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 September 30, 1996.
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[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from to .
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Commission File Number 0-17733
CABLE TV FUND 15-A, LTD.
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Exact name of registrant as specified in charter
Colorado #84-1091413
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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
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Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 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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CABLE TV FUND 15-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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September 30, December 31,
ASSETS 1996 1995
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CASH $ 310,745 $ 58,719
TRADE RECEIVABLES, less allowance for doubtful
receivables of $74,913 and $132,431 at September 30, 1996
and December 31, 1995, respectively 808,558 965,495
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 78,545,919 74,582,334
Less- accumulated depreciation (36,834,440) (32,507,403)
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41,711,479 42,074,931
Franchise costs and other intangible assets, net of
accumulated amortization of $98,559,074 and
$87,030,946 at September 30, 1996 and December 31, 1995,
respectively 21,263,898 32,782,026
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Total investment in cable television properties 62,975,377 74,856,957
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,018,208 1,246,638
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Total assets $ 65,112,888 $ 77,127,809
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The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 15-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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September 30, December 31,
LIABILITIES AND PARTNERS' DEFICIT 1996 1995
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LIABILITIES:
Debt $ 84,330,035 $ 78,818,284
Accounts payable - General Partner - 4,782,507
Trade accounts payable and accrued liabilities 1,182,635 1,825,707
Subscriber prepayments 116,712 96,991
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Total liabilities 85,629,382 85,523,489
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PARTNERS' DEFICIT:
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,124,800) (1,003,592)
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(1,123,800) (1,002,592)
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Limited Partners-
Net contributed capital (213,174 units
outstanding at September 30, 1996
and December 31, 1995) 90,575,991 90,575,991
Accumulated deficit (109,968,685) (97,969,079)
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(19,392,694) (7,393,088)
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Total liabilities and partners' deficit $ 65,112,888 $ 77,127,809
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The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
CABLE TV FUND 15-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended For the Nine Months Ended
September 30, September 30,
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1996 1995 1996 1995
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REVENUES $ 9,386,239 $ 8,632,012 $ 27,539,905 $ 25,398,420
COSTS AND EXPENSES:
Operating expenses 5,336,741 4,863,093 15,683,133 14,499,822
Management fees and allocated overhead
from General Partner 999,311 1,011,168 3,092,656 3,035,633
Depreciation and amortization 5,322,764 5,534,004 15,957,653 16,820,711
----------- ----------- ------------ ------------
OPERATING LOSS (2,272,577) (2,776,253) (7,193,537) (8,957,746)
----------- ----------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (1,564,936) (1,633,521) (4,585,472) (5,006,399)
Other, net (189,342) 67,762 (341,805) (33,756)
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Total other income (expense) (1,754,278) (1,565,759) (4,927,277) (5,040,155)
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NET LOSS $(4,026,855) $(4,342,012) $(12,120,814) $(13,997,901)
=========== =========== ============ ============
ALLOCATION OF NET LOSS:
General Partner $ (40,268) $ (43,420) $ (121,208) $ (139,979)
=========== =========== ============ ============
Limited Partners $(3,986,587) $(4,298,592) $(11,999,606) $(13,857,922)
=========== =========== ============ ============
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(18.70) $(20.16) $(56.29) $(65.00)
=========== =========== ============ ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 213,174 213,174 213,174 213,174
=========== =========== ============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Nine Months Ended
September 30,
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1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(12,120,814) $(13,997,901)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 15,957,653 16,820,711
Amortization of interest rate protection contract 56,535 56,535
Decrease (increase) in trade receivables 156,937 (315,082)
Decrease (increase) in deposits, prepaid expenses
and deferred charges 69,407 (47,490)
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (623,351) (197,610)
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Net cash provided by operating activities 3,496,367 2,319,163
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,963,585) (4,260,533)
Franchise renewal (10,000) -
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Net cash used in investing activities (3,973,585) (4,260,533)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 5,643,924 8,594,022
Repayment of debt (132,173) (119,860)
Decrease in advances from General Partner (4,782,507) (6,222,548)
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Net cash provided by financing activities 729,244 2,251,614
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Increase in cash 252,026 310,244
Cash, beginning of period 58,719 26,010
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Cash, end of period $ 310,745 $ 336,254
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 4,738,621 $ 4,892,358
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The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
CABLE TV FUND 15-A, LTD.
