1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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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 1-9332
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Falcon Cable Systems Company, a California limited partnership
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
California 95-4108170
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
10900 Wilshire Boulevard, 15th Floor, Los Angeles, CA 90024
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (310) 824-9990
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FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT.
Indicate by check (X) 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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PART I - FINANCIAL INFORMATION
FALCON CABLE SYSTEMS COMPANY
CONDENSED BALANCE SHEETS
============================
December 31, June 30,
1994* 1995
-------- --------
(unaudited)
(Dollars in Thousands)
ASSETS:
Cash and cash equivalents $ 2,987 $ 1,176
Receivables, less allowance of $73,000
and $56,600 for possible losses 2,287 804
Prepaid expenses and other 1,390 1,436
Cable materials, equipment and supplies 1,206 1,203
Available-for-sale securities 7,110 -
Property, plant and equipment, less accumulated depreciation
and amortization of $59,158,000 and $65,028,400 65,460 66,096
Franchise cost and goodwill, less
accumulated amortization of
$27,114,500 and $31,832,600 36,096 33,805
Customer lists and other intangible
costs, less accumulated amortization
of $8,356,800 and $6,030,600 2,890 1,649
Deferred loan costs, less accumulated
amortization of $221,300 in 1995 - 1,316
-------- --------
$119,426 $107,485
======== ========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES:
Notes payable $170,439 $165,919
Accounts payable 2,487 1,384
Accrued expenses 9,463 10,030
Payable to general partner 3,003 3,446
Customer deposits and prepayments 684 717
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TOTAL LIABILITIES 186,076 181,496
-------- --------
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY (DEFICIT)
General partner 42 37
Limited partners (73,600) (74,048)
Unrealized gain on available-for-sale securities 6,908 -
-------- --------
TOTAL PARTNERS' DEFICIT (66,650) (74,011)
-------- --------
$119,426 $107,485
======== ========
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements
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FALCON CABLE SYSTEMS COMPANY
CONDENSED STATEMENTS OF OPERATIONS
============================
Unaudited
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Three months ended
June 30,
-------------------------
1994 1995
---------- ----------
(Dollars in thousands except
per unit information)
REVENUES $ 13,434 $ 13,178
---------- ----------
OPERATING EXPENSES:
Service costs 3,763 4,141
General and administrative expenses 2,102 1,941
General Partner management fees
and reimbursed expenses 1,205 1,160
Depreciation and amortization 4,260 4,728
---------- ----------
11,330 11,970
---------- ----------
Operating income 2,104 1,208
INTEREST EXPENSE, NET (3,625) (4,087)
OTHER EXPENSE, NET (53) (44)
---------- ----------
NET LOSS $ (1,574) $ (2,923)
========== ==========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (0.25) $ (0.45)
========== ==========
AVERAGE LIMITED PARTNERSHIP UNITS
OUTSTANDING DURING PERIOD 6,398,913 6,398,913
========== ==========
See accompanying notes to condensed financial statements.
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FALCON CABLE SYSTEMS COMPANY
CONDENSED STATEMENTS OF OPERATIONS
============================
Unaudited
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Six months ended
June 30,
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1994 1995
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(Dollars in thousands except
per unit information)
REVENUES $ 26,774 $ 26,148
---------- ----------
OPERATING EXPENSES:
Services costs 7,698 8,167
General and administrative expenses 4,096 3,689
General Partner management fees
and reimbursed expenses 2,400 2,288
Depreciation and amortization 8,819 9,252
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23,013 23,396
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Operating income 3,761 2,752
INTEREST EXPENSE, NET (6,824) (8,168)
OTHER INCOME (EXPENSE), NET (142) 7,458
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NET INCOME (LOSS) $ (3,205) $ 2,042
========== ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (0.50) $ 0.32
========== ==========
AVERAGE LIMITED PARTNERSHIP UNITS
OUTSTANDING DURING PERIOD 6,398,913 6,398,913
========== ==========
See accompanying notes to condensed financial statements.
