.2                5                  11.6
                                                                                                  ------
     Total depreciation and amortization............                                               370.4
     Less-historical depreciation and
       amortization.................................                                              (250.9)
                                                                                                  ------
          Adjustment................................                                              $119.5
                                                                                                  ======
</TABLE>

    
 
   
(b) Reflects the reduction in corporate expense charges of approximately $8.2
    million to reflect the actual costs incurred. Management fees charged to CCA
    Group and CharterComm Holdings, companies not controlled by Charter
    Investment at that time, exceeded the allocated costs incurred by Charter
    Investment on behalf of those companies by $8.2 million. Also reflects the
    elimination of approximately $14.4 million of change of control payments
    under the terms of then-existing equity appreciation rights plans. Such
    payments were triggered by the acquisition of us by Mr. Allen. Such payments
    were made by Charter Investment and were not subject to reimbursement by us,
    but were allocated to us for financial reporting purposes. The equity
    appreciation rights plans were terminated in connection with the acquisition
    of us by Mr. Allen, and these costs will not recur.
    
 
(c) Represents the elimination of intercompany interest on a note payable from
    Charter Holdings to CCA Group.
 
   
(d) Reflects additional interest expense on $228.4 million of borrowings under
    our previous credit facilities used to finance the Sonic acquisition by us,
    using a composite current rate of 7.4% as follows (dollars in millions):
    
 
   

<TABLE>
<S>                                                           <C>
$228.4 million under previous credit facilities.............  $ 7.1
Less-historical Sonic interest expense......................   (2.6)
                                                              -----
          Adjustment........................................  $ 4.5
                                                              =====
</TABLE>

    
 
(e) Reflects the elimination of provision for income taxes, as Charter Holdings
    will operate as a limited liability company and all income taxes will flow
    through to the members.
 
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