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SEC Filings

424B3
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form 424B3 on 09/01/1999
Entire Document
 
<PAGE>   350
           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)
 
division in proportion to the respective number of subscribers of all cable
systems managed by TWC's cable division. The allocation of the TWI Cable
management fee to the Combined Systems approximated $1,432,000 and $1,715,000
for the years ended December 31, 1996 and 1997, respectively.
 
     Other divisional expenses allocated to the Combined Systems approximated
$1,301,000 and $1,067,000 for the years ended December 31, 1996 and 1997,
respectively.
 
4. INTEREST EXPENSE
 
     Prior to the CVI Merger, the Jackson, Tennessee system was included in
Cablevision Industries Limited Partnership and Combined Entities ("CILP"). The
Jackson system was charged interest expense in connection with CILP's (a) senior
and subordinated bank credit agreements; and (b) senior unsecured subordinated
Series A and Series B notes payable to CVI. The remaining five systems
comprising the Combined Systems were included in Cablevision Industries of the
Southeast, Inc. and Combined Entities ("CIOS"). These systems were charged
interest expense in connection with CIOS's (a) bank revolving credit agreement;
and (b) junior and senior subordinated debt to CVI.
 
5. INCOME TAXES
 
     Effective January 4, 1996, the Combined Systems are included in the
consolidated federal income tax return of Time Warner. Prior to January 4, 1996,
the Combined Systems were included in the consolidated federal income tax return
of CVI. The provision (benefit) for income taxes has been calculated on a
separate company basis. The components of the provision (benefit) for income
taxes are as follows:
 

<TABLE>
<CAPTION>
                                   YEAR ENDED DECEMBER 31,
                                 ---------------------------
                                  1995       1996      1997
                                  ----       ----      ----
                                       (IN THOUSANDS)
<S>                              <C>        <C>       <C>
FEDERAL:
  Current......................  $    --    $   --    $   --
  Deferred.....................   (2,881)    1,213     1,826
STATE:
  Current......................       --        --        --
  Deferred.....................     (686)      289       436
                                 -------    ------    ------
  Net provision (benefit) for
     income taxes..............  $(3,567)   $1,502    $2,262
                                 =======    ======    ======
</TABLE>

 
     The Combined Systems did not, and will not, have a tax sharing agreement
with either Time Warner, TWI Cable or CVI. Therefore, the Combined Systems have
not and will not be compensated for the utilization of the Combined Systems' tax
losses, by Time Warner, TWI Cable or CVI. In addition, the Combined Systems have
not and will not be required to make payments to either Time Warner or TWI Cable
for the current tax provision of the Combined Systems.
 
                                      F-145