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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, 1995.
[ ] 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.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
March 31, December 31,
ASSETS 1995 1994
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CASH $ 238,336 $ 26,010
RECEIVABLES:
Trade receivables, less allowance for
doubtful receivables of $117,431 and $110,979
at March 31, 1995 and December 31, 1994,
respectively 391,212 618,743
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 69,703,415 68,491,779
Less- accumulated depreciation (27,634,430) (25,879,360)
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42,068,985 42,612,419
Franchise costs, net of accumulated amortization
of $64,281,844 and $61,022,656 at March 31, 1995
and December 31, 1994, respectively 31,215,542 34,474,730
Subscriber lists, net of accumulated amortization
of $9,847,091 and $9,332,644 at March 31, 1995
and December 31, 1994, respectively 3,429,571 3,944,018
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $1,374,229 and
$1,305,270 at March 31, 1995 and December 31, 1994,
respectively 9,664,695 9,733,654
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Total investment in cable
television properties 86,378,793 90,764,821
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,423,756 1,390,513
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Total assets $ 88,432,097 $ 92,800,087
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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 BALANCE SHEETS
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------ -------------
LIABILITIES:
Debt $ 70,289,283 $ 70,287,693
Accounts payable -
Trade 52,340 149,934
General Partner 11,894,092 10,952,538
Accrued liabilities 1,260,857 1,399,978
Subscriber prepayments 147,892 147,366
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Total liabilities 83,644,464 82,937,509
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (871,758) (821,009)
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(870,758) (820,009)
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Limited Partners-
Net contributed capital (213,174 units
outstanding at March 31, 1995
and December 31, 1994) 90,575,991 90,575,991
Accumulated deficit (84,917,600) (79,893,404)
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5,658,391 10,682,587
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Total liabilities and
partners' capital (deficit) $ 88,432,097 $ 92,800,087
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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
March 31,
-------------------------------------------
1995 1994
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REVENUES $ 8,115,730 $ 7,509,791
COSTS AND EXPENSES:
Operating expenses 4,799,932 4,305,413
Management fees and allocated overhead
from General Partner 1,032,247 955,344
Depreciation and amortization 5,633,226 5,638,690
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OPERATING LOSS (3,349,675) (3,389,656)
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OTHER INCOME (EXPENSE):
Interest expense (1,721,535) (1,014,842)
Other, net (3,735) (59,835)
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Total other income (expense) (1,725,270) (1,074,677)
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NET LOSS $ (5,074,945) $ (4,464,333)
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ALLOCATION OF NET LOSS:
General Partner $ (50,749) $ (44,643)
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Limited Partners $ (5,024,196) $ (4,419,690)
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NET LOSS PER LIMITED PARTNERSHIP UNIT $ (23.57) $ (20.73)
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WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 213,174 213,174
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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
For the Three Months Ended
March 31,
--------------------------------------
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,074,945) $(4,464,333)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 5,617,920 5,638,690
Amortization of capitalized loan fees 15,306 -
Amortization of interest rate protection contract 18,849 -
Decrease in trade receivables 227,531 254,284
Increase in deposits, prepaid
expenses and deferred charges (87,654) (21,747)
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (236,189) (278,863)
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Net cash provided by operating activities 480,818 1,128,031
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,211,636) (769,700)
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Net cash used in investing activities (1,211,636) (769,700)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 38,358 -
Repayment of debt (36,768) (1,083,075)
Increase in advances from General Partner 941,554 732,567
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Net cash provided by (used in) financing activities 943,144 (350,508)
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Increase in cash 212,326 7,823
Cash, beginning of period 26,010 166,914
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Cash, end of period $ 238,336 $ 174,737
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,653,675 $ 1,051,926
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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 March 31, 1995 and December 31, 1994 and its Statements
of Operations and Cash Flows for the three month periods ended March 31, 1995
and 1994. 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 areas in and around 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 areas in and around
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., (the "General Partner"), a publicly held
Colorado corporation, 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 for the three month periods ended March 31, 1995 and 1994 were $405,787
and $375,490, respectively.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses include salaries and
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. 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 of the
Partnership as a percentage of total revenues of owned and managed cable
television systems of the General Partner. 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 by the
Partnership to the General Partner for allocated overhead and administrative
expenses during the three month periods ended March 31, 1995 and 1994 were
$626,460 and $579,854, respectively.
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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
For the three months ended March 31, 1995, the Partnership generated
net cash from operating activities totaling $480,818, which is available to
fund capital expenditures and non-operating costs. Capital expenditures
totaled approximately $1,211,000 during the first three months of 1995.
Approximately 25 percent of these expenditures were for service drops to homes.
Approximately 14 percent related to the rebuild and upgrade of portions of the
Barrington System. The remaining expenditures were for various enhancements in
the Partnership's systems. Funding for these expenditures was provided by cash
generated from operations and advances from the General Partner. Budgeted
capital expenditures for the remainder of 1995 are approximately $3,591,000.
Approximately 44 percent of the remaining capital expenditures will be for
service drops to homes. Approximately 19 percent of these remaining capital
expenditures will be to continue the rebuild and upgrade of portions of the
Barrington System. The remainder of the anticipated expenditures are for
various enhancements in the Partnership's systems. Funding for these
expenditures is expected to be provided by cash generated from operations and
borrowings available under the Partnership's new revolving credit facility.