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FALCON CABLE SYSTEMS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
============================
Unaudited
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Six months ended
June 30,
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1994 1995
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(Dollars in Thousands)
Net cash provided by operating activities $ 5,912 $ 4,493
------- -------
Cash flow from investing activities:
Capital expenditures (3,503) (6,703)
Other intangibles (184) (299)
Sale of available-for-sale securities -- 7,764
Acquisitions of cable television systems (1,464) --
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Net cash provided (used) in investing activities (5,151) 762
------- -------
Cash flow from financing activities:
Borrowings 5,875 5,215
Repayment of debt (7,150) (9,786)
Distributions to partners -- (2,495)
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Net cash used by financing activities (1,275) (7,066)
------- -------
Decrease in cash (514) (1,811)
Cash at beginning of period 1,186 2,987
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Cash at end of period $ 672 $ 1,176
======= =======
See accompanying notes to condensed financial statements.
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FALCON CABLE SYSTEMS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
NOTE 1 - INTERIM FINANCIAL STATEMENTS
The interim condensed financial statements for the three and six months
ended June 30, 1995 and 1994 are unaudited. It is suggested that these
condensed interim financial statements be read in conjunction with the audited
financial statements and notes thereto included in the Partnership's latest
Annual Report on Form 10-K. In the opinion of management, such statements
reflect all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of such periods. The results
of operations for the three and six months ended June 30, 1995 are not
necessarily indicative of the results for the entire year.
NOTE 2 - SALE OF AVAILABLE-FOR-SALE SECURITIES
On February 10, 1995, the Partnership received net proceeds of
approximately $7,764,000 in connection with the closing of the tender offer to
acquired QVC by Liberty Media Corporation and Comcast Corporation for $46.00
per share. This resulted in a gain of $7,562,000, which is included in other
income. A special, one-time distribution to Unitholders of approximately
$2,495,000 related to this transaction was declared on March 14, 1995. The
remaining proceeds of $5,269,000 were used to temporarily pay down bank debt.
NOTE 3 - EARNINGS PER EQUIVALENT UNIT
Earnings per limited partnership unit are based on the average number of
limited partnership units outstanding during the periods presented. For this
purpose, earnings are allocated 99% to the limited partners and 1% to the
General Partner.
NOTE 4 - RECLASSIFICATIONS
Certain 1994 amounts have been reclassified to conform to the 1995
presentation.
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FALCON CABLE SYSTEMS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
On February 22, 1994, the Federal Communications Commission (the "FCC")
announced significant amendments to its regulations implementing certain
provisions of the 1992 Cable Act, including those relating to rate regulation
which had previously become effective on September 1, 1993. The amended rate
regulations became effective during the quarter ended September 30, 1994.
Additional amendments were adopted November 10, 1994 and became effective
January 1, 1995. Compliance with these rules has had, and will most likely
continue to have, a significant negative impact on the Partnership's revenues
and cash flow. Based on certain recent FCC decisions that have been released,
however, the Partnership's management presently believes that revenues for the
first six months of 1995 fully reflect the impact of the 1992 Cable Act.
Nonetheless, management expects that certain costs, including programming
costs, will continue to rise at a rate in excess of that which the Partnership
will be permitted to pass on to its customers. Furthermore, given events since
the enactment of the 1992 Cable Act, there can be no assurance as to what, if
any, future action may be taken by Congress, the FCC or any other regulatory
authority or court, or the effect thereof on the Partnership's business.
