FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1997.
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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 (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 15-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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June 30, December 31,
ASSETS 1997 1996
------ ------------ ------------
CASH $ 748,810 $ 452,484
TRADE RECEIVABLES, less allowance for doubtful
receivables of $107,263 and $58,936 at June 30, 1997
and December 31, 1996, respectively 435,036 850,977
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 82,545,063 80,368,193
Less- accumulated depreciation (41,260,888) (38,212,602)
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41,284,175 42,155,591
Franchise costs and other intangible assets, net of
accumulated amortization of $105,100,445 and
$102,216,387 at June 30, 1997 and
December 31, 1996, respectively 14,722,527 17,606,585
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Total investment in cable television properties 56,006,702 59,762,176
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 740,146 890,464
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Total assets $ 57,930,694 $ 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.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1997 1996
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LIABILITIES:
Debt $ 83,440,302 $ 83,824,072
General Partner advances - 430,624
Trade accounts payable and accrued liabilities 1,585,256 2,173,095
Subscriber prepayments 133,844 117,656
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Total liabilities 85,159,402 86,545,447
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,191,923) (1,165,529)
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(1,190,923) (1,164,529)
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Limited Partners-
Net contributed capital (213,174 units
outstanding at June 30, 1997
and December 31, 1996) 90,575,991 90,575,991
Accumulated deficit (116,613,776) (114,000,808)
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(26,037,785) (23,424,817)
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Total liabilities and partners' capital (deficit) $ 57,930,694 $ 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.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
REVENUES $10,100,597 $ 9,267,555 $19,704,158 $18,153,666
COSTS AND EXPENSES:
Operating expenses 5,689,944 5,285,074 11,108,205 10,346,392
Management fees and allocated overhead
from General Partner 1,005,821 1,044,784 2,133,600 2,093,345
Depreciation and amortization 3,006,453 5,337,717 6,107,674 10,660,453
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 398,379 (2,400,020) 354,679 (4,946,524)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,522,086) (1,481,700) (3,040,727) (3,020,536)
Other, net 26,129 (69,611) 46,686 (126,899)
----------- ----------- ----------- -----------
Total other income (expense) (1,495,957) (1,551,311) (2,994,041) (3,147,435)
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NET LOSS $(1,097,578) $(3,951,331) $(2,639,362) $(8,093,959)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (10,976) $ (39,513) $ (26,394) $ (80,940)
=========== =========== =========== ===========
Limited Partners $(1,086,602) $(3,911,818) $(2,612,968) $(8,013,019)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(5.10) $(18.35) $(12.26) $(37.59)
=========== =========== =========== ===========
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.
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CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Six Months Ended
June 30,
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1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,639,362) $(8,093,959)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 6,107,674 10,660,453
Amortization of interest rate protection contract - 37,692
Decrease in trade receivables 415,941 134,999
Increase in deposits, prepaid expenses and
deferred charges (25,012) (6,866)
Decrease in trade accounts payable, accrued
liabilities and subscriber prepayments (571,651) (482,421)
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Net cash provided by operating activities 3,287,590 2,249,898
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (2,176,870) (2,327,723)
Franchise renewal - (10,000)
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Net cash used in investing activities (2,176,870) (2,337,723)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 507,459 5,543,193
Repayment of debt (891,229) (84,856)
Decrease in General Partner advances (430,624) (4,782,507)
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Net cash provided by (used in) financing activities (814,394) 675,830
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Increase in cash 296,326 588,005
Cash, beginning of period 452,484 58,719
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Cash, end of period $ 748,810 $ 646,724
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 3,450,613 $ 2,798,838
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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 June 30, 1997 and December 31, 1996 and its results of
operations for the three and six month periods ended June 30, 1997 and 1996 and
its cash flows for the six month periods ended June 30, 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 and six month periods ended June 30, 1997 were $505,030 and $985,208,
respectively, compared to $463,377 and $907,683, respectively, for the
comparable periods in 1996.
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 and six month periods ended June 30,
1997 were $500,791 and $1,148,392, respectively, compared to $581,407 and
$1,185,662, respectively, for the comparable periods in 1996.
(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
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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 are being
marketed for sale. There is no assurance as to the timing or terms of any
sales.
For the six months ended June 30, 1997, the Partnership generated net cash
from operating activities totaling $3,287,590, which is available to fund
capital expenditures and non-operating costs. Capital expenditures totaled
approximately $2,177,000 during the first six months of 1997. Approximately 57
percent of these expenditures was for service drops to homes. New plant
construction accounted for approximately 20 percent. The upgrade of cable plant
accounted for approximately 12 percent. 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 from
the Partnership's revolving credit facility. Budgeted capital expenditures for
the remainder of 1997 are approximately $2,625,000. Approximately 52 percent of
the remaining capital expenditures will be for service drops to homes.
