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 March 31, 1997
--------------
[ ] 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: 0-11911
Cable TV Fund 11-B, LTD.
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Exact name of registrant as specified in charter
Colorado 84-0908730
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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 (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 11-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
March 31, December 31,
ASSETS 1997 1996
------ ------------- -------------
CASH $ 4,034 $ 4,034
INVESTMENT IN CABLE TELEVISION JOINT VENTURE 631,621 618,344
------------ ------------
Total assets $ 635,655 $ 622,378
============ ============
PARTNERS' CAPITAL (DEFICIT)
---------------------------
General Partner-
Contributed capital $ 1,000 $ 1,000
Distributions (14,006,243) (14,006,243)
Accumulated earnings 591,267 591,134
------------ ------------
(13,413,976) (13,414,109)
------------ ------------
Limited Partners-
Net contributed capital
(38,026 units outstanding at March 31, 1997
and December 31, 1996) 15,661,049 15,661,049
Distributions (61,031,851) (61,031,851)
Accumulated earnings 59,420,433 59,407,289
------------ ------------
14,049,631 14,036,487
------------ ------------
Total partners' capital (deficit) $ 635,655 $ 622,378
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 11-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended
March 31,
--------------------------
1997 1996
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REVENUES $ - $3,618,639
COSTS AND EXPENSES:
Operating expenses - 2,428,526
Management fees and allocated overhead
from General Partner - 426,999
Depreciation and amortization - 815,841
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OPERATING LOSS - (52,727)
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OTHER EXPENSE:
Interest expense (471,349)
Other, net - (27,578)
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Total other expense, net - (498,927)
------- ----------
LOSS BEFORE EQUITY IN NET INCOME
OF CABLE TELEVISION JOINT VENTURE - (551,654)
EQUITY IN NET INCOME OF CABLE
TELEVISION JOINT VENTURE 13,277 3,321
------- ----------
NET INCOME (LOSS) $13,277 $ (548,333)
======= ==========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 133 $ (5,483)
======= ==========
Limited Partners $13,144 $ (542,850)
======= ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $.35 $(14.27)
======= ==========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 38,026 38,026
======= ==========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
CABLE TV FUND 11-B, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
For the Three Months Ended
March 31,
----------------------------
1997 1996
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 13,277 $ (548,333)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization - 815,841
Equity in net income of cable
television joint venture (13,277) (3,321)
Decrease in trade receivables - 184,059
Increase in deposits, prepaid expenses
and deferred charges - (97,018)
Increase in General Partner advances - 450,447
Decrease in trade accounts payable, accrued
liabilities and subscriber prepayments - (1,185,859)
----------- -----------
Net cash used in operating activities - (384,184)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (520,237)
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Net cash used in investing activities - (520,237)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 1,200,000
Repayment of debt - (207,849)
----------- -----------
Net cash provided by financing activities - 992,151
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Increase in cash - 87,730
Cash, beginning of period 4,034 325,270
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Cash, end of period $ 4,034 $ 413,000
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 615,930
=========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 11-B, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED 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 11-B, Ltd. (the
"Partnership") at March 31, 1997 and December 31, 1996 and its Statements of
Operations and Cash Flows for the three month periods ended March 31, 1997 and
1996. 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 11
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 11-A, Ltd. ("Fund 11-
A"), Cable TV Fund 11-C, Ltd. ("Fund 11-C") and Cable TV Fund 11-D, Ltd. ("Fund
11-D") are other partnerships that were formed pursuant to the Program. The
Partnership, Fund 11-A, Fund 11-C and Fund 11-D formed a general partnership
known as Cable TV Joint Fund 11 (the "Venture") in which the Partnership owns an
8 percent interest. The Venture owns the cable television system serving
subscribers in Manitowoc, Wisconsin (the "Manitowoc System"). Until April 1,
1996, the Partnership directly owned the cable television system serving areas
in and around Lancaster, New York (the "New York System").
(2) The Venture has entered into an asset purchase agreement to sell the
Manitowoc System to a subsidiary of the General Partner. Because the City of
Manitowoc had not consented to the transfer of the franchise by the asset
purchase agreement's original expiration date of September 30, 1996, the Venture
and the General Partner amended the asset purchase agreement to extend the
period in which to close the sale of the Manitowoc System to June 30, 1997.
Under the terms of the asset purchase agreement, as amended, the sales price of
the Manitowoc System will be $16,122,333.
The closing of the sale of the Manitowoc System is subject to the approval
of the limited partners of each of the partnerships that comprise the Venture.
There can be no assurance that such approvals will be obtained. The General
Partner, on behalf of the partnerships that comprise the Venture, is in the
process of preparing proxy solicitation materials to seek the approval of the
limited partners of the four constituent partnerships of the Venture.
