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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
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, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
ASSETS 1995 1994
------ ------------ ------------
CASH $ 833,980 $ 648,379
TRADE RECEIVABLES, less allowance for
doubtful receivables of $121,409 and $118,967
at September 30, 1995 and December 31, 1994,
respectively 1,326,658 944,373
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 90,516,571 85,658,550
Less- accumulated depreciation (42,047,916) (37,569,000)
------------ ------------
48,468,655 48,089,550
Franchise costs, net of accumulated amortization of
$48,383,500 and $43,864,245 at September 30, 1995
and December 31, 1994, respectively 37,547,297 42,066,552
Subscriber lists, net of accumulated amortization of
$14,988,794 and $13,916,352 at September 30, 1995
and December 31, 1994, respectively 2,534,146 3,606,588
Costs in excess of interests in net assets
purchased, net of accumulated amortization of
$5,089,936 and $4,572,555 at September 30, 1995
and December 31, 1994, respectively 22,496,625 23,014,006
------------ ------------
Total investment in cable television properties 111,046,723 116,776,696
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 403,466 498,309
------------ ------------
Total assets $113,610,827 $118,867,757
============ ============
The accompanying notes to unaudited consolidated financial statements are an
integral part of these unaudited consolidated balance sheets.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------- ------------
LIABILITIES:
Debt $ 57,110,787 $ 57,376,558
Accounts payable-
Trade 71,633 62,146
General Partner 1,180,610 297,956
Deferred brokerage fee 920,000 920,000
Accrued liabilities 1,804,800 1,954,453
Subscriber prepayments 569,308 582,203
------------ ------------
Total liabilities 61,657,138 61,193,316
------------ ------------
MINORITY INTEREST IN CABLE TELEVISION
JOINT VENTURE 5,055,581 5,883,075
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (658,115) (609,182)
------------ ------------
(657,115) (608,182)
------------ ------------
Limited Partners-
Net contributed capital (261,353 units outstanding at
September 30, 1995 and December 31, 1994) 112,127,301 112,127,301
Accumulated deficit (64,572,078) (59,727,753)
------------ ------------
47,555,223 52,399,548
------------ ------------
Total liabilities and
partners' capital (deficit) $113,610,827 $118,867,757
============ ============
The accompanying notes to unaudited consolidated financial statements are an
integral part of these unaudited consolidated balance sheets.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
----------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
REVENUES $ 8,661,010 $ 7,892,371 $25,635,173 $23,751,012
COSTS AND EXPENSES:
Operating expenses 4,650,139 4,733,863 14,150,356 13,740,984
Management fees and allocated
overhead from General Partner 1,007,493 954,786 3,064,930 2,943,386
Depreciation and amortization 3,718,759 3,746,710 10,693,996 11,272,978
----------- ----------- ----------- -----------
OPERATING LOSS (715,381) (1,542,988) (2,274,109) (4,206,336)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,119,113) (982,194) (3,459,352) (2,610,214)
Other, net 9,072 4,558 12,709 (33,072)
----------- ----------- ----------- -----------
Total other income
(expense), net (1,110,041) (977,636) (3,446,643) (2,643,286)
----------- ----------- ----------- -----------
CONSOLIDATED LOSS (1,825,422) (2,520,624) (5,720,752) (6,849,622)
MINORITY INTEREST IN
CONSOLIDATED LOSS 285,483 405,329 827,494 1,062,125
----------- ----------- ----------- -----------
NET LOSS $(1,539,939) $(2,115,295) $(4,893,258) $(5,787,497)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (15,400) $ (21,153) $ (48,933) $ (57,875)
=========== =========== =========== ===========
Limited Partners $(1,524,539) $(2,094,142) $(4,844,325) $(5,729,622)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (5.84) $ (8.01) $ (18.54) $ (21.92)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 261,353 261,353 261,353 261,353
=========== =========== =========== ===========
The accompanying notes to unaudited consolidated financial statements are an
integral part of these unaudited consolidated statements.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
-------------------------------
1995 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,893,258) $ (5,787,497)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 10,693,996 11,272,978
Amortization of interest rate protection contract 85,972 81,534
Minority interest in consolidated loss (827,494) (1,062,125)
Decrease (increase) in trade receivables (382,285) 483,186
Increase in deposits, prepaid expenses and
deferred charges (97,131) (344,799)
Increase (decrease) in advances from General Partner 882,654 (29,182)
Increase (decrease) in accounts payable, accrued liabilities
and subscriber prepayments (153,061) 158,126
------------ ------------
Net cash provided by operating activities 5,309,393 4,772,221
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,858,021) (3,491,734)
------------ ------------
Net cash used in investing activities (4,858,021) (3,491,734)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 1,767,613 200,000
Repayment of debt (2,033,384) (1,247,684)
------------ ------------
Net cash used in financing activities (265,771) (1,047,684)
------------ ------------
Increase in cash 185,601 232,803
Cash, beginning of period 648,379 410,238
------------ ------------
Cash, end of period $ 833,980 $ 643,041
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 3,547,170 $ 2,288,133
============ ============
The accompanying notes to unaudited consolidated financial statements are an
integral part of these unaudited consolidated statements.
