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S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
Entire Document
 
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           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
 
 Basis of Combination
 
  The combined financial statements include the assets, liabilities, revenues,
expenses, income, loss and cash flows of the Combined Systems, as if the
Combined Systems were a single company. Significant intercompany accounts and
transactions between the Combined Systems have been eliminated. Significant
accounts and transactions with Time Warner and its affiliates are disclosed as
related party transactions (see Note 3).
 
 Use of Estimates
 
  The preparation of combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the combined financial
statements and footnotes thereto. Actual results could differ from those
estimates.
 
 Concentration of Credit Risk
 
  A significant portion of the customer base is concentrated within the local
geographical area of each of the individual cable television systems. The
Combined Systems generally extend credit to customers and the
ultimate collection of accounts receivable could be affected by the local
economy. Management performs continuous credit evaluations of its customers
and may require cash in advance or other special arrangements from certain
customers. Management does not believe that there is any significant credit
risk which could have a material effect on the financial condition of the
Combined Systems.
 
 Revenue and Costs
 
  Subscriber fees are recorded as revenue in the period the related services
are provided and advertising revenues are recognized in the period the related
advertisements are exhibited. Rights to exhibit programming are purchased from
various cable networks. The costs of such rights are generally expensed as the
related services are made available to subscribers.
 
 Advertising Costs
 
  Advertising costs are expensed upon the first exhibition of the related
advertisements. Advertising expense amounted to $308,000, $632,000 and
$510,000 for the years ended 1995, 1996 and 1997, respectively and $147,000
and $59,000 for the periods ended March 31, 1997 and 1998, respectively.
 
 Statement of Cash Flows
 
  The Combined Systems participate in a cash management system with affiliates
whereby cash receipts are transferred to a centralized bank account from which
centralized payments to various suppliers and creditors are made on behalf of
the Combined Systems. The excess of such cash receipts over payments is
included in net assets. Amounts shown as cash represent the Combined Systems'
net cash receipts not transferred to the centralized account as of December
31, 1996 and 1997. The average net intercompany balances were $173,348,000 and
$170,438,000 for the years ended December 31, 1996 and 1997, respectively.
 
  For purposes of this statement, cash and cash equivalents includes all
highly liquid investments purchased with original maturities of three months
or less.
 
 Property, Plant and Equipment
 
  Property, plant and equipment are stated at cost. Additions to property,
plant and equipment generally include material, labor, overhead and interest.
Depreciation is provided on the straight-line method over estimated useful
lives as follows:
 

<TABLE>
     <S>                                                              <C>
     Buildings and improvements...................................... 5-20 years
     Cable television equipment...................................... 5-15 years
     Furniture, fixtures and other equipment......................... 3-10 years
</TABLE>

 
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