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SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/04/1999
Entire Document
 
<PAGE>   546
 
             R/N SOUTH FLORIDA CABLE MANAGEMENT LIMITED PARTNERSHIP
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
1.  BASIS OF PRESENTATION
 
     The accompanying consolidated financial statements are unaudited. However,
in the opinion of management, the financial statements reflect all adjustments,
consisting of normal recurring adjustments, necessary for fair presentation in
accordance with generally accepted accounting principles applicable to interim
periods. Interim results of operations are not indicative of results for the
full year. The accompanying financial statements should be read in conjunction
with the December 31, 1998 audited consolidated financial statements of R/N
South Florida Cable Management Limited Partnership (the "Partnership").
 
     Effective April 1, 1999, InterLink Communications Partners, LLLP ("ICP")
completed the purchase of the remaining general partner interest in the
Partnership and the Partnership was merged into ICP and ceased to exist as a
separate legal entity. The Partnership's financial statements subsequent to that
date represent a divisional carve-out from ICP. These financial statements
include all the direct costs of operating its business; however, certain assets,
liabilities and costs not specifically related to the Partnership's activities
were allocated and reflected in the financial position as of June 30, 1999, and
the results of its operations and its cash flows for the six months ended June
30, 1999. Management believes these allocations were made on a reasonable basis.
Nonetheless, the financial information included herein may not necessarily
reflect what the financial position and results of operations of the Partnership
would have been as a stand-alone entity.
 
2.  ACQUISITION BY INTERLINK COMMUNICATIONS PARTNERS, LLLP
 
     ICP agreed to purchase all of the Partnership interests as of December 31,
1998, for a total purchase price of approximately $105.5 million. The
acquisition of the Partnership by ICP was accounted for as a purchase and a new
basis of accounting was established effective January 1, 1999. The new basis
resulted in assets and liabilities being recorded at their fair market value
resulting in a increase in property, plant, and equipment and franchise costs of
approximately $5.0 million and approximately $77.1 million, respectively.
Accordingly, the 1999 interim-unaudited financial statements are not comparable
to the 1998 interim-unaudited financial statements of the Partnership, which are
based on historical costs.
 
3.  DEBT
 
     On December 30, 1998, the Partnership obtained an interpartnership loan
agreement with ICP. Borrowings under the interpartnership loan, as well as
interest and principal payments are due at the discretion of the management of
ICP. The balance of the interpartnership loan at December 31, 1998 and June 30,
1999 was $31,222,436 and $29,181,690, respectively. The interest rate at both
December 31, 1998 and June 30, 1999 was 8.5%
 
4.  ACQUISITION BY CHARTER COMMUNICATIONS HOLDINGS, LLC
 
     On February 12, 1999, ICP signed a letter of intent to sell all of ICP's
partnership interests to Charter Communications Holdings, LLC ("Charter"). On
April 26, 1999, ICP signed a definitive Purchase and Sale Agreement with Charter
for the sale of the individual partners' interest. ICP and Charter are expected
to complete the sale during the third quarter of 1999.
 
                                      F-299