FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 0-16200
CABLE TV FUND 14-B, LTD.
- -------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-1024658
- -------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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Address of principal executive office
(303) 792-3111
------------------------------------
Registrant's telephone number
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
------ -----
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, December 31,
ASSETS 1996 1995
------ ------------- -------------
CASH $ 670,429 $ 474,904
TRADE RECEIVABLES, less allowance for doubtful receivables of
$126,248 and $135,202 at June 30, 1996 and December 31, 1995,
respectively 1,533,052 1,739,859
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 95,226,043 92,097,232
Less- accumulated depreciation (46,408,937) (43,489,032)
------------ ------------
48,817,106 48,608,200
Franchise costs and other intangible assets, net of
accumulated amortization of $74,142,967 at
June 30, 1996 and $70,528,499 at
December 31, 1995, respectively 56,897,331 60,511,799
------------ ------------
Total investment in cable television properties 105,714,437 109,119,999
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 528,411 515,935
------------ ------------
Total assets $108,446,329 $111,850,697
============ ============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
2
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
------------------------------------------- ------------- -------------
LIABILITIES:
Debt $ 57,499,397 $ 56,241,715
Accounts payable to General Partner - 1,896,049
Deferred brokerage fee 920,000 920,000
Trade accounts payable and accrued liabilities 1,455,516 1,763,047
Subscriber prepayments 621,677 568,400
------------ ------------
Total liabilities 60,496,590 61,389,211
------------ ------------
MINORITY INTEREST IN CABLE TELEVISION
JOINT VENTURE 4,409,236 4,779,072
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (691,691) (670,272)
------------ ------------
(690,691) (669,272)
------------ ------------
Limited Partners-
Net contributed capital (261,353 units
outstanding at June 30, 1996 and
December 31, 1995) 112,127,301 112,127,301
Accumulated deficit (67,896,107) (65,775,615)
------------ ------------
44,231,194 46,351,686
------------ ------------
Total liabilities and partners' capital (deficit) $108,446,329 $111,850,697
============ ============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
3
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
REVENUES $ 9,328,043 $ 8,486,420 $18,496,882 $16,974,163
COSTS AND EXPENSES:
Operating expenses 5,089,939 4,740,774 10,291,940 9,500,217
Management fees and allocated overhead
from General Partner 1,084,681 990,725 2,163,654 2,057,437
Depreciation and amortization 3,306,364 3,789,489 6,615,000 6,975,237
----------- ----------- ----------- -----------
OPERATING LOSS (152,941) (1,034,568) (573,712) (1,558,728)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (961,117) (1,211,210) (2,036,159) (2,340,239)
Other, net 64,130 1,874 98,124 3,637
----------- ----------- ----------- -----------
Total other income (expense), net (896,987) (1,209,336) (1,938,035) (2,336,602)
----------- ----------- ----------- -----------
CONSOLIDATED LOSS BEFORE
MINORITY INTEREST (1,049,928) (2,244,665) (2,511,747) (3,895,330)
MINORITY INTEREST IN
CONSOLIDATED LOSS 147,859 357,483 369,836 542,011
----------- ----------- ----------- -----------
NET LOSS $ (902,069) $(1,887,182) $(2,141,911) $(3,353,319)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (9,021) $ (18,872) $ (21,419) $ (33,533)
=========== =========== =========== ===========
Limited Partners $ (893,048) $(1,868,310) $(2,120,492) $(3,319,786)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (3.41) $ (7.15) $ (8.11) $ (12.70)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 261,353 261,353 261,353 261,353
=========== =========== =========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
4
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
For the Six Months Ended
June 30,
--------------------------
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,141,911) $(3,353,319)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 6,615,000 6,975,237
Amortization of interest rate protection contract - 58,794
Minority interest in consolidated net loss (369,836) (542,011)
Decrease (increase) in trade receivables 206,807 (64,556)
Increase in deposits, prepaid expenses and deferred charges (93,103) (14,636)
