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, 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.
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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.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
September 30, December 31,
ASSETS 1997 1996
------ -------------- -------------
CASH $ 7,992,413 $ 452,484
TRADE RECEIVABLES, less allowance for doubtful
receivables of $139,656 and $58,936 at September 30, 1997
and December 31, 1996, respectively 530,281 850,977
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 84,116,623 80,368,193
Less- accumulated depreciation (42,860,202) (38,212,602)
------------ ------------
41,256,421 42,155,591
Franchise costs and other intangible assets, net of
accumulated amortization of $106,477,912 and
$102,216,387 at September 30, 1997 and
December 31, 1996, respectively 13,345,060 17,606,585
------------ ------------
Total investment in cable television properties 54,601,481 59,762,176
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 748,862 890,464
------------ ------------
Total assets $ 63,873,037 $ 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
------------------------
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1997 1996
------------------------------------------- -------------- --------------
LIABILITIES:
Debt $ 90,312,181 $ 83,824,072
General Partner advances - 430,624
Trade accounts payable and accrued liabilities 1,701,873 2,173,095
Subscriber prepayments 127,490 117,656
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Total liabilities 92,141,544 86,545,447
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,202,321) (1,165,529)
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(1,201,321) (1,164,529)
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Limited Partners-
Net contributed capital (213,174 units
outstanding at September 30, 1997
and December 31, 1996) 90,575,991 90,575,991
Accumulated deficit (117,643,177) (114,000,808)
------------- -------------
(27,067,186) (23,424,817)
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Total liabilities and partners' capital (deficit) $ 63,873,037 $ 61,956,101
============= =============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
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CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- ------------
REVENUES $ 9,939,509 $ 9,386,239 $29,643,667 $ 27,539,905
COSTS AND EXPENSES:
Operating expenses 5,329,737 5,336,741 16,437,942 15,683,133
Management fees and allocated overhead
from General Partner 1,023,387 999,311 3,156,987 3,092,656
Depreciation and amortization 3,078,303 5,354,309 9,185,977 16,014,762
----------- ----------- ----------- ------------
OPERATING INCOME (LOSS) 508,082 (2,304,122) 862,761 (7,250,646)
----------- ----------- ----------- ------------
OTHER INCOME (EXPENSE):
Interest expense (1,549,840) (1,564,936) (4,590,567) (4,585,472)
Other, net 1,959 (157,797) 48,645 (284,696)
----------- ----------- ----------- ------------
Total other income (expense) (1,547,881) (1,722,733) (4,541,922) (4,870,168)
----------- ----------- ----------- ------------
NET LOSS $(1,039,799) $(4,026,855) $(3,679,161) $(12,120,814)
=========== =========== =========== ============
ALLOCATION OF NET LOSS:
General Partner $ (10,398) $ (40,268) $ (36,792) $ (121,208)
=========== =========== =========== ============
Limited Partners $(1,029,401) $(3,986,587) $(3,642,369) $(11,999,606)
=========== =========== =========== ============
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(4.83) $(18.70) $(17.09) $(56.29)
=========== =========== =========== ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 213,174 213,174 213,174 213,174
=========== =========== =========== ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Nine Months Ended
September 30,
----------------------------
1997 1996
----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,679,161) $(12,120,814)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 9,185,977 16,014,762
Amortization of interest rate protection contract - 56,535
Decrease in trade receivables 320,696 156,937
Decrease (increase) in deposits, prepaid expenses
and deferred charges (135,250) 69,407
Decrease in trade accounts payable, accrued
liabilities and subscriber prepayments (461,388) (680,460)
----------- ------------
Net cash provided by operating activities 5,230,874 3,496,367
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (3,748,430) (3,963,585)
Franchise renewal - (10,000)
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Net cash used in investing activities (3,748,430) (3,973,585)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 7,407,459 5,643,924
Repayment of debt (919,350) (132,173)
Decrease in General Partner advances (430,624) (4,782,507)
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Net cash provided by financing activities 6,057,485 729,244
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Increase in cash 7,539,929 252,026
Cash, beginning of period 452,484 58,719
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Cash, end of period $ 7,992,413 $ 310,745
=========== ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 4,986,623 $ 4,738,621
=========== ============
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)
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 September 30, 1997 and December 31, 1996 and its results of
operations for the three and nine month periods ended September 30, 1997 and
1996 and its cash flows for the nine month periods ended September 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 nine month periods ended September 30, 1997 were $496,975 and
$1,482,183, respectively, compared to $469,312 and $1,376,995, 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 nine month periods ended September
30, 1997 were $526,412 and $1,674,804, respectively, compared to $529,999 and
$1,715,661, respectively, for the comparable periods in 1996.
