Selling, General and Administrative. Selling, general and administrative
expenses were $5.0 million for the nine months ended September 30, 1998.
Corporate overhead costs include approximately $.1 million of corporate overhead
incurred prior to the consummation of the Acquisition of the Systems on April 9,
Depreciation and Amortization. Depreciation and amortization consists of
depreciation and amortization primarily for the period from April 9, 1998 to
September 30, 1998 as the Company had no material assets subject to depreciation
or amortization prior to April 9, 1998.
Interest Expense. Interest expense was $9.1 million for the nine months
ended September 30, 1998. This amount represents interest on the Notes and the
Credit Agreement for the period April 9, 1998 to September 30, 1998.
Provision for Taxes. Renaissance Louisiana and Renaissance Tennessee have
elected to be treated as corporations for United States federal income tax
purposes. The provision for taxes for the nine months ended September 30, 1998
represents Tennessee Corporate Franchise tax expense. No income tax benefit for
the loss incurred through September 30, 1998 has been recorded due to the
uncertainty of the realization of such loss during the related carry forward
Net Loss. Net loss for the nine months ended September 30, 1998 was $8.0
million, of which approximately $7.9 million was incurred during the period from
April 9, 1998 through September 30, 1998.
NINE MONTHS ENDED SEPTEMBER 30, 1998 (PRO FORMA) COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 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 nine months ended September
30, 1998 Pro Forma results of operations to the nine months ended September 30,
1997 Pro Forma Financial results of operations. The discussion relating to the
pro forma comparisons has been condensed due to different grouping of expenses
between TWI Cable and the Company.
The Systems served 127,919 basic subscribers at September 30, 1998 compared
with 125,405 basic subscribers at September 30, 1997, an increase of 2,514
subscribers or 2.0%. Homes passed increased to 181,137 at September 30, 1998
from 177,402 at September 30, 1997, an increase of 3,735 homes passed or 2.1%.
Premium service units decreased to 59,831 at September 30, 1998 from 66,718 at
September 30, 1997.
Revenues. Revenues increased $4.4 million, or 11.7%, to $42.4 million for
the nine months ended September 30, 1998 from $38.0 million for the nine months
ended September 30, 1997. There were no pro forma adjustments to revenues.
The increase in revenues for the nine months ended September 30, 1998
resulted primarily from increases in basic revenue and other revenue. Basic
revenue increased due to an increase in the weighted average monthly
subscription rate for basic service to $7.88 in 1998 from $7.69 in 1997 and an
increase in the weighted average monthly subscription rate for cable programming
service tiers ("CPST" ) to $20.28 in 1998 from $17.33 in 1997. In addition,
basic revenue increased due to the increase in subscribers in the nine months
ended September 30, 1998. Other revenue components including home shopping,
pay-per-view and advertising revenue increased, while additional outlet revenue