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(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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(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 15-A, Ltd. (the
"Partnership") at September 30, 1996 and December 31, 1995, its Statements of
Operations for the three and nine month periods ended September 30, 1996 and
1995 and its Statements of Cash Flows for the nine month periods ended September
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 owns and operates the cable television systems serving the
areas in and around Barrington, Elgin, South Elgin, Hawthorn Woods, Kildeer,
Lake Zurich, Indian Creek, Vernon Hills and certain unincorporated areas of Kane
and Lake Counties, all in the State of Illinois (the "Barrington System") and
the cable television system serving the areas in and around Flossmoor, La
Grange, La Grange Park, Riverside, Indianhead Park, Hazel Crest, Thornton,
Lansing, Matteson, Richton Park, University Park, Crete, Olympia Fields and
Western Springs, all in the State of Illinois (the "South Suburban System").
(2) Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation, is the "General Partner" and manages the Partnership and receives a
fee for its services equal to 5 percent of the gross revenues of the
Partnership, excluding revenues from the sale of cable television systems or
franchises. Management fees paid to the General Partner by the Partnership for
the three and nine month periods ended September 30, 1996 were $469,312 and
$1,376,995, respectively, compared to $431,601 and $1,269,921, respectively, for
the similar 1995 periods.
The Partnership reimburses 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, administrative, accounting, legal and investor relations services to
the Partnership. 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 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 Intercable
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 by the
Partnership to the General Partner for allocated overhead and administrative
expenses for the three and nine month periods ended September 30, 1996 were
$529,999 and $1,715,661, respectively, compared to $579,567 and $1,765,712,
respectively, for the similar 1995 periods.
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CABLE TV FUND 15-A, LTD.
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(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
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FINANCIAL CONDITION
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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. In accordance with the General
Partner's policy, the Barrington System and the South Suburban System, along
with other Chicago-area systems owned or managed by the General Partner and its
affiliates were recently marketed for sale. The deadline set by the General
Partner for receipt of indications of interest for such systems from prospective
buyers was October 15, 1996. The General Partner did not receive any offer for
the Barrington System or the South Suburban System. The General Partner will
continue to explore other alternatives for sale; however, no specific plans have
yet been determined. There is no assurance as to the timing or terms of any
sales.
For the nine months ended September 30, 1996, the Partnership generated net
cash from operating activities totaling approximately $3,496,000, which is
available to fund capital expenditures and non-operating costs. Capital
expenditures totaled approximately $3,964,000 during the first nine months of
1996. Approximately 50 percent of these expenditures was for service drops to
homes. New plant construction accounted for approximately 17 percent and
approximately 14 percent related to the rebuild and upgrade of portions of the
Partnership's systems. The remaining expenditures were for various enhancements
in the Partnership's systems. Funding for these expenditures was provided by
cash generated from operations and borrowings under the Partnership's revolving
credit facility. Anticipated capital expenditures for the remainder of 1996 are
approximately $2,560,000. Approximately 30 percent of these remaining capital
expenditures will relate to new plant construction. Approximately 25 percent of
the remaining capital expenditures will relate to service drops to homes and
approximately 12 percent will relate to continuing the rebuild and upgrade of
portions of the Partnership's systems. The remainder of the anticipated
expenditures is for various enhancements in the Partnership's systems. These
capital expenditures are necessary to maintain the value of the Partnership's
systems. Funding for these expenditures is expected to be provided by cash
generated from operations and borrowings available under the Partnership's
revolving credit facility.
On March 28, 1996, the Partnership amended its revolving credit facility to
provide for a maximum of $90,000,000 in available borrowings and to extend the
revolving credit period to September 30, 1997. At September 30, 1996,
$84,000,000 was outstanding under the Partnership's revolving credit facility,
leaving $6,000,000 of available borrowings. Interest is at the Partnership's
option of the Prime Rate plus 1/2 percent, the London Interbank Offered Rate
plus 1-1/2 percent or the Certificate of Deposit Rate plus 1-5/8 percent. The
effective interest rates on outstanding obligations as of September 30, 1996 and
1995 were 6.58 percent and 7.39 percent, respectively.
The Partnership has sufficient sources of capital in the form of borrowings
available under its revolving credit facility and cash generated from operations
to meet its presently anticipated liquidity and capital needs.
