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SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
Entire Document
 
<PAGE>   501
 
                  MARCUS CABLE HOLDINGS, LLC AND SUBSIDIARIES
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
 
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
ORGANIZATION AND BASIS OF PRESENTATION
 
     Marcus Cable Holdings, LLC (MCHLLC) was formed in February 1999 as parent
of Marcus Cable Company, L.L.C. (MCCLLC), formerly Marcus Cable Company, L.P.
(MCCLP). MCCLP was formed as a Delaware limited partnership and was converted to
a Delaware limited liability company on June 9, 1998. MCHLLC and its
subsidiaries (collectively, the "Company") derive their primary source of
revenues by providing various levels of cable television programming and
services to residential and business customers. The Company's operations are
conducted through Marcus Cable Operating Company, L.L.C. (MCOC), a wholly owned
subsidiary of the Company. The Company has operated its cable television systems
primarily in Texas, Wisconsin, Indiana, California and Alabama.
 
     The accompanying consolidated financial statements include the accounts of
MCCLLC, which is the predecessor of MCHLLC, and its subsidiary limited liability
companies and corporations. All significant intercompany accounts and
transactions have been eliminated in consolidation.
 
     On April 23, 1998, Vulcan Cable, Inc. and Paul G. Allen (collectively
referred to as "Vulcan") acquired all of the outstanding limited partnership
interest and substantially all of the general partner interest in MCCLP for cash
payments of $1,392,000 (the "Vulcan Acquisition"). Under the terms of the
purchase agreement, the owner of the remaining 0.6% general partner interest in
the Company, (the "Minority Interest"), which represents 100% of the voting
control of the Company, could cause Vulcan to purchase the 0.6% general partner
interest under certain conditions, or Vulcan could cause the Minority Interest
to sell its interest to Vulcan under certain conditions, at a fair value of not
less than $8,000. On March 31, 1999, Vulcan acquired voting control of the
Company by its acquisition of the Minority Interest for cash consideration.
 
     Effective December 23, 1998, through a series of transactions, Paul G.
Allen acquired approximately 94% of Charter Communications, Inc. (Charter).
Beginning in October 1998, Charter managed the operations of the Company.
 
     In March 1999, Charter transferred all of its cable television operating
subsidiaries to a subsidiary, Charter Communications Holdings, LLC (Charter
Holdings) in connection with the issuance of Senior Notes and Senior Discount
Notes totaling $3.6 billion. These operating subsidiaries were then transferred
to Charter Communications Operating, LLC (Charter Operating). On April 7, 1999,
the cable television operating subsidiaries of the Company were transferred to
Charter Operating subsequent to the purchase of Paul G. Allen of the Minority
Interest.
 
     As a result of the Vulcan Acquisition, the Company recognized severance and
stay-on bonus compensation of $16,034, during the fourth quarter of 1998. As of
March 31, 1999, 85 employees and officers of the Company had been terminated.
The remaining balance of $2,400 is to be paid by April 30, 1999 and an
additional $400 in stay-on bonuses will be recorded as compensation in 1999 as
the related services are provided.
 
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