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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the period endedSeptember 30, 2001 |
or
[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the transition period from _________________ to _________________ |
Commission File Number: 0-16063
Northland Cable Properties Six Limited Partnership
(Exact Name of Registrant as Specified in Charter)
Washington (State of Organization) | 91-1318471 (I.R.S. Employer Identification No.) | |
1201 Third Avenue, Suite 3600, Seattle, Washington (Address of Principal Executive Offices) | 98101 (Zip Code) |
(206) 621-1351
N/A
Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
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PART II — FINANCIAL INFORMATION
ITEM 5 Financial Statements
BALANCE SHEETS
(Prepared by the Managing General Partner)
September 30, | ||||||
2001 | ||||||
(unaudited) | ||||||
ASSETS | ||||||
Cash | $ | 5,012,005 | ||||
Accounts receivable | 546,490 | |||||
Due from managing general partner and affiliates | 110,616 | |||||
Prepaid expenses | 67,622 | |||||
Notes receivable from Affiliates | 30,172,100 | |||||
Total assets | $ | 35,908,833 | ||||
LIABILITIES AND PARTNERS’ EQUITY | ||||||
Accounts payable and accrued expenses | $ | 706,034 | ||||
Due to managing general partner and affiliates | 77,639 | |||||
Total liabilities | 783,673 | |||||
Total partners’ equity | 35,125,160 | |||||
Total liabilities and partners’ equity | $ | 35,908,833 | ||||
The accompanying notes to unaudited financial statements are an integral part of these statements
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NORTHLAND CABLE PROPERTIES SIX LIMITED PARTNERSHIP
For the nine months ended September 30, 2001 | ||||||||||||||
Pro Forma | Pro Forma | |||||||||||||
As Reported | Adjustments | Combined | ||||||||||||
Service revenues | $ | 11,698,394 | $ | (11,698,394 | )(1a) | $ | — | |||||||
Operating expenses | 7,004,527 | (7,004,527 | )(1a) | — | ||||||||||
Depreciation and amortization | 3,293,064 | (3,293,064 | )(1a) | — | ||||||||||
Total expenses | 10,297,591 | (10,297,591 | ) | — | ||||||||||
Income from operations | 1,400,803 | (1,400,803 | ) | — | ||||||||||
Other income (expense): | ||||||||||||||
Interest expense | (1,651,011 | ) | 1,651,011 | (1b) | — | |||||||||
Interest income | 11,604 | (11,604 | )(1b) | — | ||||||||||
Other expense | (531,040 | ) | 531,040 | (1d) | — | |||||||||
Gain/loss on sale of assets | 43,028,943 | — | (1c) | 43,028,943 | ||||||||||
40,858,496 | 2,170,447 | 43,028,943 | ||||||||||||
Net income before taxes | 42,259,299 | 769,644 | 43,028,943 | |||||||||||
Income taxes | — | — | — | |||||||||||
Net income | $ | 42,259,299 | $ | 769,644 | $ | 43,028,943 | ||||||||
The accompanying notes to unaudited financial statements are an integral part of these statements
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NORTHLAND CABLE PROPERTIES SIX LIMITED PARTNERSHIP
PRO FORMA STATEMENTS OF OPERATIONS — (Unaudited)
(Prepared by the Managing General Partner)
For the nine months ended September 30, 2000 | ||||||||||||||
Pro Forma | Pro Forma | |||||||||||||
As Reported | Adjustments | Combined | ||||||||||||
Service revenues | $ | 11,369,454 | $ | (11,369,454 | )(1a) | $ | — | |||||||
Operating expenses | 6,632,979 | (6,632,979 | )(1a) | — | ||||||||||
Depreciation and amortization | 3,337,310 | (3,337,310 | )(1a) | — | ||||||||||
Total expenses | 9,970,289 | (9,970,289 | ) | — | ||||||||||
Income from operations | 1,399,165 | (1,399,165 | ) | — | ||||||||||
Other income (expense): | ||||||||||||||
Interest expense | (1,867,435 | ) | 1,867,435 | (1b) | — | |||||||||
Interest income | 34,017 | (34,017 | )(1b) | — | ||||||||||
Other income | (151,388 | ) | 151,388 | (1d) | — | |||||||||
Gain/loss on sale of assets | (104,190 | ) | 39,693,670 | (1c) | 39,589,480 | |||||||||
(2,088,996 | ) | 41,678,476 | 39,589,480 | |||||||||||
Net income before taxes | (689,831 | ) | 40,279,311 | 39,589,480 | ||||||||||
Income taxes | — | — | — | |||||||||||
Net income | $ | (689,831 | ) | $ | 40,279,311 | $ | 39,589,480 | |||||||
The accompanying notes to unaudited financial statements are an integral part of these statements
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NORTHLAND CABLE PROPERTIES SIX LIMITED PARTNERSHIP
1. The Pro Forma Statements of Operations show the adjustments for the disposition of substantially all of the operating assets and franchises which occurred on September 30, 2001. The adjustments reflect the disposition as if it had occurred on January 1, 2001 and January 1, 2000 respectively, for income statement purposes.
(a) | To eliminate revenue and expenses associated with operations. | ||
(b) | To eliminate interest income and interest expense associated with bank deposits and debt. | ||
(c) | To record the gain on the disposition of assets as if it had occurred on January 1, 2000 and 2001. | ||
(d) | To eliminate other income and expenses. |
2. The notes receivable from affiliates represent amounts due to the Partnership from the sale of substantially all of the operating assets and franchises to affiliates. Approximately $15,750,000 of the outstanding notes receivable were paid by affiliates in October 2001, the balance represents the deferred portion of the purchase price which will be paid in three annual installments with interest at 8% per annum.