Increase (decrease) in advances from General Partner (1,896,049) 1,490,717
Decrease in trade accounts payable and accrued
liabilities and subscriber prepayments (254,254) (368,144)
----------- -----------
Net cash provided by operating activities 2,066,654 4,182,082
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (3,128,811) (3,239,876)
----------- -----------
Net cash used in investing activities (3,128,811) (3,239,876)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 3,300,000 1,017,609
Repayment of debt (2,042,318) (1,992,289)
----------- -----------
Net cash provided by (used in) financing activities 1,257,682 (974,680)
----------- -----------
Increase (decrease) in cash 195,525 (32,474)
Cash, beginning of period 474,904 648,379
----------- -----------
Cash, end of period $ 670,429 $ 615,905
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,281,103 $ 2,322,688
=========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
5
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Cable TV Fund 14-B, Ltd. (the
"Partnership") at June 30, 1996 and December 31, 1995, its Statements of
Operations for the three and six month periods ended June 30, 1996 and 1995 and
its Statements of Cash Flows for the six month periods ended June 30, 1996 and
1995. Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
The Partnership is a Colorado limited partnership that was formed pursuant
to the public offering of limited partnership interests in the Cable TV Fund 14
Limited Partnership Program (the "Program"), which was sponsored by Jones
Intercable, Inc. (the "General Partner"), to acquire, own and operate cable
television systems in the United States. Cable TV Fund 14-A, Ltd. ("Fund 14-A")
is the other partnership that was formed pursuant to the Program. The
Partnership and Fund 14-A formed a general partnership known as Cable TV Fund
14-A/B Venture (the "Venture"), in which the Partnership owns a 73 percent
interest and Fund 14-A owns a 27 percent interest. The Partnership directly
owns the cable television systems serving Surfside, South Carolina (the
"Surfside System") and Little Rock, California (the "Little Rock System"). The
Venture owns the cable television system serving certain areas in Broward
County, Florida (the "Broward System"). Because of the Partnership's majority
ownership interest in the Venture, the accompanying financial statements present
the Partnership's and the Venture's financial condition and results of
operations on a consolidated basis, with the ownership interest of Fund 14-A in
the Venture shown as a minority interest. All interpartnership accounts and
transactions have been eliminated. Certain prior year amounts have been
reclassified to conform to the 1996 presentation.
(2) The General Partner manages the Partnership and the Venture and receives a
fee for its services equal to five percent of the gross revenues of the
Partnership and the Venture, excluding revenues from the sale of cable
television systems or franchises. Management fees paid to the General Partner by
the Partnership and the Venture for the three and six month periods ended June
30, 1996 were $466,402 and $924,844, respectively, compared to $424,321 and
$848,708, respectively, for the similar 1995 periods.
The Partnership and the Venture reimburse the General Partner for certain
allocated overhead and administrative expenses. These expenses represent the
salaries and related benefits paid for corporate personnel, rent, data
processing services and other corporate facilities costs. Such personnel provide
engineering, marketing, accounting, administrative, legal and investor relations
services to the Partnership and the Venture. Allocations of personnel costs are
based primarily on actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining expenses are allocated based on
the pro rata relationship of the Partnership's and the Venture's revenues to the
total revenues of all systems owned or managed by the General Partner and
certain of its subsidiaries. Systems owned by the General Partner and all other
systems owned by partnerships for which Jones Intercable, Inc. is the general
partner are also allocated a proportionate share of these expenses. The General
Partner believes that the methodology used in allocating overhead and
administrative expenses is reasonable. Reimbursements made to the General
Partner for allocated overhead and administrative expenses for the three and six
month periods ended June 30, 1996 were $618,279 and $1,238,810, respectively,
compared to $566,404 and $1,208,729, respectively, for the similar 1995 periods.
