SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 1997
FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
(Exact names of Registrants as specified in their charters)
Delaware 333-9535 84-1316775
Delaware 333-9535-01 84-1353734
(States or other jurisdiction (Commission File Nos.) (IRS Employer
of incorporation or organization) Identification Numbers)
1777 South Harrison Street,
Suite P-200, Denver, Colorado 80210
(Address of principal executive offices) (Zip Code)
(303) 757-1588
(Registrants' telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On November 7, 1997, the following press release was issued annoucing
FrontierVision Operating Partners, L.P.'s preliminary earnings information and
results of operations for the quarterly period ended September 30, 1997:
FOR IMMEDIATE RELEASE
FRONTIERVISION OPERATING PARTNERS, LP ANNOUNCES PRELIMINARY
OPERATING RESULTS FOR QUARTER ENDED SEPTEMBER 30, 1997
DENVER, CO (BUSINESSWIRE) - November 7, 1997 - FrontierVision Operating
Partners, L.P. today released preliminary financial results for the three months
and nine months ended September 30, 1997.
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FrontierVision Operating Partners, L.P. ( the "Company" or "FVOP") generated
revenue in the amount of $36.7 million for the three months ended September 30,
1997. Operating and corporate expenses totaled $19.4 million and EBITDA $17.3
million for the three months ended September 30, 1997, respectively. Increases
in revenue, operating and corporate expenses and EBITDA as compared with the
three months ended June 30, 1997 are primarily attributable to the acquisition
of systems serving, in the aggregate, approximately 12,100 basic subscribers
from affiliates of Phoenix Cable on August 29, 1997 and from SRW's Blue Ridge
Cable Systems on September 3, 1997. On a pro forma basis, adjusted to include
the operations of the systems acquired during the quarter, the Company's revenue
increased approximately 2.1% from the quarter ended June 30, 1997 and 4.6 % from
the quarter ended March 31, 1997. On this "same system" basis, EBITDA for the
three months ended September 30, 1997 increased approximately 5.4% as compared
with the three months ended June 30, 1997 and 9.8% compared with the three
months ended March 31, 1997.
Average monthly revenue per subscriber improved from $30.99 for the three months
ending June 30, 1997 to $31.29 for the three months ended September 30, 1997
primarily as a result of the roll-out of new premium programming services and
increased basic and tiered basic service rates in certain communities in each of
the Company's operating regions. As a percentage of revenue, the Company
incurred operating expenses and corporate expenses of approximately 49.9% and
2.9%, respectively, for the three months ended September 30, 1997 compared with
approximately 51.8% and 3.1%, respectively, for the three months ended June 30,
1997. The Company generated system cash flow margins of 50.1% for the three
months ended September 30, 1997 and 48.2% for the three months ended June 30,
1997; EBITDA margins were 47.2% for the three months ended September 30, 1997
and 45.1% for the three months ended June 30, 1997. The improvement in margins
is primarily attributable to the effects of initial customer service office
consolidation, the continuing elimination of duplicative functions in the
Company's currently owned systems and the realization of efficiencies in
corporate support functions
On September 19, 1997, the Company received equity contributions of
approximately $142.3 million from its partners in connection with FrontierVision
Holdings, L.P.'s ("Holdings") issuance of $237.7 million aggregate principal
amount at maturity of 11 7/8% Senior Discount Notes due 2007 (the "Discount
Notes"). Holdings is a newly organized holding company and is the new general
partner of FVOP. Holdings acquired, directly or indirectly, all of the
outstanding partnership interests in FVOP immediately prior to the issuance of
the Discount Notes.
On October 31, 1997, the Company consummated the acquisition of approximately
53,000 subscribers from affiliates of Cablevision Systems, Inc. located in
Bangor and Lewiston, Maine and surrounding communities for approximately $78.2
million. The Company is now the largest MSO in the state of Maine.
After adjusting EBITDA to include the results of operations of the cable systems
acquired during the third quarter, the Company expects its overall ratio of
total debt to EBITDA to be approximately 5.21 times and its interest coverage
ratio to be approximately 1.69 times.
