UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended June 30, 1996
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 1-9423
GALAXY CABLEVISION, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 43-1429049
(state of incorporation) (IRS Employer Identification Number)
c/o Galaxy Cablevision Management, Inc.
1220 North Main, Sikeston, Missouri 63801
(address of principle executive offices) (zip code)
Registrant's telephone number, including area code (573) 472-8200
Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
previous 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 ______
Number of Limited Partnership Units outstanding as of August 1, 1996 - 2,142,000
1
GALAXY CABLEVISION, L.P.
FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 30, 1996
INDEX
PAGE
PART I. Financial Information
Item 1 Financial Statements..................................... 3
Notes to Financial Statements..............................5
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of
Operations.................................................7
PART II. Other Information................................................9
2
PART I. FINANCIAL INFORMATION
ITEM 1. -- FINANCIAL STATEMENTS
GALAXY CABLEVISION, L.P.
(IN PROCESS OF LIQUIDATION-NOTES 1 & 2)
STATEMENTS OF NET ASSETS IN PROCESS OF LIQUIDATION
June 30, 1996 December 31, 1995
--------------- -----------------
(unaudited)
CASH AND CASH EQUIVALENTS $3,207,319 $1,435,941
OTHER CURRENT ASSETS 787,092
ESCROW DEPOSITS 101,100 101,100
INVESTMENT IN AFFILIATE 3,800,000
NOTES RECEIVABLE 1,747,037
TOTAL ASSETS 3,308,419 7,871,170
---------- ----------
ACCRUED EXPENSES AND OTHER
LIABILITIES 68,073 75,805
DUE TO AFFILIATES-NET 71,478 77,481
RESERVE FOR ESTIMATED COSTS
DURING PERIOD OF LIQUIDATION 283,755 500,000
---------- ----------
TOTAL LIABILITIES 423,306 653,286
---------- ----------
NET ASSETS IN PROCESS
OF LIQUIDATION $2,885,113 $7,217,884
========== ==========
See notes to financial statements
3
GALAXY CABLEVISION, L.P.
(IN PROCESS OF LIQUIDATION-NOTES 1 & 2)
STATEMENT OF CHANGES IN NET ASSETS IN PROCESS OF LIQUIDATION
(unaudited)
For the three months ended For the Six Months Ended
June 30, June 30,
-------------------- --------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
Net Assets in Process of Liquidation,
Beginnining of Period $ 9,456,084 $ 8,338,425 $ 7,217,884 $ 8,338,425
Expenses in Excess of Revenues
from Operations (216,245) (620,567) (216,245) (673,984)
Increase (Decrease) in Valuation of
Investment of Affiliate (144,971) 500,000 2,093,229 500,000
Distributions Paid (6,426,000) (6,426,000)
Reduction in Reserve for
Estimated Costs During Period
of Liquidation 216,245 620,567 216,245 673,984
----------- ----------- ----------- -----------
Net Assets in Process of Liquidation
End of Period $ 2,885,113 $ 6,674,789 $ 2,885,113 $ 6,674,789
=========== =========== =========== ===========
See notes to financial statements.
4
GALAXY CABLEVISION, L.P.
(In Process of Liquidation - Notes 1 & 2)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
1. STATEMENT OF ACCOUNTING PRESENTATIONS AND OTHER INFORMATION
The attached interim financial statements are unaudited; however, in the
opinion of management, all adjustments necessary for a fair presentation of
financial position and results of operations have been made, including those
required for liquidation basis accounting. The interim financial statements
are presented in accordance with the rules and regulations of the Securities
and Exchange Commission and consequently do not include all the disclosures
required by generally accepted accounting principles. It is suggested that
the accompanying financial statements be read in conjunction with the
Partnership's Annual Report on Form 10-K for the year ended December 31,
1995.
On September 30, 1994, the Partnership adopted the liquidation basis of
accounting. The statements of net assets in process of liquidation at June
30, 1996 and December 31, 1995 and the statements of changes in net assets
in process of liquidation for the three months ended June 30, 1996 and June
30, 1995 have been prepared on a liquidation basis. Assets have been
presented at estimated net realizable value and liabilities have been
presented at estimated settlement amounts.
The valuation of assets and liabilities necessarily requires many estimates
and assumptions and there are uncertainties in carrying out the liquidation
of the Partnership's assets. The actual value of liquidating distributions,
if any, will depend on a variety of factors, including the actual timing of
distributions to Unitholders, and the resolution of the Partnership's
contingent liabilities and the costs of winding up. The actual amounts are
likely to differ from the amounts presented in the financial statements.
