BRESNAN COMMUNICATIONS GROUP LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
MARCH 31, 1999
of complaint. Any refunds of the excess portion of BST or equipment rates would
be retroactive to one year prior to the implementation of the rate reductions.
Certain plaintiffs have filed or threatened separate class action
complaints against certain of the systems of BCG, alleging that the systems'
practice of assessing an administrative fee to subscribers whose payments are
delinquent constitutes an invalid liquidated damage provision, a breach of
contract, and violates local consumer protection statutes. Plaintiffs seek
recovery of all late fees paid to the subject systems as a class purporting to
consist of all subscribers who were assessed such fees during the applicable
limitation period, plus attorney fees and costs.
BCG has contingent liabilities related to legal proceedings and other
matters arising in the ordinary course of business. Although it is possible that
BCG may incur losses upon conclusion of the matters referred to above, an
estimate of any loss or range of loss cannot presently be made. Based upon the
facts available, management believes that, although no assurance can be given as
to the outcome of these actions, the ultimate disposition should not have
material adverse effect upon the combined financial condition of BCG.
BCG leases business offices, has entered into pole attachment agreements
and uses certain equipment under lease arrangements. Rental expense under such
arrangements amounted to $776 and $878 during the three months ended March 31,
1998 and 1999, respectively.
Future minimum lease payments under noncancelable operating leases are
estimated to approximate $2,240 per year for each of the next five years.
It is expected that, in the normal course of business, expiring leases will
be renewed or replaced by leases on the same or other properties.
During 1999, BCG has continued enterprise-wide comprehensive efforts to
assess and remediate its respective computer systems and related software and
equipment to ensure such systems, software and equipment recognized, process and
store information in the year 2000 and thereafter. Such year 2000 remediation
efforts, include an assessment of its most critical systems, such as customer
service and billing systems, headends and other cable plant, business support
operations, and other equipment and facilities. BCG also continued its efforts
to verify the year 2000 readiness of its significant suppliers and vendors and
continued to communicate with significant business partners and affiliates to
assess affiliates' year 2000 status.
BCG has formed a year 2000 program management team to organize and manage
its year 2000 remediation efforts. The program management team is responsible
for overseeing, coordinating and reporting on its respective year 2000
During 1999, the project management team continued its surveys of
significant third-party vendors and suppliers whose systems, services or
products are important to its operations (e.g., suppliers of addressable
controllers and set-top boxes, and the provider of billing services). BCG has
instituted a verification process to determine the vendors' year 2000 readiness.
Such verification includes, as deemed necessary, reviewing vendors' test and
other data and engaging in regular conferences with vendors' year 2000 teams.
BCG is also requiring testing to validate the year 2000 compliance of certain
critical products and services. The year 2000 readiness of such providers is
critical to continued provision of cable service.