SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): September 30, 1996
Shenandoah Telecommunications Company
(Exact name of registrant as specified in charter)
Virginia 0-9881 54-1162807
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
124 South Main Street, Edinburg, Virginia 22824
(Address of principal executive offices)
Registrant's telephone number,
including area code: (540) 984-4141
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited Statements
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
December 31, 1995
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Audited Statements
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
December 31, 1995
CONTENTS
Page
Number
Independent Auditors' Report 1
Combined Statement of Net Assets Exhibit A 3
Combined Statement of Operations Exhibit B 4
Combined Statement of Changes in Net Assets Exhibit C 5
Combined Statement of Cash Flows Exhibit D 6
Notes to Combined Financial Statements Exhibit E 7
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Audited Statements
The Partners
C4 Media Cable Southeast, Limited Partnership
Lockney, Texas 79241
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying combined statement of net assets
of the combined operations of C4 Media Cable Southeast, Limited
Partnership's ("C4 Media") cable television systems serving 6
communities in Woodstock and New Market, Virginia (collectively
referred to as the "Woodstock and New Market Clusters") as of
December 31, 1995, and the related combined statements of
operations, changes in net assets, and cash flows for the year
then ended. These financial statements are the responsibility of
the Woodstock and New Market Clusters' management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the financial
position of the Woodstock and New Market Clusters at December 31,
1995, and the combined results of its operations and its cash
flows for the year then ended in conformity with generally
accepted accounting principles.
As discussed in Note 7, on February 1, 1996, C4 Media sold
substantially all operating assets (including the Woodstock and
New Market Clusters) to FrontierVision Operating Partners, L.P.
("FVOP"). FVOP has subsequently entered into an agreement to
sell the Woodstock and New Market Clusters to Shenandoah
Telecommunications.
Williams, Rogers, Lewis, & Co., P.C.
Williams, Rogers, Lewis & Co., P.C.
Plainview, Texas
August 30, 1996
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Audited Statements
Exhibit A
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
COMBINED STATEMENT OF NET ASSETS
December 31, 1995
Assets
Accounts Receivable, Net $ 19,321
Prepaid Expense and Other 13,404
Plant and Equipment, Net 1,235,652
Franchises, Net 656,036
Acquisition Costs, Net 174,637
$2,099,050
Liabilities and Net Assets
Bank Overdraft $ 490
Accounts Payable 77,558
Other Current Liabilities 47,886
Accrued Interest Payable 5,156,619
Notes Payable 10,348,525
Total Liabilities 15,631,078
Net Assets (13,532,028)
$ 2,099,050
The accompanying notes are an integral part
of the financial statements.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited Statements
Exhibit B
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
REVENUE
Cable Service $ 1,640,624
EXPENSE
Programming Costs 357,148
Salaries 165,197
Other Operating Expenses 353,883
Management Fees 93,850
Interest 1,411,821
Depreciation 209,434
Amortization 486,396
3,077,729
NET LOSS $(1,437,105)
The accompanying notes are an integral part
of the financial statements.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Audited Statements
Exhibit C
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
COMBINED STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1995
Balance, December 31, 1994 $(12,094,923)
Net Loss, 1995 (1,437,105)
Balance, December 31, 1995 $(13,532,028)
The accompanying notes are an integral part
of the financial statements.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Audited Statements
Exhibit D
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $ (1,437,105)
Adjustments to reconcile net income
to net cash:
Depreciation 209,434
Amortization 486,396
Changes in Assets and Liabilities:
Accounts receivable 4,830
Prepaid expenses and other 7,683
Accounts payable 5,952
Other liabilities (34,338)
Accrued interest 974,373
Net cash provided by operating activities: 217,225
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of plant and equipment (244,994)
Net cash used in investing activities: (244,994)
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in bank overdraft 490
Net cash provided by financing activities: 490
Net Decrease in Cash (27,279)
Cash, Beginning of Period 27,279
Cash, End of Period $ -0-
Supplemental Disclosure for Statement
of Cash Flow:
Cash Paid for Interest $ 437,448
The accompanying notes are an integral part
of the financial statement.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BASIS OF PRESENTATION:
These combined financial statements represent the
combined operations of C4 Media Cable Southeast,
Limited Partnership's ("C4 Media") cable television
systems serving 6 communities in Woodstock and New
Market, Virginia (collectively referred to as the
"Woodstock and New Market Clusters"). C4 Media is a
Delaware limited partnership organized to own and
operate cable television systems in various communities
throughout Virginia, Tennessee, and Georgia. The
Woodstock and New Market Clusters provide basic and pay
cable television service to approximately 5,040
subscribers. On February 1, 1996, C4 Media sold
substantially all operating assets (including the
Woodstock and New Market Clusters) to FrontierVision
Operating Partners, LP ("FVOP"). FVOP has subsequently
entered into an agreement to sell the Woodstock and New
Market Clusters to Shenandoah Telecommunications. See
Note 7.