Specifically, the FCC recently issued a proposal that may allow cable operators
to file abbreviated cost of service filings for system rebuilds and upgrades,
providing for additional rate increases related to significant capital
expenditures. There is also legislation currently being debated in Congress
that could significantly revise the 1992 Cable Act, although there can be no
certainty as to the final provisions of such legislation, or whether it will
become law.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1994 1995 1994 1995
---- ---- ---- ----
Revenues 100% 100% 100% 100%
Cost of services and expenses:
Service costs 28 31 29 31
Operating, general and
administrative expenses 16 15 15 14
General Partner management fees
and reimbursed expenses 9 9 9 9
Depreciation and amortization 31 36 33 35
---- ---- ---- ----
84% 91% 86% 89%
---- ---- ---- ----
Operating income 16% 9% 14% 11%
Interest expense, net (28) (31) (25) (32)
Other income (expense) - - (1) 29%
---- ---- ---- ----
(28)% (31)% (26)% (3)%
---- ---- ---- ----
Net Loss 12% 22% 12% 8%
==== ==== ==== ====
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FALCON CABLE SYSTEMS COMPANY
RESULTS OF OPERATIONS
The Partnership's revenues decreased from $13.4 million to $13.2
million, or by 1.9%, and from $26.8 million to $26.1 million, or by 2.3%,
during the three and six months ended June 30, 1995 compared to the
corresponding periods in 1994. Of the $256,000 net decrease in revenues for the
three months ended June 30, 1995 as compared to 1994, approximately $675,000
was estimated to be due to decreases in rates implemented in September 1994 to
comply with the 1992 Cable Act. This decrease was partially offset by
approximately $236,000 related to increases in the number of subscriptions for
services, approximately $78,000 in other revenue producing items, approximately
$64,000 related to an increase in regulated service rates implemented in April
1995 and approximately $41,000 related to an increase in premium service rates
implemented during the fourth quarter of 1994. Of the $626,000 net decrease in
revenues for the six months ended June 30, 1995 as compared to 1994,
approximately $1,432,000 was estimated to be due to decreases in rates
implemented in September 1994 to comply with the 1992 Cable Act. This decrease
was partially offset by approximately $412,000 related to increases in the
number of subscriptions for services, approximately $188,000 in other revenue
producing items, approximately $64,000 related to an increase in regulated
service rates implemented in April 1995, approximately $83,000 related to an
increase in premium service rates implemented during the fourth quarter of 1994
and approximately $59,000 related to a system acquired in March 1994. As of
June 30, 1995, the Partnership had approximately 135,250 homes subscribing to
cable service and 51,703 premium service units.
Service costs increased from $3.8 million to $4.1 million, or by 10.1%,
and from $7.7 million to $8.2 million, or by 6.1%, during the three and six
months ended June 30, 1995 compared to the corresponding periods for 1994.
Service costs represent costs directly attributable to providing cable services
to customer. Of the $378,000 increase in service costs for the three months
ended June 30, 1995 as compared to 1994, $245,000 related to increases in
programming fees (including primary satellite fees), $194,000 related to
personnel costs, and $100,000 related to other service costs. The increase in
programming fees was due to a combination of higher rates charged by program
suppliers and expanded programming usage relating to channel line-up
restructurings and retransmission consent arrangements implemented to comply
with the 1992 Cable Act. These increases were partially offset by decreases of
$61,000 in property taxes and $100,000 in franchise and copyright fees. Of the
$469,000 increase in service costs for the six months ended June 30, 1995 as
compared to 1994, $346,000 related to increases in programming fees (including
primary satellite fees), $185,000 related to personnel costs, and $203,000
related to other service costs. Personnel costs increased primarily due to cost
of living increases and to lower capitalized labor due to a decrease in
construction activity in 1995. These increases were partially offset by
decreases of $92,000 in property taxes and $173,000 in franchise and copyright
fees.
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FALCON CABLE SYSTEMS COMPANY
RESULTS OF OPERATIONS (cont.)
General and administrative expenses decreased from $2.1 million to $1.9
million, or by 7.7%, and $4.1 million to $3.7 million, or by 9.9%, during the
three and six months ended June 30, 1995 compared to the corresponding periods
in 1994. Of the $161,000 decrease for the three months ended June 30, 1995 as
compared to 1994, $137,000 related to refunds and reductions of insurance costs
primarily due to adjustments to workers compensation premiums, $39,000 related
to reductions in bad debt expense, $87,000 related to decreased marketing costs
and $23,000 related to decreases in other general and administrative expenses.
These decreases were partially offset by an increase of approximately $125,000
in personnel costs as described above. Of the $407,000 decrease for the six
months ended June 30, 1995 as compared to 1994, $255,000 related to refunds and
reductions of insurance costs primarily due to adjustments to workers
compensation premiums, $116,000 related to reductions in bad debt expense,
$145,000 related to decreased marketing costs and $57,000 related to decreases
in other general and administrative expenses. These decreases were partially
offset by an increase of approximately $166,000 in personnel costs.