After the sale of the Manitowoc System, the Partnership will receive 8
percent of the net sales proceeds plus cash on hand from operations and prior
sales, estimated to total approximately $1,512,810, which will be distributed to
its partners. Cash generated from operations of approximately $98,839 will be
distributed 99 percent to the limited partners and 1 percent to the General
Partner. Because limited partners have already received distributions in an
amount in excess of the capital initially contributed to the Partnership by the
limited partners, the Partnership's portion of the remaining proceeds from the
sale of other Wisconsin systems formerly owned by the Venture and the net
proceeds from the sale of the Manitowoc System will be distributed 75 percent to
the limited partners and 25 percent to the General Partner. Based upon pro
forma financial information as of March 31, 1997, the limited partners of the
Partnership, as a group, will receive approximately $1,158,329 and the General
Partner will receive approximately $354,481. As a result, it is anticipated
that the limited partners will receive approximately $30 for each $500 limited
partnership interest, or approximately $60 for each $1,000 invested in the
Partnership. Once the Partnership has completed the distribution of these
amounts, limited partners of the Partnership will have received a total of
approximately $1,635 for each $500 limited partnership interest, or
approximately $3,270 for each $1,000 invested in the Partnership, taking into
account the prior distributions to limited partners made in 1990, 1992 and 1996.
After the Partnership distributes these amounts, the Partnership will be
dissolved and liquidated.
(3) The General Partner receives a fee for its services equal to 5 percent of
the gross revenues of the Partnership and the Venture, excluding revenues from
the sale of the cable television systems or franchises. Management fees for the
three month periods ended March 31, 1997 and 1996 (excluding Fund 11-B's 8
percent interest in the Venture) were $-0- and $180,932, respectively.
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
5
services and other corporate facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor relations
services to the Partnership and the Venture. Such services, and their related
costs, are necessary to the operations of the Partnership and the Venture and
would have been incurred by the Partnership and the Venture if they were stand
alone entities. Allocations of personnel costs are primarily based 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 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. The amount of
allocated overhead and administrative expense charged to the Partnership for
allocated overhead and administrative expenses for the three month periods
ending March 31, 1997 and 1996 (excluding Fund 11-B's 8 percent interest in the
Venture) were $-0- and $246,067, respectively.
(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
March 31, December 31,
1997 1996
-------------- --------------
ASSETS
------
Cash and trade receivables $ 3,592,869 $ 3,675,783
Investment in cable television properties 2,468,235 2,441,259
Other assets 1,868,371 1,911,804
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Total assets $ 7,929,475 $ 8,028,846
============= =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 2,583 $ 3,679
Payables and accrued liabilities 286,135 555,064
Partners' contributed capital 45,000,000 45,000,000
Distributions (118,914,493) (118,914,493)
Accumulated earnings 81,555,250 81,384,596
------------- -------------
Total liabilities and partners' capital $ 7,929,475 $ 8,028,846
============= =============
6
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended
March 31,
--------------------------
1997 1996
----------- ------------
Revenues $939,814 $ 922,895
Operating expenses 581,516 578,068
Management fees and allocated overhead from
Jones Intercable, Inc. 114,485 108,902
Depreciation and amortization 123,737 108,035
-------- ---------
Operating income 120,076 127,890
-------- ---------
Interest expense (616) (4,849)
Interest income 51,040 55,674
Other, net 154 (135,584)
-------- ---------
Net income $170,654 $ 43,131
======== =========
Management fees paid to the General Partner by the Venture totaled $46,991
and $46,145 for the three month periods ended March 31, 1997 and 1996,
respectively. Reimbursements for allocated overhead and administrative expenses
paid to the General Partner by the Venture totaled $67,494 and $62,757 for the
three month periods ended March 31, 1997 and 1996, respectively.
Management fees paid by the Venture and attributable to the Partnership's
interest totaled $3,656 and $3,590 for the three month periods ended March 31,
1997 and 1996, respectively. Reimbursements for allocated overhead and
administrative expenses paid by the Venture and attributable to the
Partnership's interest totaled $5,251 and $4,882 for the three month periods
ended March 31, 1997 and 1996, respectively.
7
CABLE TV FUND 11-B, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership owns an 8 percent interest in the Venture. The
Partnership's investment in the Venture is accounted for under the equity
method. When compared to the December 31, 1996 balance, this investment
increased by $13,277, to $631,621 at March 31, 1997 from $618,344 at December
31, 1996. This increase represents the Partnership's proportionate share of
income generated by the Venture during the first quarter of 1997.
The Venture has entered into an asset purchase agreement to sell the
Manitowoc System to a subsidiary of the General Partner. Because the City of
Manitowoc had not consented to the transfer of the franchise by the asset
purchase agreement's original expiration date of September 30, 1996, the Venture
and the General Partner amended the asset purchase agreement to extend the
period in which to close the sale of the Manitowoc System to June 30, 1997.
Under the terms of the asset purchase agreement, as amended, the sales price of
the Manitowoc System will be $16,122,333.
The closing of the sale of the Manitowoc System is subject to the approval
of the limited partners of each of the partnerships that comprise the Venture.
There can be no assurance that such approvals will be obtained. The General
Partner, on behalf of the partnerships that comprise the Venture, is in the
process of preparing proxy solicitation materials to seek the approval of the
limited partners of the four constituent partnerships of the Venture.