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CABLE TV FUND 14-B, LTD.
(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, 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.
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, Ltd. 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. Certain prior
year amounts have been reclassified to conform to the 1995 presentation.
(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 paid to the General Partner by the Partnership
and the Venture for the three and nine month periods ended September 30, 1995
were $433,051 and $1,281,759, respectively, compared to $394,619 and
$1,187,550, respectively, for the similar 1994 periods.
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 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 made to the General
Partner by the Partnership and the Venture for allocated overhead and
administrative expenses for the three and nine month periods ended September
30, 1995 were $574,442 and $1,783,171, respectively, compared to $560,167 and
$1,755,836, respectively, for the similar 1994 periods.
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(3) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
September 30, 1995 December 31, 1994
------------------ -----------------
ASSETS
------
Cash and accounts receivable $ 1,102,001 $ 856,159
Investment in cable television properties 61,884,533 65,314,914
Other assets 351,786 426,387
------------ ------------
Total assets $ 63,338,320 $ 66,597,460
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 41,086,502 $ 42,271,921
Payables and accrued liabilities 3,241,338 2,261,576
Partners' contributed capital 70,000,000 70,000,000
Accumulated deficit (50,989,520) (47,936,037)
------------ ------------
Total liabilities and partners' capital $ 63,338,320 $ 66,597,460
============ ============
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ------------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
Revenues $ 5,811,133 $ 5,420,180 $17,504,285 $16,394,101
Operating expense (3,057,922) (3,260,168) (9,493,703) (9,457,369)
Management fees and allocated
overhead from General Partner (667,136) (652,304) (2,078,732) (2,015,471)
Depreciation and amortization (2,343,671) (2,286,349) (6,439,774) (6,876,719)
----------- ----------- ----------- -----------
Operating loss (257,596) (778,641) (507,924) (1,955,458)
Interest expense (804,780) (718,922) (2,556,865) (1,934,444)
Other, net 8,934 1,885 11,306 (29,379)
----------- ----------- ----------- -----------
Net loss $(1,053,442) $(1,495,678) $(3,053,483) $(3,919,281)
=========== =========== =========== ===========
Management fees paid to the General Partner by the Venture totaled
$290,556 and $875,214, respectively, for the three and nine month periods ended
September 30, 1995, as compared to $271,009 and $819,705, respectively, for the
similar 1994 periods. Reimbursements for overhead and administrative expenses
paid to the General Partner by the Venture totaled $376,580 and $1,203,518,
respectively, for the three and nine month periods ended September 30, 1995, as
compared to $381,295 and $1,195,766 for the similar 1994 periods.
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CABLE TV FUND 14-B, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership owns an approximate 73 percent interest in the
Venture. The accompanying financial statements include 100 percent of the
accounts of the Partnership and those of the Venture, reduced by the 27 percent
minority interest in the Venture.