(3) Certain prior year amounts have been reclassified to conform to the 1997
presentation.
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CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
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It is the General Partner's publicly announced policy that it intends to
liquidate its managed 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
Partnership's systems have been marketed for sale and the General Partner is
continuing to seek out opportunities to sell the Partnership's systems. There is
no assurance as to the timing or terms of any sales.
For the nine months ended September 30, 1997, the Partnership generated net
cash from operating activities totaling $5,230,874, which is available to fund
capital expenditures and non-operating costs. Capital expenditures totaled
approximately $3,748,000 during the first nine months of 1997. Approximately 52
percent of these expenditures was for service drops to homes. New plant
construction accounted for approximately 19 percent. The upgrade of cable plant
accounted for approximately 12 percent. The remaining expenditures were used to
maintain the value of the Partnership's systems. Funding for these expenditures
was provided by cash on hand, cash generated from operations and borrowings from
the Partnership's former revolving credit facility. Budgeted capital
expenditures for the remainder of 1997 are approximately $2,407,000.
Approximately 30 percent of the remaining capital expenditures will be for new
plant construction. Approximately 28 percent of the remaining capital
expenditures will be for service drops to homes and approximately 24 percent
will be to continue the upgrade of portions of the Partnership's systems. The
remainder of the anticipated expenditures is necessary to maintain the value of
the Partnership's systems until they are sold. Funding for these expenditures
is expected to be provided by cash on hand and cash generated from operations.
Ameritech, which provides telephone service in a multi-state region,
including Illinois, has begun providing cable television service in competition
with the Partnership's Barrington System. This competition could have a negative
effect on the revenues, cash flow and fair market value of the Barrington
System. It could also have a negative impact on the Partnership's ability to
sell its Barrington System. The General Partner is taking prudent steps
necessary to meet this competition from Ameritech, and to the extent possible,
to safeguard the value of the Partnership's systems.
The Partnership has a cash balance of $7,992,413 because on September 30,
1997, the Partnership borrowed the remaining $6,900,000 available under its
$90,000,000 credit facility. This cash balance will be used for principal
repayment and other liquidity needs, in the event the Partnership is unable to
successfully renegotiate its credit facility, as discussed below.
The revolving feature of the Partnership's credit facility expired on
September 30, 1997, converting the then outstanding balance of $90,000,000 to a
term loan payable in 26 consecutive principal payments commencing December 31,
1997. However, the General Partner is attempting to amend the credit facility to
amend the credit facility's existing amortization schedule so that the revolving
feature is again available for an additional three-year period. The General
Partner hopes to complete such an amendment prior to December 31, 1997, at which
time a $3,600,000 principal payment otherwise would be due. As part of the
amendment, the Partnership intends to utilize cash on hand to pay down a portion
of the existing credit facility and reduce the commitment to $85,000,000.
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 September 30, 1997 and 1996 were 7.26 percent and 7.04 percent, respectively.
