<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to .
------ ------
Commission File Numbers:
333-56679
333-56679-02
333-56679-01
333-56679-03
RENAISSANCE MEDIA GROUP LLC*
RENAISSANCE MEDIA (LOUISIANA) LLC*
RENAISSANCE MEDIA (TENNESSEE) LLC*
RENAISSANCE MEDIA CAPITAL CORPORATION*
-------------------------------------
(Exact names of registrants as specified in their charters)
Delaware 14-1803051
Delaware 14-1801165
Delaware 14-1801164
Delaware 14-1803049
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12444 Powerscourt Drive - Suite 100
St. Louis, Missouri 63131
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(314) 965-0555
--------------
(Registrants' telephone number, including area code)
Indicate by check mark whether the registrants: (1) have filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
---- ----
<PAGE> 2
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
All of the limited liability company membership interests of Renaissance Media
(Louisiana) LLC and Renaissance Media (Tennessee) LLC are held by Renaissance
Media Group LLC. All of the issued and outstanding shares of capital stock of
Renaissance Media Capital Corporation are held by Renaissance Media Group LLC.
All of the limited liability company membership interests of Renaissance Media
Group LLC are held by Charter Communications, LLC (and indirectly by Charter
Communications Holdings, LLC, a reporting company under the Exchange Act). There
is no public trading market for any of the aforementioned limited liability
company membership interests or shares of capital stock.
* Renaissance Media Group LLC, Renaissance Media (Louisiana) LLC, Renaissance
Media (Tennessee) LLC and Renaissance Media Capital Corporation meet the
conditions set forth in General Instruction (H) (1)(a) and (b) of Form 10-Q and
are therefore filing this Form with the reduced disclosure format.
<PAGE> 3
RENAISSANCE MEDIA GROUP LLC
RENAISSANCE MEDIA (LOUISIANA) LLC
RENAISSANCE MEDIA (TENNESSEE) LLC
RENAISSANCE MEDIA CAPITAL CORPORATION
FORM 10-Q - FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. Financial Information
Item 1. Financial Statements - Renaissance Media Group LLC and Subsidiaries. 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K. 12
Signatures. 13
</TABLE>
NOTE: Separate financial statements of Renaissance Media Capital Corporation
have not been presented as this entity had no operations and substantially no
assets or equity. Accordingly, management has determined that such financial
statements are not material.
<PAGE> 4
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
RENAISSANCE MEDIA GROUP LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SUCCESSOR
-------------------------------------
MARCH 31, DECEMBER 31,
2000 1999*
--------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,347 $ 3,521
Accounts receivable, net of allowance for doubtful
accounts of $56 and $80, respectively 1,174 1,084
Prepaid expenses and other 254 157
Receivable from related party 4,100 12,500
-------------- ----------------
Total current assets 10,875 17,262
-------------- ----------------
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated
depreciation of $5,110 and $4,673, respectively 70,902 67,396
Franchises, net of accumulated amortization of $25,116
and $18,445, respectively 389,745 396,416
-------------- ----------------
460,647 463,812
-------------- ----------------
$ 471,522 $ 481,074
============== ================
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 10,771 $ 16,405
Payables to manager of cable systems - related parties 2,413 2,289
-------------- ----------------
Total current liabilities 13,184 18,694
-------------- ----------------
LONG-TERM DEBT 88,435 86,507
MEMBER'S EQUITY 369,903 375,873
-------------- ----------------
$ 471,522 $ 481,074
=============== ================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
- -----------
* Agrees with the audited consolidated balance sheet included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
4
<PAGE> 5
RENAISSANCE MEDIA GROUP LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SUCCESSOR | PREDECESSOR
--------- | -----------
THREE MONTHS ENDED | THREE MONTHS ENDED
MARCH 31, 2000 | MARCH 31, 1999
-------------------- | -------------------
|
<S> <C> | <C>
REVENUES $ 16,541 | $ 15,254
-------------------- | ------------------
|
OPERATING EXPENSES: |
Operating, general and administrative 7,959 | 6,947
Depreciation and amortization 12,337 | 6,655
Corporate expense charges - related parties 294 | --
-------------------- | ------------------
20,590 | 13,602
-------------------- | ------------------
|
Income (loss) from operations (4,049) | 1,652
|
OTHER INCOME (EXPENSE): |
Interest expense (1,928) | (4,797)
Interest income -- | 90
Other 7 | --
-------------------- | ------------------
(1,921) | (4,707)
-------------------- | ------------------
|
Net loss $ (5,970) | $ (3,055)
==================== | ==================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE> 6
RENAISSANCE MEDIA GROUP LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SUCCESSOR | PREDECESSOR
--------- | -----------
THREE MONTHS ENDED | THREE MONTHS ENDED
MARCH 31, 2000 | MARCH 31, 1999
---------------------- | ---------------------
<S> <C> | <C>
CASH FLOWS FROM OPERATING ACTIVITIES: |
