Print Page  Close Window

SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/04/1999
Entire Document
 
<PAGE>   450
                     RIFKIN ACQUISITION PARTNERS, L.L.L.P.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     As of December 31, 1998 and 1997, the subsidiaries have net operating loss
carryforwards ("NOLs") for income tax purposes of $30,317,000 and $25,264,000,
respectively, substantially all of which are limited. The NOLs will expire at
various times between the years 2000 and 2013.
 
     In 1998, one of the corporate entities was dissolved. The existing NOL's
were used to offset taxable income down to $87,751, resulting in a current tax
for 1998 of $18,075.
 
     Under the Internal Revenue Code of 1986, as amended (the "Code"), the
subsidiaries generally would be entitled to reduce their future federal income
tax liabilities by carrying the unused NOLs forward for a period of 15 years to
offset their future income taxes. The subsidiaries' ability to utilize any NOLs
in future years may be restricted, however, in the event the subsidiaries
undergo an "ownership change" as defined in Section 382 of the Code. In the
event of an ownership change, the amount of NOLs attributable to the period
prior to the ownership change that may be used to offset taxable income in any
year thereafter generally may not exceed the fair market value of the subsidiary
immediately before the ownership change (subject to certain adjustments)
multiplied by the applicable long-term, tax exempt rate published by the
Internal Revenue Service for the date of the ownership change. Two of the
subsidiaries underwent an ownership change on September 1, 1995 pursuant to
Section 382 of the Code. As such, the NOLs of the subsidiaries are subject to
limitation from that date forward. It is the opinion of management that the NOLs
will be released from this limitation prior to their expiration dates and, as
such, have not been limited in their calculation of deferred taxes.
 
     The provision for income tax expense (benefit) differs from the amount
which would be computed by applying the statutory federal income tax rate of 35%
to pre-tax income before extraordinary loss as a result of the following:
 

<TABLE>
<CAPTION>
                                                             YEARS ENDED
                                              -----------------------------------------
                                                12/31/98       12/31/97      12/31/96
                                              ------------   ------------   -----------
<S>                                           <C>            <C>            <C>
Tax expense (benefit) computed at statutory
  rate......................................  $  7,084,450   $(10,982,527)  $(8,846,971)
  Increase (decrease) due to:
  Tax benefit (expense) for non-corporate
     loss...................................   (10,373,252)     5,900,546     5,446,721
  Permanent differences between financial
     statement income and taxable income....       (36,200)        84,500        48,270
  State income tax..........................      (247,000)      (377,500)     (252,590)
  Tax benefit from dissolved corporation....      (148,925)            --            --
  Other.....................................      (456,998)        39,981       (41,149)
                                              ------------   ------------   -----------
  Income Tax Benefit........................  $ (4,177,925)  $ (5,335,000)  $(3,645,719)
                                              ============   ============   ===========
</TABLE>

 
                                      F-203