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10-K405
RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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           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)
 
 
   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).
 
6. Commitments and Contingencies
 
   The Combined Systems had rental expense of approximately $642,000,
$824,000, and $843,000 for the years ended December 31, 1995, 1996 and 1997,
respectively, under various lease and rental agreements for offices, utility
poles, warehouses and computer equipment. Future minimum annual rental
payments under noncancellable leases will approximate $1,000,000 annually over
the next five years.
 
   In exchange for certain flexibility in establishing cable rate pricing
structures for regulated services that went into effect on January 1, 1996,
TWC has agreed with the Federal Communications Commission ("FCC") to invest in
certain upgrades to its cable infrastructure (consisting primarily of
materials and labor in connection with the plant upgrades up to 750 MHz) over
the next three years (approximately $22 million). This agreement with the FCC,
which extends to the Combined Systems, will be assumed by Renaissance as it
relates to the Combined Systems in accordance with the Asset Purchase
Agreement.
 
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