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
------------------
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
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CABLE TV FUND 14-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
September 30, December 31,
ASSETS 1996 1995
------ -------------- -------------
CASH $ 841,638 $ 474,904
TRADE RECEIVABLES, less allowance for doubtful receivables of
$96,468 and $135,202 at September 30, 1996 and December 31, 1995,
respectively 2,305,451 1,739,859
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 97,252,142 92,097,232
Less- accumulated depreciation (47,866,716) (43,489,032)
------------ ------------
49,385,426 48,608,200
Franchise costs and other intangible assets, net of accumulated
amortization of $75,950,201 and $70,528,499 at September 30, 1996
and December 31, 1995, respectively 55,090,097 60,511,799
------------ ------------
Total investment in cable television properties 104,475,523 109,119,999
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 451,953 515,935
------------ ------------
Total assets $108,074,565 $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
-------------------------------------
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
------------------------------------------ -------------- -------------
LIABILITIES:
Debt $ 58,213,701 $ 56,241,715
Accounts payable to General Partner - 1,896,049
Deferred brokerage fee 920,000 920,000
Trade accounts payable and accrued liabilities 1,590,133 1,763,047
Subscriber prepayments 575,658 568,400
------------ ------------
Total liabilities 61,299,492 61,389,211
------------ ------------
MINORITY INTEREST IN CABLE TELEVISION
JOINT VENTURE 4,210,600 4,779,072
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (701,451) (670,272)
------------ ------------
(700,451) (669,272)
------------ ------------
Limited Partners-
Net contributed capital (261,353 units
outstanding at September 30, 1996 and
December 31, 1995) 112,127,301 112,127,301
Accumulated deficit (68,862,377) (65,775,615)
------------ ------------
43,264,924 46,351,686
------------ ------------
Total liabilities and partners' capital (deficit) $108,074,565 $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 Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
REVENUES $ 9,444,545 $ 8,661,010 $27,941,427 $25,635,173
COSTS AND EXPENSES:
Operating expenses 5,082,209 4,650,139 15,374,149 14,150,356
Management fees and allocated
overhead from General Partner 1,031,916 1,007,493 3,195,570 3,064,930
Depreciation and amortization 3,309,434 3,718,759 9,924,434 10,693,996
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 20,986 (715,381) (552,726) (2,274,109)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,042,277) (1,119,113) (3,078,436) (3,459,352)
Other, net (153,375) 9,072 (55,251) 12,709
----------- ----------- ----------- -----------
Total other income
(expense), net (1,195,652) (1,110,041) (3,133,687) (3,446,643)
----------- ----------- ----------- -----------
CONSOLIDATED LOSS BEFORE
MINORITY INTEREST (1,174,666) (1,825,422) (3,686,413) (5,720,752)
MINORITY INTEREST IN
CONSOLIDATED LOSS 198,636 285,483 568,472 827,494
----------- ----------- ----------- -----------
NET LOSS $ (976,030) $(1,539,939) $(3,117,941) $(4,893,258)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (9,760) $ (15,400) $ (31,179) $ (48,933)
=========== =========== =========== ===========
Limited Partners $ (966,270) $(1,524,539) $(3,086,762) $(4,844,325)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(3.70) $(5.84) $(11.81) $(18.54)
=========== =========== =========== ===========
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 Nine Months Ended
September 30,
--------------------------
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,117,941) $(4,893,258)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 9,924,434 10,693,996
Amortization of interest rate protection contract - 85,972
Minority interest in consolidated loss (568,472) (827,494)
Increase in trade receivables (565,592) (382,285)
Increase in deposits, prepaid expenses and
deferred charges (61,066) (97,131)
Increase (decrease) in advances from General Partner (1,896,049) 882,654
Decrease in trade accounts payable and accrued
liabilities and subscriber prepayments (165,656) (153,061)
----------- -----------
Net cash provided by operating activities 3,549,658 5,309,393
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,154,910) (4,858,021)
----------- -----------
Net cash used in investing activities (5,154,910) (4,858,021)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 4,077,690 1,767,613
Repayment of debt (2,105,704) (2,033,384)
----------- -----------
Net cash provided by (used in) financing activities 1,971,986 (265,771)
----------- -----------
Increase in cash 366,734 185,601
Cash, beginning of period 474,904 648,379
----------- -----------
Cash, end of period $ 841,638 $ 833,980
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,838,302 $ 3,547,170
=========== ===========
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 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 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.
