Service Costs. Service costs were $4.2 million for the six months ended
June 30, 1998. These costs represent the costs incurred at the Systems'
locations for the period from April 9, 1998 to June 30, 1998 and include among
other costs, programming costs, service employee costs, repairs and maintenance
costs, pole rents and electricity.
Selling, General and Administrative. Selling, general and administrative
expenses were $2.5 million for the six months ended June 30, 1998. Corporate
overhead costs include approximately $.2 million of corporate overhead incurred
prior to the consummation of the Acquisition of the Systems on April 9, 1998.
Depreciation and Amortization. Depreciation and amortization consists of
depreciation and amortization primarily for the period from April 9, 1998 to
June 30, 1998 as the Company had no material assets subject to depreciation or
amortization prior to April 9, 1998.
Interest Expense. Interest expense was $4.4 million for the six months
ended June 30, 1998. This amount represents interest on the Notes and the Credit
Agreement for the period April 9, 1998 to June 30, 1998 and amortization of the
Company's interest rate cap agreement for the six month period ended June 30,
Provision for Taxes. Renaissance Louisiana and Renaissance Tennessee have
elected to be treated as corporations for United States federal income tax
purposes. The provisions for taxes for the six months ended June 30, 1998
represent Tennessee franchise tax expense. No income tax benefit for the loss
incurred through June 30, 1998 has been recorded due to the uncertainty of the
realization of such loss during the related carry forward period.
Net Loss. Net loss for the six months ended June 30, 1998 was $3.6
million, of which approximately $3.4 million was incurred during the period
April 9, 1998 through June 30, 1998.
SIX MONTHS ENDED JUNE 30, 1998 (PRO FORMA) COMPARED WITH SIX MONTHS ENDED JUNE
30, 1997 (PRO FORMA)
The following discussion gives pro forma effect to the offering of the
Notes, Credit Agreement and the Acquisition (collectively the "Transactions") as
if they had occurred as of January 1, 1998 and 1997, and is provided for
informational purposes. It does not purport to be indicative of the results
which would have actually been obtained had the Transactions been completed on
the dates indicated or which may be expected to occur in the future. As the
Company had no operations prior to the acquisition of the TWI Cable Systems
discussed above and in Note 4 to the Company's Consolidated Financial Statements
the following discussion compares the six months ended June 30, 1998, Pro Forma
Financial Statements to the six months ended June 30, 1997 Pro Forma Financial
Statements. The discussion relating to the Pro Forma comparisons has been
condensed due to different grouping of expenses between TWI Cable and the
The Systems served 126,985 basic subscribers at June 30, 1998 compared with
124,880 basic subscribers at June 30, 1997, an increase of 2,105 subscribers or
1.7%. Homes passed increased to 180,561 at June 30, 1998 from 176,985 at June
30, 1997, an increase of 3,576