After the sale of the Manitowoc System, the Partnership will receive 8
percent of the net sales proceeds plus cash on hand from operations and prior
sales, estimated to total approximately $1,512,810, which will be distributed to
its partners. Cash generated from operations of approximately $98,839 will be
distributed 99 percent to the limited partners and 1 percent to the General
Partner. Because limited partners have already received distributions in an
amount in excess of the capital initially contributed to the Partnership by the
limited partners, the Partnership's portion of the remaining proceeds from the
sale of other Wisconsin systems formerly owned by the Venture and the net
proceeds from the sale of the Manitowoc System will be distributed 75 percent to
the limited partners and 25 percent to the General Partner. Based upon pro
forma financial information as of March 31, 1997, the limited partners of the
Partnership, as a group, will receive approximately $1,158,329 and the General
Partner will receive approximately $354,481. As a result, it is anticipated
that the limited partners will receive approximately $30 for each $500 limited
partnership interest, or approximately $60 for each $1,000 invested in the
Partnership. Once the Partnership has completed the distribution of these
amounts, limited partners of the Partnership will have received a total of
approximately $1,635 for each $500 limited partnership interest, or
approximately $3,270 for each $1,000 invested in the Partnership, taking into
account the prior distributions to limited partners made in 1990, 1992 and 1996.
After the Partnership distributes these amounts, the Partnership will be
dissolved and liquidated.
During the first three months of 1997, the Venture expended approximately
$144,000 for capital additions in the Manitowoc System. These capital additions
were used for various enhancements to maintain the value of the system until it
is sold. These expenditures were funded from cash generated from operations.
The Venture had no bank debt outstanding at March 31, 1997.
The Venture has sufficient liquidity and capital resources, including cash
on hand and its ability to generate cash from operations, to meet its
anticipated needs.
RESULTS OF OPERATIONS
- ---------------------
As a result of the sale of the New York System, the results of operations
for the Partnership are reflected through its 8 percent interest in the Venture.
Revenues of the Venture increased $16,919, or approximately 2 percent, to
$939,814 for the three month period ended March 31, 1997 compared to $922,895 in
1996. This increase in revenues was a result of increases in the number of
basic service subscribers and basic service rate increases. The number of basic
service subscribers increased by 326, or
8
approximately 3 percent, to 11,692 at March 31, 1997 from 11,366 at March 31,
1996. This increase in basic service revenues was partially offset by decreases
in premium service and advertising revenues. No other individual factor
contributed to the increase in revenues.
Operating expenses consist primarily of costs associated with the operation
and administration of the Manitowoc System. 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 marketing expenses.
Operating expenses in the Manitowoc System increased $3,448, or
approximately 1 percent, to $581,516 for the three month period ended March 31,
1997 compared to $578,068 in 1996. Operating expenses represented approximately
62 percent of revenues in 1997 compared to approximately 63 percent of revenues
in 1996. This increase was primarily due to an increase in programming
expenses. No other individual factor contributed significantly to the increase
in operating expenses.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). 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 cash flow increased
$13,471, or approximately 4 percent, to $358,298 for the three month period
ended March 31, 1997 compared to $344,827 in 1996. This increase was due to the
increase in revenues exceeding the increase in operating expenses.
Management fees and allocated overhead from the General Partner increased
$5,583, or approximately 5 percent, to $114,485 for the three month period ended
March 31, 1997 compared to $108,902 in 1996. This increase was primarily due to
the increase in revenues, upon which such management fees and allocated expenses
from the General Partner are based and the timing of certain expenses allocated
from the General Partner.
Depreciation and amortization expense increased $15,702, or approximately
15 percent, to $123,737 for the three month period ended March 31, 1997 compared
to $108,035 in 1996 due to capital additions in 1996.
Operating income decreased $7,814, or approximately 6 percent, to $120,076
for the three month period ended March 31, 1997 compared to $127,890 in 1996.
This decrease was due to the increases in operating expenses, management fees
and allocated overhead from the General Partner and depreciation and
amortization expense exceeding the increase in revenues.
Interest expense decreased $4,233, or approximately 87 percent, to $616 for
the three month period ended March 31, 1997 compared to $4,849 in 1996. This
decrease was due to lower outstanding balances on interest bearing obligations.
Interest income decreased $4,634, or approximately 8 percent, to $51,040
for the three month period ended March 31, 1997 compared to $55,674 in 1996.
This decrease was due to lower interest rates on interest-bearing accounts in
1997.
The Venture had other income of $154 for the three month period ended March
31, 1997 compared to other expense of $135,584 in 1996. This change was due
primarily to additional expenses incurred in 1996 from a sales and use tax
audit.
Net income of the Venture increased $127,523 to $170,654 for the three
month period ended March 31, 1997 compared to $43,131 in 1996. This increase
was due primarily to the decrease in other expense.
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 11-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By:/S/ Kevin P. Coyle
-----------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: May 13, 1997
11