General partners of C4 Media are C4 Media Cable, Inc.
and C4 Media Cable Employees Investment Corporation.
C4 Media Cable, Inc. also participates as a limited
partner. Under a letter agreement dated May 9, 1992,
Philips Credit Corporation (Philips) exercised its
rights under certain pledge agreements to exercise
voting control over all partnership interest.
Accordingly, effective October 30, 1992, C4 Media
Cable, Inc. was replaced by Southeast Cable, Inc., a
corporate affiliate of Philips, as the managing general
partner. The managing general partner utilized
Cablevision of Texas III, LP ("CAB III") as the
business manager for the Partnership until the assets
sold February 1, 1996. See Note 4.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
ORGANIZATION AND BASIS OF PRESENTATION (Continued):
C4 Media had not previously prepared separate combined
financial statements of the Woodstock and New Market
Clusters and accounting records are not maintained to
facilitate preparation of such financial statements;
therefore, estimates of certain allocable assets,
liabilities, income and expenses were required. The
allocations, where necessary, are based on subscriber
counts or plant miles of the systems. The allocation
methods are believed to be reasonable by management.
The combined financial statements do not necessarily
reflect the results of operations or financial position
that would have existed had the Woodstock and New
Market Clusters been an independent company.
The Woodstock and New Market Clusters recognize cable
service revenue on the accrual basis in the month the
cable service is provided. Payments received in
advance are included in deferred revenue until the
month the service is provided at which time they are
recognized as income. Direct expenses of the Woodstock
and New Market Clusters are recognized as the expense
is incurred. Indirect and administrative expenses are
allocated based on either subscriber counts or plant
miles of the systems.
PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION:
Property, plant, and equipment used in the business are
stated at cost and depreciated over estimated useful
lives generally on the straight line method for
financial statement purposes. Expenditures which
significantly increase asset values or extend useful
lives are capitalized, limited by projected
recoverability of such current year expenditures in the
ordinary course of business from expected future
revenue.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION
(Continued):
The useful lives of property, plant, and equipment for
purposes of computing depreciation range from 5 to 10
years. Accumulated depreciation at December 31, 1995
was $981,184.
FRANCHISES
C4 Media has been granted rights to operate within the
locations of the cable television systems. Such
franchises grant certain operating rights and impose
certain costs and restrictions. C4 Media pays
franchise fees annually on the Woodstock and New Market
Clusters' locations based upon either gross or basic
service revenues. Franchise fee expense for the year
ended December 31, 1995 was $62,968 and is included in
Other Operating Expense.
Such franchises have varying lives and are renewable at
the discretion of the locations' governing boards. For
financial statement purposes, franchise costs acquired
in connection with the purchase of cable systems are
being amortized over the remaining average lives of the
related cable television franchises at the date of
acquisition, which approximates 8 years. Franchise
amortization expense for the year ended December 31,
1995 was $437,356. Accumulated amortization for
franchises at December 31, 1995 was $2,842,814.
