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 0-17733
CABLE TV FUND 15-A, LTD.
- -------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-1091413
- -------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
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 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
March 31, December 31,
ASSETS 1997 1996
------ ------------- -------------
CASH $ 1,070,248 $ 452,484
TRADE RECEIVABLES, less allowance for doubtful
receivables of $76,445 and $58,936 at March 31, 1997
and December 31, 1996, respectively 389,000 850,977
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 81,172,517 80,368,193
Less- accumulated depreciation (39,718,227) (38,212,602)
------------ ------------
41,454,290 42,155,591
Franchise costs and other intangible assets, net of
accumulated amortization of $103,723,187 and
$102,216,387 at March 31, 1997 and
December 31, 1996, respectively 16,099,785 17,606,585
------------ ------------
Total investment in cable television properties 57,554,075 59,762,176
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 858,742 890,464
------------ ------------
Total assets $ 59,872,065 $ 61,956,101
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1997 1996
------------------------------------------- -------------- --------------
LIABILITIES:
Debt $ 84,172,542 $ 83,824,072
General Partner advances - 430,624
Trade accounts payable and accrued liabilities 1,686,003 2,173,095
Subscriber prepayments 144,650 117,656
------------- -------------
Total liabilities 86,003,195 86,545,447
------------- -------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,180,947) (1,165,529)
------------- -------------
(1,179,947) (1,164,529)
------------- -------------
Limited Partners-
Net contributed capital (213,174 units
outstanding at March 31, 1997
and December 31, 1996) 90,575,991 90,575,991
Accumulated deficit (115,527,174) (114,000,808)
------------- -------------
(24,951,183) (23,424,817)
------------- -------------
Total liabilities and partners' capital (deficit) $ 59,872,065 $ 61,956,101
============= =============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended
March 31,
----------------------------
1997 1996
----------- -----------
REVENUES $ 9,603,561 $ 8,886,111
COSTS AND EXPENSES:
Operating expenses 5,418,261 5,061,318
Management fees and allocated overhead
from General Partner 1,127,779 1,048,561
Depreciation and amortization 3,101,221 5,322,737
----------- -----------
OPERATING LOSS (43,700) (2,546,505)
----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,518,641) (1,538,836)
Other, net 20,557 (57,287)
----------- -----------
Total other income (expense) (1,498,084) (1,596,123)
----------- -----------
NET LOSS $(1,541,784) $(4,142,628)
=========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (15,418) $ (41,426)
=========== ===========
Limited Partners $(1,526,366) $(4,101,202)
=========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(7.16) $(19.24)
=========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 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
----------------------------------
For the Three Months Ended
March 31,
----------------------------
1997 1996
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,541,784) $(4,142,628)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 3,101,221 5,322,737
Amortization of interest rate protection contract - 18,843
Decrease in trade receivables 461,977 275,168
Increase in deposits, prepaid expenses and
deferred charges (57,074) (256,206)
Decrease in trade accounts payable, accrued
liabilities and subscriber prepayments (460,098) (479,568)
----------- -----------
Net cash provided by operating activities 1,504,242 738,346
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (804,324) (1,044,009)
----------- -----------
Net cash used in investing activities (804,324) (1,044,009)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 400,000 5,000,000
Repayment of debt (51,530) (41,756)
Decrease in General Partner advances (430,624) (4,443,617)
----------- -----------
Net cash provided by (used in) financing activities (82,154) 514,627
----------- -----------
Increase in cash 617,764 208,964
Cash, beginning of period 452,484 58,719
----------- -----------
Cash, end of period $ 1,070,248 $ 267,683
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,584,266 $ 1,786,113
=========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
CABLE TV FUND 15-A, 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 15-A, 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 owns and operates the cable television systems serving the
communities of 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 communities of 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 month periods ended March 31, 1997 and 1996 were $480,178 and
$444,306, respectively.
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. Such services, and their related costs, are necessary to the
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity. 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 month periods ended March 31, 1997 and
1996 were $647,601 and $604,255, respectively.
(3) Certain prior year amounts have been reclassified to conform to the 1997
presentation.
6
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
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 are being
marketed for sale. There is no assurance as to the timing or terms of any
sales.