Assuming successful renegotiation of the Partnership's credit facility, the
Partnership will have sufficient sources of capital to meet its presently
anticipated liquidity and capital needs.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Partnership increased $553,270, or approximately 6 percent,
to $9,939,509 for the three month period ended September 30, 1997 from
$9,386,239 for the comparable period in 1996. Revenues of the Partnership
increased $2,103,762, or approximately 8 percent, to $29,643,667 for the nine
month period ended September 30, 1997 from $27,539,905 for the comparable period
in 1996. Basic service rate increases implemented in the Partnership's
7
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 57 percent and 45 percent of the increase in
revenues for the three and nine month periods ended September 30, 1997. The
increase in the number of basic subscribers accounted for approximately 43
percent and 37 percent of the increases in revenues for the three and nine month
periods ended September 30, 1997. The number of basic subscribers increased by
3,138, or approximately 4 percent, to 84,847 at September 30, 1997 from 81,709
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.
Operating expenses decreased $7,004, or less than 1 percent, to $5,329,737
for the three month period ended September 30, 1997 from $5,336,741 for the
comparable period in 1996. This decrease was due to a reduction in property
taxes. Operating expenses increased $754,809, or approximately 5 percent, to
$16,437,942 for the nine month period ended September 30, 1997 from $15,683,133
for the comparable period in 1996. Increases in programming fees primarily
accounted for the increases in operating expenses. Operating expenses
represented approximately 54 percent and 55 percent, respectively, of revenues
for each of the three and nine month periods ended September 30, 1997 and
approximately 57 percent of the revenues for each of the three and nine month
periods ended September 30, 1996. 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
$560,274, or approximately 14 percent, to $4,609,772 for the three month period
ended September 30, 1997 from $4,049,498 for the comparable period in 1996.
This increase was due to the increase in revenues and the decrease in operating
expenses. Operating cash flow increased $1,348,953, or approximately 11
percent, to $13,205,725 for the nine month period ended September 30, 1997 from
$11,856,772 for the comparable period 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
$24,076, or approximately 2 percent, to $1,023,387 for the three month period
ended September 30, 1997 from $999,311 for the comparable period in 1996.
Management fees and allocated overhead from the General Partner increased
$64,331, or approximately 2 percent, to $3,156,987 for the nine month period
ended September 30, 1997 from $3,092,656 for the comparable period in 1996.
These increases were due to increases in revenues, upon which such management
fees are based.
Depreciation and amortization expense decreased $2,276,006, or
approximately 43 percent, to $3,078,303 for the three month period ended
September 30, 1997 from $5,354,309 for the comparable period in 1996.
Depreciation and amortization expense decreased $6,828,785, or approximately 43
percent, to $9,185,977 for the nine month period ended September 30, 1997 from
$16,014,762 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 $508,082 for the three month
period ended September 30, 1997 compared to an operating loss of $2,304,122 for
the comparable period in 1996. The Partnership recorded operating income of
$862,761 for the nine month period ended September 30, 1997 compared to an
operating loss of $7,250,646 for the comparable period in 1996. These changes
were a result of the increases in operating cash flow and the decreases in
depreciation and amortization expense.
Interest expense decreased $15,096, or approximately 1 percent, to
$1,549,840 for the three month period ended September 30, 1997 from $1,564,936
for the comparable period in 1996. This decrease was due to lower outstanding
balances on interest bearing obligations during the period. Interest expense
increased $5,095, or less than 1 percent, to $4,590,567 for the nine month
period ended September 30, 1997 from $4,585,472 for the comparable period in
1996. This increase was due to higher interest rates on interest bearing
obligations.
Net loss decreased $2,987,056, or approximately 74 percent, to $1,039,799
for the three month period ended September 30, 1997 from $4,026,855 for the
comparable period in 1996. Net loss decreased $8,441,653, or
8
approximately 70 percent, to $3,679,161 for the nine month period ended
September 30, 1997 from $12,120,814 for the comparable period in 1996. These
decreases were due to the factors discussed above and are expected to continue.
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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
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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: November 14, 1997
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