ACQUISITION COSTS:
Acquisition costs are those costs incurred related to
the acquisition of new systems. For financial
statement purposes, such costs are amortized by using
the straight-line method over 10 years. Amortization
expense for acquisition costs for the year ended
December 31, 1995 was $40,040. Accumulated
amortization for acquisition costs at December 31, 1995
was $315,761.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
INCOME TAXES:
C4 Media is a partnership and does not pay federal
income tax, but is a pass through entity so that
partners are taxed on their share of partnership
earnings. Net income or loss on the entire partnership
is allocated to each partner under a formula
established in the partnership agreement.
CASH EQUIVALENTS:
For cash flow purposes, cash equivalents are cash and
cash items with a maturity of less than 90 days.
USE OF ESTIMATES:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
NOTE 2: ACCOUNTS RECEIVABLE, NET
Following is a summary of receivables at December 31,
1995:
Trade Accounts $20,126
Less: Allowance for
Doubtful Accounts (805)
$19,321
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 3: NOTES PAYABLE
Following is a summary of notes payable at December 31,
1995:
Senior loan payable to Philips, due September
30, 1990, interest due at prime + 2.25%,
secured by substantially all assets of the
partnership and the pledge of partnership
interests. In addition, the loan is
collateralized by the pledge of all stock
held in C4 Media Cable, Inc. and C4 Media
Cable, Employees Investment Corporation by
the President and Chairman of C4 Media
Cable, Inc. $ 7,599,963
Junior Loan payable to Philips, due September
30, 1990 interest due at 20%, secured by
substantially all assets of the partnership
and the pledge of partnership interests. In
addition, the loan is collateralized by the
pledge of all stock held in C4 Media Cable,
Inc. and C4 Media Cable Employees Investment
Corporation by the President and Chairman of
C4 Media Cable, Inc.
2,748,562
Total $10,348,525
The Philips notes contain performance covenants
concerning homes passed, subscriber levels, miles of
plant, etc., some of which C4 Media had violated as of
December 31, 1995. Philips has not waived compliance
with these provisions. All notes payable and accrued
interest to Philips were due September 30, 1990.
Philips has not extended the due date of the notes and
has the right to demand payment at any time. See Note
7.
The fair market value of notes payable is estimated at
$2.7 million based on the amount applied to the notes
at the time of sale.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 4: RELATED PARTY TRANSACTIONS
Effective October 30, 1992, C4 Media Cable, Inc. was
replaced by Southeast Cable, Inc. as the managing
general partner. The managing partner entered into a
management agreement with CAB III that provides for
fixed fees and the reimbursement of direct expenses
incurred on behalf of C4 Media. Management fees paid
by the Woodstock and New Market Clusters under this
agreement for the year ended December 31, 1995 were
$93,850. Other fees and expense reimbursements paid
under the agreement for the year ended December 31,
1995 were $20,600 and are included in Other Operating
Expenses.
NOTE 5: COMMITMENTS
The Woodstock and New Market Clusters have certain
obligations under pole rental agreements, tower site
leases, etc. for assets utilized in the operation of
the systems. These are mostly annual agreements.
Expenses charged to operations for the year ended
December 31, 1995 were $52,818 and are included in
Other Operating Expenses.
NOTE 6: CONTINGENCIES
The Woodstock and New Market Clusters are to a
significant degree self-insured for risks consisting
primarily of physical loss to property and plant. The
headend equipment is insured, but the plant itself is
not and represents a potential exposure. Management is
of the opinion the various systems' distance from each
other make the likelihood of a complete loss to the
plant unlikely.
PAGE
<PAGE>
Exhibit E
WOODSTOCK AND NEW MARKET CLUSTERS
C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1995
NOTE 7: SUBSEQUENT EVENT
On February 1, 1996, C4 Media sold substantially all
assets to FVOP. FVOP subsequently entered into an
agreement to sell the Woodstock and New Market Clusters
to Shenandoah Telecommunications. After the initial
sale, C4 Media was still liable for the remaining
balance of the notes to Philips with no significant
assets to satisfy that liability. The agreement
between Philips and C4 Media provided that the liens
attached to the assets of the Woodstock and New Market
Clusters were released at the date of sale to FVOP.