For the three months ended March 31, 1997, the Partnership generated net
cash from operating activities totaling $1,504,242, which is available to fund
capital expenditures and non-operating costs. Capital expenditures totaled
approximately $804,000 during the first three months of 1997. Approximately 72
percent of these expenditures was for service drops to homes. New plant
construction accounted for approximately 11 percent. The remaining expenditures
were for various enhancements in the Partnership's systems. Funding for these
expenditures was provided by cash on hand, cash generated from operations and
borrowings from the Partnership's revolving credit facility. Budgeted capital
expenditures for the remainder of 1997 are approximately $3,998,000.
Approximately 51 percent of the remaining capital expenditures will be for
service drops to homes. Approximately 15 percent of these remaining capital
expenditures will be for new plant construction, and approximately 13 percent
will be to continue 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 on hand, 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. The revolving credit facility
converts to a term loan on September 30, 1997, with annual principal
installments due at the end of each calendar year and a final maturity date of
March 31, 2004. Installments due in 1997 will be 4 percent of the outstanding
balance of the converted loan at September 30, 1997. At March 31, 1997,
$83,900,000 was outstanding under the Partnership's revolving credit facility,
leaving $6,100,000 of available borrowings until September 30, 1997. Interest is
at the Partnership's option of Prime 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 March 31,
1997 and 1996 were 7.10 percent and 6.93 percent, respectively.
The Partnership has sufficient sources of capital in the form of cash on
hand, borrowings available under its revolving credit facility and cash
generated from operations to meet its presently anticipated liquidity and
capital needs.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership increased $717,450, or approximately 8
percent, to $9,603,561 for the three month period ended March 31, 1997 from
$8,886,111 for the comparable period in 1996. Basic service rate increases
implemented in the Partnership's systems combined with an increase in the number
of basic service subscribers primarily accounted for the increase in revenues.
The basic service rate increases accounted for approximately 42 percent of the
increase in revenues. The increase in the number of basic service subscribers
accounted for approximately 39 percent of the increase in revenues for the three
months ended March 31, 1997. The number of basic service subscribers increased
3,637 subscribers, or approximately 5 percent, to 83,534 subscribers at March
31, 1997 from 79,897 for the similar period in 1996. No other individual factor
was significant to the increase in revenues.
Operating expenses consist primarily of costs associated with the
operation and 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 marketing expenses.
7
Operating expenses increased $356,943, or approximately 7 percent, to
$5,418,261 for the three month period ended March 31, 1997 from $5,061,318 for
the comparable period in 1996. Operating expenses represented approximately 56
percent of revenue for the three month period ended March 31, 1997 compared to
approximately 57 percent for the comparable period in 1996. Increases in
programming fees and advertising related costs primarily accounted for the
increase in operating 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
$360,507, or approximately 9 percent, to $4,185,300 for the three month period
ended March 31, 1997 from $3,824,793 for the comparable period in 1996. This
increase was due to the increase in revenues exceeding the increases in
operating expenses.
Management fees and allocated overhead from the General Partner increased
$79,218, or approximately 8 percent, to $1,127,779 for the three month period
ended March 31, 1997 from $1,048,561 for the comparable period in 1996. This
increase was due to an increase in revenues, upon which such management fees and
allocations are based, and the timing of certain expenses allocated from the
General Partner.
Depreciation and amortization expense decreased $2,221,516, or approximately
42 percent, to $3,101,221 for the three month period ended March 31, 1997 from
$5,322,737 for the comparable period in 1996. This decrease was due to the
maturation of the Partnership's intangible asset base.
Operating loss decreased $2,502,805 to $43,700 for the three month period
ended March 31, 1997 from $2,546,505 for the comparable period in 1996. This
decrease was the result of the increase in revenues and decrease in depreciation
and amortization expense exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner.
Interest expense decreased $20,195 to $1,518,641 for the three month period
ended March 31, 1997 from $1,538,836 for the comparable period in 1996. This
decrease was due to lower outstanding balances on interest bearing obligations.
Net loss decreased $2,600,844, or approximately 63 percent, to $1,541,784 for
the three month period ended March 31, 1997 from $4,142,628 for the comparable
period in 1996. This decrease was due to the factors discussed above.
8
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
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLE TV FUND 15-A, 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
10