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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
 
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  THE COMBINED OPERATIONS OF PEGASUS CABLE TELEVISION OF CONNECTICUT, INC. AND
         THE MASSACHUSETTS OPERATIONS OF PEGASUS CABLE TELEVISION, INC.
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
 
 
2. Summary of Significant Accounting Policies--(continued):
 
   Depreciation is computed for financial reporting purposes using the
straight-line method based upon the following lives:
 

<TABLE>
      <S>                                                         <C>
      Reception and distribution facilities......................  7 to 11 years
      Building and improvements.................................. 12 to 39 years
      Equipment, furniture and fixtures..........................  5 to 10 years
      Vehicles...................................................   3 to 5 years
</TABLE>

 
 Intangible Assets:
 
   Intangible assets are stated at cost and amortized by the straight-line
method. Costs of successful franchise applications are capitalized and
amortized over the lives of the related franchise agreements, while
unsuccessful franchise applications and abandoned franchises are charged to
expense. Financing costs incurred in obtaining long-term financing are
amortized over the term of the applicable loan. Intangible assets are reviewed
periodically for impairment or whenever events or circumstances provide
evidence that suggest that the carrying amounts may not be recoverable. The
Company assesses the recoverability of its intangible assets by determining
whether the amortization of the respective intangible asset balance can be
recovered through projected undiscounted future cash flows.
 
   Amortization of intangible assets is computed for financial reporting
purposes using the straight-line method based upon the following lives:
 

<TABLE>
      <S>                                                               <C>
      Organization costs...............................................  5 years
      Other intangibles................................................  5 years
      Deferred franchise costs......................................... 15 years
</TABLE>

 
 Revenue:
 
   The Combined Operations recognize revenue when video and audio services are
provided.
 
 Advertising Costs:
 
   Advertising costs are charged to operations as incurred and totaled $20,998,
$12,768, $14,706 and $8,460 for the years ended December 31, 1995, 1996 and
1997 and for the six months ended June 30, 1998, respectively.
 
 Cash and Cash Equivalents:
 
   Cash and cash equivalents include highly liquid investments purchased with
an initial maturity of three months or less. The Combined Operations have cash
balances in excess of the federally insured limits at various banks.
 
 Income Taxes:
 
   The Combined Operations is not a separate tax paying entity. Accordingly,
its results of operations have been included in the tax returns filed by PCC.
The accompanying financial statements include tax computations assuming the
Combined Operations filed separate returns and reflect the application of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109").
 
 Concentration of Credit Risk:
 
   Financial instruments which potentially subject the Combined Operations to
concentrations of credit risk consist principally of trade receivables.
Concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising the Combined Operation's customer
base.
 
                                      F-96