General partner management fees and reimbursed expenses were
approximately $1.2 million during both the 1994 and the 1995 three month
periods ended June 30. General partner management fees and reimbursed expenses
decreased from $2.4 million to $2.3 million, or by 3.7%, during the six months
ended June 30, 1995 compared to the corresponding period for 1994. Of the
$112,000 decrease, $81,000 related to decreases in reimbursable operating
expenses of the general partner and $31,000 related to decreases in management
fees based on the Partnership's revenue. See "Liquidity and Capital Resources."
Depreciation and amortization expense increased from $4.3 million to
$4.7 million, or by 11.0%, and from $8.8 million to $9.3 million, or by 4.9%,
for the three and six months ended June 30, 1995 compared to the corresponding
period for 1994. The $468,000 and $433,000 increases related primarily to a
reduction of the estimated useful life of existing plant being replaced and to
depreciation associated with the assets purchased to replace them.
Operating income decreased from $2.1 million to $1.2 million, or by
42.6, and from $3.8 million to $2.8 million, or by 26.8%, during the three and
six months ended June 30, 1995 compared to the corresponding period in 1994. Of
the $896,000 decrease for the three months ended June 30, 1995 as compared to
1994, approximately $256,000 was due to decreased revenues, $378,000 was due to
increases in service related costs, principally programming fees, and $468,000
related to increased depreciation and amortization. These decreases in
operating income were partially offset by decreases of $161,000 in general and
administrative costs and $45,000 in general partner management fees and
reimbursed expenses. Of the $1.0 million decrease for the six months ended June
30, 1995 as compared to 1994, approximately $626,000 was due to decreased
revenues, $469,000 was due to increases in service related costs, principally
programming fees, and $433,000 was due to increases in depreciation and
amortization. These decreases in operating income were partially offset by
decreases of $407,000 in general and administrative costs and $112,000 in
general partner management fees and reimbursed expenses.
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FALCON CABLE SYSTEMS COMPANY
RESULTS OF OPERATIONS (CONT.)
Interest expense net, including the effects of interest rate hedging
agreements, increased from $6.8 million to $8.2 million, or by 19.7%, during
the six months ended June 30, 1995 compared to the corresponding period for
1994. Higher average interest rates (9.6% during the six months ended June 30,
1995 compared to 7.9% during the six months ended June 30, 1994) resulted in
higher interest expense of approximately $1.2 million. Lower average borrowings
during 1995 compared to 1994 resulted in a decrease of approximately
$124,000. An increase of approximately $268,000 primarily relates to
amortization of deferred loan costs and fees paid for interest rate hedging
agreements. The hedging agreements resulted in additional interest expense of
approximately $316,000 during the six months ended June 30, 1995 compared to
additional interest expense of $1.8 million during the six months ended June
30, 1994.
Other income increased approximately $7.6 million during the six months
ended June 30, 1995 compared to the corresponding period for 1994 due to a
non-recurring gain from the sale of marketable securities as discussed in Note
2 to Condensed Financial Statements. Other expense decreased from approximately
$53,000 to $44,000, or by 17%, and from $142,000 to $104,000, or by 26.8%,
during the three and six months ended June 30, 1995 compared to the
corresponding period for 1994 primarily due to reductions in the cost of
generating tax basis accounting information for the Unitholders.
Due to the factors described above, the Partnership's net loss increased
from $1.6 million to $2.9 million, or by 85.7%, for the three months ended June
30, 1995 compared to the corresponding period for 1994. The Partnership's net
income increased from a $3.2 million loss for the six months ended June 30,
1994 to $2.0 million of income, or by 163.7%, for the six months ended June 30,
1995.
LIQUIDITY AND CAPITAL RESOURCES
As previously stated, the FCC's amended rate regulation rules were
implemented during the quarter ended September 30, 1994. Compliance with these
rules has had, and most likely will continue to have, a significant negative
impact on the Partnership's revenues and cash flow.
