<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 15, 1995
-------------------------
TCA Cable TV, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 0-11478 75-1798185
-------------- ------------ --------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
3015 S.S.E. Loop 323, Tyler, Texas 75701
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(903) 595-3701
Registrant's telephone number, including area code ----------------
<PAGE> 2
Reference is made to the Current Report on Form 8-K (the "Form 8-K")
filed by TCA Cable TV, Inc. on December 27, 1995. The Form 8-K is hereby
amended to read in its entirety as follows:
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 28, 1995, Telecable Associates, Inc. ("Telecable"), a
wholly-owned subsidiary of TCA Cable TV, Inc. (the "Company"), entered into an
Asset Purchase Agreement (as amended, the "Star Agreement") with Star Cable
Associates ("Star"), pursuant to which Telecable would acquire the assets of,
and assume certain liabilities related to, the operation of cable television
systems (the "Star System") in and around the following cities: Ft. Chiswell,
Virginia; Cross Creek, North Carolina; Dobson, North Carolina; East
Bend/Yadkin, North Carolina; Floyd, Virginia; Lone Hickory, North Carolina; New
Castle, Virginia; Pilot Mountain, North Carolina; Sandy Ridge, North Carolina;
Walnut Cove, North Carolina; Westfield, North Carolina; Yadkinville, North
Carolina; Blythewood, South Carolina; Dentsville, South Carolina; Elgin, South
Carolina; Chapin/Lake Murray, South Carolina; Lexington, South Carolina; Lost
Creek, South Carolina; and Ravenswood, South Carolina.
The Star Transaction was consummated on December 15, 1995.
The assets acquired in the Star Transaction included, with certain
exceptions as set forth in the Star Agreement, all the assets and properties,
real and personal, tangible and intangible, used by Star in its operation of
the Star System. Concurrently with the consummation of the Star Transaction,
the assets acquired, and liabilities assumed, by Telecable were exchanged for
the assets of the TWEAN System (as defined below) as set forth below in greater
detail.
The aggregate consideration paid in the Star Transaction was
approximately $53,200,000 subject to certain post-closing adjustments as set
forth in the Star Agreement. The acquisition consideration for the Star
Transaction was determined by negotiations between the parties to the Star
Agreement.
To the best knowledge of the Company, there is no material
relationship between Star and the Company, or any of its affiliates, any
director or officer of the Company, or any associate of such director or
officer.
The primary sources of funds used in the Star Transaction were funds
received under unsecured loans extended by a group of commercial lenders for
which NationsBank of Texas, N.A. and Texas Commerce Bank National Association
are managing agents.
On August 28, 1995, Telecable entered into an Asset Exchange Agreement
(as amended, the "TWEAN Agreement") with Time Warner Entertainment -
Advance/Newhouse Partnership ("TWEAN") pursuant to which, in exchange for the
assets of, and liabilities relating to, the Star System that were acquired by
Telecable as described above, and for an additional payment of approximately
$9,000,000 by Telecable to TWEAN, Telecable would acquire the assets of and
2
<PAGE> 3
assume certain liabilities related to, the operation of cable television
systems (the "TWEAN System") in and around the communities of Alexandria and
Pineville, Louisiana.
The TWEAN Transaction was consummated on December 15, 1995.
The assets acquired in the TWEAN Transaction included, with certain
exceptions as set forth in the TWEAN Agreement, all of the assets and
properties, real and personal, tangible and intangible, used by TWEAN in its
operations of the TWEAN System. Telecable intends to continue to use such
assets to provide cable television services to the subscribers in the TWEAN
System.
The aggregate consideration paid in the TWEAN Transaction consisted of
(i) the assets acquired, and liabilities assumed, by Telecable in the Star
Transaction (for which Telecable had paid approximately $53,200,000 as
described above) and (ii) approximately $9,000,000, subject to certain
post-closing adjustments as set forth in the TWEAN Agreement. The acquisition
consideration for the TWEAN Transaction was determined by negotiations between
the parties to the TWEAN Agreement.