The Venture
For the nine months ended September 30, 1995, the Venture generated
net cash from operating activities totaling $4,086,360, which is available to
fund capital expenditures and non-operating costs. During the first nine
months of 1995, capital expenditures in the Venture's Broward County System
totaled approximately $2,900,000. Approximately 38 percent of these
expenditures related to service drops to homes. Approximately 32 percent of
these expenditures related to new plant construction. Rebuild of the cable
plant accounted for approximately 9 percent of these expenditures. The
remainder of the expenditures were 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 1995
are approximately $300,000. Approximately 95 percent will relate to service
drops to homes. The remainder of the anticipated expenditures are for various
enhancements in the Broward County System. These capital expenditures are
expected to be funded from cash on hand and cash generated from operations.
The balance outstanding on the Venture's term loan at September 30,
1995 was $40,950,468. The term loan is payable in quarterly installments which
began March 31, 1993 and is payable in full by December 31, 1999. In September
1994, the General Partner completed negotiations to lower the level of
principal payments in order to provide liquidity for capital expenditures. The
Venture paid a $585,000 principal installment on October 2, 1995 and had paid a
total of $1,170,000 during the nine months ended September 30, 1995.
Installments due during the remainder of 1995 total $585,000. Funding for
these installments is expected to come from cash on hand and cash generated
from operations. 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 September 30, 1995 and 1994 were
7.2 percent and 6.4 percent, respectively.
The General Partner has advanced funds to the Venture to fund
capital expenditures 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 $1,518,684. 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.
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 LIBOR interest
rates that exceed 7 percent for three years from the date of the agreement.
The General Partner believes that the Venture has sufficient sources
of capital to service its presently anticipated needs from cash on hand, cash
generated from operations and, if necessary and in its discretion, advances
from the General Partner.
The Partnership
For the nine months ended September 30, 1995, the Partnership
generated net cash from operating activities totaling $1,223,032, which is
available to fund capital expenditures and non-operating costs. The
Partnership expended approximately $1,950,000 on capital additions in its
wholly-owned Surfside, South Carolina and Little Rock, California systems
during the first nine months of 1995. Service drops to homes accounted for
approximately 31 percent and new plant construction accounted for approximately
19 percent of these 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 1995 are approximately
$55,000.
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The Partnership's current debt arrangements are comprised of an
$8,500,000 reducing revolving credit facility and an $8,525,000 term loan. No
principal installments were made on the term loan during the third quarter
although principal installments totaling $750,000 were made during the nine
months ended September 30, 1995. As of September 30, 1995, $7,000,000 was
outstanding under the reducing revolving credit facility, providing $1,500,000
of liquidity. However, both the reducing revolving credit and the term loan
mature on December 31, 1995. The General Partner has therefore arranged,
subject to satisfactory documentation, a new $18,000,000 credit facility. No
principal installments are required on the new credit facility prior to
September 30, 1998, after which the then outstanding amount will be payable in
22 consecutive quarterly installments. 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 September 30, 1995 and 1994 were
7.2 percent and 6.1 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 LIBOR interest rates that
exceed 7 percent for three years from the date of the agreement.
Subject to satisfactory documentation of the new credit facility, the
General Partner believes that the Partnership has sufficient sources of capital
from cash on hand and cash generated from operations to service its presently
anticipated needs.