C4 Media is in the process of liquidating all
partnership interests. Complete liquidation of C4
Media is expected by the end of 1996.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Unaudited Interim Financial Statements
FRONTIER VISION OPERATING PARTNERS, L.P.
Woodstock/New Market
Unaudited Balance Sheet
At June 30, 1996
Assets
Accounts receivable, net $ 3,189
Prepaid expenses and other 7,564
Investment in cable television
systems, net:
Property and equipment 1,936,365
Intangibles 6,043,000
Total investment in cable
television systems, net 7,979,365
Other, net -
Total assets $ 7,990,117
Liabilities and Retained Earnings
Accrued liabilities $ 38,580
Interdivisional liability 7,722,218
Total liabilities 7,760,798
Retained earnings 229,319
Total liabilities and
retained earnings $ 7,990,117
See the accompanying notes to unaudited condensed financial
statements.
PAGE
<PAGE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Unaudited Interim Financial Statements
C-4 MEDIA CABLE AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
<CAPTION> UNAUDITED INTERIM COMBINED STATEMENT OF INCOME
C-4 MEDIA CABLE FRONTIERVISION
SOUTHEAST OPERATING PARTNERS
LTD PARTNERSHIP LTD PARTNERSHIP
WOODSTOCK/NEW MARKET WOODSTOCK/NEW MARKET
ONE MONTH ENDED FIVE MONTHS ENDED
JANUARY 31, 1996 JUNE 30, 1996
<S>
REVENUES <C> <C>
Cable Television Service 127,054 638,373
127,054 638,373
OPERATING EXPENSES
Cost of Products and Services Sold 30,481 113,152
Maintenance and Support 37,081 68,296
Depreciation and Amortization 59,064 162,498
Customer Operations 14,169 1,385
Corporate Operations 8,046 63,723
148,841 409,054
OPERATING INCOME (21,787) 229,319
INTEREST EXPENSE (117,689)
NET INCOME (139,476) 229,319
PRO FORMA INCOME TAX EXPENSE (87,049)
PRO FORMA NET INCOME 142,270
See accompanying notes to unaudited condensed financial statements.
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Unaudited Interim Financial Statements
C-4 MEDIA CABLE AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
<CAPTION> UNAUDITED COMBINED STATEMENT OF CASH FLOWS
C4 Media Cable Frontiervision
Southeast Operating Partners
LTD Partnership LTD Partnership
Woodstock/New Market Woodstock/New Market
One Month Ended Five Months Ended
<S> January 31, 1996 June 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES <C> <C>
Net Income (139,476) 229,319
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and Amortization 59,064 162,498
Decrease (increase) in Accounts Receivable 3,211 12,921
Increase (decrease) in Accounts Payable (11,603) (27,865)
Other prepaids, deferrals, and accruals 115,822 (157,867)
Net cash provided by operating activities 27,018 219,006
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property & Equipment, and Intangibles (6,904) (6,127,698)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from increase in equity 0 13,671,504
Principal payments on divisional liability 0 (7,782,926)
Net cash provided by financing activities 0 5,888,578
NET INCREASE/(DECREASE) IN CASH 20,114 (20,114)
See accompanying notes to unaudited condensed financial statements. PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(a) Unaudited Interim Financial Statements
C-4 MEDIA CABLE AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED COMBINED STATEMENT OF CASH FLOWS
<CAPTION> C4 Media Cable Frontiervision
Southeast Operating Partners
LTD Partnership LTD Partnership
Woodstock/New Market Woodstock/New Market
One Month Ended Five Months Ended
January 31, 1996 June 30, 1996
<S> <C> <C>
CASH AND CASH EQUIVALENTS:
Beginning 0 20,114
Ending 20,114 0
See accompanying notes to unaudited condensed financial statements.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
Notes to Unaudited Condensed Financial Statements
1. In the opinion of management, the accompanying
consolidated financial statements contain all the
adjustments (consisting of only normal recurring
accruals) necessary to present fairly C4 Media
Cable LTD Partnership's results of operations and
cash flows for the month ended January 31, 1996
and FrontierVision Operating Partners LTD
Partnership's financial position as of June 30,
1996 and the results of operations and cash flows
for the five months ended June 30, 1996.
