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SEC Filings

AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
                                 March 31, 1999
  .  Avalon Michigan contributed its assets and liabilities excluding
     deferred tax liabilities, net to Avalon Cable LLC in exchange for an
     approximate 88% voting interest in Avalon Cable LLC. Avalon Cable LLC
     contributed these assets and liabilities, excluding the Senior Discount
     Notes and associated debt finance costs, to its wholly-owned subsidiary,
     Avalon Cable of Michigan LLC.
  .  Avalon Cable of Michigan LLC has become the operator of the Michigan
     cluster replacing Avalon Michigan;
  .  Avalon Cable of Michigan LLC is an obligor on the Senior Subordinated
     Notes replacing Avalon Michigan; and
  .  Avalon Michigan is a guarantor of the obligations of Avalon Cable of
     Michigan LLC under the Senior Subordinated Notes. Avalon Michigan does
     not have significant assets, other than its 88% investment in Avalon
     Cable LLC at March 31, 1999.
   As a result of this reorganization between entities under common control,
the Company accounted for the reorganization similar to a pooling-of-interests.
Under the pooling-of-interests method, the results of operations include the
results of operations from the earliest date that a member becomes a part of
the control group by inception or acquisition. For the Company, the results of
operations are from the date of inception (September 4, 1997) for Avalon Cable
of New England LLC (Avalon New England), a wholly-owned subsidiary of Avalon
Cable LLC.
   The Company has a majority interest in Avalon Cable LLC. Avalon Cable LLC
wholly-owns Avalon Cable Holdings Finance, Avalon New England, and Avalon
Michigan LLC.
   Avalon Michigan LLC and Avalon New England provide cable services to various
areas in Michigan and New England, respectively. Avalon New England and Avalon
Michigan LLC's cable systems offer customer packages for basic cable
programming services which are offered at a per channel charge or packaged
together to form a tier of services offered at a discount from the combined
channel rate. Avalon New England and Avalon Michigan LLC's cable systems also
provide premium cable services to their customers for an extra monthly charge.
Customers generally pay initial connection charges and fixed monthly fees for
cable programming and premium cable services, which constitute the principle
sources of revenue for the Company.
   Avalon Holdings Finance was formed for the sole purpose of facilitating
financings associated with the acquisition of various cable operating
companies. Avalon Holdings Finance conducts no other activities.
2. Basis of Presentation
   Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in financial statements prepared in accordance with generally
accepted accounting principles.
   These condensed financial statements should be read in conjunction with the
Company's audited financial statements at December 31, 1998 and notes thereto
included elsewhere herein.
   The financial statements as of March 31, 1999 and for the three month period
then ended are unaudited; however, in the opinion of management, such
statements include all adjustments (consisting solely of normal and recurring
adjustments except for the acquisition of Cross Country Cable, LLC ("Cross
Country"), Nova Cablevision, Inc., Nova Cablevision VI, L.P. and Nova
Cablevision VII, L.P. ("Nova Cable"), Novagate Communication Corporation
("Novagate"), R/Com. L.C., the Mercom Acquisition and the contribution of
assets and liabilities by Avalon Cable LLC) necessary to present fairly the
financial information included therein.