Regulatory Matters
The FCC's rate regulations contain provisions for increasing rates for
added channels, external costs and inflation. The Venture has been able to
increase rates recently under such provisions. Such increases, 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 Venture'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 to enter 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
The results of operations for the Partnership are summarized below:
For the Three Months Ended September 30, 1995
---------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 2,849,877 $ 5,811,133 $ 8,661,010
Operating expenses $ 1,592,217 $ 3,057,922 $ 4,650,139
Management fees and allocated
overhead from General Partner $ 340,357 $ 667,136 $ 1,007,493
Depreciation and amortization $ 1,375,088 $ 2,343,671 $ 3,718,759
----------- ----------- -----------
Operating loss $ (457,785) $ (257,596) $ (715,381)
----------- ----------- -----------
Interest expense $ (314,333) $ (804,780) $(1,119,113)
Consolidated loss before minority interest $ (771,980) $(1,053,442) $(1,825,422)
Minority interest in consolidated loss $ - $ 285,483 $ 285,483
Net loss $ (771,980) $ (767,959) $(1,539,939)
For the Three Months Ended September 30, 1994
---------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- -------------
Revenues $ 2,472,191 $ 5,420,180 $ 7,892,371
Operating expenses $ 1,473,695 $ 3,260,168 $ 4,733,863
Management fees and allocated
overhead from General Partner $ 302,482 $ 652,304 $ 954,786
Depreciation and amortization $ 1,460,361 $ 2,286,349 $ 3,746,710
----------- ----------- ------------
Operating loss $ (764,347) $ (778,641) $ (1,542,988)
----------- ----------- ------------
Interest expense $ (263,272) $ (718,922) $ (982,194)
Consolidated loss before minority interest $(1,024,946) $(1,495,678) $ (2,520,624)
Minority interest in consolidated loss $ - $ 405,329 $ 405,329
Net loss $(1,024,946) $(1,090,349) $ (2,115,295)
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For the Nine Months Ended September 30, 1995
---------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 8,130,888 $17,504,285 $ 25,635,173
Operating expenses $ 4,656,653 $ 9,493,703 $ 14,150,356
Management fees and allocated
overhead from General Partner $ 986,198 $ 2,078,732 $ 3,064,930
Depreciation and amortization $ 4,254,222 $ 6,439,774 $ 10,693,996
----------- ----------- ------------
Operating loss $(1,766,185) $ (507,924) $ (2,274,109)
----------- ----------- ------------
Interest expense $ (902,487) $(2,556,865) $ (3,459,352)
Consolidated loss before minority interest $(2,667,269) $(3,053,483) $ (5,720,752)
Minority interest in consolidated loss $ - $ 827,494 $ 827,494
Net loss $(2,667,269) $(2,225,989) $ (4,893,258)
For the Nine Months Ended September 30, 1994
---------------------------------------------
Partnership Venture
Owned Owned Consolidated
----------- ----------- ------------
Revenues $ 7,356,911 $16,394,101 $ 23,751,012
Operating expenses $ 4,283,615 $ 9,457,369 $ 13,740,984
Management fees and allocated
overhead from General Partner $ 927,915 $ 2,015,471 $ 2,943,386
Depreciation and amortization $ 4,396,259 $ 6,876,719 $ 11,272,978
----------- ----------- ------------
Operating loss $(2,250,878) $(1,955,458) $ (4,206,336)
----------- ----------- ------------
Interest expense $ (675,770) $(1,934,444) $ (2,610,214)
Consolidated loss before minority interest $(2,930,341) $(3,919,281) $ (6,849,622)
Minority interest in consolidated loss $ - $ 1,062,125 $ 1,062,125
Net loss $(2,930,341) $(2,857,156) $ (5,787,497)
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The Venture
The Venture's revenues increased $390,953, or approximately 7 percent,
to $5,811,133 for the three months ended September 30, 1995 from $5,420,180 for
the three months ended September 30, 1994. This increase was due to increases
in the number of basic subscribers, which accounted for approximately 34
percent of the increase; premium subscriptions, which accounted for
approximately 24 percent of the increase; and an increase in basic service rate
adjustments, which accounted for approximately 23 percent of the increase.
Revenues for the nine month periods ended September 30, 1995 and 1994 increased
$1,110,184, or approximately 7 percent, to $17,504,285 in 1995 from $16,394,101
in 1994. This increase was due to increases in the number of basic
subscribers, which accounted for approximately 40 percent of the increase;
premium subscriptions, which accounted for approximately 25 percent of the
increase; and advertising sales revenues, which accounted for approximately 11
percent of the increase. Basic subscribers increased approximately 3 percent
to 47,427 at September 30, 1995 from 45,842 at September 30, 1994. Premium
subscriptions increased approximately 4 percent to 41,660 at September 30, 1995
from 39,934 at September 30, 1994. No other individual factor was significant
to the increase in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture'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 decreased $202,246, or approximately 6 percent, to
$3,057,922 for the three months ended September 30, 1995 from $3,260,168 for
the three months ended September 30, 1994. This decrease was due to decreases
in personnel and marketing related costs, which were partially offset by an
increase in programming fees. For the nine month periods ended September 30,
1995 and 1994, operating expenses increased $36,334, to $9,493,703 at September
30, 1995 from $9,457,369 at September 30, 1994. This increase was due
primarily to increases in programming fees, which were partially offset by
decreases in personnel, plant and marketing related costs. Operating expenses
represented 53 percent and 54 percent of revenue, respectively, for the three
and nine month periods ended September 30, 1995 compared to 57 percent and 60
percent of revenue, respectively, for the three and nine months ended September
30, 1994.
