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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, 1994
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
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
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1994 1993
------------- -------------
CASH $ 1,090,858 $ 410,238
TRADE RECEIVABLES, less allowance for
doubtful receivables of $83,428 and $90,753
at March 31, 1994 and December 31, 1993,
respectively 822,453 1,331,434
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 81,720,853 80,586,783
Less- accumulated depreciation (33,136,599) (31,708,982)
------------- -------------
48,584,254 48,877,801
Franchise costs, net of accumulated amortization of
$38,846,910 and $37,174,465 at March 31, 1994
and December 31, 1993, respectively 47,083,887 48,756,332
Subscriber lists, net of accumulated amortization of
$12,673,260 and $12,258,896 at March 31, 1994
and December 31, 1993, respectively 4,849,680 5,264,044
Costs in excess of interests in net assets
purchased, net of accumulated amortization of
$4,055,174 and $3,882,714 at March 31, 1994
and December 31, 1993, respectively 23,531,387 23,703,847
------------- -------------
Total investment in cable television properties 124,049,208 126,602,024
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 472,050 436,245
------------- -------------
Total assets $ 126,434,569 $ 128,779,941
============= =============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
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CABLE TV FUND 14-B
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------ ------------
LIABILITIES:
Debt $ 58,822,517 $ 58,881,755
Accounts payable-
Trade 151,318 32,339
General Partner - 29,182
Deferred brokerage fee 920,000 920,000
Accrued liabilities 1,064,640 1,314,361
Subscriber prepayments 569,041 556,640
------------ ------------
Total liabilities 61,527,516 61,734,277
------------ ------------
MINORITY INTEREST IN CABLE TELEVISION
JOINT VENTURE 7,044,572 7,351,293
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (548,471) (530,152)
------------ ------------
(547,471) (529,152)
------------ ------------
Limited Partners-
Net contributed capital (261,353 units outstanding at
March 31, 1994 and December 31, 1993) 112,127,301 112,127,301
Accumulated deficit (53,717,349) (51,903,778)
------------ ------------
58,409,952 60,223,523
------------ ------------
Total liabilities and
partners' capital (deficit) $126,434,569 $128,779,941
============ ============
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated balance sheets.
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CABLE TV FUND 14-B
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
-----------------------------
1994 1993
----------- -----------
REVENUES $ 7,917,496 $ 7,845,961
COSTS AND EXPENSES:
Operating, general and administrative 4,517,072 4,393,640
Management fees and allocated overhead from General Partner 1,003,222 969,747
Depreciation and amortization 3,776,845 4,207,565
----------- -----------
OPERATING LOSS (1,379,643) (1,724,991)
----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (769,918) (872,501)
Other, net 10,950 19,844
----------- -----------
Total other income (expense), net (758,968) (852,657)
----------- -----------
CONSOLIDATED LOSS (2,138,611) (2,577,648)
MINORITY INTEREST IN CONSOLIDATED LOSS 306,721 387,120
----------- -----------
NET LOSS $(1,831,890) $(2,190,528)
=========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (18,319) $ (21,905)
=========== ===========
Limited Partners $(1,813,571) $(2,168,623)
=========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (6.94) $ (8.30)
=========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 261,353 261,353
=========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
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CABLE TV FUND 14-B
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
-----------------------------
1994 1993
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,831,890) $(2,190,528)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 3,776,845 4,207,565
Amortization of interest rate protection contract 27,178 27,112
Minority interest in consolidated net loss (306,721) (387,120)
Decrease in trade receivables 508,981 119,109
Increase in deposits, prepaid expenses and
deferred charges (152,942) (8,690)
Decrease in accounts payable, accrued liabilities
and subscriber prepayments (118,341) (119,120)
Decrease in advances from General Partner (29,182) (57,084)
----------- -----------
Net cash provided by operating activities 1,873,928 1,591,244
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (1,134,070) (1,113,124)
----------- -----------
Net cash used in investing activities (1,134,070) (1,113,124)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 100,000 69,632
Repayment of debt (159,238) (969,684)
Purchase of interest rate protection contracts - (246,250)
----------- -----------
Net cash used in financing activities (59,238) (1,146,302)
----------- -----------
Increase (decrease) in cash 680,620 (668,182)
Cash, beginning of period 410,238 2,946,329
----------- -----------
Cash, end of period $ 1,090,858 $ 2,278,147
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 780,928 $ 804,419
=========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
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CABLE TV FUND 14-B
(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 (the
"Partnership") at March 31, 1994 and December 31, 1993 and its Statements of
Operations and Cash Flows for the three month periods ended March 31, 1994 and
1993. Results of operations for these periods are not necessarily indicative
of results to be expected for the full year.
