Print Page  Close Window

SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
 
<PAGE>
 
             NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
 For the Three Months Ended March 31, 1999 and the Year Ended December 31, 1998
 
 (1) For the three months ended March 31, 1999, Michigan Holdings' results of
     operations include the results of operations of its wholly-owned
     subsidiary, Avalon Michigan, Inc. During this quarter, Avalon Michigan
     Inc. was the majority-owner of Avalon Cable LLC.
 
 (2) Avalon Cable LLC's results of operations include its results of operations
     for the three months ended March 31, 1999, the results of its wholly-owned
     subsidiaries, Holdings Finance, Avalon Michigan LLC and Avalon New England
     for the period ended March 31, 1999.
 
 (3) Taconic's results of operations includes the actual historical results of
     operations for the period from January 1, 1999 through March 31, 1999.
 
 (4) Pro forma adjustments represent those adjustments necessary to present
     operating results as if all pending and completed acquisitions and the
     financings occurred on January 1, 1999. These adjustments included the
     following:
 
  (a) To adjust revenues, costs, and expenses and corporate overhead of $949,
      $728 and $17, respectively for the three months ended March 31, 1999,
      and to account for the acquisitions of Nova Cablevision, Cross Country
      Cable TV, Traverse Internet, Galaxy American Communications, R/COM,
      Novagate Communications and Hometown TV as if these acquisitions
      occurred on January 1, 1999.
 
  (b) Amount represents increased depreciation and amortization due to excess
      of fair value over historical cost generated from the acquisitions of
      Taconic and other completed and pending acquisitions calculated as
      follows (dollars in thousands):
 

<TABLE>
<CAPTION>
                                                                    Three Months
                                                                       Ended
                                                                     March  31,
                                                                        1999
                                                                    ------------
      <S>                                                           <C>
      Pro forma depreciation and amortization......................   $11,179
      Historical depreciation and amortization.....................    10,944
                                                                      -------
      Pro forma adjustment.........................................   $   235
                                                                      =======
</TABLE>

     
  (c) To remove tax benefits, net, since once acquired, these businesses will
      be treated as partnerships for federal income tax purposes (dollars in
      thousands):     
 

<TABLE>
      <S>                                                              <C>
      Taconic......................................................... $    28
      Mercom..........................................................  (1,362)
                                                                       -------
          Total tax (benefit), net.................................... $(1,334)
                                                                       =======
</TABLE>

  (d) Amount represents increased interest expense of $606 due to the
      financings for completed acquisitions during the first three months
      ended March 31, 1999.
 
 (5) Michigan Holdings' results of operations include the results of operations
     of its wholly-owned subsidiary, Avalon Michigan, Inc. for the year ended
     December 31, 1998. Avalon Michigan Inc.'s results of operations include
     the results of operations of its majority-owned subsidiary, Avalon Cable
     LLC for the year ended December 31, 1998.
 
 (6) Cable Michigan's results of operations includes the actual historical
     results of operations of Cable Michigan for the period from January 1,
     1998 through November 5, 1998.
 
 (7) Avalon Cable LLC results of operations include its results of operations
     from its inception (October 21, 1998) through December 31, 1998, the
     results of operations of Avalon New England, its wholly-owned subsidiary,
     for
 
                                       36