(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 nine month periods ended
September 30, 1996 were $472,227 and $1,397,071, respectively, compared to
$433,051 and $1,281,759, 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 nine month periods ended September 30, 1996 were $559,689 and $1,798,499,
respectively, compared to $574,442 and $1,783,171, respectively, for the similar
1995 periods.
(3) Certain prior year amounts have been reclassified to conform to the 1996
presentation.
6
(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
September 30, 1996 December 31, 1995
------------------- ------------------
ASSETS
-----
Cash and accounts receivable $ 1,995,640 $ 1,465,837
Investment in cable television properties 57,808,649 60,613,938
Other assets 386,956 367,781
------------ ------------
Total assets $ 60,191,245 $ 62,447,556
============ ============
LIABILITIES AND PARTNERS' CAPITAL
--------------------------------
Debt $ 42,607,465 $ 40,530,652
Payables and accrued liabilities 1,691,308 3,926,752
Partners' contributed capital 70,000,000 70,000,000
Accumulated deficit (54,107,528) (52,009,848)
------------ ------------
Total liabilities and partners' capital $ 60,191,245 $ 62,447,556
============ ============
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------
1996 1995 1996 1995
---------- ----------- ----------- -----------
Revenues $6,327,488 $ 5,811,133 $18,861,274 $17,504,285
Operating expenses 3,378,454 3,057,922 10,292,354 9,493,703
Management fees and allocated
overhead from General Partner 697,370 667,136 2,165,938 2,078,732
Depreciation and amortization 2,064,445 2,343,671 6,185,123 6,439,774
---------- ----------- ----------- -----------
Operating income (loss) 187,219 (257,596) 217,859 (507,924)
Interest expense (777,137) (804,780) (2,268,893) (2,556,865)
Other, net (143,053) 8,934 (46,646) 11,306
---------- ----------- ----------- -----------
Net loss $ (732,971) $(1,053,442) $(2,097,680) $(3,053,483)
========== =========== =========== ===========
Management fees paid to the General Partner by the Venture totaled $316,375
and $943,064, respectively, for the three and nine month periods ended September
30, 1996, compared to $290,556 and $875,214, respectively, for the similar 1995
periods. Reimbursements for overhead and administrative expenses paid to the
General Partner by the Venture totaled $380,995 and $1,222,874, respectively,
for the three and nine month periods ended September 30, 1996, compared to
$376,580 and $1,203,518 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.
There can be no assurance as to the timing or terms of any sales.
The Partnership-
For the nine months ended September 30, 1996, the Partnership generated net
cash from operating activities totaling $1,973,695, which is available to fund
capital expenditures and non-operating costs. The Partnership expended
approximately $1,840,000 on capital additions in its wholly owned Surfside,
South Carolina and Little Rock, California systems during the first nine months
of 1996. Service drops to homes accounted for approximately 38 percent of these
expenditures and new plant construction accounted for approximately 29 percent.
The remainder of the expenditures was for various enhancements in the
Partnership's systems. Funding for these expenditures was provided by cash
generated from operations. Anticipated capital expenditures for the remainder
of 1996 are approximately $770,000. Approximately 31 percent is designated for
plant construction in both of the Partnership's systems. Service drops to homes
are expected to account for approximately 22 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 September 30,
1996, the balance outstanding was $15,500,000, leaving $2,500,000 available for
future borrowings. On September 30, 1998, the maximum available on 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 Prime Rate plus 1/8 percent, the
London Interbank Offered Rate ("LIBOR") plus 1-1/8 percent, or the Certificate
of Deposit Rate plus 1-1/4 percent. The effective interest rates on amounts
outstanding as of September 30, 1996 and 1995 were 6.8 percent and 7.2 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 nine months ended September 30, 1996, the Venture generated
operating income before depreciation and amortization totaling approximately
$6,403,000, which is available to fund capital expenditures and non-operating
costs. During the first nine months of 1996, capital expenditures in the
Venture-owned Broward County System totaled approximately $3,320,000.
Approximately 36 percent of these expenditures related to new plant
construction. Approximately 33 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
on hand and cash generated from operations. Anticipated capital expenditures
for the remainder of 1996 are approximately $880,000. Approximately 56 percent
will relate to service drops to homes. Approximately 38 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 September 1996, the balance outstanding
was $42,402,968, leaving $97,032 available for future borrowings. Interest is
at the Venture's option of the Prime Rate 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 September 30, 1996 and 1995 were 6.9
percent and 7.2 percent, respectively.