To the best knowledge of the Company, there is no material
relationship between TWEAN and the Company, or any of its affiliates, any
director or officer of the Company, or any associate of such director or
officer.
The primary sources of funds used in the TWEAN Transaction were funds
received under unsecured loans extended by a group of commercial lenders for
which NationsBank of Texas, N.A. and Texas Commerce Bank National Association
are managing agents.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
The audited balance sheet of the TWEAN System (referred to
therein as the Alexandria System) as of September 30, 1995,
and the related statements of income, changes in equity
investment and cash flows for the nine-month period then ended
are attached hereto as Annex A and made a part hereof.
(b) Pro Forma Financial Information
The unaudited Pro Forma Balance Sheet of the Company and
Subsidiaries attached hereto as Annex B has been adjusted to
give effect to the acquisition of the TWEAN System on December
15, 1995, as though such acquisition had occurred on July 31,
1995. The unaudited Pro Forma Statement of Operations of the
Company and Subsidiaries for the nine-months ended July 31,
1995 also attached hereto as Annex B present the historical
results of the Company as if the Company had acquired the
TWEAN System on November 1, 1994. Such pro forma information
is not necessarily indicative of operating results that would
have been achieved had the acquisition been consummated at the
beginning of the respective periods presented and should not
be construed as representative of future operations.
3
<PAGE> 4
The unaudited pro forma financial statements should be read in
conjunction with the historical financial statements of the
Company and the financial statements included in Item 7(a)
herein. The unaudited historical financial statements of the
Company for the nine months ended July 31, 1995 include, in
the opinion of management, all adjustments necessary for a
fair presentation of the results of such periods.
(c) Exhibits.
The following is a list of exhibits filed as part of this Current
Report on Form 8-K:
Exhibit No. Description
----------- -----------
2.1 Asset Purchase Agreement dated August 28, 1995,
between Telecable Associates, Inc. and Star Cable
Associates.(1)
2.2 First Amendment to Asset Purchase Agreement dated
December 15, 1995.(2)
2.3 Asset Exchange Agreement dated August 28, 1995
between Telecable Associates and Time Warner
Entertainment - Advance/Newhouse Partnership.(1)
2.4 First Amendment to Asset Exchange Agreement dated
December 15, 1995.(2)
4.1 Articles of Incorporation and Bylaws.(3)
4.2 Articles of Amendment to Articles of Incorporation.(4)
4.3 Articles of Amendment to Articles of Incorporation.(4)
4.4 Articles of Amendment to Articles of Incorporation.(5)
4.5 Form of Stock Certificate.(3)
23.1 Consent of Coopers & Lybrand L.L.P.(6)
- -----------------------
(1) Previously filed as an exhibit to the Company's quarterly
report on Form 10-Q (Amendment No. 1) for the quarter ended
July 31, 1995 and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Current Report
on Form 8-K filed December 27, 1995 and incorporated herein by
reference.
(3) Previously filed as an Exhibit to the Registrant's
Registration Statement on Form S-1, File No. 2-75516, and
incorporated herein by reference.
(4) Previously filed as an Exhibit to the Registrant's Registration
Statement on Form S-8, File No. 33-21901, and incorporated
herein by reference.
(5) Previously filed as an exhibit to Registrant's Form 10-K for
the fiscal year ended October 31, 1993, filed January 27, 1994
and incorporated by reference herein.
(6) Filed herewith.
4
<PAGE> 5
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 hereunto duly authorized.
TCA CABLE TV, INC.
