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S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
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<PAGE>
 
           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)
 
 
5. INCOME TAXES--(CONTINUED)
 
  Significant components of the Combined Systems' deferred tax assets and
liabilities, as calculated on a separate company basis, are as follows:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                 YEAR ENDED DECEMBER 31,     MARCH 31,
                                 ----------------------- ------------------
                                    1996        1997            1998
                                 ----------- ----------- ------------------
                                     (IN THOUSANDS)          (IN THOUSANDS)
                                                              (UNAUDITED)
   <S>                           <C>         <C>         <C>                <C>
   Deferred tax liabilities:
     Amortization..............  $    61,266 $    58,507      $57,817
     Depreciation..............        3,576       4,060        4,181
                                 ----------- -----------      -------
       Total gross deferred tax
        liabilities............       64,842      62,567       61,998
                                 ----------- -----------      -------
   Deferred tax assets:
     Tax loss carryforwards....        6,474       1,920          160
     Allowance for doubtful
      accounts.................           28          46           46
                                 ----------- -----------      -------
       Total deferred tax
        assets.................        6,502       1,966          206
                                 ----------- -----------      -------
       Net deferred tax
        liability..............  $    58,340 $    60,601      $61,792
                                 =========== ===========      =======
</TABLE>

 
  On a separate company basis, the Combined Systems have tax loss
carryforwards of approximately $4.8 million at December 31, 1997 and tax loss
carryforwards of approximately $400,000 at March 31, 1998 (unaudited).
However, if the Combined Systems are acquired in an asset purchase, the tax
loss carryforwards, and net deferred tax liabilities relating to temporary
differences will not carry over to Renaissance (see Note 8).
 
6. COMMITMENTS AND CONTINGENCIES
 
  The Combined Systems had rental expense of approximately $642,000, $824,000,
and $843,000 for the years ended December 31, 1995, 1996 and 1997,
respectively, and $209,000 and $224,000 for the three months ended March 31,
1997 and 1998 (unaudited), respectively, under various lease and rental
agreements for offices, utility poles, warehouses and computer equipment.
Future minimum annual rental payments under noncancellable leases will
approximate $1,000,000 annually over the next five years.
 
  In exchange for certain flexibility in establishing cable rate pricing
structures for regulated services that went into effect on January 1, 1996,
TWC has agreed with the Federal Communications Commission ("FCC") to invest in
certain upgrades to its cable infrastructure over the next three years. This
agreement with the FCC, which extends to the Combined Systems, will be assumed
by Renaissance as it relates to the Combined Systems in accordance with the
Asset Purchase Agreement.
 
7. OTHER LIABILITIES
 
  Other liabilities consist of:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,     MARCH 31,
                                                  --------------- --------------
                                                   1996    1997        1998
                                                  ------- ------- --------------
                                                  (IN THOUSANDS)  (IN THOUSANDS)
                                                                   (UNAUDITED)
      <S>                                         <C>     <C>     <C>
      Compensation............................... $   217 $   250     $  279
      Data Processing Costs......................     100      90        161
      Sales and other taxes......................     101      90        146
      Copyright Fees.............................      85      83         35
      Pole Rent..................................      66      63         93
      Other......................................     376     393        394
                                                  ------- -------     ------
        Total.................................... $   945 $   969     $1,108
                                                  ======= =======     ======
</TABLE>

 
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