As a result of the Partnership's ownership interest in Cable TV Fund
14-A/B Venture (the "Venture") of approximately 73 percent, 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 Cable TV Fund 14-A in the Venture shown as a minority interest. The
Venture owns and operates the cable television system serving certain areas in
Broward County, Florida. The Venture does not have any ownership interest in
the cable television systems serving Surfside, South Carolina (the "Surfside
System") or Little Rock, California (the "Little Rock System"). These systems
are owned 100 percent by the Partnership. All interpartnership accounts and
transactions have been eliminated.
2) Jones Intercable Inc., a publicly held Colorado corporation (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 for the three month periods ended March 31,
1994 and 1993 were $395,875 and $392,298, respectively.
The Partnership and the Venture reimburse the General Partner for
certain allocated overhead and administrative expenses. These expenses include
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 overhead
costs are allocated based on revenues and/or the cost of assets managed for the
partnership. Effective December 1, 1993, the allocation method was changed to
be based only on revenue, which the General Partner believes provides a more
accurate method of allocation. 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 by the Partnership for allocated overhead and administrative expenses
for the three month periods ended March 31, 1994 and 1993 were $607,347 and
$577,449, respectively.
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(3) Financial information regarding Cable TV Fund 14-A/B Venture is
presented below.
UNAUDITED BALANCE SHEETS
ASSETS March 31, 1994 December 31, 1993
-------------- -----------------
Cash and accounts receivable $ 1,293,240 $ 1,140,477
Investment in cable television properties 69,399,125 70,822,864
Other assets 399,063 352,475
------------- -------------
Total assets $ 71,091,428 $ 72,315,816
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Debt $ 43,434,538 $ 43,461,730
Payables and accrued liabilities 1,306,960 1,372,344
Partners' contributed capital 70,000,000 70,000,000
Accumulated deficit (43,650,069) (42,518,258)
------------- -------------
Total liabilities and partners' capital $ 71,091,428 $ 72,315,816
============= =============
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
------------------------------
1994 1993
----------- -----------
Revenues $ 5,495,740 $ 5,505,923
Operating, general and administrative expense (3,060,413) (3,046,276)
Management fees and allocated overhead from General Partner (688,291) (649,086)
Depreciation and amortization (2,304,020) (2,550,736)
----------- -----------
Operating loss (556,984) (740,175)
Interest expense (576,250) (701,158)
Other, net 1,423 12,844
----------- -----------
Net loss $(1,131,811) $(1,428,489)
=========== ===========
Management fees and reimbursements for overhead and administrative
expenses paid to the Jones Intercable, Inc. by 14-A/B Venture totalled $274,787
and $413,504, respectively for the three month period ended March 31, 1994, and
$275,296 and $373,790, respectively, for the three month period ended March 31,
1993.
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CABLE TV FUND 14-B
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Cable TV Fund 14-B owns an approximate 73 percent interest in Cable TV
Fund 14-A/B Venture. The accompanying financial statements include 100 percent
of the accounts of the Partnership and those of the Venture system, reduced by
the 27 percent minority interest in the Venture.