The General Partner believes that the Venture has sufficient sources of
capital from cash on hand and cash generated from operations to service its
current 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 September 30, 1996
------------------------------------------------
Partnership Venture
Owned Owned Consolidated
--------------- -------------- ---------------
Revenues $3,117,057 $ 6,327,488 $ 9,444,545
Operating expenses $1,703,755 $ 3,378,454 $ 5,082,209
Management fees and allocated
overhead from General Partner $ 334,546 $ 697,370 $ 1,031,916
Depreciation and amortization $1,244,989 $ 2,064,445 $ 3,309,434
---------- ----------- -----------
Operating income (loss) $ (166,233) $ 187,219 $ 20,986
---------- ----------- -----------
Interest expense $ (265,140) $ (777,137) $(1,042,277)
Consolidated loss before minority interest $ (441,695) $ (732,971) $(1,174,666)
Minority interest in consolidated loss $ - $ 198,636 $ 198,636
Net loss $ (441,695) $ (534,335) $ (976,030)
For the Three Months Ended September 30, 1995
-----------------------------------------------
Partnership Venture
Owned Owned Consolidated
-------------- ------------- --------------
Revenues $2,849,877 $ 5,811,133 $ 8,661,010
Operating expenses $1,592,217 $ 3,057,922 $ 4,650,139
Management fees and allocated
overhead from General Partner $ 340,357 $ 667,136 $ 1,007,493
Depreciation and amortization $1,375,088 $ 2,343,671 $ 3,718,759
---------- ----------- -----------
Operating loss $ (457,785) $ (257,596) $ (715,381)
---------- ----------- -----------
Interest expense $ (314,333) $ (804,780) $(1,119,113)
Consolidated loss before minority interest $ (771,980) $(1,053,442) $(1,825,422)
Minority interest in consolidated loss $ - $ 285,483 $ 285,483
Net loss $ (771,980) $ (767,959) $(1,539,939)
10
For the Nine Months Ended September 30, 1996
--------------------------------------------
Partnership Venture
Owned Owned Consolidated
--------------- ------------ -------------
Revenues $ 9,080,153 $18,861,274 $27,941,427
Operating expenses $ 5,081,795 $10,292,354 $15,374,149
Management fees and allocated
overhead from General Partner $ 1,029,632 $ 2,165,938 $ 3,195,570
Depreciation and amortization $ 3,739,311 $ 6,185,123 $ 9,924,434
----------- ----------- -----------
Operating income (loss) $ (770,585) $ 217,859 $ (552,726)
----------- ----------- -----------
Interest expense $ (809,543) $(2,268,893) $(3,078,436)
Consolidated loss before minority interest $(1,588,733) $(2,097,680) $(3,686,413)
Minority interest in consolidated loss $ - $ 568,472 $ 568,472
Net loss $(1,588,733) $(1,529,208) $(3,117,941)
For the Nine Months Ended September 30, 1995
--------------------------------------------
Partnership Venture
Owned Owned Consolidated
--------------- ------------ -------------
Revenues $ 8,130,888 $17,504,285 $25,635,173
Operating expenses $ 4,656,653 $ 9,493,703 $14,150,356
Management fees and allocated
overhead from General Partner $ 986,198 $ 2,078,732 $ 3,064,930
Depreciation and amortization $ 4,254,222 $ 6,439,774 $10,693,996
----------- ----------- -----------
Operating loss $(1,766,185) $ (507,924) $(2,274,109)
----------- ----------- -----------
Interest expense $ (902,487) $(2,556,865) $(3,459,352)
Consolidated loss before minority interest $(2,667,269) $(3,053,483) $(5,720,752)
Minority interest in consolidated loss $ - $ 827,494 $ 827,494
Net loss $(2,667,269) $(2,225,989) $(4,893,258)
11
Partnership Owned -
- -------------------
Revenues of the Partnership's Surfside System and Little Rock System
increased $267,180, or approximately 9 percent, to $3,117,057 for the three
months ended September 30, 1996 from $2,849,877 for the three months ended
September 30, 1995. For the nine months ended September 30, 1996 and 1995,
revenues increased $949,265, or approximately 12 percent, to $9,080,153 in 1996
from $8,130,888 in 1995. The increases in revenue were due primarily to basic
rate increases, increases in the number of basic subscribers and advertising
activity. Basic rate increases accounted for approximately 43 percent and 39
percent, respectively, of the increase in revenues for the three and nine month
periods ended September 30, 1996. The number of basic subscribers increased
approximately 4 percent to 26,557 at September 30, 1996 from 25,651 at September
30, 1995. The increases in the number of basic subscribers accounted for
approximately 25 percent and 27 percent, respectively, of the increase in
revenues for the three and nine month periods ended September 30, 1996. An
increase in advertising sales activity accounted for approximately 17 percent
and 16 percent, respectively, of the increase in revenues for the three and nine
month periods ended September 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 expenses for the three month periods increased $111,538, or
approximately 7 percent, to $1,703,755 at September 30, 1996 from $1,592,217 at
September 30, 1995. For the nine month periods ended September 30, 1996 and
1995, operating expenses increased $425,142, or approximately 9 percent, to
$5,081,795 at September 30, 1996 from $4,656,653 at September 30, 1995.
