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S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
Entire Document
 
<PAGE>   392
           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)
 
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.
 
     The differences between the income tax provision (benefit) expected at the
U.S. federal statutory income tax rate and the total income tax provision
(benefit) are due to nondeductible goodwill amortization and state taxes.
 
     Significant components of the Combined Systems' deferred tax assets and
liabilities, as calculated on a separate company basis, are as follows:
 

<TABLE>
<CAPTION>
                                               YEAR ENDED DECEMBER 31,
                                               ------------------------
                                                 1996           1997
                                                 ----           ----
                                                    (IN THOUSANDS)
<S>                                            <C>            <C>
DEFERRED TAX LIABILITIES:
  Amortization...............................   $61,266        $58,507
  Depreciation...............................     3,576          4,060
                                                -------        -------
          Total gross deferred tax
            liabilities......................    64,842         62,567
                                                -------        -------
DEFERRED TAX ASSETS:
  Tax loss carryforwards.....................     6,474          1,920
  Allowance for doubtful accounts............        28             46
                                                -------        -------
          Total deferred tax assets..........     6,502          1,966
                                                -------        -------
  Net deferred tax liability.................   $58,340        $60,601
                                                =======        =======
</TABLE>

 
     On a separate company basis, the Combined Systems have tax loss
carryforwards of approximately $4.8 million at December 31, 1997. 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).
 
                                      F-145