Net loss $ (5,970) | $ (3,055)
Adjustments to reconcile net loss to net cash provided by operating |
activities: |
Depreciation and amortization 12,337 | 6,655
Non-cash interest expense 1,928 | 2,630
Changes in assets and liabilities, net of effects from acquisitions: |
Accounts receivable (90) | 27
Prepaid expenses and other (97) | (41)
Receivable from related party 8,400 | --
Accounts payable and accrued expenses (5,634) | (1,063)
Payables to manager of cable systems - related parties 124 | --
Other operating activities -- | 237
-------------- | -------------
Net cash provided by operating activities 10,998 | 5,390
-------------- | -------------
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
Payments for acquisitions, net of cash acquired -- | (2,748)
Purchase of property, plant and equipment (9,138) | (2,393)
Other investing activities (34) | 170
-------------- | -------------
|
Net cash used in investing activities (9,172) | (4,971)
-------------- | -------------
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
Net cash used in financing activities -- | --
-------------- | -------------
|
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,826 | 419
CASH AND CASH EQUIVALENTS, beginning of period 3,521 | 8,482
-------------- | -------------
CASH AND CASH EQUIVALENTS, end of period $ 5,347 | $ 8,901
============== | =============
|
CASH PAID FOR INTEREST $ -- | $ 3,158
============== | =============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
6
<PAGE> 7
RENAISSANCE MEDIA GROUP LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT WHERE INDICATED)
1. ORGANIZATION
Renaissance Media Group LLC (Group) was formed by Renaissance Media
Holdings LLC (Holdings) to own and operate cable television systems that provide
programming and related services to subscribers. Group and its subsidiaries are
collectively referred to as the Company herein. All material intercompany
transactions and balances have been eliminated in consolidation.
On April 30, 1999, pursuant to a purchase agreement between Holdings,
Charter Communications, Inc., presently doing business as Charter Investment,
Inc., and Charter Communications, LLC (CC LLC), Group became a wholly owned
subsidiary of CC LLC (the "Charter Transaction"). The purchase price was $459
million, consisting of $348 million in cash and $111 million in accreted value
of debt assumed.
As a result of the Charter Transaction, the application of push-down
accounting, and the allocation of purchase price, the financial information of
the Company in the accompanying consolidated financial statements for the three
months ended March 31, 2000 (the successor period), is presented on a different
cost basis than the financial information of the Company for the three months
ended March 31, 1999 (the predecessor period). Therefore, such information is
not comparable.
2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The accompanying consolidated financial statements of the Company have
been prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
The accompanying consolidated financial statements are unaudited;
however, in the opinion of management, such statements include all adjustments,
which consist of only normal recurring adjustments, necessary for a fair
presentation of the results for the periods presented. Interim results are not
necessarily indicative of results for a full year. For further information,
refer to the Company's Annual Report on Form 10-K for the year ended December
31, 1999.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of
the Securities Exchange Act of 1934, as amended, and of the Securities Act of
1933, as amended, and is subject to the safe harbors created by those acts. The
Company's actual results could differ materially from those discussed herein,
and its current business plans could be altered in response to market conditions
and other factors beyond the Company's control. The forward-looking statements
within this Form 10-Q are identified by words such as "believes", "anticipates",
"accepts", "intends", "may", "will" and other similar expressions. However,
these words are not the exclusive means of identifying such statements. In
addition, any statements that refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements. The Company undertakes no obligation to release publicly the results
of any revisions to these forward-looking statements that may be made to reflect
events or circumstances occurring subsequent to the filing of this Form 10-Q
with the SEC.
Important factors that could cause actual results to differ materially
from the forward-looking statements contained herein include, but are not
limited to, the following:
- - General economic and business conditions, both nationally and in the
regions where the Company operates;
- - Anticipated capital expenditures for planned upgrades and the ability to
fund these expenditures;
- - Technology changes;
- - The Company's ability to effectively compete in a highly competitive
environment;
- - Changes in business strategy or development plans;
- - Beliefs regarding the effects of governmental regulation on the Company's
business;
- - The ability to attract and retain qualified personnel; and
- - Liability and other claims asserted against the Company.