RESULTS OF OPERATIONS
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Revenues of the Partnership increased $754,227, or approximately 9 percent,
to $9,386,239 for the three month period ended September 30, 1996 from
$8,632,012 for the comparable period in 1995. Revenues increased $2,141,485, or
approximately 8 percent, to $27,539,905 for the nine month period ended
September 30, 1996 from $25,398,420 for the comparable period in 1995. An
increase in the number of basic service subscribers combined with basic service
rate increases implemented in the Partnership's systems primarily accounted for
the increases in revenues. The increase in the number of basic service
subscribers accounted for approximately 38 percent and 41 percent, respectively,
of the increase in basic service revenues for the three and nine month periods
ended September 30, 1996. The number of basic service subscribers increased by
4,326 subscribers, or approximately 6 percent, to 81,709 subscribers for the
nine month period ended September 30, 1996 from 77,383 subscribers for the
comparable period in 1995. Basic service rate increases accounted for
approximately 62 percent and 59 percent, respectively, of the increase in basic
service revenues for the three and nine month periods ended September 30, 1996.
No other individual factors were significant to the increases in revenues.
7
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 expenses increased $473,648, or approximately 10 percent, to
$5,336,741 for the three month period ended September 30, 1996 from $4,863,093
for the comparable period in 1995. Operating expenses increased $1,183,311, or
approximately 8 percent, to $15,683,133 for the nine month period ended
September 30, 1996 from $14,499,822 for the comparable period in 1995.
Operating expenses represented approximately 57 percent and 56 percent,
respectively, of revenues for the three month periods ended September 30, 1996
and 1995, and approximately 57 percent for each of the nine month periods ended
September 30, 1996 and 1995. Increases in programming fees primarily accounted
for the increases in operating expenses. No other factor contributed
significantly to the increase in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$11,857, or approximately 1 percent, to $999,311 for the three month period
ended September 30, 1996 from $1,011,168 for the comparable period in 1995.
This decrease was due to a decrease in allocated overhead from the General
Partner. Management fees and allocated overhead from the General Partner
increased $57,023, or approximately 2 percent, to $3,092,656 for the nine month
period ended September 30, 1996 from $3,035,633 for the comparable period in
1995. This increase was due to an increase in management fees due to the
increase in revenues, upon which such management fees are based.
Depreciation and amortization expense decreased $211,240, or approximately
4 percent, to $5,322,764 for the three month period ended September 30, 1996
from $5,534,004 for the comparable period in 1995. Depreciation and
amortization expense decreased $863,058, or approximately 5 percent, to
$15,957,653 for the nine month period ended September 30, 1996 from $16,820,711
for the comparable period in 1995. These decreases were due to the maturation
of the Partnership's asset base.
The Partnership's operating loss decreased $503,676, or approximately 18
percent, to $2,272,577 for the three month period ended September 30, 1996 from
$2,776,253 for the comparable period in 1995. This decrease was due to the
increase in revenues, the decrease in management fees and allocated overhead
from the General Partner and the decrease in depreciation and amortization
expense exceeding the increase in operating expenses. Operating loss decreased
$1,764,209, or approximately 20 percent, to $7,193,537 for the nine month period
ended September 30, 1996 from $8,957,746 for the comparable period in 1995.
This decrease was due to the increase in revenues and decrease in depreciation
and amortization expense exceeding the increase in operating expenses 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 $292,436, or approximately 11
percent, to $3,050,187 for the three month period ended September 30, 1996 from
$2,757,751 for the comparable period in 1995. This increase was due to the
increase in revenues and decrease in management fees and allocated overhead from
the General Partner exceeding the increase in operating expenses. Operating
income before depreciation and amortization increased $901,151, or approximately
11 percent, to $8,764,116 for the nine month period ended September 30, 1996
from $7,862,965 for the comparable period in 1995. This increase was due to the
increase in revenues exceeding the increase in operating expenses and management
fees and allocated overhead from the General Partner.
Interest expense decreased $68,585, or approximately 4 percent, to
$1,564,936 for the three month period ended September 30, 1996 from $1,633,521
for the comparable period in 1995. Interest expense decreased $420,927, or
approximately 8 percent, to $4,585,472 for the nine month period ended September
30, 1996 to $5,006,399 for the comparable period in 1995. These decreases were
due to lower effective interest rates on the Partnership's interest bearing
obligations.
8
Net loss decreased $315,157, or approximately 7 percent, to $4,026,855 for
the three months ended September 30, 1996 compared to $4,342,012 for the similar
1995 period. Net loss decreased $1,877,087, or approximately 13 percent, to
$12,120,814 for the nine months ended September 30, 1996 compared to $13,997,901
for the similar 1995 period. These decreases were due to the factors discussed
above. These losses are expected to continue in the future.
9
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
10
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 15-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
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Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 13, 1996
11