Date: March 25, 1996 By: /s/ Jimmie F. Taylor
-----------------------------------
Jimmie F. Taylor
Its: VP, CFO & Treasurer
----------------------------------
5
<PAGE> 6
Annex A
<PAGE> 7
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Time Warner Entertainment--Advance/Newhouse Partnership and
Telecable Associates, Inc.:
We have audited the accompanying balance sheet of The Alexandria System (Cable
System of Time Warner Entertainment--Advance/Newhouse Partnership Purchased by
Telecable Associates, Inc.) as of September 30, 1995, and the related
statements of income, changes in equity investment and cash flows for the
nine-month period then ended. These financial statements are the
responsibility of Time Warner Entertainment--Advance/Newhouse Partnership
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 financial statements referred to above present fairly, in
all material respects, the financial position of The Alexandria System as of
September 30, 1995, and the results of its operations and its cash flows for
the nine-month period then ended, in conformity with generally accepted
accounting principles.
Dallas, Texas
March 8,1996
<PAGE> 9
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
BALANCE SHEET
SEPTEMBER 30, 1995
(AMOUNTS IN THOUSANDS)
ASSETS
<TABLE>
<S> <C>
Cash $ 34
Accounts receivable, subscribers 860
Prepaid expenses 55
----------
Total current assets 949
----------
Property, plant and equipment:
Plant and distribution systems 7,717
Vehicles and equipment 915
Land, buildings and improvements 674
Construction in progress 176
----------
9,482
Less accumulated depreciation (3,333)
----------
Net property, plant and equipment 6,149
----------
Franchises and goodwill, net of accumulated amortization of $536 477
----------
Total assets $ 7,575
==========
LIABILITIES AND EQUITY INVESTMENT
Current liabilities:
Accounts payable and accrued expenses $ 1,300
Deferred revenue 703
----------
Total current liabilities 2,003
Commitments and contingencies (Note 4)
Equity investment
Total stockholder's equity 5,572
----------
Total liabilities and equity investment $ 7,575
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 10
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
STATEMENT OF INCOME
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
Revenues $ 8,282
----------
Operating expenses:
Programming costs 1,757
General and administrative 2,740
Depreciation and amortization 652
Other 7
----------
5,156
----------
Operating income 3,126
Other expense, net 11
----------
Income before provision for income taxes 3,115
Provision for income taxes 345
----------
Net income $ 2,770
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 11
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
STATEMENT OF CHANGES IN EQUITY INVESTMENT
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
Balance at December 31, 1994 $ 3,744
Net income 2,770
Capital contribution 391
Reduction in equity investment (1,333)
----------
Balance at September 30, 1995 $ 5,572
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 12
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income $ 2,770
---------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 626
Amortization 26
Other 9
Changes in certain assets and liabilities:
Accounts receivable, subscribers 64
Prepaid expenses 6
Accounts payable and accrued expenses 1,436
Deferred revenue 45
---------
Total adjustments 2,212
---------
Net cash provided by operating activities 4,982
---------
Cash flows from investing activities:
Purchases of property, plant and equipment (3,615)
---------
Net cash used in investing activities (3,615)
---------
Cash flows from financing activities:
Reduction in equity investment (1,333)
Other (68)
---------
Net cash used in financing activities (1,401)
---------
Net decrease in cash (34)
Cash, beginning of year 68
---------
Cash, end of year $ 34
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 13
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND BASIS OF PRESENTATION
The financial statements include the accounts of the cable television
system acquired by Telecable Associates, Inc. (the "Company"), a
wholly-owned subsidiary of TCA Cable TV, Inc., from Time Warner
Entertainment--Advance/Newhouse Partnership ("TWEAN") (collectively,
"The Alexandria System") on December 15, 1995. The acquisition
transaction was consummated through the acquisition by the Company of
assets of cable systems located in North and South Carolina from Star
Cable Associates for approximately $54,000,000, and the simultaneous
exchange of these assets and approximately $9,000,000 cash to TWEAN
for The Alexandria System.
The Alexandria System was owned by Newhouse Broadcasting Corporation
("Newhouse") prior to its contribution to TWEAN effective April 1,
1995. These financial statements include the historical basis of
assets, liabilities and operations of The Alexandria System. In
addition, these financial statements include allocations of certain
corporate administrative costs attributed to The Alexandria System.