6
(3) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
June 30, 1996 December 31, 1995
-------------- ------------------
ASSETS
------
Cash and accounts receivable $ 1,261,922 $ 1,465,837
Investment in cable television properties 58,460,768 60,613,938
Other assets 445,455 367,781
------------ ------------
Total assets $ 60,168,145 $ 62,447,556
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 42,214,258 $ 40,530,652
Payables and accrued liabilities 1,328,444 3,926,752
Partners' contributed capital 70,000,000 70,000,000
Accumulated deficit (53,374,557) (52,009,848)
------------ ------------
Total liabilities and partners' capital $ 60,168,145 $ 62,447,556
============ ============
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
Revenues $ 6,272,821 $ 5,767,265 $12,533,786 $11,693,152
Operating expenses (3,398,184) (3,165,205) (6,913,900) (6,435,781)
Management fees and allocated overhead
from General Partner (732,724) (673,011) (1,468,568) (1,411,596)
Depreciation and amortization (2,059,297) (2,349,922) (4,120,678) (4,096,103)
----------- ----------- ----------- -----------
Operating income (loss) 82,616 (420,873) 30,640 (250,328)
Interest expense (690,065) (899,365) (1,491,756) (1,752,085)
Other, net 61,917 1,113 96,407 2,372
----------- ----------- ----------- -----------
Net loss $ (545,532) $(1,319,125) $(1,364,709) $(2,000,041)
=========== =========== =========== ===========
Management fees paid to the General Partner by the Venture totaled $313,641
and $626,689, respectively, for the three and six month periods ended June 30,
1996, compared to $288,364 and $584,658, respectively, for the similar 1995
periods. Reimbursements for overhead and administrative expenses paid to the
General Partner by the Venture totaled $419,083 and $841,879, respectively, for
the three and six month periods ended June 30, 1996, compared to $384,647 and
$826,938 for the similar 1995 periods.
7
CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
----------------------
FINANCIAL CONDITION
- -------------------
The Partnership owns a 73 percent interest in the Venture. The
accompanying financial statements include 100 percent of the accounts of the
Partnership and those of the Venture, reduced by the 27 percent minority
interest in the Venture.
It is the General Partner's publicly announced policy that it intends to
liquidate its managed limited partnerships, including the Partnership, as
opportunities for sales of partnership cable television systems arise in the
marketplace over the next several years. No specific dates or terms have yet
been set for the sale of the Partnership's systems or the Venture's system.
The Partnership-
For the six months ended June 30, 1996, the Partnership generated net cash
from operating activities totaling $2,066,654, which is available to fund
capital expenditures and non-operating costs. The Partnership expended
approximately $1,200,000 on capital additions in its wholly-owned Surfside,
South Carolina and Little Rock, California systems during the first six months
of 1996. Service drops to homes accounted for approximately 36 percent of these
expenditures and new plant construction accounted for approximately 26 percent.
The remainder of the expenditures was for various enhancements in the
Partnership's systems. Funding for these expenditures was provided by cash on
hand and cash generated from operations. Anticipated capital expenditures for
the remainder of 1996 are approximately $1,307,000. Approximately 35 percent is
designated for plant construction in both of the Partnership's systems. Service
drops to homes are expected to account for approximately 30 percent. The
remainder of these expenditures is for various enhancements in each of the
Partnership's systems. These capital expenditures are necessary to maintain
the value of the Partnership's systems. Funding for these improvements will be
provided by cash generated from operations and borrowings under the
Partnership's credit facility.
In December 1995, the Partnership entered into a new reducing revolving
credit facility with an available commitment of $18,000,000. At June 30, 1996,
the balance outstanding was $15,200,000, leaving $2,800,000 available for future
borrowings. On September 30, 1998, the available commitment pertaining to the
reducing revolving credit facility begins to reduce quarterly until March 31,
2003 when the amount available will be zero. Interest on the reducing revolving
credit facility is at the Partnership's option of the Base Rate plus 1/4
percent, the London Interbank Offered Rate ("LIBOR") plus 1-1/4 percent, or the
Certificate of Deposit Rate plus 1-3/8 percent. The effective interest rates on
amounts outstanding as of June 30, 1996 and 1995 were 6.74 percent and 7.01
percent, respectively.
