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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>   517
 
                            INTERMEDIA CABLE SYSTEMS
              (COMPRISED OF COMPONENTS OF INTERMEDIA PARTNERS AND
                     INTERMEDIA CAPITAL PARTNERS IV, L.P.)
 
                NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
 
1.  BASIS OF PRESENTATION
 
THE CHARTER TRANSACTIONS
 
     InterMedia Partners, a California limited partnership ("IP-I"), and
InterMedia Capital Partners IV, L.P., a California limited partnership,
("ICP-IV", together with IP-I, "InterMedia") are affiliated through common
control and management. Robin Media Group, Inc., a Nevada corporation, ("RMG")
is a majority owned subsidiary of ICP-IV. On April 20, 1999, InterMedia and
certain of its affiliates entered into agreements (the "Agreements") with
affiliates of Charter Communications, Inc. ("Charter") to sell and exchange
certain of their cable television systems ("the Charter Transactions").
 
     Specifically, ICP-IV and its affiliates have agreed to sell certain of
their cable television systems in Tennessee and Gainesville, Georgia through a
combination of asset sales and the sale of their equity interests in RMG, and to
exchange their systems in and around Greenville and Spartanburg, South Carolina
for Charter systems located in Indiana, Kentucky, Utah and Montana. Immediately
upon Charter's acquisition of RMG, IP-I will exchange its cable television
systems in Athens, Georgia, Asheville and Marion, North Carolina and Cleveland,
Tennessee for RMG's cable television systems located in middle Tennessee.
 
     The Charter Transactions are expected to close during the third or fourth
quarter of 1999. The cable systems retained by Charter upon consummation of the
Charter Transactions, together with RMG, are referred to as the "InterMedia
Cable Systems," or the "Systems."
 
PRESENTATION
 
     The Systems being sold or exchanged do not individually or collectively
comprise a separate legal entity. Accordingly, the accompanying condensed
combined financial statements have been carved-out from the historical
accounting records of InterMedia.
 
     The accompanying unaudited interim condensed combined financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, certain footnote disclosures
have been condensed or omitted. In the management's opinion, the interim
unaudited condensed combined financial statements reflect all adjustments
(consisting of only normal recurring adjustments) necessary for a fair
presentation of the Systems' financial position as of June 30, 1999, and their
results of operations for the six months ended June 30, 1999 and 1998 and cash
flows for the six months ended June 30, 1999 and 1998. The results of operations
for these periods are not necessarily indicative of results that may be expected
for the year ending December 31, 1999. These condensed combined financial
statements should be read in conjunction with the Systems' audited combined
financial statements and notes thereto for the year ended December 31, 1998
contained elsewhere in this document.
 
CARVE-OUT METHODOLOGY
 
     Throughout the periods covered by the condensed combined financial
statements, the individual cable systems were operated and accounted for
separately. However, the Charter Transactions exclude certain systems (the
"Excluded Systems") which were operated as part of
 
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