2. The results of operations for the one month and
five month periods ended January 31, 1996 and June
30, 1996 are not necessarily indicative of the
results to be expected for the full year.
3. On February 1, 1996, C4 Media sold substantially
all assets to FrontierVision. On September 30,
1996 Shenandoah Telecommunications acquired the
Woodstock and New Market CATV assets from
frontierVision for approximately $7.8 million.
See pro forma financial information regarding this
transaction.
4. Pro forma income tax expense was computed as if
FrontierVision Operating Partners, LTD Partnership
was a taxable entity. An assumed combined income
tax rate of 37.96% was used in establishing the
income tax expense.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
The pro forma financial information is based on the
purchase method of accounting for the Acquisition. The
pro forma adjustments are described in the accompanying
notes to Unaudited Pro Forma Condensed Combined Balance
Sheet and Notes to Unaudited Condensed Combined
Statements of Income. The unaudited pro forma
Condensed Combined Statements of Income assume that the
acquisition of the Shenandoah County, Virginia cable
television systems of FrontierVision Operating
Partners, L.P. (The Systems) had occurred on January 1,
1995 (combining the results for the year ended December
31, 1995 and for the six months ended June 30, 1996 for
Shenandoah Telecommunications Company (STC) and The
Systems). The unaudited pro forma condensed combined
balance sheet assumes that the acquisition of The
Systems had occurred on June 30, 1996 (combining the
balance sheets for STC and The Systems as of June 30,
1996). FrontierVision Operating Partners had
previously acquired the System from C-4 Media Southeast
LTD Partnership in February 1996.
Acquisition
The total purchase price for the assets acquired by
cash was $7,864,171 including $300,000 placed in an
Indemnity Escrow Deposit.
Assumptions
Purchase Price Allocation
The purchase price has been allocated to the assets
acquired based on the estimated fair values of such
assets. The purchased assets consist primarily of CATV
distribution plant and equipment and various intangible
assets.
For purposes of proforma presentations, the fair value
of the intangible assets is being amortized over an
estimated life of 15 years.
PAGE
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
Interest Expense
For purposes of preparing the pro forma financial
information, actual borrowings and terms for the
acquisition were used.
Income Taxes
For purposes of preparing the pro forma financial
information, an assumed combined income tax rate of
37.96% was used in establishing the income tax benefit
and for establishing the deferred income tax liability
associated with the transaction.
This information should be read in conjunction with the
notes included herewith. The unaudited pro forma
condensed combined financial statements do not purport
to represent what the Company's results of operations
or financial position actually would have been had such
transactions and events occurred on the dates
specified, or to project the Company's results of
operations or financial position for any future period
or date. The pro forma adjustments are based upon
available information and certain adjustments that
management believes are reasonable. In the opinion of
management, all adjustments have been made that are
necessary to present fairly the pro forma data.