During the first three months of 1994, capital expenditures in the
Venture-owned Broward County System totalled approximately $880,300.
Approximately 27 percent of these expenditures related to plant extensions and
approximately 31 percent related to service drops to homes. Rebuild of the
cable plant accounted for approximately 11 percent of these expenditures. The
remainder of the expenditures was for various enhancements in the Broward
County System. Such expenditures were funded primarily from cash generated
from operations. Anticipated capital expenditures for the remainder of 1994
are approximately $2,243,000. Plant extensions are expected to account for
approximately 24 percent of the remaining expenditures. Approximately 25
percent will relate to service drops to homes. Approximately 16 percent will
relate to converter replacements. Approximately 10 percent will relate to
plant rebuilds in the Broward County System. The remainder of the anticipated
expenditures is for various enhancements in the Broward County System. These
capital expenditures will be funded from cash on hand and cash generated from
operations. The level of capital expenditures will depend, in part, upon the
General Partner's determination as to the proper scope and timing of such
expenditures in light of the FCC's announcement of a further rulemaking
regarding the 1992 Cable Act on February 22, 1994.
On December 31, 1992, the then outstanding balance of $46,800,000 on
the Venture's credit facility converted to a term loan. The balance
outstanding on the term loan at March 31, 1994 was $43,290,000. The term loan
is payable in quarterly installments which began March 31, 1993 and is payable
in full by December 31, 1999. Installments due during 1994 were scheduled to
be $3,510,000, however the General Partner obtained a waiver of the installment
due March 31, 1994 to provide liquidity for capital expenditures. The General
Partner is negotiating to reduce principal payments further as well as adjust
certain leverage covenants of the credit facility. The regulatory matters
discussed below may have an adverse effect on the General Partner's ability to
renegotiate the credit facility. If the General Partner is unsuccessful in
renegotiating this credit facility, which is not anticipated, the Venture will
have to rely on cash on hand, cash generated from operations and, in its
discretion, advances from the General Partner to fund scheduled principal
repayments and capital expenditures. Interest is at the Venture's option of
prime plus 1/2 percent, LIBOR plus 1-1/2 percent or CD rate plus 1-5/8 percent.
The effective interest rates on amounts outstanding as of March 31, 1994 and
1993 are 5.04 percent and 4.78 percent, respectively. In January 1993, the
Venture entered into an interest rate cap agreement covering outstanding debt
obligations of $25,000,000. The Venture paid a fee of $246,250. The agreement
protects the Venture from interest rates that exceeded 7 percent for three
years from the date of the agreement.
Subject to regulatory matters discussed below and the General Partner's
ability to successfully renegotiate the Venture's credit facility, the General
Partner believes that the Venture has sufficient sources of capital to service
its presently anticipated needs.
The Partnership expended approximately $253,800 on capital additions in
its wholly-owned Surfside, South Carolina and Little Rock, California systems
during the first quarter of 1994. New plant construction accounted for
approximately 26 percent and service drops to homes accounted for approximately
19 percent of these expenditures. Upgrades of the cable plant accounted for
approximately 17 percent of the expenditures. The remainder of the expenditures
were for various enhancements in the Partnership's systems. Funding for these
expenditures was provided by cash on hand and cash generated from operations.
Anticipated capital expenditures for the remainder of 1993 are approximately
$1,757,000. Approximately 38 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 are
for various enhancements in each of the Partnership's systems. Funding for
these improvements will be
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provided by cash generated from operations and borrowings under the
Partnership's credit facility. The level of capital expenditures will depend,
in part, upon the General Partner's determination as to the proper scope and
timing of such expenditures in light of the FCC's announcement of a further
rulemaking regarding the 1992 Cable Act, and the Partnership's liquidity
position.
