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S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
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                AVALON CABLE OF MICHIGAN, INC. AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
 
5. Intangible Assets
 
   Intangible assets consist of the following:
 

<TABLE>
      <S>                                                              <C>
      Cable franchises................................................ $374,773
      Goodwill........................................................   82,928
      Deferred financing costs........................................   10,658
      Non-compete agreement...........................................      100
                                                                       --------
      Total...........................................................  468,459
      Less--accumulated amortization..................................   (6,342)
                                                                       --------
      Intangible assets, net.......................................... $462,117
                                                                       ========
</TABLE>

 
   Amortization expense for the period ended December 31, 1998 was $6,342.
 
6. Accounts payable and accrued expenses
 
   Accounts payable and accrued expenses consist of the following:
 

<TABLE>
      <S>                                                              <C>
      Accounts payable................................................ $ 5,321
      Accrued corporate expenses......................................     404
      Accrued cable programming costs.................................   2,388
      Accrued taxes...................................................   1,383
      Other...........................................................   2,150
                                                                       -------
                                                                       $11,646
                                                                       =======
 
7. Income Taxes
 
   The income tax provision (benefit) in the accompanying consolidated
financial statements of operations is comprised of the following:
 
<CAPTION>
                                                                        1998
                                                                       -------
      <S>                                                              <C>
      Current
       Federal........................................................ $   243
       State..........................................................     --
                                                                       -------
         Total Current................................................     243
                                                                       -------
      Deferred
       Federal........................................................  (2,757)
       State..........................................................    (240)
                                                                       -------
         Total Deferred...............................................  (2,997)
                                                                       -------
         Total (benefit) for income taxes............................. $(2,754)
                                                                       =======
</TABLE>

 
   The benefit for income taxes is different from the amounts computed by
applying the U.S. statutory federal tax rate of 35% for 1998. The differences
are as follows:
 

<TABLE>
<CAPTION>
                                                                        1998
                                                                       -------
      <S>                                                              <C>
      (Loss) before (benefit) for income taxes........................ $(8,833)
                                                                       =======
      Federal tax (benefit) at statutory rates........................  (3,092)
      State income taxes..............................................     177
      Goodwill........................................................      77
      Benefit for taxes allocated to minority partners................      84
                                                                       -------
      (Benefit) for income taxes...................................... $(2,754)
                                                                       =======
</TABLE>

 
 
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