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SEC Filings

10-K405
RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
Entire Document
 
<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
 
                               December 31, 1998
                       (All dollar amounts in thousands)
 
   As of December 31, 1998, the Company had unrestricted use of the $40,000
revolver. No borrowings had been made by the Company under the revolver
through that date.
 
   Annual maturities of borrowings under the Credit Agreement for the years
ending December 31 are as follows:
 

<TABLE>
      <S>                                                             <C>
      1999........................................................... $     776
      2000...........................................................     1,035
      2001...........................................................     2,701
      2002...........................................................     9,506
      2003...........................................................    11,590
      2004...........................................................    11,590
      Thereafter.....................................................    65,302
                                                                      ---------
                                                                        102,500
      Less: Current portion..........................................      (776)
                                                                      ---------
                                                                      $ 101,724
                                                                      =========
</TABLE>

 
 
   The Credit Agreement and the Indenture pursuant to which the Notes were
issued contain restrictive covenants on the Company and subsidiaries regarding
additional indebtedness, investment guarantees, loans, acquisitions, dividends
and merger or sale of the subsidiaries and require the maintenance of certain
financial ratios.
 
   Total interest cost incurred for the year ended December 31, 1998,
including commitment fees and amortization of deferred financing and interest-
rate cap costs was $14,358, net of capitalized interest of $42.
 
5. Interest Rate Cap Agreement
 
   The Company purchases interest-rate cap agreements that are designed to
limit its exposure to increasing interest rates and are designated to its
floating rate debt. The strike price of these agreements exceeds the current
market levels at the time they are entered into. The interest rate indices
specified by the agreements have been and are expected to be highly correlated
with the interest rates the Company incurs on its floating rate debt. Payments
to be received as a result of the specified interest rate index exceeding the
strike price are accrued in other assets and are recognized as a reduction of
interest expense (the accrual accounting method). The cost of these agreements
is included in other assets and amortized to interest expense ratably during
the life of the agreement. Upon termination of an interest rate cap agreement,
any gain is deferred in other liabilities and amortized over the remaining
term of the original contractual life of the agreement as a reduction of
interest expense.
 
   On December 1, 1997, the Company purchased an interest rate cap agreement
from Morgan Stanley Capital Services Inc. The carrying value as of December
31, 1998 was $47. The fair value of the interest rate cap, which is based upon
the estimated amount that the Company would receive or pay to terminate the
cap agreement as of December 31, 1998, taking into consideration current
interest rates and the creditworthiness of the counterparties, approximates
its carrying value.
 
   The following table summarizes the interest-rate cap agreement:
 

<TABLE>
<CAPTION>
   Notional                                                Initial
   Principal                 Effective     Termination     Contract     Fixed Rate
    Amount        Term         Date           Date           Cost       (Pay Rate)
   ---------     -------     ---------     -----------     --------     ----------
   <S>           <C>         <C>           <C>             <C>          <C>
   $100,000      2 Years      12/1/97        12/1/99         $100          7.25%
</TABLE>

 
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