The Partnership's credit agreement had an original commitment of
$20,000,000. Such commitment consisted of a $10,000,000 reducing revolving
credit facility and a $10,000,000 term loan. The reducing revolving credit
reduced to $9,500,000 on December 31, 1993, reduces to $8,500,000 on December
31, 1994 and is payable in full on December 31, 1995. At March 31, 1994,
$5,700,000 was outstanding under this revolving credit facility, leaving
$3,800,000 available until year end for the needs of the Partnership. The
$10,000,000 term loan is payable in quarterly installments which began March
31, 1993 and the term loan matures on December 31, 1995. As of March 31, 1994,
$9,600,000 was outstanding on this term loan. Installment payments made in the
first quarter of 1994 totalled $125,000. Installments due for the remainder of
1994 total $375,000. Currently, interest on the outstanding principal balance
on each loan is at the Partnership's option of prime plus .20 percent, LIBOR
plus 1.20 percent or CD rate plus 1.325 percent. The effective interest rates
on amounts outstanding as of March 31, 1994 and 1993 are 5.13 percent and 4.43
percent, respectively. In January 1993, the Partnership entered into an
interest rate cap agreement covering outstanding debt obligations of $8,000,000
for a fee of $77,600. The agreement protects the Partnership from interest
rates that exceed 7 percent for three years from the date of the agreement.
Subject to regulatory matters discussed below, the General Partner
believes that the Partnership has sufficient sources of capital to service its
presently anticipated needs.
Regulation and Legislation
Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States, including those
owned by the Partnership and the Venture, are subject to rate regulation of
basic cable services. In addition, the 1992 Cable Act allows the FCC to
regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising authorities and/ or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
Based on the General Partner's assessment of the FCC's rulemakings
concerning rate regulation under the 1992 Cable Act, the Partnership and the
Venture reduced rates charged for certain regulated services effective
September 1, 1993. These reductions resulted in some decrease in revenues and
operating income before depreciation and amortization, however the decrease is
not as severe as originally anticipated. On February 22, 1994, the FCC
announced a further rulemaking which could reduce rates further. The new rate
regulations, which were released in March 1994, will be effective on May 15,
1994. However, the rules provide for a deferral of refund liability for 60
days under certain conditions, effectively making the rules effective on July
14, 1994. The new rate regulations will likely require further reductions in
rates in the Partnership's and the Venture's systems. The General Partner has
not yet been able to quantify the impact of the new rate regulations, but it
believes that the new rate regulations will have a negative effect on revenues
and operating income before depreciation and amortization. The General Partner
has undertaken actions to mitigate a portion of these reductions primarily
through (a) new service offerings, (b) product re-marketing and re-packaging
and (c) marketing efforts directed at non-subscribers.
The 1992 Cable Act contains new broadcast signal carriage requirements,
and the FCC has adopted regulations implementing the statutory requirements.
These new rules allow a local commercial broadcast television station to elect
whether to demand that a cable system carry its signal or to require the cable
system to negotiate with the station for "retransmission consent." A cable
system is generally required to devote up to one-third of its activated channel
capacity
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for the mandatory carriage of local commercial broadcast television stations,
and non-commercial television stations are also given mandatory carriage
rights, although such station are not given the option to negotiate
retransmission consent for the carriage of their signals by cable systems.
Additionally, cable systems also are required to obtain retransmission consent
from all commercial television stations (except for commercial
satellite-delivered independent "superstations"), which do not elect mandatory
carriage, commercial radio stations and, in some instances, low-power
television stations carried by cable systems.
The retransmission consent rules went into effect on October 6, 1993.