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
<CAPTION> ASSETS
HISTORICAL
SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PROFORMA
JUNE 30, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
<S>
CURRENT ASSETS <C> <C> <C> <C>
Cash and Cash Equivalents 4,863,872 4,863,872
Certificates of Deposit 1,331,366 1,331,366
Investment in Held-to-Maturity
Securities 1,151,123 1,151,123
Accounts Receivable 3,161,055 3,189 3,164,244
Direct Financing Leases,
Current Portion 74,350 74,350
Materials and Supplies 2,408,770 2,408,770
Prepaid and Other Current Assets 255,730 7,563 263,293
Total Current Assets 13,246,266 10,752 0 13,257,018
INVESTMENTS AND OTHER ASSETS
Investment in Available-for-Sale
Securities 1,888,910 1,888,910
Investment in Held-to-Maturity
Securities 2,622,405 2,622,405
Other Investments 3,084,160 3,084,160
Direct Financing Lease,
Long-Term Portion 229,015 229,015
7,824,490 0 0 7,824,490
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
ASSETS
<CAPTION> HISTORICAL
SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PROFORMA
JUNE 30, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
<S>
PROPERTY, PLANT, AND EQUIPMENT <C> <C> <C>
Plant in Service 56,769,893 1,936,365 53,255 A 58,759,513
Plant Under Construction 4,540,868 4,540,868
61,310,761 1,936,365 53,255 63,300,381
Less Accumulated Depreciation (20,202,536) (20,202,536)
41,108,225 1,936,365 53,255 43,097,845
FRANCHISES 6,043,000 (140,621)B 5,902,379
62,178,981 7,990,117 (87,366) 70,081,732
<PAGE>
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
<CAPTION> LIABILITIES AND STOCKHOLDERS EQUITY
HISTORICAL
SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PROFORMA
<S> JUNE 30, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
CURRENT LIABILITIES
Current Maturities of <C> <C> <C> <C>
Long-Term Debt 461,927 461,927
Accounts Payable 479,507 479,507
Advance Billings and Payments 369,334 369,334
Customers' Deposits 101,863 101,863
Accrued Construction Costs 198,137 198,137
Interdivisional Liability 7,722,218 (7,722,218)C 0
Other Current Liabilities 891,586 38,580 930,166
Income Taxes Payable 10,339 10,399
Other Taxes Payable 252,259 252,259
Total Current Liabilities 2,764,952 7,760,798 (7,722,218) 2,803,532
Long-Term Debt, Less
Current Maturities 10,978,182 7,864,171 D 18,842,353
OTHER LIABILITIES AND DEFERRED
CREDITS
Deferred Investment Tax Credit 329,807 329,807
Deferred Income Taxes 4,029,999 4,029,999
Pension and Other 487,448 487,448
4,847,254 0 0 4,847,254
MINORITY INTEREST 1,546,013 1,546,013
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
<CAPTION> LIABILITIES AND STOCKHOLDERS EQUITY
HISTORICAL
SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PROFORMA
<S> JUNE 30, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
STOCKHOLDERS' EQUITY <C> <C> <C> <C>
Common Stock 4,740,677 4,740,677
Retained Earnings 36,942,246 229,319 (229,319)E 36,942,246
Unrealized Gain on
Available-For-Sale
Securities 359,657
42,042,580 229,319 (229,319) 42,042,580
62,178,981 7,990,117 (87,366) 70,081,732
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet:
A - Reflects fair market value allocated to plant and equipment.
B - Reflects fair value allocated to intangible assets.
C - Elimination of divisional debt to FrontierVision, L. P. not assumed by STC.
D - Assumption of debt by STC required to complete the acquisition.
E - Elimination of FrontierVision retained earnings not acquired by STC.
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
HISTORICAL
<CAPTION> SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PRO FORMA
<S> ADJUSTMENTS COMBINED
REVENUES <C> <C> <C> <C>
Local Service 3,072,097 3,072,097
Access and Toll Service 6,658,076 6,658,076
Other and Unregulated 12,188,977 1,640,624 13,829,601
21,919,150 1,640,624 0 23,559,774
OPERATING EXPENSES
Cost of Products &
Services Sold 1,493,270 357,148 1,850,418