The General Partner believes that the Partnership has sufficient sources
of capital from cash generated from operations and borrowings available under
the reducing revolving credit facility to service its presently anticipated
needs.
The Venture-
For the six months ended June 30, 1996, the Venture generated net cash from
operating activities totaling $411,366, which is available to fund capital
expenditures and non-operating costs. During the first six months of 1996,
capital expenditures in the Venture-owned Broward County System totaled
approximately $1,930,000. Approximately 38 percent of these expenditures related
to new plant construction. Approximately 37 percent of these expenditures
related to service drops to homes. The remainder of the expenditures was for
various enhancements in the Broward County System. Such expenditures were funded
primarily from cash generated from operations. Anticipated capital expenditures
for the remainder of 1996 are approximately $2,270,000. Approximately 39 percent
will relate to service drops to homes. Approximately 35 percent will relate to
new plant construction. The remainder of the anticipated expenditures is for
various enhancements in the Broward County System. These capital expenditures
are necessary to maintain the value of the Broward County System. These capital
expenditures are expected to be funded from cash on hand and cash generated from
operations.
8
In June 1996, the Venture amended its existing term loan providing for a
reducing revolving credit facility with an available commitment of $42,500,000.
The entire $42,500,000 commitment is available through December 31, 1998, at
which time the commitment will be repaid in twenty quarterly installments with a
final maturity of December 31, 2003. At June 1996, the balance outstanding was
$42,102,968, leaving $397,032 available for future borrowings. Interest is at
the Venture's option of Prime plus 1/4 percent, LIBOR plus 1-1/4 percent or the
Certificate of Deposit Rate plus 1-3/8 percent. The effective interest rates on
amounts outstanding as of June 30, 1996 and 1995 were 6.74 percent and 7.64
percent, respectively.
The General Partner believes that the Venture has sufficient sources of
capital from cash generated from operations to service its presently anticipated
needs.
9
RESULTS OF OPERATIONS
- ---------------------
The results of operations for the Partnership are summarized in the selected
financial data below:
For the Three Months Ended June 30, 1996
-------------------------------------------
Partnership Venture
Owned Owned Consolidated
------------- ------------- -------------
Revenues $ 3,055,222 $ 6,272,821 $ 9,328,043
Operating expenses 1,691,755 3,398,184 5,089,939
Management fees and allocated
overhead from General Partner 351,957 732,724 1,084,681
Depreciation and amortization 1,247,067 2,059,297 3,306,364
---------- ----------- -----------
Operating income (loss) $ (235,557) $ 82,616 $ (152,941)
---------- ----------- -----------
Interest expense $ (271,052) $ (690,065) $ (961,117)
Consolidated loss before minority interest $ (504,396) $ (545,532) $(1,049,928)
---------- ----------- -----------
Minority interest in consolidated loss $ - $ 147,859 $ 147,859
Net loss $ (504,396) $ (397,673) $ (902,069)
========== =========== ===========
For the Three Months Ended June 30, 1995
--------------------------------------------
Partnership Venture
Owned Owned Consolidated
------------ ------------ ------------
Revenues $ 2,719,155 $ 5,767,265 $ 8,486,420
Operating expenses 1,575,569 3,165,205 4,740,774
Management fees and allocated
overhead from General Partner 317,714 673,011 990,725
Depreciation and amortization 1,439,567 2,349,922 3,789,489
---------- ----------- -----------
Operating loss $ (613,695) $ (420,873) $(1,034,568)
---------- ----------- -----------
Interest expense $ (311,845) $ (899,365) $(1,211,210)
Consolidated loss before minority interest $ (925,540) $(1,319,125) $(2,244,665)
---------- ----------- -----------
Minority interest in consolidated loss $ - $ 357,483 $ 357,483
Net loss $ (925,540) $ (961,642) $(1,887,182)
========== =========== ===========
10
For the Six Months Ended June 30, 1996