<PAGE>
FRONTIERVISION OPERATING PARTNERS,L.P. ANNOUNCES
PRELIMINARY THIRD QUARTER 1997 RESULTS
Cont.
Summary financial data for the three months ended June 30, 1997 and September
30, 1997 and statistical and technical data as of September 30, 1997 for the
Company's currently owned cable systems follows as Exhibit A. The Company will
not hold a conference call to discuss the preliminary operating results and
currently expects to file its quarterly report on Form 10-Q during the second
week of November.
FrontierVision Operating Partners, LP is currently one of the 25 largest
multiple cable system operators in the United States. As of September 30, 1997,
FrontierVision's cable television systems passed approximately 579,500 homes in
thirteen states and served approximately 401,300 customers.
INVESTOR CONTACT: James W. McHose, Vice President and Treasurer (303) 757-1588
Email: [email protected]
<PAGE>
EXHIBIT A
Combined Systems Summary Financial and Operating Data
<TABLE>
------------------------------
FVOP
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For the Three For the Three
Months Ended Months Ended
September 30, June 30, 1997
1997
In thousands except ratios and
operating statistical data
STATEMENT OF OPERATIONS DATA:
<S> <C> <C>
Revenue $ 36,750 $ 34,081
Operating expenses 18,332 17,679
Corporate administrative expenses 1,071 1,048
Depreciation and amortization 15,899 15,132
Pre-acquisition expenses -- --
-------- --------
Operating income/(loss) 1,448 222
Interest expense, net (1) (10,988) (10,824)
Other income/(expenses) (7) 5
-------- --------
Net income/(loss) $ (9,547) $(10,597)
======== ========
FINANCIAL RATIOS AND OTHER DATA:
EBITDA (2) 17,347 15,354
EBITDA margin 47.2% 45.1%
Total debt to EBITDA (3) 5.21 6.45
EBITDA to interest expense (4) 1.69 1.65
Average monthly revenue per basic subscriber (5) $ 31.29 $ 30.99
</TABLE>
(1) Interest expense of $10,988, and $10,824 is net of interest income of $236
and $109.
(2) EBITDA is defined as net income before interest, taxes, depreciation and
amortization.
(3) For purposes of this computation, EBITDA is annualized for the quarter
ended, and certain pro forma adjustments are made to include the
pre-acquisition results of operations for those systems purchased by the
Company during the quarter. Total debt is adjusted to exclude the
subordinated note to UVC.
(4) For purposes of this computation, EBITDA is annualized for the quarter
ended, and certain pro forma adjustments are made to include the
pre-acquisition results of operations for those systems purchased by the
Company during the quarter. Interest expense is annualized for the quarter
ended, and adjusted for interest expense on the subordinated note to UVC.
(5) Average monthly revenue per basic subscriber equals revenue for the last
month of the quarter divided by the average number of basic subscribers for
such period.
Combined Systems Statistical Data as of September 30, 1997
<TABLE>
Ohio Kentucky New England Southeast Existing
Systems Systems Systems Systems Systems
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<S> <C> <C> <C> <C> <C>
Homes passed 212,000 169,600 96,400 101,500 579,500
Basic subscribers 146,200 124,700 68,900 61,500 401,300
Basic penetration 69.0% 73.5% 71.5% 60.6% 69.2%
Premium units 69,000 50,300 27,000 26,600 172,900
Premium penetration 47.2% 40.3% 39.2% 43.3% 43.1%
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
FRONTIERVISION OPERATING PARTNERS, L.P.
By: FrontierVision Holdings, L.P., its general partner,
By: FrontierVision Partners, L.P., its general partner,
By: FVP GP, L.P., its general partner
By: FrontierVision Inc., its general partner
By: /s/ JAMES W. MCHOSE
--------------------
James W. McHose
Vice President and Treasurer
Date: November 10, 1997 By: /s/ JAMES W. MCHOSE
-------------------
James W. McHose
Vice President and Treasurer
FRONTIERVISION CAPITAL CORP.
Date: November 10, 1997 By: /s/ JAMES W. MCHOSE
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James W. McHose
Vice President and Treasurer