The Partnership's primary need for capital has been to finance plant
extensions, rebuilds and upgrades and to add addressable converters to certain
cable systems. The Partnership spent $8.3 million during 1994 and $6.7 million
during 1995 on non-acquisition capital expenditures, and also spent
approximately $1.7 million to acquire a cable system in Oregon in March 1994.
The Partnership had planned to spend approximately $19 million during 1994 for
upgrades of certain of its regions, line extensions and new equipment. As
previously discussed, the Partnership postponed a number of rebuild and upgrade
projects that were planned for 1993 and 1994 because of the
uncertainty related to
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FALCON CABLE SYSTEMS COMPANY
LIQUIDITY AND CAPITAL RESOURCES (cont.)
implementation of the 1992 Cable Act and the impact thereof on the
Partnership's business and access to capital. The Partnership's access to
capital remains severely restrained due not only to the adverse effect of
re-regulation but also because of the limited remaining life of the
Partnership. As a result, even after giving effect to certain upgrades and
rebuilds expected to be completed in 1995, the Partnership's systems will be
significantly less technically advanced than had been expected prior to the
implementation of re-regulation. The Partnership believes that the delays in
upgrading many of its systems will, under present market conditions, most
likely have an adverse effect on the value of those systems compared to systems
that have been rebuilt to a higher technical standard.
The Partnership's management currently intends to spend approximately
$18.4 million in 1995 and $7.5 million in 1996 for capital expenditures,
including amounts required to comply with FCC technical standards. However, the
Partnership's ability to fund these capital expenditures will continue to be
dependent on its ability to remain in compliance with the financial covenants
contained in the amended Bank Credit Agreement, of which there can be no
assurance.
At June 30, 1995, the amount outstanding under the Bank Credit Agreement
was $160.2 million and the Partnership had available to it additional
borrowings thereunder of $6.8 million. The maturity date of the Bank Credit
Agreement is December 31, 1996 to coincide with the presently scheduled
termination of the Partnership. As of June 30, 1995, borrowings under the Bank
Credit Agreement bore interest at an average rate of 9.5% (including the effect
of interest rate hedging transactions). As amended, borrowings under the Bank
Credit Agreement bear interest at 1.375% over prime, 2.375% over LIBOR, or 2.5%
over the CD rate. The Partnership has entered into interest rate hedging
agreements aggregating a net notional amount at June 30, 1995 of $135 million.
The agreements serve as a hedge against interest rate fluctuations associated
with the Partnership's variable rate debt. These agreements expire through
February 3, 1997.
The Bank Credit Agreement also places certain restrictions on the annual
amount of management fees and reimbursed partnership expenses that the
Partnership may pay in cash, with any excess deferred. During the six months
ended June 30, 1995, the Partnership deferred additional payments of
approximately $444,000 of fees and reimbursed expenses charged by its General
Partner in order to maintain compliance with certain cash flow covenants. Total
management fees and reimbursed expenses deferred as of June 30, 1995 amounted
to approximately $3.4 million. The Partnership will continue to defer a portion
of such fees and expenses during 1995 and 1996. The Partnership will be
obligated to pay these deferred management fees and reimbursed expenses as soon
as the restrictions imposed by the Bank Credit Agreement are removed.
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FALCON CABLE SYSTEMS COMPANY
LIQUIDITY AND CAPITAL RESOURCES (cont.)
The Bank Credit Agreement also contains various restrictions relating
to, among other things, mergers and acquisitions, investments, capital
expenditures, a change in control and the incurrence of additional
indebtedness, and also requires compliance with certain financial covenants.
The Partnership believes that it was in compliance with all such requirements
as of June 30, 1995.
On February 10, 1995, the Partnership received net proceeds of
approximately $7.8 million in connection with the closing of the tender offer
to acquire QVC by Liberty Media Corporation and Comcast Corporation for $46.00
per share. The net proceeds of approximately $5.3 million (after a $2.5 million
special distribution paid to Unitholders in March 1995) were used to
temporarily pay down bank debt.