Throughout the cable television systems owned by the Partnership and the
Venture, no television stations withheld their consent to retransmission of its
signal, and were no longer carried on October 6, 1993. Certain broadcast
signals were carried on October 6, 1993 pursuant to extensions, and the General
Partner expects to finally conclude retransmission consent negotiations with
those remaining stations whose signals are being carried pursuant to extensions
without having to terminate the distribution of any of those signals. However,
there can be no assurance that such will occur. If any broadcast station
currently being carried pursuant to an extension is dropped, there could be a
negative effect on the system in which it is dropped if a significant number of
subscribers in such system were to disconnect their service. However, in most
cases, only one broadcaster in any market is being carried pursuant to an
extension arrangement, and the dropping of such broadcaster, were that to
occur, is not expected to have a negative effect on the system.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision has been appealed directly to the United States
Supreme Courtand a decision is expected in the next several months. Appeals
have been filed in a Federal appellate court challenging the validity of the
FCC's retransmission consent rules.
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RESULTS OF OPERATIONS
The results of operations for the Partnership are summarized in the selected
financial data below:
For the Three Months Ended March 31, 1994
--------------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 2,421,756 $ 5,495,740 $ 7,917,496
Operating, general and administrative $ 1,456,659 $ 3,060,413 $ 4,517,072
Management fees and allocated
overhead from General Partner $ 314,931 $ 688,291 $ 1,003,222
Depreciation and amortization $ 1,472,825 $ 2,304,020 $ 3,776,845
Operating loss $ (822,659) $ (556,984) $(1,379,643)
Interest expense $ (193,668) $ (576,250) $ (769,918)
Consolidated loss before minority interest $(1,006,800) $(1,131,811) $(2,138,611)
Minority interest in consolidated loss $ - $ 306,721 $ 306,721
Net loss $(1,006,800) $ (825,090) $(1,831,890)
For the Three Months Ended March 31, 1993
--------------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 2,340,038 $ 5,505,923 $ 7,845,961
Operating, general and administrative expense $ 1,347,364 $ 3,046,276 $ 4,393,640
Management fees and allocated
overhead from General Partner $ 320,661 $ 649,086 $ 969,747
Depreciation and amortization $ 1,656,829 $ 2,550,736 $ 4,207,565
Operating loss $ (984,816) $ (740,175) $(1,724,991)
Interest expense $ (171,343) $ (701,158) $ (872,501)
Consolidated loss $(1,149,159) $(1,428,489) $(2,557,648)
Minority interest in consolidated loss $ - $ 387,120 $ 387,120
Net loss $(1,149,159) $(1,041,369) $(2,190,528)
Partnership owned -
Revenues in the Partnership's wholly owned cable television systems
increased $81,718, or approximately 3 percent, from $2,340,038 at March 31,
1993 to $2,421,756 at March 31, 1994. The increase in revenue was due
primarily to increases in basic subscribers and pay units of approximately 6
percent and 21 percent, respectively. Basic subscribers
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increased from 21,957 at March 31, 1993 to 23,179 at March 31, 1994. Pay Units
increased from 12,897 at March 31, 1993 to 15,663 at March 31, 1994. The
increase in revenue would have been greater but for the reduction in basic rates
due to new basic rate regulations issued by the FCC in May 1993 with which the
Partnership complied effective September 1, 1993. In addition, on February 22,
1994, the FCC announced a further rulemaking which, when implemented, could
reduce rates further.
Operating, general and administrative expense increased $109,295, or
approximately 8 percent, from $1,347,364 at March 31, 1993 to $1,456,659 at
March 31, 1994. Operating, general and administrative expense represented 58
percent of revenue for the first quarter of 1993 compared to 60 percent for the
similar period in 1994. This increase was due to increases in personnel
related costs and programming fees. No other individual factor significantly
affected the increase in operating, general and administrative expense.
Management fees and allocated overhead from the General Partner decreased
$5,730, or approximately 2 percent, from $320,661 at March 31, 1993 to $314,931
at March 31, 1994 due to a decrease in expenses allocated from the General
Partner which resulted from an adjustment in allocation methods. Depreciation
and amortization expense decreased $184,004, or approximately 11 percent, from
$1,656,829 at March 31, 1993 to $1,472,825 at March 31, 1994. This decrease is
attributable to the maturation of the Partnership#s tangible asset base.