Maintenance and Support 3,909,571 353,883 4,263,454
Depreciation and Amortization 2,864,521 695,830 (158,936)A 3,401,415
Customer Operations 2,465,316 165,197 2,630,513
Corporate Operations 1,988,852 93,850 2,082,702
Taxes Other Than Income 305,938 305,938
13,027,468 1,665,908 (158,936) 14,534,440
OPERATING INCOME 8,891,682 (25,284) 158,936 9,025,334
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
YEAR ENDED DECEMBER 31, 1995
HISTORICAL
<CAPTION> SHENANDOAH FRONTIERVISION
TELECOMMUNICATIONS OPERATING PARTNERS
COMPANY LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET PROFORMA
ADJUSTMENTS COMBINED
<S>
OTHER INCOME (EXPENSES) <C> <C> <C> <C>
Nonoperating Income,
Less Expense 991,202 991,202
Interest Expense (685,971) (1,411,821) 785,047 B (1,312,745)
Gain On Sale of Assets 1,141,386 1,141,386
10,338,299 (1,437,105) 943,983 9,845,177
INCOME TAXES 3,572,956 (187,189)C 3,385,767
6,765,343 (1,437,105) 1,131,172 6,459,410
MINORITY INTERESTS (534,658) (534,658)
NET INCOME 6,230,685 (1,437,105) 1,131,172 5,924,752
NET INCOME PER SHARE 1.66 1.58
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,760,760 3,760,760
PAGE
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SIX MONTHS ENDED JUNE 30, 1996
<CAPTION> SHENANDOAH C-4 MEDIA CABLE FRONTIERVISION
TELECOMMUNICATIONS SOUTHEAST OPERATING PARTNERS
COMPANY LTD PARTNERSHIP LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET WOODSTOCK/NEW MARKET
SIX MONTHS ENDED ONE MONTH ENDED FIVE MONTHS ENDED PROFORMA
<S> JUNE 30, 1996 JANUARY 31, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
REVENUES <C> <C> <C> <C> <C>
Local Service 1,602,425 1,602,425
Access & Toll Service 3,478,895 3,478,895
Other & Unregulated 6,789,519 127,054 638,373 7,554,946
11,870,839 127,054 638,373 0 12,636,266
OPERATING EXPENSES
Cost of Products
& Services Sold 842,225 30,481 113,152 985,858
Maintenance & Support 2,489,964 37,081 68,296 2,595,341
Depreciation &
Amortization 1,617,960 59,064 162,498 46,885 A 1,886,407
Customer Operations 1,594,590 14,169 1,385 1,610,144
Corporate Operations 1,075,888 8,046 63,723 1,147,657
Taxes Other Than
Income 201,986 201,986
7,822,613 148,841 409,054 46,885 8,427,393
OPERATING INCOME 4,048,226 (21,787) 229,319 (46,885) 4,308,873
<PAGE>
<PAGE>
</TABLE>
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
(b) Pro Forma Financial Information
SHENANDOAH TELECOMMUNICATIONS AND FRONTIERVISION, LP WOODSTOCK AND NEW MARKET CLUSTERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SIX MONTHS ENDED JUNE 30, 1996
<CAPTION> SHENANDOAH C-4 MEDIA CABLE FRONTIERVISION
TELECOMMUNICATIONS SOUTHEAST OPERATING PARTNERS
COMPANY LTD PARTNERSHIP LTD PARTNERSHIP
CONSOLIDATED WOODSTOCK/NEW MARKET WOODSTOCK/NEW MARKET
SIX MONTHS ENDED ONE MONTH ENDED FIVE MONTHS ENDED PROFORMA
JUNE 30, 1996 JANUARY 31, 1996 JUNE 30, 1996 ADJUSTMENTS COMBINED
<S>
OTHER INCOME (EXPENSES)<C> <C> <C> <C> <C>
Nonoperating Income,
Less Expense 436,531 436,531
Interest Expense (269,678) (117,689) (197,432)B (584,799)
Gain On Sale of
Assets 228,250 228,250
4,443,329 (139,476) 229,319 (244,317) 4,288,855
INCOME TAXES 1,500,806 (58,638)C 1,442,168
2,942,523 (139,476) 229,319 (185,679) 2,846,687
MINORITY INTERESTS (301,862) (301,862)
NET INCOME 2,640,661 (139,476) 229,319 (185,679) 2,544,825
NET INCOME PER SHARE 0.70 0.68
WEIGHTED AVERAGE
SHARES OUTSTANDING 3,760,760 3,760,760
Notes to Unaudited Pro Forma Condensed Combined Statement of Income:
A - Reflects depreciation expense on fair value allocated to plant at STC rates.
B - Reflects interest expense on debt required to fund the acquisition.
C - To record the income tax effect of the adjustments to depreciation and interest expense.
PAGE
<PAGE>
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.
SHENANDOAH TELECOMMUNICATIONS COMPANY
By: Christopher E. French
President
November 5, 1996
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