-----------------------------------------
Partnership Venture
Owned Owned Consolidated
------------ ------------ -------------
Revenues $ 5,963,096 $12,533,786 $18,496,882
Operating expenses 3,378,040 6,913,900 10,291,940
Management fees and allocated
overhead from General Partner 695,086 1,468,568 2,163,654
Depreciation and amortization 2,494,322 4,120,678 6,615,000
----------- ----------- -----------
Operating income (loss) (604,352) $ 30,640 $ (573,712)
----------- ----------- -----------
Interest expense $ (544,403) $(1,491,756) $(2,036,159)
Consolidated loss before minority interest $(1,147,038) $(1,364,709) $(2,511,747)
----------- ----------- -----------
Minority interest in consolidated loss $ - $ 369,836 $ 369,836
Net loss $(1,147,038) $ (994,873) $(2,141,911)
=========== =========== ===========
For the Six Months Ended June 30, 1995
----------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 5,281,011 $11,693,152 $16,974,163
Operating expenses 3,064,436 6,435,781 9,500,217
Management fees and allocated
overhead from General Partner 645,841 1,411,596 2,057,437
Depreciation and amortization 2,879,134 4,096,103 6,975,237
----------- ----------- -----------
Operating loss $(1,308,400) $ (250,328) $(1,558,728)
----------- ----------- -----------
Interest expense $ (588,154) $(1,752,085) $(2,340,239)
Consolidated loss before minority interest $(1,895,289) $(2,000,041) $(3,895,330)
----------- ----------- -----------
Minority interest in consolidated loss $ - $ 542,011 $ 542,011
Net loss $(1,895,289) $(1,458,030) $(3,353,319)
=========== =========== ===========
11
Partnership Owned -
- -------------------
Revenues of the Partnership's Surfside System and Little Rock System
increased $336,067, or approximately 12 percent, to $3,055,222 for the three
months ended June 30, 1996 from $2,719,155 for the three months ended June 30,
1995. For the six months ended June 30, 1996 and 1995, revenues increased
$682,085, or approximately 13 percent, to $5,963,096 in 1996 from $5,281,011 in
1995. The increases in revenue were due primarily to increases in the number of
basic subscribers , basic rate adjustments and advertising activity. Basic
subscribers increased approximately 5 percent to 26,601 at June 30, 1996 from
25,297 at June 30, 1995. The increases in the number of basic subscribers
accounted for approximately 42 percent and 40 percent, respectively, of the
increase in revenues for the three and six month periods ended June 30, 1996.
Basic rate adjustments accounted for approximately 39 percent and 38 percent,
respectively, of the increase in revenues for the three and six month periods
ended June 30, 1996. An increase in advertising activity accounted for
approximately 18 percent and 16 percent, respectively, of the increase in
revenues for the three and six month periods ended June 30, 1996. No other
individual factor was significant to the increase.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expense for the three month periods increased $116,186, or
approximately 7 percent, to $1,691,755 at June 30, 1996 from $1,575,569 at June
30, 1995. For the six month periods ended June 30, 1996 and 1995, operating
expense increased $313,604, or approximately 10 percent, to $3,378,040 at June
30, 1996 from $3,064,436 at June 30, 1995. Operating expense represented 55
percent and 57 percent, respectively, of revenue for the three and six month
periods ended June 30, 1996, compared to 58 percent and 58 percent,
respectively, in 1995. These increases were primarily due to increases in
programming fees and personnel related expenses. No other individual factor
significantly affected the increase in operating expense.
Management fees and allocated overhead from the General Partner increased
$34,243, or approximately 11 percent, to $351,957 at June 30, 1996 from $317,714
at June 30, 1995. For the six month periods ended June 30, 1996 and 1995,
management fees and allocated overhead from the General Partner increased
$49,245, or approximately 8 percent, to $695,086 at June 30, 1996 from $645,841
at June 30, 1995. These increases were due to the increases in revenues, upon
which such fees are based.
