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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 September 30, 1995.
[ ] 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 (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 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 1995 1994
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CASH $ 336,254 $ 26,010
TRADE RECEIVABLES, less allowance for doubtful
receivables of $132,431 and $110,979 at September 30, 1995
and December 31, 1994, respectively 933,825 618,743
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 72,752,312 68,491,779
Less-accumulated depreciation (31,106,116) (25,879,360)
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41,646,196 42,612,419
Franchise costs, net of accumulated amortization
of $70,800,218 and $61,022,656 at September 30, 1995
and December 31, 1994, respectively 24,697,168 34,474,730
Subscriber lists, net of accumulated amortization
of $10,875,985 and $9,332,644 at September 30, 1995
and December 31, 1994, respectively 2,400,677 3,944,018
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $1,512,148 and
$1,305,270 at September 30, 1995 and December 31, 1994,
respectively 9,526,776 9,733,654
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Total investment in cable television properties 78,270,817 90,764,821
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,315,294 1,390,513
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Total assets $ 80,856,190 $ 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
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------- -------------
LIABILITIES:
Debt $ 78,761,855 $ 70,287,693
Accounts payable -
Trade 26,033 149,934
General Partner 4,729,990 10,952,538
Accrued liabilities 1,357,419 1,399,978
Subscriber prepayments 116,216 147,366
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Total liabilities 84,991,513 82,937,509
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PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (960,988) (821,009)
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(959,988) (820,009)
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Limited Partners-
Net contributed capital (213,174 units
outstanding at September 30, 1995
and December 31, 1994) 90,575,991 90,575,991
Accumulated deficit (93,751,326) (79,893,404)
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(3,175,335) 10,682,587
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Total liabilities and partners' capital (deficit) $ 80,856,190 $ 92,800,087
============ ============
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,
---------------------------- -----------------------------
1995 1994 1995 1994
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REVENUES $ 8,632,012 $ 7,785,027 $ 25,398,420 $ 23,087,146
COSTS AND EXPENSES:
Operating expenses 4,863,093 4,407,889 14,499,822 13,060,183
Management fees and allocated overhead
from General Partner 1,011,168 918,379 3,035,633 2,836,819
Depreciation and amortization 5,534,004 5,641,985 16,820,711 16,919,598
----------- ----------- ------------ ------------
OPERATING LOSS (2,776,253) (3,183,226) (8,957,746) (9,729,454)
----------- ----------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (1,633,521) (1,224,341) (5,006,399) (3,404,278)
Other, net 67,762 (110,895) (33,756) (286,224)
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Total other income (expense) (1,565,759) (1,335,236) (5,040,155) (3,690,502)
----------- ----------- ------------ ------------
NET LOSS $(4,342,012) $(4,518,462) $(13,997,901) $(13,419,956)
=========== =========== ============ ============
ALLOCATION OF NET LOSS:
General Partner $ (43,420) $ (45,185) $ (139,979) $ (134,200)
=========== =========== ============ ============
Limited Partners $(4,298,592) $(4,473,277) $(13,857,922) $(13,285,756)
=========== =========== ============ ============
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (20.16) $ (20.98) $ (65.00) $ (62.32)
=========== =========== ============ ============
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
For the Nine Months Ended
September 30,
---------------------------------------
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (13,997,901) $(13,419,956)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 16,820,711 16,919,598
Amortization of interest rate protection contract 56,535 -
Decrease (increase) in trade receivables (315,082) 45,047
Decrease (increase) in deposits, prepaid expenses and
deferred charges (47,490) 127,277
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (197,610) (256,116)
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Net cash provided by operating activities 2,319,163 3,415,850
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,260,533) (3,580,998)
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Net cash used in investing activities (4,260,533) (3,580,998)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 8,594,022 76,279
Repayment of debt (119,860) (2,211,166)
Increase (decrease) in advances from General Partner (6,222,548) 2,290,758
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Net cash provided by financing activities 2,251,614 155,871
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Increase (decrease) in cash 310,244 (9,277)
Cash, beginning of period 26,010 166,914
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Cash, end of period $ 336,254 $ 157,637
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 4,892,358 $ 3,499,572
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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 September 30, 1995 and December 31, 1994 and its
Statements of Operations for the three and nine month periods ended September
30, 1995 and 1994, and its Statements of Cash Flows for the nine month periods
ended September 30, 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 and nine month periods ended September 30, 1995 were
$431,601 and $1,269,921, respectively, compared to $389,251 and $1,154,357,
respectively, for the similar 1994 periods.
