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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 05/28/1999
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<PAGE>

            AVALON CABLE OF MICHIGAN HOLDINGS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                             December 31, 1998


<TABLE>
<CAPTION>
                                                             Tax Net
                                                            Operating Expiration
      Year                                                   Losses      Date
      ----                                                  --------- ----------
      <S>                                                   <C>       <C>
      1998.................................................  $10,360     2018
</TABLE>


   Temporary differences that give rise to significant portion of deferred tax
assets and liabilities at December 31 are as follows:


<TABLE>
<CAPTION>
                                                                         1998
                                                                        -------
      <S>                                                               <C>
      NOL carryforwards................................................ $ 5,363
      Alternative minimum tax credits..................................     141
      Reserves.........................................................     210
      Other, net.......................................................     309
                                                                        -------
        Total deferred assets..........................................   6,023
                                                                        -------
      Property, plant and equipment.................................... (10,635)
      Intangible assets................................................ (75,538)
                                                                        -------
        Total deferred liabilities..................................... (86,173)
                                                                        -------
      Subtotal......................................................... (80,150)
                                                                        -------
      Valuation allowance..............................................     --
                                                                        -------
        Total deferred taxes........................................... (80,150)
                                                                        =======
</TABLE>


   The tax benefit related to the loss on extinguishment of debt results in
deferred tax, and it approximating the statutory U.S. tax rate. The tax benefit
of $2,036 related to the exercise of certain stock options of Cable Michigan
Inc. was charged directly to goodwill in conjunction with the closing of the
merger.

8. Debt

   At December 31, 1998, Long-term Debt consists of the following:


<TABLE>
      <S>                                                              <C>
      Senior credit facility.......................................... $150,000
      Senior subordinated notes.......................................  140,875
      Senior discount notes...........................................  111,494
                                                                       --------
                                                                        402,369
        Current portion...............................................      --
                                                                       --------
                                                                       $402,369
                                                                       ========
</TABLE>


 Credit Facility

   On November 6, 1998, Avalon Michigan became a co-borrower along with Avalon
New England and Avalon Cable Finance Inc (Avalon Finance), affiliated
companies, collectively referred to as the ("Co-Borrowers") on a $320,888
senior credit facility, which includes term loan facilities consisting of (i)
tranche A term loans of $120,888 and (ii) tranche B term loans of $170,000 and
a revolving credit facility of $30,000 (collectively, the "Credit Facility").
Subject to compliance with the terms of the Credit Facility, borrowings under
the Credit Facility will be available for working capital purposes, capital
expenditures and pending and future acquisitions. The ability to advance funds
under the tranche A term loan facility terminates on March 31, 1999. The
tranche A term loans are subject to minimum quarterly amortization payments
commencing on January 31, 2001 and maturing on October 31, 2005. The tranche B
term loans are scheduled to be repaid in two equal installments on July 31,
2006 and October 31, 2006. The revolving credit facility borrowings are
scheduled to be repaid on October 31, 2005.

                                      F-32