Depreciation and amortization expense for the three month periods decreased
$192,500, or approximately 13 percent, to $1,247,067 at June 30, 1996 from
$1,439,567 at June 30, 1995. For the six month periods ended June 30, 1996 and
1995, depreciation and amortization expense decreased $384,812, or approximately
13 percent, to $2,494,322 at June 30, 1996 from $2,879,134 at June 30, 1995.
These decreases were attributable to the maturation of the Partnership's asset
base.
Operating loss decreased $378,138, or approximately 62 percent, to $235,557
at June 30, 1996 from $613,695 for the three months ended June 30, 1995. For
the six month periods ended June 30, 1996 and 1995, operating loss decreased
$704,048, or approximately 54 percent, to $604,352 at June 30, 1996 from
$1,308,400 at June 30, 1995. These decreases were due to the increases in
revenues and the decreases in depreciation and amortization expense exceeding
the increases in operating expense and management fees and allocated overhead
from the General Partner.
The cable television industry generally measures the financial performance
of a cable television system in terms of cash flow or operating income before
depreciation and amortization. The value of a cable television system is often
determined using multiples of cash flow. This measure is not intended to be a
substitute or improvement upon the items disclosed on the financial statements,
rather it is included because it is an industry standard. Operating income
before depreciation and amortization increased $185,638, or approximately 22
percent, to $1,011,510 for the three months ended 1996 from $825,872 for the
three months ended June 30, 1995. For the six month periods ended June 30, 1996
and 1995, operating income before depreciation and amortization increased
$319,236, or approximately 20 percent, to $1,889,970 in 1996 from $1,570,734 in
1995. These increases were due to the increases in revenues exceeding the
increases in operating expense and management fees and allocated overhead from
the General Partner.
12
Interest expense decreased $40,793, or approximately 13 percent, to
$271,052 for three months ended June 30, 1996 from $311,845 for the three months
ended June 30, 1995. For the six month periods ended June 30, 1996 and 1995,
interest expense decreased $43,751, or approximately 7 percent, to $544,403 at
June 30, 1996 from $588,154 at June 30, 1995. These decreases were primarily
due to lower effective interest rates on interest bearing obligations.
Net loss decreased $421,144, or approximately 45 percent, to $504,396 for
the three months ended June 30, 1996 from $925,540 for the three months ended
June 30, 1995. For the six month periods ended June 30, 1996 and 1995, net loss
decreased $748,251, or approximately 39 percent, to $1,147,038 at June 30, 1996
from $1,895,289 at June 30, 1995. These losses are the result of the factors
discussed above and are expected to continue in the future.
Venture Owned -
- ---------------
In addition to its ownership of the Surfside System and the Little Rock
System, the Partnership owns a 73 percent interest in the Venture.
Revenues of the Venture's Broward County System increased $505,556, or
approximately 9 percent, to $6,272,821 for the three months ended June 30, 1996
from $5,767,265 for the three months ended June 30, 1995. Revenues for the six
month periods ended June 30, 1996 and 1995 increased $840,634, or approximately
7 percent, to $12,533,786 in 1996 from $11,693,152 in 1995. The increase in
revenues was due to increases in the number of basic subscribers and premium
subscriptions and basic rate adjustments. Basic subscribers increased
approximately 3 percent to 49,117 at June 30, 1996 from 47,554 at June 30, 1995.
Premium subscriptions increased approximately 3 percent to 42,697 at June 30,
1996 from 41,400 at June 30, 1995. The increases in the number of basic
subscribers and premium subscriptions accounted for approximately 38 percent and
42 percent, respectively of the increases in revenues for the three and six
month periods ended June 30, 1996. Basic rate adjustments accounted for
approximately 45 percent and 47 percent, respectively, of the increase in
revenues for the three and six month periods ended June 30, 1996. No other
individual factor was significant to the increase in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture's cable television systems. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses increased $232,979, or approximately 7 percent, to
$3,398,184 for the three months ended June 30, 1996 from $3,165,205 for the
three months ended June 30, 1995. This increase in operating expense was due to
increases in programming fees and personnel related costs, which were partially
offset by a decrease in marketing costs. For the six month periods ended June
30, 1996 and 1995, operating expense increased $478,119, or approximately 7
percent, to $6,913,900 at June 30, 1996 from $6,435,781 at June 30, 1995. The
increase in operating expense was due primarily to increases in programming
fees. No other individual factor was significant to the increase in operating
expense. Operating expenses represented 54 percent and 55 percent,
respectively, of revenue for the three and six months ended June 30, 1996
compared to 55 percent of revenue for both the three and six months ended June
30, 1995.