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 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
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 and nine month
periods ended September 30, 1995 were $579,567 and $1,765,712, respectively,
compared to $529,128 and $1,682,462, respectively, for the similar 1994
periods.
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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 nine months ended September 30, 1995, the Partnership
generated net cash from operating activities totaling approximately $2,319,000,
which is available to fund capital expenditures and non-operating costs.
Capital expenditures totaled approximately $4,261,000 during the first nine
months of 1995. Approximately 47 percent of these expenditures were for service
drops to homes. New plant construction accounted for approximately 20 percent
and approximately 11 percent related to the rebuild and upgrade of portions of
the Partnership's systems. 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 1995 are approximately $542,000. Approximately 46 percent of the
remaining capital expenditures will be for service drops to homes.
Approximately 23 percent of these remaining capital expenditures will be to
continue the rebuild and upgrade of portions of the Partnership's systems, and
approximately 6 percent will be for new plant construction. 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
revolving credit facility.
In November 1994, the Partnership entered into a revolving credit
facility. The facility provides for a maximum of $80,000,000 in available
borrowings. At September 30, 1995, $78,500,000 was outstanding, leaving
$1,500,000 of available borrowings, subject to leverage covenants. Under the
terms of the 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 Certificate of Deposit 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. The effective interest rates on
outstanding obligations as of September 30, 1995 and 1994 were 7.39 percent and
6.10 percent, respectively.
The General Partner has advanced funds to the Partnership to fund
capital expenditures and to fund principal payments due under the Partnership's
former credit facility, and the General Partner may make additional advances in
the future although it has no obligation to do so. Advances outstanding at
September 30, 1995 totaled $4,729,990, which is a decrease of $6,222,548 since
December 31, 1994. This decrease is due to the Partnership repaying a portion
of the advances with borrowings from the Partnership's revolving 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 cash generated from operations.
The Partnership will rely on the remaining $1,500,000 of its credit
facility, subject to leverage covenants, as well as cash on hand and cash
generated from operations to meet its presently anticipated liquidity and
capital needs.
Regulatory Matters
The FCC's rate regulations related to the 1992 Cable Act contain
provisions for increasing rates for added channels, external costs and
inflation. The Partnership has been able to adjust rates recently under such
provisions. Such adjustments, together with a reduction in the cost of
implementing the 1992 Cable Act compared to such costs in prior periods, are
expected to cause the Partnership's revenue and cash flow to increase in fiscal
1996.
Currently, there is legislation before Congress which, if enacted,
would significantly change the regulatory environment in which the cable
industry operates. Such legislation may eliminate rate regulation and allow
telephone companies and others much broader entry into the cable television
business and, in turn, may allow cable operators into the telephone and other
telecommunications businesses. While the General Partner is encouraged by
provisions of the legislation, it is too early to assess the impact such
legislation, if enacted, would have on the Partnership.
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RESULTS OF OPERATIONS
Revenues of the Partnership increased $846,985, or approximately 11
percent, to $8,632,012 for the three month period ended September 30, 1995 from
$7,785,027 for the comparable 1994 period. Revenues of the Partnership
increased $2,311,274, or approximately 10 percent, to $25,398,420 for the nine
month period ended September 30, 1995 compared to $23,087,146 for the
comparable 1994 period. An increase in the number of basic subscribers
combined with basic service rate adjustments implemented in the Partnership's
systems primarily accounted for the increase in revenues. The increase in the
number of basic subscribers accounted for approximately 41 percent and 51
percent of the increase in revenues for the three and nine months ended
September 30, 1995. The Partnership has added approximately 4,907 basic
subscribers since September 30, 1994. At September 30, 1995, the Partnership's
systems had 77,383 basic subscribers compared to 72,476 basic subscribers at
September 30, 1994, an increase of approximately 7 percent. The basic service
rate adjustments accounted for approximately 38 percent and 27 percent,
respectively, of the increase in revenues for the three and nine month periods.