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PART I
ITEM 1. Financial statements in conformity with Rule 10-01 of Regulation S-X are not being presented due to the Partnership’s disposition of its operating assets (see Part I, Item 2). Pro-forma financial statements, giving effect to the disposition of assets, have been included in Item 5 Other Information.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Disposition of Assets
On September 28, 2001 Northland Cable Properties Six Limited Partnership (the “Registrant”) sold its (i) Bennettsville, South Carolina and Mississippi cable television assets (the “Mississippi and Bennettsville Systems”) to Northland Cable Networks LLC (“NCN”), (ii) Highlands, North Carolina cable television assets (the “Highlands System”) to Northland Cable Television, Inc. (“NCTV”), and (iii) Barnwell, South Carolina cable television assets (the “Barnwell Systems”) to Northland Cable Properties, Inc. (“NCPI”), all affiliates of Northland Communications Corporation (“NCC”), the Managing General Partner of the Registrant.
The transactions were based on an aggregate gross value for the Assets of $70,200,000. The limited partners of the Registrant approved, by the requisite consent of a majority in interest, the sale of their collective interest in the Assets. See Notice of Special Meeting and Proxy Statement (“Proxy Statement”).
As discussed in more detail in the Proxy Statement, NCC received an in-kind distribution representing its undivided portion of the assets, which is attributable to the managing general partner’s interest in the Registrant. This amount, which would otherwise have been distributed in cash to NCC was netted against the cash due from NCN, NCTV and NCPI at closing.
The following is a summary of the sources and estimated uses of the sales proceeds.
ESTIMATED NET PROCEEDS FROM DISPOSITION OF ASSETS
Gross Valuation of Assets | |||||
Mississippi Systems | $ | 46,250,000 | |||
Bennettsville System | 7,950,000 | ||||
Highlands System | 4,600,000 | ||||
Barnwell System | 11,400,000 | ||||
Gross valuation | 70,200,000 | ||||
Less purchase price adjustment, Mississippi Systems | (1,113,385 | ) | |||
Adjusted gross valuation of assets | $ | 69,086,615 | |||
Plus (Less): | |||||
Cash on hand, accounts receivable and other assets | 1,048,254 | ||||
Debt repayment to others | (31,569,639 | ) | |||
Estimated Net Cash Available for Distribution | $ | 38,565,230 | |||
Estimated Distribution to Limited Partners | $ | 31,613,508 | |||
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Estimated Distribution to Administrative General Partner | $ | 1,367,931 | |||
Estimated In-Kind Distribution to Managing General Partner | $ | 5,583,791 | |||
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PART II — OTHER INFORMATION
ITEM 1 Legal proceedings
None
ITEM 2 Changes in securities
None
ITEM 3 Defaults upon senior securities
None
ITEM 4 Submission of matters to a vote of security holders
On August 29, 2001, a special meeting of the Limited Partners was held at the executive offices of the Managing General Partner. The purpose of the meeting was to consider two separate proposals: (1) vote to extend the term of the partnership, (2) vote upon the proposed liquidation of the collective partnership interests in the Assets owned by the Partnership. | |||
The first proposal was approved by approximately 58.1 percent of the outstanding limited partnership units (or approximately 77.1 percent of the units voted). The second proposal was approved by approximately 61.1 percent of the outstanding limited partnership units (or approximately 81.1 percent of the units voted). |
ITEM 5 Other information
(a) | Pro Forma Financial Statements |
Introduction |
Unaudited Balance Sheet at September 30, 2001 |
Unaudited Pro Forma Statement of Operations for the Nine Months Ended September 30, 2001 |
Unaudited Pro Forma Statement of Operations for the Nine Months Ended September 30, 2000 |
Notes to Pro Forma Financial Statements |
ITEM 6 Exhibits and Reports on Form 8-K
Incorporated by reference from the Notice of Special Meeting and Proxy Statement to the Limited Partners of Northland Cable Properties Six Limited Partnership dated August 29, 2001. | |||
No reports on Form 8-K have been filed for the quarter ended September 30, 2001. |
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NORTHLAND CABLE PROPERTIES SIX LIMITED PARTNERSHIP
ITEM 5.
The accompanying unaudited Pro Forma Statements of Operations for the nine months ended September 30, 2001 and 2000, have been prepared to present the effect of the disposition of substantially all of the operating assets and franchises of Northland Cable Properties Six Limited Partnership (the “Partnership”). The accompanying unaudited Balance Sheet reflects the Partnership’s financial position at September 30, 2001.
The Pro Forma Statements of Operations assume that such events were effective at the beginning of the respective periods. The Balance Sheet at September 30, 2001 reflects the dispositions which occurred on September 30, 2001.
The Pro Forma Statements of Operations have been prepared by the Managing General Partner of the Partnership based upon the historical financial statements of the Partnership. Pro Forma adjustments are described in the accompanying notes. The Pro Forma Statements of Operations may not be indicative of the results of operations that actually would have occurred if the transaction had been in effect as of the beginning of the respective periods nor do they purport to indicate the results of future operations of the Partnership. The Pro Forma Statements of Operations and the Balance Sheet should be read in conjunction with the audited and unaudited financial statements and notes thereto of Northland Cable Properties Six Limited Partnership, as previously reported in the Partnership’s Form 10-K for the year ended December 31, 2000 and Forms 10-Q for the periods ended March 31, 2001 and June 30, 2001 and the Proxy Statement dated August 29, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NORTHLAND CABLE PROPERTIES SIX LIMITED PARTNERSHIP
BY: | Northland Communications Corporation, Managing General Partner | |||||
Dated: | 11/14/01 | BY: | /s/ RICHARD I. CLARK Richard I. Clark (Vice President/Treasurer) | |||
Dated: | 11/14/01 | BY: | /s/ GARY S. JONES Gary S. Jones (Vice President) |
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