Operating expenses represented 55 percent and 56 percent, respectively, of
revenue for the three and nine month periods ended September 30, 1996, compared
to 56 percent and 57 percent, respectively, in 1995. These increases were
primarily due to increases in programming fees and advertising related expenses.
No other individual factor significantly affected the increase in operating
expenses.
Management fees and allocated overhead from the General Partner decreased
$5,811, or approximately 2 percent, to $334,546 at September 30, 1996 from
$340,357 at September 30, 1995. This decrease was due to a decrease in
allocated overhead from the General Partner. For the nine month periods ended
September 30, 1996 and 1995, management fees and allocated overhead from the
General Partner increased $43,434, or approximately 4 percent, to $1,029,632 at
September 30, 1996 from $986,198 at September 30, 1995. This increase was due
to the increase in revenues, upon which such management fees are based.
Depreciation and amortization expense for the three month periods decreased
$130,099, or approximately 9 percent, to $1,244,989 at September 30, 1996 from
$1,375,088 at September 30, 1995. For the nine month periods ended September
30, 1996 and 1995, depreciation and amortization expense decreased $514,911, or
approximately 12 percent, to $3,739,311 at September 30, 1996 from $4,254,222 at
September 30, 1995. These decreases were attributable to the maturation of the
Partnership's asset base.
Operating loss decreased $291,552, or approximately 64 percent, to $166,233
at September 30, 1996 from $457,785 for the three months ended September 30,
1995. This decrease was due to the increase in revenues and the decreases in
depreciation and amortization expense and management fees and allocated overhead
from the General Partner exceeding the increase in operating expenses. For the
nine month periods ended September 30, 1996 and 1995, operating loss decreased
$995,600, or approximately 56 percent, to $770,585 at September 30, 1996 from
$1,766,185 at September 30, 1995. This decrease was due to the increase in
revenues and the decrease in depreciation and amortization expense exceeding the
increases 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 $161,453, or approximately 18
percent, to $1,078,756 for the three months ended September 30, 1996 from
$917,303 for the three months ended September 30, 1995. This increase was due
to the increase
12
in revenues and decrease in management fees and allocated overhead from the
General Partner exceeding the increase in operating expenses. For the nine month
periods ended September 30, 1996 and 1995, operating income before depreciation
and amortization increased $480,689, or approximately 19 percent, to $2,968,726
in 1996 from $2,488,037 in 1995. This increase was due to the increase in
revenues exceeding the increases in operating expenses and management fees and
allocated overhead from the General Partner.
Interest expense decreased $49,193, or approximately 16 percent, to
$265,140 for the three months ended September 30, 1996 from $314,333 for the
three months ended September 30, 1995. For the nine month periods ended
September 30, 1996 and 1995, interest expense decreased $92,944, or
approximately 10 percent, to $809,543 at September 30, 1996 from $902,487 at
September 30, 1995. These decreases were primarily due to lower effective
interest rates on interest bearing obligations.
