Print Page  Close Window

SEC Filings

S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 01/25/2000
Entire Document
 
<PAGE>   705
                      BRESNAN COMMUNICATIONS GROUP SYSTEMS
            (A COMBINATION OF CERTAIN ASSETS, AS DEFINED IN NOTE 1)
 
             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
                        DECEMBER 31, 1996, 1997 AND 1998
                                 (IN THOUSANDS)
 
  (e) Impairment of Long-Lived Assets
 
     Management periodically reviews the carrying amounts of property and
equipment and identifiable intangible assets to determine whether current events
or circumstances warrant adjustments to such carrying amounts. If an impairment
adjustment is deemed necessary based on an analysis of undiscounted cash flow,
such loss is measured by the amount that the carrying value of such assets
exceeds their fair value. Considerable management judgment is necessary to
estimate the fair value of assets. Accordingly, actual results could vary
significantly from such estimates. Assets to be disposed of are carried at the
lower of their financial statement carrying amount or fair value less costs to
sell.
 
  (f) Financial Instruments
 
     Bresnan Communications Group Systems has entered into fixed interest rate
exchange agreements ("Interest Rate Swaps") which are used to manage interest
rate risk arising from its financial liabilities. Such Interest Rate Swaps are
accounted for as hedges; accordingly, amounts receivable or payable under the
Interest Rate Swaps are recognized as adjustments to interest expense. Such
instruments are not used for trading purposes.
 
     During 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," ("SFAS 133"), which is effective for all fiscal years
beginning after June 15, 1999. SFAS 133 establishes accounting and reporting
standards for derivative instruments and hedging activities by requiring that
all derivative instruments be reported as assets or liabilities and measured at
their fair values. Under SFAS 133, changes in the fair values of derivative
instruments are recognized immediately in earnings unless those instruments
qualify as hedges of the (1) fair values of existing assets, liabilities, or
firm commitments, (2) variability of cash flows of forecasted transactions, or
(3) foreign currency exposures of net investments in foreign operations.
Although management has not completed its assessment of the impact of SFAS 133
on its combined results of operations and financial position, management
estimates that the impact of SFAS 133 will not be material.
 
  (g) Income Taxes
 
     The majority of the net assets comprising the TCI Bresnan Systems and BCCLP
were historically held in partnerships. In addition, BCG has been formed as a
limited liability company, to be treated for tax purposes as a flow-through
entity. Accordingly, no provision has been made for income tax expense or
benefit in the accompanying combined financial statements as the earnings or
losses of Bresnan Communications Group Systems will be reported in the
respective tax returns of BCG's members (see note 5).
 
  (h) Revenue Recognition
 
     Cable revenue for customer fees, equipment rental, advertising, and
pay-per-view programming is recognized in the period that services are
delivered. Installation revenue is recognized in the period the installation
services are provided to the extent of direct selling costs. Any remaining
amount is deferred and recognized over the estimated average period that
customers are expected to remain connected to the cable distribution system.
 
                                      F-476