The methods by which such amounts are attributable or allocated are
deemed reasonable by management of Newhouse and TWEAN.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost. Depreciation is
computed on a straight-line basis over the estimated useful lives of
the related assets as follows:
<TABLE>
<S> <C>
Plant and distribution systems 5 to 15 years
Vehicles and equipment 4 to 7 years
Buildings and improvements 15 to 39 years
</TABLE>
Substantially all costs associated with the initial connection of
residences and subsequent disconnections and reconnections are
expensed in the period incurred.
6
<PAGE> 14
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
When property is retired or otherwise disposed of, the related cost
and accumulated depreciation are removed from the accounts and any
resulting gain or loss is reflected in income in the period incurred.
FRANCHISES AND GOODWILL
The direct costs to acquire cable television franchises are
capitalized and amortized on a straight-line basis over the lives of
the franchises, not exceeding forty years. Goodwill is capitalized
and amortized on a straight-line basis over forty years.
Management continually reevaluates the propriety of the carrying
amount of goodwill and other intangibles as well as the amortization
period to determine whether current events and circumstances warrant
adjustments to the carrying value and/or revisions of the estimated
useful lives. At this time, management believes that no significant
impairment of goodwill or other intangibles has occurred.
EQUITY INVESTMENT
Equity investment represents the excess of assets over liabilities for
The Alexandria System. Equity investment is increased or decreased by
the net income (loss) of The Alexandria System plus or minus advances
from or to the parent and affiliates.
INCOME TAXES
Prior to the April 1, 1995 contribution to TWEAN, The Alexandria
System joined in the filing of a consolidated federal income tax
return with Newhouse and its subsidiaries. Income tax expense for The
Alexandria System was computed on a separate company basis during this
period. Deferred tax assets and liabilities were recognized for the
estimated future tax consequences attributable to differences between
the financial statement carrying amounts of assets and liabilities and
their respective tax bases in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." The Alexandria System's net deferred tax asset balance
at the date of contribution was immaterial.
Effective April 1, 1995, income taxes have not been recorded in the
accompanying financial statements because they accrue directly to the
TWEAN partners.
7
<PAGE> 15
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
TWEAN CONTRIBUTION
The contribution of The Alexandria System to TWEAN was recorded at the
historical basis of the contributed assets and assumed liabilities.
The excess of the carrying value of liabilities not assumed over
assets not contributed is reflected as a capital contribution in the
accompanying Statement of Changes in Equity Investment. This was a
noncash transaction except for the retention by Newhouse of cash
totaling approximately $68,000 which is reflected as cash used in
financing activities in the accompanying Statement of Cash Flows.
2. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Accounts payable and accrued expenses consists of the following
(amounts in thousands):
<TABLE>
<S> <C>
Accounts payable $ 206
Accrued programming costs 592
Accrued franchise fees 97
Accrued property taxes 86
Accrued payroll 66
Other 253
----------
$ 1,300
</TABLE> ==========
3. INCOME TAXES:
The provision for income taxes for the three-month period ended March
31, 1995 (see Note 1) consists of the following (amounts in
thousands):
<TABLE>
<S> <C>
Current:
Federal $ 276
State 69
Deferred -
------
$ 345
======
</TABLE>
8
<PAGE> 16
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The difference between the provision for income taxes and the amount
computed using the U.S. federal statutory income tax rate of 35% is as
follows (amounts in thousands):
<TABLE>
<S> <C>
Federal income taxes at the statutory rate $ 294
State income taxes, net of federal benefit 45
Other 6
----------
Provision for income taxes $ 345
==========
</TABLE>
4. COMMITMENTS AND CONTINGENCIES:
The Alexandria System pays pole use and miscellaneous other rentals
under various agreements. Rental expense for the nine-month period
ended September 30, 1995 was approximately $160,000.