Management fees and allocated overhead from the General Partner
increased $14,832, or approximately 2 percent, to $667,136 for the three months
ended September 30, 1995 from $652,304 for the three months ended September 30,
1994. For the nine month periods ended September 30, 1995 and 1994, management
fees and allocated overhead from the General Partner increased $63,261, or
approximately 3 percent, to $2,078,732 at September 30, 1995 from $2,015,471 at
September 30, 1994. These increases were due to the increases in revenues,
upon which such management fees are based, as well as increases in allocated
expenses from the General Partner.
Depreciation and amortization expense increased $57,322, or
approximately 3 percent, to $2,343,671 for the three months ended September 30,
1995 from $2,286,349 for the three months ended September 30, 1994 due to
capital additions during 1995. For the nine month periods ended September 30,
1995 and 1994, depreciation and amortization expense decreased $436,945, or
approximately 6 percent, to $6,439,774 at September 30, 1995 from $6,876,719 at
September 30, 1994. This decrease was due to the maturation of the Venture's
intangible asset base.
In the Broward County System, operating loss decreased $521,045, or
approximately 67 percent, to $257,596 for the three month period ended
September 30, 1995 from $778,641 for the comparable period in 1994. This
operating loss decrease was due to the increase in revenues and the decrease in
operating expenses exceeding the increases in depreciation and amortization
expense and management fees and allocated overhead from the General Partner.
For the nine months ended September 30, 1995 and 1994, operating loss decreased
$1,447,534, or approximately 74 percent, to $507,924 at September 30, 1995 from
$1,955,458 at September 30, 1994. This decrease in operating loss was due to
the increase in revenues and decrease in depreciation and amortization expense
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner.
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 $578,367, or approximately 38
percent, to $2,086,075 for the three months ended September 30, 1995 from
$1,507,708 for the three months ended September 30, 1994. This increase was
due to the increase in revenues and the decrease in operating expenses
exceeding the increase in management fees and allocated overhead from the
General Partner.
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For the nine month periods ended September 30, 1995 and 1994, operating income
before depreciation and amortization increased $1,010,589, or approximately 21
percent, to $5,931,850 at September 30, 1995 from $4,921,261 at September 30,
1994. This increase was due to the increase in revenues exceeding the
increases in operating expenses and management fees and allocated overhead from
the General Partner.
Interest expense increased $85,858, or approximately 12 percent, to
$804,780 for the three months ended September 30, 1995 from $718,922 for the
three months ended September 30, 1994. For the nine month periods ended
September 30, 1995 and 1994 interest expense increased $622,421, or
approximately 32 percent, to $2,556,865 at September 30, 1995 from $1,934,444
at September 30, 1994. These increases were primarily due to higher effective
interest rates and higher outstanding balances on interest bearing obligations.
Net loss of the Venture decreased $442,236, or approximately 30
percent, to $1,053,442 for the three months ended September 30, 1995 from
$1,495,678 for the three months ended September 30, 1994. For the nine month
periods ended September 30, 1995 and 1994, net loss decreased $865,798, or
approximately 22 percent, to $3,053,483 at September 30, 1995 from $3,919,281
at September 30, 1994. These losses are the result of the factors discussed
above and are expected to continue in the future.