2. INVESTMENT IN AFFILIATE
On May 14, 1996 Charter Wireless Cable Holdings, L.L.C. ("Charter Holdings")
sold its remaining approximate 1,369,809 shares of common stock of Heartland
Wireless Communications, Inc. for a net price of approximately $28.00 per
share. The Partnership held a limited partnership interest in Charter
Holdings and, as such, received a distribution of $5,355,029 from Charter
Holdings on that date. In February, 1996, Charter Holdings made an initial
sale of approximately 150,000 shares of Heartland stock and distributed
approximately $538,000 to Galaxy Cablevision, L.P. A brokerage fee of
$160,538 was paid to the Managing General Partner in accordance with the
Brokerage Agreement dated March of 1987.
3. NOTES RECEIVABLE
5
In connection with the Cameron Sale, the Partnership held a promissory note
in the amount of $200,000 from Galaxy Telecom, Inc., the managing general
partner of Galaxy Telecom, L.P., the purchaser of the Cameron Systems (the
"Telecom Note"). On May 22, 1996 the Gleasons purchased the Telecom Note
from the Partnership . The purchase price for the Telecom Note was equal to
the principal plus all accrued interest as of that date totalling $218,000.
Galaxy also held the Harron Note, which is a note receivable in the face
amount of $1,500,000 from Harron Cablevision of Texas, Inc. ("Harron"). On
June 28, 1996, the Partnership received $2,212,500 from Harron for the
principle plus interest accrued through that date.
4. DISTRIBUTIONS TO UNITHOLDERS AND GENERAL PARTNERS
On May 31, 1996, the Managing General Partner of the Partnership approved a
distribution of $3.00 per unit payable on June 10, 1996, to the Unitholders
of record as of the close of business on May 31, 1996. This distribution
resulted in a payment of $6,426,000 to the Unitholders.
6
PART I. FINANCIAL INFORMATION
ITEM 2.--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Partnership realized expenses in excess of revenues from operations
during the first quarter of 1996 and 1995. Such excess expenses incurred
were generally anticipated and within amounts accrued for such purposes
under accrued expenses and other liabilities and reserve for estimated costs
during period of liquidation. Aside from such expenses, no adjustment was
made to the reserve for estimated costs during the period of liquidation.
The expenses in excess of revenues from operations is unaffected by
depreciation and amortization expenses, as such expenses are not recognized
under liquidation basis accounting.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1995, the Partnership had $3,207,319 in cash and cash
equivalents deposited primarily in interest-bearing accounts. On March 19,
1996 and May 14, 1996 the Partnership received cash distributions from
Charter Holdings of $538,200 and $5,515,567, respectively. The Partnership
received note payments plus all accrued interest of $218,000 and $1,747,037
on May 22, 1996 and and June 28, 1996, respectively. During the first six
months of 1996 the Partnership also paid some accrued liabilities and
expenses. As a result, cash and cash equivalents exceeded total liabilities
by $3,045,651.
The liquidity needs of the Partnership for the remainder of 1996 are
expected to be satisfied by existing cash reserves.
The Partnership has in reserve approximately $120,000 as of June 30, 1996 to
cover certain costs during the period of liquidation including professional
fees, general and administration expenses, contingency reserves and other
costs related to dissolution and winding up.
DISSOLUTION; WINDING UP
Having sold all of its operating assets, the Partnership is now in
dissolution. The Managing General Partner is in the process of winding up
the Partnership's affairs, and expects to dissolve the Partnership before
the end of the year.
In connection with the sale of cable television system assets in Texas
(the"Austin Systems"), the Partnership agreed to certain indemnification
obligations with Time Warner, the purchaser of the Austin Systems, for
certain claims, losses, liabilities,
7
damages, liens, penalties, costs and expenses incurred by Time Warner as a
result of any breach by Galaxy of any written representation, warranty,
agreement or covenant of Galaxy contained in the Austin Purchase Agreement.
The Partnership's maximum liability for such breach is $1,200,000. The
representations and warranties survive until June 7, 1996, and any claim for
indemnification must be made by September 5, 1996. No claim can be made
until the total of all such claims exceeds $25,000.
The risk of Galaxy being required to pay an indemnification claim is a
factor which the Managing General Partner will consider in determining the
amount and timing of any future distributions to Unitholders. The Managing
General Partner believes that the likelihood of such a claim being brought
by Friendship or Time Warner decreases with the passage of time.
8
PART II. OTHER INFORMATION
Items 1 through 6
None.
9
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.
GALAXY CABLEVISION, L.P.
BY: GALAXY CABLEVISION MANAGEMENT, L.P.,
as Managing General Partner
BY: GALAXY CABLEVISION MANAGEMENT, INC.,
as General Partner
Date: August 11, 1996 \s\ Tommy L. Gleason
-----------------------
BY:
Tommy L. Gleason, Jr.
President and Director
Date: August 11, 1996 \s\ J. Keith Davidson
-----------------------
BY: J. Keith Davidson
Chief Financial Officer
10