Print Page  Close Window

SEC Filings

10-K405
RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
Entire Document
 
<PAGE>
 
   The Company is subject to interest rate fluctuations on its Senior Credit
Facility, ($102.5 million outstanding at December 31, 1998) and, accordingly,
has entered into an interest rate cap agreement with a notional amount of
$100.0 million. This agreement serves to cap the interest rates associated
with the Company's variable rate debt under the Senior Credit Facility. The
cap agreement protects the Company from increased interest costs if LIBOR
exceeds 7.25% and expires on December 1, 1999.
 
   The Company assesses its interest rate protection options on an ongoing
basis with a goal of having in place interest rate protection plans as it
deems appropriate, based on its assessment of future interest rates balanced
against the cost of such plans and the degree of interest rate fluctuation
risk the Company believes is appropriate.
 
Year 2000 Issues
 
   The Company relies on computer systems, related software applications and
other control devices in operating and monitoring all major aspects of its
business, including, but not limited to, its financial systems (such as
general ledger, accounts payable, payroll and fixed asset modules), subscriber
billing systems, internal networks and telecommunications equipment. The
Company also relies, directly and indirectly, on the external systems of
various independent business enterprises, such as its suppliers and financial
organizations, for the accurate exchange of data.
 
   The Company continues to assess the likely impact of Year 2000 issues on
its business operations, including its material information technology ("IT")
and non-IT applications. These material applications include all billing and
subscriber information systems, general ledger software, payroll systems,
accounting software, phone switches and certain headend applications, all of
which are third party supported.
 
   The Company believes it has identified all systems that may be affected by
Year 2000 Issues. Concurrent with the identification phase, the Company is
securing compliance determinations relative to all identified systems. For
those systems that the Company believes are material, compliance programs have
been received or such systems have been certified by independent parties as
Year 2000 compliant. For those material systems that are subject to compliance
programs, the Company expects to receive Year 2000 certifications from
independent parties by the second quarter of 1999. Determinations of Year 2000
compliance requirements for less mission critical systems are in progress and
are expected to be completed in the second quarter of 1999.
 
   With respect to third parties with which the Company has a material
relationship, the Company believes its most significant relationships are with
financial institutions, who receive subscriber monthly payments and maintain
Company bank accounts, and subscriber billing and management systems
providers. We have received compliance programs, which, if executed as
planned, should provide a high degree of assurance that all Year 2000 issues
will be addressed by mid 1999.
 
   The Company has not incurred any material Year 2000 costs to date, and
excluding the need for contingency plans, does not expect to incur any
material Year 2000 costs in the future because most of its applications are
maintained by third parties who have borne Year 2000 compliance costs.
 
   The Company cannot be certain that it or third parties supporting its
systems have resolved or will resolve all Year 2000 issues in a timely manner.
Failure by the Company or any such third party to successfully address the
relevant Year 2000 issues could result in disruptions of the Company's
business and the incurrence of significant expenses by the Company.
Additionally, the Company could be affected by any disruption to third parties
with which the Company does business if such third parties have not
successfully addressed their Year 2000 issues.
 
   Failure to resolve Year 2000 issues could result in improper billing to the
Company's subscribers which could have a major impact on the recording of
revenue and the collection of cash as well as create significant customer
dissatisfaction. In addition, failure on the part of the financial
institutions with which the Company relies on for its cash collection and
management services could also have significant impact on collections, results
of operations and the liquidity of the Company.
 
                                      34