Operating loss decreased $162,157, or approximately 16 percent, from
$984,616 at March 31, 1993 to $822,659 at March 31, 1994 due primarily to the
decrease in depreciation and amortization expense. Operating income before
depreciation and amortization decreased $21,847, or approximately 3 percent,
from $672,013 for the three months ended March 31, 1993 to $650,166 for the
similar period in 1994. This decrease is due to the increases in operating,
general and administrative expense and management fees and allocated overhead
from the General Partner exceeding the increase in revenues.
Interest expense increased $22,325, or approximately 13 percent, from
$171,343 at March 31, 1993 to $193,668 at March 31, 1994 due to higher
effective interest rates on interest bearing obligations. Net loss decreased
$142,359, or approximately 12 percent, from $1,149,159 at March 31, 1993 to
$1,006,800 at March 31, 1994. These losses are the result of the factors
discussed above and are expected to continue in the future.
Venture owned -
In addition to its wholly owned systems, the Partnership owns an
approximate 73 percent interest in the Venture. The Venture#s revenues
decreased $10,183, or less than 1 percent, from $5,505,923 for the three months
ended March 31, 1993 to $5,495,730 in 1994. This decrease in revenues is due
to the reduction in basic rates due to basic rate regulations issued by the FCC
in May 1993 with which the Venture complied effective September 1, 1993. In
addition, on February 22, 1994, the FCC announced a further rulemaking which,
when implemented, could reduce rates further. The decrease in revenue due to
rate reductions was offset, in part, by increases in basic subscribers and pay
units of 6 percent and 12 percent, respectively. Basic subscribers totalled
46,611 at March 31, 1994 compared to 44,043 at March 31, 1993. Pay units
totalled 39,157 at March 31, 1994 compared to 34,959 at March 31, 1993. No
other individual factor was significant to the decrease in revenues.
Operating, general and administrative expense increased $14,137, or
less than one percent, from $3,046,276 at March 31, 1993 to $3,060,413 at March
31, 1994. Operating, general and administrative expense represented 55 percent
of revenue for the first quarter of 1993 compared to 56 percent for the similar
period in 1994. The increase in operating, general and administrative expense
was due primarily to increases in programming fees. No other individual factor
was significant to the increase in operating, general and administrative
expense. Management fees and allocated overhead from the General Partner
increased $39,205, or approximately 6 percent, from $649,086 at March 31, 1993
to $688,291 at March 31, 1994 due primarily to an increase in expenses
allocated from the General Partner. Depreciation and amortization expense
decreased $246,716, or approximately 10 percent, from $2,550,736 at March 31,
1993 to $2,304,020 at March 31, 1994. This decrease is due to the maturation
of the Venture#s asset base.
In the Broward County System, operating loss decreased $183,191, or
approximately 25 percent, from $740,175 at March 31, 1993 to $556,984 at March
31, 1994 due to the decrease in depreciation and amortization expense.
Operating income before depreciation and amortization decreased $63,525, or
approximately 4 percent, from $1,810,561 for the three months ended March 31,
1993 to $1,747,036 for the similar period in 1994. This decrease is due to the
increases in operating, general and administrative expense and management fees
and allocated overhead from the General Partner exceeding the increase in
revenues.
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Interest expense decreased $124,908, or approximately 18 percent, from
$701,158 at Marach 31, 1993 to $576,250 at March 31, 1994 due to lower
outstanding balances on interest bearing obligations. Net loss of the Venture
decreased $296,678, or approximately 21 percent, from $1,428,489 at March 31,
1993 to $1,131,811 at March 31, 1994. This decrease was primarily attributed
to the improvement in operating loss and the decrease in interest expense.
These losses are the result of the factors discussed above and are expected to
continue in the future.
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Part II - OTHER INFORMATION
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 14-B
BY: JONES INTERCABLE, INC.
General Partner
By: /s/ Kevin P. Coyle
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: May 13, 1994
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