Management fees and allocated overhead from the General Partner increased
$59,713, or approximately 9 percent, to $732,724 for the three months ended June
30, 1996 from $673,011 for the three months ended June 30, 1995. For the six
month periods ended June 30, 1996 and 1995, management fees and allocated
overhead from the General Partner increased $56,972, or approximately 4 percent,
to $1,468,568 at June 30, 1996 from $1,411,596 at June 30, 1995. These
increases were due to the increases in revenues, upon which such fees are based.
Depreciation and amortization expense decreased $290,625, or approximately
12 percent, to $2,059,297 for the three months ended June 30, 1996 from
$2,349,922 for the three months ended June 30, 1995. This decrease was due to
the maturation of the Venture's tangible asset base. For the six month periods
ended June 30, 1996 and 1995, depreciation and amortization expense increased
$24,575, or approximately 1 percent, to $4,120,678 at June 30, 1996 from
$4,096,103 at June 30, 1995 due to capital additions during 1996.
The Venture reported operating income of $82,616 for the three month period
ended June 30, 1996, compared to an operating loss of $420,873 for the three
month period ended June 30, 1995. This was due to the increase in revenue and
the decrease in depreciation and amortization expense exceeding the increase in
operating expense and management fees and allocated overhead from the General
Partner. For the six month period ended June 30, 1996, the Venture reported an
operating income of $30,640, compared to an operating loss of $250,328 for the
six month period ended June 30, 1995. This
13
was due to the increase in revenues exceeding the increase in operating expense,
depreciation and amortization expense and management fees and allocated overhead
from the General Partner.
The cable television industry generally measures the financial performance
of a cable television system in terms of cash flow or operating income before
depreciation and amortization. The value of a cable television system is often
determined using multiples of cash flow. This measure is not intended to be a
substitute or improvement upon the items disclosed on the financial statements,
rather it is included because it is an industry standard. Operating income
before depreciation and amortization increased $212,864, or approximately 11
percent, to $2,141,913 for the three months ended June 30, 1996 from $1,929,049
for the three months ended June 30, 1995. For the six month periods ended June
30, 1996 and 1995, operating income before depreciation and amortization
increased $305,543, or approximately 8 percent, to $4,151,318 at June 30, 1996
from $3,845,775 at June 30, 1995. These increases were due to the increases in
revenue exceeding the increases in operating expense and management fees and
allocated overhead from the General Partner.
Interest expense decreased $209,300, or approximately 23 percent, to
$690,065 for the three months ended June 30, 1996 from $899,365 for the three
months ended June 30, 1995. For the six month periods ended June 30, 1996 and
1995 interest expense decreased $260,329, or approximately 15 percent, to
$1,491,756 at June 30, 1996 from $1,752,085 at June 30, 1995. These decreases
were primarily due to lower effective interest rates and lower outstanding
balances on interest bearing obligations.
Net loss of the Venture decreased $773,593, or approximately 59 percent, to
$545,532 for the three months ended June 30, 1996 from $1,319,125 for the three
months ended June 30, 1995. For the six month periods ended June 30, 1996 and
1995, net loss decreased $635,332, or approximately 32 percent, to $1,364,709 at
June 30, 1996 from $2,000,041 at June 30, 1995. These losses are the result of
the factors discussed above and are expected to continue in the future.
14
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
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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.
CABLE TV FUND 14-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By:/S/ Kevin P. Coyle
-----------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 14, 1996
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