Readers are urged to review and consider carefully the various
disclosures made by the Company in this report and in the Company's other
reports filed with the SEC that attempt to advise interested parties of the
risks and factors that may affect the Company's business.
8
<PAGE> 9
RESULTS OF OPERATIONS
The following table summarizes amounts and the percentage of total
revenues for certain items for the periods indicated (dollars in thousands):
<TABLE>
<CAPTION>
SUCCESSOR | PREDECESSOR
-------------------------- | ------------------------------
THREE MONTHS ENDED | THREE MONTHS ENDED
MARCH 31, | MARCH 31,
2000 | 1999
-------------------------- | ------------------------------
|
<S> <C> <C> | <C> <C>
Amount % | Amount %
------------ -------- | --------------- ---------
STATEMENT OF OPERATIONS: |
Revenues (a) $ 16,541 100.0 | $ 15,788 100.0
------------ -------- | --------------- ---------
|
Operating expenses: |
Operating, general and administrative (a) 7,959 48.1 | 7,481 47.4
Depreciation and amortization 12,337 74.6 | 6,655 42.1
Corporate expense charges-related parties 294 1.8 | -- --
------------ -------- | --------------- ---------
20,590 124.5 | 14,136 89.5
------------ -------- | --------------- ---------
|
Income (loss) from operations (4,049) (24.5) | 1,652 10.5
|
Other income (expense): |
Interest expense (1,928) (11.6) | (4,797) (30.4)
Interest income -- -- | 90 0.6
Other 7 -- | -- --
------------ -------- | --------------- ---------
|
Net loss $ (5,970) (36.1) | $ (3,055) (19.4)
============ ======== | =============== =========
</TABLE>
Other financial data is as follows for the periods indicated (dollars
in thousands, except Average Monthly Revenue per Basic Customer):
<TABLE>
<CAPTION>
THREE MONTHS ENDED | THREE MONTHS ENDED
MARCH 31, | MARCH 31,
2000 | 1999
-------------------------- | ------------------------------
<S> <C> | <C>
EBITDA (b) $ 8,295 | $ 8,307
Adjusted EBITDA (c) 8,582 | 8,307
Homes Passed (at period end) 193,085 | 189,449
Basic Customers (at period end) 133,215 | 132,205
Basic Penetration (at period end) 69.0% | 69.8%
Premium Units (at period end) 66,467 | 55,041
Premium Penetration (at period end) 49.9% | 41.6%
Average Monthly Revenue |
per Basic Customer $41.39 | $39.81
</TABLE>
- ----------
9
<PAGE> 10
(a) Local governmental authorities impose franchise fees on the Company ranging
up to a federally mandated maximum of 5.0% of gross revenues. On a monthly
basis, such fees are collected from the Company"s customers and are periodically
remitted to local franchises. Revenues and operating, general and administrative
expenses presented here have been restated for the periods prior to the Charter
Transaction to include the franchise fees collected from customers and then
remitted to local franchises as revenues.
(b) EBITDA represents earnings (loss) before interest, and depreciation and
amortization. EBITDA is presented because it is a widely accepted financial
indicator of a cable company's ability to service indebtedness. However, EBITDA
should not be considered as an alternative to income from operations or to cash
flows from operating, investing or financing activities, as determined in
accordance with generally accepted accounting principles. EBITDA should also not
be construed as an indication of a company's operating performance or as a
measure of liquidity. Management's discretionary use of funds depicted by EBITDA
may be limited by working capital, debt service and capital expenditure
requirements and by restrictions related to legal requirements, commitments and
uncertainties.
(c) Adjusted EBITDA means EBITDA before corporate expense charges and other
income (expense). Adjusted EBITDA is presented because it is a widely accepted
financial indicator of a cable company's ability to service indebtedness.
However, adjusted EBITDA should not be considered as an alternative to income
from operations or to cash flows from operating, investing or financing
activities, as determined in accordance with generally accepted accounting
principles. Adjusted EBITDA should also not be construed as an indication of a
company's operating performance or as a measure of liquidity. In addition,
because adjusted EBITDA is not calculated identically by all companies, the
presentation here may not be comparable to other similarly titled measures of
other companies. Management's discretionary use of funds depicted by adjusted
EBITDA may be limited by working capital, debt service and capital expenditure
requirements and by restrictions related to legal requirements, commitments and
uncertainties.
