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SEC Filings

10-Q
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form 10-Q on 11/15/1999
Entire Document
 
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ACQUISITIONS

         In the second, third and fourth quarters of 1999, direct or indirect
subsidiaries of Charter Holdings acquired Renaissance Media Group LLC, American
Cable Entertainment, LLC, cable television systems of Greater Media Cablevision,
Inc., Helicon Partners I, L.P. and affiliates, Vista Broadband Communications,
L.L.C., a cable television system of Cable Satellite of South Miami, Inc.,
Rifkin Acquisition Partners, L.L.L.P. and InterLink Communications, LLLP
(collectively "Rifkin"), and cable television systems of InterMedia Capital
Partners IV, L.P., InterMedia Partners and affiliates for a total purchase price
of approximately $4.3 billion which included assumed debt of $354 million. These
acquisitions were funded through excess cash from the issuance by Charter
Holdings of senior notes, borrowings under the Charter Operating credit
facilities, capital contributions to Charter Holdings by Mr. Allen and the
assumption of the outstanding Renaissance, Helicon and Rifkin notes.

         As part of the transaction with InterMedia, we agreed to "swap" some of
our non-strategic cable television systems located in Indiana, Montana, Utah and
northern Kentucky, representing 144,000 basic customers. The InterMedia systems
serve approximately 412,000 customers in Georgia, North Carolina, South Carolina
and Tennessee. We have transferred 114,000 subscribers to InterMedia in
connection with this swap. Subscribers totaling 30,000 are yet to be transferred
pending the necessary regulatory approvals. If the necessary regulatory
approvals cannot be obtained for the transfer of this system by March 20, 2000
and we are unable to transfer to InterMedia satisfactory replacement systems
before April 1, 2000, we must pay InterMedia $88.2 million. In addition, if we
transfer cash or property other than the retained system to InterMedia, in
certain circumstances, we must indemnify InterMedia 50% of all taxes and related
costs incurred or arising out of any claim that InterMedia suffered tax losses
to which it would not have been subject if we had transferred the retained
system. The exchange of cable television systems will be recorded at the fair
value of the systems exchanged.

                  Certain Rifkin sellers received $133.3 million of the purchase
price in the form of preferred equity of Charter Holdco. Under the Helicon
purchase agreement, $25 million of the purchase price was paid in the form of
preferred limited liability company interests in a subsidiary of Charter
Holdings.


<TABLE>
<CAPTION>
                                                                  PURCHASE       BASIC SUBSCRIBERS
                                                ACQUISITION         PRICE              AS OF
ACQUISITION                                        DATE         (IN MILLIONS)   SEPTEMBER 30, 1999
-----------                                        ----         -------------   ------------------

<S>                                             <C>           <C>               <C>    
Renaissance ......................                   4/99     $        459               132,300
American Cable ...................                   5/99              240                69,600
Greater Media systems ............                   6/99              500               174,300
Helicon  .........................                   7/99              550               172,000
Vista    .........................                   7/99              126                27,500
Cable Satellite...................                   8/89               22                 9,100
Rifkin   .......................                     9/99            1,460               464,500
InterMedia systems................                  10/99              904+              405,200
                                                              systems swap              (141,900)(a)
                                                                                    ------------
                                                                                         263,300 
                                                              ------------          ------------
         Total....................                            $      4,261             1,312,600
                                                              ============          ============
</TABLE>


(a)      Represents the number of basic customers served by cable television
         systems that we agreed to transfer to InterMedia. This number includes
         30,000 basic customers served by an Indiana cable television system
         that we did not transfer at the time of the InterMedia closing because
         necessary regulatory approvals were still pending.

OVERVIEW

         Approximately 86% of our historical revenues for the nine months ended
September 30, 1999, are attributable to monthly subscription fees charged to
customers for our basic, expanded basic and premium cable television programming
services, equipment rental and ancillary services provided by our cable
television systems. In addition, we derive other revenues from installation and
reconnection fees charged to customers to commence or reinstate service,
pay-per-view programming, where users are charged a fee for individual programs
requested, advertising revenues and commissions related to the sale of
merchandise by home shopping services. We have generated increased revenues in
each of the past 


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