In November 1994, the Partnership entered into a revolving credit
facility. The facility provided for a maximum of $80,000,000 of which
$70,000,000 was available through March 31, 1995. At March 31, 1995, the
then-available maximum of $70,000,000 was outstanding. In April 1995, the
Partnership borrowed an additional $7,000,000 to repay advances from the
General Partner. Under the terms of the new revolving credit facility,
interest on the outstanding principal balance is at the Partnership's option of
the Base rate plus 1/2 percent or a fixed rate defined as the CD rate plus
1-5/8 percent or the London Interbank Offered Rate plus 1-1/2 percent. At
December 31, 1996, the revolving credit facility converts to a term loan, at
which time the then-outstanding principal balance will be payable in 24
consecutive quarterly installments beginning March 31, 1997. Until April 1,
1995, the Partnership paid a commitment fee of 3/8 of one percent on any unused
portion of the $70,000,000 commitment and 1/8 of one percent on the additional
$10,000,000 commitment. Commencing April 1, 1995, the Partnership will pay a
commitment fee of 3/8 of one percent on any unused portion of the $80,000,000
commitment. A one-time loan facility fee of $500,000 was paid at closing of
the new loan in November 1994. This amount is being amortized over the life of
the loan. The effective interest rates on outstanding obligations as of March
31, 1995 and 1994 were 7.77 percent and 4.82 percent, respectively.
The General Partner has advanced funds to the Partnership to fund
capital expenditures and to fund principal payments and may make additional
advances in the future although it has no obligation to do so. Advances
outstanding at March 31, 1995 totaled $11,894,092. In April 1995 the
Partnership repaid $7,000,000 with borrowings from the credit facility.
Interest on such advances is calculated at the General Partner's weighted
average cost of borrowing. Such advances are expected to be repaid over time
with borrowings under the new credit facility and cash generated from
operations. Since the amount of borrowings available under the new credit
facility is limited by certain leverage covenants, it is anticipated that these
advances will be repaid over time as the Partnership increases cash flow.
Regulatory Matters.
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 imposes a greater degree of regulation on the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States, including all of
those owned by the Partnership, 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. In compliance with these
rules, the Partnership reduced rates charged for certain regulated services
effective September 1, 1993.
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On February 22, 1994, however, the FCC adopted several additional rate
orders including orders which revised its earlier-announced regulatory scheme
with respect to rates and established interim cost-of-service regulations. The
FCC's February 22, 1994 regulations generally require rate reductions, absent a
successful cost-of-service showing, of 17 percent of September 30, 1992 rates,
adjusted for inflation, channel modifications, equipment costs, and increases
in programming costs. The new regulations became effective on May 15, 1994,
but operators could elect to defer rate reductions to July 14, 1994, so long as
they made no changes in their rates and did not restructure service offerings
between May 15 and July 14.
The Partnership has filed cost-of-service showings for the Barrington
System and the South Suburban System and thus anticipates no further reductions
in rates in these systems. The cost-of-service showings have not yet received
final approvals from franchising authorities, however, and there can be no
assurance that the Partnership's cost-of- service showings will prevent further
rate reductions in these systems until such final approvals are received.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $605,939, or approximately 8 percent,
from $7,509,791 for the first three months of 1994 to $8,115,730 for the
comparable 1995 period. An increase in basic subscribers combined with basic
service rate adjustments implemented in the Partnership's systems primarily
accounted for the increase in revenues. The Partnership has added
approximately 6,100 basic subscribers since March 31, 1994. At March 31, 1994,
the Partnership's systems had 69,200 basic subscribers compared to 75,311 basic
subscribers at March 31, 1995, an increase of 9 percent. No other individual
factors were significant to the increase in revenues.
Operating expenses consist primarily of costs associated with the
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 consumer marketing expenses.
Operating expenses increased $494,519, or approximately 11 percent,
from $4,305,413 for the first three months of 1994 to $4,799,932 for the
comparable 1995 period. Operating expenses represented 57 percent of revenue
for the first quarter of 1994, compared to 59 percent in 1995. Programming
fees accounted for approximately 57 percent of the increase in operating
expenses. Personnel costs accounted for approximately 19 percent of the
increase. No other factor contributed significantly to the increase in
operating expenses. Management fees and allocated overhead from the General
Partner increased $76,903 or approximately 8 percent, from $955,344 for the
first three months of 1994 to $1,032,247 for the comparable 1995 period. The
increase in management fees and allocated overhead from the General Partner was
due to the increase in revenues, upon which such fees and allocations are
based, and an increase in amounts allocated from the General Partner. The
General Partner has experienced increases in expenses, including personnel
costs, a portion of which is allocated to the Partnership. Depreciation and
amortization expense decreased $5,464, or less than 1 percent, from $5,638,690
for the first three months of 1994 to $5,633,226 for the comparable 1995
period. This decrease was due to the maturation of the Partnership's asset
base.
Operating loss decreased $39,981, or approximately 1 percent, from
$3,389,656 for the first three months of 1994 to $3,349,675 for the comparable
1995 period. This decrease was the result of the increase in revenues
exceeding the increase in operating expenses and management fees and allocated
overhead from the General Partner as well as a decrease in depreciation and
amortization. Operating income before depreciation and amortization increased
$34,517, or approximately 2 percent, from $2,249,034 for the three months ended
March 31, 1994 to $2,283,551 for the similar period in 1995. This increase was
due to the increases in revenues exceeding the increases in operating expenses
and management fees and allocated overhead from the General Partner.
Interest expense increased $706,693, or approximately 70 percent, from
$1,014,842 for the first three months of 1994 to $1,721,535 for the comparable
1995 period. The increase was due to higher effective interest rates and
higher outstanding balances on interest bearing obligations. Net loss
increased $610,612, or approximately 14 percent, from $4,464,333 for the first
three months of 1994 to $5,074,945 for the comparable 1995 period. This
increase was due to the factors discussed above. These losses are expected to
continue in the future.
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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: May 12, 1995
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INDEX TO EXHIBITS
Exhibit Description Page
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27 Financial Data Schedule