The Partnership
Revenues in the Partnership's wholly owned cable television systems
increased $377,686, or approximately 15 percent, to $2,849,877 for the three
months ended September 30, 1995 from $2,472,191 for the three months ended
September 30, 1994. For the nine months ended September 30, 1995 and 1994,
revenues increased $773,977, or approximately 11 percent, to $8,130,888 in 1995
from $7,356,911 in 1994. The increases in revenue were due primarily to
increases in the number of basic subscribers, basic rate adjustments and
advertising revenue. Basic subscribers increased to 25,651 at September 30,
1995 from 24,163 at September 30, 1994, an increase of 1,488, or approximately
6 percent. The increases in the number of basic subscribers accounted for
approximately 26 percent and 38 percent, respectively, of the increase in
revenues for the three and nine month periods ended September 30, 1995. Basic
rate adjustments accounted for approximately 29 percent and 27 percent,
respectively, of the increase in revenues for the three and nine month periods
ended September 30, 1995. Advertising revenue accounted for approximately 25
percent and 15 percent of the increase in revenues for the three and nine month
periods ended September 30 1995. No other individual factor was significant to
the increase.
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 for the three month periods increased $118,522, or
approximately 8 percent, to $1,592,217 at September 30, 1995 from $1,473,695 at
September 30, 1994. For the nine month periods ended September 30, 1995 and
1994, operating expenses increased $373,038, or approximately 9 percent, to
$4,656,653 at September 30, 1995 from $4,283,615 at September 30, 1994.
Operating expenses represented 56 percent and 57 percent of revenue for the
three and nine month periods ended September 30, 1995, respectively, compared
to 59 percent and 58 percent, respectively, in 1994. These increases were due
to increases in programming fees and advertising sales expenses. No other
individual factor significantly affected the increase in operating expenses.
Management fees and allocated overhead from the General Partner
increased $37,875, or approximately 13 percent, to $340,357 at September 30,
1995 from $302,482 at September 30, 1994. For the nine month periods ended
September 30, 1995 and 1994, management fees and allocated overhead from the
General Partner increased $58,283, or approximately 6 percent, to $986,198 at
September 30, 1995 from $927,915 at September 30, 1994. These increases were
due to the increase in revenues, upon which such management fees are based, as
well as increases in allocated expenses from the General Partner.
Depreciation and amortization expense for the three month periods
decreased $85,273, or approximately 6 percent, to $1,375,088 at September 30,
1995 from $1,460,361 at September 30, 1994. For the nine month periods ended
September 30, 1995 and 1994, depreciation and amortization expense decreased
$142,037, or approximately 3 percent, to $4,254,222 at September 30, 1995 from
$4,396,259 at September 30, 1994. These decreases were attributable to the
maturation of the Partnership's tangible asset base.
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14
Operating loss decreased $306,562, or approximately 40 percent, to
$457,785 at September 30, 1995 from $764,347 for the three months ended
September 30, 1994. For the nine month periods ended September 30, 1995 and
1994, operating loss decreased $484,693, or approximately 22 percent, to
$1,766,185 at September 30, 1995 from $2,250,878 at September 30, 1994. These
decreases were due to the increase in revenues and the decrease in depreciation
and amortization expense 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 $221,289, or approximately 32
percent, to $917,303 for the three months ended 1995 from $696,014 for the
three months ended September 30, 1994. For the nine month periods ended
September 30, 1995 and 1994, operating income before depreciation and
amortization increased $342,656, or approximately 16 percent, to $2,488,037 in
1995 from $2,145,381 in 1994. These increases were due to the increase in
revenues exceeding the increases in operating expenses and management fees and
allocated overhead from the General Partner.
Interest expense increased $51,061, or approximately 19 percent, to
$314,333 for three months ended September 30, 1995 from $263,272 for the three
months ended September 30, 1994. For the nine month periods ended September
30, 1995 and 1994, interest expense increased $226,717, or approximately 34
percent, to $902,487 at September 30, 1995 from $675,770 at September 30, 1994.
These increases were primarily due to higher effective interest rates on
interest bearing obligations.
Net loss decreased $252,966, or approximately 25 percent, to $771,980
for the three months ended September 30, 1995 from $1,024,946 for the three
months ended September 30, 1994. For the nine month periods ended September
30, 1995 and 1994, net loss decreased $263,072, or approximately 9 percent, to
$2,667,269 at September 30, 1995 from $2,930,341 at September 30, 1994. These
losses are the result of the factors discussed above and are expected to
continue in the future.
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15
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
15
16
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, 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, 1995
16
17
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------ ------------------- ----
27 Financial Data Schedule