Approximately 12 percent of these remaining capital expenditures will be for new
plant construction, and approximately 9 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 and cash generated from operations.
The Partnership has a revolving credit facility providing for a maximum of
$90,000,000 in available borrowings. The revolving credit facility converts to
a term loan on September 30, 1997, with quarterly principal installments
commencing December 31, 1997, and a final maturity date of March 31, 2004. The
installment due on December 31, 1997 will be 4 percent of the outstanding
balance of the converted loan at September 30, 1997. At June 30, 1997,
$83,100,000 was outstanding under the Partnership's revolving credit facility,
leaving $6,900,000 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 June 30,
1997 and 1996 were 7.3 percent and 7.04 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
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Revenues of the Partnership increased $833,042, or approximately 9 percent,
to $10,100,597 for the three month period ended June 30, 1997 from $9,267,555
for the comparable period in 1996. Revenues of the Partnership increased
$1,550,492, or approximately 9 percent, to $19,704,158 for the six month period
ended June 30, 1997 from $18,153,666 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 subscribers primarily accounted for the increase
in revenues. The basic service rate increases accounted for approximately 37
percent and 40 percent of the increase in revenues for the three and six month
periods ended June 30, 1997. The increase in the number of basic subscribers
accounted for approximately 30 percent and 34 percent of the increases in
revenues for the three and six month periods ended June 30, 1997. The number of
basic subscribers increased 3,465 subscribers, or approximately 4 percent, to
84,701 subscribers at June 30, 1997 from 81,236 for the comparable 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 $404,870, or approximately 8 percent, to
$5,689,944 for the three month period ended June 30, 1997 from $5,285,074 for
the comparable period in 1996. Operating expenses increased $761,813, or
approximately 7 percent, to $11,108,205 for the six month period ended June 30,
1997 from $10,346,392 for the comparable period in 1996. Operating expenses
represented approximately 56 percent and 57 percent, respectively, of revenues
for each of the three and six month periods ended June 30, 1997 and 1996.
Increases in programming fees primarily accounted for the increases 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
$428,172, or approximately 11 percent, to $4,410,653 for the three month period
ended June 30, 1997 from $3,982,481 for the comparable period in 1996.
Operating cash flow increased $788,679, or approximately 10 percent, to
$8,595,953 for the six month period ended June 30, 1997 from $7,807,274 for the
comparable period in 1996. These increases were due to the increases in
revenues exceeding the increases in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$38,963, or approximately 4 percent, to $1,005,821 for the three month period
ended June 30, 1997 from $1,044,784 for the comparable period in 1996. This
decrease was due to a decrease in allocated overhead from the General Partner
exceeding an increase in management fees. Management fees and allocated overhead
from the General Partner increased $40,255, or approximately 2 percent, to
$2,133,600 for the six month period ended June 30, 1997 from $2,093,345 for the
comparable period in 1996. This increase was due to an increase in revenues,
upon which such management fees are based. This increase was partially offset
by a decrease in allocated overhead from the General Partner.
Depreciation and amortization expense decreased $2,331,264, or
approximately 44 percent, to $3,006,453 for the three month period ended June
30, 1997 from $5,337,717 for the comparable period in 1996. Depreciation and
amortization expense decreased $4,552,779, or approximately 43 percent, to
$6,107,674 for the six month period ended June 30, 1997 from $10,660,453 for the
comparable period in 1996. These decreases were due to the maturation of a
portion of the Partnership's intangible asset base.
The Partnership recorded operating income of $398,379 for the three month
period ended June 30, 1997 compared to an operating loss of $2,400,020 for the
comparable period in 1996. This change was a result of the increase in revenues
and decreases in depreciation and amortization expense and management fees and
allocated overhead from the General Partner exceeding the increase in operating
expenses. The Partnership recorded operating income of $354,679 for the six
month period ended June 30, 1997 compared to an operating loss of $4,946,524 for
the comparable period in 1996. This change was a 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 increased $40,386, or approximately 3 percent, to
$1,522,086 for the three month period ended June 30, 1997 from $1,481,700 for
the comparable period in 1996. Interest expense increased $20,191, or
approximately 1 percent, to $3,040,727 for the six month period ended June 30,
1997 from $3,020,536 for the comparable period in 1996. These increases were
due to higher interest rates on interest bearing obligations.
Net loss decreased $2,853,753, or approximately 72 percent, to $1,097,578
for the three month period ended June 30, 1997 from $3,951,331 for the
comparable period in 1996. Net loss decreased $5,454,597, or approximately 67
percent, to $2,639,362 for the six month period ended June 30, 1997 from
$8,093,959 for the comparable period in 1996. These decreases were 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: August 13, 1997
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