Approximate minimum future rentals under noncancelable operating
leases are as follows (amounts in thousands):
<TABLE>
<S> <C>
Year ending December 31:
1996 $ 213
Thereafter -
--------
$ 213
========
</TABLE>
5. RELATED PARTY TRANSACTIONS:
The Alexandria System was charged management fees by Newhouse and
TWEAN totaling $187,000 for the nine-month period ended September 30,
1995. The Alexandria System also incurred programming costs totaling
$436,000 from an affiliate of TWEAN during this period. Related
accrued programming costs approximated $98,000 at September 30, 1995.
The Alexandria System participates in a noncontributory defined
benefit pension plan (the "Pension Plan") which is maintained by Time
Warner Entertainment ("TWE") and covers substantially all employees.
Benefits under the Pension Plan are determined based on formulas which
reflect the employees' years of service and average compensation for
the highest five consecutive years of the last ten years of service.
9
<PAGE> 17
THE ALEXANDRIA SYSTEM
(CABLE SYSTEM OF TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP PURCHASED BY TELECABLE ASSOCIATES, INC.)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The Alexandria System also participates in a defined contribution plan
maintained by TWE (the "Savings Plan") which covers substantially all
employees. Its contributions to the Savings Plan can amount to up to
6.67% of the employee's eligible compensation during the plan year.
The plan sponsor has the right in any year to set the maximum amount
of The Alexandria System's contribution.
Total expenses related to these employee benefit plans approximated
$60,000 for the nine-month period ended September 30, 1995.
6. LITIGATION:
In the course of conducting its business, The Alexandria System is
from time to time named as a defendant in litigation actions.
Management currently believes the disposition of all claims and
disputes, individually or in the aggregate, should not have a material
adverse effect on The Alexandria System's financial position.
10
<PAGE> 18
Annex B
<PAGE> 19
TCA CABLE TV. INC. AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
TCA ALEXANDRIA
JULY 31, 1995 SEPTEMBER 30, 1995 ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
ASSETS
Cash $2,285,423 $34,000 ($34,000) (a) $2,285,423
Accounts receivable, subscribers 7,195,483 860,000 8,055,483
Accounts receivable, other 971,881 971,881
Income tax receivable 1,265,239 1,265,239
Notes receivable, affiliates 2,500,000 2,500,000
Investments 1,708,501 1,708,501
Property, plant and equipment, at cost 321,721,882 9,482,000 (1,544,340) (a) 329,659,542
Less accumulated depreciation (178,255,051) (3,333,000) 3,333,000 (a) (178,255,051)
----------------------------------------------------- ---------------------
Property, plant and equipment, net 143,466,831 6,149,000 1,788,660 151,404,491
----------------------------------------------------- ---------------------
Other assets:
Intangibles, net of
accumulated amortization 271,668,382 477,000 53,785,340 (a) 325,930,722
Prepaid expenses 1,807,239 55,000 (55,000) (a) 1,807,239
----------------------------------------------------- ---------------------
273,475,621 532,000 53,730,340 327,737,961
----------------------------------------------------- ---------------------
Total Assets $432,868,979 $7,575,000 $55,485,000 $495,928,979
===================================================== =====================
LIABILITIES
Accounts payable $7,484,155 $2,003,000 ($2,003,000) (a) $7,484,155
Accrued expenses 13,122,819 13,122,819
Subscriber advance payments 3,393,566 3,393,566
Deferred income taxes 45,400,000 45,400,000
Term debt 251,027,409 62,200,000 (a) 313,227,409
----------------------------------------------------- ---------------------
320,427,949 2,003,000 60,197,000 382,627,949
----------------------------------------------------- ---------------------
SHAREHOLDERS EQUITY
Common stock 2,476,552 2,476,552
Additional paid-in capital 43,361,240 43,361,240
Retained earnings 70,406,992 70,406,992
Net assets 5,572,000 (4,712,000) (a)
----------------------------------------------------- ---------------------
116,244,784 5,572,000 (4,712,000) 117,104,784
Less treasury stock, at cost (3,803,754) (3,803,754)
----------------------------------------------------- ---------------------
112,441,030 5,572,000 (4,712,000) 113,301,030
----------------------------------------------------- ---------------------
$432,868,979 $7,575,000 $55,485,000 $495,928,979
