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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 05/28/1999
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                  UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

   The following Unaudited Pro Forma Combined Financial Data is based on the
historical financial statements of the Avalon Cable of Michigan Holdings, Inc.,
Cable Michigan, the predecessor to Avalon Cable of Michigan Holdings, Inc.,
Avalon Cable LLC, Avalon Cable of New England LLC, AMRAC Clear View, the
predecessor to Avalon Cable LLC and Avalon Cable of New England, Pegasus Cable
Television, Inc. and Pegasus Cable Television of Connecticut, Inc., Taconic
Technology Corporation and Avalon Cable Holdings Finance, Inc. and the
assumptions and adjustments described in the accompanying notes. The results of
Mercom are included in the results of Avalon Cable of Michigan, Inc. and Cable
Michigan for the reported periods. The following Unaudited Pro Forma Combined
Statements of Operations gives effect to our completed and pending
acquisitions, the issuance of the old notes, the issuance of the senior
subordinated notes by the issuers' operating subsidiaries, the incurrence of
debt under our senior credit facility and the reorganization transactions
described herein, as if each had occurred on January 1, 1999 for pro forma
information for the period ending March 31, 1999 and January 1, 1998 for the
pro forma information for the period ended December 31, 1998. The Unaudited Pro
Forma Combined Statements of Operations do not purport to represent what the
issuers' results of operations actually would have been if all completed and
pending acquisitions had occurred as of the date indicated or what the results
will be for future periods. Among other things, this data does not give effect
to certain non-recurring charges or cost savings expected to result from our
acquisitions. In the following table and the related notes, we refer to:

  .  Avalon Cable Holdings Finance, Inc. as Holdings Finance,

  .  the assets and related liabilities that we will acquire from Taconic
     Technology Corporation as Taconic,

  .  Avalon Cable of Michigan Holdings, Inc. as Michigan Holdings,

  .  Avalon Cable of New England LLC as Avalon New England,

  .  AMRAC Clear View as Amrac,

  .  Pegasus Cable Television, Inc. and Pegasus Cable Television of
     Connecticut, Inc., collectively as Pegasus,


  .  Avalon Cable of Michigan, Inc. as Avalon Michigan Inc., and

  .  Avalon Cable of Michigan LLC as Avalon Michigan LLC.

   The following Unaudited Pro Forma Combined Balance Sheet as of March 31,
1999 was prepared as if all of the completed and pending acquisitions and the
reorganization had occurred on this date. The Unaudited Pro Forma Combined
Balance Sheet reflects the preliminary allocations of purchase price to the
Issuers' tangible and intangible assets and liabilities. The final allocation
of purchase price, and the resulting depreciation and amortization expense in
the accompanying Unaudited Pro Forma Combined Statements of Operations, may
differ from the preliminary estimates due to the final allocation being based
on (a) actual closing date amounts of assets and liabilities and (b) actual
appraised values of property, plant and equipment and any identifiable
intangible assets for the pending acquisitions. For every $100,000 change in
the allocation to goodwill, amortization expense would increase or decrease
accordingly by approximately $6,700 on a yearly basis.

   The Unaudited Pro Forma Combined Financial Data and accompanying notes are
provided for informational purposes only and are not necessarily indicative of
the operating results that would have occurred had all completed and pending
acquisitions been consummated on the date indicated, nor are they necessarily
indicative of the Issuers' future results of operations or financial position.
The operating results for the three months ended March 31, 1999 are not
necessarily indicative of results to be expected for the year ended December
31, 1999.

   The Unaudited Pro Forma Combined Financial Data should be read in
conjunction with the financial statements of Michigan Holdings, Cable Michigan,
Avalon Cable LLC, Avalon New England, Amrac, Pegasus, Taconic and Holdings
Finance and the accompanying notes thereto included elsewhere in this
prospectus.

   Prior to July 21, 1998, Pegasus was operated as part of Pegasus
Communications Corporation. The table below sets forth selected historical
combined data for Pegasus. The historical combined financial data presented

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