COMPARISON OF RESULTS
As a result of the acquisition of the Company by Charter Communications,
LLC (the "Charter Transaction"), the application of push-down accounting, and
the allocation of purchase price, the financial results for the periods
presented above are not comparable.
REVENUES. Revenues increased $0.8 million, or 4.8%, to $16.5 million for
the three months ended March 31, 2000, from $15.8 million for the three months
ended March 31, 1999. The increase in revenues for the three months ended March
31, 2000, resulted primarily from increases in premium penetration. Partially
offsetting the increase was a decrease in pay-per-view revenues as a result of
fewer special events in the first quarter of 2000.
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES. Operating, general and
administrative expenses increased $0.5 million, or 6.4%, to $8.0 million for the
three months ended March 31, 2000, from $7.5 million for the three months ended
March 31, 1999. This increase is primarily due to increases in license fees paid
for programming as a result of additional subscribers, new channels launched and
increases in the rates paid for programming services.
DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense increased $5.7 million, or 85.4%, to $12.3 million for the three months
ended March 31, 2000, from $6.7 million for the three months ended March 31,
1999. This increase is primarily due to the Charter Transaction and the
application of push-down accounting, which significantly increased the amount
recorded as franchises.
10
<PAGE> 11
CORPORATE EXPENSE CHARGES - RELATED PARTIES. These charges for the three
months ended March 31, 2000, represent costs incurred by Charter Investment,
Inc. and Charter Communications, Inc. on the Company's behalf.
INTEREST EXPENSE. Interest expense decreased $2.9 million, or 59.8%, to
$1.9 million for the three months ended March 31, 2000, from $4.8 million for
the three months ended March 31, 1999. This decrease was due to a decrease in
debt outstanding. In connection with the closing of the Charter Transaction on
April 30, 1999, all amounts outstanding under the Company's then-existing credit
agreement were paid in full, and the credit agreement was terminated. Also, in
June 1999, pursuant to a change of control offer, Charter Communications
Operating, LLC, an indirect parent of the Company, repurchased 48,762 of the
Company's 10% Senior Discount Notes due 2008.
NET LOSS. Net loss increased by $2.9 million for the three months ended
March 31, 2000, compared to the three months ended March 31, 1999. The increase
in revenues and the decrease in interest expense were not sufficient to offset
the increases in operating, general and administrative, and depreciation and
amortization expenses discussed above.
11
<PAGE> 12
PART II. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (listed by numbers corresponding to the exhibit table in
Item 601 of Regulation S-K):
27.1 Financial Data Schedule.*
- ---------
* Filed herewith.
(b) Reports on Form 8-K.
- On February 14, 2000, the Company filed a Form 8-K dated February 10,
2000, to announce a change in the Company's principal independent
accountants.
- On February 22, 2000, the Company filed an amended Form 8-K (amending
the preceding Form 8-K) dated February 10, 2000, to file a letter from
the Company's previous principal independent accountants.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
RENAISSANCE MEDIA GROUP LLC
RENAISSANCE MEDIA (LOUISIANA) LLC
RENAISSANCE MEDIA (TENNESSEE) LLC
Dated May 12, 2000 By: CHARTER COMMUNICATIONS, INC.
----------------------------
their Manager
By: /s/ KENT D. KALKWARF
----------------------------
Name: Kent D. Kalkwarf
Title: Senior Vice President and
Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer) of Charter
Communications, Inc. (Manager);
Renaissance Media Group LLC;
Renaissance Media (Louisiana) LLC;
and Renaissance Media (Tennessee) LLC
RENAISSANCE MEDIA CAPITAL CORPORATION
Dated May 12, 2000 By: /s/ KENT D. KALKWARF
---------------------------
Name: Kent D. Kalkwarf
Title: Senior Vice President and
Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001062363
<NAME> RENAISSANCE MEDIA GROUP LLC
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,347
<SECURITIES> 0
<RECEIVABLES> 1,230
<ALLOWANCES> 56
<INVENTORY> 0
<CURRENT-ASSETS> 10,875
<PP&E> 76,012
<DEPRECIATION> 5,110
<TOTAL-ASSETS> 471,522
<CURRENT-LIABILITIES> 13,184
<BONDS> 88,435
0
0
<COMMON> 0
<OTHER-SE> 369,903
<TOTAL-LIABILITY-AND-EQUITY> 471,522
<SALES> 0
<TOTAL-REVENUES> 16,541
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,590
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,928
<INCOME-PRETAX> (5,970)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,970)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,970)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
