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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
 
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                       AVALON CABLE LLC AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
services were terminated. The Agreement also permitted Avalon Cable of Michigan,
Inc. to agree to acquire the remaining shares of Mercom that it did not own.
 
     Michigan Holdings contributed $137,375 in cash to Avalon Cable of Michigan,
Inc., which was used to consummate the Merger. On November 5, 1998, Michigan
Holdings received $105,000 in cash in exchange for promissory notes to lenders
(the "Bridge Agreement"). On November 6, 1998, Michigan Holdings contributed the
proceeds received from the Bridge Agreement and an additional $35,000 in cash to
Avalon Cable of Michigan Inc. in exchange for 100 shares of common stock.
 
     On March 26, 1999, Avalon completed a series of transactions to facilitate
certain aspects of its financing between affiliated entities under common
control. As a result of these transactions:
 
     - Avalon Cable of Michigan Inc. contributed its assets and liabilities
       excluding deferred tax liabilities, net to Avalon in exchange for an
       approximate 88% voting interest in Avalon. Avalon contributed these
       assets and liabilities to its wholly-owned subsidiary, Avalon Cable of
       Michigan.
 
     - Avalon Michigan has become the operator of the Michigan cluster replacing
       Avalon Cable of Michigan, Inc.
 
     - Avalon Michigan is an obligor on the Senior Subordinated Notes replacing
       Avalon Cable of Michigan, Inc., and
 
     - Avalon Cable of Michigan, Inc. is a guarantor of the obligations of
       Avalon Michigan under the Senior Subordinated Notes. Avalon Cable of
       Michigan, Inc. does not have significant assets, other than its
       investment in Avalon.
 
     - Avalon is an obligor on the Senior Discount Notes replacing Avalon Cable
       of Michigan Holdings, Inc.
 
     As a result of the reorganization between entities under common control,
Avalon accounted for the reorganization similar to a pooling-of-interests. Under
the pooling-of-interests method, the results of operations for Avalon include
the results of operations from the date of inception (June 2, 1998) inception of
Avalon Cable of Michigan, Inc. and the date of acquisition of the completed
acquisitions.
 
     Avalon New England and Avalon Michigan provide cable service to the western
New England area and the state of Michigan, respectively. Avalon cable systems
offer customer packages of basic and premium cable programming services which
are offered at a per channel charge or are packaged together to form a tier of
services offered at a discount from the combined channel rate. Avalon cable
systems also provide premium cable services to their customers for an extra
monthly charge. Customers generally pay initial connection charges and fixed
monthly fees for cable programming and premium cable services, which constitute
the principal sources of revenue for Avalon.
 
     Avalon Holdings Finance was formed for the sole purpose of facilitating
financings associated with the acquisitions of various cable operating
companies. Avalon Holdings Finance conducts no other activities.
 
                                      F-307