===================================================== =====================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 20
TCA CABLE TV, INC. AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
TCA
NINE MONTHS ENDED RECENT
JULY 31, 1995 ACQUISITIONS ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
Revenues $136,383,643 $19,911,102 $156,294,745
Operating expenses:
Programming costs 31,763,534 4,502,377 36,265,911
Other operating expenses 36,853,692 6,085,848 42,939,540
Depreciation and amortization 21,083,383 6,550,710 (3,155,287)(b) 24,478,806
------------------------------------------------- -----------------
Total Operating Expenses 89,700,609 17,138,935 (3,155,287) 103,684,257
------------------------------------------------- -----------------
Operating Income 46,683,034 2,772,167 3,155,287 52,610,488
Other income 165,376 20,374 185,750
Interest expense (8,868,776) (3,626,078) (4,627,736)(c) (17,122,590)
------------------------------------------------- -----------------
Income before income taxes 37,979,634 (833,537) (1,472,449) 35,673,648
Provision for (benefit from) income taxes 15,000,000 345,000 (1,010,618)(d) 14,334,382
------------------------------------------------- -----------------
15,000,000 345,000 (1,010,618) 14,334,382
------------------------------------------------- -----------------
Income from continuing operations $22,979,634 ($1,178,537) ($461,831) $21,339,266
================================================= =================
Weighted average number of
common shares 24,573,796 24,573,796 24,573,796 24,573,796
Earnings (loss) per common share $0.93 ($0.05) ($0.02) $0.87
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 21
TCA CABLE TV, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization and Financial Statement Presentation
On May 9, 1995 TCA Cable TV, Inc. ("TCA" or the "Company") through
its subidiaries acquired substantially all of the assets used by Time
Warner Entertainment Company, L.P. ("Time Warner") in the operation
of the cable television systems in and around the following cities of
Arkansas: Fayetteville, Elkins, Farmington, Greenland, and
unincorporated areas of Washington County ( "Fayetteville" ). The
cost of the acquisition was approximately $39 million, all of which
was paid in cash obtained from the Company's bank lines of credit.
On July 1, 1995 the Company, through a subsidiary, acquired
substantially all of the assets used by Marcus Cable of San Angelo,
L.P. ("Marcus Cable") in the operation of the cable television
systems in and around the following cities, counties and areas in
Texas: the cities of San Angelo, Andrews, Ballinger, Miles and
Winters, Andrews and Tom Green counties and Goodfellow Air Force Base
("San Angelo"). The cost of the acquisition was approximately $66
million, all of which was paid in cash obtained from the Company's
bank lines of credit and a private placement.
On December 15, 1995 the Company acquired the assets of a cable
television system serving approximately 29,000 subscribers in
Alexandria and Pineville, Louisiana ("Alexandria") through an exchange
with Time Warner Entertainment - Advance/Newhouse Partnership ("Time
Warner"). The transaction involved the acquisition by the Company of
the assets of cable television systems located in North and South
Carolina from Star Cable Associates and the simultaneous exchange of
these to Time Warner for Alexandria. The cost of the acquisition was
approximately $63 million, all of which was paid from the Company's
bank lines of credit.
The accompanying pro forma consolidated balance sheet as of July 31,
1995 has been prepared as if the Alexandria acquisition had occurred
as of the balance sheet date. Accordingly, the pro forma balance sheet
presents the financial position of the Company, including the acquired
assets, as of July 31, 1995.
The accompanying pro forma consolidated statements of operations have
been prepared as if the Company had acquired the Fayetteville, San
Angelo and Alexandria systems on November 1, 1994. Accordingly, the
pro forma consolidated statements of operations present the operating
results of the Company plus the operating results of the acquired
systems for the nine months ended July 31, 1995.
The operating results of the Fayetteville system for the nine months
ended July 31, 1995 were not available from the seller and were
estimated using the audited statement of operations for the year ended
December 31, 1994 and the unaudited statements of operations for the
three months ended March 31, 1995.