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 $455,204, or approximately 10 percent, to
$4,863,093 for the three month period ended September 30, 1995 compared to
$4,407,889 for the comparable 1994 period. Operating expenses increased
$1,439,639, or approximately 11 percent, to $14,499,822 for the nine month
period ended September 30, 1995 compared to $13,060,183 for the comparable 1994
period. Operating expenses represented approximately 56 percent of revenue for
the three month period ended September 30, 1995 as compared to approximately 57
percent for the comparable 1994 period. Operating expenses represented
approximately 57 percent of revenue for each of the nine month periods ended
September 30, 1995 and 1994. Programming fees accounted for approximately 77
percent and 70 percent of the increase in operating expenses for the three and
nine month periods ended September 30, 1995, and were due, in part, to the
increase in the subscriber base. No other factor contributed significantly to
the increase in operating expenses.
Management fees and allocated overhead from the General Partner
increased $92,789, or approximately 10 percent, to $1,011,168 for the three
month period ended September 30, 1995 compared to $918,379 for the comparable
1994 period. Management fees and allocated overhead from the General Partner
increased $198,814, or approximately 7 percent, to $3,035,633 for the nine
month period ended September 30, 1995 compared to $2,836,819 for the comparable
1994 period. These increases were due to an increase in revenues, upon which
such management fees are based, as well as increases in allocated expenses from
the General Partner. The General Partner has experienced increases in
expenses, a portion of which is allocated to the partnership.
Depreciation and amortization expense decreased $107,981, or
approximately 2 percent, to $5,534,004 for the three month period ended
September 30, 1995 compared to $5,641,985 for the comparable 1994 period.
Depreciation and amortization expense decreased $98,887, or less than 1
percent, to $16,820,711 for the nine month period ended September 30, 1995
compared to $16,919,598 for the comparable 1994 period. These decreases are
due to the maturation of the Partnership's depreciable asset base.
Operating loss decreased $406,973, or approximately 13 percent, to
$2,776,253 for the three month period ended September 30, 1995 compared to
$3,183,226 for the comparable 1994 period. Operating loss decreased $771,708,
or approximately 8 percent, to $8,957,746 for the nine month period ended
September 30, 1995 compared to $9,729,454 for the comparable 1994 period.
These decreases were the result of increases in revenues exceeding the
increases in operating expenses and management fees and allocated overhead from
the General Partner.
The cable television industry generally measures the performance of a
cable television system in terms of cash flow or operating income before
depreciation and amortization. The value of a cable television system is often
determined using multiples of cash flow. 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 income
before depreciation and amortization increased $298,992, or approximately 12
percent, to $2,757,751 for the three month period ended September 30, 1995
compared to $2,458,759 for the comparable 1994 period. Operating income before
depreciation and amortization increased $672,821, or approximately 9 percent,
to $7,862,965 for the nine month period ended
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September 30, 1995 from $7,190,144 for the similar 1994 period. These
increases were due to increases in revenues exceeding the increases in
operating expenses and management fees and allocated overhead from the General
Partner.
Interest expense increased $409,180, or approximately 33 percent, to
$1,633,521 for the three month period ended September 30, 1995 compared to
$1,224,341 for the comparable 1994 period. Interest expense increased
$1,602,121, or approximately 47 percent, to $5,006,399 for the nine month
period ended September 30, 1995 from $3,404,278 for the comparable 1994 period.
These increases were due to higher effective interest rates and higher
outstanding balances on interest bearing obligations.
Net loss decreased $176,450, or approximately 4 percent, to $4,342,012
for the three month period ended September 30, 1995 from $4,518,462 for the
comparable 1994 period. This decrease is due to the factors discussed above.
Net loss increased $577,945, or approximately 4 percent, to $13,997,901 from
$13,419,956 for the nine month periods ended September 30, 1995 and 1994,
respectively. This increase is 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: November 13, 1995
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
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27 Financial Data Schedule