Print Page  Close Window

SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/04/1999
Entire Document
 
<PAGE>   622
                     CABLE MICHIGAN, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
11. AFFILIATE AND RELATED PARTY TRANSACTIONS
 
     The Company has the following transactions with affiliates:
 

<TABLE>
<CAPTION>
                                                      FOR THE YEAR         FOR THE
                                                          ENDED          PERIOD ENDED
                                                    -----------------    NOVEMBER 5,
                                                     1996       1997         1998
                                                    -------    ------    ------------
<S>                                                 <C>        <C>       <C>
Corporate office costs allocated to the Company...  $ 3,498    $3,715       $1,866
Cable staff and customer service costs allocated
  from RCN Cable..................................    3,577     3,489        3,640
Interest expense on affiliate notes...............   13,952     8,447          795
Royalty fees charged by CTE.......................      585       465           --
Charges for engineering services..................      296        --           --
Other affiliate expenses..........................      189       171          157
</TABLE>

 
     In addition, RCN has agreed to obtain programming from third party
suppliers for Cable Michigan, the costs of which will be reimbursed to RCN by
Cable Michigan. In those circumstances where RCN purchases third party
programming on behalf of both RCN and the Company, such costs will be shared by
each company, on a pro rata basis, based on each company's number of
subscribers.
 
     At December 31, 1997 and November 5, 1998, the Company has accounts
receivable from related parties of $166 and $396 respectively, for these
transactions. At December 31, 1997 and November 5, 1998, the Company has
accounts payable to related parties of $1,560 and $343 respectively, for these
transactions.
 
     The Company had a note payable to RCN Corporation of $147,567 at December
31, 1996 primarily related to the acquisition of the Michigan cable operations
and its subsequent operations. The Company repaid approximately $110,000 of this
note payable in 1997. The remaining balance was transferred to shareholder's net
investment in connection with the Distribution.
 
12. OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK
 
     The Company places its cash and temporary investments with high credit
quality financial institutions. The Company also periodically evaluates the
creditworthiness of the institutions with which it invests. The Company does,
however, maintain unsecured cash and temporary cash investment balances in
excess of federally insured limits.
 
     The Company's trade receivables reflect a customer base centered in the
state of Michigan. The Company routinely assesses the financial strength of its
customers; as a result, concentrations of credit risk are limited.
 
13. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:
 
          a. The fair value of the revolving credit agreement is considered to
     be equal to carrying value since the debt re-prices at least every six
     months and the Company believes that its credit risk has not changed from
     the time the floating rate debt was borrowed and therefore, would obtain
     similar rates in the current market.
 
                                      F-375