The operating results of the San Angelo system for the nine months
ended July 31, 1995 were not available from the seller and were
estimated using the audited statement of operations for the year ended
December 31, 1994 and the unaudited statements of operations for the
six months ended June 30, 1995.
On May 1, 1995 TCA through its subsidiaries acquired substanially all
of the assets used by Time Warner in the operation of the cable
television systems in and around the following cities in Arkansas:
Russellville, Booneville, Paris, Clarksville, Johnson City,
Pottsville, Pope County and the unincorporated areas within Arkansas
counties in which the foregoing cities are located ("Russellville" ).
The Russellville acquisition is not significant and is not included in
the statement of operations pro forma adjustments.
2. Pro Forma Adjustments
Pro Forma Consolidated Balance Sheet
(a) The purchase price of the acquisitions is allocated as follows:
<TABLE>
<S> <C>
Property, plant and equipment $ 7,937,660
Intangibles 54,262,340
------------------------------------------------
$ 62,200,000
</TABLE>
Pro Forma Consolidated Statement of Operations
(b) Additional depreciation and amortization expense has been recorded
to reflect an increase in the basis of assets acquired and the
revision of the acquired system's depreciation and amortization policy
to conform to the Company's policy. Intangibles are amortized straight
line over 40 years.
(c) Additional interest expense has been recorded to reflect the term
debt incurred to finance the acquisitions.
(d) The provision for income taxes has been adjusted to reflect the
tax provision as if the operations of the acquired systems had been
taxed at the Company's effective tax rate.
<PAGE> 22
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
2.1 Asset Purchase Agreement dated August 28, 1995,
between Telecable Associates, Inc. and Star Cable
Associates.(1)
2.2 First Amendment to Asset Purchase Agreement dated
December 15, 1995.(2)
2.3 Asset Exchange Agreement dated August 28, 1995
between Telecable Associates and Time Warner
Entertainment - Advance/Newhouse Partnership.(1)
2.4 First Amendment to Asset Exchange Agreement dated
December 15, 1995.(2)
4.1 Articles of Incorporation and Bylaws.(3)
4.2 Articles of Amendment to Articles of Incorporation.(4)
4.3 Articles of Amendment to Articles of Incorporation.(4)
4.4 Articles of Amendment to Articles of Incorporation.(5)
4.5 Form of Stock Certificate.(3)
23.1 Consent of Coopers & Lybrand L.L.P.(6)
- -----------------------
(1) Previously filed as an exhibit to the Company's quarterly
report on Form 10-Q (Amendment No. 1) for the quarter ended
July 31, 1995 and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Current Report
on Form 8-K filed December 27, 1995 and incorporated herein by
reference.
(3) Previously filed as an Exhibit to the Registrant's
Registration Statement on Form S-1, File No. 2-75516, and
incorporated herein by reference.
(4) Previously filed as an Exhibit to the Registrant's Registration
Statement on Form S-8, File No. 33-21901, and incorporated
herein by reference.
(5) Previously filed as an exhibit to Registrant's Form 10-K for
the fiscal year ended October 31, 1993, filed January 27, 1994
and incorporated by reference herein.
(6) Filed herewith.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
TCA Cable TV, Inc. on Form S-8 (File Nos. 2-82934, 2-88892, 33-21901. 33-49172,
33-33898, 33-55895, 33-61041, and 333-1487) and Form S-3 (File Nos. 33-61616,
33-44289 and 33-40273) of our report dated March 8, 1996, on our audit of the
financial statements of the Alexandria System (Cable System of Time Warner
Entertainment--Advance/Newhouse Partnership Purchased by Telecable Associates,
Inc.) as of September 30, 1995, and for the nine-month period then ended, which
report is included in this Form 8-K/A (Amendment No. 1) of TCA Cable TV, Inc.
/s/ COOPERS & LYBRAND L.L.P.
Dallas, Texas
March 25, 1996