Net loss decreased $330,285, or approximately 43 percent, to $441,695 for
the three months ended September 30, 1996 from $771,980 for the three months
ended September 30, 1995. For the nine month periods ended September 30, 1996
and 1995, net loss decreased $1,078,536, or approximately 40 percent, to
$1,588,733 at September 30, 1996 from $2,667,269 at September 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 $516,355, or
approximately 9 percent, to $6,327,488 for the three months ended September 30,
1996 from $5,811,133 for the three months ended September 30, 1995. The
increase in revenues was due to basic rate increases, increases in the number of
basic subscribers and increased advertising activity. Basic rate increases
accounted for approximately 33 percent of the increase in revenues for the three
month period ended September 30, 1996. The increase in the number of basic
subscribers accounted for approximately 28 percent of the increase in revenues
for the three month period ended September 30, 1996 and increased advertising
activity accounted for approximately 14 percent of the increase in revenues for
the three month period ended September 30, 1996. Revenues for the nine month
periods ended September 30, 1996 and 1995 increased $1,356,989, or approximately
8 percent, to $18,861,274 in 1996 from $17,504,285 in 1995. The increase in
revenues was due to basic rate increases and increases in the number of basic
subscribers. Basic rate increases accounted for approximately 42 percent of the
increase in revenues for the nine month period ended September 30, 1996. The
number of basic subscribers increased approximately 5 percent to 49,573 at
September 30, 1996 from 47,427 at September 30, 1995. The increase in the
number of basic subscribers accounted for approximately 31 percent of the
increase in revenues for the nine month periods ended September 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 $320,532, or approximately 10 percent, to
$3,378,454 for the three months ended September 30, 1996 from $3,057,922 for the
three months ended September 30, 1995. This increase in operating expenses was
due to increases in programming fees and personnel related costs. For the nine
month periods ended September 30, 1996 and 1995, operating expenses increased
$798,651, or approximately 8 percent, to $10,292,354 at September 30, 1996 from
$9,493,703 at September 30, 1995. This increase in operating expenses was due
primarily to increases in programming fees. No other individual factor was
significant to the increase in operating expenses. Operating expenses
represented 53 percent and 55 percent, respectively, of revenue for the three
and nine months ended September 30, 1996 compared to 53 percent and 54 percent
of revenue for the three and nine months ended September 30, 1995.
Management fees and allocated overhead from the General Partner increased
$30,234, or approximately 5 percent, to $697,370 for the three months ended
September 30, 1996 from $667,136 for the three months ended September 30, 1995.
For the nine month periods ended September 30, 1996 and 1995, management fees
and allocated overhead from the General Partner increased $87,206, or
approximately 4 percent, to $2,165,938 at September 30, 1996 from $2,078,732 at
September 30, 1995. These increases were due to the increases in revenues, upon
which such management fees are based.
13
Depreciation and amortization expense decreased $279,226, or approximately
12 percent, to $2,064,445 for the three months ended September 30, 1996 from
$2,343,671 for the three months ended September 30, 1995. For the nine month
periods ended September 30, 1996 and 1995, depreciation and amortization expense
decreased $254,651, or approximately 4 percent, to $6,185,123 at September 30,
1996 from $6,439,774 at September 30, 1995. These decreases were due to the
maturation of the Venture's tangible asset base.
The Venture reported operating income of $187,219 for the three month
period ended September 30, 1996, compared to an operating loss of $257,596 for
the three month period ended September 30, 1995. For the nine month period
ended September 30, 1996, the Venture reported operating income of $217,859,
compared to an operating loss of $507,924 for the nine month period ended
September 30, 1995. These changes were due to the increases in revenues and the
decreases in depreciation and amortization expense exceeding the increases 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 $165,589, or approximately 8
percent, to $2,251,664 for the three months ended September 30, 1996 from
$2,086,075 for the three months ended September 30, 1995. For the nine month
periods ended September 30, 1996 and 1995, operating income before depreciation
and amortization increased $471,132, or approximately 8 percent, to $6,402,982
at September 30, 1996 from $5,931,850 at September 30, 1995. These increases
were due to the increases in revenues exceeding the increases in operating
expenses and management fees and allocated overhead from the General Partner.
Interest expense decreased $27,643, or approximately 3 percent, to $777,137
for the three months ended September 30, 1996 from $804,780 for the three months
ended September 30, 1995. For the nine month periods ended September 30, 1996
and 1995 interest expense decreased $287,972, or approximately 11 percent, to
$2,268,893 at September 30, 1996 from $2,556,865 at September 30, 1995. These
decreases were primarily due to lower effective interest rates on interest
bearing obligations.
Net loss of the Venture decreased $320,471, or approximately 30 percent, to
$732,971 for the three months ended September 30, 1996 from $1,053,442 for the
three months ended September 30, 1995. For the nine month periods ended
September 30, 1996 and 1995, net loss decreased $955,803, or approximately 31
percent, to $2,097,680 at September 30, 1996 from $3,053,483 at September 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
15
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: November 13, 1996
16