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SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 09/28/1999
Entire Document
 
<PAGE>   483
 
                          LONG BEACH ACQUISITION CORP.
 

                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 23, 1997
 
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
ORGANIZATION AND BASIS OF PRESENTATION
 
     Long Beach Acquisition Corp. (LBAC or the "Company") was a wholly owned
corporation of KC Cable Associates, L.P., a partnership formed through a joint
venture agreement between Kohlberg, Kravis, Roberts & Co. (KKR) and Cablevision
Industries Corporation (CVI). The Company was formed to acquire cable television
systems serving Long Beach, California, and surrounding areas.
 
     On May 23, 1997, the Company executed a stock purchase agreement with
Charter Communications Long Beach, Inc. (CC-LB) whereby CC-LB purchased all of
the outstanding stock of the Company for an aggregate purchase price, net of
cash acquired, of $150.9 million. Concurrent with this stock purchase, CC-LB was
acquired by Charter Communications, Inc. (Charter) and Kelso Investment
Associates V, L.P., an investment fund (Kelso).
 
     As of May 23, 1997, LBAC provided cable television service to subscribers
in southern California.
 
CASH AND CASH EQUIVALENTS
 
     The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
 
PROPERTY, PLANT AND EQUIPMENT
 
     Property, plant and equipment is recorded at cost, including all direct and
certain indirect costs associated with the construction of cable transmission
and distribution facilities, and the cost of new customer installation. The
costs of disconnecting a customer are charged to expense in the period incurred.
Expenditures for repairs and maintenance are charged to expense as incurred, and
equipment replacement costs and betterments are capitalized.
 
     Depreciation is provided on a straight-line basis over the estimated useful
life of the related asset as follows:
 

<TABLE>
<S>                                                       <C>
Leasehold improvements..................................  Life of respective lease
Cable systems and equipment.............................                5-10 years
Subscriber devices......................................                   5 years
Vehicles................................................                   5 years
Furniture, fixtures and office equipment................                5-10 years
</TABLE>

 
FRANCHISES
 
     Franchises include the assigned fair value of the franchise from purchased
cable television systems. These franchises are amortized on a straight-line
basis over six years, the remaining life of the franchise at acquisition.
 
INTANGIBLE ASSETS
 
     Intangible assets include goodwill, which is amortized over fifteen years;
subscriber lists, which are amortized over seven years; a covenant not to
compete which is amortized over five
 
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