The Partnership Agreement, as amended on January 23, 1990, provides
that without the approval of a majority of interests of limited partners, the
Partnership may not incur any borrowings unless the amount of such borrowings
together with all outstanding borrowings (less cash and cash equivalents) does
not exceed 65% of the greater of the aggregate cost or current fair market
value of the Partnership's assets as determined by the General Partner. The
Partnership may encounter difficulty complying with this provision depending
upon the ultimate impact of the 1992 Cable Act on the fair market value of
cable properties.
The Partnership Agreement provides that the General Partner shall use
its best efforts to cause the Partnership to sell all of the Partnership's cable
systems between December 31, 1991 and December 31, 1996, the "termination date"
of the Partnership. The Partnership has initiated preliminary discussions with
its financial advisors to identify appropriate methods for the sale of its
systems or other restructuring of the Partnership. For additional information on
the terms of the Partnership Agreement including certain purchase rights of the
General Partner, see "Item 1 - Business - Introduction" and "Item 13 - Certain
Relationships and Related Transactions - Conflicts of Interest" in the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1994.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Cash provided by operating activities decreased from $5.9 million to
$4.5 million for the six months ended June 30, 1995 compared to the
corresponding period of 1994. Of the $1.4 million decrease, approximately
$885,000 related primarily to fees paid in connection with an amendment to the
Bank Credit Agreement, and $630,000 primarily related to a decrease in accounts
payable. These decreases were partially offset by $502,000 related to proceeds
from an incentive fee received from the Home Shopping Network ("HSN"). Although
advance payment was received during the quarter ended March 31, 1995,
recognition of the revenue is being deferred over ten years in accordance with
the HSN contract.
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FALCON CABLE SYSTEMS COMPANY
LIQUIDITY AND CAPITAL RESOURCES (CONCLUDED)
Cash from investing activities increased from a use of cash of $5.1
million for the six months ended June 30, 1994 to cash provided of $762,000 for
the six months ended June 30, 1995, or a change of $5.9 million. The increase
was due primarily to approximately $7.8 million of net proceeds received by the
Partnership from the tender offer to acquire QVC by Liberty Media
Corporation and Comcast Corporation described above. This was partially offset
by an increase of approximately $3.3 million in capital expenditures and other
intangibles primarily related to system rebuilds. In addition, the 1994 period
included $1.5 million to acquire a cable system. There were no acquisitions in
1995.
Cash used by financing activities increased by approximately $5.8
million during the six months ended June 30, 1995 compared to the corresponding
period for 1994 and was due to the net increase in repayments of debt of
approximately $3.3 million and to $2.5 million in distributions to Partners as
mentioned above.
Operating income before depreciation and amortization (EBITDA) as a
percentage of revenues decreased from 47.4% to 45% and from 47% to 45.9% during
the three and six months ended June 30, 1995 compared to the corresponding
period for 1994. The decrease was primarily caused by a decrease in revenue.
EBITDA decreased from $6.4 million to $5.9 million, or by 6.7%, and from $12.6
million to $12 million, or by 4.6% for the three and six months ended June 30,
1995 compared to the corresponding period for 1994.
INFLATION
Certain of the Partnership's expenses, such as those for wages and
benefits, equipment repair and replacement and billing and marketing generally
increase with inflation. The Partnership does not believe that its financial
results have been, or will be, adversely affected by inflation, provided that
it is able to increase its service rates periodically, of which there can be no
assurance due to the re-regulation of rates charged for certain cable services.
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FALCON CABLE SYSTEMS COMPANY
PART II. OTHER INFORMATION
ITEMS 1-5. NOT APPLICABLE
ITEM 6. Exhibits and Reports on Form 8-K
(a) None
(b) No reports on Form 8-K were filed during the
quarter for which this report is filed.
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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.
FALCON CABLE SYSTEMS COMPANY
a CALIFORNIA LIMITED PARTNERSHIP
--------------------------------
(Registrant)
By: Falcon Cable Investors Group
Managing General Partner
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc.
General Partner
Date: August 9, 1995 By: /s/ Michael K. Menerey
-------------------------------
Michael K. Menerey, Secretary
and Chief Financial Officer